Online Gambling Regulators All-In on Location Intelligence

Given the patchwork footprint for online gambling legality in North America, it is understandable that gaming regulators are increasingly focused on 3 key questions:

  1. Can our jurisdiction consistently detect and prevent betting from out of state/province?
  2. Are our control mechanisms sufficient to prevent fraud, money laundering, athlete wagering, and identity theft?
  3. Are we truly maximizing our jurisdictional data to modernize and optimize our gaming offerings?

Much like Netflix is focused on detecting streamers who use VPN services to mask location detection OR cybersecurity experts analyze crypto transactions to prevent nation states from evading economic sanctions, the common denominator in these concerns is the emerging tech of Location Intelligence.

Location Intelligence for Fraud Detection

The mass migration of financial transactions online has placed an ever-greater burden on government and financial regulators tasked with authenticating the geographic source of funds to ensure regulatory compliance. Typically regulators have relied on IP addresses to determine transaction location. However, IP addresses are often inaccurate and prone to manipulation, providing fraudsters the opportunity to bypass security measures with spoofing techniques and/or VPNs (Virtual Private Networks).  

For gambling regulators and licensed gambling operators, this creates the potential for fraud on numerous fronts:


To combat these threats, both regulators AND operators are increasingly relying on location intelligence solutions to accurately locate and verify transaction sources to ensure the utmost regulatory and financial compliance.

What is Location Intelligence?

Location Intelligence is the collection, verification, and analysis of a myriad of disparate location data sources to provide coherent and actionable insights for fraud and risk management.  A properly robust location intelligence solution includes 3 critical components:

  1. Multi-Source Data Gathering
    Geolocation signals are collected from multiple sources including WiFi, GPS, GSM, browsers, and IP addresses.
  2. Location Accuracy Verification
    Automated rules engines subject financial transactions to hundreds of data checks to detect suspicious actions, including VPN and proxy detection.
  3. Location Behavior Analyses
    Data models utilizing machine learning and human intelligence compare real-time and historical datasets to proactively flag patterns indicative of potential location fraud.

The net result is a multidisciplinary technology solution that strengthens existing fraud detection measures by quickly and accurately detecting and stopping attempts to spoof a transaction’s point of origin. In doing so, location intelligence tools work to detect suspicious behavior during customer onboarding, mitigate transactional fraud while reducing false positives, and prevent account fraud and identity theft takeovers.

To stay one step ahead of cybercriminals looking to spoof their locations, today’s gambling regulators and the operators within their licensee portfolio, are increasingly augmenting their existing KYC best practices with location intelligence tools to achieve improved customer verification and fraud detection results.

Enhanced Customer Verification Techniques

Dovetailing seamlessly within a highly robust and relatively non-invasive customer onboarding process, enhanced customer verification techniques may include the following:

  • Identity Verification: Compares personal details (name, address, DoB, SSN/SIN) against authoritative sources.
  • Email Verification: Validates email address authenticity.
  • Phone Number Verification: Authenticates personal details with mobile carriers, flagging numbers with a history of fraud.
  • KYC/AML Compliance: Facilitates real-time risk management including OFAC, PEP, HIO, criminal records, and sanction lists.
  • Fraud Prevention: Detects and prevents fraudulent activities such as bonus abuse, attempted account takeover, and identity theft.
  • Selfie and ID Verification: Automation triggers proactively authenticate high-risk customers with selfie photo and accompanying photo identification submittals.
  • Knowledge-Based Authentication (KBA): Only required in certain U.S. states, KBA verifies users with out-of-wallet questions gleaned from their official credit records.
  • Geometrics: Often used as an alternative to KBA, geometrics offers a faster solution that is more cost-effective with less friction than standard KBA processes.

The Benefits of Location Intelligence Augmenting Your KYC Processes

By pinpointing a bettors’ true location to within meters using accurate geolocation data, location intelligence tools help to facilitate a more robust risk management model yielding significant advantages for today’s gambling regulators and operators.

  • Age and ID verification pass rates improve by as much as 95% with data insights helping to identify areas of friction to reduce to improve the customer experience while reducing abandonment rates.
  • Geolocation authentication is ‘baked’ into the customer onboarding process across every gambling channel (sports-betting, casino, horseracing, lottery, etc.)
  • On-premises geofencing is utilized when operators need to confine betting transactions to a specific bricks-and-mortar venue or geographic location.
  • Proactive fraud detection facilitates hundreds of location data, device integrity, and identity fraud checks on every single transaction.
  • Geolocation integrated within your business intelligence tools provides detailed analysis AND actionable snapshots of your top fraud risks.

Location AND Business Intelligence a Powerful Combination

With regards to the integration of geolocation data and business intelligence, the casino industry has long been at the forefront of merging these two disciplines with organizations from Nevada to Ontario all leveraging the insights gleaned from geolocation data to optimize profitability across a diverse array of customer engagements, including:

  • Identification of the most loyal customers by profile, geography, VIP status, and more.
  • The optimization of loyalty member rewards by geography, gambling channel, and customer demographics.
  • Detection of untapped markets vs locations reaching market saturation.
  • Reducing promotional and advertising costs via improved geotargeting
  • Optimizing promotional and product offerings by analyzing historical geographic usage and profitability

As opposed to sifting through rows of data, gaming regulators can now utilize intuitive GIS map interfaces to achieve a visual interpretation of emerging risks AND opportunities. This leads to improvements in data quality as the ability to visualize such information allows inaccuracies or anomalies to be expediently identified and corrected.

Inevitably when the subject of location intelligence is raised, corresponding questions arise about the potential privacy issues involving such technologies. However, with businesses as diverse as streaming platforms, restaurant delivery apps, eBike rentals, and bricks-and-mortar casinos, all reliant on efficient geo-tracking to facilitate their respective service models, today’s modern consumer is increasingly willing to trade privacy for modern conveniences with suitable terms and conditions to match.

Location Intelligence Answers the Crucial Questions for Gambling Regulators

Given the broad capabilities of location intelligence, especially when used in conjunction with robust KYC processes, this rapidly evolving technology toolset is rapidly gaining widespread traction within the online gambling industry. Is it any wonder why when it can so effectively answer the questions uppermost on the minds of government gambling regulators and their licensed operators alike. 

  1. Can our jurisdiction consistently detect and prevent betting from out of state/province?
    Yes, the geo detection and geo fencing capabilities of location intelligence makes this detection consistently accurate and achievable.

  2. Are our control mechanisms sufficient to prevent fraud, money laundering, athlete wagering, and identity theft?
    Yes, by rapidly collecting, verifying, and analyzing thousands of datapoints across hundreds of geographic, demographic, and historic datasets, location intelligence facilitates a robust and responsive model to improve customer onboarding while simultaneously strengthening risk management and fraud detection protocols.

  3. Are we truly maximizing our jurisdictional data to modernize and optimize our gaming offerings?
    Yes, when used in conjunction with business intelligence and ad hoc reporting schemas, location intelligence has been proven as an effective model to improve customer experiences, lower operational costs, and streamline loyalty reward schemes and targeted product offerings.  

Next Steps

At the operator level, location intelligence solutions such as GeoComply and Radar are increasingly being dovetailed into the initial account registration process to ensure a comparative range of location sources and signals are gathered from the new registrant’s device to simultaneously authenticate the end user, their device(s), and any related financial transactions.

At the regulatory level, player location checks are typically enforced through a combination of regulatory requirements, licensing agreements, and compliance monitoring. However, a truly robust leveraging of location intelligence techniques by licensed operators is still very much a work-in-progress with recent advances in this rapidly evolving technology sure to impact regulatory requirements in the future as all parties strive to increase jurisdictional compliance while simultaneously reducing fraud.   

A sufficiently equipped Gaming Control Software platform is the firm foundation required to capitalize on the opportunities of the former while minimizing the risks of the latter.

To learn more about POSSE GCS, our streamlined regulatory and compliance solution for the government gaming enterprise, visit our POSSE Gaming Control Software page for more information OR contact us today to schedule a no-obligation demo.