The online gambling market has been severely affected by the health crisis
Like many other industries, the online gaming industry has not been exempted from the consequences of the Covid-19 pandemic. The abrupt end of the European sports competitions has hit online bettors hard, causing an unprecedented activity drop.
“For sports betting, it is an absolute disaster: turnover has fallen by over 90%,” explains Emmanuel de Rohan Chabot, president of the Ze Bet operator.
Then, at the end of 2020, the reverse effect takes place: the market is really growing. “Hard games”, such as casinos or even physical betting sites, have been hit hard by the health crisis, boosting the online gaming market. As the Covid-19 epidemic has also accelerated the digitization of gaming practices, it shows the historical performance of this market. Both the players number and the average spending are increasing.
2021, a new milestone for online gaming operators
Despite of the market growth, 2021 also shows its own set of challenges for the online gaming sector: restrictions related to the pandemic, code of conduct project on data protection or even tightening-up the AML/CFT regulations in some countries. Players of sports betting and online games have to be prepared.
The European Football Cup, scheduled for next June, is a long-awaited opportunity to compensate the losses from the first lockdown and to maintain the dynamic of the market. According to a study carried out by the EGBA (European Gaming and Betting Association) in partnership with H2 Gambling, gross online gambling revenues are expected to increase by about 7% per year and reach 33.6% of the total online gambling in Europe until 2025. Thai is an important turning point and it does not have to be missed.
What are the challenges of the online gambling market?
First major challenge: customer experience
In order to face the competition and get their cards right, operators will have to provide easy-to-use experiences for customers, in line with today’s practices. Users now have higher expectations from the digital technology, as they are expecting instant results, intuitive pathways and quick and easy use. An experience that is considered too long or too complex can discourage users, sometimes even leading them to abandon the account creation process.
The EGBA study revealed an interesting fact about the terminals that are used for online betting. The personal computer that is now still being used by the bettors will be overcome by the smartphone. Indeed, gambling and mobile betting will reach 50.8% of revenues in Europe by 2022. And this trend is expected to be maintained in the coming years, reaching 58.2% in 2025.
Operators will therefore have to think about their offer in an environment adapted to smartphone uses and mobility situations.
Another major issue for the online gaming sector: the regulatory compliance
Online gaming operators are subject to draconic control standards and measures defined by national regulatory authorities. The gambling market in the Member States of the European Union is also regulated by the AML/CFT Directive on the prevention of money laundering and terrorist financing. And, at the same time, more and more countries tighten-up the regulations regarding this respect, such as the Netherlands and Germany.
Money laundering, impersonation, theft of the means of payment, fraud… The gambling sector is exposed to many types of crimes. The LexisNexis Risk Solutions Report highlights that this sector is one of the most vulnerable to money laundering. In total, 1.8 million customer accounts were closed in 2020 due to fraud, illegal financial activities or lack of integrity.
In addition to financial crime regulations, there is another major challenge: users’ age verification. The law provides that only an adult can participate in gambling. Remote check of the customer’s age then becomes a real necessity in order to avoid financial penalties.
Automatic identity verification to meet the challenges of the online gambling market
In order to deal with these challenges, online gaming operators have to integrate reliable and comprehensive Know Yoru Customer (KYC) processes in their user onboarding. These pathways have to be designed for both the customer experience point of view and security aspect.
First, the operator has to collect all personal information by creating a customer account. Once the data has been collected, the user has to provide a RIB and has to prove his/her identity by sending a genuine and valid identity document (Identity Card, Passport or Driver’s License).
Now we get to the moment when the automatic identity check plays a critical role. By integrating a digital and automatic process, the player’s identity document is verified in real time, providing a verdict regarding the document authenticity in just a few seconds. No more waiting time and e-mails prolonging the opening process – the process is accelerated and simplified.
Then comes the last step of the KYC process, which certifies that the user is the one he/she claims to be behind his screen. The latter has to make a selfie or to take a short video, allowing facial recognition to corelate the capture with the identity document photograph. This process helps the online gaming operator to be sure that the person who opens the account is who he/she pretends to be and it allows him to respect the various regulations. All this provides a comfortable and pleasant account opening experience.