Online gaming sites and providers of age-restricted casinos have quite a few new and legacy rules to comply with this year. Complying with the latest governmental rules and regulations is often a major challenge for online bookmakers and gambling websites. Gaming websites need to find a narrow middle ground in order to balance their corporate interests with governmental regulations. Too much security during the sign-up phase and customers are likely to look elsewhere for their needs. Too little security, however, and gaming sites and online casinos can fall foul of the law, or worse, be targeted by fraudsters. Age verification is now mandatory for gaming companies around the world. This article will discuss 7 compliance steps your gaming organization needs to know.
Each age verification solution must include a few aspects within their process to protect users and businesses including:
- Online identity verification
- ID document verification
- Storage of personally identifiable information (depending on industry and locale)
- Reporting of suspicious transactions or suspicious persons (again, industry dependent)
Online identity verification is important in nearly all industries to protect minors and businesses alike.
Top 8 Industries Where Age Verification is Required
- Online Gaming
- Sports Betting
- Alcohol (beer, wine, and spirits)
- Adult Entertainment
Now that you know which industries need age verification the most, let’s talk about some of the details and the who, what, and why you’ll need to know to become compliant with laws and regulations. If you want to choose a powerful age verification solution, they need to be versed in legal and regulatory compliance. Online identity verification should include robust compliance processes in order for your business to function within the guidelines of age verification regulations.
7 Compliance Steps You Need To Know
Properly verifying the age of your customers is now a prerequisite in managing risk and maintaining compliance with regulatory guidelines. Whether you are a financial institution, an online gaming company or sell age-restricted merchandise, you must verify the age of your potential customers.
Step 1: Understand Who, What, and Why Behind Age Verification
Who Is Responsible?
Any sports, casino, online gambling establishment, or age-restricted product vendor may now be regulated by laws and local ordinances relating to age-restricted commerce. Each age verification solution has a specific set of industries and clients to who they cater to. Make sure your online identity verification provider is well versed in your industry.
We’re going to delve into the following industries (but there are many, many more who are required to comply with regulations):
- Alcohol and tobacco
- Online Gaming
- Online Gambling
- Dating Services
Alcohol and Tobacco
Both alcohol and tobacco are strictly regulated on a global level. The FDA specifically prohibits the sale of cigarettes to minors. On top of this, the sale of alcohol is restricted in the US to individuals over the age of 21. For online retailers that sell alcohol and tobacco, being able to verify their customers accurately before purchase is extremely important. Due to the popularity of Amazon and Direct To Consumer (DTC) companies, online identity verification and age verification have become standard.
Children, adolescents and teens are all attracted to online gaming. If played excessively, they can develop problematic habits. Plus, in many online games, children have access to players of any age from all over the world. Children can easily fall for scams, be taken advantage of, experience offensive language or even bullying from uninhibited gaming interactions. For these reasons, many gaming companies should consider adding an age barrier to their game to ensure that the players on their platforms meet the required age to play.
In the US, online gambling is highly regulated. The same is true in other countries, such as the UK. Studies have shown that as many as 50,000 children under the age of 17 have used online gambling and developed a gambling problem. By verifying a user’s age before entry into an online gambling system, subsequently, gambling companies can help prevent children from being allowed to play. Platforms must do everything they to ensure that children remain out of their systems. Online identity verification is a major part of the onboarding process for new users looking to gamble online
Online pharmacies have popped up as a convenient and easy way for patients to receive their medication. Nevertheless, underage users with drug issues pose a major risk for online pharmacies. Pharmaceuticals are highly regulated and regulatory bodies do exist to manage the records from online pharmacies. Nevertheless, age verification is not standard among online pharmacies. Online identity verification may become the wave of the future as COVID has forced customers to work from home. It is critical for online pharmacies to implement age verification processes because they create safer business practices for online pharmacies and help build trust with regulatory bodies.
Online dating websites and apps are online services with very low barriers to entry. Both the minor and the adult users are at risk with underage use of dating apps. Underage dating is illegal in most places and can cause a lot of damage to the minor and the adult involved. Adults involved in such cases can face legal action that lasts their whole lives and minors can face trauma from potential underage assault and other disturbing problems. Dating apps must do their part to verify their user base with robust Identity Verification Services rather than just relying on social profile information.
What Is Required: Are You An Age Verification Solution or Carelessly Non-Compliant?
Ensuring smooth “in-game” loot purchases, seamless betting experiences for players in casinos or sports betting clubs, and protecting monitors from accessing age-restrictive content is now one of the most important objectives of regulatory organizations around the world.
Why Is Being Compliant For Age Verification Solutions Important?
Online identity verification is more important than ever before. For vendors that sell age-restricted products and services, it is of key importance to know the age of their customers. Today, customer-not-present transactions are commonplace. Millions of transactions happen every second whether they are age-restricted products or transactions involving rare loot in a game. Identity verification is now obligatory for age-restricted commerce vendors. Some examples of age-restricted industries include tobacco, vaping, online gaming, wine and spirits. These industries must actively work to keep out minors or risk huge fines may be at stake.
Step 2: Age Verification Protects Minors Now More Than Ever
When accessibility to age-restricted goods and services is in question, age verification is necessary to prevent minors from purchasing restricted products. But age verification works vice versa as well. Companies need to prevent adults from taking advantage of products only for those under 18’s or keep adults away from sites that are designed for children.
IDMERIT’s Age Verification solutions help businesses conduct more comprehensive identity verification to mitigate the risk of fraud.
Germany Enacting Stricter Rules To Protecting Minors
Germany is taking a strong stance to protect minors and to enforce age verification on online game manufacturers and those who handle the loot transactions inside these virtual worlds. “Another European country could soon place legal restrictions on video game loot boxes. As Der Spiegel and Eurogamer report, Germany’s Bundestag has passed a reformed Youth Protection Act that would limit loot boxes to games with an 18-plus age rating. The “gambling-like mechanisms” pose too many risks for kids, according to the law.”(Engadget)
Contact IDMERIT to learn about our age verification service and how you can protect your valuable brand.
Step 3: Know Your Identification Documents
Knowing your identity documents (ID cards, national IDs, birth certificates, Social Security cards, government documents, and licensure documents) and how to identify whether they are genuine or are synthetic/tampered/falsified is one of the most critical steps that any age verification service must perform. A reputable age verification service will have a set of standards revolving around how they handle, and independently verify, specific documents relating to age.
ID protection and fraud prevention are continually innovating as regulators and law enforcement authorities continuously face threats including:
- falsification by overprint
- adding a laser-engraved personalization
- simulating optical variable devices (OVD)
- grinding to access the core of a document
- high quality “intaglio printing” look-alike in fake passports
Many data types, fields, and attributes are included within biographical data or personally identifiable information (PII) but the most critical to age verification include:
- Date of birth
- Country of origin
- First, middle & last name
- Biometric data (fingerprint, facial geometry, iris or retina scan, or palm print)
If you have the information above, you can cross-reference it to validate the identity document you’ve received and verify whether the information is accurate to sell the age-restricted merchandise or product.
Why Synthetic Fraud is a Problem
Synthetic fraud is the fastest-growing form of identity theft according to the US Federal Trade Commission. They state that it is one of the hardest forms of identity theft for businesses to detect. An Equifax study found that losses associated with this fraud amounted to around $25 million a year for communications and energy companies. Other business sectors are facing around $800 million in costs associated with synthetic fraud.
Step 4: Age Verification: Online Identity Verification Process
A Robust online age verification solution must include strict Know Your Customer processes and identity document verification. Heavily regulated industries such as pharmaceuticals, tobacco, e-cigarettes, alcohol and video games must implement stringent age verification processes to protect themselves from being subpoenaed by the court. However, limited guidance on best compliance practices has added to the growing challenges for retailers and online gaming businesses. Your local age verification service may not have the most developed online identity verification process so it is important to ask plenty of detailed questions.
The online identity verification process includes:
- Receive the identity document from the customer
- Manually, or using fraud/tamper-detection software, verify whether the identification document is valid and from an independent source.
- Retrieve biometric data (such as through facial recognition, palm print, or fingerprint scans)
- Compare PII or biometric data (including most importantly Date of Birth) to one of IDMERIT’s 440+ global data sources and/or databases
- Provide age verification and/or match results in a secure, encrypted format (if simultaneously running a search with IDMaml or IDMkyc)
If your organization doesn’t follow a strict process or use a certified, and experienced, age verification service you may end up facing severe fines, penalties, and your business could be closed.
Step 5: Global Age Verification Regulations
If you are looking for an age verification solution, during your initial discussions check to ake sure that the organization or firm is familiar with the varying age verification regulations below. These are major compliance hurdles that can be met by your organization if it remains focused and chooses the right firm to ensure its age verification compliance. Age verification services usually have access to both local, municipal, and government data sources but may lack the crucial access to rare hard-to-acquire global sources. IDMERIT can get you access to even the most challenging age verification date sources.
Know Your Customer (KYC)
Every company must comply with KYC and AML to make sure ID and age verification is checked. Companies have a moral responsibility to uphold the laws imposed by regulatory authorities. Frictionless and reliable KYC procedures will help your company be compliant and protect your company’s reputation. Consequences of non-compliance are newsworthy and in everyday headlines in the media. The fines are very large, and the penalties are even stricter. The cost value of implementing ID verification from the start is more important than ever. Use IDMerit’s to protect your customers and your business.
IDMerit’s verification tools can offer instant age confirmation, which can ensure proper age usage of your services and products and facilitate legal transactions efficiently.
General Data Protection Regulation (GDPR)
General Data Protection Regulation (GDPR) establishes the minimum age of consent in many countries. The GDPR is used within the European Union and was enacted by the European Parliament. The EU’s GDPR Article 8 specifies the age of consent may fall between the ages of 13 and 16. The GDPR also provides guidelines on dealing with privacy including the collection, transmission, and use of personally identifiable information (PII) data.
An additional framework dealing with age verification within the EU is the P an-European Games Information (PEGI) is the age classification system for the gaming industry in Europe
Step 6: Understand The Risks of Lacking Age Verification Checks
If your organization lacks an age verification solution, you could be at severe risk for reputation damage if something goes wrong or a user you’ve onboarded commits some sort of crime, abuse, or falls foul of your community standards. This is common in online multiplayer games and is known as a “rage-quit” and may also occur in online forums. If you are running a casino or selling age-restricted products or content, users also need to be a specific age to purchase these products and if you knowingly sell to anyone underage in your jurisdiction, you could open your establishment, online casino, or gaming company up to huge fines.
Step 7: Avoid Costly Regulatory Fines
We just have to repeat that it can be extremely detrimental to organizations who disregard age-verification laws and regulations: it can destroy your business and cost you millions of dollars in fines.
A few of the most recent fines levied against casino, sports betting clubs & online gaming companies include:
- Horseshoe Casino fined $100,000 for repeatedly admitting underage patron (NWITimes)
- Cantor Gaming fined $22.5 million for poor compliance and adherence to AML regulations.
- The Dutch Gaming Authority, Kansspelautoriteit (KSA), has imposed a fine of €500,000 (£425,967.50) on Maltese-based company N1 Interactive Limited. (Gambling Insider)
Stay tuned to our Identity Insights blog for more content covering age verification for your online gaming website, sports betting club, or general news about age-restricted products.
YouTube Establishing Age Verification For Users
YouTube has begun to establish age verification procedures for its users. Despite its strict video and media content guidelines, there are many examples of content filtration running short of adequate. As with many online gaming websites, sports betting clubs, and casino websites, YouTube has had to comply with age verification solution requirements just as your organization may.
As your YouTube account is handled via the Google site, you may verify your age within Google’s platform with the following steps:
- Sign in to your Google Account privacy page on a computer.
- Click Personal info.
- Click Add Birthday.
- Verify your birthday and update if necessary.
- Click Save.
Whether you are looking for an age verification API or a full-featured online age verification solution, you need to follow the compliance steps above and understand the lay of the regulatory landscape going forward. Don’t be caught without a working-age verification solution (you could face serious penalties and lose your business license).
Regulatory Outlook for Age Restricted Commerce
Much as in the world of cryptocurrencies, manifesting a strong approach towards security and proper conduct enormously improves the end-user experience for companies. Furthermore, a well-managed and policed approach to security – of which proper age verification policy form an inexpensive and robust part, provides part of a protocol that allows a simple approach to change management. Identity verification platforms like IDMERIT provide a robust age verification module is perhaps the easiest security module to implement, is an additional bonus. This also removes the need to include them in regular security reviews, as they should be considered almost an automatic feature of any gaming site’s security protocols.
Fortunately, a KYC provider like IDMERIT offers robust age verification services for online businesses. Digital and automated identity verification is possible online. IDMscan allows businesses to validate their users by verifying their government-issued identity documents. From there, it uses a facial recognition scan to confirm the person using the identity verification solution matches the person on the identity document. IDMscan can verify users in real-time, making it a simple and effective part of an online age-restricted commerce platform.
IDMscan: Onboarding Honest Customers Faster
IDMscan is a key solution that is a part of the IDMERIT identity verification service ecosystem. It is an application that scans customer identity documents, such as passports, to validate and authenticate their identity.
- We can validate Passports, Drivers Licenses and National ids from 175+ countries.
- Biometric facial recognition & face liveliness technologies are used to produce a live match.
- Multi-Language support
- Easily integrate into your system with a simple API.
- Validate someone in less than 30 seconds
Contact one of our identity specialists to Schedule a Demo of IDMscan today.
Follow our LinkedIn and Facebook pages for anti-money laundering news and significant regulatory changes.
Headquartered in San Diego, California, IDMERIT provides an ecosystem of identity verification solutions designed to help its customers prevent fraud, meet regulatory compliance and deliver frictionless user experiences. The company is committed to the ongoing development and delivery of offerings that are more cost-effective and comprehensive than other solution providers. IDMERIT was funded by experts who have been sourcing data on personal and business identities across the globe for over a decade. This access to official and trusted data throughout the world has become increasingly important as companies find themselves completing transactions across borders as a standard course of business. www.idmerit.com