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Cross-industry collaboration key to future of age verification

By - 15 April 2020

Ben Keirle, CEO of 1account Age Verification, discusses pertinent issues surrounding age verification and the need for all industries to come together and operate cross-vertically for the benefit of everyone.

Esports is one of the fastest-growing entertainment sectors in the world today and it’s growing even faster during the coronavirus lockdown. Many live video-gaming events have been cancelled during the crisis, but esports has an ability to shift seamlessly online where a captive, sport-starved audience awaits.

Despite missing its live audience, March’s Intel Extreme Masters (IEM) Katowice event set records, with more than one million viewing the final online.
On March 15, games platform Steam recorded an all-time record for concurrent users, with 20 million online and 6.2 million in-game. Meanwhile, Twitch downloads are going through the roof.

Amid all the challenges and uncertainty of the coronavirus crisis, this is esport’s moment to insert itself into mainstream consciousness. It’s time, too, for a stricken betting industry to maximise the sector’s potential during this sporting drought.

Times of uncertainty can also be a time for new opportunities and for the betting industry to prove it can adapt and provide new solutions to new demographics.

Esports is more than just gaming, it’s a subculture, with its own language, heroes and villains. In that sense, it is comparable to online poker in that operators need to build teams that are immersed in the culture of esports so they fully understand the needs of their audience.

This includes building new kinds of betting options and streaming services into your platform while exploring new solutions that appeal to a tech-savvy generation that grew up online.

But we also need to proceed with caution. For an industry that is facing increasing regulatory pressures from governments, embracing a pastime whose players and consumers are in many cases under 18 is problematic for obvious reasons.

So, will the aim of the industry be to drag esports betting kicking and screaming into the regulated sector?

Esports betting has been tainted by match-fixing and the “skin gambling” market, which was worth an estimated $5 billion in 2015, before Valve Corp, developer of Counter Strike: Global Offensive (CS: GO), moved to shut it down.

Skins are virtual designer weapons available in CS: GO with varying degrees of rarity, making some highly desirable to players. Interested in developing an in-game economy, Valve allowed skins to be traded on its Steam gaming platform.

But it was also possible to transfer skins to third-party websites, which helped these in-game items gain real-world value, facilitating the skin gambling industry that flew under the noses of regulators for many years. Esports betting was a huge focus of skin gambling, allowing internet users to place bets with no age verification checks whatsoever.

This is the betting industry’s opportunity to fight underage gambling and show that our KYC protocols are up to the job. To this end, it’s crucial that businesses can validate customer KYC data accurately and at scale.

A big age-verification challenge that operators may encounter is that a large portion of esports fans are students. Some 50 per cent of 18 to 30-year-olds are taking higher education courses, according to The Independent newspaper.

Meanwhile, operators validate around 80 per cent of their customers via data sources like the electoral roll and credit searches. But most of those living in student accommodation will not be registered to vote or to have applied for credit at their digs – they’re far more likely to be registered at their parents’ house, for example.

According to figures from Oxford University’s Migration Observatory, 9.3 million foreign-born people currently reside in the UK. So how do you identify these people, that aren’t registered to vote?

It’s crucial that this demographic can be identified confidently and in real-time, so that users don’t get bored of stalled verification and move on.

The average CPA for an operator can be in excess of £200 per customer, so if they are unable to open an account for 20 to 30 per cent of customers they’ve paid for, it’s a huge cost to a business.

In general, when looking for an age and identity provider, the more data sources they have at their disposal, the better. With 80 per cent of UK residents owning a contract phone, the ability to access this data can make a big difference or tapping into a data source that verifies a young person better.

It’s best to use a cascading system because some age-verification providers have a data source that others don’t have access to. If your automated check with Provider A fails, you can cascade to your next provider. Most of the automated companies work in real-time so there will be only a slight delay on the screen while you check another data source.
Taking this a step further, from providing verification service to multiple industry verticals — from vaping to kitchen knives and from adult-rated content to Viagra — we have observed patterns in the behaviours of those we are asked to verify.

Our research at 1account suggests that someone who buys alcohol or vaping refills online, for example, has a higher propensity to open a betting account. In this sense, it may be preferable for operators to use a provider that performs verification across different sectors.

Our research has led us to begin work on building what we hope will become the world’s largest user-base of age-verified consumers by storing their information after we validate it and even allowing a user to build on it to create a true online identity if they choose.

While it might have been difficult or expensive to verify a person the first time they needed to be checked, the subsequent time the same user’s information needs to be validated, the process can be performed quickly.

By operating cross-vertically, all industries essentially combine to create a user-base for the greater benefit of everyone.

Hopefully, this database will in the future include the esports sector and the video games industry, as we work to increase efficiency for gambling companies while protecting the underage during an anticipated esports betting boom.

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