Many sports companies are transforming their gaming platforms to ensure enhanced security for their existing players and attract new ones. Moreover, these platforms have experienced significant user traffic during the COVID-19 pandemic. In addition, the generated revenue from the online gaming market is approximately $26.14 billion, an increase of 9.8% from the previous year.
With the increased traffic on online gaming platforms, player ID verification is necessary to restrict scammers from breaching the player’s information. For this reason, regulatory authorities have forced sports companies to implement to ensure a secure experience for gamers. Thus, these companies can combat fraud by implementing instant gaming verification procedures.
A Quick Overview of the Digital Gaming Industry and Financial Crimes
The cutting-edge gamer’s identity verification solution helps the sports industry fight fraud risks on their platforms. It allows gaming service providers to provide a secure gaming experience for players and safeguard their essential information.
A major factor that supports money laundering and identity theft is the availability of in-game items that have real-life value outside the gaming platform. This comprises certain artifacts that provide additional powers to avatars (e.g., magic potions) or currency that can be used to buy these bonuses.
Microtransactions & the Rise of Fraud
In addition, some games enable players to buy and sell in-game products using government-issued currency or with cryptocurrencies. This approach is called microtransactions. This feature is especially common in freely available games that have paid-in-game services. For instance, Second Life and Entropia Universe have official online stores that facilitate in-game purchases. Moreover, several games implement gambling-style microtransactions by offering loot boxes.
Unfortunately, there are no clear standards for the conduct of gaming service providers regarding dealing with criminal behavior. This is because esports is not properly regulated in various regions. In this way, some service providers may feel motivated to use unlawful income for their purposes. This is where instant gaming verification is important to discourage criminal activities.
Sixgill & The Cases of Money Laundering
Sixgill, a cyber security agency, published research on money laundering with the help of V-bucks. As per the survey, money launderers purchased V-bucks from the Fortnite store with stolen credit/debit cards, offering them at a discount to other players on the dark web.
Likewise, other financial crime reports highlighted that organized crime groups automated using stolen card details to create a large dataset of fake IDs. The purpose behind purchasing in-game items was to resell them on third-party websites.
In this way, buying special products with stolen card data is like purchasing real-life goods. This is where the payment service providers are responsible for highlighting and deterring fraudulent activity. Gaming frauds verification services can facilitate authorities in exposing criminal networks.
BSP Warns Genuine Players about Fraud Cases
The Central Bank of the Philippines (BoP) has issued a public warning about the rising cases of financial fraud in the gaming industry, especially in play-to-earn online games. All financial organizations have highlighted such types of service providers as high-risk entities. They facilitate criminals in carrying out money laundering and other monetary crimes.
According to the reports, the Bangko Sentral ng Pilipinas (BSP) warns players about fraud cases because the digital space offers a wider playing field for cybercriminals to accomplish their malicious goals.
The central bank authorities have also said that such platforms are popular among the locals, even though they are non-compliant with regulations. On online platforms, digital token transactions provide anonymity and do not come under global regulatory standards. Such incidents show the significance of executing instant gaming verification services for fraud prevention.
Understanding the Significance of Global Regulations for Instant Gaming Verification
The online gaming industry has been under a negative influence because of financial crimes, such as money laundering and terrorism financing. For this reason, the sector must opt for instant gaming verification solutions under a regulatory obligation. The purpose is to secure the service providers against external attacks.
The standards for gaming service providers are similar to virtual currency exchange. Digital currency transactions, unlike esports enterprises, must follow Anti-Money Laundering/Counter-Terrorist Financing (AML/CTF) guidelines. Moreover, the latest recommendation of the Financial Action Task Force (FATF) requires online gaming platforms to comply with these regulations, helping them to keep scammers at bay.
Corporations under supervision must ensure customer ID verification, observe their activities, and report any suspicious behaviors to authorities immediately. Utilizing instant gaming verification services can help companies in showing compliance with regulatory standards.
Mitigating the rising financial cases in the online gaming industry is important to ensure the safety of genuine players. Prevailing criminal activities damages businesses’ market reputation and decreases the annual profit. Artificial Intelligence (AI) and Machine Learning (ML) models integrated with instant gaming verification services and AML screening systems help service providers fight ID theft, money laundering, and terrorism financing cases.
Moreover, by ensuring gaming compliance, digital service providers can easily monitor gamers’ behavioral patterns, identify cheaters, and prevent perpetrators from exploiting the systems. Thereupon, the only efficient way of dealing with fraud is the application of instant gaming verification solutions.