Digital identity verification technology provider Socure already made a name for itself in the financial services world before turning its attention to gaming, and its founder and CEO says its experience makes the crossover a natural fit.
Johnny Ayers spoke with Gaming America on the same April day the New York City-based company signed a multi-year deal with DraftKings, Inc., to help the operator meet compliance standards.
DraftKings said it will use Socure’s Intelligent KYC and Global Watchlist with Monitoring products to assist in its customer verification processes across its daily fantasy sports, sportsbook and online gaming offerings.
Ayers said Socure’s platform draws from many data sources, including proprietary data with over 290 million good identities, and more than seven billion records from credit, utility and telecom.
The partnership with DraftKings was a stamp of approval in online gaming, Ayers said, and noted financial services is a heavily regulated industry where fraud and money laundering are major problems.
“We've been successful in financial services, for nearly nine years,” he says. “We work with many of the top banks, and Wells Fargo and Citi are among our investors.”
West Virginia's MVB Bank, another Socure investor, banks many companies in online gaming. Ayers said its CEO was instrumental introducing Socure and its services to the burgeoning market.
“Fraud control and anti-money laundering are important in both industries, especially given the change from in-person sports betting to online registration,” Ayers said. “As platforms such as DraftKings grow, they look like a tier 1 bank in the number of accounts they are opening. Know Your Customer is very important to us.”
Socure is excited about partnering with online gaming and sports betting companies, Ayers continued, adding the company expects to announce more partnerships soon.
“As you see technology on contactless payments advance, a lot of the land-based operators come to us to verify identity for customers setting up digital wallets,” he explained. “Contactless payments are moving quickly in casinos. That requires ID verification and age verification, just like online gaming.”
According to Ayers, fraud is a balloon – you push one side and it expands somewhere else. There've been regular data breaches, so Ayers said it’s an important time to use identify verification services. The company is tapping machine learning to identify a person’s identity with the best available accuracy.
“It is a strategic competitive advantage for operators if they have super accurate verification models so they can give a seamless customer service experience for the good customers,” he said.
Theoretically, an operator could stop all bad actors by manually reviewing every file, but that would be a terrible customer service experience, Ayers added. “You have to be automated, seamless and accurate, all in a few seconds,” he noted. “We will be helping DraftKings push the envelope on how they service their customers in all the states in which they operate.”
According to Ayers, the regulations in the states that have legalized sports betting are similar, and companies tend to read the regulations their own way, but for the most part, the rules are very similar with a few unique wrinkles. “New Jersey did a lot of leading in setting standards,” he says. “The biggest factor to watch out for is some states allow users to be 18 versus 21 for fantasy sports versus gambling.”The message from Socure to potential clients is that they aim to verify 100% of good identities while identifying all fraud. Heavy analytics are key to accomplish this lofty goal. “As we add peers to DraftKings, it allows us to serve [them] better. The more Socure scales, the smarter we get.” The ability to verify identities of 5% more people can be seen as 5% growth, and millions in profit, all without increasing risk, Ayers said. Gaming operators are fighting to be first to run in all states with legalizing sports wagering and online casino games, but they need assistance.