The online gambling market in the US is growing fast, and that means that it needs even more attention and regulation than ever. It’s only natural that players want to feel safe and know if the sites they are accessing are legal. Also, regulators want to ensure that those sites follow the industry standards and rules.
While this sounds like a challenging job, RegTech (Regulatory Technology) can tackle all of it. This new type of technology helps gambling sites follow the law, protect their users, and earn trust. If you ever wondered how a website knows your age or location, RegTech should be your answer.
As this is a very intriguing topic, our article will explain how RegTech is helping the ever-evolving gambling industry. It will show you the means it uses to ensure betting platforms follow rules and protect users, in order to be legal, safe, and trustworthy.
What is RegTech?
As you can see, RegTech is short for Regulatory Technology, which refers to using new technologies to help casino businesses meet legal and regulatory requirements. Of course, they meet these aspects, but with the help of the new tech, they can do it more efficiently.
It all started in 2008, after the global financial crisis, responding to the need for better compliance management.
Since then, RegTech has quickly evolved, using innovative tools such as:
- machine learning
- natural language processing
- blockchain
- AI
All these technologies can improve the way casinos in the US handle regulations, making processes faster, more accurate, and also cost-effective.
The new technology covers several solutions that can help organizations keep up with the increasing regulations and avoid compliance issues that can cost a lot. RegTech’s value is recognized globally. In 2022, the global RegTech market was valued at $9 billion and is expected to grow to $66.9 billion by 2032, with an annual growth rate (CAGR) of 22.6%, according to the RegTech market report by Allied Market Research.
Why Should the Gambling Industry Care?
RegTech was created in the financial sector after the 2008 crisis, so it has found its target audience in industries where compliance is non-negotiable.
Rules differ from one state to another in online gambling, and so fraud risks are much higher. Yet, RegT4ch can be a real game-changer for these sectors. This technology can automate vital checks, ensure real-time monitoring, and offer smarter and faster tools than traditional methods.
How RegTech Addreses Main Compliance Needs?
Online gambling platforms face several compliance challenges, and RegTech solutions are designed to address them. The main areas in which this new technology can make a difference are explained below.
Age Verification
Any gambling platform’s main responsibility is to ensure that only legal-age users can register an account and play. For this reason, RegTech uses innovative tools such as biometric data, document scanning, and AI to check the user’s identity in seconds. With its help, the user experience does not slow down at all.
Geolocation
In the US, online gambling is legal only in a few states. So it is all limited to specific areas. Now, RegTech ensures that users can’t access platforms or use free bonus no deposit, where they’re not legally allowed to gamble.
It uses different tools like GPS, Wi-Fi signals, and device information to block access if someone is in the wrong state. These tools are really important as each state has its own set of rules and users must be aware of them.
Anti-Money Laundering
Casinos have always been a target for people who try to hide illegal money. However, nowadays, most online gambling sites use RegTech to watch for suspicious activity.
This technology monitors transactions as they happen and highlights anything that seems unusual. It also reports this activity to the competent authorities automatically. With features like these, casino sites can follow the law and stop criminals from abusing the system.
Regulatory Intelligence & Change Management
It’s true that laws and regulations are constantly changing, especially in different states in the US and European countries. For some, it is hard to keep up with all the shifts. However, RegTech helps by using advanced language technology to read and understand legal updates. Tense tools can automatically update a company’s rules and procedures to stay compliant.
All platforms that manage risk and compliance make this process even easier by helping casinos match their policies with the latest legal requirements. This helps them stay on track regardless of where they operate.
How Does AI Help Gambling Companies Follow the Rules?
While RegTech has its role, AI and automation also transform the gambling industry, helping operators comply with the laws. There is a large number of players who try online gambling, so new laws come up all the time, in order to protect them.
With the frequent introduction of new laws, it’s getting harder for companies to keep up with all the changes. This is where AI truly helps. IT makes it all easier by spotting problems early on and can handle a large amount of data quickly, assisting operators to stay current.
Spotting Patterns in Gambling Behaviour
AI can observe how people place bets and find unusual patterns. For instance, if someone suddenly starts betting a lot more than usual or changes their habits in a particular way, the system will alarm them. The technology can help companies catch signs of problems, such as gambling or possible cheating, before they get out of hand.
Catching Fraud Early
There are AI tools that use machine learning models that can identify suspicious activity across all user accounts. AI can flag unusual behaviour with high precision, and will observe things like:
- peer-to-peer games
- identity fraud
- the use of bots.
These early warning systems can reduce response times and help operators take action before any regulatory breaches or financial losses occur.
Predicting Risky Behavior
AI tools are also important as they can help casino operators predict which users might break the rules in the future. It observed player behavior, transaction history, and location to create risk profiles. These tools can improve the efficiency and outcomes of monitoring results.
Observing Player Communication with Language Technology
Natural Language Processing (NLP) programs can scan player messages in chats, forums, and customer service interactions. With this approach, the operators can spot abusive language and cheating attempts or groups working together to take unfair advantage. This scan will help them make the gaming space safer and more honest for all players.
Keeping Up With the Laws
As already mentioned, gambling laws change often, so generative AI intervenes. It can read legal updates and transform them into clear summaries so operators understand what to do. The people in their teams don’t even need to read every document themselves, as AI makes it easier and faster to stay compliant.
These tools also gaming platforms to prevent problems and not react to them. As rules become more complex, operators will need AI tools to stay legal and run smoothly on time.
Building Trust Through RegTech
There’s enough evidence to prove that RegTech helps build trust in the gambling industry by making everything more open and accountable. It gives both operators and regulators better tools to follow and enforce rules.
Companies can show their seriousness through RegTech by easily stopping fraud, keeping underage users out, and preventing illegal activities. These tools can check player identities, track their location, and monitor suspicious activities—all in real time.
This new technology helps operator protect their reputation. It reduces the chances of breaking the rules and helps them respond quickly if something goes wrong. Fast replies are really important in an industry where public trust is essential.
Most importantly, RegTech helps close the trust gap between gambling companies and US players. When people see that a platform is safe, monitored, and follows the law, they’re more likely to trust it and feel comfortable playing on it.
What’s Next for RegTech and Online Gambling?
RegTech is not about just following today’s rules. It’s actually growing and changing, just like all the laws do. Tools like AI are helping predict what rules might come next, spot signs of problem gambling, and even step in to help players in real time. Blockchain technology is making it easier to see and track bets and money transfers, adding more trust to the system.
At the same time, gambling companies, regulators, and tech providers are working together more closely to build more innovative, fairer systems.
Conclusion
RegTech is really helping the online gambling industry balance creativity with compliance with rules. All the tools we discussed above play a big part in helping betting companies follow the law and protect users. The new technologies surely help users trust their betting companies more, as the environments are much safer and fairer.
