New rules on online gambling and digital identity verification come into effect

The online gambling industry is a growing market: During Q4 of 2018, in Spain alone, the sector’s GGR (Gross Gaming revenue) was 189.46 million euros, up 10.74% compared to the same period of the previous year. Betting websites and online casinos take the lion’s share, 52.74% and 34.19% respectively.

What this data from the Dirección General de Ordenación del Juego (DGOJ – Directorate General for the Control of Gambling) clearly conveys, is that there is on the one hand a growing interest in this type of activity – in 2018 there were 27.31% more new users compared to 2017 – and on the other, greater economic possibilities, as the expenditure is also higher.

Like the vast majority of growing digital sectors, it attracts increasingly more users, but also more fraud and cyberattack attempts, which in turn entails a greater need for security and control over activity.

For this reason, the DGOJ has updated its regulations, whose amendments come into force on 1 April 2019. In addition to a more regular and effective control, it brings innovations that directly affect user identity verification and document authentication.

So, what does this regulation mean for digital identity verification?

1. Increased security and efficiency in checking identity and verifying user data


The DGOJ provides companies with a participant identity verification system, although they can opt for alternative systems or means of verification. In any case, the operator is responsible for the veracity of the data in their records, so companies will need fast, safe and reliable systems.

In this sense, relying solely on the DGOJ verification system can cover the security needs, but not user experience needs.

2. Supplementary Identity Verification Systems

Although the DGOJ system will be the only one that exempts the operator from liability in the event of an error, it also indicates that there may be a waiting time of up to three days due to incorrect operation of the system. This would imply both an economic loss and a loss in trust from the user, who wants immediacy above all.

Therefore, the best option remains to use systems that guarantee not only reliable user identity verification, but also speed and excellent usability.

3. Document authentication

An important aspect is that the operator must demand documentation that verifies that the user’s identity matches the identity data provided, in other words, that the user is who he or she claims to be. This document verification process is the sole responsibility of the operator, who must also establish additional controls to prevent and avoid fraudulent behaviour.

4. Identity verification, essential for authorising participation

According to the regulations, "users whose identity has not been validated by the DGOJ’s participant Identity Verification Service or by any other identity verification service, will not be able to participate, or make deposits or withdrawals". In the same way, they will not be able to carry out these actions if they have completed registration but the document validation has not been completed.

In addition, validation processes and waiting times may be longer for non-resident users in Spain.

What does this imply? If the user has to wait to carry out any action, they will have a bad experience, and most likely look for alternatives. The best option in light of this new regulation is to implement a digital identity verification and document authentication process that can be carried out once, quickly and intuitively for the user, but at the same time guaranteeing both identity validity and data security. These types of processes are already very common in financial services for onboarding processes, with which the online gambling sector has covered a lot of ground in order to adapt itself to the new regulations and at the same time improve the experience of its users.