The European Union’s digital identity initiative is set to transform the landscape of online gambling, with all eyes on major implications for operators. In a regulatory shift, the EU’s proposed European Digital Identity (EUDI) framework will require gambling companies to verify customer identities using the EU’s digital ID system. The measure, aimed at enhancing trust and security across online services, places the gambling sector in the spotlight as operators adapt to heightened regulatory scrutiny.

The move is part of the EU’s effort to combat money laundering and financial crimes, industries where gambling services are frequently targeted. As outlined in a recent report from Payment Expert, a key question posed to industry leaders – Charlotta Shelbourg, director of product at Kindred, and Peter Murray, director of strategy for betting and gaming at Mitek Systems — was whether the EUDI framework presents a significant opportunity for gaming operators.

Both agreed that this identity-based system could change the sector for the better. Since the framework is designed to centralize identity verification, it is expected to help operators streamline the traditionally slow and cumbersome onboarding process. Murray notes that, despite technological advancements, onboarding has remained relatively stagnant. However, he emphasizes that this framework could be a “fundamental game changer,” speeding up processes and improving customer experiences.

Parallels with Australia’s regulatory landscape

These developments mirror Australia’s recent changes to customer identification obligations for online gambling providers, enforced by AUSTRAC (Australia’s financial crime regulator). In September 2024, AUSTRAC implemented stricter guidelines mandating online gambling platforms to verify customers before allowing them to gamble or withdraw funds.

The changes are intended to protect users from fraud and ensure operators can, ultimately, identify criminal activities. The global shift toward more robust KYC and AML requirements highlights an increasingly interconnected regulatory environment, with digital ID systems playing a central role.

Aside from online payments, facial recognition has also been deployed to gambling kiosks in Australia by Konami Gaming.

Biometric technology driving payment evolution

Generally, biometric verification is becoming a critical component of the regulatory landscape. Minimum Deposit Casinos (MDC) recently highlighted how biometric payment tools are gaining ground in the online gambling and payments industries.

MDC’s report on biometric payment technology in 2024 indicates that advancements are expected to reduce friction in the customer experience while meeting regulatory requirements. As gambling operators are pushed to adopt stronger identity verification protocols through the EU’s digital ID initiative, biometric payments will likely play a crucial role in their compliance strategies, as MDC highlights that regulated online casinos are readily adopting these tools.

“This is without a doubt a next-generation experience. With a simple glance or touch, players can easily verify their identity when making deposits and withdrawals. This magnifies convenience for players by eliminating cumbersome steps and long waiting periods – truly pushing the boundaries of what’s possible,” says Miranda Raaff, head of iGaming information at MDC.

As biometric technology and digital IDs continue to transform the online gambling and payments landscape, the race to enhance security while minimizing user friction will continue to be monitored and implemented accordingly.

Article Topics

AML  |  Australia  |  biometrics  |  digital wallets  |  EU  |  EU Digital Identity Wallet  |  gambling  |  identity verification  |  KYC