The importance of background checks in the gaming industry

The importance of background checks in the gaming industry

The rise in the smartphone users, cheap data, fantasy games and growth of digital infrastructure have led to an increased demand for online games. Consequently, the frauds in the gaming industry have witnessed an upward curve.

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Since its commercial birth almost five decades ago, gaming has become one of the most profitable industries in the world. Take Angry Birds, Farmville and Candy Crush, for example. From young children to grandparents — gaming has captivated all generations alike.

India is one of the top five countries for gaming in the world. As a host to more than 250 game development companies and 250 million gamers, this segment is predicted to generate revenues north of INR 11,900 crore, as per a joint report by KPMG and Indian Federation of Sports Gaming. The number of users in India is projected to become 628 million and worth $1 billion by 2021, as per a NASCOM report.

Smartphone-crazy gamers in India

The mobile gaming industry has soared in the past several years. Globally, the number of users downloading apps has doubled between 2017 to 2018. 40% of this growth comes from emerging markets such as India, according to Google.

The rise in smartphone adoption in India has run in parallel to the increase in mobile gaming. Game developers such as 99Games, Moon Frog, Mech Mocha, and PlaySimple are capitalizing on the growth of smartphone usage.

The mobile gaming market is growing with cheap data charges, mobile phone prices, frictionless payments, and localized content.

The exponential growth in the fantasy games segment

A gaming sector that has witnessed 7x growth since 2016 is fantasy sports. From 2 million users in 2016, the number of players for fantasy games has grown 25x to 50 million in number in 2018, according to the same KPMG report.

The users create teams of real players for various professional sports. These virtual teams compete against each other according to the performance of real players in the actual game.

Operators such as Dream11, HalaPay, My11Circle, BalleBaazi, and GamingMonk have the largest user base in the fantasy games sports segment.

Factors such as the clarity on the legality of fantasy sports, improved digital infrastructure, investor participation and a rise in the sports leagues contributed to the wide user adoption.

Fraud puts a damper on the fast-growing industry

Despite the impressive numbers, not all is hunky-dory in the world of gaming. A ThreatMetrix Gaming and Gambling Cybercrime report states that one in every 20 new account creations is fraudulent.

From small-time scammers to large criminal syndicates, the industry has become a prime target for fraudsters looking to monetize stolen credentials by:

  • Making fraudulent bets
  • Taking over existing accounts to steal account credits
  • Signing up for fraudulent new accounts for illegal activities

Prime Indian gaming companies such as Ace2Three, Dream11, and BalleBaazi have already started putting up proper infrastructure in place to mitigate fraudulent activities.

The popularity of micro-transactions and a seamless gaming experience allows gaming publishers to store payment information. This way, for the next purchase the payment data is available with just a click/tap. Gaming companies who possess payment details on their files are an easy target for hackers.

Additionally, scams and phishing attempts aimed directly at gamers to share their confidential data also lead to fraud.

The enormous potential of this being, 75% of mobile gamers and 50% of console and desktop gamers spend on an in-game purchase, as per an ACI Worldwide report.

There are still many gaming companies across the globe that have paid a heavy price for such frauds due to negligence. Here are the 3 examples:

Fighting the bad and correcting mistakes

1. Daub Alderney fails to protect data, pays hefty fine

Many UK gambling firms paid a fine of £19.6m in 2018 for failing to stop money laundering and protect problem gamblers. More than a third of the total amount (£7.1 million) was paid by Daub Alderney, an operator running multiple sites such as Kitty Bingo and Lucky Pants Bingo.

The fact that gamblers were allowed to gamble significant amounts of money within short time frames without any operator intervention compelled the Gambling Commission in the UK to fine Daub Alderney.

2. Gambling app manipulation lands father-son in jail

In 2018, a Mumbai-based father-and-son duo was arrested from their hideout in Gurugram for running online gambling websites that had a turnover of INR 200 crore. They manipulated a software that made sure the numbers on which the customers bet never won.

The police noticed the father-son duo after arresting nine people who were arrested for illegal online gambling bets based on the software created by them. The racket had spread across seven states and 15 countries. The father-son duo is now in jail.

3. Malicious actors in Fortnite try to steal info from young players

Fortnite is the biggest name in the gaming world and has a proud parade of young fans. However, that has caught the attention of scammers who try to steal information and money from them. Strings of scams have been unraveled to trick children into revealing sensitive information about themselves and their parents.

Though the scams are age-old, Fortnite came under the radar once again in 2018 due to a spike in reported cases. The video gaming company urged parents to be vigilant and to keep an eye on what their children are doing online.

Conclusion

With more than 100 new online game developers to enter the gaming market in the next five years and an increase in localized games, the Indian gaming ecosystem is on the rise. The addiction levels are only going to grow, and fraudsters and scammers are not going anywhere.

To combat this, gaming companies have started using fraud detection solutions that can authenticate a user in real-time. With SpringVerify, you can verify the identities of the people involved. The KYC details can be checked to build customer profiles.

The right identity verification systems protect online gaming operators from the growing number of frauds and online scams. The reason being, they have more information about the users. The extra layer of protection means that companies can check and verify details about a customer before they gamble and not after. A strong verification process leads to creating a safer environment for gamers and to combat gaming-related harm.


About SpringVerify

SpringVerify is the modern take on the age-old problem of employee verification being costly, tedious, and out of reach of small businesses. We are trying to build a platform where the employee verification process happens seamlessly and with minimal effort required from both the company and the employee.

We believe that employee verification is a must for any business. It is a critical process in ensuring that every employee working with you is faithful and could be trusted. CareerBuilder survey shows that a company stands to lose on average $17000 on a wrong hire. Read more here.

We have built the platform with blockchain and believe that it will change virtually everything it comes in contact with. Blockchain helps us in building a decentralized system which keeps all our data secure and immutable. Read more here.

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