Table of Contents
Intro
In a world where sports betting peer-to-peer exchanges thrived in Europe and beyond, Americans remained bystanders—until 2022. That’s when Prophet Exchange (PE) launched the first regulated peer-to-peer betting exchange in the U.S., starting in New Jersey. With a goal of democratizing betting across America, PE offers a free app that enables users nationwide to explore betting lines and learn about peer-to-peer exchanges without spending a dime.
The regulatory landscape is evolving!
As PE embarked on introducing its peer-to-peer exchange platform, they navigated the complex U.S. gambling laws and the new, enhanced Know Your Customer (KYC) requirements aimed at accurate patron verification. The push for these enhanced KYC measures was sparked by 2022’s data breaches, impacting 422 million Americans, with notable repercussions in New Jersey. The iGaming industry also saw a 26% rise in new-account fraud, underscoring the urgent need for robust verification. New Jersey, where PE operates, was quick to respond, becoming one of the first states to enforce these requirements, showcasing a commitment to maintain online gambling integrity.
KBA: Security & usability took a hit!
When Knowledge-Based Authentication (KBA) was the sole option for enhanced KYC, PE faced major challenges. KBA was causing longer waits for their new users and more of them were giving up before finishing their sign-up. Many were caught in the frustrating loop of trying to recall answers to personal security questions. This issue hindered the growth of PE’s user base, a challenge PE could not overcome independently. Moreover, the reliance on KBA presented security vulnerabilities, as the personal data used for authentication could easily be accessed by fraudsters, given its widespread availability online. This situation underscored a dilemma: how to balance regulatory compliance with the imperative for a streamlined, secure user experience.
Recognizing these needs, PE proactively sought to enhance its KYC framework by partnering with GeoComply. This alliance signifies a thoughtful approach to addressing the nuanced challenges posed by KBA, marrying regulatory compliance with innovative solutions aimed at reducing user friction, decreasing abandonment rates, and bolstering security against fraud.
Unlocking Success: Partnering with GeoComply
GeoComply equipped PE with Core for Authentication (CfA), an extension of IDComply, offering near-instant user authentication as a more efficient KBA alternative. Utilizing billions of historical gaming transactions, CfA helped PE to successfully prevent sign-ups from sanctioned or fraud-flagged zones and detect fraudulent devices, locations, and users. Featuring more than 820 checks, including robust phone identity verification, CfA distinguishes itself as an essential authentication solution, offering strong fraud detection capabilities beyond what other market solutions provide.
Unprecedented results
Drawing on a decade of experience in the iGaming industry, GeoComply collaborated with PE to conduct an in-depth analysis of the KYC waterfall. The goal was to address false negatives concerning genuine players and enhance the onboarding experience. The strategic integration of CfA at the forefront of the funnel played a pivotal role in protecting PE’s resources from fraudsters. This integration ensured adherence to evolving regulations, minimizing the need for maintenance from PE’s team.
As a result of this integration, PE’s pass rate has increased by 50% over the KBA pass rate, and the authentication completion time improved by a staggering 20-fold. Remarkably, the integration was finalized within a matter of days, a significant improvement from the weeks needed for KBA. This accelerated implementation empowered Prophet Exchange to realize a substantial return on investment, manifested in broader player funnels and increased acceptance of legitimate users, while significantly curbing fraud.
The integration of CfA marked a significant leap forward in addressing the challenges faced by Prophet Exchange, ensuring a streamlined experience for legitimate users while keeping fraudulent activities at bay in the highly regulated landscape of sports wagering.
Jake Benzaquen, Co-Founder of Prophet Exchange, reported that the integration proceeded without a hitch, specifically pointing out its effectiveness in authenticating younger demographics, who often have thin credit files—a task that can prove difficult with KBA.
“CfA offers a blend of ideal player UX and security.
The Future: Pioneering Innovation in Sports Betting
Prophet Exchange is driven by a vision to transform the sports betting landscape in the U.S., with aspirations for expansion across states and advancements in cutting-edge technology. Initiatives such as enhanced liquidity, smart-wallet technology, and ventures into in-play betting underscore their commitment to innovation. The partnership between Prophet Exchange and GeoComply transcends mere problem-solving; it embodies a narrative of innovation, resilience, and an unwavering dedication to providing users with an unparalleled sports betting experience, all while ensuring compliance standards.
To learn more about Core for Authentication (CfA) and its ability to enhance your player funnel and prevent fraud early in the user journey, click here.
