DraftKings: Preventing Anti-Money Laundering with Data
DraftKings (NASDAQ: DKNG) is a customer-centric fantasy sports betting platform. They actively invest in technology to create a safe and secure gaming environment.
Recently, growth on their platform Monthly Unique Players (MUPs) has increased by 114% in their Q1 results which shows the strength that this new way of sports betting is becoming prominent in many people’s lives. Also in Q1, they’ve well-executed launches of their mobile sports betting platform in Michigan and Virginia which more specifically drove an incredible amount of user growth.
With all of these new customers, it becomes increasingly more difficult for fantasy sports gambling platforms to track their customers to authenticate their identity, but that’s why DraftKings has a different approach.
DraftKings has to enact anti-money laundering (AML) and Know Your Customer (KYC) procedures to monitor its users. These services need to be fast and easy for the customer, hence why DraftKings has implemented security to gain quick authentication using data-driven verification steps.
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First, DraftKings will acquire the customers’ names, ages, and the final four digits of their Social Security numbers. Once that process is complete, their system will turn to a KYC aggregator to validify the data by pulling credentials from several databases. Cross-referencing from multiple databases decreases the chance of a mistake since outdated or inaccurate information can be visible.
Compared to a few years ago, DraftKings was only using one supplier of data, this made their customers have to manually upload documents to fill in the gaps of information. It’s a painful process for many, and DraftKings knows that.
Hence, they now continuously use multiple verification vendors to authenticate customer data, which eases the process for both DraftKings and their users. The key is to continue to make more simple systems up-front for users, and more complicated security in the back-end.
Recognizing the Key Issues
DraftKings has witnessed sign-up actions from underage users, and fraudsters using other identity credentials. They combat these actions by setting up real-time alerts to recognize, flag, and prevent account creation. However, if there’s an instance where this becomes surpassed there are other security systems put in place.
If a user acts suspicious, such as placing a bet of a few dollars, then all of sudden placing a few thousand dollars on the next, that’s carefully monitored to ensure that there’s no addiction or unverified credentials from the user.
They have worked extremely hard to provide a rapid response to signs of misuse or abuse through AML and KYC processes, and have built an engaging platform for millions of their users.
The Key Takeaway
It’s become vastly complicated to get through these complicated procedures with unverifiable information on their fantasy sports platform due to DraftKings’ hard work. This will decrease the odds for them greatly of ever having to deal with large amounts of fraud on their platform. As online sports and fantasy sports betting becomes more prevalent, these extra steps are necessary to build a fun, safe, and secure platform for all users.
This is why over 5 million people have played on their platform, and that number is continuing to grow over time as more people become introduced to the world of fantasy sports. DraftKings has competitive advantages like no other when it comes to the underlying technology of their services, and the proactive protective measures in the back-end of their systems.
Overall, DraftKings is a phenomenal company that exceeds many people’s expectations because of what they strive to be. Enabling a platform where anyone can join, win big cash prizes, play against others at their skill level, and even play private contests between your friends. It’s clear DraftKings has a positive long-term objective.
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