The gaming industry is experiencing remarkable growth, with projections indicating the global gaming market could reach $321 billion by 2026 across established categories such as sports betting, iGaming, DFS, and fantasy gaming and emergent categories that include social gaming, skill-based games, and online sweepstakes. With this growth comes mounting challenges for gaming operators: enforcing geographic compliance, preventing sophisticated fraud, and navigating complex regulatory requirements across multiple jurisdictions.
Geolocation services play a pivotal role in addressing these challenges by verifying user location in real-time, ensuring compliance with regional regulations, and enhancing security measures to prevent fraud. We’re sharing proven geolocation best practices to help protect your business operations and reputation.
Why geolocation compliance for gaming has never been more critical
National and local regulations govern online gaming operations around the world, with a range of compliance requirements within each jurisdiction. At the federal level in the United States, the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 prohibits businesses from knowingly accepting payments related to illegal online gambling, placing a strong emphasis on geolocation compliance to prevent cross-border betting violations. The Wire Act further restricts interstate gambling transactions, requiring gaming operators to confirm users are physically present in permitted regions before allowing them to place bets.
State-level regulations add another layer of complexity. Online gaming is regulated jurisdiction-by-jurisdiction, with laws varying significantly across states. Some states like New Jersey, Pennsylvania, and Michigan have established robust iGaming and online sports betting markets with strict geolocation verification requirements, while others prohibit certain forms of online gambling altogether. Canada has similar province-by-province restrictions, such as those already in place in Ontario and being newly instituted in Alberta.
Internationally, frameworks like the UK Gambling Act and EU Anti-Money Laundering Directive impose strict location verification requirements. Emerging markets add new challenges and opportunities. Brazil’s regulated iGaming market, launched in 2024, mandates that operators use geolocation services to verify player location and block access from unauthorized areas. Likewise, the UAE, Sweden and Italy have implemented their own strict geographic compliance mandates for online gaming. Other regions in Latin America, Africa, and Asia are developing new gaming regulation frameworks, requiring adaptable solutions that can meet evolving jurisdictional requirements.
Additional factors impacting geolocation compliance for gaming include:
- The distinction between gambling and skill-based gaming creates further compliance complexity. Even operators of skill-based gaming platforms often decide to adopt the same geolocation measures as gambling operators to avoid potential legal gray areas and ensure regulatory alignment.
- Payment processors such as Visa, Mastercard, and major digital wallets frequently impose their own geolocation requirements regardless of local regulations. Out of an abundance of caution and risk mitigation, payment providers may mandate strict geolocation verification to prevent unauthorized transactions, chargebacks, and compliance breaches.
Why single-layer solutions fail against modern fraud
Effective geolocation compliance for gaming requires far more than basic IP address checking. Fraudulent actors often employ sophisticated techniques including VPNs, proxies, or spoofing to circumvent geographic restrictions. A single verification method simply isn’t enough.
Consider these common scenarios:
- A bettor in California (where online sports betting is illegal) might use a VPN to appear as though they’re in New Jersey to place wagers
- A player in Europe might attempt to access a Brazilian gaming site using a local proxy.
Today’s most sophisticated fraud attempts combine multiple deception techniques simultaneously. This is why leading gaming operators are implementing multi-layered geolocation best practices to defend against fraud. Locance’s geolocation solutions encompass advanced technologies that include five layers of recommended defense.
The five-layer defense strategy
The most effective geolocation compliance for gaming combines five distinct verification methods:
1. IP Location Intelligence
Our IP intelligence services go beyond basic geographic identification by analyzing connection details to identify VPNs, proxy servers, and anonymizers. We provide coverage for over 99.9999% of all active IP addresses worldwide. Still, sophisticated fraudsters can circumvent IP-only solutions without additional measures in place.
2. Browser and App-Based Location Services
This technology retrieves real-time location data directly from device operating systems that may use GPS, Wi-Fi, cell towers, and platform-based location technologies. This solution requires user consent as it provides significantly higher accuracy than IP location. A well-designed, geolocation compliance solution applies a privacy-by-design approach to minimize the risk of exposing sensitive data and maximize end user privacy and security.
3. Device Profiling and Anti-Spoofing
Device profiling technology analyzes device-specific attributes and behavioral patterns to identify irregularities indicating location spoofing, unauthorized account sharing, or bot-driven gameplay. The solution creates persistent device fingerprints to track suspicious activity across sessions.
4. Advanced Geofencing
Geofencing technology dynamically assesses end user location against predefined regulatory zones, accounting for buffer zones, exclusion areas such as tribal lands, schools or prisons, and tailored cross-jurisdictional safety margins. Advanced geofencing solutions provide ongoing compliance monitoring throughout gaming sessions to account for increasingly popular mobile game play.
5. Comprehensive Compliance Checks
Compliance checks integrate all verification methods with temporal and spatial analysis to deliver time-bounded compliance assessments based on a variety of factors including local regulations, location accuracy, speed of travel, and distance to mandated boundaries.
The cost of getting it wrong
Gaming operators who rely on inadequate geolocation solutions face mounting risks:
- Regulatory penalties and license revocations
- Payment processor account terminations
- Fraud losses from sophisticated bad actors
- Reputational damage affecting player trust
- Inability to expand into new regulated markets
Operators with robust geolocation compliance for gaming gain competitive advantages: smoother regulatory approvals, stronger payment processor relationships, reduced fraud losses, and faster market expansion capabilities.
Get the full implementation guide
The most successful platforms integrate geolocation seamlessly into their user experience, creating frictionless compliance that protects the business without impacting legitimate players.
Learn how to implement geolocation best practices that protect your platform, ensure compliance, and deliver exceptional player experiences in our guide.
The Locance Gaming Compliance White Paper provides the detailed technical guidance, implementation strategies, and regulatory insights you need to build a bulletproof geolocation compliance system.
Don’t let inadequate geolocation solutions put your operation at risk. Download your free copy today.
