The Role of Geofencing and Geolocation in Gaming and Sports Betting Compliance
In the gaming and sports betting industries, understanding geofencing and geolocation is not just a technical consideration—it’s a legal necessity. For operators in the United States, where gambling laws vary widely by state, these tools are critical to ensuring compliance and avoiding legal pitfalls.
Why Geolocation Matters
Geolocation technology allows gaming operators to pinpoint the location of a user attempting to access their platform. This is particularly important in the U.S., where gambling laws differ significantly across state lines. Operators must ensure that users are physically located in a state where their services are legal before allowing them to place bets or engage in skill-based gaming.
A prime example of this can be seen in the early days of sports betting legalization. In 2018 and 2019, sports gambling was illegal in New York but legal in neighboring New Jersey. Every Sunday morning during football season, geolocation data showed hotspots of sports betting activity clustered right over the George Washington Bridge, the Lincoln Tunnel, and bridges connecting Pennsylvania to New Jersey. These were bettors crossing state lines to place wagers legally.
This highlights the critical role geofencing plays in restricting access and ensuring compliance with state-specific laws.
Geolocation in Skill-Based Gaming and Mobile Apps
The same principles apply to skill-based online gaming and mobile app gaming. States vary widely in their definitions of what constitutes illegal gambling, and operators must navigate these differences carefully. Some states have lenient definitions, allowing for broader operations, while others maintain stricter regulations that can prohibit certain types of games altogether.
For operators, geolocation tools are indispensable for:
Restricting Access: Ensuring users can only access gaming platforms where they are legally allowed to operate.
Avoiding Penalties: Preventing unauthorized bets or gameplay in states with stricter laws.
Maintaining Compliance: Adhering to the regulatory requirements of each state where the operator offers services.
Key Considerations for Operators
To operate successfully in the United States, gaming operators need a thorough understanding of the legal landscape and the technology that supports compliance. Key considerations include:
State-by-State Variance: Some states have lenient gambling laws, while others are highly restrictive. Operators must be aware of the rules in each state where they plan to offer services.
Geolocation Technology: Investing in robust geofencing tools to accurately detect user locations and prevent access in restricted areas.
Legal Guidance: Consulting with experienced attorneys to navigate the complexities of U.S. gambling regulations and ensure ongoing compliance.
Conclusion
Geofencing and geolocation are critical tools for gaming and sports betting operators in the U.S., enabling them to comply with varying state laws and avoid costly legal issues. By understanding the regulatory landscape and leveraging technology effectively, operators can expand their reach while maintaining compliance.
If you’re a gaming operator looking to navigate the complex U.S. legal environment, Jacobs Counsel can help. Contact us today to ensure your operations are compliant and positioned for success.