At the end of last month, the European Parliament approved plans to introduce a standardised electronic European Digital Identity (e-ID) to verify citizens’ identities when using online services.
It will be obligatory for European Union (EU) member states to offer the e-IDs (which were voted through by 335 votes in favour, 190 opposed, and 31 abstentions), although it is not compulsory for individuals and businesses to use them.
The e-IDs, if widely adopted, stand to revolutionise know-your-customer (KYC) processes across financial services and the gambling sector. Because the e-IDs operate under a single framework throughout the EU, in theory, they should make KYC faster, easier, and safer.
Depending on how successfully the scheme rolls out, it has the potential to reduce friction for regulated operators trying to meet their KYC obligations and stay compliant in several EU jurisdictions.
For the e-ID to come into law, it still has to be formally endorsed by the EU Council of Ministers before its official adoption, which is hoped to happen by this summer.
The European Gaming and Betting Association (EGBA) welcomed the move, dubbing it a “significant milestone” and a “transformative tool” in creating a more secure and inclusive digital environment.
The European gambling trade body is hopeful that the new e-ID will streamline KYC processes and increase trust in the regulated businesses that choose to use it. It is also hoped that in having one system in the EU, costs and the administrative burden on operators will be greatly reduced. The trade body has endorsed the initiative since it was first proposed in 2021.
However, the EGBA is also aware that its success depends heavily on the rate of participation among citizens and operators. The European Commission has set a target for 80% of EU citizens to use an e-ID by 2030, but it is unclear how adoption may differ in different industries.
Following approval of the law, EGBA secretary general Maarten Haijer said he was confident that the use of e-IDs in the gambling sector would lead to a more seamless and trustworthy online experience for players, alongside the reduction in costs and administration for gambling operators.
“This innovative tool represents an important step toward building a more secure and user-friendly digital ecosystem, aligning with EGBA’s core objectives of promoting integrity, transparency, and a safe, consumer-centric, playing environment,” he continued.
If adopted by all EGBA members, the scheme would create a new standard in the KYC processes of licensed operators. EGBA members serve 31.2 million customers in 22 different European countries and include major brands, such as bet365, Betsson Group, Entain, Flutter, Kindred Group, and 888 William Hill.
Elsewhere, the EGBA has been working with the European Committee of Standardisation to develop a common European standard for markers of harm for online gambling, after it found significant differences in how such markers were defined in different EU countries.
If such standardisation could be applied and the e-ID incorporated into tracking indicators of harm, is it possible that something akin to the much debated “single-customer view” could be achievable?
It certainly feels like the EU is edging closer to finding workable solutions to internet anonymity, but the question remains: to what degree will punters want it?
Sure, if operators make the use of such systems mandatory, a large number are likely to use it, but at least some are just as likely to view standardised ID systems with cynicism and there is no shortage of alternatives for those who don’t want to stay within the licensed sector.
The key is likely to be how many of the biggest brands, across all industries, adopt the e-ID and in doing so lend it credibility and create an expectation among consumers of the e-ID as a standard online KYC process, encountered not just when gambling, but when accessing online retail, banking, and other services.
