The billion-dollar opportunity of ID Wallets in iGaming

In iGaming, user experience is everything for players. However, for operators and platforms, the real challenge is attracting and keeping players satisfied while maintaining strict security measures and staying compliant with regulations. It’s a balancing act between growth, security, and compliance—and it’s only getting trickier.

Thanks to mobile access, interactive and multiplayer gaming experiences, and the surge of sports betting, more players than ever are jumping in, leading the industry to grow from $540 billion in 2023 to $744.8 billion expected by 2028.

But with this explosive growth comes a big problem: fraud. Online gambling fraud and identity theft are bleeding the industry for around $1 billion a year, with fraud rates increasing 73% between 2022 and late 2024, according to GamblinIQ latest report.

As a result, regulators are cracking down, demanding stricter identity verification to combat fraud, prevent money laundering, and protect players. This is where ID wallets in iGaming step in, opening a billion-dollar opportunity for the industry by not only providing a more secure method for identity verification but also a more convenient and intuitive verification experience for players.

What is an ID wallet?

An ID wallet, like the Gataca Wallet, is a mobile or web app where users can securely store and manage digital identity documents. These documents, known as verifiable credentials, help users prove their identity and share specific personal data to sign in to services, all in a secure and encrypted format.

Think of it like the digital wallets you already use for payments, but going one step further. Instead of just holding payment methods, these identity wallets store important documents like national IDs, passports, driver's licenses, addresses, verified email and phone numbers, bank account info, and more.

But not just that. Beyond convenience, what really makes ID Wallets different is that they give users full control over their data, letting them decide who has access to their information and when to stop sharing it.

Why is everyone talking about ID Wallets recently?

ID wallets have been gaining attention for years, but 2024 has been a big year for them. Countries around the world are adding them to their digital identity systems to improve privacy, security, and ease of use.

In Europe, demand has grown even more because of the eIDAS regulation, approved in May 2024. This law mandates that every EU country must roll out at least one European Digital Identity Wallet by the end of next year.

Additionally, eIDAS states that private service providers who need strong user authentication will be required to accept ID wallets as a valid method for online verification, therefore impacting the iGaming industry.

This makes ID wallets in iGaming more than just a trend; they are game-changers for users and organizations and a source of growth for those who now seize the opportunity.

How work ID Wallets in iGaming? Verify once, reuse anytime

1. Getting required credentials

Players can get the required digital credentials from trusted sources such as government agencies, financial institutions, or compliance services. Alternatively, they can complete a one-time Know Your Customer (KYC) verification within the Gataca Wallet, which takes just a minute.

Once verified, players receive several verifiable credentials such as Identity Document Verified and Proof of Legal Age. For additional documents required by specific jurisdictions the process is the same.

These credentials are stored in the ID Wallet and can be reused across multiple platforms and sectors, eliminating the need for repeated KYC verifications.

Players can also self-issue credentials like email or phone numbers to be shared when needed.

2. Sharing credentials

Once stored in the ID Wallet, credentials remain accessible only to the player through secure authentication methods like biometrics (fingerprint or face scan) or PIN Code and can be shared instantly:

• Scan a QR code – Initiate the credential-sharing request.
• Review credentials – See exactly what information will be shared with the iGaming platform.
• Consent with a tap – Instantly share credentials to verify identity with one click.

This process takes just seconds and ensures that every interaction—whether onboarding, signing in, or withdrawing funds—is verified and secure. Cryptographic signatures confirm the authenticity of the credentials without requiring manual review or verification from the original issuer.

3. Automated risk screening & AML checks

To ensure compliance with Anti-Money Laundering (AML) regulations and risk management policies, Gataca initiates API calls to third-party compliance services. This process includes:

• Automated Risk Screening – Checking the player’s credentials against fraud prevention databases.
• AML & Sanctions Checks – Validating against watchlists and politically exposed persons (PEP) databases.

These checks occur seamlessly in the background when the player shares their credentials.

4. Revoking access anytime

Players retain full control over their credentials. If they no longer wish to share their information with a service, they can revoke access at any time, ensuring data privacy for players and compliance with data protection regulations for iGaming operators.

Why leverage ID Wallets in iGaming?

ID Wallets solve the fraud issues of traditional identity verification

Traditional identity verification methods are vulnerable to fraud and identity theft. Fraudsters exploit weak systems through deepfakes, money laundering, account takeovers, and bonus abuse.

For instance, the Spanish Gambling Regulator, DGOJ, has revealed that 5% of those who won over 100 Euros in online gambling became victims of identity theft.

Since ID wallets contain cryptographically signed verified credentials from trusted sources and use biometric authentication, they reduce the risk of fake accounts and identity fraud. This ensures that users are who they claim to be, enforcing a strict "one player, one identity" rule.

Moreover, digital credentials eliminate the need for repeated manual document uploads and reviews, reducing errors that can lead to security risks and administrative workload.

ID Wallets in iGaming provide verification that players love

Long, complicated sign-ups are a major frustration in iGaming. Many players abandon registration due to slow identity checks, leading to lost opportunities for operators.

Meanwhile, digital wallets are already popular for payments—32% of online sports bettors prefer them. So why not bring that same ease to identity verification?

With one-click verification, ID Wallets speed up sign-ups and increase conversion rates.

Another big win? Traditional identity checks are scattered across different platforms, creating unnecessary hassle. ID Wallets eliminate this friction by storing portable, verified credentials that can be reused across multiple services.

If a player already has the required credentials in their Wallet, they can sign up to your platform instantly—while also using the same credentials for banking, e-government services, or even online shopping. It’s fast, secure, and exactly what modern players expect.

ID Wallets make regulatory compliance easy

Balancing KYC, AML, eID, and data protection laws—along with local gaming regulations—with a superior user experience is a major challenge for iGaming businesses.

ID Wallets in iGaming help with compliance by automating verification checks using verifiable credentials and, therefore, ensuring data authenticity and integrity. Plus, ID wallets allow users to control their data firsthand and share only necessary information with methods like selective disclosure, ensuring adherence to data protection laws.

Moreover, the industry is already moving in this direction. In Europe, the new eIDAS regulation sets higher standards for secure digital identities, introducing ID Wallets as an authentication method. The European Gaming and Betting Association (EGBA) has welcomed this development.

ID Wallets ensure safer gaming experiences

A secure gaming experience starts with strong identity verification. Every click, bet, and win should come with confidence—and ID Wallets make that possible.

By ensuring only legitimate players gain access, ID Wallets prevent fraud and unauthorized activity, creating a safer environment for everyone.

At the same time, players (particularly high-value ones) value privacy and prefer not to share unnecessary personal details. With an ID Wallet, they can verify their identity securely without oversharing, building a stronger foundation of trust with you.

Benefits of ID Wallets in iGaming

Benefits for Players

• Convenience – ID Wallets enable instant online verification with a single click from their phone, eliminating the need for repetitive data entry, document uploads, or awkward selfies.
• Portability – Players can securely store and access all their digital credentials in a single mobile app, removing the need to carry physical documents.
• Global Recognition – Verifiable credentials adhere to international standards, ensuring acceptance across multiple jurisdictions and iGaming platforms.
• Data Control & Privacy – Players have full control over their data, choosing what information to share and with whom. They can also opt to disclose only specific details, such as sharing just their name and last name without revealing their address when sharing a National ID.
• Enhanced Security – Verifiable credentials use cryptographic security to protect personal information, reducing exposure to identity theft and fraud.

Benefits for iGaming organizations

• Reduced Identity Fraud – Verifiable credentials use advanced cryptography, allowing operators to verify data authenticity automatically without relying on traditional manual checks.
• Improved User Experience – Offering passwordless, instant access to gaming platforms ensures faster onboarding, reducing drop-off rates and increasing player retention.
• Cost Savings – Automating identity verification lowers operational costs related to KYC compliance, fraud prevention, and data storage. Also the use of standardized e-ID verification across the EU can further facilitate processes and reduce expenses.
• Increased Security – ID Wallets leverage biometrics, strong encryption, and distributed storage to minimize risks associated with data breaches and identity fraud.
• Lower Administrative Burden – ID Wallets simplify compliance and verification processes, reducing paperwork and improving operational efficiency for gaming operators.

Integrating ID Wallets in iGaming with Gataca

Integrating ID wallets presents a major opportunity for iGaming platforms to enhance the player experience—not just by speeding up and making verification more intuitive but also by making it more secure and private.

But how do you integrate ID Wallets without the hassle of overhauling your system? With Gataca's Open APIs, you can quickly and easily integrate ID Wallets so compliance and convenience work together across all touchpoints, creating a simple and secure experience for both players and operators.