Geolocation Tech A Key In State Sports Betting Launches And Beyond

Sports betting’s launch in Kansas, along with future launches in Ohio and Maryland, has brought geolocation technology to center stage as states make efforts to ensure that all bets placed are compliant.

The major player in US geolocation services is GeoComply, but there are several other companies involved in the American market.

Who offers geolocation technology services?

GeoComply is the premier geolocation company in the US market and was part of the sports betting launch in Kansas. Its partners include FanDuel, bet365, William Hill, Caesars, BetMGM, Bally’s, and DraftKings. It analyzes more than 9 billion transactions per year and offers services (including non-sports betting services) in 44 states.

Other geolocation companies operating in the US sports betting market include

MaxMind: Based in Massachusetts, MaxMind’s geolocation services are IP-based. The company has more than 5,000 clients.
LocationSmart: Involved in geolocation compliance in Nevada and Delaware, and provides geolocation services in New Jersey.

How does geolocation technology work in sports betting?

Typically, a geolocation company offers more than just the ability to tell a sports betting app exactly where a phone is when someone is trying to open the app.

GeoComply, for example, is constantly vetting locations, devices and user data to make sure that the information hasn’t been tampered with. Some bettors may attempt to use spoofing software to manipulate their GPS location; GeoComply tries to stop them.

How effective is it?

In the world of geolocation, there are a couple of methods for tracking player location. The most effective method is GPS tracking. How effective is it? Geolocation services that track the GPS location of a phone making a sports bet can identify the phone’s location within 4.9 feet under an open sky, according to GPS.gov. However, that accuracy wanes if you’re making a bet if you’re near buildings, trees, or bridges. Generally speaking, though, the average range of error is around in calculating a GPS signal is 6.6 feet with a 95% probability.

Identifying a user’s location based on their IP address is less reliable than using GPS to find their location. MaxMind’s accuracy in locating broadband and cellular IPs is around 68% via its top-tier location services.

In general, IP geolocation is about 50%-75% accurate when determining which city you’re placing a bet.

Kansas sports betting launch metrics

The launch of mobile sports betting in Kansas earlier this month provided a wealth of data about geolocation services.

During the first eight hours that mobile betting was live, GeoComply blocked more than 16,000 attempts by users to access Kansas sportsbooks, according to GeoComply data provided to the Kansas City Star. Some of those attempts took place near the border, but many took place long distances from the state line.

For example, users were trying to access Kansas sportsbooks from Blue Springs, Missouri, which is more than 20 miles by car from the border.

How much money is being bet outside of legal areas?

Kansas’ launch provides a good snapshot of the type of betting action that takes place in legal-adjacent areas. The state’s opening weekend data indicated that GeoComply did more than 2 million geolocation checks, and blocked around 100,000 log-in attempts from Missouri.

Exactly how much money was blocked is hard to pin down, as GeoComply’s data focuses on login attempts, not how much betters were willing to wager.

A 2021 study from Civic Science found that, among 994 respondents, 54% said they bet $25 and under. Nearly 30% said they bet at least $50.

Assuming those averages held true for the Kansas launch, then around 54,000 people intended to bet up to $25. Here’s what that looks like in dollars:

• 54,000 access attempts at $25 per attempt: $1.35 million
• 54,000 access attempts at $10 per attempt: $540,000
• 54,000 access attempts at $5 per attempt: $270,000

Nationally, geolocation likely wards off hundreds of millions of dollars in bets every year in the name of legal compliance.