Geofencing in Online Gambling in 2025: All You Need to Know

The online gambling industry has come a long way from its origins in the mid-1990s, but as with gambling as a whole, the law has kept tabs on it for much of the journey.

As technology evolves, law enforcement and regulatory oversight have had to adapt to keep up with advances.

One of the newest frontiers concerns upholding the location-specific rules that govern different jurisdictions.

This is where geofencing comes in. Here, we present all you need to know about the technology, how it is utilized, and how some try to avoid it.

Table of Contents Table of Contents

1. Key Takeaways
2. What Is Geofencing?
3. How Is Geofencing Applied to Online Gambling?
4. Regulators Approach
5. How Could Things Change in 2025 & Beyond?
6. How Do People Avoid Geofencing?
7. The Bottom Line
8. FAQs
9. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. What Is Geofencing?
3. How Is Geofencing Applied to Online Gambling?
Show Full Guide
4. Regulators Approach
5. How Could Things Change in 2025 & Beyond?
6. How Do People Avoid Geofencing?
7. The Bottom Line
8. FAQs
9. References

What Is Geofencing?

Geofencing combines several technologies, including GPS, radio frequency identification (RFID), Wi-Fi, and mobile phone data, to place a boundary around a designated area.

Geofencing software enables operators to tap into location services and monitor mobile devices within the boundary area. The movement of someone and their mobile device within the area will trigger an action regarding online gambling – enabling or disabling its services.

There are two main types of geofencing: active and passive.

• Active geofencing requires users to use a specific app with GPS tracking. When the user arrives at or leaves the geofence boundary, an action such as a push notification or warning is triggered.
• Passive geofencing does not require a specific app with location tracking to be open and is, therefore, less accurate. It is more likely to be used for collecting larger amounts of less specific data, such as vehicle traffic patterns and driver behavior.

Beyond that, companies can opt for circle, polygon, or isochrone geofencing. These all create different boundaries around the area you want to geofence and have advantages and disadvantages.

• As the name suggests, a circle geofence creates a circular boundary around a defined area. It is often used by physical stores to market to foot traffic in close proximity.
• A polygon geofence enables a more precise, customized boundary and is the standard used by online gambling operators.
• Isochrone geofencing uses a grid system based on coordinates and is more likely to be used for geofences based on travel distances that incorporate factors such as road networks and transportation methods available. Operators may utilize this technology, but it would be for marketing to customers rather than legal compliance.

How Is Geofencing Applied to Online Gambling?

Geofencing has become critical to online gambling as its legal status changes from country to country and across state lines in the US. Operators must verify users’ locations to comply with these laws and avoid punishment.

In the US, several states have established online gambling markets, such as New Jersey, where it is authorized and regulated. Other states, such as Nevada and Illinois, have limited legalization, but online casino games are illegal. There are 37 states, including California and New York, with complete bans. The situation regularly changes as a number of states consider legislative changes.

The main benefit of legalizing gambling is the considerable tax revenue each state would collect as it grows in popularity.

According to the American Gaming Association (AGA), the gaming industry posted record revenue for the fourth consecutive year in 2024.

Online gaming and sports betting increased approximately 25% year-over-year to $21.54 billion. Moreover, online gaming (sports and casino) now generates the majority of commercial revenue in 13 states, including Michigan, New Jersey, and Pennsylvania.

These performance metrics could see legalization prioritized in more states as lawmakers see the potential of what appears to be a thriving industry.

Regulators Approach

You may wonder whether it’s in the best interests of gambling operators to impose location-based restrictions on their potential customer base. However, regulatory bodies use various methods to ensure laws are upheld.

These include compliance checks and requirements for operators to use third-party geolocation services for accurate tracking.

GeoComply is one option widely used in the US. Xpoint and LocationSmart have also been certified. Operators must submit reports proving they use a certified solution or face penalties.

Regulators will also conduct independent audits and testing to verify geolocation systems are functioning correctly. This involves simulated tests to check the system blocks players outside the jurisdiction. Operators must also provide audit reports to retain their gambling licenses, another incentive for compliance.

In New Jersey, regulators require operators to provide real-time access to geolocation data to enable them to monitor platforms actively.

Other measures include player verification, where companies must attain proof of identity and address before a new player can gamble with real money. Anti-VPN and spoofing detection are also required to make it harder for players outside a jurisdiction to play illegally.

Penalties for non-compliance accompany these stipulations. Operators face heavy fines, license suspension, and even criminal charges.

How Could Things Change in 2025 & Beyond?

While legalization could be the route many US states and countries take, there is growing awareness of the societal issues gambling causes, which has seen governments, such as those in the UK and New Zealand, take a more hands-on approach to regulation.

Measures like financial vulnerability checks and cracking down on advertising campaigns that specifically target vulnerable groups signal a tonal shift with player welfare at its heart.

While the cat-and-mouse game between regulators and those seeking to circumvent laws will continue, governments in some parts of the world could crack down more firmly on violations in an attempt to clean up the industry. This may result in stricter regulations and place a heavier burden on technology to weed out those who should not be interacting with online gambling platforms.

One country with a newer relationship to online gambling is Brazil, which legalized fixed-odds sports betting in 2018 and saw its popularity explode.

However, a lack of regulation has caused a steep increase in gambling addiction. Retailers and analysts are now concerned this is threatening to curb consumer spending as the population has less disposable income or deals with debts built up through gambling losses.

Latin America’s largest economy generates gross gambling revenue of $4.9 billion, the seventh highest in the world.

How Do People Avoid Geofencing?

While geofencing systems are sophisticated, gamblers in outside jurisdictions can avoid detection in many ways.

The most common way is to use a virtual private network (VPN) to mask the user’s location by routing their internet traffic through servers in regions where it is legalized.

Many operators now employ countermeasures to protect against VPN access, such as blocking VPN IP addresses, IP address tracking, and device fingerprinting.

Another method people use to avoid geofencing systems is GPS spoofing apps, which alter the user’s GPS coordinates to change their location. However, gambling sites can combat this through Wi-Fi triangulation.

More rudimentary methods include using someone else’s address or account or getting someone in a legal jurisdiction to verify your account. This requires a high degree of trust, and the other party must be comfortable taking on a level of risk.

The other method falling into this category is location hopping. This is where the geographical differences in the US could undermine each state’s legislation. For example, a resident of New York, where online gambling is illegal, could travel across to nearby New Jersey and place a bet before returning home to New York. However, this may be less of a concern in larger states where it would take significantly longer to travel to a neighboring state.

The Bottom Line

As with many emerging industries that explode in popularity, legislation cannot always keep up. This can create a series of push and pull factors that impact economies and societies in ways that only become clear once the die has been cast.

In many ways, the technology arms race in the online gambling industry is following the same path as other conventional sectors. However, the key differentiating factor is the outsized impact it can have on people’s lives. The rewards are higher, but so are the losses, as it can severely harm a person’s finances and put a considerable strain on their life.

This heaps the pressure on lawmakers to implement the proper measures to ensure operators comply. Geofencing is at its vanguard, and while the technology cannot be held responsible for all the threats online gambling faces, it is the industry’s first line of defense.

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