GeoComply Under Scrutiny Over Questionable Operating Tactics

One of the fundamental concerns U.S. lawmakers have had when signing off on legalized sports betting is how to ensure sports integrity. Geolocation company GeoComply came in to help with that problem through its monitoring solutions, but now, a new question has emerged. In light of claims that the company may have helped Iowa officials circumvent state and federal laws, who’s responsible for ensuring the integrity of an integrity assurance company?

The debate stems from a revelation by the Des Moines Register (DMR). It reviewed “hundreds of emails” between the Iowa Division of Criminal Investigation (DCI) and the Iowa Racing and Gaming Commission (IRGC) and discovered that GeoComply may have suggested ways the DCI could get around individual privacy laws.

The investigation began as a result of the controversy surrounding athletes from Iowa State University (ISU) and the University of Iowa (UI), who were using accounts registered to friends and family to place bets, including wagers on their own games. The investigation resulted in 25 arrests, but it also stirred controversy, with accusations of constitutional rights violations from politicians, coaches, fans, and sports commentators.

“My sense is that GeoComply believes this technology could be beneficial for other types of investigations and may not have a way to control how our agencies use the information … which is why they are looking for the [IRGC] to say it is okay. In other words, if either agency uses the information in the wrong way, they will advise the aggrieved party that the IRGC required or gave permission for them to share. I may be looking into this too much, though.”

Former Iowa Racing and Gaming Commission Director Brian Ohorilko

As the DMR tells it, unlike other units within the DCI, such as those focused on casino gambling and horse racing investigations, the sports betting unit lacked the capability to monitor betting activities across the entire state at the time. GeoComply helped plug the gap.

The process of online betting involves users consenting to the sharing of their data, including their locations, with betting companies. This information is then shared with geolocation companies like GeoComply, which track users’ locations using various signals and data sources.

The plot thickens

In March 2022, GeoComply, which has offices in Canada, the U.S., Poland, the U.K., and Vietnam, offered to share its software with the DCI. This allowed the agents to track bets in real time across Iowa. Subsequently, a DCI agent accessed the software and determined that the ISU and UI athletes had been using third-party accounts to place bets. He allegedly singled out the individuals but had no warrants to investigate them directly.

A memo written by a DCI agent that the media outlet accessed showed that GeoComply allegedly provided information to Iowa officials on the drafting of regulations that would enable the retrieval of bettor data without the need for a warrant.

Additionally, GeoComply officials held regular meetings with law enforcement agencies nationwide to identify areas of illegal betting activity. Those agencies may have then used the newfound knowledge to target individuals, possibly without warrants.

After the betting scandal emerged, giving gambling opponents around the world the opportunity to say, “I told you so,” GeoComply jumped ship. The DMR reports that GeoComply broke off its relationship with the DCI, ostensibly in an effort to distance itself from the scandal.

GeoComply serves over 150 corporate partners. Among these are major names like DraftKings, BetMGM, FanDuel, Caesars, BBC iPlayer, Amazon CloudFront, and Prime Video. These represent a significant portion of the online gambling market, indicating GeoComply’s substantial impact and presence in the industry.