Technology: Placing Bets on Mobile Driver’s Licenses for ID and Payment

by Joe Oprosko

Buying groceries with a phone is normal and wallets are increasingly absent from consumer’s pockets. Especially in states that implement mobile driver’s licenses (mDLs), digital is replacing physical media for payment and identification. In the U.S., 11 states have successfully introduced mDLs to their residents: Louisiana, Iowa, California, Arizona, Colorado, Utah, Oklahoma, Delaware, Maryland, Georgia, and Mississippi. Six other states are in the process of passing legislature to adopt mDLs, and that number is growing. What does this shift mean for consumers and facilities required to check IDs? Specifically, what does this mean for casinos and their patrons?

Driving the Future

Smartphones serve consumers in more ways than just communication devices – they now double as digital wallets. Digitizing IDs offers several conveniences, like updating information in real-time. Check your driver’s license – is your address current? Updating that in-person could take weeks after a trip to the DMV. But with a digital ID, that change could be made in minutes and updated immediately. Mobile driver’s licenses are shaping up to be a superior identification option for several reasons – personal privacy, convenience, and administrative cost savings.

The shift to digital benefits both users and businesses with identity compliance requirements. Patrons presenting their mDL have the option to share only the data required by the receiving party – they confirm their age with the bouncer without sharing their address. Businesses can feel more secure that the information presented is accurate and not fraudulent.

Understanding mDL Technology

There are great security benefits to mDLs, but industry faith in mDL technology still lags behind the data. A recent survey of casino employees revealed that 40% believed it was easier to counterfeit an mDL than a physical ID, while the opposite is true.

Consider the security features of a physical ID. Of course, IDs have been forged since their inception, and a lookalike is relatively easy to create, passing superficial verification. But the more in-depth process of authentication goes further with various light sources revealing all the security features contained in legitimate IDs issued by the state.

In the case of an mDL, the authentication process goes beyond just checking the physical features of an identification like a holographic common loon on the teeth of a smile, in the case of the Minnesota driver’s license. Instead, an mDL directly interacts with the issuing authority to authenticate it. When an mDL is scanned, technical information is transferred between the verifying party and the issuing authority through a secure communication channel. Each mDL has a unique token that identifies the mDL holder and the mDL itself.

What to Expect?

The acceptance and use cases of mDLs are in the early stages, with only a few states accepting them at TSA PreCheck stations. There is no national standard for mDL use with local law enforcement since each state determines its own implementation and requirements. Even in states that issue mDLs, local authorities still require users to have their physical ID on hand, so full adoption will be a long process.

Adoption of mDLs is slow, with many businesses like casinos unsure if they will accept mDLs anytime soon. The survey of casino employees revealed that 39% were unlikely to recommend mDL as a form of identification to their organization, and 32% were unsure. Many of the survey respondents expressed the need for more information before making a shift within their facilities. They also noted that the scanning of mDLs will need to integrate with their existing reporting and watchlist monitoring systems to meet regulatory compliance.

Shifting to a digital-only form of IDs will take time, as it has for mobile payment methods. These have yet to gain full acceptance by businesses and consumers, although more businesses are adding mobile payment function to attract young users who are ditching their wallets. The same outcome can be predicted for mDLs. Once state regulators and local law enforcement widely accept mDLs as a standalone identity verification document, casinos should be prepared to stay current to continue to serve their patrons.

Joe Oprosko is Chief Executive Officer of Veridocs, a premier identity management software company serving the casino industry. He can be reached by calling (612) 719-0474 or email [email protected].