In sports betting, margins are razor-thin and every decision counts. Yet many operators are quietly bleeding money through one overlooked piece of infrastructure: their geolocation system. In this Q&A, we speak to Xpoint CEO Manu Gambhir about the costliest mistakes operators make with location verification, the hidden revenue impact of speed and accuracy, and why choosing the cheapest geolocation provider could end up being the most expensive decision a business ever makes.
What are the three most expensive mistakes you see operators making with their current geolocation setup?
The first comes down to accuracy and the temptation to go for the cheapest geolocation system available. A good geolocation system draws on multiple data signals to determine not just where a player is, but whether they’re being genuine about their location. More data sources cost more money, and some operators try to cut corners there. But that’s a false economy. A cheaper system with fewer data sources might incorrectly block a player who is legitimately allowed to bet and again, that is lost revenue. Or it might incorrectly approve someone who shouldn’t be allowed to play. This is a compliance violation and as we know, gambling companies have received fines of $20 million or more for compliance failures. When you’re talking about a business doing billions in revenue, the cost difference between a basic geolocation system and a best-in-class one is negligible. We are talking about the difference between spending 0.1% and 0.15% of revenue. It is simply not worth cutting corners. 
The second is failing to handle users who cross state lines or move between exclusion and inclusion zones mid-session. This happens far more frequently than people realise. We have data showing significant numbers of people who live in North Jersey and commute into New York every day, or who commute from southern New Jersey into Philadelphia. They’re crossing state lines regularly, and if the app doesn’t properly detect that and switch rules accordingly, you’re either risking a compliance violation or creating a bad user experience. Neither is acceptable. Sports betting is a low-margin business and operators are fighting for every penny. These are easy problems to solve and ignoring them is just leaving money on the table for no good reason.
The third is performing unnecessary checks which ends up costing operators more money than required. Checking location more frequently than needed diminishes the user experience, causing friction that can drive customers away if they keep seeing the ‘checking your location’ message pop up whenever they try to use a gambling app,
How much revenue can a mid-sized operator lose annually through fraud and bonus abuse that better geolocation could prevent?
Let me give you an illustrated example. Say Vendor A gives you the right answer 99.8% of the time when you ask whether a player is in an eligible location. That sounds impressive. But Vendor B gives you the right answer 99.9% of the time, and Vendor A is half the price. It is very tempting to go with the cheaper option as the difference looks tiny. But if you are doing $5 billion in revenue and multiply out that 0.1% difference, you are looking at a differential of $5 million. Neither system costs anywhere near $5m a year, so that accuracy difference immediately translates into either recovered revenue or reduced compliance risk.
It is also worth noting that building a geolocation system that is right 98% of the time is relatively straightforward. Getting it from 98% to 99% is significantly harder and requires serious engineering investment. Getting it from 99.8% to 99.9% is extraordinarily difficult as that last fraction of a percent requires substantial R&D. But for large operators, even a tiny incremental improvement in accuracy translates directly into meaningful revenue. That is why the best operators understand the value and invest accordingly.
Beyond regulatory fines, what are the hidden costs of poor geolocation that operators often overlook?
There are a few. The most direct is increased costs or lost revenue from incorrect decisions, either blocking a player who should be allowed to play or approving one who shouldn’t be. But there is another cost that gets overlooked: latency. While a full end-to-end geolocation check typically takes between one and three seconds, advanced systems mitigate this through intelligent caching. Instead of doing a full check every time, these systems calculate a validity period for each location check. This is a smart calculation based on the user’s proximity to relevant borders and other contextual factors, including the stability of their network connection. For example, a user on a stable home Wi-Fi near a border might enter what we call Trust Mode, which extends their validity period because they aren’t realistically going to cross a jurisdiction line in the next few minutes.
Xpoint also offers asynchronous periodic checking, an option where the system refreshes location checks in the background before they expire and stores the results on the client, independent of what the user is doing. This means that when the user actually triggers a check request, the response is instantaneous. Without this automation, users are stuck waiting through multi-second server trips, leading to frustration, app abandonment, and a measurable hit to daily revenue.
Bonus abuse is another significant hidden cost. If someone is attempting to exploit a promotion from outside a permitted jurisdiction using stolen identity and payment information, a strong geolocation system will catch it. But sophisticated fraudsters don’t just create one account. They might create 500, each with different stolen credentials. The best geolocation systems don’t only evaluate individual transactions in isolation, they look for patterns across users. If 500 accounts are being created from the same small area within 15 minutes, all using the same device model and OS version, that is a clear anomaly. That kind of pattern-based fraud detection is where advanced systems really earn their value.
What’s the ROI timeline when operators upgrade their geolocation infrastructure?
The benefits begin immediately. Operators putting a better system in place will start seeing improved results right away. That might cover more legitimate players being correctly approved, fewer compliance risks, or faster response times keeping users engaged. There is no lengthy runway to value, it’s essentially instantaneous.
