Know Your Customer

So, it’s an important security measure for the players and the house. Besides, financial crimes know no boundaries, so it’s an internationally reinforced practice. It may vary according to the country. This means that every player must follow local rules, even while playing abroad. Even more lenient jurisdictions like, let’s say, Costa Rica, must follow UK rulers when catering to British gamblers.

Here are the most demanding jurisdictions at the moment.

United States

Every gambling institution with annual gross revenue above USD 1 million is considered an NBFI (non-bank financial institution). As such, they’re monitored by the FinCEN (Financial Crimes Enforcement Network). The FinCEN handles the application of AML regulations. These regulations impose gambling institutions, like online casinos and sports betting sites, to report any suspicious activity via Suspicious Activities Report (SARs).

Monitored activities include transactions over USD 5,000 and any currency transaction above USD 10,000. Receipt storage and recordkeeping are also closely followed by the FinCEN. The American Gaming Association has recently changed its rules. Now, it demands that every player should at least provide a legal name, Social Security number and a valid address.

United Kingdom

The UK Gambling Commission is stringent about ID verification and KYC/AML practices. Based on the Proceeds of Crimes Act, the government focuses on three primary goals. Firstly, there’s money laundering. However, it also aims to prevent underage gambling and self-excluded gamblers from returning.

Additionally, it keeps an eye on risky candidates that may be under sanctions or hold influential positions. Other jurisdictions only apply KYC when a customer wants to make a banking operation. Meanwhile, UK laws demand KYC to be applied immediately upon registration.

European Union

There are mainly two laws supporting enhanced due diligence. These are the Prevention of Money Laundering Act from Malta and the EU 4th Money Laundering Directive. European and British laws differ regarding when KYC procedures should be applied. According to the EU’s laws, such procedures should only be applied upon a deposit or withdrawal. In fact, no transaction under EUR 2,000 is enough to trigger them.

There’s no such a thing as a standardised list of documents for opening an online casino or sports betting account. However, you’ll need to provide unequivocal proof of identity, proof of address and a payment ID. It turns out there are several documents that can be used:

• Proof of Identity: driver’s licence, passport, National Identity Card, voter’s card, university ID and more.
• Proof of Address: bank statement, mortgage statement, house deed, a recent utility bill, council tax bill and more.
  
• Payment ID: copy of the card used, bank statement and e-wallet verification.
  

Online gambling platforms, like online casinos and sports betting sites, deal with large sums of money daily. It means they’re juicy targets for all sorts of scammers and fraudsters. Keeping them outside isn’t only crucial for the business, it means a lot for customers’ security. Malicious players who have been already banned from other platforms won’t threaten other players if they aren’t allowed in.

If complying with enhanced due diligence can be costly, not doing so can be costlier still. ING, a Dutch bank, had to pay USD 900 million for not meeting the Dutch AML standards. It can be incredibly costly for players, too, who are on their own, without anyone protecting their player rights. If a platform doesn’t follow KYC rules, there’s no way of telling if it’s committed to data safety or how it’ll handle your confidential information.

How To Speed It Up

Several companies are now offering the possibility to shorten the distance between the online player and the virtual tables. Such companies offer an alternative to manual ID verification without giving up data safety and protecting player rights concerning confidential information.

In some cases, these companies store the customer’s banking KYC data and use it to log in on different platforms. The principle behind the service is simple: why repeat the same process over and over? Services like Pay’n Play are becoming more popular worldwide, so there’s still a huge market for them.

Online casinos and sports betting platforms are obligated by law to collect relevant information about any customer. However, these platforms must also be committed to player rights regarding data safety, online security and the safe storage of confidential information. The best platforms are completely transparent. There, you’ll have sections detailing issues such as cookies policy and, in some cases, editorial responsibility.

Anyway, no customer should have any confidential information disclosed to any third party. Infringing the player’s rights can have dire consequences on any platform, from fines to closure. The documents supplied to online casinos and sports betting should never be used for other purposes than ID verification.