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.
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.
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.
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.