Why AML and KYC Are Essential in Gambling

By John Gold.

As the data from Statista shows, already by 2028, the number of users in the iGaming market is estimated to reach 243.2 million. It means that the online gambling and betting industry continues to stay on the rise. 

Quality Control

However, as along with the widespread growth of online casino activities the number of hacks, fraudulent acts, and data leaks also increases, the need for protective measures becomes inevitable. That’s why, in this already heavily regulated sector, the rapid development is bringing AML (Anti-Money Laundering) and KYC (Know Your Customer) to the forefront of regulators’ agendas worldwide.

With a diversity of entertainment options for people to gamble online, it makes sense that the operators that come out on top try their best to strike a balance between user experience and compliance. When it comes to casinos sites with no verification, here, you don’t stumble upon such issues, as they don’t limit the number of games or gambling services for players. However, the situation is totally different at KYC gaming sites and platforms that work under AML regulations.

The question here is, how can these brands maintain compliance without affecting the quality and variety of gaming experiences for their customers? And we are going to find the answer in this article.

What Are AML and KYC Procedures

AML or Anti Money Laundering refers to the set of laws, policies, processes and regulations designed to prevent criminals from disguising illegally obtained funds into legal money. In online gambling, it carries the duty of ensuring that adequate controls are there to prevent casino operators from being used for money laundering and other “dangerous” financing purposes.

Protected Device

As for KYC (Know Your Customer) procedures, they are a must-have element of AML as well as CTF (Counter-Terrorism Financing) compliance.

Most gambling regulatory bodies require qualifying companies to verify the user’s identity before giving them access to their. In other words, you are obliged to guarantee that your users are who they claim to be.

In order to successfully pass the KYC verification, players are required to provide credentials such as PII (personally identifiable information) and some form of an identity document.

The organization also has the responsibility to document the identification procedures they utilize for different types of users. These KYC checks must be based on the level of terrorism financing risk of various customers and can cover the following:

  • face verification;
  • ID card verification;
  • biometric verification;
  • document verifications, such as driver’s license, proof of address, or utility bills.

However, KYC checks should not just be seen as obligations that casinos and betting sites must implement as a part of AML regulations. It’s because such procedures can also benefit the gambling operators as well, by safeguarding them against data leakage, money laundering efforts and account takeover attacks. On top of these, KYC verifications also protect users by shielding them from illegal corruption and terrorism financing, who may otherwise be at a potential risk of financial crime.

Reasons Why Online Gambling Operators Need to Be Responsible for KYC and AML

If in simple words, companies in the iGaming industry have the legal obligation to verify user age, identity, source of funds, and location, among other details. It is done to protect their customers and platforms from malicious attacks and fraud.

Smart Phone Protection

One of the core reasons for this is the need to minimize the risks of terrorist funding and money laundering. If the platform lacks proper KYC checks, it can easily become a target for bad actors to launder funds and utilize them to assimilate money for dangerous organizations. To put a stop to such practices, many laws are created. And all gaming organizers and operators should abide by them.

Just as reliable organizations prioritize trust when it comes to delivering customers a safe environment and fair gameplay, players also should trust that the information being gathered from them is safeguarded and handled appropriately. And AML and KYC are exactly those “measures” that address these issues.

Overall, gambling operators trying to be competitive and stay in compliance are seeking enhanced onboarding and identity verification solutions in order to:

  • Follow the latest regulatory changes in their jurisdictions,
  • Protect users and the company from malicious actors and scams,
  • Provide a trustworthy, seamless, and user-oriented gaming experience.

However, there are also many players who turn away from gambling sites with KYC verification requirements. It’s because they very often prefer to stay discreet about their identity. And this is where the benefits of no KYC casinos can be seen. First of all, players don’t need to fear getting their financial information revealed. Then, such platforms give gamers more privacy and anonymity.

But let’s not forget about the key risks of no KYC sites as well. They lack the regulatory safeguards present at KYC casinos, which means players have reduced protection and can’t get appropriate help in case of disputes.

Some Final Notes

As today’s world shows, the online gaming space is “grabbing” new heights around the globe, expanding with each passing day.

In terms of user experience, these gambling platforms have improved massively and currently, they can make it safer by following the globally accepted regulations and membership security protocols.

Moreover, today, apart from manual KYC procedures, casino owners can also make use of digital and video KYC checks, which have already proved to be a massive success. And hopefully, in the near future, its widespread adoption can lead to more secure and risk-free online gaming services globally.

IMAGE CREDIT: Freepik.com
IMAGE CREDIT: Freepik.com
IMAGE CREDIT: Freepik.com


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