KYC - Know Your Customer

The Differences Between KYC and AML

KYC can often be confused with another financial process associated with gaming activities known as Anti-Money Laundering (AML). 

All financial institutions are required to perform AML processes but KYC extends to a wider, more diverse range of establishments. Many times these terms and checks are used interchangeably and although they are unmistakably distinct, they are usually related. 

While KYC focuses on verifying the identities of customers, AML is intended to detect, prevent and report suspicious activities that may aid either money laundering or terrorist financing. 

AML is a far less general process and is usually targeted at the documentation of suspicious individuals only. This process includes the monitoring of suspected criminal events such as transactions and the subsequent report of these to the appropriate legal authorities. These activities are not included in KYC processing.

KYC is a process which is required more often when compared to AML, with information accrued during KYC being used in AML activities.

Are Casinos Legally Required to Hold KYC Checks?

When a casino takes on a new customer, or when required by law, it must conduct an analysis of them. This is to ensure that the money being played with comes from a legitimate source, that the person who is playing has no criminal history, and that the person is who they say they are. Usually, these checks are required by law, but any of the best online casinos will ensure that they carry out these steps themselves anyway, to remain aware of their risks.

If you are playing at any online casinos, you're usually required to provide some KYC information, which is a stipulation imposed by gambling regulators on casinos to operate in the safest way possible.

Players from around the world must verify their identity and where the money they are betting with comes from in order to avoid any fraudulent activity. Players are also required to provide any additional information the casino might deem necessary to operate safely and seamlessly.

Why Are KYC Checks Beneficial?

The benefits of KYC checks are twofold – the first is that the casino ensures that all of their activity on their website is safe, legal, and follows the requirements of local jurisdictions. By checking this, they prevent criminality or suspicious activity which could endanger not only the casino but also other players.

Another major benefit is that players are protected if their accounts is ever misused. If a casino detects that a player usually has a lower budget, but then they begin playing with triple that amount, this activity would be flagged. Either the player’s account might have been compromised, or perhaps they are extending themselves beyond their budget.

As a casino is duty-bound to maintain good responsible gambling practices, it’s necessary to check in with the players and ensure that they are able to play.

What Is the KYC Process? 

The process of KYC varies depending on the structure and function of each organisation and even between similar organisations such as online casinos in this case.

The process follows the basic procedure of identifying the customer in question before running a due diligence check on them. This check will help determine the result of a risk assessment which in turn decides whether a player may register to play the casinos games and most importantly withdraw their winnings should they have any.

The process, however, is not concluded here as it is important that the casino continues to monitor the players behaviour in order to prevent the risk of gambling harms as well as adjust for any changes in financial risk to either party. This monitoring may lead to the report of any suspicious activities to the appropriate authorities.

How to Speed Up the Process

Although KYC is most certainly a vital process which is integral for so many aspects of the modern, globally digitised world, these checks are incredibly time-consuming. This issue has been of particular concern for companies and consumers since KYC’s comprehensive implementation, soon after creating a bottleneck for business operations.

For Players

If you're a customer there are certain key characteristics you can fulfil to make the KYC steps already in place at the organisation in question occur as seamlessly as possible, which include:

• Ensure that all the documents required are in order, provided in the correct manner and in full.

• Follow every instruction given to you during the verification process.

• You could also choose to submit your documentation prior to requiring a withdrawal to make the overall experience less stressful.

For Casinos

From an organisational perspective, there has been a movement in favour of speeding up the process of KYC in a variety of innovative ways. These include:

• A shift towards technological automation using features such as facial recognition and Identity verification through the use of electronic documents.

• Many steps may be reduced through the use of artificial intelligence (AI) which can perform tasks such as data extraction, document authentication, and a stratification of risks.

• Providing immediate feedback when information is submitted with flaws or is incomplete.

• Universal accessibility options including voice over functionality and font resizing.

• Analysis of data displays where customer dropout occurs and to address such issues according.

Which Documents Do I Need to Submit for Verification?

Documents that identify you and are from a governmental institution or an accepted company, such as your energy or internet provider. These must be recent and official. For example, you may not simply send your document number, but you would instead need to send a copy showing your document in its entirety, without obscuring any important information.

The process may vary slightly between different operators. As a standard, you will need to send the casino a number of documents, which can include:

• Copy of your ID card, Passport, or driver’s licence;

• A recent utility bill with your name on it;

• A photo of yourself holding documentation;

• A document proving where your money is from, such as a payslip;

• Proof of payment, such as your debit card.

This is only a partial list of documentation, and a casino may require more information from you if they have any further questions.

How Do I Submit Verification Documents to Online Casinos?

You should ensure that you send a clean scan or photograph of your document in full. It should have the corners visible on all sides and include the front and back of the document when this is relevant. This is important because if your document photograph is in poor condition and isn’t legible, they will have to ask you to re-send it, further lengthening your verification process.

You may also be able to censor information when it is not needed. For example, if you are required to give them your credit card number, most of the online casinos in Europe will only ever usually ask for the first 3 and last 4 digits. This allows them to verify that the card is valid without requiring more information.

KYC Triggers for Existing Players

The KYC process is most often associated with checks that occur either prior or subsequent to signing up to an online casino, however, there are certain actions that may trigger additional KYC checks even once an individual has already gambled as an existing customer.

These triggers may include:

• Withdrawal limits being reached. Crossing a predetermined threshold, for instance, in Malta under the MGA, you must send documentation for further verification if you deposit or withdraw €2000 from your account. 

• Activity patterns. Should such an activity pattern such as high-risk behaviour be identified, a KYC review may be triggered.

• Account updates including changes in personal details or payment information may be cause for action as stringent as a re-evaluation.

• Periodic checks are also an eventuality. Carried out on a randomised basis, these checks ensure compliance with the varied and comprehensive gambling regulations across numerous jurisdictions. 

International KYC Requirements

Different countries have different licences, and as a result, each licensing body will require something different when it comes to a KYC check. To be fully informed of the different requirements of each jurisdiction be sure to check the local gambling laws in your area – some jurisdictions require immediate KYC.

UK KYC Requirements

The United Kingdom Gambling Commission (UKGC) governs all online gambling sites which operate within the UK. The laws state that KYC checks must be completed before a player may gamble. This includes verifying a player's name, address, and date of birth with the relevant documents at the point of signup.

UKGC casinos also have a responsibility to carry out regular deposit and loss checks on all customers. If required, then the casino must request a source of wealth and/or source of funds documentation from players. 

US KYC Requirements

Depending on which state you live in will depend on when you will be required to submit your KYC documentation. Generally, most gambling regulators in the USA require this to be completed at the point after you've registered after registering an account. Some licensing agencies also require a social security number and share (with your permission) your data on global databases to check for anything suspicious. 

US online casinos also carry out further checks if you deposit over $5,000. In this case, And you may be asked for proof of deposit along with the source of wealth and source of funds documents. 

Europe KYC Requirements

Similar to the USA, there are numerous gambling laws and licensing authorities which operate in Europe. As mentioned before, For online casinos which fall under the MGA’s jurisdiction players will be required to submit KYC when they have deposited/withdrawn €2,000. 

Conversely, Italian laws state that KYC is required before players can make a withdrawal of any amount from their account.

Online casinos based in Denmark and Sweden will also require a social security number and KYC documents when signing at the point of sign-up, a move aimed at targeting to help prevent money laundering. 

New Zealand KYC Requirements

Players based in New Zealand are legally able to play at offshore online casinos. These are generally governed by the MGA. This means that upon a at the $2,000 deposit or withdrawal point, you will ’ll be asked for ID and proof of address. You also may be asked to show proof of the deposit - a screenshot of your debit card for example. 

Do you want to know more? Read more on online gambling in New Zealand on our website.

Asia KYC Requirements

Many countries within Asia are governed by either the MGA or the Curacao licensing authorities. Players based in India and Thailand for example will be requested to send their KYC information when at the point where they exceed the 10,000 INR threshold. Players in other Asian jurisdictions will need to provide these details at the point of their first withdrawal. 

If you make large deposits at any MGA casino, you will be required to submit the source of wealth documents at some stage.

VIP Program KYC

If you are aiming to take part in a casino’s VIP program, you will likely be obliged to comply proceed with a KYC check. This is because you will definitely hit a casino’s minimum check requirements, but also because checking the source of funds and source of wealth is very important to ensure against no suspicious play. It also makes sure ensures that your VIP-level gaming is safely carried out, for you and the casino.

Terms You Need to Know During KYC

What Are Source of Wealth & Source of Funds

The Source of Wealth and Source of Funds checks are to ensure that your money is verified, and although they are similar, each one requires unique documentation. 

Simply, a Source of Funds check is to verify that your money is coming from somewhere legitimate (e.g. your bank account in your name). Your Source of Wealth is to verify that you are playing with what you can afford. The documents you would need to provide for this are related to your employment income.

What Does PEP Mean?

A Politically Exposed Person (PEP) is an individual who would represent a risk to the casino if they were to let them play. For example, if somebody worked in government, it could be argued that if they were to be at risk of bribery, they might use the casino to launder this money. As a result, casinos will often deny an account to people who are PEPs or who are related to them in some capacity.

The KYC process is most often associated with checks that occur either prior or subsequent to signing up to an online casino, however, there are certain actions that may trigger additional KYC checks even once an individual has already gambled as an existing customer.

These triggers may include:

• Withdrawal limits being reached. Crossing a predetermined threshold, for instance, in Malta under the MGA, you must send documentation for further verification if you deposit or withdraw €2000 from your account. 

• Activity patterns. Should such an activity pattern such as high-risk behaviour be identified, a KYC review may be triggered.

• Account updates including changes in personal details or payment information may be cause for action as stringent as a re-evaluation.

• Periodic checks are also an eventuality. Carried out on a randomised basis, these checks ensure compliance with the varied and comprehensive gambling regulations across numerous jurisdictions. 

Further Information

You might be interested in other security-related topics on our website - be sure to check out our most relevant pages below to become well-acquainted with the most relevant security information.

References

• UKGC (UK Gambling License)

• MGA (Malta Gambling License)