Know Your Customer

As of 2017, the international online casino industry was estimated to be worth over $45 billion and it is forecasted that it will be worth over $90 billion by the year 2024. In the recent few years, online gambling has grown exponentially across the globe. Some major online casinos and sportsbooks deal with millions of dollars on a daily basis.

Considering the large sums of money flowing through these virtual gambling establishments, it is not surprising that they have come under the scanner for being easy targets for identity fraud, money laundering and different forms of international financial crime. In order to thwart such illicit activities from happening at online casinos, these casinos are now being subjected to the same stringent regulatory mandates as banks and other financial institutions.

KYC is one such regulatory mandate. If you have ever played at an online casino or plan on playing anytime in the future, you too will be subjected to KYC verification checks. Unfortunately, way too many players make errors and easily avoidable mistakes related to KYC verification and even lose their winnings as a consequence. Here, we shed some light on what exactly KYC is in the context of online casinos and how you can jump over this hurdle in a hassle-free manner.

If you haven’t guessed it already, KYC stands for Know Your Customer. KYC has now become common place as part of various online processes that involve financial transactions, online casino gaming is no exception. In layman terms, KYC basically verifies a customer’s identity, age and address in order to make sure they are who they claim to be online and thus reduce the risk of identity theft, money laundering, underage gambling, financial crimes, etc.

KYC doesn’t just safe guard the casino from fraud, but also the customer. Thanks to KYC, no one else can pretend to be you at an online casino. Think of it this way, if you were to visit your bank and cash in a cheque, the bank would ask you to produce certain documents (typically some form of government issued identification card) before complying with your request. KYC is pretty much the same thing with the exception that is carried out completely online and you don’t have to physically be present for the verification check.

Given that online casinos deal with huge amounts of money flowing in and out nearly every minute of every day, KYC verification is most definitely required to reduce financial crimes from going under the radar. Not only are online casinos dealing with financial transactions, but since these casinos are online websites, the lack of face-to-face interaction with players makes them prime targets for money laundering, identity theft and various forms of financial crime. By verifying the identity of each player at an online casino, certain persons with particular criminal histories, high risk users, and suspicious accounts can be flagged and suspended or at least monitored.

KYC at online casinos also serves to ensure that the casino is not unknowingly serving players based in restricted countries which would be against the law too. KYC checks also play a role in reducing the risk of players using black money (source of funds not disclosed) and converting it to white money via online casino winnings.

At most online casinos, the KYC verification process is pretty much standard at this time. However, we do expect to see video KYC taking over the manual KYC checks sooner rather than later. Currently, the KYC process can be initiated and completed by a player at any time after he or she has registered as a member and opened an account. However, if not completed by the player, the casino will trigger the KYC verification process when a player requests his or her first withdrawal or cash out. Usually, the KYC check is only carried out once, but the casino does reserve the right to re-do KYC checks for security reasons if any suspicious activity is uncovered.

Effectively, a player simply needs to provide documents which prove his or her identity, age, address and source of funds in some cases. Some online casinos will have a dedicated email address for KYC checks and members can mail copies of their documents to the email address for verification. In most cases, the online casino website will have a provision where you can attach and upload copies of documents for KYC verification and even track the status of the KYC check.

For the completion of KYC, the following documents are generally acceptable:

• To prove your ID – a government issued identification document such as passport, driver’s license
• To prove your address – a utility bill in your name and address which is not older than 3 months
• To prove source of funds – Payslip, bank statements, trust deed, pension slips, directors renumeration, dividends, etc.
• To prove proof of payment method – censored copies of the front and back of your credit/debit card (if a card was used for depositing money).