Understanding KYC (Know Your Customer) in the Online Gambling World


Online casinos and gambling platforms witness the probabilities of money laundering, scams, and other kinds of financial delinquency. Hence, these entertainment sites are required to assess their customer's IDs and risk factors while approving their account. 

However, due to poor KYC (Know Your Customer) compliance, online casinos and betting platforms often get penalised by the regulatory and policing authorities. This is why you must understand KYC in online gambling and its consequences. Continue reading to learn more about this topic. 

What are the KYC Requirements for the Online Gambling Industry?

To conform with the global and local betting regulations, gambling platforms and gaming operators have established a well-organised KYC compliance system. It requires substantial data collection and appropriate risk assessment that analyses their users’ genuineness. The procedure comprises three vital phases:

User Identity Verification 

Online gaming operators analyse the personal information of individuals in order to verify their authenticity. These include their name, residential address, date of birth, and so on. In general, gaming operators conduct identity verification by checking the users’ photos of their government-issued documents such as a driving licence or a passport. 

When there are stricter rules, the users might have to take a snapshot of their own photo during the account verification process on the gaming platform. Subsequently, this photograph is cross-checked with the ID proof to make sure that the account has been opened by the correct person. 

Furthermore, during the ongoing identity verification process, gaming operators use the collected data to determine whether the user poses any risk to the online gaming site. These checks generally comprise the screening of the lists of Politically Exposed Persons (PEPs), self-exclusion lists, and watchlists. Undeniably, the data obtained from identity verification identifies fraudulent individuals and prohibits them from accessing different gaming sites. 

Source of Funds (SoF) Verification 

Often, online gaming operators verify the bettor’s source of funds (SoF) in order to prevent illegal activity within the gambling platform. Using the SoF verification process, gaming operators can take action against individuals if they cross a certain spending limit. 

The source of funds (SoF) can be assessed through various approaches, like income statements or pay stubs. Gaming operators analyse users’ accounts to identify whether there is any irregular income source. Doing so helps in monitoring the scam money launderers who are willing to use their gaming platform for illegal activities.

Source of funds (SoF) verification is performed during the account setup stage as well as in situations when a user makes ample deposits or withdrawals, or if they display any behaviour suggesting money laundering. 

Address Verification

Since the rules and regulations of online gaming differ from one country to another, it is essential to conduct an address verification process. Also called proof of address (PoA) verification, is necessary to make sure that the user is present in a region physically where online betting is legal. There are many online gaming sites that are limited to serving customers from particular geographical locations and also do not accept players from overseas without proper documents. This is why they verify the user's location and conduct an address verification or PoA. Essentially, the utility bills are used as PoA documents.

Online gaming operators ask an individual to upload a current utility bill for any of the following:



Credit Union Statement

Council Tax



Verifying a person’s address also facilitates AML efforts since it enables many gaming platforms to determine whether their funds are generated from an area of high risk which is also known for money laundering activities. In addition, gaming operators can check a user’s location through digital signals such as IP address and geolocation data from their mobile device.

What are the Challenges of KYC in Online Gambling? 

From the viewpoint of end-users, KYC seems to be a very time-consuming procedure, especially as they are keen to access the gaming website and enjoy their preferred games at the earliest. Potential gaming operators often come across the challenge of establishing a balance between improving the customer experience and protecting players’ assets. 

To ensure a seamless online gambling experience, KYC checks are performed by the gaming platforms for verifying the players and their ID documents. Thus, no matter how tiresome the identity verification process may appear, these scam prevention measures are applied for a reason. 

What is the Importance of KYC in Online Casinos?

Know Your Customer (KYC) processes are an essential security mechanism for gambling platforms. Mentioned below are the significance of KYC in online casinos:

Regulatory Compliance: Casinos need to verify their customers’ IDs in order to be compliant with the rules and regulations of gambling. This helps eliminate the illegal activities within gambling such as money laundering and ensures proper adherence to regulatory standards.

Fraud Prevention: Know Your Customer (KYC), is necessary in the world of online gaming to ensure the security, integrity, and compliance of the respective platform. Using authentic ID verification, casinos are able to detect and prevent deceitful activities such as account hacking, identity theft, etc. Besides, it protects both players and casinos from financial losses.

Responsible Gambling Measures: Using genuine ID verification and implementing liable gambling practices, casinos can observe a player’s behaviour and determine people at risk of gambling-based issues, allowing for intervention and assistance at the earliest.

Underage Gambling Prevention: By checking IDs, casinos can confirm the players’ authenticity and make sure that they are of legal gambling age. This helps maintain responsible gambling, while preventing minors from getting access to casino platforms.

Regulatory Compliance: Another notable importance of KYC in gambling is regulatory compliance. As a fundamental component of Anti-Money Laundering (AML) and Counter-terrorist Financing (CTF) regulations, KYC safeguards gaming operators from financial hazards as well as protects the consumers and national economies.

By executing all the above-mentioned measures, casinos not only conform to the laws of online gambling but also offer a secure ambience for players.

In a nutshell, KYC in online gambling plays a crucial role in eliminating the risks present in online gaming and gambling. By executing an all-inclusive KYC policy, gaming platforms can determine the identity of players, analyse their risk, and measure their activity to avert money laundering, scams, and other illegal activities. Failing to follow the KYC regulations can lead to hefty penalties and fines. So, whenever you are opting for an online casino, make sure that you have authentic ID proof and legal documents.