Feature Article
Clara Madeira29th Jun 2023

KYC in Online Casinos: The Key to Safe and Fair Gaming

KYC stands for Know Your Customer, and it’s an integral aspect of the online gambling world’s safety and security procedure. If you’re interested in how it works, and how it improves your safety and security, this is your ideal article. Read on to find answers to all of your KYC related questions. 

What is Know Your Customer (KYC)?

As we mentioned in the intro, KYC stands for Know Your Customer – but that reveals little about the process. KYC outlines a comprehensive list of procedures that all casinos have to undertake to guarantee player safety and security. 

These procedures have been designed to achieve the following objectives: 

  • Prevent identity theft
  • Detect money laundering
  • Combat terrorist financing
  • Ensure compliance with legal and regulatory bodies

Why is KYC Important? 

In the online casino industry, KYC has been implemented to make sure your personal data and real money transactions are kept safe. But it’s not only players that benefit. KYC processes are implemented to ensure that casinos are also protected and the industry isn’t stained by negative associations. 

While the rate of online gambling-associated crime fluctuates year on year, the general impact of KYC processes and increased regulation has been tangibly positive.

Expert Advice
Clara Madeira
Clara Madeira

Did you know?

A study published in the Journal of Gambling Studies found that stricter online gambling regulations in the UK reduced cases of fraud by 15% and money laundering by 20%!

The KYC Journey: What to Expect at Online Casinos

At all of the best online casinos, KYC will follow a similar 5 step process.

The KYC process begins when you sign up and create a new account. At this stage, you will be required to provide a few basic details, such as an email address, your name and date of birth. This information is meant to establish you as a real player, and is expected to reflect documentation provided later.

Once you have completed the registration process, you may be required to provide further documentation.

Examples of the type of documentation you may be required to provide include: 

  • Government Issued ID – This can include the likes of a passport, drivers license or ID card.
  • Utility Bills – These will be used to establish your proof of address.
  • Bank Statements – These may also be used to establish your proof of address, as well as verify that any real money withdrawals are made to the correct account. 

Another step used by the best online casinos to supplement document verification is identity verification. This usually involves sending the casino a recent photograph. However, in most recent times there has been a proliferation in the use of facial recognition software, which is also used for online banking. 

Enhanced due diligence (EDD) is carried out by a casino when transactions warrant additional scrutiny, or when a player is considered “high risk.” This step of the process includes requesting additional documentation, extensive background checks and asking that the player verifies the source of their funds. 

Once you have passed the first 4 stages of the KYC process, casinos will continue to monitor your account for three reasons. 

  • Compliance with regulations – Casinos will monitor how much you spend, the games you play, and the amount of time you spend playing to ensure that you are complying with the regulations. This is especially the case when you use a bonus. 
  • Detection of suspicious activities – Another area casinos are concerned about is how much you are depositing and withdrawing in your account. Unusual betting patterns are sometimes an indication of money laundering and fraud. 
  • Identifying problem gamblers – Problem gambling follows known patterns. Casinos will track your activity in an effort to detect early warning signs of problem gambling. If detected, they can offer support through the likes of responsible gambling tools and resources. 

When Do You Need to Provide Evidence? 

A lot of the work to carry out KYC goes on behind the scenes. But what’s required of you?

In most cases, there are 3 steps you have to take that occur at different junctures of your online casino experience:

  1. Signing Up – At this stage of the process, you will have to provide your proof of identity. This can happen in successive stages. For example, when you first sign up, you’ll only have to provide your name, email address, and date of birth. Later, you will have to provide further evidence. 
  2. Making a Withdrawal – When you go to make a withdrawal, you’ll have to provide some proof of address. Generally, this means providing the casino with a copy of either a bank statement or utility bill that corresponds with the details you provide when making a withdrawal. 
  3. Making a Deposit – You may choose to make a deposit when you sign up, or after you use a no deposit bonus. In either case, when you go to make a first deposit you’ll be asked to verify your payment method. Proof of payment may also include providing a bank statement or screenshot from your online bank account that displays your key details. 
Expert Advice
Clara Madeira
Clara Madeira

 Expert Tip – Beware of casinos that don’t request ID! 

A surefire sign that a casino is not up to scratch is if it doesn’t carry out a KYC process. Do not trust these casinos. The KYC process is there to protect you as well as them!

How To Pass An Online Casinos KYC Process

If you’re worried about passing an online casino’s KYC process, we can provide you with a number of tips that will greatly improve your chances.

Here’s what you can do: 

  • Provide Accurate Information
    When you register with an online casino, make sure you enter your details correctly. They must be up-to-date and accurate. Use your real name, date of birth, and genuine home address.
  • Prepare Your Documents
    It’s worth preparing all of your documents in advance to ensure a smooth KYC process. Create digital copies of your ID, utility bill, bank statement and proof of payment method. 
  • Follow Instructions Carefully
    Make sure you read the T&Cs and check all of your details to make sure they are correct before you move on to the next step. If you rush the KYC process you are likely to encounter issues later on. 
  • Cooperate with the Casino
    If the casino requests additional documentation or information, you will have to provide it. Casinos are required to be thorough with their KYC processes in order to protect you and the casino itself. 

Why Online Casinos Reject Some Players

It is unlikely that casinos will accuse you of financing terrorism or money laundering based on their KYC process. But there are common reasons why you might be rejected by a casino.

Here are five of them: 

  • You are too young
    A possible reason you’ve been rejected is that you’ve signed up to a casino based in another jurisdiction and regulated by a particular gambling authority. While you may be old enough to gamble online in your own country, you may not qualify in the country where the casino is located. 
  • You’re from an ineligible country
    There are certain jurisdictions in the world that present an increased risk of fraud to online casinos. It may be the case that players from your jurisdiction are banned entirely from accessing the online casino. 
  • There is an issue with your ID documentation
    It may be the case that the ID documentation you’ve provided is not sufficient. In most cases, this will be due to something that can be easily rectified, such as poor image quality, or you may have uploaded documents that don’t count as legitimate ID documentation. 
  • You are suspected of having multiple accounts
    You may be suspected of having multiple accounts if you do not provide adequate ID documentation, or you are creating a new account using an IP address already linked to an account. There is a one-per-player and one-per-IP address rule to casino accounts – so make sure not to use a public wifi domain when you sign up! 
  • You take too long to provide documentation
    Your casino may require you to upload your documentation within a time-limited window. If you do not provide valid documentation within the allotted time, you may fail to pass the KYC process. Try to make sure you have all necessary docs at hand before you sign up!

Benefits of KYC to the Online Casino Industry

KYC protocols have been implemented to protect both the player and the casino.

Let’s go over a handful of the benefits of using KYC:

  • Prevents Fraud
    By helping to verify the true identity of players, KYC reduces the risk of identity fraud, and other fraudulent activities, like money laundering. For example, KYC processes will flag when a player tries to use another’s credit card information. 
  • Increases Trust 
    KYC not only protects players and casinos, but it instills a greater level of trust between industry and player. Knowing that your cash is safe and you are at less risk of fraud or foul play, allows you to gamble online with confidence. 
  • Ensures Fair Play 
    One of the key benefits of KYC is that it helps casinos identify known cheaters. With the development of live and social casino games, there is a greater opportunity for players to collude to the detriment of other players and the casino. Identifying these players is essential to ensure fair play. 
  • Protects Vulnerable Players
    For one, KYC helps to identify underage gamblers by carrying out a series of identity proofs. For another, KYC gives casinos the data required to identify patterns of gambling that may constitute “problem gambling.” Casinos can then intervene and assist the problem gambler. 
  • Prevents Bonus Abuse
    By helping to identify real and potential bonus abusers, KYC allows casinos to keep providing the benefits of casino bonuses to new players. KYC makes it more difficult for players to make multiple accounts under different names or different IP addresses. 

Challenges and Limitations of KYC in the Online Casino Industry 

While the introduction of KYC has conferred many benefits to players and the industry in general, it is not without its limitations.

For a balanced overview, we think it’s necessary to provide you with an overview of these issues: 

Data Privacy 
The KYC process requires players to provide a lot of personal and sensitive information to a casino. If the casino is not well regulated, or does not use the latest SSL data encryption technology, players’ details may not be adequately protected.

User Experience
The KYC process may also have an impact on a players’ user experience. Rather than being able to sign up and play immediately, there may be a delay to verifying your account. This will hamper the user experience and deter players from signing up. 

Regulatory Complexity 
There are small differences in the KYC process depending on the players’ jurisdiction. Both casinos and players have to account for these differences and ensure that they are complying with the laws relevant to their jurisdiction. 

Cost 
You can’t carry out an effective KYC process without investing significant amounts in the relevant software. Moreover, casinos will have to incur additional costs, such as staff training and refresher courses whenever there are significant updates to the regulatory requirements.

Conclusion 

In conclusion, the Know Your Customer (KYC) process is an invaluable aspect of the online casino industry. Without it, players would be entering an industry fraught with crime ranging from common fraud to the funding of terrorist organizations. 

Understanding how to navigate this complex but necessary process is essential to ensuring a smooth path through signing up to playing your favorite online casino games.