The subject of Know Your Customer or KYC in gambling is important for ensuring that online gambling regulations are being met at all times. It is a process to ensure that the operators of sportsbooks and online casinos find out enough information about their users to carry out identity verification.
It ensures that areas like anti-money laundering AML and a block on underage gambling are covered as part of the standard KYC process for all new customers. It’s particularly important in those cases where the operators manage payments and banking relationships.
What is KYC in gambling?
The KYC process sees online casinos and other gambling sites request documents to confirm the identity of their users. It means that they can avoid underage gambling on their sites and confirm the source of gambling funds to meet money laundering regulations.
By completing identity verification professionally at an early stage, online gambling sites also make sure that there is no risk of identity theft among their users. All online casinos and sports gambling platforms should have a process in place to verify a player’s identity at the right stage to make sure that they don’t attract money launderers or other bad actors.
Why KYC matters to operators and banks
The online gambling industry needs to be particularly vigilant in ensuring KYC in online casinos. Any operator that fails to comply with the regulatory requirements could face a substantial fine, with a total of $184 million / £148.2 million applied in fines in 2024.
Failure to use a robust Know Your Customer process means that the online gaming site may see its reputation damaged, too. While players may not notice the difference, reviewers will provide negative feedback on gaming operators that don’t verify a player’s identity rigorously.
The lack of a robust KYC process during the onboarding process can also lead to issues with their financial partners. All of the companies that work with the online gambling industry look for regulatory compliance to prevent fraud risks.
The key points
All online casinos and sports betting websites need to consider the points that are most important to their businesses and customers. The first issue is that the operator needs to be protected from people carrying out identity fraud, money laundering, and all other types of suspicious transactions.
The KYC process is a big part of the way that online casinos ensure they comply with the current global gambling regulations. This is important in the responsible approach needed to make a gambling site reputable.
The previous points are all crucial, but they can’t lead to an awkward or extremely time-consuming user experience. People join gambling sites looking to start playing their favourite games or placing bets right away. They may look elsewhere if the site they initially chose makes the KYC procedures too complex.
Open an account
in Genome online
Why gambling operators must take KYC seriously
There are some powerful reasons why online gambling operators take the KYC process seriously. We’ve already seen that it’s a key part of the industry, but to fully understand the impact of these procedures, we need to look more in-depth at why the KYC process needs to be taken seriously.
The need for regulatory compliance
Regulatory compliance is needed for banking access. Any online casinos that don’t meet a good standard of identity verification requirements will be unable to offer a banking process to their users.
All reputable regulators require a strong KYC process in the online gaming industry. Without this way of carrying out identity verification, the operators can’t meet the likes of anti-money laundering and responsible gambling controls. It could lead to their licence being revoked or a fine being imposed.
Each of the world’s leading gambling regulators adopts a slightly different approach to KYC processes, but they all view it as being important.
Some examples of regulatory requirements
If we look at the UK Gambling Commission’s outline of the matter, we can see that name, address, and date of birth are needed before someone can gamble. They also confirm that a withdrawal request can’t lead to the casino asking for more information than they could have reasonably asked for before.
In this way, sites regulated in the UK make the KYC process a requirement as the start of a new player’s journey with them. Meanwhile, the Malta Gaming Authority (MGA) requires operators to verify player identity when cumulative withdrawals exceed €2,000, or earlier in cases of heightened risk. While some individual operators may impose lower verification thresholds (such as €150), this is not mandated by the MGA.
This means that the way a player starts depends on the KYC process put in place by the regulator. It’s another factor that operators need to take into account when deciding which authority to seek a licence from.
Many players may be happy to see that they can start gambling without providing their ID documents. However, they might not be so pleased when they see that they can’t withdraw their winnings before doing this.
Making the process clear for players
Therefore, each operator needs to consider what kind of process suits them best. It also makes sense to make this process clear on the site. Every new player should know when they’ll be expected to verify their ID, and how to carry this out.
The operator then needs to put a simple process in place. Players are typically asked to upload their documents to the site, rather than sending an email. There also needs to be the option of getting in touch via live chat if players have any doubts or want to check the progress of their ID verification.
Making the process clear for players
Therefore, each operator needs to consider what kind of process suits them best. It also makes sense to make this process clear on the site. Every new player should know when they’ll be expected to verify their ID, and how to carry this out.
The operator then needs to put a simple process in place. Players are typically asked to upload their documents to the site, rather than sending an email. There also needs to be the option of getting in touch via live chat if players have any doubts or want to check the progress of their ID verification.
A high-risk industry
Online gambling is considered to be a high-risk industry. It means that financial partners look for the highest standards from operators. The KYC verification process is a way for online gaming companies to show their professional approach.
It is the only way that gambling companies can confirm that they are doing everything possible to avoid money laundering and other possible types of fraud.
How the KYC process works for online gambling platforms
The KYC process is assessed by payment providers, banks, and EMIs like Genome as part of the onboarding process. They need to ensure that the online gambling site has done everything possible to ensure compliance. Every payment provider wants to see a responsible gambling approach that includes Know Your Customer.
Once the operator knows what the regulator’s rules mean for them, they can design a process that makes sense for their players. Again, transparency is a crucial point from the very start of this process, as users need to know what to expect at each stage.
The need for ongoing vigilance
Online monitoring and transaction screening help them confirm the use of KYC in online casinos. This is vital because technology improvements are making it easier for bad actors to carry out financial crimes in unregulated settings. So, ongoing vigilance needs to be part of responsible gambling, rather than the initial verification process.
In this way, online gaming companies that can show a robust Know Your Customer process enjoy a stronger financial reputation. This makes it easier for them to find financial institutions that are happy to work with them. By monitoring transactions, the operators are confirming that they support the way that other financial institutions work to stop fraud and meet anti-money laundering AML rules.
A smooth process that doesn’t cause problems
The process of verifying a player’s identity shouldn’t make online casinos more awkward to use. Given the hugely competitive nature of the market, these operators can’t afford to lose players by making the identity data process too complex. Online casinos and sports betting sites have to give a smooth onboarding process that encourages newcomers to get started without any hassle.
This is why KYC checks need to be carried out smoothly and easily. Yet, the operators also need to ensure that they do everything possible to ensure that no one uses their platform to launder money or get around the current AML regulations.
By clearly understanding the documents needed, you can make sure that this approach to cutting out money laundering works on your site without fuss.
The risks of crypto and non-KYC gambling
The KYC verification process is a big part of the way that the online gambling industry is regulated. However, we’ve seen a rise in the number of online casinos and gambling platforms that skip the KYC procedures in recent years.
This may seem like a simpler way to operate, but it means that accurate identity verification can’t be carried out. It’s an approach that makes it more difficult to prevent fraud and meet regulatory requirements. That’s why this type of site with no KYC regulations typically doesn’t have a licence, or has one from a regulatory authority with less stringent rules.
As we’ve seen, a KYC site has the advantage of being able to offer a full range of banking services from reputable providers. Non-KYC sites can’t offer the same approach, which means that more experienced users are likely to notice that they can’t access the top banking products that they’d like to use.
Someone who is considering carrying out money laundering or committing ID fraud will be drawn to non-KYC casinos. These sites make it easier for them to carry out their goals. Since both KYC and non-KYC platforms are currently available, any operator looking to offer the tightest level of control knows that using KYC is the most important step in setting their site apart.
The Contrast with KYC Casinos
The non-KYC method contrasts with the strict approach taken by the gambling platforms that work with high-quality providers like Genomes. These KYC casinos use the verification process to confirm user identities and prevent financial crimes or iGaming fraud.
Not every new player takes the time to fully understand the differences between these ways of operating. Meanwhile, those players who want to get around AML regulations will be happy to use the non-KYC approach.
However, anyone who understands responsible gambling will want to make sure that they do this as well as possible. As well as money laundering and other legal aspects, a good KYC casino is also likely to take a responsible approach to gambling in other ways. This means that they’re going to be more aware of other potential issues, such as identity theft and how to deal with the risk of gambling addiction.
In the long term, KYC casinos have a solid focus on responsible gambling that should see them gain the confidence of players. People want to stay safe, and once they understand that it isn’t difficult to carry out KYC, many will be happy to spend a moment or two doing this.
There will always be a market for non-KYC casinos, but we can expect a growing number of players to understand the difference and seek online casinos where KYC is carried out professionally. This trend is supported by the way the regulatory authorities enforce this requirement and make it easier for the public to understand what this means for them.
How Genome supports iGaming businesses
As a licensed electronic money institution, Genome supports iGaming operators across Europe with essential financial tools.
Key benefits for iGaming businesses:
High-volume transfers: Manage mass deposits and payouts effortlessly with batch transfers.
Real-time payment alerts: Stay updated with instant C2B payment notifications via API webhooks.
Seamless integration: Connect Genome with your accounting or management software.
Multi-currency accounts: Hold up to five accounts per currency (USD, GBP, EUR, PLN, CHF, JPY, CAD, CZK, HUF, SEK, AUD, and DKK) and link most of them to virtual or physical Visa cards (Google Pay, Apple Pay, Garmin Pay-compatible).
SEPA Instant Transfers: Send and receive funds across Europe in seconds.
Open an account
in Genome online
Multiple currencies and risk monitoring
Multi-currency support gives reliable support for casinos that have worldwide players using different currencies.
Bear in mind that the KYC process will need to be adapted to any country or region you operate in. This means knowing what national identity documents can be accepted and being able to translate them, if necessary.
Risk monitoring tools are available to help online casinos stay in control at all times. These include ongoing monitoring with real-time alerts and fraud protection.
The KYC process in online casinos adds a higher level of trust
The process of carrying out KYC in online casinos isn’t just a box-ticking exercise to get out of the way. This is a way of building trust by showing that you’re serious about avoiding fraud by verifying user identities. It should form part of a sensible approach taken by any online gambling operator that’s serious about doing things well.
The best KYC procedures are all about ensuring responsible gambling. Doing it right builds trust between gambling operators, banks, and regulators. The best way to prevent fraud from the beginning of any relationship is by confirming a player’s identity through accurate document verification carried out at the right time.
FAQ
What documents are required for KYC verification?
Online casinos with KYC requirements typically ask for similar documents. They look for identity checks to be completed by sending official documents with their name and address verification. A driver’s license or passport can confirm the person’s identity, while a utility or bank statement verifies the address. Payment method verification may also be requested.
What happens if I fail the KYC check at an online casino?
If the correct identity documents aren’t provided, the account may be suspended. Other KYC measures include not allowing withdrawals until the issue is resolved. This can be cleared up by verifying the player’s identity as soon as possible, sending the casino the requested documents.
Is KYC required for every deposit or withdrawal?
The KYC process is triggered by the player reaching a certain stage in their journey. This could be when a certain financial level is reached and accurate verification is automatically needed. It could also be triggered as a fraud prevention measure when there is suspicious activity or a withdrawal is requested.
