What is KYC And Why Does It Matter?

In its purest form, the purpose of KYC is to facilitate verification of the player’s identity as well as proof of address. However, KYC forms part of wider AML (anti money-laundering) processes, which sometimes blur the lines. KYC isn’t an exclusively iGaming concept, it’s obligatory for most financial institutions. 

However, due to the possibility of financial gain, online casinos and betting sites have adopted similar measures. For the purposes of this article, we’ll be looking at KYC through the iGaming lens. We’ll tell you everything you need to know about KYC, and help you determine whether a casino is legitimate, or simply stalling for time. 

Contents

Decoding KYC – What It Is And Why You Need It

Let’s be honest, KYC has a bad reputation. Many players agree that it slows down withdrawals, places a burden on the player’s shoulders and is annoyingly time-consuming. But sometimes there’s a method to the madness, and in this section we’ll help you to understand that when it comes to KYC, casinos aren’t the bad guys. 

What is KYC?

Know Your Customer (almost always abbreviated to KYC), is what online casinos call the process of formally verifying a player on their site. It’s a legal requirement, enforced by governmental organizations. 

The process is designed to ensure that a player is who they say they are. That they’re a real person, playing with legitimately earned money, and residing at a real address within the casino’s jurisdiction. For high value players, it’s particularly important to ascertain that funds are derived from a legitimate, non-fraudulent source. 

Casinos will conduct verification by asking players to submit documentation. This could take the form of government-issued identity documents, utility bills, bank statements, and more.

When will I be asked for KYC information?

KYC procedures can kick in at the registration stage, or later on when the casino begins processing your first withdrawal. You might just be asked for basic information, or the site could immediately request more detailed documentation.

Many sites won’t ask for much information when you’re in the sign up phase. You’ll generally need to provide a first name, last name, email address and mobile number. However, as you come to make your first withdrawal, you might be asked for more information before you can cash out.

It’s important to note that KYC requests aren’t all triggered in the same way, and this largely comes down to the online casino and its KYC gambling license requirements.

How Does KYC Benefit The Player?

First of all, if an online casino employs formal KYC practices, you should feel fairly secure in the knowledge that it’s a legitimate site. You should feel reassured by the fact that the site respects the legal checks and balances designed to protect players.

In fact, KYC and AML work together to ensure that the place where you share your personal and financial information is:

  • Free of underage gamblers
  • A source of support for those who become addicted
  • Legally guaranteed to protect you against banking and credit card fraud 
  • A deterrent for fraudsters and those seeking to create multiple accounts
  • Continually monitored for suspicious activity and risky conduct

Ultimately, while KYC isn’t designed to directly benefit players, it does so indirectly. Its purpose is to contribute towards the prevention of fraud, money laundering and harmful conduct. This is done through the identification and verification of every single player.

Different Types of KYC Information Requests

KYC can be quick and painless, or it can require significant effort on your part. The information requested will vary, depending on where you’ve arrived in the online casino’s KYC assessment funnel. In this section we’ll explore each phase in detail.

Customer Identification Program (CIP)

Think of this as the portion of KYC that’s directly concerned with new players. Depending on the license, players will be asked to provide certain information on registration. 

This could be as simple as a first name, last name and address. In other cases you’ll be requested to submit information that officially proves your identity, such as a copy of a government-issued identity card.

Due Diligence 

Due diligence in relation to KYC can be considered ‘basic’ or ‘enhanced’. The level of due diligence applied depends on the risk presented by the player.

For example, if you deposit small amounts and place low value bets, you’re unlikely to be subjected to rigorous screening. On the other hand, high rollers and big spenders will attract top level security checks early on. 

Basic due diligence places a minimal burden on players, requesting only that they provide some official documentation that verifies their identity, address and banking information. 

However, enhanced due diligence extends into the request for bank statements, payslips, a contract of sale, or even evidence of inheritance in an effort to verify the player’s source of funds.

Continuous Monitoring

The work doesn’t end after the registration process, or even after the first withdrawal request. Online casinos are bound to engage a team of professionals who constantly monitor account activity. 

Their job is to flag suspicious activity, drastic changes in patterns and behavior or dubious transactions. This team drafts Suspicious Activity Reports (SARs), which are made available to the regulating bodies upon request or during audits. 

The Difference Between KYC and AML

To further confuse players, the term ‘AML’ gets thrown around a lot in conjunction with KYC. It’s an acronym for Anti-Money Laundering, and KYC is one aspect of this initiative’s efforts. In fact, KYC is considered to be the most basic AML check in place. 

While KYC and AML both strive to achieve the same goals, they operate on different levels. AML is a highly complex set of measures designed to prevent financial crimes. On the other hand, KYC is the process by which the casino obtains verification of your identity. It’s just one small part of the greater AML effort.

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Pro tip: No KYC, No Party

While an online casino that allows you to play and deposit without making any KYC requests might feel like a good thing – it isn’t. This probably means that the casino is unregulated and unsafe.

KYC In Practice

If you haven’t experienced obligatory KYC procedures first hand, you’re probably curious about what they actually entail. While processes might differ from site to site, here are the broad steps you’ll be expected to go through.

  1. Step 1 – Register Your Account: Depending on the gaming license in place, you might be required to complete electronic verification before you can gain access to the site. However, many Curaçao and MGA licensed sites will allow you to register by providing basic information like first name, last name, email address, and phone number.
  2. Step 2 – Deposit, Play & Withdraw: If you’re a lucky winner, then it’s time to make a withdrawal. At this stage KYC requests might come into play. Some casinos are content so long as you’re using the same payment method that you used to deposit. Other sites will request an ID verification, as well as a recent bank statement.
  3. Step 3 – Submit Documentation: Just scan or take a photo of the requested document/s and submit them to the online casino by email. Some casinos will even allow you to make your submission via live chat. Depending on the site, it could take anything from a few hours to a few days for your information to get verified. During this period your account is locked for withdrawals.
  4. Step 4 – Unlock Your Account: Once verification is completed successfully, your account will be unlocked and you can proceed with your withdrawal. Should the documentation submitted not be sufficient, you’ll be contacted by the site with further instructions, and your account will remain locked.
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Good To Know: KYC documentation can vary!

Depending on the casino, your location and your budget, the information requested can include:

  • Proof of identity: A copy of your passport, driver’s license or other government ID.
  • Proof of address: A copy of a bank statement, utility bill, or a mailed letter from a public authority.
  • Proof of payment: Verify your credit/debit card, bank account or e-wallet with a photo of your card (front and back), a bank statement, or screenshot of your account area.
  • Source of funds: Also called source of wealth, this is reserved for very large sums of money and will require a payslip, bank statement or other document to explain your wealth.

Different KYC Requirements According to Gambling License

There are a number of licenses you’re likely to come across. Some regulators are more rigid than others, and this might become evident when KYC requests roll around. Although there are several iGaming licenses, we’re taking a look at the three most common ones, and their KYC requirements.

KYC and the United Kingdom Gambling Commission (UKGC)

The UK runs a very tight ship when it comes to gambling regulation, and they’re also very technologically advanced. They operate an electronic system, whereby players are scanned through a national database during the casino registration phase when they submit their name, address and date of birth. This means you won’t need to submit any documentation to verify your identity and address.

While this system is available, operators aren’t required to implement it. However, non-electronic systems will mean players have to submit physical documents before being able to access the site at all. 

Keep in mind that employing an electronic system doesn’t mean that physical documents won’t be requested down the line. In fact, sites that operate on this license are usually required to request information from players far more frequently. This comes down to the UK laws designed to protect the interests of players. 

KYC and the Curaçao Gaming Control Board (GCB)

The Curaçao government is famously the most relaxed of all the gambling licensors, but this is about to change. Reforms have been underway in recent years, but they haven’t yet come into practice. The proposed reforms include enhanced monitoring of operators and anti-money laundering controls. 

While the exact changes haven’t yet been clarified, we can expect them to involve a more rigid structure when it comes to requesting documentation from players. As things stand, casinos under this license are free to request KYC at any stage they please. 

KYC and Malta Gaming Authority (MGA)

The highly popular Maltese gambling license is like a halfway house between Curaçao and the UK. By this we mean that the MGA isn’t as restrictive as the UKGC, but it places far more emphasis on regulatory checks than Curaçao eGaming does.

With MGA-licensed casinos, you’ll always be asked to submit physical documents, as there’s no electronic system in place. The online casino has the option to set the request for verification once you hit €2,000 (or the equivalent in your currency) in lifetime deposits, or when you reach a €2,000 spend across 180 days rolling. 

Tips To Pass KYC Quickly

If you’re on the hunt for an online casino that doesn’t employ KYC processes, you’re going to end up disappointed or in a very sticky situation. Online casinos that disregard KYC are generally unregulated and not safe to play at.

Instead, follow these tips to skate through KYC requests, and get back to the fun part as soon as possible:

  • Stick to the same payment – Whatever method you used to deposit, use the same one when it comes to withdrawing. Multiple payment methods on a single account is a big red flag for KYC teams.
  • Never use an alias – At some point you’re going to have to verify your identity with an official document. Using a false name can cause significant issues.
  • Submit quality documentation – Don’t make the casino team reject your documents. Follow instructions clearly and make sure your submissions are clear, non-blurry and easy to read.
  • Newer is better – Try to get your hands on super up to date documents, particularly when it comes to bank statements and utility bills. Some casinos will reject documents older than six months, while setting the requirements at no older than three months.
  • Be discriminating – Choose an online casino with a great reputation and a well-known gambling license. This will ensure you won’t get tricked into losing your winnings trapped in an fictitious KYC cycle.

Wrapping Up – KYC is friend not foe

If you took the time to scan this entire article (and we can’t blame you if you didn’t), you’d now understand that KYC is essential to maintaining a safe online casino experience. Of course, that doesn’t detract from the occasional inconvenience it brings about, but you should never feel suspicious of a genuine KYC request. 

KYC Key Takeaways

It’s a lot of information to take in. We understand.

If you’re not one for heavy reading, here are the main things you need to know:

  • KYC is the process through which an online casino verifies the identity and location of a player.
  • Online casinos that don’t have KYC processes are unregulated and should be avoided.
  • Get through KYC quickly by following instructions clearly and completing information requests honestly.
  • The process will vary depending on the KYC gambling license the online casino runs on.
  • KYC requests could include proof of identity, proof of address, proof of payment, and source of funds/source of wealth. 
  • While KYC might feel like a burden, its purpose is to ensure and maintain a safe gambling environment.
Published on: 2023/07/18

About the Author

Hi, I'm Courtney, the Webmaster at No Deposit Kings - We provide visitors with free and easy access to real money casino gaming thanks to no deposit casino bonuses offered by our hand-picked selection of online casinos.