Ever wondered if KYC is truly necessary? Learn more about it, the KYC process, and its benefits to online casino operators and players.
What is Know Your Customer (KYC)?
Know Your Customer, or KYC in short, is nothing but a standard process used by financing firms, brokers and dealers, private lenders, commercial real estate investment, and other industries in the finance sector.
Besides being a legal and managerial obligation, KYC is a good business practice. It helps you understand the platform’s objectives and suitability better, therefore reducing, if not completely removing, the risk of suspicious and fraudulent activities.
Before you start playing in an online casino, you will need to verify who you are and prove who you are with the help of legally backed documents. When you create an account in an online casino, the first thing you need to check is the KYC procedure. This procedure is standard for any individual who would like to deposit or withdraw money. You may also want to know how KYC is different from AML regulations.
What is the KYC Process?
Although every online casino has its own set of rules to fulfill the KYC process, there are some basic requirements that these sites have in common. For example, the most basic information you will need to produce during the verification process is as follows:
- Proof of birth
- Identity verification (SSN)
- Proof of physical address
Additionally, some casinos may ask for a photocopy of the original government ID proof. This may be your state ID, your driving license, or your passport.
Once you submit a photocopy of your documents, it will be used to confirm your identity and complete the process. This may take time, depending on your papers and how much backlog the system has. Your KYC could be updated within a few minutes or may even take a couple of days.
In some situations, depositing or withdrawing money requires additional verification. In such a scenario, your physical address proof along with some other documentation may be needed.
How Do Casino Players Benefit From KYC?
Identity theft can turn out to be a big problem in the world of online gambling. Users can use hacking and fraudulent means to obtain credit card details, such as the report in February 2020 that states a group of professional Chinese hackers stole player database from online gambling websites in Southeast Asia. They can use these payment methods to make transactions and participate in games using someone else’s funds.
Similarly, people may submit fraudulent documents and identity certificates to play under someone else’s identity. This is done to avoid repercussions from any losses faced during the game.
With KYC in place, users can feel a sense of security, knowing that the casino has verified their identity and trust that they are in the casino only for entertainment purposes. Completing all the verification processes also ensures that they can deposit and withdraw funds without getting questioned by the casino.
How Does KYC Affect Casino Operators?
Casinos deal in vast sums of money and conduct enormous financial transactions every single day. With thousands of casino games available, online betting platforms such as casinos, have a daily turnover of at least a million dollars, making them an easy target for criminals and hackers looking to launder money.
Not just that, communication is limited to just virtual on these websites, especially gambling platforms. This makes it easier for fake users to play on these sites without getting caught.
KYC and identity verification processes were built to reduce the risks of illegal and unauthorized activity on the platform. This is done by identifying clients and confirming that this identification is accurate. In doing so, suspects and potentially high-risk users can be flagged or banned from using the website ever again.
This process, in turn, adds protection for online casino operators from users who plan to abuse and misuse their account with the casino. If you’re playing in licensed online casinos, expect that KYC verification is mandatory for all players, even more so for those who are depositing or withdrawing large sums of money.
The question now, however, is that how does KYC work in Bitcoin casinos?
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