In the UK, the government enacted through the Gambling Commission that all casinos must demand KYC documents from their customers and follow all verification protocols. This regulation is in line with the three main licensing objectives of the Gambling Act of 2005:
- To prevent gambling from being a source of or associated with crime or disorder
- To ensure that all gambling practices are fair and open
- To protect children from getting involved with gambling
With this, UK online casinos that do not follow these regulations are subject to paying heavy fines and getting their licenses revoked.
Additionally, customers who do not comply and refuse to provide KYC documents may experience withdrawal delays, or they won't get to withdraw their winnings at all. Some even have their accounts removed. And those who are caught using fake IDs may need to pay tremendous penalties or face criminal charges.
REASONS FOR ID REQUIREMENTS
Here are the five primary reasons, in detail, why IDs are required when signing up and claiming your winnings from online casinos:
Compliant with Anti-Money Laundering Laws
Money laundering is an illegal act where the source of ill-gotten money is concealed to make it look like it's obtained legitimately. In contrast, it was generated from criminal activities like terrorist funding or drug trafficking.
One of the most common methods criminals use to "launder" their money is online gambling. Since online casinos and betting sites largely operate with vast sums of money and accessing their websites is relatively easy, they can quickly become a platform where this type of cybercrime is prevalent.
Launderers deposit their money in gambling sites as a way to "clean" it or make it seem like it's from a legitimate source of funding. Others simply use the ill-gotten money to fund their leisure gambling activities. Either way, both are serious money laundering cases through online casinos.
Governments have since laid down strict laws, especially with criminals' modus operandi or techniques that have been keeping up with advanced technology. With the KYC process implemented, all members are required to submit IDs, proof of address, and most especially, bank statements. Bank statements help show the source of your money.
If casino operators notice something suspicious, you will be asked to prove the legitimacy of your funding. If you fail to do so, they can cancel your account and transfer you to the authorities.
Online casinos which are also proven to overlook or support criminal activities like money-laundering in their platforms can be sanctioned by the law. They will have to pay heavy fines or be ordered to shut down.
The KYC process also prevents fraudulent activities of individuals and groups. One example of illegal activities that fraudsters do on gambling platforms is collusion, where they create multiple accounts on the website to manipulate their odds of winning. They will often use fake IDs and stolen identities to register. These fake accounts are then set up to lose, so one of their primary accounts wins.
In addition, some criminals use stolen credit cards to register in online casinos and top up their accounts. They also sometimes use their banks' chargeback policies to get a "refund." Chargeback, also referred to as "friendly fraud," is when a customer creates disputes with their bank instead of the merchant, in this case, is the online casino, to take their money back for illegitimate reasons. Fraudsters abuse this policy so they can cut down their loss.
All of these activities are illegal, and those proven guilty of any of these can be penalized. Online casinos will carefully verify the documents submitted to them and check their legitimacy.
Players who have a history of irresponsible gaming and fraudulent activities are closely monitored. Submitting your KYC documents will help the online casino verify if you're on the blacklist of fraudsters banned from playing.
Problem gamblers are also an issue for online casinos. As a way to assist those who already had an issue being a compulsive or irresponsible gambler, they shouldn't be allowed to sign up on online casinos anymore.
Fight Bonus Abuse
Some players abuse welcome bonuses by creating new accounts multiple times. Identification verification help prevent these gamblers from taking advantage of these promotions.
All casinos only allow one account per person. If you are caught creating a second one, they will cancel your first account, and you will not be able to withdraw any of your funds and winnings from there. In worse cases, they will block all the accounts you have made and will ban you from playing on their platform.