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KYC: What is it and why is it necessary in the online gambling industry?

Most people are familiar with the term “know your customer” or “KYC” from their interactions with banks or other financial institutions. In short, KYC is the process of verifying the identity of a customer. Banks use KYC to prevent fraud and money laundering, however, this is not the only industry that decides to implement these protocols to ensure the best experiences are provided to the end user.

Indeed, online gambling sites use KYC for similar reasons, as they continue to have a responsibility to their customers and are required to make sure they continue to do all of the necessary checks when providing their services to players.

In this blog post, we’ll take a closer look at what KYC is and why it is necessary for online gambling.

What Is KYC?

As highlighted above, KYC simply means “know your customer”. This is an important aspect of the online gaming industry, with firms in this space being required to follow the processes that have been set out.

There are two components to the KYC process: identification and verification. Identification is fairly self-explanatory; online gambling sites need to know who their customers are in order to comply with anti-money laundering regulations.

However, it could be argued that verification is a bit more complicated. Online gambling sites need to verify that the information their customers have provided is accurate and up-to-date. This usually takes the form of documents like a driver’s license or passport, as this will provide them with all of the necessary details that will highlight whether a person is permitted to play the games that have been made available.

As we know, the iGaming industry is one that is heavily regulated, with a number of rules in place in order to protect everyone associated, such as operators and consumers. Those that have been able to enjoy their favorite casino games – slots, roulette, baccarat, blackjack – or play online poker in Canada will have already had to go through the KYC phase, where they will have likely had to show evidence of who they are, and that they are legally allowed to play in the country by showing proof of age and even residency in some cases.

Why Is KYC Necessary?

Banks are required by law to verify the identities of their customers. The same is true for online gambling sites in many jurisdictions. The purpose of these laws is to prevent crime, specifically money laundering. Money laundering is the process of disguising illegally-obtained money as legitimate funds. By requiring banks and online gambling sites to verify the identities of their customers, authorities can trace illegal money more easily and prosecute those who are breaking the law. 

In addition to preventing crime, KYC also protects consumers from fraudsters who might try to steal their personal information or otherwise take advantage of them. By requiring online gambling sites to verify the identities of their customers, these sites can weed out potential scammers before they have a chance to cause any harm.

KYC is clearly important

As can be seen from the above points, there is no denying that KYC is incredibly important for everyone associated with the use of a gambling site. While there might be some that may find the entire process one that can be rather long and frustrating – punters who perhaps just want to sign up and play as quickly as possible – there is no doubt that it will help to protect them in the long run, too.

Additionally, operators have a duty of care, therefore it is vital that they carry out these checks to ensure they are not penalized for breaching them. Many governments take gambling seriously, therefore firms need to ensure they are only offering the wagering experiences to those who are legally allowed to do so in order to protect themselves from hefty fines or from even being banned from operating in the jurisdiction.

Final Thoughts

In conclusion, KYC is a process that online gambling sites use to verify the identities of their customers. This process helps to prevent crime and protect consumers from fraudsters. If you are ever asked to provide identification or other documentation when signing up for an online gambling site, know that it is for your own safety and protection!


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