The online gambling sector bludgeoned rapidly, and it continues to post growing revenues. Predictions indicate that the industry will have a market cap of over $100 million by 2023. One reason online gaming has enjoyed growing popularity is that it is quick to adopt new technologies. Gambling operators are always eager to make players as comfortable as possible. Cryptocurrencies are the latest offerings at online casinos. Digital currencies hit the mainstream over the past several years, enabling consumers to leverage their unique features. Although adaption has been measured, the number of crypto casinos is rising exponentially.
Virtual currencies are suitable for online gambling because they offer a level of anonymity, which some players crave. They also guarantee safe and low-cost payments. The persistent growth of cryptocurrency gaming has drawn the attention of governments and regulatory bodies in different regions. Although digital coins are considered safer than fiat currency, users remain at risk. So, regulatory authorities began developing standards to protect gamblers on cryptocurrency gaming websites. The industry currently focuses on implementing Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures for gambling sites and crypto exchanges to boost safety.
The Risks of Crypto Gaming
As the online gambling industry expands, so do the risk factors it faces. Cybercriminals come up with new, sophisticated methods of exploiting the vulnerabilities in online casinos. Gambling operators move large sums of money, and digital currencies have only increased transactions. Therefore, these platforms are prime targets for different types of illegal activities, including money laundering, identity theft and international financial crime. The rising prominence of cryptocurrency worsened the situation. Since some coins provide highly private transactions, bad actors use them for illicit practices, like trading on the black market. They then turn to online casinos to launder the ill-gotten gains. So, even legitimate operators find themselves in trouble when these activities come to light.
Another cause for concern is the security at coin exchanges. Some of the biggest cryptocurrency exchanges have been victims of cyberattacks, leaving them with losses worth millions of dollars. The Increasing use of Bitcoin and other coins for gaming means that exchanges are gaining new customers, making them even bigger targets. The rampant cases of data breaches have made currency holders warier than usual. If players are to bet on best Bitcoin gambling sites, they want assurances that their funds and information is safe. KYC and AML compliance seeks to provide that.
Know Your Customer
For players to understand how these policies protect them, they should have an idea of what they entail. Know Your Customer protocols are designed to prevent gambling operators from onboarding fraudsters who can compromise the entire platform. KYC procedures are fundamental to AML compliance. The point of these processes is to verify account users during signup. KYC standards have become mandatory at online casinos because they reduce the risk of fraudulent accounts. Banks and financial institutions have been proving customer identities for years, and other industries like online gambling and cryptocurrency are catching up. The KYC process is not only necessary at casinos but coin exchanges as well.
A compliant operator must establish procedures to prove customers are who they say they are. Typically, a casino or crypto exchange asks for proof of identity. So, players have to submit documents, such as bills with a valid physical address. KYC policies also require age verification to ensure that customers are of legal age. Gambling operators can check a user’s history, as well, to see if they appear on sanction lists. KYC tools enable online casinos to track customers on self-exclusion lists or with multiple accounts. Recently, regulatory bodies obligate casinos to verify identities during withdrawals. Gamblers cashing out funds above a certain amount have to submit various documents. Weeding out inappropriate users doesn’t only protect the establishment but other players as well. By verifying identities, casinos and crypto exchanges can monitor the flow of illicit funds.
KYC and AML Compliance
Online casinos and cryptocurrency exchanges must find ways to comply with ID verification requirements without compromising service quality. A KYC-compliant business doesn’t only avoid penalties but also gains a competitive advantage. Gamblers tend to trust operators that abide by regulations. The same applies to coin exchanges. The more confident users are, the more they spend.
Despite comprehensive KYC requirements, both industries are finding ways to make the onboarding process as painless as possible for customers. For example, signing up at an online casino can take minutes, provided the customer satisfies all the terms. Thanks to advanced digital tools, operators can take in new players without spending too much time on the registration process.
Credibility is a precious commodity in the online gambling sector. A casino’s reputation can make or break it. KYC compliance is one way a gambling website can build a solid reputation. It shows a business values its customers, and that goes a long way in attracting and retaining users.
KYC and AML protocols vary across regions. Some countries have stricter laws than others, which affects how gambling websites operate. If a casino or crypto exchange serves international clients, then it has to factor in the KYC and AML regulations of the user’s nation.
Failure to meet KYC and AML requirements can incur penalties. In 2018, for example, gambling operators had to pay £19.6 million in fines for failing to institute the necessary AML policies. In some countries, crypto exchanges cannot operate without a license, which means they have to comply with local KYC procedures.
Security is a critical issue in online gambling, and the proliferation of cryptocurrencies has made it even more so. Both industries face numerous safety threats that necessitate the implementation of stringent standards. KYC and AML policies are some ways that regulatory authorities ensure gamblers can play with crypto safely. Online casinos and coin exchanges have to adhere to certain regulations to operate legally.