What is KYC In Online Casinos? Why Do I Have To Pass It?
KYC stands for Know Your Customer, and, it is an absolute requirement in the majority of online casinos. Even though some online casinos do not require KYC upon money deposits, without passing KYC you won’t be able to withdraw real money in most online casinos.
There are some online casinos that allow withdrawing real money without KYC!
KYC is a process that online casinos use to verify the identities of their customers to ensure compliance with anti-money laundering (AML), and counter-terrorism financing (CTF) regulations. KYC procedures are designed to prevent fraud, money laundering, underage gambling, and other illegal activities within the online gambling industry. Also, KYC plays a crucial role in helping addicted gamblers to fight their addiction through self-exclusion services.
Types of KYC you might encounter in online casinos
There are different types of KYC and each of them serves specific purposes. Each KYC type requires different documents to be provided by casino players. Let’s discuss each of them in detail.
ID verification
ID verification in online casinos is the most basic stage of KYC. Most online casinos require it at some point. Some of them ask players to download ID right after opening an account before a player can deposit real money (by the way, it is a legal requirement in some jurisdictions like the UK).
Other online casinos, offshore gambling operators often practice this, may require ID verification only once you decide to withdraw real money. The bottom line is that you will have to provide an ID to gamble for real money, except for no ID withdrawal casinos.
ID verification documents you might be asked:
Government-issued Photo ID: This is the most fundamental document required for verification. It can include a passport, driver's license, national ID card, or any other government-issued ID that includes a clear photograph of the player.
Selfie/Photo Verification: Some casinos may require the player to take a selfie holding their government-issued ID next to their face, which helps confirm that the person in the ID is the same as the account holder.
Proof of Address
Proof of address is another widespread type of KYC online casino players can face. However, you will be required to provide it less often in comparison to ID verification, a decent chunk of online casinos won’t ask for it at all (in my experience, offshore online casinos are less likely to require it).
Proof of address is a common requirement to verify the identity and residence of their players and here are documents suitable for proof of address verification:
Utility Bills: A recent utility bill in the player's name, such as a gas, electricity, water, or internet bill, can serve as proof of address. It should display the player's name and address and be dated within the last three to six months.
Bank Statements: A recent bank statement that shows the player's name and address can also be used as proof of address. The statement should be current, typically within the last three to six months.
Official Government Documents: Some online casinos may accept official government-issued documents, such as a driver's license or ID card, if it displays the player's current address.
Residence Certificate: In some cases, a residence certificate issued by local authorities may be accepted as proof of address.
Rental or Lease Agreement: If a player is renting or leasing a property, a copy of the rental or lease agreement that shows their name and address may be acceptable.
Mortgage Statement: If a player owns a property with a mortgage, a mortgage statement can serve as proof of address.
Insurance Policy: Some online casinos may accept an insurance policy document that includes the player's name and address.
Tax Documents: Tax-related documents, such as a tax return or assessment notice, may be accepted as proof of address.
Source of funds
Source of funds is the least widespread type of KYC procedure. In my experience, the source of funds is required only in highly regulated gambling markets (such as the UK) whereas offshore online casinos (such as Curacao) will almost never require it.
There are two main reasons you can be asked to provide a source of funds:
To make sure that you deposit legally earned money,
Also, to make sure that you can afford online gambling. For example, some online casinos are legally required to ensure that players do not lose money they can not afford to lose.
Suitable documents for source of funds verification:
Bank Statements: Recent bank statements that show your financial transactions, including deposits and withdrawals related to online gambling activities.
Paycheck Stubs: If your source of funds is your salary or employment income, providing paycheck stubs can be necessary to demonstrate a legitimate income source.
Tax Returns: Providing copies of your tax returns can help establish the legitimacy of your income and the taxes you have paid.
Investment Statements: If you have invested in stocks, bonds, or other assets, you may need to provide investment statements to show the source of your funds.
Sale of Assets: If you've sold assets like property, vehicles, or valuable items to fund your gambling activities, documentation of these sales may be required.
Inheritance Documents: If your source of funds includes inheritance, you may need to provide legal documents confirming your inheritance, such as a will or probate records.
Gift Declarations: If your funds come from gifts, you may need to provide gift declarations from the individuals providing you with the funds, along with their identity verification.
Business Documentation: If you own a business and your funds come from business revenue, you may need to provide business financial statements, tax records, or incorporation documents.
Loan Agreements: If you've taken out loans to fund your gambling activities, providing loan agreements can help establish the source of your funds.
Cryptocurrency Wallet Statements: If you've used cryptocurrency for gambling, you may need to provide wallet statements showing your transaction history.
Why do I have to pass KYC in online casinos?
Know Your Customer (KYC) procedures are an essential part of the online casino industry for several important reasons:
Legal Compliance: Online casinos are subject to various local and international regulations and laws to prevent illegal activities like money laundering and underage gambling. Implementing KYC procedures is a legal requirement in many jurisdictions to ensure that the casino is not being used as a platform for criminal activities.
Anti-Money Laundering (AML) Compliance: KYC helps online casinos identify and verify the source of funds deposited by players. This is crucial in preventing money laundering, as casinos must report suspicious transactions to authorities.
Age Verification: Online casinos are not allowed to accept players under the legal gambling age in their jurisdiction. KYC helps verify the age of players, ensuring that only adults are allowed to gamble.
Player Safety: KYC helps protect players from identity theft and fraud. By verifying the identity of players, casinos can reduce the risk of unauthorized account access and ensure that players receive their winnings.
Responsible Gambling: KYC can also be used to identify problem gamblers or individuals who may be at risk of developing a gambling addiction. Casinos can use this information to implement responsible gambling measures and offer support to those in need.
Fraud Prevention: KYC helps online casinos detect and prevent fraudulent activities, such as creating multiple accounts to take advantage of bonuses or promotions.
Payment Processing: Many payment providers require online casinos to implement KYC procedures to reduce the risk of chargebacks and fraud-related issues.
