Safe Online Gambling: What AML and KYC mean to you.
Two decades ago, abbreviations like AML and KYC meant nothing within the online gambling industry. Today, they are among the most important steps to protecting both players and operators from becoming victims of illegal activity. Without them, iGaming would be just another source of unencumbered crime.
Today, we’re going to take a closer look at what AML and KYC mean to
the industry and its customers. You’ll learn how they’ve enhanced one
of the world’s most financially successful digital commerce markets,
and how these two little abbreviations are making online casinos
What is AML?
AML stands for Anti-Money Laundering. According to
AML refers to:
“…a set of laws, regulations, and procedures intended to prevent criminals from disguising illegally obtained funds as legitimate income.”
In the greater scheme of things, AML laws encompass a relatively
small scope in regards to criminal activity in financial
transactions. However, the implications therein are much more
For instance, Investopdiea describes AML regulations that require any
financial institutions that provide depositing account services
and/or credit issuance to customers to follow strict guidelines to
ensure they are not facilitating money-laundering activities.
Like so many things in life, money is traceable. Criminals who obtain
large sums of money through illegal activity, such as drug
trafficking, need that cash not to be traced back to them. Thus they
will try to launder
money by having a supposedly legitimate source deposit it, then
withdraw it back clean. Casinos have been a suitable filter for such
activity for years, and the online casino business is no different.
What is KYC?
KYC is an abbreviation for Know Your Customer. In
recent years, it’s become a standard policy within all financial
markets, from government banks to internet casinos. Anywhere cash can
be deposited and withdrawn qualifies for KYC policies. The purpose
behind KYC is to enhance the efficiency of AML.
“A set of due diligence activities that financial institutions are required to complete before doing business with an entity.”
Such regulations are in place to help identify whether the
institution is – inadvertently or otherwise – involved in
fraudulent financing or any other illegal activities. Due diligence
is a constant process that helps financial institutions better
understand their customers, and where their finances are coming
How AML & KYC Promote Safe Online Gambling
When applied in tandem, AML and KYC provide a safer platform for
online casino operators and their customers. These regulatory
requisites create a safe haven, where players don’t have to wonder if
an operator is aiding or owned by a criminal organization. They don’t
have to worry that their account might suddenly disappear into the
night. So long as an operator is licensed by a responsible authority
that enforces AML & KYC standards, all fear of fraud is removed.
For online casino owners, these policies sweep aside any trepidation
that they may become unwittingly involved in a money laundering
investigation that could destroy their business. Compliance with
these laws is mandatory, and can be costly, but without it, there’s
no doubt in my mind that the iGaming industry would not be as
successful as it is today.
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