The Importance of Anti-Fraud & Money Laundering In Your Technology
The rise of the iGaming industry in recent years has been accompanied with an increasing number of jurisdictions across the globe creating regulatory bodies and rules for the industry. While the rules can vary from country to country, one of the universal guidelines iGaming operators must adhere by is having a system to protect against money laundering. Additionally, the rise of iGaming has led to increasing competition amongst iGaming operators, where many offer lucrative bonuses to new bettors, which if not administered properly can be abused by fraudsters and penalized by regulators
This article highlights the importance of anti-fraud iGaming technology and having payment processing that includes KYC (know-your-customer) systems and is AML (anti-money laundering) compliant. As a licensed operator, it is your duty to ensure that both AML and KYC features are present in your iGaming platform. If you are interested in learning more about the steps involved in being a legally compliant iGaming operator, email us at [email protected] to learn how we can help you secure a gaming license.
Let’s get started by addressing some common concerns of iGaming operators on this topic.
KYC/AML will reduce the number of players my operation will attract
This is a common concern some iGaming operators have. While it is true that some potential bettors may not feel comfortable sharing their personal information, the majority of bettors prefer to bet with sportsbooks that are compliant with regulations, as noted by the American Gaming Association below:
“Research suggests that sports bettors “overwhelmingly” prefer legal operators, with 74% of respondents stating they believe it was important to only place wagers with a regulated bookmaker.” – American Gaming Association
Operators who are not compliant with KYC/AML regulations not only risk penalties from the authorities in their respective jurisdictions, but also risk alienating the majority of potential customers.
This concern is also common among crypto casinos who want to attract players that prefer gambling in cryptocurrency. Some operators have the misconception that since crypto is supposed to be anonymous, crypto bettors won’t want to play on websites that require them to go through KYC procedures. However, what crypto bettors truly want is to be assured that the games they are playing aren’t unfairly rigged against them. Keeping their crypto safe and not being victim to online casinos or sportsbook who would unfairly take their crypto is a top concern for these players. As a licensed operator who ensures required KYC for all of their players, crypto bettors will appreciate the fact that a reputable authority is licensing the online casino and be more likely to play using your online casino instead of one that doesn’t require KYC and is unlicensed.
In addition, even the most popular crypto casinos such as Stake require their players to go through KYC processes. The popularity of Stake among crypto gamblers alone should dispel the myth that KYC will reduce the number of players your online casino or sportsbook will attract.
Implementing KYC & AML procedures is bad for the player experience
This concern is somewhat similar to the one mentioned above, however operators should rest easy knowing that all of the world’s largest iGaming operators have KYC/AML baked into their technology. Moreover, for bettors using fiat currency, it is possible for no additional steps to be required from them when funding their accounts thanks to integrated KYC/AML in most payment processors.
Plus, the KYC process these days is simple and fast. With Lion Gaming’s technology, players can go through KYC procedures and be verified in a matter of seconds. Years ago KYC took days and even weeks to conduct, but nowadays the user experience for going through KYC procedures is hassle-free.
Why else is anti-fraud & KYC technology important?
Knowing your customer is not just important for maintaining good standing with regulatory authorities, but also crucial to an operator’s bottomline by preventing fraud and abuse of bonus programs.
Most iGaming operators offer affiliate programs and bonuses that could be abused through the creation of multiple accounts. For example, if a casino offers a signup bonus consisting of a $50 risk-free bet, in addition to an affiliate program that pays 10% of the house edge, a bettor may be enticed to create two accounts to game the system. If an operator uses anti-fraud technology, they are able to prevent this from happening.
Is KYC and anti-fraud technology expensive?
KYC is one of the cheapest processes in the player acquisition process. Many payment processors include it in their processing fee, while others charge a small fee (typically under a dollar) per user. The savings from reductions in fraud alone more than account for the marginal costs of implementing this technology.
Prospective and existing iGaming operators are in good hands with providers like Lion Gaming as most iGaming technology providers are able to get their clients up and running with experienced and reliable KYC solutions. Contact us today to learn how our online casino and sports betting software can drive revenue and success for your operation.