Know Your Customer – KYC

The growing number of online casinos has made it possible for casino enthusiasts worldwide to enjoy their favourite games anytime they like. However, the increase in online gambling also comes with potential disadvantages. Cyber criminals can try to take advantage of any vulnerabilities that can benefit them within an online space, and casinos sites can be a target.

Other than usual online crimes such as malware and phishing scams, there is also a growth in fraud and money laundering. In efforts to eliminate these crimes, New Zealand and other governments around the globe have implemented KYC and related procedures.

In short, when filling in a KYC form, the information requested by casinos helps identify players so that unauthorised users do not get to take advantage of gambling sites. This way, your data and funds are protected so you can gamble securely.

What Is KYC?

KYC stands for Know Your Customer, a procedure online casinos use to identify their players. Some casinos introduce this step when users register to join the site, while others require that you fill in identifying information when making a deposit or withdrawal.

Required information may vary slightly between sites, but you are usually asked for your full name, email and residential address, bank details, and to upload an ID document.

What is AML?

The term AML refers to Anti-Money Laundering. The New Zealand government has their own AML policies in place, regulated by the Ministry of Justice. The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act) has specific requirements for online gambling sites to not only detect, but to deter money laundering and financial terrorism.

Difference Between KYC and AML

There are definite key differences between KYC and AML. Know Your Customer refers to the process in which online casinos go about collecting and verifying players’ information and identities. Anti-Money Laundering, on the other hand, is a system of policies and measures put in place by government institutions to regulate and prevent fraud. These policies are set out by the law that operators are required to adhere to.

Why Do Casinos Have KYC Requirements?

A key reason betting sites require this information is to prevent fraud. It also helps to ensure that the player is 20 years old or above, as per New Zealand’s legal gambling age. Confirming that you are really who you claim to be through KYC also plays a big part in the Anti Money Laundering (AML) procedure.

AML helps track if any illegitimate funds are coming in and out of a gambling site. On top of that, self-excluded gambling addicts can be identified and prevented from further gambling. That’s how the KYC procedure benefits the player and the casino establishment.

Casino sites are financial crime targets because of the large sums of money they handle. The technological advancement of brilliant and exciting online games and fast online payments enable casinos to cash in millions of dollars daily.

Catching Suspicious Players

In a land-based casino, it’s easier for security to identify customers because they can see them in person. This is significantly easier if the customer looks suspiciously younger than they claim or is someone who has been in the media for scams or other crimes.

This is why the KYC procedure is vital in monitoring and flagging suspicious online players. A strict KYC procedure is essential as some underage players may try to use their parents’ or fake IDs to gamble online.

Problem gambling is also a significant issue affecting online casinos and players. Some players identify that they have a gambling problem and take the necessary measures to self-exclude with the help of the casino site they use. During the self-exclusion period, they are restricted from gambling on any New Zealand casino site.

Most casinos can identify and carry on this restriction through the KYC procedure. A casino that doesn’t comply with this procedure is encouraging problem gambling. To protect customers, negligent casinos are subjected to enormous fines, if not being outright blacklisted.

Owning a casino comes with the responsibility of ensuring that players do not fall into problem gambling, because casino games are there to entertain and not put you in a complex social and financial situation.

KYC Check for Existing Customers

Each online casino is different, with their own set of terms and conditions. Their marketing strategies also vary which, in turn, ties in somewhat to the KYC process. With that, there could be several triggers for KYC checks, which could also occur at various stages of the player lifecycle.

For example, some online casinos may look at requesting KYC documents upon depositing. This may be an automatic process or via an email request or message to the player’s account. The customer support staff may also request this. Another KYC trigger is big deposits and spending. The casino requests documents at this stage to prevent chargebacks and it may also concurrently trigger the player as a potential VIP, depending on the parameters. Other instances where KYC checks are triggered include first-time withdrawals, IP mismatches, credit or debit card mismatches, incorrect personal details, bonus abuse, and big winners.

What Do You Need To Complete The KYC Check?

To complete the KYC procedure after joining an online casino, you will mainly be required to enter your personal details. Most New Zealand casinos adhere to this procedure and will require this information from you when they are processing your registration, when you want to deposit funds or when you are about to withdraw from your casino account.

The required details include:

• Full name
• Physical address
• Date of birth
• Contact details (usually you phone number and/or email)

Since you’re doing all this on the net, it is hard for casinos to know that this is really you. Therefore casinos take it a further step to confirm that these are your details. To do so, casinos ask for:

• Proof of ID
• Proof of address
• And sometimes, the source of funds

So, to complete the KYC check on NZ online casinos, you need to be honest about your personal data, have your proof of ID, address and source of funds documents ready.

Source of funds is rarely required, but it’s good to have all of these ready so that you don’t have to delay depositing/withdrawing procedures. When you’re excited about playing your favourite slots, cards, dice or other casino games, you don’t want anything to stand in your way.

How to Speed up the KYC Process

There are several ways in which you can get KYC verified more quickly. Here are some helpful tips:

1. Make sure that you have clear copies of your documents such as your ID, driver’s licence, or passport. Ensure that the images are not cropped and that all information is visible for scrutiny. Failure to do this only results in a delay in requesting the documents again.
2. Have clear copies of your proof of address. Some online casinos refuse electronic copies as they carry a risk of tampering. In this case, keeping a physical copy of your document would be in your best interest.
3. If required, have an official bank stamp as proof of your bank account and/or card. This shows the official bank information along with contact details.
4. Lastly, ensure that you scan your KYC documents rather than take photos or screenshots of them. By doing so, the documents are clear and easy to read.

Which Documents Are Accepted For The KYC Check?

Most of the time, you’ll be required to use the same documents usually asked for when opening a bank account, making an investment or opening a contractual agreement to purchase an asset.

If you’ve done these things before, then you shouldn’t be worried because these are documents you won’t have to stand in long queues to get. Most can be accessed through the internet, and others you should have at home already.

Proof Of ID

Have you ever been to a casino establishment, and the security guards don’t trust that you are old enough to enter? What do you produce to prove that it’s legal for you to spin as many slot reels as you’d like? Proof of ID in New Zealand and many other states means a government-issued ID, such as a passport or driver’s licence. These are used to confirm the name, date of birth and, sometimes, residential address.

A proof of ID document can also help confirm that you are certainly 20 years or older. A clear scan of these documents is required to be uploaded to casino sites. A site may also request documents be certified by an authoritative institution like the police department.

Proof Of Address

Betting sites don’t always require proof of address because, usually, your ID card or other documents already have your physical address attached to them. However, to be practical, people usually do their IDs while still at their parent’s house, so the address there might be different from your current physical address. To be on the safe side, have all documents with your address on with you in case the casino you’re joining asks for them.

What documents are usually required for proof of address? You can use your utility bill (water, electricity, phone, etc.) or bank statements that feature your name and address. It’s great to have these saved on your computer and phone if they are sent to you electronically so you can easily upload them when required.

Proof Of Funds

Proof of funds may not always be requested when you first join a casino, but instead when you go to make a deposit or withdrawal. Asking for proof of funds is also another way a casino protects itself according to its AML procedure, e.g., if you deposit a significantly large amount.

Proof of funds documentation can be in the form of a payslip from where you work, or a bank statement. This is to prove that you’re playing with legal funds. Once proven, you can fund your casino account, play games and request withdrawals in peace.

What Is The Difference Between Source Of Wealth And Source Of Funds Checks?

Source of funds and source of wealth are usually mistaken for the same thing, but they are different. Businesses must be able to differentiate between the two to do checks thoroughly and accordingly.

Checking how online casino users have obtained their wealth and where they get funds is an integral part of the KYC and AML procedures. Casino establishments must be updated with how financial crimes occur so that the fight against money laundering and fraud continues.

Source Of Wealth

Do you watch videos or read blogs about how much a celebrity is worth? This means they are looking at their sources of wealth (SOW): the overall value of their assets, incomes and investments. To determine this, casinos must look at how a customer has acquired their combined wealth.

There are various aspects of SOW to look at to understand how a customer generates their wealth. These include:

• Assets such as cars and buildings
• Inheritance
• Business ownership
• Employment

Source Of Funds

Source of funds (SOF) is where the money comes from. It’s checking how the customer earned the money they have. It is more specific than SOW because it explicitly identifies where your earnings come from instead of summarising where the overall volume came from.

People can have many income streams, and there should be identifiable proof of evidence to ensure that none come from illegal activities. Legitimate funds are usually obtained through:

• Release of pension
• Personal investment accounts (savings)
• Selling or renting out property
• Share dividends
• Gambling winnings
• Gifts
• Wages or salaries

To prove that you’ve earned these the legal way, they all come with certifications, receipts or confirmation letters, and are shown on your bank statement.

Who Is A PEP (Politically Exposed Person)?

Which players are considered politically exposed? A PEP is someone who holds a more senior-level position in an organisation, a politician, any other public figure, or someone related to such individuals.

The PEP procedure is arguably complicated, and casinos only sometimes go through this check. However, these checks are done because people in these positions tend to be more vulnerable to corruption.

PEP checks are not only limited to New Zealand residents but also players from abroad as well. Sites do these checks at their discretion, such as when they’ve noticed that a player is a refugee or has just moved from another country within the last 12 months.

Examples Of PEPs

• People in government like presidents, ministers, mayors etc
• Members of the parliament, courts and governing bodies
• Ambassadors
• Prominent members of a state-owned enterprise
• Prominent members of an international organisation
• Prominent members of a private enterprise
• General or other high position of the armed forces
• Close family members and known associates of the above-listed individuals

What Happens If Someone Is A PEP?

Since it’s not always straightforward to confirm that an online casino player is a PEP, operators sometimes rely on outside parties to run this check. These organisations can be non-governmental or commercial.

Examples include Transparency International Corruption Perceptions Index, KnowYourCountry, the International Monetary Fund and the World Bank. These will give a site more reliable data on possible PEP users. Some players may only become PEP after joining the casino; hence, it’s crucial to do checks on existing users.

So, what happens if someone is confirmed as a PEP? If a potential or existing customer is a PEP, a casino operator has to assess such users further. When doing this, they have to check the risks associated with the player. They have to thoroughly check any information about the player and assess it using guidelines issued by whichever gambling commission runs the site.