Identity Verification in Online Sports Betting

When it comes to Identity Verification, it helps to have some background first. In the online gambling landscape, gaming hubs accepting virtual currencies first appeared at the start of the 2010s. The exact year when this happened gets contested by some. A few parties claim this occurred in 2011, and others claim this trend unveiled itself in 2012. Nevertheless, regardless of the date when these hubs appeared on the Web, their primary allure was that they provided fast transaction processing and secretive gambling.

However, that began to change post-2014, since after this year, Curacao Antillephone N.V. began licensing these sites. When that occurred, crypto-gambling platforms started to attain regulatory approval. Many slowly began implementing mandatory identity verification processes known as KYC. These were necessary for crypto casinos to work with famed providers who refused to partner with unregulated operators. Sites offering sports betting then quickly followed in their footsteps, and these procedures, known as Know Your Customer policies, became industry staples.

Identity verification has become established in this industry because of the pressures that online gambling operators face in various jurisdictions concerning their sites getting used for money laundering purposes, preventing fraud, ensuring age compliance, and risk management assessments. Moreover, adhering to KYC rules shows that companies are committed to facilitating responsible gambling. And have a dedication to following government-imposed rules and international regulations. That improves operators’ standing in markets and may increase customer loyalty.

KYC Defined

Over the decades, monetary transactions have moved more into the digital sphere. Furthermore, the world has increasingly become a global economy, leading to more illicit financial activities. Thus, institutions and governments around the planet raise the need for new customer standards that aim to protect against terrorist financing, money laundering, and fraud.

That said, while KYC is something that has entered the limelight in the past decade, the truth is that initial guidelines were created by the US Bank Secrecy Act of 1970. Notable additions to these original rules, whose goal was to lower unchecked financial crimes, came in 2001, following the 9/11 terrorist attacks. Then, the global financial crisis of 2008 added new regulations.

At a minimum, companies with a KYC policy must get their customers’ date of birth, address, ID number, and name. In cases involving more significant transactions, a source of funds may get demanded, as a list of past transactions. The end goal is to get enough data to rate a client’s riskiness level. Most carry no to little risk, but some may raise red flags that will see them subjected to enhanced due diligence. That stage gets reserved for those customers whom a company believes pose extra risks, and they decide they must take additional steps that will lead them to gain a better understanding of why they want to use their service.

What Do Crypto Sportsbook Require?

In the least, an online sportsbook/casino identity verification procedure will ask that a user supplies proof of ID and address. The first usually entails a copy of a government-issued identification. This could be a national ID card, a passport, or a driver’s license. These should display a person’s full name. Then, their date of birth. And they must be valid. Expired ones are ineligible. Some operators may demand that their expiration date is not less than three months away. The other requirement, proof of address, can get satisfied by providing a copy of a bank statement or utility bill. In most cases, they must not be older than thirty or ninety days.

In recent times, many sites have tightened their verification procedures. They have done so by demanding a photo or video selfie with the asked documents. Additionally, some platforms no longer accept photos or screenshots and ask for documents to only get submitted in PDF format.

A source of wealth customarily only gets demanded from high-rollers or when a users request to withdraw a substantial sum from their account.

The submitted data gets thoroughly reviewed by a platform’s compliance team. This process usually takes up to two days. With users get a deadline of two weeks to submit the required data. If they do not follow through with this request promptly, they risk getting their account closed. During the verification process, gamblers’ funds either get frozen or users get allowed to deposit but cannot withdraw. 

Data Retention Concerns

Undoubtedly, giving personal data to companies is something that most people are not comfortable with. That gets highlighted by the fact that most gaming/betting platforms must traditionally keep users’ data for up to five years after account closure. Some operators may even keep this info for eight years, depending on their operating jurisdictions and personal views. Such a stipulation gets listed on a sportsbook terms and conditions page. This is something most gamblers never check, and they agree to the rules stated there blindly. That site section also discloses the third parties to whom an operator can share their accumulated data. As a rule of thumb, a betting hub would never share KYC-related documents with other companies. As they are likely unauthorized to legally do so. They primarily share cookie-accumulated info.

Per the Data Protection Code of Conduct for Online Gaming Operators published by the European Gaming and Betting Association, a Brussels-based trade association, European operators must enhance data portability rights.

Aside from AML compliance and guaranteeing adequate data processing in the online gambling sector, this Code states that gambling companies must take novel steps regarding data processing to ensure the safety and health of their gamblers. It also mentions that the data minimization principle must get followed, which states that operators must only acquire the necessary data. Also, we should not forget to add that the EU’s General Data Protection Regulation mentions several exceptions in spite of this regulation mandating transparency.

Must an Online Sportsbook Implement Identity Verification?

It depends on its licensing jurisdiction. Now, if a sportsbook operates/gets regulated in a developed European country, such as the United Kingdom or Sweden. Then, identity verification is mandatory. For example, in the UK, British gamblers cannot even complete the sign-up process at their chosen site without first supplying the necessary KYC data. They also automatically get entered into a national self-exclusion system. And if they activate a self-imposed anti-gambling ban at one hub, they cannot play at any other UK Gambling Commission-licensed site until this restriction set date expires. The same is also valid for many European markets.

That said, offshore websites may accept gamblers from these regions and not have any KYC procedures. Such a platform may or may not have a license. Still, even non-regulated Internet bookies, or ones operating from territories with lax rules that do not mandate KYC/AML compliance usually, still require identity verification. They do this to avoid legal hassles from other countries whose citizens they allow to use their services under international trade agreements. In general, many offshore regulators do obligate their licensees to implement an identity verification process. But, most do so by their own free will. Still, some exist that do not do this. Moreover, others only ask that users fulfill this requirement after they reach a specific withdrawal milestone.

While you may get away with betting at a few credible online bookmakers without disclosing who you really are, we say have your documents on hand because you are likely going to need them if you plan on teaming up with a respectable bookie.

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