Online casinos have been expanding in recent years. This is the case in terms of embracing new technologies and finding a wider base of players. The use of cryptocurrencies as a payment method has especially changed the industry as it allows players to make bets without providing personal information.
With the increased adoption, government agencies' regulations on online gambling have also changed their approach. This has led to the introduction of Know Your Customers rules, otherwise used to prevent money laundering.
Being Anonymous Online
Using cryptocurrencies to pay for online gambling allows the players to stay anonymous online. It's an essential feature, as everyone leaves a trail of their activity online. This is because cryptocurrencies don't rely on any traditional and centralized financial network to be operational.
A user only needs an email address to set up a crypto wallet. This attracts some players to the use of cryptocurrencies, which can worry authorities since the transfers can't be traced. The use of cryptocurrencies also comes with additional features, such as increased safety and speed of transfer.
What Are Know Your Customer Regulations
The Know Your Customer (KYC) regulations are widely used in the banking industry and other financial sectors to protect the integrity of transactions. Simply put, the regulations require the business to have their customers provide their real names in order to use their services.
There are three main components of the "know your customer" process. These are the customer identification program (CIP), customer due diligence (CDD), and enhanced due diligence (EDD). This means that the customer needs to provide an ID, the business needs to do what it can to verify it, and it needs to provide additional security for individuals who are at high risk.
How are Online Casinos Handling it?
According to the Webopedia's analysis, there are still online casinos with no KYC that players can use without providing any personal information. However, more and more casinos are complying with the regulations when they are mandatory, and some are anticipating that they will be – and applying beforehand.
For some casinos, this means that they are losing a service that attracts players. Some are implementing other safety measures and features that would allow them to retain those players, but the change is a deal breaker for some. The casinos that are introducing the KYC rules are doing so for both new and old users.
How Will Things Change for the Players?
From the customer's point of view, the process is rather simple. The casino will now require them to provide a set of personal information before they can sign up and use its services. In most cases, this needs to be done only once.
The most basic of information includes their name, date of birth, address, and identification number. Most casinos also take additional steps as a precaution, such as making sure that the player doesn't appear on government sanction lists, politically exposed person lists, or known terrorism lists.
The Regulations
The regulations that require the casinos to take this step in assuring their process's security are quite old, but they haven't been applied to online casinos so far. In 1985, casinos were designated "financial institutions" under the Bank Secrecy Act, which in turn required them to file currency transaction reports for any transaction over $10,000 and comply with the same KYC and AML rules that apply to banks and other financial firms.
It's also important to note that country-specific regulations depend on where the casino is based. In some cases, it may affect who's eligible to sign up based on their age.
Will the Changes Affect the Demand?
At this point, it doesn't seem that the increased security measures will affect the demand for online casinos. Plenty of online casinos still don't require know-your-customer data gathering; chances are, they'll get new users.
In the long run, chances are that the increased interest in online casinos will continue to grow. It's part of the larger trend where public attitudes towards it are more liberal, and a growing middle class has the funds to gamble online. The base of potential players is also distributed all over the world.
Conclusion
In conclusion, the introduction of Know Your Customer (KYC) rules in online casinos reflects a broader trend towards increased regulation and security in the gambling industry. While cryptocurrencies have enabled players to remain anonymous, this anonymity poses risks that concern regulatory authorities. KYC regulations, which require players to provide personal information, aim to prevent money laundering and ensure the integrity of transactions.
Although these measures may deter some players, they are crucial for maintaining a safe and transparent gaming environment. Despite these changes, the demand for online casinos is expected to continue growing, driven by technological advancements and evolving public attitudes toward online gambling.
