How AML and KYC work in licensed casinos

In licensed casinos, anti-money laundering (AML) and customer knowledge (KYC) are not "report boxes," but mandatory processes on which the license itself, access to banks and brand reputation depend. Below is how it works in practice: from the moment the player registers to monitoring payments and incident reports.

Basic concepts (short)

KYC (Know Your Customer): identification, verification of age and address; the goal is to make sure a real adult is playing.

CDD (Customer Due Diligence): basic customer due diligence (KYC + primary risk scoring).

EDD (Enhanced Due Diligence): in-depth verification for increased risk (large amounts, complex routes, PEP, etc.).

SoF/SoW: Source of Funds and Source of Wealth.

PEP/Sanctions/Adverse Media: Persons with political influence, sanctions lists and negative media publications - all three blocks affect the risk profile.

Player Compliance Lifecycle

1) Onboarding (before admission to deposits)

1. Identification: document (passport/ID/water. credential) + selfie/liveness, automatic age verification.

2. Confirmation of address (PoA): bill for services/bank statement/register (in some jurisdictions - optional at the start, but required before withdrawal).

3. Sanction/POP screening: reconciliation by global and local lists; saving the "snapshot" of matches.

4. Primary risk scoring: country, payment method, attraction channel, behavioral signals → CDD/EDD mode selection.

5. Account approval: rules of responsible play (RG), limits, consent to data processing.

2) Deposits and game (on-going due diligence)

Transactional monitoring: threshold amounts, frequency, deposit-withdrawal loops, atypical hours/geo.

SoF checks: when triggers are triggered - request for an extract, income statement, contracts, holding cards/wallets.

Behavioral monitoring: quick re-deposits, aggressive rate increases, ignoring RG notifications.

List rescreening: periodic update of sanctions/REP and adverse media.

3) Cash-out

"Return to source" (where possible): if possible, payment by the same method/to the same account.

Rescreening: sanctions/PEP/geo + chain screening for crypt.

EDD if necessary: if the sum/pattern is above the threshold - SoF/SoW and manual validation by an AML officer.

Logs and artifacts: decision logs, reasons for delay/failure, SLA by player response.

Risk model: How casinos define 'heightened risk'

Jurisdiction and residency: high risk countries, IP and claimed address mismatch.

Payment method: prepaid cards, anonymous tools, new PSPs without due practice.

Volume and frequency: sharp jumps in deposits/conclusions, short cycles "out of the game."

Social profile: PEP, proximity to public persons, negative materials in the media.

Cross-channel signals: multiple accounts, a common device/browser fingerprint, similar patterns in a group of players.

💡 Scoring result - scenario selection: CDD (normal check) or EDD (in-depth, with SoF/SoW, additional documents and limits).

What is requested in SoF/SoW (examples)

SoF (about specific money): bank statement, salary certificate, confirmation of the sale of an asset, wallet/exchange screen with input history.

SoW (about the state in general): income declarations, contracts, corporate documents, information about property/dividends.

Sanction and PEP screening

Primary match: automatic search in lists (OFAC/EU/nat.) + PEP bases.

Match score: name/date of birth/citizenship; probabilistic matches - manual revision.

Tolerance policy: what to do with "false positive" and "true" matches; Decision log is required.

Adverse media: negative context (corruption/fraud) strengthens EDD and lowers limits.

Transaction Monitoring (AML Core)

Rules and scenarios: thresholds of amounts, turnover rate, multiple deposits before withdrawal, "mules" (many cards/wallets), atypical geo-hops.

Anomaly detection: models/heuristics - look for deviations from the client's own "normal" behavior.

SAR/STR: preparation and submission of suspicious transaction reports to financial monitoring; storing copies and responses.

Special Case: Cryptocurrencies

Chain-screening addresses: sanctions, mixers, hacks, darknet tags; checking the on-chain source of funds.

Travel Rule (where valid): the exchange of a minimum package of KYC data between VASPs for transfers above the threshold.

Custody policies: hot/warm/cold, multi-signatures, withdrawal limits and daily reconciliations.

Payouts: preferably through verified on/off-ramp; rescreen before cashout.

Responsible Play (RG) and AML/KYC: How Related

The same signals (nocturnal activity, rapid deposit growth) are important for both AML and RG.

Interventions: at risk - "reality check," pause, limits; with AML triggers - request for documents, temporary output blocking.

Logs and transparency: the player must understand why they requested documents/limited functions.

Data protection and privacy

Minimizing data: Collect exactly what you need for KYC/AML/RG purposes.

Subject rights: access, correction, deletion (where legal) + retention periods.

Access control: role-base, the principle of "minimum necessary."

Cybersecurity: encryption "at rest" and "in flight," immutable logs, e-signatures.

Working with providers (KYC/sanctions/chain analytics)

Vendor-dewdiligens: certification, uptime, geography of data centers, incident policy.

Provider router: fallback in case of downtime; different providers for different countries/documents.

Quality control: periodic selective case reviews and "trial" list matches.

AML/KYC Maturity Metrics

KYC TAT: average verification time (target - minutes, not hours).

On-time filing: the share of reports submitted before the deadline (≥99%).

False Positive Rate for sanctions/PEP (balance of accuracy and sensitivity).

SAR/STR hit-rate: proportion of reports received without return.

Cash-out SLA: Median time to withdrawal without risk compromise.

Complaint SLA: average response time for CCR claims/payouts.

Common errors (and how to close them)

1. "KYC on output only." Late: risks accumulate, banks/payments are blocked. Solution: phased KYC while still onboarding.

2. One provider for everything. Downtime = stop onboarding. Solution: multi-provider and routing.

3. No SoF/SoW procedures. "We ask for anything" → a conflict with the client. Solution: checklists, letter templates and thresholds.

4. Manual reports. Excel breaks, deadlines burn. Solution: data marts, e-signature and receipts.

5. Opaque communication. "Why am I being tested?" - an increase in complaints. Solution: Explain triggers and timelines in advance, hold SLAs.

Implementation Roadmap (T-12 → T-0)

T-12...T-9: risk map by jurisdiction, KYC/AML policy, choice of providers, design of data marts and logs.

T-9...T-6: integrations (KYC/sanctions/PSP/chain analytics), launch of basic transaction monitoring, SoF/SoW and SAR/STR templates.

T-6...T-3: training of support and AML officers, incident testing, setting up RG signals and joint alerts.

T-3...T-1: parallel loop (manual + auto), threshold correction, final DPIA/safety.

T-0: full switch, monthly retro case reviews and risk drift.

Operator's checklist (short)

Identity/age verification + PoA prior to withdrawal.
Sanctions/PEP/adverse media - primary and periodic screening.
Threshold SoF/SoW with clear document requirements.
Transactional monitoring (rules + anomalies), decision logs.
RG triggers: limits, pauses, reality check.
Privacy policy, retention, role-based access.
Multi-provider KYC/sanctions/chain analytics.
SAR/STR procedures and e-reporting.
SLA for communication with the player (timing and reasons for requests).

FAQ (short)

Why am I being asked for SoF if I have already passed KYC?

KYC confirms the identity, and SoF confirms the legality of specific money. These are different purposes of the law.

Can I play without PoA?

Sometimes - until the first conclusion. But before cashout, PoA is almost always required.

How long is the conclusion checked?

Depends on risk and amount. In the basic scenario - quickly; with EDD and SoF/SoW - longer, but with statuses and explanations.

Crypt faster?

Not always. Addresses are chain-screened and large amounts are SoF/SoW. Without this, payments will stop.

Effective AML and KYC are an engineering discipline: clear rules, automation, transparent communications and respect for privacy. They protect players and the market, reduce the risk of fines and payment blocks, and allow the brand to grow predictably. Build the process so that it is understandable to the player and convincing for the regulator - and compliance will become a competitive advantage, not a brake on the business.