Why casinos are required to comply with AML and KYC policies

In a nutshell

AML (anti-money laundering) and KYC (know your customer) are the foundations of licensed gambling. Without them, the operator risks: losing the license, payment channels and reputation, and the player - money and privacy. The correct AML/KYC is not "paper," but processes built into the product: identification, transaction monitoring, risk management and provable reporting.

Why AML/KYC casinos: Four reasons

1. Law and license. Most jurisdictions explicitly require operators to conduct CDD/EDD, review sanctions/PEP, and file suspicious transaction reports.

2. Access to payments. Banks and providers require a mature AML circuit (KYC/KYT, policies, logs, audit) - otherwise the account will be closed or the limits will be cut.

3. Player protection. KYC helps keep minors out, protect the vulnerable and prevent account hijacking (ATO).

4. Fight against fraud. KYT and behavioral analysis identify "mules," bonus abuzz and cash out, saving transaction and reputational costs.

Key compliance elements (what the regulator requires)

1) CDD/EDD: recognize the customer

Basic verification (CDD): document, selfie/biometrics, address reconciliation (by jurisdiction), age.

Enhanced verification (EDD): for high risk/VIP/crypto - proof of source of funds (SoF) and source of wealth (SoW), additional documents, frequent reviews.

Re-verification: when changing the device/details, accumulation of risk signals or threshold amounts.

2) Sanctions and PEP

Screening of the client for sanctions lists, PEP and related persons, with regular rescans.

Escalation logic: "coincidence → manual validation → decision with justification."

3) KYT: we know every transaction

Rules and models for deposits/withdrawals: thresholds, frequency, atypical patterns, geo/device, account connectivity.

Behavioral scenarios: "quick deposit → instant withdrawal," crushing, circular transfers, abnormal activity at night.

Crypto (if allowed): chain analysis, address risk tags, off-ramp policies, Travel Rule/sender-receiver data.

4) Responsible game (RG) - link with AML

Self-exclusion block lists, deposit/time limits - used as anti-harm and as anti-fraud signal.

Mandatory interventions and case management (support, consultations, temporary locks).

5) Reporting and data storage

SAR/STR (suspicious transactions), CTR/threshold reports, case decision log.

Immutable logs (WORM), retention 5-7 years (depending on jurisdiction), PII and DPIA protection.

How it works in a product: end-to-end flow

1. Onboarding: KYC + consent collection, instant sanctions check/PEP, risk assessment.

2. First deposit: KYT rules, 3-D Secure/SCA, device fingerprint, antibot.

3. The game: RG monitoring and behavioral anomalies, alerts and case management.

4. Conclusion: repeated KYC/EDD for risk, verification of details = client name, sanctions/REP rescan.

5. Reporting: automatic generation of SAR/STR, telemetry to the regulatory hub, storage of logs.

6. Revaluation: periodic KYC-refresh, compliance KPI reports (verification time, EDD share, conversion).

What exactly needs to be documented (and shown to the auditor)

Politicians: AML/KYC/KYT, sanctions/REP, RG, privacy/information security, incident management.

Procedures: onboarding, escalation, EDD, case closure, SAR/STR, log storage.

Registers: beneficiaries and key functions (MLRO, Compliance, InfoSec, RG Lead).

Evidence: flow screenshots, KYC/KYT provider reports, decision logs, staff training.

How banks and payment partners look at you

Risk-based approach: high share of chargeback/fraud, "gray" countries, crypto without rules - red flags.

Technical protection: MFA, segregation of funds, SLA by conclusions, admin action log.

Transparency: are they ready to provide SAR/STR cases, KYC/EDD logs, audit results.

Typical mistakes and why they are fined

KYC "after deposit." Verification should occur before/at the first risk event.

One-time Sanskan. We need rescans and coincidence monitoring.

No SoF/SoW for VIP. Large turnovers without proof of origin - direct AML risk.

Scattered logs. Without WORM/idempotency, SAR/STR is difficult to defend in court/before a regulator.

Ignoring RG signals. Continuation of the game with signs of harm → sanctions and public statement.

Crypto without politics. There is no Travel Rule, chain analysis, limits - a block of payments and investigations.

AML/KYC Maturity Metrics (What to Measure)

KYC SLA: median/90th percentile of verification time.

EDD rate: the proportion of customers who have gone to EDD and the closing time of the case.

Sanctions hit-rate: the share of "true match" to total positives, solution time.

KYT alerts: quantity/quality (TP/FP), time to investigate.

RG KPI: share of players with limits, speed of reaction to triggers.

SAR/STR timing: submission on time, return from the regulator without corrections.

Chargeback/fraud ratio: trends by segment and payment method.

Check sheets

Starter (before market launch)

MLRO/Compliance/RG Leads assigned, roles and RACI described.
AML/KYC/KYT, sanctions/PEP, RG, privacy/information security policies approved.
KYC (biometrics/dock) and KYT (transactions/crypto) providers are connected.
Sanskans and periodic rescans are configured.
SAR/STR/CTR channels tested, patterns consistent.
WORM storage and event schemas (UTC, idempotency) are ready.

Operating room (for each day)

KYC before the first risk operation; EDD by triggers and thresholds.
RG tools are visible and working (limits/timeouts/self-exclusion).
KYT alerts on duty 24/7; decisions are documented.
Conclusions - only on the client's personal details; sanctions rescan.
Daily log and reporting reconciliations, DQ monitoring.

In case of incident/suspicion

Account freeze, client notification.
MLRO escalation, SAR/STR generation, timeline, and artifacts.
Check of RG signals, communication with support/assistance service.
Post-mortem and corrective actions.

FAQ

KYC slows down onboarding - won't we lose the conversion?

Make phase KYC (risk-based): light CDD at the input, EDD - by triggers. Integrate providers with good UX and auto-checks.

Do I need to re-check existing customers?

Yes I did. Periodic KYC refresh and sanctions scans are mandatory for the risk profile.

Are cryptocurrencies completely banned?

No, it isn't. In a number of jurisdictions, they are permissible under strict AML/KYT, Travel Rule, limits and off-ramp policies. Always see local rules.

Can only KYC/KYT provider be relied upon?

No, it isn't. The operator is responsible: the provider - the tool, the solutions and the case log - are yours.

AML/KYC is not a growth brake, but a business insurance: license, payments, reputation and player trust hang on them. Build a risk-oriented contour: KYC/EDD, sanctions/PEP, KYT and RG, plus unchangeable logs and reporting. Then checks turn into a formality, banks - into partners, and players - into brand lawyers.