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Why casinos are required to comply with AML policies
Introduction: AML is about law, reputation and access to payment infrastructure
Gambling is a sector of increased AML risk. Casinos operate with cash, electronic wallets, cards and cryptocurrency, and the turnover is heterogeneous and fragmented. Non-compliance with AML means not only fines and license revocation, but also disconnection from PSP/banks, domain blocking, criminal cases for management and toxic reputation. Therefore, AML is both a legal duty and a condition of access to finance and markets.
Where does the duty come from: regulatory pyramid
1. International level: FATF recommendations and regional standards (e.g. European AML directives).
2. National law: AML/CFT (AML/CFT) requirements for gambling operators, including online.
3. Licensing authorities: license conditions (control, reporting, audit, fines).
4. Payment partners and banks: own KYC/AML requirements and merchant monitoring.
If in the chain "regulator → license → bank/PSP" somewhere distrust arises, the business stops.
How to "wash" money in gambling: classic stages
Placement (entry): cash deposits in land casinos, replenishment with cards/e-wallets/crypto online.
Layering: many bets, chip exchanges, quick deposits/withdrawals, pseudo-gaming activity, transfer between accounts/" friends."
Integration: withdrawal of "net" funds to a card/account/crypto wallet, purchase of assets.
The purpose of AML is to break this chain before integration.
Key elements of the casino AML system
1) Risk-based approach (RBA)
Player country/region, payment method, product type, channels (online/offline), behavioral risk.
Customer categories: standard, high risk (EDD), PEP, corporate (KYB).
2) Identification and Verification (KYC/KYB)
KYC: document + selfie/biometrics, address validation, age verification.
KYB: for B2B/VIP structures - registration documents, beneficiaries (UBO), director composition.
POP/sanctions/negative media: primary and permanent screening.
3) Source of funds/Source of wealth (SoF/SoW)
For VIP/large amounts: income statements, statements, documents on the sale of property, dividends, crypto-history (on-chain reports).
4) Transaction Monitoring (TM) and Behavioral Analytics
Online signals: speed and frequency of deposits/outputs, stavka→vyvod without playing, geo/device, inconsistency with KYC data.
Ground signals: frequent exchanges of chips without playing, splitting amounts (smurfing), attempts to bypass limits.
Rules and models: static thresholds + scoring/ML models, scenario alerts, manual verification.
5) Reporting and escalation
SAR/STR (suspicious activity report): we collect the invoice, freeze the payment according to the procedures, notify the competent authority.
Record-keeping: storage of KYC, logs, solutions and correspondence for a set period.
Threshold reports: large cash transactions, cross-border transfers - according to the rules of jurisdiction.
6) Limit policies and "clean" money
Limits on deposits/withdrawals/speed of operations, "play-through" rules (minimum game activity before withdrawal), bans on transfers between accounts, control of bonus abuse (often associated with AML).
7) Cryptocurrency and Travel Rule
Crypto payment providers with KYC, wallet screening, on-chain risk analysis (mixer/sanctions/darknet).
Travel Rule - Pass sender/receiver attributes between VASPs at threshold amounts.
8) MLRO role and three-line protection model
MLRO (Money Laundering Reporting Officer): final word on SAR/locks/escalations, contact with the regulator.
1st line: operations/support - "see" the client and alerts.
2nd line: compliance analysis/policies.
3rd line: independent internal audit.
9) Staff training and independent audit
Annual trainings (cases, "red flags"), knowledge tests.
Unscheduled post-incident reviews.
External audit of policies/systems/reporting.
Typical "red flags" in online casinos
Deposit → minimal activity → instant withdrawal (and loop repeat).
Multi-account with matching devices/IP/payments (mules).
Use of high-risk payment methods/wallets; frequent deposit cancellations/chargebacks.
Stable deposits just below the KYC/EDD ("structuring") thresholds.
Profile mismatch: Low-income student - high VIP limits without SoF.
Unusual patterns in live casino: exchange of chips without playing, "carousel" bets.
Affiliated schemes: refunds through referrals/cashback/bonuses.
How AML pairs with Responsible Gambling (RG)
Matching signals (high deposit/bet rates) are analyzed in both planes.
Procedures should avoid "conflict": you cannot justify blocking only RG if there is an obvious AML risk - you need the correct SAR and communication with the player within the law.
Penalties and consequences
Regulatory sanctions: millions of fines, freezing of payments, suspension/revocation of license.
Payment risks: break with banks/PSP, getting into the "high-risk" lists.
Criminal and civil liability: for directors/MLROs with gross negligence or intent.
Reputation: listings of "unreliable," leakage of partners and traffic.
Practical AML framework for operator (online)
Policies and risks
Documented AML/CTF policy, risk matrix, RBA methodology, KYC/EDD/SoF/SoW thresholds.
List of high-risk countries/wallets/PSPs, de-risking rules.
Processes and tools
CCM tools/sanctions/REP/address, end-to-end logs and case management.
Transaction Monitoring: rules, models, manual verification, four-eyed.
Case lifecycle: alert to SAR/close, SLA and quality control.
Vendor risk: regular checks of KYC/cryptanalyst/PSP providers.
Data and reporting
Centralized transaction showcase (gaming and payment events are linked by ID).
Storage of data on the terms of the law, traceability of solutions.
Regular reports for the board and regulator (KRI: SAR rate, alert precision, EDD coverage).
Mini Check List for Land Casino
Identification of customers when exchanging chips above the threshold; chip-to-cache tracking without playing.
Cameras and register/table overlap log; double control.
Mandatory reports on large cash transactions; training cashiers and pit bosses.
Common mistakes and how to avoid them
Formal KYC without continuous monitoring. → Implement behavior triggers and regular rescreening.
EDD thresholds are too low (everything goes into manual labor). → Balancing: risk bundles and ML assistants.
No game ↔ payment connection. → Single key per user/session/transaction.
Non-transparent compliance solutions. → Case notes by template, reproducibility for audit.
Ignore crypts. → Connect the on-chain analytics provider, Travel Rule regulations.
What it gives the player
Protection against fraudsters, card theft and "cashing" through his name.
Faster payouts to "white" players: Proven KYC/SoF reduces manual checks.
Transparency and predictability: understandable limits and rules.
Role of e-communications and transparency
Public sections "AML/CTF Policy," "Responsible Play," "Identity Checks" with plain language.
Service letters: what documents are needed and why, terms and download channels, encryption/confidentiality level.
Casinos are required to comply with AML because the law, the market and financial partners require it. The working AML system is not one module, but a chain: customer risk assessment → KYC/KYB and sanctions/PEP → transaction monitoring and SoF/SoW → behavior for high SAR/STR → and data storage → training and independent auditing. Companies that do this systematically and transparently receive a sustainable license, access to acquiring/PSP, player confidence - and a competitive advantage in mature markets.