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Why your casino needs AI-powered KYC solutions (and how Slotegrator can help)

Petr Stehlik
August 11, 2023
7 min

Proper know your customer (KYC) measures aren’t just important for online casinos; they’re a requirement for licensing conditions. From compliance to protecting their business, there are nothing but good reasons for online casinos to have fast, effective ID verification.

In this article we’ll look at why ID verification is necessary, how the process works, and how the KYC module in Slotegrator’s turnkey platform solution can make operators’ lives easier.

Retail, gaming, and other online businesses don’t require customers to scan their IDs and submit them for approval before buying something or paying for entertainment. So why do online casinos?

Why ID Verification is Necessary for Online Casinos

The three main reasons are legal requirements, protecting their players, and protecting themselves.

Every jurisdiction that regulates gambling sets a minimum age requirement. Normally, it’s 18, but sometimes it’s 21 or even 25. Sometimes this even varies within a country. In Georgia, for example, where problem gambling is a social concern, locals have to be 25 to visit land-based or online casinos, while tourists only have to be 18. In order to remain compliant with their licensing conditions, then, online casinos have to make sure that underage players can’t access their site.

Another legal requirement is the prevention of money laundering and the financing of terrorism. Unfortunately, gambling has become associated with criminality, largely due to the use of casinos for money laundering. Carrying out thorough KYC checks can prevent the casino from being used as a conduit for criminals to move cash around the globe — helping to fight crime and bolster the industry’s reputation.

Many countries also maintain databases where players can self-exclude. If a player feels that their betting habit is getting out of hand, they register with the database to bar themselves from visiting casinos and sportsbooks for a set period of time. When verifying a player’s ID, a casino should check that the new player hasn’t excluded themselves.

Casinos also need to protect themselves.

Bonuses are the best way to get players in the door. Offering to match their first deposit or flat-out giving them cash to get started lets players try the casino risk-free. Unfortunately, bonus abuse is commonplace.

Bonus abusers go from platform to platform, registering, getting the bonus, satisfying rollover requirements, withdrawing their cash, and moving on to their next target. Sophisticated bonus abuse schemers use stolen, borrowed, or false identities to open up dozens of accounts and use auto-play settings to blow through rollover requirements and maximize their ill-gotten gains.

KYC checks, as well as comparing IDs to IP addresses, can help protect casinos from bonus abuse.

Slotegrator’s turnkey online casino software has everything you need for a successful online casino. Learn more here.

Regulatory concerns and compliance requirements

Every regulator requires licensees to adhere to KYC and anti-AML requirements. Compliance failures can result in fines and license suspensions.

The fines are more than just a slap on the wrist.

This year, the United Kingdom Gambling Commission ordered sportsbook Betfred to pay £3.25 million (€3.78 million/$4.25 million) for failing to protect new and vulnerable players as well as having too low a threshold for financial alerts.

TonyBet, based in Estonia and licensed to operate in the UK, was fined £442,750 (€515,522 / $565,923) by the UKGC for its policy of only checking ID for winning bettors when trying to withdraw their funds and doing nothing to verify the identities of potentially vulnerable users.

Also this year, the UKGC also ordered William Hill to pay £19.2m (€21.9m/$23.7m) — a record fine — for social responsibility and anti-AML failures; certain players were able to deposit and wager tens of thousands of pounds without any checks on affordability or the source of funds.

These issues are bad PR for the industry as a whole, and they also highlight how difficult compliance can be. The only solution is to have a robust ID verification system.

Advantages of robust ID verification systems

The most obvious advantage of having effective ID verification is that casinos can avoid paying fines and having their license suspended.

But fast, effective, AI-driven ID verification is good for business in other ways.

Friction during onboarding can drive players away. Having a fast, efficient ID verification system establishes a good relationship with players right off the bat — quick onboarding lets them get right to betting and reassures them of the platform’s security.

Good KYC measures also make good business sense. No one wants to explain to investors that KYC failures led to fines that took a massive bite out of that quarter’s revenues, and it’s obviously not in your interest to have your license suspended.

The KYC process

How do players prove their identity?

The process is fairly uniform. New players click the registration button and fill out a form with their basic information. At some point, usually at the time of their first deposit, they’ll go through a short, two-step process where they upload scans or photos of their identity document — a driver’s license, national ID, or passport.

Casinos will typically also ask for supporting documents, such as bills with the player’s name and address.

In many jurisdictions, such as the UK, it’s necessary for casinos to check ID as soon as possible. Requiring ID verification only when the player attempts to withdraw funds can be a violation of licensing terms.

The casino then verifies that the photo, name, and address all match. The process is usually completed within 48 to 72 hours.

Some casinos will also include affordability checks, such as bank statements, and check your regular salary as well as sudden differences in personal wealth, such as the sale or purchase of a home.

Part of anti-AML measures might include checks on sources of wealth. Determining the legitimacy of funds can prevent casinos from being used for money laundering, which is a prominent concern in iGaming. Often, these checks will only be carried out if the player exhibits indicators that they might be involved with criminal activity.

It’s increasingly common for casinos to ask new users to upload a selfie along with their ID document to prove they aren’t using a stolen or borrowed identity.

The role of AI in ID verification

As in many other arenas, AI can greatly improve the ID verification process.

Manually checking ID documents is time-consuming and takes team members away from other tasks. Using AI can greatly accelerate the process, sometimes even making it instant. Obviously, AI tools can scan databases far faster than a human ever could.

The difference between manual and AI-assisted ID verification becomes more apparent when operations are scaled. If marketing efforts are successful, a casino should have more players flooding in than a human employee could hope to process in a reasonable amount of time. Using AI from the get-go means there will be no growing pains when scaling your business.

Our free business consultations can help you determine the right business model and target market for your iGaming business. Get in touch here.

How to optimize KYC procedures with Slotegrator

Slotegrator’s turnkey online casino platform includes a powerful KYC module.

Using the module, operators can set parameters for which documents are needed and when the verification takes place (upon registration, upon the first, deposit, etc.). Operators can also restrict registration by various parameters, such as location or history of self-exclusion.

The module’s AI-powered tools also let operators easily create blacklists of potentially suspicious players in order to protect the casino’s license. Operators can set their own criteria for suspicious behavior, such as multiple IDs from the same IP address or the use of a VPN.

The module was developed in compliance with the requirements of regulators in both Curaçao and Malta, meaning it’s ready to go for many first-time licensees as well as those who are expanding into Europe.

Using the KYC module, operators can also manage player documents, monitor risky behavior, and segment players according to demographic data, making it a powerful and versatile tool for both compliance and player retention.

Contact the Slotegrator sales team to learn more about how our turnkey platform’s KYC module can improve your online casino.

Petr Stehlik
Petr Stehlik
In 2016, Petr graduated from the Law Faculty of Charles University in Prague. The main area of law on which he focused both during and after his university studies is software law (and intellectual property in general). After graduating, he briefly worked at a medium-sized law firm in Prague, but in 2018 he joined Slotegrator, where he has been working ever since and where he handles the company’s day-to-day legal matters.


  • D
    December 6, 2021
    Thank you for posting such an urgent question. A license from KYC is really necessary to keep the business legal. What countries do you license in?
    Nikolaj Plugatar
    Nikolaj Plugatar • Business Development Manager
    December 6, 2021
    Thank you for your interest. We can help you with licensing in any country)

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