Experts predict the online gambling industry will be worth £94.4 billion in the next two years. Canada, one of the largest regulated markets, has seen a surge in online casino users, partly due to the Covid-19 pandemic. However, with this growth comes increased scrutiny from regulators. As a result, online casinos are now prioritising Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance more than ever. In this article, discover why there is a move towards player protection, and who the biggest winners could be.
Regulatory Pressures Are Mounting
The UK Gambling Commission (UKGC) has significantly tightened its rules, imposing over £64.3 million in fines on non-compliant operators in the past year alone.
In March 2020, Betway was fined a then-record £11.6 million for historical failings in customer protection and anti-money laundering checks. The investigation revealed that Betway allowed one customer to deposit over £8 million and lose over £4 million during a four-year period without adequate source of funds checks.
Other notable cases include:
- Entain, the owner of Ladbrokes, facing legal action for "systemic failures" in its AML protocols.
- William Hill, fined £6.2 million for failing to implement adequate AML and player protection measures.
- Cantor Gaming, forced to pay $22.5 million in fines after criminals laundered money through its platform.
Given the vast sums of money flowing through online casinos, regulators treat them similarly to financial institutions. Operators must verify customers' identities, monitor transactions, and prevent illicit activity.
These issues are regularly raised in parliament, highlighting just how under the microscope this industry has become.
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Fraud and Money Laundering Concerns
Online casinos process millions of daily transactions, making them prime targets for money laundering, fraud, and identity theft. A study found that 1 in 7 people had either committed online gambling fraud or knew someone who had.
One of the most prominent examples happened in Malta. In September 2022, the Financial Intelligence Analysis Unit (FIAU) in Malta fined gaming company Olimp Limited €130,460 for several anti-money laundering breaches. An inspection revealed that the company lacked a Business Risk Assessment and did not have proper customer due diligence measures in place. Additionally, the company's Money Laundering Reporting Officer (MLRO) was outsourced, which is against regulatory expectations.
But this is not new; Finnish gambling operators submitted 9,000+ money laundering reports in 2014 due to suspicious activity. So, online gambling has always been an industry that has to ensure its checks are bulletproof.
Modern criminals also leverage new payment technologies like e-wallets, prepaid cards, and mobile payments to make illicit transactions harder to track. For online casinos, robust KYC and AML checks are the only way to prevent their platforms from being used for financial crime.This protects not only the online casino but also, of course, players.
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Building Trust and Reputation
A strong reputation is everything for the best online casinos. Players are more likely to engage with safe, fair, and compliant platforms. Non-compliant casinos risk massive fines, loss of licences, and a damaged reputation, which can be devastating in a highly competitive industry.
Strict KYC protocols reassure players that they are gambling in a legitimate, well-regulated environment. This includes verifying identities, preventing underage gambling, and flagging suspicious accounts. When choosing a casino, players should prioritise fully KYC-compliant ones, as this indicates adherence to the UKGC's stringent regulations. At Gambling Zone, we only ever recommend casinos that our experts have verified and suggest you only play at sites with a UK license.
The Shift Away from Manual KYC Processes
Traditionally, KYC verification involved manual document checks, which were time-consuming, expensive, and prone to human error. Research shows that 52% of gaming firms still rely on manual verification methods despite faster, more accurate alternatives being available.
Today, leading casinos use automated third-party KYC and AML solutions to:
- Speed up verification while reducing operational costs.
- Eliminate errors that could allow fraudsters to slip through the cracks.
- Continuously monitor transactions for suspicious activity.
By leveraging AI-driven identity verification and AML monitoring, operators can comply with regulations without adding friction to the player experience.
The Future of Compliance in Online Gambling
The UKGC continues to tighten its rules, with major changes arriving in January 2025. Operators must now conduct enhanced financial checks on players depositing more than £150 per month, a dramatic reduction from the previous £500 threshold. This shift will require casinos to ramp up their compliance efforts, ensuring they:
- Verify customer identities quickly and efficiently.
- Assess sources of funds to prevent problem gambling and money laundering.
- Adopt AI-driven fraud detection tools to stay ahead of increasingly sophisticated criminal tactics.
With gambling regulations evolving worldwide, operators who fail to adapt risk being left behind.
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Conclusion
Online casinos' prioritisation of KYC and AML compliance is no longer just about avoiding fines; it is a business necessity. Stricter regulations, increased fraud risks, and growing industry scrutiny mean that operators must take compliance seriously or face severe consequences.
By investing in advanced identity verification, automated AML solutions, and continuous compliance monitoring, online casinos can protect themselves and build a safer, more trustworthy gaming environment. This, in turn, attracts more players, enhances brand reputation, and ensures long-term success in an increasingly regulated industry.
