Businesses that handle transactions with large sums of money are at particular risk when it comes to money laundering. With laws and regulations constantly changing, these businesses have a lot to do to stay compliant and preserve the customers’ and business’ interest.
Compliance and responsible gaming are the two main areas iGaming institutions need to concentrate on and in this article, we will talk about both. With particular emphasis on how these work in Poland and in the EU in general we discussed the topic with Jacek Michałski, iGaming expert. Jacek lives and works in Poland and you can learn more about him here.
Compliance requirements and regulations
Online casinos, as well as all money institutions such as banks, need to comply with the law in order to operate. The reason for this is to try to prevent money laundering (AML). In recent years we have witnessed several giant online gaming companies receiving fines for not meeting gambling compliance. British gambling company, Ladbrokes paid £5.9 million in fines last year while 888 Holdings paid £7.8 million in 2017.
Gambling regulation in the EU
As a Polish player to play legally in an online casino you have to make sure that the casino is licenced to operate in Poland. It is always a good idea to read casino reviews from a reputable website before signing up at an online casino. Casinia is a legitimate casino and you can read their full review by clicking on the link.
AML in the gambling industry
In the online gambling industry, there are two main types of money laundering that companies have to look out for and these are:
- Laundering money from illegal sources by for example betting on sports events that carry a very low risk (betting on the favourite)
- Using money from criminal sources for entertainment (e.g. embezzled money or money obtained through scams)
Gaming companies, more often than not, have dedicated anti-money laundering departments to try to eliminate money laundering activities. They use an AML compliance program that aims to detect, analyze and report a financial crime.
When a customer signs up on a casino’s website the casino checks the identity of the person and tries to assess the risk this person poses. This process is called due diligence. It involves verifying the person’s identity and trying to determine if the person is involved in any crime. If there are reasons to believe that the person poses a high risk they might check the source of funds before the person is allowed to deposit/withdraw more money.
Responsible gaming means the social aspects of gambling. While most people enjoy gaming recreationally, some might have gambling problems that can affect their lives in a negative way.
Know your customer
KYC is a relatively new phenomenon in the online gaming industry. This means checking that the customer is not underaged (in the EU, gambling under the age of 18 is illegal) and making sure that customers are not spending more than what they can afford.
Gaming companies have dedicated responsible gaming departments that are detecting signs of problem gambling such as chasing losses, placing high-risk bets and losing continuously or complaining about losing, aggressive or manipulative behaviour towards customer support staff.
Gambling websites should educate their customers about the risks of gambling, not advertise in a deceitful way and take measures when detecting problem gaming behaviour, such as preventing the customer from placing further bets.
Online casinos and betting sites are complying with the law and adhere to a strict set of rules, or else they will be fined by the regulators. Responsible gaming is a practice that honest operators apply in order to protect their customers from the possible negative aspects of gambling.