There is a wide variety of online gambling available. Gambling includes sports betting, casinos, and virtual poker. Some countries have laws that regulate gambling on the internet while others have no regulations. The Internet is an open market, and state officials have voiced concerns that the Internet may be used to transport illegal gambling into their jurisdictions.
For example, in the U.S., online gambling is prohibited in Atlantic City. However, New Jersey permits casinos and online poker, and Connecticut is expected to allow online gambling in 2021. Other states are hesitant to legalize the practice. Fortunately, there are ways to mitigate the risks. In particular, implementing AML and KYC practices can help casinos keep their customers safe from money laundering schemes.
As the number of gambling venues increases, so does the potential for fraud. According to the FBI, the risk of money laundering through the Internet is on the rise. It is therefore important for companies to have the latest in money-related technology and best practices. These include in-depth external audits, proper compliance management, and a source of funds verification.
While some companies have adopted advanced strategies to minimize the risks of money laundering, the best protections remain in the hands of the companies themselves. Online casino operators must not overlook AML and KYC as part of their overall gambling program. To ensure compliance, they must implement best practices for all areas of their business, including marketing and advertising, customer support, and internal operations.
To be effective, a good AML or KYC program should be the product of a judicious blend of in-house expertise and external resources. In addition to standard checks, casinos may wish to consider performing more esoteric checks such as verifying customers’ identities or establishing a self-exclusion list. This will prevent potential problems with repeat customers.
The most common AML or KYC compliance issues include determining user identities, preventing money laundering through gambling applications, and preventing fraudulent transactions from occurring. In fact, it is not uncommon for cyberattackers to try to breach customer accounts, so online gambling sites should be on guard to prevent this from happening.
One way to minimize the chance of being caught in the crosshairs of federal prosecutors is to employ a self-exclusion policy. Self-exclusion lists prevent users from re-registering with an online gambling site. When a customer is on such a list, the company may revoke their access, if it finds that the user has engaged in a particularly illegal activity, such as gambling, or is in danger of becoming a problem gambler.
It is also a good idea for a casino to perform an in-depth AML or KYC audit to determine whether they are doing their part to prevent money laundering. Taking the time to review and update their existing AML or KYC policies and procedures can go a long way toward minimizing the risk of money laundering through the Internet.
The best way to do this is to implement a comprehensive AML or KYC program that will cover the many areas of an organization’s operations. Even in the most secure environment, a thief could slip into an online gambling account to transfer money to the wrong person or place, and then use the money to perpetrate other crimes.