The gambling industry is one of the most dynamic commercial sectors in the world. According to forecasts from Future Market Insights, an independent research agency, the market turnover is expected to exceed $105.5 billion by the end of this year and $286.4 billion by 2035. The expected average annual growth rate of the vertical is 10.5%.
With increasing traffic volumes, the requirements for the user verification procedure become more severe. Customer identification is the most important element of all modern anti-fraud and AML programs.
Casino Market experts have collected comprehensive information on the most popular types of KYC methods, as well as ways to optimise and scale them. For more advice about the launch and promotion of entertainment projects, please contact our managers.
Know Your Customer: About the Concept
This is a set of specialised procedures for performing 3 key tasks:
- gamblers’ identity verification;
- assessment of the risks associated with a specific client;
- financial crime prevention.
For casino owners, the KYC procedure is a way to ensure that players are really who they claim to be and that their actions are safe for the platform or other visitors.
This data verification format emerged in the US financial sector in the early 2000s. The final version of the amendment to the USA PATRIOT Act came into force on June 9, 2003, and remains unchanged so far.
Very quickly, other commercial structures (websites with slots, betting portals, and bookmakers’ offices) followed the approach.
Policies and Standards on Compliance Procedures
In 2025, the Know Your Customer protocol became a mandatory international rule applicable in all business verticals.
Relevant practices have been implemented both at the level of individual states and within global associations and trade zones.
Let us consider several examples of legislative norms:
- Regulation (EU) No 910/2014 (eIDAS). A single European standard for the verification of electronic identity and the control of trusted services such as electronic signatures and digital IDs.
- Directive (EU) 2018/843 (5th Amendment AMDL). This is an extension and clarification of Directive 2015/849 with strengthened measures to combat money laundering and terrorism financing.
- UK Money Laundering Regulations 2017. Requirements for gambling operators in the British market, including: multi-level client authentication, CDD and EDD compliance, as well as timely provision of mandatory reporting.
- USA PATRIOT Act (Section 326 CIP). This US federal law is mandatory for all financial institutions. It was initially applied to the banking sector, but today, the document is increasingly taken into account by other commercial structures, including iGaming platforms.
The Most Effective Verification Methods for Casino Operators
In the entertainment niche, the following protocols and services are frequently used:
- Standard document check. As a rule, new clients provide an ID card or other proof of identity. OCR technologies and finding concurrences in different databases are applied for evaluation.
- Confirmation of the address. Entrepreneurs may require a utility bill, a lease in the client's name, or other documents showing that the customer actually resides where he stated during registration.
- Biometric authentication. The player's face is compared with the photo on the passport or other submitted papers in real time. It is the Liveness Check technology (recognition of a real human face) that reduces the risk of personal details’ falsification.
- Search for matches on sanctions lists. These can be both open public or international databases and closed portfolios for members of partner communities. For example, network operators can inform each other about suspicious behaviour of individual clients.
- Monitoring of financial activity. One of the KYC methods focused on assessing the security of deposits and withdrawals. The indicator is triggered automatically when any deviations from standard patterns are detected.
The Impact of KYC Algorithms on User Experience
The conformity check should not only ensure safety, but also be as comfortable for gamblers as possible. Too complex and lengthy registration can force people to interrupt the procedure and leave the platform.
The task of operators is to build a scheme that will simultaneously protect online casinos and retain their customers.
The most effective approaches to organising such a process include:
- Step-by-step verification. First, players go through standard registration with a login and password. The full identification is carried out later, usually before the first withdrawal of funds.
- Implementation of gamification elements. These can be internal rewards and other incentives similar to marketing retention strategies. For example, a certain number of free spins immediately after the completion of authentication or an increased percentage of cashback for verified clients.
- The use of smart assistants. Chatbots and pop-up notifications that tell casino visitors about the remaining steps to complete the KYC protocol show good effectiveness. This approach has the best customer experience indicators.
Compliance Practices from Top European iGaming Brands
The EU is considered a leader in the implementation of common standards and regulations for different verticals. Entrepreneurs working in this trading zone demonstrate exceptional commitment to the local legal system and provide expert advice to regulators.
Such consistency contributes to the formation of the most stable, transparent, and safe gambling environment.
The greatest success in the field of compliance control was achieved by:
- The Entain brand has implemented a unique Advanced Responsibility and Care (ARC) system based on AI. Artificial intelligence evaluates the behaviour of each player and provides risk forecasts and a list of relevant protective measures in the event of abnormal activity.
- The Kindred Group corporation has integrated the Swiss BankID service to speed up identification. The protocol has significantly optimised the registration procedure for new clients and brought the KYC program into line with the standards of Scandinavian gambling regulators.
- The Flutter UK & Ireland concern has developed an innovative Affordability Triple-Step policy. This is a multi-level program aimed at increasing the protection of customers under the age of 25. The solution includes an automatic algorithm with a fixed monthly limit on bets up to £500, a real-time behavioural response monitoring system, and a set of stop mechanisms for vulnerable clients.
Benefits of Implementing AI and ML in KYC Procedures
One of the main advantages of using artificial intelligence is the global automation of standard processes.
This has made it possible to significantly increase the speed of services and improve their quality at all levels: from the initial processing of the requests of new casino visitors to providing personalised bonuses to regular VIP customers.
Key benefits of applying AI and machine learning algorithms during user authentication:
- Reduced the number of errors and false positives. Artificial intelligence accurately identifies falsification and data inconsistencies, automatically blocking any suspicious patterns. This approach is a huge help for casino support services.
- High level of adaptability. AI systems effectively detect atypical activity at early stages and quickly learn to predict the actions of players based on available information.
- Increase in the audience’s confidence. Entertainment platforms that use advanced KYC protocols based on artificial intelligence are perceived by bettors as more stable and reliable. People start to subconsciously trust the digital portal.
- The growth of recognition and improvement of the brand’s image. Users are more willing to return to online casinos with transparent and fast KYC algorithms that do not cause unnecessary stress.
- Financial savings. Automation and artificial intelligence significantly reduce the amount of operating expenses, including the budget for hiring/training staff and manual document processing.
- Minimising the likelihood of penalties. Algorithms are easily and quickly adjusted to specific legal templates. This eliminates human error and organises the right business structure in accordance with local and international standards.
Prospects and Development Vectors of Authentication Protocols
KYC evolution is taking place against the background of mass digitalisation and tightening of regulatory standards. According to Statista, in 2023, about 40% of all companies in the market have already implemented machine learning tools in their fraud detection systems.
The trend very accurately reflects the transition of the global iGaming industry to more intelligent identity checks, thanks to improving algorithms.
In the coming years, the following new standards may appear:
- Use of blockchain and SSI (Self-Sovereign Identity) services. A decentralised authentication process will allow players to store personal information in fixed virtual blocks and share only the necessary fragments of the chain. This approach will reduce the operational burden and increase the audience’s trust.
- Implementation of national ID cards. The idea of electronic passports is actively discussed in the EU and some other jurisdictions. An example of a similar practice is the eIDAS European system of a single remote wallet.
- Transition to central bank digital currencies (CBDC). With the mass implementation of such a scheme, KYC verification can be built directly into the payment architecture. In this case, each transaction will have double protection provided by casinos and financial agents.
- Deployment of behavioural biometrics programs. They collect and analyse various user patterns: typing speed, cursor movements, frequency of clicks, and other features. The use of this data helps entrepreneurs detect anomalies and prevent unauthorised account activity.
- Implementation of hybrid verification algorithms. The authentication procedure can consist of several complementary components. For example, a classic search for matches in databases in conjunction with behavioural analysis. The level of control will be set automatically depending on the level of risk determined by AI.
The Main Things about the Standards of Player Verification
KYC and AML practices form trends and define guidelines for the development of the entire gambling industry.
Key aspects that business owners should take into account:
- Scaling and security with AI. The use of artificial intelligence allows you to automate verification algorithms, increase the level of platform protection, and simultaneously reduce the operational burden on the provider.
- Improvement of the user experience. KYC algorithms make interaction with the platform safe and comfortable. For the convenience of customers, it is possible to divide the procedure into several stages, add hints or AI assistance, and much more.
- Global compliance practices. Identity verification and risk control are relevant for work in any jurisdiction. Most developed countries are gradually adopting the approach of the EU, where a single standard Regulation (EU) No 910/2014 is in effect.
Learn more about advanced technological developments for iGaming sites from the Casino Market studio.
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