Crypto Casino KYC | Why Do Crypto Casinos Need Your ID?
When players use a crypto casino or gambling site for the first time, they are often confused. Why would a crypto casino need me to give them my personal data? If the whole point of cryptocurrency is anonymity, why would a gambling site need ID verification? Happily, there are very good reasons why crypto casinos have a KYC procedure in place. And we are here to explain why.
Why do Online Casinos Need ID Verification?
Before we start on Bitcoin casinos or other crypto gambling sites, let’s first consider the best New Zealand casinos. Why would any online wagering site be required to ask players to verify their identity?
These casinos and other wagering sites are subject to a strict set of operating conditions, put in place by gaming regulators. It’s true that some territories are less tough than others. But no country allows you to simply turn up, open and run a new gambling site unchallenged.
Let’s go into detail on exactly what acquiring a license involves. This will help to provide further context on why casinos need to confirm the identity of their players.
Online Casino and Gambling Regulators
The process of setting up and managing an online gambling company is not straightforward. In order to obtain a casino, sports betting or lottery license, the regulator in your chosen territory will insist on you satisfying certain conditions. These will include, among other things:
- Crime Prevention: The company must do everything in its power to prevent gambling from being used as a source of crime. For example, money laundering.
- Player Protection: The gambling company must not allow vulnerable people to play. This includes problem gamblers and those under the legal age for gambling.
- Fair Games: An independent third party testing lab, such as GLI, must be employed to confirm that provably fair games are being offered by online casinos.
- Player Funds: All money deposited by players must be stored in a separate account. So if the company goes out of business, players can still get their money.
- Reputable Owners: Company directors must be shown to be of good character (for instance, no criminal record).
If an operator cannot satisfy these terms, they will not be granted a license. It’s as simple as that.
So on the point of player protection, how is it possible for online casinos to prove that I am who I say I am? Am I really a 46 year old woman, or am I a 14 year old boy posing as my mother?
If I am funding my account using anonymous cryptocurrency, as opposed to something like a credit card, where I would have had to provide personal information in order to apply, there is simply no way to know. And this is where KYC verification comes into play.
KYC: Know Your Customer
Online casinos, betting sites and gaming regulators often talk about KYC (Know Your Customer) internally. But unless you have worked for such a company, you may not be familiar with the expression. It simply refers to the process of understanding exactly who the player is.
Let’s now take a look at why it’s so important for all online casinos to have a proper KYC procedure in place.
Player Protection
Most casino and gambling regulators take player protection extremely seriously. If such casinos were ever to breach the terms and conditions of their license, they may lose it. But that’s not all. The company and individuals associated with it could face huge fines, or even jail time.
Player protection is important for several reasons. Online casinos need to look out for vulnerable people. This includes people who may have a gambling problem. Or even underage players that may have lied about their personal data in order to play. Additionally, someone may be registering under a false name in order to commit fraud.
In order to prevent the above examples, basic KYC checks are sufficient and all online casinos must carry them out. Yes, even Bitcoin casinos – crypto casinos are no exception.
But in some cases, it is not as simple as just obtaining the player’s name, address and date of birth. It can go much deeper than that. What about if a player is found to be turning over tens of thousands on casino games, when just last week they were playing at micro stakes? Is this person out of control? Could they have a gambling problem?
Many regulators, such as the UK Gambling Commission, require such sites to reach out to casino players and sports bettors who are potentially problem gamblers. This is not just about being nice and having a social conscience. It is an actual condition of holding a license. Failure to do so can result in heavy punishments.
In such cases, online casinos must obtain information about whether or not the player can truly afford to lose the money they are playing with. This is referred to as Proof of Funds.
Money Laundering
Another key agreement when holding an online gambling license is that the operator must not allow their casino to be used as a source of crime.
Historically, gambling has been a great method for questionable characters to indulge in a spot of money laundering. And in recent years, with the surge in online gambling sites, using the casino to cover your dirty tracks has become even easier. With a growing interest in crypto payments, the potential for laundering money has grown still further.
So in addition to Proof of Funds, the regulator will want to know about the player’s Source of Funds too. It’s not enough for an online gambling site to confirm that the player has sufficient money in their bank account to absorb a big loss. That money could have come from dealing drugs, robbing a bank, or some kind of identity fraud.
This means that gambling operators in some countries, including Bitcoin casinos or other crypto casinos, must find evidence of a salary, such as employee pay slips. These KYC casino sites and sports betting companies do everything in their power to make sure that the player is legitimate.
What are Crypto Casinos anyway?
Crypto casinos come in two different flavours. The term crypto casino can mean different things.
First of all, there are crypto casinos that are essentially the same as regular internet casinos. They accept traditional payment methods and offer the same games as any other casino site. But they just happen to also accept cryptocurrency, such as Bitcoin, as well.
This type of crypto casino accepts an initial deposit in your chosen currency. But it is then converted to a fiat currency in the casino’s wallet, such as USD or GBP. All the denominations of chips used for wagering are in that traditional currency. When it comes to making a withdrawal, only then are the funds converted back to your chosen crypto.
Secondly, there is a new breed of wagering sites popping up on the internet. They are built to be crypto-first. So instead of depositing in cryptocurrency and then the casino converting it to a traditional currency, the casino actually uses crypto throughout the whole journey.
Funds are stored in the site’s wallet in your preferred cryptocurrency. The various games use chips with values in cryptocurrency. And of course, withdrawals are processed in crypto too.
These crypto-first casinos usually offer exclusive Bitcoin games, too. Check out BitStarz for such an example.
Crypto Casinos and Anonymity
It is true that cryptocurrency transactions are truly anonymous. But as we have discussed at length elsewhere in this article, crypto gambling is still subject to the conditions of holding a license. As such, they must protect vulnerable players from harm. In order to identify those players, the company needs to be sure that they are who they say they are.
Additionally, the crypto casino still needs to be certain that they are not helping criminals to get away with identity theft or money laundering. So KYC controls are still required, even by cryptocurrency casinos.
Truly anonymous Bitcoin casinos or other crypto casinos are dangerous. If a gambling operator properly adheres to the terms set out by the regulator, then they should perform KYC identity checks.
How to Find the Best Bitcoin casino
All of the best online casinos share common factors, regardless of whether they accept fiat currency, or crypto payments. Here are the most important features to look out for, when choosing the best Bitcoin casinos.
Online Casino License
As we have already alluded to elsewhere in this article, a casino license is a critical component when searching for the best Bitcoin casino. Or indeed any kind of gambling site, for that matter. A properly licensed Bitcoin casino offers players the following benefits:
- Protection from ID fraud.
- Safe and secure payment methods.
- Probably fair games.
- Responsible gambling options.
Game Selection
When searching for the best crypto casino, the range of casino games is another key factor. Without a large back catalogue of casino games to choose from, it will be difficult to keep things fresh, interesting, and appealing to players.
Even if you only play a certain type of game, such as roulette, you may become bored from time to time. You might want to mix things up and dabble with an interesting new variant. Live dealer games such as Lightning Roulette provide a fresh twist on a casino classic.
Players should also consider factors such as the RTP (Return To Player) of the various games. If you enjoy online slots, you probably want to look for high RTP games, to have the best chance of winning. A good example is 1429 Uncharted Seas by Thunderkick, which has a huge RTP of 98.50%. This game can be played at several Bitcoin casinos, such as PlayAmo.
Payment Options
When it comes to online gambling, everyone has their own preferred payment methods. Withdrawing funds quickly and easily is a big concern for many players. So it’s important for operators to offer a wide range of withdrawal options.
Even if it’s a crypto gambling site, it never hurts to have more traditional currency options available as a backup. And we all know how tribal cryptocurrency advocates can be, so it’s a good idea to have as many different crypto payment methods on offer as possible, not just the likes of Bitcoin, Litecoin and Bitcoin Cash.
Customer Support
Even the most experienced casino players are going to run into difficulties from time to time. Perhaps the game you were playing malfunctioned. Maybe there are technical difficulties preventing you from logging in, or from withdrawing funds. In such cases, we need to contact the casino support team.
The best online gambling firms have polite, knowledgeable customer support teams, available 24/7 by telephone, email, and live chat.
Why Crypto Casinos Need ID: Conclusion
Hopefully, you now understand exactly why crypto casinos have to perform Know Your Customer (KYC) identity checks. As frustrating as it might be to discover that cryptocurrency casinos are still required to verify a player’s identity, there’s nothing they can do about it. Unless, of course, they wish to break the terms of their license. In which case they risk huge fines, loss of license, or even imprisonment.
So next time you feel like playing casino games and you search for anonymous Bitcoin casinos, think twice before signing up.
Crypto Online Casino KYC: FAQs
Isn’t a Bitcoin casino supposed to be anonymous?
This is a misconception. It’s true that cryptocurrency payments are anonymous. But the only truly anonymous Bitcoin casinos that exist, are simply failing to perform KYC controls. This means that they do not carry out the proper checks around ID fraud, money laundering, and responsible gambling.
All online gambling sites, including crypto casinos, must do this. It is highly likely that they are in breach of licensing regulations. They may not have a license at all.
Do I need to go through the KYC verification process at all crypto casinos?
No, but they should ask you to. All crypto casino sites, and indeed all sites offering casino games and other forms of online gambling, are required under their licensing conditions to force players to go through an ID verification process.
If you are using cryptocurrency casinos that are not doing proper KYC checks, you should investigate whether or not they are properly licensed. Proceed with caution, as they may be rogue casinos operating illegally, and you run the risk of being cheated.
Can I still use fiat currency at a Bitcoin casino or other crypto casinos?
It depends. There are two kinds of crypto casinos. Some are simply ordinary casinos that accept crypto payments. Such sites usually offer fiat currency payment options such as credit and debit cards, as well as e-wallets and bank transfers. But a crypto-first site will exclusively operate using cryptocurrencies such as Bitcoin, Ethereum, and Bitcoin Cash.
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