The gaming industry must implement online gaming verification with KYC procedures to prevent financial crimes like money laundering and terrorist financing.
Online gaming has become a buzzword in the 21st-century digital era, as people of different age groups are getting on board the gaming industry. The rising revenue opportunities in the online gaming industry attract business owners to launch their gaming firms. However, online gaming has its challenges because of regulatory limitations. The gaming industry is susceptible to security breaches, fraud, identity theft, scamming, phishing, and financial crimes like money laundering and terrorist financing. Thus, online gaming verification with KYC is crucial to curb the aforementioned crimes.
The Significance of Identity Verification for Online Gaming
The largest revenue share in the digital media market is credited to the gaming industry, which accounted for up to 21.1 billion US dollars in 2020. The more revenue opportunities, the more online gaming is prone to fraud and financial crimes. Fraudsters steal people’s identities to get unauthorized access to already-existing user accounts or create new ones. They exploit the weaknesses in regulatory procedures to commit fraud and other crimes like money laundering. Thus, being the owner of a gaming enterprise, you must prioritize your company’s security measures. Online gaming verification with KYC is vital for your organization because it prevents players from engaging in illicit financial activities. Identity verification for online gaming must be the foremost priority of an online gaming firm. It proves to be critical for the security of your organization and customer data.
Mandatory Gaming Verification of Players
According to statistical data, online gamers are projected to exceed the figure of 1.3 billion players by 2025. The continuous rise in users of the gaming industry must undergo online gaming verification with KYC for a safe gaming environment. Your company must conduct gaming verification of your players by verifying their identities as the initial step of the customer onboarding process. The identity authentication procedure includes the verification of the following documents:
- Government-issued identity documents
- Player’s age
- Player’s location
- Source of funds
Checking these details is crucial to protect your platform from getting into the hands of imposters, financial criminals, and fraudsters. Furthermore, online gaming verification with KYC ensures a user-friendly gaming experience while enhancing your organization’s credibility and trust-building. This also guarantees regulatory compliance because the players refrain from indulging in fraudulent activities and financial malpractices such as money laundering.
Why is the Player’s Age an Important Factor in Gaming KYC?
For multiple reasons, players’ age is the most essential factor in the gaming KYC and due diligence procedures. Gaming companies must resort to several age verification approaches, such as requiring a driving license or passport to confirm the players’ age. These proofs inform about who is eligible to access your platform and which customer falls in the age-restricted group, thus, age authentication in online gaming verification with KYC regulates the age groups reaching your online gaming arena. It also targets suitable advertisements and content to appropriate players within a particular age group. Thus, the customer’s age in online gaming verification with KYC proves immensely helpful in curbing minors from accessing certain adult-oriented content and games.
Furthermore, age confirmation in online gaming verification with KYC has another advantage of efficient compliance with the regulatory standards related to anti-money laundering and terrorist financing. Validating your customers’ identities by age verification ensures that the gaming firm abides by the laws and is fully committed to complying with all the regulatory standards. Therefore, it prevents your organization from the hefty legal penalties resulting from compliance failures.
AML Gaming – Crucial To Combat Financial Crimes
The online gaming industry has become a high-risk platform for money laundering and terrorist financing due to its unregulated features like anonymity and inadequate transparency. The massive bulk of financial transactions paves the way for potential criminals to launder the funds generated from unregistered sources and various criminal activities. The most common way to launder money via online gaming is when funds are deposited into one account and withdrawn from another. Usually, the withdrawal of funds is through a legitimate account, thus, the criminals disguise the source. Therefore, gaming firms must conduct online gaming verification with KYC by monitoring the transactions and analyzing the high-risk customers. AML gaming is crucial for your organization to inhibit such financial criminals from engaging in illicit monetary practices and money laundering via your platform. Simply put, AML compliance in the gaming industry refers to meeting the legal requirements for preventing money laundering and terrorist financing.
Gaming AML/KYC Regulations
Money launderers are taking advantage of online gaming companies by deploying money laundering techniques to convert funds from illegal or criminal activities into legal ones. Hence, gaming firms must follow gaming AML KYC regulations to prevent such circumstances. In many countries, gaming companies are now required to pursue online gaming verification with KYC to prove that they have integrated sufficient identity verification mechanisms and are committed to mitigating AML risk. The renowned Financial Action Task Force (FATF) is an inter-governmental regulatory body that oversees the financial activities of countries to ensure AML compliance. It revised its recommendations in 2009 to elevate AML compliance for the gaming sector. According to them, the gaming industry is obligated to implement strict and rigid measures to prevent money laundering and terrorist financing. Furthermore, gaming firms, and even states, are vulnerable to economic sanctions and financial penalties due to compliance failures.
The entire discussion sheds light on the significance of online gaming verification with KYC to protect the gaming industry from financial crimes. A transparent and vigilantly monitored gaming company is the only way to ensure effective AML/CFT compliance.