Sumsub publishes new KYC report for gaming industry in Europe

Sumsub, an industry specialist focusing on KYC, AML and compliance with reach in over 220 countries, has published a detailed report that focuses on the European iGaming industry. The report titled "KYC for the gaming industry: Europe" tries to pave the way to balancing between regulatory compliance, customer conversions and fraud protection.

The company acknowledged in the report that the gambling industry in Europe is set to achieve growth of €140.05bn between 2021-2026 and set out to outline several important painpoints for the industry that needed addressing.

Sumsub touched on the main challenge of identity verification contrasting business models where fast conversion and onboarding was of the essence against the need to conduct better KYC checks. The company said that companies would need to elevate fraud protection at the onboarding stage to prevent complications after accepting a player’s deposit.

Sumsub also outlined the need for regulating gambling platforms, arguing that this leads to better player protection and protects operators of becoming the victims of fraud. It leads to much better overall reputation for the industry across the board and can be an important tool in spotting and preventing criminal activity.

The report outlined some of the national and pan-European regulators that have been created to regulate the industry and uphold its principles with important national regulators including the UK Gambling Commission, the Kansspelautoriteit in the Netherlands, the Malta Gaming Authority, and others.

On a pan-European level, there is the European Gaming & Betting Association which is an ambitious project that wants to see national gambling legislations harmonized with the European Union’s benchmark standards. However, as Sumsub notes, there is no one regulator that currently exerts control over the entire sector.

Sumsub stresses that AML compliance is of the essence for gambling companies as breaches of these mandates and rules (particularly tied to problem gambling) could easily lead to regulatory fines that cost millions and disrupt a company’s ability to operate in a market or the industry.

Part of the AML standards that companies must meet today include Customer Due Diligence and Enhanced Due Diligence, Sumsub notes in the report. There must also be reporting and ongoing monitoring of customer activities to protect customers. Not least, there is a big focus on responsible gambling guidelines.

Operators need to implement and comply with source of funds (SoF) verification, ongoing monitoring and addictive gambling triggers, screening for self-excluded individuals, ongoing monitoring of the aforementioned addictive gambling triggers and more. All of this will guarantee a smooth KYC process.

Casino Guru Sustainable & Safer Gambling Lead Šimon Vincze who is spearheading the company’s GSES global self-exclusion imitative has offered his insight in Sumsub’s report. Vincze touches on the important topic of player expectation versus KYC realities and the operator’s position in matters.

"Since deposits come through instantly, players expect their withdrawals to be processed immediately as well. They are not aware of the fact that additional KYC measures must be completed for the withdrawal to be successfully finalized," Vincze notes. This often leads to players mistakenly interpreting the pending withdrawals as purposefully delayed, he notes. Casino Guru is also working on a dedicated self-exclusion initiative globally.

Players tend to find the process unsettling and sometimes, they may provide documentation that simply does not meet the requirements to conduct a thorough KYC process and are asked to reupload documents. Sumsub, though, is confident that there are ways to improve this process.

The company’s report argues that the verification flows can be automated up to a point and that the processes can also be tailored based on certain criteria. Besides, companies may choose to divide their verifications into different levels to further facilitate the process. Not least, SumSub reminds that it has the means and tools to help operators boost their verifications.

Presently, the company operates in more than 220 countries and territories, it takes SumSub an average of 50 second to process a verification at a time and it successfully prevents 50,000 fraud attempts every month.

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