Why Verification is Required for Cryptocurrency Casinos
You were all ready to play your favorite dice game on a Bitcoin casino website when you received a pop-up notification requiring you to verify your identity. We know this can be frustrating, especially since the verification usually takes a few hours—so why do online casinos do this?
Legal online casinos are required to verify the identity of their customers in order to comply with gambling age restriction laws, and KYC and AML. While it can be annoying, it is a huge aspect of keeping you safe while gambling online. Read on to learn more about the details as to why online casinos require verification.
1. To Ensure You are Of Gambling Age
Honestly, the main reason online cryptocurrency casinos require identity verification is to ensure you are of legal gambling age. While this is annoying, it is the law, and if you were to win big while playing underage, you wouldn’t be able to cash out your winnings—so it’s better that the casino checks in the first place.
The legal gambling age varies by country, but in general, you must be either 18 or 21 years old to engage in gambling activities online.
2. To Comply with KYC and AML Policies
Many countries have policies for companies to know who they are dealing with when they are accepting money. These policies are known as KYC (“Know Your Customer”) and AML (Anti-Money Laundering) in the United States.
Basically, KYC and AML laws require that a company know who is spending money in their casino so they can provide this information to the government when requested. The government requires this because it hope to crack down on illegal activities that net individuals’ substantial profits through money laundering. While we aren’t sure these policies help as much as the government likes to think, a legal online casino must follow them or risk being shut down, so even though they are annoying, a casino asking you to verify your identity for KYC reasons is a good indication that you are playing in a legit online casino.
3. To Prevent Fraud
Fraud is unfortunately rampant in online casinos, especially those that accept cryptocurrency. Although most of the identity verification requirements are to comply with local laws, some of them are so that an online casino can protect itself and its players from fraud.
Professional criminals have been known to try to take advantage of online casinos, and though there aren’t that many out there, it does happen, and casinos need to take steps to protect themselves. Identity notification is one of these steps.
Not only does this protect the casino, but it also helps protect players from identity theft. The last thing you want is someone to steal your credit card and then head to an online casino to try to win with the money they stole.
4. To Stop Compulsive Gambling
While the United States is behind in this aspect, many European and British countries have invasive programs to help stop problem gambling. They do this by tracking certain individuals and preventing them from opening accounts on gambling websites (they also prevent them from visiting local brick and mortar establishments!)
Basically, this program functions like a blacklist, and if your name is added, all legally registered casinos are notified of your prohibited status, and you will be unable to play or even create an account. Although this sounds bad, these programs have been very successful in helping individuals to stop compulsively gambling while they receive treatment for their condition.
5. Increasing User Experience
As we mentioned, there are a lot of malicious actors in the cryptocurrency space. Even though all of these are individuals who will be able to hack casino systems, there may be some who are known for harassing or scamming other players. The casino may ban them, but this doesn’t always stop the individual from returning under a different username.
Therefore, when online cryptocurrency casinos no longer want to serve someone, they must block the identity behind the username—another reason that casinos ask for this information—and another response that protects you, the player, from a not-so-stellar gaming experience.
6. Improving Security
This reason closely ties in with reason number 5: a casino cannot expect to have robust security without knowing its players. Not only are they looking to prevent criminals, known hackers, and addicts from playing, but they also want to ensure they don’t allow players who may cause problems for them.
For example, Do Kwon, the man who created TerraLuna, was arrested and eventually sentenced to prison for fraud. However, his court case took many years to reach a verdict. A casino would want to know who they are servicing, so if someone were to end up in the public eye for suspected fraud, they would be able to restrict the account even before the verdict is reached to protect themselves and players.
7. For Tax Reasons
The final reason you have to provide your identity in order to play at an online cryptocurrency casino is for tax purposes. As much as we hate it, it is a requirement in most countries to report large wins to the government—so they can ensure they receive their cut. As such, a casino must know your identity so they can submit the tax documents on your behalf.
This isn’t all bad, however, as some countries, like the United States, will reduce your taxes due to gambling losses. As such, the IRS may contact the online casino to verify that you lost all you said you did while gambling. So, while this may be annoying (especially if you win big!), this can also be a benefit in your favor.
Overall, most online cryptocurrency casinos verify your identity for legal and security reasons, though they also use this information to improve the user experience. While it isn’t always fun, adherence to legal requirements is a sign of a safe online casino.
