Anti money laundering measures for Betting on Reliability

Denis Urazbakhtin Head of Partnerships, Gaming for Sumsub, discusses the importance of anti-money-laundering measures. By Peter White

For those whom are unfamiliar with Sumsub, could we commence this interview with an introduction of the company and its services?
Sumsub is a full-cycle, verification platform that secures the whole user journey. With Sumsub’s customizable, know-your-customer/know-your business, transaction-monitoring and fraud-prevention solutions, you can orchestrate your verification process, welcome more customers worldwide, meet compliance requirements, reduce costs, and protect your business. Sumsub has over 2,000 clients across gaming, as well as fintech, crypto, transportation, trading and e-commerce.
Sumsub enables gaming businesses to onboard new players from over 220 countries and territoriesn full compliance — all in less than 30 seconds. Users operating in markets such as the UK, The Netherlands, Brazil, Nigeria, Ghana, India, Bangladesh, Indonesia and Argentina can skip ID scans altogether with ‘Non-Doc Verification,’ where all that’s needed is an ID number, bank app or governmental app.
Anti-money laundering (AML) and know your customer (KYC) financial-transaction legislation has tightened up since our last interview with Jacob Sever, Chief Innovation Officer of Sumsub, back in 2021.
Image: Denis Urazbakhtin Head of Partnerships, Gaming for Sumsub
What has been Sumsub’s reaction to these new measures?
The regulatory landscape is becoming increasingly complex and online gaming poses a risk for money laundering. Hence, casino AML-compliance software is essential to monitor transactions and prevent illegal activities.
In 2022, the UK-based Entain Group was fined a staggering £17 million (USD $21 million) for failures in social responsibility and AML at its online and land-based gambling businesses. The following year, the Federal Court of Australia imposed an AUD $450 million (USD $300 million) fine on Crown Resorts for violating the country’s Anti-Money Laundering & Counter-Terrorism Financing Act of 2006 (the “AML/CFT Act”).
Aside from heavy regulatory penalties, the gambling industry also faces significant losses due to fraud. According to Statista, casino and sports betting apps lost around $1.2 billion between January 2022 and February 2023 alone. The online gambling market is predicted to reach USD $153.57 billion by 2030, further attracting money launderers, fraudsters and other financial criminals. That’s why all gambling operators should bet on a reliable KYC solution.
In sectors like fintech and many other industries, KYC checks are carried out during the registration phase of a user’s journey. In iGaming – across 90 percent of jurisdictions – KYC checks are carried out once funds are being withdrawn.
However, our internal insights show that the majority of fraud in gaming — such as bonus abuse, multiple accounting and affiliate fraud — can occur even before the KYC stage. This highlights how fraud prevention is extremely important, particularly for the sector.
Furthermore, with more countries legalizing gambling, compliance for operators has become more complex and expensive to manage. Additionally, illicit actors have become more skilled, making detection without advanced AI-based tools increasingly challenging when compared to just a few years ago. As regulatory scrutiny intensifies and criminal tactics evolve, investing in robust AI-powered solutions is crucial for effective risk mitigation in an evolving gambling landscape.
In the autumn of 2023,
Sumsub launched the first full-cycle verification and anti-fraud solution for the gaming industry. Can you explain what are the key features and advantages of this verification platform?
For context, KYC compliance in gaming involves a set of verification processes that include player ID verification for gaming, as well as age checks. These procedures ensure that an online casino meets legal and regulatory requirements. The gaming industry faces various risks, including identity theft and payment fraud. Gaming-fraud-prevention solutions like Sumsub must be in place to mitigate these risks and protect both players and operators.
Our new solution is the first to integrate user verification, anti-fraud, and compliance in gaming enabling both platforms and operators to seamlessly cover the entire player lifecycle, and to maximize revenue while staying compliant with all regulations and guidelines.
Currently, many providers on the market tend to offer tools which solve particular use cases and address certain parts of a player’s journey. We are, in turn, offering a solution that is complete and ‘all-in-one,’ in the sense that it covers all aspects of the user journey, and everything related to fraud and compliance that an iGaming business might need for their users.
The solution’s four pillars to ensure full-cycle verification include: Fast and secure player onboarding; fraud prevention; player-risk profiling and analytics; responsible gaming (RG) compliance.
Can you explain each of the products the company provides for identity verification: user verification; business verification; transaction monitoring; case management?
Of course. User Verification: We verify users anywhere in the world with ease. Smooth onboarding and compliance have finally come together.
Business Verification: We can streamline your verification flow and welcome more companies to your business at record speeds.
Transaction Monitoring: We keep you compliant with regulatory requirements by monitoring transactions and detecting suspicious activity.
Fraud Prevention solution: AI-driven product that provides accuracy, proactive action, and comprehensive protection against all forms of fraud.
For patrons, their online gaming experience needs to be seamless. Any protractive series of questions can lose an organization’s customers.
What is Sumsub’s approach to the age-and-address-verification process?
Age verification is an essential component of responsible gaming, designed to prevent underage individuals from participating in gaming activities for which they are not legally eligible. This process is a critical aspect of compliance, requiring age verification for access to gaming platforms.
It involves two steps. There is ID check: The system automatically extracts date of birth data from submitted documents, restricting access to users who don’t meet your requirements. Liveness and face matching: Facial biometrics create a scan of the user’s face to compare with the submitted photo ID. This ensures that the user is truly present.
If a business falls under AML regulations, they must not only verify user identity but also establish proof of address. This allows businesses to effectively cut off residents from restricted jurisdictions. Address verification is a requirement in most jurisdictions with a few exceptions, such as Hong Kong.
This typically obligates financial services, fintechs, payment and e-money institutions, and other similar businesses to verify proof of address. Proof of address (PoA) is evidence that a user truly resides at their claimed address. Common documents include:
• Bank statements
• Utility bills for gas, electricity, water, Internet, etc., linked to the property
• Letters from a recognized public authority or public servant/any government-issued correspondence
• Current lease agreement with signatures of the landlord and the tenant
• Credit card statement
• House-purchase deed.
Does your platform employ AI?
We provide an AI-powered, full-cycle solution, including identity verification, anti-fraud and compliance. We employ our ‘AI Lab’ throughout the KYC process, from document fast-fail to liveness checks and age estimation. It takes a picture as input and outputs an array of scores. For example, the Face Liveness model determines whether a selfie image is genuine, while the Document Readability model assures us that a document is clear and free of visual artifacts.
During liveness checks, our deepfake-detection software employs machine-learning algorithms and forensic analysis to detect anomalies in manipulated media. As deepfake technology advances, so does the sophistication of detection methods, resulting in an ongoing cat-and-mouse game between fraudsters and detectors.
In terms of ongoing fraud monitoring, our AI-powered Transaction Monitoring automatically detects suspicious activity and generates ready-to-file suspicious activity reports (SAR/STRs), saving you time and resources.
What is your experience of the gambling sector to date?
Internal-compliance teams often need to carry out manual compliance checks, sifting through huge amounts of documents, leading to drop-offs and sub-standard user experiences. Instead, we help them with automated verification to speed up onboarding for players in multiple markets such as Brazil, Romania, Greece, Germany, Chile and more.
In the gaming industry, the scarcity of vendors offering truly customized solutions is evident. Typically, these vendors merely repurpose existing solutions for industries such as fintech — a strategy that’s proven costly and also ineffective due to the lack of tailoring to the specific profiles of gaming users. Based on conversations with our clients and prospects, gaming businesses have desperately called for a solution that fills this gap. For instance, gaming firms will want to ensure users in Europe are allocated a larger deposit amount compared to counterparts in LATAM or Africa. Our solution also addresses specific verification needs in gaming including age estimation, proof of address and proof of funds.
We are pioneering new markets, working with some of the biggest players in the industry such as Kaizen Gaming. We are providing smooth onboarding experiences for players across several countries and continents. This year, we expect to see more demand in having solutions that not only tailor profiles to individual gaming users but also introduce geographic customization and localizations.
How does Sumsub help organizations with the complexities that go with compliance and the anti-fraud challenges?
To prevent fraud, iGaming businesses can seek out third-party platform, like ours, that can introduce anti-fraud systems easily for them. These will control onboarding and user behavior on their web and mobile applications.
A well-rounded fraud-detection software can detect any kind of fraud, and help companies verify personal documents and business data in the same place. Its functions include user verification, behavioural analysis, screening against global watchlists and internal blocklists, investigation of suspicious cases, and more. Automation can help detect fraudulent activity at every touchpoint of the customer journey
How many jurisdictions worldwide does your player-onboarding services have full compliance?
All of them. Our player-onboarding services ensure full compliance across all jurisdictions apart from sanctioned ones worldwide. We proactively monitor and adapt to all significant compliance developments, staying ahead of the curve. This goes beyond AML processes which aren’t largely specific to gambling, but also encompassing responsible gambling practices – which are more specific to the sector.
Fraud prevention is massively important. How does your system help prevent it?
Our AI-driven transaction monitoring efficiently identifies suspicious behaviour and produces suspicious activity reports (SAR/STRs) for immediate filing, streamlining your fraud monitoring efforts, and conserving valuable time and resources. Across iGaming, our fraud prevention measures actively combat various scams, including bonus abuse and account takeover, in real-time through specific rules, thereby mitigating reputation risks, and minimizing fraud-related losses.
What are the latest features on the dashboard?
We pride ourselves in anticipating the needs of the market and work on creating solutions that address upcoming needs. We launched a number of exciting new products last year:
  •  Non-document verification – enabling clients to replace their entire KYC process. Instantly onboard users in 10-plus countries including the US using just their ID document number and a Liveness Check
  • Global Database Verification – also streamlining onboarding for billions of users without requesting documents
  • Deepfake detector solution – integrated into our liveness solution and enhanced to align with the latest AI technology, making sure no fraudster passes the check.
  • Travel Rule – product facilitates secure information transfers between VASPs in accordance with compliance requirements, enabling crypto firms to both send and receive Travel Rule messages for corresponding transactions.
How was ICE London 2024 for Sumsub?
Absolutely amazing, the biggest ICE London we have ever seen. Barcelona definitely has a tough challenge of exceeding this year’s event.
What other exhibitions and conferences is Sumsub attending during the rest of 2024?
You can find us at a number of other conferences throughout the year, including SIGMA Africa in South Africa, SIGMA Americas in Brazil and SIGMA Europe in Malta. We’ll also be at conferences like SBC, iGaming Next, ASEAN Gaming Summit and many more! Keep an eye on our socials for more information about the exhibitions we’ll be attending.

Anti money laundering measures for Betting on Reliability was first seen on Casino Life Magazine