To tackle the spectre of money laundering, Indian government officials plan to introduce a regulator for the skill gaming industry, further opening the pathways to total real money gaming regulation in India.
The move to bring the industry under the Prevention of Money Laundering Act (PMLA) feels like a natural next step toward legitimacy for the skill gaming sector. According to a 2021 report by the Boston Consulting Group, the mobile gaming industry will be worth $5 billion by 2025 – that’s up from $1.5 billion in today’s market.
What will the new regulations mean for real money gamers? Why is it an exciting next step for online betting in India? What are examples of anti-money laundering rules in mature markets?
What Is Know Your Customer (KYC), And How Will It Affect The Skill Gaming Industry?
Hundreds of operators in regulated territories use Know Your Customer rules to act against money laundering and add a real sense of trust to their services. The operator needs to trust the money coming from the player is fair, but it also works the other way around. Research shows players feel much more susceptible to playing at reputable organizations.
For example, companies operating under the UK Gambling Commission (UKGC) will not allow players to deposit until they have passed the KYC protocols. This requires players to send in a photo of a national ID and a bank statement – or similar document – to prove they are who they say they are. Despite it being a pretty invasive process, the upsides to the player are evident. Once they pass the checks, they can benefit from superfast payments and trust their investments are safe.
Simple identity checks for online casinos in India will represent a significant step to bringing real money gaming services into the modern age.
Why Is This Good News For Online Betting Companies?
India has thousands of online gamers who play real money online roulette, blackjack, teen patti, and other classic table games – all outside the jurisdiction of any authority.
Gaming industry leaders have been arguing for years that realizing the benefits of the betting business in India depends on proper regulation.
For example, by bringing in strict KYC processes, you are massively reducing the time and resources spent investigating money laundering via police and other government agencies.
Other advantages include taxation benefits to the government, job growth, and stimulating investor confidence – they are not achievable without decisive government action.
If the KYC laws for Skill Gaming Industry roll out smoothly, it will be yet another example of why fit and proper regulation is in the interest of all parties.
What Are Examples Of KYC In Mature And Regulated Markets?
The UK Gambling Commission, the Malta Gaming Authority, and the Curacao Gaming License all employ KYC protocols.
The processes vary! Some operators use databases shared with other companies to check the player’s identity quickly and securely. Others will require players to submit documents with a view to a resolution within 24 hours.
How Can India Work With Agencies Around The World?
When bringing in sophisticated screening policies, the prospect of enhanced criminal intelligence on navigating rules and regulations also increases.
That’s why officials working for the PMLA will liaise with a database of global sanctions, Politically Exposed Persons (PEPs), and watchlists to ensure international criminals do not fall through the compliance net.
Liudas Kanapienis, Co-Founder and CEO of Ontario, recently wrote for Forbes about the importance of modernizing the fight against Money Laundering:
“To help eliminate fraud and set a stronger level of protection, we advise shifting toward more complex checks, such as combined artificial intelligence and human assessment.”
“Compliance is not a one-time box to check off. Stay in the know about the fraud trends affecting the industry, and plan your countermeasures before you have to deal with the consequences. Whether this involves updating the tools you use or providing more timely training for your employees, make this part of your routine.”
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For gaming industry – KYC is must to prevent fraud