Why do bookmakers allow you to deposit and then request your ID, bank statements or proof of address when you want to withdraw?
It’s one of the most annoying, and unfair, policies surrounding online betting but you’ll be surprised to know it’s a legislative reason that this process takes place and not the bookmakers trying to con or scam you.
Bookmakers must be licensed by the UK Gambling Commission.
Licensed companies must abide by license terms in order to avoid it being revoked.
One key term is to ensure gambling is not associated with or used to support any criminal activity.
Gambling businesses are, therefore, required to seek information about their customers’ identities by law.
‘Know Your Customer’ checks now in operation at all online bookies.
Gambling Businesses & the Law
In order to operate legally in the UK, gambling businesses of all types must be licensed by the UK Gambling Commission. As such, they then must adhere to the terms of their licences or as the Gambling Commission themselves put it, they have:
‘a responsibility to uphold the three licensing objectives set out in the Gambling Act 2005.’
The first of those licensing objectives is to do all that they can in order to prevent gambling from
‘being a source of crime or disorder, being associated with crime and disorder, or being used to support crime’.
In general terms, when it comes to online gambling businesses, the most likely crime which could be committed through their services is that of money laundering. It is contingent upon online gambling businesses, as a key term of their licence therefore, to do all that they can to combat money laundering.
Money Laundering & Suspicious Activity
Money laundering is in its simplest possible terms the concealment of the origins of illegally obtained money through transfers or transactions utilising legitimate organisations or businesses.
In the case of online gambling businesses, then, money laundering would involve the staking of illegally obtained money to turn it into gambling winnings from a legitimate source.
As we have mentioned above, gambling businesses have a legal obligation to combat such activities and the Gambling Commission advise such businesses that the best way to do so is by performing ‘customer due diligence’. The Commission explain what they mean by this, as follows:
‘You can better identify suspicious transactions if you know your customer…Customer due diligence is identifying the client and verifying their identity on the basis of documents, data or information obtained from a reliable and independent source.’
When it comes to online casinos, what’s more, their responsibilities in fighting money laundering are even more strictly set down by the Commission.
The Money Laundering Regulations 2007, in fact, require that remote casinos establish and verify the identity of all customers before access is given to their gaming facilities. Those customers, too…
‘who, in the course of any period of 24 hours, pay to, or stake with, the casino €2,000 or more in connection with remote gaming facilities’
…must be identity checked once again.
In the case of online bookmakers, meanwhile, customer identities must also be verified and followed up on, and this is most often achieved via so-called ‘Know Your Customer’ checks.
Know Your Customer Checks
When customers sign up for an account with an online bookmaker, the bookmaker will generally perform an identity check using the electoral register. If for any reason the customer’s identity cannot be verified in this manner, however, they will request official government ID from the customer.
Such ID includes a driving licence, passport or other official documentation, and can also be requested if a customer attempts a transaction which is in some way out of the ordinary or has potential to be suspicious. In such circumstances, bookmakers may also require a direct conversation with the customer in question, regarding their account activity or the source of their account funding.
These types of check are known as ‘Know Your Customer’ checks and it should be obvious from what we’ve talked about above how they relate to bookmakers’ legal obligations, especially when it comes to money laundering.
In short, therefore, the reason why you have to send your ID to withdraw winnings is because bookmakers are legally required to take steps to ensure that no criminal activity takes place through use of their service.