How to Improve AML in iGaming

iGaming companies are no strangers to money laundering attempts. Regulators monitor such attempts and keep updating their rules accordingly.

So, how can you enhance your AML processes today?

Why Is Money Laundering a Problem for iGaming Companies?

iGaming companies provide the perfect opportunity for money laundering.

Just like brick-and-mortar casinos, online gaming platforms act as a perfect front for money mules to launder illegally obtained funds, which hides their true criminal origins. 

For two simple examples, criminals will deposit money in their accounts and either collude with other players for the money to change hands, or play a few games and withdraw their money to another account.

This is, of course, illegal and under the scrutiny of financial authorities as well as regulators. If your iGaming company is found to facilitate money laundering, you risk:

  • hefty compliance fines
  • hurting your brand name
  • legal repercussions, including removal of license

Unfortunately, it also happens that AML is equally challenging.

Regulations vary from one country to the next, and regulators are constantly changing and updating their rules. AML also adds friction to the user journey, which isn’t ideal in the highly competitive world of real-money gaming done online.

In this sense, both money laundering and anti-money laundering are a problem for iGaming companies.

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How Do You Detect Money Laundering in iGaming?

To detect money laundering, you need a full picture of who your users are. Firstly, this will be done by combining AML and KYC due diligence checks to identify your players.

You may want to answer the following question:

  • Are they on PEP lists? Politically exposed persons are more likely to be complicit in money laundering.
  • Are they connecting from a country on sanctions lists?
  • Are they using any spoofing tools to hide their data – such as emulators or VPNs?
  • Are they depositing and withdrawing money in suspicious patterns?

The last point, in particular, relates to transaction monitoring. This is a legal requirement, where you must keep a close watch on your players’ flow of money, both at the deposit and withdrawal stage. 

In fact, deploying the right risk rules to track your users’ deposits could be one of the leading indicators to prevent money laundering.

Let’s look at some basics of setting up risk management rules in your security stack to boost AML as an iGaming operator.

Top 3 Custom Rules for AML iGaming

AML and KYC in the gambling world are closely linked, you need to understand who your players are. You must also track their funds.

Let’s see how this can be done via custom risk rules. 

#1: IP Address from High-Risk Country

One of the simplest AML rules is also one of the most effective: using IP analysis to geolocate users. 

IP Geolocation

You can use the data to calculate an IP fraud score, but is particularly helpful when it comes to reviewing signups originating from high-risk countries. 

This is how easy it is to set up that kind of rule in SEON:

After creating a list of high-risk countries (as seen above), you can tell the system to automatically scrutinize carefully any connection from these locations. 

This is what it will look like in our dashboard once the rule has been triggered:

AML high risk country list rule

As you can see, a user from the custom AML high-risk list was given a higher fraud score.

Of course, you can take control over how many points this would add to the total risk score, and what happens to them: Are they blocked outright or reviewed by a team of fraud analysts, for example?

#2: User Has No Social Presence

After SEON’s 90+ social media and online platform checks, also known as digital footprint analysis, a user with no results – and thus no social presence whatsoever – is very suspicious indeed.

In theory, this rule could create a lot of false positives. After all, a user who doesn’t have a Facebook account isn’t necessarily a fraudster.

However, considered in tandem rather than examining social media in isolation, and used in combination with other rules, such a flag can actually help pinpoint fake IDs or synthetic IDs, which are a problem for both KYC and AML. 

This is the thesis:

  • Money launderers want to hide their identities.
  • They create iGaming accounts using stolen IDs and made-up data (synthetic IDs).
  • This is a time-consuming process, and creating a social footprint for each is exponentially more taxing.
  • Therefore, fraudsters do not have enough incentive to take the time to create social footprints for their fake personas – and even if they do, some data points are impossible to fake.
  • This process doesn’t scale up easily, either.

This is how you end up with users who appear legitimate but have no connections to social or web-based networks whatsoever, which should increase your suspicions. 

The key is to look at social presence as an indicator of a real identity.

Social Media Profiles

An email address or phone number not linked to social media accounts at all does not necessarily mean you’re dealing with a money launderer – but such a finding does increase this likelihood via unique, difficult-to-fool data points.

#3: Sudden Increase in Spending

Another simple but effective AML technique is transaction monitoring. In the world of risk rules, this can be done in two ways:

  • flagging deposits and withdrawals above the AML limit
  • looking for suspicious increases 

The latter is done via velocity checks. These are rules looking at specific actions within a certain time range.

In the example below, you can see how we’re targeting a drastic 200% increase over a 24-hour timeframe. 

Note that in that scenario, we have decided to increase the risk score by 20 points rather than instantly block the deposit.

You can of course choose what happens based on the risk score. Some iGaming companies have a larger risk appetite than others, so it’s up to you to mitigate these users as needed.

Discover SEON for iGaming

Boasting unique social and digital footprint analysis, ML and end-to-end customizability, SEON helps iGaming vendors stay safe and grow.

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How SEON Does AML for iGaming Companies

By providing AML screening, transaction monitoring, and fraud signals with real-time alerts, SEON is a reliable partner to help you fulfill your AML requirements and stay compliant. Specifically:

  • The AML checks functionality scans someone’s name against known crime watchlists, screening lists, PEP and relatives lists, and so on, including fuzzy matches and alternative spellings.
  • SEON offers fantastic transaction monitoring capabilities thanks to custom risk rules that give you complete control over your players’ actions. This is true at the deposit, gaming, or withdrawal stage. 
  • With the help of our Customer Success team, you can further create customizable risk rules to address any specific concerns or additional legislation.
  • Our data enrichment tools are designed to give you a complete profile of your iGaming users. You can use the same data for pre-KYC checks, spotting multi-accounting and flagging bonus abuse –- and protect yourself in addition to your compliance.

This also works to spot multi-accounting and player collusion – the Achilles’s heel of the best iGaming groups. You can also find hidden links between data points to instantly spot potential fraud rings and collusive players, as you can see above.

Best of all, with SEON, you have complete control over the integration process, whether you need data enrichment via API calls, manual queries, or even a Google Chrome extension to turbocharge your manual review process.

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Author avatar
Tamas Kadar

Tamás Kádár is the Chief Executive Officer and co-founder of SEON. His mission to create a fraud-free world began after he founded the CEE’s first crypto exchange in 2017 and found it under constant attack. The solution he built now reduces fraud for 5,000+ companies worldwide, including global leaders such as KLM, Avis, and Patreon. In his spare time, he’s devouring data visualizations and injuring himself while doing basic DIY around his London pad.

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