Before Australian people can gamble online, operators now need to have customer pre-verification in place before they can create an account for the player.

Thanks to the National Consumer Protection Framework for Online Wagering, published by the Australian government in 2018 and updated in 2022, we are seeing new regulations rolled out at a fast pace.

These new regulations tighten the controls required by operators to filter out criminals, problem gambling, people who have self-excluded themselves from gambling, fraudulent accounts, and also underage people.

Irrespective of whether players are choosing from the best online casinos rated by Chloe Wilson of AustralianCasinoClub, or other equally established affiliates, this pre-verification measure will be expected across the board. The National Consumer Protection Framework for Online Wagering requires all state governments to implement the same regulations.

While state governments all manage their gambling operations within the state slightly differently, federally-produced laws on the matter take precedence and must be adhered to.

How the regulations work in Aus

Online gambling operators servicing Australia need to have an Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) component in place to prove to authorities they are compliant with the laws surrounding AML/CTF. The AML/CTF is part of the Know Your Customer (KYC) activities.

KYC involves ensuring that the customer details entered such as name, date of birth, address, etc., match up to official documents such as passports, licenses, energy provider bills, and other government-issued documents.

These procedures are in place to stop underage gambling, check that problem gamblers on a register cannot register with a new operator, identify individuals that may be involved in illegal activities such as criminal enterprises, fraudulent activities, or money laundering, check that the player is not underage, and check that a person is not registered with BETSTOP (The National Self-Exclusion Register). These are all important to stick to the laws surrounding gambling within Australia.

Why is all this important?

You may or may not be aware of some of the strife that Australia’s biggest casino operator got into over the last few years. A stand out piece of investigation found that a $2 shell company called Riverbank Investments Pty Ltd was used to launder hundreds of millions of dollars at Crown Casino Perth.

Through deposits under $10,000 at a time, they were able to skirt the reportable amounts required by AUSTRAC, the government body that investigates money transfers in Australia. The company then could withdraw these funds from their casino account.

While online casinos cannot currently get a license within Australia, there are plenty of betting operators available, plus international operators that provide services to Australians.

With the previous rules surrounding player verification, there was a chance that players could gain an account and make a deposit or bets before the verification procedures were complete. Previously, verification could take up to 72 hours to complete. This meant the opportunity for play before verifying that a person was actually fit to play.

When are the pre-verification changes effective?

Online gambling operators have some time still to implement the pre-verification changes within their systems. The changes do not come into strict effect until the 29th of September 2024. This means that operators have approximately one year to change their internal systems to adhere to the new rules, so long as they meet the special circumstances outlined by AUSTRAC.

There are some special circumstances

Until the 29th of September 2024, there are some special circumstances that allow operators to create a player account before applicable customer identification procedures (ACIP) are complete.

When operators are conducting applicable customer identification procedures (ACIP), there are some cases where the account can be created before ACIP is complete. These special circumstances are when:

It is critical in carrying out normal business
The money laundering and terrorism financing risk is low
There are established and mature risk-based controls in place to manage money laundering and terrorism financing risk
There are established and mature risk-based controls in place to ensure ACIP is completed as soon as possible
There are no services offered to the customer before ACIP is complete

If these special circumstances are valid, the operator must still complete ACIP within 72 of opening the account (i.e. no betting or deposits). Typically, if ACIP can’t be done within 72 hours, the account must be deleted.

These special circumstances have been carefully constructed with the help of gambling service providers. For some providers, pausing account creation before ACIP would require significant changes in their software, taking the provider offline for many months to implement the changes.

Obviously, the cost to business would be huge. With the special circumstances, providers have the opportunity to make smaller changes that will not significantly affect their systems’ data flows and modeling.

Sports News