The sports betting market in India has been witnessing an exponential pace, despite being largely unregulated and operating under a deemed ‘illegal’ status. The uncertainty around the Indian Gambling Laws has not made things clearer for the bettors as they have been taking advantage of this lack of clarity. Even though sports betting is considered to be taboo in many parts of the country, operators and bookmakers alike are looking to break this notion and create a safe, trustworthy, and secured betting atmosphere for Indian punters. KYC commonly referred to as Know-Your-Customer, is a crucial part of this framework.
What Exactly does KYC entail in Online Gambling?
In the simplest of words, KYC essentially means that the operator/sports betting site needs to know the bettor in order to avoid any sort of fraudulent activities like money laundering, tax evasion, match-fixing, betting syndicates, illegal/underground betting, et cetera. The KYC norm is widespread in India (and elsewhere) wherever online gambling has been practice and also when it comes to opening a new bank account, investing in stock markets and cryptocurrencies, or even installing a new UPI payment app.
Within the world of betting, however, KYC takes additional precedence to counter the negative, rouge elements. Betting operators are required to verify their customers’ identities and determine that they are not privy to or involved in any financial crimes. This process also allows the bookmakers to verify that the information provided during profile creation matches that of the person who created it. Moreover, the KYC also helps operators verify the source of funds and ensure that it is not backed by any illegal activities.
As things stand, many online betting sites in India require the following from their new members:
- An identity proof – Passport, Aadhar Card, driving license, PAN card
- Address proof – Utility bills, rental agreement, Passport, Aadhar Card
- Source of funds – Recent bank statement/credit card statement
One good thing about the KYC for online gambling sites in India that some of the websites don’t allow the members to withdraw the winnings unless they have fulfilled their KYC obligations. Let’s assume you win ₹10,000 on a bet you made. You cannot withdraw it to your bank account until and unless the operator has verified your account and identity. At the same time, there are many operators who do not follow such measures yet, simply because they are not legally bounded to do so.
Of course, with time each website will start making it mandatory. Additional blankets of security can also be added like taking a selfie with a numerical code written on paper, uploading self-attested copies, and even submitting a completely filled application form. This can also help the relevant government authorities to monitor the betting activities and keep an eye on things.
India’s sports betting market is pegged to be around $150 billion as of 2018. Knowing the fact that such a humongous market is unregulated and underground, governments can’t do a lot but continue to miss out on incredible tax benefits. Instead of coming through as tax revenue, all the winnings are going untaxed and possibly, adding on to the pile of black money, which criminals may use for their illegal activities.
A lot of this is happening at the moment owing to soft KYC measures, combined with the absence of a framework where betting can take place in an orderly, legalized, regulated manner. As evident, KYC is the first step in moving away from this distorted view of online betting. It is crucial to safeguard users’ and the operators’ interests while ensuring that there is no room for any illegal betting.