Therefore, in this article, InPlaySoft will address the importance of AML tools, how they work to protect both operators and users, the risks of non-compliance and the fundamental role of software providers in this scenario.
What are anti-money laundering (AML) tools?
Because it deals with fast, digital and worldwide financial transactions, the iGaming sector is one of the most vulnerable to the crime known as money laundering, which is the process of disguising the illicit origin of financial resources to make them appear legitimate.
AML tools aim to detect, prevent and report suspicious activities to the competent authorities. They are especially important in iGaming due to the digital, transactional and often anonymous nature of online gaming, which facilitates the movement of large amounts of money with little oversight when there is no adequate control.
According to a report by the Financial Action Task Force (FATF), gaming and betting sectors are among the most exposed to financial crimes when they operate without an effective AML system. Countries such as the United Kingdom, Malta and, more recently, Brazil, require iGaming operators to implement AML policies that are compatible with international standards.
How do AML tools work?
AML tools use technologies such as machine learning, artificial intelligence and predictive analytics to identify patterns of abnormal behavior. They integrate different resources to compose a defense system, among which the following stand out:
* Identity verification (KYC): the process called Know Your Customer is one of the most important steps in AML tools. During this process, documents are verified, addresses are validated and risk analyses are performed based on public and private data.
* Transaction monitoring: this feature analyzes users' deposits, withdrawals and bets in real time to identify suspicious activities, such as atypical movements of large amounts or repetitive use of different payment methods.
* Screening against sanctions lists: AML tools also check whether users or business partners are on international sanctions lists, such as OFAC (USA), UN, EU or national lists.
* Automatic reporting: Efficient AML systems make it easy to generate automatic, auditable reports to submit to regulatory authorities. These reports document suspicious transactions and actions taken, ensuring transparency and legal compliance.
Risks of operating without AML tools
Ignoring or underestimating AML tools can result in serious consequences for iGaming platforms. The main risks include:
* Fines and sanctions: severe penalties can be applied to companies that fail to implement effective AML policies, including monetary fines and sanctions.
* Loss of licenses: authorities can suspend or revoke the operating license of a platform that violates AML rules, preventing it from operating legally.
* Damage to reputation: being involved in money laundering scandals can undermine the trust of users, investors and partners. Reputation, especially in emerging markets such as Brazil, is a strategic asset.
* Ease of use by criminal networks: without AML tools, criminals can use the system to move illegal money, which puts the platform at risk of becoming an accomplice, even if unwitting.
Benefits of choosing software providers with integrated AML tools
Given the regulatory complexity and risks involved, it is not enough to simply meet the minimum requirements - it is essential to choose a software provider that offers robust AML tools from the ground up that are integrated into the iGaming platform. Some of the advantages of choosing a software provider that offers AML tools include:
* Regulatory compliance: good providers already offer solutions that are compatible with international regulations, which makes it easier to enter different markets without the need for major adaptations.
* Automation and scalability: with automated AML systems, it is possible to monitor thousands of transactions simultaneously without compromising the performance of the site.
* Constant updates: laws and regulations change frequently. Quality providers keep their tools up to date and in compliance with the latest standards.
* Reporting and regulatory support: in addition to facilitating monitoring, good AML systems also help in the preparation of reports required by regulatory bodies, which can be decisive in audits and inspections.
Brazilian market
With the regulation of fixed-odds betting by Law No. 14,790/2023 and the creation of the Secretariat of Prizes and Betting (SPA), Brazil took an important step towards formalizing the iGaming sector. Among the requirements of the new legislation is the implementation of rigorous AML and KYC practices.
Platforms that wish to operate legally in Brazil must have anti-fraud systems, identity verification mechanisms and transaction monitoring, based on the Money Laundering Prevention Law (Law No. 9,613/1998) and the regulations of the Central Bank and Coaf.
According to the Ministry of Finance, the regulation could move more than R$15 billion per year (US$2.75bn), which highlights the size and attractiveness of the market — and, consequently, the level of attention that the authorities will give to compliance with the rules.
InPlaySoft: stay safe with AML and KYC tools
InPlaySoft is a software provider for iGaming platforms, including online casinos and sports betting sites, that values ??security and regulatory compliance. The company has integrated AML and KYC tools so that all of our partners, and their players, act within the law and are always protected.
To learn more about InPlaySoft, and InPlaySoft’s AML tools, click here to visit our website and contact us.
Source: InPlaySoft
