The internet has become a popular place to play games of chance for money. This includes sports betting, casinos, poker, and virtual poker. However, some states have opted to prohibit or limit this form of gambling. For instance, in Atlantic City, it is illegal to gamble on the Internet. Other states, including Delaware and New Jersey, allow some forms of online gambling. These sites, however, must adhere to regulatory standards or face fines and penalties.
In addition to the monetary penalties, federal agencies can also seize online gambling assets. In November 2007, federal marshals seized $3.2 million from a web-based business, Discovery Communications, that was involved in an online poker match. There have been numerous other cases where the government has seized assets from web-based businesses that accepted funds to market virtual gambling operations.
While the United States has been a leader in regulating and enforcing laws regarding online gambling, there is still work to be done. Although many state governments are reluctant to adopt laws regulating online gambling, others are likely to follow suit in the near future. Some nations, such as France, have introduced new laws aimed at taxing and regulating Internet gambling. Others, such as Canada, require that web-based casinos report their transactions in electronic form.
One of the best ways to combat money laundering is to implement a Know Your Customer (KYC) or Anti-Money Laundering (AML) program. AML programs ensure that online gambling businesses are able to confirm their customers’ identities and sources of funding. When it comes to implementing an AML program, online gambling sites may wish to expand their scope to include sources of money such as credit card or wire transfers. As a result, there will be more opportunities for cyberattackers to access customer accounts and potentially steal their money.
In conjunction with the KYC program, an online casino might also want to consider an external audit. Performing in-depth audits of the casino’s operations can help determine whether the casino is following the proper regulations. If a customer’s account is compromised, there may be little recourse available. Furthermore, if the company suspects that the user may be underage, it can take steps to block the user from accessing the site.
To find out what the most important regulatory requirements are, you can refer to the American Gaming Association’s list of Best Practices for Online Gambling. Another helpful tool is the UIGEA (Unlawful Internet Gambling Enforcement Act) which was designed to provide guidelines for preventing money laundering.
The best way to protect yourself from being targeted by a criminal is to screen your users for self-exclusion. Many consumers place themselves on a self-exclusion list to prevent them from accessing certain websites. Not only will screening for self-exclusion help keep your business from running afoul of legal and regulatory restrictions, but it also helps ensure that your customers will not be able to use your site again.
There are also some other more subtle measures you can take to prevent money laundering. These include ensuring that your site uses an appropriate data security program, implementing an internal audit system to monitor financial transactions, and taking steps to minimize fraud.