The Gambling Sector Stung by £1 Billion in Costs due to KYC Policy
According to a new report, the UK’s online gambling industry has been significantly impacted by Know Your Customer (KYC) restrictions, with costs exceeding £1 billion.
KYC is a process allowing online gambling operators to identify and verify the identity of their customers. This report highlights the significant financial and operational challenges that online gambling companies face as they strive to meet these regulatory requirements.
Report Findings
The report, titled “The Impact of KYC Regulations on the UK Online Gambling Sector,” was conducted by a team of researchers at the University of Bristol’s Personal Finance Research Centre. It was commissioned by the UK Gambling Commission, the regulatory body responsible for overseeing the country’s gambling industry. The researchers used data from various sources, including interviews with industry experts, to assess the impact of KYC regulations on the online gambling sector.
The costs of KYC restrictions to the online gambling sector have been substantial, with operators spending an estimated £210 million per year on compliance. Additionally, these restrictions have led to a significant increase in customer churn rates, with some operators reporting churn rates as high as 40%.
Impact after KYC Restrictions Imposed
Furthermore, the report found that KYC restrictions have had a significant impact on the customer experience, with many customers finding the verification process to be overly complex and time-consuming. As a result, some customers have abandoned their accounts and moved to alternative gambling providers that offer a simpler verification process.
In light of the report, it recommends the UK Gambling Commission work alongside the online gambling industry to develop a more streamlined and efficient KYC process that is less burdensome for operators and customers alike. This could include the use of new technologies, such as biometric identification, to simplify the verification process.
Key findings from the report include:
- KYC restrictions have cost the online gambling sector over £1 billion to date.
- Compliance with KYC regulations costs operators an estimated £210 million per year.
- KYC restrictions have led to increased customer churn rates, with some operators reporting churn rates as high as 40%.
- KYC restrictions have had a significant impact on the customer experience, with many customers finding the verification process overly complex and time-consuming.
- The report recommends that the UK Gambling Commission work with the industry to develop a more streamlined and efficient KYC process.
