PAYMENT TECHNOLOGY
use of, the wagering account by any person other than the patron or patrons for whom the wagering account is established.” 2 Some jurisdictions allow for multiple patrons on a single cashless wagering account, provided that each individual registers with the operator. Account Verification Most states require that an individual confirm their identity before establishing or funding a cashless wagering account. In Nevada, a patron can visit a casino cage in person and present a valid government issued picture ID to establish or fund a cashless wagering account. 3 If the patron wants to set up their cashless wagering account remotely, the operator must (1) validate the player’s government issued picture identification and (2) perform an identity verification in order to form a reasonable belief that the true identity of the patron is known. Nevada requires this two-step verification process to ensure that the individual attempting to use the cashless wagering account is the person that established the account. The first step of the verification is establishing the authenticity of the individual’s ID, which can be done by comparing the ID to an electronic library of ID specifications and associated security features as well as by comparing the data obtained from the ID via optical character recognition to the data embedded in the two-dimensional bar code on the back of the ID. Some states only require this first verification step and do not necessitate that the identity of the individual accessing the account is separately validated. The verification of the identity of the individual and not just the validity of the ID is a requirement in most states that have cashless wagering, although the method for performing this second step can vary. Some states allow for biometrics or a “selfie” to authenticate the identity of the individual accessing a cashless wagering account. In Nevada, a selfie is insufficient for an operator to establish a reasonable belief of the patron’s identity. ID verification can be completed when the operator remotely validates that the picture on the ID matches the selfie and the
operator performs Know Your Customer (“KYC”) analysis of the data provided (name, address, date of birth and social security number) against its identity databases to determine if the data provided matches. If some portion of the KYC is a partial match only, the operator can also use a Knowledge Based Authentication (“KBA”) process in which the patron is presented multiple- choice questions regarding the individual’s personal history. All questions presented are non-credit based and are formed using proprietary data. In summary, a robust account authentication system consists of 1) validating something the patron has (such as a valid government ID); 2) validating something the patron knows (like responses to enrollment questions and KBA), and 3) validating something they are (using KYC and KBA). Evidence of Identity The Financial Crimes Enforcement Network (“FinCEN”) requires casinos to “examine” a document to verify the name and address of their customers. 4 Verification of the identity of an individual who indicates that he or she is a non-US resident must be made by passport, alien identification card, or other official document evidencing nationality or residence (e.g., a Provincial driver’s license with indication of home address). Verification of identity in any other case shall be made by examination of a document, other than a bank signature card, that is normally acceptable within the banking community as a means of identification when cashing checks for non-depositors (e.g., a driver’s license or credit card). 5 FinCEN regulations and guidance applicable to casinos do not clarify whether the examination of a document must be in-person. 6 FinCEN’s guidance dated October 19, 2021 (the “Guidance”) excepts casinos from the requirement of in-person verification in the context of online gaming; i.e., casinos have the option to use non-documentary methods to verify identity for online gaming. This Guidance implies that remote examination of a document is acceptable in the online gaming context but does
2 Nevada Gaming Commission Regulation 5.225(6). 3 Nevada Gaming Commission Regulation 5.225(7). 4 See 31 C.F.R. §§ 1010.312; 1021.410(a) (“ . . . verification shall be made by examination of a document.”) 5 Id. at § 1010.312. 6 See, e.g., 31 C.F.R. §§ 1021.100 et seq; Internal Revenue Manual §§ 4.26.5 et seq.; FinCEN Frequently Asked Questions: Casino Recordkeeping, Reporting, and Compliance Program Requirements.
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IMGL MAGAZINE | APRIL 2023
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