If you have ever gambled online, you may well have been asked to supply proof of your identity and/or address. This is a relatively common request and one that forms part of a standard ‘Know your Customer’ (KYC) procedure. As it is easy to pretend to be someone you are not online, bookmakers perform these checks to ensure players are who they claim to be.
As well as providing proof of one’s identity and address though, there is another check that bookmakers sometimes perform. Known as ‘proof of income or ‘source of funds’, this is less common but it is still something that bookies will insist on for certain customers. If you ever find yourself subject to a proof of income check, there is no need to panic as it is a perfectly normal request, not a sign you have done something wrong. In most cases, once players provide satisfactory documents they can continue betting as normal without restriction.
What Does Proof of Income Mean?
The first question to ask is what exactly does proof of income entail? It is a check bookmakers carry out to find how a player is financing their gambling. For customers depositing/betting small sums of money, it is a question that does not need asking. For big-money players though, a bookmaker may double-check where all this money is coming from.
In response to proof of income request, a customer must provide documents proving how they finance their bets. This can include sending copies of one, or a combination of the below documents. The bookmaker will specify which documents they wish to see and it is up to the customer to supply them within the given time frame.
- Job contract
- Recent payslip from employer
- Recent tax return
- Recent bank statement
- Recent credit card statement
- Screenshot from online payment system
By providing one (or more) of these documents and sometimes some additional information, players will be proving how they finance their betting habits. There is no legal obligation to hand over copies of these personal documents when a bookmaker requests them. Failure to do so though will usually lead to account suspensions or restrictions on how much players can bet/deposit. The only way to get such action lifted is to comply with the source of income evidence request. For customers not willing to do this, they can find a new bookmaker instead but as such checks occur across the industry, this is not a solution.
Why Do Bookies Check Income Sources?
You might be wondering why bookmakers bother to query where some high-rolling players are getting their money from. After all, it does come at some expense to them (with then having to employ and train staff to perform such checks). Additionally, some might say it is not their business to ask. When people buy expensive items online such checks are not carried out so why with a bookmaker?
The short answer is that they are legally obliged to. Things are particularly strict in the UK where bookmakers face harsh fines should they fail to perform the necessary checks on players. Other jurisdictions may not be so particular with their rules but proof of income checks are a common theme across gambling licences. This means that no matter where you play, bookmakers have the right to request documents proving how you fund your gambling habits.
Some bookmakers are more concerned than others about performing these checks, of course. Taking a lenient approach in certain countries, where gambling is heavily regulated, often proves costly to the bookmakers though. In March 2022, 888 UK Limited were hit with a £9.4m fine of various failings on their part. One of these included having a policy only to carry out proof of income checks once a customer had reached £40,000 in deposits. They also let one customer spend £65,835 over a five-month period without requesting any source of income information.
Many of the failings of 888 in this particular case centred around failure to uphold source of income policies, or having entirely inadequate policies in the first place. At the time, they gave customers 10 days to provide proof of income before their accounts would be restricted. This is an acceptable duration but in one instance they waited an extra three weeks, by which point the customer had lost £15,0000. It is not just 888 who are guilty of failings around proof of income either.
Part of William Hill’s £19.2m fine referenced one example in which a player staked £276,942 over two months without any checks. Similarly, Genesis Global Limited faced a £3.8m fine for their wholly insufficient source of fund checks that enabled customers to spend well above their means.
To avoid these large fines, bookmakers need to take income checks extremely seriously and insist on following acceptable procedures at all times. Taking a much more relaxed stance might see them benefit in the short-term, thanks to an increase in customer losses, but this will not exceed the amount of the fine. Perhaps some think they will manage to get away with it, and maybe some do, but there are enough examples of heavy fines to act as a real deterrent.
Why Do Regulators Care About Proof of Income?
We have established that the main reason bookmakers perform source of funds checks is to comply with their legal obligations, but why do such rules exist in the first place? There are two main reasons for this, one is to protect customers themselves and another is to ensure that the money being gambled is ‘clean’. Let us take a look at both these points individually.
Customer Protection
Proof of income checks, when performed correctly, help prevent customers from spending well above their means and getting into huge levels of debt. They largely check to see that:
- A customer is betting with their own money and not the money of someone else.
- A customer can actually afford their current levels of gambling.
Discourage Criminal Activity
Without bookmakers performing any source of funds checks, online betting would become a big target for criminals to ‘clean’ their money. With the checks though, bookmakers can see if:
- A customer is using funds linked to criminal behaviour.
- A customer account is being used (knowingly or unknowingly) to launder money.
- A customer has a genuine, legal source of income as this reduces the risk of any illegally sourced money being involved.
In the UK, one of the main objectives of the Gambling Commission is “preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime”. So, to this end, source of funds checks are integral to their mission and you can see why they take them so seriously.
Should Bookmakers Be Required to Perform Source of Income Checks?
Proof of income checks are perhaps not as uncontroversial as you might think. Some are happy with the current rules whereas others believe checks on income do not go far enough. This is largely from the perspective of reducing customer harm as there are still many punters out there suffering from gambling addiction who end up losing large chunks of their income. One proposal has been to set a relatively low monthly/deposit limit for all customers as default and only increase it if a customer proves they can afford it.
Flutter Entertainment, who own the likes of Paddy Power and Betfair, voluntarily introduced a new policy based on this in 2021. As part of the changes, any customer under the age of 25 would be limited to £500 in net deposits. For the minority of young players who can comfortably afford to lose more than £500 a month, they can agree to a higher limit but only providing they supply supporting evidence they can afford it (i.e afford to lose it!). When shaping their new policy, Flutter found there was a 77% approval among regular gamblers for more measures to protect younger customers.
Despite their findings, you can find other data that paints an entirely different picture. When asked about the ‘proof of income’ specifically, rather than the more general ‘protecting players’, most were not in favour according to research carried out by the Betting and Gaming Council. According to them, 7 out of 10 bettors would refuse to provide personal financial information. One bookmaker even produced a higher figure claiming 9 out of 10. A lot of the objection revolves around simply not wanting to share very personal financial information with a bookmaker. In such cases, punters can find themselves with restrictions on their account, making them bet much less than they can comfortably afford.
You may think a few seasoned gamblers having their habits curbed is a price worth paying to protect at-risk gamblers but one less disputable point is the current level of inconsistency. One player can provide the same source of funds documents to two bookmakers yet find themselves handed different limits. The current levels of guidance from the UK Gambling Commission, do not appear to be terribly clear, and this can lead to significant variances in how bookmakers act. There are ultimately a lot of grey areas and the betting industry could well benefit from having some strict, black-and-white guidance surrounding source of income checks.