What is the difference between KYC and CDD in gambling compliance?

What is the difference between KYC and CDD in gambling compliance?

• A. KYC focuses on verifying customer identity, while CDD involves assessing risk and monitoring for ongoing activity.
• B. KYC requires risk assessment, while CDD only verifies identity.
• C. KYC and CDD are identical in purpose and process.
• D. KYC applies to vendors, CDD applies to players.

Answer: (A)

KYC is about confirming who the customer is, while CDD is about evaluating the customer’s risk and actively monitoring their activity over time. In gambling compliance, you first verify identity—collecting documents to establish name, date of birth, address, and similar details. CDD goes beyond that by assessing the player’s risk profile, monitoring transactions and behavior for signs of money laundering or other illicit activity, and adjusting scrutiny based on risk (with enhanced due diligence for higher-risk cases). So KYC is the initial identity check, and CDD is the ongoing, risk-based process that includes monitoring and potential deeper review. The other statements aren’t correct because risk assessment is central to CDD, not to KYC alone; KYC and CDD are not identical in purpose, and these procedures focus on players/customers rather than vendors in standard gambling compliance.

KYC is about confirming who the customer is, while CDD is about evaluating the customer’s risk and actively monitoring their activity over time. In gambling compliance, you first verify identity—collecting documents to establish name, date of birth, address, and similar details. CDD goes beyond that by assessing the player’s risk profile, monitoring transactions and behavior for signs of money laundering or other illicit activity, and adjusting scrutiny based on risk (with enhanced due diligence for higher-risk cases). So KYC is the initial identity check, and CDD is the ongoing, risk-based process that includes monitoring and potential deeper review. The other statements aren’t correct because risk assessment is central to CDD, not to KYC alone; KYC and CDD are not identical in purpose, and these procedures focus on players/customers rather than vendors in standard gambling compliance.