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Glossary · platform

KYC (Know Your Customer)

KYC stands for Know Your Customer — the identity verification process required by regulated sportsbooks, exchanges, and prediction markets before allowing betting or large transactions. KYC requirements stem from anti-money-laundering laws and gaming regulations.

What KYC Typically Requires

Most regulated US books verify customer identity at signup using:

  • Full legal name
  • Date of birth (must be 21+ in most states)
  • Social Security Number (last 4 digits or full)
  • Permanent address (must be in a legal state)
  • Government-issued ID (driver’s license, passport — sometimes uploaded as a photo)

Some books require additional verification for larger withdrawals or for high-volume accounts:

  • Selfie verification (photo of yourself holding your ID)
  • Proof of address (utility bill, bank statement)
  • Source-of-funds documentation (for very large deposits)

Why It Matters

KYC affects bettors in several practical ways:

State residency requirements. Most US sportsbooks are licensed state-by-state, and KYC enforces state-specific eligibility. You generally need to be physically present in a legal state to bet (geolocation services check this), and sometimes need to be a state resident to register.

Withdrawal delays. First withdrawals often trigger KYC review, especially for larger amounts. Plan for a 1-3 day delay on initial withdrawals at most regulated books.

Account closures for KYC failures. If you can’t produce required documents, the book can suspend or close your account. This is rare for typical bettors but worth knowing.

Tax reporting. US books are required to report significant winnings to the IRS via 1099 forms. This is an extension of the broader KYC framework. Offshore books typically don’t issue 1099s, shifting the tax-tracking burden to the bettor.

Limits on fake accounts. Books use KYC data to prevent customers from creating multiple accounts. Once your name is on file, you can’t easily create a second account at the same book to evade limits. Some books also share KYC data within parent companies (e.g., the same account history may apply across DraftKings sportsbook and DraftKings Casino).

KYC at Different Platform Types

Major US sportsbooks: Strict KYC. Required before betting; large bets/withdrawals trigger additional reviews.

Offshore sportsbooks: KYC requirements vary widely. Some require ID verification at signup; others rely primarily on cryptocurrency for verification (the wallet itself acts as identity).

Exchanges: US-based exchanges (Novig, Prophet) follow standard KYC. International exchanges (Betfair) follow their jurisdiction’s rules.

Prediction markets: CFTC-regulated markets (Kalshi, Polymarket via Polymarket US) require KYC. PredictIt’s CFTC no-action letter requires identity verification.

Privacy and Security Implications

KYC means your identity information is in the book’s databases. Considerations:

  • Data breaches happen. A book’s database breach could expose customer identities.
  • Books share data with regulators. Tax reporting and gaming regulator requirements mean your activity isn’t private from the government.
  • Multi-account is harder. Even if you’re not trying to game the system, having one identity tied across multiple books means a problem at one can affect others (in cases of confirmed fraud or self-exclusion).

For most bettors, KYC is a routine onboarding step. For privacy-sensitive users, the data exposure is worth understanding before opening accounts.