Online Gaming License
As the iGaming industry continues to expand into Asia, Africa and Eastern Europe, securing the right gaming license is a critical step for operators aiming to establish a legitimate and competitive online gaming business. The .com licensing model was the first licensing model available to the market prior to the .country emergence in the EU and the United States, but has since still maintained its relevance, albeit mainly for upcoming regions. Its popularity is due to its flexibility and wide reach in those jurisdictions that do not have a .country local licensing regime.
However, selecting the online gaming right license involves understanding the legal, operational, and financial implications of each jurisdiction. While the established jurisdictions of Malta, Isle of Man and Gibraltar dominate the Tier 1 choices, and Curacao leads in the Tier 2 choices, some newer and alternative options like Anjouan and Tobique, alongside legacy ones such as Kahnawake, are often considered as a Tier 3 choice. This guide will help you navigate the complexities of choosing the right .com online gaming license.
Why a .com License?
A .com license provides access to international markets and allows operators to host websites globally. This license type is particularly appealing for businesses targeting a diverse player base while maintaining operational flexibility. Additionally, many .com jurisdictions offer favourable tax structures, enabling cost efficiencies.
Key Factors to Consider
When choosing the right .com online gaming license, consider these essential factors:
1. Regulatory Environment
The more reputable jurisdictions have specific regulations governing online gaming. Evaluate the following:
- Compliance Requirements: What are the key regulatory obligations, including anti-money laundering (AML), data protection and responsible gaming measures?
- Reputation: Does the jurisdiction have a credible reputation in the iGaming industry? Is there a real state regulator that is established at law? Is there a proper license awarded or is just a simple registration certificate granted?
- Third Party Access: Does the chosen license enable access to third party services such as banks and PSPs? What about access to technology providers, aggregators and games suppliers
- Stability: Are the regulatory frameworks consistent, or do they frequently change? In other words, are regulatory actions predictable, or does the jurisdiction change approach and conditions too frequently, and often in a contradicting way?
Popular .com licensing jurisdictions include:
- Malta: Known for its robust regulatory framework, excellent reputation, an all inclusive gaming eco-system, and high expertise.
- Isle of Man: Renowned for its stringent compliance standards and strong industry support.
- Gibraltar: Known for its straight forward approach and proximity to Spain for labour market access.
- Curacao: Until recently offering a low cost process and very low post licensing compliance.
2. Cost Implications
The cost of obtaining and maintaining a license can vary significantly. Consider:
- Application Fees: These may range from a few thousand to tens of thousands of Euro.
- Annual Renewal and Compliance Fees: Understand ongoing costs, including renewal and compliance fees.
- Tax Rates: Investigate corporate and gaming tax rates, as these can impact profitability, whilst also ensure to have a proper international tax assessment in order not to underestimate transfer pricing challenges
- Hidden Costs: What may seem as a cheap solution may end up to be the most costly for the business. Restrictions (including bans) imposed by banks and payment institutions on certain jurisdictions, may drive your operational costs sky high, to operate with a license from a very low cost jurisdiction.
3. Market Access
A .com license may enable access to multiple markets, but it's vital to confirm:
- Accepted Regions: Ensure the license allows you to operate in your target markets.
- Local Restrictions: Some countries have additional requirements for operators entering their jurisdictions.
4. Application Process
Consider the complexity and time involved in obtaining the license:
- Documentation Requirements: Tier 1 jurisdictions require detailed business plans, financial statements, compliance policies, technical blue prints, test lab certifications for both the RNG and games, AML structures and systems, and robust responsible gaming measures.
- Processing Time: While some licenses, like Anjouan, can be secured within relatively few weeks, others, especially Tier 1s may take several months. Some jurisdictions, like Isle of Man have a stated obligation to issue or refuse a license within a span of 14 weeks from filing.
- Technical Audits: Some jurisdictions like Malta, mandate procedural and technical infrastructure audits before granting a license, whilst some mandate such post-licensing audits on a regular basis, such as in the case of Isle of Man and Malta.
5. Operational Support
Ensure the jurisdiction provides the necessary technical, legal, and business infrastructure to support your operations, such as:
- Payment Processing Solutions: Does the license facilitate partnerships with leading payment providers?
- Regulatory Advisors and Expert: Does the jurisdiction have a strong and vast choice of regulatory advisors and experts?
- Legal Services: Are there law firms that are specialised in gaming law and that can assist your company with all matters related to gaming law, intellectual property law, data protection law, employment law, tax and litigation?
- Dispute Resolution Mechanisms: Are there clear protocols for resolving disputes with players?
Tips for Securing the Right License
- Consult Experts: Engage legal and consultancy firms, such as GTG, specializing in iGaming licensing to ensure a smooth application process.
- Plan for Growth: Select a jurisdiction that aligns with your long-term market and operational goals.
- Prioritize Compliance: Ensure your operations adhere to the highest compliance standards to build trust with regulators and players.
Choosing the right .com online gaming license is a foundational step in building a successful iGaming operation. By carefully assessing the regulatory environment, costs, market access, and operational support of each jurisdiction, operators can position their businesses for long-term success in the global iGaming market.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
