Obtaining an online gambling license is an important step in opening an online casino or sports betting business. Although some operators consider the application process to be complex and daunting, it is important to note that the long-term benefits of a license far outweigh the investment in money and time.
Planning a successful business is done in advance. When a new casino operator looks at its long-term prospects, it will find that, in addition to providing legal stability, an online gambling license is a ticket to cooperation with financial institutions and quality game developers, as well as a sign of a trustworthy reputation, which players will respect.
Most countries require gambling operators to apply for and obtain a license from regulators. In addition, there are a number of offshore jurisdictions that issue gambling licenses, allowing online casinos and sports bookmakers to reach an international audience. These licensing jurisdictions include gambling activities in Malta, Curacao, Gibraltar, the Isle of Man, and the Mohawk Kahnawake Territory.
Why get an online gambling license?
Start-up companies at the beginning of the road are questioning the costs and requirements of obtaining an online gaming license and are wondering if it is worth applying for it. Application fees, license fees, and charges can put pressure on a casino’s budget and reduce profit margins. And that’s if you manage to get the license in the first place – many jurisdictions have tough, bureaucratic enforcement processes that new entrants find daunting.
Szilaghi Consulting offers consulting services and complete package solutions for the purchase of the gambling license, which include:
- Jurisdiction of gambling and business consulting
- Incorporating the corporate structure of the gambling business
- Opening bank accounts
- Application for a gambling license
Operators on the gray or black market will face serious obstacles to growth and expansion. Unlicensed companies will encounter the following problems:
- Most banks and financial institutions will refuse to process gambling transactions. Banks see licenses as a guarantee that their institution will not be used for money laundering.
- The payment service providers that your platform needs will need to have a license before you can start cooperating.
- Gambling developers will rarely cooperate with unlicensed casinos – sometimes only with platforms licensed by the same regulatory body.
- Lack of license can cause legal instability. Depending on the jurisdiction, the site may be blocked by the authorities, the business assets may be frozen and the company’s management may be fined or imprisoned.
- Unlicensed operators may not advertise on advertising platforms.
- Lack of confidence of experienced players who will avoid playing on sites that do not offer bonuses and free spins.
In conclusion, having a gaming license opens up opportunities that an online casino needs to grow. License fees can be high, but a well-run online casino or sports betting should allow them easily.
Friendly Gambling Jurisdictions for Start-ups
For start-up operators, there are a number of jurisdictions around the world that issue licenses that enjoy international recognition. Operators often start or expand their licensed operations in one of the following jurisdictions:
Curacao
The Caribbean island of Curacao is one of the oldest online gambling regulators, which began issuing licenses in 1996. The island’s modern infrastructure and favorable business tax rates make it a popular location for international industries. The Curacao gaming license has become very popular, especially for new entrants.
The Curacao system has two types of licenses – a primary license and a sub-license. New operators apply for a sub-license from a master’s licensee (the four master’s licensees have been established since 1996). Master’s licenses are valid for five years in a row, and secondary licenses are valid as long as their master’s license is valid.
Each master’s degree holder sets their own requirements and fees, but there are some features common to all of them. Most importantly, the sub-license allows the holder to organize all types of casino games and sports betting, while other authorities require an additional license for each type of activity that the licensee wishes to offer.
The Curacao game license has the following advantages:
- Less expensive than other jurisdictions
- Licenses can be available in just six weeks
- 0% profit tax and 2% net profit tax
- Compliant operators can pay in cryptocurrencies
- Less complicated process than in other jurisdictions
- A license covers all online gambling activities
Curacao licensees have some restrictions. They are forbidden to accept players from the USA, France, the Netherlands, and Curacao, among other countries.
In conclusion, the Curacao gaming license is the first choice of many new operators.
Malta
Malta is known as the home of gambling in Europe. The Malta Gambling Authority (MGA) is one of the most prestigious organizations in the world and enjoys recognition throughout Europe. Compared to Curacao, the Maltese gambling license is more expensive and is usually chosen by more established operators who want to enter the thriving European market.
Malta offers four classes of licenses, each of which allows the holder to organize a different type of activity. Licenses are valid for 10 years.
- Type 1. Allows operators to organize games of chance when the result is determined by a Random Number Generator (Slots).
- Type 2. Allows operators to organize games in which the outcome is determined by the outcome of an event (sports betting).
- Type 3. Allows operators to organize gambling that generates commission-based revenue based on stakes (poker).
- Type 4. Allows operators to organize controlled skill games with a result based on aggregate statistical performance (fantasy sports).
A 2018 legislative change streamlined the tax system, eliminated the need for current licensees to apply for separate licenses, and dropped the monthly compliance contribution for the first 12 months of a casino’s operation.
MGA is known for having a rigorous licensing process.
- Fit and proper check.
- Business planning check (MGA ensures the viability of the applicant’s business plan).
- Operation and statutory requirements check (incorporation documents, verticals, terms and conditions, policies and procedures, financial reserves – € 100,000 for licenses 1 and 2, € 40,000 for licenses 3 and 4).
- System review (applicant begins operations and a qualified refers checks that all is in order).
- Compliance check (within 90 days of going live, a compliance auditor confirms that the operator is adhering to regulations).
Kahnawake
The Mohawk Territory of Kahnawake in Quebec is home to the Kahnawake Gaming Commission (KGC), which has been issuing licenses since 1999. Operators apply for a Client Provider Authorization, which enables them to organize all kinds of casino gaming and sports betting — except for the live casino games, for which the KGC offers a Live Dealer Studio Authorization. Additionally, operators will need a Key Persons Permit for at least one of their critical personnel.
The KGC license offers a few clear incentives for operators; the corporate tax rate is 0%, with no additional gaming tax. The reduced financial burden can be especially helpful during a casino’s first few years of operation as it builds up its player base. The initial license is valid for 6 months before the project is reviewed. If the project satisfies authorities and there isn’t a substantial number of player complaints, the next license, valid for five5 years, is issued. Due to the KGC’s commitment to fair and transparent gaming, the Kahnawake gaming license has a good reputation among players.
The KGC has a five-step licensing process.
- Appoint a key person
- Gather all the necessary documents
- Submit the application and pay the application fee
- Wait about 4 to 8 weeks
- Launch your online casino
Gibraltar
Gibraltar is a territory under British jurisdiction that issues gambling licenses that are respected around the world. The licensing authority issues six types of licenses, and operators need a separate license for each product they wish to offer.
Licenses offered by the Gibraltar Licensing Authority:
- Remote Gaming B2C Operator
- Remote Betting B2C Operator
- Other Remote B2C Gambling Products
- Gambling B2B Support Services
- Non-Remote B2C Gaming Operator
- Non-Remote B2C Betting Operated
Among the advantages offered by the gambling license in Gibraltar we list:
- Simple price structure
- Remarkable reputation
- Reliable government
- Taxes represent 1% of revenue, capped at GBP 425,000 with a minimum of GBP 85,000.
The Gibraltar license is a less common choice for new or inexperienced operators; The licensing authority traditionally only considers applications from licensed operators in other jurisdictions, significant finances, and a sound business plan.
Applicants must also provide information on key personnel and verify that the business will be controlled from Gibraltar. Gambling products must be certified and comply with Gibraltar regulations.
Instead of charging annual license renewal fees – and all fees that come with the application process – the Licensing Authority charges a single lump sum; Remote operator licenses cost £ 100,000 for a five-year license.
Isle of Man
The Isle of Man is a dependency of the British Crown on the Irish Sea. The Gambling Supervisory Commission began regulating online gambling in 2001, and currently issues several types of licenses depending on the company class (B2C licensees can organize all types of gambling activities).
The Isle of Man does not have a blacklist of prohibited markets, but licensees must not enter markets where gambling is prohibited.
The low gambling tax of 0.1% to 1.5% of GGY and the lack of a capital gains tax probably stem from the authorities’ focus on supporting the private sector. The government also supports the blockchain.
Applicants must meet a number of requirements.
- The company must be incorporated in the Isle of Man.
- The company must have two resident directors and a designated official or operations manager.
- B2C licensees must register players in servers on the Isle of Man.
- Potential licensees must pay an application fee of £ 5,000 (€ 5,700).
- All games, RNGs, and gambling systems must be approved.
- Key persons and those with over 5% stake in the company will be subject to due diligence checks.
How to apply for an online gambling license
In general, each licensing authority has its own application process and you can expect the following steps: payment of fees, completion of several documents, and waiting at least two or three months.
Some of the most common requirements include:
- Due diligence
- Business plan
- Proof of funds
- Software checks
- Conformity checks
- Incorporation in the jurisdiction of the licensor
- Server location (often must be in the licensor’s jurisdiction)
Most often, licensing authorities require certain standards that the platform’s software must meet in order to help you stand a chance of a successful application cooperating with a reputable and licensed software provider.
Applying for an online casino or sports betting license is not an easy procedure and there is no guarantee that you will get the license. Even the slightest mistake on an application form can ruin the whole process and reset the whole process.
To avoid wasting time and money, it is a very common practice for potential operators to seek legal advice and services from a team of lawyers with experience in the field of iGaming licenses.
Conclusion. How do you choose an online casino license?
In choosing the perfect jurisdiction, gambling operators must consider the following factors:
- License rate
- Your level of experience
- How many licenses will you need
- Administrative costs
- Taxes
- International recognition
- Licensing requirements for other companies with which you will cooperate
- Type of the operation you will carry out (casino games/sports betting/others)
How can Szilaghi Consulting help you get an online gaming license?
Choosing a gambling licensing jurisdiction is quite difficult, to begin with. Given the sheer number of factors that need to be considered by gambling operators, the choice can be overwhelming.
Szilaghi Consulting has been providing services to the online and offline gambling industry for over 17 years. We have helped our clients to make the right choices, to realize their visions, to overcome obstacles, and, above all, to succeed. We offer transparency and efficiency and we are committed to always acting only in your interest.
Our experience in obtaining online and offline gambling licenses differentiates us from the competition. We cover all your needs, from the incorporation of the gambling company, the creation of fiscal and compliance structures, to obtaining the gambling license.
We invite you to schedule a consultation with us. We like to communicate with our customers, troubleshoot their problems, and offer solutions. We invite you to contact us today to discuss this with one of our agents. Let us help you take your business to the next level.
