The expanding world of online gambling licenses: A comprehensive guide

As the online gambling sector continues to expand, it becomes increasingly imperative for gambling operators to acquire the necessary licenses to ensure legal compliance, player protection, and operational integrity. In this article, Ron Mendelson, Fast Offshore, delves into the various types of iGaming licenses and explores their specific requirements, shedding light on the vital aspects that operators must consider.

Jurisdictional Licenses: The Gold Standard of Player Protection

Jurisdictional licenses are obtained from specific countries or territories that have established comprehensive regulatory frameworks for online gambling. These licenses are regarded as the most credible in terms of safeguarding player interests and holding operators accountable. The requirements for obtaining jurisdictional licenses typically encompass a detailed application process, financial stability assessment, player protection measures, technical standards, and ongoing compliance. Examples of well-known jurisdictional licenses include Malta, Isle of Man, and the UK.

Offshore Licenses: Exploring Alternative Regulatory Frameworks

Offshore licenses refer to licenses obtained from jurisdictions outside the operator’s home country. Operators often seek offshore licenses to benefit from favorable tax rates and regulatory frameworks. While some offshore licenses offer adequate player protection and regulatory oversight, others may have more relaxed requirements. Common offshore licensing jurisdictions include Curacao, Costa Rica, Kahnawake, and Anjouan. The requirements for offshore licenses may vary, but they typically encompass company registration, application fees, financial guarantees, minimal reporting, and satisfying due diligence and KYC checks.

White Label Licenses: A Shortcut to Market Entry

White label licenses have become popular for entrepreneurs and companies looking to enter the online gambling market without undergoing the full license application process. With a white-label license, operators essentially lease a pre-existing licensed platform from a third-party provider. The provider holds the primary license and handles most regulatory obligations, while the operator focuses on marketing and customer acquisition.

Business-to-Business (B2B) License: Empowering Service Providers

A B2B license is obtained by companies that provide gambling services or products to other operators. These licenses enable B2B providers to supply their software, platforms, or games to licensed operators. Requirements for a B2B license may include company registration, financial stability, compliance with technical standards and independent testing.

Business-to-Consumer (B2C) License: Directly Serving Players

A B2C license is obtained by operators who offer online gambling services directly to consumers. These licenses are essential for running an online casino, sportsbook, or other gambling platforms. B2C license requirements may include company incorporation, ownership structure, references, player protection measures, due diligence and KYC policies, and more.

Master License: The Gatekeeper of a Jurisdiction

A master license is obtained by a gambling company or operator that holds the primary license for a specific jurisdiction. Master licenses allow operators to grant sub-licenses to other businesses or individuals. The requirements for a master license typically include fulfilling all the criteria for a B2C license and demonstrating extensive industry experience, financial stability, and robust operational processes.

Sub-License: Accessing an Established Framework

A sub-license is obtained by businesses or individuals who wish to operate under an existing master license. Instead of going through the entire licensing process themselves, they can acquire a sub-license from a licensed operator. The requirements for a sub-license depend on the jurisdiction and the specific terms set by the master license holder. 

Games of Chance and Games of Skill: Catering to Different Gambling Experiences

Online gambling licenses may differentiate between games of chance and games of skill. Games of chance rely predominantly on luck, such as slots or roulette, while games of skill require a certain level of knowledge, strategy, and player proficiency, such as poker or blackjack. The requirements for licenses that cover games of chance and games of skill are generally similar, including technical standards, player protection measures, and compliance with relevant regulations. However, games of skill may require additional verification or certification processes to ensure fairness and integrity, considering the element of player skill involved.

The Importance of Obtaining the Appropriate License

Obtaining the appropriate online gambling license is crucial for operators to ensure legal compliance, player protection, and operational integrity. Jurisdictional licenses offer the highest level of accountability, assuring players that their rights are protected. Offshore licenses and white label licenses provide alternative options with varying degrees of regulation, allowing operators to explore different markets and business models. Operators considering entering the online gambling market should thoroughly research the specific requirements and reputability of the licenses available to make informed decisions and ensure a safe and responsible gambling experience for their players.

Remember, every jurisdiction is different and has different kinds of licenses available. Some have one-size-fits-all, while others provide one license with various add ons. In other jurisdictions, you may need to get one or two licenses to conduct your work. This is why it is essential you engage a corporate services provider like Fast Offshore to give you the best advice. We will analyse your situation and choose the best jurisdiction and license for you, assisting you with acquiring it and setting up any other corporate structures. Fast Offshore also takes care of all ongoing maintenance, including compliance, leaving you to run your business. 

Contact us today to find out more.