Licensing an online casino: exploring options and pitfalls

Licensing for online casinos, despite the cost and occasional complexities involved in acquisition, represents a profitable investment that definitely pays off. An official online casino license significantly elevates trust and legal operating status. Licensed casinos enjoy the privilege of international operation and a broader selection of partners, many of whom only cooperate with licensed entities. Moreover, a license attracts reputable developers and quality payment systems, crucial for retaining players.

Where to obtain the license for gambling?

Around 80 countries grant gambling licenses, each with its own prestige level that often dictates the document's cost. The higher the prestige, the more trust it commands among partners and players.

Before choosing a country for your gambling license, identify the target audience, geographic coverage, and your casino's unique characteristics. It's also worth to calculate how much it will eventually cost for you. The licensing process usually involves an initial fee and may include ongoing monthly or periodic payments for conducting business within the jurisdiction. Factor these into your budget well ahead of starting operation so that not become a surprise for you.

Online casino licensing falls into two broad categories:

• Local (limited to a specific country or region)
• International (permitting operation across multiple countries and regions) 

An international license opens up wider opportunities but doesn't grant the right to operate in countries where gambling is illegal or limited to land-based casinos. Additionally, the process and regulatory requirements vary by country, as does the scope of gambling activities covered by a single license.

The licensing authority's structure and demands differ in each country. For example, European Union licenses come with state support and high trust levels among online casino players. However, obtaining such a license is complex, expensive, and often restricted to a single jurisdiction.

International licenses from Malta and Curaçao are popular choices. Your decision will not only determine the markets your project can access but also payment partners you'll work with. Local licenses often secure a stronger position in-country, while international license holders must be more discerning when selecting payment partners. 

To make it right from the very beginning, reach out to Monoup for expert advice and experience.

Malta online casino licensing: advantages and challenges

Malta, an island state within the EU, has the Malta Gaming Authority (MGA) overseeing its gambling regulations. Recognized as one of the most esteemed licensing bodies, MGA has been regulating the gambling market for over 20 years. A Maltese license is reputable for its comprehensive AML standards, representing a green light for operations, with one of the lowest costs in the EU.

This reputation makes Malta a major choice for obtaining a license, offering access to some other European markets. Yet, acquiring a Maltese document requires adherence to strict legislative standards and is not quite easy.

Obtaining a Maltese gambling license contains these features:

• Lengthy acquisition process, usually a minimum of six months
• Extensive documentation for application
• Substantial costs during the licensing process
• Several B2C license types, with a minimum capital requirement ranging from €40,000 for fantasy sports to €100,000 for slots;
• Possible rejection for applicants without prior licensing experience or operational history
• Not suitable for all types of gambling activities, so watch carefully

Malta suits those with industry experience looking to enhance their project's prestige. While MGA is supportive of newcomers, compliance with all rules and standards is mandatory. MGA offers B2B licenses for developers and B2C licenses for gambling projects, with four types of B2C licenses catering to different gambling services.

Despite the licensing appeal, Malta imposes significant taxes on gambling operators, an essential consideration for potential licensees. The license also entails responsibilities to promote safe gaming and protect players from addiction by setting play or loss limits.

Curaçao Online Casino Licensing: Benefits and Considerations

Curaçao's gaming industry has flourished since the liberalization of the gambling sector in the 1990s. As one of the first jurisdictions to create a flexible and transparent system for issuing licenses, Curacao remains a simpler option for legalizing gambling projects, despite upcoming reforms happening at the end of 2023.

The island is a global gaming hub, with advantages including:

• Relatively low licensing costs
• Simplicity and clear structure in the licensing process
• Quick setup after document verification — can happen in a weeks
• Options for limited operation within Europe and other region 

A Curaçao license is budget-friendly compared to Malta and suitable for first-time gambling project operators. Its status suffices for player trust, supported by the island's modern IT infrastructure, ideal for gaming platform development and hosting.

However, it's important to note that from late 2023, the licensing and regulatory oversight in Curaçao is set to become more stringent. New entrants, in particular, should be aware of these changes:

• Transferring or subleasing a license is prohibited. This ensures all licensees adhere to the required standards.
• The Curaçao Gaming Control Board, an autonomous body, is now responsible for issuing gambling licenses. Applications must be submitted directly to this authority.
• Audits and verifications are mandatory for all licensed companies. They must submit detailed information to the Board, including company documents, business plans, technical specifications, financial reports, game rules, and AML policies.
• The selection process for licensing is now more rigorous regarding financial reliability and transparency. The Board's review can last up to six weeks.
• Responsible gambling rules have been introduced for player safety and protection against gambling addiction.
• Companies must register an office in Curaçao and employ local specialists.
• From November 2023, the annual licensing fee is 60,000 ANG (approximately 33,600 USD), and the registration fee is 10,000 ANG (approximately 5,600 USD).
• The minimum required capital for a license is 100,000 ANG (about 56,000 USD).
• Existing Curaçao licensees have an 18-month period to adapt to the new conditions and reapply for licensing.

With Curacao's impending new regulations, other small jurisdictions are gaining popularity, offering alternatives for those seeking a gambling license.

Like, for example, An jouan license. Kahnawake, known earlier and administered by a small indigenous community in Canada, has appealed to many operators. Although it has not become as widespread as Curaçao, such a license still has a number of advantages: openness of payment systems and game providers to collaboration, and the ability to legally operate a website.

In addition to the previously mentioned Malta, Gibraltar and the Isle of Man are also popular and considered attractive for obtaining a gambling license.

Local Online Casino Licensing

International gambling licenses typically don't permit operations in countries with localized regulatory frameworks. Some jurisdictions require their local license for both domestic and foreign operators. For instance, gambling is prohibited without a local license in the UK, Finland, and several other nations. 

Ontario, Canada, has also initiated its licensing process for state-based operations. This landscape indicates that owners must undertake thorough market and legal research before launching a gambling product. Partnering with legal experts, who are proficient in the regulatory landscape and have industry-specific experience, ensures high-quality information and legal support. This article is provided with information purposes only and does not contain any legal advice.