With more and more countries regulating iGaming, or tightening existing laws, deciding which jurisdictions to seek licensing from has become increasingly complex.
The licensing landscape is evolving rapidly. And as more nations join the regulatory race, new jurisdictions are challenging older multi-jurisdictional regimes, such as Malta and Curacao.
This ongoing shift makes it an opportune time to explore the current state of play and the strengths of different jurisdictions.
With over a decade of experience in compliance and licensing, there’s no better time and no better expert to talk to than Mike de Graaff, Director and Chief Compliance Officer at BetComply.
Mike and iGF Head of Content Curtis Roach explored a range of topics, embracing the rise of Anjouan and the relative decline of Malta and Curacao; the differences between multi-jurisdictional and local licensing – and the pathway new jurisdictions should follow to foster stability and confidence in their licensing regimes.
Curtis began by asking:
We’ve recently seen a rise in the opening of new jurisdictions offering iGaming licenses, such as Anjouan. Why do you think this trend is increasing, and how will this benefit the iGaming market going forward?
“The opening of jurisdictions with similar ‘.com’ offerings results from the downward spiral that Malta and Curacao have been a part of. These used to be valuable licences, providing single permits to operate in many lucrative markets.
“But, with Malta and Curacao decreasing their reach and increasing their regulation, other jurisdictions saw an opportunity to offer the same–but better–in terms of costs and timelines.
“A Maltese license is not cheap and takes months of preparation, whereas, in Anjouan, for example, you can be licensed and live within [just] six-weeks. What happened in Malta in recent years (grey-listing, increased cost of living causing companies to leave and the introduction of Bill 55) didn’t help with the region’s stability either.
“Curacao, a stable and relaxed environment, suddenly became very unstable with increased regulations. Promoting themselves as a ‘regime’ wasn’t helpful either.
“Companies–or investors to be more specific–don’t like instability.”
As more countries worldwide continue to regulate, creating their own separate regulatory frameworks, how will this affect the potential value of popular multi-jurisdictional licenses, such as Malta’s or Curacao’s, going forward?
“More countries understand the need for local licensing for obvious reasons like tax and consumer protection. The more local licences are issued, the less value a multi-jurisdictional permit has.
“And some countries that have begun regulating locally have also started introducing so-called cool-off periods. This means if you were providing gambling services there under a .com license–or none at all– you could be excluded from the first licensing round.
“The Netherlands is a prime example of this. When the market opened, some notable big hitters that had previously been offering services were not part of the first licensees – Betsson and Kindred, to name a few.”
What type of operators can best benefit from obtaining a license from new jurisdictions, and how can BetComply help them get the most value from it?
“Jurisdictions like Anjouan are attractive for companies looking to enter a market fast and test their products and market strategies on the wider public. The relatively low costs for setting up and speed of licensing enable operators to do so.
“New jurisdictions want companies to apply, so they will try to make it attractive for you to obtain a license from them.”
Some new iGaming jurisdictions are often stigmatised in the public view. What can operators and other key industry stakeholders do to improve trust with the public and reinforce these new jurisdictions as safe licensing options?
“I’ve said it numerous times: If you want to be trusted, be trustworthy. This also applies to jurisdictions and authorities.
“What do operators look for? They like low costs, a good tax regime and, most importantly, a stable regime with all their favourite providers and features. They want to know how they can use their platform, what games they can offer, whether payment service providers are there to process transactions, et cetera. They also want reassurance that they won’t suddenly lose their ability to do business or face operational blocks.
“What do suppliers and other stakeholders look for? Opportunity, low taxes and once again, a stable regime. It needs to pay off if they invest in expanding their offering into those jurisdictions.
“When companies invest in jurisdictions, they want to confirm that those investments will yield a return on investment within the period they plan for. If a regime is too unstable, you can’t forecast properly, meaning you cannot invest properly. And if none of your favourite suppliers and providers are present, the market offer becomes weak.
“Authorities of said jurisdictions should invest time and resources in ensuring the industry invests in a good regime that focuses on access to the market – not just for players but also for providers and suppliers. That will provide the stability they are looking for.”
Editor’s Note:
For many years multi-jurisdictional licences were the go-to solution for operators seeking easy entry and the potential to operate in multiple markets.
But as more gambling jurisdictions transition from unregulated “grey” markets into regulated spaces, localised regulations and licensing regimes are becoming increasingly dominant.
This doesn’t make multi-jurisdictional licensing obsolete. But it does mean the worth of this once-dominant licence is decreasing.
According to Mike, multi-jurisdictional licensing bodies still provide advantages like speed, ease of licensing, and lower costs.
Yet, increasingly, they also come with potentially significant drawbacks, such as localised regimes penalising operators who previously targeted their players under multi-jurisdictional permits, which makes the wisdom and leadership of experts such as BetComply all the more essential for sustained success.
