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Checklist for entering regulated gambling market

Gambling is the number of games in which the likelihood of winning or losing depends solely on moody fortune. They may or may not be accompanied by rates. The context in which they occur is usually varied, they can be carried out at the table (poker, roulette, cards, bingo, etc.), in some establishments, through the purchase of lotteries and/or sports betting, or online, with all existing game modes.

The gaming sector can provide an excellent opportunity for aspiring entrepreneurs.

Firstly, determine your target market. Choosing your target market will be one of the first steps in developing your online casino, and the decision you make will shape many of the key aspects of your business. So what should you keep in mind?

Legal notices

Legislation governing the gambling industry sometimes completely differs within one country. The presence of a government body responsible for the legal life of the gambling sector testifies to the transparency of the business, and therefore such markets are called white. At the same time, regions, where gambling is outlawed, belong to black markets.

It is also worth considering that several countries completely ignore the gambling industry or adopt conflicting laws — gray markets. For example, the provisions of some administrative bodies may exclude the provisions of others, thereby leading to legislative confusion. Another striking example is the situation when the responsible authority does not issue licenses for gambling operations but does not prohibit players from its jurisdiction from visiting third-party offshore sites.

The status of the regulations is the first thing to think about. While some operators are putting themselves at risk in the highly volatile black and gray markets, white markets offer operators a solid footing — regulations create a healthy and secure business environment.

They also deserve attention for another reason: gambling licenses do not always cover all the latitudes of the iGaming geography. Study the territorial features of licenses in advance to be sure there are no legal barriers between your online casino and the target audience.

There are a few more delicate points that matter. For example, some countries are considered to be areas of increased risk of money laundering, which makes the conditions for cooperation with financial institutions much more stringent, since administrative institutions resort to very thorough due diligence checks.

In addition, you should turn your attention to the marketing strategies that you would like to implement while promoting your business. There are several regions with rather limited opportunities when it comes to the advertising gambling business. If you do not have the opportunity to attract players using contextual online advertising, then try to optimize your site as much as possible to satisfy SEO algorithms so that players have a real opportunity to organically discover your brand among the most popular.

Is it possible to do business in the field of gambling without a license?

The cost of licenses in the gambling industry is very significant. For example, for a license to organize casino games will have to pay a considerable amount of 13 million dollars. The cost of a license to open a slot machine hall is much more modest, but also considerable — 1.7 million dollars. So the question is if it’s possible to do without a license.

Let's look at this question in more detail. Gambling activities are subject to licensing. What games do they belong to?

For a game to be considered gambling, it must contain the following features:

- availability of rates

- the probability of receiving (or not receiving) a prize 

- this probability must depend entirely or partially on chance.

If at least one of these features is missing - the game is not considered gambling, and its holding does not require a license.

There are also a few exceptions, including sports poker (tournament poker). Poker tournaments can be played without a license, while cash games require licensing.

So, some of the games, in theory, can be organized without a license. But we sincerely advise you to consult with lawyers before that. After all, the fine for each case of using a gaming table for which a license has not been obtained is currently 76.000 dollars (hereinafter all amounts are indicated taking into account the amount of the minimum wage as of January 2021). The use of uncertified equipment will result in a fine of 220.000 dollars

So, a mistake in organizing a business in the field of gambling will cost you dearly. Therefore, we advise you to coordinate with lawyers at all stages of your project.

The list of requirements for who plans to buy a license differs depending on the type of license that you plan to obtain. However, there are some general requirements for everyone:

  • it must be a legal entity with an established authorized capital of at least 1 million dollars
  • the source of the funds for the formation of the authorized capital will need to be confirmed.

This legal entity will be obliged to issue a bank guarantee for 1.6 million dollars.

Another requirement is that the managing officials and owners of this legal entity must have an impeccable business reputation. Unfortunately, the legislator does not specify by what criteria the impeccability of business reputation will be determined. We hope this requirement will not become the basis for abuse by the licensing authority and groundless refusals to issue licenses.

In addition, a person planning to organize online gambling must be the owner of a domain name in the zone of his country. Since to obtain such a domain it is necessary to register a trademark of the same name (and the term of its registration is more than 10 months), this should be taken care of in advance.

Considering the global informatization of society, the online gambling market is growing at an insane rate every year. In the context of countering the coronavirus and constant quarantine restrictions, the relevance of all online leisure facilities, including online gambling, is also increasing. Although, as a rule, the rake (casino commission) online is less than offline, given the significantly lower expenditure side, online casinos can be no less (and often more) profitable than offline ones.

The license fee for playing casino games on the World Wide Web is $ 1.4 million. The license to open an online poker room is slightly cheaper — $ 1 million.

Such activities can only be organized using the domain of your country (once again, we remind you of the obligation to register a trademark to obtain the right to such a domain). Software equipment (including mobile applications) must be certified.

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