I’m not going to look back at the early days of the gaming industry with rose tinted glasses and suggest that licensing was ever easy. Getting a gambling licence in a proper and respectable jurisdiction has always, quite rightly, been a challenge that tested companies. What I will say, however, is that after you jumped through the hoops to get your licence ten years ago, at least that was you set to take on the world. Not so, any more; more and more fences have been going up between gaming jurisdictions, and the modern operator has a much more complex job on their hands.

Once upon a time, in the heady days of the previous decade, it was possible to have one rack at your local data centre and one gaming licence to match, which between them would cover your worldwide service requirements. Now that’s efficiency! One centralised operating hub was sufficient to take on the world.

The Challenge

Oh, how times have changed. As the market has matured, the web of regulation has naturally grown more complex. This has partly been led by admirable player protection efforts, partly by less nimble jurisdictions playing catch-up with the early winners, and partly down to countries looking to expand their tax revenue base. This accounts for the fences I mentioned earlier: the Gambling (Licensing & Advertising) Act 2014, for example, placed an obligation upon overseas operators to obtain a UK licence in order to target UK audiences. Several other onshore jurisdictions are following similar routes. This sort of legislation has meant that increasingly gaming operators with multi-market ambitions need to licence and report in multiple jurisdictions. Multi-jurisdictional licensing is, therefore, now very much the norm.

Remote operators in jurisdictions like the Isle of Man, Malta, and Gibraltar can qualify for a UK Gambling Commission licence without the need for infrastructure in the UK. However, duplicate reporting, duplicate compliance standards and differential betting duty calculations add to the complexity. This is applicable to other countries and it is clear that there is no single piece of legislation that covers worldwide online gaming laws. Instead, each country has their own local regulations and laws which operators must abide to.

The Solution

The (potentially multi-million dollar) question is, does this mean those days of efficient centralised operations are over?

Not necessarily.

The solution is relatively straight forward considering the complexities of the legislation, regulations and jurisdictional differences. Certain legislatively nimble and progressive offshore jurisdictions such as the Isle of Man and Malta offer effective centralised platforms which can be adapted for licences in multiple jurisdictions. These offshore hubs have adapted from ‘the only place you need to licence’ to ‘a central hub for global compliance’.

How? Well, both jurisdictions have world renowned regulations, a simple and clear framework for the licencing process, and world class technical environments which demonstrate an excellent level of resilience and stability. The establishment of an Isle of Man ownership structure, for example, and on-going management can and normally do include structures over a number of jurisdictions. When combined with an effective corporate governance structure backed by solid licensing experience, multi-jurisdictional gaming doesn’t have to be such a headache. We have done that very effectively for several operators, to great result.

I will be at ICE next week. If you would like to discuss licensing in different jurisdictions, please drop me a line – my details are above.

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