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Top gaming licenses
The global online gaming landscape offers a myriad of different jurisdictions and licensing options for an online gaming and/or online gambling operator, but the most popular at the moment are Curacao, Kahnawake and Malta.
Each of these online gaming licenses has its advantages and disadvantages and they are by no means ‘one size fits all’. They are however suitable for clients with differing budgets, business goals, and areas of operations. In this article, we will delve into the three most popular licenses and give a concise comparison of the most important aspects of each one.
Curacao
The island nation of Curacao has been offering its online gambling license since 1993, making it one of the oldest iGaming jurisdictions in the world. Online gambling is legal from the country but online providers are not allowed to offer online casino products onshore. Its licensing process is fast, low cost, and there is a range of fiscal benefits on offer to those who obtain the license.
Kahnawake
The Kahnawake gaming license is issued by the Kahnawake Gaming Commission. Kahnawake is a Mohawk territory and First Nations reserve, located within Quebec, Canada. The online gambling license was established in 1999 and it is home to several online gambling platforms and service providers.
Malta
Malta is a fully-fledged EU Member State and is located in the southern Mediterranean. Its online gambling industry is regulated by the Malta Gaming Authority and it is considered as one of the most prestigious in the world. But with this gold seal of approval, comes a price.
How long does it take to get a license?
Acquiring an online gambling license can take between two working days and several months, depending on which one you opt for.
The Curacao online gambling license is one of the fastest to apply for and receive and when managed professionally, it can take as little as two to three working days. This is great for those who are on a strict schedule and want to become operational as soon as possible.
The Maltese online gambling license takes the longest to acquire- up to 12 weeks. This is assuming everything is order but be prepared as there are occasions it can take longer. The Malta Gaming Authority also requires meetings with prospective license holders and this can sometimes prolong the process.
Kahnawake is somewhere in between. It takes between 8-10 weeks to get the Kahnawake online gambling license in hand. Of course, this depends on submitting the relevant paperwork correctly which is why we always advise on engaging with a professional to guide you.
Which license has the most favourable timeline will depend on what you are trying to achieve and how long you have to start recouping on your investment.
How hard is the application process?
Application processes are not easy in any jurisdiction as there are a number of criteria that need to be satisfied. There are however differences in just how much paperwork is required.
In Kahnawake, there are several different licenses to apply for, depending on what services you want to offer. For a new online casino, you need to apply for a Client Provider Authorisation. The process itself is not particularly complex but there is more legwork required than with the Curacao license. Due diligence is carried out on all shareholders and directors and those in senior positions should include a Key Persons License Application into the process. There are additional ethical considerations to take into account, including protecting vulnerable and underage users.
The Curacao license is not only quick, but it is relatively straightforward when compared to other jurisdictions. You also only need to apply for one license that will cover all of your online gambling activities. In terms of ongoing maintenance, there are minimal obligations. You need to keep good financial records, ensure fair play for all players, maintain a self-exclusion policy, avoid underage gaming, and keep the description of the company activity up to date.
Malta is a lot tougher and has strict criteria that it expects prospective license holders to adhere to. As well as full due diligence and KYC, applicants must provide references, letters of good standing, bank references, criminal record checks, qualified key function compliance roles and ongoing compliance and software audits. These are just some of the requirements and it doesn’t get easier when you have the license in hand. Periodic reviews, checks and audits are required, and the MGA can ask that they are carried out as and when they choose.
How much does the license cost?
When compared with Kahnawake and Malta, the Curacao license is by far the lowest cost. For start-ups or entrepreneurs, we always recommend this license. This low cost means that money can be spent in other areas including marketing, game development and HR. Ongoing maintenance costs are low as well.
Kahnawake is a step up in terms of costs. You then have to consider additional costs including corporate set up, bank accounts, and of course the Key Person License Application for each individual.
Malta is the most expensive, both at the application stage and during the ongoing operation of activities. The application fee which is payable every 12 months and some providers have to pay extra depending on the games they offer. There is also a compliance contribution that is payable on the gross gaming revenue brought in during each financial year, calculated and paid monthly -this amount can be between EUR 15,000 or EUR 600,000 depending on how much you generate and what games you offer. Operators are also required to pay a 5% gaming tax that is applied to gaming revenue from Malta-based players.
What are the benefits of each?
Malta has the highest taxation rate at 35% but there is a full imputation system in place whereby shareholders can receive a tax credit on dividends that are distributed to them. This can lower the tax rate to as little as 5%, depending on circumstances.
You should also consider that Malta is a full EU Member State and its license is the ‘gold standard’ in the industry. Yes, it’s expensive, takes a long time and requires a lot of work, but for large EU centric operators, it’s the ideal. On a practical level, it is home to a highly educated local and international workforce that is experienced in iGaming and it has a stable and flourishing economy.
Both Curacao and Kahnawake offer the ability to pay as little as 0% corporate income tax on profits, 0% VAT and 0% gaming tax. This is great for newer businesses that are looking to limit outgoings during the initial years of operation.
In Curacao, the quick set up and low costs involved are significant benefits. This combined with its favourable fiscal regime make it an obvious choice for startups or those on a budget. For those with a bit more to spend, the Kahnawake license is a good choice and operators can enjoy all the benefits of zero taxation and affordable fees.
Are there any restrictions?
Across all jurisdictions, it is illegal to offer gambling services to citizens and residents of a country where online gambling is not legal. It is also not allowed to offer these services in FATF blacklisted countries. Further, some licenses do have other specific restrictions, such as the Curacao license.
Holders of a Curacao license cannot accept players from Australia, Aruba, Curacao, Cyprus, France, Netherlands, the UK and the USA and its territories. Those holding a Kahnawake or Malta license are only restricted to countries that ban iGaming and FATF blacklisted nations.
About the author:
Ron Mendelson has been working in the online gaming industry since the industry started in the late ’90s in Costa Rica. Since then, he has helped countless clients start, relocate, and grow their businesses in jurisdictions spanning several continents. Fast Offshore assists in online gaming licensing, blockchain & cryptocurrency business services, company formation & management, corporate structuring, Forex licensing, payments, accounts, regulatory compliance, and more. The firm has clients located around the world including the USA, Central and South America, Europe, and Asia. He can be contacted at [email protected].
