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Tax Engineering

Online Gambling license

Why do I need to have an online gambling license? Is it legal to have an online casino without a gambling license? People who have or want to start a business activity related to online gambling ask all these questions.

Gambling activities have always been closely related to money laundering and according to the new international regulations the governments now oblige you to legalize your activity and obtain a gambling license in the country of business registration. In this way all parties are benefited, the tax agencies charge corresponding taxes on gambling companies operating in their country and on the other hand the final users obtain the guarantee that the provided gaming system complies with a series of regulations that prevent software fraud.

Currently there are many legal gaps that one can face when starting an online gambling activity and the authorities identify two types of activities related to the game. The first type of activity is a physical game, that is, casinos or slot machines halls that can be found in almost every city. The gambling commission of this same country where the business takes place usually regulates this type of gambling activity. For example, the casino in Monaco or the Bellagio casino in Las Vegas, mainly due to the relation to possible money laundering climes have to comply with many protocols imposed by local governments and tax agencies. 

Why do I need online gambling license?

On the other hand we find online gambling activities that do not require a physical establishment for operation because they are 100% online. For example, if you have an online game located on a server than anyone who wants to connect to it can do so after paying certain fee that you have established. Even if your gambling activity was created only for online entertainment you still need a license to make sure that your business is legal. When a company does not have an online gambling license but has a bank account in the name of a company that develops this gambling activities, the bank has a right to request it and in case if it is not presented cancel the account. All banks in the world are obliged to know the legal origin of the client´s sales and identify the authority that regulates this business due to the high possibility that some type of criminal activity may occur.

Countries specializing in gambling, such as the United Kingdom, Malta, Canada, Austria, Spain, have developed effective regulations for the development of this activity with the corresponding payment of taxes. These are the countries with a strict laws and where the gaming commission may or may not grant the license according to the suitability of the owners of the company and the money they contribute to the country. Obtaining online gambling licenses in these countries is very expensive and includes software audit, high social capital and tax payments. It is not uncommon to find countries that require a social capital of 1,000,000 EUR to open an online gambling company and make suitability study to see if you have experience in the sector or not. It is also possible that if a director or shareholder of the company has a criminal record, his application might be declined. 

On the opposite side we find countries that have not developed specific regulations related to online gambling as an activity indicated in the deeds of the company. These countries due to their infrastructure and local laws authorize start-ups to develop online entertainment activities through the commercial register that would be the authority that regulates and gives the go-ahead for the development of the activity. The perfect example of these countries would be Anjouan and Comoros, Costa Rica, Curacao and Liberia. The only restriction imposed by these countries is that the gambling activity of a company can never be physically developed on the territory of its registration. For example, Costa Rica online gambling companies are not allowed to have local clients. The costs of obtaining a gambling license in these countries are very cheap compared to the United Kingdom or Malta.

Who has a right to verify if my business has a license?

The online gambling license can be requested mainly by customers who want to feel safe playing or providing their card number, the banks where the company has its bank account and receives all the payments and, in case if you decide to hire a payment gateway, the entity that provides this service can also request documentation to see if a company complies with the regulations.

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FINANCIAL SERVICES

Offshore Company

Bank accounts

Prepaid cards

E-commerce package

Payment gateway

Online gambling license

Private foundations