Checklist for gambling startups
So you have decided to open your own casino/sports betting/lottery/poker room or any other type of activity based on gambling and real money winnings. You are confident in your project and you want to open the “virtual” doors to your website for players. However, you have heard that the gambling industry is considered to be high-risk business and you want to make sure you do not encounter any possible risks.
What should you start with? Buy or develop games? Register a company or finish the website first?
Clients request our assistance at compeltely different stages if their projects, therefore we make sure we make an individual approach at each stage. In order to establish a precise and clear structure of realization of your gambling project, the following checklist was prepared:
- Make sure whether you are subject to licensing
You might take a long time to decide whether you need a license or not, or you can try working without a license to then receive fines, IP-address blocking and criminal persecution by law enforcement agencies.
You need a license in 99% of cases. Yes, even if you work only in cryptocurrencies.
How to understand if your activity will fall under the provision of online gambling?
It is rather simple, you only need to answer several questions:
Is the result of your game random? What influences the result of the game more, the skill of the player or randomness?
Do the players receive any kind of material benefit from the result of the game? (Even if your game does not have real-world money at stake, but in-game items for example, that have a monetary value, this also qualifies as a material benefit).
If your answers are positive, we can definitely suggest that you are our client and you need a gambling license.
2. Decide the list of countries you are going to operate in
During the initial consultation, we ask our clients to provide the list of countries they are going to operate in and unfortunately, quite often we hear the answer – “all of the world”.
Why is it important to decide on the list of countries you are going to operate in?
Firsty, this defines the choice of license you would need to start operating. There is a big difference in gambling licenses in UK and Malta and countries of Afria or Asia.
Secondly, this defines your payment solutions. In order to accept deposits and make payouts, you would need a merchant account, not one, but several of them, as merchant providers have their own limitations and fees for processing different regions.
3. Decide where will you obtain your games from
It is rather simple if you source your gaming software from gaming software providers (they may be licensed or not-licensed). In order to obtain a license, you would need to show agreements on provisions of games with them.
But what should you do if you have developed your games by yourself? In this case, you would need to receive an RNG certification for your gaming software. This certificate will be shown to the regulator, and in future can be placed on your website to show the fairness of your games.
4. Develop your gaming website
It may sound rather obvious, but quite often clients address us without having a website.
In order to obtain a license, you need to have a website. The regulator will visit your website and check its content. The license will be issued to the company and the domain names that belong to it. It is impossible to receive a license and then develop your website.
But the gaming software providers ask me for my license before providing me with games!
Keep calm, this is a normal situation. Some gaming software providers will request to see your license, as they have an obligation to only supply their games to licensed operators.
There are two solutions:
First — to show the gaming software providers that you are applying for the license. They will agree to supply you with games subject to the condition that you will receive a license in future. п
Second – to find gaming software providers that do not require a license to sign an agreement with you and supply you with games. In future, once you have received a license (depends on the license) you will be able to add new games from suppliers that required a license.
5. Decide which gambling license you need
A gambling license can be issued only to a legal entity registered in the country of licensing. For example, in the case of Curacao gambling license, the company must be registered in Curacao.
Obtaining a license is a rather complex process to be described in the next articles.
If you have decided all of the above for yourself – you are serious with your gambling project.