Licensing Roulette - Snog, Marry, Avoid

Why choose one ‘rest of the world’ licence over another? Which jurisdiction is the easiest to work with? Where should I go to get a licence as quickly as possible? These are the questions we receive quite regularly here at Betsmart Towers. 

Recently, we had occasion to review the various areas around the world that we had worked with and came up with a list of 26 different jurisdictions. Mostly these are standalone markets, but the count of ‘rest of the world’ licence types is increasing. As well as the operational support services we’re famed for, our work has ranged from regulatory analysis for those seeking a new licence through to regulator management and licence application, plus support for greener authorities seeking to understand industry trends and developments etc. 

There has been a lot of regulatory change lately, with constant ongoing revamps by existing jurisdictions (looking at you, Curaçao), increased marketing by previously somewhat dormant countries (how’s it going, Anjouan?), legalisation of previously questionable markets (greetings Brazil) and new entrants who have bounced on to the scene and impressed (nice one, Tobique, keep it up). 

During our discussions on the topic, we also noticed that the requests we receive have changed over time from what was, originally, a fairly basic “where can we get a licence?” to a much more informed and targeted enquiry with, more recently, requests including “ignore X jurisdiction please” instructions. Also, it seems that not only has the industry become more precise in its requirements, but jurisdictions have understood that they can differentiate themselves from their competition to a certain extent by offering differing types of application process, with differing levels of support and differing levels of engagement. 

Firstly then, what changes have we seen from the business side of the industry? Well, most certainly, we have seen an increase in the number of enquiries. In the past, we would receive maybe one or two a month and after discussion, maybe 50% of those would convert to Betsmart providing jurisdictional analysis services, consultancy on approach, licensing application support etc. That figure has increased noticeably over the last 12 months and the conversion rate to actual consultancy work has also increased. 

Next, what changes have we seen from the various jurisdictions?  This is possibly the more interesting element. Previously, it was pretty much a case of “send in your application and we’ll look at it and get back to you” and this is still the case for a number of the tier 1 (and a small number of lower tier) licensing authorities. However, increasingly, there has been an obvious move towards a more interactive approach where the authorities not only offer to collaborate with the applicant but in several cases, actually expect this as part of the application process.   

Are these changes a good thing?  And why have they appeared?  And what about those that haven’t changed? 

“Are these changes a good thing?” We reckon, yes, they most certainly are. From the applicant’s perspective it means that the days of the hit and hope approach to licence application, where you gather the information and send it to the licensing authority and then sit on your hands waiting for any response, are disappearing. More proactive and collaborative engagement means that there is room for discussion and a closer, up front relationship between licence agency and potential licensee is created early on, which inevitably means that a better understanding is generated all round. 

“Why have the changes appeared?” Ooooooo very good question!  Well, there has been an increase in the level of interest in starting gambling operations, in what could be described as “non-traditional” markets. As we know, the mainstream countries such as the UK and US, are very well serviced and, some might say, have reached or will very soon reach saturation point. This means that they are at the stage where yet another operator might struggle to get market share without massive investment in marketing and giveaway promos etc. For smaller and new-to-market businesses it’s potentially better to look for newer, less well-serviced targets.   

Another aspect that cannot be ignored is that of regulatory approach.  Established environments have a fine balance to maintain between delivering regulatory standards and facilitating market development. Some areas appear to be better at this than others, and the results of the less able are ever more noticeable when the more able make an effort to help.  The balance is difficult to achieve. Ensuring that regulations are followed whilst allowing industry growth, innovation and development could be considered counter to each other.  However, the more open approach of less mainstream jurisdictions does at least lead to a better understanding on all sides. And this has obviously been noticed by operators. 

Some jurisdictions ask for complete applications to be submitted before the licensing agency will consider the information. Some even take this approach and then just reply with an “accepted” or “rejected” response, the latter meaning that everything must start again. Quite time consuming and unhelpful. Some even publish “estimated application times” on their websites which are, quite frankly, unachievable, mainly down to the lack of engagement from the jurisdiction itself. 

Lastly, we’ve seen an increase in applicants asking to specifically exclude certain jurisdictions from their considerations. From the discussions we’ve had, this appears to be primarily down to a mix of the lack of engagement and approachability, a perception of overly stringent investigations and enforcement actions and a perceived habit of ‘adjusting’ information and industry data to fit a regulator’s chosen narrative. 

So which jurisdictions are being singled out for exclusion?  Well, it would be unkind to say, as the reasons are unique to the client and relate to their business approach and risk appetite.   

However, what we will say is that the proactive, helpful, eager and willing to engage jurisdictions are relatively easy to find. The likes of Isle of Man, Alderney, Gibraltar and most recently, Tobique First Nation have all shown considerable interest in getting involved early. Obviously, several of these are well established and all are well respected. But the emergence of newer possibilities such as Tobique, and the enthusiasm such places are showing, means that your choice as a new entrant is getting wider and wider. 

Written by Andrew Mason

If you are considering new markets or even applying for a gambling related licence for the first time, get in touch and we’ll share our knowledge to help you make an informed opinion.