The gambling industry is growing at a tremendous pace and is expected to be valued at $426.02 billion by 2030. Several factors favor this: the development of VR and AR technologies, access to 5G internet, cloud services, the growth of players’ solvency, the possibility of online payment, and successful marketing campaigns.
When choosing a jurisdiction, one should consider the type of market, requirements of state regulators, time and complexity of authorization, amount of annual fees, tax rates, and reputation of the region.
The Asian region dominated the field of gambling in 2021-2022, the fastest growing markets are considered – Eastern Europe and Latin America, with the largest number of players in the U.S., but the largest market with a regulated gambling sector was the EU zone with 41% of the global GGR.
For a successful business, good reputation, and cooperation with top companies it is worth considering what countries are gambling legal. Below is a list of countries with several advantages for gambling operators.
Isle of Man
The Isle of Man is a jurisdiction with a developed gambling sector and innovative legislation in comparison with other gambling laws by country. Regulation of the online industry began by the Gambling Supervisory Commission GSC in 2001 when the Online Gambling Regulation Act 2001 was adopted.
Benefits of obtaining an Isle of Man license:
- License term of 5 years.
- Ability to make payments in cryptocurrencies, support of blockchain projects by the state.
- 0% corporate tax, from 0.1 to 1.5% tax on gambling.
- Included in the list of the UK Gambling Commission, which allows advertising campaigns in the UK.
- Disaster Recovery Program, DR – support for the relocation of gambling activities to this jurisdiction.
- It is a member of the WTO, and signed cooperation agreements with the EU.
- Stable economic and political system. It is one of the oldest parliaments since 979.
It is important to consider disadvantages such as:
- The Isle of Man is not part of the UK, adopted its legislation.
- The Isle of Man license is divided into several types (main, sub-license, network), depending on the further activity of the operator.
- When entering other jurisdictions it is necessary to get approval from GSC.
- There is a residency requirement for general managers, company registration and bank account should be only in this jurisdiction.
The government of the Isle of Man in every possible way promotes the development of gambling and innovation: provides grants, and loans, licenses a lottery based on blockchain, opened centers for the development of blockchain technologies; there is an opportunity to receive winnings in virtual currency. This jurisdiction attracts tax rates: 0% VAT, low annual fees, and recognition in the international market.
Curaçao
Curaçao began issuing gambling licenses in 1993 with the National Ordinance on Offshore Games of Hazard. The Ministry of Finance and the Financial Intelligence Unit (FIUU) controls the industry.
Advantages of Curaçao gambling license:
- One license for different activities (online casinos, betting, roulette, etc).
- Low cost of authorization.
- Enter the market in one month.
- Minimum package of documents, no requirements for authorized capital.
- 2% income tax, 0% on company income.
- Opportunity to work with cryptocurrencies.
- The IT sector is developed, providing various technological solutions for online platforms.
It is necessary not to forget about the disadvantages:
- There are countries where is gambling legal in the world, which do not recognize this type of permit (USA, UK, Spain, etc.).
- One of the owners must be a resident of Curacao.
- Passing audits and inspections.
License is the best solution for those who want to quickly enter the market for a relatively small fee. Most of the world’s online casinos operate under a Curaçao license, with more than 450 operators registered. In 2018, a license for blockchain-based online casinos was issued. This island has a special status, it is not part of the EU, accordingly, high tax rates are not charged here.
Anjouan
Anjouan aims to optimize the timeframe for obtaining a license from the Betting and Gaming Commission. The rules of the Online Gaming Law 007/2005 granted the right to gambling operators to also advertise their services and sites.
Advantages of Anjouan over other jurisdictions:
- One authorization for several types of games (poker, casino, roulette, lottery, etc.).
- Online filing.
- Processing time up to 2 months.
- Affordable price.
- Settlement in virtual currencies.
- Jurisdiction is part of the WTO.
- 0% on gambling income, VAT, and profit.
- No annual audit requirements.
- The owner of the company can be a non-resident.
It is important to recognize that there are disadvantages:
- There are jurisdictions in which it is prohibited to provide gambling services (USA, UK, Germany, etc.).
- Registration of a legal entity on the territory of the island is required.
- The validity period is only 12 months.
- All changes in the company and the provision of their services must be approved by the Betting and Gambling Commission, which takes additional time.
The favorable regulatory framework of Anjouan allows operators, and startups with modest budgets to quickly and affordably obtain a legal permit, advertise their services, and optimize the tax burden. However, it should be taken into account that there are countries where such a license is not recognized.
Tobique
The Tobique Gambling Commission (TGC) has been operational since 2023 and the Tonique Gambling Act 2023 has been adopted. TGC acts as a regulator and controller of gambling operators and reviews applications for authorization.
Advantages of working with a Tobique license:
- There is no tax burden, only a license fee.
- Non-resident companies can apply for a license.
- The term of obtaining is up to 2 weeks.
- Remote filing of documents.
- Payments in virtual assets.
- No requirements for server colocation.
Disadvantages that affect the work of gambling operators with a Tobique license:
- Two separate accounts (for the company and customer funds).
- Compliance with AML/KYC regulations.
- The validity period of 1 year.
- Confirmation of reputation and experience of owners, and key managers.
- There are requirements for company website organization.
- Prohibition of working with users, as well as advertising in certain countries (FATF and US, UK blacklists).
Tobique with its loyal tax system, and fast decision-making, became a competitor for many other gambling jurisdictions. Low fees for license renewal and the possibility of obtaining a permit from a non-resident company have become decisive factors for many operators.
Costa Rica
Costa Rica is a specific jurisdiction, because as such there is no license, although there are more than 400 online casinos and gambling revenue of more than $14 billion a year. Gambling operators must register the company to provide entertainment on the Internet in the Ministry of Commerce, Industry and Economy.
Benefits of Costa Rica jurisdiction:
- No taxes on online gambling.
- No prohibitions on advertising activities.
- No regulation, or legislation.
- Ability to work with cryptocurrencies.
- A highly profitable market, Costa Rica is a tourist country.
- Allowed to provide services to clients from the U.S. and EU.
- No server hosting requirements.
- No residency requirements for owners and managers.
Disadvantages that are important to explore:
- Compliance with AML regulations.
- Registration agent required.
- Prohibition on providing services to residents.
- 30% corporate tax.
Loyalty to the legal regulation of gambling activities is both a plus and a minus. For the company, their activities are not subject to audits, or inspections, but the lack of a gambling license puts into question the legality of business for international companies in other jurisdictions, which somewhat complicates the issues of cooperation.
Macau (China)
Macau is one of the countries where gambling is legal. The sector is overseen by the Gaming Activities and Coordination Bureau (DICJ). The basis for regulation is the Macau Gaming Law and the Civil Code.
A prerequisite for legal activity is the conclusion of a concession agreement with the Government.
Advantages of operating in Macau:
- License term up to 20 years.
- World center of casinos.
- Activity is allowed in airports, on ships, airplanes.
Among the negative factors of the jurisdiction stand out:
- You can not use cryptocurrency.
- Restrictions on gambling advertising.
Malta
After going through the process of obtaining a license from the Malta Gaming Authority MGA, the business is opened to the EU market. Malta is one of the top 10 gambling countries. One of the first to develop and implement Remote Gaming Regulations S.L. 438.04.
Advantages of Maltese legislation:
- EU zone, European market with banking system, payment services.
- License and minimum capital depends on the type of gambling services.
- Gaming tax 5%.
- Allowed to accept users from the Asian region.
- Proven reputation, and legality of activity.
- Corporate tax can be reduced from 35% to 5% for gambling companies.
- EU rules on the transfer of VAT payments to customers.
Disadvantages include:
- The long and complicated process of obtaining, up to 6 -12 months.
- A large package of documents for MGA with confirmation of the reputation of the owners of the company.
- There are requirements for authorized capital (from EUR 40 to EUR 240 thousand).
- The license is divided into several variants (B2B, B2C).
- It is necessary to have an AML specialist and auditor.
- The manager must be a resident.
- Two bank accounts (for the company and clients’ funds).
Companies are required to comply with AML requirements and pass an audit, all of which somewhat delays the authorization process. MGA has been issuing licenses for more than 20 years, obtaining such a permit means transparency of activity, compliance with all EU regulations, and protection of users’ rights. Malta has more than 70 double taxation treaties. Many operators choose the Malta license because of its reputation in the market and tax benefits for gambling companies.
United Kingdom
The UK is one of the best countries for gambling, the second largest in Europe with over 2500 gambling operators and €7 billion GGR. Since 2005 the UK Gambling Commission – UKGC has been operating under the Gambling Act.
Advantages for a gambling company to operate with a UK license:
- Prestige and reputation. This license is very valued in the market, many operators are eager to get it.
- Highly profitable market, there are about 17.5 million players.
- The license fee is calculated on the income and the type of license.
Among the negative factors it is worth highlighting:
- Advertising activities require a license, which increases costs.
- Strict legislation, a large list of documents.
- The jurisdiction has one of the strictest Market Regulators. Violation of the legislation is strictly punishable by a fine, or imprisonment.
Italy
Italy is a casino country with €8 billion in annual revenue from the gambling sector. The Gambling Law was ratified in 2006 and amended in 2011, providing the basis for the regulation of virtual gambling. Oversight is carried out by the Amministrazione Autonoma dei Monopoli di Stato (AAMS) and the Agenzia delle Dogane e dei Monopoli (ADM).
Benefits of the Italian license:
- The license term is 9 years, one of the longest in the EU.
- Servers can be located in any of the EU countries.
- The owners of the company receive a business visa.
The negative factors are that the Italian legislation requires a large list of documents for authorization and the Regulator takes a long time to review the documents.
Gibraltar
Gibraltar is one of the places where gambling has been legal since 1998. In 2005, the Gambling Act was approved, specifying the standards for obtaining a permit from the Department of Licensing.
The main advantages of Gibraltar:
- Tax -1% on income, no VAT.
- License validity period up to 5 years.
- Confidentiality of personal data.
The disadvantages of obtaining a Gibraltar license are:
- Availability of a license in another jurisdiction. The regulator favors companies that already have experience in the market.
- The long and complicated process of obtaining authorization.
Australia
Australia is a gambling country, with more than 25% of the adult population participating in gambling. This is due to the absence of tax on winnings and a large number of online platforms. The legislative system is multifaceted, each region of Australia has its own regulations and separate regulatory bodies.
Benefits worth mentioning:
- Every fifth resident gambles. About $1000 is spent by one player on average.
- Strongly developed IT industry, with a large number of platforms, and services.
- The authorities support the development of gambling because it brings large revenues to the budget.
The disadvantages of the jurisdiction are considered:
- Each region has its own legislation and regulatory bodies.
- An additional license is required for advertising activities.
Summary
Each jurisdiction has its own peculiarities and regulatory mechanisms that affect the company’s costs and rules of interaction with other market participants. Some offer reduced taxes, others prestige and access to Asian markets or the EU zone. The industry is rapidly transforming against the backdrop of the development of the techno-sector and, according to estimates, will continue to show an upward trend for a long time to come.