Navigating the Digital Dice: The Changing Landscape of Gambling Regulation in Ontario

Ontario, Canada's most populous province, is undergoing a transformative shift in its approach to online gambling regulation.

As the digital age continues to redefine how people interact with the world, the way we engage with games of chance and skill is also evolving. Ontario's lawmakers and regulators find themselves at a crossroads, facing the challenge of adapting an antiquated framework to an era of online gaming and technological innovation.

In this article, we embark on a journey through the rapidly changing landscape of online gambling regulation in Ontario.

A brief overview of the gambling industry in Canada

Canada has its own regulation of the gambling industry. In order to carry out any gambling-related activity in Canada, you must obtain regulatory approval (usually at the provincial level).

At the same time, the provisions of Section 6 of the Criminal Code of Canada indicate that provincial regulators cannot grant permission to third parties to conduct gambling that takes place on a computer, video device, slot machine (i.e. online gambling). Thus, these provisions of the Criminal Code of Canada only authorize provinces to conduct online gambling themselves.

According to statistics, the money turnover in the gambling sector in Canada in 2021 was $12.5 billion, and the same figure was in 2022.

Considering the popularity of gambling, the province of Ontario, Canada has come up with its own model on how to make online gambling legal and supplement its budget with it. To this end, Ontario has utilized iGO and AGCO  iGaming Ontario (hereinafter – “iGO”) и Alcohol and Gaming commision Ontario (hereinafter – “AGCO”). What these bodies are and why they are needed – let’s take a look at them next.

Ontario’s online gambling model

It is worth starting with the fact that the regulator of gambling in Ontario is the Alcohol and Gaming commision Ontario  -AGCO.

The main regulation that governs gambling in Ontario is the Gaming Control Act of Ontario (1992).

In June 2021, lawmakers approved Bill C-218, known as the Safe and Regulated Sports Betting Act. This Act gave the provinces the ability to implement single sports betting systems in Canada and effectively gave the provinces the right to conduct online gambling.

Ontario’s regulator, the AGCO, has created a subsidiary company for this purpose, iGaming Ontario, which is authorised to carry out online gambling.

Given the strict limitations of the Criminal Code (prohibition on licensing third parties to conduct online gambling) – Ontario has devised an approach whereby iGaming Ontario enters into a commercial agreement with a third-party gambling service provider (usually from other jurisdictions) and effectively “leases” its licence. Clearly, the business model is as follows.

What do you need to do online gambling with iGaming Ontario?

It is mandatory for organisations operating Internet gaming sites in Ontario to register as Internet gaming operators. Based on the variety of structures and practices of companies, there is no definitive list of activities that defines what is meant by “operating a gaming site”. In general, operating a gaming site in the gambling industry involves ongoing responsibility for the entire gaming site, including:

  • Making strategic decisions.
  • Ensuring compliance with all requirements relating to the gaming site.
  • Managing supplier relationships, including the selection of Gaming Related Suppliers.

In order to legally operate a gambling website in Ontario, a regulatory fee must also be paid. For example, the operator of an Internet gambling site is required to pay a regulatory fee of $100,000 annually for each gambling site.

It is also important to emphasise that the subject of the authorisation is the website. Thus, in order to conduct online gambling through a network of websites – it will be necessary to register each website.

In addition, the step-by-step procedure for registering with AGCO and iGaming Ontario is outlined on the official iGaming Ontario website. The steps required include, among others, the following:

  • NDA with iGaming Ontario;
  • AGCO registration;
  • setting up access and secure channels;
  • developing policies and other measures to monitor compliance with the standards of the regulator, the AGCO;
  • filing required information with iGaming Ontario and the AGCO;
  • entering into an operating agreement with iGaming Ontario.

At the time of application for authorisation to the AGCO, it is necessary to provide detailed information on the business activities of the Gaming Platform Operator (website), financial statements, corporate structure, incorporation documents and other necessary documents.

Additionally, the legal aspects of applying to the AGCO are regulated in the Internet Gaming Operator Application Guide.

What are the rules for internet gaming operators in the AML field?

The AGCO Standards require Internet gaming operators to comply with stringent AML/CFT measures. 

For example, an Internet gaming operator must ensure that anti-money laundering policies and procedures are in place to support its obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).

AGCO requires that operators, as a minimum, develop the following control measures:

  • implement policies, procedures and controls that define risk-based times and situations where the Operator will identify and reasonably confirm the source of a player’s funds;
  • implement risk-based policies and procedures that provide for enhanced measures to deal with players whose behaviour is consistent with indications of money laundering, including refusal of transactions or exclusion of the player;
  • ensure that mechanisms are in place to legally share information about high-risk or suspicious activities with other Operators who may also be subject to similar activities.

Conclusions

Thus, the Ontario government has developed a model whereby third-party suppliers can enter the online gambling market in Canada. This solution helps to fill local budgets and also brings the online gambling business, which was previously in Canada, out of the shadows.

The ability to get authorisation to provide their services in Canada is also terrific news for Gaming Website Operators. With a clearly regulated registration procedure and clear requirements – the latter can expand their business to Canada and do so with absolutely clear legal consequences.

FAQ

Are Internet gaming operators required to have a registered entity in Canada? 

No. There is no such requirement.

Do players have to be residents registered in Ontario? 

A player’s residency status is not a factor in determining whether they can play on websites offered by registered and authorised operators. The requirement is that players must be physically located in Ontario to play legally.

Notwithstanding the above, players can register and operate their account (e.g. deposit or withdraw funds) while physically located outside of Ontario.

How long does it usually take to complete the registration and authorisation process for an Internet gaming operator? 

Each case is different, but typically operators should expect a minimum of 90 days to complete all registration procedures with the AGCO and sign an Operating Agreement with iGaming Ontario.

The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation. 


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Playing by the Rules: Estonia’s Approach to Responsible Gambling

In the constantly changing landscape of global entertainment, the gambling industry is a dynamic and controversial force.

As countries around the world struggle with the complexities of regulating this industry, Estonia has become an interesting model to follow. Lying at the heart of the Baltic region, Estonia has undergone significant changes in recent years, not only in its economic and social structure, but also in the way it regulates and manages the multi-faceted world of gambling.

General understanding of gambling regulation in Estonia

The regulator of gambling in Estonia is the Estonian Tax and Customs Board (“EMTA”).

It is allowed to organize gambling that complies with the requirements of the Gambling Act (“Act”). The purpose of the Act is to set high standards for gambling operators, to provide measures to protect players, and to reduce the harmful effects of gambling and its influence on society.

According to Section 2 of the Act, “gambling” is a game that meets all the following criteria:

  1. it is a precondition for participating in a game that the player makes a bet;
  2. the player may win a prize as a result of the game;
  3. the outcome of the game is partly or fully determined by an activity based on chance or depends on the occurrence of a previously unknown event.

The following types of gambling may be organized in Estonia:

  • Games of chance (and remote gambling)
  • Toto i.e. sports betting
  • Lottery
  • Games of skill
  • Commercial lottery

List of legal gambling operators can be seen here.

The requirements provided by the Act are not applied to the following types of gambling:

  • games of skill, the only possible prize of which is getting the opportunity to take part in the same game again;
  • sports competitions;
  • lotteries with the value of the prize pool of up to EUR 1000 which are not organized more often than once a week;
    • lotteries with the value of the prize pool of up to EUR 1000 which are organized on ships carrying passengers on international voyages that have been registered in an Estonian ship register;
  • commercial lotteries with the value of the prize pool of up to EUR 10,000.

These games are not subject to gambling tax.

It is prohibited to organize gambling, if the condition for determining the outcome of the game is the achievement of a certain number of participants or bets, and it is not guaranteed to return the player the entire amount of the bet in case the condition is not achieved.

Application for permits

Before offering gambling in Estonia, the company must first apply for the activity license for organizing gambling and the operating permit to the EMTA.

The first step is to apply for the activity license, following which the company must apply for a separate operating permit for each gambling location. Only after the activity license or operating permit has been granted the company may start offering gambling in the gaming locations specified in the operating permit.

No activity license or operating permit is required in the case of a commercial lottery, but a notice of economic activities must be filed with respect to the organization of a commercial lottery.

Activity license for organizing gambling characterized as follows,  but not limited:

  1. This license grants the right to apply for operating permits for gambling and is valid for an indefinite period of time. You can apply for the activity license to offer games of chance (which also include poker tournaments), toto and games of skill. A separate activity license is required to provide each type of game.
  2. The license can be applied for by a public limited company or a private limited company registered in Estonia or in the European Union, share capital amounts to at least:

  • EUR 1,000,000 for games of chance;
  • EUR 130,000 for toto;
  • EUR 25,000 for games of skill.

  1. The gambling operator must be a reliable legal entity, for whom the organization of gambling is its only activity.
  2. In order to obtain this license, fill in the application form and attach the documents listed in the annex to the application. 
  3. The state fee for this license is:

  • EUR 47,940 for organizing a game of chance;
  • EUR 31,960 for organizing a toto;
  • EUR 3,200 to organize a game of skill.
  1. The EMTA shall take a decision on granting or refusing to grant this license within 4 months after receipt of all the necessary documents and information, but not later than within 6 months after receipt of the application for this license.

Operating permit for gambling has the following features, but not limited:

  1. This permit grants the right to open the gambling gaming location at the address indicated on the permit, aboard a ship, or to organize gambling as remote gambling.
  2. The permit can only be applied for by the company that has already been issued the activity license of the corresponding type of gambling in Estonia (except the lottery).
  3. A land-based operating permit must be applied for if the entity wishes to arrange gambling at a specific address or aboard a ship.
  4. The operating permit for remote gambling must be applied for if gambling is to be organized where the outcome of the game is determined by an electronic device and the player can participate in the game by electronic means of communication, including telephone, Internet and media services.
  5. These are the Terms and Conditions for the organization of remote gambling, compliance with which is mandatory.
  6. To obtain the land-based operating permit, the application form must be filled in and the documents listed in the Annex must be attached to the application. 
  7. To submit an application for a permit to organize games of chance, toto or games of skill as remote gambling, this application form must be filled in and the documents listed in the Annex must be attached to the application.
  8. The EMTA shall take a decision on granting or refusing to grant the operating permit within 2 months after receipt of all the necessary documents and information, but not later than within 4 months after receipt of the application for the operating permit.
  9. Before submitting the application, the company must pay the state fee of EUR 3,200, except in the case of the application for the operating permit for the lottery, the review of which will be subject to the state fee of EUR 640.
  10. One of the conditions for obtaining the operating permit  is the existence of a control system for electronic gambling reporting (i Elektrooniline hasartmängu aruandlus) (read more here) and the list of persons with restrictions on gambling (Hasartmängu piiranguga isikute nimekiri) (more information can be found in § 39 of the Act and § 64 of Statutes of the Register of Taxable Persons). 

Anti-money laundering regulation of gambling

The Money Laundering and Terrorist Financing Prevention Act is applicable to gambling operators, except for organizers of commercial lotteries.

The gambling operator applies due diligence measures at least upon payment of winnings, making of a bet or on both occasions where the sum given or receivable by the customer is at least EUR 2,000 or an equivalent sum in another currency, regardless of whether the monetary obligation is performed as a single payment or as several related payments over a period of up to one month.

The gambling operators apply such due diligence measures before the establishment of a business relationship or the making of a transaction outside a business relationship:

  • identification of a customer or a person participating in an occasional transaction and verification of the submitted information based on information obtained from a reliable and independent source, including using means of electronic identification and of trust services for electronic transactions;
  • identification and verification of a representative of a customer or person participating in an occasional transaction and their right of representation;
  • identification of the beneficial owner and, for the purpose of verifying their identity, taking measures to the extent that allows the obliged entity to make certain that it knows who the beneficial owner is, and understands the ownership and control structure of the customer or of the person participating in an occasional transaction;
  • understanding of business relationships, an occasional transaction or operation and, where relevant, gathering information thereon;
  • gathering information on whether a person is a politically exposed person, their family member or a person known to be their close associate.

The Financial Intelligence Unit may transmit the information (data, analyses or assessments registered in the Unit) to the EMTA to be used in proceedings related to gambling activity licenses.

Taxation on gambling activities

Regulation of taxation in the sector of gambling is performed on the basis of Gambling Tax Act.

Gambling tax must be declared and paid by each company to which the activity license and operating permit have been issued. The tax is paid to the bank account of the EMTA.

The period of taxation with gambling tax is the calendar month.

 In the event of organizing a commercial lottery, the period of taxation is the period during which the commercial lottery is organized, starting on the first day set out in the rules of the game for placing bets and ending on the final day for distributing winnings as set out in the rules of the game.

In the event of organizing a tournament of a game of chance, the period of taxation is the period during which one tournament of a game of chance is organized, starting on the first day of accepting the participation fees set out in the rules of tournament of the game of chance and ending on the day when the acceptance of participation fees set out in the rules of tournament of the game of chance is terminated.

The gambling operator submits a gambling tax return to the EMTA and pays the gambling tax by the 15th day of the calendar month after the taxation period.

You can check the tax rates that exist in the gambling industry:

Gambling activityRate
1Organizing games of chance on a gaming machineEUR 300 per gaming machine used for the organization of a game of chance and 10% of the total amount of bets, from which the winnings have been deducted
2Organizing a game of chance using a gambling tableEUR 1278.23 per gaming table
3Organizing a game of skill on a gambling machineEUR 31.95 per gambling machine of game of skill
4Organizing a lottery18% of the total amount received from the sale of lottery tickets
5Organizing a commercial lottery18% of the prize pool
6Organizing games of chance and games of skill as remote gambling5% of the total amount of bets from which the winnings have been deducted
7Organizing a gambling tournament as a tournament of a game of chance5% of the total amount of participation fees for the tournament of a game of chance, which is the amount of fees paid to the operator by the participants of the tournament, which constitutes the prize pool of the tournament and the fee of the operator
8Organizing a tournament of a game of chance as a ring game5% of the total amount received from the participation fees of the tournament of a game of chance, which is the amount of fees received by the gambling operator from the bets made by the players in the ring game
9Organising a toto5% of the total amount of bets from which the winnings have been deducted

In addition, each year, within 6 months following the end of the financial year, companies must submit an annual report to the Commercial Register for the previous year.


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Gambling in Kahnawake: A Peek Inside the Mighty Regulatory Hub

Gambling is a popular activity in the world, contributing significantly to the countries` economy and entertainment industry.

Kahnawake is a community of approximately 8,000 Mohawk (North American Indian) persons located on the south shore of the St. Lawrence River, near Montreal, Quebec, Canada. This modest indigenous reserve has asserted itself as a consequential player in the international gaming industry. Gambling in Kahnawake (including online games) is permitted by the law. 

Kahnawake Gaming Commission: its role and Regulations

To legally provide gambling services, it is necessary to apply for a gambling license with the local regulator – the Kahnawake Gaming Commission (KGC) which was established by the Mohawk Council of Kahnawake in 1996. 

The KGC is comprised of three members appointed for two year terms by the KGC’s governing body, the Mohawk Council of Kahnawake.

Speaking about the functions of the KGC, it should be noted that the KGC licenses and regulates interactive gaming (casino, poker, sportsbook) and land based gaming (poker rooms, raffles, electronic gaming devices) conducted within the Mohawk Territory of Kahnawake. 

Next, let’s analyze these types of gaming in more detail: 

  1. Interactive Gaming. Kahnawake was one of the first jurisdictions in the world to recognize the opportunities presented by the interactive gaming industry. Since then, the KGC has continuously licensed and regulated a wide range of interactive gaming sites. 

On July 8, 1999, KGC enacted Regulations concerning Interactive Gaming. These Regulations are designed to ensure that all interactive gaming and gaming related activities conducted within or from the Mohawk Territory of Kahnawake satisfy several basic principles, namely:

  • to provide a lawful basis for the regulation and control of interactive gaming based in or offered from within the Mohawk Territory of Kahnawake;
  • to ensure that interactive gaming is conducted responsibly, fairly and honestly;
  • to prevent interactive gaming from being associated in any way with crime or criminality;
  • to ensure that the operators of interactive games treat players fairly; that they pay winners promptly and that all information related to player accounts is held in the strictest confidence; and
  • to protect persons under the age of eighteen (18) years and other vulnerable persons.

Online gaming operators licensed by the KGC must be hosted by Mohawk Internet Technologies, a data centre located within the Mohawk Territory of Kahnawake and operated by Continent 8 Technologies.

  1. Land Based Gaming. The KGC presently licenses and regulates three land based gaming activities: 
  2. Poker Rooms. On October 3, 2007 the KGC enacted its Regulations concerning Poker Rooms. In accordance with its Regulations, the KGC licenses and regulates terrestrial poker rooms that are located within the Mohawk Territory of Kahnawake. The approved games that may be offered in any poker room that is licensed and regulated by the KGC are:
  • Hold’Em;
  • Omaha;
  • Omaha High-Low;
  • Seven Card Stud;
  • Razz (Seven Card Stud Low);
  • Seven Card Stud High-Low;
  • Lowball;
  • Draw High;
  • Chinese Poker.

The KGC licenses and regulates four land-based poker rooms. But it should be noted that the KGC is presently not receiving applications for land-based poker rooms.

  1. Raffles. On November 9, 2011 the KGC enacted its Regulations concerning Raffles (came into effect on January 1, 2012). The Regulations were developed in response to complaints and concerns that were submitted to the KGC and to the Mohawk Council about unregulated raffles being conducted within Kahnawake. It was decided that there was a need to establish a clear set of rules that would apply to raffles offered within the community. 

Only Eligible Organizations can obtain an authorization to conduct a raffle within Kahnawake. The Regulations define “Eligible Organization as an organization operating in Kahnawake that is recognized by the Mohawk Council of Kahnawake and the KGC as an organization that operates on a non-profit basis and that has as its primary purpose a sporting, cultural, charitable or community-oriented objective”.

The Regulations apply only to raffles – they do NOT apply to lotteries, 50/50 draws or sports pools. The Regulations define “Raffle” as a game where tickets are sold for a chance to win a prize (which can be money or an item of value). Winners are determined by drawing a random ticket or by a random selection of numbers.

Pursuant to its Regulations, the KGC authorizes raffles offering a prize over $5,000 that are conducted by Eligible Organizations within the Mohawk Territory of Kahnawake. In addition, raffles offered by Eligible Organizations are exempt if the total value of the prize (or prizes) is less than $5,000.

  1. Electronic Gaming Devices. On March 29, 2018, the KGC enacted its Regulations concerning Electronic Gaming Devices. In accordance with its Regulations, the KGC licenses and regulates electronic gaming devices that are located within the Mohawk Territory of Kahnawake. Please note that the KGC is not presently accepting new applications for land based Electronic Gaming Device Licenses.

Types of gambling licenses in Kahnawake

The KGC issues several types of licenses, authorizations and permits under its Regulations concerning Interactive Gaming:

  1. Interactive Gaming Licence (IGL):  Issued to an approved hosting facility in Kahnawake for starting an online casino. Only one IGL may only be issued at any given time. Since 1999, Mohawk Internet Technologies has held the sole IGL issued by the KGC. However, it must be said that the IGL is less popular because of its complicated and long рrocess of obtaining.
  2. Client Provider Authorization (CPA):  Issued to approved entities that want to provide interactive gaming services from the hosting facility in Kahnawake. There is no limit on the number of CPA’s that may be issued by the KGC. An CPA holder must be hosted at the hosting facility that holds the IGL and is entitled of offer any type of interactive gaming:  eg. casino, poker and/or sportsbook. This is the most common gambling license in Kahnawake.
  3. Casino Software Provider Authorization (CSPA):  The holder of a valid CSPA is entitled to locate and operate interactive gaming equipment at the co-location facility that is owned and operated by the holder of a valid IGL; and license casino software to a third party online gaming operator for the use on the third party online gaming operator’s website but is not entitled to offer interactive games directly to players.
  4. Live Dealer Studio Authorization (LDSA):  The holder of a valid LDSA is entitled to operate a Live Dealer Studio, to conduct live dealer games and, if authorized by the KGC, to conduct interactive gaming related activities from premises located within Kahnawake.
  5. Inter-Jurisdictional Authorizations (IJA): This license is specifically issued to an entity that possesses an IGL from another jurisdiction but desires to establish some or all of its equipment and/or personnel within the Mohawk Territory of Kahnawake.
  6. Key Person Licence (KPL):  Issued to at least one person who performs managerial or operational functions for the entity that holds a CPA or CSPA. The KGC considers the information contained in KPL’s to be confidential.

Benefits of obtaining a gambling license in Kahnawake

Advantages of obtaining a gambling license in Kanawaka include:

  • Kanawaka has reliable legislation governing gambling which can be attractive to gambling operators.
  • A Kahnawake gambling license adds legitimacy and credibility to an online gambling business. It signifies that the operator has met certain regulatory standards and is committed to fair and responsible gaming practices.
  • All gambling companies that hold a Gambling Kahnawake license have tax incentives – 0% corporate tax, gambling tax and gross income tax. 
  • Perfect for start-ups with relatively low costs, regulatory support and minimal taxation.
  • The KGC has a wealth of experience in regulating online gambling. Its expertise and understanding of the industry can benefit operators by providing guidance on compliance and best practices.
  • Operators with a Kahnawake license benefit from the regulatory support and oversight provided by the KGC. This can help resolve disputes, ensure compliance with regulations, and maintain the integrity of the gaming industry.

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Isle of Man’s Bet on Innovation: An Analysis of Online Gambling Framework

Located in the Irish Sea, the Isle of Man, a self-governing crown territory, has earned a reputation as a global center for the online gambling industry.

The Isle of Man, known for its business-friendly environment and commitment to regulatory excellence, has established a robust gambling regulatory system.

This system is designed to ensure a gaming environment which is fair, transparent and safe, balancing the interests of both operators and consumers.

As a pioneer in online gambling, the jurisdiction is regularly updating its legal framework to meet emerging challenges and opportunities in the rapidly changing digital gaming landscape. This adaptability has attracted a wide range of international operators, contributing to the island’s vibrant and innovative gaming ecosystem.

Regulative authority and legal basis

The regulative body is the Gambling Supervision Commission (“GSC”), which was established in 1962 and comprises the Inspectorate and the Commission. 

The major principles the GSC adheres to are ensuring that gambling is crime-free, that youth and at-risk individuals are protected, and that the services offered by licensees are fair and players receive true winnings. Besides licensing and regulating land-based gambling activities (casinos, amusement and slot machines, betting offices and lotteries), the GSC also regulates all online gambling activities, which have grown significantly in the last number of years.

Thus, there is the fundamental act – the Online Gambling Regulation Act, 2001 (“OGRA”), which is one of the world’s first acts governing online gambling. According to Section 1 of OGRA, “online gambling” means:

  • any gaming, where any player enters or may enter the game, or takes or may take any step in the game, by means of a telecommunication;
  • the negotiating or receiving of any bet by means of a telecommunication; or
  • any lottery in which any participant acquires or may acquire a chance by means of a telecommunication.

In the jurisdiction of the Isle of Man, a person conducts online gambling if:

  • in the case of gaming or a lottery, he takes part in its organization, management or promotion;
  • in the case of a bet, he carries on any business involving the negotiating or receiving of the bet; or
  • he maintains, or permits to be maintained, in the Island any computer or other device on or by means of which the game or lottery is operated, or the bet is received, as the case may be.

The GSC has also issued a document which contains all the guidance that is required for the application to operate online gambling in the Isle of Man.

Licensing process

The applicant or his/her representatives must initially submit a completed application form and the application fee prescribed by law to the Inspectorate.

The application must contain the following items:

  • The application form.
  • The application fee – £5,250 (approximately EUR 5,996).
  • A personal declaration form (PDF) for some of the appointments.
  • A simplified personal declaration form (SPDF) for some of the appointments.
  • A list of key officials in the group where the application is from a publicly listed company.
  • A letter from the Isle of Man based directors, within which the directors vouch for the integrity and background of the individuals concerned, for those entities submitting a SPDF.
  • A business plan which includes specific chapters based on the type of the license.

One hard copy of the entire application package should be supplied to the Inspectorate, together with one electronic copy which has all individual documents saved as separate files. 

Once the Inspectorate is satisfied that the application is complete and has received the application fee it will typically complete the licensing process within 10-12 weeks. Officially, this period begins when the Inspectorate sends a letter stating that the application has been accepted and the process has started.

If there are no delays in the application process, then, depending on how the monthly Commission hearings go, approximately 12 weeks after formal acceptance of the application, the Commission is required to notify the applicant of its licensing decision. This hearing must be attended by the directors who serve on Manx Island’s board, the designated officers, and the operations manager (if any). Off-island directors do not have to attend the hearing but will be required to meet with the inspectorate within 6 months after the hearing.

Types of OGRA licenses

TypeCostKey Features
Full license£36,750 per annum(~ EUR 42,380)The full license runs for five years. It is issued to undertake such licensable activities as:Casino GamesCasino Games (RNG)Casino Games (Peer to Peer)Casino Games (Live Dealer)Casino Games (Other)Casino Games (Virtual Goods)Bingo GamesRandom number generatorLottery Games 1Lottery Games (RNG)Lottery Games (Reseller)Lottery Games (Live Studio)General BettingGeneral Betting (Fixed Odds)General Betting (Tele-betting)General Betting (Pari-mutuel)General Betting (Betting Exchange)General Betting (Lottery) Pool BettingPool BettingPool Betting (Virtual Goods)Betting IntermediariesBusiness to Business Software ProvisionNetwork ServicesSoftware SupplySoftware SupplySoftware Supply (Token-Based) The list is not intended to be restrictive.It allows licensees to operate business-to-consumer (B2C) activities, including registration of players, storage of their data, and exploitation of proprietary technologiesOperators with the full license can offer technology (games, software, network access to Isle of Man sub-licensees, etc.) to sub-licensees under the reduced fee sub-licence scheme.The full license extends to all parts of a business at the license-holder level and below. The license can not however operate ‘upward’ to cover the gambling activities of a parent or holding company or ‘sideways’ to cover the operations of sister companies.
Sub-license£5,250 per annum(~EUR 5,996)This license can be obtained if the applicant wishes to operate exclusively with a technology provider with the full license.The sub-licence lends itself to the smaller operator looking to establish and grow a presence and to the company that has assets to monetise (e.g. a player database) but no established gaming infrastructure.Any new operator that wants to use the games offered by a network operator can obtain the sub-license. The condition will be that the sub-licence holder is tied exclusively to the network operator for its games and products that it has developed itself.Should the sub-licence holder use the games of another network it would need to upgrade to the full license.
Network services license£52,500 per annum(~ EUR 60,543)It must be obtained if the operator wishes to allow one or more foreign registered players on to its Isle of Man server without reregistering the player details.All of the benefits of the full license are available to the holder of a network services license (for example, the network services licensee could offer games directly to the world market and offer sub-licensing opportunities for its business partners in addition to offering its networks to foreign operators).There is no additional fee for each network partner. There is the ability for existing OGRA licensees upgrading to the network services license to offset any unutilised portion of its license fee against the cost of the new license.Contracts entered into between the Isle of Man network platform and foreign operators must include an appropriate commitment to game fairness, the exclusion of crime and the protection of young and vulnerable people. The foreign operators will be expected to operate Isle of Man (i.e. international) standards of AML/CFT and KYC in respect of any players they supply to the Isle of Man based network.
Token-based software supplier license£52,500per annum(~ EUR 60,543)
It is available to entities that have created blockchain tokens that are intended to be used as the medium of transaction by those who use the gambling software. For example, players obtain the tokens in order to participate in gambling, affiliates are paid using the tokens, and so forth.Applicants will be required the demonstrate that:A credible supply of tokens has been created and the token is available to the public for purchase (i.e. there are exchanges prepared to list it).The key personnel behind the business:Understand the technologyUnderstand the risks peculiar to the technology and have credible mitigationsHave a credible, sustainable business model andHave a track record of successful business and the experience necessary to sustain the business model.Applicants will not be permitted to publicize their licensing efforts, or respond to enquiries in respect of the licensing process until they have been licensed.
Software supplier license£36,750 per annum(~ EUR 42,380)The design and/or sale of software that is used by gambling operators whether online or in the back office and whether as games or as auxiliary services (such as player accounts and registration software, random number generation and etc.) does not require the OGRA license. However, in accordance with the Online Gambling (Software Supplier Licence) Regulations 2019, operators can choose to be licensed in order to list software on the GSC’s software register.

The list of current license holders is available here.

Requirements for online gambling operator

The operator intending to establish in the Isle of Man must meet the following specific requirements:

  1. it must establish a Manx company (limited by shares);
  2. it must have at least 2 local directors, who must be individuals and not corporate entities;
  3. it must appoint at least 1 resident designated official (it is a person appointed by an applicant or license holder from amongst its directors to represent that company’s interests in the Isle of Man), or where that designated official can not reside in the Isle of Man, the operations manager;
  4. it must either register players on Isle of Man servers or it must operate under a network services license which obliges it to establish the network services in the Isle of Man (except in the case of software supply only licenses where no play must take place on Manx servers)
  5. gambling and trading accounts should be located in a bank in the Isle of Man unless otherwise agreed.

It should be noted that changes to regulation in 2017 made it possible to open an account with Isle of Man gambling operators using any funds that have a monetary value. This includes convertible and non-convertible virtual currencies (CVC and VC respectively).

In this case, сonvertible virtual currencies include cryptocurrencies (e.g. bitcoins) that can be bought and sold on independent exchanges for fiat currency. And non-convertible virtual currencies include virtual goods such as digital “skins” for avatars and weapons in video games and other digital objects that perform functions in video games, as well as in-game currency that can be used to purchase such objects.

AML regime regarding online gambling

What is key to remember is that most gambling licenses are governed by AML/CFT legislation. Thus, the GSC monitors the Isle of Man gambling industry’s compliance with the Gambling Act, 2018 and the Code, 2019. The GSC also created such a document as AML-CFT Guidance for Gambling Operators 2020 that contains all of the guidance necessary to operate a framework for compliance with the Gambling Code, 2019.

The operator must not enter into or carry on an ongoing customer relationship or with or for a customer unless the operator institutes, operates and complies with the systems, procedures, record-keeping, controls and training required in order to comply with the provisions of Code as  Risk-based Approach, Customer Due Diligence, Record-keeping and Reporting, Staffing, Training and Monitoring Compliance, and Miscellaneous.

It is vital for operators to have policies, procedures and controls in place prior to commencement of activity. The Code requires AML/CFT procedures and controls to be approved by senior management. The GSC expects approval from the following:

  1. the AML/CFT Compliance Officer;
  2. the Money Laundering Reporting Officer (“MLRO”) (for those relating to suspicious activity reporting); and
  3. at least one director.

The operator also must register on the designated reporting platform “Themis” as provided by the Financial Intelligence Unit. Every operator must have at least 1 employee (MLRO) who is permanently registered with Themis. This is required to avoid delays in reporting due to the need to create an account. Furthermore, Themis is used by the FIU as a messaging system and a repository for instructions and other useful information.

Please also note that in the field of online gambling, there is a term called “qualifying transaction” which means deposits or withdrawals and is an important term as customers that exceed the qualifying transaction threshold of EUR 3,000 (or equivalent) in 30 days must have their identity verified. For clarity, the threshold is EUR3,000 in deposits or EUR3,000 in withdrawals.

Taxes in online gambling activity

Currently no levy is charged on operators (such as corporation tax or capital gains tax), but operators are required to make a proportionate contribution towards advancing education and research into, as well as support for, problem gambling.

In addition, online gambling which registers players attracts online gambling duty:

  • For gross gaming yield not exceeding £20 million per annum – 1.5%
  • For gross gaming yield more than £20 million, but not exceeding £40 million per annum – 0.5%
  • For gross gaming yield exceeding £40 million per annum – 0.1%
  • For gross gaming yield from Pool Betting – 15%.

The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.


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Gambling in India – regulation and changes in 2023

Gambling in India enjoys considerable popularity in both physical and online formats.

This exciting activity not only attracts a lot of participants but has also played an important role in boosting the economic growth of the country.

Gambling in India enjoys considerable popularity in both physical and online formats. This exciting activity not only attracts a lot of participants but has also played an important role in boosting the economic growth of the country. Gambling operators not only provide an opportunity for people to have fun but also play a major role in job creation.

Gambling also has a positive impact on the tourism industry in India. This activity is a powerful magnet for foreign tourists which attracts them to India.

OVERVIEW OF THE REGULATORY FRAMEWORK FOR GAMBLING IN INDIA

India is one of the countries where gambling is stipulated in its Constitution as a legal activity. According to clause 34 of the Seventh Schedule of Schedule II (List of States) of the Constitution of India, 1950, separate states have the power to enact laws relating to gambling and betting. However, when India was a British colony (i.e. before independence in 1947), there were no such provisions like the one mentioned above. At that time, the main gambling and betting regulation in the country was the Public Gambling Act, 1867 (“PGA“). Remarkably, the PGA does not define the term “gambling.” Generally speaking, it provides for the punishment of organizing public gambling and maintaining common gambling houses in the United Provinces, East Punjab, Delhi and Central Provinces.

Clause 12 of the PGA states that it shall not be held to apply to any game of mere skill wherever played. So it follows that Indian law distinguishes two broad categories of games:

  1. games of skill – legal;
  2. games of chance – illegal.

In 1967, the Supreme Court of India decided the following:

“The game of Rummy is not a game entirely of chance like the ‘three-card’ game mentioned in the Madras case. The ‘three card’ game which goes under different names such as ‘flush’, ‘brag’ etc. is a game of pure chance. Rummy, on the other hand, requires a certain amount of skill because the fall of the cards has to be memorized and the building up of Rummy requires considerable skill in holding and discarding cards. We cannot, therefore, say that the game of Rummy is a game of entire chance. It is mainly and preponderantly a game of skill.”

After the declaration of India’s independence in 1947, most of the states have enacted laws to regulate gambling related activities that are based on PGA. But apart from this, some states have passed laws that conversely prohibit gambling.

Due to the fact that the main Indian gambling law, the PGA, was enacted prior to the emergence of online gambling, it is limited to physical gambling only. As a result, there is no general federal specific law that prohibits activities related to online gambling. Essentially, online gambling falls into a gray area and complexity arises because each state in India has the right to make its own decisions on this matter. But based on the above, at the moment online gambling is legal in India.

Currently, only a few states in India have modern laws that regulate or prohibit online gambling (for example, it is allowed in the states of Goa, Sikkim). However, even if other states do not have regulating legislation on online gambling, people there still have the opportunity to play online in various gambling games.

TYPES OF GAMBLING IN INDIA

Despite its lucrative nature, gambling in India is highly regulated and only some states allow it under license requirements. This approach allows states to control and regulate gambling in accordance with their socio-cultural and economic characteristics. As a result, licensed operators can provide gambling services in accordance with the requirements and regulations established in each particular state.

Table 1. illustrates the types of gambling that are available in the Indian legal framework and the list of states in which they are permitted.

Table 1. Types of gambling in India

Type of gamblingRegulatory states
CasinoSikkim:
Sikkim Casinos (Control and Tax) Act, 2002 (“SCA“) prescribes a license regime for casino gaming in five-star hotels in Sikkim. Sikkim has also officially allowed the establishment of online casinos with a special license. For this purpose, the Sikkim Online Gaming (Regulation) Act, 2008 (“SOGA“) was enacted. SOGA covers certain casino games such as roulette, blackjack. These games may only be offered via intranet within the State of Sikkim. The license is generally valid for 5 years unless revoked or withdrawn. The regulatory authority under SOGA (for issuing licenses for online games that are offered within the intranet of the State of Sikkim) and SCA (for issuing casino licenses) is the Finance, Revenue and Expenditure Department of the Government of Sikkim.

Meghalaya:
Meghalaya Regulation of Gaming Act, 2021 (“MRGA“) and Meghalaya Regulation of Gaming Act Rules 2021 (“MRGAR“) allow operators to acquire a license to provide online and in-state gambling games such as slots, roulette, keno, wheel of fortune, etc. Only Indian citizens or a legal entity registered in India can apply for a gambling license in Meghalaya. Each license is valid for 5 years and licensees will have to pay “Gambling Royalty”. MRGA also states that it is illegal to operate a casino or offer games in the state without a license.The licensing authority is the Government of Meghalaya and the Commissioner of Taxation or any other officer authorized by the state government adjudicates offenses under MRGA and MRGAR. The Meghalaya State Gambling Commission is responsible for controlling the licensees and making sure that they comply with the license requirements. It also issues new regulations regarding the games offered.

Goa, Daman, Diu:
The Goa, Daman and Diu Public Gambling Act, 1976 (“GDDPGA“) regulates casinos and permits the offering of “electronic entertainment/gaming machine games” in five-star hotels in Goa, Daman and Diu under a licensing regime. Table games and gambling games may also be offered on board marine vessels. Offshore casinos require a license to operate under the GDDPGA.In Goa, the Commissioner of Commercial Taxes acts as the Gambling Commissioner. 
PokerWith the exception of the states of Sikkim, Nagaland and Meghalaya (regulate games of skill), and the state of Tamil Nadu (prohibits real money poker), poker is not regulated by other states. The Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2015 (“NPGPROGSA“) and MRGA establish that poker is regulated as a game of skill.NPGPROGSA designates the State Financial Commissioner or any other authority authorized on his behalf as the “licensing authority” for offering online games of skill.
BingoIt can be played in different formats (online or in the states) and they fall under the category of lotteries or the category of gambling (the last prohibited by most gambling laws). 
BettingSeveral types of betting are stipulated:sports betting – in the states of Sikkim and Meghalaya, sports betting is allowed under license via intranet;horse race betting – they have been judicially recognized as a game of skill and many gambling laws exclude them from their list of prohibitions. Also since most gambling laws started before the Internet, there is no regulator, no definition of “online horse racing betting” and therefore no license is required.  But the club organizing the horse race can impose certain conditions.Betting on physical horse racing is regulated by certain state governments (Karnataka, Telangana, West Bengal, Maharashtra, Delhi and Tamil Nadu). Additional conditions may be imposed by the club organizing the race itself and operating under the terms of a license issued by the state government.fantasy betting – regulated in some states: Nagaland and Meghalaya have enacted laws (NPGPGPROGSA and MRGA) introducing licensing regimes for virtual fantasy sports league games. Both laws recognize “virtual team selection games” and “virtual sports fantasy league games” as games of skill.In Andhra Pradesh and Telangana, fantasy sports for betting or winning are strictly prohibited.
LotteriesExcluded from the sphere of gambling laws and regulated by state and national lottery laws. Private lotteries, except those permitted under a license issued by a state government, are prohibited under the Indian Penal Code (45 of 1860) (“IPC“).  Among those state governments that organize lotteries themselves, physical lotteries are conducted by their authorized departments or the state finance ministry.In the states of Punjab, Kerala, and Maharashtra, only physical lotteries are authorized.
Social GamesSince there are no cash prizes, gambling laws will not apply.  There is also no special regulator. 
Skill GamesGambling laws provide special exemptions for skill games.  In most states in India, except for Nagaland, which has an online skill games licensing regime, a license is not required to conduct skill games.

CHANGES IN INDIAN GAMBLING REGULATION LEGISLATION

In 2022, the Indian government announced its intention to create a new gambling law to replace the PGA.

In January 2023, the Government of India issued new rules to regulate online gambling, with the intention of creating “self-regulatory” bodies to oversee the sector.

The Ministry of Electronics and Information Technology (“MEIT“) issued amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 (“ITR“), which came into effect on April 6, 2023.

According to Article 2 of the ITR, “online game” means a game that is offered on the Internet and is accessible by a user through a computer resource or an intermediary.

“Online real money game” means an online game where a user makes a deposit in cash or kind with the expectation of earning winnings on that deposit.

It also states that any online game must not violate existing laws (such as those that establish state-level gambling bans).

ITR cover permissible online real money gambling, which is divided into two groups:  

  • Permissible online real money gambling (“PORMG“) 
  • Any other online games that are not online real money games (such games may be blocked in India).

“PORMG” means an online real money game verified by an online gaming self-regulatory body (“OGSRB”).

Under Article 4A of the ITR, the MEIT may, by a notification in the Official Gazette, designate as many OGSRBs as it may consider necessary for the purposes of verifying an online real money game as a PORMG.

An entity which fulfills the following criteria may apply to the MEIT for designation as an online gaming self-regulatory body:

  1. the entity is a company registered under section 8 of the Companies Act, 2013 (18 of 2013);
  2. its membership is representative of the gaming industry;
  3. its members have been offering and promoting online games in a responsible manner;
  4. its Board of Directors is comprised of individuals of repute and do not have any conflict of interest and possess special knowledge or practical experience suitable for the performance of the functions of such self-regulatory body, and consists of:
  • an individual having special knowledge of or practical experience in the online gaming industry;
  • an individual having experience in promoting the interests of users of online games;
  • an educationist;
  • an expert in the field of psychology or mental health or such other relevant field;
  • an individual having special knowledge of or practical experience in the field of information and communications technology;
  • an individual who is or has been a member or officer of an organization dealing with the protection of child rights;
  • an individual having practical experience in the field of public policy or public administration or law enforcement or public finance or other relevant field, to be nominated by the Ministry; and
  • such other individuals as may be appointed with the previous approval of the Ministry;
  1. its memorandum of association and articles of association contain provisions relating to:
  • the performance of its functions under these rules, including the redressal of grievances;
  • the disclosure and reporting by and accountability of its members in relation to the online games verified by such body;
  • the clear and relevant criteria, consistent with the ITR, for the

acceptance and continuation of a person as its member, and for revoking or suspending such membership after giving such person an opportunity of being heard; 

  • the requirement that the amendment in the memorandum of association and articles of association in relation to any matter referred to in subclauses above, is carried out with the previous approval of the MEIT; 
  1. the entity has sufficient capacity, including financial capacity, to perform its functions as an online gaming self-regulatory body under these rules.

OGSRBs should develop regulations to protect users from harm (e.g. gambling addiction). In addition, it is important to protect children and prevent various financial crimes.

OGSRBs should oblige participants to comply with user verification procedures, Know Your Customer (KYC) procedures to ensure safety and protect the interests of users. 

They need to develop a complaint handling procedure to ensure transparency and fairness in handling complaints from users. This helps to build trust in the gambling industry and ensure that the rights and interests of users are protected.

Finally, OGSRBs should have a contact address within India that allows users to contact the body with questions, suggestions or complaints. Having a local contact ensures easy communication between the authority and users and also demonstrates the authority’s commitment to regulate and protect the interests of users.

All these measures help to ensure safe and responsible interaction with gambling in India, protecting the interests of users and preventing potential risks and abuses.

WHY IS INDIA A POPULAR GAMBLING DESTINATION?

India possesses a range of factors that make it attractive to gambling enthusiasts. Here are some reasons why India is considered a great destination for such games:

  1. Traditional skill-based games: In addition to games of chance, India has a long-standing tradition of skill-based games like chess and rummy. These games require strategy, critical thinking and expertise, making them popular among players who prefer to test their abilities rather than rely solely on luck.
  2. Legal framework: While the legal status of gambling varies from state to state in India, some states such as Goa, Daman, and Sikkim have established a legal framework for gambling activities. These states have licensed casinos and gambling establishments, providing a regulated and safe environment for gamblers.
  3. Online gambling opportunities: With the advancement of technology, online gambling has gained significant popularity in India. Many reputable online casinos and betting platforms serve Indian players, offering a convenient and accessible way to enjoy gambling without leaving home.
  4. Growing casino industry: The casino industry in India is steadily growing, with new casinos opening up. This growth creates new job opportunities, stimulates the tourism sector, and contributes to the overall economic development of the country.
  5. Cultural diversity: Different regions of India have their own traditional games, rituals, and customs associated with gambling. Learning about these diverse gambling traditions can be a fascinating and enriching experience for players.

All these factors make India an attractive destination for gambling enthusiasts, offering diverse opportunities, rich cultural experiences and the thrill of participating in a rapidly growing industry.

But it is also important to always take a responsible approach to gambling and comply with the legal regulations and age restrictions in place in the relevant jurisdictions.

If you are interested in acquiring a gambling license in India, the Manimama team is ready to assist you.

FAQ

Is gambling legal in India?According to the Constitution of India 1950, each state makes its own rules regarding gambling and they can either allow or prohibit such activities.
How is online gambling regulated in India?At the moment, there is no general specific law in India that would regulate online gambling and accordingly prohibit it. Therefore, it is quite legal to engage in this activity. But also some states have their own regulation of online gambling and set licensing rules.
What is the difference between games of chance and games of skill?In India, there is a distinction between games of chance and games of skill from the point of view of legal regulation.The PGA, as the main law for regulating activities related to gambling, prohibits gambling within India. But clause 12 of the PGA provides that it shall not apply to any game based on mere skill wherever it is played. So it follows that Indian law distinguishes two broad categories of games:games of skill – legal;games of chance – illegal.Games of chance are games in which the outcome depends wholly or largely on chance, probability or luck and where the bets, entry value or prizes are determined in accordance with that outcome (e.g. games such as dice, cards, slots and lotteries). Skill games, on the other hand, refer to games where the outcome depends entirely or largely on the player’s skill, ability, knowledge or experience (e.g., chess, rummy).

ABOUT US

Manimama is a law firm that always creates and provides its clients with original and quality solutions with long-term planning, risk control and minimum legal surprises. 

For the successful realization of your requests, we form professional focus groups based on your business and its characteristics. 

Our services and presentation are highly regarded as they meet the needs and expectations of our clients. We understand the desires of successful people and help in their quick realization.

We are not ordinary lawyers, we are lawyers from business and for business. Our strongest areas are fintech and blockchain. We work so you can focus on your main tasks – moving only forward and continuous growth. If you can do something good, you can set your sights on great and remarkable things with us.

We don’t have any former clients. All of them, without exception, continue to interact with us to this day. Because we know exactly how to do the right thing and not to make mistakes.

The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.


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Curaçao Implements Stricter Standards for Online Gambling Operators under National Gambling Ordinance (LOK)

In a bid to enhance integrity and align with international standards, Curaçao is set to impose stricter regulations on online gambling operators starting from September 1st, 2023.

The announcement was made by Minister of Finance, Javier Silvania, during the iGaming NEXT Valletta 23 conference.

The new legislation, known as the National Gambling Ordinance (LOK), is currently under review by the Advisory Council and is expected to introduce more rigorous rules in the gambling industry, focusing on anti-money laundering measures, fraud prevention, and player protection.

Minister Silvania emphasized the importance of transparency and compliance, demanding operators to adhere to legislation that meets the minimum requirements of international laws and guidelines regarding money laundering. Curaçao aims to ensure a level playing field for operators and suppliers by collaborating with reputable jurisdictions.

A crucial development under the LOK is the establishment of a new supervisory authority, the Curaçao Gaming Authority. This authority’s primary objective is not only to prevent illegal activities but also to actively curb them. The minister highlighted that Curaçao intends to move away from its previous reputation as a permissive licensing hub in the gambling industry.

License extension

As part of the transition process, all master licenses will be extended for an additional year to ensure continuity and avoid disruption for current licensees. This extension will not impact the operations of existing licensees, allowing them to continue their businesses seamlessly.

Transition period

Once the LOK comes into force, all sub-licensees will have a 90-day deadline to apply for a new license, irrespective of the remaining term of the master license. During the application process, the old regulations will apply for up to nine months after the LOK’s implementation, providing a transitional period for operators to comply with the new requirements.

New License Issuance

Starting from September 1st, the Curaçao Gaming Control Board (GCB) will issue licenses directly to operators under the current legislation, rather than the LOK. These licenses will grant operators the right to operate gambling activities but will not authorize them to offer sub-licenses. Notably, the new licenses will incorporate provisions that address anti-money laundering (AML) and responsible gambling obligations, further enhancing the regulatory framework

Application process

The application process for new licenses will involve three key forms that operators need to complete. First, the online gaming application will require operators to provide an analysis of their business operations, including marketing strategies, distribution plans, and growth targets. Second, the personal declaration form will involve identifying key individuals in the business who hold 10% or more control, along with providing details of their source of wealth, source of funds, and verifiable identity information. Finally, the corporate disclosures form will necessitate Curaçao businesses to provide specific details to the GCB.

Audited Policies and Procedures

Within six months of obtaining a license, operators will need to submit audited policies and procedures for evaluation. These policies and procedures must adhere to international standards and cover essential aspects such as player protection, AML procedures, know your customer (KYC) requirements, responsible gaming measures, and robust technical and information security setups.

The ministry has further updates planned for September, including outlining the fee structure of the new regime, providing additional clarity for operators. The implementation of stricter standards under the National Gambling Ordinance (LOK) demonstrates Curaçao’s commitment to combating money laundering, ensuring transparency, and preserving the integrity of the gambling industry. By extending master licenses, introducing a transitional period, and streamlining the license application process, Curaçao aims to facilitate a smooth transition for operators while elevating the jurisdiction’s reputation as a responsible and reputable hub for online gambling.

To facilitate a smooth transition, existing operators will be allowed to continue their business uninterrupted. The Gambling Control Board (GCB) will launch a dedicated portal to streamline the license application process, simplifying the procedures for operators seeking to comply with the new regime.

While most operators with a Curaçao license already maintain integrity and follow good practices, Minister Silvania cautioned that past abuses of Curaçao’s reputation should not be forgotten. The implementation of stricter standards aims to address these concerns, promote a higher level of professionalism, and preserve the integrity of the entire gambling industry.

Following the September 1st deadline, the Curaçao Gaming Control Board will directly issue licenses to operators under the current legislation, which will automatically convert to licenses granted under the LOK. Notably, existing master license holders will still be permitted to issue sub-licenses under the current legislation.

Operators seeking new licenses will need to complete three forms: the online gaming application, the personal declaration, and corporate disclosures. The online gaming application will require operators to provide an analysis of their business operations, including marketing strategies, distribution plans, and growth targets. The personal declaration will involve identifying key individuals in the business, while corporate disclosures will require providing business details specific to Curaçao.

The new licenses issued under the LOK will be subject to international standards, including player protection, dynamic anti-money laundering procedures, know your customer (KYC) requirements, responsible gaming measures, and robust technical and information security setups. Within six months of obtaining a license, operators will need to submit audited policies and procedures for evaluation.

In conclusion, Curaçao’s implementation of stricter standards under the National Gambling Ordinance (LOK) signifies its commitment to transparency, compliance, and safeguarding the interests of players, while we should still expect further updates in September, including outlining the fee structure of the new regime, providing additional clarity for operators. The establishment of the Curaçao Gaming Authority and the collaboration with reputable jurisdictions aims to elevate Curaçao’s standing in the global gambling industry. With a seamless transition process for existing operators and streamlined license application procedures, Curaçao seeks to uphold integrity, prevent illegal activities, and ensure a fair and responsible gambling environment while elevating the jurisdiction’s reputation as a responsible and reputable hub for online gambling.

The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.


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Crypto in the Spice Isle: Navigating Grenada’s Cryptoregulation Landscape

Grenada is a small island country in the Caribbean that has become a popular offshore area for international companies and investors.

A stable political environment, a well-regulated financial industry and favourable tax laws make Grenada a beneficial location for companies seeking to establish an offshore presence.

In addition, Grenada has attractive investment programmes such as the Citizenship Investment Programme, which allows investors to obtain Grenadian citizenship in exchange for investment in the country’s economy. This can provide investors with additional benefits such as freedom of movement, access to new markets and the opportunity to improve their international business profile. In addition, Grenada is a member of the Organisation of Eastern Caribbean States (OECS) and the Caribbean Community (CARICOM), which provides additional support and protection for foreign investors.

Benefits of doing business in Grenada

Doing business in Grenada has a number of advantages. First фтв foremost, the country offers attractive tax incentives to international companies. For example, offshore companies established under the International Companies Act may obtain tax exemption for 20 years. And also the state does not apply taxes on inheritance, wealth, worldwide income, capital gains, interest and dividends to non-residents.

Secondly, Grenada has a well-developed business infrastructure, which makes it easier to start and run a company. The country has greatly improved its infrastructure facilities, including high-speed Internet access and expanded international connectivity, well-established domestic transport links and extensive port facilities with shipping links to ports in the United States, Canada, Europe and Asia, and there are also fairly good regulated financial services and preferential conditions for international banking transactions.

Thirdly, the state has a stable political environment and strong legal safeguards that provide investors and entrepreneurs with protection and security. 

Finally, Grenada offers access to the growing markets of the Caribbean region and is an attractive place to do business in tourism, real estate, agribusiness and other sectors.

Incorporation of companies

Under the International Companies Act 1989 of Grenada investors may choose one of three forms of offshore companies:

  • single-person company; 
  • partnership;
  • limited liability company 

A limited liability company (LLC) is the most common type of company in Grenada. An LLC in Grenada has the following characteristics:

  1. The number of members is a minimum of one director, who may be an individual or an entity, resident or non-resident in Grenada. The directors of the company may meet at such times and places within or outside Grenada as they may determine to be necessary or desirable. As regards the shareholders, there shall be at least one. Shareholders may reside and be citizens of any country.
  2. A registered agent residing in Grenada with the requisite agent’s license from the Grenada Authority for the Regulation of Financial Institutions (GARFIN) is compulsory.
  3. The company must have a registered office in Grenada, which may be rented or owned by the company.
  4. There is no minimum amount of share capital.
  5. The issue of nominal or no par value shares is permitted and bearer shares are not permitted.
  6. The company must keep accounts, records and minutes, which must be kept at the company’s registered office.

An LLC in Grenada may be an attractive option for foreign investors who wish to quickly and easily establish a company in an offshore zone with low taxes.

What is the current status of crypto-regulation?

There are currently no specific regulations in Grenada regarding the regulation of cryptocurrencies, especially Bitcoin. However, guidance has been issued there stating that it is not considered legal tender. This means that Bitcoin transactions are not subject to the same laws and regulations as traditional fiat currency transactions. However, Grenada is considered a favourable jurisdiction for Bitcoin trading due to its low taxation rates and developed infrastructure. The country also has a number of Bitcoin-friendly businesses, such as hotels and restaurants that accept the digital currency.

In July 2021, Grenada passed the Virtual Asset Business Act, which provides registration and oversight of virtual asset businesses from and with persons in Grenada and matters related to it. The Grenada Financial Institutions Regulatory Authority is the enforcing and implementing body for this Act.

The country has also signed up to participate in the Eastern Caribbean Central Bank (ECCB) pilot programme to test the use of cryptocurrencies alongside the country’s national currency. 

“DCash” (an electronic version of the Caribbean dollar and blockchain-based currency) is the first of its kind, a blockchain-based currency. It is not a cryptocurrency and, as a difference, DCash is issued by the official central bank and has a fixed value, pegged to the existing Eastern Caribbean dollar used in most of the region. It became available on 31 March 2021 as part of a one-year pilot programme in some Caribbean states, one of which is Grenada.

The Bankers’ Association in Grenada has expressed the hope of introducing new legislation to regulate the business of virtual assets. They believe that such a law would ensure the integrity of the region’s financial industry, given the growing popularity of digital assets and cryptocurrencies in financial services.

Thus, Grenada does not yet have clear legislation regulating cryptocurrencies and blockchain technology, but the government and the Central Bank have shown interest in the topic and may introduce relevant legal provisions in the future.

Gambling regulation

Gambling has been legal in Grenada since 2014 under the Casino Gambling Act 2014 and the Gambling Act 2016. Before 2014, all forms of gambling were illegal with the exception of lottery and bingo. Online gambling is not currently regulated in any way. Locals are free to play at online casinos that are willing to accept players from Grenada.

The main gambling authority is a corporate body called the Gambling Commission. It accepts applications for gambling licenses and makes recommendations to the Minister of Finance for approval or rejection of applications for such licenses.

A gambling tax was introduced to regulate the use of slot machines, lotteries and betting and the gambling business in general. Every person who provides gambling facilities is liable to pay such tax. It is levied for each month on the gross proceeds of gambling by each person at the rate which is specified in Schedule IV of the 2016 Act.

Conclusions

Grenada is strategically located in the Caribbean region, which provides access to international markets and the opportunity to expand business in the region. The state has a free market and an open economy, which is conducive to business development and capital investment. Overall, Grenada offers unique business and investment opportunities in an offshore zone with good infrastructure and government support.

Reliability and experience are key to successful legal issues. By contacting Manimama you will receive expert legal advice to protect your rights and secure your business.

The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.


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Welcome to Monaco!

Brief Jurisdiction Description

Welcome to the Principality of Monaco - an economically stable and investment-attractive country with low taxation. Despite its small size, Monaco has managed to create a reliable business environment for foreign investors.

Monaco is an exceptionally attractive place to do business. The country is known for its simplified company registration procedures and transparency of the process. A limited liability company (SARL) is the most common organizational form of legal entity in Monaco.

Benefits of Doing Business in Monaco

One of the main advantages of Monaco is its tax regime. Monaco is not a classic offshore jurisdiction, but its tax regime can be called a “tax haven.” Personal income tax (PIT) is absent, and corporate income tax is also not levied. However, there is an exception – companies of any type that carry out commercial or industrial activities on the territory of the Principality are subject to a tax rate of 25%, if at least 25% of their turnover comes from operations outside Monaco.

In addition, new companies can be exempted from income tax on profits earned during the first two years, and partial taxation of only profits for the following three years.

The Principality of Monaco also has an attractive geographical location and developed gambling and innovative technology industries. This makes Monaco an excellent place for investors who, in addition to the banking and finance sectors, wish to develop small and medium-sized companies in areas such as consulting, shipping, tourism, fashion, leisure, or industry, intellectual property, and others.

What about cryptocurrencies?

Monaco is considered a jurisdiction favorable for conducting business in the field of cryptocurrencies, as the country has adopted the Law on the Digital Principality, which regulates the status of cryptocurrencies and taxation of operations with them. The sale of cryptocurrencies is not taxed in Monaco thanks to the Tax Haven regime, which presents a significant advantage for business.

The cryptocurrency legislative base of Monaco consists of the following main rules:

Development of modern technologies in the Principality of Monaco

It is worth noting the important role of gambling in Monaco. Currently, there are 4 land-based casinos operating legally in the country: Casino de Monte-Carlo, Casino Café de Paris, Sun Casino, and Monte-Carlo Bay Casino. All of these establishments are located in Monte Carlo.

As for online gambling, it is currently not regulated by the government and residents of the country visit virtual casino platforms of foreign operators.

Monaco pays due attention to promoting and developing new technologies. In 2017, an incubator for startups called MONACOTECH was created in the Principality, which provides an opportunity for project promoters and investors who want to develop innovative enterprises to interact and produce a high-quality final product.

More information about MONACOTECH can be found here and here.

Also, in 2021, another incubator called Monaco Boost was created in the Principality, whose main goal is to accelerate the process of creating and developing businesses.

Conclusions

The Principality of Monaco is an excellent place for investors who want to develop their business and maximize profits. Thanks to its tax haven, stable economy, openness to foreign businesses, and friendly regulation, Monaco has created a favorable environment for business development, including small and medium-sized companies.

Manimama legal & growth agency can help its clients realize their business ideas in Monaco by providing legal services for company registration and assistance in obtaining the necessary regulatory documents for conducting crypto and other high-risk businesses.

Additionally, thanks to its knowledge and experience, Manimama can help its clients maximize profits and reduce tax obligations while complying with all legislative requirements of the Principality of Monaco.

Do not miss the opportunity to register your company in one of the most attractive tax regimes in the world and start your business in Monaco with the help of Manimama. Our specialists will assist you at every step of this process, so you can maximize your potential and achieve success. Contact us today and begin your path to prosperity in Monaco.

The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.


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Online gambling regulation in South Korea

Korean Citizens are prohibited to engage in gambling activities and have hardly any options to gamble.

Gambling facilities in the country are open to everyone, but Koreans. It is worth highlighting that gambling sector is not developed in the country, yet it is a tourist attraction tool of the government.

Korean Citizens are prohibited to engage in gambling activities and have hardly any options to gamble. Gambling facilities in the country are open to everyone, but Koreans. It is worth highlighting that gambling sector is not developed in the country, yet it is a tourist attraction tool of the government.

Basics of gambling regulation

Gambling sector is closely monitored and regulated by the National Gaming control commission under#nbsp; and the government specially legislated certain types of gambling activities and supervised by relevant governmental institutes under National Gambling Control Act, such as:

  • the Ministry of Culture, Sports and Tourism regulates the South Korean casino industry, motorboat racing, cycle racing and sports promotion betting tickets (e.g., Sports Toto),
  • the Ministry of Agriculture, Food and Rural Affairs regulates horse racing and traditional bullfighting,
  • the Ministry of Strategy and Finance regulates lottery businesses.

Aforesaid gaming activities are only legal forms of gambling in South Korea and available for its citizens, and each is regulated under specific legislation. For example, gambling in land-based casinos are regulated by the Tourism Promotion Act; lottery is allowed under Lottery Tickets and Lottery Fund Act; betting on racing is legalized under Bicycle and Motorboat Racing Act, the Korean Racing Association Act.

The land based gambling sites only serve foreigners and expatriates, thus prohibitive to Koreans except for the only one – Kangwon Land Casino & Hotel where citizens are allowed to gamble. The government seems to support businesses offering profitable gaming services to attract tourists, while restricting its population from such entertainment activities.

Risks of playing illegally

Game industry promotion act regulates online gambling in the republic, making it illegal, aside from the lottery. Gambling is an act of crime under the Criminal code, and the laws do not provide distinct meaning between online and physical gaming. As per article 247 of the Criminal code, any person conducting unlawful gambling in South Korea will be subject to up to 5 years of imprisonment or KRW 30 million (EUR 22032). This article applies to online gaming activities, apart from the online sales of lottery tickets which is allowed.

Korean Citizens gambling in unlicensed operators sites (both online and offline) will be fined up to KRW 5 million (EUR 3673), while repetitive infringers are punishable up to 3 years of imprisonments or a pay a fine up to KRW 20 million (EUR 14695). The law has extraterritorial application, as individual players face the same penalties even if they are caught gambling in other countries.

Online gaming: present and future

Internet censorship is prevalent in South Korea. There are some reports indicating that access to foreign online gaming operators is blocked by Internet Service providers and transactions suspected of being affiliated with foreign online gambling operators are routinely blocked by financial institutions of the country. The Government is not prioritizing any further legalization of gambling activities. Likewise, there is no considerable demand for online gambling from Korean citizens, even if some local licensed operators existed, they could not compete with their offshore counterparts. The position of Korea does not look to switch and the regulatory measures are not expected to change in the near future.

The content of this article is intended to provide a general guide to the subject matter, not be considered as a legal consultation.


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Procedure for obtaining gaming-license in Curacao

General provisions about licensing in Curacao

Online gaming is considered as a legitimate commercial activity within the Netherlands Antilles, particularly Curacao being one of the most respected jurisdictions for regulation and issuance of gambling permits. Being established under the Ministry of Justice, The Curacao Internet Gaming organization acts as an intermediary between the government and the licensed E-gaming businesses, while ensuring the e-gambling operators follow the established license requirements and code of conducts.

The Curacao e-gaming licensing authority, on the other hand, is in charge of guaranteeing that its licensees work within the scope of the guidelines established by the Government of Netherlands Antilles and ensures that they follow the standards of client service.

One universal license covers all the type of gambling activities, such as:

  • bingo;
  • online casino games (roulette, blackjack, slots);
  • sports betting peer to peer games (poker, backgammon, mah-jong);
  • mobile phone games, betting;
  • live dealing;
  • fantasy football;
  • pari-mutuel and pool betting;
  • network gaming;
  • lotteries and trivia.

Master license and sublicense

There are two ways of obtaining gambling license: either directly from the Curacao department of Justice or through acquiring a sub-license from a master license holder. Hence, two forms of license are available for issuance: Master license and sub-license. Master license authorizes the companies to work in gaming industry and makes it available to sub-license to third parties. While the holders of sub-licences under the master license can enjoy the same rights to carry out legitimate business activities, but are not in a position to further sub-license to outsiders.

Companies interested in online casino operations, software and service providers in the online gaming industry can apply for a master license to conduct gambling business activities in the jurisdiction of Curacao, based on the following requirements complied:

1.existence of a registered company in Curacao. A local limited liability company (B.V. or N.V.) must be established, have a registered address in the e-zone of Curacao and be registered as a legal entity in the chamber of commerce and Industry. To apply for a business license in the commercial register of the Curaçao Chamber of Commerce, the following corporate data should be provided:

  • identification document (ID card, driver’s license, passport);
  • name and registered address of the business;
  • amount of invested capital and source of finances.

2.a local resident should be appointed as a director to represent the foreign company;

3.presenting transparent description of the games;

4.the detailed explanation of rules to use e-games website;

5.the ownership of a domain;

6.having a minimum of one physical server of the company hosted in the Curacao jurisdiction;

7.implementing Anti Money Laundering procedures in connection with every player in accordance with Article 1 and 4 of the National Ordinance Penalization of Money Laundering” (PB 1993, No. 52);

8.arranging a technical (Software and Hardware) audit of each e-gaming system;

9.a software certification of a Random Number Generator (RNG);

The review of the license application shall take up to 6 weeks, during which the Department of justice checks the company’s background information, company history, and e-gaming software to confirm fairness. Upon the successful completion of a review, the company will be granted a provisional license, on condition of a payment of guarantee deposit in the amount of 60,000 ANG (approximately EUR 29,000). In addition to the deposit, Master license holders are subject to monthly payment of 10,000 ANG (approximately EUR 4,900) for the first two years. After a two-year period, any official fees going forward will be negotiated with the government.

While sub-licenses are granted indefinitely, as long as its master licensor is valid. Currently, there are only four holders of Master license, namely, Cyberluck Curaçao N.V. 1668/JAZ, Gaming Curaçao 365/JAZ, Curaçao Interactive Licensing N.V. (CIL) 5536/JAZ and Antillephone NV 8048/JAZ. These master license holders generally charge an annual fee ranging from EUR 10,000 to EUR 25,000 contingent on the type of the license. However, depending on sub-license agreement, licensees are forbidden to accept players from several countries like UK, France, Belize, Netherlands, USA, Germany and Curacao itself. This might seriously reduce the number of the customers, but should the licensees contravene this limitation, there is a high risk that their license will be revoked.

Advantages of doing business in Curacao

In line with operating a legitimate gambling business, companies enjoy several regulatory advantages. By incorporating in the Curacao jurisdiction. The company can apply for a special e-zone where no taxes are applied except for 2% of a net corporate income tax. Although the physical presence of the company is not compulsory, an advanced legislative system and stable political environment sets less restrictions which will enable businesses to operate smoothly.

With a well established financial service industry and strong telecommunication infrastructure, Curacao remains to be the biggest online gaming registries across the globe. The government is supportive to new businesses and the application procedures to legalise a business are quite straightforward. However, the government does not take part in the dispute resolution process between operators and gamers, which may make the online games offered by Curacao based companies less attractive, as players’ rights are not duly protected.


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