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Crypto gambling: Don't risk your license
Saturday, 6 November 2021
Getting an online gambling license is not a quick or straightforward process. Every jurisdiction requires you to compile documents, fill in an application form, meet various requirements, and submit them to the licensing authorities. There are also fees payable, both to the authorities and your corporate service provider. Having gone to all of that effort, once you have the license, you need to keep it in good shape.
Losing your license can have a catastrophic impact on your business. You will have to stop operating immediately, and you may find it hard to get a license elsewhere. Here’s how as a crypto gambling operator, you can keep your license in shape.
We all know that the house always wins, but under fair gambling rules, your customers have to win sometimes. Online gambling licenses will require you to have some form of technology in place to make sure your games are fair. More often than not, this is a random number generator. As the name suggests, it randomly generates numbers for games of chance. It should be certified by an independent third-party source.
Another option is a predictably fair algorithm. This uses blockchain technology and an algorithm that verifies a casino's fairness. All results are stored on the blockchain and are accessible to the player at any time. Either of these solutions is an excellent way to ensure and prove that your games meet the level of fairness laid down by the license provider.
KYC and AML
Just because you accept payment in crypto, not fiat, does not mean you don't have to abide by KYC and AML rules. Accepting bitcoin and other digital currencies in many jurisdictions does not exclude you from monitoring transactions for suspicious behaviour and identifying your customers.
At the customer onboarding stage, you will need to authorise their identity, check their address, and in some cases, their source of funds. You will also have to monitor their deposits and withdrawals on an ongoing basis for any signs of suspicious activity.
You need to consider other rules depending on the jurisdiction, such as only allowing withdrawals and deposits from the same source and requiring ID verification before either. Be sure you are up to speed on your obligations and enlist a corporate service provider to guide you.
Many gambling operators take responsible gambling very seriously. This means that licensees must ensure underage players are not using their platform. It can also mean monitoring activity for problematic gambling activity. Some require the use of self-exclusion policies that players can use if they think their gambling is problematic. These can be temporary or permanent, depending on the jurisdiction and operator.
There are often other rules to adhere to around advertising, incentives, bonuses, and loyalty schemes. Be sure you know what you can and can’t do before you start operating, or you could end up in trouble.
Mind your obligations
On top of all of this, you need to abide by your ongoing obligations. You may be required to pay gambling taxes, submit annual statements or reports, or even conduct audits on some issues. The company you use for your business will also need attention annually, as will your taxes and license.
Failure to keep up with these obligations can result in suspension or even revocation of your license. In some cases, it can result in court action as well.
It sounds like a lot, doesn’t it? In a way, it is, but it doesn’t have to be an issue for you. When you partner with a corporate service provider like Fast Offshore, we can do most of the work for you. We can take care of all ongoing obligations and keep you abreast of new developments in KYC and DD. If you are starting a cryptocurrency gambling company, let us help you share the work! Contact Fast Offshore for a free conference.