The Future of iGaming Licensing

With more players embracing the convenience of online gaming, regulators around the world are facing the challenge of adapting their frameworks to ensure a safe and transparent environment. For online operators, the future of iGaming licensing represents both an opportunity and a challenge—one that will shape the way businesses operate in the coming years. Here, Ivan Belic, Head of Legal and Compliance at Pronet Gaming, shares why it is essential for online casino operators to stay ahead of evolving regulatory trends and requirements. 

The growing need for regulation 

With the rapid evolution of technology, an almost uniform broadband internet coverage which further drives societal evolution across the planet, iGaming is now more than ever a continuously evolving market. As such, the demand for clear and robust regulatory frameworks is more important than ever. Governments are recognizing the benefits of iGaming to a country’s economy and job market but at the same time also the growing need for stringent controls to combat issues such as money laundering and fraud. 

 Furthermore, the exponential growth of both B2B and the B2C online iGaming businesses, which now operate across multiple jurisdictions, has led to a proliferation of licences from various regulatory bodies of various reputation and regulatory requirement levels. While this offers operators and suppliers flexibility, it also raises significant business and compliance challenges in choosing the right model and target markets the iGaming business wishes to thrive in. 

We also cannot understate the well-established interest in cryptocurrencies and other digital assets within the iGaming industry which further reinforces the need for regulators to adapt their frameworks. As more online casinos begin to offer cryptocurrency-based transactions, licensing bodies must create clear guidelines around how digital currencies should be handled and monitored to prevent financial crime while promoting innovation. 

Regional licensing models 

The iGaming industry is marked by fragmented regulatory environments, with different regions imposing their own licensing requirements. Taking Europe as an example, iGaming is one of the few areas where even on an EU level there is such a disparity of legislations. We have seen the regulated markets in Europe transition and expand from having only a few established licensed jurisdictions such as the UK, Malta, and Denmark, to our present reality wherein almost every European country has its own unique regulation. Once we widen the scope and include the Americas, Africa, South-East Asia, and the Middle East, the regulatory landscape becomes muddled, showing a glaring number of inconsistencies and a lack of uniformity in the industry. 

The market in the past couple of years has clearly shown that these fragmented regulatory environments are becoming more of a burden to the industry instead of being a solution. On top of that, we have observed that end users’ retention experience and, most importantly, safety have declined in the past years. This has all led to and been an effect of the alarming number of black markets emerging. These black markets have been attracting quite a large number of users despite their complete lack of controls and safeguards present to ensure a safe, fair and ultimately a legally controlled environment for the end users, not to mention a complete lack of any assurance of control or compliance with any applicable laws whatsoever when it comes to money laundering or financing of terrorism. 

Given the trends of today, the future of licensing will need to be focused towards more regional and international cooperation in licensing. Industry legal and compliance experts have for some time now been working to bring licensing bodies in Europe to align their regulatory standards to promote cross-border business, while maintaining rigorous standards to ensure consumer protection and responsible gaming. This is a path that could create a more predictable and efficient landscape for operators, making it easier for them to scale and enter new markets. 

Bringing regulators together 

As is always the case: industry innovation and evolution are followed by and is a conduit for regulatory evolution. As online iGaming businesses continue to expand globally through utilizing many technologies, regulators have undertaken an ongoing effort to reconcile their licensing standards with the rapidly evolving industry. The regulators have become increasingly aware of the need to not only create a more consistent and unified approach to regulation across entire regions, but also to keep abreast of all current trends in technologies used and/or being developed within the iGaming industry. 

Having regulators share experiences with each other, learn from each other and share expert insights leads to not only better recognition of the regulators between themselves and recognition of their licenses, but a more streamlined and efficient licensing process for iGaming suppliers and operators alike. 

One of the most exciting and positive showcases of such a regulatory approach can be seen from an emerging regulator in the UAE, the GCGRA. This could very well be the beacon and catalyst that other regulators could take up a similar path and usher the industry into a more stable and unified future. Such developments will undoubtedly have a deep impact on aspects of the iGaming industry that have traditionally been the Achilles-heel, such as the acceptance of payments and the processing of payments in various markets. 

Having regulators set common standards and requirements that would be unified, transparent, enforced, and unique on a regional level, respecting the realities of each region and its markets, would enhance the acceptance of other industries iGaming relies on. Furthermore, regulators being led by experienced industry experts have shown us clear and positive results as opposed to regulators relying on experiences from other industries without connection to iGaming, whilst trying to replicate them into iGaming. Such efforts have failed to produce the expected results and have given rise to illegal black markets and lowered end user safety and satisfaction. 

By bringing regulators together and creating a transparent and uniform regulatory environment even on a regional level as opposed to each country being fragmented with their own respective licenses will undoubtedly: 

• Reduce the complexities associated with iGaming businesses managing multiple licences across different markets as well as easier entry into new jurisdictions. 

• Ensure better but most importantly safer end user experiences. 

• Ensure better overview and compliance with AML/FT regulatory requirements. 

• Help bring banking institutions into the fold and break down many of the existing barriers with the banking institutions. 

• Lower the ultimate costs related to compliance for licensed iGaming businesses and open the market for more competition. 
  

Consumer protection and responsible gaming 

As the iGaming industry continues to mature, consumer protection and responsible gaming practices will continue to be at the center of licensing discussions. Regulators are becoming more focused on ensuring that operators implement effective measures to protect vulnerable players, including age verification tools and limits on gambling spend. 

The future of iGaming licensing will see increased scrutiny on operators’ responsible gambling policies, with regulators demanding more transparent processes. Operators will need to demonstrate much more clearly that they are taking proactive steps to address problem gambling, and they will need to implement effective player protection measures as part of their licensing agreements. This continuous shift towards consumer protection will as standard include regular audits and checks, alongside real-time reporting, and data-sharing requirements. 

Adapting to the future 

The future of iGaming licensing is one of constant change and adaptation. As the industry continues to expand and evolve, operators as well as supplier must navigate a complex regulatory landscape while embracing innovations stemming from emerging technologies, enhanced consumer protection measures, ever evolving product verticals and new features. For iGaming businesses, staying ahead of regulatory trends will be crucial to ensuring lasting compliance and driving sustainable growth. Ultimately, as the licensing environment evolves, it will not only shape the way iGaming businesses operate but will also contribute to the creation of a safer and innovative industry.