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Curacao licence reaction, U.S. regulation: A look back at 2022

Posted: Dec 21, 2022 12:37 Category: Online , Regulatory , Sportsbetting , Posted by Content Team

There have been mixed responses to Curacao’s announcement to implement a new licensing regime to replace the old Master/Sub-licence set up, where there was in practice, little oversight of the many domains operating from there, writes Hilary Stewart-Jones, chair and CEO of Skywind Group.

The to-be-implemented legislation will allow a transition period so the so-called “bad actors” can be phased out. There will be financial incentives to invest locally (a tax-free period of 10 years, provided there is investment of $3 million and ten local residents employed). The burgeoning crypto casino market will also be tolerated for a period.

Much of the negativity therefore seems to come from those who would prefer no change, despite the Finance Minister promoting the bill promising as a consequence to improve local banking alternatives, which has long been a bugbear for operators there. However, for operators it is the unknown that will be daunting.

Even if crypto is tolerated, who can say which of the current operators will pass the other probity and governance tests? Also, if the new regulations have come about largely as a result of pressure from the Dutch government, will the latter continue to oversee and monitor their effectiveness? Of course, it is a truth universally acknowledged, that regulations once implemented very rarely shrink in reach or are made more liberal. 2023 will no doubt be a period of upheaval and with (possibly) a number of operators seeking “safe-harbour” elsewhere. The big question is where?

Players demanding crypto

Just one final word on crypto, just when one thought crypto could at last be going mainstream, we had the collapse of FTX, and the arrest of its founder in the Bahamas. Many continue to treat crypto with suspicion, despite the fact that the war in the Ukraine has made crypto payments one of the only ways of moving money across borders for employees and service providers. Back in the UK, the Commission’s stance and formal position is that it will “have questions” of any operator taking risks in the space (without specifying what acceptable risks would be). Such attitudes also fail to keep pace with the economic realities of running global businesses, fiat FX volatility, and the fact there is a whole new generation of gamblers who simply do not want to play with fiat.

Other positives in 2022 were the implementation of online licensing, or launch dates, in Peru and the U.S. states of Arkansas, Kansas, Louisiana, Maine, Maryland, Massachusetts, Minnesota, New York (for sports betting) albeit that U.S. casino online regimes seem to have stalled at just six states for now.

Still the U.S. sports betting market alone is transformational, truly making the activity mainstream. Ireland too seems to be eventually pushing ahead with its long-awaited revised Gambling Regulation Bill (for online casino) in 2023, and Ontario issued its first seven AGCO licences ahead of the formal opening up of the market in April, with numerous others following in quick succession. Again, a potentially huge market – the forecasts are for C$ 1.8 billion plus gaming revenues in just three years.

Point-of-consumption licence trend

In short, the trend for point of consumption licensing regimes continues and whilst this means that compliance and licensure costs are invariably increased for the overlapping yet different regimes, securing a licence, or creating the infrastructure to get one within a grace period, at least removes some uncertainty as to legality and more scope for advertising.

As to what 2023 holds, I believe from an industry perspective there will continue to be, despite multiple point of consumption regimes, ongoing pressure from banking partners. The trend for heightened consumer protection will invariably continue, so harnessing technology to facilitate account opening and ongoing fraud checks will be critical. Finally, we cannot ignore the metaverse’s increasingly relevance in the gambling space (ditto crypto) and the importance of product differentiation in a crowded content market.

  • With thanks to David Whyte, Harris Hagan

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