Ever wondered what a gambling license really gives operators and software providers the license to do? LCB got the answer to this and many other burning questions in our exclusive interview with Susan O’Leary, the CEO of Alderney eGambling. Did you know that you can turn to the AGCC for complaints associated with any of its licensees? Read all about the how your claims are handled behind the scenes, licensing costs, types of licenses and other relevant topics. We thank the Commission for giving us a better perspective on their role in the iGaming business and we encourage you to leave any additional questions in the comments section.
1. The average player may know that licensing is important but may not fully understand it. Please explain the importance and what it means.
In short, being a regulated gambling business is a strategic approach; a way of doing business to set that business apart from others and show they are working to the highest possible standards. It opens doors to working with other regulated partners and adds a layer of security and robustness - with both parties adhering to the same set of internationally recognized standards. Payment processing and banking are vital components of any online gambling business and many financial institutions and processors will not work with unlicensed companies; the risk simply outweighs the reward. Holding a license from an internationally recognized regulator is more than enough to mitigate that perceived risk and players can feel safe registering with an operator licensed by a top tier regulator. The Alderney Gambling Control Commission's framework is endorsed by Moneyval and the Financial Action Task Force achieving full compliance with international AML and CFT standards.
2. What types of gambling licenses are available from the Alderney Gambling Control Commission?
The licensing framework is straightforward and essentially separates the regime into two functions. A Category 1 Licence (B2C) covers all aspects of player management and a Category 2 (B2B) Licence, covers all aspects of providing the games and betting activities. There is also an option to obtain a Category 2 Associate Certificate, which enables the business to base their servers outside of Alderney. Walk us through your general approval process. How many people are staffed to look over applications, what are they looking for and what sort of issues would raise a red flag?
3. Walk us through your general approval process. How many people are staffed to look over applications, what are they looking for and what sort of issues would raise a red flag?
The first port of call for a business looking to be licensed for online gambling with the Alderney Gambling Control Commission (AGCC) is to speak to us at Alderney eGambling. We are able to recommend the best course of action and we can tailor advice to the objectives of that business. Then, the phased application process starts with a test of the suitability of the applicant in terms of character, business reputation, financial position, ownership and corporate structure, character and reputation of business associates, and sources of funding.
The second phase involves testing of business processes, equipment and product. This requires the approval of Internal Control Systems (ICS), gambling equipment and premises. The ICS document is a unique requirement of AGCC and is a detailed “procedures manual” for each licensee. On successful completion of Phase II, a licensee may commence operations and exercise its license.
4. If a gambling operator holds a valid Alderney license does this mean they are free to operate wherever they choose?
A license from Alderney will permit an AGCC eGambling licensee to trade in any country where it is legal to do so. In some countries, including the UK, a licensee will also be required to obtain a local license issued by that country.
5. On average, what can a software provider or casino operator expect to spend on licensing including upfront and ongoing costs?
The cost structure is very simple and transparent. The fees for a Category 1 (B2C) Licence are banded according to Net Gaming Yield (NGY) but an introductory flat fee of £17,500 is charged for the first year. Thereafter £35,000 for an NGY of up to £500k is levied, and a banded fee structure applied up to NGY of £30m. There is a maximum fee of £400,000 (all activities included).
For a Category 2 (B2B) Licence, there is an introductory fee of £17,500 for the first year, and £35,000 flat fee thereafter. A Category 2 Associate Certificate (B2B) costs £35,000 for the first year and £50,000pa thereafter. There are no other license fees, gaming duties or levies charged making the fees the most competitive.
6. Do you see any opportunities in the land based gambling market?
There is an increasing cross over in the land based gambling arena, with leading operators recognizing the importance of multi-channel engagement in order to attract new players. Many land-based operators and software providers are looking to establish an online offering to diversify their business. We have helped many to achieve this.
7. When a player has a complaint, can they turn to you for assistance?
While complaints do occasionally get filed, Alderney's player protection program and regulatory requirements are considered to be among the highest in the world. We cooperate closely with similar first tier eGambling regulators when developing and enhancing our player protection requirements.
8. What happens behind the scenes once you receive an official complaint from a player?
If a written complaint is received, the AGCC will, if it is their domain, first attempt to resolve the dispute by liaising with the complainant and the operator. If an agreement cannot be reached the complaint is escalated to the AGCC’s Executive Director. If either party does not accept the Executive Director's preliminary determination, they can appeal to the Commission. The Commission will then convene formally for a complaint hearing and invite the complainant and the license holder to present their cases.