Operators approach us with the same order of operations: pick a licence, build the platform, then "sort out payments". It is backwards, and it is why so many launches sit fully licensed with no way to take money.
Payments are the binding constraint in iGaming. Everything else should be designed around them.
Licence tiers and what they buy you
Tier one — Malta (MGA), Isle of Man, Gibraltar, Alderney. Slow, expensive, demanding on substance and key persons, and accepted by the widest range of payment providers and B2B suppliers. If the plan involves European players and card acquiring, this tier is usually unavoidable.
Tier two — Curaçao (post-reform LOK regime), Anjouan, Tobique. Faster and cheaper. The Curaçao reform replaced the old master/sub-licence model with direct licensing and real supervision, which improved its standing, but acquiring remains harder and pricing worse than tier one.
National licences — UK, Denmark, Sweden, Netherlands, Ontario, and the regulated German and Italian regimes. Required to serve those markets lawfully. Each carries its own tax rate, advertising restrictions, responsible-gambling obligations and, in several cases, local-entity requirements.
The critical point: a Curaçao licence does not authorise you to serve players in a market that requires a national licence. Geo-blocking of regulated markets is not optional, and payment providers check.
The payments chain
Four links, each of which can break:
- The acquirer — the entity with scheme membership that submits your card transactions. High-risk acquirers for gaming are a small set, priced accordingly.
- The PSP or gateway — the technical layer, often bundled with the acquirer.
- Alternative payment methods — bank transfer, open banking, local wallets, vouchers. In many markets these carry more volume than cards and cost less.
- The settlement bank — where funds land, and where player funds are segregated if the licence requires it.
Your effective cost of payments is the blended rate across all four plus chargebacks plus rolling reserve. It commonly runs 4–8% of deposits for a new operator, versus 1.5–3% for an established one with tier-one licensing and clean ratios.
What acquirers assess
- Licence and market map. Which licence, which markets served, and the geo-blocking evidence.
- Chargeback ratio. Scheme monitoring programmes bite quickly; sustained excess ratios end relationships and can end scheme access.
- Refund and dispute handling. Documented, fast, and evidenced.
- Responsible gambling and AML. Deposit limits, self-exclusion, source-of-funds triggers at defined thresholds, sanctions and PEP screening.
- Corporate structure and ownership. Beneficial owners must be identifiable and clean; opaque ownership fails at this stage more often than at the regulator.
- Rolling reserve. Expect 5–10% held for 90–180 days on new relationships. Model it — it is working capital you do not have.
Structuring the group
A typical workable structure separates:
- The licensed operating entity in the licence jurisdiction, with the substance the regulator requires — local directors, key function holders, and often local hosting.
- The IP and platform entity, holding the software and brand, licensing it to the operator on arm''s-length terms.
- Player funds segregation where the licence mandates it, in a designated account that is genuinely ring-fenced.
- A holding company in a jurisdiction with treaty access and a credible banking profile.
Two errors recur: booking the licence in one place and running the whole operation from another (which the regulator now checks), and charging IP royalties at rates no transfer-pricing analysis supports.
Sequencing a launch
- Define the target markets and confirm which require a national licence.
- Get a soft indication from at least two acquirers on the intended licence and market map — before applying for the licence.
- Apply for the licence, with key persons identified and appointable.
- Open banking in parallel; expect it to be slower than the licence.
- Integrate alternative payment methods per market, not a single global card strategy.
- Launch into one market, stabilise the chargeback ratio, then expand.
Tax and the quiet cost
Gaming duty varies enormously — from single-digit percentages of gross gaming revenue in some jurisdictions to over 20% in several regulated European markets, sometimes on turnover rather than margin. Model duty per market before choosing markets. Operators regularly launch into a market whose duty rate makes the unit economics impossible.
FAQs
Can I start on a tier-two licence and upgrade later?
Yes, and many do. Plan the migration path early — moving players and payment relationships between entities is disruptive.
How long does an MGA licence take?
Typically six to twelve months from a complete application, with key-person approvals often the slowest element.
Do I need crypto payments?
They solve some corridors and create AML and MiCA obligations of their own. Treat crypto as an additional rail with its own compliance perimeter, not as a way around banking.
What chargeback ratio is safe?
Stay well under scheme monitoring thresholds; healthy operators run a fraction of the limit. Design deposit flows and dispute handling to keep it there.
