What to consider when launching a gambling start-up

The British online gambling market is now mature, with high costs to acquire customers and to operate, with a significant regulatory burden. Start-ups face a tough time differentiating their product in a crowded market. It’s a good idea to take advice from others in the industry before you sink your life savings into a new gambling project.

Tips for launching a gambling start-up

Before launching a gambling start-up in Great Britain, think about the following:

• Speak to others in the industry. Has the idea been tried before and if so, what happened to it?
• Establish where your customers will be located? Work out where you want to operate and what licence you will need. Most European countries (and many further afield) now require operators to hold a local licence to provide remote gambling services to residents. If you want to operate in Great Britain, you will need a licence from the Gambling Commission.
• As part of an operating licence application, you will be required to lodge a written business plan, including three-year, monthly profit and loss projections. Make sure you’re aware of all the costs that are involved in running the business, including licence fees, legal fees, integration with GAMSTOP, betting/gaming duty, payment processing fees, identity verification fees, responsible gambling contributions, dispute resolution fees, security audit costs, and staff costs. Only when you’ve worked out your revenue and expenses will you be able to assess whether the business is sustainable.
• The Gambling Commission will want to be satisfied that you’ve got the financial resources to cover any initial losses. You will be required to provide proof of your funding, so get your funding in place at an early stage.
• Who is going to develop your software, whether it’s a website or an app? Do you know the process to get an app approved on the App/Play Stores? Remember that you will either need a remote software licence to do this or to engage a developer with a software licence.
• Are you aware of the licence conditions and codes of practice (“LCCP”) – if not, you need to read these through at an early stage to make sure you know what’s involved.
• The same goes for the Commission’s remote technical standards (“RTS”) in relation to remote gambling games. These standards regulate gambling games.
• Who are you going to bank with? Banking for gambling operators can be tricky. No high-street banks will offer bank accounts to gambling start-ups. Speak to banking providers, as without banking you will have no business.
• Who is going to process your payments and what will this cost?
• Who is going to verify the identity and age of your customers before they gamble and how much will this cost?

By seeking legal advice and thoroughly addressing the above issues, you will be in a much better position to launch your business and seek investment to do so.

If you have questions about launching a gambling start-up, please contact Richard Williams.