Innovative Asian Betting Model from Alderney

Alderney is a top tier jurisdiction well known for its innovative approach. For a small island it has a huge reputation for marrying pragmatic regulation with a flexible approach.

This article first appeared in Asian Gaming Lawyer, May 2016.

Alderney is a top tier jurisdiction well known for its innovative approach. For a small island it has a huge reputation for marrying pragmatic regulation with a flexible approach.

Asia is showing tremendous interest in what we can offer. I have just returned from Hong Kong, Manila, and Vietnam and was joined by our regulator Jorn Starck in Macau for the iGaming Asia Congress, where we spoke to delegates about how Alderney can help operators reach global eGambling markets.

One of our recent innovative projects that benefit our licensees and certificate holders is a regulatory structure incorporating the agency model for Asian betting markets. We recognised that just one person on behalf of all others may place bets on popular sporting events in a typical Far Eastern extended social structure. Credit may also be extended by ‘agents’ to linked sub-accounts, where individuals can place their own bets.

This is a cultural issue that is fraught with challenges for the gambling companies who wish to operate, and be seen to operate, to the highest regulatory standards.

Working closely with industry to find solutions to ensure compliance with internationally acceptable standards, specifically in the area of AML/CFT, the AGCC set to work. After an in-depth review of Alderney’s regulatory requirements, which are fully compliant with FATF standards, the AGCC developed and launched the model, which is already being used by a number of licensees.

This development again shows a uniquely pragmatic yet innovative approach to regulation that is currently, and will be, of genuine benefit to many operators. However, we would emphasise that if a business only has short-term prospects, Alderney may not be the ideal jurisdiction. That said, if the business is following a long-term business plan of steady growth and development and they ultimately want to operate in other regulated markets then they should consider Alderney as a jurisdiction.

There are a growing number of European operators who are interested in Asian markets and the AGCC is looking to reduce their "dual regulation burden".

We are currently in active dialogue with First Cagayan in Asia, and we expect many of our licensees to hold licences both in Asian jurisdictions and in Alderney.

The AGCC has regulated operators and content providers in countries that have yet to have their own online gambling framework, also known as grey markets. This is well-trodden ground for the AGCC. Now that more European markets are maturing, becoming white markets, it is a natural move for us to return to helping those operators and developers who have grown in line with the top international standards in a regulated environment.

Operators in yet-to-be regulated jurisdictions, such as some Asian countries, are looking to be regulated to grow their businesses in line with international best practice, like the AGCC regime. This approach in turn provides such businesses with a wider array of options available to them in respect of doing business in the regulated space. Options include increasing prospects for an exit strategy like an IPO or a buy-out; or indeed making it easier to access well regarded banks and payment processors to run their businesses.

Alderney does not have an overly prescriptive approach to regulation. Typically, we work with operators to understand the risks associated with the business with a view to agreeing the best way to mitigate such risks. When entering regulated jurisdictions, businesses will be judged on their record and will be required to show that they can operate according to certain standards.

These are a just a few of our latest developments for the jurisdiction, but we work closely with operators, visiting our licensees for an on-site inspection at least once a year. It is a great opportunity to discuss, discover and assess what changes are needed in the regulatory framework. Alderney understands operators' businesses and in that process we have helped many who started small but have grown to be large and successful. We are excited about the growth in Asia in this arena and are looking forward to helping these businesses grow and develop in line with the best international standards in the sector.

Written by
Alderney eGambling