Regulatory Challenges in Running a Sportsbook Website
December 20, 2016
Many countries including US have banned online gaming by a law passed by the Senate. Therefore all online gaming activities including running a sportsbook website out of US soil is banned.
What steps should an operator take to overcome such regulatory hurdles?
The strategies suggested below will help sportsbook operators to overcome some of the regulatory challenges
Starting a White Label Sportsbook operation based out of countries like Costa Rica, Isle of Man, Bermuda or Mauritius is the best option. These countries have liberal sportbook and casino laws as well as friendly tax laws. The sportbook entrepreneur will be able to retain a bulk of the profits if the operations are based out of these countries.
A White Label operator will generally have operations out of tax havens and countries that have liberal gaming and casino laws. However, a sportsbook entrepreneur will have to be clear on gaming and casino laws in their country of operation. An experienced lawyer should be hired to get all the necessary regulatory approvals.
A sportsbook entrepreneur should have a lightweight operations model with operations managed by a white label sportsbook operator. In this way the entrepreneur will only have to focus on marketing and the regulatory environment prevalent in the country.
Online sportsbook including is a lucrative business and there are thousands of players operating in various countries. However, many countries have still not legalized online sportsbook operations because of political, cultural, religious and other factors. Even a liberal country like US was forced to ban online gaming and sportsbook because of political and social considerations. Therefore it is important for a sportsbook entrepreneur to check all prevalent laws and any new laws that may affect the business operations.
The repatriation of funds from the payment processing country to the operating country can also become a hurdle. A sportsbook entrepreneur should check the prevailing banking laws in their country and ensure that there should be no hurdles in moving funds back to their country.
It is important to note that online sportsbook is completely transparent and legal business in countries where it is regulated. It is suggested that sportsbook entrepreneurs should not circumvent the law and try to launch operations in countries where online gaming in not legal. There have been instances in US where some of the largest poker, sportsbook and online gaming operators had to pay large fines to the Government for running their operations after the law was enforced. These companies have spent millions of dollars in lobbying with the US Government unsuccessfully.
Companies like Party Gaming which used to earn millions of dollars in revenue from the US market had to withdraw. Many of these companies have navigated the regulatory hurdles quite well by moving their operations to other locations where online gaming is legalized. In the process they may have lost millions of dollars in revenue but were able to come out of the regulatory challenges successfully. White Label sportsbook operators should always be aware of laws and regulations before launching operations. Once the operations are launched, you will want to focus only on your business rather than dealing with regulatory authorities.