Adam Tracy Explains Offshore Gaming Licenses & US Law

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So you want to go off-shore with a gaming license, and there’s a lot of great locales to start this from, ranging from the very easy and cost-effective in like a Costa Rica to the more established and more, I guess, respected locales of Alderney, Isle of Man, Gibraltar, and places like that. And the question becomes, what jurisdiction can I license in? Can I form in and license in order to operate in the US, and your answer is: none of them, right? Absolutely none of them. While the US doesn’t specifically outlaw offshore online gaming, it does specifically outlaw through the Wire Act and through the Unlawful Internet Gaming Act, financial transactions within the context of online gaming.

So for purposes of the way the country has gone with individual states, New Jersey, Indiana, Delaware, opening up their own legalized sports betting, and then casino gaming being really ubiquitous in almost every state at this point. You really see that there’s really not going to be any sort of leeway or change to the law because the states logically and the federal government have an interest in protecting that revenue. So they’re not going to open it up to gaming operations that are outside the US.

So when you’re looking to establish offshore, which is entirely feasible, and it opens you up to a considerable part of the world, for reasons I’ll get into in a second. It’s still not going to give you that access to the United States, right? And you do so at your own peril. If you wanted to offer like a Bovada, Bovada advertises in the United States, but if I’m running Bovada, I’m not stepping foot in the United States because I’m promoting numerous felonies on any given day. Now, the players obviously have no exposure, no criminal exposure, but there is some consideration as it relates to the operators.

So, Isle of Man, Alderney, Guernsey, Malta, Gibraltar, Costa Rica, St. Vincent, you name it. Stay away from the United States unless you’re not going to live in the United States. In which case don’t travel there, but be wary of the fact that you may be violating US law. And it’s not going to change anytime soon. So, what are your options? Well, your option is obviously, to go to the states that have opened that up and New Jersey is a great example where you can buy a cost-effective license for online gaming. Like a FanDuel did, at a relatively low cost and that’s your entree. So usually what I suggest is, you can get the rest of the world, especially in the sports wagering context, you can obtain the rest of the world with the exception of the United States, with an offshore license from a place like Alderney, Guernsey, Malta, so on and so forth.

You can access Asia. You can access the majority of Europe, subject to Brexit, which I’ll talk about in another talk. But that’ll give you access to the rest of the world. And when you’re operating and you’ve developed that operational history, developed some capital, then you can look at the United States, especially as the United States still opening up. The United States hasn’t really fully opened up in terms of sports wagering, but you see more and more states such as Illinois, which can’t get its act together, but has tried and is slowly coming on board with gaming opportunities.

So, as it relates to, and I get this question all the time, that’s why I wanted to do this piece on it, you have to stay away from the United States. If you’re a US resident, especially, there’s just great risk involved, it’s illegal. And there’s a big world out there other than the United States. Granted the United States is a large market, especially for gaming, but it’s not necessarily prohibitive or fatal to your operations in the gaming context, especially when you consider the money coming from Asia and other places as it relates to gaming. So if you have a question about offshore licensing for gaming operations, by all means, hit me up, Happy to talk to you. Thanks.