Key Moments:
- Operators experience shifting regulatory requirements as they expand into new jurisdictions.
- Compliance failures most often originate from within organizations due to misaligned procedures across regions.
- The cost and complexity of obtaining non-passportable licenses continue to increase with every new market.
Regulatory Diversity Complicates Market Expansion
Operators entering new jurisdictions frequently encounter regulatory environments that differ significantly from those they previously mastered. Each region views operational risk uniquely, resulting in a landscape lacking uniformity. This inconsistency is particularly evident as the iGaming sector grows across Europe, Asia, and emerging markets. The Financial Action Task Force has highlighted that unequal anti-money laundering regulations can create vulnerabilities for financial crime. While some markets lack mechanisms such as the Travel Rule and robust licensing protocols, others implement tight restrictions suddenly, forcing operators to rapidly adapt their practices.
European markets are working towards harmonization through the new Anti-Money Laundering Authority, whereas Asian regions remain fragmented, with each country independently setting and revising rules without clear timelines. Central Europe often supports consultative processes, but some Southeast Asian jurisdictions institute abrupt regulatory adjustments with little warning. This creates a dynamic environment where consistency is rare and pushing business models across borders becomes a formidable challenge for operators.
Internal Teams: The Front Line of Compliance Risk
Compliance challenges often stem from the actions of a company’s own staff. According to Sona Kirakosyan, Head of the Technical Monitoring and Compliance Unit at TotoGaming, compliance risks frequently start within the business. Actions considered standard in one jurisdiction may breach regulations in another. For example:
- Customer service messages regarding withdrawal times may violate consumer rules elsewhere.
- A marketing campaign that is permissible in one region may contravene bonus restrictions in another.
- Retention strategies that are normal in Europe might be viewed as illicit incentivization in certain Asian markets.
Despite the lack of ill intent, these errors can have serious consequences, as regulators focus on outcomes. Minor miscommunications or unapproved messaging may result in fines, official warnings, or even jeopardize licensing. For organizations with teams operating across different continents, there is little room for error.
The Essential Role of Localized Expertise
Companies navigating regulatory change successfully are those that recognize compliance as a company-wide culture, not just a department. Kirakosyan underscores the importance of integrating compliance with daily operations. TotoGaming addresses this through employing local experts, ongoing training, and facilitating direct coordination among teams to ensure employees are always aware of the specific rules in each jurisdiction.
Whereas Europe benefits from structured rules under EU directives, Asian jurisdictions offer a patchwork of changing requirements and stand-alone licensing systems that lack standardization. Without regional expertise, operators risk losing their footing whenever a market shifts direction. Investing in in-house compliance capability grants companies the flexibility to adapt quickly to regulatory developments and helps mitigate surprises during audits and reviews.
Non-Passportable Licenses Amplify Operational Costs
Operators often realize only after entering new markets that each jurisdiction requires its own licensing process, fees, audits, and documentation – all of which rarely carry over. In contrast to other digital sectors, gambling licenses cannot be transferred between markets. Thus, a license from Malta holds no value in Armenia, and authorization in Romania does not help operations in the Philippines. Local regulators may also require region-specific bank guarantees or system certifications, which cannot be obtained until licensing is complete. This can lead to cascading delays and mounting expenses.
For companies expanding simultaneously across several continents, these costs can escalate rapidly, with overlapping fee structures, renewal cycles, and resource demands for every additional market.
| Jurisdiction | License Passporting | Special Local Requirements |
|---|---|---|
| Malta | No | Unique bank guarantees, certifications post-licensing |
| Armenia | No | Stricter advertising restrictions, European AML alignment |
| Romania | No | Possible emergency regulation updates |
| Philippines | No | Independent licensing system |
Managing Unpredictable Regulatory Changes
Operators generally anticipate regulatory evolution, but it is the unpredictability of new rules that is most difficult to navigate. Many markets introduce regulatory updates without soliciting industry feedback or providing adequate transition periods. Some jurisdictions revise anti-money laundering rules overnight, while others enact sudden restrictions in response to political or social pressures.
As described by Kirakosyan, even in Romania, regulatory updates can be issued through emergency ordinances with little opportunity for operator input. In Armenia, authorities have introduced restrictive advertising standards similar to strict Asian jurisdictions, affecting market visibility just as opportunities are expanding. Sudden regulatory shifts prompt operational disruptions, forcing companies to halt marketing, overhaul payment systems, and retrain teams under significant time constraints.
Armenia: A Hybrid Regulatory Approach
Certain markets embody aspects of both European and Asian regulatory philosophies. Armenia offers an example, employing a transparent licensing regime and anti-money laundering measures that draw from European best practices, while simultaneously enforcing stringent advertising limits reminiscent of Asian standards. This “hybrid” environment means operators cannot simply apply policies from one region to another but must instead develop tailored strategies that address a mixture of regulatory expectations. Many emerging markets may follow this path, requiring operators to stay adaptable as these hybrid regulatory models take shape.
Compliance: The Deciding Factor for Global Growth
As the demand for rapid expansion in the iGaming sector continues, companies must confront the reality that navigating cross-border compliance is increasingly complex, time-consuming, and costly. The process of securing and maintaining licenses directly impacts entry speed, operating expenses, and the fundamental security of regulatory approval.
Regulators are equally challenged, as consistency and communication remain critical for the safe development of markets. Operators who view compliance as a strategic priority – an integral part of their organization – are best positioned for resilience in this evolving landscape.
The fundamental question persists: Can iGaming scale worldwide without being overwhelmed by its own compliance requirements?
- Author
Daniel Williams
