In the 21st century, an online casino is an excellent choice for a hearty startup company that is sure to withstand economic downturns, pandemics, and other social struggles that hit brick-and-mortar businesses very hard.
When starting such an endeavor, the most important consideration to make is where your new online business should be based. Although online casinos are a global phenomenon with players from nearly every nation, some countries have much more favorable provisions than others for new organizations.
Get your ducks in a row
Before embarking on a project as intensive as starting your own online casino, it’s good to make a long-term plan for how you want to conduct your business in the future.
Heidi Allen from NDD suggests: “It’s a great idea to have a 10-year forecast in terms of where you want to be as an online company. Are you after running a couple of million-per-year casinos? Or do you want an IPO one day? Such information can be useful in picking where you want to be incorporated.”
So, without further ado, here are our top picks for the 7 best countries to start your new online casino business.
Any of the Scandinavian countries might be good picks for basing your new online casino, however, Sweden tops this list due to the sheer number of iGaming companies with Swedish roots as well as its progressive stance on player safety.
The Swedish government doesn’t impose any taxes on players’ winnings. Casinos need to pay 18% tax on all revenue, but players get to keep their winnings, tax-free.
There’s a reason Gibraltar hits so high on this list. Over 10% of Gibraltar’s entire workforce is somehow employed or tied to the gaming industry. Application and setup are easy but very thorough.
There’s no fee to apply, but companies looking to set up shop in Gibraltar need to show extensive security built into the platform from trusted sources, and the majority shareholder or members of the board need to have an impeccable moral record before Gibraltor will issue the license.
Gibraltar hits one other important checkbox. It’s extremely generous with its taxation. If the company is registered in Gibraltar it’s a simple 1% of profits made with a cap at about half a million pounds.
Cyprus is a unique addition to the list because it’s rather difficult and in most cases quite illegal to gamble within Cyprus itself. However, it allows for licenses and businesses to own and operate online casinos as long as they’re marketed for the rest of the world and not accessible to the Cyprus public.
Potential operators must have all the usual background checks, and be approved by the Cyprus board after paying all the usual fees, €30,000 for a 1-year license and €40,000 for a 2-year license.
Operators are also required to have a Cyprus bank account that ensures the bets being made on their platform. They’re allowed to have a separate bank account for operating costs and the company, but the actual account holding the payouts needs to be a Cyprus account.
#4. Isle of Man
For unprecedented access to the UK’s massive online gambling market, the Isle of Man is a great choice. There are three different kinds of licenses available for online gaming on the Isle of Man: a network services license, a full license, and a sublicense depending on the goals and needs of your company.
Luckily, the Isle of Man has no corporate tax, although it does charge a 1-1.5% tax rate on gambling income, depending on the success of your business.
For starting an online casino in the Caribbean, many experts recommend Antigua and Barbuda. They, however, have one of the most expensive licenses for online gaming operations. To avoid this hefty startup cost, many savvy entrepreneurs choose Curacao.
An island nation part of the Dutch Antilles, Curacao offers a meagre 2% corporate tax and no tax at all on large-scale betting. With a process that takes about six weeks, the application fee is about $2,300, and the country charges a monthly fee of $1,700, Curacao is a great option as a base of operations for your new online casino company.
An island in the Mediterranean Sea, Malta is your new online casino’s gateway to Europe. Malta has all of the advantages of membership in the European Union as well as access to European players. The startup costs there are relatively low but do vary by the type of license you choose.
The application fee for a license in Malta is $2,700, and the fee for operating an online casino is about $9,800 per year. The process can take several months and for a higher level license, it may require you to invest a substantial amount of money in the country as a sort of retainer.
Germany is currently making online gaming history, and only time will tell what the outcome will be. Germans can currently play through a multitude of systems, but the actual operation of online gaming sites is in question. Legislative talks are currently in progress to legalize the system and to get hard-written rules down on the books for operators.
How the cards will fall will only be seen later on in 2021 when the dust has settled. Whether Germany becomes a powerhouse for gamers or a ghost town is yet to be seen, but if you’re looking to start an operation, it’s worth keeping an eye on Germany.
Taxes, taxes, taxes
As with any business you’ll always need to be aware of taxes. Where you decide to home base your operations will have a massive impact on those taxes and who exactly you end up paying. It’s worth looking to a trusted accountant with experience in these kinds of matters because a sweet tax break at the beginning of your operation could cost you big later down the road.
There are two schools of thought when looking at taxes before choosing your base of operations: initial cost, and long-term taxes. Some countries have significant tax breaks in order to entice new businesses but as they grow, they want a piece of the action.
On the flip side, some countries look to keep out small startups and only want well-established businesses, so they have large startup costs but lower yearly taxes as time goes on.