Understanding the Challenges of Setting Up a Bank Account in the eGaming Sector

Online gambling is a highly regulated industry worldwide, with an increasing number of regions now crafting their own laws and regulations. This is done to stay up-to-date and prevent unlicensed operators from operating within their borders.

The advantages of implementing a licensing system far outweigh those of not having one, even though most regions primarily aim to levy taxes or duties on eGaming businesses' profits. A more comprehensive regulatory framework allows for better player protection and overall well-being. The industry faces significant scrutiny in terms of player safety, responsible gambling, and ensuring the welfare of players. Notably, major operators have shifted their focus over the years. Television ads and online banners now emphasise responsible gambling tools, such as setting deposit and session limits, and advising players on the option to 'take a break' from their accounts instead of offering enhanced odds or free bets/spins. Operators are taking more steps to combat the stigma associated with online gambling and provide a friendly and secure environment for their customers.

Opening bank accounts is often a challenge for operators and businesses in this sector, mainly due to the negative perception of 'gaming' by banks, which have been hesitant to collaborate with such businesses for many years. Capital International Bank, thanks to its understanding of the sector and knowledge of the high regulatory standards across multiple regions, can make informed decisions and adopt a risk-based approach when assessing new business from this sector Whether working with startups aiming to establish themselves or well-established enterprises seeking diversification, we offer various solutions, including operational gaming accounts and segregated player funds accounts. We cannot currently accept direct player deposits or provide accounts for gaming operators in USD directly in the Bank, however we have a money market solution for USD segregated player funds in the wider Capital International Group.

At Capital International Bank, we work with a wide range of businesses operating in the eGaming sector and understand the regulatory requirements they must adhere to. Similar to our own banking requirements, regulatory reporting in the gaming industry is frequent and demands a high level of detail. Regulators heavily rely on the reports they receive from operators to maintain a crime-free industry, ensure compliance and promptly report significant events.

According to the Global Online Gambling Market Report, the online gambling market is expected to grow by $40 billion between 2020 and 2025. eGaming businesses are constantly innovating and improving their platforms to enhance the customer experience and expand their product offerings to compete for a small share of the market. Customers remain loyal to their preferred brands and platforms. Hence, operators are constantly striving to enhance their websites to ensure customer satisfaction and long-term relationships. Similar to any other industry, dissatisfaction prompts consumers to seek change and improvement. This also applies to banking. When developing our digital bank, client feedback played a central role in our project. Capital International Bank was incorporated with a focus on client-centricity and to cater to both emerging and existing industries in need of corporate banking solutions.

But why is it so difficult to open a bank account in the gaming industry? We observed that in general, the process of opening a corporate bank account can be quite protracted, labour-intensive, and occasionally exasperating for corporate clients.  

We have identified several common issues that clients often encounter:

1. Difficulty in locating a regulated 'bank' that offers a suitable corporate banking solution. Operators are often forced to deal with Electronic Money Institutions (EMIs); EMIs are not required to operate to the same capital, liquidity and market risk regulations that apply to licensed banks.

2. The task of completing numerous forms and submitting extensive paperwork, only to face rejection for an account, a situation colloquially referred to as 'the slow no.'

3. An end-to-end account opening process over weeks or even months.

4. Dealing with outdated and cumbersome banking technology.

Capital International Bank has been designed to alleviate these issues. We offer quick decision-making at our headquarters in the Isle of Man - we will let you know whether you are eligible for a bank account within 24 hours and new accounts are opened within days, not weeks, avoiding the dreaded ‘slow no’ and protracted account opening process.

Our clients are then able to access our bespoke, purpose-built digital banking platform and our suite of interest-bearing solutions, including same-day access* fiduciary accounts with competitive rates of interest.

If you would like to know more, please do not hesitate to reach out at businessdevelopment@capital-iom.com

*subject to cut-off times

Disclaimer: The views, thoughts and opinions expressed within this article are those of the authors and not those of any company within the Capital International Group (CIG) and as such are neither given nor endorsed by CIG. Information in this article does not constitute investment advice or an offer or an invitation by or on behalf of any company within the Capital International Group of companies to buy or sell any product or security or to make a bank deposit‍

Capital International Bank Limited is a wholly owned subsidiary of Capital International Group Limited (www.capital-iom.com) a privately owned financial services group based in the Isle of Man. Capital International Bank Limited is licensed by the Isle of Man Financial Services Authority and operates as a non-retail, restricted deposit taker under a Class 1 (2) licence. Deposits are not covered by the Isle of Man Depositors’ Compensation Scheme and terms and conditions apply. Capital International Bank is the trading name of Capital International Bank Limited. Capital International Bank Limited is also licensed by the South African Reserve Bank Prudential Authority to conduct the business of a Representative Office in South Africa.