Advertising in the iGaming: How Licenses Help Solve Challenges
iGaming advertising, despite its potential for attracting a large audience and generating revenue, faces several difficulties and limitations due to regulatory measures put in place by governments. These regulations aim to ensure that advertisements are safe, ethical, and socially responsible. This article explores the key difficulties and limitations that impact professionals in the iGaming industry, including marketing specialists, directors, product managers, investors, analysts, equipment owners, SEO and PR specialists, iGaming influencers and streamers, marketing software developers, iGaming software developers, and iGaming platform developers. Additionally, we will examine the role of licenses in facilitating advertising for the industry.
When it comes to advertising gambling, you may face challenges. Consider which jurisdiction your project falls under. Firstly, iGaming advertising must not target individuals under the age of 18 or use tactics that may appeal to them in all jurisdictions. The jurisdictions can be divided into several categories:
- Strictly regulated countries, such as France, Australia, and the UK, have regulations in place for the safe and responsible advertising of gambling. In these countries, advertisements are not allowed to present gambling as a means to resolve financial issues or target vulnerable individuals.
- Regulations in moderately controlled jurisdictions such as Germany and the United States are not as strict for iGaming advertising. These areas permit advertisements to show gambling as an entertaining and fun activity but false or deceptive statements regarding odds of winning or returns from iGaming are prohibited.
- In partially regulated jurisdictions, advertising regulations are less extensive compared to those in stringently or moderately regulated areas. This includes countries such as Poland, Turkey, South Korea, and Indonesia in Europe and Asia, though this list is not exhaustive. Advertisements may face some restrictions, but their enforcement may be limited in these countries.
- In countries with unregulated iGaming advertising laws, such as those in Africa and South America (e.g. Nigeria, Kenya, Brazil, and Peru), there are virtually no regulations on gambling advertising. As a result, advertisers have the freedom to promote their products and services in any manner they see fit, with few or no restrictions.
However, it’s important to note that the list of countries with unregulated advertising laws can change over time. In many countries, there are restrictions on when iGaming advertisements can be aired. This is done to protect children and vulnerable individuals from being exposed to gambling advertisements. For instance, in the UK, iGaming ads can only be broadcast after 9 PM. In Australia, they can only be broadcast after 8:30 PM and before 5 AM on television and radio.
Targeting and Contextual advertising
To advertise iGaming on platforms such as Facebook and Google, written permission is required. To obtain this permission, start by completing a form and applying to promote your iGaming project. You must provide the relevant licenses from the regulatory authority or show evidence of the legality of your iGaming activities in the targeted territory. If your ad is initially rejected, you can make changes and resubmit your request for re-approval. A very important element of advertising approval is the availability of a license. Next, we will look at the 3 most powerful licenses.
The UK Gambling Commission (UKGC), Malta Gaming Authority (MGA), and Gibraltar Gambling Commission (GGC) are considered to be the three most reputable licensing authorities in the iGaming industry. A license from these authorities enables operators to advertise in their own jurisdiction as well as in countries within the European Union (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, etc) and other countries that have a legally regulated online gambling market. This broad country’s reach makes them the most powerful for advertising purposes.
The UK Gambling Commission
The UK Gambling Commission is one of the most well-established and highly respected regulatory bodies in the gambling industry. Obtaining a license from the UKGC is considered to be a rigorous and demanding process. Applicants must provide a comprehensive business plan, demonstrate financial stability, provide registered company documents (or personal identification for sole proprietors), and provide a clear criminal record. The cost of obtaining a UKGC license has increased significantly in recent years, reaching 70,000 pounds for a one-time payment and up to 155,000 pounds annually in 2021, with a 55% increase in 2023. License holders are also subject to a tax rate of 15% to 50% on their gross revenue.
The Malta Gaming Authority
In 1998, Malta became one of the first in regulating and licensing online gambling. Today, a license from Malta is highly regarded and the industry contributes significantly to the country’s GDP, accounting for over 10%. Before obtaining a license, operators undergo thorough scrutiny, from their business plan to the history of the owners’ business activities. Failure to launch a business within 60 days of receiving the license can result in revocation. Even after the launch, the operator is closely monitored by the Maltese regulator for the first year of operation.
Gibraltar Gambling Commission License
Gibraltar is also a significant player in the gambling industry, with the sector contributing 20-25% of the country’s total income. For 2022, the tax rate for operators is 1% of their revenue. There are two types of licenses offered by Gibraltar:
- B2C, with an annual fee of 85,000 pounds
- B2B, with an annual cost of 100,000 pounds
Before granting a license in Gibraltar, like in Malta and the UK, the operator is thoroughly scrutinized, checks the company’s reputation, experience, and existing other licenses.
Boosted Trust: Having a license from a well-respected regulatory authority displays that your business is dependable and follows a clear operating standard. This raises customer trust, resulting in increased traffic and profits. Enhanced Customer Acquisition: With a license, you can reach a larger audience and attract new customers. Facebook and Google demand a license to advertise iGaming ventures, and it is easier to advertise with legitimate grounds than to avoid the system. Opportunities for Third-Party Collaborations: A license can provide opportunities for potential collaborations with outside companies such as payment providers, game suppliers, and marketing firms.
The cost of obtaining a license can be expensive and is a first disadvantage. For operators who wish to offer multiple gambling activities, for example, casinos and betting, they may need multiple licenses, but it is better to conduct each project separately from each other, since the type of license has different restrictions on advertising. Finally, the process of obtaining a license is complex and involves preparing documents, a business plan, and being prepared for inspections and audits.
Despite the challenges of advertising online gambling in certain countries, it can still be done legally with licenses. Obtaining a license from UKGC, Malta, or Gibraltar can greatly benefit online gambling operators seeking to expand their presence and promote their services. These licenses not only indicate a dedication to ethical and responsible gambling, but they also provide access to some of the most profitable and well-regulated markets globally. Selecting the appropriate license depends on the operator’s specific requirements and objectives.
The marketing experts in the iGaming industry are well-versed in navigating these challenges and are able to reduce customer acquisition cost (CAC). For instance, in the United States, the CAC for an online casino player can be as high as $500. However, not all marketing specialists have the expertise to run advertisements through third-party accounts and reduce costs by half.