Asia Gaming Brief looks at existing and upcoming grey market licensing jurisdictions and compares what they offer to the industry.
We shine a light on everyone from Curacao to the Isle of Man, presenting you the basic facts and analyzing the pros and cons of every jurisdiction based on our in-depth expertise, industry feedback, and decades of experience in the field. We continue the series with a look at Vanuatu, a pioneering jurisdiction that is making a comeback.
What & where is it
The Republic of Vanuatu is an island country in Melanesia, located in the South Pacific Ocean around 1,750 kilometers east of northern Australia. Formerly the jointly administered Anglo-French condominium of the New Hebrides, Vanuatu achieved independence in 1980 and is home to around 300,000 people who live across 83 islands. Its capital city is Port Vila, with a population of around 50,000. Located on the island of Efate, it is also home to the only international airport and the nation’s business center.
Its online gambling legislation is widely regarded as the oldest in the industry, dating back to 1993. The country was home to numerous operators in those early days, with many Australia-facing books calling Port Vila home at the time. Contrary to what many gambling licensing service websites continue to claim, there are no active licenses left over from the old system and the island is effectively starting from zero again.
The country’s primary licensing legislation, the Vanuatu Interactive Gaming Act, recently saw its related regulations amended to create what is essentially a brand-new licensing regime.
The Vanuatu Interactive Gaming License is overseen by the Vanuatu Department of Customs and Inland Revenue as the regulator. The newly established Vanuatu Gaming Authority, a private entity that acts as exclusive agent in a public-private partnership, is handling general administration and processing of applications.
What licenses does it offer?
Vanuatu currently offers a B2C license that covers all common product verticals including sports, casino, live casino, lottery, poker and more. Every license is valid for 15 years and comes with the ability to operate one URL under it. Additional URLs can be added for a fee. This essentially allows Vanuatu licensed operators to offer a White Label model similar to that of jurisdictions like the Isle of Man, where the main license holder can allow White Label partners to operate under its license but is also responsible for the regulatory compliance of those partners. Vanuatu currently does not offer dedicated Sub-licenses or B2B licenses.
Cost & Taxes
Fees for a Vanuatu Interactive Gaming License are as follows:
- Application Fee EUR 5,000 ($5,370)
- Annual License Fee EUR 10,000 ($10,700)
- Additional URL Fee EUR 1,500 ($1,620)
- The jurisdiction charges a flat 1 percent Wagering Activity Tax on GGR
Vanuatu does not have any corporation tax and gaming companies are also exempt from VAT.
What countries can be targeted?
In line with most other pre-regulated market jurisdictions, Vanuatu expects its licensees to ensure they operate lawfully in any regions they target. This enables licensees to largely make their own decisions based on legal advice. Blocked countries include those on the FATF “black-list”.
How long does it take?
The VGA states a target turnaround time for applications of between two to four weeks.
Do I need a company there?
Yes, a presence on the island is required and the license must be held by a Vanuatu company. Assistance in this regard is available from corporate service providers (CSPs) familiar with the new scheme. The regulator also requires that certain data is mirrored through its systems for auditing and compliance purposes, and this is part of the licensing process. There is no requirement for separate on or off-island hosting to facilitate this.
Do operators have to go there?
No. The entire application process is done online through a dedicated portal maintained by VGA Limited. A personal visit to the island is therefore not required.
Can operators get banking and payment services?
Generally, yes. While the renewed Vanuatu license will need some time to fully establish its credibility in the market again, the Vanuatu Gaming Authority and the Vanuatu government are already actively working on trying to improve the standing of the jurisdiction. Various banks and PSPs have already indicated their willingness to accept the new license and for others, a setup utilizing a payment entity in another jurisdiction such as Cyprus or the Isle of Man will likely be required. This will be a familiar process to operators who were licensed in countries such as Curacao before.
On-island banking in Vanuatu is available and required to pay the license fees and Wagering Activity Tax. It can be obtained at the same time as the required local company is established. On island banking does not currently cover operational payments.
Is the license accepted by suppliers and third parties?
Generally, yes. Many big and small platform and games providers have already indicated a willingness to accept the new license, but it may be trailing behind other jurisdictions, at least for a while. As the due diligence requirements and the over-all compliance mindset behind the new license appear to be above other, competing, jurisdictions, it is likely that more suppliers will start to accept the Vanuatu Interactive Gaming License in the near future.
Pro and Contra Summary:
- Vanuatu is in a strange juxtaposition at the moment. It is, at the same time the oldest jurisdiction in the industry, but also the newest. It will therefore take some time to re-establish itself as a trusted and credible player in an increasingly crowded market.
- An entirely online application process, attractive price point, long license validity, short turnaround times, and a high level of flexibility when it comes to target markets will likely appeal to many operators. Innovative uses of technology to ensure compliance with regulations and to manage ongoing monitoring will also help to build up the jurisdiction’s credibility, as will the transparency and openness of the local government in general.
- Vanuatu is a safe and politically stable country looking to diversify its economy, and a revitalized eGaming sector forms part of this long term strategy. The fact that members of its government and the regulator are willing to put faces and names to the place will no doubt elevate it above some other grey market jurisdictions and help to build trust. In the end, only time will tell if the island’s goal of positioning itself somewhere between the Isle of Man and Anjouan will be achievable. Early signs appear promising.
