"Now the trend is maximum transparency and publicity of the company." Interview with lawyer Tatiana Klimenko

kazino-game24.online editors again introduce their readers to interesting people from the world of gambling. This time our interlocutor was the lawyer Tatyana Klimenko. She spoke about the intricacies of obtaining licenses, problems with payment systems in online casinos, prospects for the development of cryptocurrencies in gambling, and much more.

I want to give an interview

— Tatiana, hello! Please tell us what you do at Law&Trust International.

— Good afternoon! I work as a lawyer at Law&Trust International, namely the Head of legal: Banking & Finance Department. Accordingly, I work closely with banks and financial institutions around the world.

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— Your company is engaged in support and registration of business, including gambling. Do you remember your first major gambling project? Tell us about it.

— Yes, our company is a leader in the post-Soviet space in providing legal services to gambling companies. We were one of the first to start working on Curacao, which was very popular, and still is, in principle. Now our clients are working on many continents.

Татьяна Клименко на UGW
Tatiana Klymenko with a report at Ukrainian Gaming Week

The first major project was in the UK, with 5 licenses at once. The bottom line is that here every type of gaming activity is licensed, even croupiers and other significant persons in a land based casino should receive licenses. Therefore, the project was a rich and quite useful experience. Since the UK is one of the leading countries in the field of gambling, it was interesting to delve into the legislation and guides, which are simply ideally designed for business.

— In which countries do clients most often register a gambling business? What is remarkable about the jurisdictions of these particular countries?

— In fact, in different ways, each has its own goals and business strategies. Most often, of course, they consider the EU, namely Malta - the country of European gambling, I would say. Quite democratic in terms of requirements and moderately strict in terms of regulation, where the law and business are trying to keep a balance. Also, the UK is in sufficient demand, but there is a slightly higher price entry compared to Malta. The Isle of Man is a country that an operator who has already worked in another state can enter. That is, this place is for more experienced operators with a history. Curacao, by the way, is still in demand, and many operators continue to work there. At the same time, they can open European affiliated companies (Subsidiaries that are subordinate to the parent company. - Ed.), expand regions, but do not leave Curaçao.

— Let's assume that the client has decided on the choice of the country in which he plans to register an online casino. What is the next course of action?

— When the client has decided on the choice of a casino, we immediately proceed to a substantive discussion of the details of his project. The choice of jurisdiction is very individual, so we never act in a stereotyped way. The first two important issues are the geography of work and the budget. Geography is important because there are no international licenses. That is, having received a license in a certain country, the operator can work both in it and abroad. But the most interesting thing is that when an operator enters another state, the local regulator may ask him to obtain a local license plus pay tax on the income that the operator receives in that country. This is the case in most EU countries. There are countries where the order is not regulated. There are countries where gambling is completely prohibited. Therefore, it is very important to determine the geography of work and adopt a budget. Further, thanks to these two things, our circle of countries will be narrowed, after which you can study the details of local legislation.

— What package of documents is required to obtain an online casino license?

— Package documents varies by country. In some jurisdictions, a rather serious package of documents is requested. As a rule, these are states where the gambling business has been developed for a long time and there is a regulatory framework and work practice. In countries that have recently legalized gambling, it is a little easier at the first stage. But usually almost everywhere they ask for full documents on the legal entity that will receive a license, and full KYC (Information about a person. - Ed.) for persons in the company - the owner, director, AML specialist, etc. It is necessary that these people have experience in the gambling industry. And, of course, a number of documents that will confirm that the operator will conduct its business honestly, check the players, identify them, maintain accounting databases and accounting, adhere to the law and report to the regulator. Now the trend is maximum transparency and publicity of the company.

— In one of your earlier interviews, you mentioned that the key problem that operators face when licensing the gambling business is opening bank accounts. What is it connected with? And how to deal with this problem in practice?

— Yes, absolutely right. This problem is still in trend, so to speak. This is due to the fact that gambling is classified as high risk. That is, many banks generally refuse to take responsibility for the work of a gambling operator, and those that agree carefully study the work of the operator. That is why I said that transparency and publicity are now in trend. The more understandable the business is to the bank and the more public the company is - for example, you can find quite a lot of information about it in public resources and social networks - the safer it is for the bank to accept such a client.

Юрист Татьяна Клименко
Tatiana's speeches attract a large audience

Banks are also required to report every customer transaction to their regulator. If it turns out that the transactions carried out by the operator are dubious, and the bank serving this client did not notice this or turned a blind eye, he may be threatened with paying serious fines or losing his license. Therefore, before choosing a bank, you need to prepare the entire package that he wants to see, and then individually select all payment solutions.

— What is the procedure if I need to open a bank account to accept payments from casino users? 836

— Для этого есть прекрасное решение — процессинг, либо, иными словами, мерчант аккаунт (Торговый счет. — Прим. ред.), который открывается для приема оплат онлайн-картами. То есть на сайте игорного оператора пользователи смогут пополнять свои аккаунты с помощью оплаты онлайн-картой. Здесь самым важным является наличие сайта, который будет отвечать требованиям Visa и Mastercard, если нужен прием данных карт, а также наличие подходящей структуры, то есть компании.

- What problems do customers most often face when opening an account?

— Most often today, clients face the problem of the source of funds. Now all banks and payment systems are asked to show the legal source of origin, that is, how the owners of the company earned their capital. They may request official documents - tax returns, bank statements, etc. Quite often there are problems here. In particular, now many people earn money on cryptocurrency. And cryptocurrencies in many countries have not yet been regulated. Here, too, there are difficulties in proving the origin of funds. All this can be proved, of course, it just requires special knowledge of lawyers who lead the client, and a creative approach.

— How does the system for accepting payments in online gambling work on the part of the operator?

— The payment acceptance system works differently for everyone, since everyone has their own geography of work. If you take the big picture, in any case, the company must have a settlement account for economic activities (internal, such as payroll, office rent, etc.); a segregated account where customer funds will be kept; account for operating activities (payments to counterparties under agreements, contracts, etc.); processing for accepting payments online. That is, the more accounts a company has, the more correctly the diversification of capital occurs. And the safer it will be for the operator.

— Which payment systems are the most convenient for operators to work with, and which ones are more difficult?

— Of course, it is more convenient to work with those who provide the most complete functionality, that is, SWIFT, SEPA, Target2 are global channels through which payments are made from one country to another. SEPA, for example, only works in the Eurozone, and if you have only SEPA, then it will not be possible to send a transfer to the USA or China. SWIFT works around the world globally. Target2 also works globally, but only with the euro currency. When choosing a payment system, you need to pay attention to whether it has a license at all, what kind of license it is, what channels will be available for transfers, which countries it will be able to work with, in what currencies, whether there are cards. As practice shows, there are not so many payment systems with full functionality with such a huge offer today, so you should choose carefully.

— How do you evaluate the payment system in online gambling in the CIS? What differences would you single out in comparison with the West?

— Currency control delays payments, plus gambling is only partially allowed in most CIS countries, so making payments in this region is problematic. This is one of the reasons why operators go abroad.

— In recent years, cases of hacker attacks on user and operator accounts have become frequent. How would you rate the level of security of the existing payment acceptance system in the CIS?

— Now the security system is one of the leading topics of discussion. Everyone wants to get complete security and confidence that their savings will remain safe and sound. In this case, we always recommend that you carefully approach the selection of a bank or payment system and immediately ask questions - how is the account protected, what methods of user identification are provided, is there two-factor authentication (Access control method in which the user must provide more than one proof of account ownership. — Ed. note).

— In your opinion, which countries currently have the most reliable systems for controlling the financial activities of operators?

— If we look at the gambling sector, I would single out Malta and Great Britain. These are the countries where a large number of operators are concentrated, they occupy leading positions in the ranking of the largest revenues to the budget from the gambling sector. Accordingly, the state has a powerful system of regulation and control.

— What measures do you consider the most effective in monitoring payments in online gambling?

- The most effective, in my opinion, is the online monitoring system, since there is a powerful system to which all gambling operators connect their software, and monitoring by the state takes place online. This is the transparency and publicity of the activities of both the operator and the state. But the online monitoring system is a powerful tool that requires a lot of resources to implement. Therefore, not many countries have it. In the classic approach, monitoring is carried out through reporting by gambling companies, audits, inspections by the regulator, etc.

— Have you ever been contacted by clients with the problem of blocking accounts? What should be done in such cases?

—Yes, of course, a very common request. Account blocking is usually accompanied by a request for additional documents. The bank does not understand the client's action, and it blocks the account until the reasons are clarified. Here it is important to quickly understand what the bank wants to see, and explain everything in order to quickly resolve the misunderstanding.

Фото Татьяна Клименко
Tatiana is an experienced speaker

— How are taxes collected from operators for gambling activities? 874

— Это происходит посредством подачи отчетности, где видны налоги, подлежащие оплате. Также государства ведут контроль налоговых отчислений. К примеру, законодательства ЕС требуют, чтобы игорные операторы открывали счета исключительно в странах Европейского Сообщества (EEA), которые обмениваются налоговой информацией в автоматическом режиме. Операторы должны иметь учетную запись в пределах юрисдикции ЕС/ЕЭЗ. За нарушение положений им грозят санкции.

Any person found guilty of violating financial obligations or paying fees and taxes is liable to a severe fine or imprisonment.

— As a regular online player -casino to be sure that the operator will honestly pay the entire amount of the winnings? Are there any supervisory authorities that control this process?

— The player needs to see where he deposits his money: what kind of company is it, does it have a license, who issued it. This information must be provided on the operator's website. There must also be detailed policies, such as Terms of use, Refund Policy. If the player does not see this legal information, which is basic, he should think before depositing funds. If he made sure that the company is completely legal, it has a license, but in the process he has complaints - they can be addressed to the regulator that issued the license.

— Does the presence of a license guarantee complete honesty and transparency on the part of the operator?

— Complete honesty and transparency are quite evaluative concepts. But, of course, the presence of a license creates a framework for the operator within which he must work, and ensures the safety of the player.

— What is the reserve fund for player payments? Who creates these funds and why are they important?

— Each license requires a certain amount of capital to be contributed, which will be used to pay out players and other creditors in case the operator fails to repay debts. Client funds must be kept separately from operator funds in a bank or payment system. In the EU, for example, there are requirements for a bank to be in the EEA. This protects the players from the fact that the operator in case of bankruptcy will not pay out the winnings. The legislation obliges to create reserve funds, without which the further work of the operator is not possible.

— What do you think about cryptocurrency transactions? Is the anonymity of payments in online gambling a plus or a minus?

— There are two sides of the coin here. One is that there is actually a lot of settlement going on in cryptocurrencies right now. The second is that virtual currency is quite difficult to trace and return. It is worth noting that payments in cryptocurrency in any case will grow. Countries that have not yet regulated cryptocurrencies should do so.

— In your opinion, what major changes await us in the system of accepting and monitoring payments in online gambling in the coming years?

— The trend is now towards transparency. They are being replaced by payment systems that are faster, cheaper and easier, as well as payments in cryptocurrency. The world is striving to reduce bureaucracy, formalism and transition to a fast, simple and safe mode of operation. Therefore, the fintech industry is now noticeably crowding out banks, and I assume that this movement will gain momentum and create safe regulation for customers.

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