What is sublicensing?
Gambling sublicensing is a process by which a gambling business operator grants another company (the sublicensee) the right to use its license for gambling. The main company remains the owner of the license and the controller of the activity, but the sub-licensee can use it under its own brand and for the purpose of carrying out its own gambling operations. A vivid example of sublicensing existed until recently in one of the most popular gambling jurisdictions - Curacao. Previously, there were 4 Master Licensees in Curaçao, it was a kind of monopoly, because no one except these 4 Master Licensees could issue sub-licenses. In practice, although the requirements for obtaining a sublicense in Curaçao were general, each master licensee could impose its own additional requirements, since the master licensee bears full responsibility for each company to which a sublicense was issued.
Who needs it?
First of all, for companies just starting out in the gambling industry, sublicensing can be an attractive option, as it allows them to quickly enter the market without having to obtain their own license. However, also, companies that already have a successful gambling business and want to expand their capabilities can use sublicensing to introduce their brand to new markets or to develop new products. Or, for example, some companies may have limited financial or human resources to conduct gambling operations. Sublicensing allows them to use the resources of other companies to expand their capabilities.
Therefore, sublicensing has a number of advantages, such as:
• quick start, because sublicensing allows you to quickly enter the market, reducing the time for obtaining your own license.
• the use of a sublicense can be economically more profitable compared to the costs of obtaining one's own license and maintaining the gambling infrastructure.
• risk reduction, as the master licensee remains responsible for compliance with regulatory requirements, but the risks associated with gambling operations are shared between him and the sub-licensee.
However, as always, there are two sides to every coin. Although, at first glance, sublicensing looks like an ideal option for starting a business, this type of licensing also entails certain limitations.
So, for example, the interests of the master licensee and the sublicensee may not always coincide, which can cause conflicts and negatively affect cooperation.
In addition, sublicensing can raise legal issues, especially in regions where gambling laws are complex and changing.
