Alderney is one of three islands in the Bailiwick of Guernsey, which includes the islands of Sark and Guernsey. The Bailiwick is a British Crown dependency, although it is independent of the United Kingdom and the European Union. The States of Alderney operate the Government of Alderney. The states were formed in 1948 to manage financial and administrative activities in Alderney. Alderney is not a member of the European Union or the European Economic Area. Alderney does not have any land-based bookmakers. There was one in the area, but it ceased operations in January 2014.
Alderney’s original plan was to manage telephone betting activities. But in 2001, Alderney started focusing on online gambling, or eGambling as the AGCC refers to it. The UK gave Alderney permission to manage eGambling activities after section 331(4) of the Gambling Act 2005 was enacted in 2007. Alderney is one of the first non-EEA jurisdictions to receive permission to eGambling activities. The effort confirmed that Alderney has regulatory standards for online gambling that are suitable enough to where operators in the area can promote and provide their gambling activities to the UK market without needing to possess a Gambling Commission operating licence.
But the Gambling (Licensing and Advertising) Act 2014 eliminated the white list that included Alderney. The legislation for gambling activities in Alderney was renovated and revised by the government in 2009 to prevent gambling activities from being impacted by such events like the passing of the 2014 Act.
The concepts listed in this guide are defined as such:
Gambling: Gambling entails any form of betting, wagering, or other activities involving the transfer of money. Lotteries and gaming events are included here. Lawful Gambling: Lawful gambling is a form of gambling legal under section 6 in the Gambling Law (Section 20, Gambling Law).
Online Gambling/eGambling: Online gambling or eGambling is a gambling activity held online (section 30(1), eGambling Ordinance 2009). The gambling activity occurs with a licensee or a category 2 associate certificate holder.
Gambling is regulated in Alderney through the Gambling (Alderney) Law 1999, also known as the Gambling Law. The law facilitated the creation of the Alderney Gambling Control Commission (section 1). The law also states that all forms of gambling are illegal except for those provided in other legislation (section 5).
Multiple ordinances within Alderney facilitate the legality of online gambling. Among the rules that manage online gambling include the Gambling (Interactive Gaming) (Alderney) Ordinance 2001. The law allows parties outside Alderney to apply for licences for operation with the AGCC.
The Alderney eGambling Ordinance 2006 introduced laws surrounding online gambling in Alderney. The law was replaced by the Alderney eGambling Ordinance 2009.
Some of the other essential parts of online gambling law in Alderney include:
eGambling Ordinance 2015, an amendment to Alderney’s eGambling Ordinance;
eGambling Regulations 2015, an amendment to existing eGambling laws in Alderney;
Alderney eGambling (Operations in Guernsey) Ordinance 2006 and an included Amendment from 2010;
Alderney eGambling Regulations 2009.
The AGCC will regulate all legal online gambling activities in Alderney. The AGCC will ensure all online gambling functions are legitimate and safe.
Online gambling or eGambling is legal based on Section 1 of the eGambling Ordinance 2009 if:
The person engaging in online gambling is of the legal age. A person must be at least 18 years of age;
The work is promoted by or alongside someone who holds a category 1 eGambling license;
The gambling works through a party that holds a category 2 eGambling license or associate certificate.
The AGCC has positive links with various regulators and continues to establish agreements with many licensing entities worldwide, including throughout Europe. Alderney is aiming to host and regulate gambling servers for various B2B entities that can work with B2C licensees in their jurisdictions. These B2B operators will also have a choice to obtain B2C licences for their use.
Benefits of license
There are many benefits of running a gambling activity in Alderney:
Simple transfer of players to Alderney and support for multiple licensing;
Support for a Category 1 or B2C licence for operators that use their platforms or another entity’s platform while holding a contractual connection with customers;
Support for a Category 2 or B2B licence for operators that manage platforms and whatever games run on those systems;
No gambling, corporation, value added, capital gains, or capital acquisition taxes;
Lower income tax rates than what is in comparable areas and no hidden duties;
Thorough data centres and networks to keep online operations active.
Alderney is one of the world’s top locations for B2B services. It transmits more online gambling traffic than any other place in the world.
Steps of the licensing process
First part of the application:
An applicant can start the process of obtaining a licence in Alderney through these steps: Fill out and submit a corporate application form and all supporting documents for the work; Provide the applications for whatever individual certificates one will require; Pay a deposit of GBP 10,000 to initiate the reviewal process; Establish a company registered in Alderney. The registration must be for a category 1 or 2 eGambling licence.
The applicant will then meet with the AGCC to illustrate one’s business plan, how it will operate, and whatever corporate entities will work here. The applicant must also provide a listing of possible associates. The AGCC may also determine that certain people might need to provide separate applications to receive individual certificates. The applicant will receive one’s licence after the application is approved and the party pays the fee for said licence.
Second part of the application:
The next part of the application process entails the AGCC reviewing and approving the applicant’s ICS, gambling equipment, and capitalisation. The AGCC also reviews how a licensee can meet all regulations. The AGCC will check the applicant’s ICS to see if it can manage all processes as necessary.
The ICS is a series of administrative and accounting efforts facilitating how the licensee can handle online gambling activities. It includes reviewing an applicant’s accounting work, its corporate structure, how it manages customer data and funds, and whatever computer controls it may use.
Term of registering
The licenses and certificates issued by the Alderney Gambling Control Commission do not expire.
Types of licenses
Alderney offers various licences for online gambling, but the one someone will receive will depend based on the activities involved. Licences in Alderney are divided between B2C and B2B efforts. Alderney does not have limits on how many licences or certificates it will issue. There are 37 registered licensees in Alderney as of 18 June 2020. These include seven who have category 1 licences, twelve with category 2 licences, and eighteen who have both of these two licences. Alderney has also issued twelve category 2 associate certificates, two category 1 and category 2 associate certificates, and 21 core services associate certificates.
People looking to get a license for eGambling in Alderney can obtain one of these two licenses:
Category 1 Licencefor B2C Work: The Category 1 licence allows the licensee to prepare gambling activities. The work includes managing relationships with customers, verifying players, and ensuring all player funds are safely secured.
Category 2 Licence for B2B Efforts: A Category 2 licence allows the operator to manage gambling transactions in a hosting centre in Alderney or Guernsey. Applicants can also receive a temporary eGambling licence before getting Category 1 or 2 certification.
Some applications can receive both Category 1 and 2 licences. A category 1 operator can work with many category 2 licensees or associate certificate holders who can host games on a server, for example. Players will go to the category 2 licenses or certificate holder depending on where one works. A category 1 licensee can also have a category 2 associate certificate to manage gambling transactions with customers. A category 2 associate certificate can also become a category 2 licence without losing any value in the process.
Someone who holds a licence in one category can apply to have a licence in the other category and continue to operate while waiting on the application. Investigations on an operator will have been conducted before the new application, meaning the timeframe for confirming the application will be minimal.
Only companies registered in Alderney can obtain either of these two licences. But the company that is applying doesn’t need to be formed before it can apply to the AGCC. The applicant can apply beforehand if it commits to establishing a company registered in Alderney before receiving its official licence.
An operator can obtain a temporary eGambling licence in Alderney. A temporary licence allows the licensee that has already been licensed in another jurisdiction to operate gambling activities for a limited time. The temporary licence allows the operator to manage gambling activities for up to 29 continuous days or a total of 59 days within six months.
The operator must apply for a category 1 or 2 licence after that temporary period ends. The AGCC will require the operator to apply within 42 days after that initial period is over. Temporary licences are also available to operators who use servers in Alderney for disaster recovery intentions.
Certificates available in Alderney:
Category 2 Associate Certificate For B2B Efforts: The Category 2 certificate for B2B events works when the operator is an equivalent of a category 2 eGambling licensee.
Core Services Provider Associate Certificate: A third-party group can obtain this certificate. The third-party entity allows an eGambling licensee or category 2 associate certificate holder to utilize gambling software and accept deposits from players.
Hosting Certificate: A hosting certificate allows a party to host gambling equipment, including servers necessary for keeping an eGambling site running. The certificate must meet all technical quality rules established by the AGCC.
Key Individual Certificate: A key individual is affiliated with a licensee or certificate holder or has a managerial position for that said party. The key individual can also administer managerial efforts for that licensee, or that person can express substantial influence over how a licensee can operate.
AGCC-issued licences and certificates have no corporate taxes, VAT charges, or gambling duties.
The income tax rate in Alderney is 20%. An operator may pay up to GBP 260,000 per year on income from Guernsey and GBP 130,000 per year on income outside of Guernsey.
The applicant will become a resident of Guernsey after ninety days. Guernsey will also become the applicant’s primary residency after 182 days.
Social security contributions are subject to levies of 6.6% of the employee’s gross salary. The annual earnings on contributions are limited to GBP 149,760.
The European Union endorses the current corporate tax rules in Alderney and Guernsey. A company that has non-resident shareholders will not be subject to corporate taxes, providing a 0% tax rate. But for this to work, the licensee must show that it is a resident of the Bailiwick of Guernsey and manages its operations from the area. The licensee must also have its permanent location that handles most of its group profits in the Bailiwick of Guernsey.
We, at Private Financial Services have experience in setting up gambling structures all around the world. Our portfolio of licensing includes the following countries: UK, Guernsey, Alderney, Estonia, Malta, Lithuania, Sweden, Curacao, Isle of Man and even Russia.
We will take care of all matters: analysis of your business model and country selection, formation of the legal entity, assistance with third party providers and banks, preparation of all internal policies and procedures, assistance with business plan and program of operations, compliance, assistance with application, and documents preparation to apply for gambling licenses, communication with regulators.