Paper Without Banking: Why Licenses Alone Are Not Enough for Online Casinos

In the world of online gambling, the tide has turned. Thirteen years ago, a shell company and a single bank account were often enough to start a business in Curacao or other jurisdictions. Compliance back then was little more than a polite gesture between the operator and their lawyer. Today, however, the license itself is often the easiest part of the equation, while building a stable financial infrastructure has become the real hurdle for a company's survival.

Anyone running a casino or founding a fintech company today faces a wall of regulatory requirements. Experts are observing a massive professionalization of the sector. While it was once possible to operate almost anonymously under a master license in Curacao, new frameworks like the LOK require physical presence, local directors, and documented anti-money laundering (AML) audits. This development makes it clear that simply holding a certificate is no longer enough to participate in the market.

Numbers and facts

The complexity is particularly evident in the technical and financial details. Roman Baranovskyi, head of the iGaming practice at SBSB Fintech Lawyers, points out that digital asset firms accounted for nearly a quarter of the ten largest AML fines issued worldwide in 2025. This underscores the pressure faced by crypto and gambling companies. In markets like the UK, one in five consumers and businesses already use open banking, showing how important modern interfaces have become. At the same time, player adoption rates are critical: when documents like bank statements must be manually uploaded, conversion rates often drop to just 10-15 percent.

"A licence without a bank account behind it is just a document. A large part of what we do is the unglamorous part: ring-fencing entities, opening segregated accounts, setting up EMI and PI structures, building crypto on-ramps and off-ramps that a compliance officer will actually approve." - Roman Baranovskyi, Lead of iGaming and Investment Practice at SBSB Fintech Lawyers

Background

The shift is fueled by the reluctance of major tier-1 banks. Many institutions have withdrawn from high-risk industries, making Electronic Money Institutions (EMIs) and specialized Payment Service Providers (PSPs) the backbone of the industry. A modern operator can no longer afford to rely on just one bank. If that bank disappears or changes its risk strategy, the entire operation grinds to a halt. Redundancy in the banking structure is therefore not a luxury but a necessity. Furthermore, regulations like MiCA in the EU require crypto transactions to undergo the same strict identity checks as traditional bank transfers.

Corporate structuring today follows strict segregation rules. A company cannot manage customer deposits for a fintech product and run an online casino at the same time. Banks categorically reject such mixed models. Instead, companies are broken down into layers: one entity holds the license, another manages the technology, and a holding company protects the intellectual property. Everything must be governed by proper Service Level Agreements (SLAs) and documented intercompany pricing so that auditors can trace the flow of money without gaps.

Why it matters for German players

For German players, this development is of central importance, as the State Treaty on Gambling 2021 (GlüStV 2021) sets extremely high hurdles for payment transactions. Anyone playing with a provider on the GGL whitelist in Germany can be sure that payment flows are strictly monitored. The deposit limit of 1,000 euros per month is controlled via the central LUGAS system. Operators must ensure that payment providers technically support these limits while identifying the player beyond doubt.

The days of depositing anonymously with crypto wallets without KYC checks are over for legal German providers. While strict AML guidelines mean slightly more effort for players during verification, they also offer the protection that winnings can actually be paid out and money does not end up in blocked accounts. German players should ensure that their chosen provider holds a license from the Gemeinsame Glücksspielbehörde der Länder (GGL), as this is the only way to guarantee compliance with these safety standards.

What it means for GGL-licensed casinos

Casinos with a GGL license must design their IT systems to technically enforce the stake limit of 1 euro per spin and mandatory break times. Cooperation with payment service providers is particularly sensitive here, as any error in the connection to LUGAS can lead to the revocation of the permit. The professionalization of banking relationships is existential for these operators. They must prove that they keep player funds separate from operational assets, a requirement that Roman Baranovskyi describes as a standard for serious regulation. A German casino that does not have its banking relationships under control will not be able to withstand the strict requirements of the GGL in the long run.