How to Start a Crypto Betting Platform and grow up in betting business

As blockchain technology becomes more popular and its application for online cryptocurrency exchange equally improves, traditional online betting platforms and activities have been having a facelift. Crypto betting platforms are increasingly considered by entrepreneurs as an entrance to tech-savvy gamblers with big spending potentials. Operating a crypto betting platform requires knowledge in regulatory compliance and technical know-how. With this said, if you want to realize the potential in this growing niche, it is time you learn about some key elements, and for this, we discuss some notable facts that might shape your road to success.

What is a Crypto Betting Platform?

A crypto betting platform is a website that accepts bets in cryptocurrencies, such as Bitcoin, Ethereum, or Ripple, among others, and not with fiat currencies like dollars or euros. It is possible through the blockchain technology that enables these websites to offer safe, transparent, and decentralized experiences to their users. With traditional sports or event betting, users can also bet their cryptocurrencies on different events, outcomes, or predictions. The variety of bets that users can place on a crypto betting platform includes, but is not limited to, moneyline bets, spread bets, total bets, futures bets, and cryptocurrency price predictions.

Most crypto gambling sites offer smart contracts, meaning automatically executing contracts where the conditions of the bet are encoded in lines of code. When a user places a bet, a smart contract is created listing the terms of that bet and the cryptocurrency bet taken in. When the event happens and an outcome is decided upon, the code of the smart contract then automatically assesses the outcome. If the user’s prediction turns out right, the smart contract releases the payout to his account.

Crypto Betting Market

The crypto betting market is one of the most dynamic and evolving sectors, putting together the thrill of betting with the promise of cryptocurrencies and other blockchain-based products and services. These online betting software platforms change the paradigm in which people participate in wagering activities. With the market continuing to mature, responsible practices, adhering to regulatory policies, and further innovations are going to be the keys to the future in this niche.

The Crypto Betting Market already sports a host of leading, diverse platforms that target different audiences and different niches. From traditional sports fans to esports enthusiasts, and from crypto traders up to political experts, these platforms fit into the spectrum of markets. This provides great variety, as many different interests within the crypto community can be served—from those that would hope to create an online casino of their own to those who seek out safe and innovative betting sites. Some of the most trusted and best crypto betting platforms in 2023 include but are not limited to Ignition, BitStarz, Bovada, and Mega Dice. However, there is still a great room for new crypto betting ventures that would excel in the quality of services and innovations.

With the growing competition in the online gambling business and the market for crypto betting platforms, operators are looking to user experience and innovative features as differentiators. User-friendly interfaces, options for live betting, and the inclusion of gamification elements further enhance user interaction and create immersive betting experiences. Also, additional ideas of DeFi-like farming and staking make some platforms even more innovative and attract users with extra ways of reward earning aside from just pure betting on outcomes.

Still, despite potentiality, there is also a number of problems in the market of crypto betting platforms. First of all, there is an issue of high importance lying in regulatory compliance: different jurisdictions have different levels of oversight on starting gambling business activities. Then, there is security—very important in this part—it concerns the protection of user funds and data from possible vulnerabilities that can cause a serious financial and reputational impact.

The other challenge that operators face is finding a balance between innovation and responsible gambling, ensuring the well-being of users along with that of the regulators. The lawyers at Regulated United Europe can support you through all the legal complexities of opening and operating a sports betting business or a crypto betting platform in such a way as to safeguard the continuous growth of your business.

Advantages of a Crypto Betting Platform

Running a crypto betting platform offers a great number of considerable advantages that are basically related to the intersection of software for a betting business and blockchain technology. They make crypto betting platforms a promising, new area of business with high growth potential in the future-facing Web3, i.e. the third generation of the internet, where users focus on decentralization.

The main advantages of operating a crypto betting platform include the following:

• Cryptocurrencies are borderless; thus, users from anywhere in the world can access them. This, in turn, allows crypto betting platforms to have a global scope without the many limitations imposed on fiat currencies.
• Many transactions of cryptocurrencies come with reduced fees compared to traditional payment methods. This provides room for cost savings both at the user and operator sides.
• Cryptocurrency transactions are faster, allowing users to deposit money and make bets in almost real-time, reducing friction and increasing overall user experience.
• Blockchain offers transparency and an unalterable record of all transactions, building trust among consumers and eliminating the possibility of fraud.
• Depending on how the platform is set up, users could, in theory, bet anonymously, offering another layer of privacy to their activities.
• These innovative features might include decentralized governance, token-based incentives, and other features of a crypto betting site to offer users the most modern experiences.
• Build gamification elements into the platform to keep users more engaged with the site through the use of leaderboards, challenges, and rewards that will encourage users to bet more often.
• Some platforms research decentralized models where users can be the bookmakers, creating odds and markets of their own, which empowers users and creates a layer of decentralization from the gambling-as-business platform, adding to the growing Web3 creator economy.
• Utility Tokens: A utility token can be created to reward users for participating in the platform, referring friends, and other user activities.

Approaches to Launch a Crypto Betting Platform or Online Gambling Business

If you wonder how to start an online gambling business or crypto betting platform, then it can be launched and operated through two major approaches: by developing your proprietary platform and buying a white label solution. Both of these methods have a number of positive and negative sides. The option you choose relies on your business goals, resources, technical expertise, and timeline.

You should know that our team at Regulated United Europe can assist you in starting a crypto betting platform, either way. We specialize in company incorporation, obtaining gambling and crypto licenses, and identifying the top white label crypto betting platform providers throughout Europe and beyond. We are in a position to offer practical and economical solutions to startups, small businesses, and mature companies.

How Are Crypto Betting Businesses Regulated?

Any crypto betting platform approaching a launch, or simply trying to figure out how to create a gambling website, needs to take the time to examine in detail the legal and regulatory requirements for operating a betting platform in selected jurisdictions to ensure that it will be in compliance with national legislation. It is needless to say that regulation can vary strikingly from one jurisdiction to another. It is a very complex mix, combining gambling regulations with financial laws and the particular legal status of cryptocurrencies.

Many countries prescribe licenses to be held by a betting platform-including both traditional and crypto-based-once it needs to operate legally. Licenses in such cases are usually issued through gambling regulating authorities. Depending on the jurisdiction, there may be a separate license for online gambling, sports betting, and other betting activities. Moreover, in the case of creating a gambling website, crypto betting platforms have to follow local regulations related to the use, exchange, and trading of cryptocurrencies and may require a separate crypto license.

Although many countries have been regulating gambling activities for decades, the regulatory frameworks for blockchain-based businesses have yet to surface or exist only in a few countries. The EU is at the forefront in attempts to correlate crypto regulations across member countries, seeking clarity and transparency for businesses involved, as well as protection for investors. The most important crypto regulatory framework in the EU today is entitled Markets in Crypto-Assets Regulation (MiCA), and covers everything from token classification used in crypto betting sites through to requirements around token issuers and service providers. Other states and separate jurisdictions, like Curaçao, have not enacted any crypto legislation as of yet and hence are more free for those who want to test an idea of their business. Many countries apply national AML/CFT laws, in particular to those working with digital assets. Crypto betting operators are normally required to collaborate with Financial Intelligence Units (FIUs), whose task it is to analyze suspicious transaction reports, including information on money laundering, and to act accordingly. Many jurisdictions adhere to the recommendations given by the FATF, or the Financial Action Task Force-an inter-governmental body that develops standards to help countries create and update their laws in fighting money laundering and terrorism financing.

Another very standard domain that many countries regulate is responsible gambling. Responsible gambling laws seek to ensure that people have fun betting in a safe and controlled manner that minimizes the potential harm caused by excessive gambling. These regulations span various jurisdictions, done in ways to protect players, discourage under-aged gambling, and offer support to those who might have issues because of gambling. Those who are concerned with the question of how to create a gambling site should be aware that the main focuses of such legislation include legal age verification, self-exclusion possibility, and responsible advertising.

Crypto betting platforms have to comply with data protection and privacy legislation, which identifies the way in which user data and sensitive information must be handled securely. It means all businesses operating within the EU are subject to the General Data Protection Regulation, which at least provides a basis on which consistency in the application of data protection law across the member states can be created for purposes of implementing appropriate security measures in relation to data collection and processing. Other regions and countries have their own but often with similar intent data protection laws. For instance, the adoption of the Data Protection Act 2018 in Great Britain became its version of the data protection law after Brexit, which was based on the provisions of GDPR. In essence, it provides a code for data protection, individual rights, and enforcement.

The Best Jurisdictions for a Crypto Betting Platform

Curaçao is widely recognized as a center of online gaming activities. It has a somewhat simplified procedure for the acquisition of a license to provide gambling services. Generally speaking, there is Curaçao eGaming Licensing Authority – one providing licensure under many forms of gambling activities using various cryptocurrencies. The jurisdiction is becoming appealing with its really straightforward regulative base, nice-looking tax policy, and well-established reputation in the online gambling industry. Since Curaçao provides a relatively low barrier to entry, it’s especially popular among startups and small businesses.

Malta has positioned itself as a cryptocurrency and blockchain-friendly jurisdiction. The Malta Gaming Authority or MGA regulates all activities relating to gaming and betting, including those making use of cryptocurrencies. Malta’s regulatory environment, plus its proactive approach to blockchain and cryptocurrency, makes it an attractive option for crypto betting platforms. However, Malta is mostly available to mature gambling businesses and those who have experience in how to start an online gambling business, as they should be capable of implementing robust internal processes, raising considerable capital as well as paying steep application and supervision fees, due to stringent license application and ongoing compliance requirements.

Costa Rica is another country that is favored by online operators, as well as those who wish to establish an online gambling business of their own. In fact, even though it does not regulate cryptocurrencies, it has been utilized by some crypto betting platforms due to the low licensing requirements, in combination with its very advantageous tax regime. Besides that, license fees for opening a gambling business in Costa Rica are often cheaper than in other jurisdictions. The country does not impose any taxation on income from gambling derived outside its jurisdiction.

Crypto Betting Business: Legal Requirements

Opening a crypto betting venture in your country will likely require you to establish a local company with at least the statutory share capital. While company registration itself is usually straightforward and speedy in jurisdictions offering the most favorable gambling legislation, drafting of all required documents may take some time and might be well beyond your professional expertise. That is where our team of seasoned corporate lawyers can spring into action for your assistance.

Since in many countries crypto-betting platforms are a regulated business, just like gambling legislation, your newly established company will most likely need to apply for a gambling license which can be issued either only for a crypto betting platform or for all the gambling activities. Some jurisdictions may also require you to obtain a crypto license under relevant crypto regulations. We specialize in obtaining both types of licenses-gambling and crypto-and can guide you through the processes of finding and implementing the best solution.

How to Apply for a Crypto Betting License

The crypto betting license is an important step in establishing a company willing to operate a compliant and legitimate crypto betting platform. Whether renowned jurisdictions with established regulatory frameworks or the newer options regulating, or at least permitting, the newest technologies in town, knowing the crypto betting license application process is basic for ensuring compliance and credibility of a platform.

The following key steps should, therefore, usually be taken for the application of a crypto betting or gambling license:

• Fit and Proper tests to be taken by shareholders and directors;
• The preparation of the required documents;
• The transfer of required license application fees;
• The submission of an application form along with the documents to the regulatory authority of the chosen jurisdiction;
• Testing the gaming software, RNGs, and other technical components;
• Attending in-person meetings with the regulatory authority to discuss the business model and scope.

If you want to establish a gambling business, such as a crypto betting platform, our team here at Regulated United Europe will be more than happy to guide you through the process of incorporating a company and applying for necessary gambling licenses. With full-time legal advisors, tax experts, and financial accountants by your side, the process of launching a crypto betting platform will be smooth, seamless, and absolutely transparent. Contact us today for an at-your-convenience consultation and set the stage on fire for perpetual success.