How to improve your bank account, brokerage & payment gateways for Casinos & Bitcoin

Using a Xace digital bank account & our industry standard ID to manage your casino payments and compliance ecosystem, with industry low fees and settlement

Banking for Gambling
March 23, 2020
10 min read

As a casino accepting online payments and cryptocurrencies such as Bitcoin for deposits, you’ll face many challenges throughout the entire journey of dealing with those finances. Much will depend on your gaming licence and KYC/AML policies, while many high street providers in banking and payment processing will reject an application simply due to being in the online gaming industry.

We look to explore the primary issues you may face, while providing suitable solutions available alongside a gaming digital account with Xace where our industry standard compliance ID (Xace ID) can transform how your business works.

How to get a bank account for a casino?

Can I settle gambling payments in my bank account?

Will a bank account accept gambling payments made in Bitcoin?

How to get a payment gateway for a casino?

How to sell casino crypto to fiat? 

How to convert currencies from casino or bitcoin payments?

The risks to a bank, payment processor, broker, FX provider or licence issuer, and the reasons for not providing a service to a casino like yours, are the same, while the compliance requirements are the same too, which opens up additional value to Xace account holders - one that our Xace ID will solve for all Xace account holders. Read more about how a Xace will make all compliance possible with 1 unique ID here.

1. Your gaming licence

The fact Xace truly understood our gambling licence, company structure and business operations was very refreshing. Before Xace, our only experiences with attempting to open a bank account were of multiple compliance delays and general lack of knowledge of how an online casino runs – especially with the licensing set up.
Xace staff truly understand the gambling sector, the licencing process and what is permitted, meaning Xace onboarding was time-efficient.

Your gaming licence will determine a lot of what is possible with bank accounts, crypto brokerage and payment gateways. With some licences best suited to certain jurisdictions,currencies and crypto and gaming types, while others are simply easier and more cost effective to obtain, this will directly impact how any service provider will consider an application. 

Some gaming licences will have the most trouble securing a gaming bank account, payment gateway and Bitcoin brokerage services outside of specialist providers like Xace digital bank accounts. Some licences are the hardest to acquire and come with the most stringent of rules, but this in turn reduces the compliance risk for providers.

Different Types of Licence

Multiple countries regulate gaming around the world. Although a lot of licences are similar in approach (especially across Europe), each one can be unique.

Curacao Licence

Over 20 years ago, Curacao was one of the first to provide a licence for online gambling operators. The Curacao licence remains popular today. In recent years, Curacao has been credited as one one of the first to award licences to cryptocurrency based online casino and betting sites, something other regulators have been slower to adopt. This gives remote gaming operators the rare opportunity to licence both fiat and crypto sites under the Curacao licence.

Sweden Licences

There are multiple local licences appearing across Europe, some newer than others, some with a perceived higher risk than others. Sweden recently re-regulated online gambling (during early 2019), with an aim of having a more robust Swedish Gambling Authority.

Denmark Licence

Denmark also makes our list as an example of a medium risk licence. Denmark regulates both operators and the games themselves, across a range of different betting sites, such as casinos, lotteries and sports-books.

UK Gaming Licence

The UK Gambling Commission is viewed as one of the leading gambling regulators in the world, licencing both land-based and online casinos. The benchmark set by the UKGC on application and continuous monitoring of licence holders, means those with a UK licence fall into the lowest risk.

Malta Gaming Licence

Much like their UK counterparts, the Maltese licence sets very high standards. The Malta Gaming Authority regulates both land-based and online sites, with upfront and ongoing compliance a requirement to remain licenced.

2. Casino friendly bank accounts

Every casino or gaming platform will have difficulties when acquiring a new bank account for a casino, where the risk for the account provider is so high, many will simply forego the onboarding of a new client to simply avoid navigating the challenging compliance landscape.

We have thousands of monthly users, depositing across 3 cryptocurrencies and fiat. We first hit a roadblock with acquiring a bank account to move from crypto to fiat, we just couldn't get one. Our only option was to open an account in a less regulated country, which we had to do. However, our preference has always been to safely and securely hold our funds with a reputable provider regulated by the FCA, such as Xace.
Moving to Xace was a simple process – we now have the benefits of Xace being viewed as a safe partner by multiple other providers we need, such as our payment processor and crypto broker. For us, the account allowed us to grow our casino, without doubt.

Running a casino will come with the same requirements as many other European or International business, where SEPA payments, UK faster Payments and Swift will all be necessary in order to move your funds and pay 3rd parties and invoices with a dedicated named Bitcoin IBAN for EUR payments.

Although you will face barriers, the key to overcoming them quickly and successfully, is to ensure your business, and it’s stakeholders, are fully compliant. Even with a high risk account provider like Xace, any application for a bank account for an online casino will come with strict requirements like the below. 

  1. A valid, non-expired licence.
  2. Full set of policies, including AML, KYC, Underage Gambling, Problem Gambling and more.
  3. Full due diligence on all Directors and Shareholders holding above 25%, including passport checks and proof of address checks.
  4. List of accepted currencies, whether fiat and/or crypto.
  5. List of countries you operate in.

This is not to intentionally make things more complicated or difficult to get an account - if you have all the right documentation and are fully compliant the process will be fast, simple and cost effective - but to stay legal as an account provider and to stay within the banking licence rules from the likes of the FCA in the UK. Here are some of the reasons why a casino may not be able to secure a legal crypto bank account:

  1. Operating in countries that are high risk or where online gaming is illegal. This is one of the biggest problems for account opening - make sure you geoblock correctly.
  2. Weak or non-existent AML and KYC policies. If your policies do not exist, or are weak, this is an immediate red flag for account opening.
  3. Unclear complaints or self-banning process on the site. This is an important factor to protect vulnerable players.
  4. Unverifiable owners or Directors. Failing to provide, or providing poor quality documents will lead to rejection.

Join Xace and simplify the way you manage your money for both business and personal accounts.

3. Gambling payment processors

Without a payment processor, your casino is unlikely to function very well, in fact as you’re likely aware, it won’t function at all. Although cryptocurrencies have made wallet to wallet staking possible, it has yet to transform the way payments to online gaming sites are made and there is still a layer of technology required to handle and process payments to winners. The existing process of your payment gateway.

Obtaining a merchant account was absolutely essential for our casino. Once we had the processor in place, we needed to ensure we would always receive our customer deposits. We knew that having a bank account that would potentially block payments from our processor would be very damaging to our business.
We were also aware that our payment processor, along with others, either bank with Xace or have agreements in place. This is when we spoke to Xace for our needs, we really needed a gambling friendly account. This immediately gave us the security we wanted to ensure our customer deposits would arrive, on time, every time.

With providers like Payed enabling the activity of gambling, they too come with very strict compliance requirements for the businesses that are offering online gaming, which protect them as much as they protect you and your players. It should be noted at this point that these risks and compliance checks come at a cost, especially when compared to your average e-commerce processor and it’s processing fee.

Mainstream gateways are going to be ruled out, with the likes of Paypal and Sagepay avoiding the compliance risks of gambling so your application will need to be with specialist platforms. The requirements for successfully acquiring a processor will include:

  • Where are your customers based?
  • What is your average transaction value?
  • % split between Visa & Mastercard, Amex and Others

The reason each payment gateway has to make these complex compliance requirements is primarily due to the risks of money laundering and even terrorism financing. 

Anywhere funds can be moved or cleaned from one currency or from one cryptocurrency wallet through a gateway and out the other side into new currencies or new wallets is extremely high risk for the processor. It isn't just the casino that is legally responsible for the legitimacy of these funds, the payment gateways are too.

If you’re unable to be compliant and legal, then you will not secure a payment gateway and risk serious legal issues. why not take a look at your UK Gaming Statistics 2020 to see how the gaming industry continues to evolve.

4. Casino crypto brokerage

Cryptocurrencies such as Bitcoin are extremely powerful for casinos that are able to accept them, speeding up payment settlements and simplifying the majority of the processes between you and the players.

With the right gaming licence and games, Bitcoin can be the best payment option for your business but the requirements for your bank account and payment gateways do change as a result, as discussed above. 

Our gambling and crypto friendly Xace account has made banking our crypto casino proceeds seamless. We can send as many payments from our broker as we like, with no transaction limits. Additionally, Xace whitelisted our broker. Now we no longer worry about ‘how long will it take for my funds to settle’ or even ‘will my funds arrive at all’. We can plan our cash flow far more accurately knowing Xace will permit daily withdrawals and settlement times are very fast.

Why use a Bitcoin Broker to sell BTC?

Where things become more challenging for Bitcoin gaming businesses is moving from Bitcoin to your required currency, such as BTC to GBP and into your bank account. Paying out to players in BTC is relatively easy and quicker than paying out fiat currencies to their bank accounts via the payment gateway.

There are multiple ways that you can and will be selling Bitcoin from player deposits into currencies of your choice:

Selling BTC through your payment processor

Player stake/deposit BTC > Withdraw > Gateway pays GBP, EUR, USD to your bank account

This process seems the simplest to a lot of casinos and online games, but it has some big drawbacks for businesses.

Bitcoin Brokerage
When using a payment gateway
  • High fees - on top of transaction & processing fees from the original deposit.
  • Often slow -settlement from Bitcoin to GBP/EUR bank accounts.
  • Rejected - Many banks will reject payments from known crypto and gaming payment gateways.
Bitcoin Brokerage
Bitcoin Broker
When using a Bitcoin Broker
  • From 0.5% - Industry low fees with specialist gaming friendly Bitcoin Brokers.
  • Instant - From instant/under 1 hour or 1-2 days for non-Xace account holders
  • Acceptance - Xace account & ID holders will never have a payment rejected.
Bitcoin Brokerage
When using an exchange
  • High fees - Industry high fees of up to 4% or set fees for payment brackets.
  • Very slow - often anything from 1-7 days will be experienced with little feedback while processing is taking place.
  • Rejected - Not all gaming friendly, may require more compliance checks or rejections, while many banks will reject payments from exchanges.

Withdrawal Fees

Gateway withdrawal fees - the gateway has already taken fees from the initial payment, but additional fees are applied for the withdrawal process. These will on average add up to over 2% of funds to be withdrawn.

Exchange withdrawal fees - some exchanges use fixed fee brackets, which can be very expensive when selling a value at the lower end of the bracket, while some charge up to 5% for a fiat withdrawal to a bank account. 

Broker fees - sending the BTC from the gateway to a Bitcoin Broker will provide much lower fees. Depending on the amount being sold, fees to GBP and EUR can be as low as 0.75%.

Settlement speed

Gateway withdrawal speed - each gateway is different but same day settlement is highly unlikely to be possible between a gateway and your Xace account. 2 days is often common for withdrawing Bitcoin into a bank account.

Exchange withdrawal speed - often very slow, the biggest exchanges in the industry can take many days, so expect the sale of BTC to your bank account to be a process that can take anywhere from 1 day to 7 days.

Broker speed - depending on the broker and the bank accounts they use, settlement can vary from instant or under an hour to 1-2 days. Xace account holders can sell via approved suppliers with their Xace ID and receive the fastest settlement times in the industry.

Extra compliance checks

Gateway withdrawal compliance checks - If you use a gateway, you need to pass both compliance on the crypto element and fiat element. Additionally, a gateway may use a range of banks and providers in the background. Banks do not synchronise changes to risk policies with other banks - meaning the gateway is continuously receiving new requests and procedures to comply with. Regularly providing documents and bank statement copies is likely - payments for withdrawal may be held whilst this is requested.

Exchange withdrawal compliance checks - The exchange will ask for a bank statement at some point. This may not be during onboarding, but once you’ve hit a certain volume of trades. Some exchanges, or the banks they use, are not gambling friendly. When it comes to withdrawing your funds in fiat, you don't want to be stuck with them rejecting your fiat payment.

Broker compliance checks - The best solution for you if you accept Bitcoin, or if it is of interest in the future, is to build a relationship with a Bitcoin Broker and for same day approval and settlement to GBP or EUR in under an hour, you can use a Xace approved provider with your Xace ID.

How to use a Bitcoin Broker for your casino

It depends on the broker but the process is as simple as sending the BTC to an address and receiving the funds in your bank account. 

Some brokers provide platforms with user controlled accounts, enabling the sale of BTC anytime of the day from anywhere in the world, with industry low fees, particularly when compared to mainstream exchanges.

If the brokers uses a Xace ID, then compliance and account approval can be immediate, while settlement of funds in GBP or EUR can also be immediate making the BTC confirmation time the only delay of the entire process.

What are the challenges of using Bitcoin for a casino?

Bitcoin brokers again have their own compliance requirements for proof of funds, KYC and AML etc much like the licensors, banks and payment processors - again strengthening the value of your Xace ID. These requirements include:

  1. Source of coin and chain analysis - ensuring coins do not come from hacked or stolen accounts is, of course, exceptionally important. The broker would check the wallet the crypto is being sent from to begin. Going forward, in the vast majority of cases, this becomes an automatic behind the scenes process.
  2. Type of crypto accepted via the casino, with BTC and ETH being the preferred choice as they are well established digital currencies.

5. FX & currency exchange for Casinos

FX for our casino has always been a challenge. It felt like competitive rates were only available for other industries, not gaming or crypto related. As such, we found ourselves needing to accept poor rates as we simply had no other choice. This has changed with Xace. Having a regulated entity handle our FX via their trusted partners means we have access to more currencies, at a far better spread than we’ve ever had in the past.

Running an online casino or gaming site invariably means that you will be attracting customers from all over the world. As long as KYC stacks up and you're able to accept and bank funds, your next consideration will be foreign currencies. This will cover off payments to players in other countries you're licenced to be in and paying 3rd party invoices from all over the world for the likes of developers, marketing or legal.

For example customer A will gamble and collect in USD, Customer B will gamble and collect in EUR, and customer C may gamble in BTC and collect in EUR. Your main questions should be:

How do I accept different currencies?

How do I hold different currencies?

How do I convert currencies from one to another?

How do I make payments in different currencies?

What account is needed to allow casino FX?

What is FX?

Currency Accounts

As mentioned above, a multi currency account with the ability to hold, convert, pay and receive funds on various different currencies. A bit like your online bank account but for multiple currencies simply means holding a balance in your account eg

a USD account with 43,456.45

a EUR account with 13.567.56

a GBP account with 34,562.23 and this can stay here for an indefinite amount of time.

Receive Funds

The ability to receive a currency. For example, a customer would like to deposit 50,000 Australian Dollars. You need and AUD account to be able to receive this.

Convert Funds

You are required to pay out USD 30,000 in winnings, but only have USD 25,000. So what can you do? Convert some AUD to USD 5,000 and the approximate amount of AUD will be transferred to your USD account with regard to the  AUD/USD market rate at that time.

Paying in a different currency

You need to actually make a payment of USD 30,00 to a bank account. Therefore connections to international and local banking rails such as SWIFT and Domestic ACH is a must. Who are the providers?There are three main providers you need to know about: FX providers fall into 3 main categories:

1. Banks

2. FinTechs

3. FX brokers

What challenges are faced in opening a casino FX account?

1. Banks such as Barclays or HSBC.

Banks control the FX market, the wholesale (or interbank market) that is, trading between each other and serving their top corporate customers who need access to foreign currency eg Quantas puts in a large Airbus order or a large hedge fund who wants to speculate (bet on the movement of price). These large banks do not have the time to serve smaller clients, it is not worth their time, so they provide market access (liquidity) to smaller businesses who in turn provide FX services to their clients at a marked up rate.

These smaller players can be modern FinTechs or specialist FX brokers (described below and most likely your best route to casino FX services). But mainly, these banks proved access to their retail divisions who serve retail customers and small businesses. It is very convenient FX, but it is the most expensive FX out there, averaging at around 2%.

2. FX brokers such as MoneyCorp or FairFX.

These providers have a large market to play in, generally serving SMEs (small to large) and HNWs. They offer a bespoke, personal service and charge accordingly usually 1% or more. Trades are places over the phone or email.

These businesses are service lead and have large staffing costs. They have over recent years developed online trading platforms to compete with the modern FinTechs but are inherently risk averse due to the manual compliance requirements - ruling them out for casinos or cryptocurrency businesses in almost all cases.

3. FinTechs such as Revolut and TransferWise.

These businesses take the bank pricing and automate the work flow of the FX broker to reduce costs and the provide cheaper prices to the end user.

If you have paid attention to this article, it will not come as much of a surprise the obtaining an FX and accounts services is a difficult task for casinos and online gaming sites. To access the bank’s FX service, you will need to have a bank account at the bank. Banks, as discussed above, will often not touch gaming payments. Period. It is a not for them as the they make plenty of money in other industries and do not feel the compliance risk is worth the reward.

This has been a common theme in this article! Xace are here to change the industry across the entire compliance and payments eco-system for casinos.

Some FX brokers are able to provide a more bespoke service.

The bigger players will not be interested (again enough money made in the usual channels), however smaller niche FX brokers may be able to provide a service to casinos and they will charge accordingly for the risk of onboarding you.

Essentially, they know you have nowhere else to go and have to pay their fees, which can be as high as 3%. So where does this leave you and your business?

You simply need to know where to look and how to best apply for casino FX.

Xace work with fair and approved providers, where your Xace business account and Xace ID will enable FX services with near instant onboarding and industry leading FX fees, speed and compliance.

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