As a peer-to-peer, skill-based sports betting platform where anyone can create and accept bets with anyone else in the world without the need for a centralized bookmaker, a legal argument could be made that ZenSports doesn’t need any foreign entities or gaming/sports betting licenses at all.
However, we’ve made the decision to comply with traditional sports betting laws and licensing requirements in all jurisdictions where we operate. There are two reasons for this:
1. It eliminates all questions about whether we’re legally allowed to operate in a specific jurisdiction.
2. When there is a lack of liquidity/bets created within ZenSports for certain leagues, sports, and games in our platform, ZenSports will “fill in the gap” for these bets by adding bets under the ZenSports brand, thus effectively making us a traditional bookmaker in limited situations. We don’t believe this is a long-term strategy, but it’s critical in the early days of a marketplace (where a chicken and egg problem is prevalent) to provide sufficient supply and liquidity to customers.
To be clear, ZenSports is still a peer-to-peer, skill-based sports betting system, but again, there are instances where we need to step in during these early days to provide liquidity.
All of this is why we’re excited to announce today that we’ve secured both our Malta Limited Liability Company and Curacao Gaming License.
This is an important first step on the regulatory side of things in growing our international business, which continues to be our main strategy in scaling ZenSports. By having a Malta entity and Curacao gaming license, we now are able to do the following:
1. Begin accepting Credit Card and ACH payments — due to the heavy restrictions on sports betting within the United States, we needed a foreign entity and gaming license in order to be approved by a merchant payment processor to begin accepting credit card and ACH payments. With our Malta entity and Curaco gaming license, we have now been approved by PaySafe, one of the largest international payment providers within the gaming industry, to offer credit card/ACH payments. This feature will be coming later this month and will give our customers additional flexibility in funding their ZenSports account beyond cryptocurrencies.
2. Grow our presence within the European Union — Malta is a member country of the European Union, and our Malta entity will help us in obtaining additional licenses within the EU. Specifically, we’ll be obtaining an Isle of Man license in 2019, which has a reciprocation agreement with the U.K and will allow us to operate in the U.K. and most other European countries. With the U.K. and European Union being a big sports betting market, this is a top priority.
3. Operate in several countries that accept a Curacao gaming license but don’t accept pure skill-based gaming products — while we’re already able to operate in several countries that view ZenSports as skill-based gaming, not all countries take this same view of us. However, many of the countries that don’t view us as skill-based gaming do accept a Curacao gaming license. We can now operate in these countries.
4. Gain credibility and a fast track to regulatory approval in countries outside the EU — We plan on obtaining licenses across Africa, Australia, and Asia later in 2019. With an EU business entity and Curacao gaming license, we will have instant credibility with other countries outside the EU, and should be able to fast-track our licensing applications in those jurisdictions.
The entire process to get both our Malta entity and Curacao gaming license took approximately 5 months to achieve. In addition to growing our customer base and revenue, checking off these regulatory boxes and building moats around what we’re doing is important in giving us the infrastructure to scale into the largest peer-to-peer sports betting platform in the world.
We’re excited by what we’ve achieved to date here at ZenSports, and this is just the first of many regulatory achievements that we expect to have in the coming months.