Why do gaming companies fail in the process of opening bank accounts? What are the red alerts that may cause a refusal?

When a gaming company applies for a corporate bank account, in many cases, the process of opening their bank account is halted and the bank account application is declined. When this is happening, everyone in the process – the company, we as agents/intermedories for the client, and the financial institution that declined the application all lose both time and money. This is very frustrating when it happens.

 

In this guide, we will try to point out some of the main reasons why account opening applications may become bogged down. We will also show how to approach the process so that the account opening application will eventually be approved and that bank will establish the account.

 

Below we have listed for you some of the more common reasons for banks to decline account opening applications:

 

  • Shareholders and Ultimate Beneficial Owners (UBOs) are from restricted countries: In some cases where they come from a restricted or blacked list country, the financial institution can decline the application. Sometimes and especially if the legal structure is complex and has several holding companies on top, it is difficult to determine who the UBOs are and banks err on the side of caution.
  • Operators without a license or a valid link to licenses: Every licensed online casino must show the information about its license on the site’s footer – from which jurisdiction it comes, license number and provide a link to the regulator. If they fail to do so, the financial institution can decline the application.
  • Nominee shareholders and directors: Financial institutions raise red flags in any case where there are directors’ nominees. In some cases there is no problem with this if the nominees are professional or are required by law. However, be aware that any case of shareholder nominees is a potential throttle in the flow of approval.
  • No adequate AML policy implemented: As a part of the account opening process, the bank’s AML team checks every aspect of the client, including its AML policy and implementation. It is relatively easy for them to pick up on improper procedures in how the gaming company conducts its AML checks on new and existing players.
  • Operating outside of legal jurisdiction: For example, in any case where you hold a license from country A, but you onboard and accept players from country B, from which you don’t have a license.
  • Not having transparent business activity: The AML team cannot easily understand your business model and identify the ultimate source of funds.
  • Managers are not sharing sensitive information with the Bank/PSP/Financial Institute: Banks and financial institutions can ask for many documents, some of which are highly sensitive such as main clients or major supplier lists, financial reports, personal reports and declarations. If the company fails to get those documents from shareholders or fails to submit them, the bank will probably decline to open the account.

 

As you can see, there are numerous reasons why banks can refuse to open an account. We will be happy to elaborate more – please don’t hesitate to contact us.

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