"Vanuatu aims to be a shepherd for its licensees rather than applying a carrot and stick concept"

Back in July, the island nation of Vanuatu introduced a new licensing framework for the gambling industry, allowing applications to be submitted entirely online while updating its fees and tax structure. These amendments update Vanuatu's outdated licensing system dating back to 1993, one of the first such regimes on a global scale.

Under the new regime, the Vanuatu Department of Customs and Inland Revenue will regulate the gambling sector, with applications processed by the newly established Vanuatu Gaming Authority under a public-private partnership. The update seeks to position Vanuatu as a leading iGaming jurisdiction, a key point of its economic strategy.

As part of the promotion efforts of this new framework, Vanuatu participated in the SBC Summit Lisbon, which brought together more than 25,000 delegates from September 24 to 26. At the show, Yogonet spoke with Collins Gesa, Acting Director at the Vanuatu Department of Customs & Inland Revenue, and Macyn White, CEO of the VGA, about the key features behind this update and what it means for the nation.

What can you tell us about Vanuatu's participation at SBC? What opportunities do events such as this one provide for the promotion of the Vanuatu license?

Collins Gesa, Acting Director, Vanuatu Department of Customs & Inland Revenue: The SBC Summit is a truly global stage to showcase Vanuatu as a jurisdiction and also as a regulator, working alongside our trusted partner Vanuatu Gaming Authority Limited. 

It's a true testament to reflect the depth of our endeavors, allowing the industry to feel our presence and credibility. It's also an opportunity for exchange and exploring the ins and the outs of the gaming industry, on a global stage. This summit does not only serve a purpose for Vanuatu now but also for its bright future ahead.

I've been able to see with my own eyes that there is a major interest in us as a regulator; and an interest in Vanuatu as an iGaming jurisdiction. This is because a lot of work was done behind the scenes to ensure a competitive package for Vanuatu to deliver. Application and other fees have been reduced dramatically compared to our competitors.

Why was now the correct time for Vanuatu's major regulatory update, and what have the results been like thus far?

Collins Gesa: The strategic focus was revenue collection, in the ultimate interest of our citizens. You are correct in saying that Vanuatu was a world pioneer, going back to 1993, when we regulated the industry with legislation that went through Parliament.

But the lessons we learned from 1993 to 2024 have been full of challenges, partly because we had teamed up with some unfavorable partners in the past. Little did we know that they lacked the global industry network and knowledge to support us. However, we have now transitioned from an older model to where we are today.

I have absolute confidence in us engaging with Vanuatu Gaming Authority Limited as our partner, helping us stand within the industry and providing their in-house capacity. Working with them, in only a very short time, has already been a game changer.

What are the major improvements you expect from this relaunch?

Collins Gesa: It's all about the government's interest in raising revenue. That has positioned us to see the strategic potential in the industry, but only if we are able to engage the right partners right from the start. And Vanuatu Gaming Authority has that know-how; that capability and expertise within the industry at a global level.

In our engagement with VGA, the use of technology to ensure our checks and balances are reputable was key. These meet all the international standards in the industry. The company has provided us with an online software solution to this end, another thing we've learned from the past when we were dealing with manual processes.

As for me, I want to see our customer base increase and our legislation allow us to appropriately collect the fees and taxes. That all goes back to the citizens of my country as a sovereign nation. What the government wants is to make a positive use of those funds, ensuring that money is well spent on services in line with priorities.

Can you tell us a bit more about your role in this update, Macyn?

Macyn White, CEO of VGA Limited: To put it simply, we were engaged due to our knowledge of the industry. We come with ten-plus years as software providers, so we are approaching regulation from an industry perspective and with industry experience.

We were engaged because the legislation was simply outdated. We've modernized the legislation to be more in line with current trends. In terms of application fees, these are now €5,000; we have an annual license fee of €10,000; and a 1% GGR tax. We're much more in line with the modern standards of a regulator.

What can you tell us about the regulatory aspect of this new chapter in Vanuatu's history with gambling, Collins?

Collins Gesa: From the perspective of the regulator, I see three major points. On the policy front, the government was very clear, and we have their support through the Ministry of Finance. There was a major government commitment on that policy level.

Second to that, which is something CEO White alluded to, we have a lot to work on in the legislation front of the update. I fully agree with him that our legislation was dated, which is why we needed their expertise in the industry to ensure that Vanuatu would be able to shape a good gambling product for the jurisdiction. 

The third thing is that we strongly believe in Vanuatu Gaming Authority Limited as our partner. Capacity building in this industry is so very lacking. Whilst we have our institutional reform, where we have a new structure for gambling, anti-money laundering, and counter-terrorism financing, there remains a grey area where we lack some of the essential industry knowledge and expertise. They bring that.

Is the industry already taking note of these changes?

Macyn White: I think the success of our changes is already showing. At SBC, the first event since our launch, we saw more interest than what Vanuatu observed in the last 20 years of gambling. The interest is off the charts. We were busy the entire event, with back-to-back meetings, talking with numerous licensees, and engaging partnerships with them.

What we're hearing from stakeholders in the industry is that the acting Director of Customs and Inland being at the event is proof of the legitimacy of this endeavor. It is a fully government-backed regime. They have full belief in us and it's a two-way relationship.

How does the Vanuatu license address the major needs of the current market? What steps are being taken to strike a balance between compliance and leaving room for innovation?

Macyn White: Approaching this from an industry perspective is a major point. We understand that operators do need some freedom. We've seen that other regulatory bodies go too far and overreaching in terms of their compliance.

At the Vanuatu Gaming Authority, and with the Vanuatu Interactive Gaming License, we aim to allow companies that freedom. We aim to be a shepherd for our licensees rather than applying the carrot and stick concept. We will guide our licensees to be fully compliant, and if they step out of line, we will guide them back into the lines rather than punishing them.

We also understand that the gaming industry is driven by innovation, and we aim to assist in that progress. For that reason, we are opening our doors to both fiat and cryptocurrency licensees. We are not stuck in our ways but looking forward to the future.

Do you agree with this idea, Collins?

Collins Gesa: I like the concept Macyn used of acting as a "shepherd" because it describes the cooperation and bonds we are working on with other key stakeholders. For instance, the Company Registry, to register a company; the Financial Intelligence Unit, to carry out the checks and balances; Interpol; and also with the Foreign Investment Gateway, of which I'm also a board member, to name a few.

Our robustness and positive relationship with these other key government agencies is why we have the backing of the government. It is important to highlight that it is a state-sponsored initiative, where the government was looking at this industry for the interests of its citizens as a sovereign country.

Attending events like SBC sends the right message because it proves that commitment is real and that we are prepared to welcome any operator or new player in the industry to come to our shores and not only do business but enjoy our unique and diverse culture.