Gambling License Transfer and Acquisition in the EU: Change of Control Requirements, M&A Regulations, and Regulatory Approval Processes

Understanding Gambling License Transfers in the EU

The European gambling industry has experienced significant consolidation in recent years, with private equity firms, strategic acquirers, and investment groups actively pursuing gambling company acquisitions. However, the heavily regulated nature of gambling means that standard M&A processes must accommodate substantial regulatory requirements that can materially impact transaction timing, structure, and success.

As explained in our EU gambling laws guide, gambling regulation remains a member state competence, meaning each country maintains its own licensing framework. Consequently, acquiring a gambling company with licenses in multiple jurisdictions requires navigating distinct regulatory approval processes in each relevant market. According to the European Commission, gambling regulation falls outside the scope of EU single market harmonization, leaving member states with primary authority over licensing and oversight.

Why Gambling Licenses Cannot Be Directly Transferred

Gambling licenses are personal to the licensed entity and are granted based on the specific characteristics of the applicant, including:

• Corporate structure and governance: The organizational setup of the licensed company
• Ownership and beneficial owners: The identity and suitability of shareholders
• Key personnel: Directors, managers, and compliance officers who passed fit and proper assessments
• Financial resources: Capital adequacy and funding sources verified during application
• Technical systems: Platforms and games certified for the specific licensee

When any of these foundational elements change significantly, regulators have a legitimate interest in reassessing whether the license should continue. This is why change of control mechanisms exist: they allow regulators to verify that new owners meet the same standards as original applicants before permitting continued operations.

Change of Control: Regulatory Framework

Change of control provisions are central to gambling M&A transactions. These regulatory requirements mandate notification and/or approval when ownership or control of a licensed entity changes beyond specified thresholds.

Common Threshold Structures

Most EU gambling regulators define multiple threshold levels, each triggering different requirements:

Calculating Ownership and Control

Regulators typically look beyond simple share ownership to assess:

• Direct ownership: Shares held directly by the acquiring party
• Indirect ownership: Shares held through intermediate entities, requiring calculation up ownership chains
• Voting rights: Rights that may differ from economic ownership (dual-class shares, voting agreements)
• Beneficial ownership: Ultimate beneficial owners (UBOs) behind corporate structures
• Acting in concert: Parties coordinating actions may have their holdings aggregated
• Effective control: Ability to influence decisions regardless of formal ownership percentage

Complex ownership structures, particularly those involving trusts, funds, or multi-layered corporate holdings, require careful analysis to determine which individuals and entities require vetting. The EU Anti-Money Laundering Directive (AMLD) has reinforced beneficial ownership transparency requirements that apply to gambling licensees, and regulators expect full disclosure of ownership chains to ultimate beneficial owners.

The Regulatory Approval Process

Change of control approval processes share similarities with initial license applications, though typically focus on the new parties rather than operational elements already approved.

Phase 1: Pre-Transaction Assessment

Before announcing or structuring a transaction, acquirers should:

1. Identify all relevant licenses: Map licenses held by target company across all jurisdictions
2. Review license conditions: Examine each license for specific change of control provisions
3. Assess approval requirements: Determine whether pre-approval or post-completion notification applies
4. Evaluate timeline impact: Estimate regulatory approval timelines for transaction planning
5. Conduct internal due diligence: Identify any issues with acquiring parties that could complicate approval

This phase should inform transaction structuring, including whether to proceed with signing and closing simultaneously, include conditions precedent for regulatory approvals, or structure deals to minimize regulatory complexity.

Phase 2: Notification and Application

Formal change of control applications typically require:

Corporate Documentation

• Acquirer's corporate documents (certificates of incorporation, articles of association)
• Updated ownership structure charts showing post-transaction structure
• Transaction documents (redacted as necessary for confidentiality)
• Evidence of funding sources for the acquisition
• Beneficial ownership declarations for all entities in ownership chain

Personal Documentation for New Beneficial Owners

• Personal declaration forms
• Certified passport copies
• Criminal record certificates from relevant jurisdictions
• Curriculum vitae (typically 10+ years)
• Financial references and source of wealth documentation
• Declaration of other business interests and directorships

Key Personnel Changes

• Documentation for any new directors or key function holders
• Confirmation of continuing personnel meeting fit and proper requirements

Phase 3: Regulatory Review

Regulators conduct comprehensive reviews similar to initial licensing, typically including:

• Background investigations: Criminal, financial, and professional background checks on new beneficial owners and key personnel
• Source of funds analysis: Verification that acquisition funding comes from legitimate, identifiable sources
• Business plan review: Assessment of post-acquisition plans for the licensed business
• Compliance assessment: Review of acquirer's compliance track record and capabilities, particularly for parties with existing gambling operations
• Interview requests: Some regulators conduct in-person interviews with key individuals

Phase 4: Decision and Conditions

Following review, regulators issue decisions that may include:

• Unconditional approval: Transaction may complete without additional requirements
• Conditional approval: Approval subject to specific conditions (personnel changes, governance requirements, compliance undertakings)
• Additional information requests: Decision deferred pending further documentation or clarification
• Non-approval: Transaction not permitted in proposed form, often with reasons provided and opportunity to address concerns

Jurisdiction-Specific Requirements

Malta Gaming Authority (MGA)

The Malta Gaming Authority has well-established change of control procedures, making Malta a common jurisdiction for gambling M&A.

MGA Change of Control Thresholds

MGA Process Characteristics

• Timing: Pre-approval required before transaction completion for qualifying holdings
• Timeline: 2-4 months for straightforward applications; complex cases may take longer
• Fees: Administrative fees apply for change of control processing
• Key focus areas: Beneficial owner suitability, source of funds, compliance history

Germany - Gemeinsame Glücksspielbehörde der Länder (GGL)

Germany's GGL applies strict change of control requirements under the Interstate Treaty on Gambling.

GGL Requirements

• Pre-notification: Intended changes must be notified before taking effect
• Reliability assessment: New beneficial owners and responsible persons must demonstrate reliability (Zuverlässigkeit)
• Documentation: Criminal record certificates, financial background, professional qualifications
• Timeline: 4-8 months typical; complex transactions may take longer

Germany's approach emphasizes the personal reliability of individuals associated with licensed operators, meaning personnel changes accompanying ownership changes receive particular scrutiny.

Spain - Dirección General de Ordenación del Juego (DGOJ)

Spain's DGOJ requires notification and approval for changes in licensee ownership structure.

DGOJ Requirements

• Threshold: Changes in shareholding structure require notification; significant changes require pre-approval
• Documentation: Updated corporate documentation, new shareholder vetting, source of funds
• Timeline: 3-6 months typical
• License continuation: Licenses remain valid subject to regulatory approval of new ownership structure

Netherlands - Kansspelautoriteit (KSA)

The Netherlands' KSA maintains strict ownership transparency requirements.

KSA Requirements

• Suitability testing: All persons with ultimate or joint control must undergo suitability assessment
• Policy persons: Board members and key managers require individual approval
• Pre-approval: Required before transaction completion for controlling changes
• Timeline: 4-6 months typical; enhanced scrutiny for operators with compliance history concerns

Italy - Agenzia delle Dogane e dei Monopoli (ADM)

Italy's concession-based model means that changes in concession holder ownership require ADM approval under the terms of each concession.

ADM Considerations

• Concession terms: Each concession contains specific provisions regarding ownership changes
• Anti-mafia certification: Italian anti-mafia checks (Certificazione Antimafia) required for all parties
• Approval process: Formal ADM approval required with extensive documentation
• Timeline: Can be lengthy; 6-12 months not uncommon for complex transactions

United Kingdom (for comparison)

Although post-Brexit the UK is no longer an EU member state, many EU gambling operators hold UK Gambling Commission licenses, making UK change of control requirements relevant to many transactions.

• Threshold: 3% or more shareholding triggers notification; 10%+ requires personal management license application
• Pre-notification: Must notify before transaction completion
• Timeline: 2-4 months for straightforward applications

M&A Transaction Structuring Considerations

Deal Documentation

Gambling M&A transactions require careful deal documentation addressing regulatory requirements:

Conditions Precedent

• Regulatory approvals: Completion conditional on receiving required gambling regulatory approvals
• No adverse findings: Condition that no material adverse regulatory findings emerge during approval process
• License maintenance: Condition that licenses remain in good standing through closing

Regulatory Cooperation Covenants

• Seller cooperation in providing information to regulators
• Buyer commitment to pursue approvals diligently
• Joint approach to regulatory communications where appropriate
• Allocation of regulatory approval costs

Long-Stop Dates

Given uncertain regulatory timelines, transactions should include realistic long-stop dates accounting for:

• Expected approval timelines in all relevant jurisdictions
• Buffer time for information requests and supplementary submissions
• Potential for extension by mutual agreement
• Consequences if long-stop date passes without approvals

Risk Allocation

Parties should address allocation of regulatory risk:

• Approval risk: Who bears risk if approvals are not obtained?
• Delay risk: How are delays beyond expected timelines addressed?
• Condition risk: What if approval comes with onerous conditions?
• Break fees: Are reverse break fees appropriate if buyer cannot obtain approval?

Interim Period Management

During the period between signing and regulatory approval, parties must address:

• Target company operation: Covenants regarding ongoing business operations
• Regulatory compliance: Maintaining license compliance during transition
• Information access: Buyer access to information for regulatory submissions
• Key personnel retention: Ensuring critical compliance and operational staff remain

Due Diligence Considerations

Gambling company due diligence must address regulatory-specific areas in addition to standard commercial, financial, and legal review. See our Compliance Audits guide for additional context on regulatory review processes.

Regulatory Due Diligence

• License review: Verify all licenses, their terms, conditions, and expiry dates
• Compliance history: Review regulatory correspondence, inspections, warnings, and sanctions (see Fines and Sanctions guide)
• Change of control provisions: Understand specific requirements under each license
• Pending regulatory matters: Identify any ongoing investigations or unresolved issues
• License renewal status: Assess timing and requirements for license renewals

Compliance Due Diligence

• AML compliance: Review AML framework adequacy and compliance track record
• Responsible gambling: Assess responsible gambling measures and any compliance issues
• Data protection: Review GDPR compliance and data handling practices
• Advertising compliance: Evaluate advertising compliance across markets

Operational Due Diligence

• Technical platform: Assess platform certification and compliance status
• B2B relationships: Review B2B provider contracts and their own licensing status
• Payment processing: Evaluate payment service provider relationships and compliance
• Self-exclusion integration: Confirm self-exclusion system compliance

Common Challenges and Solutions

Challenge: Complex Ownership Structures

Issue: Private equity, fund, or multi-layered structures create complexity in identifying and vetting all beneficial owners.

Solution: Map complete ownership chains early. Engage with regulators proactively about complex structures. Consider whether restructuring can simplify ownership before transaction. Prepare comprehensive ownership charts with supporting documentation.

Challenge: Adverse Background Issues

Issue: Key individuals have historical issues that may complicate approval (prior regulatory sanctions, criminal records, controversial business activities).

Solution: Conduct thorough pre-transaction due diligence on all parties. Disclose potential issues proactively rather than waiting for regulator discovery. Consider whether alternative transaction structures can minimize involvement of problematic individuals. Engage early with regulators where appropriate.

Challenge: Multi-Jurisdiction Coordination

Issue: Transactions involving licenses in multiple EU countries require parallel approval processes with different requirements and timelines.

Solution: Develop comprehensive regulatory workplan covering all jurisdictions. Align documentation to address all requirements efficiently. Identify critical path jurisdiction(s) and focus resources accordingly. Consider phased approach if certain markets prove problematic.

Challenge: Timeline Uncertainty

Issue: Regulatory approval timelines are difficult to predict and can delay transaction completion.

Solution: Build realistic buffer time into transaction planning. Use appropriate conditions precedent and long-stop dates. Maintain active communication with regulators. Have contingency plans for delays.

Challenge: Seller Cooperation

Issue: Sellers may be reluctant to provide information needed for regulatory submissions before transaction certainty.

Solution: Address cooperation obligations clearly in deal documentation. Consider appropriate information sharing arrangements. Build trust through professional conduct of process. Align incentives around transaction completion.

Regulatory Trends and Future Developments

Several trends are shaping gambling M&A regulatory requirements:

Increased Scrutiny of Beneficial Ownership

Regulators are intensifying focus on ultimate beneficial ownership transparency, driven by anti-money laundering requirements and concerns about unsuitable persons hiding behind corporate structures. The implementation of successive EU Anti-Money Laundering Directives has reinforced these requirements.

Cross-Border Regulatory Cooperation

EU gambling regulators increasingly share information and coordinate on significant transactions, particularly those involving operators licensed in multiple jurisdictions. This can streamline processes but also means issues in one jurisdiction may affect approvals elsewhere.

Enhanced Source of Funds Requirements

Regulators are applying greater scrutiny to acquisition funding sources, particularly for transactions involving investors from outside traditional financial markets or jurisdictions with weaker AML frameworks.

ESG and Responsible Gambling Focus

Environmental, social, and governance (ESG) considerations are increasingly relevant to gambling M&A, with regulators and investors alike focusing on acquirers' commitment to responsible gambling and player protection. Buyers should be prepared to articulate their responsible gambling philosophy and commitments as part of regulatory approval processes.

Practical Recommendations

For Acquirers

1. Start early: Begin regulatory planning as early as possible in the transaction process
2. Engage advisors: Retain legal and regulatory advisors familiar with target jurisdictions
3. Internal due diligence: Conduct thorough internal review of all individuals who will require vetting
4. Documentation preparation: Prepare comprehensive documentation packages in advance
5. Budget appropriately: Plan for regulatory approval costs and potential delays

For Sellers

1. Prepare for diligence: Organize regulatory documentation for buyer review
2. Maintain compliance: Ensure regulatory compliance remains current through transaction
3. Facilitate access: Support buyer access to information needed for regulatory submissions
4. Manage expectations: Be realistic about regulatory timelines with buyers

For Legal Advisors

1. Map requirements: Develop comprehensive matrix of requirements across all relevant jurisdictions
2. Structure appropriately: Ensure deal documentation addresses regulatory requirements
3. Coordinate workstreams: Manage parallel regulatory approval processes efficiently
4. Maintain relationships: Cultivate constructive relationships with regulatory authorities

Conclusion

Gambling license transfer and acquisition transactions in the EU require careful navigation of regulatory requirements that go well beyond standard M&A processes. The personal nature of gambling licenses means that new owners must demonstrate the same suitability that would be required of fresh license applicants, and regulators maintain significant discretion over whether transactions may proceed.

Successful gambling M&A requires early planning, thorough preparation, realistic timelines, and professional engagement with regulatory authorities. Parties who approach regulatory approval as an integral part of the transaction rather than an afterthought are better positioned for successful completion and post-acquisition operations.

For operators considering expansion into new markets rather than acquisition, see our License Application Process guide. For information on license costs, see our License Cost Estimator tool.