The iGaming supply chain
Very few operators build everything themselves. A typical online casino runs on a platform licensed from a specialist provider, offers games from dozens of studios through an aggregator, buys fraud and identity verification tools, hosts its systems with a data centre or cloud provider, and uses a customer relationship management system for player communications. A sportsbook adds odds feeds, live data and trading services.
Each of these relationships produces invoices, and together they are usually the largest category of outgoing payments after payments to players and processors. For many operators, supplier costs absorb a significant share of net gaming revenue, much of it paid in EUR or USD regardless of where the operator's players are.
From a payments and compliance perspective, supplier payments are generally lower risk than affiliate payouts. The counterparties are fewer, better known and often licensed. They still need documentation, and the commercial terms can be complex enough to cause confusion if they are not explained.
Main supplier categories and how they bill
The billing model varies by supplier type. Understanding the model helps finance teams forecast and helps providers judge whether a payment looks right.
| Supplier type | Typical billing basis | Common currency |
|---|---|---|
| Platform provider | Share of net gaming revenue, often with a monthly minimum and set-up fees | EUR or USD |
| Game studio or aggregator | Share of gross gaming revenue on its games, invoiced monthly | EUR |
| Sports data and odds feeds | Fixed monthly fee or tiered by events and markets | EUR, GBP or USD |
| Managed trading services | Share of sportsbook margin or fixed fee | EUR or GBP |
| Hosting and infrastructure | Fixed monthly fee plus usage | Varies by location |
| KYC, fraud and geolocation tools | Per-check fees or monthly subscription | EUR, GBP or USD |
| CRM and marketing technology | Monthly subscription, sometimes tiered by player count | EUR or USD |
This table is illustrative. Commercial terms vary widely, and many suppliers negotiate bespoke arrangements with larger operators.
Supplier licensing in general terms
Many gaming regulators license suppliers as well as operators, particularly suppliers whose products affect the outcome of games or the handling of player accounts. The Malta Gaming Authority issues B2B licences for critical gaming supplies. The UK Gambling Commission requires gambling software licences for businesses that make or supply gambling software used in Great Britain. In Ontario, gaming-related suppliers register with the AGCO. Other regulators have their own approaches, and some certify games through approved testing laboratories.
The consequence for operators is that the supplier's licensing status often depends on the operator's markets. A studio may be licensed in Malta and Great Britain and registered in Ontario, which allows it to supply operators in all three. An operator should check that each supplier holds the approvals needed for every market where its products are offered.
Not every supplier needs a gaming licence. Hosting providers, CRM vendors and general technology companies usually fall outside gaming supplier licensing, although some regulators impose requirements on where systems are hosted. Those suppliers are assessed like any other commercial counterparty.
What payment providers check on supplier payments
A provider handling an operator's supplier payments will typically look at the following.
- Who the supplier is. The legal entity, its jurisdiction and its ownership. Well-known licensed suppliers need little explanation. Smaller or newer suppliers need more.
- Whether there is a contract. A signed supply agreement, with commercial terms that explain how the invoice amounts are calculated.
- Whether the invoice matches the payment. The beneficiary name, amount, currency and bank details should match the invoice and the supplier's known details.
- Whether the pattern makes sense. Revenue share invoices should move with the operator's revenue. A large jump in a platform invoice while revenue is flat would prompt a question.
- Licensing status. For gaming-related suppliers, whether they are licensed or registered in the markets where the operator uses their products.
Providers also look for payments that are labelled as supplier fees but go somewhere unexpected, such as a personal account, a company in an unconnected jurisdiction, or a supplier whose invoice address differs from its registered office without explanation.
Aggregators and payments through intermediaries
Many operators source games through an aggregator, which contracts with dozens or hundreds of studios and provides a single integration. The operator pays the aggregator, and the aggregator pays the studios. This simplifies the operator's supplier list, but it also means the operator's payments go to a single intermediary rather than to each studio.
Providers are comfortable with aggregator arrangements when they are documented. The operator should have a contract with the aggregator, monthly statements that break down game revenue by studio, and evidence that the aggregator is licensed where required. The operator should also check that the studios offered through the aggregator are approved for the operator's markets, since a studio's lack of a licence can become the operator's regulatory problem.
The same principle applies to other intermediaries. If an operator pays a reseller for a data feed, the provider will want to know why it does not pay the data owner directly, and will look for a contract that shows the reseller's role.
Intercompany flows inside gaming groups
In many groups, the most significant payments are not to third-party suppliers but between group companies. A licensed operating entity might pay an IP company for brand and platform rights, a services company for staff and marketing, and a holding company for management services. Dividends and loans may also move between entities.
These flows are legitimate when they reflect real services and are properly documented. Providers will ask for the intercompany agreements, invoices and, where relevant, a summary of how prices are set. They will compare the amounts with the services described. A Maltese operator paying a service company a fee broadly in line with the cost of the staff it employs, plus a margin, is easy to understand. A fee that absorbs most of the operator's revenue with little explanation is harder.
Tax and transfer pricing are matters for the group's advisers, and regulators may have views on how much value leaves the licensed entity. A payments provider is asking a narrower question: whether there is a commercial reason for this payment and whether documents support it. Groups that maintain a clear intercompany matrix, listing each agreement, the paying and receiving entity, the basis of charge and the payment frequency, make that question easy to answer.
Currency management for supplier costs
Supplier costs are usually priced in EUR, with some in USD and GBP. Operators whose revenue arrives in other currencies, such as CAD, NOK or local Latin American currencies settled as USD, carry a currency mismatch between income and costs.
A simple discipline helps. Finance teams can map each supplier's invoicing currency and typical monthly amount, then hold or convert enough of each currency to cover the next cycle. As a worked illustration: if platform and game costs average a stated amount in EUR each month and are due on the twentieth, an operator receiving CAD and USD settlements could convert sufficient balances to EUR during the first two weeks of the month, leaving a margin for revenue share invoices that come in higher than forecast.
Spot conversion on a regular schedule keeps costs predictable without requiring the operator to take a view on exchange rates. Some groups prefer to convert as settlements arrive. Others convert once a month. Either can work, provided the approach is consistent and the treasury team understands its upcoming obligations.
Onboarding suppliers properly
Operators should run a basic onboarding process for every new supplier. That means collecting corporate documents, confirming ownership, screening the supplier and its principals, checking licensing status where relevant, verifying bank details through a known contact, and keeping a signed contract on file before paying the first invoice.
For critical suppliers, operators may also need to notify or seek approval from their regulator before using the supplier, depending on the regime. Records of those notifications should be kept with the supplier file.
Supplier bank detail changes deserve the same care as affiliate changes. Invoice fraud, in which a criminal sends a fake invoice or a change of bank details that appears to come from a real supplier, is common across many industries. A rule that every change must be confirmed by phone with a known contact before a payment is released is simple and effective.
A practical checklist
Before submitting supplier payments to a provider, finance teams can run through a short checklist.
- Confirm the supplier is on the approved supplier list with a current contract.
- Check that the invoice shows the correct legal entity, amount, currency and bank details.
- Match the amount to the contract terms and to the revenue or usage data behind it.
- Make sure any change in bank details has been verified independently.
- For gaming-related suppliers, confirm their licences and registrations are current for the markets where their products are used.
- Send the payment from the group entity that is party to the contract.
Checks like these, run internally, stop most problems before they reach a payment provider. Our article on processor settlement reconciliation explains how incoming funds are matched before they are used to pay suppliers.
General information, not legal advice
This article is general information about supplier and intercompany payments in licensed iGaming. It is not legal, tax or transfer pricing advice, and operators should take advice on their own arrangements.
CCYFX works with business clients on corporate payments, subject to onboarding and review. It does not handle player deposits or withdrawals. See our Collections and payouts page for an outline of how outgoing payments are handled.
