Offshore vs Domestic Online Casino Processing: Which Is Right for Your Operation?

One of the biggest decisions online casino operators face is whether to pursue domestic US processing (in legal states) or work with offshore processors. Each path has distinct advantages and trade-offs. This guide helps you make an informed choice for your operation.

Understanding Your Options

Domestic Processing (US-Licensed Operations)

Processing through US-based acquiring banks for state-licensed gambling operations. Available only in states where online gambling is legal and you hold appropriate licenses.

Offshore Processing

Working with international processors and acquiring banks, typically in gambling-friendly jurisdictions like Malta, Gibraltar, Isle of Man, or Curacao. Can serve broader markets but comes with different considerations.

Domestic Processing: Advantages

Player Trust and Conversion

US card issuers more likely to approve transactions
Familiar billing descriptors increase trust
Lower cart abandonment rates
ACH/eCheck options readily available
PayPal, Venmo integration in legal states

Regulatory Clarity

Clear legal framework in licensed states
State regulator oversight provides legitimacy
Banking relationships more stable
No UIGEA concerns for legal operations

Lower Processing Costs

Domestic interchange rates apply
Typically 3.5-5.5% vs. 6-10% offshore
Lower cross-border fees
USD settlement without conversion

Domestic Processing: Challenges

Limited markets: Only 6 states allow online casino gambling
Licensing requirements: Must partner with land-based casino
High taxes: State gaming taxes can exceed 50% in some markets
Compliance burden: Extensive reporting and oversight requirements
Geo-fencing required: Players must be physically in-state

Offshore Processing: Advantages

Market Accessibility

Serve players globally (where legal)
No geographic restrictions within service area
Access markets before US legalization
Multi-currency processing capabilities

Licensing Flexibility

Faster license acquisition (Curacao in weeks vs. months/years for US)
Lower licensing costs
Less restrictive game offering rules
Cryptocurrency acceptance more common

Operational Independence

No casino partnership requirement
More control over operations
Flexible bonus and promotion structures
Lower overall tax burden in many jurisdictions

Offshore Processing: Challenges

Payment Friction

Higher card decline rates for US players
Many US banks block offshore gambling codes
Limited payment method options
Cryptocurrency reliance can limit audience

Regulatory Risks

UIGEA creates legal gray areas for US-facing operations
Banking relationships less stable
Processor shutdowns more common
Player fund protection varies by jurisdiction

Higher Costs

Processing rates typically 6-10%+
Higher reserve requirements (10-15%)
Currency conversion fees
Potential need for multiple processor relationships

Decision Framework

Choose Domestic Processing If:

You're targeting legal US states
You can secure state licensing
You have a casino partnership opportunity
Player trust and conversion rates are priority
You want stable, long-term banking relationships

Consider Offshore Processing If:

You're targeting international markets
US licensing is not feasible currently
You need to launch quickly
Your player base is comfortable with crypto
You're building toward future US expansion

Hybrid Approaches

Many successful operators use both:

Domestic for legal states: Maximize conversion in NJ, PA, MI, etc.
Offshore for international: Serve Canada, LATAM, other markets
Separate entities: Clean corporate separation for compliance
Shared platform: Common technology, different payment routing

Transitioning Between Models

As US legalization expands, offshore operators often transition:

Enter new states as they legalize
Partner with land-based casinos for market access
Gradually shift player base to domestic operations
Maintain offshore for international revenue

Processing Partner Requirements

For Domestic Operations

State gaming license
Casino/tribal partnership documentation
Compliance certifications
Player protection measures

For Offshore Operations

Curacao, Malta, or equivalent license
Corporate registration in processing jurisdiction
Enhanced due diligence documentation
Chargeback prevention measures

Expert Guidance

HighRiskChamps works with online casino operators pursuing both domestic and offshore processing strategies. We can help you evaluate options, connect with appropriate processors, and structure your payment operations for success.

Discuss Your Processing Strategy