The Classification Question Comes First
A single product can simultaneously read as a game, a gambling service, and a securities offering depending on which mechanic a regulator examines, and institutions decline what they cannot classify. Classification therefore settles the file before volume, funding or engineering quality enters the conversation.
The three questions interact. A purely cosmetic token with no cash-out is a normal games business. Adding a player-to-player market and a fiat off-ramp requires analysis of the token, services, customer-fund flows, and which entity performs each activity. Exchange of crypto-assets for funds is a distinct MiCA service; any payment services must be provided by an authorised provider, whether the studio or a third party. Add a randomised reward purchasable with real money and it may be a gambling business in some of the markets it serves and not others.
Three Tests Decide Whether the File Is Placeable
Token status. MiCA Article 2(4)(a) puts crypto-assets that qualify as financial instruments outside MiCA altogether, so the securities regime governs instead, which changes both the authorisation and the institution list.[1] Article 2(3) also excludes crypto-assets that are unique and not fungible, but MiCA’s recitals treat issuance in a large series or collection as an indicator of fungibility, which matters for in-game items minted in quantity. Where the token is a crypto-asset within MiCA, the regulation applies to the services provided around it, including custody and exchange, and Article 70 safeguarding follows for client funds other than e-money tokens that a crypto-asset service provider holds, unless it is itself a credit institution, electronic money institution, or payment institution: placed with a central bank or a credit institution by the end of the business day following receipt, held so that they are separately identifiable.[1]
Mechanic classification. Loot boxes and randomised rewards purchasable with real money are treated as gambling in some jurisdictions and as a consumer-protection matter in others, and there is no single European answer. Belgium’s Gaming Commission found in April 2018 that the paid loot boxes in three of the games it examined met every element of a game of chance, which Belgian law bans without a licence.[4] The UK government concluded in July 2022 that most loot boxes fall outside the Gambling Act 2005 because the prize cannot be converted into real-world money, and it treats the ability to cash out rewards as the important distinction, which is the feature a Web3 cash-out adds.[5] A studio serving thirty markets has thirty answers, and institutions ask for the market-by-market position rather than a general statement.
Cash-out design. Where a player can convert in-game value to fiat, the studio has to establish whether that leg is a crypto-asset exchange or payment service, and it inherits that service’s obligations unless a licensed partner carries it; for crypto-asset transfers between crypto-asset service providers, Regulation (EU) 2023/1113 applies with no value threshold.[3]
Institutions Test Player Funds Before They Read the Architecture
Once classification is settled, the rest of the file turns on player funds, market access, and monitoring.[2]
- Player-fund handling. Whether in-game balances are the studio’s money or the player’s, and whether a segregated client-funds arrangement therefore follows.
- Market blocking and geolocation. Enforced wherever a mechanic is prohibited in a market served.
- Age verification. Required wherever the gambling classification bites.
- Analytics coverage. Applied to any on-chain leg.
Studios routinely arrive with the technical architecture documented and the classification undocumented. That is the wrong way round for a banking application, because the classification determines which institution can serve them at all and no amount of technical detail substitutes for it.
Stack and Timelines: Weeks for the Operating Account, Months for Cash-Out
| Layer | Institution | Difficulty | Timeline |
|---|---|---|---|
| Operating account | Bank or EMI | Moderate once classification is settled | 4–10 weeks |
| Player funds (if held) | Credit institution | Hard; depends entirely on classification | 3–6 months |
| Card acquiring for purchases | Acquirer; MCC depends on mechanics | Moderate to hard where chance mechanics exist | 4–12 weeks |
| Cash-out rail | Provider authorised for the actual exchange or payment service | Hard; classify services, fund flows, and each party’s role | 3–6 months |
Pricing is quoted per case and is driven by classification uncertainty rather than volume. The timelines above are indicative across the partner network as of .
How Jagelski & Partners Helps
Web3 gaming placement starts with a classification map rather than a banking application: token status, mechanic-by-mechanic gambling position per market, and cash-out design. That map is what an institution actually reads, and producing it is usually the difference between a decline and a conversation.
Where a mechanic makes a market unbankable, that is stated plainly, alongside whether blocking the market is cheaper than the banking consequence of serving it.
Genuinely unsettled classifications are presented as unsettled, because an institution that discovers an applicant asserted certainty it did not have withdraws rather than negotiates.
What we do not do. Studios are not placed into markets where a mechanic is prohibited and unblocked. Gambling-classified mechanics are covered on the iGaming banking page and licensing on gambling licensing.
Frequently Asked Questions
Because institutions decline what they cannot classify, and a single product can look like a game, a gambling service, and a securities offering depending on which mechanic is examined.
Three questions drive the whole conversation: whether the in-game token is a financial instrument, whether any chance mechanic constitutes gambling in the markets served, and whether players can cash out.
A great deal. Where a player can convert in-game value to fiat, the studio has to establish whether that leg is a crypto-asset exchange or payment service, and it inherits that service’s obligations unless a licensed partner carries it; for crypto-asset transfers between crypto-asset service providers, Regulation (EU) 2023/1113 applies with no value threshold.
It depends on the market, and there is no single European answer. Randomised rewards purchasable with real money are treated as gambling in some jurisdictions and as a consumer-protection matter in others.
A studio serving thirty markets has thirty answers, and institutions ask for the market-by-market position rather than a general statement.
Only where the token is a fungible crypto-asset rather than a financial instrument. MiCA Article 2(4)(a) excludes crypto-assets that qualify as financial instruments, which fall under the securities regime instead, and that changes both the authorisation and the institution list. Article 2(3) excludes unique, non-fungible crypto-assets, although issuance in a large series or collection indicates fungibility.
Where MiCA does apply, it governs the services provided around the token, including custody and exchange, and Article 70 requires client funds other than e-money tokens, held by a crypto-asset service provider that is not a credit institution, electronic money institution, or payment institution, to sit with a central bank or a credit institution by the end of the business day following receipt, separately identifiable.
They document the technical architecture in detail and leave the classification undocumented. That is the wrong way round: classification determines which institution can serve them at all, and no amount of technical detail substitutes for it.
A classification map covering token status, per-market gambling position, and cash-out design is what an institution actually reads.
Institutions ask this directly, and the answer determines whether a client-funds account is needed. Where balances are the player’s and convertible, the studio is holding client money and needs the segregated arrangement that follows.
Where balances are purely internal, non-convertible game state, the position is much simpler and the operating account is usually sufficient.
Present it as unsettled. An institution that discovers asserted certainty the applicant did not have withdraws rather than negotiates, and classification of hybrid game tokens is genuinely unresolved in places.
Showing the analysis, the competing readings, and any regulator engagement is a stronger position than a confident wrong answer.
Frequently, and it is worth calculating rather than assuming. Where one market’s treatment of a mechanic makes the whole profile unbankable, geo-blocking that market can restore access to institutions for the rest of the footprint.
Markets carrying that effect are identified during the assessment so the trade-off is a commercial decision rather than a discovery.
Pricing is quoted per case and is driven by classification uncertainty rather than volume. Operating accounts run 4 to 10 weeks; player-fund accounts and cash-out rails, where required, run three to six months.
Ranges are indicative across the partner network as of June 2026.
No. Jagelski & Partners is paid by the institution that takes the business, through a referral or revenue-share arrangement, not by a fee billed to the client. The pricing is the institutional rate, with no markup and no onboarding fee.
Ready to Answer the Classification Question Before an Institution Asks It?
Book an assessment. We scope the classification map covering token status, mechanic-by-mechanic gambling position per market, and cash-out design, then introduce an independent specialist to place the operating, player-fund, and cash-out layers against institutions whose appetite admits the resulting profile. No markup on institutional pricing. No onboarding fee.
References
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- European Union, Regulation (EU) 2023/1114 on Markets in Crypto-Assets (MiCA), Articles 2(3) (exclusion of unique, non-fungible crypto-assets; recital 11 on issuance in a large series), 2(4)(a) (exclusion of crypto-assets qualifying as financial instruments) and 70(3) and (5) (safeguarding of clients’ funds other than e-money tokens: deposit with a central bank or credit institution by the end of the following business day, separately identifiable; not applicable to credit institutions, EMIs, and payment institutions); Title V applicable from , eur-lex.europa.eu, accessed .
- European Banking Authority, Guidelines EBA/GL/2024/01 amending EBA/GL/2021/02 on customer due diligence and ML/TF risk factors, including for crypto-asset service providers (applicable from ), eba.europa.eu, accessed .
- European Union, Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets, applying a zero de minimis threshold between crypto-asset service providers, eur-lex.europa.eu, accessed .
- Belgian Gaming Commission, Research Report on Loot Boxes (English translation; the Dutch version is authoritative), April 2018, section 6 (conclusion), gamingcommission.be, accessed .
- Department for Digital, Culture, Media and Sport, Government response to the call for evidence on loot boxes in video games, , paragraphs 13 and 35, gov.uk, accessed .