Good evidence shows that the online casino business model remains legitimate and that payouts for winnings are guaranteed. Therefore, if you want to engage in any activity that could be considered gambling, such as playing games of chance like slots, poker, roulette, or the lottery, and betting on sports, you will need a license.
You may wonder why casino licensing plays an important role in the industry and as a player of online casino games, you may want to understand more about why casino licensing matters.
Why A Gaming License Matter
Possession of a gambling licence is evidence that an online gaming and betting website maintains a high level of transparency and safety for its users. The authority in charge of issuing licences in a given region is called the licencing authority of that region.
The areas are often referred to as “jurisdictions” for either online gambling or licensing jurisdictions. They each have their own distinct sets of statutory requirements that must be satisfied before issuing a gambling licence.
Several different aspects will determine the type of gambling licence that you require. Including the kind of gaming and betting you offer (online poker, slots, sportsbook, and so on), the jurisdiction in which you and your players are based, the currencies you use to conduct business, etc.
This article will take a comprehensive look at the different gambling licences, discussing their costs, ongoing compliance requirements, and the procedures for obtaining them.
What Do Licensing Authorities Do?
The welfare of gamblers is the primary concern of the licensing authorities. These licenses are a legal requirement for any business that wishes to accept money from participants in a game in which there is a chance that the participant will win a prize.
Each jurisdiction has a set of rules and regulations spelt out in the law to ensure that the gambling industry is open and honest.
Any enforcement activity is typical to protect gamblers and maintain high standards of quality and transparency in this industry so that customers can play safely and securely on gambling sites. This measure comprises various components, including enforcing formal rules, levying financial penalties, suspending licences, and achieving criminal penalties.
Gaming Control Boards
In every jurisdiction, there is a regulatory body that has been established. This body’s responsibility is to regulate the gambling industry in each country and either grant or deny licences to new operators. It is possible to call these government agencies by different names, depending on the setting (for example, gambling commission, gambling association, gambling board, etc.). Still, the term in everyday use is “gaming control board.”
For instance, the United Kingdom Gambling Commission is an example of a gaming control board. The Curaçao e-Gaming Licensing Authority is also an example of this.
According to the Gambling Act of 2005, the UK Gambling Commission has the official authority to approve licenses and regulate the UK’s gambling industry.
It should be noted that there are some legal exceptions required by the UK Gambling Commission, which permit operators coming from the European Economic Area (EEA) and from other specified countries to operate in the UK under certain circumstances.
The following areas are classed as remote operators authorised to operate in the UK:
- EEA countries
- Antigua and Barbuda
- Isle of Man
Any online casino that holds a gaming license from a licensing authority in any of the above locations can be classed as fully licensed and legal to operate in the UK.
There are usually credentials listed in the footer of an online casino’s website to see where their credentials are.
Scrolling down to the bottom of any web page, you should be able to see a stamp, a crest or some other identifying feature that identifies the location where the website is registered.
You can locate a company’s name and headquarters on the UK Gambling Commission’s website by using the search feature available on the website. In each casino review, you will find a link to the licensing information so you can verify this information for yourself before signing up with an online casino.
List of Overseas Licensing Authorities
Listed below are the current licensing authorities from various countries. They are listed alphabetically rather than in order of preference.
There is someone responsible for regulating Alderney’s online gambling industry; this is known as the Alderney Gambling Control Commission (AGCC), which was established in May 2000 to monitor the widespread online gambling activities on the island.
Due to the rapid evolution of the gaming industry over the past few years, the AGCC has improved its regulatory framework to compete with other online gaming hubs. As a result, the AGCC offers two types of iGaming licenses:
Category 1 – deals with the management of funds and interaction with customers in situations that are governed by a direct contractual relationship.
Category 2 – A gaming licence of category 2 can be used to conduct online gambling transactions and to manage an online gaming platform.
Depending on the requirements, an organisation can apply for either one or both licenses.
Antigua and Barbuda
The Free Trade and Processing Act, under which licenses in Antigua were initially granted, and it was the Division of Gaming at the Financial Services Regulatory Commission that managed them (FSRC).
In 1999, a new regulatory body known as the Directorate of Offshore Gaming was created to meet the growing demand for licenses in the industry of online casinos.
Upon receiving a license, businesses are awarded a “Preferential Seal”, indicating they have successfully passed our rigorous screening process.
Belize Gaming Control Board is responsible for overseeing the administration of the online gambling industry operating out of Belize, which the Belizean government directly controls.
Gambling companies operating in Belize must comply with the National Anti-Money Laundering Regulations, the Unusual Transactions Act, and the Counter-Terrorism Financing Regulations.
Among its duties, the Belize Gaming Control Board ensures all gaming businesses and services in Belize are operating in compliance with the laws and regulations of the government. In general, the board performs this function daily. Regular compliance audits are conducted to monitor compliance with the licence requirements. Every player depositing with an operator must have a comprehensive audit trail kept by the licensee. In addition to this, a record must be kept of all financial transactions and wagers.
It’s unnecessary to invest large amounts of money and become fully licensed before testing the waters. However, getting a gaming license from Costa Rica is an excellent option when starting a gambling company.
It is impossible to work with traditional payment providers and merchants like Visa and MasterCard if you obtain a gaming license in Costa Rica since there is no official license. However, if you decide to apply for an appointment in a different jurisdiction, you could accept cryptocurrency payments and add other currency support later.
A year before its Caribbean relative Antigua, Curacao became one of the first nations to offer licenses for online gaming operations. So that, the Curacao eGaming Authority was established in 1996 to oversee the licensees of the country’s e-gaming industry and ensure that they are honest.
Since Curacao’s iGaming industry was separated from the offshore regulator known as the Curacao Gaming Control Board in 2002, the industry has provided one licence that is valid for every form of gambling. Generally speaking, the licence can be divided into two parts:
Master Licence – gives companies the right to run an online gaming company and offer sub-licences to third parties.
Sub-Licence – enables businesses to run online gaming companies only.
As a result of this lack of market restrictions and low entry barriers, new companies can launch businesses with little red tape by offering dedicated personal servers and private cloud servers. It also makes the market more competitive due to the lack of market restrictions and low entry barriers.
Cyprus Gaming Commission issues casino licences in the country and regulates and monitors all gambling activities within the country.
Danish online licensing is surprisingly successful despite its high tax rates and late entry into the market. It is no secret that Denmark was one of the first allowed jurisdictions in the United Kingdom (which allowed Danish licensees to serve the lucrative market of UK players).
The Danish Gambling Act (Danish Lottery) Act of 2012 was the first law to bring Denmark’s approach to online gambling up to date, as up until then, Danish online gambling had been the sole domain of the state-owned monopoly Danske Spil. Even nowadays, the national lottery still holds exclusive licenses to sell items that can only be won through chance, such as lottery tickets and scratch cards.
Currently, there are 47 licensees listed on its website (both online casinos and pool betting combined). There are two types of licences available, a five-year licence and a one-year licence.
The Gambling Commissioner established the Gibraltar Regulatory Authority (GRA) in 2005 to manage the licensing process.
As a result of its low taxes, the absence of VAT charges, and a large workforce, the territory quickly gained a reputation as a great place for online gaming companies.
Gibraltar is a Crown Dependency within the United Kingdom that is self-governing. While Britain is responsible for the region’s external affairs, Gibraltar maintains its independence in most legislative matters, including taxation.
Gambling commissions in the United Kingdom and Gibraltar are included on the “white list” of jurisdictions acceptable for online gambling. Gambling websites that have been licensed in Gibraltar are therefore permitted to provide their services to people residing in the UK. In the UK, more than half of all online gambling takes place on servers in Gibraltar.
Isle of Man
One of the first countries to create new legislation specifically for the online market was the Isle of Man. Online gambling in the Isle of Man is regulated by the Online Gambling Regulation Act (OGRA) of 2001. The Isle of Man government wanted to create a gambling environment that would appeal to companies providing online gambling services by enacting this legislation.
There are also two more pieces of legislation pertinent to the industry, the Gambling (Amendment) Act of 2006 and the Gambling Supervision Act of 2010. Contrary to some other gambling licenses available in other parts of the world, an Isle of Man gambling license carries greater weight regarding the safety of the gambling operation and its legitimacy.
The United Kingdom’s Gambling Commission has approved this licensing authority for their approved list. As a result, this indicates that the United Kingdom’s government is pleased with the high standards and in-depth investigations that are conducted before issuing licences to operators. There is no restriction regarding the advertising or provision of services to residents of the United Kingdom by businesses that possess a license issued by the Isle of Man.
The Channel Islands are made up of three different islands: Jersey, Guernsey, and Alderney. As the largest of these three islands, Jersey occupies the most land area. Almost every island in the chain of islands has its own set of gaming laws and licensing requirements. During the same period when the legislation governing online gambling was passed, Jersey’s three-member Gambling Commission was formed to act as the regulatory body for the industry.
The Jersey government took the first step toward regulating online gambling in 2008 by passing the Gambling Act (Remote Gambling Disaster Recovery) (Jersey) Regulations 2008. The Jersey government has made steady progress in this regard ever since. As a result of this piece of legislation, remote gambling operators will be able to provide their services from servers located in Jersey if the need arises in the event of a crisis.
A territory known as Kahnawake resides within the province of Quebec in Canada. One of the first jurisdictions in the world to issue gambling licences for use over the internet. A series of gambling regulations were adopted in 1999 for various forms of gambling. There is an official body responsible for granting licences and performing regulatory duties in Kahnawake – the Kahnawake Gaming Commission. It is possible to operate a gambling business online legally and safely when you have a gambling licence from Kahnawake.
Malta Gaming Authority is one of the most sought after authorities that issues licences for online gambling, but getting one is not an easy task. Operators highly prize the Malta Gaming Authority licences. Online gambling platforms benefit from the world-famous license, which provides them with an almost unrivalled level of legitimacy; however, the bureaucratic process is never straightforward to navigate.
Malta became the first EU member state to fully accept online gambling after passing the Remote Gaming Regulations in 2004. As a result of the name change in 2015, the Malta Gaming Authority took over the previous name of the Lotteries and Gaming Authority. It quickly established itself as a leading gaming authority and regulator for the online gambling sector. As a result of its welcoming government, thriving business and technology sectors, and unique geographical location, Malta has established itself as a central international hub for the online gaming industry (iGaming).
The MGA offers two types of licences: a business-to-consumer (B2C) licence for organising gambling activities and a business-to-business (B2B) licence for supplying gambling items.
Even though Panama is one of the less populated licensing jurisdictions for online gambling, it still boasts a few well-known brands of casinos and poker rooms. In addition, the low level of government interference and the gambling-friendly banking industry make it an ideal location for establishing a new business due to the low level of government interference.
Panama was recognised as a jurisdiction that could issue gaming licenses after the Online Gaming Act of 2002 was passed in 2002. Since 2003, when Panama distributed its first licence, the country has been a consistent participant in the market.
In the Philippines, the Gaming Industry is the second-highest source of taxation revenue, after the tourism industry. Traditionally, PAGCOR, the regulatory body and operator of the gaming industry, has been responsible for overseeing the business. The Philippine Amusement and Gaming Corporation (PAGCOR) is dedicated to providing both casino entertainment and online gaming.
Kitts and Nevis
Gaming licences are offered by the government of St. Kitts and Nevis to casino operators, software providers, and service providers in the gambling industry. Gaming operators who hold this licence may conduct business concerning casinos, lotteries, and other gaming-related activities.
St. Kitts and Nevis Gambling License is consistently ranked among the most sought after gambling licenses by online casinos worldwide.
A gambling license is a document issued by the Swedish government to all casino operators, software providers, and service providers in the gambling industry. A licence granted to gambling operators enables them to carry on business concerning casinos, lotteries, and other gaming-related activities that may interest the public.
Gambling licenses from Sweden are quickly becoming one of the most sought-after gambling licenses in Sweden and around the world.
As the only authority that oversees the gaming and gambling market in Sweden, the Swedish Gambling Authority has the sole responsibility to ensure that the market is safe, legal, and of some importance, trustworthy.
As a division of the Department of Treasury and Finance, the Liquor and Gaming Commission of Tasmania is responsible for overseeing the licensing of all forms of online gambling permissible under the law. These forms of online gambling are sports betting, simulated games (such as fantasy football leagues), betting exchanges, race wagering, and the major lotteries.
Considering that the Gaming Control Act 1993, the nation’s most recent significant gambling law, was passed in 1993 (when the internet was a rumour), Tasmania will not license any new online gambling operations.
As a result of the Gambling Act of 2005, the United Kingdom Gambling Commission was established and given the authority to regulate the gambling industry in the United Kingdom, focusing on online gaming. A prominent example of best practice in gambling regulation, this publication is frequently cited as an example to be followed by gambling regulators worldwide. It also serves as a benchmark when comparing the regulatory bodies of different countries and states.
There are many rules, regulations, and policies that the Gambling Commission has in place that address every aspect of online gambling, from the testing and certification of software to the procedures for financial transparency and auditing.
Vanuatu’s government offers gambling licences to casino operators and software and service providers in the gambling industry.
As provided for by its Gambling Act of 2000, Vanuatu was one of the first nations to offer online gambling licences. As a result, Vanuatu became one of the first nations in the world to provide online casino games, even though much larger and more active players now overshadow it.
In addition to the legislation, various regulations and policies implemented since then require compliance with a range of forward-thinking and sophisticated rules. Among these rules is the requirement that all gaming software be regularly tested and certified by independent organisations.
Casino licensing is an essential part of player safety online. It’s fair to say that not all licensing authorities are the same. Those based out of European countries operate at a higher standard and therefore offer better player protection and should be the preferred gambling destination for most players.
That’s not to say that those based out of the EU are not good options for some players; you need to be more diligent in your research before signing up for an account there.
What is a certainty to never deposit money at an online casino that holds no license or whose license has expired. These casinos are trading illegally and should be avoided at all costs.