Online Casino Licenses
Welcome to the online.casino guide to casino licenses. Many online casinos obtain licensing in one or more jurisdictions. A license makes an internet casino look more legitimate and allows it to serve a specific region.
The following guide discusses why and how casinos obtain licensing. It also covers some of the popular gaming regulatory bodies.
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Why do online casinos get licensing?
Internet casinos benefit from a license in multiple ways. Below, you can see the main advantages of obtaining an online casino license.
Gain access to markets
Each gaming jurisdiction covers a specific territory. For example, the United Kingdom Gambling Commission (UKGC) presides over gaming throughout the UK.
Casino operators must gain licensing to access a given market. If they want to legally operate in the UK, for example, they need to obtain a UKGC license.
Some online casino licenses are broader in scope than a single country. For instance, the Malta Gaming Authority (MGA) issues licenses that cover many European countries.
Other jurisdictions may only cover a single state. The New Jersey Division of Gaming Enforcement (DGE), for example, only presides over New Jersey.
In any case, casinos usually must possess a license to serve a particular state, country, or region. By obtaining proper approval, they can legally offer online gambling to a specific jurisdiction.
Secure a base of operations
Some governments don’t maintain a stance on internet gaming. However, many of the same entities don’t allow online casinos to operate within their borders.
Ohio, for example, doesn’t feature strict anti-internet gambling laws. However, it would quickly arrest anybody whom it found running an unlawful casino out of the Buckeye State.
Therefore, casinos must secure a base of operations. They can establish themselves and legally operate from a jurisdiction where they hold licensing.
Inspire trust with customers
Online casinos must go through a vetting process to obtain a license. They need to fill out an application, pay relevant fees, and receive approval from a licensing body.
Gamblers are more apt to trust a site that earned approval from at least one jurisdiction. Meanwhile, they’re less likely to trust an unlicensed gaming site.
Of course, some jurisdictions are harder to please than others. The UKGC, for instance, features stricter standards than Costa Rica.
An operator gains even more respect when it obtains licensing from premier jurisdictions, such as the UKGC, New Jersey DGE, or Swedish Gambling Authority.
Make banking easier for players
Payment processors and banks don’t like working with unlawful gaming sites. After all, they don’t want to risk serious legal trouble by serving unregulated casinos.
On the other hand, many payment processors are willing to serve legal online casinos. In turn, gamblers enjoy access to more banking options when playing at regulated gaming sites.
Avoid breaking laws
Various internet casinos, poker sites, and sportsbooks have suffered legal consequences for unlawfully serving certain jurisdictions. Most of the same operators eventually went offline after paying heavy fines or being forced to shut down.
Gaming sites can avoid this problem by going through proper channels. They don’t need to worry about legal troubles if they hold licensing.
What must casinos do to obtain a license?
The licensing process varies based on the jurisdiction. Generally, casinos must take most or all of the following steps to become approved.
Submit an application
Online casino owners must fill out a lengthy application to become eligible for a license. The relevant regulatory body will look over the application and decide if the ownership group meets its standards.
Given the complex nature of most applications, casinos hire lawyers to guide them through this process. They specifically seek lawyers who are experienced in the gaming industry.
Pay licensing fees and taxes
Casino operators must pay fees and taxes to operate in a given jurisdiction. The application process alone can require a high cost.
If approved, operators may need to pay annual fees to maintain their license. They also must cover annual taxes on their income.
Work to prevent/minimize problem gaming
Politicians don’t pass online gambling bills nor approve regulatory bodies without concessions for problem gaming. Specifically, they want to ensure that casinos avoid taking advantage of gambling addicts.
Firstly, operators need to avoid misleading advertisements. They can’t run commercials that create the illusion that gamblers will easily win.
Secondly, casinos must make a reasonable effort to identify and stop serving problem gamblers. They face hefty fines if they’re found guilty of targeting addicts.
Submit games for testing
Many regulatory bodies require casinos to obtain third-party testing for games and random number generators. This requirement ensures that casinos and software providers offer fair gaming.
Third-party labs that provide these testing services include:
Popular licensing jurisdictions
Many online gaming jurisdictions exist throughout the world. Below, you can read about some of the most popular casino regulatory bodies.
Curacao licenses well over 400 online casinos. It draws many operators thanks to low fees and a light vetting process.
Curacao eGaming requires 60,000 ANG ($33,500) in fees for a “master license.” It calls for an additional 10,000 ANG ($5,500) each month over the next two years.
Casinos merely need to pay a 2% income tax and negotiable fees once this two-year period is over. Adding everything together, Curacao is one of the world’s cheapest gaming jurisdictions.
Operators with master licenses can grant sub-licenses to anybody with no additional charge. This aspect is perfect for casino groups that manage multiple skins.
Malta Gaming Authority
The Malta Gaming Authority (MGA) offers licenses that cover many countries throughout the world. It currently features over 500 licensees.
Operators only need to pay a €2,330 application fee upfront. They must cover an additional system audit fee worth €1,770 and annual licensing costs of between €10,000 and €25,000.
Casino owners also pay a “compliance contribution” ranging from 1.25% to 0.4% of revenue. The compliance contribution tops out at €375,000 per year.
New Jersey Division of Gambling Enforcement
The New Jersey DGE only presides over 8.9 million residents. However, it still demands plenty of respect as a regulatory body.
The DGE asks applicants to pay between $750 and $4,000 in application fees. It also requires operators to cover a 15% income tax rate.
Swedish Gambling Authority
Sweden’s government used to hold a monopoly over the state’s online gaming industry. However, the Swedish Gambling Authority, or Spelinspektionen, now accepts international applicants, too.
Those seeking an online-casino license must pay 400,000 SEK ($43,000) upfront. If approved, they need to cover an 18% income tax rate.
UK Gambling Commission
The UKGC is the gold standard for gaming regulatory bodies. It features a strict vetting process and strong protections for problem gamblers.
This licensing body requires applicants to prove that they’re financially solvent and able to provide fair gaming.
Operators must front between £5,711 and £14,647 in application fees. Licensees also need to cover an annual renewal fee ranging from £3,748 to £49,219 based on revenue.
If you have any doubts about the licences a top online casino in the UK or another jurisdiction holds, you can make a note of the licence number on the casino website and then look up that number on the UK Gambling Commission website (or relevant offshore regulators site).
An online casino can legally serve a specific jurisdiction with its license. By obtaining Curacao eGaming licensing, for example, it can serve every country covered by Curacao’s terms.
A gaming site also gains more trustworthiness with a license because players know it went through and passed a vetting process.
Technically, gaming sites don’t need a license to operate. They can still launch and serve gamblers just like any other casino.
However, an unlicensed site runs into the following problems:
1. Lack of trustworthiness.
2. Fewer payment processors (these casinos typically offer cryptocurrency banking).
3. Violation of laws by serving jurisdictions without proper licensing.
Unlicensed online casinos aren’t automatically crooked. However, they’re generally not as credible as licensed operators.
Most casino owners hire lawyers to help them fill out an application. After finishing the application, they submit it and wait for approval.
Operators must also pay the relevant licensing fees. Depending on the jurisdiction and type of license, they may front anywhere from four to five figures during the application process.
Once the application and fees are submitted, the regulatory body reviews the document and (potentially) approves the casino.
Gaming jurisdictions reserve the right to revoke licenses from non-compliant operators. For example, the UKGC revoked Bodugi Limited’s license for multiple violations in April 2014.
In other cases, a regulatory body might level a fine at an operator. Fines are common when an online casino runs misleading adverts.
If a gambler has a dispute with an online casino, they may contact the relevant licensing body. From there, the regulator can either choose to help settle the dispute or ignore it.
Premiere jurisdictions, such as the New Jersey DGE and UKGC, feature standards for settling such issues. Less reputable licensers, like Costa Rica and Belize, take a hands-off approach to these matters.