One of the most vital components of planning an iGaming business is obtaining the appropriate gambling license. It is one of the first essential steps if you are serious about launching a legitimate and reputable online casino or sportsbook operation.
At Top Casino Solutions, we understand that the licensing process – from determining what license(s) you need for your specific business, how to apply for a gambling license, and understanding laws, taxes, and fees – can be daunting.
Here, you’ll find the answers to the most common licensing questions as well as be provided with in-depth gambling license information about international and local regulators. This includes regulators such as the Malta Gaming Authority, Curacao eGaming, and the UK Gambling Commission, among others.
Gambling License Overview
In our online gambling license analysis, you’ll learn about:
- Background information about the regulator
- The different types of licenses available
- How to apply for a gambling license
- The licensing application process
- Gambling license costs
- Key laws and regulations operators need to follow
- The regions the license covers
- The pros and cons associated with getting the license
Our detailed and instructional guide is designed to deliver the essential information you require about the many different gambling regulators around the world that offer remote gaming licenses. With our guidance, you can pick the one best suited to your long-term business goals.
License Vs Unlicensed Sites – Do I Need a Gambling License?
We’re going to be completely honest. Not all iGaming licenses are easy to acquire. Some have very complex bureaucratic application processes. Additionally, they are costly, with application fees, licensing fees and taxes eating into your budget and profit margins. Since this is the case, it is not uncommon for many new operators to debate whether its worthwhile for them to get an iGaming license.
The reality is however, if your intention is to achieve long term success, the benefits of getting an online casino license far outweigh the drawbacks. Unlicensed operators can only go so far before they hit roadblocks that hinder their growth and profits.
Why do I need an online gambling license?
In most jurisdictions where gambling is legal, a gambling license is required for any business that offers real money gambling activities to residents within these regions. Also, depending on the region, you may need a gambling license for a raffle as well. That said, gambling includes activities that involve betting on an outcome and games of chance, such as slots, poker, casino games (e.g. roulette, blackjack, etc.), live casino games, bingo, lottery, sports betting, eSports betting, fantasy games, and many other types of games of chance.
There are a number of benefits to obtaining a remote (online) gambling license. Key benefits include:
- You can legally operate your business in prime jurisdictions. For instance, the UK is the largest remote gambling market in Europe, accounting for the largest portion of Europe’s online gambling market revenue. To legally operate in the United Kingdom, you require a local gambling license from the UK Gambling Commission (UKGC).
- Reach international markets. For instance, a license from the Malta Gaming Authority (MGA) can be used internationally and can help you target a range of markets around the world, particularly those where gambling is legal, but where there is no single regulator that governs the whole country, such as Canada.
- Partner with financial institutions. Build solid relationships and negotiate terms with some of the most trusted payment providers like local and international banks, PayPal, Neteller, Skrill, Trustly, etc.
- Partner with top gaming suppliers. This includes highly respected companies that have won awards and are recognized throughout the industry for their innovation and premium products, such as NetEnt, Microgaming, Play’n GO, IGT, WMS, Playtech, Pragmatic Play, etc. You can also take advantage of lucrative advertising campaigns created by these popular and respected game software providers, which can be an asset for helping with player retention marketing strategies.
- Legal advertising – Licensed operators are permitted to advertise their platforms in accordance with the regulations put into place by the jurisdictions where they operate. Even if these regulations are strict, it’s still better to be able to advertise for the sake of your player acquisition and retention strategies than not to be able to advertise at all.
- Get your app approved for official stores. You can list your casino or sportsbook app on Google Play or in the App Store. Players are more likely to trust an app they can easily download via an official channel over an unknown source.
- Gain credibility and authenticity for your business. iGaming operations that are licensed are trusted by both players and businesses. You are far more likely to enjoy lucrative opportunities, as partnerships with top software, hardware, and other service providers are easier to come by.
- Fiscal benefits. Some offshore licensing jurisdictions have zero or low tax rates, allowing you to enjoy fiscal benefits. You can also open a settlement account in an array of jurisdictions.
What happens if I don’t have a license?
Online gambling is highly regulated, not only to ensure that governments and authorities get their piece of the revenue pie but, more importantly, for the purpose of protecting players and operators from various forms of criminal activity (e.g. fraud, money laundering, bonus abuse, etc.) and gambling-related harm (e.g. protection of minors, aiding in the prevention of problem gambling, etc.).
Not licensing your company with at least one jurisdiction puts your operation and your reputation at huge risk. It can even have a negative impact on the industry as a whole. More to the point, not having a license can lead to many disadvantages, such as:
- Limited player reach. You will not be able to legally operate in many parts of the world, including some of the most lucrative iGaming markets in the world, particularly those in Europe.
- Most banks and financial institutions will refuse to work with you. Banks see licenses as a guarantee that their institution will not be used for money laundering or other criminal activity. One of the reasons is that licensing authorities typically carry out background checks to ensure that those who apply for licenses have no criminal record.
- Difficulties partnering with reputable companies. Top software companies and gaming suppliers are not as keen to offer their products and services to businesses that are not licensed. They don’t want to take the risk of having their brand associated with companies who may engage in unethical practices.
- Lack of trust from players and the industry. Players trust companies that are licensed, because a license from a legitimate industry regulator means that the iGaming operator is following strict rules pertaining to data security, fair gaming, and socially responsible gambling. Without a license, there is no guarantee that where they are playing is safe.
- Being blacklisted. Without a license, your site is at risk of being blacklisted by reputable review sites, organizations and regulators. A bad reputation could even lead to you being unable to acquire an online gambling license in the future.
- Risk of penalties and/or being shut down. Attempting to operate in a specific region and not adhering to that jurisdiction’s particular licensing requirements can have devastating consequences, including being blacklisted, heavy fines, facing criminal proceedings (which could include jail time), and having your business shut down.
Ultimately, online gambling licenses provide legal stability and opens doors to partnerships with financial institutions and quality game developers. To your customers and other businesses in the industry, having a license is a sign that you are running a reputable and trustworthy operation. In short, it gives you credibility. The growing online gambling industry is far too large and saturated for you to be anything but credible. A trusted reputation is paramount to your brand’s survival.
License, regulation, compliance – Is there a difference?
The terms gambling license, gambling regulation, and gambling compliance fall under the same umbrella, but are different terms that should not be used interchangeably. Here’s a basic definition for each term to help you recognize the difference.
- Gambling license – Is permission issued by a dedicated gambling committee that provides valid proof that your business is legitimate and winning payouts are guaranteed.
- Gambling regulation – Is a set of rules that identify acceptable and unacceptable activities on the part of individuals, firms, or government departments and agencies. They are the laws you are expected to follow.
- Gambling compliance – The act of conforming with regulatory requirements, such as rules, standards, laws, etc.
Essentially, obtaining a gambling license is your declaration of regulatory compliance within a specific jurisdiction. Being licensed means that your business is complying with the laws, regulations, guidelines and specifications that are relevant to your operation’s processes, such as advertising laws, KYC (Know Your Customer) requirements, game fairness (RNG software checks), guaranteed payouts, security (SSL data encryption, anti-fraud, anti-money laundering, etc.) and so on. Violating regulatory compliance is a breech of your license agreement and is often met with legal penalties, most notably federal fines.
How Do I Get an Online Gambling License?
There’s no question that getting a gambling license is vital for long-term success in the iGaming industry. That said, you likely still have many questions regarding the licensing process, costs, and wondering which gambling regulator is the best one to choose. The following explores the most common questions new operators have about applying for an Internet gambling license.
Where can I apply for an online gambling license?
There are a number of industry-recognized jurisdictions across the globe that issue licenses. While you can choose any one of these gaming control boards to start or expand your business, typically speaking, new operators tend to choose to apply for a gambling license from one of these leading jurisdictions:
What’s involved in the online gambling application process?
First and foremost, you should know that each online gambling application process – from the requirements and fees, to the time it takes to complete the process – is different. The rules that apply to attaining a UK gambling license, for instance, differ from what applies to obtaining a Curacao gambling license. As this is the case, always check the requirements of a specific jurisdiction before applying. Never assume.
While we will go over the application process in detail for each jurisdiction in their individual reviews, generally speaking, among the most common application requirements are:
- Proof of identity
- Background check of the applicant and key members of the operation
- Proof of sufficient funds
- Business plan
- Software checks (certain standards are often enforced that the platform software must adhere to)
- Compliance checks
- Incorporation within the jurisdiction of the license authority
- Server location (usually it must be located within the jurisdiction of the license authority)
Am I guaranteed a license?
No. Simply because you apply for a license does not mean that you will get one, even after going through the application process. All it takes is one mistake on an application form to ruin the whole process and land you back at square one. Furthermore, be advised that in many cases the fee for applying for a license is non-refundable. For instance, it costs £370 to apply for an online gambling license in the UK. This fee will not be refunded if you choose to withdraw from the application process or your application is unsuccessful.
For this reason, it is highly recommended that you seek the appropriate and most up-to-date jurisdictional advice from lawyers and legal experts who specialize in online gambling licensing in the specific region you’re targeting. Doing so helps to ensure you do not waste valuable time or money.
How much does a gambling license cost?
Gambling license cost varies from one jurisdiction to the next, with different types of fees and taxes playing a role in the overall cost. That said, one thing that can be said for all of them, no online gambling license is cheap. Expect the license to be one of your highest business expenses.
With that said, here’s a basic look at online gambling license costs to give you a general idea of the level of expense you could face:
Using Maltas’s €36,000 10-year license (type 1, 2 or 3 B2C license) as an example, the cost of this MGA license is broken down as follows:
*Remember, keep in mind that license fees and costs vary depending on several factors (e.g. application fees, renewal fees, annual fees, taxes, type of license you apply for, etc.) and these fees can change. The above is meant for general information purposes only and does not include all potential fees, such as renewal fees. Its purpose is to give you an overall idea of initial costs and how they can differ from one jurisdiction to the next. For a more accurate in-depth look at a specific jurisdiction’s gambling license cost, please select the appropriate review.
How do I choose the right jurisdiction?
There are several factors to consider when you want to get a gambling license from a gaming control board. Here are some of the things to keep in mind when selecting a jurisdiction:
- What type of gambling operation do you intend to run – Will you be running a casino, sports betting, fantasy sports, bingo, poker, lotto, etc., business?
- Who is your primary market – Do you need a local license for this region?
- Application eligibility and time – How long does the application process take and can you meet all the requirements to even be considered?
- Licensing costs – What is the total cost – application fee, license fee, renewal fee, taxes, other fees, etc.?
- Your industry experience – Are you starting your first iGaming operation or are you familiar with the industry and are seeking to grow your target market?
- How many licenses do you need – Are you planning on targeting one local region or do you want to reach players from all over the world?
- Licensing requirements for partners – What regulatory compliance do the companies you’re working with (e.g. software, games, etc.) require?
Is one jurisdiction better than another?
Not necessarily. Just like everything in life, there are pros and cons associated with each gaming control board. No single one is perfect.
For instance, although Curacao offers the advantage of lower costs and a single license that covers all gambling activities, Malta’s more expensive license is better for operators who seek to enter the European gambling market.
Ultimately, you need to select a jurisdiction that can meet all your business needs as well as know the limits of the license you choose.
Will one online gambling license cover all markets?
No. There is no one-size-fits-all license. Every license has limits in regard to the region(s) it covers.
For instance, if you obtain a license from Curacao eGaming, this doesn’t open the door to your site for players in the UK. You will need a Gambling Commission license in order to legally advertise to and provide your betting services to residents in Great Britain.
Essentially, most gaming control boards do not cover the USA and any areas where a local gambling license is required (e.g. the UK, Sweden, Italy, etc.). They also will not serve any regions where the regulator deems online gambling to be illegal.
How can TCS help me get an online gambling license?
TCS is dedicated to helping industry newcomers and established operators achieve their iGaming business goals. You can benefit from our knowledge and experience in the industry, coupled with the partnerships we’ve forged with some of the top online gambling software companies.
In regard to gambling licensing, we can help you:
- Find a white label solution – Although there is no “easy” way to obtain a license, one of the simper ways is to opt for a white label casino or sportsbook platform offered by some of the online gambling software solution companies we review. A white label solution is a low-cost and ready-to-launch platform that includes everything you need to operate an online casino or online sportsbook, including a license.
The way it works is you operate with a sublicense. This is a license that is supplied to you by the B2B company that provides you with the white label solution. They are the official licensee, having acquired the license from the regulator, and extend some rights and privileges of owning this license to you. In short, the white label provider is responsible for the license and has taken care of all the grunt work for you. Discover top white label solution providers here.
- Find a turnkey solution – A turnkey solution provides you with the convenience of a ready-for-service platform and the freedom to customize your business. Unlike a white label, everything is not included. You get to choose your products and services. You also will need to obtain a license.
That said, many turnkey operators have experience obtaining licenses from various jurisdictions and can help you obtain a license, including providing you assistance with the application process. Discover top turnkey solution providers here.
- Get the information you need – Our gambling license information provide you with an in-depth look at the different jurisdictions. They also include the names of software providers who have experience in these jurisdictions and who may be of service to you.
Ready to get started to find your perfect online gambling license match? Begin your search today and don’t hesitate to get in touch with the TCS team. We’re always happy to help!