A gambling license is an essential document for every iGaming operator. It grants permission to operate legally and provides protection from legal issues. Moreover, a license guarantees quality and safety in the eyes of players, casino game providers, and other operators. In other words, a gambling license is a golden ticket to the industry, making it crucial to obtain one.
This article serves as a comprehensive licensing guide. We will explore why gambling operators need a license, how to choose the right location for obtaining one, and which jurisdictions are considered the best choices in 2024. Additionally, we will review the most common requirements for operators and outline the process for obtaining a license. Finally, we will explain why operating without a permit is inadvisable and how to facilitate the licensing process.
Let’s dive in and get familiar with the most necessary information about gambling licensing.
Why do you need a license?
Despite the obvious need for a license, many operators still prefer to cut costs by operating illegally. We strongly advise against this for several reasons. To make it clear, let’s figure out what benefits the operator receives after obtaining a license.
1. Legal protection
Having a license protects operators from legal issues. Conversely, running an illegal online casino or sportsbook exposes the entrepreneur to significant fines, platform bans, and even prison terms in some jurisdictions.
2. Purchasing official games
Without a license, it is nearly impossible to collaborate with official game developers for online casinos. Reputable providers prefer to sell their products only to legal operators. Additionally, high-quality, stable, and user-friendly gaming content is essential for the success of a gambling platform.
3. Cooperating with banks and integrating popular payment systems
To operate properly, an online casino needs corporate and merchant bank accounts, as well as integrated payment systems.
Like game developers, financial institutions prefer to work exclusively with licensed gambling operators. This is another crucial reason to obtain a license.
4. Customer trust
An important factor is the trust of players and the reputation within the gambling community. Experienced gamblers always check for a license before starting to play. This document guarantees the operator’s compliance with established quality and safety standards, ensuring that the funds and personal data of clients at a licensed online casino are secure.
5. Being a part of global gambling community
Obtaining a license grants the operator access to the global gambling community. This enables cooperation with other operators, participation in large-scale industry events, meeting like-minded people, and building professional networks.
Now we know why a license is needed. But where can you get one? Let’s find out how to choose a country to legalize your gambling project.
How to choose a jurisdiction for obtaining a license?
Choosing the right jurisdiction to obtain a gambling license is not an easy task. However, there are several clearly defined factors that need to be taken into account when doing this.
1. Reputation
Choose reputable jurisdictions with a recognizable and reliable licensing authority. The regulator’s reputation will inevitably affect your business. Note that the more respectable the jurisdiction, the stricter the requirements for operators. When choosing the most prestigious locations, be prepared to meet the highest standards. Fortunately, these efforts pay off in the long run, as online casinos operating under the license of esteemed jurisdictions do not face problems with attracting clients, cooperating with banks or game developers.
2. Support
When choosing a jurisdiction, pay attention to the attitude of local authorities towards the iGaming industry. Many countries not only demonstrate a gambling-friendly approach, but also support the gambling business in every possible way. Stimulating measures may include tax benefits, simplified licensing procedures, and even grants for starting a gambling business.
3. Costs
Find out the fees required to obtain and maintain a license in each jurisdiction. Additionally, review local tax policies and potential benefits for gambling operators.
Understanding the costs and realistically assessing your financial capabilities will help you choose a jurisdiction that matches your budget and prevents bankruptcy in the first year.
4. Requirements
Carefully study the licensing requirements for operators. It is important to make sure that you can fulfill each of them, because regulators thoroughly check applicants and can refuse to issue a permit at the slightest violation of the rules.
5. License features
An important factor is the specifics of the license itself, including its validity period and the markets it covers.
For the validity period, it is more profitable to choose permits that do not require renewal for several years. Each renewal involves time, financial costs, and bureaucratic red tape.
As for the markets in which you can operate with a license, everything is straightforward. Choose a country whose license allows you to engage your target audience.
6. Issuing terms
Last but not least, consider the timing of license issuance. In some jurisdictions this is just a few weeks, in others the procedure lasts up to six months. There are no general recommendations here, just focus on how soon you plan to enter the market.
Read on to learn about the 5 most popular jurisdictions for licensing Internet gambling in 2024.
Top 5 licensing jurisdictions
Now that we have discussed the importance of obtaining a gambling license and how to choose the right jurisdiction, let’s explore the five most popular jurisdictions for licensing online gambling businesses. These locations are known for their reputable licensing authorities, supportive environments, and comprehensive regulations.
1. Anjouan
Anjouan has become a popular destination for obtaining a gambling license. The jurisdiction is known for its straightforward application process and relatively low fees. Anjouan offers a supportive regulatory environment that helps new operators enter the market quickly and efficiently. Additionally, their licensing authority is recognized internationally, which can help build trust with players and partners.
2. Curacao
Curacao is one of the most well-known jurisdictions for obtaining an iGaming license. The Curacao gaming license covers all types of gambling activities, simplifying the process for operators. Even after changes to the island’s gambling legislation, the licensing fees remain affordable, and the tax regime is favorable. Curacao’s licensing process is efficient, allowing operators to start their businesses with minimal delays.
3. Kahnawake
Canadian Kahnawake is another respected jurisdiction for online gambling licensing. The Kahnawake Gaming Commission has been regulating the industry since 1996, offering a stable and reliable licensing environment. The application process is thorough but fair, ensuring that only reputable operators obtain licenses. Kahnawake also provides excellent support to licensees, helping them navigate the regulatory landscape effectively.
4. Malta
Malta is one of the premier jurisdictions for iGaming licensing, known for its stringent regulatory standards and comprehensive oversight. The Malta Gaming Authority (MGA) is highly respected in the industry, and a license from Malta is a mark of quality. While the requirements are strict, the benefits are substantial, including access to the European market and high levels of player trust. Malta also offers favorable tax conditions and robust support for operators.
5. Isle of Man
The Isle of Man is another top choice for online gambling licenses. The jurisdiction is renowned for its strong regulatory framework and commitment to maintaining high standards of integrity and fairness. The Isle of Man Gambling Supervision Commission ensures that operators adhere to strict guidelines, providing a safe environment for players. Additionally, the Isle of Man offers various tax benefits and a supportive business environment, making it an attractive option for many iGaming companies.
Choosing the right jurisdiction is crucial for the success of your iGaming operation. Each of these five jurisdictions offers unique benefits and opportunities. By selecting a reputable jurisdiction that aligns with your business goals and capabilities, you can ensure a strong foundation for your online gambling venture.
Gaming license requirements
Each licensing jurisdiction has its own unique set of requirements. Nonetheless, we can highlight the 10 most common requirements that you are likely to need to fulfill in all jurisdictions.
1. AML/KYC compliance.
Since gambling is an area vulnerable to fraud and money laundering, financial security is the most important requirement for operators when obtaining a license.
Compliance with AML (anti-money laundering) policy standards and the KYC (know-your-customer) principle protects the operator and its clients from financial crimes and reduces the risk of losing money.
2. Protecting minors
A mandatory condition of any licensor is to prevent persons under the legal gambling age from entering the game. The legal gambling age varies between jurisdictions, but is usually 18 or 21 years old.
3. Responsible gambling policy compliance
Compliance with the principles of responsible gambling helps protect players from gambling addiction, bankruptcy and other related problems.
Responsible gaming measures include setting deposit limits for some players, allowing self-exclusion, and posting honest information about gambling addiction and how to deal with it on the online casino website.
4. Fair gaming and RNG
The operator is required to prove that the games on their website are fair and unbiased, with outcomes determined randomly. To do this, they must provide a certificate for the random number generator used in the games on their platform.
5. Background checks
To prove trustworthiness and ability to run a gambling business, an operator must undergo a background check. During the procedure, it is necessary to prove the absence of a criminal record, the presence of the necessary education and/or experience in the industry.
6. Proof of financial stability
It is also necessary to prove that your company has sufficient funds to conduct business and pay winnings to players. Some jurisdictions require a security deposit, which guarantees that clients will receive their money under any circumstances.
7. Business plan
To understand the operator’s business goals and assess the potential of the company, licensing authorities require providing a detailed business plan.
This document is necessary not only to obtain a license, it is also a guiding light for the operator himself. By following a business plan, it is easier to achieve your goals and control processes.
8. Compliance with local laws
In addition to complying with generally accepted standards, the operator must also adhere to local gambling legislation. For example, it is important to understand the marketing rules, as many countries have restrictions on the promotion of gambling products.
9. Regular audits
Regular checks and financial reports await the operator even after receiving a license. This is one of the basic requirements in the vast majority of jurisdictions.
10. Paying fees and taxes
Timely payment of application, licensing, renewal and other fees, as well as taxes, is a prerequisite for obtaining and maintaining an online gambling license.
How to get a gambling license?
Finally, let’s address the main question: how can you obtain a license for an online casino or bookmaker? Here is a brief algorithm of actions for the future operator:
1. Choose the jurisdiction and learn its gambling legislation
We have already talked about the importance of choosing a jurisdiction. If you’re having trouble deciding on your own, turn to industry experts for professional advice.
2. Ensure the compliance with all requirements
Try not to miss anything and don’t look for loopholes. Even the slightest violation of the requirements can lead to a refusal to issue a license or its further revocation.
3. Prepare a complete documentation package
Provide the regulator with a complete package of documents about you and the company. Information must be accurate and up to date. Try to provide all documents at once so as not to delay the process of reviewing your application.
4. Pay licensing fees
Pay all required fees. This could be an application fee, licensing fee, annual fee, etc.
5. Submit the application
Once all documents are prepared and fees paid, apply for a license. Some jurisdictions allow this to be done online; other regulators still require in-person attendance.
6. Undergo all required checks
After submitting your application, the commission will begin the review process. During this period, various checks may be conducted on your business to ensure safety, compliance with local legislation, and integrity.
7. Obtain a long-awaited license
If the licensing authority approves your application, you will receive the desired license. However, the work does not stop there. Any business requires timely updates to stay in line with changing trends and legal requirements.
The process of obtaining a license can seem difficult and intimidating for those new to the industry. However, there is nothing to be afraid of: if you follow all the rules, the chances of refusal are small. In addition, you can make your task easier by contacting LicensingAid specialists.
LicensingAid license acquisition service
The LicensingAid team consists of professionals in the field of online gambling licensing. Their experts accompany operators throughout the entire licensing process and communicate with the relevant authorities on their behalf.
Here’s what LicensingAid can do for you:
- Help with company registration;
- Assist in bank/merchant account opening process;
- Help to comply with AML requirements;
- Help with preparing documents;
- Trademark and design consultations;
- Legal advice and any other matters related to a license acquisition.
Do not hesitate to contact LicensingAid and get your first free consultation.