What is a gaming license?
A gaming license is a key document for every online casino or sportsbook operator. This is an official permit to provide gambling services to players. It is possible to obtain such a document in one of the jurisdictions where iGaming is legal and regulated.
Keep reading to figure out why you shouldn’t run an online casino without a license, what are the requirements for operators to obtain the document and where it is easier to get it. We will also tell you how to simplify the process of licensing an iGaming project with the help of specialists.
Why do you need a license?
A gambling license solves many potential problems that may arise on the path of online casino operators. In addition, the document provides several undeniable benefits to its holders. Let’s list the main advantages of owning a license.
1. Legal protection
Without a license, the activities of a gambling operator are illegal, which means owners of such unlicensed platforms may face fines, ban, and in some jurisdictions even prison sentences. A license is a guarantee of the absence of problems with the law, and therefore the cornerstone for building a long-term and profitable iGaming project
2. Possibility to buy official software
Leading developers of gaming content do not want to cooperate with illegal operators. Thus, the license gives you access to the best games and other software for your online casino.
3. Using common payment systems
Without a license, you are deprived of the opportunity to add popular payment methods to your website, which automatically cuts off a huge part of the audience.
4. Opening of corporate and merchant accounts
Like software developers, self-respecting financial institutions do not want to work with online casinos without a license. At the same time having a bank and merchant account is a prerequisite for the normal functioning of an online gambling platform.
5. Customer trust
Experienced players know that a license is a guarantee of quality and safety. Since in order to obtain a permit the operator is obliged to bring his website into compliance with certain standards, gambling on a licensed platform significantly protects the customer’s personal data and assets. Thus, a license increases the level of trust in your online casino and attracts more and more clients.
6. Ticket to the gambling industry
Last but not least, the license opens the door to the exciting and diverse world of the gambling industry. These include regular industry events, useful contacts and international cooperation.
Having understood the advantages of owning a license, let’s move on to how to get one.
How to get a gambling license?
The algorithm for obtaining a permit and gaming license requirements differ depending on the jurisdiction. In some counties the conditions for issuing a document are stricter, but in others it is enough to fulfill the standard requirements. Let’s list several basic requirements that are common to the vast majority of jurisdictions.
1. Business registration
Your gambling operation must be legally registered as a business entity within the jurisdiction you’re targeting. This legitimizes your operation and is foundational for any subsequent licensing steps.
2. Criminal background checks
Applicants and key personnel must be free of criminal records, particularly related to financial crimes or fraud. This ensures the integrity and trustworthiness of the gambling operation.
3. Software and game fairness certification
Your gaming software must pass fairness and randomness testing by an approved third-party. This ensures that games are fair and operate correctly, providing players with confidence in your platform.
4. Capital requirements
Many jurisdictions require proof of financial stability, showing that the business has sufficient capital to cover potential winnings. This safeguard protects customers from operators who might not be able to pay out their money.
5. Responsible gambling and Anti-Money Laundering (AML) policies
Operators must demonstrate a commitment to responsible gambling, including measures to prevent underage gambling and provide help for gambling addicts. Additionally, it is needed to implement effective anti-money laundering procedures to monitor and report suspicious activities.
6. Data and cyber security measures
You must have robust systems to protect user data and ensure secure financial transactions. This includes complying with data protection regulations and having encryption technologies in place.
7. Detailed business plan
A comprehensive business plan detailing operational, financial, and growth strategies is required. This plan helps regulatory bodies understand the business model, revenue projections, and long-term viability.
8. Licensing fees
Be prepared to pay the initial licensing fees and any ongoing payments or taxes. These costs vary widely by jurisdiction but are necessary for obtaining and maintaining a license.
9. Compliance with local laws
You must comply with all local laws and regulations, which may include age restrictions and advertising guidelines. Failure to comply can result in fines or revocation of your license.
10. Periodic audits and reports
Expect to submit to regular audits and provide periodic reports to regulatory authorities. These ensure ongoing compliance with the terms of your license and help maintain transparency in operations.
What are the best jurisdictions to obtain a license?
Among the jurisdictions that issue licenses to operators, there are those that prioritize reputation and commitment to high standards. These countries impose the most stringent requirements on operators, carry out more checks and charge high licensing fees.
There is another category of jurisdictions – those that try to attract gambling projects to their territory by any means. Unfortunately, regulation in such countries is often very poor and vague, and gambling regulators turn a blind eye to red flags and license unscrupulous operators. This undermines confidence in the gambling industry.
The perfect solution for a new operator would be to choose a well-known jurisdiction with moderate requirements. Such locations include Malta, Curaçao, Anjouan, Gibraltar, Isle of Man, Kahnawake. For a long time, the Curaçao gaming license was the most desirable permit among iGaming operators. However, today, the island’s gambling legislation is changing, and therefore it is worth carefully studying the new rules and also considering other jurisdictions.
If you still have questions about licensing online casinos or want to get professional help in this procedure, contact LicensingAid experts.
LicensingAid license acquisition services
LicensingAid is a team of specialists in the field of licensing of online casinos and sportsbooks. The company has helped dozens of operators enter the market fast and without any issues. What services does LicensingAid provide?
- License acquisition;
- Company registration;
- Bank/merchant account opening;
- AML/KYC compliance;
- Design and trademark consultancy;
- Legal advice.
Feel free to contact the LicensingAid team for a free consultation and begin your journey into the world of iGaming!