Licenses
Online Casino Licences – Everything You Need to Know (2024)
Have you ever wondered how online casinos are regulated? In all of our casino reviews, there is a column about licences and regulations where you can read about which jurisdiction(s) a casino operates under. Usually, you can also find this information in the footer of a casino's homepage. If you scroll right down to the bottom there should be a small icon or icons that relate to the appropriate authorities. But what does that say about the casino?
In this article, we will look at how casino licences are obtained, how they work, and what different types of licences you can expect to find.
Why do Online Casinos Need Licences?
For a casino to offer any games or betting markets that can be played for real money, they will need to have a licence that is recognised by the jurisdiction they are selling their games. Land-based casinos also need licences to operate in the jurisdiction they are registered at, but the difference is that online casinos have a far larger reach than land-based casinos.
Players feel safer with a licensed online sportsbook or casino. This is because operations need to meet the requirements as stipulated in the laws of the jurisdiction they operate from. If you have a dispute with a licensed operator, you can turn to the regulatory body. They should be able to solve your dispute, and legislation mostly favours players ahead of operators.
Another incentive for operators to obtain a licence is simply because it is illegal not to. If a casino or sportsbook is found to be operating without a licence, then in most cases there are severe consequences including fines and even imprisonment.
How to Get a Casino Licence
Now if you are a new operator and you want to start up an online gambling business, the first questions you need to ask are:
- What services will you provide?
- Do you want to be independent or work as an ancillary operation?
- Which market do you want to target?
- What is your budget/How much do you want to make?
Services Provided
You may limit your services to slots/table games/video poker. If you include live dealer games too then you need to check whether that falls under the same scope in your jurisdiction of choice. Usually, sports betting services require a separate licence, but in some jurisdictions, there is only 1 licence that includes all forms of online gambling.
Independent or Semi-Independent
As a startup, it is probably better to work in cooperation with an established operator. You may have a service, such as bingo rooms, and instead of going solo, you could reach more customers by teaming up. In this case, you may not need to obtain a full casino licence but instead some kind of hosting/ancillary/partial gambling licence. Your bingo rooms will be an added category on the website of the operator you team up with. However, you can still reap the profits.
Alternatively, you can use a white-label solution. You will need to have a functioning website that you have designed to the last detail. Then, you will team up with a company that already holds a licence. They will manage the legal side for you whilst you will run your operation. From the player's perspective, you will look like a fully independent operation.
Target Market
You may offer a set of games and bets that can be enjoyed by anyone in the world. However, you may have a vision of targeting a specific audience, like say, the UK. Your collection of games includes all the top slots, roulette games and scratchcards for the market. You also provide extensive betting markets for football, horse racing, cricket and rugby. When thinking about where you want to get a licence, the UK is quite an expensive and heavily taxed option. If you look elsewhere, like say Antigua and Barbuda, Gibraltar, Alderney, the Isle of Man, and so on, you may find better deals where you: do not need multiple licences, can save money on the application, and do not need to pay high tax.
Budget
This leans heavily into the last question about budgets. Not everyone has the same financial means as the heavyweights in the industry. Smaller operations or startups will have no option but to look for cheaper licences or operators to partner with.
Application for Licence
Applying for a licence is a lengthy and usually quite expensive procedure. The details depend on which jurisdiction an operator wants to be licensed in and what services they plan to provide.
Scope of Licence
This was mentioned earlier, but the point is raised again now in more detail. Some jurisdictions give one type of licence that covers all forms of online gambling. Here are a few categories of games:
- Casino Games (against the house or peer vs peer)
- Bingo
- Live Casino Games
- Lotteries
- Fixed-Odds Betting (sports betting, virtual sports betting)
- Gameshows
Depending on the jurisdiction, you may find that: a licence covers all these categories, a licence covers a few of these categories, and even that there is no licence for some of these categories (because they are a state monopoly or outright banned).
Have a Physical Presence
Most jurisdictions require a company to establish a company with a physical location within the jurisdiction. Not all regulators have this requirement, and some even offer different types of licences to offshore companies.
Provide Proof of Fairness
All licensed games need to be provably fair to play. Operators will need to supply certificates that their content has been tested by third-party auditors. There may also be jurisdictions that conduct further investigations into an applicant’s portfolio. This may lengthen the amount of time that it takes to obtain the licence.
How Players Are Protected
Proving that games are fair to play goes a long way to helping applicants get their licences. However, the obligations to player safety do not stop there.
Know Your Player and Player Verification
It is in the interest of both the players and the regulatory bodies to verify the ID of gamers. This is to prevent underage gamers from gambling and to ensure there is no fraudulent activity such as player duplicating their accounts. It also keeps your funds safer – as you can only withdraw once you have verified your account with an ID. Personal information that is required to verify players is the following:
- ID Card/Passport/(Sometimes) Driver’s Licence
- Proof of Address
- Date of Birth
- Contact Information (ie email address)
- Telephone Number
The casino or sportsbook may use your telephone number and email address to send you promotions (something which you can unsubscribe from). It can also be used for two-factor authentication – further increasing the safety of your account.
Responsible Gambling
We can all get carried away when playing an awesome game or catching some fantastic odds. You should always play for fun and avoid spending more than you can afford to lose. Should you find that you are going over your budget, then the casino or sportsbook should offer responsible gambling tools.
All jurisdictions have laws about these tools, and licensed operators are obliged to provide them. Self-exclusion is a tool by which you can effectively ban yourself from a casino or sportsbook, for a period of time. There should be numerous options, such as a week, a month or even longer.
In addition to self-exclusion, most jurisdictions also state that operators should offer deposit limits and timeout tools. These let you set a limit for your deposit (for example a weekly maximum) and limit your gaming hours (for example in a day).
Financial Security
When applying for a license, a casino or sportsbook should provide all sorts of bank statements and company finances. This is to ensure that they have the funds to pay out player winnings. Additionally, operators may have to submit a deposit, which can be used to pay players if for any reason the operator cannot.
Gambling Licences Around the World
Whether it is legal or not, every country has its own laws about online gambling. In some countries, all online gambling is illegal. Other jurisdictions may have different definitions for online gambling and will either allow certain types of games or allow them all.
As a player, this does not mean you can simply pick a country that has more lenient laws and then find those casinos and play on those websites. The gaming laws of the country you live in also relate to you. For example, if you are living in Australia then you will not be able to access a South African-licensed sportsbook, no matter how many brilliant cricket bets it may offer. You should not even think about using a VPN to access the sportsbook. There is a zero-tolerance policy for players who use VPNs to hide their real address and register at a website they are not supposed to. You may be able to deposit money, but you will not be able to verify your account – and therefore withdraw.
Instead, you should look at your viable options. Your country of residence may recognise other gambling jurisdictions, giving you the option to explore all the operators from those countries. Jurisdictions such as Malta, Curacao and Kahnawake can issue licences which are recognised in several countries across the world.
For more information on this topic, be sure to check out our Gaming Licence Reviews for:
Alderney Gambling Control Commission
Isle of Man Gambling Supervision Commission
Antigua and Barbuda Financial Services Regulatory Commission
FAQs
What Licences Are There?
It depends on the jurisdiction. Some gambling authorities only issue one licence that covers all casino games, live games and sports betting. There may be some that issue separate licences for different types of activity. For example, the UK Gambling Commission can issue over 30 different types of licences.
Can I use a VPN to Join an Online Casino?
Using a VPN, you can hide your physical location to try to access a casino that is restricted in your country. Is this allowed? Absolutely not. Whilst a VPN may take you onto the casino's website, you will not be able to register an account to play games for real money. Registration may require details such as proof of address, and possibly a mobile phone number (with the appropriate country code). Even if you manage to create an account at the casino, you may have issues when requesting withdrawals. A casino holds the right to deny withdrawals from players if they are suspected of fraudulent activity. Furthermore, this activity may be punishable by law, depending on which country you are in.
What is an Offshore Online Casino?
Some jurisdictions allow operators to obtain licences without a physical presence in the country. There are several reasons why this can happen. An operator may have a representative in the jurisdiction, they may obtain a licence that allows them to operate from another country, or they may obtain a licence that is white-listed in the country you are playing in. Though the operator may be located in another country, there is nothing to worry about. Licensed casinos or sportsbooks (either by white-listing or not) are completely safe and legitimate. The only thing you may want to double-check is the payment methods, currencies that are supported, and how you can reach customer services
What is a White-Label Solution?
Simply put, this is when an operator borrows a license from a well-established company. A startup company or a smaller operator can decide to launch a casino or sportsbook and can simply partner up with a licence holder. The licence holder then vouches for the operator, who launches a fully legitimate casino or sportsbook. As a player, you will not notice the difference at first glance. The operator runs their website with their own brands and portfolio. However, you can find out by checking out who owns and operates the company and what licence they hold. Well-established businesses usually have their hands in multiple casinos and sportsbooks. White-label solutions are not rare at all, and there is nothing to worry about if you want to play at one. It is just as legitimate as an independent licence-holding establishment.
What is a White-Listed Jurisdiction?
When a territory is “whitelisted” this means that it is recognised by another territory. There may be a relationship between the countries, or the regulatory bodies have signed an agreement. Operators may advertise and provide services to any white-listed territory as they would in the jurisdiction in which it holds a licence. For example, Gibraltar is a white-listed territory in the eyes of the UK Gambling Commission. This means that any gambling operations that are licensed by Gibraltar can operate in and advertise to the UK market.
