To legally allow an online casino operator to offer gambling or sports betting, they need to have a license in a specific territory. However, obtaining a license is not that easy. Not only can they be expensive (depending on the jurisdiction), but they also require the operator to comply with regulations.
More and more countries are implementing regulations for gambling and are beginning to take action against illegal online casinos. Failure to legalize a gambling website can even result in legal penalties.
Generally, the responsibility of license providers is to ensure that all types of gambling, including online gambling, are safe and legal for users of online casinos or betting companies. The difficult part is choosing a license, as not all licenses are identical and each has its own pros and cons.
However, there are countries where online gambling is illegal and these licenses have no jurisdiction in those countries. In addition, many countries where online gambling is permitted have their own jurisdiction and national license, such as France, Spain, Germany, the United States, and the United Kingdom. This allows for more rigorous control of virtual casinos and taxes to be collected in the country.
The fundamental purposes of gaming licenses include:
- Safeguarding the rights of participants.
- Ensuring the integrity of operators and the services provided.
- Safeguarding children and vulnerable individuals.
- Promoting responsible gaming in a safe environment.
- Combating criminal activities related to gaming.
Categories of regulations and permits
In the global market, we can find different regulations and licenses depending on the jurisdiction. This means that when selecting a license, the operator must consider the location where they will register their online casino or sportsbook. Below are two general types of licenses: national licenses, which correspond to each country, and international or “offshore” licenses.
Country license
Domestic licenses are valid within the boundaries of a specific territory. These licenses are more convenient for operators who want to get involved in a specific market. Both the requirements and costs vary depending on each country and its regulatory body.
It is fascinating to know that an online casino without a national license cannot operate in a territory, as it could be considered illegal and face limitations such as domain blocking on the internet or the inability to use all accepted payment methods.
Global license
Also known as remote or offshore licenses, these allow operators to access iGaming services in various countries. In addition, they generally do not apply in areas that have a national gaming license.
They are generally more versatile, as they operate in a wide range of countries that do not have a national license and include various activities such as gambling, sports betting, or slot machines.
How can virtual casinos apply for a gaming license?
Each licensing authority has its own application procedure, although they share aspects such as the payment of fees (one-time and/or annual), the completion of numerous formalities, and a waiting period of at least two months for a response.
Some of the common requirements generally include identity verification, background checks, a business plan, bank and fund verification, software verification, and compliance verification. Depending on the jurisdiction, it may even be necessary to establish a company within the jurisdiction and host the servers in the same location. In addition, authorities have the ability to establish rules for platform providers, such as collaboration with those who already have a license and reputation, similar to an “endorsement.”
It is difficult to obtain a license, as they demand numerous requirements, prerequisites, and checks, and one mistake can result in the license being denied, even permanently.
Similarly, gaming authorities have the possibility of obtaining the support and regulation of other regulatory bodies, whether national or international, to verify the suitability of the applicant and obtain data on their history and background. The most effective method of obtaining a license is to be clear and transparent.
As for the start of the process, applications can be made through a licensing agent or in person, and it is even possible to do so online.
Finally, all online casinos must bear in mind that, although most operate in numerous countries, national law will always prevail over international legislation. Currently, there are several well-recognized international jurisdictions, such as Malta and Curacao.
