The global gambling market demonstrates steady exponential growth due to the development of IT and financial technologies. Experts estimate that its capitalization will double by 2030. Those wishing to join this industry are required to legalize their activities by obtaining a gambling license from the regulator.
Benefits of a license:
- Legality of doing business, confirmation of income received to financial institutions.
- Stability of activity with clearly defined mechanisms of work.
- Recognition in the global market, trust from users, increased confidence in winning.
- Opportunity to cooperate with international banks, payment services, and software developers.
There is no single global regulatory body. Operators need to apply to gambling regulators of the jurisdiction where they plan to operate.
What are the main regulations?
Any gambling license needs to comply with the requirements of state authorities regardless of the chosen jurisdiction.
Among the general norms it is worth highlighting:
- The qualifications and experience of the personnel must be appropriate for the chosen field of activity.
- Confirmed reputation in the market, in some countries it is necessary to present certificates of absence of criminal records for all founders.
- Have the necessary technical support, and fulfill the requirements for data storage, and server location.
- Keeping financial records, and conducting audits.
One of the strictest criteria is compliance with AML/KYC regulations.
The enforcement of these procedures has become stricter in recent years, as it is estimated that over $2 trillion is laundered annually, about EUR 100 billion in Europe alone.
Other regulations/recommendations that operators need to comply with:
- Directive (EU) 2019/1153 of the European Parliament and of the Council of June 20, 2019.
- Payment Services Directive (PSD2).
- General Data Protection Regulation (GDPR).
- Recommendations of the Financial Action Task Force (FATF).
- Customer Due Diligence (CDD).
- Enhanced Due Diligence (EDD).
Among the complexities, it is worth noting that some countries limit the number of operators, and license fees can be up to $500k per year.
International Gaming Regulatory Authorities
According to the global directory, there are 676 agencies and commissions that regulate, license, and enforce international gambling law business in 142 countries.
The most authoritative governing bodies in the world:
- UK Gambling Commission (UKGC).
- Gibraltar Gambling Commission (GGC).
- Macau Gambling Inspection and Coordination Bureau (DICJ).
- German Sports Betting Association (DSWV).
- Casino Regulatory Authority of Singapore (CRA).
Games Regulatory Authority Online
ARJEL has become the regulator of online gaming in France. In 2010, the Gambling Act (No. 2010-476) was passed, which allows such activities:
- Poker
- Sports betting
- Lottery
Online casinos are banned in France, and ARJEL can fine up to EUR 10,000 for sites offering such services to residents of this country.
Macau Gaming Inspection and Coordination Bureau
DICJ (Gaming Inspection and Coordination Bureau) serves as the supervisor of the gambling market in Macau. The license is issued for 20 years through a concession agreement with the Government. Macau has not developed separate legislation regulating online gambling.
Macau is competing with Las Vegas for the supremacy of the world gambling city. In 2023, the revenue from the gambling business amounted to $1.43 billion.
Casino Regulatory Authority of Singapore
Singapore is the third largest gambling market after Macau. Since 2022, the Gaming Regulatory Authority of Singapore (GRA) has become the single regulator of this market.
The main legislation:
- Gambling Regulatory Authority Act (2022), outlines the main points for obtaining a license.
- Gambling Control Act (2022), emphasizes the requirements for business and conducting transparent operations.
- Casino Control Act (2006), specifies the regulations for opening and operating a casino. To work in a casino, employees must obtain one of 4 types of licenses.
Marina Bay Sands and Genting’s Resorts World Sentosa are considered among the largest casino resorts in the world.
German Sports Betting Association (DSWV)
In 2021, all 16 German states approved the Gambling Treaty, which aims to protect users and legalize advertising and gambling. For this purpose, a supervisory state body was established – the Joint Gambling Authority of the Länder, which issues licenses for 5 years.
This has stimulated an influx of new companies. DSWV reported that the number of gambling operators is already about 30 thousand.
DSV is an association established in 2014 to promote gambling operators in the sports sector.
Sports betting and online poker operators do not pay VAT. The license can be obtained by companies located in the EU.
Gambling Commission UK
In 2007 the Gambling Commission of the United Kingdom UK GC was formed.
The main functions of the UK GC include:
- Issuing licenses to operators. There are already about 600 gambling operators offering online games. More than GBP 4 billion is brought to the coffers of online casinos.
- Protection of users’ rights, and compliance of gambling operators with all technical requirements (RTS).
- Implementation of AML/KYC procedures.
- Regulation of land-based and online operators (casinos, sports betting, slot machines, etc.).
- Imposition of fines, revocation of licenses.
Legal regulations:
- UK Gambling Act 2005.
- Gambling Licensing and Advertising Act of 2014.
- National Lottery Act 1993.
Financial Services and Gaming Gibraltar
The license obtained from the Gibraltar Regulatory Authority (GRA) is valued worldwide. Therefore, the process of obtaining it is quite complicated and long. A positive response from the GRA is influenced by the presence of a license in another jurisdiction and the proven financial stability of the company.
Gambling operators are attracted to this jurisdiction by a loyal tax system (no VAT, low corporate tax), data confidentiality, and proximity to the African and EU markets.
GRA, according to the Gambling Act of 2005, can consider applications for B2B and B2C licenses for 5 years. The gambling industry contributes 25% of GDP.
Financial Services Regulatory Commission
The Financial Services Regulatory Commission (FSRC) began reviewing applications from licensees in 1994, following the passage of the Free Trade Area Act.
Jurisdictional features:
- The license allows the advertising of gambling services within the UK.
- Residents are prohibited from playing online gambling games.
- Non-resident companies do not pay taxes, only the license fee.
- Beneficiary data is closed.
In 2005, the Prevention of Terrorism Act was enacted, after which one of the functions of the FSRC was to check operators for compliance with the rules on the prevention of terrorist activity.
Lotteries and Gambling Supervisory Inspection
Since 1998 casinos started to operate in Latvia, and since 2003 online operators have been operating in Latvia. The license for gambling companies is approved by the Lotteries and Gambling Supervisory Inspection (IAUI). IAUI requires that 50% of the company’s management be Latvian residents and that the equipment complies with EU standards.
Gambling is regulated by:
- Law on Games and Lotteries.
- Gambling Tax Law.
Gaming Control Authority
Lotteries have been allowed in Lithuania since 1998 and online gambling since 2016. The Gambling Control Authority (GCA) monitors the implementation of the provisions of the Law on Gambling (2001) and the Law on Lotteries (2003).
From 2021, to attract investment, they allowed online operators to obtain licenses without the need to own land-based gambling establishments.
GCA to fight illegal online companies by blocking the transaction. Also from 2025, the Lithuanian government plans to further tighten the rules of gambling advertising, after which advertising will be possible only on the company’s website or in the establishment itself.
Gambling Supervision Commission (‘GSC’)
Since 2001, the GSC Gambling Supervisory Commission has been administering the system based on the Online Gambling Regulation Act 2001 (OGRA).
The GSC requires company registration on the island, as well as hiring a local manager.
The jurisdiction attracts operators with its tax system (0.1 to 1.5% tax on gambling) and innovative, UK-based operations.
The authorities support the use of cryptocurrencies in payments, as well as blockchain technology – the GSC has issued a license for a blockchain-based lottery.
Summary
Regulatory authorities are established to ensure compliance with local and international laws, protect investors’ capital, and control the activities of market operators.
Strict rules and high license fees are usually imposed by jurisdictions with a good reputation (UK, EU countries). Liberalization of the gambling market, lack of licensing in some jurisdictions, and low tax rates are beneficial for business, but they may lead to distrust of the operator from other companies, and customers, and unwillingness to cooperate.
When entering new markets, it is worth not forgetting about the additional conditions of some zones: peculiarities of legislation (what is included in the package of documents, residency requirements for owners and managers, availability of office space); types of licenses (one license or several for different types of activities); regulations regarding gambling advertising (sometimes a separate permit is required). The combination of these factors can significantly increase the cost of opening a business.
A license obtained from a reliable regulator is a guarantee of the legality of the business, a proven reputation in the market, and the trust of users.