Going Legal: Do You Need A License to Start Your iGaming Business?

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do you need a license to start your igaming business

Introduction

The iGaming industry has grown significantly over the past few years, with global revenues reaching $127 billion in 2023 according to technology and growing online gambling popularity. In fact, online betting operators grew by 15% in 2022, with over 7,500 licensed operators globally. But as it grows, regulatory compliance is key. Not being licensed to operate can lead to fines, bans, and legal troubles, hurting your brand and profitability.

This blog article addresses the why you should get an iGaming license, what licenses you can get, how to get one, and why it's more intelligent to be a licensed operator. If you are opening an online casino, sportsbook, or poker room, learning about the need for licensing can make you a success.

Why Licensing Matters in iGaming

Legal Compliance in the iGaming Industry

The iGaming industry is highly regulated, and there are strict laws to be adhered to in order to ensure that operators are adopting a fair and honest strategy. Getting a real iGaming license is not optional; it's the law in all but a few jurisdictions. Operating unlicensed is very risky and can see fines, prohibitions, and legal problems threaten the existence of your business.

Licensing creates a regime that safeguards both operators and consumers inside. Regulators enforce a level of player protection, safe gambling, and fairness that puts consumers at ease. For players, a licensed operator is an assurance that they are playing within a secure and stable gaming environment.

Risks of Running Without a License

Running without a license is a risk in itself. The risk can extend to the extent of hefty fines and lawsuit to being barred from offering iGaming services for life in some jurisdictions. You may also find it difficult to market to players, affiliates, and investors without the confidence that comes with a valid license. Without the legal protection of a license, you stand in the path of fraudulent activities and you expose yourself to being punished by regulatory authorities.

Most jurisdictions, such as the UK and Malta, are tough on unlicensed operators. When caught, the penalty can be more than the reputation of your business. In some cases, operators are charged criminally, which could see them imprisoned.

What This Blog Will Cover

Within the following sections, we will classify the different types of iGaming licenses, requirements in each jurisdiction, and the procedure of obtaining a license. We will also provide an overview of the fees, benefits of being licensed, and professional recommendations regarding applying for a license.

What is an iGaming License?

An iGaming license is a lawful permission from a government or regulatory body to conduct a gaming or betting operation online. The license is evidence that an operator is in accordance with all the applicable regulations so that their business is authentic, safe, and within the limits of the law.

The Role of an iGaming License

The most compelling reason that you would pursue an iGaming license is to make sure that your company is legitimate. A license ensures that your iGaming website adheres to local and international gaming laws, and this offers the players a secure and fair environment to play in. The moment you have a license, you are in the right to provide gambling services via the internet such as casino, poker, sportsbook, etc.

Benefits of Having a License

Having a license offers numerous advantages:
  • Trust: A licensed operator is viewed as more trustworthy. People will bet with operators who have already been proven by the tests of regulation.

  • Customer Confidence: Players are confident that, as a licensed operator is under the eyes of regulators, there will be good behavior and openness in managing their funds.

  • Market Expansion: Doing business under a respected license opens up global markets. The majority of nations have prerequisites for operators to secure a license before offering gaming services to locals.

Types of iGaming Licenses

There are various types of iGaming licenses, one for each industry business. It is crucial that you know the kind of license your business will require so that you can follow relevant regulations.

1. Online Casino License

Online casino license is needed if you want to operate an online casino that offers traditional games like slots, table games (blackjack, roulette, etc.), and live dealer games. These licenses are governed as per the rule, thus the operator has to play by rules of fairness and has to provide a secure environment to the players.

2. Sports Betting License

If you're planning on operating a site where people can bet on sporting events, you'll require a sports betting license. These licenses are more sport or region-specific because there are different laws regarding sports betting from region to region.

3. Poker License

For poker rooms offering online poker games, poker licenses are required. As with online casinos, poker rooms must have their games be fair and money of the players be safe.

4. Lottery License

Lottery licences are granted to operators wishing to offer lottery games via the internet. Lottery licences are treated differently from other gaming licences due to the nature of lottery schemes.

Jurisdiction-Specific Licences

Licensing legislation varies greatly from jurisdiction to jurisdiction. Some of the more popular jurisdictions issuing iGaming licenses are:
  • Curacao: With extremely low-cost licensing, Curacao is a favorite among operators.

  • Malta: With a good reputation for having a powerful regulatory framework, Malta is one of the top iGaming European-targeted jurisdictions to operate for operators.

  • Gibraltar: Gibraltar has long been world-renowned for regulation and taxation advantages, hence this is the next most well-known jurisdiction to obtain a license in.

  • UK: The UK Gambling Commission issues one of the most robust licenses, so it is among the most well-recognized jurisdictions that operate in the iGaming world.

  • Isle of Man: The jurisdiction has a relaxed tax system and high-risk licensing procedure for online casino operators and online sportsbook operators.

  • UAE: The UAE, though tightly controlled, recent developments in their iGaming market are opening up possibilities for regionally licensed operators.

Which License is Best for Your Business?

Your choice of the best license to obtain for your business depends on the nature of operation you will be conducting and the customers you are targeting. Should you, for example, be conducting your operations in the European market, then perhaps it would be better to obtain a license from Malta or the UK. If you want to offer services all over the world at an affordable price, however, Curacao can be the place to begin with.

Do You Always Need a License?

A license is typically required for most iGaming operators, except where your jurisdiction or business model dictates otherwise.

B2C vs. B2B Operations

If you have a Business-to-Consumer (B2C) business, where you are selling iGaming products to online bettors directly, in most cases, you would need to be licensed. However, if you have a Business-to-Business (B2B) business, selling items such as software development or white-label solutions to licensed operators, you may not necessarily need to be licensed as well.

Exceptions in Certain Jurisdictions

There are less stringently regulated laws in other regions, and you may not require a license to work there. But this is more of an exception as governments clamp down increasingly on unlicensed operators. You should always confirm the jurisdiction in which you intend to work in order to determine what the prevailing laws are.

Steps to Obtain an iGaming License

Getting an iGaming license consists of several steps, which will differ from jurisdiction to jurisdiction. But the process generally follows the same basic outline.

1. Select the Proper Jurisdiction

You must first choose a jurisdiction that suits your business requirements before you begin the licensing process. Look at tax rates, the business reputation of the licensing jurisdiction, and the intended market for your platform.

2. Prepare Required Documents

Once you have made a decision on your jurisdiction, you will prepare the following documents:
  • Business registration documents
  • Financial statements
  • Proof of ownership or control
  • Details of your company’s directors and key personnel

3. Submit the Application

Now, you will make an application to the licensing authority. This is accomplished through filling forms, presenting papers, and paying application fees.

4. Compliance Checks and Approval

After submission, the issuing authority will conduct compliance checks, which may involve directors' and company owners' background checks. It is a time-consuming process and may take anywhere from several months depending on the jurisdiction.

5. Pay Fees

In addition to application fees, you will also be required to pay renewal fees annually to keep your license.

6. Costs Involved in Getting Licensed

The cost to obtain an iGaming license can also vary significantly depending on jurisdiction. Some factors that affect the cost include:
  • Application fees: These range from a few thousand dollars to several hundred thousand dollars, depending on jurisdiction.
  • Annual renewal fees: These are less than application fees, but they can be expensive.
  • Operational expenses: These include legal fees, administrative charges, and compliance audit charges.
While licensing is expensive, it is a valuable investment for the long-term viability and reputation of your iGaming business.

Benefits of Being Licensed

Licensing has a number of benefits that can make your business thrive and succeed in the competitive iGaming industry.

1. Legal Protection

A license protects your business from legal lawsuits and makes you a law-abiding citizen in the jurisdiction you've chosen. 

2. Player Trust

Players are more likely to trust a licensed operator, knowing that their personal and financial information is safe and that the games are fair.

3. Market Credibility

Having more credibility for your business in the eyes of investors, affiliates, and partners because you have a license means more opportunities for growth.

4. Global Expansion

Having an original license welcomes foreign markets to your business, and you can take your business to other nations and be accessed by many more individuals.

Working With Experts to Get Licensed

Dealing with the intricacy of iGaming licensing is daunting, particularly for a new player. Being able to let an iGaming consulting agency or company do it can make a significant difference. The specialists at AIS Technolabs are experienced in helping operators through the whole licensing process, from determining the best jurisdiction to comply with local regulations.

Conclusion

Obtaining a license is an experience well worth while if you are launching your iGaming business. Not only does it get you in line with the law, but it also makes your business more respectable and attractive to players, investors, and affiliates. Even before you take the first step, it is well worth taking some time out to learn about the different licenses out there, which jurisdictions they can be purchased from, and what they cost.

If you are ready to go ahead with pursuing your next step of obtaining your iGaming license, reach out to AIS Technolabs for expert consulting and advisory on starting your business in the licensed iGaming sector.

Disclaimer

This blog is intended for informational and educational purposes only. We do not promote or facilitate gambling activities in any country where it is considered illegal. Our content is focused solely on providing knowledge about legal and regulated markets. We only work with operators and platforms that are licensed and comply with the laws of jurisdictions where casino gaming is permitted. We do not operate or endorse any form of gambling in restricted regions. In countries where only skill-based games are allowed, our involvement is strictly limited to those games.

We believe gambling should be an entertaining and responsible activity. Our goal is to ensure that the platforms we review uphold the highest standards of fairness, transparency, and player safety.

FAQs

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Yes, in all jurisdictions, you will need a current and active iGaming license to lawfully operate an online betting or gaming website. The license will ensure you of compliance with domestic and international laws, offering a secure and reliable environment for users.

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There are several types of iGaming licenses, from online casino licenses, sports book licenses, poker licenses, to lottery licenses. Which one you will need will depend upon the nature of gaming or betting services you will be offering.

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Commonly utilized iGaming licensing jurisdictions include Curacao, Malta, Gibraltar, the UK, the Isle of Man, and certain UAE jurisdictions. Each one differs as far as the licensing requirements and benefits.

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The fee to acquire an iGaming license is quite different in different jurisdictions and according to the license type. It generally includes application fees, yearly renewal fees, and compliance operational expenses. The price can be anything from a few thousands of dollars up to hundreds of thousands of dollars.

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The licensing procedure may last between a few months and one year, depending on the state and the complexity of your company. Compliance checking and approval are most likely to be the longest part in the process.

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Being unlicensed is quite risky and can result in fines, lawsuits, and not being able to retain customers. Being licensed indicates that you are legit and gives your company credibility.

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If you are providing services to other licensed operators (e.g., software development or white-label solutions), a license may not be necessary. This is, nevertheless, dependent on the jurisdiction's regulations.