The types of online casino licenses

In order to legally provide gaming services associated with sports betting, lotto, poker and bingo, an online casino owner must obtain a license. Its absence challenges the successful work of an online platform, due to the fact that the operator is unable to open a bank account or even put any games on their site. That is because one has to make a contract with gambling software provider for that, which cannot be done without a license. Besides, a gambling license often comes with reduced tax rate and other benefits.

The types of online casino licenses

However, obtaining a license does not mean that any country will now welcome a new operator because the legal systems of some countries (almost all of the US states, Poland, France and others) forbid online casino games, in whole or in part. Moreover, local legal regulations may be inconsistent, and a country which had no issues with online casinos before may enact a law that blocks the activity of gambling sites on its soil. For example, until February 2017, Australia was being a favored place for online casinos of all stripes since the Australians were considered to gamble the most, spending about $8 billion a year according to a research made by Australasian Gaming Expo in 2018. This huge amount of money was going to foreign casinos bypassing the local budget. The new legal system, in particular Interactive Gambling Amendment Act 2017, prohibited the work of foreign casinos without a special Australian license, resulting in lots of gambling businesses leaving the country.

A gambling license enhances players’ trust and address concerns about slots “rigged” RTP (Return To Player) percent and non-payment of big winnings. The reason is that a licensed casino regularly has its random numbers generator audited, and a compliance certificate is given based on the results of the examination. Generally, gambling websites have licensing info in a footer, and experienced players at their first visit always scroll down to see the jurisdiction where the site was licensed.

Online casino owners face a difficult choice of a reliable jurisdiction, which provides licenses that are valid in many countries. As of today, the choice is not rich, and gambling business owners undergo licensing in one of the following countries and territories:

Curacao

Curacao

The advantages of this small Caribbean island are zero percent tax on casino profits, fast licensing process (usually about 1.5-2 months) and low ongoing expenses. A casino owner has to place computing power (servers) in the Curacao territory. Online gambling industry forms a great part of the island’s budget, which is why Curacao has such an appealing tax system.

Kahnawake

Kahnawake

Canada is famous for its very tolerant attitude towards gambling in terms of legislation. In 1996, Kahnawake Gaming Commission was created, which, among other things, provides licenses for online casinos. The first annual license fee is $40,000, software inspection costs $15,000 and annual license renewal fee is $10,000.

Malta

Malta

Malta Gaming Authority provides two types of licenses (B2B and B2C) for a period of five years. Those operators who obtained a prestigious Maltese license are on the UK Gambling Commission’s ‘white list’, which allows them to offer their services to British players. The operators have to adhere to a number of requirements, such as filing financial statements, ensuring players’ personal data safety and creating a Responsible Gaming Policy.

The licensing procedure is conducted in several stages: the Authority considers an application—this takes 3-4 weeks—and then the casino obtains a temporary license for a period of six months. After that, based on the results of a thorough analysis, a five-year gambling license is given. In accordance with the new taxation rules, which came into effect on January 1, 2018, online casinos with “B2C – Type 1 Gaming Services” license (slots, board games, live games) pay annual taxes of 1.25% if their profit does not exceed €3.000.000, 1% for a profit of up to €4.500.000, 0.85% for a profit of up to €5.000.000, 0.70% for a profit of up to €7.500.000 and 0.55% for a profit of up to €10.000.000.

Gibraltar

Gibraltar

In order to get a Gibraltar license, online casino owners have to prove their financial solvency, provide a business plan and be ready to perform transactions (winnings payouts, players’ credit card data processing) exclusively through Gibraltar’s banks. License holders pay 1% of their annual profit, but no less than £85.000.

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Apart from the jurisdictions above, online casino owners can also obtain a license from the UK, Alderney, Macao, Belgium, Denmark, Isle of Man and some other countries. Getting a license will help a gambling operator to work in compliance with laws and regulations, attracting players by complete transparency, financial transactions safety and fairness of the gambling process. Licensing leads to players’ loyalty. A client of a licensed casino is always sure that every reels’ spin, every blackjack deal is always determined by random number generator system where there is no space for any fraud and software manipulation.

Nov 14, 2018