The Value of Online Casino Licences

Resources  /  Published 03 Aug 2021  /   / 

As the iGaming industry continues to grow and expand into new markets, more and more countries are seeking to regulate online casinos and sportsbooks through their own licensing requirements. This is causing gambling regulation to differ from jurisdiction to jurisdiction, further complicating an already complex licensing process.

Considering all the costs required to obtain an online gaming licence, new operators may ask where the true value of a licence lies. Application fees, licensing fees, renewal fees as well as taxes are a heavy burden that can put a strain on a casino’s budget and eat into their profits. And now more than ever, due to freedom of the internet and new untraceable payment methods such as crypto, some online operators may even try to avoid licensing altogether and do away with all the elaborate bureaucratic processes.

So, is there any value to obtaining an online gambling licence and what are the benefits?

ukgc registers may slowdown on online gambling activities trifecta directoryOnline Gambling Jurisdictions

Different regions around the world enforce different legislation to regulate online gambling operators and industry solution providers, such as gaming developers. These areas are known as online gambling jurisdictions. Each jurisdiction will have its own gambling authority to oversee all matters concerning licensing and regulation within its respective jurisdiction. Some of the most popular gaming jurisdictions in world in 2021 include Malta, Curacao, Gibraltar, and the Isle of Man.

Gambling authorities will usually require operators to base part of their operations within the jurisdiction they wish to be licensed in. This means, that many online casinos will choose their licence on their preferred location of business as well as the regulatory practices that are most favourable to them.

Gambling Licence | Trifecta DirectoryWhat do operators stand to gain from an Online Gambling Licence?

First of all, it’s important to note that operators need a license to work legally within any regulated market. Some countries, like the UK, require operators to be in possession of a local licence, i.e. a licence that is issued within their own jurisdiction. However, other countries allow online casinos to operate within their market should they hold a licence issued from an internationally recognised jurisdiction, such as Malta and Gibraltar.

Currently, the trend within the European market is that more and more countries are creating their own local licenses, which may eventually nullify many international licenses. Until recently, international licenses issued from jurisdictions meant that online casinos were free to operate and provide their services in many other EU jurisdictions. This has been steadily changing in recent years. Individual countries, such as Sweden, Norway, and Spain, now insist that online gambling operators obtain licences and pay taxes in their countries should they wish to provide services to their citizens.

While the licensing process is certainly expensive and complicated, the benefits far outweigh the costs in the long run. To start with, operators are given clear and specific rules of operation within that jurisdiction, transparent tax policies, legal protection from the state in case of disputes, and respect and recognition from business partners, solution providers, game developers, and marketing specialists.

This last point is particularly significant, as without a licence most banks and financial institutions will outright refuse to process an operator’s finances. Because licensing regulators carry out extensive background checks and audits on operators, banks regard licenses as assurance that their institution won’t be used for money laundering or illegal financial activities.

Furthermore, a gambling licence is valuable in terms of building a positive reputation among players. With a huge range of online casinos and sportsbooks to choose from, players are increasingly looking for the most trustworthy operators in the market. Licences ensure that operators provide a duty of care towards their players and have in place responsible gaming measures that reduce the risk of gambling addictions and destructive betting patterns. Failure to comply to such responsibilities will result in heavy fines. As such, a licence is a mark of quality, integrity, and safety that will put a player’s mind to rest.

In light of all the above, it is immediately clear that unlicensed operators will quickly hit serious roadblocks on their way to growth. Obtaining an official gambling licence opens up many opportunities for gambling business to expand. And while the fees may be high, any well-run gambling operation will be able to take the costs in their stride once they are up and running.