Online Casino Licensing and Regulation
The arena of online casinos is a source of entertainment for so many online players. Players are always in a constant search for casinos with the best features. But behind the fancy graphics and thrilling bonuses offered by a casino is a legal framework to ensure that a casino is properly run: licensing and regulations.
Licensing is important in creating a trustworthy gambling environment for players. With a valid license, players are promised a fair gaming experience, secured funds, and well-protected data.
Understanding how licensing works helps players make informed decisions when searching for a thrilling gaming experience. We will discuss how operators obtain these licenses across different jurisdictions and why it should matter to you. Let's dive in.
Why Is Licensing So Important?
Before creating an account on any platform, you must check its license. This license holds so much value and should be non-negotiable. Let's look at some of the reasons why a casino's license is so important.
Player Fund Protection
One of the priorities of a
Game Fairness
A casino's license ensures that every result generated from playing a game online is fair and generated from an algorithm called Random Number Generator (RNG). To guarantee that this algorithm is perfect, experts test its functionality and certify that the results are fair and original. This is usually done before casino operators are given their licenses.
Responsible Gaming
Creating a responsible gambling environment is a goal of a licensed online casino. Before a casino is licensed, top gaming authorities ensure that operators implement features of their platform that help players maintain control over their gambling habits and finances.
This includes features like deposit limits, loss limits, and gaming periods. These features are key to demonstrating concerns towards the welfare of players over profits.
Security
Licensed casinos are mandated to employ advanced encryption technology, which turns every financial detail you input on their platform into an unreadable code. This is important as it prevents hackers or a third party from being able to read sensitive details like your bank card number.
Factors to Consider for Obtaining a License
Before applying for a license, there are several factors to consider that will determine the success of your application. Let's take a look at some of them.
Jurisdiction
A license only lets you carry out gambling operations within the jurisdiction where you're registered. One of the most important factors to consider when setting up a casino is your target market and knowing the jurisdiction that offers you the license to operate there. Other things to consider are the licensing fees, tax rates, and so on.
Cost of License
The cost of obtaining a license is important. You should check your budget and know how much you are willing to spend. Also, you must prepare for other expenses, including software maintenance and company registration. Ensure you select a jurisdiction that fits your budget.
Tax
Ensure you study the taxation modalities of each jurisdiction before requesting a license. Also, there are jurisdictions that sign double taxation agreements. Therefore, read the tax conditions before applying.
Financial Stability
The financial stability of the jurisdiction is important. The low cost of a license can be attractive, but you must look beyond that. Always consider the long-term perspective. If a jurisdiction is in a poor economic state, it can lead to unstable exchange rates and affect future payments.
How to Obtain a Gambling Licence
Getting a licence from a recognized gaming authority can be a strenuous and meticulous process. It can take months to get a licence. The goal of the entire procedure is to ensure that only capable and trustworthy operators are allowed to set up a casino for players. We will explain the steps of getting a license in the following section.
Submission of Business Plan
The first step to securing a license is the submission of a draft, containing how the operator intends to set up their casino. The company must create a plan that meticulously explains how it wants to run the gaming business.
Gaming regulators assess their plans and the feasibility of their lasting long-term. This plan must contain the target markets of the casino, the providers they intend to work with, and the player demographics they intend to serve. The goal of this stage is to ensure that applicants have a clear and feasible plan.
Background Check on Individuals Involved
Regulatory bodies often do a background check on every key player involved in the setting up of the casino. A check into the financial history of each member will be done to ensure they are responsible. Their criminal background will also be checked to ensure that none of the members have had a previous history of fraud or financial misappropriation.
Proof of Funds
Money is important in running an online casino. The financial health of an operator corresponds with how well players are protected in times of crisis. Therefore, the financial stability of an operator is well scrutinized to ensure they are fit to set up a casino. Also, they must provide a source of income to verify that they are well-backed financially.
Testing of Technical Infrastructure
The casino's online platform will be tested thoroughly to see if it's well-designed. One of the key focuses of testing is the Random Number Generator (RNG) to ensure that every outcome is unpredictable and the game is fair.
The platform's security system is also tested to ensure that there are no vulnerabilities. The goal of testing is to ensure that the platform passes the fairness check and is a secure gambling environment for the players.
Implementation of Policies
The operator must create and submit policies about their commitment to run an ethical and legal business. These policies will serve as the blueprint for the company's day-to-day conduct and how to address certain grey areas.
A responsible gambling policy must be outlined, and the operator must explain how to identify players at risk of problem gambling habits and how to help them. There must also be data protection policies to safeguard the privacy of users. However, these policies should be more than just words – there must be plans to implement them.
Granting of License
If the operator meets the jurisdiction's standard, then a license will be offered to them. Receiving a license, however, isn't the end but the beginning for the operator.
The operator must now comply with the rules of the jurisdiction and must accept continuous monitoring, regular financial audits, and technical reviews of its software. Also, they must report any significant event that occurs in the company. Failure to meet the standard set by the jurisdiction can result in penalties.
Popular Jurisdiction to Get a Gambling Licence
Most online casinos are licensed to operate in various countries. Their freedom to operate in certain countries depends on the legislation of the jurisdiction where they are registered. You can get your casino license in any country you want. However, many operators prefer to obtain their license in popular gaming regulators like Curacao, Malta, or Kahnawake. Let's look at why.
Curacao
Curacao Gaming Authority is one of the earliest licensing bodies and is one of the most reliable jurisdictions to get a license. Getting a license from Curacao is ideal for operators who do not intend to spend a lot on application procedures. Obtaining a license from Curacao and complying with the regulations will improve your company's reputation.
Kahnawake
Kahnawake offers international licenses for online gambling and places value on compliance and ethical gambling practices. Some of the benefits of getting your license at Kahnawake include 0% gambling tax and a cheap application process.
Malta
Getting a gambling license in Malta is a popular choice among many operators. One important benefit of getting your license in Malta is the ability to operate within the European Union. Malta, however, is one of the most expensive jurisdictions to obtain a license. Aside from the expenses, the entire process is longer compared to other gaming commissions.
Gibraltar
Gibraltar is a country with a lot of opportunities in the gambling industry. The cost of obtaining a license from Gibraltar depends on the type of gambling and the company's structure. One huge advantage of this license is that the gambling tax is just 1% of the income. Gibraltar's license often lasts for five years, with an annual fee for its renewal.
Conclusion
Obtaining a license is the most crucial step to building an online casino. Before applying for a license from a jurisdiction, always investigate the licensing procedure and know if your budget can cover the cost of the application. After obtaining your license, you must comply with the rules of the jurisdiction to prevent revocation of the license.