Going Legal: Do You Need A License to Start Your iGaming Business?
The gambling license issue is in top-10 most popular questions that come from our customers. Not every jurisdiction allows legal online gambling, and those who do often make the licensing process a path of pain. On that path, you’ll suffer less if you are ready.
Why licensing matters to a software developer?
The platform is the basis and the center of a gambling universe; no wonder that each gaming authority evaluates it. An operator may perform third-party system audit but the evaluation is inevitable. If the poker backend has any problem with RNG, security or privacy issue the license application will be suspended.
Not all online casino providers may deliver a system that will meet evaluation demands. If you are getting the system from a well-known company (like NetEnt casino software or Playtech casino software) you should not worry. If not, ask for RNG certification and the examples of customers that have a valid license.
When no license needed
There are three ways to earn from online gambling without taking care of the licensing issues:
- Operating in the country where online gambling is legal and not regulated. There are few of them including Costa Rica.
- Start a play money project and earn from it indirectly (i.e. from advertising), or a social gaming app.
- Join a gaming network. Most of the networks have centralized licensed server and a number of websites that connect to this server. You may have your own logo and tables but will not process any transaction. Your money will come as a share.
Legal ways to operate without license limit your business opportunities. Nevertheless, it is a great chance for a startup to test its business model and to learn the market.
Getting legally legal
If you are ready to become an official gambling operator there are three main factors to consider.
Curacao license will cost you less than a Gibraltar one. Tax fees also vary; if you are operating legally, you cannot avoid taxation. For example, if you are in Europe and want to promote your website in the UK, you may consider getting a Maltese license. Maltese Gaming Authority is in “white list” for the UK so you can accept players and promote there, but the taxes differ dramatically.
Most countries want you to operate as a locally registered company and need to evaluate your system. Some need your business plan and personal information (like bank references and the proof that you have no criminal record), some want to learn nearly everything about you and the gaming company you are starting.
No jurisdiction will let you start operation in a week, but a month or three months – it makes difference. If you have everything ready, including the documentation from your online casino software provider, you should seek for an easy and fast license (most probably, in the Caribbean region). Otherwise, you may want to spend more time to get a license with the greatest promotion perspectives.
If you have a serious intention to license your gaming operation, you should choose the jurisdiction wisely. Sometimes the outcome of your business venture depends on it (what if you have planned to promote in Europe but your license doesn’t allow it?).
Risks of operating without a license
They are significant. In most of the countries, illegal online gambling is considered a serious crime. The penalty varies from a huge fine and property confiscation to several years in prison.
Learn about the penalty for illegal gambling organization in your country. Illegal operation is always an option but we strongly recommend making your business legal to secure your funds and transactions.
Poker licensing on a map
Red – online poker is illegal (or licenses are not issued like in France)
Blue – online poker requires a specific license
Green – online poker doesn’t require a specific license
On this map, you may see on the example of online poker that in most popular gaming destinations the license is necessary to operate legally without the risk to lose a business, the money and a few years of your life.
As a software vendor, we are ready to provide documents for license application: software specifications, information about RNG certification, and an operator-vendor agreement. EvenBet Gaming has customers licensed both in Europe and in Caribbean region, so we can ensure our online casino software for sale is ready to pass the gambling authorities evaluation.