Online Gambling Licenses: importance, different types and main ones in the market

The online gambling industry, which offers a diverse range of gaming experiences, from casino to sports betting, is currently worth billions of dollars worldwide. However, it is becoming increasingly regulated – and one of the cornerstones of regulation are the online gambling licenses. In this article, inplaySoft will explore what they are, why they are important, the main types and the top online gambling licenses in the world.

What are Online Gambling Licenses?

Online gambling licenses are legal authorizations granted to online gambling operators so they can offer their services within certain jurisdictions. They are regulatory mechanisms that ensure operators comply with laws, rules and standards designed to protect both consumers and the integrity of the gambling process.

Government agencies or regulatory bodies are responsible for issuing online gambling licenses. The licensing process generally includes a thorough review of the operator’s business practices, financial stability and security protocols to ensure compliance with local and international laws.

Online casinos, sportsbooks and other gambling platforms must obtain a license from one of these regulatory authorities in order to operate legally. The license validates that the operator meets specific standards in areas such as:

• Fairness and transparency of games
• Player protection against fraud and exploitation
• Prevention of underage gambling
• Ensuring responsible gambling practices
• Compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) laws

Without a valid gambling license, online gambling operators may face legal penalties, including the closure of its operations.

Why are Online Gambling Licenses Important?

Some of the key reasons why online gambling licenses are important are:

• Legal Compliance: licenses ensure that operators adhere to legal requirements. Operating without a valid license is illegal in many jurisdictions. 
• Consumer Protection: gambling licenses guarantee that the operator’s activities are regularly monitored, which helps protect consumers from unfair practices, such as rigged games, undelivered winnings or poor customer service.
• Player Trust: reputable gambling licenses boost player confidence. Customers are more likely to trust a licensed operator with their personal and financial information, knowing that the operator adheres to high standards of security and fairness.
• Fair Play: licenses require operators to use certified random number generators (RNGs) for games, which ensures that outcomes are fair and unbiased. This is particularly important in casino games like slots, roulette and blackjack.
• Access to Payment Processing: many payment processors and financial institutions will only work with licensed operators. A gambling license makes it easier for operators to offer convenient and secure deposit and withdrawal options to players.

Main types of online gambling licenses

Currently there are many available online gambling licenses, each with its own set of specifications, such as varying prices, tax conditions and gaming services authorized. For operators, that need to choose the appropriate license, the decision-making process can be daunting. The main types of licenses are:

Fixed-cost gambling licenses

• Under this system, operators pay a set fee for their gambling license, which does not change based on their revenue or the volume of gambling activity.
• This fee is predictable and is typically paid annually or for a set period.
• It provides a stable revenue for the regulatory body, but does not vary with the operator’s success or profitability.

Gross-based gambling licenses

• In this model, the fees or taxes are based on the gross gambling revenue (GGR), which is the total amount wagered by players minus any winnings paid out.
• The tax or fee can be a percentage of the operator’s earnings and varies depending on their performance. This system adjusts to the scale and success of the operator’s business.
• It ties the regulatory fee to the operator’s actual revenue, meaning that the regulatory body earns more when the operator performs better.

B2B Gambling License:

• B2B licenses are issued to companies that provide services and products to other businesses in the gambling industry.
• These services can include software providers, platform developers, payment processors or affiliate marketers.
• A B2B license allows these companies to operate legally and supply gambling-related services to operators who run online gambling sites, but don’t directly interact with players.

B2C Gambling License:

• B2C licenses are granted to businesses that directly interact with consumers.
• These are for online gambling operators such as casinos, sportsbooks, poker rooms or lottery sites that offer games and betting services to individual players.
• A B2C license allows these operators to legally run and offer gambling services, ensuring they comply with consumer protection, anti-money laundering and fair gaming regulations.

Who should obtain a gambling license?

Any individual or business involved in the operation or provision of online gambling services should obtain an online gambling license. Some of them are:

• Online Gambling Operators (B2C), such as casinos, sportsbooks, poker rooms and lottery providers that offer gambling services directly to players. This includes platforms that allow users to place bets, play games or participate in any form of gambling online.
• Gambling Software Providers (B2B), such as companies that develop and provide gambling software, games or platforms for online operators.
• Payment Providers, which are businesses that handle financial transactions related to online gambling, such as payment processors or electronic wallet services.
• Affiliate Marketers, who promote gambling sites and receive commissions based on referrals to have a license.
• Online Lottery Platforms, where people can buy tickets and participate in draws.

Top online gambling licenses

Each gambling license provides distinct advantages and has different requirements. Some of the top online gambling licenses, considering their regulatory framework, reputation and price range are:

1. Isle of Man Gambling Supervision Commission

2. Curaçao eGaming

3. Malta Gaming Authority

4. UK Gambling Commission License

5. Kahnawake Gaming Commission

6. HM Government of Gibraltar License

7. Swedish Gambling Authority | Spelinspektionen

8. Danish Gambling Authority | Die Spillemyndigheden

9. National Betting Authority

10. Directorate General for the Regulation of Gambling (DGOJ)

11. Alderney Gambling Control Commission (AGCC)

12. Hellenic Gaming Commission

13. Romanian National Gambling Office

14. L’Autorité nationale des jeux (ANJ)

Reflexiones finales

Online gambling licenses are vital for ensuring the legitimacy, fairness and safety of the online gambling industry. For operators, obtaining a reputable license not only ensures compliance with legal standards, but also helps to build trust with players. For players, a licensed platform provides the assurance that their money and personal data are secure and that they are participating in fair and regulated games.

With various jurisdictions offering different advantages and requirements, operators must carefully choose the license that best suits their business needs. By adhering to the regulatory framework of the chosen authority, both operators and players can enjoy a more secure and trustworthy gambling experience.