Online Casino Licenses

Casino licenses are an important part of the online gambling industry and are there to ultimately protect the general public. In the UK and most parts of Europe, online casino licenses are a legal requirement for operators who wish to offer their services to paying customers.

How Does a Casino License Work?

Every casino license differs from the next and although CasinoFans© concentrates largely on the UK jurisdiction, the main purpose of every license is to safeguard customers from gambling addiction and also make sure that you’re treated fairly and your personal details are safe.  Operators need to prove that they can be trusted with your data and your payments (especially your winnings) and be able to help should you have any queries or need to contact them. Think of a casino license as a ‘seal of approval’ a badge if you like, which shows that the operator has satisfied the licensing body to run their casino operations legally and satisfactorily. 

Getting a casino license can be a difficult process as there are many hoops that an operator needs to jump through and also various criteria they must achieve to obtain one. However, that’s only part of the equation. Once a casino has their license issued, they need to uphold all obligations otherwise they risk losing it. Casino licensing is a serious business which is on-going, and this is why any casino that has been issued with a gambling license is usually responsible, legal and trustworthy.

Why Does a Casino Need a License?

When a casino has a license, it basically ensures the protection of players. As we mentioned above, when you see that a casino is licensed, especially in the UK, it will give you a reassurance that the casino is legit, safe and it can be trusted.  

Think about it, if anyone could open a casino without carrying the proper licensing, there would be no way to know they could be trusted with all kinds of sensitive data you give them (such as personal details, credit card numbers, your entire casino balance). Another thought and possibly a more frightening prospect; there would be no way to know that the casino would honour your rightful winnings either. Of course, this is something that everyone is keen to avoid and casino; licensed stands to protect you from this, from the rogue casinos!

Why Are There Different Casino Licenses?

There are a few different licenses out there as there are quite a few ‘regulated markets’. A regulated market means a country which offers their own gambling license, such as the UK and only casino companies which are approved by them can offer their services to residents there. The main regulated markets in the EU are the UK, Spain, Italy and also Sweden. We expect more to follow suit over the next few years.  This legislation may be far stricter, but it’s in place to make a safer industry, bring revenue into the country (including taxes) as well as having a tighter control to keep a closer eye on things too.

With that said, there are of course unregulated markets such as Malta, Germany, Japan and New Zealand.  For example, if a casino wishes to accept players who reside in Finland, operators don’t need to have a licensed by any Finnish governing body, they just need to have a recognised license such as an MGA license (Malta Gaming Authority) in order to accept players from here.  

There are some countries where online gambling is completely illegal, however, no matter if a casino holds several of the best licenses possible; it’s still illegal and any company caught allowing residents to place real money bets can face heavy prosecution. Countries such as France, Australia and the USA are prime examples of countries where internet gambling is illegal. 

Why You Should Check a Casinos License

Whilst we only ever recommend trusted UK licensed casinos here at CasinoFans™, it’s always a good idea to be aware of casino licenses, especially if you’re planning on giving a brand new casino a go. 

Unfortunately, just like in real life, there can be some rogue traders out there, however, if you take our casino suggestions into consideration, then there’s little chance you’ll fall prey to them. Each reputable casino will openly display their license credentials, usually within the footer of their website, or they’ll give you the information when you ask.

Reputable casinos are usually transparent so it’s really easy to look up their details if you wish. If they aren’t playing ball and offering this information easily, then alarm bells should start to ring. A casino operating without a license is breaking the law, so who’s to say they’ll keep your private data, passwords and money safe?

UK Gambling Commission Licenses (UKGC)

The aim of the UK Gambling Commission is to remove criminality from both offline and also online gaming and to protect vulnerable people, including children and vulnerable adults. Also, the UKGC wants to prevent gambling from being a source of crime, which also includes money laundering. They also want to ensure that an online casino/ gambling sites are run in a transparent and more importantly - a fair way.

The UK Gambling Commission was created by the government to oversee the Gambling Act 2005, to offer casino licenses to businesses offering their gambling services within the UK. In 2014, the UK became a “regulated” market. This means that all casinos/gambling operations functioning within the UK now require a UK Gambling Commission license. Before this time, it was optional as long as the casino or gambling site in question held another EU recognised license, such as an MGA (Malta Gaming Authority). 

As you can see, the UK Gambling Commission has been operating for many years, with the sole purpose of safeguarding the British public against rogue gambling operations. Many of the larger gambling companies had already obtained a UK license long before 2014. However, the number of new casino sites that wanted a UK license increased because they also wanted to offer their services to UK residents. We have to say that we’re glad they did as it meant that many reputable EU based casinos and some of our favourites including Casino Joy, bCasino and Winstar Online Casino could operate within the UK legally.

How UK Casinos Get Their License Approved

Before any company or persons are even considered for a UK casino license, the UK Gambling Commission will take into account the following points:

Identity &  Ownership

They will look into who is the person applying for this casino license is, how they fit into the casino structure and who ultimately owns the operating company. They will do a lot of research so that everything is transparent from the word go.

Finances

Quite an important one; the UKGC will take an in-depth look into the applicant’s financial history and also those who own and run the casino too. Basically, they will need to satisfy the UKGC regulators that they have enough liquidity within their business to successfully operate. Do they have the assets necessary to successfully run an online casino?  As you can imagine, you need to have deep pockets and plenty of funding to run a successful online gambling site. You need even more to get it off the ground. Everything from paying customers who win, marketing costs (there’s little chance a new casino will stand out of the crowd if you don’t invest heavily into marketing costs) to other costs including license costs, operator costs, staff costs and so on. 

Integrity

Here, the UKGC looks at the trustworthiness of the applicant and anyone within the company relevant to the application process. Are they honest and reliable? Can they be trusted? Do they have a history of bad business practice, County Court Judgements and so on? Basically, everyone involved is vetted, and then some.

Competence

Does the applicant, and also the people running the casino, have the necessary experience, knowledge and expertise to run a casino or gambling site?

Criminality

Does the applicant or anyone relevant to the application have a criminal record?

There are also many other responsibilities a casino company must fulfil on top of the initial points we raised above. Other obligations include preventing children under the age of 18 from using their service, including the use of free demo games. This is usually done via a KYC (“Know Your Customer”) checks, whereby all customers must provide an ID document proving their name, address and DOB. 

Anti Money Laundering

Casino companies must also comply with the Anti Money Laundering act by putting strict procedures and processes into place to check customers’ information is correct and monitoring their financial activity. This is partly covered by the KYC process above, whereby players must prove their place of residence (usually with a utility bill or Driving License) and they must also verify any credit cards on the account belonging to them (by providing a scanned copy). 

This is by no means everything on the UKGC license checklist, but a start. There are so many more obligations they must fulfil, including establishing fair bonus terms and policies within their casino offers and promotions, as well as offering fair and random tested casino games (usually undertaken by a third party).

For full details about other obligations, casino licensees must undertake in the UK, you can check the UKGC website. You can also use their handy “Licensee Lookup” tool to check if a casino holds an active license or not. If that’s too much bother then you can also see licensing information about every single one of our casinos within their casino reviews, right near the bonus information.