It’s no secret that almost every industry in the global economy is undergoing a digital transformation. The introduction of crypto, blockchain, Internet of Things, and SaaS – to name a few – are disrupting traditional sectors at light speed. The gambling industry is no exception. However, changes in technology bring about new questions, regulations, and complexities that prospective online casino and sportsbook operators need to navigate.
One of the topics that comes up most often in our conversations with prospective online casino operators is gaming licenses. We’ve put together this article to share everything iGaming operators need to know about gambling licenses.
For the purposes of this article, gambling license and gaming license will be used interchangeably.
What is an online gambling license?
In short, a gambling license is a granted certification from a reputable regulatory authority that allows iGaming operators to legally run online sportsbooks and casinos in specific regions. If you want to run a legal iGaming operation such as an online casino or sportsbook then you need a gaming license.
Some countries and regions have more stringent requirements around online gambling than others. For example, in the United States, gambling is legalized at the state level, and licenses are issued by state governments. This means that in order to legally operate an online casino or sportsbook, iGaming operators need to secure licenses specific to the states in which they want to accept wagers from. Having a license in one state does not permit the operator to run their business in a different state without acquiring an additional license for the other state. Click here to see a state-specific guide of online gambling in the U.S.
To be sure about the specific requirements of the region you want to take bets from, contact your local gaming and gambling authority to learn about any applicable licenses you’ll need to set up an iGaming operation. If you’re not sure where to start, contact us and we can help point you in the right direction.
Do I need a gaming license if I only want to accept wagers in crypto?
Yes. To run a legal and compliant gambling business you need to have a gaming license. This extends to crypto casinos as well. There is no such thing as a specific crypto gambling license. If an iGaming operator accepts cryptocurrency like Bitcoin as a payment mechanism then they need to have the appropriate licenses that legally allow them to do so. Even the most popular crypto-based casinos like Stake have gaming licenses.
Ambiguous legislation around crypto is partly responsible for the misconception among some iGaming operators that gaming licenses aren’t required to run a crypto casino or sportsbook. Legally, there is no difference between running a crypto casino or a traditional fiat casino. An operator still needs to hold the relevant licensing for the regions they operate in, and ensure they are compliant with the corresponding Know Your Customer (KYC) and Anti Money Laundering (AML) rules. Make sure to consult your legal team or a reputable betting technology provider to ensure that your operation is compliant with the laws of your jurisdiction regardless of whether you accept wagers in fiat currency, cryptocurrency, or both. In the case of online gambling, it’s better to conduct the proper due diligence up front than face hefty fines and penalties for non-compliance further down the road.
Are there any other benefits to having a gambling license?
The benefits of gambling licenses extend beyond regulatory compliance as well. Assuming you are not developing your casino games or sportsbook product in-house, and are partnering with a betting technology provider for your technology needs, having a license is crucial. No reputable iGaming solutions provider will work with an operator who does not hold proper licensing. In order to offer a wide variety of third party casino games that players have come to expect, you will need a license or the game developer will not permit their games on your site.
In addition to being necessary to getting your business operational, holding a gaming license also adds a stamp of credibility to your operation which helps with customer acquisition and retention. Think of the bettor who is evaluating a new online casino or sportsbook. Seeing an accredited gambling license on your website gives them the confidence they need in order to make that first time deposit. A gambling license provides added confidence to bettors that their money is safe, payouts are assured, and games aren’t rigged unfairly. After that first deposit, operators can nurture them with their marketing engines to keep them coming back to your website. Don’t underestimate the impact that a stamp of credibility has on the effects of first time deposits to your website.
Ready to learn more about starting your own legal iGaming operation? Contact us today at [email protected] to discover our suite of blockchain-based sportsbook and casino solutions.