UK Gambling Commission

All online casinos that operate in the UK require a UK Gambling License (UKGC). This rule has been in place since 2014. The UK is now the most regulated market for online casinos in the world.
A majority of the reputable online casinos operating in the UK has had this license much before 2014. The UK Gambling Commission has been around for a number of years now. But now, there is a real urgency among online casinos to get licensed in the UK; otherwise, they risk losing their business.

Why It Is So Important to Apply to the UK Gambling Commission for an Online Casino License

Any online casino or a “remote gambling operator” as these establishments are called, will need a remote operating license from the UK Gambling Commission if they are to serve customers based in the UK.
The Gambling Act 2005 prohibits people from within the UK from accessing remote gambling facilities that are not explicitly licensed by the UK Gambling Commission. The UK Gambling Commission is well known for taking a tough line on unlicensed operators of online casinos that target players within the UK. They issue “cease and desist” letters immediately on coming to know about this.
Any operators of an online casino that wants to serve players in the UK have to send their application to the UK Gambling Commission and wait for approval. The remote gambling operator license can cover a number of different gambling activities such as sports betting, bingo, lotteries and pool betting – but we are focused on online casinos only.
Moreover, a casino establishment has to apply separately for its online and offline businesses. Any license that a casino has for its brick-and-mortar facility within the UK does not apply to the online part of its business as well.

Are There Any Exceptions to Getting a License for an Online Casino?

Startups within the online casino industry can apply for an exception under the “small scale operator” category. They can do so if they have 3 or fewer people working in their establishment. The owner of such an establishment can fill in the Annex A form instead of getting a Personal Management Licence (PML).
This exception is very difficult to get. The UK Gambling Commission rarely licences remote casino operators as belonging to the small-scale casino category. Small-scale operators can develop their software in-house as well, as long as they don’t spend more than £50,000/year on it. In case their expenditure exceeds this limit, they will be required to get a remote software operating licence.

How Much Goes a UK Gambling License Cost?

The cost of the UK Gambling License depends on the projected gambling revenue of the establishment. This isn’t much for startups or for any of the smaller casinos. But for major operators, this can be quite a lot. Operators will also need to pay an additional annual fee about 30 days after the license has been granted. It generally takes 4 to 8 weeks from the point of submission of the application for the license to be granted,

Requirements for a UK Gambling License

When a casino operator applies for a remote gambling operator license, the UK Gambling Commission will do a background check on the owners of the establishment and examine their credentials closely. Criminal Records Bureau Checks are mandatory in case the owners are residents of the UK. If the owners do not reside in the UK then the checks are performed by the police.
Applicants are asked for the business plan. They will be expected to show a detailed cashflow projection and prove that the business is well funded. They will also need to show the details on the financing – how the financing is done, where the money is coming from, who are the investors, etc.
The most important thing for the Commission is to make sure that the casino owners have a proper business model and they are not going to go bankrupt anytime soon. The applicants will need to comply with the various licensing objectives and provide the Commission with a detailed blueprint of their policies and business plan. They will be specifically asked about where their IT equipment will be located.

The UK Gambling Commission considers 5 things when providing an operator with a license

Identity and Ownership – Who is applying for the casino license, what brings them into the industry and who owns the casino.
Finances – What’s the financial background of the owners? Do they have the assets and the financial wherewithal to run the casino successfully?
Integrity – What’s the trustworthiness or credibility of the applicants? Do they come across as reliable and honest?
Competence – How competent are the applicants? What experience, skill-set or knowledge they have which qualifies them to run the casino?
Criminality – Does the applicant have any sort of a criminal record? In that case, the license cannot be provided to them.

UK Gambling License Rules

The main purpose of the UK Gambling License is to ensure that the players are fully protected and not taken advantage of by unscrupulous or criminal elements. This is a part of the government’s efforts to fight crime and to ensure that the casinos are run in a fair and transparent manner.
The casino has to have many processes in place to ensure that children under the age of 18 do not use their services. That’s why all customers need to go through a detailed KYC [know your client] check. They will be asked to provide with an official ID that shows their name and DOB (date of birth).
The casino should be in full compliance with the UK Government’s Anti Money Laundering legislation. They should have the proper procedures and processes in place to ensure that all information provided by their customers is accurate. They should ask for a KYC from each customer. All players must be asked to prove their place of residence. This can be done with a passport or a utility bill. The players should be asked to verify that the credit or debit cards on their accounts belong to them by providing the casino operator with a scanned copy.
The casino operator should have a closed loop policy according to which players are allowed to withdraw an amount only from the same payment method used for making the deposit, before using any other method for the withdrawal.
This means if you deposit €200 in your account at an online casino using PayPal, and you win €500, you must first withdraw at least €200 back to your PayPal account before using any other method such as a credit card, bank transfer or e-wallet for the withdrawal. Once you withdraw €200, you can then take out the remaining amount or the profit any way you like.
The UK Gambling Commission expects online casinos to encourage responsible gambling from all players by putting in place systems and processes such as Deposit Limits or limit settings on an account. Players can only deposit a certain amount into their accounts with the online casino within a certain time frame, and not more than that.
The customer will be provided with an option of having their accounts closed permanently or for a set time period, upon request. This is to protect them from picking up an addiction to online gambling.
Players can contact the UK Gambling Commission directly if they suspect any wrongdoing or detect anything illegal at the casino. However, they should not contact the Commission for issues related to their account or with regard to any mundane dispute with the casino. That is something they will have to take up with the casino itself.