Casino licensing and regulation – a complete guide

Casino licensing and regulation – a complete guide - Banner
Catherine Stirland
by Catherine Stirland Last updated:

Casino licensing and regulation are essential components for an effective, orderly gambling industry. They make up the legal framework that governs the operation of online and land-based casinos, ensuring they operate fairly and securely. 

Here at No Wagering, we only feature Gambling Commission (UKGC)-licensed operators. The UKGC is one of the most highly regarded regulators in the world, providing unparalleled security for players.

In this guide, we’ll explore gambling regulations fully. You will understand how your favourite casinos stay safe and why you can be sure of a fair and trustworthy gaming experience when playing. This is what we are covering:

Casino licensing process

Overview of the licensing process

To operate legally, adhering to UK gambling laws, casinos and gambling operators must obtain a licence. This application process involves several steps, starting with submitting a detailed application to the relevant licensing authority, including business plans and financial information. The licensing authority will evaluate applications to ensure that they meet regulatory requirements.

Licensing requirements

Applicants need to meet specific criteria. This includes demonstrating financial stability and passing background checks. 

Types of licences

Types of gambling licences available include:

  • An operating licence – required for running a gambling business
  • A premise licence – necessary for physical locations where gambling takes place
  • Personal licences for people involved in managing gambling operations

Licensing fees and annual fees

Obtaining a gambling licence involves various fees, including an initial application fee and an annual fee. These fees contribute to regulatory bodies' operational costs.

What do casino licences ensure?

These licences ensure technical requirements and standards are upheld and that casinos meet specific requirements to ensure fair play. Another key goal of licensing is to encourage casinos to promote responsible gambling. They must also support initiatives for problem gambling. Players can have peace of mind and feel secure, knowing that a reputable body has licensed a casino. This ensures a safe place for their data and funds.

Casino regulation

The role of gambling regulatory bodies

Regulatory bodies oversee the gambling industry to ensure compliance with laws and regulations. In Great Britain, the Gambling Commission plays a pivotal role. It handles:

  • Issuing licences to operators
  • Ensuring compliance with the Gambling Act
  • Monitoring gambling activities 
  • Enforcing penalties for non-compliance

Regulatory bodies of other reputable jurisdictions, such as Malta, Gibraltar, the Isle of Man, and Curaçao, can also license casinos.

Another important industry body is the Betting and Gaming Council (BGC), which represents the UK gambling industry. The Council promotes best practices and ensures the maintenance of industry standards.

Gambling laws and acts

The Gambling Act provides the legal framework for casino licensing and regulation. It covers both the land-based casino and online casinos. It also specifies the prerequisites for licence acquisition and lawful operation.

Regulation of land-based casinos

Land-based casinos must comply with licensing requirements and other regulations to operate legally. The application needs to include details of the casino's business plan, financial details and key personnel. They must also undergo a detailed background check on all stakeholders, have a premise licence to ensure the venue meets regulatory standards, and secure an operating licence.

Compliance with health and safety regulations is paramount for land-based casinos. Key aspects include: 

  • Venue safety, including fire safety measures, structural integrity and accessibility
  • Security measures, such as surveillance systems and security personnel
  • Health regulations, which include maintaining clean facilities, providing adequate ventilation and ensuring food and beverage services meet required standards 

Land-based casinos must also promote responsible gambling and provide customers with the necessary tools and information, including self-exclude options.

Regulation of online gambling

Like land casinos, online casinos must follow strict licensing and regulatory rules. These rules ensure a fair and safe environment. Gambling regulations help protect players, prevent illegal activities and promote responsible gambling. 

Online casinos need to apply for a gambling licence to the appropriate licensing authority. It needs to include details about the casino's operations, business plan and finances.

A comprehensive background check on the owners, directors and key people is carried out to ensure they have no criminal history. They must also provide finances showing they can cover player winnings and operational costs. 

There are strict technical requirements to ensure game integrity. This includes using certified random number generators (RNGs) to ensure fairness, along with regular testing and auditing. Security measures must be in place to protect players' personal and financial information.  This includes data encryption, secure payment systems, and adherence to data protection laws. 

Money laundering is another significant concern in the gambling industry, with online casinos particularly vulnerable. Therefore, before granting a license to an online casino, regulatory authorities need to implement special anti-money laundering (AML) measures. They must implement AML safeguards, including Know Your Customer (KYC). Additionally, they need to watch transactions and reports. They also need to ensure employees get ongoing training. They must also establish anti-money laundering compliance programs.

The protection of vulnerable individuals, including children, is a vital aspect of online casino regulation.  Players are required to provide proof of age before they can open an account or make deposits. Online casinos must also commit to responsible gambling initiatives such as:

  • Providing customers with self-exclusion options
  • Safer gambling tools such as deposit limits, reality checks and time outs 
  • Access to support services.

What happens to casinos that don't follow industry regulations? 

Casinos that fail to comply can face substantial fines and, in some cases, have their licence suspended or revoked. There have been several cases recently where gambling companies have faced severe punishment for regulatory breaches: 

The Gambling Commission fined 888 Holdings £7.8 million in 2017 for failing to protect vulnerable customers. The company’s self-exclusion system failed, allowing over 7,000 self-excluded customers to continue gambling, resulting in vulnerable players losing money. The investigation revealed that 888 Holdings didn’t have adequate safeguards in place to ensure self-excluded customers were identified and blocked from gambling therefore breaching the regulatory requirements.

Entain was hit with a record fine of £17 million in 2022 for a series of regulatory breaches. The Gambling Commission found that Entain failed in its anti-money laundering (AML) and social responsibility procedures. The breaches included insufficient due diligence on customers who deposited large amounts without proper financial checks, thereby risking potential money laundering activities. Entain also failed to take action to protect vulnerable customers. 

In 2018, William Hill was fined £6.2 million for non-compliance issues. These related to anti-money laundering and social responsibility regulations. The Gambling Commission found William Hill had inadequate procedures in place to prevent money laundering.  and the identification of vulnerable customers. One customer deposited £654,000 over nine months without any checks on the source of funds. Another player lost £147,000 within a month without any welfare checks. William Hill's oversights failed to protect customers from gambling-related harm and allowed money to be laundered. The fine highlighted the importance of proper AML measures and customer protection strategies.

Important lessons have been learned from these breaches. It’s also important to note that the regulatory oversights were regretted by the companies involved and penalties accepted willingly. 888 Holdings, Entain and William Hill are fully committed to compliance with Gambling Commission regulations. We are confident that any casinos we recommend owned by these companies are safe to play at.

Unlicensed casinos – the dangers

Unlicensed casinos – those without a gambling license – pose a risk to customers. They lack proper customer support, leaving players without recourse when issues such as disputes over pay-outs arise. Predatory terms and conditions are another common risk. The small print can favour the casino – leading to unfair withdrawal restrictions or excessive wagering requirements. 

Unlicensed operations typically do not adhere to industry-standard encryption and security practices. This can expose players to potential hacking and fraud. Rigged games are also a concern, with unlicensed casinos able to manipulate game outcomes, eliminating fair play. Additionally, the theft of personal data is a risk, as unlicensed casinos often fail to protect sensitive information. The absence of regulatory compliance means there are no guarantees of data privacy, secure transactions or fair gambling, making unlicensed casinos a dangerous choice for any player.

Impact of casino licensing and regulation

Proper licensing and regulation of casinos has many economic and social implications:

  • Consumer protection. Licensing and regulation ensure fair and responsible gambling practices, protecting consumers from fraudulent operators.
  • Economic impact. The gambling industry contributes to national and local economies by creating job opportunities. It also provides significant tax revenues.
  • Advertising rules. Regulations ensure that gambling advertising doesn't appeal to young people. Anyone appearing in gambling adverts must be (and appear to be) over 25.
  • Social implications. Addressing problems such as gambling addiction is an important part of regulation. Support for responsible gambling initiatives and self-exclusion schemes and the provision of safer gambling resources is essential for protecting players.

Case studies and findings

Jurisdictions like the UK, Malta and Gibraltar have established systems that ensure fair play, protect consumers and promote responsible gambling. Here are a couple of cases that exemplify the success of casino licensing and regulation in the UK: 

One example of successful regulation in the UK is the National Lottery, operated by Camelot Group until early 2024. The National Lottery is regulated by the Gambling Commission, which enforces strict rules to ensure the lottery operates fairly and responsibly, while also ensuring that lottery funds are distributed to good causes. Camelot ran the lottery to the letter of the regulations, building and maintaining public trust, while contributing billions to projects across the UK. This included initiatives relating to the arts, national heritage, sports, education, environment, health and the community. 

Projects funded by the lottery include The Prince’s Trust, Mind, The National Trust, Sport England, The National Theatre and The Eden Project.

Another example of successful regulation includes the Gambling Commission’s enforcing of Remote Gambling and Software Technical Standards (RTS). This ensures all software used at online casinos is fair, reliable and secure. Casinos are required to use random number generators (RNGs) to ensure results of games are entirely random. They also need to undergo regular testing by approved independent authorities. RTS regulations also require casinos to be transparent about pay-out percentages, odds and game rules. Other areas covered by these regulations include data protection through encryption technologies; commitment to safer gambling through the provision of responsible gambling tools and self-exclusion options; and the threat of fines and/or licence suspension/removal if operators fail to meet these standards. 

Challenges and shortcomings

Despite the success stories, regulating the casino industry presents challenges. Ensuring compliance by operators, addressing problem gambling and keeping up with technological advancements take time and resources. One major concern is the casino grey market, where casinos operate in jurisdictions where gambling is legal but unregulated. Players are at risk when playing at these casinos. They have no regulatory systems ensuring fair play, transparency, data protection or problem gambling support.

Continuous adaptation to technological changes and strict enforcement of rules are essential to the integrity of the industry, while collaboration among international regulatory bodies can help to address these types of gambling issues.

Conclusion

Casino licensing and regulation are vital for maintaining the integrity of the gambling industry. Fair play, transparency and player protection are essential. As the industry evolves, regulatory bodies will face new challenges. How the industry meets those challenges will determine its success and sustainability.

All casinos on No Wagering are licensed by the Gambling Commission. This ensures a safe and trusted gambling experience. Our commitment to featuring only these operators ensures you can enjoy playing at any of our recommended casinos with total peace of mind, knowing that you are protected by strict regulations that guarantee fair play and put customer safety first.