Online casino gaming licences - how they work and what you should know
Online casinos and gaming licences go hand in hand. Licensing is part and parcel of the iGaming industry and a fundamental component to an online casino's operations. If you play in online casinos, it's important to know how licensing works in Canada and beyond, plus gain an awareness of what matters most to you as a player.
A licence paves the way for online casinos to be governed by a set of rules and be regulated by an external, independent authority. When an online casino is licensed, it's a sign that it's a legitimate virtual establishment that operators within an organised framework. All the casinos featured on Bojoko have a full, valid online gaming licence.
We've compiled this informative guide with all the information you need to know about the different licensing systems and how this affects online casino players. Take your time in learning the particulars and applying this knowledge to create the best casino experience for yourself.
What is an online casino licence?
An online casino licence is a permit that certifies that an online casino is fully compliant with a set of conditions and requirements devised to regulate its operations, and ensure it stays in line with best-practice gambling. Casino licences are also there to regulate the iGaming industry and ensure that all kinds of online casino operators abide by an official code of conduct when it comes to running their business.
In general, an online casino licence is a formal assurance that the casino operator is fit to conduct a gaming business, including adhering to strict social responsibility guidelines concerning:
- Advertising and marketing
- Contribution to research, education and treatment
- Information for players
- Underage gambling
- Anti-money laundering safeguards
- Technical standards
- Alternative dispute resolution
Casino licences also enforce anti-money laundering practices that safeguard players and other stakeholders from criminal activity that can underpin rogue casinos' business operations.
The online casino operator should be adequately equipped to enter the market from a business strategy perspective, must meet the operational and statutory requirements prescribed by the law and policies of the jurisdiction it falls under, and have correctly implemented and tested its gaming product on a technical basis before launching it.
A casino gaming licence is issued by the relevant authority which regulates the gambling industry in a particular jurisdiction. The online casino operators licence is issued to the casino after several stringent rounds of vetting against the criteria mentioned above. Let's take a harder look at what these specific criteria are.
Casino licensing in Canada
Online casinos are legal in most of Canada. Most provinces and territories are 100% open to online casinos licensed in offshore jurisdictions, with the following exceptions:
- Online casinos are completely banned in New Brunswick
- Nova Scotia residents can only play in the casinos of Atlantic Lottery Corporation (ALC)
- The legal minimum age is 18 in Alberta, Manitoba and Quebec. For the rest of Canada, it's 19.
Requirements for online casino licence holders
Regulatory bodies impose a list of requirements that online casino operators need to comply with in order to be issued with a casino licence. Here are the different facets of an online casino business regulators look into during the decision-making process.
ADVERTISING AND MARKETING
Online casinos are required to advertise gambling products and services in a socially responsible manner. This means that an online casino cannot misrepresent any aspect of its product or service to gain an unfair advantage over other operators and spread false information. This is true especially when it comes to the marketing of casino offers and promotions, the participation of young people in casino advertising, the placement of digital adverts and universal laws governing privacy and electronic communication.
CONTRIBUTION TO RESEARCH, EDUCATION AND TREATMENT
To receive a casino licence, operators must provide a valid contribution to the research, education and treatment of problem gamblers. This monetary contribution is generally made on a voluntary basis to one or many from a selection of organisations and charities that assist problem gamblers.
Responsible gaming is crucial to the health of the player and the industry. Different regulators and licensing bodies set fundraising targets for the online casino industry that generate funds to cover annual research, education and treatment budgets.
INFORMATION FOR PLAYERS
Online casinos must supply the necessary information for players to be fully aware of the circumstances and conditions under which casino gameplay takes place. This means that online casinos should provide ample honest information about their product or service, as well as helpful information about engaging in socially responsible gaming. This information is generally displayed on the online casino's website but can also be distributed via an e-newsletter or social media.
Underage gambling by players under the legal minimum age is considered a serious offence punishable by law under any jurisdiction. This is why online casinos must put policies to prevent underage gambling into practice and monitor their effectiveness.
The legal minimum age for gambling is 18 in Alberta, Manitoba and Quebec; 19 for the rest of Canada.
There are several different measures that online casinos take to provide for this – you can read more about them in our casino guide for beginners. Regulators work with other bodies to test the robustness of online casinos' age verification policies and procedures.
Online casinos must provide the option of self-exclusion to players who would like to take active steps to limit or stop their gambling. Self-exclusion is a feature present in licensed online casinos that allows players to disable their online player account for a select period of time. The self-exclusion time window can range from one day to several months. Players can also close their account permanently if they so wish. Players should be able to opt for self-exclusion and put it into force instantly through the online casino's website. Adequate support for players seeking self-exclusion should also be available for online casinos to be granted a licence.
ANTI-MONEY LAUNDERING SAFEGUARDS
Online casinos must undertake to implement systems and processes appropriate to their business that counter money laundering and terrorist financing. These systems and processes need to be regularly assessed, and online casinos are required to engage with law enforcement bodies and the regulators to single out suspicious activity.
Although they shouldn't be regarded as an indicator of excellent quality or security, online casino licence holders must comply with the Gambling Commission's technical standards and requirements. These are related to the gaming software that online casinos use, which is subjected to a testing strategy before the game is officially released.
ALTERNATIVE DISPUTE RESOLUTION (ADR)
Licences bind online casinos to offer either a confidential third party service or access to an ADR provider, where players can receive a customer dispute resolution service free of charge. This ADR function is important in cementing the casino's credibility and allows both players and operators to manage their expectations well, plus mediate issues in difficult situations. Online casinos should present their customers with the ADR option if a dispute about their gaming activity hasn't been resolved in the initial stages of the complaints procedure. There's a list of approved providers that players and online casinos should stick to when ADR is required.
Why should online casinos be licensed and regulated?
Online casinos should be licensed and regulated as they have grown from a fledgling niche in the early days of the internet to a global industry worth billions today. Just like banks and financial service providers are regulated by central banks, for example, so should the booming online casino industry be subject to laws, regulations and licences that control its operators for the benefit of all stakeholders.
Without a regulation and licensing system, online casino operators would not be bound by strict codes of conduct and other measures to ensure they run their business in a legitimate and ethical way. Let's delve into some detail about why online casino licensing is so critical.
BENEFITS OF PLAYING IN LICENSED CASINOS
There's a lot to be gained from playing in a licensed online casino. All the online casinos featured on our site have a full and valid online casino licence issued by the reputable UK Gambling Commission or other licensing bodies, most notably theMalta Gaming Authority.
Seriousness and stability.
An online casino licence is an indicator of an operator's seriousness and stability in its operations. The licensed online casino will have had its business operations duly analysed and tested to reveal any weaknesses or malpractices. All areas of operation are scrutinised and the casino has to comply with high standards of quality and stability for it to receive and maintain its licence.
Sound operation of interactive games and game quality.
Since licensed online casinos have had all the components of their operations assessed, their licence ensures a degree of quality to their games. It's also a guarantee that their games run smoothly. Apart from licensing game providers, licensing bodies carry out technical tests on the online casino games' software to certify that the product or service offered by the casino is up to scratch. Most importantly, it also means that the casino's games use a reliable random number generator (RNG) to ensure the fairness of the outcome.
Protection of players.
Players are protected in a number of ways when playing in online casinos. Due to the legal framework in place, licensed online casinos cannot rip off players or provide games that might be rigged. There are several protective measures in place to safeguard players' interests, such as alternative dispute resolution (ADR) services, support functions that cater for issues arising from gameplay, the monitoring of internal accounting practices, and routine external auditing. All of these contribute to a safe and accountable environment for those who play in licensed online casinos.
Prevention of money laundering.
When an online casino is licensed, it has already gone through thorough anti-money laundering checks. Regulatory authorities require all licensed online casinos to undergo risk assessments and implement or reinforce the appropriate procedures and policies to prevent their facilities from being in any way connected to money laundering or terrorist financing. This means that the money you funnel into the casino as a player doesn't end up in the wrong hands or finance illicit and criminal activity.
Socially responsible and ethical practices.
Licensed online casinos are required to abide by conditions that permit socially responsible and ethical practices to remain a priority within the industry. A portion of the casino's profit must be donated to organisations supporting charitable causes and treatment for problem gambling on an annual basis. Casinos must also conduct their business in an ethical manner and not expose vulnerable members of society to gambling, especially considering the remoteness of their operations. By playing in a licensed casino, you're entrusting your money to an operator which runs in harmony with these beneficial rules.
HOW TO RECOGNISE LICENSED CASINOS
Learning how to recognise licensed online casinos is a must. There a number of things you should be looking at to determine whether the casino site you're on is licensed (but remember that all casinos featured on Bojoko are always 100% licensed).
- Check the footer panel at the bottom of the online casino's website first by scrolling right down to the bottom of the homepage. This panel will display the logo of the Gambling Commission if it has a valid licence.
- If the logo isn't anywhere to be found, the licensing might be indicated in an alternative way. Try looking for a mention of the licence or the licence number in the same footer panel.
- Sometimes, casinos put all information about their licensing on the "About us" page. This page may include links to further licensing documentation.
- The public register of the Gambling Commission has a search facility where you can look for licensed online casinos from a comprehensive list.
- Some of the other licensing bodies have similar search tools.
- If none of these signs are present and you have doubts about an online casino's licensing, you can contact the casino to find out more. Ask the personnel to provide evidence of a UK online casino licence, especially the licence number.
Remember to always stay on the safe side!
WHY YOU SHOULD AVOID UNLICENSED CASINOS
Playing in an unlicensed online casino is tantamount to courting unnecessary danger. Despite the warning signs and information resources available, some players still persist on playing in online casinos that don't have a valid licence from a reputable licensing body. On Bojoko this risk is nil, but you may still somehow land yourself on an unlicensed online casino site if you follow one too many unchecked links. There are plenty of reasons why you should avoid unlicensed online casinos, no matter how big the temptation is. Let's look at the ramifications involved.
Risking the loss of your funds and winnings.
What's the point of playing in online casinos if the most important thing – your funds and winnings – are at considerable risk from the very first moment? Licensed casinos always need to pay out your real money balance and winnings - even when you accept a casino deposit bonus. Unlike casinos with a licence, unlicensed online casinos aren't bound by tight regulation to stick to fair money-handling policies.
The internet is replete with reports of players being ripped off by unlicensed casinos that never process players' withdrawals and withhold winnings. Don't be their next victim. Unlicensed online casinos can't be easily sanctioned like licensed ones and it will be difficult to bring them to justice if you lose large sums of money.
Games may be rigged.
Without any licence to certify the quality of their games and their randomness, games in unlicensed online casinos may be rigged. This means that they don't use adequate random number generators (RNGs) to ensure that the outcome in online slots is completely random and fair, or that the RNGs are programmed in the rogue casino's favour. In such a scenario, winning in casino games is close to impossible and you'll be forking out tons of money for nothing.
Security is never guaranteed.
In unlicensed online casinos, you can't count on any form of security to see you through the experience. There will be little to no security measures on many fronts, whether it's from a web development side when it comes to capturing sensitive data and protecting it from hackers, to a marketing side when presenting false offers and promotions. With no regulation to keep them in check, unlicensed online casinos have free reign to do whatever they want, and this usually means that security is the first to go out of the window.
Data fraud is very possible.
Along with scarce security measures comes the risk of data and identity fraud. When you supply your personal and financial details to unlicensed casinos to open your player account and transfer money, you always run the risk of that data being used in fraudulent ways. Apart from your money and your identity being at risk, you're also more likely to be susceptible to external data attacks because the casino's security system is not effective.
The negative consequences are obvious – when your sensitive data ends up in the wrong hands, it can be used to extract your funds and access personal accounts for malicious means.
Customer support is very poor or non-existent.
Unlicensed online casinos typically have poor customer support – or in some cases, none at all. Since they're not bound by regulation to provide their players with the assistance they need and deserve, they generally won't have reliable customer service. They might provide support to customers through only one channel, and the service will probably be misleading and unsatisfactory. In the worst cases, the contact information supplied might simply be a front for a complete lack of service, which often comes as a nasty surprise to players. If very little or no contact information is available, consider it a major red flag.
Much-needed regulation is slowed down.
When you play in unlicensed online casinos, you're placing your money in avenues and establishments that don't contribute anything to the industry, especially in terms of its health and safety. Licensing and regulation support the online casino market, and by fuelling unlicensed casinos' operations, you contribute to the slowing down of regulatory processes and forward advances in the industry and markets. The more you frequent unlicensed online casinos and entrust your funds to them, the weaker the leaps made to strengthen regulation and keep quality and safety levels at respectable highs.
Casino might be participating in dodgy business.
Playing at unlicensed online casinos is a risky bet at best (and we're not referring to wagering in the games). You never know what lies behind the operations of an online casino without a licence, but some may be engaged in criminal activity or be implicated in dodgy business behind the scenes. Without any regulation to bring these illicit practices to light, unlicensed casinos can be involved in some unsavoury business dealings that go undiscovered. You don't want to be funding this with your precious clean pennies, so stay away.
Why are some Canadian online casinos licensed overseas?
You'll find plenty of examples of Canadian online casinos that have an overseas licence. This is most commonly issued by the UK Gambling Commission or Malta Gaming Authority (MGA).
Licences from other jurisdictions enable online casinos to serve customers residing in areas outside Canada. This is the reason why most Canadian online casinos are licensed overseas.
This "white list" of countries includes:
- The United Kingdom
- EEA countries
- Isle of Man
- Antigua and Barbuda
If an online casino is licensed at any of these locations, you can assume it's regulated by the respective licensing bodies of good repute based in these areas.
Online casino licensing and regulatory bodies
Kahnawake Gaming Commission
The Kahnawake Gaming Commission was established in 1996 and issued its first online gaming licence in 1999. The Commission is self-formed and bases its authority to license and regulate casinos on the "Aboriginal Rights".
The Kahnawake Gaming Commission is considered one of the more prestigious and competent gambling regulators. The Commission has a strong focus on player safety and responsible gambling. The licensing fee of C$25,000 is on the higher end of the scale, which makes Kahnawake a licence for serious casino companies.
The Kahnawake Gaming Commission is based in Quebec, making it a domestic regulator for Canadian players.
UK GAMBLING COMMISSION
The main licensing and regulatory body for online casinos in the UK is the Gambling Commission. The Gambling Commission was set up in 2007. It regulates arcades, betting, bingo, casinos, slot machines and lotteries – including the National Lottery – apart from remote online casino operators, game providers and other gambling businesses.
The Commission's objectives are to keep gambling crime-free, to ensure that gambling is conducted fairly and openly, and to protect children and vulnerable people from harm or exploitation caused by gambling.
The UK Gambling Commission issues several types of gambling licences to different entities, on the basis that online casino operators fulfil and uphold the licensing objectives. Among the Commission's responsibilities are ensuring that online casino licence holders act in line with the requirements imposed by the Gambling Act 2005 and other conditions as set by the Commission itself.
MALTA GAMING AUTHORITY (MGA)
The Malta Gaming Authority is frequently a regulatory and licensing body for online casinos catering to UK customers. Considered one of the world's foremost regulatory bodies for remote casino operators, the authority was established in 2004 and issues licences in the same vein as the Gambling Commission.
MGA aims to provide a one-stop shop for licensing and support the industry and the technological innovation typical of its enterprise. It operates under the directive of The Lotteries and Other Games Act 2001.
GIBRALTAR REGULATORY AUTHORITY
Another regulatory body closely linked to online casinos is the Gibraltar Regulatory Authority. The Gambling Commissioner has the power to grant operating licences to online casinos and regulate the burgeoning industry on the British overseas territory.
The Gambling Commissioner also handles complaints from anyone experiencing issues with playing at online casinos licensed in Gibraltar. This jurisdiction goes a step further in appointing a gambling ombudsman who can personally assure that operators abide by their licence requirements.
Republic of Estonia Tax and Customs Board
Estonia has licensed local online gaming operations since 2010 and offshore online casinos since 2011. All online casinos offering their games in Estonia must hold the local gaming license. All unlicensed casinos offering games to Estonian citizens are blocked by the government.
Estonian licence can also be used in other jurisdictions. Unless the country in question has a national licensing system (e.g. the UK, Denmark, Sweden), the Estonian gaming licence is enough. The licenses are issued by the Republic of Estonia Tax and Customs Board.
Curaçao eGaming is the online gaming licensing body of Curaçao. The Caribbean island is an autonomous, constituent country and part of the Kingdom of the Netherlands.
Curaçao eGaming has provided online gaming licences since 1996. The regulatory body has positioned itself as a low threshold licensor with:
- Low 2% income tax rate
- No need for physical presence
- Low annual licensing fees
- Quick 2-3 week application processing
- A single licence for all gambling products
Since obtaining a Curaçao licence is fast, cheap and easy, it's the first order of business for many casino companies. From the player's perspective, there are two major downsides:
- Lax oversight and player protection compared to the UKGC
- Winnings aren't tax free
To set their customer's minds at ease, many online casino companies get another licence, usually from one of the EU jurisdictions.
How is an online casino gaming licence obtained?
Regulatory bodies have the authority to issue an online casino gaming licence to a range of gambling businesses, including online casino operators, game providers and others. Let's take a look at how this happens.
The first step in obtaining an online casino licence is applying for it. Licence applicants have to first decide which type of licence fits in with their business objectives and then apply online.
Application fees and processing times vary between jurisdictions. In Curaçao, one may get licensed in less than 3 weeks. In UK, you should prepare for a 16 week waiting time.
To complete the application form, applicants need to present proof of their identity, proof of identity documents for the business, a host of other supporting documents evidencing what type of organisation it is, how it's structured and set up, who is managing what and who, who benefits from and influences the gambling activities, how the applicant fits into all of this, and the relationships he or she has with the rest of the group.
Applicants pursuing a remote online casino gaming licence also need to show evidence of a clean police record.
The licensing bodies process all applications with due diligence and conducts the necessary background checks using this application material before ascertaining that the applicant can receive a licence.
After a licence has been granted to the online casino operator, the regulator is immediately on watch to make sure that the new online casino is compliant with the licence conditions. Licence holders must co-operate with the licensor and be forthright in their communication. Otherwise they risk elevated levels of regulatory intervention.
Licence reviews are routinely conducted by the regulators and consist of audits with the scope of verifying that the licence holder is adhering to the full set of their licence's conditions. The regulators work with other organisations to achieve the best results when screening its licence holders.
SUSPENSION OR REVOKING OF LICENCES
The UK Gambling Commission and other licensing bodies duly take action against licence holders which infringe the conditions of their licence. The Commission has the power to launch regulatory or criminal investigations when it has suspicions of malpractice. This can lead to sanctions or criminal charges.
The regulatory and licensing body retains the right and has full authority to deny, suspend and revoke online casino licences. If the licence holder is found to be in breach of their licence conditions, the regulators might opt for suspension of the licence until the holder actively returns to compliance.
In more severe cases of misconduct, the licensors can revoke the licence altogether – even barring the online casino operator in question from ever being issued with a licence again. This blacklisting is possible in scenarios where extensive fraud, money laundering and other serious criminal activity is traced.
A list of online casino operators and personal licence holders who have had a regulatory sanction imposed on them by the Commission is available online through the public register. You can have a quick look at all the casinos the Gambling Commission has blacklisted if you ever have a suspicion about the licensing status of a casino.