How Online Casino License Works? Everything You Need to Know

In the world of online casinos, different licenses are key for different operators.

So what exactly are these licenses? It is well known that licenses issued in foreign countries are the norm, but what are the differences and characteristics of different issuing countries?

In this article, we will explain how online casino licenses work and how they affect operations from an expert’s perspective in an easy-to-understand manner. If you are interested in learning more about online casino licensing, please refer to this article.

How Online Casino Works in Operation

First, let’s explain how online casinos function.

Online casinos operate using five key components, including the players.

1. Player
   As a player, you’re the individual actively engaging in the online casino. You participate in games using the funds you’ve deposited. Winnings from these games can be withdrawn. Since online casinos attract people of various ages and nationalities, tailored support and services are provided for each country.
2. Management Company
   These companies are responsible for offering games to players. The funds received from players are utilized to offer various services, including game selections and user support. The company’s profit is derived from the difference between the total deposits made by players and the total payouts.
3. Payment Processor
   This includes credit card companies like Visa and MasterCard, e-payment services such as Ecopays and Venus Points, and financial institutions managing cryptocurrency accounts. Only casinos are authorized to process credit card payments. When a player makes a deposit via credit card or electronic payment, the casino pays a commission to the payment processor.
4. Software Provider
   These are companies supplying gaming systems to online casinos, acting as manufacturers. They collaborate with casino operators to introduce new games and update systems. Unlike providing physical machines like pachinko or pachislot, they supply software that enables the creation of new games.
5. Government and Regulatory Bodies
   Online casinos must operate under a license. The issuing government or regulatory body continuously monitors the casino to ensure fair operations.

What is “Online Gambling License” ?

Here’s a revised version of your text with improved clarity and flow:

“An Online Gambling License serves as proof that an online casino is legal and operates fairly.

Online casinos operating without an Online Gambling License are considered illegal. Since they aren’t subject to audits by regulatory bodies, there’s no assurance that the money you deposit will be securely handled for gaming, or that your winnings can be successfully withdrawn.

When selecting an online casino, the first aspect to verify is whether it holds an Online Gambling License.

If an online casino is licensed, you can trust its operations and are less likely to encounter problems.”

This version maintains the original information but offers a clearer, more concise structure.

The Best Online Gambling Licenses

Online Gambling Licenses are issued by many countries, but not all are equally reputable.

The most trusted casinos hold licenses that have undergone thorough screening and have earned a high reputation.

Let’s look at some countries known for issuing highly-regarded Online Gambling Licenses.

Republic of Malta Malta

Republic of Malta Malta, a small island nation in the Mediterranean Sea, comprises three inhabited and two uninhabited islands. Since 2000, the Malta Gaming Commission has issued Online Gambling Licenses. Among all licenses, Malta’s are particularly rigorous in their screening process, and maintaining a license is challenging.

Applicants must meet strict criteria, such as incorporation in Malta and adherence to stringent guidelines. The licensing process, taking 3 to 6 months, is arduous, deterring ill-prepared casinos from obtaining a license. Moreover, the licensing authority conducts rigorous checks even after a license is granted, and revocations following audits are not uncommon.

Therefore, a casino holding a Malta Online Gambling License is generally considered to provide a highly secure gaming environment.

Curacao

Curacao is a constituent country within the Kingdom of the Netherlands, located in the Caribbean. Many online casinos have obtained a Curacao Online Gambling License. This license is recognized as the second most stringent after Malta’s, and casinos with a Curacao License are highly regarded for their reliability.

A notable feature of the Curacao Online Gambling License is its adaptability to new services. Unlike the Maltese license, it allows for deposits using cryptocurrency.

With the growing trend of players preferring to use cryptocurrency for deposits and withdrawals, the demand for Curacao Online Gambling Licenses has risen. Online casinos such as VeraJohn Casino and InterCasino, while holding a Malta license, have also obtained a Curacao License specifically for cryoticurrency transactions.

This flexibility makes the Curacao License increasingly relevant, especially in light of the rising popularity of cryptocurrency payments.

Canada

In Canada, Online Gambling Licenses are not issued by the federal government but by regional governments, notably around Quebec. The Kahnawake Gaming Commission is responsible for issuing these licenses. Known for their swift processing, these licenses place a special emphasis on preventing money laundering, with examination standards being quite stringent. Due to Canada’s proximity to the U.S., rigorous checks are conducted during the licensing process to prevent cross-border money laundering.

Philippines

In Southeast Asia, the Philippines issues PAGCOR (Philippine Amusement and Gaming Corporation) Online Gambling Licenses. Initially aimed at land-based casinos like Okada Manila, Solea Resort, and Resort World Manila, these licenses are now increasingly used for online operations. The criteria for obtaining these licenses are relatively lenient. Most operators in the Philippines hold multiple licenses, including the First Cagayan license, mainly for businesses operating within the Cagayan Special Economic Zone. However, for online casinos, this license does not have location restrictions, making it popular across Asia.

Gibraltar Gibraltar

A British Overseas Territory on Spain’s southern coast, has a long history of issuing Online Gambling Licenses. The Gibraltar Regulatory Authority (GRA) oversees the licensing process, which is known for its rigor. High fees for obtaining and renewing licenses mean that typically, only well-established, large online casinos apply.

United Kingdom

The United Kingdom, issuing licenses since 1960, is the oldest jurisdiction in the world to regulate online gambling. The UK Gambling Commission, an independent body, handles the licensing. The UK is particularly stringent about money laundering, with thorough investigations into financial management.

Isle of Man

Isle of Man Situated in the Irish Sea between the UK and Ireland, the Isle of Man also offers Online Gambling Licenses. These are administered by the Isle of Man Gambling Supervision Commission, which is known for its rigorous review process. This process evaluates not just financial stability and operational structure, but also leadership quality.

Regularly Audited by Third Parties.

Obtaining an Online Gambling License involves a rigorous screening process, but simply acquiring the license is not the end of the journey.

The operation of an online casino with such a license is subject to ongoing, irregular checks by third-party organizations. These checks ensure compliance with the standards set by the Online Gambling License.

These organizations also audit the payout percentages of slot machines and the fairness of software programs to guarantee a consistently fair gaming experience for users.

If a third-party audit reveals shortcomings, the Online Gambling License can be revoked. It’s not rare for even large, established casino operators to lose their licenses, emphasizing the importance of maintaining high standards of fairness in their operations.

In the following section, we’ll introduce some of the leading third-party organizations in this field.

eCOGRA

eCOGRA Established in 2003, eCOGRA is a UK-based non-profit organization committed to protecting online players. They conduct rigorous reviews of online gaming software and providers, focusing on:

1. Consistently fair gaming.
2. Prompt problem resolution.
3. Orderly payments. eCOGRA’s checks are known for their strictness, and they also mediate disputes between players and management, adding an extra layer of security.

GLI

GLI (Gaming Laboratories International) Founded in 1989 in New Jersey, USA, GLI is a leading auditing organization with nearly 30 years of experience. Their auditing criteria include:

1. Correct financial handling by gaming equipment.
2. Accuracy of game results and corresponding payouts.
3. RNG (random number generator) testing.
4. Prevention of underage user registration. Notably stringent in slot machine audits, GLI expanded its reach by acquiring TST (Technical Systems Testing) in 2010, further enhancing its influence.

iTech Labs

iTech Labs Based in Melbourne, Australia, Labs is known for auditing both online and social gaming. Their main auditing criteria are:

1. Adherence to game rules.
2. Correspondence between game results and payouts.
3. Proper game functionality. They rigorously check payout percentages and winning patterns in various games.

TÜV compliant

A German-based organization, TÜV compliant focuses on company compliance, safety testing, and product certification. With a global presence, they have recently gained recognition in the online casino sector.

GAMCARE

While not a typical third-party organization, GAMCARE plays a vital role in supporting players. It offers counseling for gambling addiction through phone and email. Online casinos collaborating with GAMCARE demonstrate a commitment to addressing gambling addiction issues.

Software and Gaming Platform Are Also Licensed

Even with a strict Online Gambling License, an online casino can’t be considered safe if the games themselves are rigged. That’s why software companies providing slots and games to online casinos also need to be licensed.

After an online casino obtains its Online Gambling License, it undergoes irregular audits. These audits verify that the payout percentages of slots are functioning as reported.

When browsing an online casino, you can typically find information about the software company’s license. It’s important to check this to ensure the software’s safety before playing.

Summary

You can gauge the trustworthiness of an Online Gambling License by looking at the third-party agency responsible for issuing and auditing it.

Casinos holding high-quality licenses with stringent examination criteria, like those from Malta and Curacao, are generally considered safe to play at.

It’s common for major online casinos to hold multiple licenses. Therefore, before playing, it’s advisable to check which Online Gambling Licenses the casino has obtained.