Licensing in iGaming and the Licence Acquisition Process

The development of the global iGaming industry is linked to the implementation of digitalisation, the growth of mobile technologies, and the expansion of markets. Online casinos, bookmaker platforms, and other gaming services are moving into the legal space, which is why the process of obtaining appropriate permits – licences – is important. After all, operational standards and licensing frameworks play a key role in this space. Countries are introducing their own rules, recognising the need to make the market more transparent, to protect users, and to ensure control over all financial operations.

Today, licensing is considered one of the main factors of trust. By establishing transparent working conditions in the market, operators must comply with requirements, implement responsible gaming mechanisms, use AML and KYC procedures, and ensure the fairness of gaming processes.

For operators, licences mean legal permission to operate and, at the same time, access to international markets. It is licences that provide the opportunity for further cooperation with payment systems and gaming providers.

For users, licensing ensures the protection of personal data, transparency of financial operations. For these reasons, licences are considered a key indicator of reliability; they prove and confirm the reputation of each operator.

What is a Licence in iGaming

A licence in the iGaming sector is an official permit issued by a government or authorised body. According to such a permit, an operator can legally provide online gaming services. Licensing covers not only modern online casinos and bookmaker platforms but also poker rooms, lotteries, and other digital gaming services. A licence is proof that a company operates within the established legal framework and complies with all requirements of a specific jurisdiction. Learn more about Soft2Bet and its technology solutions.

The main purpose of licensing is to create a transparent and controlled online gaming market. Industry standards are designed to support player protection, fraud prevention, and fair gaming processes at all stages. Licensing frameworks also contribute to greater transparency and oversight of financial operations within the iGaming industry. As a result, a legal tax system for operators can be established.

One of the key functions of licensing authorities is control over operators’ activities. Having obtained licences, companies are obliged to regularly undergo organised inspections, provide financial reports, comply with Responsible Gaming requirements, and confirm platform security. If an operator violates requirements, they may face the following consequences: 

• fines; 
• restricted activity in a specific jurisdiction; 
• revocation of a previously issued licence.

Everything depends on the degree of violations. For this reason, licensing is not a formality but a necessary tool for regulating the entire iGaming industry.

Types of Licences in iGaming

The iGaming industry uses three main types of licences:

Licences for Online Casinos

Operators provide users with access to a list of gambling games through digital platforms: 

• slots; 
• table games; 
• live casino; 
• poker and other entertainment formats depending on the jurisdiction.

The exact list of permitted gaming products, as well as certification requirements, is determined within established licensing frameworks and industry standards. For example, some licensing authorities put forward the requirement for mandatory testing of RNG (random number generator) as one of the conditions – this is important to confirm the fairness of game results.

At the same time, certain requirements for software are noted: compliance with security requirements, protection of user data, support for stable operation of payment systems. Among the requirements of most jurisdictions is the need to maintain cooperation exclusively with certified software providers who regularly conduct technical inspections and independent audits.

Licences for Sports Betting

The activities of bookmaker platforms are regulated by appropriate licences, which determine the types of bets, line formation, list of rules for calculating winnings, and resolving disputes.

Thanks to licensing, it is possible to: 

• ensure transparent operation of bookmaker services; 
• minimise fraud risks.

Specific rules for accepting bets include requirements for financial reporting, storage of betting data, and adherence to Responsible Gaming principles. In some countries, the list of obligations of licensed bookmakers includes the need to integrate self-limitation tools, betting limits, and user age verification during registration.

Licences for Software Providers

For technology suppliers developing solutions for the iGaming industry, a separate category of licences is provided.

The list of these companies includes developers of: 

• gaming engines; 
• online casino platforms; 
• payment solutions; 
• analytics systems; 
• live casino technologies.

The presence of licences confirms that the software complies with all security requirements and therefore can be successfully used by licensed operators.

For such suppliers, one of the main factors is the ability to integrate with various gaming platforms, as well as compliance with international technical standards. In some jurisdictions, software providers are required to undergo mandatory independent system audits and preliminary RNG verification. This list also includes compliance with data protection protocols. As a result, a stable and secure iGaming ecosystem can be maintained.

Basic Requirements for Obtaining a Licence

To obtain a licence, iGaming companies must meet a list of mandatory requirements, among which are:

1. Financial requirements – it is necessary to confirm financial stability and the ability to fulfil obligations to players (sufficient authorised capital, compliance with AML rules, regular reports and audits, financial guarantees for player payouts). Operators must prepare financial statements, banking documents, and confirmation of compliance with AML rules.
2. Corporate structure of the company – a transparent ownership structure of the company is important. The operator must not conceal ultimate beneficial owners (UBO), directors and key managers, ownership structure, or jurisdiction of registration. In addition, particular attention is paid to the transparency of the entire corporate structure and the absence of illegal connections related to suspicious activity. Many jurisdictions require the provision of a complete package of corporate documents: from company registration data, management structure, to the distribution of all shares among shareholders.
3. Technical standards – the platform must meet a number of technical requirements (protection of players’ personal data, transaction security, fairness of gaming algorithms, independent testing of gaming systems, compliance with Responsible Gaming standards). For this purpose, special inspections of server infrastructure, RNG testing, and cybersecurity systems audits are organised.

Each time before issuing a licence, a reliability check of the company is conducted. A comprehensive check involves checking against sanctions and international databases, analysis of the business model, verification of all partners and suppliers, sources of funding, and business reputation.

Technical Requirements for Platforms

One of the mandatory conditions for platform licensing is software certification. An important technical requirement is undergoing independent testing in accredited laboratories. Such testing confirms that all games work correctly and the operator does not influence the final game result.

A key element of platform fairness is the random number generator (RNG). This generator is responsible for the randomness of results in slots, roulette, and other games. It must be certified and pre-tested by independent laboratories.

Additionally, platforms must ensure a high level of protection of players’ personal data and all financial information. Therefore, the system includes: 

• data encryption; 
• secure channels for information transmission; 
• ability to store data in accordance with GDPR; 
• ability to prevent unauthorised access.

All financial operations on gaming platforms must operate within established oversight and compliance frameworks. Therefore, operators monitor player transactions, prevent fraud and money laundering (AML), and identify users in a timely manner (KYC).

Licence Acquisition Process

Obtaining an iGaming licence is a complex procedure that involves several main stages. It includes mandatory operator checks at different levels: legal, technical, and financial. Depending on different jurisdictions, some details of the procedure may differ slightly, but the overall structure remains unchanged:

1. Submitting an application. At the first stage, the company must prepare an appropriate package of documents: registration data, AML and KYC policies, business plan, platform description, ownership structure, information about beneficiaries, financial forecasts, confirmation of sources of funds.
2. Company verification. After submitting the application, the regulator conducts a financial audit and assessment of business sustainability, verification of management and key persons.
3. Technical certification. At this stage, the technical infrastructure of the platform is verified: software for compliance with standards, correct operation and RNG certification, protection of user data, compliance with Responsible Gaming requirements.
4. Obtaining the licence. Official permission to conduct activities in the chosen jurisdiction assumes certain obligations for the operator: regular audits, compliance with the requirements of a specific jurisdiction, provision of financial reports, maintenance of Responsible Gaming standards.

Only after this can the company begin operating in a specific market.

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Tax and Financial Obligations

iGaming industry operators are obliged to pay appropriate licensing fees, which may vary depending on the jurisdiction, type of licence, and scale of the company’s activities.

Most often, the list of licensing fees includes: 

• initial licensing fee; 
• annual renewal fee; 
• additional payments related to audits/expansion of the existing licence.

Licensed companies must pay taxes, which depend on the type of licence and country of registration. For example, some jurisdictions apply a tax on gross gaming revenue (GGR – Gross Gaming Revenue), whilst others apply a corporate income tax.

To protect players’ funds and ensure business stability, operators are obliged to provide financial guarantees.

This list often includes: 

• bank guarantees; 
• reserve funds that can be used for payout of winnings; 
• segregated player accounts.

Therefore, the separation of players’ funds and the company’s operational funds is considered one of the main conditions for protecting user deposits.

Control After Obtaining a Licence

After obtaining a licence, the operator’s work does not end. As a result, another mandatory stage begins – constant control. At this stage, licensing authorities monitor that the company continues to comply with requirements throughout its activities.

Regular Inspections

The list of tasks for regulators includes constant inspections, both scheduled and unscheduled.

Most often, such inspections involve the following actions: 

• audit of all financial activities of the company for a specific period of time; 
• testing of user protection systems used; 
• verification of compliance with AML and KYC rules; 
• analysis of the features of the gaming platform and the specifics of its operation.

The main purpose of such inspections is to ensure that the operator does not cease to comply with the standards of the licence obtained. After all, some operators comply with such standards only at the time of obtaining the licence, forgetting about the need for their constant compliance.

Licence Renewal

All licences in the iGaming industry have certain validity periods, which means they require regular renewal.

During the licence renewal process, the company is re-evaluated according to the following important criteria:

• financial stability of the company; 
• any changes in the business structure that have occurred since the use of the first licence; 
• compliance with all requirements; 
• results of previously conducted inspections.

Refusal to renew a licence or its revocation may occur due to the operator’s violation of rules or non-compliance with the list of standards, rules, and requirements.

The Significance of Licensing for the Stability of the iGaming Industry

In the iGaming industry, licensing plays a key role, influencing the formation of a sustainable, predictable environment. Thanks to licences, it is possible to create a single list of operating rules for all operators, which they will follow. This approach reduces the level of illegal activity in the market, thereby creating a clear system of requirements. Therefore, the modern market becomes more structured and manageable, and business becomes transparent and professional.

The list of the most important functions of licensing includes the protection of all users. For this purpose, establish certain standards for fair play, a high degree of data security, financial operations, and Responsible Gaming.

As a result, it is possible to: 

• minimise the risks of using fraudulent schemes; 
• ensure complete control over all payouts; 
• create a working mechanism for the quick and fair resolution of disputes that may arise between the user and the operator.

Transparent and uniform rules are important for the modern market, allowing the entire iGaming industry to develop actively in the right direction.

In this situation, each party receives the necessary list of advantages: 

• companies receive a list of clear conditions and requirements for entering new markets; 
• investors receive a predictable environment for future investments; 
• users receive safer platforms that can be trusted.

Thus, licensing is not simply another restriction for all market participants but, first and foremost, the foundation for the long-term growth of the iGaming ecosystem.