A gaming machine license is a type of permit that allows operators to legally run a business using slot machines (whether online or physically in the premises). It is a type of game of chance. As far as physical casinos in some countries are hard to open or simply prohibited, online gaming platforms keep developing very fast. Nevertheless, a gambling business must be licensed to ensure working with international regulations. Operating slot machines online legally is also possible with a gaming machine license only.
Reasons to obtain a gaming machine license
As soon as monetary rewards are the desirable outcome of slot machine gaming activity, the process has to be secured. There are particular benefits a gambling company gets by receiving a gaming machine license:
- Cooperation with software developers. Whether we speak about game suppliers or other software developers, the recognized companies that provide operators with high-quality products cooperate with the licensed companies only (they are licensed as well).
- Payment systems incorporation. Payment providers reject unlicensed companies. A gaming machine license allows businesses to conduct transactions on their platforms easily.
- Merchant and corporate bank account opening. Banks are extremely critical and attentive when it comes to high-risk businesses. So, having no license is a huge disadvantage for companies applying for bank account opening.
- Operating in the regulated markets. You are expanding the business presence to such countries as the UK, the USA, and EU members.
- Reputational security. Your company is much more chosen and trusted by gamblers if you are licensed. Especially if you have a license from one (or a few) of the top jurisdictions.
- The fair play principles compliance. When you possess a license, it is a guarantee of transparent and secure work of the RNG (Random Number Generator). Besides, it demonstrates that the RTP (return-to-player) rate is fair.
- Avoiding law violation consequences. The international gaming regulations are strict and accurate. Operating unlicensed creates a huge risk for a company. And fines are not the worst-case scenario.
The list of countries issuing a gaming machine license is not that big. Let’s get down to an application order and a jurisdiction choice.
Steps to get a gambling license
So, what to start with? There are particular steps you need to take as a gambling operator to obtain a gaming machine license:
- Make a choice. It is not so easy to pick an option that suits your company best. Later, we will mention the criteria to keep in mind while choosing a jurisdiction.
- Collect the required paperwork. The preparation process is very important. If you don’t make mistakes, the review will most likely be smooth. If something goes wrong, you may be asked to submit additional documents or fix mistakes, which will take time.
- Go through audits. The applicant has to be audited to prove its capability in the gambling business performance.
- Fill in the application form. A special information sheet must be filled out and attached.
- Pay the fees. A review procedure costs differently in each country.
- Submit the documents and the application form. After applying for a gaming machine license, all you can do is wait for a final decision, which will be taken in a few weeks or months, depending on the chosen jurisdiction.
An operator may use casino license services for a smooth application process. Even though it may seem quite easy to get a license, the specialists’ assistance may solve most possible problems and save you a lot of time.
How to choose a jurisdiction for the gaming machine license?
There is a particular list of countries that issue a gaming machine license. Not all jurisdictions have it. We will discuss the most popular options below.
| Country | Price | Description |
| Curacao | $4,700 – $13,000 (annually) | It’s one of the favorite jurisdictions of startups. The price is affordable even though it increased after the White Label changes. |
| The Isle of Man | £5,000 (~$6,000) | It is considered to be easy to obtain, and the government supports innovations. The tax system is also beneficial. Taxes are applied to the profit and result in 0.1-1.5% of the income. |
| Malta | $5,200 (for submitting documents) + ~$26,000 (yearly fee) | This jurisdiction is known as a highly prestigious and trusted option. The regulations are strict, and there is a corporate tax you’ll have to pay. |
| Gibraltar | £100,000 ($122,000) | The Gibraltar license is suitable for experienced companies that have already received a license from other jurisdictions. It is considered to be a “niche” choice. |
| Romania | $31,000 – $125,000 (annually) | An operator pays fees for this kind of license in parts. Equal payments are to be made during a period of 5-10 years. This may appear beneficial for many startups that need time to earn funds. |
The fees mentioned in the table above are given for your general reference only. Please make sure to check the actual information in the jurisdiction you are interested in as soon as changes are regularly applied.
Main criteria for the jurisdiction choice
So, how should a smart choice be made? There are a lot of aspects that are to be taken into consideration. LicensingAid creates tailor-made solutions for gambling companies and will willingly assist you at every step of the license acquisition. But here are the most important factors you should consider before applying for a gaming machine license in a particular jurisdiction:
- Business performance geography. First of all, check which countries are covered by the chosen permit. Monitor, from where the highest inflow of slot machine players is possible.
- Tax system. It goes without saying, the tax system must be beneficial, particularly to your type of company. There are some jurisdictions that offer zero gaming tax conditions. Nevertheless, countries with higher taxes can turn out to be beneficial to your business in other ways.
- Application and maintenance fees. The difference between the initial fees in various countries is huge. The annual payments are also quite high in prestigious jurisdictions.
- The application simplicity. While in some countries the application process is straightforward and clear, in other countries there are very specific requirements, and extra checks may be needed if they decide that it’s needed.
- The review duration. The auditing can be very time-consuming. Sometimes, the jurisdictions with a long review period give the applicants a temporary license so they can start working until they are granted an actual license. Other jurisdictions may require just a few weeks to take a final decision and issue a permit.
- The gaming machine license validity term. It is recommended to check how often you must apply for a license renewal and how much it will cost you.
- Maintenance procedures. It is highly important to submit all required reports in time; otherwise, you may get fined, so keep in mind this aspect. Such reports become public records, so please check what you will have to submit in the future after obtaining a license.
- The reputation. Gamblers (especially experienced ones) trust recognized names. That’s why it’s so crucial to monitor how reliable and trustworthy a jurisdiction is.
These are just some of the important factors to consider when applying for a slot machine license. Contact us for an individual appointment for the consultancy from our professionals.
Who needs to obtain a gambling machine license?
License acquisition is applicable to both B2B and B2C companies. The most frequent applicants for a gambling machine license are:
- The game developers and software providers (B2B). The software companies that develop and provide slots to the online gambling platforms have to get licensed.
- The game aggregators (B2B). The platforms that collect and offer various game software options of different providers to the operators are in this category.
- The gambling operators (B2C). The businesses that work directly with customers, offering them slot machines with the possibility of winning monetary rewards online, have to be licensed.
As the gaming machine license is a specific type of permit, it is suitable for companies mentioned above as they offer games of chance with real money involved to players or operators, and every step of the process must be secure to prevent money laundering attempts.
How to apply for a gaming machine license?
Slot license acquisition has some specific features. Before submitting documents, the company has to meet the criteria for the application. Surely, these criteria may vary in each jurisdiction, but the main requirements are generally the following:
- Business incorporation. Your company has to be registered in the chosen jurisdiction. In some cases, you will also need an actual office there. Each country has its own requirements for hiring locals as well.
- Sufficient funds proof. You have to demonstrate that you meet a minimum requirement of financial compliance to get a slot license.
- The AML compliance policy. To gain trust, your business has to show compliance with international anti-money laundering regulations.
- The RNG certificates. Your business requires a certification issued by internationally trusted companies.
- Documents readiness. Check the paperwork thoroughly to avoid extra audit and fixing mistakes in the future if you want to get a result fast.
When your gambling company meets all criteria, the process goes smoothly. Let’s mention the documents you have to get for the application process.
The required document list
Each jurisdiction has its own specific rules and regulations, but there is a generally required paperwork you will be obliged to collect to apply for a gaming machine license. The documents you will need:
- A company registration proof
- An accurate business plan with future financial expectations
- The passport copies of the company’s key figures
- A Police Clearance Certificate (no criminal record proof)
- Certification for games and other software
- Funds origin proof
- Privacy policy
You may also be required to submit a letter from the bank and any other documents that the authorities of the chosen jurisdiction decide to check. The information in the application form and the documents you submit must be correct and true. Otherwise, the license will not be granted, or it may be revoked later. So our experts highly recommend that you not take risks with inaccurate information and to be as transparent as possible.
Why choose LicensingAid for professional assistance?
The LicensingAid specialists have been consulting gambling companies for many years. We provide you with assistance at each stage of starting and performing a business. Surely, we will help to choose a jurisdiction and to calculate the required initial budget in your specific case. The processes we specialize in are:
- A company registration
- A merchant and a bank account opening
- A trademark registration
- An online platform design consultancy
- The AML compliance policy
- A gambling license application
- A further license maintenance
These are just a few of the issues we are ready to help you with. Please contact our professionals for any business advisory service you are interested in, and we will do our best to add value to your company’s growth.
FAQ
What happens if a company operates without a license?
First of all, famous payment system operators (like PayPal) will refuse to cooperate with such a company. Trusted game developers will not work with you either. And, it goes without saying, working unlicensed is illegal. Your company may face huge penalties and income confiscation. You may lose the player base and end up closing the business. Remember that unlicensed casinos will never compete with licensed ones as they have significantly fewer growth opportunities.
Why can a gaming machine license be revoked?
There are several reasons for losing a gaming license. It may be suspended in case your company operates not in compliance with international regulations. This may happen because of insufficient anti-money laundering measures, violation of fair play policy, failure to provide secure funds transfers, submitting false information in reports or other documents, etc. The success of your business fully depends on fairness and transparency, as well as responsible gaming compliance.
Which type of slot machine license do I need to choose?
The license type you need depends on your company’s activity. For example, if your business covers developing and distributing slot games, you have to obtain a provider (developer) license. In case you operate a gambling platform and are dealing with gamblers directly, you need a casino operator license.
