It goes without saying that obtaining a license is a turning point in gambling business activity development. Every company that deeply cares about the reputation and financial security should work under the gaming regulations. After getting a consultancy from our experts and choosing a suitable licensing option you must be aware of further license maintenance and possible risks, it is crucial to study what can disqualify you from a gambling license. Even though the first reaction to a violation will most likely be issuing a fine, be careful. First, it can cost you millions of dollars. Second, if the company ignores the laws, the license can be easily revoked. So obtaining it is the first step only. We unveil the most crucial information about proper safety measures in the article.
Why do regulators reject applicants?
Even one small mistake can cost you a license. To avoid being rejected you must take into consideration every detail in the regulations specific requirements. Every jurisdiction has something particular you have to be aware of. As an example, the minors’ age differs in various countries. Some of them allow players from 18 years old, other ones – from 21 years only. Speaking about the application rejections, you must be attentive in the process of the documents preparation. The basic paperwork list should contain the following documents:
- Due Diligence Check of every key figure.
- The legal entity information verification.
- Main business stakeholders verification.
- Criminal record check.
- RNG certificates verification.
- Bank account statements or letters of good standing (depending on jurisdiction).
After the compliance check the decision is made upon the fact whether you meet the criteria or not. So the preparation process must be taken seriously and the help of professionals should be involved in the best case scenario. This factor is essential as the jurisdictions strictly control the AML regulations and other gaming rules that secure the businesses from money laundering and fraud cases.
Common reasons for gambling license withdrawal
The international gambling community aims at working in compliance with the worldly recognized standards. To keep standards high, every jurisdiction sets its own regulations. Even though there are various rules and laws, the main principles stay the same. Let’s proceed to the most common reasons for gaming license rejection:
- The AML policies violation.
- Technical standards violation.
- Inappropriate protection of clients’ funds.
- Digital advertising rules violation.
- The minors safety violation.
- The vulnerable persons protection violation.
As for the background check failure, we will unveil each reason in a more detailed way further in the article. Each of these factors may represent a risk for a mass gaming license disqualification. If you need more detailed information, please contact LicensingAid specialists.
Financial instability and untrustworthy credit history
Funds origin check is a must regardless of the chosen jurisdiction. The company and its leading figures undergo a thorough check. Besides, the capital reserves may be held in trust due to some jurisdictions’ requirements. It is done by a regulator with the aim to protect customers from illegal actions from the operator. If there is financial instability gaming license is not granted.
The reasons for rejection by this criteria include negative credit history, debts, bankruptcy or any kind of financial violations. The regulator has to trust the applicant in terms of business stability.
Criminal records and law violations
The companies applying for a gaming license must prove having no criminal records. The company owners, investors, directors, etc. – every key figure undergoes this inspection. Criminal, administrative, civil or financial violations will result in rejection of a license issuing. Some jurisdictions are stricter than others. For example, in the USA one-time violation can be accepted as an issue not sufficient enough to deny the license granting. In Brazil this would be an instant “no” for an applicant.
If you have concerns about your criminal history and whether it will be good enough for the license application, don’t hesitate to contact our specialists for a more detailed approach. We will choose the most appropriate jurisdiction for you, which will increase your chances of getting a license.
False or misleading data in application
The transparency is a key value for the regulators. In case the applicant hides important information or gives false or misleading data to the regulatory body or its staff, he will most likely face gaming license disqualifications. The details must be clear, you should be completely honest to avoid any suspicions.
Suspicious source of funds or beneficiaries
Know Your Customer (KYC) and Anti-Money Laundering (AML) policies must be precisely observed. The funds must be “clean” to ensure the trust. The ownership structure should be clear. Otherwise the operator is considered to be unqualified to perform business activity in gambling industry.
Connections to sanctioned individuals or jurisdictions
The relation to the offshores and particular countries are reviewed with thorough attention. The blacklisted persons or countries under severe sanctions should not be associated neither with you nor with your gambling company as such circumstance isn’t in correspondence with a responsible gaming policy. This means the regulators would not be open to grant you any permits for performing a legal online gambling activity.
How is a gaming license background check conducted?
There are two most significant authorities in the gambling sector. They are the Curacao Gambling Control Board and the Malta Gaming Authority. These entities review applications in absolutely different ways. The pricing policy is different as well. The high standards these authorities set are the key to their unshakable prestigious reputation. That is why they are very strict and demanding. The applicants should mind all the rules and regulations to meet the criteria of these jurisdictions. Your funds, connection to offshores or illegal activities, citizenship and other information will be thoroughly checked. The review procedure may take from weeks to several months depending on the authority and the chosen licensing option. Its durability also depends on whether your paperwork has any arising issues to be fixed while being examined.
What happens if your license is revoked
If your license was withdrawn, it means that there were severe failures that caused it. The chance to recover from being suspended is undeniably very small.
Such a move as a license revoking is usually a last step after issuing multiple fines to show the gambling company what inappropriate business activity results in. So a most common response of the operator who faced this problem is a company liquidation.
Serious violation will very unlikely be forgiven as no authority is willing to risk its reputation, so gaming license disqualifications are a must in specific cases. The gambling companies’ representatives should treat international high-risk businesses regulations with due respect in case they strive for growth and success.
FAQ: common questions about gambling license denial
Regardless, whether the applicant does not meet the conditions or he has convicted anything illegal, the commission can withdraw the license without a warning. There is no specific strict rule claiming that the violation will directly lead to the license denial, but the decision remains up to the respective staff.
Is it possible to get a gaming license with a felony?
An operator may have a chance to get a license with a felony (like a traffic infraction) if the jurisdiction is not very strict regarding these issues. The gaming license disqualifications California conducts are fewer than ones done by Brazil. Everything depends on the jurisdiction. To choose a right license for your specific case please contact our experts team. We will conduct a research and ensure you make the right choice to avoid picking a jurisdiction which denies operators with any felony in their record.
Can you obtain a gaming license with a misdemeanor?
Let’s single out the difference between the felony and misdemeanor first. Generally, misdemeanors are not severe violations, resulting in such punishments as fines or jail time of up to one year. Felonies are more serious crimes (breaking into properties, murders, rape, federal crimes, etc), which lead to high penalties, imprisonment longer than one year, sometimes even a death sentense.
So, a misdemeanor is less likely a reason for a license denial. Each application and the history of participants is considered individually though. It goes without saying that the violations related to the gambling industry can result in automatic denial. Financial crimes are a great obstacle to obtaining a license as soon as the operators work with huge money flow and must not represent a threat to an iGaming society.
What may disqualify you from getting a gambling license?
There are a few main reasons for a license rejection. They are giving misleading or false information, debts, being unqualified, not providing commission with significant changes during 7 days, not meeting tax obligations, not meeting requirements, relations with sanctioned personalities and countries, etc. Gambling industry welcomes those who are trustworthy and safe for jurisdictions’ reputation.
Which jurisdictions have the softest licensing requirements?
It’s no secret that some licenses are much easier to obtain than other ones. But you should take into consideration that a review process simplicity and affordable price are not a guarantee of quality or prestige. The jurisdictions that are believed to be comparatively soft are Curacao, Anjouan, Kahnawake. Anjouan has a universal license for all gambling companies and activities. Curacao grants businesses with two types – B2B and B2C licenses. Kahnawake issues Secondary CPA, Key Person, Live Dealer Studio Authorization, Interactive Gaming, Client Provider Authorization types of licenses. LicensingAid experts will help you to pick the best solution for your company.
Conclusion: how to get a license and keep it
The procedure of a license application is transparent and consecutive. You must study the rules of the chosen jurisdiction thoroughly and simply follow them with no violations. Make sure you give the accurate data without a single exaggeration even if the information looks better this way. Check every required document. It’s recommended to analyze and prepare the paperwork with the lawyers as professionals may see what a regular observer can miss. Having a bad criminal record and gambling license receival are not meshed together. Your history must be clean. Pay all necessary fees and show the proof of payments. And what’s very important – follow the license maintenance regulations attentively. Choose the providers with trustworthy reputation and experience in the market. Remember, the mentioned measures are important as they represent a core value of modern online gambling, which is transparency. The authorities no longer wish to tolerate that gambling is widely associated with financial crimes and violation, so following regulations serves you and your customers as a safety guarantee in the first place.
The LicensingAid team will willingly provide assistance at each step of the license application procedure, its further maintenance and other relative services like trademark registration, starting a company and design consultancy.
