The UAE: A New era for gambling regulation

Historically, gambling in the UAE was strictly prohibited in adherence to Islamic law, which classifies all forms of gambling, including lotteries, as "haram" or forbidden. However, limited exceptions existed for specific promotional draws and raffles, permitted under trade or entertainment licenses in free zones, where they were framed as non-gambling activities. This allowed for lottery-like events without conflicting with religious principles.

The establishment of the General Commercial Gaming Regulatory Authority (GCGRA) in 2023 marked a significant step, positioning the UAE to manage and oversee gambling activities. Headquartered in Abu Dhabi and created by Federal Decree Law, the GCGRA holds exclusive authority to license and regulate all commercial gambling in the country.

The GCGRA’s framework now includes licensing for various forms of gambling. This shift represents a departure from previous prohibitive policies, reflecting a cautious openness to incorporate gambling into the UAE’s economic strategy while maintaining strong oversight and control.

Types of Licenses and Regulatory Structure

The GCGRA issues five primary types of licenses that cover a broad range of gambling activities and are designed to suit different operational needs within the industry:

1. Gaming Facility Operator License – permits entities to manage land-based casinos and slot machines.
2. Lottery Operator and Retailer Licenses – required for companies managing lotteries or selling lottery tickets. At this moment, The Game LLC holds an exclusive Lottery Operator License, granting it a monopoly over the "UAE Lottery".
3. Internet Gaming Operator License – authorizes online gambling services, including casino games, betting, slots and etc.
4. Sports Wagering Operator License – covers betting on sports events.
5. Gaming-Related Vendor License – applicable to suppliers providing gambling equipment or services.

Additional Licensing Requirements for Key Persons and Gaming Employees

The UAE's gambling regulatory framework requires licenses not only for operators but also for individuals and entities closely tied to the gambling business.

1. Key Corporate License

This license applies to entities that have control or significant influence over a gambling operation, such as:

• Controllers: Those holding 15% or more of economic or voting rights in the gambling operator, allowing them to influence or make key strategic decisions.
• Affiliates: Entities controlled by another party. Basically, companies or organizations that operate under significant influence from the main operator or Controller, supporting or enhancing the core business.
• Management Service Providers: Companies contracted to manage key operations within an operator

2. Key Person License

Individuals in high-level decision-making roles must obtain this license. This includes:

• Directors and Executive Officers: Those influencing the strategic direction of the operator or its affiliates.
• Controllers: Individuals with substantial control over the gambling entity.
• Affiliate Directors: Key individuals within affiliated entities.

3. Gaming Employee License

This license is required for employees involved in day-to-day operations. It has two levels:

• Level 1: For supervisory roles within the gambling proccess, overseeing activities and ensuring compliance with regulatory standards
• Level 2: For non-supervisory, operational roles, who are involved in operational aspects of casino and who contribute to the conduct of gambling activities.

This strict licensing system ensures only reputable and financially stable operators and personnel enter the UAE’s gambling market.

The Licensing Process

To begin the licensing process, applicants must notify the GCGRA and complete an intake form. After a preliminary screening, eligible applicants receive access to the licensing portal, where they submit required documentation, including corporate records, business plans, and responsible gambling policies.

The process entails several stages:

1. Initial Screening – Applicants submit an intake form detailing corporate and operational plans.
2. In-Principle Approval – Following an initial review, applicants pay a 10% fee for in-principle approval, allowing them to establish a corporate presence in the UAE.
3. Full Application Review – The GCGRA conducts an in-depth assessment of the applicant’s financial, legal, and organizational credentials.
4. Final Approval and Licensing Fee – Once approved, the applicant pays the remaining licensing fee, receives the license, and may begin operations upon meeting pre-opening conditions.

Additionally, applicants must comply with a bad actor clause, which screens the reputations of the company, its shareholders, and key individuals. This procedure aims to exclude those with histories of recorded violations of gambling operations in other countries. For example, similar rules in certain U.S. states (e.g., New Jersey), where applicant would not be granted a license, if regulator discovers violations of the gambling laws in other countries.

In the UAE, a bad actor clause in gambling licensing is intended to ensure that only reputable operators enter the market, promoting a secure and trustworthy industry. How this clause is implemented – whether by brand or other criteria – will be crucial, as it could greatly limit the number of eligible licensees.

As for fees, the GCGRA requires an annual maintenance payment for licenses, with the amount depending on the license type. However, specific fees for application and licensing remain undisclosed.

The terms of licenses have also not yet been officially revealed. Meanwhile, based on the casino operator Wynn's investor presentation, it can be seen that the license term will be 15 years, with an option for renewal. The Game LLC has been granted a 10-year permit to operate the UAE Lottery.

Tax obligations have not yet been finalized, but Wynn Resorts has indicated a rate of 10-12% on gross-gambling-revenue (GGR). According to the regulator, a 25% tax will be introduced for the general gambling sector and 8% for the premium segment (VIP services and industry development investments).

This lack of transparency can be connected with the nascent state of the UAE’s gambling market. With only a few licensed operators currently active, the regulatory framework is still evolving, and details around fees, licesing terms and long-term costs may be subject to adjustment as more operators enter the market.

Technical and Advertising Standards

To maintain the integrity of the gambling industry, the GCGRA has introduced rigorous technical standards, established in collaboration with gambling Laboratories International (GLI). These standards include:

• GLI-11 for gambling devices
• GLI-19 for interactive gambling systems
• GLI-33 for event betting systems, among others

Operators must comply with guidelines covering areas like equipment functionality and cashless systems. The UAE also enforces strict advertising standards to promote responsible marketing, restricting gambling ads to protect minors and vulnerable individuals.

4H Agency Opinion

According to the latest news, Wynn Resorts already has secured the country’s first casino license, Aristocrat has received the first gambling-related vendor license, and MGM Resorts has applied for another casino license. The rapid interest from such major players highlights the UAE's potential as a new attractive hub for international gambling.

At the same time, while the GCGRA’s regulatory framework brings legitimacy and clarity to the UAE’s gambling sector, it also introduces challenges. High financial thresholds, compliance procedures and extensive documentation requirements may limit access for smaller or new operators. However, these strict standards position the UAE as an exclusive market, likely to attract established operators with strong reputations.

As the market evolves, the UAE may need to refine certain regulatory aspects, particularly around fees and tax obligations, which remain partially undefined. In conclusion, the UAE’s commitment to responsible gambling creates a solid foundation for growth. With time, the UAE could set a regional standard for balanced gambling regulation that supports economic development while safeguarding consumer interests.

Image credit: Casino Guru News