UK Gambling License

Advantages of the UK Gambling License

The UK has one of the world’s leading economies and is among the most business-friendly jurisdictions where licensed gambling operators can be assured that the government won’t hinder compliant business growth. In the World Bank Ease of Doing Business Index 2019, the UK was ranked 8th out of 190 countries as it scored high on such aspects as starting a business, employing workers, obtaining permits, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

Moreover, in the 2023 Index of Economic Freedom, the UK has been ranked 28th out of 162 countries. It demonstrates this jurisdiction’s judicial effectiveness, reasonable tax burden, regulatory efficiency, and investment freedom. The UK’s labor market is relatively flexible, its gambling regulatory framework is robust, efficient, and transparent and therefore attracts an increasing number of gambling entrepreneurs.

The UK’s taxation system is relatively easily manageable and efficient, offers a lot of tax benefits, and the tax rates aren’t burdensome. For instance, gambling businesses are generally subject to the General Betting Duty (3-15%), Pool Betting Duty (15%), or Remote Gaming Duty (21%), levied on profits, calculated as stakes received (from UK people where appropriate) less winnings paid out (to UK people where appropriate). Moreover, the UK has over 130 international agreements on the elimination of double taxation which promote cross-border investments by providing such benefits to UK-based companies as not having to pay Corporation Tax on foreign dividends.

Advantages

Gambling Regulations in the UK

The Gambling Commission (GC) is responsible for the supervision of UK gambling businesses. It essentially aims to keep crime out of gambling and to protect vulnerable members of society. To do so, it enforces relevant gambling regulations, including the investigation and prosecution of illegal gambling activities, as well as cooperates with the police and international authorities.

The Gambling Act 2005 is the main piece of gambling legislation in the UK. It provides definitions for gambling terms and sets out requirements for all types of gambling licenses, including the protection of children, inspection policies, and prosecution in case of a criminal offense.

According to the Gambling Act 2005, the term “gambling” means the following:

• Gaming – playing a game of chance for a prize
• Betting – making or accepting a bet on the outcome of a race, competition, or other event or process, the likelihood of anything occurring or not occurring, or whether anything is or is not true
• Participating in a lottery where persons, among other conditions stipulated in section 14, are required to pay in order to participate in the arrangement, and the prizes are allocated by a process that relies wholly on chance

Other gambling-related legislation includes the following:

• Gambling (Licensing and Advertising) Act 2014
• The Gambling Act 2005 (Horserace Betting Levy) Order 2007
• The Gambling Act 2005 (Horserace Totalisator Board) Order 2007
• The Gambling (Geographical Distribution of Large and Small Casino Premises Licences) Order 2008
• The Proceeds of Crime Act 2002 (POCA)
• The Terrorism Act 2000
• The Gambling Commission’s Money Laundering and Terrorist Financing Risk Assessment

The Risk Assessment guidance is developed in cooperation with sector specialists including the National Crime Agency (NCA). It details the role of gambling operators in relation to the prevention of money laundering and financing of terrorism. To identify sector-specific risks and threats to operators, the GC uses the Financial Action Task Force (FATF) framework.

Types of Gambling Licenses in the UK

In the UK, gambling licenses are very intricately structured and granted either by the GC or a local licensing authority. While we can provide the affordances of each license below, it’s best to consult with our team here at Regulated United Europe if you intend to find out which license types are required exactly for your business model. In the end, depending on your business activities, you may need to obtain several types of licenses.

The types of UK gambling licenses are as follows:

• An Operating License (granted by the GC)
• A Personal Management License (granted by the GC)
• A Personal Functional License (granted by the GC)
• A Premises License (granted by a local licensing authority)

A low-level gambling license for lottery registrations and gambling permits for pubs, clubs, and other establishments is also granted by local licensing authorities.

Operating License

An operating license must be obtained by every company that intends to provide services to gamblers in the UK, irrespective of its location of operations, i.e. whether its operations are based in the UK or not. It’s also obligatory for companies that advertise their gambling services to UK consumers. An Operating License is generally valid indefinitely unless the GC decides otherwise in accordance with sections 111 and 113-115 of the Gambling Act 2005.

If your license has a specific termination date, you’ll still be able to apply for its renewal during the following period:

• A period that begins 3 months before the date on which the license would otherwise expire
• A period that ends one month before the date on which the license would otherwise expire

Operating licenses are divided into the following categories:

• Non-remote – for various land-based gambling businesses
• Remote – for a variety of online gambling businesses
• Ancillary – for gambling operators that provide telephone and email betting

Operating licenses are also activity-specific with varying rights and limitations which means that you’ll need a separate license for almost every variation of a gambling activity sold to consumers in the UK. Recall that we can assist you in determining what licenses are required for your business in a personalized consultation.

Operating licenses are divided on the basis of the following activity categories:

• Licenses for arcades activities
• Licenses for betting activities
• Licenses for bingo activities
• Licenses for casino activities
• Licenses for casino activities
• Licenses for gambling software activities
• Licenses for gaming machines activities
• Licenses for lottery activities

Each of these activities has several types of licenses with varying conditions and specifics of licensable gambling activities. They cover nearly all gambling businesses, including family entertainment centers, plenty of betting business models, and gambling software services.

The application fees vary widely depending on the type of license, annual gross gambling yield, and other factors. They start from as little as 100 GBP (approx. 117 EUR) and can reach 91,686 GBP (approx. 107, 000 EUR). The annual license fees also vary a lot depending on the type of license, annual gross gambling yield, and other factors. They start from 230 GBP (approx. 270 EUR) and can reach 793,729 GBP (approx. 927,000 EUR) plus 125,000 GBP (approx. 146,000 EUR) for each complete additional 500 mill. GBP (approx. 584 mill. EUR) of annual gross gambling yield above 1 bill. GBP  (approx. 1,2 bill. EUR). The full list of fees can be found here. The exact costs can be calculated by using the GC’s online calculator.

While the Operating License is costly, remember that it can pay off by giving you access to a vast gaming market. Your gambling business will immediately gain the trust of consumers as they consider UK gambling operators reliable due to strict player protection protocols.

Personal Management License

A Personal Management License (PML) must be obtained by people in qualifying management positions within a gambling business. The application has to be sent at the same time as the application for the Operating License. It normally takes up to 6 weeks to process a PML application, provided that the application is completed thoroughly. You should note that licensable PML responsibilities can be carried out only after the issuance of the license.

You’re required to apply for a PML if you are responsible for the following activities within an Operating License holder:

• Overall strategy and delivery of gambling operations
• Financial planning, control, and budgeting
• Marketing and commercial development
• Regulatory compliance
• Gambling-related IT services and security
• Management of licensed activity for a particular area in the UK where you have 5 or more sets of premises for which you hold a Premises License
• Management of a single set of licensed premises for bingo and/or casino

Personal Functional License

A Personal Functional License (PFL) must be obtained by certain workers in non-management positions within a gambling business. It normally takes up to 6 weeks to process a PFL application, provided that the application is completed thoroughly. In this case, it’s the applicant’s responsibility – not the employer’s – to follow the relevant rules and regulations. On the other hand, a licensed operator is obligated to employ licensed individuals.

A person needs a PFL before taking up any of the following positions at a gambling business:

• A dealer or croupier
• A cashier
• An inspector
• A pit boss or a gaming supervisor
• Security staff or monitoring surveillance related to gambling activities

Premises License

To run a premises-based gambling business (e.g. bingo hall or a betting shop), you have to obtain a Premises License from your local licensing authority. Your local licensing authority is usually your local council, which could be identified here.

An application can only be submitted if the following conditions are met:

• An applicant has the right to occupy gambling premises
• An applicant has a valid Operating License permitting the conduct of the gambling business

It’s possible to apply for a provisional statement from the local licensing authority if the premises are still to be built, require major alterations or an applicant doesn’t have the right to occupy it. Companies with Gambling license in UK

Requirements for Operating License Applicants

Any person or group of people can apply for an Operating License, regardless of their location as the eligibility criteria don’t include any conditions of incorporation in a particular jurisdiction. The License is valid in England, Scotland, and Wales.

The application requirements include the following:

• Individuals involved in the gambling business must be at least 18 years of age to apply for a license
• An applicant must provide an address in the UK at which a document under section 69 of the Gambling Act 2005 may be served
• Anyone with a 3% equity or more in the company must be named and the percentage of their holding shown
• Anyone with 10% or more equity is a financial controller and must submit an Annex A
• A PML must be obtained by people in qualifying management positions of the company
• The application must clearly state the activities to be authorized
• The application must clearly state whether the applicant has been convicted of a relevant or any other offense

Generally, the following documents are required:

• Corporate documents if applicable
• Business plan
• Audited accounts
• Profit and loss projections for the next 3 years
• Internal policies and procedures
• Customer terms and conditions
• Rules of play
• If applicable, copies of gambling licenses from other jurisdictions
• Bank statements for all accounts for the last 6 months
• Proof of funding
• Credit report if the company is based overseas
• Certificates of criminal records of shareholders, directors, and beneficiaries

GAMBLING LICENSE IN THE UK

How to Establish a Gambling Company in the UK

An applicant for an Operating License can be of any legal business structure except for a sole trader. UK companies are generally governed by the Companies Act 2006. Depending on whether the application is submitted online or by post, the process can take from 24 hours to 10 days which in any case is very efficient.

One of the most frequently used business structures in the UK is a Private Company Limited by Shares (Ltd) which is suitable for small and medium-sized businesses. The main requirements include at least one shareholder residing anywhere in the world, and at least one director. There are no minimum share capital requirements. When there’s an intention to build a large-scale gambling business, incorporating a Public Limited Company (Plc) is a better option. The required minimum share capital is 50,000 GBP (approx. 58,400 EUR). There must be at least 2 shareholders, 2 directors, and a company secretary.

The following documents are generally required to register a new company:

• A Memorandum of Association
• Articles of Association
• An application form for registration
• Copies of passports of all directors and shareholders
• Proof of residential addresses of all directors and shareholders
• Proof of registered office address

Key steps of registering a new company in the UK:

• Choosing a unique and compliant name
• Preparing incorporation and personal documents
• Registering a physical office in the UK
• Opening a local corporate bank account and transferring the required share capital
• Submitting an application to the Companies House
• A Public Limited Company (Plc) also requires a separate application for a trading certificate from the Companies House to prove that the initial share capital has been raised

Operating License Application Process

It takes about 4 months to process an Operating License application, provided that all the supporting documents are supplied and all relevant information can be verified. To assess an application, the Gambling Commission essentially aims to understand whether the applicant’s business will maintain the licensing objectives and if the applicant is suitable to carry out the licensed activities.

The authority, therefore, seeks to verify the ownership of the company and the identity of the shareholders, assess the financial standing and sources, as well as thoroughly examine the integrity, competencies, and criminal records of the relevant persons. If any provided documents in relation to this information are incomplete or incorrect, this will delay the process and may result in rejection. To avoid undesirable results, we strongly recommend consulting with our team first.

The main steps of the application process are as follows:

• The preparation of all the required documents in line with regulations
• Paying an appropriate application fee, or multiple fees when applicable
• The submission of the application form along with the required documents either to the GC or the applicant’s local licensing authority
• Providing further information upon the GC’s request
• Paying the first annual license fee

Requirements for Operating License Holders

Operating License holders are required to comply with regulations related to anti-money laundering, counter-terrorist financing, responsible gambling, and other relevant areas which we can help you to navigate. As mentioned earlier, all of these regulations help to build trust with customers and eventually have a positive impact on the company’s bottom line.

Crucially, all Operating License holders must protect minors from getting involved in gambling. Therefore, any person commits an offense if they invite, cause, or permit a child or young person to gamble. The ways of inviting include sending to a child or young person any document which advertises gambling or bringing to the attention of a child or young person information about gambling with a view to encouraging them to gamble.

All non-remote operators holding a Premises License in the arcade, betting, bingo, and casino sectors are obligated to participate in a multi-operator self-exclusion scheme in accordance with the Social Responsibility Code. In the case of a breach of this Code, the GC can review the operator’s license and may decide to suspend it, revoke it, or impose a financial penalty. Also, a non-compliant operator can even risk prosecution.

Furthermore, in order to avoid committing offenses under POCA, gambling operators should report instances of known or suspected money laundering or terrorist financing by customers to the National Crime Agency (NCA) and, where a defense is requested, wait for such defense to deal with a transaction or an arrangement involving the customer or wait until a set period has passed before proceeding.

If you think that this jurisdiction is right for you, our team here at Regulated United Europe will be delighted to support you in obtaining a gambling license in the UK and, if needed, in incorporating a company in the UK or another country of your choice. With dedicated legal advisors, tax experts, and financial accountants at your side, you will find the incorporation and application processes easy, frictionless, and transparent. Contact us now to schedule a personalized consultation and set the stage for long-lasting success.

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