Applying to the UK Gambling Commission for a Remote Operating Licence
As a general rule, a remote gambling operator intending to provide “facilities for gambling” to customers based in the UK, will require a remote operating licence issued by the UK Gambling Commission. It’s an offence under the Gambling Act 2005 to allow gambling facilities to be accessed by UK customers, even if no remote gambling equipment is located in the UK. The Gambling Commission takes a hard line on this and will issue cease and desist letters to unlicensed operators targeting UK players.
For remote operators, an application is made to the UK Gambling Commission for a remote operating licence to authorise the provision of the proposed gambling activity. Operating licences may cover a single activity, such as pool betting, or multiple remote activities, such as betting, bingo, casino or lotteries. Non-remote and remote activities cannot be combined on the same operating licence.
Are any exemptions available to Start-Ups?
Start-ups may be able to take advantage of a “small scale operator” exemption, where there are three or fewer persons in qualifying positions involved in the business. This exemption avoids having to obtain a Personal Management Licence (PML) for key individuals who can complete an Annex A form instead. Again, we can advise on this, although the Gambling Commission is unlikely to licence casino operators as small-scale operators. Start-ups may be able to apply for a linked software licence to authorise development of software in-house, provided that the expense involved does not exceed £50,000 per year. If the limit is exceeded then a separate remote software operating licence would be required.
How much does it cost?
A fee is payable when the application is submitted, based on the projected gambling turnover of the operation. For start-ups, this will usually be the lowest turnover band. We can advise operators about their likely licensing costs in advance of making an application. A further annual fee is payable 30 days after the grant of the licence, so costs can soon add up.
What will the UK Gambling Commission require?
When applying for an operating licence, the Commission will want to identify the individuals involved in the business and to check out their credentials. Criminal Records Bureau checks are required for UK residents and police checks for non-UK residents. Applicants will have to prepare a business plan, showing detailed cashflow forecasts and how the business will be financed. The Commission will want to know that the applicant has thought through the proposal and will not become insolvent, risking customer funds. Applicants will need to prepare detailed policies to show compliance with the licensing objectives and will need to identify the location of their proposed IT equipment.
How long will it take?
The timescale for the grant of an operating licence is usually four to eight weeks from the point of submission, although getting to that point can be time consuming. A well-prepared application will lead to few further questions from the Gambling Commission and a speedier process.
What happens after the licence has been granted?
Once the operating licence is granted, the applicant must comply with mandatory licence conditions relating to the licensed activity and must notify any “key events” to the Commission, such as changes in company structure or ownership. An annual security audit will be required. Applying for an operating licence can be a complex business, but with the right legal advice and input, it can be a smooth process.
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