Why is it Important to Have a Gambling License?
Licenses ensure online gambling sites comply with the current legislation and industry standard procedures. They help players determine if the online casino they’ve chosen is legal, fair, and safe.
Licensed casinos are tested according to various parameters related to the casino’s financial, social, and legal aspects. Additionally, casinos with a gambling license in the USA are regularly and randomly tested to ensure they keep following the law and its updates.
A gambling commission license can also improve a casino’s quality. Licensed casinos can use gaming software from top-rated industry providers, open a merchant account, and partner with safe and secure electronic payment systems.
A license is also a great way to attract new players, as they’re more likely to gamble at a safe and reputable operator. A gambling commission license is also important to prevent money laundering, as licensed casinos must provide extensive financial reports and records.
We’re constantly scouring the web for the latest updates regarding online casinos. Our goal is to inform readers about the best online casinos in the USA. If we recommend a casino, you can be sure we thoroughly tested it according to several important criteria. We only feature licensed casinos with a proven reputation.
Main USA Gambling Licenses
As previously mentioned, online casinos in the USA vary from state to state. As such, each state where online casinos are legal has its gambling commission designed to oversee the gambling activity within the state.
While many US states allow online sports gambling, there are only currently seven US states where online casinos are legal – Connecticut, Delaware, Michigan, Nevada, New Jersey, Pennsylvania, and West Virginia. There are no federal gambling commissions, albeit online gambling wins are subject to a 24% federal gambling tax, which the casino withholds. Take a look at the gambling commissions operating in the USA:
What is a Gambling Commission and How Does it Operate?
Gambling commissions are government-owned organizations responsible for overseeing online gambling activities and other forms of gambling, such as horse racing and lotteries. They regulate online casinos through a gambling license, regularly testing them to check if they follow strict regulations. A casino can only be considered legal within a particular state if it has a gambling commission license.
However, applying for 50 different gambling licenses and following 50 rulesets is not economically feasible. Therefore, many online casinos resort to offshore licenses. This doesn’t mean the casino isn’t fair or unsafe, although you may struggle to get legal help if things go awry. This is why we only recommend online casinos licensed in the USA.
USA-based online casinos can also lose their license and pay a hefty fine if they fail to pay fees, break the rules, or let their license expire. 888 Casino and LeoVegas are two of the most common examples of reputable casinos that paid huge fines after failing to comply with regulations in the United Kingdom.
How Does a Casino Get a Gambling License?
To obtain a gambling commission license, casinos must undergo a rigorous application process. While the laws vary between jurisdictions, obtaining permission is more or less the same. Obtaining a gambling license also requires owners to pay application and licensing fees. Learn more about this below:
What are the parameters to license a casino?
As previously stated, there are many parameters required to license a casino. Here’s what gambling commissions require to issue a license:
- Company information – The gambling commission will need to know where the casino is based, how many employees it has, and who the owners are. They’ll also need the criminal record of all employees and a copy of the business registration document.
- Financial information – Casinos need to provide the bank accounts related to the activity, including the money availability, to prove they can pay out prizes to players.
- Owner information – Gambling commissions need extensive background checks on the casino’s owners and shareholders. Applicants are required to provide a copy of every owner’s passport, as well as the criminal record.
- Fairness testing – In some jurisdictions, casinos must perform a third-party audit before applying for a gambling license. Reputable third-party organizations conduct audits specialized in gambling. They ensure the casino provides fair software with truly random RNG algorithms. The most popular third-party auditors include eCOGRA, GLI, iTechLabs, and BMM Testlabs.
- Fight problem gambling – Gambling commissions require casinos to prove they care about their customers. As such, casinos seeking a license must offer responsible gambling resources. These include reality checks, self-exclusion, time-outs, and betting limits. Offering contacts to relevant gambling addictions is also crucial. Players should have these features readily available.
- Privacy and data protection – Online casinos must also follow extensive privacy guidelines designed to protect players. An online casino should be encrypted, and its privacy terms should be clear, detailing how data is collected, kept, and used.
- Application fees – Last but not least, online casinos must pay the application fee. The gambling commissions will only analyze the application after paying due fees.
Can Online Casinos Operate Without a License?
Technically yes, as some markets don’t require casinos to have a license to operate. However, unlicensed casinos are more likely to engage in criminal activity, including identity theft, rigged games, and credit card fraud. Luckily, some tips can quickly help you identify an unlicensed casino:
- Check for the license status – Unlicensed casinos may come with a fake license badge from a reputable gambling commission. We recommend you check their license status through the gambling commission’s website, not the casino.
- Few payment methods – While this doesn’t automatically guarantee a casino is unlicensed, it can raise suspicion. By not having a license, online casinos can’t partner with payment processors such as VISA, Mastercard, and PayPal. Unlicensed casinos will typically only accept cryptocurrencies due to their untraceable nature.
- Bonuses – If a promotion seems too good to be true, it probably is. Unlicensed casinos will often have outrageous bonuses to attract more players. Once you make a deposit, you may never get your money back.
What are blacklisted casinos?
Blacklisted casinos are gambling operators found to engage in suspicious activity, such as failing fairness testing, operating without a license, or withholding payments. Other reasons include false advertising, unclear terms, and unhelpful customer support. We recommend avoiding blacklisted casinos for a better online gambling experience.
Gambling licenses help players feel safe when gambling online while increasing the casino’s reputation, which helps them attract more players and provide a better experience.
By being a laborious, costly, and time-consuming process, obtaining a gambling license is typically avoided by untrustworthy casinos. If a casino is licensed, it passed extensive testing and background checks and was deemed safe by a gambling commission.
We want players to feel safe, so we only recommend licensed casinos. You can enjoy the top games without safety and privacy concerns. While you’re at it, why don’t you grab a bonus to get you started?