Commercial Gaming in the UAE: Key Legal Insights and Practical Processes
Karim Fawaz and Mirko Olmos of AX Law discuss licensing and other requirements regarding commercial gaming in the UAE.
As the global gaming industry expands, the United Arab Emirates (UAE) is emerging as a key player in this dynamic sector. The establishment of the General Commercial Gaming Regulatory Authority (GCGRA) in 2023 marks a significant step in this development. The GCGRA is dedicated to establishing a robust regulatory framework that promotes industry growth, while ensuring player protection.
This article presents an overview of the UAE’s evolving gaming regulatory environment, supplemented by recent GCGRA guidance. It is worth noting that, as with any other newly regulated sector in the region, the practice may vary from the plain text of any regulatory instrument as the regulators work on accommodating the market’s needs.
The GCGRA
The GCGRA is an independent entity within the UAE Federal Government, responsible for regulating, licensing and supervising all “commercial gaming” activities in the UAE.
According to the “Guide to Obtaining a Commercial Gaming Licence in the UAE” (the “Guide”), “Commercial Gaming” encompasses any game of chance or skill where money is placed as a bet to win monetary prizes. This includes land-based gaming (eg, table games, slot machines), lotteries, sports wagering and internet gaming within the UAE.
GCGRA Licensing
The Guide outlines the licensing requirements, application process and considerations for potential applicants. It is important to note that, while the Guide stipulates the relevant licensing steps, it remains a set of non-binding rules that may be superseded by enforceable laws and implementing regulations.
In the Guide, the GCGRA makes it clear that no person or entity can establish a land-based gaming facility (“Gaming Facility”) or operate any Commercial Gaming activity without obtaining the necessary licences.
The licences are currently categorised into two types:
- entity licences are required for gaming operators, gaming-related vendors and key persons (corporates); and
- individual licences are required for key persons (individuals) and gaming employees.
“No person or entity can establish a land-based gaming facility or operate any Commercial Gaming activity without obtaining the necessary licences.”
In some circumstances, entities may require multiple licences depending on their operations, as addressed further below.
Entity Licences
Gaming Operators
A Gaming Operator licence is required for any entity managing a gaming facility or engaging in specific gaming activities. These include the following.
- Gaming Facility Operator – licensed to operate and manage a physical Gaming Facility.
- Lottery Operator – licensed to manage a lottery or raffle game where participants purchase tickets for a chance to win cash or prizes.
- Lottery Retailer – licensed to sell lottery tickets.
- Internet Gaming Operator – licensed to offer online gambling-related activities.
- Sports Wagering Operator – licensed to manage sports betting activities.
Gaming-related Vendors
Suppliers of gaming-related goods and services must obtain a licence as a Gaming-related Vendor. This ensures that all gaming equipment and services in the UAE meet regulatory standards.
Key Persons (Corporate)
Entities closely associated with a Gaming Operator or Gaming-related Vendor must obtain a Key Person (Corporate) licence if they meet certain criteria. The Guide considers “control” as one of the main factors, which as defined as instances “in which, in relation to a Person (the ‘controller’) and an entity (the ‘controlled entity’), any of the following circumstances exist:
- the controller holds or is entitled to acquire, directly or indirectly, 15% or more of the economic rights of the controlled entity;
- the controller holds or is entitled to exercise, directly or indirectly, 15% or more of voting rights of the controlled entity; or
- the controller has the power, directly or indirectly, to appoint or remove a majority of the members of the board of directors or equivalent governing body of the controlled entity, by virtue of any contract, agreement, understanding or otherwise,
where, ‘economic right’ means the right to receive income, return of capital, distributions or other financial benefits from the controlled entity, and ‘voting rights’ means the rights to vote at general meetings of the controlled entity or to appoint or remove members of its governing body.”
The Key Persons (Corporate) include:
- Controllers – entities or individuals exercising control over another entity;
- Affiliates – entities controlled by another person or entity; and
- Management Services Providers – entities engaged by a Gaming Operator to manage a Gaming Facility and provide operational services (eg, admin, maintenance).
The GCGRA may also determine any other person to be a Key Person (Corporate) based on their duties or status.
Individual Licences
Individuals involved in the management or operation of gaming entities must obtain an individual licence. These licences fall into two categories.
Key Person (Individual)
Individuals holding executive, decision-making roles within applicants/licensed entities, Affiliates or Controllers (“Key Person (Individual)”) will need to obtain a commercial gaming licence. These include:
- directors of Gaming Operators, Gaming-related Vendors, Controllers and Affiliates;
- executive officers of Gaming Operators, Gaming-related Vendors and Affiliates; and
- any other individual the GCGRA determines to be a Key Person (Individual) by virtue of their duties or status.
Gaming Employees
Employees involved in the operation, supervision or management of a Gaming Operator or Management Company, or those who play an important role within a Gaming-Related Vendor, are known as “Gaming Employees”. There are two levels of occupational licences:
- occupational licence level 1, for Gaming Employees in a supervisory role; and
- occupational licence level 2, for employees involved in gaming activities but not in supervisory positions.
Licensing Process
The Guide outlines the general licensing process for potential applicants. While there is no specific timeframe for approvals, the GCGRA has expressed its commitment to ensuring a smooth and expeditious process for assessing applications it receives within its scope. The key steps are as follows.
- Step 1: initial notification and Intake Form – applicants submit an intake form detailing company information, key persons, ownership structure, intended operations and which licences they are applying for.
- Step 2: application fee, GCGRA screening and portal access – upon receiving the Intake Form, the GCGRA conducts an initial screening. If the applicant passes this stage, they are granted access to the licensing portal after paying an application fee.
- Step 3: detailed documentation submission – applicants must provide comprehensive documentation, including business information, financial statements, organisational charts and details about key personnel.
- Step 4: in-principle approval – the GCGRA reviews the submitted information and grants in-principle approval if all requirements are met (including payment of an in-principle approval fee). This approval allows the applicant to incorporate their business, obtain the necessary permits and open bank accounts.
- Step 5: final review and licence granting – after fulfilling all conditions and paying the license fee, the GCGRA grants the final licence, enabling the applicant to commence operations (by issuing a “Certificate of Operation”).
Conclusion
The GCGRA’s Guide is an essential resource for entities seeking to operate commercial gaming in the UAE, and the GCGRA seems to be operating on the basis of international standards (eg, GCGRA partnered with Gaming Labs International, LLC to issue technical standards aligned with international benchmarks and best industry standards). While the standards are international, setting up and operating a commercial gaming business in the UAE still requires clear understanding of the basics of business set-up and operations in the UAE.
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