Difference Between a UKGC Software License and an Operating License?
Hopefully, you will already know to check that any new online casino you sign up to is properly regulated. Not doing this can lead to costly and sometimes devastating situations where money is lost unfairly and even illegally.
In order to become a regulated business a gambling license is required, but there are many different types of gambling license and this can be confusing for a regular online casino player.
It’s the UKGC (United Kingdom Gambling Commission) who regulate businesses providing gambling services, but it’s fair to say that the information on their website isn’t exactly user friendly for anyone who doesn’t already work in the industry.
The only two licenses the majority of players need to know about are the ‘remote operating license’ and the ‘remote software license’.
Many licenses have both remote and non-remote versions in order to cover either land based businesses or online casinos, which is easy enough to understand, but what is the difference between a software license and an operating license?
In the following few paragraphs, we will explain this further and in plain English so that you can be a better-informed casino player.
Remote Gambling Software License
Gambling software is the clever tech that works in the background as you play your favourite casino games. It’s the long code, the complex programming, and the random number generators and all of that stuff. Any company who manufactures, supplies, installs, or adapts gambling software by means of remote communication – in the words of the UKGC.
Basically, any company that has anything to do with the development, maintenance or supply of online gambling products needs a remote gambling software license, as opposed to an operating license, because they are not actually providing their services to the customer, only to another business (the online casino).
Anyone who creates slots, table games, bingo games, keno, scratchcards or anything else where money is wagered, and wants to make them available to players in the UK, falls into this category. Equally, any company engaged in these activities who is based in the UK will also need a software license, even if they don’t plan to make their products available here.
This isn’t free either, there is an application charge as well as an annual fee to hold a gambling software license, and this is scaled according to each company’s annual gross sales:
|Fee Category||Annual Gross Sales||Application Fee||Annual Fee Thereafter|
|C1||£6.6 million-£26.4 million||£14,647||£6,351|
|D1||£26.4 million-£50 million||£14,647||£14,703|
|E1||Over £50 million||£14,647||£24,057|
The software license provides regulation for what goes into the games, how they run, how they are made, how they are tested for fairness, the way information is displayed (such as your balance and history), the way features like autoplay work, responsible gambling, presenting honest chances of winning, etc.
This is all there to make sure that games presented to UK players are responsible in the way they are displayed and the way they run, so they mustn’t encourage overspending for example. It also ensures they are fair.
Remote Gambling Operating License
This is the sort of license players are most likely to be familiar with, because it is the license that online casinos require in order to trade in this country. They can’t accept your bets without one. Hopefully you will have checked out a few licenses in your time to make sure the casino you play with is trustworthy.
If you haven’t, go to your favourite online casino and scroll to the very bottom of the homepage until you find an icon of the Gambling Commission, or the license number in the tiny official looking writing.
If you click the link it should take you to a page that looks like this:
You can see that William Hill’s license is ‘Active’ – if it says ‘Suspended’ or something else worrying then steer clear.
It’s not just websites though; any company who offers gambling games like roulette, blackjack, poker, slots, etc. via a website, mobile phone, TV, or other online service needs a remote operating license.
Just like the software license, the operating license comes with costs:
|Fee Category||Annual Gross Gambling Yield||Application Fee||Annual Fee Thereafter|
|G21||£2 million-£5.5 million||£6,452||£9,480|
|H1||£5.5 million-£25 million||£10,147||£13,307|
|I1||£25 million-£100 million||£14,896||£35,541|
|J1||£100 million-£250 million||£23,977||£68,146|
|K1||£250 million-£550 million||£33,832||£136,455|
|L1||£550 million-£1 billion||£57,304||£387,083|
|M1||Over £1 billion||£57,304||£512,083*|
*Every £500 million over £1 billion incurs an additional £125,000 fee.
These large fees ensure that casino operators take their responsibilities seriously, because the UKGC can remove a license if the conditions are breached, which would be very costly for the casino in question.
Where the software license covers the games themselves, the operating license covers the way those games are sold to customers by the casinos, and the behaviour of the casinos themselves. For example a casino cannot mis-represent their promotions to be more favourable than they are, or use baffling language in their terms and conditions.
They are obligated to carry out checks on every single person who signs up to ensure they are of legal age and not a potential money launderer or problem gambler, and they must continue to monitor their players’ behaviour indefinitely.
Again, this is all in place to ensure players are treated fairly and that their consumer rights are not being abused.
Other Common Gambling Licenses
There are many more types of licenses out there in order to cover every inch of the industry and all of the activity that goes on within it.
It’s not really necessary for players to be aware of all of them, just knowing that you are playing games from a licensed developer at a licensed casino is enough, and really, a licensed casino wouldn’t be peddling unlicensed games anyway as it would break the terms of their license.
Nevertheless, for interest only, here are a few others:
- Bingo Licenses – Much the same as those already mentioned here but applying specifically to bingo. Remote and non-remote bingo operators need the appropriate license, and there is also a license for hosts (those who provide their own products through other operators).
- Gaming Machine Licenses – There are no less than 8 different licenses in this category, both remote and non-remote, covering suppliers, technical, and software.
- Lottery Licenses – 4 different licenses for remote and non-remote activities, including an operating license, societies (lotteries run for charities basically), and 2 external lottery manager licenses.
- Betting Licenses – These cover sports betting, virtual events betting, pool betting, bookmakers shops, and things like that. There are 12 different licenses in this category.
- Arcade Licenses – Gaming arcades you find at seaside towns like Cleethorpes, and family entertainment centres that have gambling machines like Butlins etc.
There are also what’s known as Personal Management Licenses, or PML’s, which cost just £370 to apply for and must be held by anyone working in the industry who is responsible for:
- overall strategy and delivery of gambling operations
- financial planning, control and budgeting
- marketing and commercial development
- regulatory compliance
- gambling-related IT provision and security
- management of licensed activity for a particular area in Great Britain where you have five or more sets of premises for which you hold a premises licence
- management of a single set of bingo and/or casino licensed premises.
This covers the individual only, not the company they work for, although they only need one license even if they have multiple responsibilities.
This license exists to ensure that everyone working in the industry is known to be trustworthy (they do criminal record checks, for example) and aware of the regulations surrounding safeguarding and responsible gambling etc.