Written by Kelly Tymburski and Afaf Alubaidi
A New Regulatory and Licensing Framework
In a groundbreaking and long-awaited development, the government of the United Arab Emirates (“UAE”) has finally made available further information about the commercial gaming regulations and related licensing framework. This follows on many years of speculation that gambling and related activities would become imminently permissible in the UAE, as reported by multiple media outlets on various occasions over the past few years, in particular in relation to the launch of the UAE’s first official casino and gaming resort complex in the Emirate of Ras al Khaimah (Ras Al Khaimah (“RAK”); one of the seven Emirates that comprise the UAE, with the others being Abu Dhabi (the federal capital), Ajman, Dubai, Fujairah, Sharjah and Umm Al Quwain).
This development is historic to say the least, as it means that the UAE will become the first Gulf Cooperation Council (“GCC”) state to formally permit and legalize gambling activities, taking the lead ahead of the other five GCC states comprised of Bahrain, Kuwait, Oman, Qatar and Saudi Arabia.
The Federal Gaming Regulatory Authority (GCGRA)
The General Commercial Gaming Regulatory Authority (“GCGRA”) was established in September 2023 (see relevant press release here), and is the UAE federal regulatory authority which holds the exclusive jurisdiction to regulate and oversee, license, supervise, and enforce all regulations pertaining to all aspects of commercial gaming and gambling activities and related operations and facilities in the UAE.
The GCGRA Board is comprised of members with a depth and breadth of expertise and experience in commercial gaming and gambling, professional sports betting and all relevant ancillary areas of law and regulation. Noteworthy is that the Chairman of the Board, Mr. Jim Murren, is the former CEO of MGM Resorts International (a globally recognized chain of popular, Las Vegas-inspired, gambling and entertainment resorts), who was also recently inducted into the American Gaming Association’s Hall of Fame. The Board is supported by a similarly experienced Executive Management team.
Suffice to say, it would appear that with the extensive global and regional expertise underpinning the operation of the GCGRA (full Board and Executive Management member profiles are accessible here), the UAE has skillfully ‘stacked the odds’ (so to speak) very much in its favor to help successfully launch and regulate gaming and related activities in the UAE.
How and What Exactly Does the GCGRA Regulate?
The GCGRA’s stated mission is to “drive sustainable growth by cultivating world-class commercial gaming operations and agile regulation, grounded in the principles of integrity, innovation, and responsible practices”, being guided by its core expressed values of integrity, trustworthiness, collaboration, innovation, and excellence.
To this end, the GCGRA is responsible for regulating “Commercial Gaming” in the UAE, which is defined on the GCGRA website as “any game of chance, or combination of chance and skill, where an amount of money, in cash or cash equivalents, is wagered – i.e. placed as a bet – for the purpose of winning a sum of money or other valuable items”. This is expressly noted to include acts, facilities and equipment such as:
gaming machines and activities (e.g. slot machines and table games typically found at casinos or related establishments);
engaging in internet gaming, partaking in electronic skill-based games (whether such games involve elements of skill in place of or in addition to elements of chance);
lottery games (whether for cash or other types of prizes); and
event wagering (such as betting on sporting events or animal races).
In typical fashion, the GCGRA is also empowered to regulate any other form of commercial gaming that it believes ought to rightfully fall within its ambit taking into account the definitions and scope of regulatory remit as set out above.
It is also important to note, however, that the GCGRA does not regulate (nor does it intend to regulate) activities that would qualify as “promotional activities” (effectively, activities that can reasonably be regarded as marketing expenses / activities as opposed to commercial gaming activities). If it is unclear whether or not the activity in question qualifies as “commercial gaming” or a “promotional activity”, additional guidance or legal advice should be sought in order to clarify this point.
Who Requires a License from the GCGRA?
Generally speaking, the GCGRA is able to issue five types of licenses that fall under two main categories; namely, entity licenses and individual licenses. We have set out these types of licenses with very brief descriptions below, but it is advisable that clarification be sought before making any such applications to ensure the license applied for will meet the intended operational and activity objectives of the prospective licensee.
The “entity licenses” available at this time are as follows:
Gaming Operators (e.g. operators of gaming facilities, lotteries, internet gaming sites/apps, sports wagering, and lottery retailers);
Gaming-Related Vendors (e.g. suppliers of goods/services that relate to gaming activities/equipment); and
Key Person Corporate (e.g. an entity that is a Controller, Affiliate or Management Services Provider of either of the foregoing entities).
The “individual licenses” available at this time are as follows:
Key Person Individual (e.g. directors and/or executive officers of entity-licensed Gaming Operators or Gaming-Related Vendors; directors of Controllers, and directors and/or executive officers of Affiliates of Key Person Corporate licensees); and
Gaming Employees (e.g. individuals considered to be very important to the operation, supervision and management of gaming operations or for gaming-related vendors).
In order to obtain a license, an applicant must first notify the GCGRA of its intention to apply and then follow a prescribed application process. License fees (application and annual) will also be payable in accordance with a fee schedule that may be updated by the GCGRA from time to time. Further information can be provided upon request.
The licensee will also have initial and ongoing obligations to comply with certain duties and responsibilities as dictated by the terms of the license and otherwise by the GCGRA generally. This will include obligations as to:
financial crime prevention and AML obligations;
compliance with prescribed advertising standards;
cooperation with any supervision and investigation requests from the GCGRA;
compliance with a responsible gaming framework prescribed by the GCGRA; and
adherence to certain technical standards (which may include obtaining equipment certifications from pre-approved third party testing laboratories).
Furthermore, in what amounts to a very exciting recent development, the GCGRA also announced by a Press Release dated 28 July 2024 that it had awarded its first license to an entity called The Game LLC, a commercial gaming entity operating in the fields of game development and gaming-related content, as well as lottery operations. The Game LLC will operate under the name “UAE Lottery”, and will offer a range of lottery games and other gaming content to cater to individuals’ various interests and financial preferences.
What are the Risks for Non-Compliance?
The GCGRA clearly states that any “commercial gaming” activity (see discussion above) that is conducted in the UAE without a license to do so is illegal and that violators will be subject to penalties. It is noteworthy that the notion of “violators” includes individuals who play unlicensed games, not just the entities or individuals making them available.
It is also noteworthy that there remain a number of additional UAE federal laws, regulations and policies that otherwise prohibit the act of gambling, in spite of the introduction of the licensing framework under the GCGRA. By way of just one example, Federal Decree-Law No. 34/2021 Concerning the Fight Against Rumors and Cybercrime (“Cybercrime Law”) was issued in September 2021, which repealed and updated the provisions of the predecessor regime (Federal Decree-Law No. 5/2012 Concerning Anti-Cybercrimes, hereafter referred to as the “Old Cybercrime Law”). The Old Cybercrime Law contained a blanket, very clear prohibition on the “practice of gambling activities” generally (at least in an electronic context). However, the updated Cybercrime Law contemplates an exception to the prohibition on the “practice of gambling activities” where it is occurring in the context of “the permitted cases”. This is an exception that was not contemplated in the Old Cybercrime Law. Although there is no further elaboration on what such “permitted cases” might be, in our view it is entirely possible that this change (albeit subtle) may indeed have been paving the way for the introduction of the new federal licensing regulations discussed herein. Whether and to what extent any other laws or regulatory instruments that prohibit gambling will be updated or repealed still remains to be seen. Albeit the GCGRA has published extensive information and ancillary documents in relation to the regulation of commercial gaming on its website, it appears that to date the governing law and implementing regulations in relation to commercial gaming have not been made public. That said, we would anticipate, as is often the case in other federal frameworks in the UAE, that the law and implementing regulations governing commercial gaming, will likely include language which will either repeal any conflicting provisions in other laws or regulations in effect in the UAE or that it would expressly state that the provisions of the law, by virtue of its federal status, will surpass any conflicting provisions in other laws or regulations.
In any event, it does appear that the GCGRA takes its enforcement responsibilities seriously, and to this end has made available a Complaints Form whereby anyone may lodge a complaint about any type of non-compliance of an entity or individual with the relevant regulatory framework.
What’s Next?
Clearly, this is an exceptionally groundbreaking and exciting development – not only for the UAE but for the wider region. It also underscores the UAE’s commitment to continuing to offer new and exciting entertainment options for its residents and visitors alike, and to maintaining its position on the regional forefront of fostering innovation and progress.
We anticipate that this new framework will open up many new and exciting opportunities for various stakeholders in the commercial gaming industry. Although the framework and governing regulatory body are still relatively new, now is definitely the time to start taking any requisite steps toward market entry or establishment / expansion while the market is still in this exciting frontier phase.
For any further information on how these regulatory updates may impact your ongoing or intended operations in the UAE, our team of experienced commercial and regulatory specialists in the region are able to provide further commercially practical advice and guidance, so don’t hesitate to get in touch with Kelly Tymburski or your normal contact at The Bench.