August 4, 2024
Betting on Change: The UAE Rolls on New Regulator for Gaming Licences
- The General Commercial Gaming Regulatory Authority (GCGRA) has been introduced to oversee and regulate the UAE’s gaming (gambling) industry.
- The GCGRA aims to create a progressive regulatory framework to ensure fair and transparent gambling practices, while combating unethical activities.
- The GCGRA will regulate lotteries, internet gaming, sports wagering, and land-based gaming facilities, covering all participants in the sector.
- Despite the introduction of the GCGRA, existing gambling prohibitions under the UAE Penal Code remain in effect, indicating the early stage of regulatory changes.
- The GCGRA has granted its inaugural lottery licence to The Game LLC, with plans for casino licenses in every Emirate, reflecting a significant shift towards legalising gambling in the UAE
Background
The General Commercial Gaming Regulatory Authority (GCGRA)[1] has been introduced to oversee the licensing process in the UAE’s gaming (gambling) industry. This new regulatory body will ensure compliance and maintain standards within the sector.
The GCGRA’s primary objective is to develop and maintain a progressive regulatory framework that safeguards the market from unethical gambling practices and ensures a fair and transparent environment for operators and consumers. In addition to its local responsibilities, the GCGRA is committed to fostering strong partnerships with international gambling regulators.
It is pertinent to note that the GCGRA will regulate lotteries, internet gaming, sports wagering, and land-based gaming facilities, which will include games such as slots, roulette, blackjack, baccarat, and craps.[2] Further, the GCGRA covers everyone in the gambling sector, from big operators and vendors to staff and key players, ensuring everyone plays by the rules and keeps the industry in check.
The GCGRA’s licensing process is similar to that of other regulators. It starts with an initial approval process and weaves in regulations on Anti-Money Laundering and Combating the Financing of Terrorism.
Gambling Laws in the UAE v Gulf Cooperation Council (GCC) or the Middle East
Casinos, sports betting, and online gambling sites are illegal across the GCC and the Middle East. In places where gambling is permitted, such as Morocco, Lebanon and Egypt, it is typically subject to strict regulations and often only accessible to foreign visitors, while residents are not allowed to participate.[3]
On the contrary, in GCC countries such as Saudi Arabia, Kuwait, and Oman, no form of online or offline gambling is permitted and strictly prohibited by their respective laws.
Under Articles 460 and 461 of Federal Law by Decree No. (31) of 2021 Promulgating the Crimes and Penalties Law of the UAE (Penal Code),[4] “Gambling is a game whereby each of the parties thereto agrees – in case of losing – to pay to the winner a certain sum of money or any other thing agreed upon”[5] and whoever gambles shall be punished with incarceration for a period not exceeding (2) two years or a fine not exceeding (50,000) fifty thousand AED.[6]
The introduction of a new commercial gambling regulator indicates that the UAE is paving the way to legalise gambling. This historical development shows another step towards westernisation, aiming to attract foreign investors and transform the UAE into the Middle Eastern counterpart of New York or London.
Note that while the GCGRA has been established, the Penal Code provisions described above remain in effect, which is why the GCGRA is still in its early stages. The structural and legal changes required to support a new gambling regulator would necessitate substantial amendments to the long-standing laws of the UAE.
What does this mean for other regulators and registrars, such as the Virtual Assets Regulatory Authority (VARA) and the Abu Dhabi Global Market (ADGM)?
From an initial overview, the GCGRA is set to be the federal authority responsible for issuing all kinds of gambling licences independently, without needing external approval from other authorities such as VARA and ADGM. The GCGRA has laid down that engaging in, conducting, or facilitating commercial gambling activities within the UAE without approval from the GCGRA is illegal and exposes offenders to severe penalties. Playing as a consumer via unlicensed operators is also unlawful under the GCGRA framework.[7]
Since the GCGRA regulatory framework is new, the licensing process’s specific elements and implementation are yet to be determined.
The Way Forward for the GCGRA
The GCGRA aims to position itself as the sole authority in establishing a regulatory framework for gambling and lottery activities in the GCC. One of its primary objectives is to promote a secure commercial gambling environment in the UAE. It also provides consumers comprehensive tools to monitor and manage their gambling activities. Additionally, the GCGRA is leveraging new technologies to foster the creation of safe, entertaining games and drive consumer-focused innovation.[8]
Further, the GCGRA provides educational materials and maintains an open and transparent dialogue with prospective licensees to ensure they possess a comprehensive understanding of their obligations, the purpose of each regulation, and the necessary skills and technology.
The GCGRA has already granted its inaugural lottery licence to The Game LLC,[9] operating under the “UAE Lottery” brand. As the GCGRA’s first licensee, The Game LLC will offer various lottery games and other gaming options to cater to diverse player interests and financial preferences.
Although the GCGRA does not have specific legislation yet, it has laid down rules on the risks of engaging in illegal gambling activities[10] as well as guidelines on responsible gambling.[11]
In 2023, the UAE announced plans to roll out a casino licence in every Emirate, similar to a high-stakes game of “Casino Monopoly.”
Wynn Resorts, a top U.S. casino operator, is already working on what’s set to be the UAE’s first integrated resort with gambling, located on the man-made Al Marjan Island in Ras Al Khaimah.[12] Meanwhile, Abu Dhabi’s Yas Island, home to the Marina Formula One Circuit, could be the first island to welcome a casino. As for Dubai, MGM Resorts has already expressed interest in including this gambling facet. The factors relating to the place and location of the casinos are solely based on the discretion of the independent rulers of the respective Emirates.[13]
The GCGRA is poised for a significant period of activity in the coming years, driven by its mandate to issue licences and establish a comprehensive regulatory framework for this industry. This heightened level of engagement will involve developing robust guidelines, ensuring compliance with international standards, and fostering a fair and transparent gambling environment. As the GCGRA takes on these critical tasks, its efforts will be instrumental in shaping a well-regulated and thriving new sector, contributing to economic growth while safeguarding public interests.
Conclusion
Clear and supportive regulations from the GCGRA can attract more investment into the UAE. This can drive growth as investors and companies feel more confident about the legal landscape and potential for innovation.
The UAE has had rumblings to legalise and regulate gambling for years and years now. The announcement and formal institution of the GCGRA is concrete evidence that this is more than just rumblings. By allowing gambling activities, the UAE is seeking to supercharge the hotel and tourism industry and create a whole new revenue source that, until now, has been illegal.
This development is in line with the continuous push towards the UAE’s westernisation and making it the go-to destination for businesses wishing to enter the GCC.
Gambling licences are still brand new, and we await secondary regulations from the GCGRA. For anyone interested in pursuing one of these licences, we strongly recommend seeking legal support and advice before substantially engaging in the process with the regulator.
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[1] General Commercial Gaming Regulatory Authority. Available at: https://www.gcgra.gov.ae/en/ (Accessed: 31 July 2024).
[2] Singh, M. (2024) UAE issues license for lottery; publishes rules for Legal Gaming Infrastructure, Gulf Business. Available at: https://gulfbusiness.com/uae-license-lottery-rules-legal-gaming-licenses/ (Accessed: 31 July 2024).
[3] Gambling Laws by Country – Guides to betting in the Arab states (2021). https://arabianbetting.com/en/country/ (Accessed: 2 August 2024).
[4] Federal Law by Decree No. (31) of 2021 Promulgating the Crimes and Penalties Law.
[5] Article 460, Penal Code.
[6] Article 461, Penal Code.
[7] WAM وكالة أنباء الإمارات. Available at: https://wam.ae/en/article/141eh6i-uae-lottery-games-operate-within-the-gcgra%25E2%2580%2599s (Accessed: 31 July 2024).
[8] WAM وكالة أنباء الإمارات. Available at: https://wam.ae/en/article/141eh6i-uae-lottery-games-operate-within-the-gcgra%25E2%2580%2599s (Accessed: 31 July 2024).
[9] Thegamellc.ae. Available at: https://www.thegamellc.ae/ (Accessed: 31 July 2024).
[10] General Commercial Gaming Regulatory Authority. Available at: https://www.gcgra.gov.ae/en/legislation-compliance/compliance/risks-of-engaging-in-illegal-gaming-activities/ (Accessed: 31 July 2024).
[11] General Commercial Gaming Regulatory Authority. Available at: https://www.gcgra.gov.ae/en/responsible-gaming/how-to-comply-with-responsible-gaming/ (Accessed: 31 July 2024).
[12] Intelligence, fDi Fear and loathing in Ras Vegas, fDi Intelligence – Your source for foreign direct investment information – fDiIntelligence.com. Available at: https://www.fdiintelligence.com/content/feature/fear-and-loathing-in-ras-vegas-82792 (Accessed: 31 July 2024).
[13] UAE may grant one casino license to each of its seven Emirates (no date) Games Magazine Brasil. Available at: https://www.gamesbras.com/english-version/2023/11/3/uae-may-grant-one-casino-license-to-each-of-its-seven-emirates-40761.html (Accessed: 31 July 2024).