Playing by New Rules: The Introduction of the Commercial Gaming Regulatory Authority in the UAE

The UAE’s General Commercial Gaming Regulatory Authority has gone live, with the launch of its public website and the announcement of the award of the first commercial gaming licence. With well-publicised casino resort developments also under way, this represents the first official stage of a new and potentially lucrative industry in the UAE, unique to the wider region.

Background

In September 2023, the UAE announced the formation of a new commercial gaming authority called the General Commercial Gaming Regulatory Authority (“GCGRA”) which has been assigned exclusive jurisdiction to regulate, license, and supervise all commercial gaming activities and facilities at a national level, in the UAE.

What is ‘commercial gaming’?

According to the GCGRA, ‘commercial gaming’ refers to any game of chance, or a combination of chance and skill, where an amount of money is wagered for the purposes of winning a reward. Importantly, this does not include marketing expenses for ‘promotional activities’.

Commercial gaming activities under the purview of the GCGRA will include the following:

Internet Gaming – any form of commercial gaming conducted via the internet using a computer, mobile phone, or any other digital device with access to websites or apps that offer chance and/or skill based games such as online casinos, eSports, bingo and more.

Land-Based Gaming Facilities – physical establishments offering commercial gaming activities such as slots, roulette, blackjack, baccarat, craps, and more. 

Sports Wagering – any form of commercial gaming involving betting on the outcome of sports events or performances.

Lottery – any form of commercial gaming involving buying or betting for tickets with numbers or symbols, with a chance of a reward if drawn by a random generator.

Engaging in, conducting or facilitating commercial gaming activities in the UAE without prior approval from the GCGRA is prohibited (and, in addition to infringing the GCGRA’s own rules could constitute, for example, a criminal offence under the laws of the UAE).

What is the legal significance?

The possibility of obtaining a licence to lawfully conduct commercial gaming activities within the UAE has been met with significant interest, since gambling has always been prohibited as a criminal offence under Article 460 of the Penal Code, with further restrictions under Article 1021 of the Civil Code declaring void any agreement relating to gambling, and Article 38 of the Cybercrimes Law providing that anyone who creates, manages or propagates gambling activities through IT networks (i.e. online gambling) commits a serious criminal offence. Both culturally and legally, commercial gaming activities have always been extremely limited across the Middle East region.

What is the practical significance?

It has been known for some time that certain resort developers were looking to build large scale integrated casino resorts in the UAE, however it was not clear how such resorts would legally operate. In addition, the legal status of some businesses already operating and offering lottery-style operations was not entirely clear.

By regulating the industry and creating a coordinated commercial gaming sector, the UAE has created a unique regional proposition with the potential to drive significant growth in the tourism and leisure sectors. We also assume that commercial gaming activities may make significant contributions to UAE public finances through enhanced taxation, royalties or similar, although this is yet to be publicly confirmed.

How can you obtain a license?

For entities wishing to engage in commercial gaming activities in the UAE, a license must be obtained from the GCGRA. The licensing process includes preliminary screening, preparation and submission of business proposals, assessment and evaluation, add ongoing compliance and monitoring – please refer to the GCGRA Licensing Guide.

There are several types of licenses which can be obtained. For entities, this includes licenses for Gaming Operators, Gaming-Related Vendors/Suppliers, and Key Persons (Corporates). For individuals, this includes licenses for Key Persons (Individuals) and Gaming Employees.

On 28th July 2024, the GCGRA awarded its first Lottery License to ‘The Game LLC’.

What are the key compliance principles?

One of the GCGRA’s key principles is ‘responsible gaming’, which aims to ensure that the UAE commercial gaming industry prioritises player safety, ethical gaming practices and the prevention of harm – please refer to the GCGRA Responsible Gaming Guide.

Another key principle motivating the GCGRA is to promote understanding of the risks of engaging in illegal commercial gaming activities. This includes acknowledging the risks for consumers, operators, and vendors, and complying with Supervision and Investigations, Financial Crime Prevention, and Certified Service Providers obligations.

What can we expect to see next?

The GCGRA has declared that it will establish a robust regulatory framework for the UAE’s commercial gaming industry, so we expect to see further details of the formal legal framework emerging. A flagship project which has already received much publicity is the development of the Wynn Resort in Ras Al Khaimah, which is expected to house the UAE’s first ever casino, and is already under construction.

The advent of the GCGRA is not going to lead to an opening of gambling floodgates; individual Emirates will still have discretion to adopt their own practices when it comes to the local licensing of commercial gaming businesses (for example, one might not expect to see commercial gaming businesses licensed in the emirate of Sharjah, where alcohol currently remains prohibited) and the GCGRA will want to ensure the development of the industry is carefully calibrated in line with the key principles of responsibility and consumer protection. Instead, we expect to see a careful and gradual expansion of the sector in the UAE over coming years.