Expert says UAE is “moving faster” than EU in gaming regulations

Garance Limouzy November 14, 2024
Expert says UAE is “moving faster” than EU in gaming regulations

The United Arab Emirates (UAE) is pushing the boundaries in the global gaming industry with groundbreaking steps toward becoming a regulated gaming hub in West Asia. In 2023, the UAE established the General Commercial Gaming Regulatory Authority (GCGRA), and by 2024, it introduced a licensing framework, laying the groundwork for a regulated market and making the UAE a regional competitor in gaming tourism.

As Gordon Einstein, Founding Partner at CryptoLaw Partners, puts it, the UAE’s approach signals a shift in regulatory strategy. “It’s fascinating to watch how small jurisdictions such as Malta, Lithuania, the UAE, and others look to establish regulatory avant-garde environments,” Einstein explains. “These micro-jurisdictions are often nimble, moving faster than larger ones like the EU, which sometimes struggle to catch up.” The UAE is indeed moving swiftly, with licences granted to global players like Wynn Resorts and Game LLC, and others like MGM Resorts applying, keen to gain a foothold in this emerging market.

Dubai’s transformative vision

Einstein, who relocated to Dubai three and a half years ago, attributes this shift to Dubai’s transformative regulatory vision: “Dubai specifically took the point of view that they needed to create enabling legislation to create a framework so companies would feel comfortable moving their capital there, moving their people there, and basically making a bet on the environment.” This proactive approach mirrors Dubai’s earlier work with the Virtual Asset Regulatory Authority (VARA) for crypto, and Einstein suggests that VARA served as an example for the GCGRA, providing clarity and centralised oversight.

A simplified licensing model

The GCGRA’s model prioritises simplicity and accountability, much like the VARA framework. Einstein points out that in other jurisdictions, “you don’t know which regulator’s door to knock on … there are 20 different authorities.” In contrast, the GCGRA is “the one door you need to knock on,” overseeing all aspects of the UAE’s gaming licensing process and avoiding the common maze of multiple agencies.

Beyond regulatory clarity, the UAE’s cultural and religious diversity has allowed it to design a gaming structure that is “very clever,” according to Einstein. Acknowledging the regional cultural sensitivities around gambling, the UAE has adopted a two-pronged strategy, creating “carve-outs” in specific areas to allow non-Islamic residents and tourists to access regulated gaming. “They’ve been liberal and forward-thinking with their regimes,” he explains, adding that this approach recognises the need for adaptability in a region undergoing significant economic and cultural shifts.

Blooming market

The financial incentives are equally compelling, with no personal income tax and a corporate tax rate of 9 percent, the lowest allowable under EU tax benchmarks, following Hungary’s example. “It’s a developed country, more developed than many other places we call developed,” Einstein observes. “There’s a lot of money, a lot of wealth, reliable banking, and it’s safe.” The regulatory transparency, financial incentives, and stable infrastructure position the UAE as an attractive destination for gaming investments.

Wynn Resorts, one of the first major players to receive a commercial gaming licence, is already building a $5.1 billion resort on Al Marjan Island in Ras Al Khaimah. “The Wynn project represents the kind of large-scale investment that underscores the UAE’s potential as a gaming powerhouse,” Einstein remarks. He emphasises that Ras Al Khaimah is one of the smaller, emerging Emirates, similar to Dubai’s role as a pioneer among Middle Eastern cities. “Ras Al Khaimah is making big moves when it comes to crypto and gaming,” he says, drawing a parallel between its bold steps and Dubai’s trailblazing initiatives in both sectors.

Compliance as a core value

Einstein also stresses that compliance is non-negotiable. For anyone entering the UAE’s gaming market, he advises, “Get a licence. They want you to come, they want you to compete, but if you don’t comply with the rules, it’s not just a fine or a ban—you’re looking at potential criminal penalties.” This strict regulatory stance aligns with the UAE’s objective to establish a well-regulated and credible gaming sector.

As more international brands like Aristocrat and Smartplay International secure licences, the UAE’s regulated gaming market could see substantial growth, possibly reaching $3-5 billion. Einstein concludes, “The UAE is not the Middle East of 30 years ago. It’s a developed, dynamic, and business-friendly environment, a place where the world’s top players in gaming, tech, and crypto now gather. The world is changing, and so is the UAE.”

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