Guide to Obtaining a Sweepstakes Casino License

1. Perform legal due diligence

Researching the requirements of your state and jurisdiction regarding sweepstakes casinos is the first step in obtaining a valid gaming license.

These rules and regulations can vary widely from one state and jurisdiction to the next. Knowing and understanding these requirements is key to obtaining a valid license, and you’ll need to comply with each jurisdictions’ requirements in order to legally operate in those states.

It’s worth noting that some states, like Washington, prohibit gambling casinos and websites altogether, while others have very strict requirements. Such US states include Idaho, Nevada, Kentucky, Delaware, Wyoming, etc.

Requirements for obtaining a license to operate a sweepstakes casino

Although the requirements can vary quite a bit from state to state, most of them include a few standard elements that are the same from one territory to another. These elements include:

• Legal Entity – Most states or jurisdictions require that you have a legal entity registered in the state or jurisdiction where you’re applying to become licensed to operate a sweepstakes casino.
• Criminal Background Checks – Anyone with a criminal record or a history of having been incarcerated is likely to get turned down by regulatory authorities. Therefore, sweepstakes casino company owners, employed officers, and board members must have no criminal history.
• Financial Stability – When applying for a sweepstakes casino license, you will also be rejected if you are in debt in any form or amount. Providing financial statements that prove your financial stability and the stability of your business is an important step in getting licensed to gamble.
• A Detailed Business Plan – You’ll need to outline a comprehensive sweepstakes casino business plan that details your business model, marketing strategies, financial projections for the next few quarters or years. Otherwise, your application may be subject to rejection by state authorities.
• Certified Gaming Software – The use of certified casino software for all gambling games is also required in order to obtain a sweepstakes casino license. You need to prove that the software has been tested and certified by a reliable and respected third-party organization such as eCOGRA or iTech Labs.

More often than not, state-level entities will also require that your sweepstakes casino has responsible gaming measures in place such as time and deposit limits and similar self-exclusion tools. To prevent compulsive gambling and similar problems, these measures are necessary.

2. Gathering the Documents You Need

Once you’ve researched your state’s or jurisdiction’s requirements and become familiar with the components of those requirements, it’s time to obtain the required documents. In addition to the items and documents listed above, you’ll likely need other documents specific to the state or jurisdiction in which you’re applying for a sweepstakes casino license.

3. Undergoing a Financial and Legal Review

Once you have the necessary documents and you’re ready to apply, it’s important to remember that you’ll also need to go through a legal and financial due diligence process beforehand. This will ensure that you comply with all the legal and financial rules and regulations of the jurisdiction you have chosen.

You’ll probably need to hire financial experts, legal professionals, attorneys, and others to help you with this step and make sure you meet all the requirements. While it’s technically possible to do this on your own, it will take a considerable amount of time and require an extensive amount of research.

4. Submit Your Sweepstakes Casino Application

Once you’ve completed the steps above, you can apply for a sweepstakes casino license. Submit your application after paying the application fee. It’s worth noting that application fees can vary. Often, the application fee is non-refundable.

5. Application review by the regulatory authority

Regulatory agencies and the number of employees at these facilities vary from state to state. The application process can take anywhere from a few weeks to several months.

Be patient. The regulatory agency will review your application and the documentation you’ve provided. Keep in mind that the regulatory agency may request additional information, documentation, or clarification of your application at any time during the application review process.

6. Get approval and obtain a license

After a few weeks or months, your application will be reviewed and approved, and you’ll gain your sweepstakes casino license from your jurisdiction’s regulatory establishment. These licenses are also subject to various terms and conditions.

For example, your sweepstakes casino will sometimes require an implementation of responsible gambling measures, or you can be required to submit constant financial reports of your business. Periodic audits are also often a term with sweepstakes casino licenses.

7. Payment of the license fee

In addition to a non-refundable application fee, a sweepstakes casino license includes another fee after you’re approved.

Several factors affect the license fee, including the number of sweepstakes casino games your site will offer, projected revenue, submitted financials, and more. The license fee also varies from state to state, so thorough research is essential.

The bottom line

Obtaining a license is an integral part of starting a sweepstakes casino business and launching your website, although it’s a very demanding, time-consuming, and complicated process with many tricky steps.

You will need to conduct due diligence on the regulations and jurisdictional requirements of your state, gather the necessary documentation, conduct a financial and legal assessment of your entire business, and submit a detailed license application.

Depending on the state, jurisdiction and regulatory authority, after weeks or months of reviewing your comprehensive application, your chosen regulatory authority will grant you a sweepstakes casino license.

You must then pay the final license fee and comply with your license’s rules and regulations. If you do not, you risk losing it.

References:

• Division of Gaming Enforcement. State of New Jersey.
• Haan, K. (2024, February 02). Best Background Check Sites of 2024. Investopedia
• What is a financial assessment?. Hillingdon London.