General Commercial Gaming Regulatory Authority (GCGRA)

The UAE recently established the General Commercial Gaming Regulatory Authority (‘GCGRA’) to introduce a regulatory framework for national lottery and commercial gaming. Although it does not explicitly refer to gambling, the appointment of two US gambling industry executives, Kevin Mullally and Jim Murren, as CEO and Chair of the GCGRA respectively, hints at the possibility of creating a well-regulated and legalised gambling industry in the UAE.

Prior to the GCGRA’s establishment, Ras Al Khaimah announced a project in 2022 with Las Vegas-based casino giant, Wynn Resorts, for an integrated resort with gaming facilities that is expected to open in 2027. “Integrated resort” refers to a hotel that includes a casino and other amenities. Ras Al Khaimah has also created a Department of Entertainment and Gaming Regulation for the Emirate. Dubai’s Caesars Palace, which was established in 2018 with global casino company Caesars Entertainment, operated as a non-gambling hotel and will close in November 2023 with Banyan Tree resort to replace it.

With the support of GCGRA at the federal level, this development in the UAE’s lottery and gaming legal framework has the potential to attract significant investment and employment opportunities, as well as boost tourism. The UAE is estimated to generate up to $6.6 billion in gambling revenue, potentially surpassing Singapore’s numbers.

Prohibition on Gaming and Gambling in the UAE

To understand the significance of these reforms, it is essential to consider the UAE’s long-held position on gaming and gambling. Article 461 of Federal Decree-Law No. 31/2021 On the Issuance of the Crimes and Penalties Law (‘UAE Penal Code’) defines gambling as “those in which each party, if losing a game, agrees to pay to the winning party, a sum of money or another thing agreed upon.” Engaging in gambling is punishable by imprisonment of up to 2 years or a fine of up to AED 50,000, while managing a gambling place is punishable by imprisonment of up to 10 years or a fine of AED 100,000 or more. Federal Law No. 5/1985 On the Civil Transactions Law of the United Arab Emirates (‘UAE Civil Code’) also considers any agreement related to gambling as void.

The prohibition on gambling extends to online gambling activities as per Federal Decree-Law No. 34/2021 Concerning the Fight Against Rumors and Cybercrime (“UAE Cybercrime Law”). The UAE Cybercrime Law imposes detention and/or a fine between AED 250,000 to AED 500,000 to persons who create, manage, publish, or propagate gambling activities online. The UAE Telecommunications and Digital Government Regulatory Authority (TDRA) and the Media Regulatory Office (MRO) have also required internet service providers to prohibit and block online gambling activities.

Permitted activities: Betting and Raffles

Despite the UAE’s strict prohibition of gambling, it has allowed related activities such as betting and raffles. The UAE Civil Code allows betting in the limited context of racing, shooting, sports, or muscle building.12 In order for a bet to be legal, there must be certainty of the prize, certainty of the person giving the prize, and certainty of the subject matter and scope of the competition.

The UAE also permits competitions such as raffles to operate, subject to prior permission from the Ministry of Economy. For instance, the Emirates Draw, a Sharia-compliant digital collectible scheme with optional free entry to a weekly draw when purchasing an Emirates Draw collectible, is backed by the UAE government.

However, these activities are limited exceptions to the general prohibition on gambling. Both the UAE Penal Code and Civil Code emphasise that any element of chance in an activity that does not require skill or experience to succeed is still considered gambling.

GCC and the Middle East Approach to Gambling

As the law in GCC countries are also based on Islamic principles, it is no surprise that Saudi Arabia, Kuwait, Qatar, Bahrain, and Oman have similar prohibitions on gambling as the UAE. However, Saudi Arabia recently launched its National Gaming and E-sports Strategy comprising 86 initiatives for launching business incubators and hosting events for gaming and e-sports. As Saudi Arabia and the UAE have shared agendas in attracting investment and diversifying their economies, the Kingdom’s investment in the gaming industry may lead to potential interest in the gambling industry as in the UAE, but this remains to be seen.

Egypt, Lebanon, and Morocco have successfully legalised casinos despite having laws based on Islam and Muslim-majority populations. Egypt established licensing, royalty, and taxation systems to regulate casinos within the country, and does not allow Egyptian locals to enter casinos. Lebanon has only one casino that limits membership by age and a minimum salary. For casinos in Morocco to obtain a licence, they must receive a decree that is signed and agreed upon by the prime minister. These examples of legalised gambling in Islam-based jurisdictions indicate the possibility of the UAE and other GCC countries succeeding in establishing and regulating their respective gambling industries.

Conclusion

The establishment of the GCGRA is the first of its kind in the GCC. Although legalising gambling in the UAE remains uncertain, this regulatory body will no doubt open new opportunities for the country’s commercial gaming and lottery industry. It is important to monitor the GCGRA’s regulations to determine whether the authority will strike a balance between the UAE’s economic growth and cultural values or significantly shift the UAE’s gaming and gambling legislation.

The first Arabian Business Conference on gaming called “Gaming Countdown” is set to take place on 25 January 2024 in Atlantis The Royal, Dubai. With senior leadership from major casinos in Las Vegas and Macau to speak at the conference, the Gaming Countdown is only the beginning of the advancement of the gaming and gambling industry in the UAE and the wider Middle East.