One thing that often comes to everyone’s mind is whether gambling is legal in the Emirates. Similar to many Middle East countries, gambling is illegal in UAE, as these countries devise some of their laws based on the Quran. It is important to understand that Islam is the official religion of the country, pursuant to the constitution of the UAE. Gambling is prohibited in Islam, and this forms the basis for the Federal and Local Emirate Laws that prohibit all forms of gambling, as well as the advertising of any form of gaming.
Article 460 of the Federal Decree Law number 31/2021 on the issuance of the crimes and penalties laws states that gambling games are 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.
Generally, “sales promotions”, such as raffles and sweepstakes with a skill-based element, are permitted in the UAE provided they have been approved by the licensing authorities. Whereas chance-based games are generally not permissible as they would be likely to fall within the scope of gambling.
Non-Compliance and Penalties
According to the article 461 of the Federal Law number 31/2021, any person who engages in a gambling game shall be liable to a jail sentence for a period not exceeding two years or a fine not exceeding AED fifty thousand. If the crime is committed in a public place or open to the public or in a gambling place or house, shall be liable to a jail sentence or a fine.
Any person who opens or manages a gambling place, or prepares it to receive people, and any person who organizes any gambling game in a public place or open to the public or in any place or house intended for this purpose, shall be sentenced to temporary imprisonment for a period not exceeding ten years and a fine not less than AED one hundred thousand (article 462).
In all cases, the money and tools used in a gambling game shall be seized and confiscated. An order for the closure of the establishment, or the place intended for gambling, shall be rendered, and it may not be permitted to reopen unless it is intended for a legitimate purpose, and after the approval of the public prosecution (article 463).
Federal Law number 5/1985 (amended by Federal Decree-Law number 30/2022) on the civil transactions law of the UAE has referred to contracts related to gambling as being considered void, in terms of their enforceability.
In addition, the Cyber Crimes Law (Federal Law number 34/2021) sets out a penalty of imprisonment and/or a fine for anyone caught establishing, managing or running a website, or transmitting, sending, publishing or re-publishing through a computer network gambling activity. It also prohibits producing, creating, preparing, sending or saving for exploitation, distribution or display to others through a computer network, gambling activities and/or anything else which may afflict public morals.
Furthermore, the Telecommunications Regulatory Authority implements an “Internet Access Management” policy. This policy requires internet service providers to block access to websites providing illegal content or content that is inconsistent with the moral or public norms of the UAE. As a result, access to gambling related content is generally blocked from viewing on the internet in the UAE.
The UAE’s National Media Council (which has now been replaced by the Ministry of Culture and Youth, MCY, through their Media Regulatory Office) is responsible for monitoring the content of materials published in the country, including electronic games. The principal regulations pertaining to the media licensing and age rating framework are Resolution number 30/2017 and Resolution number 26/2017 respectively.
Games of Skill and Games of Chance
In accordance with the Penal Code, games outlining the involvement of stakes where the winning of the stake will depend upon the chance of loss of the other party are considered illegal. Therefore, if there is even a small element of chance in any gaming component, such a game shall be deemed to be gambling. Further, the government is exploring allowing fantasy gaming as sports in UAE as long as no stakes are involved.
It may be inferred that gaming-centric corporate entities would be able to conduct skill-based gaming activities in UAE, subject to their business model. Further, to assess the component of skill or chance in the game, one of the following three renowned global tests may be applied:
– Dominant factor test: The games which constitute the principle of skill and have the slightest component of chance are treated as a game of skill. The test also counts the components such as superior knowledge, experience, training, personal attributes, and capabilities of the player, then such games shall be considered as game of skill. The dominant factor test is fairly easily applied to games such as roulette where there is a greater chance quotient and chess which features a greater skill quotient. This test may not be considered a universal test for identifying the component of skill or chance as there is no quantifying mechanism to evaluate the stronger element in the test.
– Material element test: This test governs the elements of the game which determine the outcome of the game. Even if there is the slightest component of chance along with the substantial component of skill, the game will be considered as game of chance and it will be considered as gambling in accordance with the Penal Code of UAE.
– Any chance test: This test determines the scope of chance in the valuation of the outcome. If there is even the slightest scope of chance in the outcome of the game, then the game shall be considered a game of chance.
Ras Al Khaimah announcement
In the past few years, we have seen an active and growing gaming population across the Middle East region, particularly in UAE and KSA. A major push from the UAE government to develop eSports within the UAE.
Several factors that make the UAE particularly attractive for gaming. The UAE possesses the infrastructure, as the key contender in the emerging technology space, such as blockchain, artificial intelligence and augmented reality, that allows the growth of the digital gaming ecosystem. The UAE government has also established specific non-financial free zones supporting this industry. These free zones provide commercial trade licenses for most activities that fall under the gaming sphere, which include, e-gaming, developing and publishing games, digital services and event management.
Given the prohibition of gambling in the UAE, neither the free zones nor the mainland licensing authorities currently offer licensing options for gambling or betting related activities. Whilst there are certain licensing regimes for activities relating to gaming, e-sports and amusements, it should be noted that these are limited in one way or another to exclude the possibility of legally conducting gambling activities.
An announcement by RAK, one of the UAE seven emirates, that it would regulate gaming ahead of the arrival of Las Vegas casino giant Wynn Resorts (WYNN.O) in 2026, has revived speculation that gambling could be allowed in Dubai, where a Caesars Palace opened in 2018. The development is planned to be built on Al Marjan island and will include around 1,000 hotels rooms, a mall, a convention center, restaurants and the “gaming area”. The gaming facility is currently in the design phase and will be purposely built, taking into consideration culture and societal norms. The developers will need to apply for an integrated resort license from the RAK Tourism Development Authority’s newly-established Department of Entertainment and Gaming Regulation.
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Disclaimer: This publication is for informational purposes only and does not provide any legal advice.
