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Gaming in the U.A.E.

Gaming in the U.A.E.

Lawgical with LYLAW and Tim Elliot

14 June 2022

Tim Elliot:  Welcome to Lawgical, the U.A.E.’s first, and we think the only, legal podcast as well.  My name’s Tim Elliot.  Lawgical comes to you from HPL Yamalova & Plewka, the Dubai-based legal firm. Here’s the Managing Partner, Ludmila Yamalova.  It’s nice to see you.

Ludmila Yamalova:  Good to see you too, Tim.

Tim Elliot:  If you’re interested in gaming, this is the podcast for you.  Now, I’m not a gamer.  I have a son who is an avid gamer, and I can see how popular and how important it is.  Now, Ludmila, let’s make it clear from the outset that we’re not really trying to influence people to own a Nintendo, Wii, or a Playstation.  This is not who this is aimed at.  But it’s really a look at the commercial aspects of online gaming, if you want to set up here in the Emirates and offer online gaming services.  That is who we are aiming at.

Ludmila Yamalova:  Indeed.  Just for the record, also at a personal level, I am not a gamer, never have been.

Tim Elliot:  I’m surprised.

Ludmila Yamalova:  It’s because of my age, I’m sure, because I am so young.  It’s my generation.

Tim Elliot:  Exactly.

Ludmila Yamalova:  Thank you.  I’ll take the compliment.

Tim Elliot:  It was.

Ludmila Yamalova:  I appreciate it.  But I am a little, perhaps even more conservative than you are.  I would fight very hard not to develop an interest in gaming in my children.  You have allowed yours, and obviously I know I am being very naïve, but my kids are still quite young.  There is a long road to go until they get to that age, but I am fighting hard against allowing any kind of online gaming.  With my kids, I am all about board games, card games, chess, that we all do, but not online gaming.

Tim Elliot:  Good luck with that uphill struggle.

Ludmila Yamalova:  I know.  I’m reveling in that dream while I still can control it.  You are correct, we are not here to encourage gaming amongst any segment of the population, but ultimately, we also have to be very realistic and practical that online gaming is a thriving industry and a very popular one for many reasons.  There are also educational, therapeutic, and health driven online games that have many health benefits, social benefits, and educational benefits, and so on and so forth, or even just for pure entertainment purposes or even intellectually challenging.  That is true.  All those aspects do exist and are legitimate.  Therefore, also gaming and online gaming per se is not against the U.A.E. laws, and that is for that very reason.  Obviously, there is plenty of educational benefits to it.

But it’s also important at the outset to highlight that, for example, when we are talking about gaming, online gaming, and online gaming licenses, they do not include gambling, at least for the time being, because gambling is expressly against the law in the U.A.E..  However, there are some emirates, Ras Al Khaimah in particular, that have already announced some kind of an affiliation with potentially a casino operator in the future, so that is a space that might develop.  There might be special zones that would be set up for these kinds of activities, but that’s what we are here talking about today.  For the time being, gambling is expressly prohibited by law in the U.A.E.

There are certain online games or e-games that are not gambling, that are just online games, that are also prohibited in the U.A.E. or made unavailable, and if I were that generation that you insinuate, Tim, that I am – I’d love to be, but I’m not – I would know the names of these many games.  But I have learned about them actually, interestingly enough, my TikTok followers who will ask questions about why such and such game is banned, and I’m like what is that name?  Oh, it is this popular video game, a popular online game who name I never had heard before.  Anyway, so there are some games that are also prohibited in the U.A.E. because ultimately at a high level, the government or the authorities here believe that those games are not in the interest of the public, and therefore, they’re regulated in the sense that they are not easily allowed to be played here or to be accessed here.  Our discussion today does not include those either.

But we are talking about here is all those businesses, or even entrepreneurs, youngsters who either want to develop an online game, an e-game, or they already have a business of online gaming and they want to set up a base here in the U.A.E., either a brand new one or an extension of an existing business elsewhere, or they are rebranding or restructuring because part of their business now does gaming, then there are specific gaming licenses.

I will tell you, it is kind of an interesting observation, because a lot of influencers these days have become so popular, which is a tremendous success for them and much to applaud them for, and as a result they have such a large audience that they are starting to introduce different aspects of services to their followers, including, for example, gaming and websites and such.  I would say in cases like that, you can see how at some point in time if there comes enough of a pull and enough of a customer base, it might even make sense to spin off that particular part of a service or business into its own license, for example, a gaming license.

Tim Elliot:  But the point is, you can get a license here.  That’s the crux of this, isn’t it?  When it comes specifically to online gaming and activities and services, you can get your license in a number of different ways in the Emirates.  That’s the thing.  It’s not just the one available, one possibility.

Ludmila Yamalova:  Indeed, and as you said, I think maybe actually find it surprising.  Every time I have broached the subject, people have met it with some level of surprise for that very reason, but you are right, it is not just one license and it is not just one place, but multiple, and not just in one emirate, in fact, several emirates, and within particular emirates there are several economic zones that offer these licenses.

In terms of the categories of licenses, if you want to, in simple terms, we can bring it down to two major categories.  The first is one where e-gaming is kind of the core activity, and you are developing, let’s say, games.  This includes digital interactive game development, an artificial intelligence developer, or a virtual reality or augmented reality service provider and developers.  These are some examples of the licensing activities that exist in some of these economic zones that offer these kinds of licenses where gaming is the core of your business.  You are developing ultimately online games.

Then you have the supporting services as the second category.  These are a category of activities which basically covers support service activities provided to online gaming services and service providers and developers, such as localization services, gaming consultancy services, and gaming community management.  These are the support services, not the development of the game itself, but providing ancillary services to those game developers and designers.

These are the two categories of licenses, if you will, or activities.  Within each one of these activities, depending on where you are applying, they have specific license types, license activities, some of which you can select as just one and only.  In other cases, you can add multiple activities under the same license.  The authorities that are introducing them seem to be rapidly growing and introducing more of these kinds of activities.

Tim Elliot:  Okay, Ludmila, so I’ve decided I want to set up an online gaming forum.  I want to be able to offer people certain games.  I’ve got a couple of developers interested.  Who would I approach?

Ludmila Yamalova:  It depends on a few things.  One thing to keep in mind is, do you want to have an office of you own?  What we are talking about here is online gaming.  Online means that you can be sitting in the comfort of your home and you don’t really have engineers or developers.  It is just you, so you don’t need an office to be able to employ people and to house people.

Tim Elliot:  Let’s say I do.

Ludmila Yamalova:  So, if you do, then you would need to look for a place where you want to live and then where you think you will be able to hire the best talent that you’re looking for and then where that talent and you want to live.

For example, Ras Al Khaimah has some very cool licensing activities and it’s called the Economic Zone.  It’s called the Ras Al Khaimah Economic Zone or RAKEZ.  That is, by the way, in that vicinity where there will be further developments in terms of the entertainment industry.  It’s an interesting space to watch because Ras Al Khaimah could be the leader in the gaming space, at least judging by some of the announcements that we have seen in the press in terms of entertainment industries that it has tried to embrace.  That is an interesting place because they seems to be forward thinking, kind of fresh and exciting, and they offer licenses, and these are fairly new activities that they are offering, for example, in the field of arts, photography, and technology under their media license.  With the media license, they have two different types of activity groups connected to online gaming, such as e-gaming where it is the core of your business and e-gaming support services.  Ras Al Khaimah has some very cool, very specific, if you will, and very new licensing activities that would certainly provide quite interesting fertile ground for web designers, developers, and even for those who are looking to support their gaming businesses.

However, it is Ras Al Khaimah, and if you want to live in Abu Dhabi or Dubai, that’s not really going to help you very much because if you want to have a number of developers and engineers and you want them to be close by and you want them to live, technically speaking, legally you are not supposed to be living in, let’s say, in Dubai and working Dubai while on a Ras Al Khaimah visa.  There is a limitation there.  This is one aspect you are going to look at.

Dubai has its own.  Let’s say if we were to use Dubai as an example.  Dubai actually has a few options.  There is one zone that is called the International Free Zone Authority, or IFZA.  There is DDA, or the Dubai Development Authority as well.  This is a free zone that in the past was referred to a TECOM, and these two free zones offer specific activities for gaming.

Let’s say in IFZA, you can set up as a game developer or as part of the gaming support services.  It is a professional and unregulated activity, so you don’t even need to obtain additional permits or regulations, so it is a lot easier to set up.  It is in the heart of Dubai, so it would be easy for you to find people.  You can get this license and have an office along with it.

Similarly, with the DDA, it is a Dubai media city, and they have different activities such as an online digital agency, digital interactive game developments, and interactive services under their umbrella that they can license.  They too are based in Dubai, and they have a number of offices spaces and locations that you can choose from.  You have a few options there.

Tim Elliot:  I guess if you have a media license from one of these free zones, you could add an e-gaming license on any license in from free zones.  You could add a gaming license to it.

Ludmila Yamalova:  Exactly.  Great question because you potentially could have, for example, your headquarters set up in Ras Al Khaimah because it does have, for now it seems to have the most interesting selection of gaming activity license.  You could set up a headquarters there and then from there on you could set up other branches or subsidiaries or affiliates Ras Al Khaimah in Dubai or in other emirates, but certainly Dubai because it does have a number of options that also provide gaming licenses.  Or you can set up separate businesses and then just have some kind of collaboration or a service agreement amongst them.  You really can benefit from these different zones in different ways, depending on your needs and requirements.  Just generally speaking, each one of these licenses, by the way, allows you to not only obtain a license, but obviously have an office and hire employees and apply for visas for them.  It’s truly treated as just any other kind of business without any limitations.

Tim Elliot:  Just one final question before we head off to play a little bit of Fortnite together.  What does it cost to get a gaming license?

Ludmila Yamalova:  A good question but hard to pinpoint because it really depends on where you are setting up, whether you want an office or not, whether you need visas or not, whether for one employee or multiple employees, but generally speaking for licenses, it could be anything from 10,000 dirhams to 50,000 dirhams to set up, and then there will be an annual license renewal fee which is about 10,000 to 20,000 dirhams, depending on where your license is and how big your business is.  These are the licensing costs.

Tim Elliot:  Pretty much it seems like what you’d expect.

Ludmila Yamalova:  Absolutely.  It is very much treated as any business activity and the same kind of costs that exist for other businesses apply here.

Tim Elliot:  That’s another episode of Lawgical, this time gaming, e-gaming in the U.A.E., at least from a commercial point of view.  As ever, our legal expert, Ludmila Yamalova, the Managing Partner here at Yamalova & Plewka.  Thank you.

Ludmila Yamalova:  Thank you, Tim.  Always a pleasure.

Tim Elliot:  Find us at LYLAW social media.  You can get us on Facebook, Instagram, TikTok, LinkedIn.  There is an ever-growing library of hundreds of podcasts with all kinds of legal issues here in the U.A.E. at our website, all free to listen to.  Finally, to have a legal question answered in a future episode of Lawgical or if you’d like to talk to a qualified U.A.E. experienced legal professional, click Contact at LYLawyers.com.