This analysis draws on research published in Lexis Middle East by Arslan Malik, International Tax Specialist at Rise Accounting. Rise Accounting advises UK tech businesses and UAE-based companies on accounting, tax compliance, and international expansion. To discuss UAE market entry or VAT planning, get in touch.
The UAE has quietly become one of the most interesting jurisdictions for businesses evaluating international expansion. The latest development worth paying attention to: a fully regulated commercial gaming sector, built from scratch, now operational.
In September 2023, the UAE established the General Commercial Gaming Regulatory Authority (GCGRA) making it the first formal legal framework for commercial gaming in any Arab Gulf state. By December 2025, the first licensed online gaming platforms, play971 and Truewin, had gone live. The Wynn Al Marjan Island casino development in Ras Al Khaimah is under construction. A sector that had no legal existence two years ago is now open for business.
For founders and finance leaders considering UAE operations — or already there — this creates real opportunity. It also creates real tax complexity that most businesses aren’t prepared for.
The problem: regulation moved faster than the tax framework
The UAE’s VAT legislation was written when commercial gaming was entirely prohibited. The Federal Tax Authority (FTA) has published no guidance on how gaming revenue should be treated. There is no gaming-specific VAT legislation. The correct taxable base — the figure from which VAT liability is calculated — remains genuinely ambiguous.
Under UAE VAT Decree-Law No. 8 of 2017, any supply of services defaults to 5% VAT unless it falls within an explicit exemption. Applied literally to gaming, that creates an immediate problem: VAT is calculated as a percentage of the value of the supply, but in gaming, the “value” isn’t straightforward. Gross stakes? Net gaming revenue? Operator margin? Each product type (sports wagering, online casino, lottery) has a different revenue structure, and the law doesn’t currently answer the question.
Get the taxable base wrong, and the entire VAT liability figure is wrong. For a business processing high volumes of transactions, the commercial exposure is significant.
It goes further than headline rates
Beyond the core taxable base question, operators face a range of related issues that any competent tax adviser would want to work through before entering this market:
How free bets and complimentary plays are treated for VAT. How refunds, bad debts, and fraudulent transactions interact with VAT obligations. Whether loyalty points and non-cash prizes constitute taxable supplies. Whether jackpot pools shared across multiple operators create joint supply issues.
Online gaming adds another layer. Services delivered via the internet may qualify as electronically supplied services (ESS) under the UAE VAT framework. This classification can affect both the applicable rate and whether offshore operators serving UAE-resident players need to register for VAT without any physical presence in the country.
What a resolution might look like
The UAE VAT framework was built on the GCC Unified VAT Agreement, which drew heavily from EU VAT principles. That makes EU case law — specifically from the Court of Justice of the European Union — the most relevant reference point for predicting how the FTA might eventually approach these questions, even though it isn’t binding.
The EU exempts gaming supplies from VAT entirely. It’s a pragmatic solution to an otherwise intractable problem: rather than legislating a correct taxable base across structurally different product types, exemption removes the question altogether. No output VAT charged to players. No period-by-period tax base calculation. No invoice-level complexity across millions of transactions.
The UAE may follow the same path. It would align with the dominant global norm and reduce friction for international operators already licensed in EU jurisdictions.
The trade-off for operators is real, though. VAT exemption removes output VAT liability, but it also removes the right to recover input VAT on costs. Costs such as technology infrastructure, premises, staffing, marketing, professional services all becomes an irrecoverable cost absorbed into the operator’s margin. Whether exemption is commercially favourable depends entirely on the ratio of input VAT exposure to total revenue. That calculation looks different for every business model in this sector.
What this means in practice
If your business is outside the UAE and you’re evaluating gaming, lottery, or sports wagering as a new market: the framework now exists, the licensing structure is operational, and entry is possible. The GCGRA issues five categories of licence covering operators, vendors, key corporate persons, key individuals, and gaming employees. This is a heavily regulated sector with serious compliance requirements across licensing, AML, and player protection, as well as an unsettled tax position.
If you’re already operating in the UAE across other sectors and gaming-adjacent activity is part of your expansion thinking, e.g., technology supply, affiliate services, ancillary products, you need to understand where your revenue model sits in the licensing and VAT framework before you move.
The regulatory architecture is in place. The tax guidance will follow. Businesses that plan ahead will be better positioned than those that wait for certainty before asking the questions.
