I don't agree. Licenses are a way for the government to make additional money on the side. They are already earning money when the casino pays its taxes, but licenses give them a secondary source of income from license fees. The government doesn't care if the casino is a scam or not and is not going to audit it prior to issuing a license. All that matters is if the books are in order and all fees are paid. They don't even verify location, because online businesses only need a mailing address and this is usually done by renting out a mailbox in an office building.
Correct, and the government doesn't really check how and where the casino is operating from and they don't really care enough about the same. All they expect is the money that needs to be paid on time in order to renew and let their license up and running. I believe that there must be an in-person check in order to check the authenticity of a casino and then only decide whether to give them a license or not.