Where do you live? That is outrageous.
Maryland and now VA. They had a few unlicensed “daycare” busts recently (children getting abused) and now because of that, I have to either have my children at a “licensed facility” or at my house. I can’t have my neighbor care for my kids after school at her house while I work a full time job. That constitutes a service, even if it’s free, and in order to provide that, she needs a license. They play over there all the time but I can’t use her for “daily childcare” unless she has a license. If anything were to happen, she could get hosed for running an unlicensed facility and I will be cited for abandonment.