Whenever we talk about the online casino world, we bang on about licensed and regulated online and mobile partners. You’ll see it in our articles about which online casinos we recommend for South African online gamblers. You’ll find it at the top of our reviews pages. You’ll notice it prominently in our guides to the industry.
So, who exactly are these shadowy figures lurking in the background of the online casino world?
Well, to put it simply, they are the authorities that make sure NO shadowy dealings are being done that will have a detrimental effect on the industry as a whole.
Any industry that has as wide a spectrum of potential fraud, embezzlement, crooked behaviour, and the chance to cheat the public out of money as the casino industry is going to need a body of authority to oversee it. Just look at the traditional land-based casinos. You can be sure that they are put under a microscope by governments to make sure that they are giving their players a fair go at winning money and not just sucking them in and sucking them dry.
Add in all the different gambling laws (and the number of countries that have outlawed gambling in its entirety) and you can see how we might need some rules and regulations over how online casinos go about their business – to protect the player and the casino.
An online gambling regulator or authority is a government-established body that oversees the licensing of online and mobile casinos. It also sets legislation – the laws around what, where, and how the online gambling activities can take place.
There are certain areas around the world that have legalised online gambling and these are known as territories. Each territory has mostly the same laws around how the gambling activities take place, but they can have specific additions that are unique to that territory. For example, some territories allow lotteries and sports betting but no other online gambling at all. Other territories might allow slots games but not table games, or a full casino offering.
The regulator ensures that all online casinos licensed through its jurisdiction are complying with its laws.
The very first gambling authority was established by Antigua and Barbuda in 1994. This followed the development of the first functioning online gambling software by Microgaming. The purpose behind the Free Trade & Processing Act by the Caribbean nation was to allow the granting of legal licenses to companies or organisation looking to open an online casino.
By the end of 1996 there were a total of 15 gambling websites in existence. By the end of 1997 that number had grown to 200 and the industry had begun its boom. The financial implications of a global industry that would be worth $56 billion by the end of 2018 resulted in a number of countries establishing online gambling territories to protect (and probably cash in on) this global phenomenon.
Currently there are a number of countries that have gambling authorities that legalise and regulate online gambling:
Alderney • Andorra • Argentina • Armenia • Australian Capital Territories • Australian Northern Territories • Austria • Belarus • Belgium • Belize • Bulgaria • China • Costa Rica • Curacao • Cyprus • Denmark •Estonia • France • Georgia • Germany • Gibraltar • Hungary • Ireland • Isle of Man • Italy • Jersey • Kahnawake • Latvia • Lithuania • Malta • Montenegro • Nevada • Panama • Poland • Serbia • Spain • The Netherlands • The Philippines • United Kingdom • Vanuatu
Let’s begin with the similarities: each gambling authority is established to set the rules governing any online casino operating under its license, and to regularly check that these rules are being followed.
With each territory being able to set their own terms, limits, definitions, regulations, and so on, there are often slight differences between territories. The other big differences include the number of licenses the authority gives out, the time it takes to grant a license, and the cost of the license.
Belgium, for example, has a high tax on winnings. The UK on the other hand has much lower taxes. Ireland has no tax at all on winnings.
The UK has a very strong international reputation. Belgium has very strict regulations. Hungary is a bit iffy when it comes to both the validity of their licence and the conditions of licensing.
The perfect online gambling license needs to be a balance of bureaucracy, cost, and time frame. Italy, although a very respected authority, is pricy, and has an insane bureaucratic maze that needs to be navigated.
Then there are the territories like Belarus, China, and Argentina which, even though they have Gaming Licences on offer, seem to either outlaw gambling outright or have very nebulous laws leaving players and operators in a very grey legal area.
There really is no “best”, each comes with its own challenges and strengths. The most popular Gaming Authorities (most likely based on time, cost, and paperwork) are Curacao, Gibraltar, Kahnawake, Malta, and Isle of Man.
Operators – both the casinos and the studios that develop and provide the casino games – are only granted a licence if they agree to the legally bonding terms of the Gambling Authority.
The Gambling Authority does regular checks and audits of all those operators under their jurisdiction to ensure they are compliant at all times. These checks happen randomly but must occur at least once every year.
Should the online or mobile casino, or the games provider, break any of the terms of the licence, the Gambling Authority has the power to revoke their licence.
But it often doesn’t get to that stage because, before the licence is taken away, the operator has time to fix the issues.
This doesn’t mean they get a slap on the wrist though. The casino or developer may be given a fine (and not a parking fine, we’re talking about fines that can go into the millions of dollars). Those responsible for the infraction may even face jail time.
A well-known example of the fine is the casino 32Red who were given a spot fine of £2 million because they failed to support a known problem gambler.
Some of the things the online casino can be taken to task for include: failing to prevent money laundering, producing misleading adverts, not complying with players’ withdrawal terms, and even offering games which are excluded from their licence.
As can be seen, the Gambling Authorities are the gatekeepers of the online and mobile casino world. Without them players, casinos, and developers would be wide open to abuse and illegal activity.
The internet can be a great and entertaining place, but it also has some very dark and dangerous corners. Next time you wonder why there are so many documents you need to upload to your chosen online casino or are wondering why the hell it’s taking so long to withdraw your winnings or are just frustrated at the games you CAN’T play – blame the Gaming Authorities.
And then thank them for keeping you and your money as safe as possible.