Online Gambling Regulators and Licensing Bodies
Whether gambling at land-based casino or a virtual one online, players need to have enough confidence that their gambling will proceed fairly. Players place a great deal of trust in casinos, handing over their money for the opportunity to play games of chance that are actually based upon chance.
Operators have a financial interest in our gambling, where they do have the potential to try to cheat us. Online sites, free of anything physical, can cheat even more nefariously, as it all comes down to their code, which they do not show you. All they need to do is to program in an extra slice for themselves, and perhaps no one will ever even notice.
There is a higher standard, therefore, with online casinos, where we need the oversight of gaming commissions even more than the land-based ones do, although that alone isn’t enough. We also need to look toward other independent bodies to do our diligence, independent auditors that will do the proper inspections and evaluations to confirm the fidelity and fairness of an online casino.
It all starts with the licensing body though, and as important as audits are, we need to make sure that someone is not only keeping their eye on online casinos, but can be relied upon to not only seek to prevent disputes but help resolve them fairly should they occur.
There are a number of these online regulators scattered throughout the gaming world, where online casino sites can apply to and be granted a license. This license also brings with it regulation, and no online casino site should be considered to be operating legitimately without one.
We’ll now go over the major regulators in various regions of the world:
North and Central America
None of the countries in North America permit regulatory bodies to license online gambling outside their own particular jurisdiction, and we don’t even have a national regulatory body in these countries. Instead, gambling is licensed and regulated at the state and provincial level, in a way that treats it as domestic, where licensed sites offer online play to residents of their particular jurisdiction.
This does not mean that the sites that are licensed under this scheme are themselves limited to offering play to only these residents, as both Nevada and New Jersey in the United States only require at an online casino put up a special site that is available to their residents only, and they may operate other sites elsewhere under different regulation. This allows them to attract some bigger names and also make the offering of casino play more cost-efficient, to the benefit of all.
The Nevada Gaming Control Board has been offering legal gambling to its residents since 1955, and have now added online casino sites to their repertoire. The New Jersey Division of Gaming Enforcement has been at it for a while as well, since Atlantic City’s casinos have been opened, and both provide experienced and effective regulation.
Due to gambling being exclusively regulated at the state level in the United States, the scope of their regulation stops at their state borders, as they are not permitted to regulate interstate gambling, and they use geolocators to verify that players are physically located within their jurisdictions.
Canada does have regulated online gambling as well, which is run by what used to be provincial lottery commissions, some of which have ventured off into the world of online casinos as well. These sites are not all that competitive with offshore casinos though, and use their advertising reach to entice customers who aren’t really familiar with what else may be out there.
Canada also is home to the Kahnawake Gaming Commission, which has dominated what is deemed to be the unregulated North American market as well as markets elsewhere, although the use of the term unregulated merely refers to not being regulated by governments. The Kahnawake are an Indian tribe that see themselves outside Canadian law and Canadian authorities have let them go their own way, and they have a strong reputation for defending the interests of players.
Central America is home to the Panama Gaming Control Board, who got in the business of online gambling regulation in 2002 and have since been regulating online casinos throughout the world, and have managed to build a good reputation throughout the years and have built up a lot of trust among players playing at their licensed casinos.
European Domestic Regulation
Europe has some of the best online gambling regulation in the world, both domestic focused and offshore focused. The U.K. Gambling Commission is considered by many as the finest domestic regulatory scheme in the world, and they certainly have well taken advantage of their vast experience in regulating gambling generally. They well understand that their mission is to jealously guard the interest of players, and they set the standard for this.
While the U.K. has sought and achieved the goal of both closely regulating online gambling in their country while providing their players the best that online gambling has to offer, with virtually all the best sites at the table, other countries in Europe have taken a more exclusionary approach, leaving many players unsatisfied and looking to play outside their national regulatory scheme.
France’s ANJ, for instance, does not even permit online casino gambling, and goes as far as blocking access to offshore online casinos, even though this is not very effective as players can easily get around this with a VPN. If you serve your market well enough, your players will buy into it, but when you fail to do this, sites regulated in other countries are but a few mouse clicks away, site blocking or not.
ANJ does allow other forms of online gambling such as poker and sports betting, but their ring-fenced approach with poker in particular has also served to drive a lot of players away, those who wish to go beyond the comparatively small market in France and play against players elsewhere in the world. This is a big deal with poker and one that France has been unable to solve.
There are a number of other ring-fenced regulatory schemes in other European countries, such as Italy’s AAMS and Spain’s Spanish Gaming Commission that do allow online gambling but still have some players looking for greener pastures. Both of these regulatory bodies, as well as others such as the Gaming Board of Hungary, Portugal’s Inspectorate General on Gaming, Slovenia’s Office for Gaming Supervision, and others, all offer their residents access to online gambling, and while all do a good enough job regulating, the quality of their approved sites still needs to be competitive enough with what is offered elsewhere.
It’s a plus generally to have the sites you play on regulated in your own country, and these regulatory bodies tend to have a higher level of oversight compared to offshore regulators, but this needs to be weighed against the quality of play at the sites themselves. Players can simply choose to play outside their oversight, something that domestic regulation still does not seem to appreciate enough, leading to their taking too much for granted and their not paying enough attention to being competitive.
The European Union requires that players in any member country be allowed to play at any site that is regulated in any other member country, but some countries still insist on telling their players that they are only allowed to play on domestic sites. This is particularly an issue in Scandinavia, with the Swedish Gambling Authority and the Norwegian Gambling Authority looking to claim a monopoly, joining the other countries in Europe who insist on this.
Denmark’s Danish Gambling Authority has taken a more inclusive approach, and their model of allowing their players to play on the big sites but have their play tracked and taxes separately set the standard for European gambling, one that the U.K. Gambling Commission has embraced in their new regulatory framework.
European Offshore Regulation
Europe is also the home of some of the biggest and finest offshore gambling regulators, those who focus not domestically but internationally. Like other offshore regulators, these are set up in very small jurisdictions that regulate players not residing in their own country, but aim at players from elsewhere.
Among the biggest and most respected offshore regulators in the world is the Malta Gaming Authority, considered by some to be the finest there is. Malta has been overseeing online gambling since 2001, and continue to do a fine job. A license in Malta is highly coveted and they only take the good sites.
The Gibraltar Regulatory Authority is also a big-time offshore regulator located in Europe, and also go back to the earlier days of online gambling. Gibraltar is fully on board with EU standards, and being regulated in Europe, players in other European players are supposed to be able to play there, as is the case with all European regulated sites, but they do get a lot of pushback. This is not due to any lack of quality of regulation, it has to do with these countries opposing EU control.
There are a number of other prominent offshore regulators located in Europe, who have set up shop off the coast of the United Kingdom, and like Gibraltar and Malta, punch way above their weight. This includes the Alderney Gambling Control Commission, the Jersey Gambling Commission, and the Isle of Man Gambling Supervision Commission. All of these bodies are well experienced and do an effective job of protecting players.
European online gambling regulation overall is quite a patchwork, with a great deal of good mixed in with some questionable strategies in some countries. In spite of this, Europe overall is quite evolved compared to other regions of the world, and we will continue to see online gambling regulation evolve as time moves forward.
The Caribbean has been a hotspot for offshore gambling regulation since online gambling was born. There are several major players that are located here, and while they aren’t as prominent as the biggest offshore regulators in Europe, they sure do regulate a lot of offshore gambling sites.
All of the Caribbean’s online gambling regulators deal with offshore clients, as there aren’t really that many people living in these locales. However, the rest of the world is their oyster, and they oversee many online gambling sites that are enjoyed by people all over the world.
Among the more prominent ones are the Curacao Internet Gaming Association. Curacao has been regulating online gambling since 1993, with the Association itself established in 2002. Curacao’s very low corporate tax rate of 2% make this jurisdiction very popular among operators, where they can pass on these savings to their players.
Aruba’s DAC is set up similar to Curacao’s, other than the fact that they regulate land-based gambling as well as online gambling. Both of these regulators have built up a good reputation over the years. Neither Aruba or Curacao allow their licensed sites to take players from the Netherlands, but they are happy to accept players from any other location.
Antigua and Barbuda’s Antigua Division of Gaming famously fought back when attacked by the United States in the early days of online gambling. The U.S. took the case to the World Trade Organization, and Antigua and Barbuda won.
The U.S. still haven’t paid the damages that the WTO ordered them to pay, but this regulator is not afraid to stand up to anyone, and have lived up to this great reputation since. They also boast not only solid gaming regulation but very low taxes as well and this is another location that online sites love.
The Philippines’ FCLRC is the only online gambling regulator in Asia, offering companies a way into the vast Asian online gambling market. There’s no particular reason why an online gambling site would need to be licensed in Asia to offer gaming to Asians though, so they don’t really play much of a role in the industry.
Ironically, online sites in the Philippines are not allowed to accept players from the Philippines, but the government has no problem with Filipinos playing at gambling sites regulated offshore. There are some slight advantages to having your servers in Asia to offer Asian gaming, and the Philippines do offer a nice package of tax credits to attract operators, but they don’t compete all that well with the better offshore regulators.
Australia’s ACT Gambling and Racing Commission licenses sites that serve Australian sports betting sites, but they are restricted to this form of betting only. Aussies who wish to gamble on other things online must play at sites regulated elsewhere. There has been interest in expanding the Commission, but so far, it hasn’t gotten off the ground. As Australia comes to better realize the opportunities that they are missing out on, they may change their minds, but land-based operators still have too much clout.
The Vanuatu Customs and Inland Regulation, based out of the small South Pacific island nation of Vanuatu, has been trying to make a name for themselves in online gambling regulation, offering operators tax rates as low as 0.1%, in addition to other friendly conditions.
They also offer a variety of customer protections and have shown that they are indeed serious about making a go of this, although they only accept a limited number of applicants and this is therefore has really limited their scope, whether they can generate enough interest in their licensure or not.
Online Gambling Auditors
There are a number of respected companies who perform independent audits of online gambling sites, which is the only way to know if they are living up to their payout claims or even if the sites are fair at all. Without an auditor, we are left to take the word of online gambling operators, and it’s just so much better to have these things verified.
The biggest and most widely regarded of these agencies is eCogra, a U.K. auditor who has been certifying online gambling sites since 2003. eCogra has won many awards for the quality of their services, and even lend a hand in resolving disputes between players and the sites they regulate.
There are several other well-respected online gambling site auditors, including BMM Testlabs, GLI, iTech Labs, QA Lab, Eclipse Compliance Testing, QUINEL, Gaming Associates, and SQS Group. If your site doesn’t have its random number generator, payout table, and other aspects of their software regularly tested by one of these third parties, you don’t really know how fair the site may be.
Choosing a Safe Site is More Than Just Their Having a Good License
As long as an online gambling site is audited and licensed by a legitimate regulator, you can generally play there safely enough, although we still need to look at the individual sites, their complaint rates, and the general feeling among their players as to how good or how safe an online gambling site may be.
Casinos used to have to rely on word of mouth, where you may have known someone that had an experience at a casino you wish to try out, or not. This is a very limited means of communication though and these places aren’t going to take out ads telling you of their dark side, they want you to play with them and will always create a positive image of themselves whether they deserve it or not.
Only an extremely tiny number of complaints make it to the regulators, who only really deal with the big stuff, things like the debacle that Full Tilt Poker got into a few years back. Smaller scandals make the grade as well, but for the most part, online gambling policies itself, due to the nature of the internet.
If you operate an online gambling site, the last thing you want to see is a lot of players sharing their anger at you online, and in today’s world of social media particularly, bad news both goes far and gets around fast.
There are some online operations that are only there to pillage, and these ones don’t care what you think of them, they are only there to grab what they can and then get out of town. An online gambling site’s reputation is therefore a lot more important than if they are regulated in Malta or Aruba for instance.
It is not that who licenses and regulates an online site doesn’t matter, and you don’t want to be playing at a site that doesn’t bother to tell you that they are licensed, or may be licensed by a body you’ve never heard of and can’t even find that much about them searching the internet.
Being with a very highly regarded and effective online gambling regulator does not preclude our needing to still do our homework about sites we may wish to try. Good regulation, like a site being audited properly, is a must have, but in itself is not enough.
This is why it is so important to get expert advice when considering online gambling sites, those who know exactly what to look for and especially are well aware of what the experiences of other players like yourself have had. This is just one of the things that people in the profession of analyzing and recommending online gambling sites account for, and together with everything else that matters, they provide you with what you need to make these important decisions.
Mike Brown, Chief Editor: Mike leverages his true passion for online gambling to create a uniquely informative site that takes players well beyond the standard fare in the industry.