Online casino gambling as an industry began in 1994 when the Caribbean nation of Antigua and Barbuda decided to pass the Free Trade and Processing Act. That is the first law on the planet that allowed businesses to apply for a gaming license that permitted them to offer gambling services to a global user base.
Unfortunately, casino game enthusiasts had to wait two more years following the birth of this law before the first set of such sites debuted on the Web. The delay was due to this sector lacking proper payment processing technology, which WagerLogic from Canada initially invented. Once that happened, other territories looking to rake in extra tax revenues started to jump on the trend of legalizing online gaming. Hence, in 1996, The Kahnawake Gaming Commission and Curacao eGaming entered this mix as the sphere’s newest licensors.
Today, the number of international online casino regulators is more extensive than in the 1990s. And what is different is that now, many countries have created bodies to approve and oversee entities interested in running interactive gaming businesses. Below, we explain what job these regulators perform and the differences between ones that allow their licensees to access players from all corners of the globe and those that strictly oversee gaming activities in one specific region.
What Does an Online Casino Regulator Do?
An online casino regulator provides its seal of approval to companies that wish to run gambling websites. Their licenses give these platforms a sense of legitimacy, ensuring players that their chosen sites can payout winnings, feature fair games, and reassure them that they have someone to turn to in the case of a dispute.
To attain gaming approval, one must first apply with an appropriate licensing body and have an office in that region, operating as a registered legal entity. Towards this document, the filing party must attach evidence of financial stability, a business plan, proof that no one from its management team has a criminal record, and more. It also must pay an application fee. And, if granted a license, a substantial licensing charge will also be needed to get paid. As a rule of thumb, in Curacao, sub-licenses issued by master license holders run about $20,000 in total. These are mandatory for someone to start operating an interactive gaming platform in this small Caribbean nation, which is an alluring proposition for most since the corporate income tax in Curacao is only 2%. Hence, most review sites that list trustworthy online casinos highlight Curacao-based hubs because these predominantly swarm the internet.
It is the job of the casino regulator to respond to player complaints, guarantee that all the games operators offer are 100% random, and react in the case of liquidity issues displayed by their licensees.
Country-Based Regulators
In the US, online casinos became a thing in 2013, when the New Jersey Legislature entered bill A2578 into force and legalized online gambling. It was then that US-based online casinos became a reality, but only to residents of the Garden State. So far, only six US states have permitted online casino gaming for their citizens. These are Delaware, Michigan, New Jersey, West Virginia, Pennsylvania, and Connecticut.
In general, the territory-specific regulators enforce more stringent player safety measures. Moreover, legally they get limited regarding the number of online casino licenses they can provide, and the fee to get one is far more significant than what companies have to pay to gain the approval of an international regulator based in a smaller country. For instance, casino applicants wanting to run a gambling website in New Jersey have to be active in the casino industry in this US state and pay a nonrefundable deposit of $100,000 to begin their online gaming application process with New Jersey’s Division of Gaming Enforcement.
In Britain, the UK Gambling Commission is the country’s sole gaming regulator, birthed via the Gambling Act of 2005. It boasts a reputation as one of the strictest licensing/overseeing bodies ever, focused on putting an ever-growing emphasis on player safety. It does this by enforcing measures not applied by offshore/international regulators, such as no credit cards allowed for betting fun, specific gameplay restrictions, like no auto-play, spin-timers, and more. In essence, the UKGC goes all-out to put the safety of British gaming mavens first, sacrificing some of the entertainment value that enjoying games of chance provides.
Offshore/International Regulators
International regulators are active in smaller countries that have legalized online gambling. They have gotten granted permission by these countries’ governments to issue internet gaming licenses to operators they deem fit. Aside from Curacao, other famous homes to such licensors are Panama, Costa Rica, Alderney, and Malta.
These territories’ regulators implement many of the same measures as their country-based counterparts but are far laxer in their implementation.
This article was written in collaboration with online gambling analysts.