Licensing Authorities – Their Mandate and the Difference they Make

Internet gambling or mostly referred to as online gambling started once the first casino opened its virtual doors to online players in 1994. Many countries banned or restricted online gambling completely at first while others passed free trade and processing acts that allowed that license could be granted to applying online casinos.

Much like country laws in general, gambling laws tend to vary from one country to the next, in the UK gambling is strictly regulated by both the non-government and government bodies to ensure players enjoy safe online gambling activities. What comes as a surprise is just how many countries still straight-out ban online casino gaming or not regulate it at all.

In general, countries around the world can be placed into three categories:

  • Countries where gambling online and in land-based casinos are regulated and legal
  • Countries where gambling falls in a grey area, it’s not legal, and citizens are not banned from playing at online casinos
  • Countries where all gambling are illegal and citizens participating in casino gaming or any other form of gambling are arrested and prosecuted

The first country to address online gambling was the United Kingdom, creating the UK Gambling Commission to oversee remote casino gaming via the Gaming Act of 2005. In the UK all gaming is now controlled via one regulator, and the jurisdiction of the Gambling Commission includes online casino games, online keno, online sports betting and online poker. A tax was created on online gaming, and all online operators wishing to offer services to individuals in the country are required to be licensed.

In general gambling authorities or commission are in place to regulate that only persons of legal age participate in gambling, that operators follow responsible advertising, to ensure players enjoy gambling in a safe, fair and responsible environment, receive winnings owned, and that everyone enjoys bonuses with reasonable terms and conditions.

Legal Gambling Ages

The legal age at which a person can gamble or participate in casino games differs, in most countries persons older than 18 years can enjoy gambling, while in others the minimum age is 21 years of age.

Socially Responsible Advertising

The rules around accepted advertising are diverse and strict, these include that advertisers should be legal, not mislead the public and great care must be given not to exploit vulnerable individuals or children. Advertising should not intestinally target anyone under the legal gambling age via its presentation, style, context, content or selection of media. Any advertising of sports betting or online casino gaming is not allowed before 9:00 pm and advertisement may not include sign-up offers, while the tone and overall content are strictly regulated in countries that do allow advertising on television at all.

Fair Player Conditions

Several of the major online brands recently faced massive fines as gambling authorities found them guilty in terms of not offering their member bonus terms that were reasonable or fair. The guilty parties need to change the terms and conditions of their promotions and bonuses so that players would no longer be required to wager their money multiple times before withdrawals are granted on their own money. All restrictions need to be clear to members and players are never obliged to take part in any form of publicity. Online casinos need to offer players fairness and transparency and forcing players to accept winnings in small instalment over an extended time-period was one of the terms frowned upon.

Casino Player Fund Protection

Strict laws are in place regarding segregation of member/player funds, which means that all online operators must ensure that member funds are kept in a separate account. Players funds include the value of funds held in credit, prizes and winnings as well as unpaid loyalty bonuses or any other bonuses.

Displaying Licensed Status to Ensure Players Can Easily Identify Regulated & Licensed Operators

Remote bingo halls, poker rooms, sports betting websites and casinos are required to display their license status on every page/screen that players can access. The licensing statement or display of the jurisdiction logo must be linked to the Licensing Authority allowing players to access the license.

Gambling Software

Regulated online casinos are required to use software including games from developers/software providers that are in possession of a gambling operator’s license. The software can only be installed by such a software supplier, and all software must be tested and audited by independent testing facilities.

Anti-Money Laundering

Licensed online operators are required to prevent terrorist financing and all forms of money laundering, licensees are required to conduct assessments of risk appropriate to prevent the chances of money-laundering by making sure procedures, controls and policies are in place according to the Money Laundering Regulations.

Responsible Gambling

Licensed operators are required to ensure their members/players have easy access to information on how to gamble responsibly as well as information or direct links to assist them when they need assistance in respect to problem gambling.

When it comes to the information, the measures include providing individuals with tools to control or monitor their gambling, which allows restricting the amount of cash spent as well as the duration of a gaming session. Operators also need to display timers, reality checks or reminders as well as self-exclusion options.

Self-Exclusion

Under the social responsibility, remote gambling provision licensed online operators need to take all steps to ensure self-exclusion agreements are honoured. Steps include that all marketing material will not be sent to anyone who chooses to exclude themselves from gambling, which means the account must be closed to players who entered self-exclusion agreements, all funds must be returned to such members and a registered need to include the names, details as well as the member’s account details. All staff must be trained to ensure that the system is administered in the most effective way and all access must be removed from such players.

Disputes and Complaints

Regulated and licensed online operators are required to put into effect a procedure on how member complaints are handled, all disputes not resolved to the satisfaction of players/members must be referred to an entity for further action. Such complaints include the outcome of gambling transactions as well as information not accessible or clear on websites.

Online Gambling Regulations and Laws by Country

  • Canada

In terms of online casino gaming, Canada is mostly a country unregulated. The regulation of gaming is up to each of the individual provinces and in most cases, the online gaming is regulated by provincial lotteries. Casino games, including craps, roulette, sports parlay and poker are operated under licenses where these are specifically approved. In Quebec, Ontario, British Columbia and Manitoba, remote gambling is licensed under lotteries.

Manitoba and British Columbia operate under the brand PlayNow, while Ontario under PlayOLG, Quebec under Espacejeux, which are the only gaming sites that are regulated and operated by the government of Canada.

Hundreds of online sites welcome Canadian players and should Canadians play at unregulated sites there are little resources should there ever be a dispute.

  • France

Autorite de Regulation des Jeux and Ligne regulate online gambling in France, which basically translates to the Online Gaming Regulatory Authority. The abbreviation it is referred to in most cases is the ARJEL, which was established by the French Gambling 2010 Act. The ARJEL is responsible for the regulating or all types of online gaming including sports betting, poker, roulette, blackjack and casino games.

The ARJEL is criticised in many ways and in most cases, it is due to the 44% tax rate, it is one of the highest tax rates of any country across the globe. Only one other state has a higher tax rate, and that is US state Delaware where it is 45%, although 100% up to when $3 million annual revenue is reached. Operators find this tax rate a burden as it cuts into their profit margin and there are basically affiliate deal in the online gaming sector no longer are occurring.

Online poker in France is ring-fenced, players may only enjoy poker at sites operating within the borders of the country, and there is no longer access on legal sites for international player pools. It limits game variety, availability and limits the tournament pool size.

The largest operators licensed by the ARJEL is Winamax while others include Playtech, bwin.party and Pokerstars, while companies regulated and licensed by the ARJEL are required to use a fr.domain.

  • Italy

Italy tried to blacklist and block online companies from other EU nations from accepting Italian gamblers. The EU Commission rejected both the blacklisting and blocking while demanding that Italy opened-up to all European Union licensed companies. This resulted in Italy implementing strict regulations when it comes to the online gambling industry.

The amendments to the online gambling laws in Italy started in 2006, and all new regulations included that companies outside the Italian borders could apply for interactive gaming licensed permitting games such as casino games, poker as well as sports betting.

At first, poker was limited to online tournaments, which limited the poker players from enjoying all the benefits of international poker rooms and many started joining sites not permitted by the law. The laws evolved also to include video poker and cash games, while by 2010 fixed-odds games were legalised. Regulated poker sites offering licensed poker are ring-fenced in Italy, which eliminates player pools outside the country. The tax rate in Italy is higher than most other jurisdictions at 20%, and currently, the largest poker site in Italy is PokerStars, while others in possession of an Italian licensed includes bwinparty, Boss Media, Playtech and Microgaming.

UK Gambling Commission Regulating Gaming in the UK

The UK was not only the first to legalise online gambling, but the UKGC is also known as the most involved when it comes to fair play, players safety and protection of vulnerable individuals. The Gambling Commission of Great Brittan remains the most active in making gambling safer and fairer. The Commission exists to safeguard the public and to ensure all online gambling takes place in a safe, secure and fair environment and aims to keep a balance between the enjoyments of gambling versus the risk involved.

After an extensive survey in 2017 showed signs that the trust the UK public has in gambling is declining. In a survey done in 2008, 49% of the public believed that gambling was fair and could be trusted, in 2017 this percentage declined to 34%. The latest survey also unveiled that 69% believes that gambling holds a treat towards family life and 78% of UK individuals feel that there are too many gambling opportunities.

The United Kingdom Gambling Commission recently published its strategy for 2018 to 2021, priorities include:

  • Improving the way, the UKGC regulate
  • Optimise the returns from lotteries invested towards good causes
  • Raise the gambling market standards
  • Prevent harm in the gambling market towards the public and consumers
  • Protect consumer interests

Currently the number of Britain citizens employed by the gambling industry is 106,678 and according to March 2017 the number of betting shops, now standing at 8,788, decreased by 1.4% from March 2016, during the same period bingo premises now totalling 583 premises, decreased by 5.7% and land-based casinos remained unchanged at 148 casinos.

The total net spent by British citizens on gambling is £13.8-billion of which 31% spent online. Of the 31% spend online 51% was spent on slots, 43% on betting and 27% on casinos games. (http://www.gamblingcommission.gov.uk/PDF/Strategy-2018-2021.pdf)

The United States Online Gambling Regulations

In the United States, online gambling is regulated at state level. There are three states in which online casino games and online poker are legal, these include New Jersey, Nevada and Delaware, although each of these has its own distinctive approach to the online gambling industry. Although there are a few similarities between these three states, all three agree that the legal age for gambling is 21 years-of-age and that Geolocation software should indicate the device used to access the site, which ensures players outside of the jurisdictions cannot gain access. All three of the states mentioned above regulate and taxes on gambling activities, although the tax rates differ.

Nevada Online Sportsbetting and Online Poker

The first state to legalise online gambling was Nevada in 2010, and it began with online sportsbetting. Both websites and mobile apps are allowed and legalised to accept betting form persons 21 years or older. At first, the only entrants into the Nevada online market was Station Casinos, CG Technologies, and Williams Hill.

By the 30th of April 2013 online poker was added via the opening of Ultimate Poker which started offering online poker from September of the same year. In February 2014, Real Gaming also began online poker operations in Nevada, while by November 2014 Ultimate poker closed, as did Real Gaming in August 2016 thereby leaving the monopoly in the hands of WSOP.

Nevada and Delaware by February 2014 entered into a poker liquidity agreement, and by March the WSOP became connected to the lottery poker network in Delaware and by May 2018 New Jersey also joined the network. When it comes to state-regulated online gambling, only online poker and online sports betting is regulated and can be enjoyed either on mobile devices or the internet, casinos can offer mobile games within their premises. The Nevada Gaming Control Board regulates all forms of gambling including land-based or online and applies a 6.75% tax rate.

Online Casinos and Online Poker Regulations in Delaware

The second US state to regulate online gambling was Delaware and by the 1st of November 2013 casino games were made live, one week later the launch of the state’s internet poker network took place. Online gambling is regulated by the Delaware Lottery, and when it comes to online games, both casino games and poker is allowed, which includes video poker, slots, and table game such as roulette and blackjack.

While both mobile and online games are permitted, the software has limitations to specific game selections, including video poker and a limited number of slots. Due to Delaware not being able to  generate annual revenue that exceeds $3 million, the tax rate is effectively 100%. Should the industry manage to surpass $3 million, the tax rate will be decreased to 45%.

Online Poker and Online Casino Regulations in New Jersey

The third US online gambling market that was regulated was New Jersey, permitting online casino games as well as online poker. On land-based casino licenses casinos in Atlantic City can offer as many as five brands, while the casinos in New Jersey have partnered with several software developers to power casino and poker. Party Poker and Borgata both offer a poker network. 888 and WSOP partnered to offer another, and by 2016 Atlantic City paired with Resorts. Casino brands focused towards the online casinos market in New Jersey includes 888, Betfair, Harrah’s, Mohegan Sun, Golden Nugget, Virgin, Tropicana, and Party.

The state’s gambling industry is regulated by the Gaming Enforcement Division of New Jersey Gaming, which also regulates the eight casinos in Atlantic City. The Casino Reinvestment Development Authority tax is 2.5% while the tax rate of New Jersey is 15%.

The United States Online Gambling Laws

In the United States, online gambling is complicated due to the intersection of the federal and state, while key federal laws relating to online gambling discussion include PASPA, The Wire Act as well as the Unlawful Internet Gambling Enforcement Act.

There is a huge difference when it comes to signing up with a licensed online casino versus an unlicensed casino, gambling commission and authorities have the interest of players at heart and ensure fairness and player safety in a regulated, secure online environment

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