The system of online gambling legislation is quite a complicated thing. While it is quite easy with land-based gambling, the same industry on the Internet is the subject of different nuances, continually changing laws, and, in some countries, of a top one question of the close urgent consideration. The brick-and-mortar casinos are either prohibited or not, or, as an alternative, are legitimate in certain areas, and the taxation of such a business is a precise thing accurately indicated in the regulations of certain regions.
When it comes to online activity, it turns out that the rules and conditions of online casinos, slot machines sites, and sports betting platforms do not just vary from country to country, but are not even elaborated till the end in many jurisdictions. So how to learn the ropes and make it clear how to start your business in the countries where online playing is legal and regulated by the government? Let’s try to sort it out.
Countries that prohibit online gambling activities
There is a range of countries around the world that released laws connected with a total ban of any online playing services within the country. The ban is concerned all types of online casino games, online sports betting, horse racing stakes — in short, all forms of gambling on the Internet is punished by the law.
The interesting fact is that many countries that prohibit gaming websites have a regulated and legal onsite casino market. Actually, such an approach is quite understandable: it is much harder to control the performance of the online platforms, including the accurate payment of the income taxes and providing the customers with a fair gaming service. Such countries do not issue licenses and determine using offshore websites with the licenses of different jurisdictions illegal as well.
Among the countries that refuse to regulate gambling on the Internet and transferred it into the shadowy zone totally are Japan, Russia, Cyprus, Brazilia, Cayman Islands, New Zealand. The tricky thing about the online gambling restrictions in this list is that every state treats the act of breaking the online gaming law in its own way.
For instance, most online casinos in Russia are blocked by Internet providers; however, if a user will be caught using offshore operations with the help of multiple mirror sites or proxy servers, they will not be incurred a penalty unless their wages from a casino or a sports betting site are the main source of their income. In other countries, there is a severe punishment laid upon casino users, but surprisingly the online gaming platforms are totally accessible from any browser and IP address. This might be connected with the limited technical abilities of certain states, so the government warn the players of the consequences but do not always protect them from seduction.
Obviously, the illegal casino business is usually flourishing in such areas. There are plenty of methods invented by the artful entrepreneurs of how to game the system and stay on the edge of being legal. For example, Japanese gambling site owners do not advertise their games like real money slots: people are offered to win some souvenirs instead of money, but then they are offered to change them for real cash. An interesting fact: even though online gambling is banned in Japan, advertising the services of online and onsite casinos is legal; if you check the Google Ads terms and conditions block, you will also see that publishing the advertising campaigns of gambling sites are allowed and will be accepted by Google unless the campaign is created against any other general rules.
Many countries, like Germany, have started to reconsider such a situation with the online gambling markets: it became evident that people still use the gambling sites, suffer from ludomania, and what is even more important for the government, send enormous amounts of funds to the offshore businesses. Taking control of the online betting and casino situation has been regarded as a wiser decision recently in such countries as already mentioned Germany, the United States of America, Canada.
Countries that force the operators to hold a local internet gambling license
If you want to lead a casino business under the jurisdiction of most European countries, the United Kingdom, Sri Lanka, Antigua and Barbuda, Panama, Reunion, Georgia, Ethiopia, and several other countries, you can do this perfectly legal under one condition: you have to become an official representative of the local gambling market by obtaining a license from the corresponding legal organ and follow the taxation rules of the chosen jurisdiction.
If a website already holds a license from another country, it will still be obliged to apply for a separate licensing procedure; otherwise, the web resource will be under a threat of blocking.
There is still a range of limitations concerning the gambling market in this group of countries. For instance, it is illegal to publish any advertisement of the gambling platforms on the Internet and offline in Great Britain; the exceptions are the ads of the informational services that do not provide the users with any gaming products, the lotteries, and bingos. The Italian legislation system does not accept any forms of advertising of online gambling sites except the lotteries sponsored by the governmental bodies.
Countries accepting offshore operators and licensing local companies
Another form of a gambling act exists in the group of the European Union countries, like Greece, Monaco, Switzerland, Sweden, Portugal, Slovenia, Lithuania, Montenegro; in the Oceanian Fidji and the Vanuatu Republic; in some parts of Africa, including Seychelle islands.
In fact, in this group, the authorities properly regulate the gambling activity of the operators and players only in terms of the local sites. For them, it is a must to go through the licensing procedures and receive a confirmation in accordance with a local gambling act. Many online poker rooms, casinos, and other resources are not controlled as they are registered in foreign territories and are not the subject of the local laws.
Countries with no exact regulating of the gaming industry
The biggest group of the world countries does not have any regulations on the gambling industry at all. They do not have any laws against online gaming services but no legal status is also assumed. This is a so-called grey area of the business that can not be called legitimate but it is not a criminal section, too.
Organizing a business or getting involved in the gaming process online in such countries is more productive of fraudulence and scam. This is more actual for the countries of South America, like Argentina, Peru, Bolivia, partly Africa, North America including Costa Rica, Bahamas, Guatemala, and a couple of the other countries located on different continents. Generally, almost 100 world countries can not regulate gambling at the time being mostly due to lack of the needed instruments.
Illegal gambling consequences for players
Most regions do not apply any serious punishment against people who find ways to circumvent the laws and blocks and enter online casinos for playing real money games or making bets on sports. In most cases, they can become a subject of interest for governmental tax services, in case their revenue from casinos are regular and compile the major part of the total annual income.
However, there is a small list of countries that not only prohibit the betting and casino platforms but also set serious fines upon the players who violate the rules. Among these countries are Cambodia, Cyprus, United Arab Emirates, Poland, North Korea, Singapore.
The owners of the business in the gambling industry should take care of the restricted countries: in case the customers are fined, they may set complaints about the website and also publish a range of deadly reviews, mentioning that the service allowed them to play even though it was prohibited by their country. This may lead to a severe reputational risk of the site and give it a lower rating than the opponents who just block the restricted countries have. Players, at the same time, must be aware of a possibility of such a situation and be careful taking their time for learning their local legislations and laying the responsibility for the consequences upon themselves, as barely a casino would be on the players’ side in case they break their local rules.
In addition, even if the government does not have any pretense towards the player, they can face difficulties with the withdrawals: in case the bank blocks a transaction connected with online gambling, even the top-rated online casinos will not be able to help in this case.
The already mentioned Poland has though some nuances in its law: the financial department is able to issue licenses for the owners of online casinos, but there are only a few of them at the moment; the main requirement is to have a physical office in Poland to legally pursue activities in the Internet segment.
The other countries do not put the responsibility on the players, even if the federal law forbids all kinds of gambling entertainment online. For instance, there is no legal online casino registered in Russia, but the law does not say anything of the possibility to register a company that will perform as a casino provider under an offshore jurisdiction. Forbidding online gaming, the government does not intend to punish the lawbreakers but disclaim any responsibility for any issues for the players from itself.
The latest changes in the world of the online gambling
As was mentioned before, many countries have realized that the approach of ignoring or banning the platforms where people can gamble online is not the most effective method of dealing with this enormously rich and profitable segment of the business as this is harmful to both the economical state of the country and the prosperity of the citizens.
Thus, several brand new regulations have been initiated recently and in some of them, this will become a genuine revolution in the online gambling legal world. Let’s take a closer look at some examples around the world.
The United States of America
When the first gambling sites began to open in 1996, the American government released a total ban of any online casino games and bets on sports and horse racing. To wrestle against Internet gambling, American gambling laws were changed in order to prohibit banks to accept any transactions connected with online casinos, including offshore ones. At that time, most American customers were welcomed to the websites working under the jurisdiction of the Isle of Man, but after a new law, they were forced to leave the market. In general, the law was aimed against money laundering and financial crime. However, the online industry of gambling kept developing and more websites appeared in the US market, so the government had no choice but to reconsider the existing regulations.
Thus, a ban was removed for all online gambling activities except sports betting and allowed each state to make its own decision on the online casinos separately. The first states to legalize online gambling were New Jersey, Nevada, and Delaware, which started licensing the online poker rooms and casinos soon.
The vast majority of states have accepted the new regulations allowing online sports betting and online casinos in 2019 and 2020. Some of them allow only sports stakes at the moment, and the others are preparing to make all forms of gambling legal. The local licensing in some states, though, cost a fortune: for instance, to run an online casino in Illinois will cost 10 000 000 USD which makes the operators opt for the offshore licensing. An important note: to gamble on the legal sites, the player has to physically situated in the same state where the website is registered.
The states who have not already come to the decision on online gambling remain the shadowy zone that allows the foreign companies to lead their business successfully on the territory of the United States. However, not many websites working under offshore jurisdictions welcome US players in order to avoid any litigations.
The websites registered by the official organs of the United States can accept the most familiar payment methods like credit and debit cards released by the Visa and Mastercard systems. However, the licenses provided by the other jurisdictions prevent the users from such payment options and force them to use the other systems, including Bitcoin wallets and the other e-money facilities like Skrill or Neteller. At the moment, the ban of such transactions is valid only for the sports betting site which leads to creating separate websites for the Americans by the popular platforms in order to exclude the betting divisions from them. However, even though the law has changed, Visa and MasterCard are not ready to come back to the American gambling market at the moment, so the operators still receive more funds from the US via American Express wires or through Bitcoins.
Advertising any online gaming activity is prohibited in the USA no matter what the laws of a certain state are.
Online gambling has become more popular than ever during the pandemic times when the citizens were extorted of accepting the lockdown regulations and stay in quarantine at their homes. The situation revealed that more than 10 percent of online gambling lovers suffer from ludomania on different stages or faced unfair gaming issues using illegal websites.
As till the latest time, this sector of business was not properly controlled by the government in Germany, it became not only a problem for the players who were not protected by any gambling laws, but also troubled the reputation of the country in terms of the European Union regulations that do not allow the possibility of not having proper legislation acts in terms of the Internet gaming industry.
Being registered at the websites, regulated by the jurisdictions out of Germany, players are not able to receive any kind of support from any governmental bodies in case their rights are violated. Such a situation led to the reconsideration of the laws and, like in the USA, allowance of creating the own gambling rules for each state of Germany. At the moment, online poker rooms and online casinos are going to be licensed on the local level, and a special controlling gambling commission will be convened to monitor the platforms and solve the issues of the players.
Australia is one of the countries where gambling online as well as in the brick-and-mortar casinos is one the most popular ways of recreation in the world. It especially applies to horse racing and the Australia major racing tournament in Melbourne, but the biggest part of the budget of an average Australian gambler comes to slot machines, Keno games, and lotteries.
After a range of protests against online gambling, the Australian government brought into new regulations that resemble the US ones: the local financial systems could not accept payments intended to fulfill the online casino deposits anymore which lead, again, to the leave of many major marketers. However, the law does not include any mentions of punishment for the Australian players.
To prevent people from getting into trouble gambling, the government initiated a draft plan for a new law that would enable players to self-exclude themselves from the gambling platforms in order to have no possibility of gaming for a chosen period of time.
Even though Canada neighbors with the USA, a country more conservative in terms of online gambling, it allows online gambling in most provinces and lets each province regulate the nuances of the gambling rules including the minimum age of a player or the licensing process. At the moment, there are about 400 online casinos that have an official license from the Canadian authorities and many more companies working under offshore licenses. No player was ever prosecuted for sports betting or playing at an online casino, even during the period of the total ban of online gambling in the country.
The main stumbling block is again the Canadian banking system, which is not so loyal to the customers of even the legal online casinos. Some of the leading respectable banks do not allow transactions connected with gambling activities so websites that want to welcome Canadian players have to take care of more payment methods for the users from this jurisdiction.
The newcomers in the gambling industry usually pay regards to India, which seems a very convenient market to start your own online casino.
First of all, Indian government does not prohibit online gaming activities at all. It is possible to issue a license for opening a local entertaining service, but they also willingly license the offshore operators. In 2016, betting on sports became also legal so generally, this market seems to be very attractive for many operators.
However, the average income of qualified Indian personnel is approximately 200-300 USD, which does not seem much for being able to spend a lot on slots or poker rooms. There is a wealthy domain, too, but this is a minor part of the whole society so it would be a mistake to make them a target of the advertising campaign. On the other hand, the poor workers are willing to earn more without much effort and there is always a chance to find the audience among them, especially keeping in mind that advertising casinos are totally legal in all possible forms.
The Chinese government strictly prohibits all forms of casino gaming — no matter if it is an offline or online service. The exception is Macao — a Chinese Las Vegas, the center of gambling, where hundreds of casinos legally operate and the online casinos are also accessible. However, the casino websites are not the online versions of the brick-and-mortar Macao clubs: only a range of private local companies was licensed to provide the customers with the gaming entertainment and no onsite casino is included in the list. Moreover, the firewalls strictly prevent the citizens who want to use the offshore services from entering foreign websites; in addition, Chinese polity is also preparing the software that will enable them to restrict access via VPN, too. Such a new policy will probably make a great impact on the current situation which is actually an amazing fact: almost 40 percent of all online gamblers come from China.
It is quite obvious that the advertisement of the gambling companies is prohibited; however, the target ads that can be seen in the mobile apps are not controlled by the authorities which are widely used by the companies.
To sum up
As it may become clear from everything described above, online gaming is not really regulated in most countries. Most attempts to make this segment of the enormous industry a subject of strict control turned out to be half measures. This means much for the development of the market for the new operators as at the moment they have a great choice of markets they can use for promoting their casinos online. However, the rules are constantly changing as many countries has begun to reconsider their policies and are trying to regain the control of this profitable and at the same time harmful at some sense area, so it is essential to monitor all brand new laws and regulation of each country or even certain cities and regions before launching any gambling business.
Interesting Related Article: “Impact of Online Betting on the Economy“