The world of gambling is exciting and multifaceted. In order to enter it, you need to understand how this sphere is regulated in different countries of the world. Since gambling is a very controversial industry, the benefits and harms of its legalization are still being debated. As a result, we see very different attitudes towards online casinos, which are reflected in legislation.
In some jurisdictions, virtual gambling is strictly prohibited, in others, it is not regulated or is permitted under certain conditions. However, plenty of countries have long realized the potential of the industry and are happy to license online casinos, replenishing their budgets from taxes paid by operators.
Continue reading to understand the concept of iGaming regulations, learn why it is important to regulate and license online casinos, and familiarize yourself with the current gambling laws in a number of countries.
Definition of gaming regulation
What is iGaming regulation? This is the totality of all the rules and laws relating to gambling in the country. Typically, the development and enforcement of these rules is the responsibility of a dedicated regulatory body. Often, its employees are also involved in issuing iGaming licenses to new casino operators.
Today, more and more new countries are opening their doors to online gambling and introducing gaming regulations. Legalization and control of the industry provide many benefits, including reducing the number of financial crimes, replenishing the budget and ensuring the security of data and money for citizens who gamble. Let’s talk about this in detail.
The role of gambling regulation
So, what are the main pros of gambling regulation?
Fraud/money-laundering prevention and ensuring fair play
When gambling is legal, it becomes much more difficult to commit crimes in this industry. This is due to strict requirements for operators that ensure compliance with quality and safety standards. Thus, anyone who wants to offer iGaming services to clients is obliged to implement measures to combat money laundering and fraud.
It is also worth mentioning that in order to obtain a license, operators are required to provide RNG certificates, which are a guarantee of fair play.
Economic benefit for states
Instead of banning gaming and thereby proliferating underground casinos, governments can legalize the industry and begin collecting taxes from operators. Good examples in this sense are the UK, Malta and Gibraltar. The gambling sector has been bringing a lot of money into the treasuries of these states for many years.
Removing stigma from the gambling industry
Unfortunately, the high risk of financial crime, as well as the potential for gambling addiction, spoil the reputation of the iGaming industry. However, most of the dangers are associated with illegal gambling. At the same time, the presence of related regulations protects players from fraud, loss of deposits and leakage of personal data. Moreover, licensing authorities require operators to completely prohibit minors and potentially vulnerable persons from gambling, and due to mandatory customer identification, the likelihood of such customers being missed is extremely low. This is how gambling regulations can demonstrate that iGaming can be safe and fair and therefore improve the reputation of the industry in general.
Market overview: gambling regulation options
There are black, grey and white gambling markets. If everything is clear with white and black, then grey ones raise many questions. Let’s look at what exactly this classification means, which countries have chosen each model, and which markets are the best choice for new iGaming operators who are going to launch a casino.
- White (or regulated) markets
This type includes countries where virtual gambling is completely controlled by the state and is subject to industry legislation. In these jurisdictions, there are specially established regulators who oversee the development of the sphere and compliance with iGaming rules, as well as issue licenses to new operators. As a rule, operating in these markets is only possible with a local permit.
Most European countries such as the UK, Malta, France, Portugal, Spain and Italy fall under the definition of white markets. In these jurisdictions, gambling is legal and very clearly regulated. However, due to high licensing costs and strict requirements, these jurisdictions are generally not an affordable option for new operators.
- Black markets
There are a number of countries where online gambling is completely prohibited, and participation in it is punishable by law. There are many Muslim (UAE, Afghanistan, Pakistan), Asian (Singapore, China, Indonesia) and North African (Algeria) countries in this category. Reasons for banning iGaming vary, but most often, they relate to religion, culture, or attempts to reduce financial crime.
It is worth noting that some countries issue licenses to online operators, but prohibit them from providing services to local residents. This is done, for example, in Costa Rica, where it is very easy to obtain permission to open a virtual casino.
- Grey (or unregulated markets) markets
Countries from this category do not prohibit iGaming, but also do not officially allow it, and, as a result, do not have industry legislation and licensing rules. Another option is jurisdictions with very weak, vague and poorly functioning gambling regulations. Often, the second group includes small and/or poor countries that would like to become a gaming hub, but for various reasons can not regulate the industry or can not afford to establish and maintain a regulatory body.
Grey markets often attract remote operators and it is not unreasonable. To work in these countries, you do not need to obtain local licenses, and due to the absence of legislation, there are no fees or taxes. However, operating in the “grey zone” has a huge disadvantage – the instability of legislation. The governments of these jurisdictions are often fickle in their opinions and decisions, and, therefore, it is difficult to talk about stability and long-term planning for the gambling business. Grey markets today include, for example, Macau, Bangladesh, Taiwan and India.
Conclusion
An operator wishing to launch a virtual casino must first understand which markets he plans to enter. The best solution seems to be to choose the white segment, obtain a license from one of the countries with detailed gambling regulations and work in a completely legal zone. However, this option can be prohibitively expensive for new entrepreneurs. In this case, you could consider obtaining an offshore license and operating in jurisdictions with weak or no gambling laws. To choose the right locations and not get burned by ignorance of the laws, contact LicensingAid specialists. Our team has many years of experience in launching iGaming projects and will be able to choose the best option specifically for you.
