Is Online Gambling Legal and Regulated?
Online gambling started out as an unregulated industry. The first step in the process of bringing legitimacy to the industry was the creation of online gaming commissions. Many started in island nations.
These include Malta, Gibraltar, Alderney, Isle of Man, Curacao and Kahnawake.
These jurisdictions are still by and large involved in online casino regulation. But over time, regulation of online gambling, and the development of law surrounding online gambling, has become an area of interest for larger economic powers.
Below is an overview of how online gambling is handled in a variety of major international jurisdictions.
UK online gaming regulation
The United Kingdom was the first country to address this situation. The UK Gambling Commission was created through the Gaming Act of 2005 and oversees remote gaming. This combined all gaming in the United Kingdom under one regulator. Online gaming under the jurisdiction of the Gambling Commission includes online poker, casinos, sports betting, bingo and keno.
The UK Gambling Commission created a tax on internet gaming but it had a loophole. Only companies located in the United Kingdom were required to be licensed. This motivated companies that once calling UK home to migrate to tax havens.
These offshore companies were not just evading taxes, but there were also player disputes that UK regulators could not intervene with due to a lack of jurisdiction. These two issues pushed the country to revisit its online gaming licensing process.
Any company that now operates in the UK must be licensed by the Gambling Commission. There is 15 percent tax on all gaming win, known as a point of consumption tax. The Gambling Commission also has jurisdiction in gaming disputes.
This caused some remote gaming companies to leave the market. Others consolidated brands as each required licensing under the Act.
Canada online gaming regulation
Canada is largely an unregulated country in terms of online gaming. Gaming regulations are up to the individual province. Provincial lotteries regulate online gaming in all jurisdictions where it is regulated. Poker, sports parlays and casino games are operated under a license where it is specifically approved.
Remote games are licensed under the lotteries in British Columbia, Manitoba, Ontario and Quebec.
British Columbia and Manitoba operate under the PlayNow brand. Ontario’s site is PlayOLG. Quebec’s is Espacejeux. These are the only sites operated and regulated by Canada governments.
Boss Media software is used by these lotteries. The poker sites between the lotteries are networked.
There are more than 100 other sites that accept Canadians. These are not licensed and there is little recourse if there is a dispute.
France online gambling
Online gambling in France is regulated by the Autorité de régulation des jeux en ligne. This translates into English as the regulatory authority for online games. It is typically referred to by the acronym ARJEL. It was created by the French Gambling Act in 2010.
ARJEL regulated all forms of online gambling. This includes poker, casino games and sports betting.
There are multiple criticisms of ARJEL. The tax rate is 44 percent. This is the highest of any country in the world. Only the tiny US state of Delaware has a higher rate, which is 45 percent, but 100 percent up to the $3 million in annual revenue.
This high tax rate is a burden on operators. This cuts into the marketing budgets. This is one reason there are virtually no affiliate deals in the French online gaming sector.
Another complaint by operators is that online poker in ring-fenced. Poker players in France may only play at sites that operate within the country’s borders. There is no access to international player pools on legal French sites. This hurts liquidity. It limits the game availability as well as the size of tournament prize pools.
Winamax is the largest operator licensed by ARJEL. Others include PokerStars, bwin.party and Playtech. These and other companies licensed by ARJEL will use a .fr domain.
Spain online gambling regulation
The Spanish Gambling Act nationalized regulation of the online gaming industry in Spain. It created uniform framework between all regions of the country.
Online poker, casinos and sports betting are regulated by a central authority. The tax rate is 25 percent. This is more reasonable than the 44 percent demanded in neighboring France, but it is still historically high compared to most other countries.
In addition to the high tax rate, online poker players receive a poor deal. The tax rate forces Spain’s regulated online poker companies to charge a higher rake than sites in other countries. Another issue is that Spanish online poker does not share liquidity with other countries. All Spain poker sites are ring-fenced within the country.
PokerStars.es is the largest poker site in Spain. Other Spanish operators include 888, Playtech, bwin.party and Boss Media. Licensed sites in Spain will use the .es domain extension.
Italy online gambling regulation
Italy is another European country that strictly regulates its online gambling industry. Italy originally tried to block and blacklist companies from other EU nations that accepted Italian players. The EU Commission tossed out the blacklist and demanded Italy open its country to all companies licensed in the European Union.
Amendments to the Italian online gambling laws were made in 2009. The new regulations went live in 2010. This permitted companies outside Italy to receive an interactive gaming license. Games included poker, casinos and sports betting.
The first stage of online poker only permitted tournaments. This hurt popularity and drove players to underground sites. Cash games were later added to the available list of games. Licensed Italian poker sites are ring-fenced, meaning these platforms do not have access to player pools outside of Italy.
The tax rate is 20 percent in Italy. This is lower than other ring-fenced countries, but still higher than most jurisdictions.
PokerStars is the largest poker site in Italy. Other interactive gaming providers that hold an Italian license include Playtech, Microgame, Boss Media and bwin.party.
Online gambling regulation in the United States
Online poker and casino games are legal in three states. Delaware, Nevada and New Jersey each take a unique approach to its interactive gaming industry.
There are many similarities between the three states. Each requires players to be at least 21 years of age. Geolocation software pinpoints the device being used to log into the site. This ensures that players outside the jurisdiction cannot gain access. Each state regulates and taxes the activity.
There are also several differences. The tax rates differ between the states. Delaware uses the state lottery as the hub of the gaming. The other two states license outside companies. The games are also different between the jurisdictions.
Nevada online poker and sports betting
Nevada was the first state to legalize and regulate online gambling. It all started with online sports betting in 2010. Mobile apps and websites are permitted to accept wagers from anyone 21 years of age or older in Nevada at the time of initiating the action. CG Technologies, Leroy’s (now William Hill) and Station Casinos were all early entrants into that market.
Online poker was the next step for Nevada’s online gaming industry. It started on April 30, 2013 with the launch of Ultimate Poker. WSOP.com entered the market on September 17, 2013.
Real Gaming entered the Nevada online poker market in February 2014. Ultimate Poker shuttered in November 2014. Real Gaming struggled to draw a single game most hours of the day and folded in August 2016. WSOP.com now has a monopoly in Nevada.
Delaware and Nevada entered into a poker liquidity sharing agreement in February 2014. In March 2015, this went live. WSOP.com is the Nevada platform for this network. It connects to the Delaware Lottery’s poker network. New Jersey joined this network in May 2018.
Online poker and sports betting are the only two statewide forms of regulated online gaming. Both are available over the Internet and on mobile devices. Casinos may offer mobile casino games but only within the boundaries of their property.
The Nevada Gaming Control Board regulates online poker and sports betting in Nevada. It is the same gaming regulator that oversees Nevada’s bricks-and-mortar casinos. Nevada’s online poker and sports betting industry pays a tax rate of 6.75 percent.
Delaware online poker and casinos
Delaware was the second state to launch regulated online gaming. Casino games went live on November 1, 2013. The state’s online poker network launched the following week.
The Delaware Lottery regulates its online gaming industry. There are three skins on the platform: Delaware Park, Dover Downs and Harrington Raceway. All three are nearly identical. 888 provides the software for Delaware’s interactive lottery.
In addition to online poker, casino games are permitted. This includes slots, video poker and house-banked table games. The only two table games spread in Delaware at this time are blackjack and roulette. The casino software is limited in its game selection. Online and mobile apps are permitted as platforms. There is one video poker game and about a dozen slot titles bricks-and-mortar casino players will not recognize.
The tax rate for Delaware’s online gaming industry is effectively 100 percent due to its inability to generate more than $3 million in annual revenue. That rate lowers to 45 percent if the industry manages to break the $3 million annual threshold.
New Jersey online poker and casinos
New Jersey was the third state to enter the US regulated online gaming market. It permits online poker and casino games.
Atlantic City casinos are permitted to offer up to five brands on each bricks-and-mortar license. All New Jersey casinos partnered with software providers to power poker networks and casino platforms.
Borgata and Party Poker offer one poker network. WSOP.com and 888 paired for another one. PokerStars launched in 2016 with Resorts as its Atlantic City partner.
There are numerous casino brands in the New Jersey online casino market. These include Harrah’s, Caesars, 888, Tropicana, Virgin, Mohegan Sun, Resorts, Golden Nugget, Betfair, Borgata and Party.
Most platforms offer a unique aspect in terms of game variety. Most offer dozens of slot titles, multiple video poker games, blackjack, roulette, and a number of house-banked card games. Websites and mobile apps are acceptable platforms for New Jersey online gaming.
The New Jersey Division of Gaming Enforcement regulates the state’s interactive gaming industry. This is the same regulator that licenses Atlantic City’s eight casinos. The tax rate in New Jersey is 15 percent plus 2.5 percent to the state’s Casino Reinvestment Development Authority.
US Federal law regarding online gambling
Gambling law in the United States is an incredibly complicated matter, thanks in part to the awkward intersection of state and federal law on the issue.
Below are some of the key federal laws that are often invoked in discussions related to online gambling; click on any to learn more about the law:
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