How Online Gambling is Regulated

Many punters that gamble on the internet rarely take the time to understand how the online gambling industry is controlled and regulated. You wouldn’t have to worry about regulation in a perfect world, as all gambling operators would be vigilant and honest, and the industry would be regulated uniformly across jurisdictions. But as we do not live in an ideal world, every online punter needs to be aware of and understand the regulations before gambling online.

Ziv Chen
Jun 07 2021

In this guide, our team of legal experts at Playright.co.uk covers all the essential parts of online gambling regulation that you need to be aware of. We explain the different types of regulations and go into detail on governing bodies and licensing in specific jurisdictions. Our regulation experts also look at the requirements and processes required by online gambling operators to get a license. So you can learn and understand how online gambling is regulated in your country. Also, we constantly update this Playright.co.uk guide with the latest news and developments on online gambling regulations from around the world. So bookmark this page and visit us regularly to stay updated on the latest gambling regulations news and status. 

Importance of Online Gambling Regulation

When you gamble online, you entrust your money and personal details in the hands of “faceless” third parties. Millions of people worldwide deposit money in different gambling sites, but very few people know about the betting companies or individuals behind those websites. Ultimately, this is the main reason why regulating the online gambling industry is essential. Punters have the right to know that they can safely deposit their money and that they are dealing with trustworthy betting companies. 

Online gambling regulation main objectives are to ensure that:

  • Gambling websites are operated lawfully.
  • Operators offer punters a fair, responsible, and safe gambling environment. 
  • Sites are free from fraud, breaches of security, and money laundering.  

Therefore, all regulated and licensed gambling operators must comply with the laws of their respective jurisdiction and are also expected to engage in ethical and fair play practices vigilantly. One of the most important requirements of online gambling regulation is to implement strict measures against underage gambling. Moreover, adverts from online gambling sites should be honest and free from misleading information. 

Player Funds

Another one of the most important areas that regulation attends to is the security and handling of player funds. Punters should feel like they have a fair chance to win their bets and should be eligible to receive their winnings within a realistic timeframe. 

Therefore online gambling regulators make sure that player funds are held in separate accounts. This way, winnings are always available to be paid out, and punters can receive their withdrawals within stated times that are clearly listed and transparent like all other terms and conditions. 

Beyond understanding online gambling regulations, it is also essential to use only licensed sites that are compliant with regulations and laws. Therefore we only recommend on Playright.co.uk sites that are fully licensed by the UKGC, MGA, or your respective jurisdiction. But before signing up for an online gambling site, you should always check the operator’s credentials that are usually listed at the bottom of the homepage. 

Online Gambling Jurisdictions

To fully understand how regulation in the gambling industry works, you need to be clear on the concept of online gambling jurisdictions. These refer to government agencies empowered by local authorities to regulate and enforce local gambling laws. With these laws in place, gambling operators can apply for a license and offer their services with full legal backing.

International Online Gambling Jurisdictions

While some countries exclusively regulate their gambling activities, others rely on international regulators that oversee many countries. Be it local or international, there many online gambling jurisdictions worldwide. Some are well respected and draw most operators and players, while others are less reputable. Here is a closer look at some of the most popular ones, starting with the international online gambling regulators.   

Malta Gaming Authority (MGA)  mga logo

Malta has one of the most popular online gambling licensing authorities in Europe. The island is situated in the Mediterranean, and it’s also a member of the European Union. The nation began regulating online betting in 2000 through the Public Lotto Ordinance. It then joined the European Union in 2004, making it the first EU member to regulate online betting.
Today, all types of gaming in Malta are governed by the MGA under the Remote Gaming Regulations of 2004. Due to its stringent regulations for gambling websites, Malta is perceived as one of the trusted licensing authorities globally.  

Gibraltar Gambling Commission (GGC)  Gibraltar_Regulatory_Authority_logo

The (GGC) is one of the departments of the Government of Gibraltar that handles remote gambling. It oversees licensing and regulation of online gambling businesses and online casinos operating under the jurisdiction. If GGC licenses an operator, it can offer online gambling services right from Gibraltar to other parts of the world where online gambling is legal. Gibraltar is also considered one of the most respected online gambling jurisdictions globally, with licensees including 888 Holdings, Bet Victor, Bet365, and more leading online gambling brands. 

Curacao Gambling Control Board (GCB)  Curacao Gambling Control Board

Also known as Netherlands Antilles, Curacao is an island situated in the Dutch Caribbean. The GCB is among the longest-standing online gambling regulators and has been one of the largest governing bodies in the past. Gambling operators that obtain the Curacao license have to go through some initial checks and periodical audits by Curacao authorities. This jurisdiction is considered very lenient. 

The biggest disadvantage of having an online gambling license from Curacao is that it doesn’t bear much meaning. Almost anyone interested in setting up a gambling website can easily go past the initial background checks phase. As long as you have the compulsory funds and a casino, you’re good to go.

Isle of Man  Isle of Man

The Isle of Man is a British Crown Dependency situated on an island in the Irish Sea. It issued its first online gambling license in 2001. The gambling licensing authority is highly respected, and thus, any gambling website with its license is regarded as safe and trustworthy. Therefore, people can be confident to wager their money on these sites. The process of obtaining an Isle of Man gambling license is efficient and straightforward. But unlike other online gambling licenses that are cost-effective and efficient, a license from the Isle of Man bears the right amount of weight concerning safety and legitimacy.

In fact, the Isle of Man is one among the few licenses that have been whitelisted by the United Kingdom’s Gambling Commission. It means that the UK government is pleased and satisfied with the depth and standards of investigation that takes place while issuing licenses to online gambling sites. Companies with licenses from the Isle of Man can advertise and offer their online gambling services to UK citizens.

Alderney  Alderney

Alderney is an island situated on the English Channel, approximately 12 kilometers off the coast of France. It’s the home to the highly respected Alderney Gaming Control Commission (GCC), established in 2000, and provides licenses and regulated some respected online gambling players in the industry. 

Alderney is another licensing authority that the UK’s Gambling Commission whitelists, meaning its operators are allowed to advertise their services in the UK. It is also authorized to display its adverts in the UK. The mere fact that the UK’s Gambling Commission trusts is enough evidence that it’s a legitimate regulator.  

Local Online Gambling Jurisdictions

While some countries allow online gambling companies to acquire their licenses from international jurisdictions, others have their local gambling laws and regulations. Below are a few of the prominent examples of countries that regulated their own remote gambling.  

United States  Flag-United-States-of-America

Both land-based and online gambling in the U.S. has been undergoing tectonic shifts in recent years. In Online gambling was not regulated, nor banned until 2006 when the Unlawful Internet Gambling Act of 2006 (UIGEA) prohibited operators from ‘knowingly accepting payments in connection with a person participating in a bet or wager using the internet.’ This ban put a stop to a thriving online casino, sportsbook and poker industry that was powered by offshore operators. 

Another law that changed the face of US gambling was the Professional and Armature Sports Protection Act of 1992 (PAPSA) that in essence granted Nevada with a monopoly on sports betting. It all changed dramatically in May, 2018 when the Supreme Court accepted New Jersey’s appeal and ruled that PAPSA in unconstitutional, leaving the legislation of sports betting to each state. This caused in influx of states that started legalizing sports betting and remote gambling. Following are the updates of key states.

New Jersey: The pioneer state and first to regulate land-based casinos, sportsbooks and poker. The first online casinos and sportsbooks were launched in 2013 and 2018, respectively.

Pennsylvania: The first regulated mobile casino and sportsbooks launched in 2019.

Michigan: Legalized online gambling in December 2019, with the first online casinos, sportsbooks and poker sites going live in January 2021.

Delaware: One of the earliest states to pass legislation, Delaware launched its online casinos on centralized platform in 2013.

West Virginia: West Virginal launched online casinos its first online sportsbook through Hollywood Casino in 2018.

Colorado: The Centennial State launched online sports betting and casinos in 2020, after a public vote that called to legalize gambling in the state passed in 2019.

Illinois: Illinois legalized online sports betting and gambling in June 2019, initially included an in-person registration clause that was lifted in January 2021.

Iowa: Sports betting has been legal in Iowa since the Hawkeye State legalized it in 2019. 

Indiana: In 2019, Indiana legislature passed Act H1015 which expanded land-based casino gambling to live and online sports betting. 

Virginia: FanDuel and DraftKings sportsbooks were the first to launch in the Old Dominion State in January 2021. Since then, more world-class operators such as BetMGM, William Hill and others joined the market. 

Tennessee: The first sports betting sites to launch in Tennessee opened their doors on November, 2020. It includes leading US brands like DraftKings, FanDuel, William Hill and others.

Washington DC: The D.C. lottery has launched its GameBetDC Platform in June 2020. It is the first sports betting site in the self-governing city, and is expected to be followed regulation that will bring in more operators.

Many other states are on currently in various stages of legalizing sports betting. These include New York, Maryland, Florida, Arizona, Connecticut, Washington and others.

Canada  Canada Flag

Things are somewhat different north of the border in Canada. But even though the central government has passed specific gaming legislation, each respective province can regulate gambling differently in its region. Unlike the US, where overseas websites are illegal, they still fall within a grey area in Canada. 

Australia  Australia-Flag

Companies operating gambling websites down under operate in a complex legal environment. In 2001, Australia signed off the Interactive Gambling Act (IGA), which entailed a long list of requirements that operators within the region should meet. The long list of requirements is confusing and even contradictory at times, and many requirements need to be met by operators. 

The IGA prohibits offshore and local online operators from offering certain forms of gambling to Australians. However, one big exception went to sports and racing betting. It is only allowed as long as all wagers are closed before the beginning of any race or match. Several big players in the gaming industry operate out of the country and offer online sports betting for Australians.

Nevertheless, websites based in Australia can offer other wagering games to non-Aussies across the globe. But there is a list of selected countries that Australian gambling sites cannot operate in, such as countries with similar laws preventing Australians from using their gambling services.

Australian citizens bear no responsibility to abide by the IGA rules. On the contrary, it’s the operator’s responsibility to make sure that they block Aussies from accessing any other types of gambling besides sports betting. This means that if you’re an Australian gambler, you don’t have to worry about choosing the best website to wager on. With the regulations in place, you simply need to pick any site that is safe and secure.

UK  Flag_of_the_United_Kingdom.svg

2005 Gambling Act

The UK gaming and betting industry was transformed by the 2005 Gambling Act, which exclusively regulates gambling within the United Kingdom and its territories. Beyond licensing operators and protecting punters, the bill also regulates how gambling is advertised in the UK. For example, it includes restrictions on international operators that advertise in sporting events (e.g. signboards in football pitches) based on the location of their customer base, hours allowed to advertise gambling on TV, no use of cartoons or adverts that appeal to children and more. 

UK Gambling Commission (UKGC)UK-Gambling-Commission

The UKGC was established as part of the 2005 Gambling Act. It is the regulating and licensing body of gambling in the country. The UKGC regulates all forms of gambling, gaming, bingo, and lottery in Britain, across both online and land-based conventional forms of gaming. Spread betting is, however, one of the only forms of betting that is not regulated by the Gambling Commission. Instead, this is regulated by the Financial Conduct Authority.

The primary role of the UKGC is to make sure that the objectives set by the Gambling Act 2005 are fulfilled. It is the responsibility of the commission to make sure that all types of gambling are offered in a safe and non-biased manner while at the same time protecting children and vulnerable adults. 

Germany  Germany

The current gambling legislation in Germany presents a mix of federal legislation and laws passed by local states. Some states allow specific forms of betting and gaming, whilst other states prohibit those. Until 2008, Germany did not regulate online gambling, and the laws at the time did not refer to internet gambling in any way. However, this changed after the Interstate Treaty on Gambling (ISTG) was signed off in Germany in 2008. As a result, all forms of online betting were banned except for state-owned companies’ horse racing and sports betting.

All 16 local German states joined the treaty. Later on, Schleswig-Holstein chose not to participate in 2012 and went ahead to license approximately three dozen operators, including 888 and PokerStars. But this initiative was short-lived and was revoked a year later when a new governor took office.

Currently, online gambling is illegal throughout Germany except for a few operators who have acquired licenses to operate in Schleswig-Holstein. German lawmakers have set July 1st, 2021 as a target date to complete online gambling legislation and unite all states under the ISTG. The new regulations are expected to cover advertising, player funds, slot machine betting limits, sports betting and more. 

 

France   Flag-of-France

France legalized online gambling in 2010. It is supervised by the ARJEL (“Regulatory Authority for Online Games”). Although officially all forms of gambling are legal and regulated in France, excessive regulation and high taxes make it challenging for licensed gaming websites to stay in business for long. About half of the gaming websites that had gained their licenses in 2010 have opted out of the market. Additionally, the high taxes on sports bets and poker pots also affect players. This has caused many French bettors to turn to unlicensed, foreign gambling sites that operate illegally in the country. 

Sweden  Flag_of_Sweden

All forms of online gambling in Sweden are regulated by the Swedish Gambling Authority, where the regulation is divided into several segments: 

  • Gaming: including casino, poker and bingo.
  • Betting: including sports betting, horse race betting, fantasy betting.
  • Lotteries
  • Social games
  • Skill games

The Swedish Gambling Authority also regulates remote gambling. Although the Swedish online gambling market has been active and flourishing for many years, the legal and operational landscape weren’t as straight forward until recently. Back in 2002, two large Swedish corporations were allowed to open online gambling sites in the country: Svenska Spel and Trav Och. This resulted in Svenska Spel becoming sort of a monopoly in effect and controlling most forms of gambling in Sweden, including control over key areas of licensing across land-based and online gambling. 

Although the only official, state-licensed gaming website was run by Svenska Spel, international operators were also present in the country and gamblers were not obliged to limit themselves to this single option.

However, power shifted due to pressure from the European Commission to open the market to competition from foreign investors. This resulted in the new Swedish Gambling Act that came into effect in January 1, 2019. The act regulates operator licenses that are granted for a maximum of five years, and are available to both international and local companies that comply with the Swedish Gambling Authority’s standards. The new act introduced to the Swedish market a wide array of online gambling sites and apps that pay taxes to the state, and comply with all Swedish regulations of player safety, betting limits and social responsibility. The 2019 Swedish Gambling Act also made it explicitly illegal for unlicensed sites to operate in the country. 

Holland  Flag-Netherlands

Until recently, all Dutch gambling market was regulated by an archaic legislation that dates back to 1964. This served as a legal framework for land-based gambling and included the prohibition of online and digital gambling altogether. However, things have changed recently, with Holland legislators taking steps towards legalizing online gambling in a bid to become one of the largest regulated iGaming markets in Europe. 

The Kansspelautoriteit (KSA) is Netherland’s Gambling Authority that was established in April 1, 2012 as an independent government agency that oversees all gambling activities in the country. It was founded with three tasks: 

  • Keep gamblers informed and aware.
  • Supervise and prevent criminal, money laundering and other illegal practices in gambling.
  • Protect gamblers, treat gambling addiction and promote safe gambling. 

The brick and mortar gambling market in the Netherlands is regulated by a state monopoly that includes 14 land-based casinos operated by Holland Casino. There is also a state lottery, regulated charity lotteries, a horse racing monopoly and a network of private, regulated operators. These operate over 42,000 slot machines in bars, restaurants and arcades across the country. 

In February 19, 2019, the Dutch Senate approved a remote gambling draft legal bill. Now it is possible for gambling operators to apply for licenses under the Remote Gambling Act that is coming into force in 2021. Holland’s regulated online and mobile gambling market is expected to launch 6 months after the law came into effect.  

 

Reviewer Photo
Written by: Ziv Chen
Jun 07 2021
With over two decades of work experience in the online gaming industry, Ziv has been covering topics such as casino table games, slots, poker and sports betting. He also loves to write about American sports, betting odds and game predictions. A self-proclaimed struggling artist, Ziv finds his creativity constantly torn between his two biggest passions: American football and world football (soccer).