The law and online gambling

US Gambling

In the United States of America (USA) online gambling is illegal in certain areas although that doesn’t stop them from being the most ‘creative’ provider of online casino players. A 1961 law (“The Wire Act”) that forbids interstate telephone betting should of course theoretically apply to the Internet, but only around 19% of US Internet gamblers in a 2006 poll conducted by the American Gaming Association (AGA) thought that online gambling was illegal. That Act has never been enforced for Internet betting. There is an element of letting the individual States decide rather than a federal enforcement, but in 2006 the US senate passed the “Unlawful Internet Gambling Enforcement Act” (UIGEA) which has had a major effect on gamblers in the USA. Not only have a number of the safer casinos stopped accepting US gamblers, but banks and online funding options have been drying up rapidly. The UIGEA “prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law.”

The States that definitely outlaw online gambling in the USA include Illinois, Indiana, Louisiana, Nevada, Oregon, South Dakota, Washington and Wisconsin. The UIGEA is designed to limit payment providers such as banks and eWallets from funding online gambling. A number of online casinos have stopped taking US players.

 

Europe Gambling

The UK Gambling Act passed in September 2007 and affects the operators more than the players. It is perfectly legal for UK residents to gamble online, however the only casinos that are allowed to advertise on the UK market are those based in recognised jurisdictions, such as Gibraltar, Malta, Alderney and Isle Of Man. The UK Gambling Commission didn’t explain in detail what changed between 2007, when Antigua’s white list application was rejected, and 2008, when Antigua was eventually accepted. But they said that as part of their regulatory work they carry out ongoing reviews of white list operators. Kahnawake still hasn’t been accepted though.

Many European countries have strict online gambling laws. It’s currently illegal in France, although that is under review, in areas of Germany and in the Netherlands where a state run operation exists. Sweden is similar to the Netherlands, although the state monopoly is being challenged. You’d do well to check that your country allows online gambling before you play or you might find it a problem getting paid if you win.

The fact is, that if you live in a country that prohibits online gambling, you’re the one at risk. Some casinos will not allow access to US gamblers at all and some also publish lists of countries they will not accept. The Netherlands is another area affected by this. However, many gamblers in the US continue to play online and therefore they remain a high-profile target audience. Just be aware that your casino of choice may have a T&C’s of play attached to players from your jurisdiction, and always read these before you deposit.

You will also find that some Credit Card companies forbid their cards being used at online casinos. Mastercard is one that has restrictions in territories where online gambling is illegal, and I believe Visa has followed suit in the USA. There are however Prepaid Credit Cards that provide an alternative to gamblers in these jurisdictions.

 

Licensing Jurisdictions and Regulation

Every (honest) casino is required to be licensed within the jurisdiction that they conduct base operations and in which they house their player servers. Consequently this means that most casinos are operated from small island principalities. These are certain regions in the world that have a specific legislation in place which allows them to license and regulate companies that operate online gambling sites or provide gambling industry services (such as the supply of gaming software). These regions are referred to as online gambling jurisdictions or licensing jurisdictions. Within these jurisdictions, there’s usually an organization that’s responsible for issuing licenses and regulating the licensees: The licensing authorities.

The most common countries offering online casinos a regulated (and taxed) base for operation are Gibraltar, Costa Rica, Antigua and Barbuda, Curacao, Malta, the Isle Of Man and a small Indian reservation in Canada called Kahnawake. Each of these jurisdictions provide varying levels of regulation, but this is an important element for a player, since good regulation can prevent a casino from dodging their responsibilities. Of the above, both Gibraltar and the Isle Of Man (off the UK coast) have a strong reputation for ensuring operations are run smoothly and totally ‘above board’.

Costa Rica is a jurisdiction that you are better off avoiding, since they tend to lack in taking action when needed and Kahnawake is actually quite interesting. It’s where a large number of online casinos house their gaming servers and while few if any operate from within the Reservation, Kahnawake alleged to provide a level of regulation to support players. Even though experience has learned that response from Kahnawake has been less than effective. Nonetheless, it is accepted that Kahnawake run a very secure environment for the gaming servers and know their tech stuff inside out, so even though the Kahnawake seal in itself may not mean much to some, it’s certainly not a negative.