Regulation for Online Casinos

Gambling laws vary considerably from country to country. At one end of the scale is the US, who has tried to make online gambling completely illegal. At the other end is Costa Rica, home to more than 200 online gambling companies, but with no legislation to deal with online gambling. A number of countries allow online gambling sites from other countries, as long as people from that same country are not allowed to play. Some countries have only one licence, to run a website for a state lottery. With so much confusion, what can you rely on?

The Gambling Act 2005

The UK introduced a gambling act to update various pieces of legislation, reflect the relatively new area of online gambling and to regulate it. It has 3 key aims:

- keeping gambling crime-free
- making sure that gambling is fair and open
- protecting children and vulnerable adults

The UK is therefore unusual in having modern laws, permitting gambling, including ‘remote’ gambling, and extensive regulation.

The definition of remote gambling includes internet gambling and any gambling which can be accessed without going to specific licensed premises. It therefore includes gaming via mobile telephones, landlines, television, radio or "any other kind of electronic or other technology for facilitating communication".

The "white list"

The act also introduced a ban on online gambling advertising for any company not based in the UK or other countries in the European Economic Area. The EEA consists of the 27 countries in the European Union together with Norway, Liechtenstein and Iceland. Countries outside that area could apply for approval to be included on a "white list" of countries outside that area, who would be allowed to advertise in the United Kingdom.

The only 2 countries on the white list initially were Alderney and the Isle of Man. A number of countries have applied to be added to this list, but the stringent requirements have meant a number of well-known gaming commissions have not made the list so far.

Offshoring

A number of companies base their operations outside the UK, as the taxes in the UK can be very high compared to other countries. This is also true with online gaming. In the UK, gaming tax is 15%, whereas in the Isle of Man, corporation tax is 0%.

So don’t be surprised if your favourite online casino is not registered in the UK! They are more likely to be registered in Malta, Gibraltar or Alderney. These countries offer both robust regulation for the protection of the player and fiscal benefits for the gaming company. Alderney is a good example to demonstrate this.

Alderney’s approach

The Alderney Gambling Control Commission (AGCC) was founded in May 2000. They voted in 2005 to allow a "free market approach towards e-gambling." This means Alderney offers a practical approach to online gambling, good tax incentives for gaming companies (no income tax, but a fixed annual fee) and strong regulation.

The AGCC is independent and non political, and regulates eGambling on Alderney. Its regulatory and supervisory approach meets the highest of international standards. For example, an amendment in 2008 means that an eGambling licensee’s advertising must comply with the advertising laws in their target market.

A good rule of thumb is to see where an online casino is regulated. Then look for information about that country’s online gaming regulations. You will soon establish which locations have a reputable reputation.