Online Casino Licenses and Gambling Commissions

Online Casino Licenses and Gambling Commissions

The online casino market is still growing at an incredible pace and new companies can actually set up the entire operation in just a couple of days, which means that there’s also a growing demand for the industry to be regulated and the online casinos to be kept in check all the time. It’s not only about the various governments forcing them to follow certain rules – it’s also about the players wanting to stay in the safe zone, knowing that the casino they’re playing isn’t a scam.

That’s why there are gambling commissions all over the world that can grant licenses to online casinos that are capable of proving themselves worthy. In fact, there are so many of them nowadays that a newcomer to the business could easily get lost while trying to discover which are the most important ones.

And that’s where this article comes in, as we’re going to give you brief summaries of the biggest players of the scene – many of them are located in Europe, but the Americas are getting their fair share of action as well. After giving it a read, you should have a good idea about what’s behind all those licensing logos that online casinos are so proudly displaying on their websites.

I’m a Player – How Does It Concern Me?

Chances are that you’re just an online casino player that’s out there just to play a game or two here and there – so why should you actually care about things like casino licenses?

Well, there are at least two good reasons. Firstly, online casinos that don’t hold any licenses whatsoever are very suspicious from the get-go – and it might also be illegal to play at them in many countries. They might look good and they might look shiny, but the odds are that their games aren’t fair and that you just won’t be able to get your money back from them once you request a withdrawal.

Secondly, casino licenses are about far more than legality and tax regulations. They are also supposed to guarantee that you’re going to get an excellent service all around and that you will have an option to complain at a regulatory body if the online casino of your choice behaves in a manner that you think is unfair or unsatisfactory. Finally, since most regulators are supposed to see the business results of their licensees, you should be getting guarantees that your deposited money isn’t being siphoned out elsewhere.

Of course, we don’t think that you should know the different jurisdictions by heart or know all the details about the individual licenses. You should just remember which of them are rated highly – if the online casino you’re checking out has at least one of them, there’s a very good chance that it is not only fair when it comes to its games, but that it also has enough money to pay you out if you win and that it won’t just run away. Those are the hallmarks of a good online casino – and ones that you should always be looking for.

United Kingdom

The UK Gambling Commission, which began functioning in 2005 after the Gambling Act was passed by the UK legislators, is arguably the most important licensing body in Europe. The reason for that is that it acts as the regulator for what’s the biggest European gaming market, which means that virtually every single operator out there is obliged to find a way to comply with its requirements. That doesn’t mean that every single online casino has to have a license from the Gambling Commission, however – it just needs to have a license from one of its white-listed jurisdictions.

Those who do apply for a license from the Gambling Commission naturally have to fulfill certain conditions, with the body reviewing five crucial elements when considering applications. They go as follows – identity and ownership, finances, integrity, competence, and criminality.

As far as players are concerned, the area of finances is probably the most important one and the Commission actually prides itself on playing a role in protecting the funds of the players. That said, the listed requirements for operators are only about two things – having a separate client bank account for those funds and having a plan for the event of insolvency. We would like to hope that this alone ensures a certain safety net, but we have to be honest here and say that it doesn’t really do that – and this is the one thing that we would probably criticize the Gambling Commission for.

Apart from all this, we would also want to note that the Gambling Commission does more than just regulate gaming, as it also has a mandate to fight against betting-related corruption in sports, an area that is starting to become very important nowadays. To date, we haven’t really noticed any successful investigations, but chances are that we’re going to see some high-profile cases in the near future.

Unlike many other licensing bodies, the UK Commission does have a fairly untarnished reputation, which most likely has something to do with the fact that it isn’t a particularly independent body. However, it has already been criticized on a couple of occasions for not being able to force its licensees to adhere to all the set standards.

The current list of licensees – which is so long that you’ll probably need to use the search function in order to check the company of your choice – includes the likes of Bet365, 888Casino, and 32Red.

Malta

The Malta Gaming Authority is currently one of the most popular European regulators of online casinos, with its licensee list including some of the biggest names in the entire industry, including Unibet and Betfair. It’s also the number one gambling commission when it comes to how its website looks and works, but that’s probably something that most of you aren’t interested in.

In any case, the official materials state that the regulator takes some very strict measures when it comes to its licensees in the sector of remote (online) gaming. The most interesting bit is that even the employees of the gambling operators are supposed to be approved by the Malta Gaming Authority and that the company should also inform the Authority whenever an employment contract is about to become terminated. The funds of the players are also supposed to be protected by multiple layers of oversight. All in all, it seems that the Authority really is offering a very complex solution to the entire issue.

However, it is possible to question whether all of these rules are being enforced in the strictest possible way and it is also possible to question whether the Malta Gaming Authority can indeed offer a great service to the players. The Casinomeister website, which is somewhat of a legend in the world of online gambling, has actually awarded the Malta Gaming Authority the yearly “Sitting on One’s Hands Award” on four separate occasions, as there have been plenty of incidents when it didn’t act appropriately.

Just to give you an example – in 2011, it gave a license to an online casino that was running pirated software without noticing it. The players did notice, of course, and the word soon spread around, which eventually led to the regulator revoking the license and apologizing, but the damage was done.

Unfortunately, small scandals are still far too common for us to give the Maltese regulator the highest marks – and chances are that this has something to do with the fact that its list of licensees is almost mind-numbingly big. With so many rules and so many companies, one simply has to wonder whether it really is possible for the Authority to be on its toes all the time.

Gibraltar

The small country of Gibraltar plays a very big role in the world of online gaming, with some even saying that it’s the second most influential authority in Europe, right behind the UK Gambling Commission.

There are plenty of reasons for that, but let us mention just a few of the most important facts and figures. First and foremost, the jurisdiction is currently white-listed by the UK Gambling Commission, which means that it can serve as the entry point to the UK market, which is probably the most valuable one in the entire Europe. Secondly, Gibraltar has very low taxes in the gaming sector and there’s even a tax cap in place to ensure that the licensed companies won’t ever pay massive sums of money. Thirdly and finally, there’s a bit of a symbiosis going on between Gibraltar and online gambling – the country relies on it for its income, the companies rely on it for licensing and business reasons.

The body that cares about all things gaming in Gibraltar is the Gambling Division and we can tell you that its licenses are fairly difficult to obtain, especially once you start comparing it with some of the other licenses out there, including the aforementioned Maltese one. The companies are not only required to have a proven track record, but they also have to have some of their main offices in Gibraltar – and you also need to be licensed elsewhere in order to be able to apply for the Gibraltarian license.

It really is a strict set of rules and the exclusive club certainly isn’t for everyone, but it also means that the license is worth a lot – if the online casino or bookmaker you’re playing at is licensed in Gibraltar, there should be absolutely nothing to be worried about. To this date, there has been just a single big case concerning one of its licensees – and it isn’t absolutely clear whether the Gambling Division really mishandled it.

So who’s currently holding this prestigious license? Well, at the time of writing, the list of licensees included – among others – Ladbrokes, BetVictor, 32Red and Stan James. And, if you’re interested in the software side of things, you should also know that many of the biggest games developers, including IGT and Net Entertainment, hold Gibraltarian licenses.

Alderney

Alderney is one of those small islands in the vicinity of the United Kingdom which have become well-known for licensing gambling companies all over the world. And, truth to be told, the Alderney license was once thought to be one of the most prestigious one and that’s how it is still often perceived.

However, there is one thing that the Alderney Gambling Control Commission can’t be proud of – and it concerns the 2011 Full Tilt scandal. Most of you can probably still remember the so-called Black Friday that brought the American online poker scene to a standstill in 2011, but there’s actually more to the story than just the American authorities cracking down on the biggest online poker providers.

Put simply, the investigation revealed – among other things – that Full Tilt was not being run as a proper business with all the safety nets in place. In fact, it was more like a Ponzi scheme that allowed many of the figures behind it to rack up big figures without there being any security for the player’s funds whatsoever. Don’t get us wrong – withdrawals were getting processed and players were able to get their money, but there wasn’t enough funds in the coffers to pay them all out.

At that time, Full Tilt had the Alderney license and the Alderney Gambling Control Commission was therefore supposed to be guaranteeing that everything is being done properly and that there’s no risk of the players not getting paid in the end. However, it was eventually revealed that the Commission had some non-standard deals signed with Full Tilt that allowed the poker company to keep a large share of its dealings hidden from the regulator. With the poker business booming and Full Tilt being one of the major players on the market, it seemed like a good idea to be more lenient with the licensing in exchange for money and prestige.

Of course, the Commission was quick to react when the scandal broke out and it was also quick to investigate everything and conclude that it was more about Full Tilt lying about the numbers and everything than about the regulator failing to meet any standards, but the bottom line is that some big mistakes were made by the Alderney Gambling Control Commission and that the scandal has left a permanent mark on its reputation.

Nowadays, many big online casinos and sportsbook still hold the Alderney license and many are quite proud about it, but it will take long years of hard work and trust-building for us to rate them as highly as many of the other gambling commissions. On one hand, we can somewhat sympathize with them over the Full Tilt scandal in that it probably shocked them as much as it shocked the players. On the other hand, they were supposed to guarantee that such things would be stopped before growing out of proportion and that’s clearly where Alderney failed. Adjustments have already been made and we wish Alderney all the best for the future, but, as things stand, we simply can’t rate them among the best right now.

Isle of Man

The Isle of Man, which can be found between Great Britain and Ireland, might be fairly small size-wise, but its gambling commission, the Gambling Supervision Commission, is one of the most important ones in the world of online casino gaming.

It does not only have a bit of a history, as it was established way back in the year of 1962, but it also has quite a bit of reputation – even nowadays, it’s viewed as one of those commissions that don’t give licenses to just about anyone who’s got a working business and enough money to pay.

Its website isn’t incredibly great and you have to fish around a bit to learn more about it, but the most important thing is that it places a lot of importance on how the funds of the players are protected. Currently, there are three layers of protection that are supposed to guarantee that you’ll never have anything to be worried about. Firstly, there must be a bank guarantee in place – if the operator cannot pay, the bank will. Secondly, there must also be a trust fund that more or less doubles as yet another guarantee that there will always be funds from which players can be paid out. Thirdly, the operator must also have a Client Account with money that is considered to belong to players. Regular checks are held to confirm that the money held in those layers is at least equal to the value of all player deposits.

Apart from protecting funds, the Commission also oversees the marketing activities of the operators, while all the games have to be independently tested by companies that are approved by the Commission itself as well. The coverage is comprehensive – and the Commission is yet to be hit by any significant scandals for which it could be held responsible.

At the time of writing, the list of the Commission’s licensees included not only Rational Entertainment (the guys responsible for PokerStars), but also the incredibly popular Paddy Power and the Asian Dafabet.

Antigua and Barbuda

Although we’re sure that many of you don’t even know where exactly the small island nation of Antigua and Barbuda lies, it has actually been one of the more important players when it comes to the online gaming industry thanks to its Directorate of Offshore Gaming, which is a division of one of the government agencies.

The country has been granting licenses since the year of 1994 and the fact that it’s officially recognized on the white-list of the UK Gambling Commission has made plenty of online casinos and sportsbooks apply for its licenses. Nowadays, the list of the licensees includes the likes of Bodog and Winner.

As far as we know, the regulations are pretty strict and that’s why the club of licensees isn’t very big nowadays, but another reason for that might be the fact that Antigua was always seen primarily as the entry point to the American market.

That reason disappeared after the UIGEA was passed in the US, which means that the Antiguan license isn’t very appealing right now. The Antiguan government did initiate a World Trade Organization dispute against the United States after the aforementioned piece of legislation was passed and the WTO did rule in its favor, but that didn’t change anything in the sector of online gambling. Instead, the case was settled by the US granting some other concessions to the island nation.

Curacao

The other big player in the Caribbean Sea is the country of Curacao, which has been championing online gambling since the year of 1996 thanks to Curacao eGaming, http://www.gamingcontrolcuracao.org/.

However, the Curacao license is somewhat different from the biggest ones in that it doesn’t really give any assurances and protections. While many other bodies require the operators to adhere to strict rules and follow certain procedures, there aren’t all that many requirements when it comes to getting a license in Curacao – and yes, there have been some pretty bad cases of Curacao-licensed online casinos going rogue.

With that in mind, you should always do more research before playing at a Curacao-licensed casino or bookmaker, especially if there are no other licenses in place that could give you assurances about the qualities of the given operator. As always, there are good companies and bad companies, with the incredibly popular Pinnacle Sports showing that even a Curacao-licensed company can be truly great one.

Nevada

The American state of Nevada is home to the famous Las Vegas Strip, so it’s hardly surprising that it also has one of the most influential gaming commissions in the entire United States, the Nevada Gaming Commission. The Commission works alongside the Nevada Gaming Control Board to govern and regulate the entire industry, with a very complex system in place to ensure that everything is as it should be.

In recent years, this partnership became famous due to its efforts to promote the liberalization of online gaming, not only in the state of Nevada, but also across the entire United States. That’s why so much attention is being drawn to it nowadays and the hopes of online gambling companies also seemed to be pinned on it in many ways, but, at the time of writing, the Commission had only two online gaming licensees on the list – and neither of them was particularly well-known.

Massachusetts

The other American state that is well-known for its gambling commission is Massachusetts – and many in the industry are hoping that this state will open its market for online gaming providers in the near future. In fact, Massachusetts could be ideal for the American liberalization push for two reasons.

Firstly, the Massachusetts Gaming Commission has an excellent reputation in the land-based industry, not only for how it handles cases, but also for how open it is about the most important issues. All the crucial information can be found on its official website, www.massgaming.com, which is one of the best around as far as gaming commissions are concerned.

Secondly, the Massachusetts Gaming Commission has recently voiced its interest in drafting new regulations for all sorts of online gaming in connection with the growing popularity of various online fantasy leagues providers. We are talking about the United States and gambling here, so it’s no wonder that things weren’t moving particularly quickly at the time of writing, but there was some hope at least. And that’s more than we could say about the vast majority of American states!

Kahnawake

The Kahnawake Gaming Commission is one of the oldest regulatory bodies in the world, having been set up way back in 1996. It’s unique selling point is that it’s a North American regulator that isn’t bound by the US legislation, as it’s located in the Canadian Mohawk territory.

It offers its services to both land-based and online casinos, but the latter part is probably what interests you the most. For quite a while the Kahnawake Gaming Commission was seen as more of a ‘rubber stamp’ than a body that exercised real oversight. Pre-UIGEA it was easy enough to operate as a Gambling Commission, so there were few problems that needed to be dealt with.

The event that did the most damage to the reputation of this body was the Ultimate Bet Scandal of 2009.

After a lengthy investigation into the business dealings of Ultimate Bet, the company was eventually found guilty of allowing cheating to take place in its poker products and ordered to refund millions of dollars to the players, while there was also a significant fine apart from that, of almost $22 million.

Being this strict meant that the Kahnawake Gaming Commission began to claw back some respect, but it also means that it doesn’t have a particularly long list of licensees. In fact, this is not only because of the regulations, but also because its licensees have to be hosted in the Commission’s very own data center.

While the commission now appears to be operating well in its role, and does handle player complaints frequently and properly, it will take a bit of time for this jurisdiction to be considered a premium one.

If you’re looking for its most famous licensee, you should head towards the famous Bovada online casino, which has a very lengthy history under its belt and which is now starting to pick up pace all across the world once again.

Summing Up

The list that we’ve presented here is by no means exhaustive, but it should nonetheless give you a very good idea about the current situation in the world of online gaming. As you’ve seen, it isn’t easy to discover everything about all the licensing authorities and they certainly aren’t equal when it comes to their reputation and trustworthiness. Several high-profile cases have hit the online gambling industry in recent years – and virtually no licensing bodies have been left intact.

If we had to pick the current top three, we would go for Gibraltar, the United Kingdom, and the Isle of Man. You should generally be very safe when playing at online casinos and sportsbooks that hold those licenses. We also have high hopes for Massachusetts and Nevada going forward, but it’s impossible to give any definitive verdicts about them given that they’re yet to become fully established on the online market.