The phenomenal growth of the online casino industry has brought the legal and regulatory challenges that the industry faces into focus. Many countries are opening up to online gambling while others are exploring ways to be more proactive in regulating online gaming platforms.
Thanks to rising industry standards, activism on the part of problem gambling monitors and heightened awareness of the increase in real money gaming, governments throughout the world are taking a stronger stance regarding their involvement in regulating the industry.
As online gambling expands, the online casino industry must take their part in making sure that laws and regulations pertaining to online casino activity address the needs of both gamers and platforms. We in the industry want to be sure that all aspects of the gameplay are safe and fun - games, promos (like our Grande Vegas no deposit bonus codes) and more.
Since 1994, when the first Internet casino opened, the industry has experience continued growth and expansion. In 2003, the industry was worth $2.6 billion worldwide and by 2007 it had almost doubled to a value of $5.7 billion. By 2019, the year before COVID hit, the industry grossed $45.7 billion worldwide and that jumped to $55.1 billion in 2020, thanks, in part, to the coronavirus epidemic that kept people at home.
Pundits assumed that after the COVID stay-at-home culture abated, so would the interest in playing casino games online but that hasn’t happened. Statistics show global online gambling revenue has grown by an average of 20% in recent years and is expected to reach $95 billion n in 2023. The double-digit revenue growth is expected to continue and, say financial statisticians, will likely hit $117.6 billion by 2025.
Governments are taking notice, especially in regards to the estimate that more than 80 million people have started gambling online since 2019. There were approximately 95 million online gamblers in 2019 – today there are an estimated 176 million online gambling customers.
The largest segment involves sports gambling platforms with online casinos constituting the second-largest segment. Online gambling brings in billions of dollars in revenue every year but it also affects society by impacting on education, employment and people’s finances.
How are governments addressing this growing market?
A number of governments have begun to address issues that may arise due to this growing market. Sweden, Germany, Australia, the UK and a number of other countries are grappling with strategies that will allow the industry to grow and flourish while dangers are minimized. Proposed and passed legislations of the past few years include:
Regulations vary from one jurisdiction to the next, even within the same country. For example, in America, each individual state legislates its own laws pertaining to both gambling and online gambling.
Sports betting is legal in 36 states. Legal lotteries operate in 45 states plus DC. In some states, only retail gambling is legal while in other states, only online gambling can operate legally. A few states allow both online and retail casinos to operate. This diversity poses a significant challenge for operators who must tailor their offerings to comply with the specific laws of each individual market.
Licensing and Compliance
Obtaining and maintaining the necessary licenses is a critical aspect of operating an online casino. Each jurisdiction has its own licensing requirements, and operators must comply with a set of stringent criteria to ensure fair play, responsible gambling practices, and financial transparency. Failure to meet these standards can result in hefty fines, legal action, or even the revocation of licenses.
Each jurisdiction has its own licensing authority and the proper standards must be met for every locale. In addition, within some larger areas there are sub-authorities (cities within states, etc) that have their own demands to be met.
Anti-Money Laundering (AML) and Know Your Customer (KYC) Compliance
Online casinos are often used by money launderers. Over the last 10 years authorities worldwide have been cracking down on such efforts. Most jurisdictions have strict AML and KYC measures in effect and expect operators to implement robust systems to verify the identity of their customers and monitor fiat and cybercurrency transactions for suspicious activities.
Until recently the focus of enforcement of AML and KYC casino regulations was on retail casinos but with advancing technology, authorities are, today, starting to examine money laundering in online casino transactions as well.
Consumer Protection and Responsible Gambling
Concerns about consumer protection and responsible gambling have become subjects of conversation in a number of countries. Regulatory bodies are increasingly focused on ensuring that operators provide a safe and fair gaming environment and implement measures to prevent and address gambling addiction, including self-exclusion options, setting deposit limits, and providing resources for responsible gaming.
Until recently, the casino industry itself pushed for these goals through industry standards and regulatory bodies but a number of countries are now demanding that their own regulators monitor casino operations to enforce these standards.
Technology and Security Concerns
The online casino industry is highly reliant on technology and that makes it susceptible to cybersecurity threats. Operators must ensure the security of customer data and financial transactions in order stay in business.
This involves investing in robust cybersecurity measures like strong anti-virus protection for the server, two-factor authentication protocols for users, security software, firewalls, frequent monitoring of systems and programs, 128 BIT encryption for financial transactions, etc.
Marketing and Advertising
Many governments are starting to closely scrutinize marketing practices of casinos. This is especially true regarding the targeting of vulnerable populations and excessive gambling promotions. The imposition of restrictions on advertising content is relatively new but more and more countries are adopting such limitations and operators must navigate those regulations to avoid legal repercussions.
As technology continues to advance, it is imperative for the online casino industry to adapt and collaborate to address emerging legal and regulatory challenges proactively.