A while back we looked at some of the jurisdictions offering online wagering licenses, including Antigua and Vanuatu and Kahnawake and Alderney. But there’s lots more you should know about Internet casino licenses so we asked Judi Kelly of GamblingLicenses.com for a little help with the basics.
WINNERonline: Are online gambling licenses the same as land-based wagering licenses?
Judi Kelly: No. A land-based casino cannot automatically operate an online casino, nor is an Internet casino automatically entitled to operate a land-based casino in the jurisdiction it is licensed.
In most instances, jurisdictions offering Internet gambling have established separate sets of regulations and legislation to allow online gaming. Some, such as the Isle of Man, started with their land-based gaming regulations and developed their online gaming laws around existing legislation but the two are generally quite separate.
Why do many online casinos obtain a license in the first place?
It is important that an online casino is operating under the legalities of a particular jurisdiction. Some online casinos also believe that a gaming license offers credibility and adds legitimacy to their business.
Online casinos with licenses from highly regulated jurisdictions operate under a strict framework where the regulator is a watchdog that monitors their operation to ensure that the odds are fair, there is no tampering with the random number generator, players winnings are paid, and so on.
Do licenses mean more for the casino or the player?
Overall, I believe casinos find licenses more important than players do. Sun International’s CasinoAtlantis.com promotes its Isle of Man license on the casino home page but recently reported very low gross revenues of US$100,000 for a three-month period, which indicates to me that a well-regulated license is not necessarily important to players.
In comparison, Captain Cook’s Casino decision to change to a Kahnawake license had no impact on its ongoing success. It appears that players are more interested in the bonuses offered, getting paid on time, and the entertainment aspect of the games, rather than the casino having a certain license.
Are some licenses more valuable in terms of the status they offer or regulatory guidelines they implement than others?
Yes, operators believe so. This can be based on both perceived and real value. A jurisdiction’s reputation is often important, as is its previous experience with other online operations. Many casinos state that they are licensed in a certain jurisdiction, even though it may only mean that they pay an annual fee for a data processing license; their operation is therefore not tested or regulated.
I believe the most attractive online gaming license [for casinos] is one that is well regulated but still offers the operator an ability to commercially operate successfully, with reasonable fees in a “first-world” jurisdiction that offers excellent information technology facilities and a good business environment.
Is a casino license from one particular jurisdiction clearly better than any of the others?
There are quite a few jurisdictions that have established good models for Internet Thaibet gambling. A few that come to mind are Kahnawake (Canada), which seems to be an attractive option for many operators, Alderney, the Isle of Man, Vanuatu, and Australia’s Northern Territory and Tasmania.*
What will happen with online gambling licenses in the future?
I believe they are going to become more important. They are essential for the long-term viability and on-going success of an operator, and they offer an added sense of security for players knowing that they will be paid their winnings. A few highly regulated jurisdictions specify that the licensee post a bond to ensure that players are paid, even if the operation does not have surplus profits.