How are the online casinos licensed

Given the profits of online casinos and gambling firms, as well as the pace with which operators can become major players within the industry, it is not surprising that new sites are constantly emerging on the scene.

How are the online casinos licensed But how are they licensed? And where? You would be surprised, for not only does online gambling serve to demonstrate just how easy it is to lose a few dollars in such a short time (almost without us noticing, in fact...), but seeing the various places around the world in which these firms are officially based is quite a good lesson in geography.

Don't be fooled into believing that online casinos with, for example, Monte Carlo or Mississippi as part of their name are actually operating within a dice throw of the Cote D'Azur or the great gambling river. The snappy or stylish sounding site names are simply the first step in painting a suitably attractive, alluring picture with which prospective customers feel comfortable. Qualifying for and securing a license requires those behind these firms to venture further a field in the search of a recognized, legal jurisdiction from where to operate, and for internet entrepreneurs in some countries this isn't always convenient.

When the pioneers were taking the first steps into online gambling the jurisdictions situated mainly around the Caribbean, in Antigua, Costa Rica, Dominica and (later) Curacao. As the industry's potential was becoming more apparent other, more industrially developed countries got involved, with Australia throwing its hat in the jurisdiction ring. This was followed by the Mohawk Territory of Kahnawake in Canada, which was the first North American jurisdiction to introduce licenses for online gambling.

Then came Europe in the shape of Gibraltar, the Isle of Man and Alderney providing the whole internet gambling with the 'respectability' afforded the industry by the facility to be licensed from a U.K. jurisdiction.

With countries responding to the growth of internet gambling among their own nationals by investigating the pros and cons of offering licenses from their shores, and with England taking a lead in terms of a realistic approach to gambling in general, it is surely only a matter of time until certain other countries more positively explore the implications of allowing what are essentially domestic enterprises to finally operate within domestic jurisdictions.

In the meantime, regardless of the fact that countries which are neither very well known or, indeed, very wealthy are hosting what have become big businesses, a would-be operator must demonstrate certain qualifications in order to be secure the necessary regulation (moreover the jurisdictions require a respected, confidence inspiring environment in which to maintain any successful level of competition with their growing number of rivals). Therefore, as would be the case for anyone planning to set up a bricks and mortar casino in Las Vegas, for example, the online casino applicant must demonstrate a sufficient level of competency (and respectability) and so on even to be part of the process. Fundamental factors such as having the financial ability to actually operate an online casino and manage the payouts is obviously imperative.

Typically, having met all the conditions, the applicant's software then comes under scrutiny (security, fair games, payouts, ability to cope with heavy traffic and peak periods of activity, general reliability etc.).

As for the cost to the prospective operator, depending on the quality and range of facilities offered by a particular jurisdiction, annual licensing fees can be anything from a round, tidy sum of $50,000 (in itself no small potatoes) to a staggering $1 million...

As well as licensing fees and local taxes, the operator must also be prepared to provide the host authorities with accounts and relevant reports, and constantly be able to demonstrate that the initial requirements are being maintained.

David

Published on 07/11/2007