Legal Aspects

Legal Future of Online Gambling

Many governments have announced about prohibition of online gambling on their territories. Most gambling laws, however, were not written to address the issues presented by online gambling. Therefore, some questions exist about whether these laws apply to online gambling.

The important question about future of online gambling, however, is not how the current state law goes, but what the future holds for both law and enforcement efforts. The simplest part of attempting to regulate or prohibit online gambling is drafting legislation. The most difficult part is, of course, implementation. Since online gambling laws implementation is very difficult, creating an online gambling-free environment is impossible. They may, however, inhibit in the growth and development of the industry under severe control. Prohibition of online gambling may result in becoming an unregulated industry dominated by persons willing to violate laws in jurisdictions where it is illegal. Whether governments ultimately enforce the laws, however, influences the size of the industry.

Global Policies

Online gambling is the industry that needs to be well-regulated. At this stage most online gambling seems to be unregulated because of the specifics of World Wide Web. Thought the notion that geographic borders do exist on the Internet it is still too difficult to divide the electronic world into territories. There is no any law yet that can define where a money transaction takes place: where the server is physically placed or where a player’s computer is located. For that reason there arise too many disputes on the Internet gambling regulation. Examining and comparing the varying igaming policies and enforcement mechanisms throughout the world is an important exercise in understanding online gambling law as a whole.

Today there exist at least 94 jurisdictions that offer some sort of legal igaming services, while a handful of jurisdictions prohibit any variations of remote gambling performed via Internet. As one can understand, online gambling industry as a whole now faces a great many of legal challenges.

According to the Internet Gambling Report (Eleventh edition), online betting divides the approaches to online gambling policy into four basic categories:

1. Protection and Security
These policies are aimed at ensuring full compliance with highest world standards of fairness and protection of both online gamblers and online casino websites operators. The approach lays emphasis on probity of companies and key personnel and presupposes testing and auditing of software solutions, mathematics, RNG, mechanisms of verifying age and geographic location of the player, etc. This category of regulation impose strict control over identifying and addressing compulsive gambling as well as tools to prevent money laundering and fraud. This kind of legislative approach is used in Europe and Australia.

2. Laissez-Faire
This is a more flexible approach aimed at attracting more online gambling businesses operators with lower barriers to entry in terms of licensing fees and probity. Under this approach online gambling business operators pay lower or no taxes. The approach can be described by the following peculiarities: reliance on self-regulation, legitimate concern for fairness and players protection. This approach is common for Caribbean and Central America.

3. Tolerance
This approach presupposes allowing online gambling business operators conduct online gambling operations in an unregulated environment. This way of online gambling regulation was typical for Costa Rica, but under the external pressure the online gambling regulation in Costa Rica can be tightened.

4. Prohibition
This approach makes all or some forms of online gambling illegal. It is used in the United States and Australia.

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