Online gambling is not a young industry. The first online casinos and sports betting outlets were launched in the mid-1990s when the internet itself was still in its infancy and spread rapidly all over the world. As you might expect, regulations were quite a few steps behind the technology – it still is, even in some of the… Read More »

Online gambling is not a young industry. The first online casinos and sports betting outlets were launched in the mid-1990s when the internet itself was still in its infancy and spread rapidly all over the world. As you might expect, regulations were quite a few steps behind the technology – it still is, even in some of the most advanced countries – so it took Europe decades to work out a legal framework that could allow online casinos and betting outlets to function properly.

Fraud and money laundering prevention, customer protection, and customer care are just some of the aspects that make regulating online gambling a must in countries around the world. Regulating this industry can also represent a hefty source of income for governments.

The “grey” market

There are many jurisdictions around the world that issue gambling licenses, and most of them are trusted by the players. A casino licensed in the EU country Malta, for example, has to adhere to strict regulations to function, which makes Malta-licensed casinos a trusted gaming outlet for the players, offering random number generator and live casino games that adhere to high standards both when it comes to security and the quality of the services offered.

But a license issued by the Malta Gaming Authority is not binding in countries outside the EU, for example. So, a casino licensed in Malta and regulated in the EU can easily be considered one operating on the ‘grey’ market in other countries.

Regulation and taxation

When playing at an online gambling outlet outside of the country, the money of local players leaves the country. The gambling operators are, of course, not doing anything wrong: they are well within their rights to offer their services to anyone willing and allowed to use them. This, of course, means that the companies operating this way are not required to pay taxes on the profits generated by local players.

Regulation and taxation solve this dilemma of safety, equity, and privacy. Countries can impose their own regulations on iGaming operators that make their services a better fit for their local markets, perceive licensing fees from operators willing to function on them and enforce a tax regimen that will make sure that the operators pay their dues on the profits they generate in the local market, just like all other companies do. Besides, in our world riddled with concerns about privacy, it can mandate operators to store any information collected from local customers on servers within the country, thus making sure they don’t fall in the wrong hands.

How other countries did it

While the European Union does have a comprehensive legal framework to regulate their own iGaming markets, countries still have an option to draft and enforce their own laws and regulations on the matter. And many countries do. The measures taken by these countries’ gaming authorities range from perceiving special taxes on gambling activities to blocking access to out-of-state operators not having a license to offer their services in their jurisdiction.

This way, the regulators can maintain proper control over the iGaming activity, make sure all taxes go where they are supposed to go, that the operators conform with the right set of rules, and that customers can enjoy their favourite form of entertainment with peace of mind.


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Updated On 22 April 2021 6:02 AM GMT
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