Online Casino License Jurisdictions
It took a while before the internet became more and more accepted as a channel for consumption, including online casinos. It is around 20 years ago internet connections came available everywhere, although the internet speed wasn’t that incredible back then. However the internet speed grew fast over the years and it looks like the iGaming industry grew with it.
The birth of an industry
Online casinos are relatively new overall as an industry, dating all the way back to 1994. It was in this year the first online casinos were established, even though many didn’t even have internet at home yet and the games were rather simple compared to today’s high quality casino games. In the past 20 years the iGaming industry has changed entirely, from a non-regulated industry, with extremely simple websites, to a regulated billion euro industry with hundreds of high quality websites licensed in particular jurisdictions all over the world.
The larger operators, including most Netent Casinos, are offering their casino games through cutting edge gambling platforms including a front office, back office, and up to hundreds of employers responsible for an optimal customer care, marketing, design, and much more.
Antigua and Barbuda
It was in 1994 Antigua and Barbuda opens for business regarding online gaming. The Caribbean nation is the first country to pass a law which made it possible for operators to apply for licenses. As one of online gambling’s first licensing regulators, Antigua and Barbuda has a long standing reputation, but by now many European operators prefer countries like Malta, Gibraltar and Isle of Man over jurisdictions like Antigua and Barbuda, Curaçao (Netherlands Antilles) as well as Costa Rica.
Another jurisdiction that has a long history in iGaming is Kahnawake or The Kahnawake Mohawk Territory, an Indian reserve located in Quebec, Canada. The Kahnawake Gaming Commission (KGC) was established in 1996, but just as Antigua and Barbuda, also Kahnawake isn’t preferred by the many European operators.
Being one of the first iGaming jurisdictions to regulate online gambling, Curaçao is one of the most stable providers of regulated iGaming services. It’s already since 1996, when it was still part of the Netherlands Antilles*, that Curaçao provides iGaming Licenses and IP (Information Provider) compliance services to qualified operators. Currently over 200 iGaming companies operate from this Caribbean jurisdiction, with online gambling as one of the largest industries on the island.
The Curaçao Department of Justice has designated the Curaçao eGaming Licensing Authority to be the master licensing authority in Curaçao offering only one iGaming License type that covers all product operators or software providers. A Curaçao jurisdiction license covers skill games, games of chance and sports betting.
*Curaçao used to be a part of the Netherlands Antilles up to October 10, 2010 when Curaçao gained the status of a constituent country within the Kingdom of the Netherlands.
The online gambling boom
Though the establishment of the two first jurisdictions were very important for the history of the iGaming industry, the story continues when in 1998 the first internet poker room is launched known as Planetpoker. It was in this same year a total of over 700 real-money online casinos were established already, a huge amount for such a young industry. By the millennium online casinos are generating over €1.6 million in revenues, mostly contributed by US players, at that time responsible for two-thirds of the total iGaming revenue.
More iGaming jurisdictions
By now, especially after the online gambling boom, online casinos have proven to be immensely popular and lucrative. But with the rapid expansion of online gambling, corruption of online casinos became a major concern for both, players and online casino owners. While the iGaming community sought a way to standardize and regulate online gambling, it was in this period a number of new jurisdictions established in Europe too.
It was not long after the online gambling boom, that a small and sunny island in the middle of the Mediterranean Sea, started to regulate online gambling. Just as in many countries at that time Malta didn’t have an appropriate gambling act which included online gambling too. This is why Malta began licensing online gambling sites in 2000, under the Public Lotto Ordinance. However it was in April 2004, just one month before the island became a member of the EU, the revamped Remote Gaming Regulations were published. From this moment on, Malta was the first EU member state to regulate online gambling. By now Malta is one of the world’s largest and most respected iGaming jurisdictions with over 500 licensees in possession of a Class 1-4 licence granted by the Lotteries and Gaming Authority.
Just like Malta, also Alderney is one of the UK’s white-listed remote gambling jurisdictions and well-known for its iGaming industry, although the Channel Islands have long been regarded as one of the leading offshore finance centers in the world.
The Alderney Gambling Control Commission (AGCC) was established in May 2000, under the Gambling (Alderney) Law, 1999, to regulate online gambling operations in Alderney, responsible for issuing licenses to operators in the region and supervising their activities. By now Alderney has been regulating online gambling for almost 15 years and adopted a conservative approach which deliberately resulted in slow growth as the AGCC was very keen to get it right rather than see it as a race for the line.
With the eye on the future it was in 2011, the AGCC entered a cooperation agreement with the Nevada Gaming Control Board, with a view for sharing information, knowledge, and skills which was considered as a significant development in iGaming and a major step towards international cooperation.
Isle of Man
In the Irish Sea, between Liverpool and Ireland’s Belfast, you will find another British Crown Dependency that is self-governing and well-known as an iGaming jurisdiction. Isle of Man, or simply Mann, is also an UK white-listed remote gambling jurisdiction and ever since the introduction of its Online Gambling Regulation Act in 2001, this jurisdiction has been encouraging the development of internet gambling.
Its gambling act has specifically designed to benefit gambling companies as well as it fully protects customers. Although there are less than 20 operators licenced with the island, the Isle of Man remains one of the most successful iGaming jurisdictions around.
A memorable peak
With the establishment of the new jurisdictions Malta, Isle of Man and Alderney, iGaming became more and more accepted as an industry and by 2001 more than 8 million players have found their way to the gambling platforms. A memorable peak was reached in 2005 when large operators like PartyGaming, 888.com and software supplier Playtech independently of one another are registering for an initial public offering (IPO). While in the same year another jurisdiction established as the new UK Gambling Act became active, representing Europe’s most important and liberal legislation.
Even though gambling has been prevalent in Britain for hundreds of years, it was in 1960 the Betting and Gambling Act first legalised betting shops. Further legislation, including the Gaming Act 1968, led to the introduction of the Gambling Act 2005, which came into force in 2007.
The Gambling Act 2005 is the primary piece of UK gambling legislation and regulates gambling in the UK, including bingo, lotteries, casinos, gaming machines and remote gambling. Online gambling is big business in the UK mainly due to its liberal legislation. In the United Kingdom, unlike many other iGaming jurisdictions, the laws relating to online gambling are relatively straightforward.
The Gambling Commission
The Gambling Commission regulates the entire iGaming industry in the UK (except spread betting), under the terms of the Gambling Act of 2005. The UK currently has one of the most liberal online gambling regimes in the EU with an new bill, the Gambling (Licensing & Advertising) Bill, currently passing through parliament. This new bill intends to introduce a point of consumption licensing system for online gambling in the UK. Also in March 2012, the government announced that it would seek to introduce a system of point of consumption taxation, expected by December 2014.
Over the years Gibraltar has developed into an iGaming centre relying on its EU membership, even though this iGaming jurisdiction is a British Crown Dependency. Gibraltar is one of the most successfully iGaming jurisdictions attracting major international licensees like Bwin.Party, Ladbrokes and Betfair. The main piece of gambling legislation in Gibraltar is the Gambling Act 2005, which was last amended with the Gambling Act 2011, regulating both land-based casinos and online operators.
An important aspect of Gibraltar’s gambling market was the United Kingdom’s authorisation for operators licensed in one of the European Economic Area (EEA) member states to advertise freely in the country. Besides Gibraltar, also certain white-listed countries were benefiting from this policy, but now the UK is currently moving towards a point of consumption licensing and taxation system, it will see an end to this system. From that point any operator has to acquire a Gambling Commission (UK) licence.
Unlawful Internet Gambling Enforcement Act 2006
While the UK liberalised its gambling market a year ago (2005), The US gambling market receives a blow. It was in this year the Unlawful Internet Gambling Enforcement Act is passed, better known as the UIGEA. While the UIGEA doesn’t forbid online gambling, it does make it illegal for banks and credit card companies to process financial transactions from and to online gambling platforms a reason for many international operators to withdraw from the US market. From that moment on large operators like 888.com and PartyGaming started concentrating on the European market as by then more and more countries are in the process of regulating online gambling.
In 2008 H2 Gambling Capital estimates that the worldwide gambling industry is generating over €15,6 billion on revenues while 2010 shows a number of 865 online casino of which I personally believe this number must have been much higher. Although one big operator counts as a -1 as in this year PartyGaming and Bwin join forces to form the world’s largest publicly traded gambling company.
Forever etched in my memory, and in that of many (online) poker players worldwide, Black Friday is arguably the most significant day in online poker history. It was on April 15 2011 the US Department of Justice (DOJ) succeeded in seizing the domain names of PokerStars, Full Tilt Poker, and Absolute Poker/UB and decisively cripple a relatively stable market in a matter of hours.
The charges were based on the Illegal Gambling Business Act of 1970 and the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 and alleged that the companies used fraudulent methods to circumvent federal law and trick banks into processing payments. The end result of Black Friday is a miniscule and uncertain market for online poker in the US as up to today the effects of this single day have been felt.
Record jackpot win
While online casinos grow fast attracting more and more players playing online casino games, network jackpots manage to grow faster than ever before. In 2011 this resulted in the largest online jackpot win ever when a Norwegian students scoops a staggering €11,7 million while playing Net Entertainment’s progressive jackpot slot Mega Fortune.
The iGaming industry by 2014
I think I can say that it was two decades ago a dynamic industry was born which exploded a decade ago. While gambling in many countries used to be illegal, including most parts of the US, is still illegal, it’s by now 85 countries have legalised online gambling. These countries have excepted the internet as a channel for consumption, including online casinos, online poker rooms, betting sites and mobile casinos. Each of these regulated countries contribute to what is by now a €26 billion worldwide industry which has the intention to keep on growing.