European gambling regulations dispel outdated myths and allow the industry to bloom

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"Rules" (CC BY 2.0) by Steve A Johnson

GAMING is entertainment. However, whenever financial and personal information exchanges hands, there need to be safeguards in place to protect everyone involved.

Given that online casino gaming has become a $51 billion industry, setting regulatory standards has become a priority for governments and industry operators over the last two decades. Indeed, since the iGaming boom of the early noughties, countries around the world have started to implement their own licensing systems and codes of practice.

In practice, this means someone who visits a modern gaming site will now see various regulatory seals of approval at the bottom homepage. For example, at Karamba online casino, the Gambling Commission’s logo is on display for all customers in the UK to see. For players visiting from Italy, a certificate from the Amministrazione Autonoma dei Monopoli di Stado (AAMS) is on display. Finally, for European countries such as Sweden and Denmark, the Malta Gaming Authority (MGA) provides the regulatory standards. Put simply, for modern online casinos to operate legally, they need to obtain a licence relevant for the jurisdiction/s they’re active in.

Gaming takes inspiration from the financial sector

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Of course, this model isn’t unique. Look towards the financial sector and there are multiple regulatory bodies. In the UK, eBay International AG is regulated and overseen by the Financial Conduct Authority (FCA). Despite being based in the US, the online auction site is active in a country that has its own set of standards. Because of this, it has to hold an FCA certificate in order to trade legally in the UK. Moreover, eBay has to fulfil specific regulatory requirements outside of the UK in order to operate in other countries. In other words, a licence in one region doesn’t automatically qualify a company for a licence somewhere else.

This is very much how things work in the casino gaming industry. Although meeting the standards of one regulator will help satisfy another, each body has its own assessment criteria. For operators, this requires a huge amount of flexibility and, in turn, proper investment and resource management. For example, under the Gambling Commission’s terms and conditions, players must go through a .co.uk URL extension. Although UK players aren’t ring-fenced (they can play against residents of other countries), they must go through a country-specific website. When this rule was brought into force back in 2013, it required a huge amount of effort from operators that wanted to stay active in the UK.

Headaches lead to a pain-free gaming experience

However, what may have been a headache for the leading casino brands turned out to be a blessing for players. Forcing operators to take regulation seriously and refine their software has meant that players are getting a better, more secure overall experience. That, in essence, is why online casino regulation has become a hot topic across Europe and beyond over the last decade. So, what do these regulators actually do for players on a practical level? As noted, all authorities have their own standards. However, as a general rule, the areas covered include:

Game Integrity: Every licenced online casino has to prove that its gaming software is secure and fair. This typically requires a third party to come in and carry out some tests. Going back to our example, a company called iTechLabs has certified that the site’s random number generator is free from any glitches or biases.

Data Protection: Long before the GDPR became a big deal in Europe, casino sites were required to uphold rigorous standards when they processed and stored data. To help facilitate this, the leading platforms use SSL encrypted software.

Financial Protection: One rule that came into effect following a 2011 incident in the US was financial protection. Although casino sites have always used recognised processors such as Visa, MasterCard and Neteller, new regulations have insisted that player balances be kept separate from operating funds. This rule is designed to ensure players can get their money back if the site goes bankrupt.

Social Responsibility: The most recent area of focus for gaming regulators is social responsibility. In simple terms, these rules are designed to stop operators from making false/inaccurate claims, offering poor customer service and generally not offering an ethical service.

Compared to other industries, online gaming is still developing. However, through a desire to dispel old ideas that gambling is a precarious business to be in, those involved have created a highly regulated economy.

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