Online Casino Laws

18 Jan , 2018 Casinos

Online Casino Laws

Does There Need to be Laws for Online Casinos?

While it may seem unnecessary to have laws governing online casinos, the truth is they are just as important as live casinos. Without laws you lend the way to unethical business practices up to and including refusal to pay a player for his winnings and failing to use his money to allow him to play the game. While the majority of casino owners would follow ethical practices without the laws to oversee their compliance, there must be laws for those who will only do what is right when they are made to do so.

In addition to complying with ethical practices, there is a need for online casino operators to comply with local licensing and taxation laws. An online casino must still have a license and pay business taxes like a live casino. Certainly they do not have the overhead a live casino does, but that is the only difference between them.

How Local Laws Relate to Online Casinos

In spit of what you may think, online casinos are regulated by the areas in which they are licensed. While  this is no usually a problem, if you live in a state where gambling is illegal, any casinos operating out of that state are in violation of the law and subject to fines. Being located online instead of in a brick and mortar building does not mean a casino has immunity from local laws.

Why do business owners choose online casinos? The difference in set up cost is substantial–$1 million for an online casino compared to $300 million for a live casino. One does not need to do very much math to figure out which venture is more profitable and has less overhead. While they still must be licensed and follow local laws, they are easier to operate and do not require the owner to be on site during business hours.

Online Casinos: How Difficult is it to Enforce the Laws?

Since online casinos are part of the entire global community, it could sometimes be difficult to enforce online casino laws, especially if the owner manages to become “absent.” This is no different than it would be if the same thing were to happen with a live casino except thee is a building where the authorities could pounce, locking doors and other methods of enforcing the law. While they could cancel the license of an online casino, it would be more difficult for them to track the activities.

Unfortunately there are many online casinos that are operating without a license and until someone complains they will continue to operate. The same holds true of those who lose their licenses or are cited because of failure to pay taxes. You can ask them to abide by the laws but they are more difficult to enforce in the online community.

Who Has Jurisdiction Over Online Casinos?

Since an online casino is part of the global community it is natural to think they are governed by international laws, but that is not the case. When a casino sets up its operations it must obtain a license for the state or country in which it holds domicile. What this means is an online casino that is domiciled and licensed in London, England is subject to the laws of that city and country while an online casino based in Atlanta, Georgia is subject to the laws of the state of Georgia and the city of Atlanta.

Unlike a live casino, an online casino has more options regarding its region of domicile. In most cases a live casino holds domicile in the state where it is located though it can hold domicile in the region where its home office is located if there is more than one location. An online casino can “take residence” wherever the owner wants to license it though in most case that will be where the owner lives for ease of taxation.

 

 


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