The first time that online gambling was made available to the public was when Liechtenstein’s International Lottery tickets went on sale on the web in 1994. As internet usage and online gambling began to increase, it soon became obvious that gambling on the web would have to become regulated in a similar way to land-based gambling.
Today, virtually all online gambling service providers are legally required to have some form of license. In most places, the activity is regulated by official bodies. For example, online gambling is legal in some but not all of the states in the United States and the provinces of Canada, and it is legal in most European Union countries and nations of the Caribbean. Each country has its own regulatory organization to ensure the gambling is fair, safe, and compliant.
The First Regulators of Online Gambling
The first regulation of online gambling occurred in 1994 when Antigua and Barbuda passed the Free Trade and Processing Act. It enabled an organization wanting to open an online casino to be granted a license.
Another early regulatory body was the Kahnawake Gaming Commission, which was established in 1996 to regulate the First Nations reserve of the Mohawk Territory of Kahnawake, across from Montreal in Canada. The gaming commission now issues licenses to many of the world’s online casinos and poker rooms.
Regulatory bodies govern a number of elements of online gambling platforms. Many areas are the same as land-based gambling establishments, but regulators for online sites also need to ensure the sites comply with technology-related factors, such as the quality of software code, algorithms, and the server’s architecture.
Online Gambling Regulation in the US
In the US, legislation and regulation of online gambling were first drafted in the late 1990s. The Internet Gambling Prohibition Act was introduced in 1999 as a bill in the US Senate, but it did not pass. In 2002, amendments to the Federal Wire Act came into existence, which prohibits electronic transmission of data for sports betting over telecommunication lines, although it does not technically prohibit internet gambling on a game of chance. Land-based gambling and online gambling legislation and regulation are complex in the US, though. The Supreme Court ruled each state would determine online gambling’s status. In states where it is legal, online gambling must follow federal and local regulations. For example, in Pennsylvania, the Pennsylvania Gaming Control Board regulates online gaming establishments in the commonwealth.
Online Gambling Regulation Around the World
As online gambling laws change and continue to change, new regulatory bodies are required to ensure online gambling sites are safe and compliant in different countries. Here is a look at some of the most prominent countries that introduced new regulations at the beginning of the 21st century.
In Australia, it is illegal to provide interactive gambling services, such as online casinos, but it is not an offense for Australians to play casino games online. And online sports betting is legal. The Interactive Gambling Act was passed in 2001. Today, the Australian Communications and Media Authority regulate online casino gaming.
In the United Kingdom, gambling laws that had been in place since the 1960s were changed in 2003 to keep up with the advances in technology. The laws and regulations were updated to reflect how the gambling industry was a popular leisure activity in Great Britain. So, the Gambling Board was replaced by the UK Gambling Commission, which is tasked with regulating all codes of practice that they set for land-based and online gambling establishments.
In 2009, France proposed new laws to regulate and license online gambling, and in 2010, internet gambling was legalized. The Regulatory Authority for Online Games, more commonly known as ARJEL, was set up in the same year to regulate all online gambling platforms operating in the country.
As online gambling evolves and more countries make online gambling legal, the more that regulations will have to evolve with it. These are very early days of internet gambling, so the subject’s history has only just begun. It will be interesting to see where both the internet and gambling activities take us in the future.