Gambling regulation has always been a contentious issue, and this is probably truer today than ever. Lawmakers are often torn between encouraging business and vague notions of moral hazard.
The fact is that gambling is a hugely important industry. It is estimated to boost the US economy to the tune of $240 billion annually. The US is also a perfect example of the vagaries of gambling legislation. The historic repeal of PASPA has certainly given the industry a shot in the arm, with online sports betting now firmly established in several states. However, the law prohibiting sports betting was honored mainly in the breach, with offshore operators generating billions with complete impunity for many years.
Nevertheless, as legitimate online betting grows, a deep understanding of the regulatory environment is an essential weapon in the arsenal of any ambitious operator. While most states are likely to use broadly similar laws, important differences may emerge over the next few years, particularly with regard to omni-channel betting – the ability for a customer to place a bet on one touch point, cash out on another and withdraw on a third.
There are also important technical considerations, such as the requirement to prevent mobile sessions from crossing state lines. In other words, if a player from New Jersey – where online sports betting is legal – travels the short distance to New York state – where it’s illegal – their mobile session must be terminated automatically.
For these reasons, any new entrant to the sector – be it a major media company looking to leverage the power of its brand or a hungry startup with a unique idea – needs to work with a provider that knows the legal landscape inside out.
Gambling remains illegal in some countries
In many countries, gambling is against the law and is likely to remain so for the foreseeable future. There are various reasons for this, from religion and tradition to politics and practicalities. These bans on gambling are not always total, however. For instance, land-based gambling and online betting are looked on differently in some countries.
China’s citizens have a reputation for being particularly fond of a bet. However, Chinese culture – and the government – do not consider playing the lottery to be gambling. The China Sports Lottery and Welfare Lottery are both operated by the state, while Hong Kong and Macau have separate gambling laws. And while online betting is illegal in China, it is estimated to represent a $150BN industry.
Technology and gambling regulation
A major complication for gambling regulators is the use of technology. Online gambling is still a relatively new concept, and many governments are struggling to keep up with its implications. For that reason, one type of gambling might be permitted on land, but not online – or vice versa. Some jurisdictions have introduced blanket bans on all online gambling, but this may be only temporary.
Other countries have taken a more sophisticated approach. Cyprus, for example, updated its gambling laws in 2012, making specific provision for online gambling, accompanied by appropriate licenses.
Keep up to date
The best way to stay ahead of the game is to talk to the experts. The global betting arena offers a wealth of opportunities but can often be a legal minefield. Visit Betinvest to make sure you’re fully prepared.