Any industry with billions of dollars switching hands daily requires precise regulation. The real skill isn’t just regulating these industries but providing a balanced framework so parties across the spectrum are content. For instance, online casino regulation must balance opinions from casino companies and people who want to see the industry under strict rule.

Striking a balance is crucial in life, and finding a balance in most areas is critical. Regulation and compliance are the same. The cryptocurrency industry in America has fallen foul to growing at a pace that regulators haven’t been able to keep up with. This has led to short, quickfire interventions that have harmed the industry and driven multibillion-dollar companies overseas.

Thankfully, the regulators in America have been more lenient and considerate when establishing a legal framework for digital casinos to operate within. In truth, you could say this across the board, as more countries open themselves to the idea that legalized gambling can generate employment and billions in tax revenue. However, ensuring that it’s appropriately regulated and protects problem gamblers is also vital, so the industry utilizes a solid set of parameters.

The importance of regulation

“Establishing clear rules, regulation and framework are the most vital components that ensure gambling companies can construct long-term plans that generate growth for them, the industry and in the tax receipts for the countries in which they operate.” – Daniel Halvorsen

The quote above from Daniel perfectly illustrates the importance of compliance. It would be ridiculous for a digital casino to operate without a license in today’s day and age. Still, it is always best to verify that your chosen site has valid credentials and the correct permission to operate in your country.

Without regulation, industries are subject to unfettered capitalism, which we see in the cryptocurrency market, where the price is manipulated heavily by social media news and algorithmic trading.

The reality of unregulated casinos is much darker, as witnessed in many Hollywood movies in the mid-20th century. The casino industry was controlled by a concentrated number of organized criminals who could manipulate it and use it as to launder money.

While regulation and compliance have been unbelievably important in driving out these rogue agents from the industry, we must also be careful not to regulate and stifle innovation entirely; it’s a balancing act and must be done with great care and attention to detail.

The perfect formula

The introduction of mobile gaming and smartphones, combined with the everyday presence of the internet, has cultivated an atmosphere of great opportunity for digital casino providers. When an industry emerges from the fringes of a sector to become a global, multibillion-dollar enterprise, it’s never just one component that helps propel it into the stratosphere.

All these factors have helped immeasurably, but compliance and licensing also had to be on point and cater to the needs of the government administrations within the regions which these companies operate. If regulation and compliance weren’t robust and rigid, the industry may have failed to take off in the way it has. Luckily for the casino industry, regulation and licensing have provided fertile ground for companies to make ample profit from their digital casino enterprises.

Many online casinos are set up in specific regions where the tax rate is low for digital gambling. Gibraltar, Malta and Cyprus are usually the most common. While this might seem improper, plenty of enormous corporations will base their headquarters in tax-efficient locations to maximize profits, and digital casino companies are no different.

As long as the digital casino operator is registered in a country that allows this activity and they play by the rules, larger economies will usually allow their digital presence so long as they contribute to the tax base of that particular area. This is particularly true in the United States, where different states have various tax laws, so compliance is critical to ensure the smooth operation and continuation of services within each region.

Does the current system work?

No system is perfect, but the current compliance and licensing laws in digital gambling are much more lucid and accessible to implement than in many other industries. Some industries struggle to find a balance when it comes to regulating their industries properly. Ultimately, this can result in a severe loss of revenue and drive innovators away from the sector.

One of the best measuring tools you can use to see whether compliance and licensing are working effectively is to calculate the amount of profit and innovation within the sector. The gambling sector is thriving at the moment, and some of the world’s top game designers are moving into the industry due to the amount of money that is available for those that can design games that end up becoming top-performing titles, whether they are slot machine games or virtual games such as poker and roulette.

As far as regulation goes, dozens of industries could learn from the compliance and regulation that underpins digital casino gambling as a way of springboarding their own ingenuity and stimulating creativity in their respective sectors. Working with regulators and legislators is a much simpler way of generating the change you want in your industry rather than locking horns and fighting fire with fire when it isn’t necessary or a productive approach.

How compliance changed the game

Gambling companies, especially casinos, have always been under strict rules. Understandably, this industry should face stringent tests. While it should be focused on enjoyment, and you should only gamble with money you can afford to lose, some people require protection.

Problem gamblers make up a small percentage of the overall digital casino client base. However, as there are millions of people who play casino games online every year, a small portion is still a considerable enough number to ensure that compliance does its utmost to protect these people from problem gambling and the loss of large sums of money.

Compliance ensures that gambling companies adhere to strict know your customer limits, offer a variety of safe gambling tools such as time and deposit limits, and freeze accounts that they believe aren’t operating in good faith or practice. All of this would be more difficult to implement without a rigid set of rules and legislation across the board. However, because compliance is so robust, it is a lot easier to implement these conditions and deal with these problems efficiently when they arise.

Physical casino licensing

It wouldn’t be fair to suggest that compliance is something that digital casinos have championed; the truth of the matter is physical casinos have long had a solid framework, which many digital casino legislators mirrored to ensure that online casinos could function in the same way as their land-based competitors.

Although physical and digital casinos broadly offer the same games and services, the way you deposit your cash, use bonuses and interact with the casino is in stark contrast to traditional gambling businesses. Physical licenses were often restricted to one area where gambling was permitted, as we have seen in Las Vegas up until the turn of the millennium. There are now more states that allow gambling, and compliance and legislation have made physical licenses more straightforward to obtain.

Digital casino licensing is a more fluid process. Although there are barriers to overcome, it doesn’t follow the same cumbersome, regimented and drawn-out process that plagued many casino companies looking to expand their operations before online casinos.

It appears that online casino regulation has learned a lot from some of the negatives of the physical casino sector and has run with the possibilities. Not only have casino providers found a happy medium and a good starting point for them to negotiate compliance and licensing issues with regulatory bodies, but it appears all parties are content with the current landscape.

This has led to a world where casino companies can set up shop and expand, and regulatory bodies are happy with the money they’re bringing in for their tax base, which is the true definition of compromise.

Conclusion

There’s not much more that needs to be said on the matter, and it’s clear that the current foundation is working, so there’s no need to change anything at this time. Given that the online casino industry continues to move at a lightning pace and expand into new areas, it is imperative that compliance and licensing keep up alongside it and complement the sector so that it can continue to grow and thrive in the way it has over the last two decades.

Regulation will continue to play a vital role in the industry, but the current foundations are solid and allow all parties to walk away satisfied. As long as a digital casino operator adheres to the regulations and the legislative bodies are happy that their service ticks all the required boxes, the balance is perfectly struck, and this will continue encouraging more companies to venture into the gambling sector.