Why are Gambling Licenses Still Useful?

Welcome to this post about why Gambling Licenses are still Useful. Different countries have different attitudes toward online casinos. Some of them take the path of regulation, implementing laws that govern the activity of online gambling operators, and their relationships with their players.

Others choose to ban the business altogether, a path that has repeatedly been proven to be ineffective. In the debate of regulations versus blanket bans, the essence of the conversation is often overlooked, though: are gambling licenses even useful? We think they are – and we have arguments for them.

There’s no such thing as a working prohibition

Governments have repeatedly tried to prohibit the trade and use of various products – and they have all failed miserably. Perhaps the best-known example is the United States; prohibition of alcohol in the 1920s which has given birth to extensive criminal organizations,

Involving bootleggers, and entire networks of speakeasies and has pumped millions of dollars into the underground. And the state didn’t see a cent of revenue from these activities. Banning online casinos has a similar effect.

On the one hand, players will find a way to play online – and there will be more than enough gambling outlets to accommodate them. On the other hand, the state has no control over these offshore casinos and doesn’t get its cut from their activity. This means no taxes, but also no customer protection, and no data protection and responsible gambling rules apply.

A legal grey area

In many countries where regulations are lacking, there’s a legal grey area where some operators work. In South Africa, for example, you have operators like Springbok or ZAR Casino that work in this way: they don’t have a license from the Western Cape Racing Board but they are reputable operators licensed by an offshore regulator.

With a comprehensive gambling regulation, this legal grey area ceases to exist. The operators obtain a license from the relevant authorities, pay their fair share of taxes, and comply with customer protection, anti-money laundering, and responsible gambling rules.

Are gambling licenses useful?

Yes, they are – but the reasons why they are useful differ from one stakeholder to another. Governments benefit from gambling licenses through the revenue streams they ensure.

Aside from the license fees, there are also taxes applied to the operators’ transactions and the players’ winnings – this means extra revenues that can be spent on useful things.

Casino operators benefit from licenses by having peace of mind, operators relying on the market of a certain jurisdiction can rest assured that once they have obtained a license. They can operate without interference from the authorities – as long as they play by the rules, of course.

Finally, players also benefit from licensed online gambling outlets. On the one hand, licensed operators must comply with data protection and customer protection rules. On the other hand, they will benefit from the mandatory problem gambling prevention tools and government-funded programs meant to mitigate its effects.

Final words

In conclusion, we can safely say that regulating online gambling is the more desirable course of action. Aside from preventing money from flowing out of the country, it ensures the governments get appropriate tax revenues, the operators have peace of mind and the players have all the protection they need when playing online.