The Drawbacks of Casino Regulation: Examining the Negative Impacts

Regulation of gambling allows to ensure a fair and safe gambling process. Despite the advantages of legalisation of gambling sphere, there are some negative consequences of this process. Let’s find out together with iotathegame.com.

Restrictions for Players

Regulation imposes certain restrictions on players. For example, most licences require the user to be over 18 years old. If the player is under the specified age, he will not be able to register at the casino. There are some licences where you can create a profile on the site only after the age of 21.

Another requirement concerns verification. Licensed casinos always require you to verify your account before withdrawing your winnings. This rule is due to the fight against money laundering, financing of terrorism, preventing access of persons under a certain age to play for money.

Increased Costs for Operators

Casino regulation drives up the costs for companies providing access to machines. The cost of a licence depends on the specific jurisdiction:

• Malta – 36 000 EUR;
• Brazil – 30,000,000 BRL;
• Antigua and Barbuda – 15,000 USD;
• Greece – 25 000 EUR;
• Curaçao – 4500 USD.

In addition to the cost of purchasing a licence, casinos incur auditing costs. Regulatory commissions periodically check sites for compliance with regulatory requirements, and you have to pay for it.

Another item of expenditure that appears after the licence is taxes. Licensed casinos must make contributions to the budget of the country where the document was issued.

Companies with a licence must comply with requirements that relate to the protection of player data. This also leads to higher overall costs. Casinos spend money on providing the proper level of security, creating a system that will help protect users.

Making Access to Innovation More Difficult

Licensed casinos are not allowed to introduce any innovations. Companies must take into account the restrictions that are spelled out in the authorisation of the regulator. For example, there are licences that prohibit payment transactions using digital currencies. Because of such a restriction, players can not use crypto wallets on the site, conduct the fastest and safest transactions with minimal commissions.

Many authorisations set strict requirements for mobile applications. Because of this, casinos do not release software for betting from smartphones, even if they have such an opportunity. First, the companies bring the software in line with the requirements of the regulators.

Inconsistency of Standards

Inconsistency of standards is another problem relevant for iGaming regulation. Having an authorisation from one jurisdiction does not guarantee that a casino will comply with the requirements of another country. This leads to the fact that a company has to apply for several licences in order to expand its audience.

Many casinos solve this problem by applying for a licence with the most stringent requirements. Let’s take a look at how licences differ from one jurisdiction to another in terms of the difficulty of obtaining one:

• Curaçao is a jurisdiction that allows you to buy a licence inexpensively and provides for transparent regulatory rules. Taxes set by the country are considered to be among the lowest in the world. Casinos that obtain a Curacao licence can draw up the document in the shortest possible time. The disadvantage is that the licence does not open access to the markets of other jurisdictions due to the low requirements.
• Malta is a jurisdiction that issues prestigious licences. To obtain a document, a company must have a solid reputation, provide personal information about the founders and a detailed scheme of business. The first payment for the licence is 2330 EUR. After the licence is approved, it is necessary to pay 8500 EUR every year. The monthly tax during six months after the document is issued is 4660 EUR. Further it increases up to 7000 EUR. The procedure of registration of the licence involves a lot of expenses. However, casinos that have received the document, can immediately enter the international market. The licence includes requirements typical for permits of many other jurisdictions.
• The Isle of Man is another jurisdiction that issues prestigious licences. You have to pay approximately £5,000 to register an application. The annual payment after the licence is issued is 35,000 pounds. The tax rate is determined taking into account the company’s profit, can be equal to 0.1-1.5%. Not every casino gets a licence from the Isle of Man. However, companies that have managed to do so, can operate in a variety of countries.

There are other jurisdictions that issue casino licences.

Limitation of Advertising Opportunities

Licences restrict marketing opportunities for casinos. For example, many licences prohibit offering certain types of bonuses. Other licences impose restrictions on the channels through which a casino is promoted. For example, regulators may prohibit TV adverts.

Limited marketing options make it difficult for companies to attract new audiences. In addition, companies cannot maximise retention of those who have already registered. Such restrictions are particularly relevant for the Swedish licence, which prohibits offering a welcome bonus to newcomers.

Despite all the negative consequences listed above, the regulation of casino activities has a positive impact on the industry. Users are recommended to play for money only on those sites that have a licence – this guarantees a safe gaming process, the possibility of withdrawing winnings received in the machines.