Harmonization of Gambling Laws Make Sense with Global Connectivity

Legal Reader
 
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If you look around the world, gambling laws are almost always messy. In fact, it’s difficult to find any industrialized country with gambling laws that aren’t backwards. Germany, for example, had legal gray areas for operating gambling for many years, and even the new regulations coming in 2021 – after years of debate – have been heavily criticized and labelled as “built on sand”. Australia, New Zealand, Ireland, Canada and countless others have archaic regulations, too.

In Australia, which tops the list as the country with the biggest gambling spend in the world, playing online casino games is not illegal, but operating an online casino site is illegal. As you can imagine, this creates confusion and a rush towards the black market for online gaming.

What all countries seem to share is a lack of acknowledgement of the role the internet plays in gambling, and a lack of foresight into the role it will play in the future. Even in the UK, which has arguably the most centralized and liberal gambling regulation in the developed world, there is a tangled mess of issues concerning the tax status of remote operators. The UK Exchequer makes a fortune from gambling taxation, but the option for off-shoring is always threatened by gambling companies, and there is little the government can do about it.

Many players simply play illegally

To be fair to those countries, it is not an easy industry to regulate, especially online. But there needs to be some kind of willingness to accept that the internet is global, and people know how to use it. Consider being based in a strict non-gambling US state like Utah, and how easy it would be to get a VPN to spoof your location to access an unlicensed casino. Nobody really wins in this scenario. Of course, nobody is saying that Utah should legalize gambling – far from it. Instead, it would be nice to see regulators take a harmonious approach.

Today, the gambling industry is dominated by global brands. And, if you play Mega Jacks poker from SlotsHeaven in Canada, the experience will be similar to playing the game at sister sites in the UK, Ireland, New Zealand, Italy or India. But action from regulatory bodies differs dramatically by country. Harmonizing some of those regulations to create ‘internet norms’ adhered to by licensed operators regardless of where they come from would be a smart step.

Consider some of the regulations handed down by the UK Gambling Commission recently. For a start, the UKGC banned the funding of accounts with credit cards. Most rational people can agree that is a good thing, as it is the very definition of gambling with money you can’t afford. The UKGC also banned so-called “turbo buttons”, reasoning that nobody needs to be playing slot or roulette spins every second. These are just a couple of examples of what the UKGC has done lately. The regulatory body is not perfect, of course, and it comes in for a lot of criticism from within the gambling industry and outside of it, but its actions of late warrant attention from other regulatory bodies across the world.

Bitcoin is a headache for regulators

But harmonization can also help in other areas outside of promoting responsible gambling. Most notably, action against fraud and money laundering. For instance, there is a massive unregulated shadow industry based around cryptocurrency gambling. So-called bitcoin casinos are everywhere, but none of the major regulatory bodies will – as yet – offer a license to these operators. Some regulatory bodies do, but none of the gold standard regulators – UK, Malta, Nevada, New Jersey (any US), Gibraltar, Alderney – will give their stamp of approval.

The reason the approved bodies do not regulate cryptocurrency casinos boils down to KYC (know your customer) policies. The logic goes that tokens like bitcoin naturally lend themselves to anonymity, and that (supposedly) makes it much more difficult for operators to pinpoint fraud and money laundering. There are counterarguments against this, mostly surrounding the ironic fact that blockchain technology can be used to combat fraud and money laundering better than traditional means. Nevertheless, the solution lies in a concerted, coordinated effort from governments and regulators to meet the challenge of cryptocurrency. Otherwise, people will continue to play at unregulated, untaxed crypto sites.

None of this is meant to be easy, and it would be something that happens over many years, not weeks or months. Moreover, it hints at a greater, more fundamental question – the regulation of the internet itself. That could be one of the biggest challenges facing all of us in the coming years.