Online Gaming Regulation

  1. Internet Gaming
  2. Online Gaming Regulation

There have be numerous points of debate over the issue of regulated online gaming, because the interpretation of this industry and how it is controlled has broad variations throughout each country. In Canada alone, there are even numerous regulatory structures depending on the province. The presence of online gaming is only continuing to grow, as it offers a convenient alternative for consumers who are interested in this form of entertainment. As a result, each government must adapt to meet the demands of the expanding industry in a way that fairly regulates consumer access to these services.

As an example, in 2010 the estimated total value of online gaming services in Canada was approximately $800 millions, based on conservative statistics from Global Betting & Gaming Consultants. That number skyrocketed to around $1.3 billion by the year of 2013, and this is again a conservative number given by experts. What’s more is that the bulk of this wagered money occurs through offshore clients.

When the time comes for any government agency to incorporate a model that helps with their unique online gaming industry, three popular structures already exist. These are monopoly, hybrid, and regulated.

Monopoly

Using the monopoly model indicates that a government-run lottery corporation is legally the sole provider of any products or services related to online gaming that residents can use within the local jurisdiction or province. Of course, this is dependent upon the agency’s ability to develop gaming software and products that will effectively grab a percentage of the market from larger operators that would be considered appropriate. The size of the market itself is important with this model, especially when it comes to games that feature a multiplayer aspect. Consumers would typically opt for the provider with more players.

The technical aspect of such games is another major hurdle that the agency has to take seriously. Each game offered at an online casino is developed by leading companies in the industry, and they come backed with years of experience as well as rigorous testing and auditing. In its infancy, a lottery corporation has virtually no chance of competing with larger operators in such an ever-changing market.

The Internet Gaming Council would like to add that multiple countries across Europe have ditched this monopoly model due to the fact that it cannot achieve the desired market percentage. In addition, the poor performance of these structures led to vague projections for future years.

Hybrid

The hybrid model is somewhere in between a regulated and monopoly structure, and it can prove to effectively meet the needs of local players if it is planned and executed carefully. Each lottery corporation can offer a mix of regulated games and services from established operators with its own developed software and games. In regards to third party gaming, it is up to the lottery corporation to approve of each applicant’s products prior to those options being made available to the public. These games can then be accessed through the government agency’s system that manages player accounts.

In Canada, the hybrid model is presently in use as a default system. Certain provinces have lottery corporations that have begun to offer exclusive gaming and other services through their systems, but the market is still fair game for other offshore casinos and operators to provide content for players. Again, this leads to underwhelming performance from each lottery corporation due to the loss of possible tax revenue as well as a dwindling amount of excitement and interest from local residents.

Regulated

What has become the popular structure for government agencies is the regulated model. Already in use by numerous countries in Europe, the regulated model allows the government to openly offer the products from online gaming operators and produce economic growth.

The global shift from prohibitive legislation to more inclusive models is moving faster as the years progress, and more and more countries are gravitating towards the regulated model. As the online gaming industry becomes more accepted, additional information has become available that shows the facts as opposed to myths in relation to gaming online. In addition, the structure of online gaming gives agencies much easier methods for monitoring and auditing. The transparent nature of online gaming proves to be a major advantage over land-based casino or other venues.

Open and regulated online gaming markets allow for the collection of tax revenue from almost every operator, which is something a government agency with a prohibitive model cannot hope to gain.

It is the stance of the Internet Gaming Council that valuable information can be seen when in observation of the regulated models of their respective jurisdictions. Through each system, it is possible to regulate this industry and protect the consumer effectively. Economic growth can occur from local investing and the creation of jobs. These benefits are possible simply through a reasonable amount of taxation.

Addressing Problem Gambling

The problem of compulsive gambling has been one that has been hard to quantify. The disorder itself is new compared to other forms of addiction. The American Psychological Association (APA) included it as a mental condition in 1980. Unlike alcoholism, drug abuse, and other addictions, gambling is a more hidden form of compulsion. Combined with a lacking of funding to research the problem it often goes under-reported.

Many people are not identified as problem gamblers until it is too late. Sometimes a catastrophic amount damage has already occurred. Examples of damage can range from loss of friends and significant relationships and even jobs. Some people experience devastating financial ruin. Others make poor decisions leading to criminal activity. There is some research indicating that gambling may lead to increased domestic violence.

Researchers have noted that the increase in the number of physical casinos is not correlated with a similar rise in compulsive gamblers. Others suggest the tremendous growth in online gaming sites is part of the problem. Gambling websites number in the tens of thousands and new casino online sites launch every day. Gambling online may provide a sense of anonymity and easier access to games.

How To Know If You Are A Problem Gambler

The APA lists a set of nine criteria that helps identify those with a gaming addiction. When an individual meets any four within a twelve month period the diagnoses is earned.

These criteria include:

1. The gambler has to bet larger amounts to achieve the same excitement.
2. Problem gamblers also may become irritated when unable to play.
3. When not playing, thoughts of gambling are often persistent and controlling.
4. Unsuccessful attempts to stop or cut back.
5. Compulsive gamblers will often play when distressed or depressed.
6. A problem gambler will often return after a big loss to win back their losses.
7. Frequent attempts to hide or cover up their addiction.
8. The loss of a significant relationship, job, or other opportunities.
9. Whether someone has to rely on others to assist with desperate financial conditions created by gambling.

Individual Options

When an individual, his or her friends or family believes there may be an issue with compulsive gambling, there are several options for treatment and intervention. Counseling with a licensed mental health profession should be one of the primary courses of action. There are also options for joining Gambler’s Anonymous or other self-help groups.

Some people, especially the elderly, find turning over their financial affairs to a trusted family member helps. This limits the access to money that would be used to gamble. Placing restrictions on what internet sites that can be visited are another option.

Societal Options

Governments can enact legislation that provides a safety net. Australia recently passed the Interactive Gambling Amendment Bill in 2016. The problem gambling issue in that country has reached epidemic proportions. According to The Economist Magazine, the average gambling losses per adult Australian is around $1,000.

Included in the eleven measures in the bills are setting limits on the incentives offered by online casinos. Also, lines of credit would be eliminated once the bill takes effect. Residents could sign up for an online gambling exclusion registry. The period of time for the exclusion would be up to the individual but would be at least three months.

Other things that governments can do is to fund research into gambling addictions. By helping to identify those types of people likely to become problem gamers better treatments can be devised.

Casinos can also play a part in helping to resolve problem gambling. Marketing can be “toned-down” and recast to encourage responsible play. Embedding on-site counseling with proactive monitoring to identify potential addictive behavior. For online sites, algorithms could be employed for the same purpose.