The global gambling industry is a multi-billion dollar sector that attracts billions of people to physical and online casinos every year. Several stats suggest that 26% of the world’s population, or at least 2 billion people, have gambled at least once in their lifetime. In the United States alone, 85% of residents have gambled at least once, with about 60% of all Americans gambling at least once in the past year.
The global gambling market grew at a compound annual growth rate (CAGR) of 56.4%, from $449.04 billion in 2022 to $702.45 billion in 2023. Despite economic challenges, supply chain problems, and rising inflation, the market size is expected to hit $765.89 billion in 2027. So how do gambling operators keep players safe among this rapidly expanding market?
The Need For Gambling Regulation
The sheer size of the gambling market has unsurprisingly attracted illicit operators. The rate of digital fraud attempts in the gambling industry rose 261.9% in the US from the second quarter of 2020 to the second quarter of 2021. This is why many argue that regulation is not only crucial but also required.
The gambling industry is somewhat peculiar because operators are interested in logical and progressive regulations, unlike other sectors where stakeholders frown at increased government interference. Operators have realized that without proper regulation, organized crime would permeate the gambling scene.
The history of gambling in Las Vegas reflects the importance of government regulation. Although gambling became legal in 1931, the industry received a lot of money from organized crime players and therefore did not attract legitimate investments until the government stepped in and established the Nevada Gaming Control Board (NVGCB) in 1955. The agency was created to tackle organized crime, develop license issuance rules, and establish tax regulations. By 1966, Las Vegas witnessed a significant increase in the number of new casinos and legitimate investments.
Another argument for regulation is the need to protect customers. Most regions have regulatory agencies in charge of casino operations, handling licensing, and taking punitive action against erring operators. These agencies also regulate online casinos and establish rules that iGaming services must follow. In the US, for example, states like New Jersey and Pennsylvania require players to be physically located within the state’s borders to play. Regulators also establish rules to ensure fair play by requiring operators to use tested random number generators (RNGs) to ensure fair outcomes. In addition, regulation protects customers and ensures casino apps that pay real money deliver user winnings promptly and according to law.
Furthermore, the government uses regulation to ensure that online and physical casinos pay their fair share of taxes to guarantee revenue from licensed operators. The well-regulated environment favors the industry because investors are more likely to release funds when some legal protection is guaranteed. In addition, regulation helps to enhance trust among players as users feel at ease while gambling if they know that protective legislation exists.
Gambling Regulations Protecting Players
The UK recently updated regulations governing gambling operators to ensure proper protection for gamblers. For instance, the Gambling Commission wants to reduce citizens’ access to black market operators and now has more authority to prosecute these operators by obtaining court orders. These court orders may require internet service providers (ISPs) to block illegal online gambling sites.
Furthermore, the government introduced rules that shape how casino operators design their bonus offers to prevent harming vulnerable people. There also is a new statutory gambling operator levy to help with treatment research and services, as well as new stake limits for online slots games – with specific attention paid to players aged 18 to 24. Finally, the updated rules established a gambling ombudsman to mediate disputes and make decisions in cases where players suffer losses caused by an operator’s inadequacies.
In the US, casinos adopt the American Gaming Association’s (AGA) Responsible Gaming Statutes and Regulations Guide, a collection of regulations and statutes in the District of Columbia and US states where one or more forms of gambling are legal. Although specifics differ, most regions enforce laws that address several issues. For instance, at least 21 regions require casino operators to establish plans for responsible gaming, employee training, and public awareness. Also, in at least 30 jurisdictions, some laws restrict the type and content of advertisements operators use. For instance, gaming advertising cannot target minors or contain deceptive information.
There are also restrictions in several states that limit the amount of alcohol players can consume in physical casinos or restrict access to games when players are visibly inebriated. In addition, several regions have statutory requirements for treatment and research funding. Some jurisdictions also enforce rules that require operators to introduce features that help players set wager and time limits in online casinos.
