Are National Gambling Regulations Being Undermined?

Posted by Harry Kane on Friday, February 2, 2024

In many ways, technology has played a seminal role in the evolution of online gambling and its proliferation in markets across the globe. However, technological advancement is always a double-edged sword, and one that is now arguably undermining gambling regulations in jurisdictions across the globe.

But what technologies are posing challenges to national regulators, and what does all this mean from the perspective of players? We’ll explore this and more in the article below, while looking at how the regulatory landscape may continue to evolve in the future.

How is Online Gambling Regulated?

There’s no global or universal regulatory standard for iGaming, whether you consider casino wagering or remote sports betting. This means that different countries and jurisdictions will have their own unique regulatorily framework, or take a harder line approach that completely outlaws different types of online gambling.

In the UK, for example, the government legislates the iGaming market, while the UK Gambling Commission (UKGC) is responsible for granting licenses and enforcing regulations. However, casino and sports betting legality is now determined at state level in the US, with all relevant federal laws having been struck down.

In regions such as Kuwait and Bahrain, all forms of off and online betting are expressly illegal. From a legislative perspective, this means that local and domestic operators are banned from offering any kind of betting vertical or service, and commercial entities that break this law are likely to face heavy sanctions.

Exploring the Loopholes in Gambling Regulation

This is where online gambling legality gets interesting. In jurisdictions that prohibit online gambling and prevent domestic operators from targeting natives, for example, there’s rarely laws that criminalise individuals from seeking out betting opportunities overseas.

At the same time, we’ve seen a huge number of offshore betting brands launch during the digital age. These are usually entities that have a Curaçao eGaming license or similar accreditation and target markets ‘off the shores’ of where they’re based, regardless of any national laws and restrictions that may be in place.

We’ll touch more on offshore operators later in the piece, but the presence of such brands poses a huge headache to national regulators. Much of this has to do with the difficulties involved in sanctioning both international betting companies and individual bettors, which may prove costly, time consuming and technically complex.

What Contemporary Tech and Trends are Undermining Gambling Regulations?

Undoubtedly, the fractured nature of iGambling regulations makes it hard for countries to enforce their own individual laws on a significant scale. The inability to legislate against international operators and individual players is also a problem, as these two entities can combine to facilitate safe and technically lawful gambling.

Such challenges are also being compounded by the rising popularity of offshore gambling brands and and their ability to fill the void left by unregulated marketplaces. So, let’s take a look at the specific trends and technological advancements that are challenging regulators in 2024!

• – The Rise of Offshore Betting Brands with Enhanced Tech Stacks: While most offshore betting brands are completely safe and licensed by a recognisable entity, they typically have less regulations and lower overheads to contend with. This enables them to offer far more games and verticals and build more expansive tech stacks, which includes virtual and esports categories. Such sites are increasingly attractive to players, who may be tempted by the promise of a more immersive and less restrictive gambling experience.
• – The Widespread Use of VPNs: Not only are Virtual Private Networks (VPNs) now widely accessible, but paid products are also affordable and available across both desktop and mobile devices. VPNs encrypt your web traffic by connecting to a virtual server, which also masks your IP address and allows you to appear as though you’re based in another part of the world. So, bettors can lawfully distort their physical location and access casinos or sportsbooks that may not comply with a national regulator’s rules.
• – The Emergence of Blockchain or Telegram-Integrated Casinos: A growing number of offshore sportsbooks are built on blockchain technology, while they may also boast extensive integration with the communication platform Telegram. By leveraging one or both of these technologies, sites can offer enhanced anonymity to players, enabling them to signup simply with a verifiable email. Once again, players can also register regardless of their geographical location, while these sites also circumnavigate crucial Know-Your-Customer (KYC) protocols.

What Does This Mean for Players and the Future of the Marketplace?

From a player’s perspective, these innovations and advancements represent excellent news. This is especially true in the UK, where the recent iGaming review has proposed a number of measures to curb the industry’s perceived excesses, tighten regulations and prevent players (especially those who are younger) from wagering outside of their means.

However, they pose a significant challenge to regulators given the content of the iGaming review and the desire to introduce better player protections. For example, bettors may be able to avoid the new slot bet limits, simply by accessing an offshore casino with a secure VPN or wagering at a blockchain or Telegram-integrated site.

While it may be that the recent iGaming review is just the first step in a wider but more gradual process of reform, the complexity of regulating offshore website and so-called “anonymous casinos” makes the life of national regulators incredibly difficult. It’s also fair to surmise that the tech stacks owned by regulators aren’t evolving at the same pace as casino and sports betting brands.

Without a collaborative approach between different markets and regulators, it’s hard to see how the UKGC and similar bodies can minimise the influence of offshore brands, VPNs and crypto gambling on the marketplace. However, this will be an interesting space to watch in the future, especially as the technologies behind VPNs and blockchain continue to evolve.