Why are Licensing, Regulation, and Auditing so Important for Online Casino Players?

Brett C. - January 25, 2022

Online casinos are a dime a dozen. But only a select few are fully licensed, regulated, and audited by approved agencies to offer legal, safe, and fair gaming.

The Importance of Playing at Licensed Casino 

Online casinos are everywhere. A rudimentary search for online casinos in your country will yield myriad results, but which ones should you play at? As a trusted international authority vis-a-vis online casinos, OCR has established a set of benchmarks for playing at online casinos. Foremost among the requirements is full licensing and regulation. You might be wondering why it's so important to play at a fully-licensed online casino. Over the years, criminal syndicates and illegal operators have sought to profit from people's desire to gamble online.

One of the easiest ways to guarantee profits is through unlawful means. With no legal frameworks in place, it becomes way too easy for illegal online casinos to exploit their players. For starters, unlicensed online casinos do not adhere to any official rules. They may or may not pay players their due winnings, and there is no assuredness of fair outcomes of online casino games. From a player’s perspective, there are zero guarantees that your personal information, banking information, or online safety are protected at all. If these factors cast doubt on your desire to play at an unlicensed casino, they should.

Licensing and regulation are sacrosanct. Imagine being able to purchase a firearm with no background check, drive a vehicle without passing your driver’s license, or operating as a surgeon without going to medical school. While online casino gaming is merely for entertainment purposes, outcomes of casino gaming can change lives for better or for worse. Fully licensed, regulated, and audited online casinos are responsible actors. They care about their company and their players. Operators pay a substantial sum of money for their license and to remain compliant with the authorities. They implement a series of safety protocols, adhere to marketing rules, implement necessary player protections, and offer high-quality customer service.

Here are 5 reasons you should never play at an Unlicensed Online Casino:

  • Your safety and security could be at risk
  • Marketing scams, unfair T&Cs, and poor support
  • Unlicensed online casinos rarely put player interests first
  • There is no guarantee that the online casino will pay your winnings
  • Players cannot attest to the fairness, credibility, or reliability of game outcomes

These are the main reasons why online casino players should avoid unlicensed online casinos at all times. These operators are often owned by dodgy shell corporations set up on an offshore island, with multiple layers of secrecy hiding the true identity of the owners. This makes it nearly impossible to lodge official complaints against an online casino. To avoid all of these nightmarish scenarios, it is strongly advised to stick to fully licensed, regulated, and audited online casinos.

What is an online casino license?

Think of Las Vegas, Atlantic City, Monte Carlo, Macau, or Sun City in South Africa – these are all major hotel and casino entertainment destinations. They draw in scores of players every year, and they maintain operations according to a set of rules and a specific code of conduct. Foremost among the shared characteristics of all of these gambling locales are licensing and regulation. Each casino resort is mandated by law to comply with licensing requirements. Failing which, the authorities will shut these operations down. The legal framework within which casinos operate is published by each gambling authority at the local, state, regional, or national level. Depending on the country, there might be a framework for all forms of gambling activity. Alternatively, the rules may be established for a region.

Online casinos have been operational since the 1990s in the United Kingdom, and later in other gambling jurisdictions. The widespread liberalization of online gaming legislation is taking place at a steady clip, with many more countries, territories, and jurisdictions now authorizing some or other form of gambling activity. When government intervenes, it becomes official. There are rules, procedures, frameworks, requirements, and mandates in place to ensure that every licensed online casino operates according to the book. There are many licensing authorities today including the following:

  • Isle of Man
  • ADM of Italy
  • ONJN of Romania
  • Antigua and Barbuda
  • Government of Gibraltar
  • Spelinspektionen of Sweden
  • The Government of Curaçao 
  • Irish Revenue Commissioners
  • The Malta Gaming Authority (MGA)
  • The Kahnawake Gaming Commission (KGC)
  • The United Kingdom Gambling Commission (UKGC)

You might have noticed that there are country-specific gambling licenses, and there are offshore licenses. For example, the UKGC, ADM, ONJN and Spelinspektionen are country specific. They issue online casino licenses to operators in their country only. There are also offshore authorities that offer broad-based licensing to online casinos which operate under a specific license, anywhere in the world. Not every licensing authority is created equal. For example, offshore authorities are often lax when it comes to the requirements of casino operators. That's why it's so much easier to get a license in Antigua and Barbuda, or Curaçao than it is to be licensed by the UKGC, the NJDGE, or Spelinspektionen.

This begs the question: Should offshore operators be trusted less? The answer is complex. It is always better for a player to choose a licensed online casino, irrespective of where it is licensed. However, not all licenses are created equal. If possible, always play at an online casino licensed in your country. If that's not possible, choose the most reputable offshore licensing authority. It is incumbent upon players to comply with local gambling laws in respect of licensing and regulation.

What is an Auditor?

An auditor is a watchdog authority, a third party that validates the fairness, credibility, and transparency of online casinos. Since we are dealing with sophisticated computer software, Random Number Generators (RNGs), and uncertain game outcomes, players must trust the online casino to deliver fair results. Various online casino auditors act in the public's interest. These include eCOGRA Safe & Fair, TST (Technical Systems Testing), and Gaming Labs, among others. Auditors follow a checklist. These include the following:

  • Checking the Random Number Generator (RNG)

The RNG is a computer program that randomizes the outcomes of slots, card games, table games, dice games, and instant win games. These have to be fair, random, and unbiased.

  • Game Restarts After Stops/Failures/Pauses

All online casinos operate with servers that store valuable information about each player’s playing activity. If the game is interrupted for any reason, it must resume without any unfair advantage to the player. The gaming platform must be approved accordingly. All information about a specific player's betting activity, deposits/withdrawals, and gaming sessions are stored with the online casino. This must be ironclad.

  • Player Protections & Responsible Gaming Advocacy

Problem gambling is a real issue. Players may fall victim to reckless gambling if left unchecked. That's why it is important to provide all necessary responsible gaming advocacy resources. This includes Gamblers Anonymous, No Under 18 or 21, etc. Fortunately, players can spot responsible gaming practices by searching the footer of online casinos for badges, certificates, or responsible gaming protocols. Loss limits, deposit limits, self-exclusion, session limits, and other measures can be implemented to guard against problem gambling.

  • The Average Yield of Online Casino Games

If you look at any online casino game, it is always associated with a specific RTP. The return to player percentage indicates what percentage of every £, €, US $ et cetera is paid back over the long term. A figure of 95% indicates that $.95 will be paid back on every dollar over at least 1 million game outcomes on average. This has to be tested and verified by the auditor.

  • Safety and Security of the Online Casino

The role of auditors is not limited to checking the numbers. It's also important to ensure the integrity of the gaming platform, player information, banking information, and overall site security is protected at all times. Third-party interception of casino servers is common – that's why a full audit is necessary to protect player information. This may also extend to online casino employees, and other third parties involved with the gaming platform.

How to Locate the Casino License on The Casino Site?

Luckily, almost every online casino that is fully licensed proudly displays its licensing and regulation in a prominent place on the interface. Scroll down to the bottom of the casino's homepage – or any page for that matter – and you should see the badge posted on site. It might be the UKGC, MGA, IRC, Curacao, or KGC et al. But that's not enough. It's important to cross-reference the licensing posted on-site with the specific authority in question. In other words, navigate to the regulator website to ensure that the online casino is indeed fully licensed and regulated by them. They may have had a license in the past, but no longer hold a valid license. Always double-check when you are verifying the authenticity of regulated online casinos.

How to Locate A Third Party Auditor?

Third-party auditors are instantly recognizable on site. This is usually displayed by way of a badge from the respective authority. Recall that examples of third-party auditors include eCOGRA, TST, and Gaming Labs. As with online casino licensing, players are strongly encouraged to cross-check the validity of the auditor with the online casino.

Summary & Conclusion

Now you know how important it is for an online casino to be licensed by a reputable authority. Avoid registering, depositing, or playing at unlicensed online casinos. Unregulated online casinos often try to entice players with lots of window dressing. They present you with unbeatable bonuses and promotional offers, an exciting selection of online casino games, and lots of hype. Unfortunately, there are few (if any) player protections in place. You may not receive your winnings, and you may not have any recourse in the event of complaints. More importantly, you have no guarantees that your information will not be sold on the black market, or intercepted by hackers. Untested RNGs work to your detriment. The absence of responsible gaming practices can also be problematic for some players. For all of these reasons, never play at an unlicensed online casino.

Online Casino Reports (OCR) is an industry-leading authority that only works with fully licensed online casinos. Our trusted reviews present players with objective assessments of each operator, based on pros and cons. Player safety and security are always priority #1 with us. Every online casino listed on site is tested, verified, and audited accordingly.

Disclaimer: This opinion article is your 'Play Safe Guide'. As an online casino player, the integrity of your ID and account is sacrosanct. When you bet online, stick with fully licensed and audited online casinos. Responsible gaming advocacy is a priority – top online casinos comply with minimum legal gambling age requirements (18+ or 21+). Strict security protocols ensure that players are safe while playing online casino games.



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