SEARCH NEWS:

 

Electronic Gambling Report: Legal Issues and Licensing Questions

Some sites, such as Global Sports in Costa Rica, say that the only jurisdiction that counts is the one where the site is located; since they are licensed in Costa Rica, for example, Global Sports maintains that gambling is legal no matter where the customer is sitting.

Some sites warn the customer to check local laws before entering. A few list states such as Indiana and Minnesota as jurisdictions where Internet gaming has been declared illegal. And many simply say that the status of a patron' s Internet gaming activity is a complex problem that has not been decided definitely or consistently.

The question of taxability of winnings is addressed by about half of the sites, often with the answer that no accounting of winnings goes to any customer' s government, and that it is the customer' s responsibility to determine tax requirements and to comply with them. In any case, it is clear that customers cannot and should not rely on site operators for complete and accurate legal guidance.

Licensing Questions:

The subject of licensing and specific regulatory requirements is omitted entirely on many gaming websites, and in some cases there is no mention of ownership or location.

When licensing is mentioned, the terminology differs somewhat. Some sites state the case directly and briefly (for example, "Casino Money is fully licensed by the govern-ment of Venezuela." )

In a few cases, there is mention of bonding, periodic monitoring, or other regulatory activity. In other cases, the issue of licensing and location becomes split, as in " Casino Money is a fully licensed sportsbook operating in Venezuela," a construction that may indicate that the location and the licensing jurisdiction are not the same. Compare the more specific statement, "Casino Money is fully licensed by and operating in Venezuela."

According to several websites that comment regularly on Internet gaming, the term "license" is commonly used by the gaming business to bolster its credibility and authenticity to would-be customers. In some jurisdictions, such as Australia, advertisement of a license is indicative that background checks have been made, that a special fee has been paid, and that the business is subject to periodic monitoring and auditing.

In other jurisdictions such may not be the case. The term "license" may indicate that a franchise has been issued to the operator by a software and electronics firm that supplies it. In other words, the business is licensed by another firm but not necessarily by a government entity.

< Gaming News