Licensed to Thrill
By Paul
With the majority of Internet casinos and sports books licensed by and operated from “offshore” locations – i.e., the Caribbean and the Isle of Man – the question of “how important is licensing” is one vexing the minds of many gamblers.

As Stuart Kernaghan of points our in his interview with Judi Kelly of, there are 64 jurisdictions world-wide offering some form of Internet wagering license, but some of those (including the popular licensing destination Vanuatu) are on the Organization for Economic Co-Operation and Development's list of uncooperative tax havens.

So why is it important to be licensed? Obviously, players want to be assured that they will be paid, and a few highly regulated jurisdictions ensure that by specifying that the licensee posts a bond to ensure this, even if the operation does not have surplus profits. Also, according to Kelly, “Online casinos with licenses from highly regulated jurisdictions operate under a strict framework where the regulator is a watchdog that monitors their operation to ensure that the odds are fair, there is no tampering with the random number generator, players winnings are paid, and so on.”

Kelly says that licenses can differ greatly in their scope: some involve little more than the payment of an annual fee for a data processing license, with operations being essentially untested and unregulated. She does, however, single certain jurisdictions out for praise: “There are quite a few jurisdictions that have established good models for Internet gambling. A few that come to mind are Kahnawake (Canada), which seems to be an attractive option for many operators, Alderney, the Isle of Man, Vanuatu, and Australia's Northern Territory and Tasmania.”

However, Kelly believes that players don’t put such a premium on licenses as the casino operators themselves do. For example, Sun International's promotes its Isle of Man license on the casino home page but recently reported very low gross quarterly revenues of $100,000 indicating that a well-regulated license is not necessarily important to players.

However, unless the US finally grasps the nettle and makes Internet gambling legal via federal legislation, it seems that the reputations of offshore licensing jurisdictions will come under increasing scrutiny.

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