Why is Legalised Gambling Important?
While it might seem a given that you can find a casino in any country in the world or you can use your online casinos when travelling to different countries, you may be in for a rude shock. You may be travelling to Japan, only to find that all online gambling sites are unreachable due to the country’s zero tolerance policy on online gambling.
Historically gambling has been a talking point for hundreds of years; from being criminalized by the Church to seeing the rise of mob or gang run organizations to being a legitimate state monopoly. The origins of gambling can be traced back to the Paleolithic age, before written history.
Before we go into the effect that legalized gambling would have, it is important to distinguish the regulations between land casinos and online casinos.
While most countries are generally more lenient about having brick and mortar countries, there are some surprising restrictions.
You have probably heard of the Monte Carlo, the famous casino in Monaco. The independent state has had legal gambling since the 19th century, including casinos, lotteries and sports betting. Making a state monopoly of the casinos filled the government's purse enough to not levy income taxes on its residence. Monaco has been considered a tax haven because of this, and it has proven to work, as the law still stands since it was passed in 1869. However, local residents were prohibited from entering casinos, this was an economic protection scheme to make sure that the money was only coming into Monaco, and that residents could benefit from the tax free haven rather than push money back into the system, muddying the government's income.
That is until 2020, when the Monegasque casinos opened their doors to local residents due to the debt that it accumulated during the pandemic.
It may surprise you to learn that over half of all the American states prohibit land casinos. Under federal law, it is up to the government of each state to decide whether they allow commercial gambling, lotteries, charitable gambling or online casinos, and, with the exception of charitable gambling, the majority of the states prohibit popular gambling.
There is a small loophole in the law though. Native American gambling falls in the grey here, where the Native American reservations are semi-autonomous; after a few court cases that went all the way to the supreme court, it was ruled that Native American reservations had the right to make their own casinos and could, for the most part, regulate their establishments tax free.
On the subject of tax, in the US there are special requirements, not just for the casinos but also for gamblers; you must pay tax on your winnings. While this is frustrating for foreign gamblers, US citizens can also apply for tax deductions from their losses (provided they have tickets or logs that back this). This works to a limit, being only as high as your winnings, so if you won a collective of $400 but lost cumulatively $600, then you could only get a $400 deduction.
In Britain, all gambling establishments need licenses from the state, but there are no restrictions over who can apply or who can gamble (save for the minimum age requirement that is 18). The UK was quite late coming onto the scene, opening its first official casino in 1960. As in most other countries, gamblers do not need to pay tax on their winnings.
With the surge of popularity of online gambling and casinos in the 2000’s, governments were quick to react. In Britain, the government decreed the 2006 act, which regulated the online gambling sites that had become popular. The intention was not to ban or criminalize it but rather to verify that only companies that were licensed to offer gambling sites were in operation.
This is not the case for all countries, take for example Japan, where gambling is very tightly regulated. In Japan any and all forms of online gambling are illegal, so you will not be able to use any of your favourite online casinos over there.
In the US, the stance on online gambling varies. Online gambling is allowed in several states, but this is only on the condition that there is no house or dealer, and it’s just player against player. For the most part however, you will find that online gambling is not tolerated. Only 11 of the states allow online gambling, including casinos and sports betting. The Federal Wire act of 1961 outlawed all interstate sports betting.
This was brought to a head in 2011, when the FBI closed in on three of the major online poker rooms in the US, seizing their domains. This saw the loss of hundreds of thousands of accounts and money that people won in the poker rooms, and though some companies could reimburse players, others went into administration and players lost their livelihoods.
This was a major blow to the world of online gambling, and not exclusively poker rooms, as people started having doubts about playing with their money online. This is when most European countries, including the aforementioned British, made laws to give some security to people as well as allow gambling companies to carry on their businesses.
The largest benefit for gamblers would be a safe environment in which they can gamble. If gambling were legal in certain parts of the world, then there would be no illegal gambling organizations, which offer no security and can lead to the rise of gangs and crime syndicates.
Another factor to consider would be that governments could profit from the gambling revenue through taxation, taking Monaco as a prime example. This could boost the economy and, with further investment, the tourist industries, as we have seen in Monaco, Vegas or Atlantic City.
Nowadays you will find many European countries have their own local gambling sites, though some of the bigger companies are seeking licensure abroad, there are several influential factors. For example, the taxation; in Germany or Britain you may find medium level taxes, but high taxes for France, Spain, Italy or Belgium. Sometimes licenses are only granted with several conditions such as a 5 year contract, high entry fee, software inspection or certain requirements to hire local management. All of these can make it difficult for companies to operate abroad, especially when local laws may ban some forms of gambling.
It goes without saying that excessive gambling can lead to addiction, and with legalized gambling it would be the government’s responsibility. There are several preventative methods already in place set by land casinos, like self-exclusion. With self-exclusion gamblers can choose to ban themselves from a casino for a period of time.
Online gambling sites can offer players the chance to check their gameplay time and how much they spent in the day. This can also be set to a limit, either on money spent, time spent or both, on the site. It is always important to remember that even if you are not necessarily losing money, the time you spend gambling can have adverse effects, as you may get accustomed to long hours of gambling.
One of biggest player benefits from playing at properly licensed and regulated casinos is that they can be sure the games are fair. When playing at a licensed online casino, players can be sure that the games have been properly tested to ensure that they are genuinely random and fair. A black-market operation does not offer the same guarantees and while the games may be fair, there is no way of being sure.
The legalisation of gambling, both online and offline, has been to the benefit of all. Players can be sure that they are not being cheated, that their money is safe, and that casinos can be held responsible if they are not honest. At the same time, governments can benefit through taxation, while gambling operators can act with legitimacy and flourish as companies.