Online Gambling

Online gambling is the act of gambling over the internet. In most cases, online gamblers bet money on games of chance and sporting events in hopes of winning additional money. Online casinos are often used as the platform for internet gambling activities while various independent websites run poker, bingo, sports betting, and lottery operations.

Many companies that operate online gambling websites have obtained licenses from gambling jurisdictions throughout the world. But even with licensing, the legality of online gambling is debated in certain regions/countries across the world. Some nations have placed restrictions and/or even banned the activity.

Online Casinos

Online casinos, or internet casinos, are the internet's version of land-based casinos. The majority of online casinos allow people to play the same games and place similar wagers that are available in land-based casinos. Blackjack, roulette, bingo, craps, keno, poker, and slots are some of the common games you will find in internet casinos while there are lots of other games and game variations found in online casinos.

Some casinos require potential members to download software before playing since the games run through software (called download-based casinos). Other internet casinos allow people to play games directly through the website (called no-download casinos). However, these games do run through browser plug-ins such as Java or Macromedia Flash so players need to have the plug-ins downloaded before playing.

One unique feature of online casinos not offered in land-based casinos is that potential members can play free games with play money. In play money games, users don't have to risk their own money while gambling.

Online Poker

Online poker gives people the opportunity to play various poker games over the internet. Some of the common games offered in online poker include Texas Hold'em, Omaha, Seven Card Stud, Razz, and H.O.R.S.E. Several other poker games and variations are offered on the internet too.

Internet poker differs from other forms of online gambling in that people are competing against each other rather than against the house (provider of the gambling services). Because of this fact, poker is considered to be a game of skill by many experts because skilled players can consistently make profits over time.

The house makes their profits by taking rake from both tournaments and cash games. Normally, 5% is taken in rake from cash game pots while 10% is raked from each tournament fee. However, these numbers are subject to change depending on the provider and the size of the game/tournament.

Some online casinos run poker rooms as part of their operation while other online poker sites are independent operations. Full Tilt Poker and PokerStars are two examples of large independent rooms. Other poker rooms operate through a network of sites such as the Cake Poker Network, which provides Cake Poker, DoylesRoom, Red Star Poker, Juicy Stakes Poker, Victory Poker, and Power Poker. Poker networks involve a group of sites that share the same software and player base.

Online Bingo

The internet's version of bingo is known as online bingo. The notable difference between online bingo and its land-based counterpart is that online bingo games use a random number generator to create winning number combinations. This differs from land-based bingo because parlors and halls use physical balls, machines, and callers (person who calls out numbers from the machine) to create winning number combinations.

Another big difference in online bingo is the chat option featured in most games. Since players are not playing alongside other people, online bingo rooms offer a chat box so players can type messages to each other.

Most internet bingo games revolve around some variation of 75-ball or 90-ball bingo. But there are some rooms that allow people to play more obscure games such as 80-ball bingo.

Online Sports Betting

Online sports betting enables people to place wagers on sporting contests and other events over the internet. Many online casinos run sports betting operations while there are also plenty of independent sportsbooks (also called bookmakers). The majority of bets offered at online sportsbooks include fixed-odds bets where players wager against the odds offered by the bookmaker.

Sporting contests are the most common event people bet on at sportsbooks, but there are also lots of other events featured at online sportsbooks. Politics, TV shows, weather, and celebrities are some of the other things you can bet on at sportsbooks.

Online Lotteries

In the early days of the internet, online lotteries were similar to other forms of online gambling in that they were mainly run by private companies licensed in offshore locations. However, governments around the world have passed laws to protect their own lotteries from private companies. State and national governments draw a lot of taxable revenue from lotteries, which is why these laws have been enacted.

As things now stand, a large majority of online lottery websites are run by governments at the state, national, and international level. However, there are still plenty of privately-run online lotteries too, and some of these sites even offer free lottery services.

Online Skill Games

Online skill games are considered any game where the most skilled players will win in the end. People can play for prizes and/or bet on different internet skill games such as poker, chess, backgammon, online pool, various single player games, and trivia contests. Different formats for online skill games include people playing head-to-head, tournaments, and people playing against the software.

Not all online skill games that offer prizes require a person to bet their own money. Some websites allow visitors to play free games and collect points that can be exchanged for prizes. Other internet skill games enable players to risk their own money in hopes of earning a profit.

The legality of betting on skill games has sparked debates in countries around the world. Wagering on skill games has been banned or restricted in some nations while other countries recognize gambling on internet skill games as an acceptable activity.

Mobile Gambling

Mobile gambling involves any type of gambling done through remote wireless devices. Most mobile gambling is done through mobile phones, but mobile gambling also refers to mobile computers and pocket-sized computing devices. Regardless of the wireless device used, mobile gambling requires a data connection to operate such as I-MODE, UMTS, GPRS, and GSM.

As of now, the mobile gambling market is still in development since online casinos and other gambling companies are hesitant to offer services. Most countries are still deciding on how they will view mobile gaming from a legal standpoint, and companies aren't willing to risk their reputation by jumping into the market yet.

Even still, many companies such as Seymour Pierce and Jupiter are busy developing mobile gaming platforms. These companies hope to position themselves as leaders in the mobile gambling sector as the market grows in future years.

Legality of Online Gambling

The legality of online gambling is a gray area in several parts of the world. Some countries have no restrictions against online gambling, but other nations are staunchly opposed to internet gambling. Some of the countries that have either banned online gambling or placed restrictions on it include the following nations:

Australia
Imposed in 2001, the Interactive Gambling Act (IGA) makes it illegal for companies to provide online gambling services to residents of Australia. The IGA targets both offshore and Australia providers of internet gambling services. Some concessions are made for online sports betting providers since it's not illegal to offer internet sports betting to Australian residents. It is also totally legal for Australian residents to engage in online gambling so long as they are not a provider.

China
China does not allow internet or land-based gambling throughout their country. The only form of gambling that's legal in China is the national lottery, but this doesn't offer an online option due to internet scams involving fake lottery sites. Macau, which is a special administrative area of China, is the lone territory where Chinese citizens can go to gamble; however, the government has made it hard for people to get a visa to Macau.

India
Online gambling is neither legal nor illegal in India; instead, it is a silent issue. However, the state of Maharashtra has banned online gambling through the Bombay Wager Act.

Israel
Israel's gambling legislation (Israeli Penal Law 5737 – 1977) makes land-based and online games of chance illegal in the nation of Israel. The only exceptions to this law are the Israel Lottery and the Israeli Commission for Sports Gambling; both freely offer their services to Israel residents.

Malaysia
Internet gambling operators are not allowed to offer their services to Malaysians by law. Companies that do allow Malaysians to gamble through their online site can be prosecuted. Banks are not supposed to allow residents of Malaysia to authorize any online gambling-related transactions either. Despite the anti-online gambling legislation in place, Malaysia has had a tough time preventing residents from gambling over the internet.

Russia
While Russia has moved all land-based gambling to four remote areas of the country, online gambling is not a clear-cut issue. Russia prohibits its residents from gambling online, but some companies still offer their services to Russians.

Turkey
Turkish legislation makes it illegal for both residents to engage in online gambling and for companies to offer their services to Turkey.

United States
The Unlawful Internet Gambling Enforcement Act (UIGEA) makes financial transactions from banks to online gambling websites illegal. It also prohibits credit card providers from allowing transactions to internet gambling sites. Since the UIGEA was signed into effect in 2006, there have been numerous challenges to the law by US House of Representatives member Barney Frank. And numerous online gambling companies have chosen to ignore the law since they still over services to American gamblers.

United States/Antigua and Barbuda Debate
Antigua and Barbuda, which is one of the world's biggest providers of online gambling licenses, has made several appeals to the World Trade Organization (WTO) regarding the United States' anti-online gambling laws. The United States' Wire Act and several other anti-gambling laws were ruled to be in violation of the WTO General Agreement on Trade in Services (GATS) as a result of the appeals. Since the ruling, the United States has done nothing to make amends to their anti-gambling laws. This caused Antigua and Barguda to file a claim with the WTO for $3.4 billion in 2007; the matter is still being debated.

Online Gambling Licensing Jurisdictions

Some countries offer online gambling licenses to companies that meet certain requirements. The requirements differ depending on what jurisdiction a company is trying to obtain licensing from.

An online gambling license establishes reputability for an internet gambling company. In turn, the gambling companies must pay licensing fees and taxes after obtaining a license. Some of the online gambling jurisdictions are listed below.

Alderney
Alderney is an independent member of the British Crown that lies in between France and Britain. An Alderney license makes cessions for companies to take bets from anywhere in the world. To obtain a license from Alderney, a company needs to undergo an investigation by the Alderney Gambling Control Commission, pay £10,000 to cover the investigation, pass compliance testing, and pay an annual licensing fee of £70,000.

Antigua and Barbuda
Antigua and Barbuda is a British constitutional monarchy that's located in the West Indies. Companies wishing to be licensed in Antigua and Barbuda must first submit an application to the Directorate of Offshore Gambling. If the application is accepted, a $70,000 licensing fee is required in addition to 3% in annual taxes.

Costa Rica
Costa Rica, which is located in Central America, offers some of the lighter requirements out of any gambling jurisdiction. To obtain a Costa Rican internet gambling license, companies need to pay $5,000 for a business license along with an additional $5,500 at the end of every year to keep the license ($500 included for legal fees).

Curacao
Although considered a territory of the Netherlands, Curacao is also its own country; this gives them the ability to offer online gambling licenses. The application process for a Curacao gambling license begins with a lengthy investigation by the Department of Justice. If a prospective online gambling company passes the investigation, they are to pay a 60,000 (ANG) deposit fee along with 10,000 (ANG) every two months during the initial two years after receiving a license.

Gibraltar
Gibraltar is a British territory that governs itself through an internal government. This 3-mile strip of land is located to the south of Spain, and offers some of the strictest requirements for those wishing to obtain an online gambling license. Potential licensees must already have a successful background in the internet gambling business, and have enough funds to pay the annual 1% tax up to £425,000.

Kahnawake
The Kahnawake gambling jurisdiction is based in the Kahnawake Mohawk Territory in Quebec, Canada. This organization will review companies for online gambling licensing for a $5,000 CAD application fee. Once this fee is paid, companies must pay an additional $15,000 CAD to cover investigation fees. Once the investigation is completed and a license is issued, an additional $10,000 CAD is required in license fees every year. The Kahnawake Gaming Commission (KGC) has gained international fame for its involvement in the Ultimate Bet Poker cheating scandal. The KGC announced that it found professional poker player Russ Hamilton at the heart of the scandal along with former Ultimate Bet employees.

United Kingdom
The United Kingdom offers internet gambling licenses at one of the highest prices in the world. Companies wishing to obtain licensing from the United Kingdom must not only pass a rigorous application process, but also be able to pay a 15% tax on internet gambling profits. According to the Gambling Act of 2005, the UK wants to make online gambling companies comply with certain standards before advertising in the United Kingdom. This process is known as white listing, and companies that meet the requirements set forth earn “white label” status.

Transferring Funds

In order to make wagers at online gambling websites, bettors must transfer funds to the site before playing; people also need to cash funds out after playing. There are several methods available for transferring funds to and from online gambling sites including payment processors, credit cards, eWallets, checks, and bank transfers.

Due to various anti-gambling laws around the world, some payment methods aren't available to residents of certain countries. For instance, the United States has laws that prohibit residents from using credit cards to fund online gambling accounts. Some payment processors such as Moneybookers and Neteller have chosen to stop offering services to US residents to avoid legal issues with the United States.

Online Frequent Player Programs

In order to reward frequent players, online frequent player programs (also called rewards programs) are offered. Online rewards programs are internet casinos' version of the comp programs that land-based casinos offer. Gamblers earn frequent player points based on their play in online rewards programs, and can exchange the points for various bonuses. Frequent player programs are very popular at online casinos, poker rooms, bingo websites, and sports betting sites. Some of the common bonuses offered through online rewards programs include the following:

Free Play
Most online gambling websites allow players to exchange comp points for free play. In the case of an online casino, players would exchange their points for a free blackjack bet, roulette bet, etc. In the instance of an online poker room, players can enter a tournament using their points instead of money.

Money
Internet gambling websites allow bettors to trade in frequent player points for cash. A large amount of points are required in proportion to the amount of money during the exchange.

Store Merchandise
Some online gambling sites offer stores where bettors can exchange their points in for physical merchandise. Every store features different merchandise, but some of the most common items offered includes t-shirts, hats, televisions, computers, video game systems, video games, DVD's, and books. In some cases, gambling websites offer high-end merchandise such as brand new cars.

Vacations
Vacations or cruises are prizes that can be purchased with comp points at some online gambling sites. The cruises and vacations vary depending upon what rewards program is offering them.

Online Gambling Promotions

Online gambling websites frequently run promotions to entice new players to sign up for their services. Some promotions are longstanding deals that may last for years while others are short-term promotions that last for one month or less. The type of promotions an internet gambling site runs depends on the site and the games they offer. Below are some of the common promotions offered at online gambling sites.

Signup Bonus
A signup bonus (also called deposit bonus) is a deal that internet gambling companies offer to draw players to their website. Money is normally used as the bonus offer in a signup bonus. The size of a signup bonus differs depending on what company is offering the bonus as well as how much money a person initially deposits. In most cases, the signup bonus money is not awarded right away and players must earn it through their play. However, no-deposit casinos differ because they give players free money upfront; the catch is that players can't cash this money out until they meet wagering requirements.

Reload Bonus
Reload bonuses allow players to earn extra money on deposits made after the initial deposit. Reload bonuses are very popular at online casinos, internet bingo sites, and online poker rooms. Reload bonus sizes vary based on the site offering the bonus and how much money a person deposits. For example, if the reload bonus offer is 50% up to $200, a person could potentially earn up to $100 on a $200 deposit. Reload bonus money must be earned through play.

Leaderboard Races
Leaderboard races offer bettors the chance to compete for prizes given out to the top players on a leaderboard. Frequent player points are used to determine a person's ranking on the leaderboard. Players are given a timeframe for how long they have to accumulate frequent player points, and the timeframe varies from one month to one year. Prizes will be awarded to designated spots on the leaderboard after the race is over.