Who Regulates Casinos?

Casinos are one of the most popular forms of entertainment and gambling in the world. Millions of people visit casinos every year to enjoy various games, such as slots, roulette, blackjack, poker, and more. However, casinos are also subject to strict rules and regulations that ensure fair play, consumer protection, and social responsibility. But who regulates casinos and how do they do it?

What is a Gaming Control Board?

A gaming control board (GCB) is a government agency that is responsible for regulating casino and other types of gaming in a defined geographical area, usually a state or a country. A GCB has the authority to grant or deny licenses to gaming establishments, their owners, employees, and vendors. It also has the power to enforce gaming laws and regulations, and to impose sanctions or penalties for violations.

A GCB typically has a set of rules and regulations that dictate how gaming activities are to be conducted within its jurisdiction. These rules and regulations are derived from the enabling act, which is the law that establishes the GCB and its functions. The rules and regulations cover a broad range of topics, such as:

• Licensing requirements and procedures
• Accounting systems and auditing standards
• Rules of casino games and payout percentages
• Fair play and anti-cheating measures
• Security and surveillance systems
• Responsible gambling and problem gambling prevention
• Anti-money laundering and anti-terrorism financing
• Taxation and revenue distribution

A GCB may also have a separate body or a division that carries out the enforcement function. This body or division may conduct inspections, investigations, audits, hearings, and adjudications of gaming-related matters. It may also cooperate with other law enforcement agencies or regulatory authorities to combat illegal or unethical gaming activities.

How Do Gaming Control Boards Differ Across Jurisdictions?

Gaming control boards may vary in their names, structures, functions, and scopes across different jurisdictions. Some examples of gaming control boards around the world are:

• Malta Gaming Authority (MGA): Founded in 2001, the MGA regulates most forms of gambling in Malta, including land-based and online operators². The MGA is also one of the most reputable licensing authorities for online gambling in Europe and beyond. The MGA offers four types of licenses: Class 1 for casino games and lotteries; Class 2 for fixed-odds betting; Class 3 for peer-to-peer gaming; and Class 4 for hosting and managing online gaming operators. The MGA also monitors the compliance of its licensees with the applicable laws and regulations, such as the Gaming Act 2018, the Prevention of Money Laundering Act 1994, and the Data Protection Act 2018.
  
• Casino Regulatory Authority of Singapore (CRA): Established in 2008, the CRA regulates the two integrated resorts (IRs) in Singapore, which are Marina Bay Sands and Resorts World Sentosa³. The CRA ensures that the IRs operate in accordance with the Casino Control Act 2006 and other relevant laws. The CRA issues casino licenses to the IRs for a period of up to 10 years, subject to renewal. The CRA also imposes conditions on the licenses, such as entry levies for Singapore citizens and residents, social safeguards for vulnerable groups, anti-money laundering measures, and responsible gambling practices.
  
• Gambling Commission (GC): Created in 2005, the GC regulates arcades, betting, bingo, casinos, gaming machine providers, gambling software providers, lottery operators, external lottery managers and remote gambling (online and by phone) that use British-based equipment⁴. The GC aims to keep gambling fair and safe for all. The GC issues various types of licenses, such as operating licenses, personal licenses, and premises licenses, depending on the nature and scale of the gambling activity. The GC also enforces the Gambling Act 2005 and other relevant legislation, such as the Money Laundering Regulations 2017, the Data Protection Act 2018, and the Proceeds of Crime Act 2002.
  
• Nevada Gaming Control Board (NGCB): Formed in 1955, the NGCB regulates all gaming activities in Nevada, which is home to Las Vegas, the gambling capital of the world. The NGCB consists of three members appointed by the governor for four-year terms. The NGCB issues various types of licenses, such as non-restricted licenses for casinos with more than 15 slot machines or any table games; restricted licenses for locations with up to restricted licenses for locations with up to 15 slot machines and no table games; and interactive gaming licenses for online poker operators⁵. The NGCB also regulates various aspects of casino operations, such as gaming devices, games, systems, personnel, internal controls, surveillance, and accounting. The NGCB works in conjunction with the Nevada Gaming Commission (NGC), which is a five-member board appointed by the governor for four-year terms. The NGC acts as the final authority on licensing matters and appeals.

What are the Benefits of Casino Regulation?

Casino regulation has several benefits for various stakeholders, such as:

• Reduced Crime: First of all, online casinos that operate on the black market are often tied to fraud and money laundering. If an operator is left unregulated, it has the chance of diving into criminal activities. By regulating online casinos, authorities can prevent such illegal practices and protect the public from harm.
  
• Tax Revenue: One of the biggest benefits that come from having a regulated online casino industry is tax revenue. Online casino revenue is subject to tax and the money is surprisingly high. Take the state of New Jersey, USA, as an example. In November 2021, New Jersey recorded $1.3 billion in revenue from sports betting only⁶. This revenue can be used to fund public services and programs, such as education, health care, and infrastructure.
  
• Higher Employment Rates: Another benefit of casino regulation is that it can create more jobs and boost the local economy. Casinos employ thousands of people directly and indirectly, such as dealers, security guards, managers, accountants, cleaners, chefs, and more. Casinos also generate demand for other businesses, such as hotels, restaurants, shops, and entertainment venues. According to a study by Oxford Economics, the U.S. casino industry supported 1.8 million jobs and contributed $261 billion to the economy in 2017.
  
• Player Security: Casino regulation also protects the interests and rights of players who gamble at casinos. Casino regulation ensures that players have access to fair and honest games, that they receive their winnings promptly and accurately, that they are treated with respect and dignity, and that they are informed of the risks and consequences of gambling. Casino regulation also helps players to gamble responsibly and avoid problem gambling or gambling addiction by providing them with tools and resources, such as self-exclusion programs, deposit limits, time limits, helplines, and counseling services.
  
• Improved Gaming Experience: Finally, casino regulation can improve the gaming experience for players by ensuring that casinos offer high-quality products and services. Casino regulation can encourage innovation and competition among operators by setting standards and benchmarks for game design, software development, customer service, and user interface. Casino regulation can also foster trust and confidence among players by ensuring that casinos are transparent and accountable for their actions.

What are the Challenges of Casino Regulation?

Casino regulation is not without its challenges and difficulties. Some of the common challenges that regulators face are:

• Keeping Up with Technology: Technology is constantly evolving and changing the way people gamble. Online gambling platforms offer new features and functionalities that may not fit into existing regulatory frameworks or pose new risks or opportunities for players. For example, some online casinos use blockchain technology to ensure transparency and security of transactions, while others use virtual and augmented reality to create immersive and realistic gaming environments. Regulators need to keep up with these technological developments and adapt their rules and standards accordingly.
  
• Balancing Interests: Another challenge of casino regulation is balancing the interests of different stakeholders, such as operators, players, governments, and society. Regulators need to consider the economic benefits of casino gaming, such as tax revenue, employment, and tourism, as well as the social costs, such as problem gambling, crime, and addiction. Regulators also need to ensure that casino gaming is fair and competitive, while protecting the rights and welfare of players. Finding the optimal balance between these interests can be difficult and complex.
  
• Harmonizing Regulations: A third challenge of casino regulation is harmonizing regulations across different jurisdictions. Casino gaming is a global phenomenon that transcends national borders and boundaries. Players can access online casinos from anywhere in the world, while operators can offer their services in multiple markets. However, each jurisdiction has its own laws and regulations that may differ or conflict with each other. This can create confusion and uncertainty for both operators and players, as well as legal and operational challenges. Regulators need to cooperate and coordinate with each other to create a consistent and coherent regulatory framework that respects the sovereignty of each jurisdiction while facilitating cross-border gaming activities.
  
• **Best Practices**: A fourth challenge of casino regulation is identifying and adopting best practices that can enhance the effectiveness and efficiency of regulatory processes and outcomes. Best practices are methods or techniques that have been proven to produce optimal results in a given situation or context. Best practices can be derived from independent, evidence-based research, industry standards, or benchmarking with other jurisdictions. Best practices can cover various aspects of casino regulation, such as licensing, auditing, enforcement, anti-money laundering, responsible gambling, internal controls, game approval, technical standards, and testing. However, finding and applying best practices can be difficult and complex, as they may vary depending on the size, scope, nature, and objectives of the casino industry and the regulatory authority.

What is the Future of Casino Regulation?

Casino regulation is a dynamic and evolving field that responds to the changing needs and expectations of the gaming industry and society. Some of the future trends and developments that may influence the direction and scope of casino regulation are:

• Online Gaming Expansion: Online gaming is expected to continue to grow and expand in the coming years, as more players access online casinos from different devices, platforms, and locations. Online gaming may also offer new forms and modes of gambling, such as esports betting, social gaming, live dealer games, and virtual reality games. Online gaming may also create new opportunities and challenges for regulators, who need to ensure that online operators are licensed, regulated, and monitored in a consistent and coherent manner across different markets.
  
• Responsible Gambling Enhancement: Responsible gambling is expected to become more prominent and important in the future, as more players become aware of the risks and consequences of gambling. Responsible gambling may also involve more measures and initiatives, such as setting limits on time and money spent on gambling, providing self-exclusion programs and helplines for problem gamblers, educating players and operators about the risks and consequences of gambling, and supporting research and treatment programs for gambling disorders. Responsible gambling may also require more cooperation and coordination among regulators, operators, players, and other stakeholders to prevent or reduce the harm caused by problem gambling or gambling addiction.
  
• Anti-Money Laundering Strengthening: Anti-money laundering is expected to become more stringent and rigorous in the future, as more regulators, operators, and players become aware of the potential use of the gaming industry for money laundering or terrorism financing. Anti-money laundering may also involve more measures and initiatives, such as identifying and verifying the identity of customers and beneficial owners, monitoring and reporting suspicious transactions or activities, conducting due diligence and risk assessments on customers and operators, and cooperating with law enforcement agencies or regulatory authorities. Anti-money laundering may also require more compliance and oversight from regulators, operators, and players to prevent or combat the misuse of the gaming industry for illicit purposes.
  
• Global Cooperation Intensification: Global cooperation is expected to intensify in the future, as more regulators, operators, and players recognize the benefits and challenges of cross-border gaming activities. Global cooperation may also involve more forms and levels of collaboration and coordination among regulators from different jurisdictions to address common issues and challenges in casino regulation, such as illegal or unethical gaming activities, technological changes, market trends, social issues, and legal developments. Global cooperation may also foster trust and confidence among regulators and stakeholders by ensuring that casino regulation is consistent and coherent across different markets.

Examples of Casino Regulation

Casino regulation can vary widely across different jurisdictions depending on their legal, political, economic, and social contexts. However, some examples of casino regulation that can illustrate the diversity and complexity of the field are:

• New South Wales (NSW), Australia: NSW is one of the states in Australia that has a casino industry. The NSW casino industry is regulated by the Casino Control Act 1992 and other relevant laws. The NSW Independent Liquor & Gaming Authority (ILGA) is the regulatory body that licenses and monitors casino operators in NSW. The ILGA also has a Casino Division that conducts inspections, investigations, audits, and enforcement actions related to casino operations. The ILGA works closely with other agencies, such as the NSW Police Force, the Australian Transaction Reports and Analysis Centre (AUSTRAC), and the NSW Office of Responsible Gambling. The NSW casino industry has been subject to several inquiries and reviews in recent years due to allegations of money laundering, corruption, and misconduct involving casino operators and regulators.
  
• European Union (EU): The EU is a political and economic union of 27 member states that have a common market and a single currency. The EU does not have a unified or harmonized legal framework for casino regulation. Instead, each member state has its own laws and regulations that govern casino gaming within its territory. However, the EU does have some general principles and rules that apply to casino regulation across the EU, such as the freedom to provide services, the protection of consumers, and the prevention of money laundering. The EU also has some institutions and bodies that facilitate cooperation and coordination among member states on casino regulation issues, such as the European Commission, the European Parliament, the Court of Justice of the European Union (CJEU), and the Expert Group on Gambling Services.
  
• United States (US): The US is a federal republic that consists of 50 states and a federal district. The US has a complex and diverse casino industry that includes commercial casinos, tribal casinos, racetrack casinos, riverboat casinos, and online casinos. The US does not have a national or federal authority that regulates casino gaming. Instead, each state has its own laws and regulations that govern casino gaming within its jurisdiction. However, the US does have some federal laws and agencies that affect casino regulation in some aspects, such as taxation, anti-money laundering, and tribal gaming. The US also has some organizations and associations that represent or support the interests and activities of casino operators, regulators, or stakeholders, such as the American Gaming Association (AGA), the National Indian Gaming Commission (NIGC), the International Association of Gaming Regulators (IAGR), and the National Council on Problem Gambling (NCPG).

Conclusion

Casinos are regulated by gaming control boards that are established by law and have the authority to license, monitor, enforce, and sanction gaming activities within their jurisdictions. Gaming control boards differ in their names, structures, functions, and scopes across different regions, but they all share a common goal: to ensure that casinos operate in a fair, honest, and responsible manner. Casino regulation has several benefits for various stakeholders, such as reducing crime, generating tax revenue, creating jobs, protecting players, and improving gaming experience. However, casino regulation also faces several challenges, such as keeping up with technology, balancing interests, harmonizing regulations, and adopting best practices. Casino regulation is a dynamic and evolving field that requires constant adaptation and innovation to meet the changing needs and expectations of the gaming industry and society.