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The “Unregulated Casinos” Myth

24 November 2010 by admin

As I’m sure you know, we wholeheartedly support legalizing online gambling in jurisdictions where it is not currently legal. We also support definitively legalizing it in jurisdictions where there is disagreement about whether or not it is legal (such as in the United States). We do not support dishonesty, though, even when it is done for “the greater good.” Therefore, it’s time for everyone to stop talking about the myth of the “unregulated online casinos.”

Both sides of the argument – the pro-gambling side and the anti-gambling side – propagate this myth that there are thousands of unregulated online casinos out there that are unsafe places to play. People who oppose legalizing online casinos say that they are unsafe because the websites are unregulated, so those casinos can simply rip off the players with no repercussions. There’s no way to determine if they’re safe! Those who support the government legalizing and regulating online gambling say it is necessary to provide a regulated industry to protect players from those unregulated online casinos.

Government-DespairThere are two problems with the unregulated online casinos myth. The first problem is that the myth implies that only government regulation can protect people from unscrupulous businesses. To people who think that is true, remember that in the United States, the two most heavily regulated industries are the financial industry and the oil industry. In the last two years, both have endured catastrophes that government oversight could not foresee or prevent. Also, both catastrophes were caused, in part, by mistakes made by the government intruding in the free market.

People already have a number of things protecting them from unscrupulous websites. One protection is the legal system. If a player is cheated out of money, they can sue or press criminal charges. Depending on the website’s jurisdiction, that is sometimes easier than others. Another protection is word of mouth. This is the number one thing in the free market that causes some businesses to succeed while others fail. If people have a negative experience dealing with your business, they are going to tell people about it. If enough people do that, the business develops a bad reputation. A smart player avoids any online casino with a bad reputation (or no reputation at all). As a result of enough people doing that, the casino goes out of business.

Conversely, if someone has a positive experience dealing with a company, they will share that as well. If enough people do that, the business develops a good reputation. A smart player only plays at an online casino that has a good reputation. With the online gambling industry, the reputation of casinos is spread through word of mouth, gambling forums, websites like this one and more. To help you, Suite has a casino blacklist of websites to avoid. There is a wealth of player-generated information on websites out there. A wise player takes advantage of that information.

ecogra-sealThe other problem with the unregulated online casinos myth is that any reputable online casino is actually regulated. There are some gambling websites on the internet that are not licensed or regulated by anybody. Do not play there. However, most online casinos – and any that have a solid reputation – are actually licensed and regulated. For example, take the United States, where Barney Frank says the government needs to regulate online gambling to protect Americans. It’s true that there are no online casinos regulated by the U.S. government, but there are plenty of online casinos available to Americans that are regulated by the governments of the UK, Gibraltar, Costa Rica, the Netherlands Antilles, Antigua and more. Even more importantly, most reputable online casinos are also licensed and regulated by private regulatory groups, such as the eCommerce and Online Gaming Regulation Assurance (eCOGRA) and Technical Systems Testing (TST).

It’s time for both sides to stop propagating the “unregulated online casinos” myth. Online casinos are not organized crime syndicates that aim to steal all of your money and most are not unregulated. Those who push for the legalization of online gambling should do so to maximize freedom and respect people’s right to spend their money as they choose, not to protect the people from a myth.

5 Responses to “The “Unregulated Casinos” Myth”

  1. James says:

    Good points, Perry. Thanks for your response.

  2. Perry says:

    Great article. The only thing I would add is that Costa Rica does not “regulate”. I hear what you’re saying about regulation, but Costa Rica only hands out business licenses. That may change later this year hopefully. The government is talking about actually introducing some legislation to regulate. I see you guys have Rushmore and some others on your site, which are based in Costa Rica. But like your article says, not every casino that is less “regulated” or not regulated at all, is still subject to word of mouth and bad press. I wouldn’t play at 90% of the casinos in Costa Rica, but Rushmore, Cherry Red and High Noon (voted Best New Casino by CM recently)are good. In a way, any online casino with a good software platform (in theory) is subject to “regulations” through the software provider. Have a complaint, contact the software provider. not all of them have good complaints channels, but will always look into mediation, especially if there’s a stink on the forums.

  3. […] it a freer market. Or they can do away with their own regulation entirely. After all, despite the myth of the unregulated online casino, any reputable online casino is regulated already. « UIGEA strikes […]

  4. […] is the best way to protect their citizens from disreputable companies. Of course, unlike the myth of unregulated online casinos, most gambling websites are actually regulated already by the government in which they reside was […]

  5. danielle jacobs says:

    in my perspective, we should stop propagating this myth because it affects the online casino sites, thus making them hard to get legalized. If we want online gambling to be legal, we should promote it in a good way, not in something that can ruin its image.