Study Shows How Regulated Online Gambling Raises Consumer Protection

Setting up an efficient gambling regulation in India is a challenging matter for State and Central authorities. Predominantly an online phenomenon at this point, games for real money are easy to monitor and control with a combination of strict licensing procedures, technical means, frequent testing and independent QA. Expert analysis shows why a regulated market leads to better consumer protection and more responsible gaming.

Choosing to Close an Eye Exposes Players

Online gaming for money has become the norm for many smartphone users in the past couple of years. India has a vast gambling market, both legal and illegal, but no central regulation or common standards. Industry research shows how setting up a national licensing system offers better protection to consumers than any blanket bans.

In most cases where legal online casino or other popular gaming options are not available, players tend to seek alternatives – offshore casinos like 10Cric or on other black markets. Setting up a legislative framework to control the "inevitable" money flow works for the benefit of players and the public exchequer, studies show. User protection is especially important given the market volume and specifics of online gaming.

A huge list of risks and vulnerabilities include fraud, negligence and other criminal activities, where the lack of clear definitions and obligations offers unreliable companies a chance to operate that they should not have. More importantly, technical means of control and Quality Assurance (QA) are more efficient than written rules in enforcing quality and legality.

National Licenses and Control Tools

Governments care about illegal markets, players worry about loss of personal funds. Everyone, in the end, is interested in avoiding tampering and system manipulation. Fortunately, the digital tools that enable authorities to control online gaming are more than a few. Leading examples include verification of proper Random-Number Generation mechanisms (RNG) and Return-to-Player (RTP) algorithms.

Most mature markets – e.g. the UK, US, Europe – have high standards and tough licensing procedures for all gambling operators to begin with. The safe treatment of players at regulated online casinos is ensured through repeated checks, both by government agencies and independent QA agencies. eCOGRA, a London-based firm, is a prime example of a reputable testing agency to which Government Regulators often outsource cyclical checks of gaming platforms.

Successful regulatory regimes put such standards among the fundamental legal definitions for the gaming industry. More importantly, these requirements are made indispensable for obtaining a gambling license in the country of operation, in addition to precise game descriptions, a realistic business plan and tech certificates from international and local firms.

Emerging technologies make it also simpler to follow up and verify requirements on Responsible Gaming, such as spending limits, age verifications, exclusion lists and many others. The public interest makes RNG and RTP just as important as any written anti money-laundering policy or tax evasion concern. Raising the bar from the start makes it harder to offer fraudulent services or provoke problem gaming among the more than 400 million Indian players.

Central Regulation the Only Way

In this context, policy recommendations and informal safe checks are a good start to minimize individual and collective harm, both economic and social. However, moving from privacy protection to active player protection requires a hands-on regulatory framework. Technical, commercial and ethical principles all make up for a more effective legislation in the sector.

Recent High Court judgements in several States have suggested that betting and gambling should be regulated and taxed. Ultimately, a long-term gambling regulation should also include better consumer protection in addition to more financial transparency.

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