Hidden Dangers of Offshore Casinos: What You Need to Know
For those players who do not have a regulated gambling market in their country of residence, offshore gambling is a last resort. However, often, even those gamblers with plenty of casinos licensed in their home countries still opt for offshore gambling destinations. Many do not even suspect that this type of gaming is much more risky; some ignore the risks and try their luck on such platforms.
We have taken a closer look at offshore licensed casinos so you can be well-informed about what to expect when you decide to create an account in one of such gambling destinations. The pros and cons of such websites are included in the article, so you will be able to make a sensible choice of whether such platforms are suitable for you.
WHAT ARE THE OFFSHORE GAMBLING REGULATIONS?
Depending on your perspective, offshore gambling has two main aspects. For players, gambling offshore means selectinganoperatorthatisnotlicensedintheircountryofresidence. Most often, such websites hold a license from another jurisdiction that allows the acceptance of international traffic. Some of the well-known offshore gambling territories are the Comoros and Costa Rica. Such a choice has its benefits and drawbacks that should be weighed carefully.
One reason players prefer offshore casinos over home-based ones is the greater variety of gambling options. Until recently, this was the most common reason for players from Finland. Veikkaus owned and maintained all the casino and sportsbook entertainment destinations. It was not that interested in the diversity of provided gambling options, so the choice of entertainment was limited to fewer than 20 software providers. Given the great variety of games and studios available worldwide, it's no wonder Finnish players opted for offshore websites.
For the casinos, offshore gambling means that they can apply for a license in one of the offshore gambling jurisdictions and welcome players from all across the world. This way, they do not commit to applying for a license in various countries to be able to operate there legally. This is undoubtedly a beneficial option for operators who are willing to start working rapidly and do not want to meet various requirements of different jurisdictions, which are quite different, by the way.
At first sight, offshore gambling destinations seem to be a win-win option for both a player and a casino entertainment provider. However, once you dig into the way offshore gambling works, you can see that the picture is not entirely rosy.
THE APPEAL VS THE REALITY
Of course, some advantages are widely advertised to attract players, and they work as magnets because who would not like easy, fast, and discreet gambling? This is often the complete opposite of what you usually get at home-licensed operators.
Lightning-Fast Registration
When it comes to offshore gambling destinations, registration could not be easier. Players often need to indicate their email address and create a password (it is not even necessary to make up a strong password) to access games. No phone and billing address verification is required, and no ID is needed (at least until it comes to withdrawals). Therefore, account creation is a matter of minutes.
Opportunity to Stay Incognito
Practically all offshore licensed operators offer cryptocurrencies among payment methods, so it is easy to avoid letting a bank know about your gambling activities. This alone is a convincing benefit for many players who do not want to reveal information about their leisure. On top of that, offshore licensees are less strict about KYC policies, so it is often up to a casino to decide if identity verification from players is required. Some platforms omit this inconvenient part for all the players, and others might request it under certain conditions. Thus, unlike brands licensed by the UKGC, the MGA, and other similar gambling commissions, there are offshore operators that do not force KYC right before the first cashout request.
Bigger and Better Bonuses
Promotions and bonuses are among the other features that keep attracting more players to offshore gambling destinations. Often, that is not the case for many regulated gambling markets. Still, some might get extremely strict when it comes to bonuses (e.g., in Sweden, casinos can offer bonuses only on a first deposit, and it cannot be more than 100 SEK. That's quite a disappointing option for a welcome offer, isn’t it?)With online casinos licensed by offshore gambling authorities, there are few restrictions, and the choice of bonuses for newbies and regulars can be as diverse as the imagination and desire of a casino owner.
What about Casinos?
However, attractive conditions for players are just one piece of a puzzle that makes offshore gambling popular. It would not be possible if casinos did not find benefits for themselves. Actually, when it comes to offshore licensing, it is clear that operators are the biggest winners. Why?
- Fewer Requirements: If you have ever taken a look at the conditions for receiving a gambling license from the UKGC, you would have no doubts that it is a highly challenging and ambitious goal to obtain a casino license. However, a casino owner can go an easier way and get a license in one of the offshore jurisdictions. Of course, one would need to share documents about the financial status of the company. Still, there is no need to have a company registered in the licensing territory or have a physical office there.
- More Flexibility: The simplicity of requirements affects the company and the services provided. Because rules are fairly obscure, operators have more flexibility in what services they provide and how they do this.
- Lower Cost: Getting licensed by a gambling authority onshore is not cheap, so many opt for offshore licensing to save on the application and license costs.
- Tax Heavens: In addition to the licensing cost, operators should pay taxes in the country where they are licensed. Offshore jurisdictions often have tax percentages close to zero. This is one of the definitive things for casino owners.
- Less Control: Finally, no obligatory audits are conducted, so owners are unlikely to be fined for their activities. License cancellation or rejection is also rare.
SO, WHERE IS THAT DARK SIDE?
Essentially, the advantages of offshore licensing for operators are a double-edged sword. But it often hits only players. Thus, practically every benefit mentioned above has a dark side that can impact gamblers negatively if an untrustworthy casino is selected. How exactly?
Lack of Transparency in Terms and Conditions
Fewer requirements and more flexibility for operators can result in terms and conditions that are not in favor of players and their needs. Often, there are no standards of what is required from operators in terms of policies and customer protection, so it is entirely at a casino’s discretion. If a platform would like to appreciate its customers and provide them with trustworthy gambling services, it would have clear T&C. If not, well, it is wise to read the rules carefully before account creation.
Payment Method Risks
Payments are the second most important thing after entertainment (some might even say they are the most crucial part), and some casinos neglect them. They do everything to attract players with generous welcome offers and easy depositing, but they change the rules completely when it comes to withdrawals. Offshore licenses do not regulate the way payments are made much. Therefore, players are at risk of delays at minimum and fraud at maximum.
Limited Dispute Resolution Options
While players get specific protection and rights from operators licensed in their home countries, they are left alone when it comes to offshore casinos. If you are dissatisfied with certain services or consider them unfair, do not expect that any institution would interfere to help you. Of course, offshore operators have customer support, but it does not often work efficiently when there is a cause for a dispute.
Addiction and Exploitation
Unfortunately, gambling addiction is not uncommon, but this problem is much more complex to deal with when it comes to offshore casinos. Home-licensed casinos are still controlled and monitored in the country. This allows an authority to be informed about the gambling addiction in the country and intervene when needed. At the same time, it is completely up to the casinos to decide whether they would like to introduce responsible gambling tools and allow a self-exclude option for gamblers.
Rigged Odds
While non-payment issues are a significant problem for fighters with unfair gambling, rigged odds might not even let you get to the payment stage. Fraudulent websites might introduce unfair odds, and they would not be punished in any way if they held a license from an offshore licensee. At the same time, the availability of a certification hints that the casino is a trustworthy one, even if it is not.
ARE THINGS DARK ONLY FOR PLAYERS?
Actually, not. Offshore licensing and unreliable operators that exploit it cast a negative shadow not only on offshore gambling but on the industry overall. There are hundreds of scam websites disguised as trustworthy gambling destinations that operate under Comoros, Curacao, or Costa Rica licenses, and they tarnish the industry’s credibility. They scare off potential gamblers who have formed the opinion that it is impossible to get fair outcomes when gambling at an online operator.
Moreover, offshore licenses prevent regulated markets in different countries from engaging all the potential players in online operators licensed in a country. This way, not only online operators but also the government lose the revenue they might have gotten. Therefore, onshore operators should provide highly lucrative services to win the competition with offshore-licensed companies.
However, the situation does not seem to change much in the future until easy licensing exists for casinos and simplicity and anonymity are provided to gamblers. Given the situation, we can give only one piece of advice, closing our research: be cautious about the choice of a gambling destination. At the same time, onshore operators should provide highly lucrative services to win the competition with offshore licensed companies.
