Casinos without a license - A growing problem on the market

Reza Shojaei | 20. August 2020

The market for casinos and games is growing at record speed. New online casinos are being established almost daily, and fortunately for players, the vast majority of them are legal with the necessary licenses in place. They offer entertainment and a fair chance of winning in a safe environment.

Unfortunately, I have seen that this rapidly expanding market for casinos and gambling has given a fertile ground to more illegal operators where the sole purpose is to take as much money as possible from the players. This is a problem I will address in more detail in this blog post, but first I will give you a brief explanation to why licenses are so important in the casino industry.

What is a license?

All online casinos that offer gambling must have a license in place if their services are to be legal. A license is a security guarantee that you as a player and your money are taken care of in a safe way in accordance with laws and regulations. This includes guidelines that address the conditions for responsible gaming at an online casino. A license also states that the games the casino in question offers are fair, which in practice means that you have a real chance of winning.

Licenses from different countries

A license is granted to a casino by the authorities of a country, but the country that granted the license must not be the same country in which the gambling is to be offered. For that reason, there are a number of different licenses a casino can use, and the more licenses a casino has got in place, the safer it is for you as a player and consumer. The regulator that has issued the license maintains strict supervision of the casino that has been awarded the license. It is also not easy for an online casino to get a license, as there is a lot of work behind checking that the online casino operates legally and responsibly.

The requirements behind a license

Fortunately, a license is not something that is handed out with a light hand by the authorities. In Europe, the rules for being allowed to offer gambling are very strict, and we should be happy about that. Some of the requirements to get a license are  that the operator must have enough money to buy it, as well as have an impeccable record for those behind the casino.

What I consider to be the best thing about the license is that it is more difficult to keep it than it is to get it. The license regulates absolutely everything an online casino can do, and the slightest breach will result in fines and revocation of the license. The authorities that have issued the license constantly check that the requirements behind the license are maintained. An online casino would not go far with an attempt to avoid the rules.

Easy to see if the casino has a license

It should be easy for you to find out if an online casino you want to play at has a license. At most online casinos, it is common for this to be stated at the bottom of the main page, and as you have probably realized, it is very important that you check this before you register and make a deposit.

For instance, Norway does not have its own authorities that control online casinos. We are a so-called unregulated market, where it is foreign operators who mainly offer gambling. The licenses you should pay attention to as a Norwegian player come from Malta, Great Britain, Curacao, and Gibraltar.

Now that I have explained why a license is so important, you will probably see right away why an unlicensed casino is a big problem - and I will take that further in this post.

Illegal casino operators and fraud

Online casinos and gambling are a growing source of entertainment, and I am concerned that this form of entertainment should take place in a legal and safe environment for the player. Therefore, I find it disturbing that an increasing number of operators are looking to deceive consumers and affiliates.

What is scary about such illegal online casinos is that for many they can be very difficult to detect. For a dishonest online casino to be able to trick you for money, they must give you a good impression, a desire to play there. Therefore, the online casino must give the impression that they are a safe and fun place to play, where you can safely bet money and where your chances of winning are fair. In other words, an illegal online casino must be both genuine and professional.

Scary easy for illegal operators

Since many players do not quite know, or forget to take the time to read the legal information behind an online casino, I find it frightening how easy it really is for illegal operators to feed the players false and confusing information. They may give you the impression that they have their licenses in place, but is the company registered? Is there the address they have provided? Is the license active? Who is the license issued to?

This is information that does not take many seconds to double check, and it is something I recommend everyone to do to avoid being scammed. If the information does not match the online casino has stated, some warning signals should flash.

Fake licenses and fake games

There are many factors that come into play to determine if a casino is operating illegally or not. As I have mentioned above, the use of fake licenses, i.e. that the online casino claims to have a license that they do not have, is a common method that illegal online casinos use to scam players and possibly affiliates (which are websites that promote casinos).

A license regulates so many areas within the casino industry that when an online casino operates without a license, it is almost impossible to cheat. Lack of license also means lack of controlling authorities who strictly monitor that the casino business is reputable and adheres to the terms of responsible gaming.

Fraud via fake games

Fake slot machines are also a factor that characterizes illegal online casinos. It is the games that are most important at an online casino. There are games that offer entertainment and adrenaline kicks. Fake games therefore have a harmful potential to swindle huge amounts of money before you discover that something is not right.

It is not the casino operators who create the games they have in their portfolio. This is what different developers do, and through collaboration with online casinos, they make the games available to the public. Among other things, what I have discovered is that in today's modern, high-tech world, it is unfortunately far too easy to copy and make changes to the original slot machines.

Pirated slot machines

There are many fake online casinos that seem to offer slot machines from, among others, the popular developer NetEnt, but in reality they have no contract with the developer. To an untrained eye, such pirated slot machines can be very difficult to detect as they are very reminiscent of the originals.

What characterizes the fake slot machines, and which are the signs you should look for, is that the payout rate (Return to Player - RTP) is significantly reduced - it is rigged so that you never win, there are no progressive jackpots and it costs you enormously a lot to play on the slot machine.

Follow your gut feeling

As I have already mentioned, it is not always so easy to see if a game is fake. If you get the feeling that something is not right, you should check the information about the game against the information another casino has provided about the same game. You can also check out what the developers themselves have written about the game in question. If the information is different, you should tread carefully.

Since it can be so difficult to detect such fake slot machines at dishonest online casinos for players, I want there to always be an easily accessible and always up-to-date list of such casinos. Then it will be much easier for players to detect such attempts at fraud, and the dishonest online casinos will be held responsible for their actions.

Fraudulent collaboration between blacklisted online casinos

There are many forms of fraud, and you need to be aware of something called fraudulent cooperation. Dishonest cooperation is characterized by what I have mentioned later in the post - when affiliates are cheated for money.

Online casinos can partner with a variety of forums, websites, casino portals and newspapers to market themselves and their services in a way that effectively reaches out to players. These affiliates are entitled to a certain amount of the online casino's profits as they take the time and resources to market them to a wide audience. Extremely many online casinos have been blacklisted in recent years because they have unfortunately failed to pay their partners what they are entitled to.

A sign that everything is not as it should be

The reason I choose to inform you about this type of scam, even if it does not necessarily concern you, is because this is often the first sign that the online casino is not what it claims to be. In such cases, fortunately, the partners will be quick to go out and warn players about the relevant online casino. It is important that you as a player do not bet money on such blacklisted online casinos. It is not uncommon for them to declare themselves bankrupt and run away with all your money.

Online casinos that are in a gray area

What I have focused on in this post is to provide more information about what characterizes dishonest online casinos in the hope that you as a consumer will avoid experiencing fraud. What is challenging in this expanding market is that there are casinos that are not directly illegal, but which you should still be careful about. I am talking here about the sites that are in the so-called gray zone.

For a casino to be legal, it must have a license in place, but since licenses only provide an extra guarantee of security if the authorities behind follow up and set strict requirements, there can unfortunately be a gap in this area that operators with dishonest intentions know to take advantage of. This can be very confusing for players who see the license and thus think that everything should be in order. Some licenses are sadly worse than others, and can provide a false sense of security.

No-so-good licenses

The license from Curacao is an example of a not-so-good license. It has been discovered that these authorities easily issue licenses, and that they rarely follow up on their licensed online casinos and that players who report complaints rarely receive a response. The Curacao license does have some requirements, and not all online casinos that have this license are dishonest and looking to defraud you.

However, it is easier for casinos in the gray zone to commit such illegalities with only this license. Therefore, it is recommended that you check if the online casino has this license along with other licenses. The license from Malta is, for example, the safest because the gaming authorities there are among the strictest in the world.

This is how you can protect yourself against fraud attempts

I want to help ensure that you as a player do not end up in the desperate situation of fraud and deception. Therefore, I will end this post with some tips you can take with you further when seeking entertainment in gambling.

Read reviews written by experts

Perhaps the best tip I can give you is not to search for online casinos directly, but read more reviews of the casino in question before signing up. Read reviews written by experts, and see what is written about the casino itself, what licenses they have and what protocols they have in place to protect your information. You will find useful overviews of blacklisted casinos here at CasinoTop.com.

Check the information provided

You can also do some research on your own, such as checking that the license is active. Also check which games the online casino has in its portfolio. Does the information about the game match the information you find at other online casinos and in reviews? What payment methods are offered and are they safe to use?

These are small signs that together can reveal dishonest online casinos. The best way to put an end to such gambling sites is to not leave money there.

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