Is Offshore Gambling Illegal?

Is offshore gambling illegal? This is the question people around the world are asking themselves. The short answer is – no, it’s not illegal. The long answer is – it’s most likely not illegal. It really depends on the point of view, too.

Whether you play casino games online, bet on sports, or participate in poker, offshore gambling has plenty to offer. This is why many players choose to trust offshore gambling websites despite some of the undeniable risks.

Does this make them complicit? Not really, at least not in the majority of jurisdictions around the world. The risk that consumers carry, however, is very real. Offshore gambling sites have no obligation to pay you in full, honor wagers you have placed with them, or protect your personal information.

That is, they are not regulated by any authority that would sanction them if they wronged customers in any way.  Knowing this, whether you play at offshore gambling sites is down to you.

This article seeks to present you with the facts that you need to know before placing or first offshore wager – or even if you are already betting and gambling offshore.

Is Offshore Gambling Illegal & The Law?

No, there is no law in most countries that offshore gambling websites are illegal – at least not for you as a person who chooses to make a deposit and gamble at them. Separate countries have their own approach to such websites.

For example, some governments create blacklists and demand Internet Service Providers (ISP) to block offshore gambling sites that the governments brand as “illegal.” Australia is a very good example of this. The Netherlands brands offshore gambling sites that target its citizens illegal as well.

When it comes to consumers, this is pretty much the status quo in the United States as well. There is also no federal law that states that people who bet with gambling sites located offshore are criminals.

Should I Be Worried about Penalties If I Gamble Offshore?

No, or mostly no. Unless you are abetting offshore gambling websites to conduct business in your country, you are unlikely to ever be prosecuted or face any penalties over your participation in an offshore gambling website. For one, you may argue that you were not aware.

This may sound a little dishonest, but the truth is that many consumers really do not know which websites are regulated and licensed, and which are not. In the United States, consumers still play offshore.

Some do so by choice, while others simply don’t know any better. The American Gaming Association, though, has reported higher levels of channelization into the regulated sports betting market, which means that more consumers are making a conscious choice to switch to regulated markets instead as awareness is improving.

To cut a long story short, you will not be fined or arrested for simply placing a bet with an offshore gambling site. Abetting such operations, however, may land you in hot water with the authorities in your respective country.

Who Regulates and Licenses Offshore Gambling Sites?

Now, since we are asking if offshore gambling is illegal, we have to ask ourselves – is there anyone regulating these offshore websites? The answer is yes. There are regulators based in the offshore gambling industry. Many of them are taken seriously internationally, and this has made it possible for what would have been otherwise an illegal gambling industry to thrive internationally.

• Curacao: Curacao is perhaps the best-known offshore regulator of them all. It’s the Netherlands Antilles and the jurisdiction is working closely with the Netherlands in regulating gambling, with calls to toughen its stance on operations and a growing international pressure from Australia and other countries.
• Costa Rica: Costa Rica is an interesting outlier in this list of gambling authorities as, although there are at least several big offshore websites licensed in the jurisdiction, Costa Rica itself does not have a gambling commission as such.
• Panama: Panama is a preferred destination for gambling companies since the dawn of sports gambling which began with phone betting. Once again, there is no official licensing body that can actually certify gambling sites – and yet many sites based offshore claim they have been certified in the Central American tax haven.
• Kahnawake: Kahnawake is a tribal region in Canada, and as such it has sovereignty. The reserve is run by the Morris Mohawk tribe, which offers remote gambling servers for websites all over North America and is one of the more legitimate “offshore” licensing bodies.
• Barbuda and Antigua: Barbuda and Antigua is another prominent small Caribbean nation that offers registration to offshore gambling sites. The jurisdiction has been fighting the United States on blocking payments to its gambling sites, arguing that the country had caused it financial harm.

What Types of Offshore Gambling Is There?

The term offshore gambling is often used as a general term, but it actually can refer to several different activities. Most offshore gambling websites will usually run at least two verticals, such as sports betting and casino, but sometimes feature poker rooms as well.

Offshore Casinos

Online casinos are becoming increasingly popular in the United States these days, but this wasn’t always the case. Some 10 years ago, it was very hard to find any casino other than the available land-based properties. This led to the rise of offshore casino gaming, with players playing online slots, table games, and even winning jackpots by joining these offshore websites. Live dealer games are also popular offshore, but more and more of these products are now beginning to appear on the mainland.

Offshore Sportsbook and Sports Betting Sites

Offshore sports betting has undergone the biggest transformation over the past five years. Since the repeal of PASPA in 2018, sports betting is legal in the United States, and more than 30 states and Washington, D.C. have rolled out their own dedicated betting industries, giving local sports fans a very strong incentive to play locally rather than offshore. The offshore betting industry has been trying to move onshore as a result but this is still an ongoing and difficult process. Meanwhile, some offshore sportsbooks have complied with individual state laws that deemed their offering illegal and have stopped processing players from those states.

Offshore Poker

Offshore poker is one of the verticals that developed the most rapidly as demand for high-traffic card rooms has been growing over the past two decades. With UIEGA virtually blocking many poker websites in the United States, many players started turning to offshore poker rooms instead. Those rooms offered big prize pools – and they do to this very day – as well as the opportunity to play against hundreds if not thousands of other players.

What Are the Risks and Problems with Offshore Gambling Sites?

As you can imagine, there are issues when not enough oversight is involved. Although we tend to grumble against the government and institution, the tax man being a little too harsh, and a little too nosy, the fact is that these mechanisms protect consumers on a larger scale – not you particularly if you are not paying tax, but the other people who are, and who expect everyone to be doing their bit.

So, with this in mind, we have outlined the most common things that you should know about the risks and problems with offshore gambling and the sites that operate there. These are pretty much the same across poker rooms, sportsbooks, and online casinos. These are not necessarily always true, but they tend to be the norm with offshore gambling.

No License Means No Supervision

The general consensus is that legal operators will usually have a license or certification from a credible source of authority. Now, with offshore gambling operators, they may stay have that license, but not necessarily.

Even when they do, they may receive it from jurisdictions that do not actually hold very strict control over the licensees. For example, Curacao, a popular destination for some offshore websites, is now under pressure from the Australian Media and Communications Authority (ACMA) to monitor and intervene in its licensee’s operations when there are reports of wrongdoing.

Deposit Options Are Few and Between

Once again, this is mostly true for the United States. Offshore gambling sites that target Americans will offer fewer payment options. In many cases, you have to actually use cryptocurrency to avoid the US Banking System from blocking a payment to a website.

The good news is if a payment gets rejected, it gets sent back to you. The bad news is that it can be annoying to pick a whole new payment method, and crypt of all things, to just place a wager.

Withdrawals Are Restricted and Slow

Another risk pertinent to the offshore gambling market is the fact that withdrawals are restricted and slow. This means that any big win may need to be cashed out over months instead of right away as you would with regulated gambling markets in your country.

Fees Are Charged to Transactions

Because of the more intricate nature of offshore transactions, there mare by significant fees charged to your transactions if you do not want to use a specific payment method, for example, Bitcoin. A check may cost you $50 to cash out, which is really steep.

Bonuses May be Voided without Notice

Some players have complained that their bonuses have been voided without notice. This is a two-way street. Sometimes players are not really paying attention to the T&Cs

Customer Support Is Limited

A glaring issue with offshore gambling operators is their approach to customer support. Customer support is only limited in terms of options, but it’s often unhelpful. Many of the messages you receive are either automated or lifted verbatim from the Terms and Conditions, which is not always helpful.

Overall, players do agree that offshore gambling sites, although not illegal for them to play on, can definitely improve the level of customer support.

How Can I Tell If an Offshore Gambling Site Is Legal?

This will mostly come down to the place where you live. Some jurisdictions automatically call offshore gambling sites “illegal” by default. Others, such as Canada, do not necessarily have a name for them, and even allow them to continue targeting their players on specific conditions.

In general, you need to do two things to determine if offshore is illegal in your country. First, you need to read the local laws that apply. These could be federal laws, but there are also provincial and state laws that may supersede these.

Then, you need to check where the offshore gambling site is licensed and based. As you can imagine, there are very few licensing authorities that serve as proper licensing watchdogs, with those mostly being Curacao and Kahnawake. The rest have a well-established status in the offshore gambling community, and they can be used as a point of reference, but as noted – they do not necessarily provide licenses through authorized governmental bodies.

The Legality of Offshore Gambling in a Word

Regulatory scrutiny worldwide is definitely improving today, and this means that offshore gambling websites need to adapt. They may or may not be illegal where you live. In the United States, local state laws and the American Gaming Association brand such websites as illegal and dangerous.

This does not necessarily need to be the case, though. Every country is different, but what countries want is for any business that targets its citizens to pay taxes, be accountable to local laws, and ensure that they protect consumers in the regulated market. Offshore gambling is definitely here to stay.

The sector’s legality will be a continuous debate, but the trend right is for offshore operators to try and shift their operations within the countries that they target. This process is going to be slow, somewhat painful, but ultimately necessary.