Every country in the world participates in gambling. This is a rule of life. In some jurisdictions, gambling might be illegal, but even then, there is always going to be some sort of black market. Some experts would even say that completely prohibiting gambling by law is always a way of creating an illicit market for it.
Naturally, every country also has its own laws and regulations when it comes to gambling. In this article, we take a special look at different kinds of gambling systems and legislation. In addition, we also go over how online casino payments can be weaponized to tackle unwanted gambling in an effort to help so-called channelization.
Licensed gambling markets could be the way to go
Most analysts would probably agree that completely outlawing all gambling is not sustainable in most countries. This realization leads to lawmakers having to choose between one of the three following options:
- Completely open the market for competition
- Maintain a governmental monopoly on all gambling
- Create a governmentally licensed system for gambling
Obviously, the first option on the list is not all that realistic either. Having no governmental control over any gambling and allowing citizens to play wherever they want is not necessarily a great idea. After all, having a completely open market would mean that the government would lose out on all potential gambling revenue.
Taking away the first option leaves us with two options that are both popular in today’s world. For instance, the Finnish state has maintained a governmental monopoly on gambling all the way from the 1940s to the present time. Both sports betting and pure casino games have been exclusive to the Finnish government for decades. However, in recent years, online casinos at britekasinot.io have become too popular for the Finnish state to control. Because of this, Finland is also moving on to create what is described in the third item of our list: a governmentally licensed system.
The main problem with maintaining a monopoly in today’s world is that the internet makes it almost impossible. Policing what websites citizens can use is not exactly easy in a modern society. This is also why countries such as Finland are moving away from strict monopolies and instead trying to bring all the competitors under the same umbrella.
Governments want to maximize their channelization rate
The main goal for any governmental gambling legislation is to maximize the so-called channelization rate of the currently used system. The term “channelization” refers to how big a percentage of the market remains within the confines of the system. For instance, a monopoly is only a true monopoly if 100% of the market remains under it. Consequently, when the channelization rate drops to around only 50%, as happened in the case of the Finnish gambling monopoly, then, clearly, the monopoly is not working.
One relatively effective way that some governments are turning to to maximize their channelization rate is payment blocking. This means trying to block payments outside of the preferred system. In a monopoly, all payments to all other gambling operators would be blocked. In a licensed system, all payments to all gambling operators outside of the licensed system would be blocked.
For free governments, it is much harder to block access to websites than it is to block access to payments made to a list of companies. This is why countries such as Norway (a gambling monopoly) and Sweden (a licensed gambling system) are both trying to increase their channelization by resorting to payment blocking.
Payment blocking is not airtight
When trying to block payments, governments will usually try to prevent the use of local bank accounts. For instance, they can ask payment providers such as Brite, Trustly, and Zimpler to not allow payments to what are deemed unlawful operators. However, while they may be able to prevent certain types of payments, players can still use more covert ways to pay, including e-wallets. Payment methods such as these can function as proxies and are therefore able to circumvent any blocks..
Conclusion
All countries in the world have to make a decision in terms of what kind of stance they take toward gambling. One option is to play a game of whack-a-mole, where you try everything you can to maximize the channelization rate. Another option is to accept that the percentage will never be 100% and just try to make the system as good as it can be to not cause customers to want to play outside of the system.
