Online casinos, also known as virtual casinos or Internet casinos, are online versions of traditional (“brick and mortar”) casinos. Online casinos enable gamblers to play and wager on casino games through the Internet.
Online casinos generally offer odds and payback percentages that are comparable to land-based casinos. Some online casinos claim higher payback percentages for slot machine games, and some publish payout percentage audits on their websites. Assuming that the online casino is using an appropriately programmed random number generator, table games like blackjack have an established house edge. The payout percentage for these games are established by the rules of the game.
Many online casinos lease or purchase their software from companies like, , Realtime Gaming, Playtech, International Game Technology and CryptoLogic Inc.
Online casino types
Online casinos can be divided into two groups based on their interface: web-based and download-only casinos. Some casinos offer both interfaces.
Some casinos offer ‘Live gaming’, either exclusively, or as part of a wider online casino offering. In live online casinos, popular casino games such as roulette and blackjack are dealt by real dealers in casino studios, in an attempt to convey more of the atmosphere of a physical casino. Player actions (including chat) such as ‘hit’ in the game of blackjack may be transmitted to the dealer; in some online casinos more than one player may ‘sit’ at a particular ‘seat’ on the table, and in this case there is no interactivity between player and dealer, the question of which player(s) requested the extra card that the dealer dealt and which chose to ‘stand’ will be handled by the software. It is usual for players to be able to observe a video feed of the action, and equally common for players to opt to turn it off, if they lack the bandwidth – as the cards are read by OCR and other technology, the video feed is only ever a visual cue.
Web-based online casinos
Web-based online casinos are websites where users may play casino games without downloading software to the local computer. Games are mainly represented in the browser plugins Macromedia Flash, Macromedia Shockwave, or Java and require browser support for these plugins. Also, bandwidth is needed since all graphics, sounds and animations are loaded through the web via the plugin. Some online casinos also allow gameplay through a plain HTML interface. Apple devices such as iPod, iPad and iPhone cannot play Flash games as the technology is not supported.
Download-based online casinos
Download-based online casinos require the download of the software client in order to play and wager on the casino games offered. The online casino software connects to the casino service provider and handles contact without browser support. Download-based online casinos generally run faster than web-based online casinos since the graphics and sound programs are located within the software client, rather than having to be loaded from the Internet. On the other hand, the initial download and installation of a download-based online casino client does take time. As with any download from the Internet, the risk of the program containing malware does exist. Still the graphics and sounds at download-based online casinos are most of the time much better than those at web-based online casinos.
A typical selection of gambling games offered at an online casino might include:
- Sic bo
- Online slot games
- Online poker
For live dealer option, these games are the most typical offered:
- Sic bo
Many online casinos offer sign-up bonuses to new players making their first deposit, and often on subsequent play as well. These bonuses are a form of marketing that may incur a cost (potentially justifiable in order to attract a new player who may return and deposit many more times), since the casino is essentially giving away money, in return for a commitment from the player to wager a certain minimum amount, usually a multiple of the deposit and/or bonus credited to the player’s account. Since all casino games have a house edge, the wagering requirements ensure that the player cannot simply walk away with the casino’s money, and indeed if the wagering requirements are sufficiently high, he may in fact have a negative expectation, exactly as if he had deposited without any bonus.
Casinos may choose to restrict certain games from fulfilling the wagering requirements, either to restrict players from playing low-edge games, or to restrict ‘risk-free’ play (betting for instance both red and black on roulette, thereby completing the wagering requirement with a guaranteed profit, after the bonus is taken into account.
Non-cashable bonuses may be called “sticky” or “phantom” bonuses. In both cases, the bonus forms a part of the player’s balance, but cannot be cashed out. The difference comes at cashout time. A phantom bonus disappears when the player cashes out, while the sticky bonus ‘sticks’ to the player’s account until it is lost.
Comps are commonly available at land-based casinos, but also exist online. Comp points can usually be exchanged for cash, prizes, or other comps. The amount of cash given per wager is usually very small and often varies with game selection. A casino might offer three comp points for each $10 wagered on slots and one comp point for each $10 wagered on blackjack. The casino might give $1 for each 100 comp points. This example is equivalent to returning 0.3% of wagers on slots and 0.1% of wagers on blackjack. In addition online casinos may offer comps such as free tickets to online tournaments, tickets to other special events, extra bonuses, souvenirs and pay back.
Bonus hunting (also known as bonus bagging or bonus whoring) is a type of advantage gambling where turning a profit from casino, sportsbook and poker room bonus situations is mathematically possible. For example, the house edge in blackjack is roughly 0.5%. In the example above, $5000 in wagering with a house edge of 0.5% will result in an expected loss of $25. Since the player received a $100 sign-up bonus, after subtracting the expected loss of $25, the player has an expected gain of $75.
A large portion of online casino disputes relate to bonuses. Casinos may label players who win using bonuses as “bonus abusers.” Both players and casinos may commit fraud. An example of player fraud is creating multiple accounts and using the accounts to claim a sign-up bonus several times. An example of casino fraud is changing terms of a bonus after a player has completed the wagering requirements, then requiring the player to meet the new bonus terms.
Fraudulent online casino operator behavior
Fraudulent behavior on the part of online casinos has been documented. The most commonly reported behaviors are refusal to pay withdrawals or cheating software with rigged payouts. An online casino with multiple confirmed cases of fraudulent behavior is often called a rogue casino by the online casino player community.
Some casino software has been mathematically proven to cheat, such as Elka System/Oyster Gaming and Casino Bar. Screen shots from the back office of an older brand of software indicated the odds could be adjusted by the operator.
Many casino gambling portals and player forums maintain blacklists of rogue casinos. While some carry more authority than others, most blacklists constitute individual webmaster and player opinions rather than anything official from any type of regulating body.
Online gambling legislation often has loopholes that result from the rapid development of the technology underpinning the development of the industry. Such countries as Canada, Finland, Sweden have state gambling monopolies and do not grant licenses to foreign casino operators. According to their law, operators licensed on the territory of these countries can only be considered legal. At the same time, they can’t prosecute foreign casino operators and only block their sites. Players in these countries can’t be punished and can gamble at any site they can access.
In Belgium, according to their Gaming Act, all people involved in illegal gambling should be prosecuted, which includes both operators and gamblers.
In the United States, all online casino operators – local and foreign – should be prosecuted if they accept wagering money from American citizens. Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) limits restrictions to online gambling operators, while players can be prosecuted only in certain states, where the state law prohibits placing bets.
Gambling online has never been a crime in Canada, as international casino operators can provide their services to residents so long as they are regulated in their own jurisdictions. Recently, however, local gaming commissions have decided to launch their own online gambling commission, providing residents with the opportunity to play at online casinos that are regulated by their own provincial governments. The British Columbia Lottery Corporation and Loto Quebec are the first two provincial entities to launch these types of online casinos. PlayNow.com was first launched by the British Columbia Lottery Commission in 2010. While the site got off to a slow start, there are now 180 000 players registered on Playnow.com. BCLC launched the site as an alternative to offshore gambling websites, so the local economy would be able to reclaim a portion of the profits that residents have been spending on gambling websites located in other countries. Since the British Columbia Lottery Corporation operators the site, profits are tax by the government and used to fund a wide range of programs across the province. Loto Quebec became the second Canadian lottery commission to launch its own online gambling website later in 2010. Despite the Kahnawake Gaming Commission being located in the province, the lottery commission wanted to reclaim a portion of the revenue that was going to sites ‘offshore’ websites, providing players with a government-regulated option. Both websites offer players online lottery sales, in addition to a wide range of online casino games. Slots, table games and card games are all available – and the two companies have even teamed up to launch their inter-province poker network. Several other provincial lottery commissions are considering the option of launching their own online gambling websites. The Ontario Lottery and Gaming Corporation is the latest Canadian lottery to express its interest in the online gambling market, recently announcing its plans to launch its own online casino.