How Online Casinos Work

Over the last two decades, the online casino industry has completely boomed, taking itself from a handful of sites to well over a few thousand. Every week, new online casinos are launched in the Canadian market. The reason for its success is that great mix of supply vs demand. More and more players are becoming interested and the technology at hand means better and faster products are available.

And as the industry gets bigger and bigger, it is certainly becoming a safer place for players with so much more focus on regulations and security. Here, we go through the basics to keep you up to speed on just how online casinos work and what they offer.

Where it All Began

Back in the early nineties, as internet usage started to really pick up, Antigua and Barbuda passed what was known as the Free Trade and Processing Act. Without going into all the particulars, it meant that the door was opened for companies worldwide to gain an operating license to develop an online casino platform.

Around the same time, a company called Microgaming was forming that produced casino games and had developed their own platform for online use. But, in order to get their product from the design stages to operational level, they needed a payment system to unlock all that potential. CryptoLogic was just the ticket; a company specializing in online, real-money transactions, and their 1996 platform opened the way for online casinos the world over.

By the end of 1997, players across the globe had access to nearly 200 different sites from online casinos, poker sites and sports books that offered a variety of betting options and the ability to make payments across the world. It was by no means a streamlined process however, and the early days sure had online casinos open to fraud and abuse, which slowly became more prevalent. As the years went on, more regulations were introduced to ensure the safety and protection of all players in the industry.

How Online Casinos Work These Days

Nowadays, with nearly twenty years of operation under their belts, the best online casinos have flourished into multi-million-dollar businesses who employ hundreds of people the world over. Whilst many companies have come and gone, being purchased by others or amalgamating into new entities, Microgaming is still around and is now one of the biggest games providers in the industry.

Over the last twenty years, not only have the games offered seen huge changes, but also how you choose to deposit and more importantly, the security levels that protect your online payments and personal information. This is due to the many regulations that are now in place to stamp out online fraud, eliminate money laundering and ultimately offer players a safe experience when gambling online.

Thousands of sites are available at your fingertips and with mobile technology becoming more and more advanced, you can even take your gaming on the road with you. Your phone is now your computer, wallet and casino, all tucked neatly into your pocket. It’s yet another reason the online industry is continuing to boom.

The Different Components of Each Site

Another cog in the wheel of how online casinos work is the make up of each website, which basically all operate the same. They take some popular casino games, add in a few different payment methods to please the masses and then offer support for any issues that may occur. Some of these parts, especially the games, come from third party companies who specialize in just that piece of the puzzle, and offer their services to multiple companies. It breaks down like this:

Games

Software providers spend thousands of man hours designing and building online games that will excite and attract players. The bigger names in the business are NetEnt, Microgaming, Quickspin, Play’n GO and Yggdrasil who have many award winning games under their belts. And with so many different individuals looking for their own cup of tea, variety is definitely the focal point.

Casino games are dominated by slots and although you can still find newer versions of the fruit machines from days gone, endless themes now grace online casinos the world over.

From ancient antiquity to Amazonian jungle adventures, outer space to Hollywood blockbusters, video slots come in so many different themes and stories that there is certainly something for all players. What they do have in common is HD graphics and authentic sounds to really offer a visual feast and are the backbone of all good online casino games libraries.

Most sites use third party providers, like those mentioned above, for their games to allow their specialized teams to create the best games, then casinos pay them to have their games available on their site. It’s a great system, as not only does specialization mean a better product, but the providers themselves are overseen by the casino regulators, too. That’s how online casinos work to have the best games without compromising on fairness and safety.

Slots aside, table games like roulette, poker and blackjack are also found in many different styles. Anyone who has played their games at land based casinos will adapt within minutes as the rules are all the same, you just bet electronically from the comfort of your sofa. You can even find live dealer games now that will have you watching a croupier deal the cards to the table in real time, as thousands of players can bet on the same cards the world over.

Payments and Withdrawals

Being able to make safe payments over the internet has really been the focus of the industry the last decade or so. The early days unfortunately saw a bit of fraud creep in which has thankfully been stamped out by the powers that be and now millions of online payments are made across the globe every hour.

How online casinos work is that you deposit money into your account from one of the multiple ways each casino offer including bank transfers, credit cards, e-Wallets and one-time, payment vouchers. You can then use this credit at that site on whatever games you wish to play. You’re in control of your money at all times and as security procedures scramble any of the information you indulge, you’re always well protected.

Then, when it comes time to withdraw your winnings, you can simply do so with little fuss and have your money back in your pocket in a matter of days. As online payments for everything from groceries to on-demand TV to your power bill become more common, so does the security that protects them. How online casinos work to keep your money safe is the exact same technology that is implemented by your local bank.

Customer Support

Although 99% of the time your online casino experience will run without a hitch, the odd problem may come up from time to time, or you may simply need some questions answered. Every online casino must offer a certain level of customer support to their players and most do so with a dedicated customer support team who are trained in-house. This means they know all the ins and outs of the product to answer your queries, quick-smart.

How online casinos work with regards to their customer support is that they will usually offer it in a couple of ways. Telephone is sometimes an option though you will have to phone Europe most of the time and this method is slowly getting fazed out. You can email your query and will receive an answer within a few hours or the next day. But the easiest and most common is via live chat that will have you send an instant msg to their team and get a response in minutes.

Have a look for a FAQ section on their homepage too, which has the answers to most day-to-day questions before hitting that live chat button. Many sites will offer both English and French languages and their support team are generally very friendly and helpful.

Casino Bonuses

With literally thousands of online casinos out there these days, finding the best one can be a little daunting. Promotions can sometimes help you test out a site without committing too much of your own money and is great for first time players. This is how online casinos work to attract players to their site in an ever-increasingly competitive industry. Yes, they need to ensure their site has all functions that a player needs but getting that first bite is the trickiest part; that’s where casino bonuses come in to play.

Many sites will offer up bonuses to new players to get you to choose their site over a competitor and for players it can mean some decent money for nothing. The most common is a deposit bonus, where the casinos will match your first few deposits with some credit of their own, so you end up playing with more.

You’ll find plenty of other promotions though, too, such as:

• Free spins – a free number of spins on chosen slot machines to further promote a specific game.
• Cashback – a percentage of your loses back to reward your weeks loyalty.
• No deposit bonus – the holy grail of all bonuses, this means you don’t even need to invest any of your own money to get some casino credit. Very hard to find but great when you do.

Wagering Requirements

Attached to every bonus you receive from a casino will be some requirements to play these winnings a number of times before you can withdraw it. It’s always clearly written in their T&C’s but is usually between 25 -50 times any winnings from the bonus given.

You will also have a certain amount of time to do this by, around 14 days – a month and if you fail to complete the requirements, you’ll forfeit your winnings.

Loyalty Programs

Another way how online casinos work to keep their customers is by offering a reward scheme for players who regularly gamble on their site. It’s usually found as a tiered system where you reach a higher level for every specific amount of money you deposit.

If you do find that one casino that you love to play, being involved in their loyalty program is a great way to ensure you are being rewarded for all your custom. Exclusive prizes and events are often up for grabs from weekly cash-back, further bonuses and even tropical holidays.

Casino Licenses

The major reason for the shift towards a safer online experience for players over the last decade is the implementation of casino licenses. Online sites can apply for these “seals of approval” by meeting the demands of organization behind it. Some have stricter guidelines than others and some sites will hold multiple licenses to cover various jurisdictions.

In Canada, the Kahnawake Gaming Commission adopted its regulations as early as July 8, 1999 to regulate interactive gaming. They also now regulate some online sites in Canada, but as online gaming has not reached a federal level of regulatory advisory as yet, Canadian players have the option to play at many internationally based sites around the globe.

One of the most common and also most strict is the license offered by the Malta Gaming Authority which covers the majority of Europe and the world. The United Kingdom Gambling Commission is also a leading regulator, as is the Gibraltar Gambling Authority. These four are in the top level when it comes to Canadian online gambling and should be viewed as a badge of honor for any casino that has acquired one.

Changes are underway though, and Ontario is actively working to create a secure and regulated iGaming market within it’s province.

Requirements for an Online Casino License

Whilst the requirements do vary from one organization to another, the basics are the same. There are five key attributes that need to be satisfied before a casino will receive its license, and it also costs a decent sum of money. This is good reassurance that the casino is in it for the long haul not just a quick buck:

• Complaints must be responded to in a quick and fair way, with a decent level of customer support at hand.
• The software used is to be regularly tested and validated to be fair and honest with the use of Random Number Generators (RNG) for the results.
• All owners and senior management are audited to ensure they are fit to conduct their business accordingly and are without any criminal records.
• Games must display the elapsed time in order for players to keep track of their gambling habits.
• Money reserved for players winnings must be kept separate from the operating funds of the company.

These requirements form the bases of casino licenses and is how online casinos work to ensure the industry is as safe and secure as possible for all players. It is not a legal requirement for online casinos to be licensed however, so ensuring you only stick to those sites that are is certainly recommended.

KYC; Know Your Customer

Know Your Customer (KYC) is becoming a bigger part of the registration process when players choose to play at online casinos. This is because the regulatory bodies are tightening up their standards to ensure the safety of players and the industry as a whole. It lay-mans terms, it means that each site must seek to confirm that players are whom they say they are, to stamp out fraud and criminal activity, keep under-age players off the sites and to help those who have encountered addiction.

This means that more information is needed these days when you register an account with a casino, which may seem like a bit of a nuisance but is for the good of the industry. Each new account opened, and you’re entitled to have just one at any casino, will require the following information to de divulged:

• Full name
• Date of birth
• Address
• Phone number

This information confirms the identity of the individual and will need to be corroborated with a selfie photo of you and your passport, ID or drivers license. A utility bill or bank statement no less than three months old will also need to be provided to confirm your address.

This is how online casinos work to eliminate corruption and is part of their requirements to their license, so not their choice. They are also required to ask for proof of funds once your deposit limits reach a specific amount as financial verification that the money was acquired legally and your gambling is sustainable. This can either be:

• Copy of your payslip
• Bank account records
• Copy of the bank card used

Note; The hassle that this sometimes seems is far outweighed by the safety it provides the entire industry. And is yet another way how online casinos work with the regulators for the benefit of everyone.

Security and Player Protection With Real Money Involved

We have certainly mentioned this a good few times now, but it really is one of the most important aspects when choosing to play at real money casinos online. How online casinos work to protect players is first and foremost by using what is known as SSL encryption. Secure Sockets Layer is the global standard in online protection that first certifies that the website you’re using is legitimate, then provides a “private” connection between your web browser and the casinos web server.

How they make this a conversation only between the two intended parties is by scrambling all the information you send to the casino, like your personal information and your financial details, so that it can not be used if intercepted. It the same level of security used by all major banks, financial institutions and anything that is paid for online.

By choosing to use further middlemen when you deposit is also adding to that security. E-Wallets, such as Skrill or PayPal mean you can add money to that account, which is then used to fund your casino accounts. That way you can not only budget your gambling better, but can control just how much could ever be accessed if the worst case should happen.

Remember; At the end of the day, the industry as a whole wants things running as safely as possible to garner as many players as possible. It’s just another way how online casinos work together to keep the entire industry safe and devoid of fraud, and it’s working.

How Online Casinos Work to Make Profits

Like anything else offering a service, the online casinos wouldn’t exist without turning a profit. They way the make their money is by what’s known as the house edge.

House edge is the piece left over after we calculate the return-to-player (RTP) from the games on offer. For example, video slots traditionally offer an RTP of around 90% which means you can expect to win back $90 from every $100 you invest. The other $10 is the operating costs that casino uses to pay their staff, finance the games and pocket some profit.

Fees that can sometimes be incurred when you deposit or withdraw are not from the casino but the financial partner you’ve chosen. In fact, the casino pays fees to them too, to get them on board and provide options for their players. But, because an online casino doesn’t need to rent a hefty space or use a small fortune in electricity, their over-heads are considerably lower than land-based establishments. This means the RTP is substantially better; around 75% from a slot machine in Vegas compared to 90% online.

How online casinos work to make the most money they can is by maximizing the number of players they get everyday. Small profits from many players means an overall healthy bank balance but it still means better odds for players than at land-based establishments.

Written by: Petricia Brown Petricia holds the position of Casino Review Manager. She is a gambling expert with more than 10-years experience in the casino Industry.

23/08/2021

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