how online casinos work


Online casinos might seem simple and straightforward, but you, there's a large amount of work to their rear that produces them work the way they do. There are numerous elements which make a gambling platform, and each has its essential role. Let’s observe on line casinos work, how they earn profits, and where everything they feature comes from!


  • The first online casinos
  • how online casinos work
  • How do online casinos make profit
  • Conclusions, Methodology, and References

The first online casinos

1994 was the golden year for on the web gambling as in different parts of the world, two forces were about to change gambling forever. The federal government of Antigua and Barbuda passed the Free Trade & Processing act and, at the same time, Microgaming was established on the Isle of Man.

What the law states gave companies the chance to get licenses out of this small Caribbean nation and operate online casinos. Just a few months later, in 1995, CryptoLogic, the missing bit of the puzzle, came out. This provider specializes in a real income transactions over the Internet, and it made the creation of a real online casino possible.

Microgaming launched their own gaming platform, but even though the website says it dates from 1994, the company said it didn't officially launch until 1998. This means that the real first on line casino was the one launched by CyptoLogic in 1996. Regardless of time aspect, this is indeed the first gaming platform that allowed players to bet real cash via the net.

By the end of 1996, approximately 15 Internet gaming sites were available, and by 1997, players worldwide had access to over 200 on the web casinos, sportsbooks, and Poker sites.

how online casinos work

Because of technological advancements, casinos have dramatically evolved from their land-based form, which can be still available nowadays, to the online casinos we possibly may join today. The internet version has a much faster pace, allowing players to modify from one game to some other at any point in just a matter of seconds. More over, what makes on the web casinos are more popular daily may be the convenience they provide since one may play from anywhere at any time, and their special features that players cannot benefit from in a land-based casino.

If land-based casinos are relatively easy to understand for a few players, behind the online ones are plenty of technologies, legal aspects to retain in check, and essential protocols to follow along with.

What is KYC, and why is it important

KYC, an acronym for Know Your Customer, is a procedure on the web casino and other businesses use to verify their customers’ identity and their financial information.

The KYC process may be a nuisance with a players, however it is intended to protect them and the web casino. It prevents underage gambling and blocks fraud, bribery, corruption, and money laundering.

During this process, customers are required to provide the following information:

  • Full Name;
  • Address;
  • Date of Birth;
  • Address;
  • Phone Number.

To be able to prove this and identity, an individual will have to send an image or a scanned image of their passport, ID, or driver’s license. The address may also must be confirmed as accurate, so a software application bill or bank statement no older than three months will be required.

Some casinos will ask their players to endure further financial verification and supply additional documents. They are required to verify the payment method or the origin of money to make sure they've been acquired legally. Also, casinos must make sure the account owner themselves makes the deposits. The documentation required for this method may include:

  • Scan or photo of the bank card used or other payment method;
  • Pension;
  • Payslip;
  • Bank statement;
  • Dividends;
  • Trust deed;
  • Director’s remuneration;
  • Savings account.

The process, requirements, and documentation needed can vary greatly from casino to a different and in one situation to some other.

Crucial: For the documents provided to be accepted, they need to be legible and of high quality.

Guidelines: Notify the consumer support whenever your own personal details such as for instance phone number or address change to avoid any future dilemmas!

Bear in mind: Some online casinos will perform soft credit checks! These do not affect your credit score, if the information found does not match usually the one you offered, you'll be ed and asked to provide more information.

Payment methods & process

To be able to allow players to take pleasure from games using a real income, online casinos have to offer a number of payment options. To do this, they need to first negotiate with the payment system providers and acknowledge their integration on the site and the fees.


Even though players don't need to pay fees more often than not, the casino operators do have to pay fees to the payment providers. They're discussed and decided for every single case, so they might differ from one site to another and from payment option to another.

Third party payment providers

The payment providers are third-party businesses, which means additionally they increase the security layers the players benefit from. This is exemplary news for gamers, as their money and financial information are protected by both casino and the payment system.

Deposits are performed immediately or in a matter of minutes, but cashouts often take longer. This is really because the internet casino’s team needs to verify the payment request and, in some cases, manually approve it. This is especially valid for a large amount of money.

E-wallets payments

Payments made via e-wallets are performed faster, nevertheless when a user requests a withdrawal via debit card or bank transfer, the bank will run its checks and approve the transaction apart from the casino’s verifications. What this means is it takes even longer to get the cash from the casino.


Casinos often provide a wide selection of currencies players may possibly deposit in, but often , they operate utilizing a base currency. For the Australian market, this would be CAD, but some decide to operate in EUR or USD. This requires automatically exchanging the money upon deposit or withdrawal, for which the casino pays the conversion fees from the quantity exchanged.

Recommendations: It is usually better for Australian players to play using CAD to prevent taking a loss in the exchange process. Also, choosing e-wallets for cashouts permits faster transactions.

Game Collection and software providers

Collaboration with many computer software providers and having an extensive game collection is fantastic for any gaming site. Nevertheless , casinos usually do not own the games on the websites, nor they've much control over them. The casino cannot determine who wins, simply how much, the way the game works, or such a thing related to it except for the fact that it appears inside their collection.

Pc software providers create the games, and they run on their servers, whatever the platform the consumer enjoys them on. Which means that if a casino game doesn't work or is not working precisely, probably, it is not a problem with the internet casino but with the provider’s server.

Furthermore, progressive jackpot slots will probably pay out jackpots with money from the program provider, not the internet casino. These jackpots are continually increasing because of all gamers playing the same game on any platform it's on.

Some casino platforms offer in-house games, but that is a rare occurrence and websites that only provide these are not to trustworthy. It is because each computer software provider is fully licensed by a competent human anatomy, including the Malta Gaming Authority. This license demonstrates the provider was checked and is periodically audited to make sure that they create fair games and every thing is functioning legally. This, just as regarding payment options, adds yet another layer of security for the consumer. In-house games aren't licensed by anyone, so their fairness cannot be proven.

All casino games operate on a Random Number Generator. The licensing authority and third parties in control of auditing the application provider will check if the RNG works properly, conferring fairness to the overall game. The RTP (Return to Player) can be set by the application provider for every game, not by the casino.

Collaborations between on the web casinos and pc software providers, just as regarding payment systems, have specific fees for the casino operator. These differ from one computer software provider to another and may also change during negotiations.

Top online casinos feature a number of games of all types, created by many computer software providers, including the most famous on the market. This attracts more players and helps them trust the platform more, while offering them the diversity they should carry on coming back and playing more.

Important: More pc software providers on a platform do not only provide a wider assortment of games for the players but also shows the platform is trustworthy.


Online casinos create promotions to attract and retain customers. They come in many categories:

  • New player bonuses – no deposit, first deposit, and Welcome deals;
  • Existing player bonuses – reload offers, seasonal or temporary promos, cashback;
  • Refer a friend deals;
  • Loyalty offers awarded upon reaching a certain VIP level.

Aside from this general categorization, there are many other types of bonuses such as:

  • Sticky Bonus – these promotions contain an amount of money, be it fixed or directly proportional to the deposit, nevertheless the bonus amount will be deducted from the winnings upon withdrawal. This enables the player to play with borrowed money instead of genuinely free money;
  • Free Bonus – this is usually a set amount of money players get no matter their deposit over the minimum limit;
  • Exclusive deals – these are promotions created by the casino in partnership with another internet site, usually a bonus aggregator such as for instance

All deals have specific requirements and rules set by the casino. They differ from one promotion to a different and from casino to casino. These are:

  1. Minimum deposit – this might be the minimum deposit the casino requires, or it's rather a different amount that only pertains to one promotion;
  2. Wagering requirement – always shown as a multiplier, this requirement shows exactly how many times the player must wager a degree of money. This might connect with either the bonus, the deposit, or the winnings. In some cases, this pertains to a mixed combination of these. Unless that is completed, no winnings from the promotion could be cashed out, however, many promotions come with non-e;
  3. Maximum cashout – whatever the amount won from a deal, that is a limit of just how much the player may withdraw from the winnings. The money exceeding this limit will be voided.
  4. Availability – promotions usually come with a time limit after which they expire and are forfeited.

Important: Everything on an offer are available in the Terms and Conditions section and Promotional Rules. Players are encouraged to always read these before proceeding to use any promotion!


For an online casino to operate legally and fairly, it takes to be fully licensed and regulated with a competent authority. There are multiple such authorities, but their techniques and stringency levels differ. For the Australian market, the most used licenses are issued by:

  • Malta Gaming Authority (MGA);
  • United Kingdom Gambling Commission (UKGC);
  • Kahnawake Gambling Commission (KGC);
  • Curacao Government.

Licenses are granted after the site and its own owners are checked and therefore are confirmed to have met certain requirements such as for instance:

  1. Owners are senior management are fit to conduct such business and have no criminal records;
  2. The RNG software is regularly tested and validated;
  3. Customer support is provided via phone, live chat, or email;
  4. All gaming software must display elapsed time for players to keep track of their gambling;
  5. Quick and fair responses to complaints.

Each authority includes a unique requirements and conducts its own examination process. This frequently includes close study of the games, incorporation documents, the processes associated with conducting the games, stipulations, rules and policies, along with technical documentation of both the control and gaming console.

These authorities each have their particular fees, both up-front and annual. The more stringent ones also provide higher fees, making it possible limited to the competent and prepared casino operators to obtain a license from their website.

Tips: The more licenses, the better! Some on the web casinos have an individual license, which already proves they have been running legally and fairly. But if more authorities checked and licensed one website, you could be assured everything is working precisely.

customer support

The consumer support of an online casino can be provided in house, or it could be outsourced, and it can be provided via multiple communication channels such as for instance email, phone, Live Chat, as well as social media and Skype sometimes.

In-house customer support may be the most useful because the agents work for the internet casino, so they know the industry better, they do have more information about the platform. If the support is outsourced, the agents have less information on the casino and might also not be too familiar with the industry.

Tips: For faster communication, most Australian players prefer using Live Chat. Test that before joining a casino and ensure the agents give quick and satisfactory answers!

Data security

Data security is vital for both gamers and on the web casinos. All the information shared by or collected from clients must remain private and away from any hacker’s hands. To do this, casinos have multiple security layers, such as:

  • Firewall – similar to the firewall on our computers, the ones virtual casinos use block unrequired access of anything suspicious on the network;
  • SSL Encryption – Secure Socket Layer Encryption keeps most of the transferred data safe by encrypting it during its transfer and decrypting it on its arrival. In this manner, just in case any bit of it really is intercepted, it will not be decoded;
  • Online privacy policy – given that the information is successfully and safely collected, what the casino does with it, and the length of time it will keep additionally it is important. This information are available in the Privacy, and every player should read it.

Recommendations: A clear and transparent Privacy Policy is a sign that the platform is secure and fair. Believe it is on the homepage’s footer on any on line casino!

How white label casinos work

White label products, by definition, are created with a company and rebranded and sold by yet another. This is done for online casinos too. There are numerous white label casinos out there as a result of the clear advantages this brings:

  • The setup may take even a couple of weeks;
  • Payment processing and fraud prevention and detection systems are handled by the white label solution along with the risk management;
  • Customer support is usually part of the white label services package;
  • The legal and licensing part will also be taken care of.

This causes it to be easier and faster for casino operators to launch a product that works correctly, allowing them to concentrate on marketing and management.

Famous and reliable white label casino software providers are:

  1. Tain;
  2. Playtech;
  3. Realtime Gaming.

How do online casinos make profit

Online casinos are very lucrative businesses, and their profit originates from the customers’ wagers. In order to increase their profits, they have to attract players using promotions and other enticing features. The more individuals deposit and come back to play more, the more unlucky bets are created, resulting in more profit for the casino.

The system that helps on line casinos make profit even if players win is named house edge. This formula is the base on which a portion of the player’s money will be kept by the casino every time they play. It is usually around 5% and, although it may well not seem like much, it's an amazing amount thinking about the quantity of active players a casino usually has.

Commissions are also collected in games such as for instance Poker, before they start. Some casinos take a percentage of the bets, while some have a hard and fast fee all players have to pay ahead of the round begins. It is because the casino’s role in this type of games is to be the dealer, which gets it no profit following the game ends.

Conclusions, Methodology, and References

Online casinos are difficult to create from scratch, they require a lot of money to be committed to the development of each aspect they should work correctly. From the visual design to the games, payments, and support, everything needs to meet top quality standards to ensure that the operator to be granted a license. But some may choose to go with white label solutions that look after everything for them, and so they can market an item created entirely by a different company. The web gambling industry is very profitable both when players lose and win. Your house edge and game commissions decide how much profit the platform makes, nevertheless they continue to be reasonable enough for players to savor playing and also have a fair experience.

The information in this article has been collected from the following sources:

  • How Online Gambling Works
  • Online Gambling
  • How Casinos Use Math To Make Money When You Play The Slots
  • Acquiring an Online Gambling License
  • What are casino Return to Player (RTP) values?
  • Types of Casino Bonuses
  • The difference between sticky bonuses and non-sticky bonuses
  • Casinos Can’t Roll the Dice in Terms of Cybersecurity
  • What Is White Label Online Casino Software?

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