To be legal an Internet casinos should be licensed in the country where they or their web servers physically reside in and have to report to the local government to some extent.
Most gambling sites are are located outside the U.S. but still many companies that run casinos and sportsbooks offshore are actually operated from the US - it is just their servers that are located offshore.
Licenses to operate Internet casinos and sportsbooks are now issued by many governments around the world. The first were Caribbean and Pacific Island Governments such as Antigua and Barbuda, St Kitts, Dominica, Curacau and Vanuatu.
The reason these small countries allow Online Gambling operations to set up is because it can help boost their economy. Companies pay anything up to $100,000 to gain a gaming license in these countries, as well as paying ongoing taxes to the local Government.
Recently, more recognizes jurisdictions started issuing licenses. They are Australia and gaming commission of North American Indian territories (Kahnawake Gaming Commission).
A reputable Online casino always displays the logo of its license. You can always check it against the licensee list. Below we will list a few jurisdictions with an existing or pending Internet gambling licensing regime.
For a comprehensive list of licensing jurisdictions, visit GamblingLicenses.com.
Kahnawake Gaming Commission
The Kahnawake Gaming Commission, established in 1996, is an independent third-party interactive gaming license provider composed of three members appointed by the Mohawk Council of Kahnawake, Canada.
The Mohawk territory became very popular in online gaming industry, because it's an only Jurisdiction which have servers in North America that host real-money online gambling sites.
The Gaming Commission accepts applications from gaming businesses and evaluates and certifies the standard of its applicants' gaming equipment, solvency and continuing ability to meet its obligations to players, reviews applicants' software and control systems to ensure their fairness, accuracy and reliability.
A list of all licensees to date is available at their site.
The Gaming Commission work closely with PricewaterhouseCoopers in conducting its monitoring activity of licensed businesses. You can make complaints about a casino licensed by the Commission here:
http://www.kahnawake.com/gamingcommission/
Antigua and Barbuda - The Directorate of Offshore Gaming
The "Preferential Seal" is issued to qualifying offshore gaming entities licensed under the laws of Antigua and Barbuda by the Directorate of Offshore Gaming, which was established in April 1999.
The "Preferential Seal" means that:
- The company operating this site and shareholders holding 5% or more shares in the company have passed personal and corporate due diligence screening.
- The software, which makes the odds for games played on this site meets internationally recognized standards for fairness.
- The company has its physical corporate headquarters and primary server in Antigua and Barbuda. The primary server in this case is that on which the transactions are conducted.
A list of all licensees to date is available at their site.
http://www.dirgaming.gov.ag