7 Must Know Facts about Online Casinos

By Michael Stevens in Casino & Gaming on February 1, 2017

If you’re new to the world of online casinos, you need to make yourself aware of several facts. The purpose of this post is to list and explain the most important things you need to know before you ever place your first deposit.

Online gambling, especially online casino gambling, isn’t for everybody.

1. Online Casinos Aren’t Legal Everywhere

You’ll find conflicting opinions about the legality of online casinos in the United States, for example. Three states (Delaware, Nevada, and New Jersey) have legalized and regulated Internet casinos. But the other 47 states have vague laws on the matter.

Many (if not most) states have some kind of clause about using unauthorized equipment for gambling. This would presumably include computers tethered to the Internet.

Other states, like Washington, have downright draconian laws about specific Internet gambling activities. (In Washington, it’s a FELONY to play online poker for real money.)

Federal law is similarly vague. The Wire Act might seem to apply, but the latest interpretation of that law from the Department of Justice is that The Wire Act only applies to sports betting. Blackjack and slot machines are presumably not covered.

The Unlawful Internet Gambling Enforcement Act didn’t make online casino gambling illegal, either. This law just made it a crime to facilitate the transfer of funds for purposes of illegal gambling.

A more realistic approach to making legal decisions about online casinos might involve looking at risk factors. To my knowledge, no one has ever been arrested anywhere in the United States for playing an online casino game.

In fact, Internet gambling arrests of any kind are rare. I know of a couple of cases where individuals were arrested and prosecuted for betting on sports on the Internet. But even in those cases, the individuals only got a slap on the wrist.

On the other hand, running an Internet casino is clearly illegal. The risk level is extreme. Companies engaged in the practice of running online gambling businesses seem to run afoul of the United States government regularly.

What does this mean for the player?

It could mean trouble when it’s time to cash out your bankroll. If an online casino website and its assets are seized by the federal government, you might wait a long time to get your money.

This actually happened to PokerStars and Full Tilt Poker players after poker’s Black Friday. They eventually got their money, but it took time.

This means you should avoid depositing any money into an online casino that you might need for anything else at any point. This would be true even if the legal situation were friendlier, but it’s doubly true because of the extra risk involved to your bankroll.

My advice, of course, is to make yourself aware of the laws that apply in your jurisdiction. Then obey those laws to the best of your ability.

But if you decide to play at an online casino, avail yourself of the rest of the information in this post.

2. Not All Online Casinos Are Honest (But They’re Not All Dishonest, Either)

The most trustworthy and respected online casinos are aware of the legal situation in the United States. They don’t accept real money players from anywhere within that country.

You’re stuck needing to pay attention to the reputation of any site where you plan to play. Some of these companies are as reliable as they can be. Others are less reliable. And you’ll find some outright crooks on the Internet, too.

Some examples of online casinos that have been pre-screened include the ones listed on this site. Some of their names include:

  • Bovada
  • SportsBetting.ag
  • BetOnline
  • TopBet
  • Slots.lv
  • Las Vegas USA
  • Cafe Casino

Our team of reviewers have played at these casinos. They’re recommended to you with the confidence of decades of combined experience in the online gambling industry.

Most of the rogue casinos you see complaints about are slow to pay out. In other words, if you’re a winning player, you can’t get your money out of the cashier in a timely manner. In some cases, it’s impossible to cash out altogether.

This is contrary to the common belief among the uninitiated that the worst thing you should worry about with an online casino is a rigged game. They don’t have to rig their casino games. The house edge takes care of that part.

Instead, crooked online casinos make it hard to cash out. Most of them hope that you’ll change your mind about your withdrawal request and gamble the money back by playing more games.

This might be a smart business practice, but it’s unethical and unfriendly. In fact, in the long run, it’s a stupid business practice. Online casinos stand to make far more profits by treating their players well.

So few online casinos offer fast payouts and customer friendly terms that the ones who do wind up with fanatically loyal players who deposit repeatedly throughout the year.

Sure, sometimes the casino loses a little money paying off the players’ winnings. And in fact, some of those players never return.

But the net effect of good, customer-friendly business practices is a loyal player base that generates consistent profits over a long period of time.

3. The Odds for Online Casino Games Mirror the Odds for Their Land-Based Counterparts

I mentioned the concern that many players seem to have about online casinos cheating or having rigged software. That’s a legitimate concern, and it does happen. I’ve read about players at some casinos who have played dozens of hands of blackjack or video poker without ever being dealt a winning hand. But it’s still rarer than you think.

The reason for this is simple:

Cheating is unnecessary in the online casino niche.

The fact is that casino games already have an unassailable mathematical edge over the player. If you play any of these games long enough, you’ll eventually lose all your money.
That’s how the games are set up.

Here’s an easy to understand example:

Suppose you’re playing standard roulette at a Las Vegas casino. A bet on black pays off at even money. This seems like a fair bet at first. But let’s examine the wheel and the odds.
You have 38 possible outcomes on a roulette wheel. 18 of them are red, and 18 of them are black. 2 of them are green. The probability of winning a bet on blackjack is 18/38, or 47.37%. This means you’ll win less than half the time.

Here’s another way to look at it. Suppose you play 38 spins and bet $100 on every spin. And further suppose that you hit every number on the wheel once and only once.
You’ll win $1800 and lose $2000, for a total net loss of $200. Divide that $200 by the total number of bets (38), and you’ll get an average loss per bet of $5.26.

That average $5.26 per bet that you’re losing is the house edge, and there’s no way to defeat it. Sure, in the short run you can walk away a winner. But the odds are against you.

Online casinos use a computer program called a random number generator (RNG) to generate the results for their games. These programs duplicate the odds and probability you would see in a live casino game.

Yes, in a sense, all casino games are rigged. But not in the way you think. The management of the casino can’t turn a slot machine you’ve been winning on “off”. The random number generator takes care of that by paying off less than the true odds of winning. Casinos are willing to accept short term losses in order to keep you motivated to play their games. If no one ever won, no one would ever play.

Look at it this way:

Suppose you were playing a roulette game where you could win every time you bet, but you only win $95 for every $100 bet. In other words, every time you bet, you’d see a net loss of $5 or so. No one would play that game. But give someone a chance of winning in the short term, and they’ll be all over that game trying to get lucky.

It’s not in the casino’s best interest to cheat at their games. They create games which mirror the odds of playing in a traditional casino so that players will keep playing. The casino gambling business model is a winner already. They don’t have to cheat to take your money. Cheating would be, in fact, counter-productive.

4. Online Casino Bonuses Aren’t Nearly as Good of a Deal as You Might Initially Think

If you’ve never played at an online casino, you might start seeing dollar signs when you first visit a casino site. You might visit a site that offers a 500% matching deposit bonus of up to $5000. In other words, you deposit $1000, and you get $5000 in bonus chips to play with. You have a total bankroll of $6000 to play with. How can you lose with an offer like that?

The answer is that you can lose quite easily with that offer. Online casinos require you to place a minimum number of wagers before allowing you to cash out. They do this so that the house edge can catch up with you and eliminate both the bonus AND your initial deposit. You get to spend more time playing, but it’s almost impossible mathematically to walk away a winner on one of these bonus deals.

Here’s an example of how this 500% up to $5000 bonus might work:

  • You’re only allowed to count wagers on slot machines toward your wagering requirements.
  • You’re required to wager the entire $6000 60 times before cashing out.

I discussed the concept of the house edge in the last bullet point, but here’s how it applies to a casino bonus. You’re required to make $360,000 in wagers on slot machines before being allowed to cash out. Let’s assume that this casino has a 5% edge on their slot games. That’s not a bad deal—slot machine payback percentages can range from 75% to 95%, and they often skew lower. 5% of $360,000 is $18,000. Your starting bankroll is $6000. You might get lucky and win $30,000 on the first or second spin.
If you do, you might walk away a winner. But odds are you won’t. In fact, the odds are you’ll go broke long before you ever achieve the wagering requirement. Does this mean that casino signup bonuses are a bad thing?

That’s not what I’m saying. Signup bonuses are a fun way to get more action for your money. But you need to get into such a situation with your eyes wide open. Casino bonuses are not a way for you to get an edge over the casino or to make a profit. These gambling sites are smarter than that.

5. Not All Information Portals in this Niche Are Created Equal

I’ve mentioned this fact in multiple articles and blog posts, but here’s the reality about gambling information portals:

Much of the information on these sites is suspect.

Here’s why:

An online gambling information portal makes its money by selling advertising to online casinos. They usually do this on a pay-for-performance basis. If a player signs up through a link on an information portal and makes a deposit, the webmaster behind the information portal makes a commission. There’s nothing wrong with this business model, by the way.

Amazon has been conducting business this way for years. It’s common in the travel niche, too. But an average casino player is worth so much to an online casino that they’ll pay extremely well for referrals—so well that many gambling portal webmasters write puff pieces masquerading as reviews. If you read an online casino review that sounds like an advertisement or a brochure for an online casino, then it probably IS nothing more than an advertisement. This ad might include some accurate information, like the size of the welcome bonus, the licensing jurisdiction, and the number of games available. But most people reading reviews of products on the Internet are hoping for something more helpful than just an overview of what a product has to offer.

They want real opinions about the pros and cons of a product. Those are the kinds of reviews we provide on this site. Read some of them for yourself and see. As I pointed out in some of my earlier bullet points, online casinos aren’t always honest. But neither are online casino information portals, as it turns out. The more enthusiastic a reviewer’s praise of an online casino is, the less attention you should pay to it. Look for pieces which read like they were written by an even-handed journalist, not like they were written by PT Barnum.
You’ll find legitimate reviews of online casinos on the Web—but not that many of them.

6. Getting Money to and from an Online Casino Can Be Tricky

I mentioned in an earlier bullet point a law called UIGEA (The Unlawful Internet Gambling Enforcement Act). This law made it illegal to transfer funds for someone if the funds are going to be used for illegal gambling. This law made it hard for an American player to make a deposit at an online casino.

Credit card deposits are the standard in the industry, but they’re processed by companies called “credit card processing” companies. Usually these financial institutions are banks. Most of them have gotten the message about online gambling deposits, so they’ll decline a charge if it’s coming from a company associated with online gambling.

PokerStars got around this (at one time) by investing heavily in a bank and using that bank as its credit card processor. This was a clever strategy, but it was also illegal. It didn’t take the Department of Justice long to figure it out and take action, either.

But online casino operators are a clever lot, and they find new ways for you to get money to and from their sites all the time. The best and easiest deposit methods now include cash transfer services like Western Union and Moneygram. Another option that’s growing in popularity is BitCoin.

New wallets and services will continue to appear, but they all seem to have one thing in common:

They charge relatively high fees compared to just making a deposit on a credit card.

7. An Online Casino Isn’t Necessarily the Same Thing as an Online Bingo Site, Poker Room, or Sports Book (But It Might Be)

Online casinos offer casino games, which are a specific kind of game. These are games where the player is competing against the house rather than other players. They’re also games of chance where the casino has a mathematical edge over the players.
Examples of casino games include baccarat, blackjack, craps, roulette, slot machines, and video poker—among others.

Online bingo is a different animal. Most online bingo jackpots are derived from the players’ contributions when they buy their bingo cards. You ARE competing with other players for this money, not the house. Online poker is also a different animal. You’re playing poker against other players, and the website makes its profit by taking a percentage of each pot as a commission. This percentage is called “the rake”.

Sports betting, too, is different from a casino game. You’re competing with the bookmaker, but you’re required to wager $110 or $120 to win $100. That’s where the book gets its edge. They set the lines so that they get roughly equal action on either side of a contest. That way they can use the losers’ money to pay off the winners and still make a profit.

If you’re interested in those latter 3 activities, great—lots of casinos offer one-stop shops where you can engage in all those activities.

But most online casinos specialize. Some of them only offer casino games. Others, like Bovada, might offer casino games and sports betting. Ignition Casino offers casino games and a poker room. Few online casinos offer real bingo, in fact. They’ll often have games that look like bingo which you play one-on-one against the computer, though. Those can be fun, but real bingo players tend to enjoy actual bingo halls where they can chat with the other bingo players.

Conclusion

There’s a lot to the online casino industry that not everyone is aware of. It’s easy to misunderstand some things.

I’ve tried to list the 7 facts that most people need to learn or be reminded of. If I left something out that you know of, mention it in the comments section below.

Michael Stevens

Michael Stevens has been researching and writing topics involving the gambling industry for well over a decade now and is considered an expert on all things casino and sports betting. Michael has been writing for GamblingSites.org since early 2016.

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