Offshore casinos explained: who licenses them, and how countries push back

"Offshore casino" is a common term that is often misunderstood. It usually means an online gambling site licensed, or simply incorporated, in one jurisdiction while taking players from countries where it holds no licence. Many offshore sites display a licence seal. That seal answers only one question: which authority, if any, supervises the operator at home. It does not answer whether the site is allowed to serve a player in, say, Michigan, Germany or Chile.

This explainer sets out how offshore licensing works and the tools regulators use against unlicensed offers.

Licensed where, legal where?

Most regulated markets decide legality from the player's location. Germany's 2021 Interstate Treaty on Gambling (GlüStV 2021) charges regulators with making sure that "unauthorised gambling and advertising for it do not take place". Michigan law requires anyone offering internet casino games or sports betting to Michigan residents to hold a licence from the Michigan Gaming Control Board (MGCB). Under these regimes, a site licensed in another jurisdiction but not locally is unlicensed in that market, whatever seal it displays.

Several small jurisdictions have long issued licences to operators serving international customers. Two are now under particular scrutiny.

• Curaçao. Curaçao replaced its old system with the National Ordinance on Games of Chance (Landsverordening op de kansspelen, LOK), in force since 24 December 2024. The Curaçao Gaming Authority (CGA) says the reform, begun in November 2023, is meant to address "longstanding issues and challenges" in the sector. Under the LOK the CGA issues licences directly, after integrity and compliance reviews, and publishes policies on player complaints, crypto, testing labs and the wind-down of operations. A Curaçao licence is still a home licence, not permission to serve markets that require their own.
• Malta. Malta is an EU member and a major licensing hub. Its 2023 Article 56A of the Gaming Act requires Maltese courts to refuse to recognise or enforce foreign judgments against Malta-licensed gaming companies when the claims challenge services authorised by Malta. On 18 June 2025 the European Commission opened infringement proceedings (INFR(2025)2100). It said the provision "effectively shield[s] the online gaming sector from cross-border litigation" and breaches the EU's Brussels I bis Regulation. The case is still open. The Commission's view is not a court ruling.

How countries push back

Regulators rarely have direct jurisdiction over an operator abroad, so they act on what they can reach inside their borders.

1. Orders and notices to the operator. The MGCB sent cease-and-desist letters to 33 offshore operators on 8 October 2026, following 45 letters it announced in April 2026. It warned that operators ignoring them may face further action with the state Attorney General. Germany's treaty lets regulators prohibit unauthorised gambling and advertising for it, and appeals against such orders do not suspend them (§9(1)–(2) GlüStV 2021).

2. Payment blocking. Germany's regulators may order banks and payment providers, after giving notice, to stop processing deposits to and payouts from unauthorised gambling (§9(1) no. 4 GlüStV 2021). The aim is to cut off the money flow, which is harder to relocate than a website.

3. Site and DNS blocking. The same treaty allows blocking measures against internet access providers and registrars where action against the operator is "not feasible or not promising" (§9(1) no. 5). Other countries use similar tools: in Latin America, Chile's telecoms regulator ordered DNS blocking of 143 sites. Blocking is imperfect, because mirror domains reappear, but it raises the cost of reaching local players.

4. Removing links and ads. Regulators also target the search results, social posts and affiliate pages that send traffic to unlicensed sites. In one example, the UK Gambling Commission said it had removed 267,000 illegal links in a year and that it was seeking court powers to block domains.

5. Fines and criminal referrals. Where an operator has assets or staff within reach, regulators can impose fines. The Dutch Ksa and others have fined unlicensed operators, and serious cases can be referred to prosecutors.

6. Official licensee lists. Most regulators publish the operators they license. Germany's treaty requires a joint official list, updated at least monthly (§9(8)), and the MGCB tells residents to check its list of authorised platforms before playing.

In the United States, the federal Unlawful Internet Gambling Enforcement Act of 2006 bars gambling businesses from knowingly accepting credit, electronic fund transfers, checks or similar payments in connection with unlawful internet gambling (31 U.S.C. §5363), and its implementing rule, Regulation GG, requires payment systems to have policies to identify and block such transactions. Whether a bet is unlawful still depends on the federal or state law that applies where it is placed or received.

Tax obligations do not depend on where a site is licensed: the IRS says gambling winnings "are fully taxable" and must be reported on a tax return, including winnings not reported on a Form W-2G (IRS Tax Topic 419).

What players give up

The MGCB's October 2026 notice sets out what is lost when a player uses an unlicensed site:

• Self-exclusion does not follow the player. Licensed Michigan operators must honour the state's Responsible Gaming Database. Offshore operators have no such obligation, so a self-excluded person can still open an account and deposit.
• There are no local protections. Deposit limits and responsible-gambling tools are missing, and there is no independent game testing under state standards.
• Data protection is weaker. Personal and financial information is not protected under the state's regulatory rules.
• There is no one to escalate to. The MGCB says it cannot help if winnings are withheld or an account is closed.

The MGCB also cited American Gaming Association (AGA) research estimating that Americans wager $673.6 billion a year with illegal and unregulated operators. According to that research, the share of online casino players who use only legal sites fell from 52% in 2022 to 24%. The figures are the AGA's, as quoted by the MGCB.

The bottom line

An offshore licence describes where an operator is supervised, not where it may legally operate. Regulators measure legality against their own licensing regimes. The tools they are building, including payment blocks, DNS blocks, link removal and cross-border legal challenges, are aimed at making unlicensed offers harder to reach and harder to pay. For players, the reliable check is the regulator's official list in their own country.