How Do Online Casinos Work 

Online Casinos – often referred to as ‘Virtual Casinos’ – are a type of website where players from around the world can wager money on casino games, and these websites allow anyone (provided they’re permitted under law) to enjoy gambling without the need to venture to land-based casinos, bookmakers, or other ‘brick and mortar’ gambling establishments.

The late 1990’s saw the popularity of Internet gambling vastly increase, and with the advancements in technology, the online gambling industry (including casino, sports-betting, bingo, and Poker) grew at a rapid rate with the industry worth a reported £200 billion today. While online casinos have often attracted criticism, both from responsible gambling advocates, and tax-authorities around the world, casinos today are generally well-regulated to ensure game-fairness, and implement player-protection measures.

How Online Casinos Work

While every casino (and licensing jurisdiction) has their own rules and measures in place, the majority of online casinos use the following principle in delivering their services to players:

  • Player creates his/her casino account, and deposits funds (money) into account
  • Player chooses game(s) he/she wishes to play, and decides how much to wager on each game
  • If the player loses their funds, the casino retains them – if a player wins, and ends up in profit, they can withdraw their funds back into the back account (or other payment processor)

How Online Casinos Provide Games

With thousands of online casinos currently in operation, there’s – naturally – a large number of casino games available to play, and this far-exceeds the classic table games one might expect to find in a land-based casino. For details on specific games offered, see our guide to Casino Games.

Generally, casinos choose not to self-host casino games, but, instead, to ‘rent’ them from software providers (companies who develop the games), and so, when playing at an online casino, most of the time you will actually be connecting to the game’s developer’s server, rather than the casino’s. Not only does this make loading times quicker and cut costs for the casinos, but it acts as a measure of protection for players, as the casinos themselves have no influence on the game or its outcome.

How to Play at an Online Casino

Head online today, and you’ll find a multitude of different casino sites to play at. But before players can begin gaming, they first must decide how they wish to play – or in other words – what type of online casino to play at. Below are the different types of online casinos:

Download-Based Online Casinos

The ‘original’ online casino technology, downloadable casinos allow players to download software to their computer or laptop, which they can then open as they would any other program. The casino software automatically connects to the casino’s service provider, and allows the player to enjoy all the games on offer without the need to open Internet windows or log onto an online website.

Downloadable casinos – while generally dated and rarely used in today’s world – often provide a speedier access to games, due to the fact that the graphics and sounds programs are cached by the software (or in other words, ‘remembered’), this means that each time the game loads, the computer device simply brings up the cached memory, rather than loading it from scratch. While download-based online casinos stem largely from the industry’s early days, they can still be found at certain online casinos – although the preferable method of play is the web-based option, detailed below.

Web-Based Online Casinos

More commonly known as ‘Instant Play’ or ‘No Download’ casinos, web-based casinos are generally seen as the industry ‘norm’ nowadays, and they allow players to play casino games from within their Internet browser. This eradicates the need to download any software, although it does hamper the gaming experience somewhat, due to the graphics, audio clips, and animations being loaded through the web, rather than on the player’s computer itself. Web-based casino games are usually delivered using Flash, Java, or HTML (HTML5) technology directly through the web interface, and this is the preferred choice today, due to ease-of-use, and the ability to begin playing without downloading software.

Mobile Casinos

Mobile casinos have grown significantly in popularity over recent years with the advancement of mobile technology, and in particular, smart-table devices, which are now more accessible (and affordable) than ever before. Due to the popularity of iOS (Apple) products, most mobile casino games are built using HTML and HTML 5, as iOS devices are unable to run flash or Java-based applications.

Games and Software

Casino games (and the software behind them) are the focal point of online gambling, and the scope of casino games available to play today is greater than ever before. While by no means an extensive list, below are the main game-types offered by online casinos today:

Casino Table Games

Arguably the most ‘classic’ form of casino games, table games include most game-types typically associated with casinos, including Roulette, Baccarat, Baccarat, 3 Card Poker, Casino Hold'em, and Punto Banco. Many of these games offer multiple variations, so that players can play different versions.

5-Reel Slot Games

More commonly known just as ‘Video Slots’, 5-reel slot games are one of the biggest attraction-points for players gambling online today, and thousands of different Video Slots are now available. Differing from traditional ‘Vegas-Style’ slots, 5-reel slots use unique bonus rounds, enhanced graphics and themes, and a more-enjoyable overall experience.

3-Reel Slot Games

Traditional slots, usually without bonus rounds or extravagant storylines, 3-reel slot games do still exist in most online casinos. However, the selection offered is generally minuscule when compared against the 5-reel games with many casinos offering just two or three titles due to a lack of player interest.

Video Poker

Another classic casino-game, Video Poker hasn’t quite caught on in the online casino world, and casinos generally don’t offer a wide selection of games. That being said, there are variations available to play at most online casinos, and while the demand for them is relatively low, they are available if desired.

Live Casino Games

The newest form of online casino entertainment, Live Casino Games are extremely unique, in that they allow players to play their favourite Casino Table Games from their computer, but instead of looking at a virtual table screen, instead, they play against a real person streamed direct to their computer or mobile device through a live video link. Live Casino Games are generally limited to just Roulette, Blackjack, Baccarat, Casino Hold'em, and 3 Card Poker, although other variations do exist.

Casino Game Developers

While the list of companies who produce casino games is near-endless, there are some significant names to remember. Much like many industries in today’s world, it’s fair to say the top 4-5 software providers provide – probably – around 80% of all casino games available today.

  • Microgaming
  • Net Entertainment
  • Playtech
  • Play 'N Go
  • Novomatic
  • Evolution

While that’s by no means a complete list of game providers, those tend to be the names you can find universally at most casino websites. For a more in-depth look at software providers, head over to our dedicated guide to Casino Software Providers.

Online Casino Bonuses

Almost all online casinos now offer a form of bonus to players, and this is usually seen first upon a player first joining the site, and making a deposit. It’s important to understand how casino bonuses work as, while they may appear tempting, some carry stringent terms and conditions attached alongside, making due diligence extremely important when claiming a bonus.

Types of Casino Bonuses

Welcome Bonus

The most popular form of casino bonus, a welcome bonus is generally offered to players on their first deposit, usually by ‘matching’ their deposit amount. In other words, the casino will match a certain percentage of the players first deposit (usually 100%), allowing the player to begin with double the funds they put into their account. Welcome bonuses may also include free-spins on Video Slot titles.

No Deposit Bonuses

A no deposit bonus is – as it sounds – a bonus that is given to a player without them needing to deposit real money into their account. This is usually either in the form of free casino credit or free-spins. There are many more bonuses available, and for more information, you can check out our Casino Bonuses page.

Bonus Terms and Conditions

Wagering Requirements: Almost all bonuses (especially first-deposit and no-deposit) have what are known as ‘wagering requirements’, which is, in essence, a way of reducing the casinos exposure to loss. A wagering requirement means a player must wager their bonus a certain number of times before they can withdraw it, and one of the most common wagering requirements is 35 times. This would mean, for example, a £100 casino bonus would need to be wagered a total of £3,500, before being applicable for withdrawal.

Are Online Casino Bonuses Worth Taking?

Online casino bonuses can be worth taking, but it’s a question that depends on the specific terms and conditions, your personal preferences, and the bonus amount. For players who like a challenge, some enjoy taking bonuses and trying to ‘beat’ the wagering requirements, while other players prefer to play solely with their own money, knowing any winnings they accumulate are theirs to keep. Before taking a bonus, always read the full terms and conditions, often found in the ‘casino small print’.

Safety, Security and Fairness

One of the biggest issues players have with online gaming, is that – aside from what you are shown on your screen – you have no real way of knowing whether or not the casino games you are playing are fair, honest and ‘as advertised’. Thankfully, legitimate casinos, licensed by the relevant gambling authorities, must go through extremely strict auditing to ensure they comply with the law. This includes having their games regularly tested by independent third-party companies to ensure they are truly random.

Casinos are also subject to certain rules and regulations that dictate terms like paying players out on time without discrepancy, secure holding of player funds, as well as transparency with game payouts (notably to UK players).

Security Measures Taken by Online Casinos

The vast majority of reputable online casinos use state-of-the-art 256-bit encryption to protect customer data, and this means personal details, payment methods, and any form of data the casino holds on players, is secure, and free from unwanted third parties. Similarly, reputable online casinos with use only the highest security when it comes to processing payments with VBV (Verified by Visa), and Netsafe used to authenticate transactions.

Note: Due to laws and regulations, casinos are often required to verify your identity before you are able to make withdrawals. This is usually limited to copies of ID, proof of address and proof of payment methods, but in certain cases, due to money-laundering law, you may be required to show copies of your bank statements when requested.

How Do Casinos Make Money?

It should come as no surprise that online casinos exist – in their bare form – to make money. As they’re often corporate companies with shareholders, investors and employees, generating profit is a requirement, not an option. So, How Exactly Do Casinos Make Their Money?

It’s called the “House Edge”, and it’s exactly the same way land-based casinos profit. All casino games – regardless of whether they are a Casino Table Games, a Video Slot, or else, are built and designed to be profitable to the casino first and foremost. This means, that over time, that game will earn the casino a profit, and it’s thanks to mathematics that this profit can be predicted.

Some casino games, like Blackjack, Baccarat, and Craps, have a relatively low house edge, which means when players stick to the mathematically correct gameplay, the casino edge is relatively low – often as little as 99.5%, meaning that for every £1 wagered, the casino can expect to pay back £0.95 to players, and make a £0.05 profit. Other games, however, including Video Slots and Instant Win games, have a much higher house edge with games ranging – generally – between 87% and 97% in the ‘return to player’ percentage.

Another main revenue source for online casinos is greed; it’s not uncommon for players to win – and in fact, despite the odds often heavily stacked against players, quickly turning a big profit can be relatively easy, if 'lady luck' is on your side. It is, however, the notion of actually stopping there, and cashing out, that contributes to a casino’s profits. Other factors, like gamblers who believe they can ‘beat the system’, those losing large sums of money, and gambling addicts are also revenue-creators for the casinos.

Are Online Casinos Legal?

Legalities and online casinos have always gone hand-in-hand almost since the very first online casino appeared, and for many countries, it’s been a constant battle between gambling corporations and legislators to attempt to convince the courts to side with their favour. Most European countries allow their citizens to access online casinos; it’s the United States and a few other countries where things become more complex.

We’ve compiled a full-guide on legalities of gambling, which offers an in-depth look at countries where it is and isn’t legal to gamble online. All casinos must hold a valid license to offer gambling services, and much like the legalities surrounding countries where gambling is legal/illegal, licensing is often complex – read more about casino legalities and varying jurisdictions here.

Responsible Gambling & How You Can Stay Safe

It should come as no surprise to know gambling can be extremely addictive, and problem gamblers often encounter life-changing altercations as a result of their gambling habits. Due to the nature of gambling, and the ease at which money can be lost online, almost all online casinos offer responsible gambling measures (many are required to in order to receive a license) and some of these measures include:

  • Deposit Limits – A limit on the amount of money a player can fund into their account, on a daily, weekly or monthly basis.
  • Time-Out Periods – Short periods where players can lock themselves out of their account.
  • Loss-Limits – A cap on the amount a player can lose in a set amount of time.
  • Self-Exclusion – A facility where problem gamblers can ban themselves from the casino for a period between 6 months to 5 years.

Various gambling-help websites exist to help those who suffer gambling problems with GamCare, Gambler’s Anonymous, and Gambling Therapy being the three main help providers. 

As you can see, a lot goes into online casinos and, with today’s technology, there’s a lot more than just a few games on offer. Choosing an online casino to play at can be a daunting task, and if you want to begin enjoying the thrills of gambling online, it’s important you pick a casino that’s regulated, fair and offers good player-service. Below, you’ll see a list of our safest, recommended casino’s that are known for their fast payouts, and honesty.

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Disclaimer: Please note that the legality of gambling online varies between countries and it is your responsibility to verify that your actions are legal in the country you reside. Please play responsibly - if you feel you may have a problem and need advice please visit Gamble Aware (UK) or Gamblers Anonymous.