How Do Online Casinos Work?


How Do Online Casinos Work?


Various colored poker chips fly out of tablet screen on a green casino table.

How Do Online Casinos Work?


Various colored poker chips fly out of tablet screen on a green casino table.

Over the last decade, the online casino has risen to prominence and become a popular option alongside the traditional brick-and-mortar casino. Technological advances, specifically concerning the internet and smartphones, have resulted in people spending much of their time online.

For many industries, the increased connectivity has led to added convenience and different delivery modes. The gambling industry is no exception. Some might even argue that online casinos have helped the gambling industry build a better reputation.

So how do online casinos work? On the face of it, there is little difference between an online casino and a brick-and-mortar casino. All virtual casino games are either the same or based on existing casino games. In a virtual casino, real money is bet, won and lost, just as in a traditional casino. You need to be of age and in a location where gambling online is legal, and you should always do so responsibly.

There remains a fair amount of skepticism about virtual casinos and whether they are to be trusted. Some of the concern is warranted, while some of it can be dispelled once you understand how they work, how they are regulated, how the games are developed and how your money is handled. By registering to join only the best online casinos and understanding how these casinos operate, you can lay all of your doubts to rest.

This article will explain the intricacies of the online gambling world. This includes the history, legal requirements and regulations, types of online casinos, what games you can play and how they work and some key gameplay differences between gambling online and in person.

Various colored poker chips fly out of tablet screen on a green casino table.

Brief history of online casinos

In the 1980s and 1990s, more and more desktop computers made their way into homes. The beginning of online casinos was heralded in 1994, when the government of Antigua and Barbuda passed the Free Trade and Processing Act. This Act effectively allowed casinos to apply for licenses to open an online casino from outside of Antigua and Barbuda.

The next step was to have the correct gambling software. Microgaming, a software company based in the Isle of Man, built the first fully functioning gambling software in 1994. Microgaming teamed up with Cryptologic, an online security software company, to integrate encrypted communication protocols to ensure secure financial transactions. Once fully integrated, Microgaming launched The Gaming Club in 1995. This was, in effect, the first online casino in the world.

1996 would become significant in online gambling history as the year InterCasino claimed the first real money wager in an online casino. InterCasino is still active today, but at that point had only 18 casino games on offer. It was also the year the Kahnawake Gaming Commission was established in the Mohawk Territory of Kahnawake in Canada. This commission has remained one of the most respected bodies for regulating and issuing online casino licenses to this day.

From these humble beginnings, over 85 countries have legalized online gaming, and according to GlobalNewsWire, the online gambling industry is set to be worth a staggering $145.6 billion by 2030. Since the ’90s, the world has grown more connected, and the online gambling industry has become more regulated and professional, drawing in plenty of new gamblers of all ages, genders and backgrounds.

Legality, licensing and regulation

As with any industry that involves money changing hands, extensive regulation must be conducted to avoid exploitation by either party or both parties against the state. The online gambling industry has thorough regulations that apply differently depending on what country you’re in.

If you are wondering if online gambling is legal in your country, you should confirm this before signing up with an online casino. In the US, for example, each state has specific online gambling laws. In areas where online gambling is legal, there is more than likely a licensing body regulating and handing out licenses to the online casinos in operation.

Laptop screen displaying online casino with cards, red dice and poker chips

Remember, as with a real casino, you stand to win real money when gambling online. If an online casino is not fully licensed, or is licensed by an unknown licensing body, you could end up losing all of your winnings. If an online player has a complaint against an online casino, they will lodge it with their regulatory body. The respectability and location of that regulatory body could make all the difference as to whether or not anything will be done.

During the Black Friday raid in the US in 2011, several virtual casinos were indicted. Many players were spooked and tried to withdraw their winnings. For some, this resulted in the casino being unable to pay out, and because it was illegal to use the online casino in the first place, they had to forfeit their winnings. Online poker players brought a class action lawsuit against Full Tilt Poker for failing to pay out winnings.

The Black Friday raid brought a renewed focus on regulation and licensing for virtual casinos. For players, it has meant that there are now reputable regulatory bodies that ensure that these remote casinos meet minimum payout percentages and keep player funds in a separate account from that used for the casino’s operations. It has also led to the introduction of 256-bit encryption to secure player data and banking details.

The licensing and regulations in the online gambling industry are as robust as ever. This means that if you know online gambling is legal where you live, you can find a respectable online casino that has stringent regulations and thus ensures your safety and peace of mind.

You might be tempted to explore an offshore online casino if online gambling is illegal in your area. The risks involved are obvious. You could pay a fine or even be sent to jail. You also put your funds at risk, as there is no way that your local government will fight on your side if the online casino refuses to pay out your winnings. All in all, it’s safer to gamble online in areas in which the practice has been legalized.

Lit up ace cards behind a lit up poker chip with a black background.

Find a reputable virtual casino

Once you’ve done your research and found that online gambling is legal in your area, the next step is to select the best virtual casino for you to play. Many sites offer online casino reviews that can help you understand what each casino offers in terms of support, bonuses, games and mobile apps. But, aside from other gamblers’ seals of approval, what exactly should you be looking for in a good virtual casino?

Make sure the casino prioritizes your safety

Although it’s often wordy, it’s important to read through the website’s privacy policy for details on how it collects, uses and stores your personal information. Also, double-check that all payment processing and communication between you and the website is adequately encrypted with TLS 1.2 (or above) and that the site has up-to-date TLS/SSL Certificates.

Look at their gaming selection

Do you like playing specific casino games online, such as poker or bingo? Do some research to see the quality and quantity of the virtual casino games on offer before signing up, ensuring that they fit in with your preferences. 

Investigate payment options

Some virtual casinos’ payment options are extremely limited. Investigate the options on the table before registering, checking to see if your preferred payment method is supported. 

Setting up with an online casino

Once you’ve decided on your online casino of choice, you will generally follow the next four steps:

  1. Create your account
  2. Load your bankroll
  3. Select a virtual casino game
  4. Wager money on the outcome of the game

Once your account is registered, you can load money into your account. Your starting amount is typically a portion or the full amount of your bankroll. Your bankroll is the amount of money you have allocated to use for gambling. Never play with money that you can’t afford to lose!

Effective bankroll management is key to responsible gambling. It involves knowing how to bet, when to log off and what type of buy-in you should pay for. You should be extremely deliberate about how you use your bankroll; otherwise, you could end up losing much more money than you initially expected. 

Once you’ve input your banking details and added your cash, you’ll be ready to play. You can then browse through the virtual casino games offered by the online casino. Most remote casinos don’t create their own games. Rather, the games are developed and designed by software companies, who rent the games to the casinos.

This is beneficial for players for two reasons. Firstly, it means that the game manufacturer is incentivized to create a game that is trustworthy and fair. The quality of the game is tested and needs to stand above competitors. Secondly, the casino is unable to rig games (which they wouldn’t want to do in any case) because they don’t have direct access to the game’s software.

Tablet and iPhone displaying online roulette and poker.

The best online casino will invest in the best games. This means that players can sit back and enjoy the game rather than wonder if they are being taken advantage of.

If you win the game or bet, the online casino will add the winnings to your profile’s bankroll. If you lose the game or bet, money will be deducted from your bankroll. At any point, you are able to withdraw your bankroll (with winnings and losses accounted for) back into your bank account.

If you no longer want to gamble online, you can withdraw your money and close your account. Some online casinos will have terms and conditions that determine when you can withdraw and whether or not you can withdraw any signup bonus.


If you have explored online casinos before, you will be familiar with signup bonuses. How do online casino bonuses work? Basically, in order to entice players to register and remain with their chosen virtual casinos, many offer bonuses for players. These often come in the form of matching the amount of money a person deposits when they sign up as a welcome bonus or rewarding loyalty.

How do online casino welcome bonuses work? Some remote casinos offer very generous welcome bonuses, but they usually come with strict terms and conditions attached. Naturally, an online casino wouldn’t want to give you the bonus, only for you to immediately withdraw it and close your account. As a result, many welcome bonuses require players to play a certain number of games or for a specific length of time before they can withdraw the bonus.

Casino bonus in big gold letters with blue and red sparks in the background.

This is important to know because your bonus will be placed with the bankroll that you deposited. This means that you might be restricted from withdrawing for a certain period of time and perhaps not even some of your winnings until you have met the criteria for withdrawal.

Another type of welcome bonus is access to free virtual casino games. The bonus is usually offered in the form of limited free spins in online slots or free credits for casino table games. These bonuses will help you find the types of games that you’ll enjoy playing more often.

Some online casinos will give you the option to accept or deny the welcome bonus. When considering this, you should think about how long you envision playing online. The truth is the most successful players earn their winnings over a long period. This comes with constantly reflecting on your strategy and managing your bankroll wisely. If you plan to enjoy online gambling, it would be worth accepting the welcome bonus, as you will play through all of the required games needed to withdraw the bonus. Ultimately, each virtual casino will have its own welcome bonus; make sure you should understand the terms before signing up.

Outside of welcome bonuses, some remote casinos will offer bonuses every time a player deposits more money into their account. Even the games themselves will sometimes have in-game bonuses to entice you to play more. Make sure that you understand the in-game prompts when it comes to money and bankroll. In-game top-ups can often tempt you into spending far more than you initially planned.

There are also loyalty bonuses in some virtual casinos. Casinos award these bonuses to loyal players who have spent a certain amount of money since registering to join the platform. It’s often tiered depending on how much money has already been spent. The bonuses can range from money, credit and free tournament entry to event tickets and merchandise.

Types of online casinos (download, web-based, mobile)

In a real casino, you walk through the door and toward the games you want to play. How does it work in an online casino? There are currently three main ways you can gamble online: by downloading a program, through your web browser and mobile phone.

Downloaded online casino software

In the mid-to-late 1990s, the primary way that players accessed an online casino was by downloading and installing a casino program. For many, this was their first experience of an internet casino.

You would launch the casino program on your computer and it would open up like a computer game would. Once opened, the casino software automatically connected to the casino’s service provider, allowing the user to play all the games online through the program.

The downloaded internet casino had reliable gameplay and fast graphics. In the early days of the internet, this was even more impressive. The speed was faster because the images and graphics were cached on your computer rather than being loaded anew each time, as would be the case on a web browser.

The downside to using a downloaded online casino program was that you could only use it on the computer that you installed it on. You couldn’t log in to a friend’s computer and access your account and games.

As internet speed has improved over the last 20 years, the benefits of a downloaded online casino are not as apparent as they once were. Most people prefer to access their chosen internet casinos through their web browsers. That being said, some remote casinos still offer a downloaded version of their platform.

Web browser-based online casino

Tablet and iPhone displaying online slots game.

The most common way players of today access internet casinos is through their web browser. This involves simply typing the online casino’s URL into your browser and logging in. It’s marginally slower than a downloaded casino program because the games, images and graphics are loaded through the web.

Many people feel uncomfortable about downloading and installing casino software on their computers, so the web browser-based online casino is a more viable option. It also offers added flexibility, as you can securely log in on different computers and web browsers. All you need to do so is a connection to the internet.

Web browser-based internet casinos are often built to be responsive. In other words, you can play on any device, such as your laptop, tablet or smartphone, because the display responds to your screen’s width. This flexibility is why this type of virtual casino is so popular.

Mobile apps

The last ten years have ushered in the smartphone era. These days, we spend an inordinate amount of time on apps on our phones. As a result, online casinos offer iOS and Android apps so players can easily access and play online.

An app is often easier to navigate on phones than a responsive web browser. On a tablet, the same is true. The design, graphics and loading speed can be quicker on an app than in a web browser on your phone.

Jackpot slots machine with 777 displayed with coins flying around it

The virtual casino apps are similar to the downloadable online casinos of the 1990s. The downside is that you can only use it on the device it has been installed on. By purchasing the app on the Apple App Store (iOS) or the Google Play Store (Android), you know that the app is secure and has good reviews.

For security reasons, it’s not recommended to download an app or APK directly from a website. Instead, make sure you download it from either the Apple App Store or Google Play Store.

Types of games

If you imagine walking through the doors of a real casino, you might be overwhelmed with choices. There will be countless flashing lights, casino table games and slot machines all vying for your attention. In the same way, once you’ve decided on a reputable online casino to sign up with and set up your account and bankroll, you might be overwhelmed by the volume of games available.

As with a real casino, digital casinos have a full selection of games, sometimes including online sports betting. All the games offer the chance to win real money and, in many cases, to play against or alongside real people. Online casino games are played the same way as in a brick-and-mortar casino. The only difference is that online casino games have an element of computer-generated chance, whereas real casinos have a face on the other side of the table.

Because transactions involve real money, casinos need to ensure that the games are fair and regulated. This strictness applies to digital casinos even more – after all, there is no room for computer error when it comes to real money games.

How do virtual casino games work? Many people wonder if the game is not rigged in the casino’s favor. As with anything in life, knowledge is power. The more you know about how online slots, online poker and online blackjack work, the more comfortable you’ll feel about the fairness of the games.


There are many skeptics regarding the fairness of online slots. Some of this stems from the skepticism of video slots in casinos. The truth is that, statistically, playing slots online has a higher payout than casino slot games.

How do online casino slots work? Online slots work similarly to the real money slots you’d find in a traditional casino: you initiate a spin and tell it to stop, hoping to get a winning combination on the reels. In contrast to casino slots, you may also get bonus rounds in online slots. The main difference is that online slots have a Random Number Generator (RNG) coded into the software.

The RNG allows online slots’ fairness to be regulated and measured. The RNG allows the online slot to produce random sequences every millisecond. The RNG is set up for each individual online slot, along with an algorithm to make each spin a unique spin. This means that the RNG in online slots doesn’t store memory of when a specific combination happened last. The results of the spin aren’t pre-programmed before you begin. They’re determined by when you click to stop the spin.

Not only do RNGs guarantee the randomness of the slots, but they’re also tested regularly and independently. The online gambling licensing and regulatory boards will require digital casinos to undergo regular tests of their gaming software. The RNGs of online slots are audited and tested by third-party testers, which check that the RNGs are running as they should and verify their theoretical return percentages. These tests can happen as often as once a month; some online casinos make the results of these tests available online.

RNGs are used in all online slot games, from 3-reel slots to 5-reel slots. They offer credibility and integrity to the results of the slot spins (but it doesn’t mean that you’re guaranteed to win.) As with any casino game, the odds favor the casino. The RNG just ensures that the odds are fixed and returns are measured.

It’s important to remember that the game developer is the only one who can adjust the settings when it comes to virtual slots and RNGs. The online casino cannot tamper with a game or make it more difficult for players to win.

If you’re interested in getting used to online slots, many virtual casinos offer free access to slots in the form of free spins, usually as a signup bonus. These free spins will help you familiarize yourself with the tempo of online slots – you may even get lucky and win. Free spins will also come in handy when figuring out which slot machine themes you most enjoy. After all, there are hundreds to choose from, including food-themed slots, Egyptian-themed slots and animal-themed slots, to name just a few of the most popular on the gaming menu. 


Online poker is perhaps one of the most popular games in online gambling. The televised World Series of Poker has enhanced the game’s popularity and highlighted more of the strategy behind the play. Many players have registered with internet casinos to play online poker exclusively. Plus, there are many more versions of poker online than you might find inside a traditional casino.

How does online poker work? Online poker follows the same rules as casino poker. The main difference is the speed of the game and the aggressiveness of the bets. Online poker games use a time bank for players, ensuring that the game continues to progress smoothly without any lengthy delays.

In online poker, you won’t be able to read another player’s bluff in the same way that you would in a real casino. You might learn a player’s style of play after a few hands, though.

You’ll be pleased to note that RNGs are used in online poker software, meaning that casinos cannot rig games. Internet casinos would have nothing to gain from rigging games in any case, as they make their income from the rake.

The developers of online poker games use RNGs to make sure that all cards dealt are always randomly selected from the available deck. Before a card is dealt, the RNG selects a number, which is then assigned to a card in the remaining deck.

The fairness of online poker games brings the skill level of a player into sharper focus. As a result, online poker tournaments can amass significantly large pots. Remember, though, that the higher the buy-in, the more likely you’ll play against some very strong poker players.

If you are new to poker, there are many free online casino poker games available. You won’t necessarily be playing in real cash games, but you’ll become familiar with the pace and style of online poker.

Experienced online poker players have been known to play multiple games simultaneously, each in a separate browser tab. Such a play-style is, of course, not possible in a physical casino, but it’s one of the many ways that the online environment offers nuances to how we can play.


Light up blue playing cards mid air with a black background.

Online blackjack doesn’t differ from casino blackjack. There are different types of blackjack (and you might find more online than in a casino,) but for the most part, the rules and play of the game remain the same.

One key difference with blackjack online is that players can’t count cards. In online blackjack, the cards are shuffled after each round with the help of an RNG. This means that you can’t necessarily count the burn cards when deciding whether to increase your bet.

The RNG for online blackjack games is tested and audited to ensure that it’s operating correctly and fairly.

Live dealer

Some online players prefer to experience casino table games with a real person dealing the cards rather than a computer. As a result, there’s a branch of online gambling that involves a live dealer.

Naturally, having a live dealer removes the need to use an RNG. As a result, you can see the dealing and shuffling in real time on your computer. The dealer is live-streamed using a high-end camera to all the players in the game.

There’s also an added social dynamic to live dealer casino table games because they often come with a chat box that players can use to talk to each other or the dealer. The dealer can also be tipped at the end of the game.

Casino game developers

Since the first digital casinos were created in the 1990s, software developers have been an integral part of the online gambling industry. As mentioned, casinos can’t develop the games themselves, so it’s important to know who the reputable software companies are. The top three casino game developers are Microgaming, Playtech and Net Entertainment (also known as NetEnt.) Microgaming has been around since 1994 and today provides some of the industry’s leading online casino games. After starting arguably the first virtual casino, The Gaming Club, in 1995, Microgaming decided to rather focus its strategy on developing casino games and is now very much an industry leader.

Playtech was founded in 1999. Many of its games have titles of iconic movies, comics, shows and books. Playtech has also established itself as one of the leading mobile casino game developers.

Net Entertainment was founded in 1996 and has developed award-winning slot games, among others. Recently, the company has set the standard for live dealer games with exceptionally high-quality streams.

As with any industry, there are also some up-and-coming game developers who are looking to make their mark. However, to be on the safe side, you can’t go wrong with these established names when looking for a new virtual casino game to explore online.

Responsible gambling settings

Accessing internet casinos is very convenient. It can be as easy as taking your phone out of your pocket and playing online slots. The danger, of course, is that gambling, whether online or in-person, can be addictive. It’s essential to ensure that you are gambling responsibly at all times.

Online casino games can be just as addictive as those played inside a brick-and-mortar casino and often have in-game offerings to help you top up or buy into the next game. You might see a signup bonus of free online casino table games and play more than you thought you would. If you don’t manage your bankroll, online gambling could cost you way more than your initial bankroll.

A tablet displaying slots game and iPhone displaying roulette

Thankfully, many leading internet casinos add responsible gambling settings to their platforms. As technology has helped us to access casino games more readily, it can also be used to manage our access to them.

Deposit limits can be set that restrict the amount of money a player can deposit into their online casino account. You can set the limit to a daily, weekly or monthly one. Even if you think you are gambling responsibly, setting this amount is strongly advisable. You might get a sobering surprise if you hit the limit.

Keen to limit your playing time? Some online casinos offer time-out periods. This is when a player knowingly locks themselves out of their account for a set period of time. More experienced players might use this after winning to make sure that they cool off before playing again. Too often, players win big and then lose it all, trying to chase another win.

Players can also set loss-limits, where they restrict themselves from losing too much of their bankroll in a session. This is a good example of how you can manage your bankroll by ensuring it isn’t depleted too quickly due to bad decisions.

Some online casinos also offer self-exclusion periods where a player can lock themselves out of their account for an extended period of months or even years. This feature might also be for players who know they aren’t going to play and want to lock their account in case it’s hacked or for players who know they’re developing an addiction and need extended time off.

Each online casino will have versions of these types of responsible gambling settings. In any addictive realm, cash games can appear to offer a quick fix to financial stresses. In truth, online gambling can have devastating effects on personal finances if not handled responsibly.

Before registering to join a virtual casino, it’s vital to familiarize yourself with the signs of problem gambling so that you can take swift action if and when necessary. Symptoms of gambling addiction include:

  • Having trouble sticking to your bankroll or your time limits. 
  • Canceling social plans because you’d rather stay home and gamble online (or head to the nearest casino on your own.)
  • Finding yourself spending more time thinking about gambling, even when engaging in other activities or tasks. 
  • Feeling the urge to keep your gambling behavior a secret or lying about how much money or time you spend doing it. 
  • Gambling even when you can’t afford to lose any more money. 
  • Losing interest in other aspects of your life that used to bring you joy. 
  • Friends or relatives expressing concern about your gambling habits. 

Your ideal internet casino should be regulated and licensed by a respectable gaming board. Another important factor is that it should have an interest in ensuring that you are supported in order to gamble responsibly. 

Return percentages

Magnifying glass over gold percentage symbol.

It’s always important to remember that the house edge is in favor of the online casino. What is the house edge? It’s basically the odds being favorable that the outcome of a game will benefit the casino. That’s where the betting comes in. The bet is that this time, the lower odds will take it (and they sometimes do.)

To know how often the house’s edge is beaten, you can look into a casino’s return percentage. The return percentage shows you relatively how much the casino usually makes per game. For example, blackjack has a very low house edge of 0.5%, which means that the casino expects to pay 99.5% of wagers back to players, but in the long run, make 0.5% profit on the wager per game. So, 99.5% is the return percentage.

Other games will have a higher house edge. Online slots have a house edge of between 2–15%, while American roulette has a house edge of roughly 5%. It’s important to remember this when playing. The law of averages is that you will win from time to time, but in the long run, the games will make online casinos more money.

For that reason, managing your bankroll and being strategic with your play when you’re ahead is essential. Have an effective strategy and know when it’s a good time to bet and when it’s a good time to walk away. When done responsibly, virtual casinos bring hours of enjoyment.

Explore online gambling at Borgata Online

Looking for a reputable virtual casino to explore the realm of online gambling? Borgata Online ticks all the boxes. From live dealer games to online slots, bingo and casino table games, we’ve got it all – and your safety is always a top priority! 

Go ahead and register to join in on the fun.