Onboard Gambling: Who Regulates Cruise Ship Casinos?
Xenia Luch
08 January 2025
Comment 0

Gambling has always been a favorite pastime for people worldwide. But what happens when die-hard gamblers find themselves outside their home country — or any country for that matter?
This comes into play during cruise ships, where the casino industry extends its services into international waters. Naturally, the big question is: Who regulates the casinos on cruise ships, and what laws apply when you’re out at sea?
Turns out, it’s not so simple. The rules that govern cruise ship gambling depend on a variety of factors, and regulation can get tricky. But don’t worry, we’ll break it down step by step.
The Law of the Flag in Cruise Ship Gambling
One of the fundamental principles that determine whether gambling can take place on a cruise ship is the Law of the Flag (lex flagi).
This means that a ship is subject to the laws of the country whose flag it sails under. So, if a cruise ship is registered in a country where gambling is illegal, then casinos won’t be allowed on board.
But, as with most things in life, there are some gray areas. Let’s break it down with an example. Cruise Ship X sails under the British flag, which means gambling is legally allowed on board under British law.
But here’s the twist: British gambling law has a clause stating that the UK Gambling Commission has no authority to regulate casino operations when the ship is in international waters.
So, even though the ship sails under the UK flag, the law of the flag doesn’t fully apply. The UK’s regulator steps back from overseeing gambling once the ship enters international waters, leaving a regulatory gap.

John Kavanagh, Legal Practice Director at Pacific Maritime Lawyers, says: “Pragmatically, the flag state has responsibility for investigating issues with that ship wherever it is, but the further away that ship is from home, the logistics of that make it very difficult.”
And it doesn’t end with international waters. Cruise ships often enter the territorial waters of other countries during their voyages. When this happens, the ship is no longer bound by the laws of its flag state. Instead, the laws of the country whose waters the ship is in take over.
Scenario | Flag State’s Law | Gambling Regulation |
Cruise ship in international waters | Law of the flag applies, but regulation may lapse | No oversight from the flag state (e.g., UK example) |
Cruise ship in territorial waters | Laws of the territorial country apply | Gambling laws of the country whose waters the ship is in |
Before diving into the details of ships entering these different territorial waters, let’s first take a closer look at what happens in international waters.
International Waters: The Wild West of Cruise Ship Gambling?

Tim Stephens, a professor of international law at Sydney Law School: “Beyond 12 nm, anything goes, as far as gambling is concerned.”
Most countries claim territorial waters that stretch up to 12 nautical miles (about 22 km) from their coastline. Beyond this limit lie international waters (aka “high seas”), where, in theory, the Law of the Flag applies.

This “anything goes” situation means that, in international waters, cruise ship casinos can operate in ways that would be heavily penalized in land-based casinos. For example, they can offer guests free alcoholic drinks to encourage betting — something that would lead to significant fines onshore.
However, there’s some level of self-regulation. The Cruise Lines International Association (CLIA) sets guidelines for onboard casinos.

However, there’s some level of self-regulation. The Cruise Lines International Association (CLIA) sets guidelines for onboard casinos.
Here’s where things get tricky: if a guest has a dispute with the cruise casino, reaching out to CLIA might not be an option while at sea.
CLIA’s rules ensure that cruise ship casinos follow certain standards, including:
- Equipment Standards: All gaming equipment must meet the standards of the Nevada GCB or another regulated jurisdiction.
- Betting Limits: Min and max betting limits must be clearly posted at each gaming table.
- Age Requirements: Only adults are allowed to gamble.
Territorial Waters: When Local Laws Take Over
When a cruise ship enters territorial waters (aka territorial sea), it becomes subject to the laws of that country. That’s why most cruise operators shut down their onboard casinos before sailing into territorial waters, avoiding any legal conflicts between the Law of the Flag and the local regulations.
However, some countries have found a workaround by allowing regulated casino operations even within their waters. For instance, Bermuda and Malta have developed procedures that permit cruise ship casinos to operate under local law. For example, Malta issues licenses that allow casinos on cruise ships to remain open from 6 PM to 6 AM while in its territorial waters.

Once the ship crosses the 12-nm limit, marking the edge of territorial waters, it enters the contiguous zone (see diagram above). In this zone, coastal states have limited control over certain “activities”. The moment the ship leaves territorial waters, the casino can reopen under the same rules that apply in international waters.

Tax Considerations in Cruise Ship Casinos
Unfortunately, there’s no one-size-fits-all answer here. It all depends on where the cruise operator is registered and what the tax laws in that country say about gambling income.
Some countries have no taxes on casino winnings at all, like the UK. In other jurisdictions, the tax rate varies depending on local laws.
Because of this, the best way to avoid surprises with the tax authorities is to ask the cruise operator about their tax policy for casino winnings before you even set sail.