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The digital revolution has created new opportunities for borderless industries such as online gambling. This has created new collective action problems as industry actors initially operate in a market without rules. In the absence of coordinated formal governance structures and institutions, the industry has responded by creating its own comprehensive self-regulatory regime. However, the United States and United Kingdom have had opposing responses: the US has increasingly sought to prohibit online gambling, while the UK has moved to regulate the industry. This paper examines the emergence of self-regulation for online gambling, and how it has been undermined or supported through the opposing legislative and regulatory responses of these two states. Taking an approach that draws on institutional analysis and design, the paper asks: what are the factors that led to the emergence of a comprehensive self-regulatory regime for this borderless industry in the absence of global governance? Why has the legislative response been so different in the US and the UK? Specifically, which interests and information have shaped their respective regulatory responses? How have these different responses affected the development of the online gambling industry and the capacity of the industry to regulate itself globally? The paper finds that the prohibition of online gambling by the US has done little to deter Americans from gambling online, but has led to the offshore expansion of the industry. The result is the rise of online gambling sites that are unregulated by the US, yet still have the potential to harm American consumers, particularly if their operators are not adherents to the industry’s self-regulation regime. On the other hand, the UK has formally adopted many of the same regulatory tools developed by the industry as effective means of regulation. The findings show that the US has created conditions under which defection from the self-regulatory regime is more likely, exposing consumers to higher risk. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]