How Online Gambling is Regulated in the UK
14 February, 2020
When we take a look at the global online gambling scene the United Kingdom stands leaps and bounds over most other countries. In fact, the UK is a shining example of how online gambling can be implemented fairly and safely for consumers. British bettors have more than 2,600 different online platforms at their disposal which offer multiple forms of gambling, including casino gaming, sports betting, bingo, poker, lotteries, and others. With a plethora of options available at any one time, it is great to be a gambler in the UK.
The United Kingdom online gambling industry is one of the healthiest in the world and one of the main reasons behind this is the willingness of the government to step in and regulate the market. Below, we will explore what actions the UK has taken to ensure high-quality gambling services for its citizens.
The Gambling Act of 2005
The Gambling Act of 2005 was the first piece of legislation passed in the UK that set the stage for the online gambling scene we see today. It covered multiple forms of gambling and set regulations for a healthy betting industry. According to the Act, the primary goals are to ensure that companies engage in transparent and fair conduct, to protect underage and otherwise vulnerable individuals from the dangers of online gambling, and to prevent crime tied to the gambling scene.
Not only that, but the Gambling Act of 2005 also brought with it the first standards for remote gambling, allowing Internet betting platforms to operate legally after meeting certain criteria. Among these, we count the ability for customers to self-exclude from gambling, performing identity verifications, and ensuring a safe and fair gambling experience. According to casino laws and regulations in UK, online venues are required to prove that the odds and payouts they produce have not been adjusted from their original values. Any deviation from the norm is treated as cheating on the casino’s part.
Along with new legislation, the Gambling Act of 2005 also gave rise to the United Kingdom Gambling Commission. This new institution took over the responsibilities of the now-defunct Gaming Board for Great Britain and began oversight of the online betting scene.
The UKGC is the government body that controls the gambling industry in the country, setting the quality-assurance standards and introducing new regulations when required. Any gambling website that wants to offer its services to the UK public first has to pass UKGC audits and standards and only then will it receive a license to operate. Unlicensed entities are not legally permitted to take bets in any capacity.
Not only that, but the UKGC also seeks to protect customers from fraudulent and predatory practices. It regulates advertisements and the conduct of gaming platforms. When a company is out of line, the Commission will intervene and levy fines if necessary.
Over the years, the UK online gambling scene has shifted and the government has passed new regulations to keep up with the times. For example, the Gambling Act 2014 brought changes to established norms and has been seen as instrumental in stabilizing the gambling scene. While not as groundbreaking as the Act of 2005, the Act of 2014 tackles important issues head-on. It served to add to the original Act, rather than to restructure the gambling industry itself.
Of the multiple provisions in the Act, several stand out. First, a gambling operator has to be licensed specifically by the UKGC in order to accept wagers from UK bettors. Prior to this point in time, companies were permitted to take UK customers, as long as they were licensed in the EEA or a number of other jurisdiction, including Alderney, the Isle of Man, Gibraltar and others. With this amendment, the UKGC has direct control and influence over all gambling operations in the country and that has certainly been useful to enforce regulations.
Further regulations also introduced a definitive tax rate on UK gambling profits, regardless of where an operator is based. Currently, gambling companies pay 15% tax on their profits. This only applies to businesses and bettors are not subject to this.
Recently, in May 2019, the Commission imposed new and stricter verification requirements on online gambling venues. Where in the past, bettors would have to verify their identity when requesting a withdrawal, the new regulations dictate that companies have to perform this procedure within 72 hours of taking on a new customer. In effect, many online casinos and sportsbooks will request identity documentation before the customer can even make a deposit.
Effect of the Regulations
The UK online gambling market is exceptional due to just how efficient and well-performing it is. Customers get to enjoy safe and fair betting, overseen by an institution that takes a proactive approach in dealing with issues. UK gambling companies, on the other hand, benefit from a low tax rate, especially when compared to those in other countries. However, they are also required to operate at the highest standards set out by the Commission.
So far, the regulations have proven effective and the UK market has flourished under them. Moreover, the Commission is always looking to introduce new practices to make gambling as safe as it can be for vulnerable individuals and children. The British seem to have found the perfect mix between having a tight grip on the industry, but not so much as to debilitate it and prevent it from growing. Presently, remote gambling represents over a third of the overall gambling market in the country and it has generated more than £14 billion in gross revenue in the last review cycle.