UK Government Publishes Long-awaited Gambling Reform Whitepaper

The genesis of the regulated online gambling industry as we know it today is mainly due to the progressive stance taken by the UK government. It was the 2005 Gambling Act that established the Gambling Commission (UKGC) and set the tone for the licensing and regulation that has allowed the industry to gain legitimacy worldwide.

A Slow Burn Review Process

However, the Gambling Act did not receive any notable updates or amendments since then, resulting in the UK falling behind its peers in many respects. A review of the act was run from December 2020 to March 2021, with more than 16000 submissions commenting on the current state of play and providing feedback on where it could be enhanced.

In a concerted effort to create fair and sustainable amendments to the Gambling Act, various ministers, officials, and other stakeholders have spent the last two years meeting to debate how best to proceed. This process has had industry pundits fearing the worst as the UKGC had garnered a reputation for decision-making that served neither the players nor the business aspect of the industry as they enforced knee-jerk responses to short-term challenges.

A Far Brighter Light Than Expected

Despite these concerns, reviews of the whitepaper on the proposed amendments have been surprisingly positive. One industry expert said: “For the gambling industry, these measures are not as bad as once feared”. The general consensus is that the larger gambling sector will be much better served despite imposing limitations on operators.

Here are some of the highlights of the proposal:

• Enhanced player protections: These will include financial vulnerability checks at predetermined loss and deposit levels.
• Improved player-centric tools: The Commission wants to make player-set deposit limits mandatory to help curb unexpected losses and compulsive behaviours.
• Limitations on high-loss games: The report proposes limiting stakes on video slots to between £2 and £15 per spin. Players aged 18-24 will automatically be limited to the lowest possible stakes as they are deemed vulnerable.
• Suppressing the lure of high-value prizes: The government felt the 2005 Gambling Act did not consider “prize draws which offer significant prizes such as a luxury home or car” and intends to impose regulations to address these incentives.

With the UKGCs increased focus on protecting players from gambling harm, these measures are well within expectation and, in many cases, impose far lighter restrictions than anticipated.

Plans to Super Charge the Commission

A repeated concern with the actions of the UKGC under the existing Gambling Act is their apparent nonchalance towards the growing threat of unlicensed operators. Based on the proposal, the government was paying closer attention to this than we realised.

The official statement says:

“The threat of an online gambling black market does not mean we should avoid tightening controls on licensed operators. However, the threat does exist and could undermine the licensing objectives.”

The plan will increase the Gambling Authority's scope to limit access to unlicensed sites and increase market channelling. The two essential action items will legally require internet service providers (ISP) to block access to unregulated gaming sites. The same will be true for payment providers who would be banned from processing deposit or withdrawal requests relating to unlicensed sites.

Land-based Gambling Win

While most of the upcoming amendments look at limiting online casinos and games of chance, the land-based gambling sector saw a massive relaxation in one key area – betting.
Richard Williams of Keystone Law said:

Overall, this is good news for the land-based gambling industry at the expense of the online industry. Casinos will be delighted with the proposals to offer sports betting, which has always been a strange restriction.

In addition to allowing casino license holders to offer sports betting, the Commission will also free up dormant casino licenses to allow new operators to enter the market, increase the number of games allowed on gaming premises, and allow casinos to offer credit facilities to non-UK residents to bolster local venue revenues.