UK Gambling Authority comes down on online gambling

The industry generates an estimated £5 billion a year in revenue

ONLINE GAMBLING: Websites are facing new regulations

ONLINE GAMBLING generates £5 billion in revenue annually in the UK, but new regulations are trimming the freedoms associated with betting, particularly now that it can no longer be based on credit. Here’s a deeper look at how the future of this booming industry is being blurred by legislation. 

How UK gambling is regulated

Gambling in the UK is regulated by the UK Gambling Commission (UKGC), as British gamblers regularly spend over £14.4 billion per year on these games. This governing body oversees 343 licensed casinos within the nation. Meanwhile, many websites are popping up online constantly, but are often not legitimate. It’s now tedious work for consumers to research which ones are legal.

The history of online gambling in the UK reached a turning point with the 2005 Gambling Act, passed by parliament and signed by prime minister Tony Blair. It was this law that decriminalised gambling and turned it into a wide open industry with enormous opportunities for entrepreneurs, job seekers and gamblers.

The law also was set up to create a fair market for gambling, as well as online gambling and regulation of lotteries. It established the legal gambling age to be 18, with certain exceptions for 16 year olds. It was the first time British residents were permitted to bet online.  Furthermore, the law allowed for advertising on TV and radio. Another milestone was that it outdated a previous law, the Gaming Act of 1845, which made wagers unenforceable as legal contracts. 

Stricter UK gambling regulations

At first the Gambling Act had very few requirements of casinos and other vendors facilitating wagers. In fact, not much has changed since then to its language, other than minor details, such as offshore gambling firms must now apply for licensing through the UKGC. The commission now oversees all online betting sites across the nation, which must gain license approval in order to operate. To some degree the topic has become as controversial as the UK drug trade

Regulations are steadily tightening even more, such as capping betting limits for fixed odds betting terminals (FOTB). British citizens were once able to bet with a credit card, but in January 2020 the Gambling Commission announced a ban on credit cards for gambling would go into effect April 14. The previous year British lawmakers began taking measures to limit the addictive appeal of such activity. According to the commission, Britain is home to 24 million adult gamblers, in which 10.5 million gamble online. 

The ban restricts gambling businesses from accepting credit cards for wagers. UKGC chief executive Neil McArthur stated that credit card gambling can lead to financial harm and that new regulations were designed to minimise risks.  He identified 22 per cent of British online gamblers as “problem gamblers”. Many of these consumers have racked up tens of thousands of pounds in debt. An even bigger problem occurs when gamblers try to chase losses, which becomes a catalyst for gambling addiction and financial self-destruction

Culture minister Helen Whately has teamed up with the UKGC to work on further legislative issues to lower gambling risks. She said: “We will be carrying out a review of the Gambling Act to ensure it is fit for the digital age”. She added the regulators are launching a national “addiction strategy” in 2020. 

Another step the UK government has taken to curb the negative effects associated with gambling is a charity called GambleAware. This charity conducts research on gambling problems and provides free prevention and treatment services for people who suffer from gambling addiction. 

Gambling and the UK economy

How much will these new regulations affect the UK’s economy? One of the biggest benefits that the British government gets out of gambling is taxes. The minimum tax on winnings up to £2,370,500 is 15 per cent. From there taxes increase, which amounts to gambling being one of the UK’s biggest sources of tax revenue. 

The UK gambling industry is divided into different sectors, such as online gambling, bingo halls, casinos and lotteries. About 39 per cent of the industry’s profits come from online betting. Then land-based bookies account for about 22 per cent, followed by the National Lottery at just over 20 per cent. There is practically an entire industry built around online casinos and casino review sites. 

Another economic factor for the British government to consider is that the UK gambling industry employs over 100,000 workers. These employees tend to earn above-average income, which contributes to taxes. Gambling entities such as the National Lottery also give substantial money to charities. 

On one hand the UK government is working to reduce risks for impulsive gamblers who end up creating mountains of debt. At the same time, gambling is one of the UK’s top industries and contributes to enormous tax revenue. Regulators and consumers must be prepared to balance between these concepts so that gambling remains a fun, thriving industry that doesn’t wipe people out financially. 

Comments Form

1 Comment

  1. | jon peters

    Good comment at the end: that when seeking to regulate the industry, the government (and the Gambling Commission), need to balance up the protection of gamblers at risk of harm, and the other key factors – namely, that it is one of Britain’s top industries, providing huge tax revenue for the Chancellor, and that it is something a huge number of people enjoy doing for fun.

    The last points deserve elaboration. The vast majority enjoy betting – the unfortunate scare stories in the media about problem gamblers, will not change this. Online betting, which is the trend of the age we live in, is central to the way people bet now.

    There has notably been a group of anti-gambling activists making their voices known recently – calling for massive online stake limit reductions, which would effectively prevent betting for fun (since bettors can do little with a £2 stake, on games requiring strategies involving multiple bets for example, or different staking ideas for different occasions…). Amid all the scare stories, they have almost been leading the discussion – and to the superficial eye, it would sound like an easy solution: just get rid of online betting in areas that are an issue, entirely! (and don’t worry about the great majority who enjoy online betting – or the loss of tax revenues to come out of this).

    There are obvious solutions to the need to protect those in danger of experiencing harm in their online betting. Betting companies and other organisations need to apply comprehensive monitoring of bettor’s habits and spending levels – to avoid bettors ‘over-spending’. The bookmakers already have nearly all the technology to do this. There just needs to be more co-ordination, an applied will to do it, and the creation of an information-pooling facility (what’s mooted in the industry as the ‘single-customer view’ of what bettors are doing). With this, those at harm will be able to be stopped from coming to harm when they bet; and the interests (and indeed rights!) of the vast majority will be protected, as well as the Chancellor’s tax revenues.

    The UK regulator, the Gambling Commission, has been looking into this area and advancing it. (Not that you would know, from the activists’ talk!) The online field is different from land-based betting as it enables this approach. (In land-based betting venues, anyone can do betting and so suitable monitoring is not possible.)

    It is unfortunate that the anti-betting zealots have achieved such a high profile – preventing the true solution in the online field from gaining prominence. But times will change…


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