Navigating the regulatory landscape of the UK gambling industry

The UK is at the forefront of creating a regulated gambling landscape and is a model that many other countries use to shape their own policies in this area.

Overall, market liberalization combined with a strong regulatory framework was hailed as a success. Certainly, UK National Lottery funding has played a key role in many successful projects in this country. The Community Fund stands behind projects and activities that protect the country’s heritage, transform communities and enrich lives through sport, art and culture. Gambling in the UK is no longer something that takes place ‘behind closed doors’.

The industry has become incredibly important to the UK economy and we can hardly turn on the radio or TV or watch a sports match without being bombarded with gambling adverts. A report by the British House of Lords shows that in 2018, marketing and advertising spending amounted to £1.5 billion. This has raised concerns that children and vulnerable people will be over-exposed to gambling-related messages, especially as the lion’s share of marketing is estimated to take place online. The Young People and Gambling Commission’s 2023 survey found that 40% of people aged 11 to 17 had experienced gambling, and over a quarter said they actively gambled.

One of the problems with the regulatory landscape in the UK is that gambling liberalization laws were made for a different time. When lawmakers were trying to work out the best way to ensure public safety and enable easy access to sports and casino gambling in the UK, the Internet was still in its infancy. One might have thought that online casinos would one day be possible, but with painfully slow internet connections and very poor online security, it was not a proposition considered as a real possibility. When you consider how easy it is to find an online casino these days, it’s no wonder that some regulatory updates have been necessary.

The first step towards the UK gambling market as we know it today was the legislation that led to the creation of the National Lottery, with the first draw taking place on November 19, 1994. The UK Gambling Act 2005 was passed by the UK Parliament on April 7, 2005 and was fully implemented by September 2007. The purpose of the Act was to provide new powers and safeguards, including the creation of the Gambling Commission. The law was introduced to ensure freedom from gambling-related crimes, to ensure the fairness and openness of gambling, and to protect children and vulnerable adults. The Act was based on social responsibility and a new system of fair regulation that would enable people to enjoy gambling and encourage an important industry to grow while behaving responsibly. The law provided for close consultative cooperation between all relevant authorities, industry and entities dealing with the effects of problem gambling.

The Gambling (Licensing and Advertising) Act 2014 amended the 2005 Act to ensure appropriate regulation of online gambling. It imposed an obligation on companies wishing to offer online gambling in the UK to have an appropriate license issued by the UK Gambling Commission. This happens regardless of the jurisdiction in which they are based. At the same time, the Gambling Commission has made a number of changes to the License Conditions and Code of Conduct (LCCP). Operators have a legal obligation to verify the age of customers before they can deposit money and access gambling on free versions of casino games. The customer’s date of birth, email address and address must be verified, as well as customers’ payment methods. They must also prove that they match the name of the gambling account holder. As of 2020, it is illegal to accept credit card payments, and customers can set daily, weekly and monthly spending limits on their accounts.

However, concerns remain that further action needs to be taken to protect vulnerable people. On February 23, the UK government announced that online slots stake limits for under-25s would be reduced to £2 in September, and to £5 for over-25s. There will be a six-week transition period during which operators will have to comply with the general £5 rate cap rule. They will then have a further six weeks to develop any necessary technical solutions to implement the £2 limit for 18-24 year olds.

Gambling Minister Stuart Andrew said: “While millions of people gamble safely every day, evidence shows that the rate of problem gambling with online slot machines is much higher. We also know that young adults can be more vulnerable when it comes to gambling-related harm, so we set out to address both of these issues in our white paper. There is clearly a growing popularity of online gambling, so this announcement will level the playing field with the land-based sector and is another step towards a range of measures introduced this year that will protect people from gambling-related harm.

This is unlikely to be the last change we will see in the UK to gambling laws, although it is doubtful whether the proposed changes will make it into the statute before the next general election.

The government wants the Gambling Commission to be given more stringent powers to impose financial penalties on gambling companies that fail to protect people at risk. While millions can enjoy a little fun every now and then and play casino games safely, it is estimated that problem gambling affects around 300,000 people. Anyone looking to start a gambling business in the UK must exercise caution. Earlier this year, William Hill was fined more than £19 million after its failures allowed a customer to lose £23,000 in less than half an hour.

There are also plans to close loopholes that ensure people under 18 are not allowed to gamble, and it all comes in the wake of the Premier League’s decision to ban gambling advertisements from the front of club shirts from the end of the 2025/26 season. The government’s latest white paper proposes that sport’s governing bodies support the Gambling Sponsorship Code of Practice and improve gambling sponsorship standards.

Image by Fathromi Ramdlon from Pixabay