Gambling Laws in the UK

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There have been legalized forms of gambling and laws to govern and regulate it in the UK for centuries. The current regulatory body that enforces UK’s gambling laws is the United Kingdom Gambling Commission (UKGC) set up with the passage of the Gambling Act of 2005. A later enactment – the Gambling (Licensing and Advertising) Act of 2014 – was enacted specifically to bring under the ambit of regulation the overseas remote/online gambling operator servicing UK players.

Of course, there were different gambling laws and bodies in the UK before the UKGC was formed. On this page we take a look at the different aspects of gambling laws in the UK, including:

  • The relevance of gambling laws in the UK.
  • A brief history of UK’s gambling laws.
  • An overview of the United Kingdom Gambling Commission.
  • Specific considerations involving online casino and sports betting regulations.
  • The Gambling Commission and advertisement regulation and enforcement.
  • Law and compliance enforcement.
  • How UK’s gambling laws affect its players.

The Relevance of Gambling Laws in the UK

Gambling laws are critical given the overall size of the industry in the UK today. The following statistics drawn from the annual report of the UKGC for 2016 (April 2015-March 2016) gives you an idea of how big the industry is today in the UK:
  • The total gross gambling yield (GGY) of the UK’s gambling industry stood at a massive £13.5 billion.
  • The market share of the remote gambling sector (betting, bingo and casino) was 33%.
  • The number of employees in the UK’s gambling industry stood at 104,896.
  • The total number of betting shops stood at 8,709.
  • The total number of bingo premises stood at 575.
  • The total number of casinos stood at 148.
  • The total GGY of the remote gambling sector (online and mobile gambling) was £4.5 billion.
  • There were 167,839 betting machines, excluding those that needed just a local authority permit.

Before we go any further, let us take a look at the history of gambling laws in the UK.

A Brief History of UK Gambling Laws

Gambling has been a part of British life for hundreds of years. Thoroughbred racing, for instance, was one of the core reasons for the development of fixed odds betting. A number of the major public buildings, like the British Library, was funded by money from lotteries. Up until the 17th century AD, gambling in the UK was a class-based activity:

  • For the rich there were wagering games like cock fighting, horse racing and card games (the latter came about only around the 15th century).
  • For the poor there were dice games like Hazard and later, coin-based toss games.

Earliest Gambling Laws in the UK

The earliest laws related to gambling in the UK can be traced back to 1190, when King Richard of England and King Phillip of France set down laws to determine who could gamble and how much.
  • Only princes, noblemen and knights could place real money wagers.
  • The maximum bet limit was 20 shillings in 24 hours; there were penalties for exceeding it.

The commercial aspect of gambling rose in the second half of the 17th century and coincided with the industrial revolution. Activities included horse racing, lotteries and commercial gaming establishments.

Gambling Laws in the UK from the 17th Century

The following is a timeline for gambling laws in England between the 16th and 19th centuries:

  • 1694: First authentic national lottery launched.
  • 1721: Private lotteries banned.
  • 1739: Gaming Act passed to deal with horse racing-related gambling.
  • 1823: Lotteries Act passed to ban the national lottery.
  • 1845: Gaming Act passed; it was formulated in 1844 by the Select Committee on Gaming and made all existing agreements relating to gambling and betting null and void. All commercial gambling except on-course horse race betting made illegal for the working class.
  • 1890s: National Anti-Gambling League formed to eradicate Street betting and betting at horse races.

UK Gambling Laws in the 20th Century

The following is a timeline for gambling laws in UK in the 19th and 20th centuries:

  • 1906: Street Betting Act passed in an attempt to eradicate Street betting.
  • 1960: Betting and Gaming Act passed, based on the premise of the 2nd Royal Commission on Lotteries and Betting of 1849. As a result public bingo halls and casinos are opened in the UK.

The Gambling Act of 2005 and the United Kingdom Gambling Commission (UKGC)

United Kingdom Gambling Commission (UKGC)

The Gambling Act of 2005 resulted in the formation of the United Kingdom Gambling Commission (UKGC) to license gambling in the UK. The entities licensed by the UKGC include operators and people offering the following in Britain:

  • Arcades
  • Betting
  • Bingo
  • Casinos
  • Gaming machines
  • Lotteries
  • Remote gambling (over telephone and online)
  • Gambling software

The Gambling Act of 2005 undertook to regulate a new and rapidly surging form of gambling in the country and across the world – remote/online gambling. Remote gambling was defined as ‘any form of gambling that involved a player placing a wager over any electronic technology or device that enabled communication’. The devices and technologies included:

  • Telephone
  • Radio
  • Television
  • Internet

In 2013, the National Lottery, which was regulated under the National Lottery Act of 1993 and was so far outside the purview of the UKGC, was brought under it.

The Gambling Act of 2005 did not require overseas operators servicing UK players to obtain a license from the UKGC. This was remedied with the passing of the Gambling (Licensing and Advertising) Act in 2014.

The Gambling (Licensing and Advertising) Act 2014

This Act was introduced with the objective of having a specific law to deal with remote gambling. It was introduced in the Parliament on 9th May, 2013 and passed as a law on approval by Royal Assent on 14th May, 2014. As per the provisions of this law:

  • Gambling operators – local and overseas – must get a license from the UKGC to offer gambling services to players in the UK.
  • Even if an overseas operator is licensed from a whitelisted gambling jurisdiction, he needs to acquire a license from the UKGC to cater to UK players.
  • Until an overseas operator obtains his UKGC license, he can offer games to UK players through an interim continuity license that is valid till the new license is approved.
  • Overseas operators must pay a 15% point of consumption tax for bets placed by UK players at their online gambling websites.
    • This tax has seen a number of overseas operators pull out of the UK market.
    • The Gibraltar Betting and Gaming Association (GBGA) challenged the Act in the courts of law, resulting in a postponement of the enforcement of the Act to November 2014.

Some overseas operators continue to offer their services to UK players using available workarounds that include:

  • Applying for a fresh licence from the UKGC.
  • Moving all their UK players to another of their casino brands and prevent access to the rest of their brands for these players.
  • Preventing UK players from accessing their brands and instead moving to brands owned by an associate.

However, there has been positive movement as well:

  • Many overseas operators have begun to move their players to UK-based platforms.
  • The DCMS has received over 1000 applications till date.
  • More than 150 operators and operator group companies have applies for continuation licences.

Specific Online Casino Regulation by the UKGC

The following are the specific areas of online casino gambling that the UKGC regulates:

  • Location of key equipment: No new equipment may be added, or existing equipment relocated, without proper notification.
  • Access to key equipment: Enforcement officers must be granted access to key equipment for audit and inspection.
  • Gambling software: Operators can use only those gambling software manufactured by the holder of a gambling software operating license.
  • Peer to peer gaming: All licensees offering peer to peer gaming must follow the specific guidelines laid down in the Gambling Act of 2005.
  • Segregation of funds: Operators must ensure that customer funds are held in a separate client bank account.
  • Disclosure of fund protection status to customers: Operators must state in their terms and conditions whether:
    • Customer funds are protected in the event of insolvency
    • The level of protection offered
    • The method used to ensure protection.
  • Cash and cash equivalents: Operators must have in place policies and practices to safeguard customer funds from money-laundering and offering of illegal credit.
  • Payment method services: Operators must accept payment from customers using approved payment services.
  • Compliance with terms for fair gaming: Operators must comply with the terms of the Consumer Rights Act of 2015 to ensure fair gaming.
  • Display of license status: Operators must display the licencing and regulation status on every screen and also provide a link to it on the Gambling Commission’s website.
  • Anti-money laundering: Operators must assess the risk of their business being used for money laundering and terrorist financing and comply with specific segments of the Money Laundering Regulations 2007.
  • Return of stakes to children to prevent underage gambling: Operators are required to return money paid for gambling by a minor and ensure he/she is not given any winnings.

Specific Sports Betting Regulation by the UKGC

The UKGC sees sports betting, especially e-sports betting, as an opportunity and not as a risk. It works collaboratively with the British eSports Association (BEA). One potential problem area it has identified is the use of advanced technology like high-speed Internet by some bettors to receive data prior to other players and also operators. To mitigate this, it has licensed 6 trading rooms offering high-end Internet connections.

  • It allows licensees to offer e-sports betting to players.
  • It regulates sports betting to ensure eradication of match-fixing through its anti-match fixing measures.
  • It has put in place mechanisms to deal with the risk of problem gambling associated with e-sports betting and sports betting in general.

The Gambling Commission and Advertising Regulation and Enforcement

The Gambling Commission has strict rules in place to regulate and enforce advertising for online casinos. Operators must advertise gambling products and services in a socially responsible manner while at the same time complying with the UK Advertising Codes; these are laid down by the Committees of Advertising Practice (CAP) and administered by the Advertising Standards Authority (ASA). The following are some rules for operators with regard to advertising:

  • Compliance with the gambling industry code for socially responsible advertising administered by the Industry Group for Responsible Gambling (IGRG).
  • Setting age limits for people appearing in gambling-related advertisements.
    • No child (15 years or lower), young person (16 or 17) or anyone below 25 years should be shown gambling anywhere, including social media.
    • Individuals between 18-24 years may be shown in marketing communications at an operator’s website only.
  • Marketing communication for bonuses should not be misleading.
  • No digital advertising should be placed on websites offering access to copyrighted content without proper authorization.
  • Operators are required to comply with Privacy and Electronic Communications Regulations (PECR) enforced by the Information Commissioner’s Office (ICO) for direct marketing by phone, e-mail, text or use of cookies and related technology on their website.

UK Gambling Laws and Compliance Enforcement

The Gambling Commission regulates the gambling industry in the UK in a transparent, accountable and consistent manner. The focus is on issues and gambling businesses that are the biggest potential threats to fulfilment of the UKGC’s licensing objectives using a risk-based approach. Commercial businesses must obtain a license from the UKGC and comply with the rules laid down and also the Licence Conditions Code of Practice (LCCP).

The Commission publishes the manner in which it interprets different bits of legislation and supports its compliance and enforcement initiatives with proper communication. It also gathers intelligence and information related to gambling in the UK and maintains an evidence base that it uses to support government initiative and action. The UKGC works in cohesion with other regulators and also government bodies like the police and HM Revenue and Customs (HMRC).

To ensure compliance with its licensing objective the UKGC conducts a number of different activities. These include:

  • Conducting visits and reviews.
  • Offering pertinent and specific holders to individual licence holders.
  • Taking preventive or remedial action.
  • Putting in place extra licencing conditions when needed.
  • Accessing and reviewing a licencee’s financial data.

Any licence holder who is found guilty of not being in compliance run the risk of having regulatory action initiated against them. The degree of regulatory action depends on the level of non-compliance.

UK Gambling Laws: How They Affect You as a Player

There are a number of positive ways that the gambling laws in the UK affect you as a player. We list some of the important aspects below:

  • Licensing: Playing at a casino licensed by the UKGC gives you a safety net: licensing automatically means compliance with the rules. It also means you can turn to the UKGC or any of the associated regulatory authorities if you have a problem with the casino at any time.
  • Regulation: You know that all the top online casinos in the UK, and also the land-based ones, are completely regulated. This means they have to be in compliance with the rules set down by the UKGC, which guarantee fair gaming.
  • Safety: You are safe when you play at a casino licensed by the UKGC because it has to meet the minimum standards for ensuring player safety laid down by the Commission.
  • Legality: You are made aware that gambling is legal in the UK as long as you are not a minor, i.e. below 18 years of age. You can visit any of the large number of UK online casinos, including the biggest and the best.
  • Taxation: Winnings from gambling are not considered taxable income in the UK. You know that anything you win at a casino that is licensed and regulated by the UKGC is yours to keep.