Before 2005, the gambling laws and regulations in the UK were administered by the Gambling Board of Great Britain. Its successor – the UK Gambling Commission was established in 2005 and took control two years later. In 2014, online casino operators were allowed to market their services in the UK; a move that saw the entry of foreign operators that were attracted by the lucrative UK market. Such operators were required to get a licensed from the Gambling Commission.
In 2015, the UK authorities introduced tax law in all forms of gambling. Since this law came into place, the UK gambling market has seen many casino operators limit their market with some withdrawing from the market altogether. Foreign gambling operators have struggled to remain in the lucrative market despite the various painful requirements they had to meet.
The pre-requisites to tightening regulations
The expansion of the UK online gambling industry was rapid over the last decade. And, it came about mainly because of the heightened demand for casino services. The explosion elicited a lot of media attention. A phenomenon that also highlighted the powerful opposition the gambling industry got from the public. This opposition was mainly due to:
- The highly controversial fixed-odds betting terminals that the industry player preferred.
- Evidence on the addiction to gambling products and a connection between this and other mental health issues.
- Concerns about the growth of the industry to a level that required additional stricter regulations
- Failure by operators to provide customers with socially responsible services.
- Complete disregard to the relevant advertising codes and principles.
- Doubts over the operators’ compliance with the existing gambling rules.
- Unethical sign up promotions used by the operators and their affiliate partners to attract players.
Because of these factors, it become necessary to impose further, stricter regulations on the operators that violated gambling rules, codes of practice and principles.
The purpose of the regulations
By tightening regulations in the industry, the UK Gambling Commission aimed to:
- Encourage openness and transparency in advertising gambling products.
- Enable customers to realize the benefits and appreciate the risks of gambling.
- Impress upon the operators to provide their services responsibly and with the player’s wellbeing in mind.
- Ensure children are protected. A 2016 research by the UK commission found that nearly 450,000 children gamble each week. A finding that led the commission to set the minimum legal age for gambling in the UK at 18 years.
- Insist on a safe and secure gambling environment that ensures all gambling companies are licensed, tested, and regulated.
- Limit the number of disreputable casino sites.
- Ensure that all overseas-based and remote gambling operators complied with the level of security and fair gaming principles as required by the UK Gambling Commission.
- Ensure that gambling is undertaken in secure environments by responsible operators that abide by the regulations set by the commission.
The gambling legal framework in the UK consists of the the Gambling Act of 2005. This piece of legislation sets out the precedents that guide the gambling industry and how it should be regulated in the Great Britain. The law covers the operations of arcades, sports betting, bingos, casinos, gaming machines, society lotteries, and remote gambling operations. It became effective on 1st September 2007.
The legal framework also includes the Gambling (Licensing and Advertising) Act of 2014. This, on the other hand, was assented to on 14th May, 2014 and became effective on 1st November 2014. This Act regulates remote gambling by consumers and requires all operators to be licensed. These statutory laws are used alongside relevant government policies in order to ensure effective control and regulation.
The effects on online casino bonuses
The introduction in 2015 of tax (a betting duty of 15%) on all gambling activities created a cost implication for the operators regarding online casino bonuses. This means their profits would reduce. As a reaction to this, a vast majority of the free bonuses that customers enjoyed have been withdrawn. The new tax regulations also covered free bets, meaning that these too, may have to be limited or withdrawn altogether; a factor that makes gambling less motivating to the players.
Although the UK gambling regulations opened up the market for online casino business leading to the entry of overseas operators and players, the follow-up regulations took eroded most of the gains that came with the initial flexible laws. This, in turn, benefits players used to enjoy in the form of free bets and bonuses.