The year 2021 is shaping up to be a huge one for the UK gambling industry.
Against a backdrop of concern around issues of problem gambling, the Department for Digital, Culture, Media and Sport (DCMS) has already begun its complete review of current legislation with a view to publishing a white paper and presenting a new Gambling Bill for approval in parliament later this year. This process represents the biggest change to the law since Tony Blair’s labour government passed their own Gambling Act in 2005. Since then the industry has grown in size to a colossal gross gaming yield of over £14 billion annually, driven by technological change and huge advertising spends.
Now deemed an ‘analogue law in a digital age’ every area of the 2005 Act will come under scrutiny. With pressure from MPs, the Lords, charities and the media, the government will seek to balance the needs of adequately protecting consumers with the freedom of any individual to spend their own money as they wish. But can it really be done?
It’s worth noting that the UK is not the only country seeking to impose stricter regulations around online gambling. In 2020 Sweden set prohibitive limits on monthly deposits for individual players, and Germany announced the same kind of plans for its new regulated industry in 2021. Meanwhile in Spain TV advertising of online gambling was all but banned and new rules were put in place outlawing sponsorship of La Liga football teams by gambling firms.
Regulation is sweeping through Europe and is set to arrive in the UK this year. Here we look at some of the likely changes and how they may affect gambling for consumers in the future.
Responsible Gambling and Player Protection
The principle reason for a change in the law is to provide much better protection for those at risk of problem gambling in the UK. It is fair to say that the architects of the 2005 Act did not know how a future gambling industry might look with the ability to place unlimited bets on a mobile phone across 1,000s of live betting markets or online slots and roulette games. Over the last decade much has been done to improve regulation that limits the risk of problem gambling. We’ve seen a ban on credit cards deposits, stricter ID verification on sign up, new rules on source of wealth checks, and bans on withdrawal reversals.
A new Gambling Act may go much further. Here are some proposals under consideration:
Affordability, Stake and Deposit Limits (Source of Wealth Checks)
Perhaps the most controversial area for lawmakers to find a solution to is affordability.
Whilst it seems unlikely that the UK will follow Sweden in imposing a monthly limit for all players regardless of their income, more stringent affordability checks are definitely on the table. Currently operators are obliged to carry out source or wealth checks for any customer who deposits over £2,000. This is after basic ID verification checks are carried out on all new accounts. Under new laws a soft cap of £100 may be brought in with source of wealth checks for anyone wishing to deposit more. Source of wealth checks are a gripe for many high spending gamblers as they are time consuming and require the customer to present details of their income, bank balance and expenditure.
Alongside Source of Wealth checks are stake limits which are likely to be applied to online slots and some table games. The £2 limit imposed on Fixed Odds Betting Terminals (FOBTs) in April 2019 is being touted by many campaigners who say online is no different to offline. Again, a solution that allows those who pass affordability checks to play at higher stakes may be found.
Those campaigning for reforms have also proposed limits on how long a player can continuously play a casino game for. It is suggested that after 30 or 60 minutes a player may be locked out of playing or even have a break imposed. New rules on time between spins might also be brought in. Online slots allow a player to burn though £1,000s in minutes if they are so inclined. Introducing a 3 to 5 second lag between spins may slow down spend and also give more pause for thought.
VIP Schemes and Bonuses Rules
Treatment of high value customers is another area that has come under intense scrutiny in the last year with some high-profile campaigners calling for a complete end to VIP schemes which reward big spending customers with exclusive loyalty rewards including regular top up bonuses and free bets. The Gambling Commission has been reluctant to outlaw VIP programs entirely preferring to impose stricter rules on how they are run and who gets in. Those under 25 are now barred from being invited onto VIP programs and additional affordability checks and spend monitoring are required for those accounts who are part of any scheme.
And it may not be just VIP progammes that are affected by new legislation. The entire area of ‘incentives to bet’ is under review. Again, it seems unlikely that bonuses will be outlawed entirely as this would be too prohibitive for businesses, but limits on how much can be given away to a customer each month are not out of the question.
In order to tackle the issues of problem gambling it is proposed that much more pressure is put on gambling operators to monitor their customers behaviour to look for signs of gambling addiction. That may be sudden increases in deposits and spend or longer than usual session times. Of course, currently sites use this information to predict who their best value customers are so there is some conflict with the objectives of that business. With this in mind, proposals have been made to create a Gambling Ombudsman which would oversee this side of the industry and ensure that steps are taken to protect vulnerable customers who are at risk of spending beyond their means.
In April 2020 we saw a new ban on credit card deposits at gambling websites. This measure aimed to tackle the risks of debt incurred from gambling beyond an individual’s means. New regulation also means that credit card deposits made through eWallet systems like Paypal were also outlawed. Could a new Gambling Act go further and restrict deposits entirely to traditional payment methods like Debit Cards? It seems unlikely, but further restrictions on services like Skrill, Paypal, and the PrePaid Card system, Paysafecard, which effectively allows a player to gamble with cash, are not out of the question.
Withdrawal Limits and Reversals
The issue of withdrawal limits and reversals is one that is concerned more with consumer rights than responsible gambling. In the past casino operators have done everything that they can to withhold funds for as long as possible in the hope that players will reverse the balance back into their account and spend it. Withdrawal ‘pending periods’ of up to 72 hours were ostensibly a period of time required for a casino to ‘process’ a withdrawal – i.e. review the account and transfer the money from the business account. Player power and pressure from the regulator has since made 72 hour pending times a rarity now, and a new Gambling Act may outlaw them completely. Additionally, maximum withdrawal restrictions, which stop a player withdrawing all their funds in one go when they score a big win, may also be banned.
Advertising and Sports Sponsorship
Aside from player protection, advertising and sponsorships are the key areas that a new Gambling Act in the UK will look at. Pervasive advertising on TV and online over the last two decades have helped turn the UK into a nation of gambling fanatics. Turn on your TV any evening and you will be bombarded with adverts promoting free spins, bonuses, slot games and sports betting sites. Campaigners are calling for a curtailment to this frenzy of marketing noise.
Advertising is no more prevalent than in the arena of sport, and of course, football. Just like tobacco and Formula 1 before it, the close relationship between gambling and football needs to be broken according to reform groups. Half of the Premier League’s 20 team’s shirts, and much of the space on the boards around any ground, are taken up by gambling ads. Those who want tighter regulation say that the presentation of gambling brands around football teams ‘normalises’ betting and exposes it to children who grow up without understanding the risks.
Of course, with football clubs, like all other businesses, facing financial pressures after the impact of the Coronavirus pandemic, there will be a lot of push back against any proposals to cut the ties between sport and gambling entirely. But we can expect at least some restrictions and maybe a planned phasing out of sponsorship deals rather than a cliff-edge ban. And at the same time, there may be restrictions on how and when TV channels can show gambling advertisements.
Social Media Advertising
Another area where a new Gambling Act may seek to restrict marketeers is on social media. The problem with social media advertising is the risk that children are exposed to gambling ads. Social media channels like Twitter do not carry out ID checks on new accounts which means that it is very hard to successfully exclude groups of users from viewing particular ads. Outright bans may be tough to uphold but it is likely that Facebook, Twitter and other popular social aps will come under close scrutiny in this review.
Role of the UK Gambling Commission
The UK Gambling Commission is the industry regulator in the UK. Their role is to issue licenses and uphold the terms of those licenses to ensure fair, safe and secure gambling in the UK. It is also part of their remit to prevent gambling operations being used by criminals for nefarious operations like money laundering, and to protect the vulnerable and under 18s from being exploited for the financial gain of betting firms.
In recent years the Commission has come under fire from campaigners who claim that is it ‘not fit for purpose’, partly because it lacks the funds and man power to tackle a multi-billion pound industry which repeatedly skirts around the edges of what is within the terms of regulation. The UK GC has defended itself against these claims, pointing to huge fines dished out to operators and moves to better protect customers including curbs on VIP programs, bans on credit card deposits and better age and ID verification. Of course, campaginers claim these measure do not go nearly far enough and are calling for the UK GC to be brought to an end and a new independent Ombudsman to be brought in to replace it.
Whether the UK GC continues as it is, or under a new name, it will surely get a much larger slice of funding to help regulate whatever the reformed industry looks like moving forward.
What About the Black Market?
Whenever radical reform of online gambling in the UK is discussed the industry cry is that customers will leave in their droves to play at black market sites where there are no restrictions on stakes, deposits, or bonuses, and high value customers are welcomed with open arms. It is certainly true that it won’t be difficult for a gambler to find a non-UK licensed casino if they want to. And there are lessons to be learned from the Swedish market where one report estimates that as much as 28% of online casino activity now takes place at offshore sites.
It is inevitable with even just a few of these proposed changes, that Black Market gambling sites will benefit. Currently it is down to the player to protect themselves in this regard, by only playing at sites that carry a UK license. So, it is hoped that as part of a new Gambling Act, and with money raised in increased licensing fees and taxes, that some will be put towards blocking black market casinos and sportsbooks in the UK.
Conclusion – Expect Big Changes in 2021 – 2022
It seems that the UK gambling industry is heading for massive change. There is a weight of support behind all these measures from a cross party body of MPs and Lords, a swathe of the media, and much of the public who will be expecting nothing more from a government who was voted in on the promise of a new Gambling Act back in 2019. The question is, how far will a new act go, and how successfully can it tread the line between protection and individual liberty?
We won’t have long to wait to find out. The official line is that the review of current legislation will be completed in March, with a white paper published soon after. We will keep all our readers updated on this page with news of when new regulations will become law, and how they will impact your enjoyment of gambling online.