After years of delays and speculation, the most transformative review of gambling in the United Kingdom (UK) in 18 years has finally been published. The white paper, which can be found here, brings its biggest reforms to the industry in almost two decades. While some of the measures it includes won’t have a major impact on operators’ activities, others will probably cause trouble.
The publication of the Gambling Act review white paper signifies a landmark upheaval of how gambling will be regulated in the UK going forward, in an age of smartphones and 24/7 internet access. To say the review has been much anticipated would be an understatement. It has been an eventful almost two and a half years since the UK government announced the review – one that has encompassed the resignations and appointments of two prime ministers, the declaration of a cost-of-living crisis and Russia’s invasion of Ukraine. Industry trade bodies, operator groups and industry critics alike have waited eagerly for the white paper’s publication.
The last time the UK Government worked on sweeping rule changes for the gaming industry was in 2005. After several failed attempts to introduce reforms that began a few years ago, 2023 marks the next defining moment for operators and consumers. The white paper is the government’s presentation of the measures it wants to introduce. However, there’s still time for feedback and possible tweaks and companies attached to the gaming space now have a small window of opportunity to share their opinions.
While the white paper document outlines much of what the industry expected, it contains a few unexpected additions – including the addition of a gambling ombudsman, to give consumers one point of contact for industry queries. In this article, we set out the most important changes for the gaming industry.
Of Affordability Checks and Limits
The Department of State for Culture, Media and Sport (DCMS), headed by Secretary of State for Digital, Culture, Media and Sport Lucy Frazer, led the reforms. As had been repeatedly rumoured, the idea of affordability checks and wager limits made the final cut.
“For the former, there are two proposals on the table. One centers on a “moderate loss threshold” of either a net loss of £125 (US$155.95) in a 30-day period or £500 (US$623.80) in a rolling 365-day period. The other proposal would be a second tier of control. Anyone who experiences a net loss of £1,000 (US$1,247) or more in a 24-hour period, or £2,000 (US$2,495) in a 90-day period, would face increased scrutiny.”
Some bettors can spend that much on a single bet. This makes it unclear how the DCMS plans to oversee the activity effectively and efficiently. The DCMS believes that the affordability checks will only impact around 3% of consumers.
The way operators are expected to monitor the affordability checks is less than perfect. They would be responsible for verifying a consumer’s “financial vulnerability” by relying on data included in credit reports, court records, such as judgments and bankruptcies, and postal code statistics.
More controls and a wagering limit on slot machines
Protecting vulnerable groups has been one of the main pillars of gambling law reforms. Back in early April 2023, it was reported that there would be a wagering limit for young players. The rumour is largely true, as the white paper prescribes a maximum bet per spin on slot machines. However, it is not yet known exactly what the maximum amount per spin will be. Likely, this will only be known after the consultation period, which will be held this summer.
For all online gamblers, a limit of £2 to £15 per spin is envisaged. There is even a chance that this could come out to £5 per spin, as this maximum also applies to slots in land-based casinos.
Three options are being considered for young adult players:
- £2 per spin;
- £4 per spin;
- A maximum amount is based on the player’s individual risk.
There will also be better controls on players at online casinos. Thus, online gamblers will face “light controls”. If it is up to the government, providers will perform these checks if gamblers gamble an amount of £125 in a month or £500 in a year. This will not involve requesting documents from the player himself, but a provider may, for example, look at the average wealth in the region where the player lives.
The checks that providers perform do become stricter when it comes to larger amounts. Players who gamble more than £1,000 per day or £2,000 every 90 days must be subject to stricter affordability checks. These amounts are lower for young adult players, at £500 per day or £1,000 per 90 days.
Protections for vulnerable groups
VIP schemes will also be more tightly regulated under the new legislation. Frazer said that this was due to the temptation they hold for those suffering from problem gambling behaviours.
“We know many addicts find each time they break free from the temptation to gamble, they are drawn back into the orbit of online companies with the offer of a free bet or some free spins,” she said.
The Gambling Commission has recently strengthened restrictions on online VIP schemes to make sure they are not used to exploit gamblers and has introduced rules to stop bonus offers and other marketing being targeted at people showing significant indicators of harm. It will now take forward work to review the design and targeting of incentives such as free bets and bonuses to ensure there are clear rules and fair limits on re-wagering requirements and time limits, so they do not encourage excessive or harmful gambling. The Commission will consult on proposed new controls.
No restrictions on the sports sector, loot boxes, and affiliation
The white paper does not impose any restrictions on the sports sector when it comes to sponsorship by gambling companies. The Premier League clubs already banned shirt sponsorship on the front of the shirt themselves but appear to be avoiding tougher measures.
Instead of regulation, the government is proposing a new code of conduct for the sports sector. For instance, it proposes to allow people to opt for shirts without the logos of sports companies due to religious or health reasons. In addition, sponsorships should only be allowed for companies that have a gambling licence in the UK. Finally, the government proposes that gambling companies pay a fee so that sportsmen and sports club staff can be better educated about gambling-related harm.
Loot boxes and affiliation are other topics for which no new legislation seems to be forthcoming. For affiliation, online casinos remain responsible for the behaviour of their affiliates.
“We are not persuaded by arguments for affiliates to be licensed by the Gambling Commission. Affiliates’ marketing activities are already regulated by the ASA under the CAP codes, meaning that placing additional duties on the Commission would lead to duplication. In addition, the distinct responsibilities and activities of affiliates would require an entirely new licensing regime to be created; and the size of the sector means that it would distort the Commission’s remit, which concentrates on gambling operators themselves.”
In the case of loot boxes, a decision was made to support a long-term study on the effects of loot boxes in video games.
Equality between land-based casinos and online casinos
The white paper seems to be positive for land-based casinos in the UK. Ministers want to create more equality between online casinos and land-based offerings. That is why, among other things, the decision has been taken to increase the maximum number of slot machines in smaller casinos from 20 to 80 machines, as long as the casino is at least 750 square metres. Also, all land-based casinos are allowed to start offering sports betting with their current licence.
Mandatory Operator Tax
As operators feared, a new mandatory tax will replace their voluntary contributions to responsible gambling efforts. Annually, they provide millions of dollars through established programs.
“Government will introduce a statutory levy paid by operators and collected and distributed by the Gambling Commission under the direction and approval of Treasury and DCMS ministers,” said the DCMS in its new gambling white paper.
Although the white paper acknowledges a mandatory levy, it doesn’t specify what it will be. The DCMS and other government agencies will review the current policies and discuss their options before presenting a recommendation next year.
UKGC gets more control
One of the biggest changes included in the reforms centers on the UKGC. The DCMS made it clear the regulator will have much more control over the industry than it already has. The UKGC will be a “more proactive regulator,” and based on parliamentary oversight, will have “increased powers to support disruption and enforcement activity.” This could give it the authority to order ISPs to block access to unlicensed sites or to force an operator to reimburse a user following a complaint. To support the latter, the DCMS wants to implement an industry ombudsman that will field complaints about social responsibility or gambling harm. This would, in turn, funnel information to the UKGC for it to act.
Reactions from the gaming industry
Since the white paper was published, several parties have made their voices heard through reactions. There were warnings from the gambling industry in the months leading up to the publication of the white paper about the possible consequences of too strict legislation. UK Members of Parliament were also concerned that players would flee to illegal offers if controls were too strict. The reactions now mostly emerging from the various parties are positive.
While politicians of all parties welcomed much of the contents of the Gambling Act Review white paper, many have questioned the lack of action on advertising. Liberal Democrat peer and chair of the Peers for Gambling Reform Group Lord Don Foster said he was happy that many of the areas the group had campaigned for were included in the white paper. However, the government opted to not go further on the question of the terms or amount of gambling advertising permitted disappointed Foster.
Neil Banbury’s, General Manager for UK at Kindred Group, conclusion of the White Paper is broadly positive, “We welcome the measures outlined in the White Paper and support its ambition to update legislation to develop a dynamic regulatory system for gambling that is fit for the digital age. We challenge ourselves daily to do more to provide a safe and enjoyable experience for all of our customers. To be a long-term sustainable business, it is not in our interest to have any of our customers experiencing problems which is why at Kindred we have our Journey Towards Zero ambition, to eventually generate 0% of our revenue from people who exhibit problem behaviours”.Kindred Group is an online gambling operator which consists of nine brands, among them Unibet, Maria Casino and 32Red.
The UKGC has also provided a comprehensive response to the white paper, which can be read here.