In the following sections, we will look at the legislation concerning casinos in the United Kingdom, an industry that is now producing over £3.2 billion in gross gaming yield. There are more than 150 casinos in the UK, while the number of online licenses is quickly growing and now exceeds 2,000.
Gambling in the UK: Historical Overview
Gambling first became subject to state regulation in the 1400s when authorities in the country restricted betting on horse races and sports to the nobility, while the poor could only play dice games. The Unlawful Games Act 1541 outlawed practically all forms of gambling but it was never really enforced - just a few years later, lotteries were officially launched through a Royal Charter from Queen Elizabeth I. The first gaming houses and clubs emerged in the late 1700s and since then, they operated under different regulatory regimes.
Different laws were passed, amended, and repelled over the following decades and centuries and although casinos were outlawed temporarily, they continued to gain popularity in the underground. In the 1960s, the UK finally legalized casino operations and today, gaming establishments can be accessed by anyone over the age of 18. The main regulatory authority is the Gambling Commission, which oversees all forms of gambling (with the exception of spread betting) on behalf of the government's Department for Culture, Media and Sport (DCMS).
Gambling Act 2005
The main piece of legislation that regulates both land-based and online casinos in the UK is the Gambling Act, passed in 2005 by the Parliament of the United Kingdom. It controls all forms of gambling in England, Scotland, and Wales. The Act established the Gambling Commission and transferred licensing the magistrates' courts to local authorities and to Scottish licensing boards.
Considered to be the most important overhaul of the gambling industry in the country since the 1960s, the sets out three main objectives. First, it aims to guarantee that all gambling is conducted in a fair and open way. Second, it prevents gambling to be associated with any form of criminal activity. And last, but not least, it focuses on minimizing the negative impact of gambling on society - it aims at protecting children and other vulnerable groups from problem gambling.
The law does not place any restrictions on casino patrons - they are allowed to play casino games without a license and they do not need to pay any taxes on the profits generated from gambling activities. Of course, the minimum age requirements have remained. Online casino operators are required to conduct age and identity verification procedures (these were updated in 2019) for all newly registered customers.
The Gambling Act 2005 has an entirely different impact on operators, however. First of all, we should note that it does not differentiate between land-based and remote operations - casinos are defined as "an arrangement whereby people are given an opportunity to participate in one or more casino games". And casino games refer to "games of chance", which is different from equal chance gaming. All casino operators are required to obtain a license from the Gambling Commission and their profits are subject to taxation, depending on the type of game they offer - games such as roulette, poker, and blackjack may come with a tax, ranging from 15% to 50%. Land-based slots, however, are taxed at a rate from 5% to 25%.
Gambling (Licensing and Advertising) Act 2014
The Gambling Act 2005 has been amended multiple times over the past 15 years. Probably the most important updates to the legislation were made with the Gambling (Licensing & Advertising) Act 2014. It contributed several major amendments to the Act, most notably a requirement that all off-shore gambling companies apply for a license from the Gambling Commission.
Additionally, foreign operators from the white-listed gambling jurisdictions were required to submit to a 15% point of consumption (POC) tax on gross profits.
Whitelisted Gambling Jurisdictions
Until 2014, when amendments to the Gambling Act were made, operators licensed in certain countries could advertise their services and provide gambling facilities in the UK without an additional license from the UKGC. Casino and betting firms from countries outside the UK and Gibraltar were not allowed to advertise in the UK unless they were from these so-called white-listed gambling jurisdictions – EEA countries, Alderney, Antigua and Barbuda, Gibraltar, Isle of Man, and Tasmania.
However, the Gambling (Licensing and Advertising) Act 2014 brought changes to the licensing regime for operators. Now, all firms that wish to advertise and provide gambling services to customers based in the UK must obtain a license from the UK. They must apply for either new authorization or for a continuation of their license.
Advertising Rules for Gambling Ads
One of the most important aspects of gambling regulation in the UK concerns the advertising and marketing of such products. The current rules are underpinned by the Gambling Act 2005 but are defined in detail in the UK Advertising Codes issued by the Committees of Advertising Practice (CAP). They are administered by the Advertising Standards Authority (ASA), a self-regulatory, non-government organization that acts as the main advertising regulator in the UK.
The Gambling Commission controls and regulates not only land-based casinos and gambling premises but also the entire remote gambling sector. This includes all online casinos - both UK-based and offshore brands, that wish to offer their services to patrons based in England, Wales or Scotland. According to the official website of the UKGC,
The remote casino operating license allows operators “to offer casino games to customers via a website, mobile phone, TV or other online service. This includes poker, roulette, blackjack and other casino games, as well as online slot games”. In addition, all online casinos must provide software from suppliers that have a licence from the Gambling Commission. The remote gambling software license is mandatory for all firms, which manufacture, supply, adapt or install gaming software to the websites of UKGC licensees.
Stake Limit on Fixed Odds Betting Terminals
Originally, the Gambling Act 2005 determined that the minimum amount that could be wagered per spin was £1, while the maximum stake was £100. In May 2018, however, the Department for Digital, Culture, Media and Sport (DCMS) announced that the maximum stake would be lowered to £2 per spin. The new regulations came into force on 1 April 2019 – the maximum single bet was changed to £2, while the maximum prize remained the same at £500.
The move came after increasing concerns about the addictive nature of such types of games. Similar to standard slot games or fruit machines available only in the highly regulated environment of casinos, FOBTs are offered in betting shops and tracks with pool betting, as well. Moreover, critics claimed that the maximum allowed stake per single game resulted in huge financial losses for gamblers.