Who Regulates Gambling In The UK?

Bram Welch
20 January 2023
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The United Kingdom has one of the most liberal attitudes to gambling, a historically ingrained attitude. Although gambling in the past might have faced opposition from religious zealots and those who think it is completely immoral.

While the UK has not completely embraced disestablishmentarianism, the hold Christians and Catholics have on UK law has largely been loosened. The Betting and Gaming Act 1960 set gambling completely free of those shackles.

Despite the country’s permissive attitude towards gambling, the industry also operates with some of the strictest regulations. The government acknowledges the harm gambling can cause to a person, the people around them, and the wider society.

The regulation and taxation of gambling is carried out for the combatting and prevention of these harms.

Gambling Laws in the UK

The Gambling Act 2005 was a seminal piece of the British legislature. It signalled a huge overhaul of the laws related to gambling in the UK. Officially it is the piece of legislature that inserts several important gambling rules in UK law.

It was preceded by a mishmash of legislative acts among different government bodies including the Gaming Act 1968, the Betting, Gaming & Lotteries Act 1963 and the Lotteries and Amusements Act 1976. The 2005 act allowed the government to consolidate and improve the laws surrounding gambling in the UK.

The Gambling Act 2005 also put the onus of dealing with problem gambling on the industry while also giving the government more power to tackle these issues. Another issue surrounding the Act was the dawn of new technologies that meant people were gambling more and more online.

Since the royal ascension of the act in 2005, it has faced criticism for not holding to account offshore gambling providers and for not being able to deal with the increased threat of addiction posed by fixed-odds betting terminals. The Act has since been reviewed to “make sure it is fit for the digital age”.

Regulating off-shore providers were covered in a separate act: the Gambling (Licensing and Advertising) Act 2014. This now required any remote operators to acquire a licence from the UK Gambling Commission to offer services to UK residents.

Previously, this was only required if you had physical equipment in the country, but with the proliferation of gambling apps and websites, this law was not sufficient. As part of the agreement, the operator pays a 15% levy on profit made from UK players. This is put back into tackling the harm caused by gambling.

The 2005 Act was also criticised for interfering with the legitimate commercial interests of some gambling companies. The complaints are not backed up by the numbers. William Hill saw their profits jump by around £40 million from £113 million to £157 million in the two years following the act, while Bet365 recorded a NET income of £2.5 million in 2005 and £52.4 million in 2009.

That is a 2000% increase in income, not double, not even tenfold, but a two thousand per cent increase which suggests their commercial interests were perfectly fine.

Gambling Regulation in The UK

Gambling is regulated by the UK Gambling Commission (UKGC), which was established as part of the Gambling Act 2005. They are a non-departmental public body (NDPB) which essentially means they are part of the national government but not under one of the government departments such as the Department for Education or the Department for Digital, Culture, Media and Sport.

The commission has the power to: carry out visits and inspections, take action against consumers who pose a problem, impose licensing conditions and suggest new ones, and they can review the financial information and assets of a gambling company.

The biggest concern of the UKGC is protecting the public from the harm caused by gambling, principally gambling addiction. Gambling spaces in the UK are plastered with promotional material about support for problem gambling. These are usually “WHEN THE FUN STOPS STOP” reminders or posters advertising the National Gambling Helpline.

This should not be seen as targeting customers as they also do their bit to curtail the unsafe practices of casino operators. A recent example of this comes from March 2022, when they fined the operating business related to Sky Betting and Gaming.

They were found to have contacted 41,395 self-excluded customers and 249,159 customers who had unsubscribed from their emails. The company offered these people the chance to earn 100 spins from betting £5. Bonne Terre Limited was subsequently fined £1.17 million. This action attempt to protect people from addictive gambling but also safeguard currently suffering addicts.

It is not just addiction that they are concerned with; there are other examples of shady practices in the gambling industry. Another concern is money laundering and this is where Know Your Customer protocols come in.

The UKGC found that William Hill Group (WHG) were not taking steps to avoid facilitating money laundering. They allowed one customer to deposit £654,000 in nine months without analysing the source of these funds.

It turns out the customer worked in the accounts department of a company that recorded earnings of £30,000 a year. WHG was fined £6.2 million. These are just two examples of the work they do.

Why is Regulation Important?

It is no secret that gambling poses a threat of addiction, and addiction can lead to an array of issues including relationship problems, financial problems, and health and mental health problems. Providing support for the issues caused by gambling comes at a cost. Problem gambling is estimated to cause a £1.27 billion total cost to public spending.

In the UK, the NHS allows people to receive healthcare that is free at the point of sale. The national healthcare system is funded by taxes and government spending. Recently the cost gambling poses to the NHS is estimated to be around £760 million.

This is spent on treating people suffering from gambling addiction. The rest of the one-and-a-quarter billion is spent on the economic costs of suicides caused by problem gambling and support for people made homeless by problem gambling.

It has also been found to be one of the most destructive addictions a person can develop. The thing with substance addictions is that there is a limit to how much your body can handle, so your finances are inadvertently regulated by this.

When it comes to gambling, there are online games that allow you to bet hundreds of pounds on a spin of a slot game or £50,000 on the outcome of a football match. It is common to get into financial trouble while addicted to substances, but people are unlikely to spend tens of thousands of points for one hit of a drug.

It is not just the financial destruction that gambling can cause but also the rapid deterioration of mental health. The National Council on Problem Gambling (NCPG), a body in the United States, found that one in five gambling addicts attempt to kill themselves.

A study in Australia found that 17% of all suicide admissions to A&E were related to gambling which is very close to one in five.

Gambling In Young People in the UK

There are still arguments that not enough is being done as the menace of gambling addiction has been allowed to lure over young people in the UK. In 2017, there were around 156,000 16-24 years olds addicted to gambling.

At that time, there were also about 25,000 11 to 16-year-olds who were problem gamblers. In 2022, this had not improved because studies now show 31% of the same age group have spent their own money on a gambling activity in the previous 12 months.

The rise in young gambling addicts has been linked to the arrival of loot boxes in video games such as Apex Legends or Fifa. Loot boxes are typically, but not exclusively, included as part of free-to-play console games.

Although the gameplay is free, players can buy in-game merchandise at set prices or buy the chance to win them from loot boxes. Loot boxes contain an unknown mix of items. The total value of the mixed items could be higher or lower than the price paid for the loot box.

GambleAware funded research into video game loot boxes and found that 40% of video game-playing children have opened a loot box. Half of the gaming industry’s revenue from loot boxes came from a small selection of 5% of players.

Most importantly, though, they found that 12 of 13 studies show an unequivocal link between loot boxes and problem gambling behaviour.

One of the most popular games in recent years, Fortnite, was at the centre of a loot box controversy. Tim Sweeney, a co-founder of Epic Games, the company that made Fortnite, said the gaming industry as a whole is benefitting from causing harm to customers.

Epic Games responded by making their llama pinatas, which serve as loot boxes, transparent. The fact that gambling poses such a huge problem to children is a massive advocation for the strict regulation of gambling in the UK.

Help For Problem Gamblers

The increased level of awareness surrounding the issues with problem gambling has led to much more support. Anyone struggling with problem gambling in the UK can call the national gambling helpline known as GamCare; you can also visit their website.

GambleAware runs many successful campaigns that advise on the issues with addictive gambling.

The National Problem Gambling Clinic provides treatment services as part of the NHS.

There is also a self-exclusion scheme run by GAMSTOP. This is a tool that allows you to ban yourself from brick-and-mortar bookmakers and casinos, as well as online casinos.

Conclusion

The United Kingdom has a comparatively liberal attitude towards gambling but a relatively rigorous regulation of the activity. Initial legislation set up in 1960 led to an expansion of commercial gambling and incidentally increased illegal activity.

Since then, a number of acts attempted to regulate gambling in the UK until the arrival of the Gambling Act 2005, which overhauled and consolidated the laws. This Act led to the creation of the UK Gambling Commission, which is responsible for regulating gambling.

Regulation can be perceived as the government-dampening of fun, but the financial and human cost of gambling is indisputable evidence that it is necessary. Especially now, there is strong evidence that a whole new generation of problem gamblers has been bred by video game practices akin to gambling.

Author Bram Welch

After working in journalism, teaching and hosting radio, I am now enjoying working on long-form articles around the gambling industry and iGaming for UKCasino.com & Casinogrounds.com