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onlinecasinoselite.org  › Blog  › Gambling Legislation in the UK is becoming more restrictive
July 7, 2020

How will the industry respond to the pressure


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UK's gambling restrictions

We’ve covered gambling legislation in the UK and what operators are required to do to be able to offer their services in the country. UK is one of the places that have completely legalised and regulated gambling. It is clear what is permitted and what isn’t and you can immediately know whether an operator is working in accordance with laws and regulations or not.

For a while the UK has been regarded as one of the most liberal countries when it comes to online gambling. In fact, many other nations modelled their gambling legislation and their overall approach towards online gambling based on the British model.

However, since few years ago, the situation started changing. Faced with findings that point to certain issues, such as problem gambling and the government’s desire to gather more funds from gambling and related activities, the legal framework in the UK started becoming more restrictive and further restrictions are considered.

We’re going to have a look at the measures that have been introduced in the past year or so, as well as the ones that might be introduced in the upcoming period.

FOBTs betting limit

Fixed-odds betting terminals (FOBTs) have been regarded as the crack cocaine of gambling. They acquired this terrible reputation since FOBTs gambling was extremely popular in poorer areas, among low-income workers or benefit claimants. Stories of people losing hundreds of thousands on FOBTs have been flooding the press, including horrible stories like this one.

There was increased pressure on Government to do something about the situation and place a limit on the amount of money that a player can lose on a FOBT in a certain amount of time. The debate lasted almost a year, before a decision was finally reached to decrease the amount of money that a player can lost to £2, as opposed to £100 which was the previous minimum. The regulation setting the new limit to £2 was enforced in April this year.

Many operators warned that they will see significant decline in revenue which will force them to close facilities and lay people off and so it happened. Few months after the new limit was implemented, companies reported on the impact that the new limit had on their revenue. William Hill reported a 12% decrease in income from FOBTs.

Loot boxes and their effect

While the aim with the decision to decrease the FOBTs limit was to protect people with a gambling problem, the next issue that occupied the public attention was concerned with the protection of children. So called loot boxes, which are available on a number of popular games played by youngsters, were classified by gambling by many experts and several counties decided to act on the recommendations and ban loot boxes. Belgium was one of the first countries to ban loot boxes. Initially, there was no support in the UK for a similar motion, but the situation started to change and the pressure on the authorities mounted.

Parents started going to the press saying that their children spend thousands on loot boxes and the issue finally caught the attention of the authorities and was discussed at Westminster.

MPs who are dealing with these issues as part of an all-party parliamentary group on gambling-related harm are almost unanimous in the understanding that loot boxes are indeed gambling and should be regulated as such.

What the future holds for the industry?

The most serious challenge for the online gambling industry comes in the form of an idea to limit online wagering in the same manner as FOBTs have been limited. That would mean that if a player logs in to their online casino account to play one of their favourite new online slots they wouldn’t be able to wager more than a limited amount (like £2) in a minute. The online industry is likely to oppose this decision and they have some strong arguments.

Unlike land-based facilities, like local betting shops which offer FOBTs, online casinos check players’ identity and not only people under 18 aren’t able to enter or place a wager, they also keep track of players’ behaviour and gambling habits. Online operators are supposed to take various measures to ensure that none of their players are wagering too much or behaving in a way that indicates that they have a problem. There are heavy fines for operators which fail to comply with these standard, whereas there is no equivalent requirement for land-based gambling operators.

In the meantime, the gambling tax was also raised from 15% to 21%. This is a point of consumption tax of 21% on the profits of the remote operators. There is one obvious way in which the industry can respond to increased taxation – pass the cost onto customers, who will be expected to play at lesser odds and return to player percentages.

However, gambling is a large industry in the UK, with a long-standing tradition, so it is not likely that any Government would jeopardise that and push players to unregulated offshore sites where they could get better odds.

Author: Jeff Grant (info)





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