In the years since the 2005 Gambling Act came into force, the UK gambling industry has grown into a colossal beast. With a yearly GGY of approximately £14 bn, and a growth rate that shows no signs of slowing down, it has become clear that new legislation is needed to keep this behemoth in check.
Prior to the 2020 pandemic, concerns regarding vulnerable players, underage gambling, and criminal activity were already being addressed. However, the steep rise in the number of online gamblers during the periods of lockdown forced the UK Gambling Commission to take emergency measures to increase player protection.
These measures included a ban on reverse withdrawals, affordability checks on players wishing to make large deposits, and limits placed on bonuses for any player showing signs of problematic behaviour. The industry is now bracing for a new gambling act to come into force in 2021.
New Casinos with New Rules
New casinos hitting the market in 2021 will need to ensure that they are fully compliant with the new rules and regulations laid out in the 2021 Gambling Act. This will likely cause many new casino sites that were slated to launch this year to delay their launches until the final draft of the new act is released.
As of now, the proposals regarding new legalisation are still under consideration, and the industry has only been given a rough outline of what to expect. New online casinos must be prepared to make last minute changes to their set up in order to comply with the new rules.
Old Casino Overhauls
Established sites may have to undergo complete overhauls in order to meet the new expectations placed on them by the new act. Many believe that the costs involved in meeting these expectations may be astronomical and could cause many of the smaller casinos to go out of business. In fact, there is a very real concern that while trying to better protect players, the new laws could continue to fuel the monopoly effect that is already taking hold of the industry.
Large companies buying out smaller companies is effectively killing the competition and, therefore, providing less value for consumers. What many in the industry fear, of course, is that stricter regulations will lead to fewer players and a hefty financial hit.
What to Expect
So, what changes can we expect to actually take place? We know that the emphasis will be firmly placed on protecting vulnerable players. And we know that legislators are walking a fine line when it comes to finding a way to increase protections without removing a consumer’s freedom to spend their money in whatever way they so choose.
Affordability, Deposit Limits, and Time Limits
Affordability checks, for example, have already caused a fair amount of controversy. At this stage, affordability checks are only imposed on players who wish deposit more than £2000 in one go. However, should the UK decide to take this further and follow the Swedish model, we could see a fixed monthly spending limit for all players regardless of their financial status.
It is almost guaranteed that betting limits will be imposed on online slot machines. We’ve already seen betting limits reduced to £2 on land-based slot games, and many are pushing for the same limits to be imposed on online slots. Depending on the limit, casinos could take a considerable financial hit from the loss in revenue gleaned from slots. We may also see time limits related to how long a player can play for in one session.
VIPs, Points, and Bonuses
2021 could mark the end of the road for VIP programmes and loyalty schemes. Campaigners have long sought to shut down these types of reward programmes, but the UKGC has so far been reluctant to do so. Strict regulations regarding VIP programmes have been introduced over the last few years, but the whole concept is now under review and could end abruptly.
Bonuses are also under intense scrutiny, and we expect to see strict limits put in place that will drastically reduce the number of bonuses on offer and the amounts given.
Identity Checks and Payments
In order to better prevent underage gamblers from accessing online casinos, casinos are now required to verify a players age and identity prior to their first deposit. Previously, this was only done prior to a first withdrawal. This change came into effect in early 2020. Next on the horizon is the change in age limit associated with the national lottery.
The age limit will be raised from 16yrs to 18yrs for anyone wishing to buy a lottery ticket. Another change that has already come into effect is the ban on credit card transactions. eWallets are still acceptable, but watch out for stricter verification measures associated with eWallet payments, and tighter rules associated with pay by phone methods.
Other elements that are under scrutiny and likely to be impacted by the new gambling act include, but are not limited too:
- TV advertising and sport sponsorship
- Rules regarding ownership of a casino and the way a company is structured.
- Level of deposit protections for customer funds
- Self-exclusion rules
- Withdrawal limits
- Monitoring of players and playing habits
- Loot boxes
- Games design
The UK Gambling Commission have been criticised for being an outdated institution that can no longer cope with an industry that has modernised so rapidly. However, it is thanks to the UKGC that the UK was able to lift the gambling industry out of the dark and seedy underground and turn it into a well-regulated and legitimate money-maker.
The UKGC do not turn a blind eye to any casino or company that does not comply with the current regulations, and they look set to get even tougher on those who break the rules.
Most recently, for example, a large gaming company was fined £3.4 million for failing to comply in the areas of social responsibility, anti-money laundering, and transparent terms and conditions. The company will also have to undergo (and pay for) a complete audit by an independent auditor. Casino operators would be wise to take any new regulations extremely seriously.