The UK is one of the biggest regulated gambling markets in Europe. And with the reform of the UKGC’s Gambling Act underway, more and more gambling industry news articles are centered around this topic.
David Clifton, a founding director of Clifton Davies Consultancy Limited, Licensing & Gambling Consultants, has shared his professional opinion on the gambling industry in the country and the upcoming reform. The expert has also explained all the difficulties of obtaining a license from the UK Gambling Commission and maintaining compliance with the exciting regulations.
David, what are the main characteristics of the UK gambling market? What are the latest changes that have happened in the industry?
The UK – or, more precisely, Great Britain – has long-established gambling licensing and regulatory regime, independently described recently as providing “robust regulation, moderate operator costs, and taxation” that “represents one of the earliest pieces of online gambling legislation and remains one of the nest examples of regulation globally”. The latest regulatory changes have added even greater robustness, focusing on consumer protection measures such as a total ban on the use of credit cards for gambling, more onerous customer interaction requirements (including customer affordability assessments), more demanding age and identity verification obligations, considerably more burdensome KYC requirements for VIP customers who are offered tailored or personalized incentives linked to high value spend or frequency of play and, with effect from 31 October, implementation of new controls on online slots intended to make gambling safer. Also in October, operator costs will increase when considerably higher license fees become payable to the regulator (the Gambling Commission).
How did the global pandemic affect the industry?
Overall participation in gambling declined over the period of COVID-19 lockdowns in Great Britain. This was largely due to the enforced closure of land-based gambling for most of the time since March 2020. For example, it’s only since the beginning of August this year that English casinos have been permitted to re-open and trade to the same hours as applied prior to the pandemic. Most of the high-end casinos in London still remain closed and are unlikely to re-open until international airline travel returns to some kind of normality. There was a smaller than expected increase in online gambling participation over that same period since March 2020 and, in what is good news for the industry and consumers alike, recent Gambling Commission statistics show that in the year to June 2021, the overall problem gambling rate has remained statistically stable at 0.4% and the moderate risk rate for that same period of time has decreased significantly to 0.7% compared with 1.4% in the year to June 2020.
What is the procedure for obtaining a gambling license in the UK?
In broad terms, anyone wishing to provide land-based or online B2C facilities for gambling (i.e., gaming, betting, or lotteries) to customers in the UK requires an operating license from the Gambling Commission. In addition, a B2B business wishing to supply gambling software to B2C operators licensed by the Commission must also be licensed to do so. Licenses are either “remote” or “non-remote”, dependent on whether the operator intends to provide online and/or land-based gambling facilities. A wholly separate license must be obtained from the relevant local government authority for each individual land-based gambling premises intended to provide casino, bingo, gaming machine, or betting facilities. Personal license requirements also exist for those in senior positions in gambling businesses and those involved in gaming or handling cash at a land-based casino.