What Will Be Included In The New UK Gambling Rules?
Earlier this year we discussed calls to replace the 2005 Gambling Act with a new set of laws that reflect the digital age we now live in. Gambling regulation, online especially, has been a big political topic of the last few years and was high on all parties agenda in the 2019 UK General Election. A review and new proposed rules was due to be completed this year but has since been delayed due to the unforeseen impact of the corona virus pandemic.
This has not stopped the UK Gambling Commission making a series of changes to help improve online betting over the last few years. In 2020 new rules for verification were brought in, that means customers now must prove their age and who they are before they can deposit and bet. Credit cards were also banned for use on gambling following evidence that problem gamblers use credit more than others. During the corona virus outbreak the UKGC also brought in a raft of emergency measures to help prevent a rise in addiction.
Despite the delays in completing the new review we now have a fuller picture of the changes under consideration and how these will impact problem gambling, stake limits, gambling sponsorship and the general role of betting within society. Here we will run through the major points likely to be addressed under new UK gambling laws.
Online Stake Limits
In 2018 campaigners were successful in driving changes to fixed odds betting terminals in betting shops. This called for stakes to be reduced from the £100 per spin/hand at the time to a maximum of £2. While a reduction was expected many in the industry were shocked that the lowest level of £2 was opted for, with operators expecting a limit of £10+ at the time.
This was the first significant sign that the UKGC and regulators were prepared to make wide ranging changes to British gambling in order to protect problem gamblers and prevent the industry being used for crime. It also had less of an impact on betting companies profits, jobs and shop closures than they said it would at the time, with many brands finding ways to offset the reduced revenue from these machines in other sectors, online in particular.
Following the successful implementation FOBT stake cuts campaigners then turned their attention towards online games. Here players can spin tens of times a minute and can lose almost unlimited amounts with no restriction on stake levels or session times, making these games responsible for a lot of problem gambling now seen online.
Various parliamentary groups have now called for online stakes to also be limited to £2 per spin/hand. In combination groups have also advised that spin rate should be decreased and session limits be imposed with regular ‘reality checks’ from the operators monitoring players.
Of all the new rules proposed this is the one that worries betting companies the most given the profits they make from online games. The move will be highly resisted but as shown from the FOBT limits brought in 2019 this may have little affect on the eventual outcome. Many industry insiders are expecting stakes to be cut to the £2 limit.
Deposit Limits and Loss Limits
It is already possible for customers of betting sites to set deposit limits, some even allow you to set loss limits, time limits or even exclude yourself from an entire section of a site. While these tools are good it is only something that is useful to those that actively seek them out, which is not the case for many people with addictive behaviour – these limits can also be reversed (although usually only after a certain time).
In order to help the most vulnerable proposals have been made to introduce a ‘soft’ deposit limits, on new accounts especially. This would mean you may be limited to deposits of say £100 per month but you would be able to exceed this by opting into higher limits and demonstrating you can afford them.
Another more recent proposal has been to set loss limits, again the figure of £100 has been cited. This again could be set as a ‘soft’ limit that people could opt-out of, but only if they can show they can afford the higher loss rates.
Affordability Checks & VIP
The age old phrase ‘only gamble what you can afford to lose’ could actually now be enforced by online bookmakers and casinos. Operators are already expected to perform checks on the source of funds but this generally only applies to significant amounts of money or uncharacteristic deposits, and is aimed more at preventing money laundering and crime than protecting problem gamblers.
New ideas have been presented that will force operators by law to check customers can afford to bet. This means that affordability checks could be carried out on anyone who wishes to opt-out of imposed limits and would require the user to show their income source, savings and bank balance in order to prove they can afford to lose what they are gambling.
This will have a big impact on VIP schemes, which have come under intense pressure over the last year. In October new rules were brought in for VIP programs, with the UKGC feeling they couldn’t wait for new gambling laws before responding to this issue.
Most of these rules focus around VIP players proving they can afford the stake levels required for these schemes as well as much closer monitoring of customers to check for signs of harmful behaviour. This comes on the back of several big UKGC fines over the past few years for operators who’s VIP programs have been used with criminal money or by people who could not afford to use them.
It seems VIP schemes will either be severely curbed from what they are now or banned all together.
Curbing or Banning Ads and Sports Sponsorship
The rules above look at helping to protect gamblers when they are betting but there have also been many calls to reduce the exposure of gambling through adverts and sponsorship in sports, which naturally exposes under 18’s to gambling messages.
One aspect of the new proposals looks at the number of adverts in general, especially in and around sports. There have been voluntary moves by operators in recent years, such as a whistle to whistle ban on gambling adverts but campaigners feel this does not go far enough. Celebrities under the age of 25 can also no longer be used in betting ads and there are calls for a ban on using any celebs in this type of marketing. Ideas for further changes include a watershed ban, with no ads before 9pm or a complete ban on gambling adverts.
Following a number of fines in recent years adverts in general are also expected to undergo closer scrutiny, with previous slaps on the wrist for companies that have shown ads that may appeal to children, using people that look under 25 and creating a link with sex.
The other more talked about issue is the amount of sponsorship in sport. In 2019-20 half of Premier League teams had a gambling sponsor and this was even higher in the Championship. A recent House of Lords report suggested gambling sponsors should be banned, on shirts especially, to reduce exposure to children.
Those opposed to the move point out that gambling sponsorship is vital for the survival of many sports and there is no natural replacement. They also point out that the main industry that will likely replace gambling is financial services, which in itself is hardly a socially responsible industry.
Interestingly the rules proposed would not apply to horse racing, given the sport would almost certainly fail without gambling as they are intrinsically linked.
New Rules For New Games and Products
Until now the approach from the UKGC has generally been reactive rather than proactive. This means products and games are released and then dealt with later if they cause issues related to the legislation.
Under new laws it is expected that new games and features will now need to be signed off by regulators before they can be rolled out.
This will ensure games and products are not designed to appeal to children, so expect a reduction in games based on childish characters. It will also look at stake levels, time between spins/hand and how much can be bet on them.
Bonuses, Free Bets and Incentives
Online gambling is immensely competitive, especially in the UK. Therefore, companies have been providing introductory offers and retention promotions since the birth of online betting in order to entice customers to try them out over others and then stick with them longer term.
Free bets and bonuses, however, have come under scrutiny as they can also fuel addiction, abuse and crime. It is likely that under new rules there will be restrictions brought in on what type of promotions operators can provide to new and existing customers.
For example, customers may only now be able to receive one incentive from a betting company on sign up, rather than series of bonuses that can encourage addiction. This will have a big impact on VIP schemes in particular that rely on repeated bonuses.
Monitoring & Sharing Information
With hundreds of online betting sites available to punters it is difficult for vulnerable people to avoid gambling completely. Setting limits or excluding yourself from one brand does not automatically exclude you from every site.
Therefore new rules will require companies to share information on their customers so that if someone shows symptoms of gambling harm on one platform they will be flagged up across the board. This does not mean people are 100% protected as they could still gamble on the black market with no protections, but it would help to ensure more people displaying problem gambling symptoms would be spotted through legal channels.
Sites will also be expected to monitor customers more closely and intervene more actively if there are signs of harm. This will include on site messages asking people if they might want to have a break, phone calls or even temporary lock-outs.
Managing The Black Market
Despite gambling having been widely legal in the UK since the early 1960’s the black market, or parallel market as it is sometimes referred to, is still very much a real thing. What has changed is illegal gambling is no longer conducted underground on the high street but rather now takes the form of unlicensed gambling sites based in locations that have weak or no gambling laws.
There are countless unlicensed gambling sites that will accept UK customers illegally. While it is a requirement to have a UK license to provide gambling in Britain the UKGC does not have the power or the resources to close these sites down and so many continue to operate.
These sites are able to attract customers by offering ridiculous welcome offers and high odds. This is partly because they pay no tax and don’t have to spend on regulation but mainly because many never actually intend to pay you out, they simply keep customers money and winnings with little legal recourse available to users.
Despite the risks it is estimated that over 1% of gambling is conducted through unregulated channels and there is a risk that this could grow with the new restrictions proposed in the UK. The Department for Culture, Media and Sport (DCMS) – under which the UKGC operate, has said it will provide more funding to tackle this, but quite how this will be done remains a mystery.
The Gambling Commission and Funding
The UKGC has become somewhat of a whipping boy in the last 5 years, taking the flack for pretty much every thing that goes wrong in the industry. This has lead to recent calls for the body to be scrapped altogether and replaced with a new regulator.
It is a little unfair to level all the criticism at the door of the Gambling Commission. The body was set up as part of the 2005 gambling act at a time when high street betting still dominated and few foresaw the dramatic rise in remote gambling.
The UKGC has responded in recent years by dramatically increasing fines, suspending and terminating licenses and coming up with new strategies. Still, the agency is dramatically underfunded with only around £30 million available to regulate an industry worth over £15 billion. Recently the UKGC were even forced to make redundancies, which is staggering considering it is at a time when gambling regulation is under the spotlight.
Under any new rules the UKGC will either need to receive significantly more funding or more likely will be replaced entirely by a new body. This could be as simple as a name change to try to remove the agency from previous criticisms.
What the DCMS will not do is take on responsibility for the lack of funding for treating those with gambling problems, suggesting this will be left to the health service to sort out.
Further changes are also expected to be made across a range of gambling verticals. It has already been publicised that the National Lottery are to change the minimum age limit from 16 to 18, this will come into effect from October 2021. The increase has been made as despite lottery itself being a ‘low risk’ form of gambling for addiction it is often cited as a gateway to other more addictive forms of gambling.
Currently gambling firms that are members of the Betting and Gaming Council (BGC) pay a voluntary levy, that is used to help fund safer gambling services. It is likely under new rules that this levy will now become mandatory and may be increased.
Remote gambling duty was increased from a 15% point of consumption tax to 21% in 2019, despite this there are still campaigners that believe gambling companies do not pay enough tax. This may be considered under any new rules.
Finally further protection of customer funds will also be considered as part of new rules. Currently companies are obliged to hold customer funds separately within the business but this does not protect customers in the event of insolvency. An example of this was seen when MoPlay went bust in early 2020 – those accounts were rescued by Betfred but for a while it looked like users would not get their money back.
It is expected that firms may be obliged to provide either insurance on customer funds (known as medium protection) or hold funds in a legally independent account (high protection) to ensure players and punters are protected in the case of a firm going bust.
What Do The Punters Think?
Many politicians see gambling reform as a sure fire way to win votes, hence why it was such a hot topic in the 2019 general election despite big issues such as Brexit. Still, this does not necessarily reflect what punters actually think.
Those affected by gambling addiction will welcome any and all of the new rules and, in fact, many wish they would go even further. Others, however, who enjoy gambling without harmful effects say this is an attack on personal freedoms and their right to take risks with their money as they please.
New rules will almost certainly increase the level of information betting companies require from customers, such as proving income and affordability, and this will not sit well with people concerned about their data, privacy and information. There is a risk that those adverse to providing these details could turn to black market sites where no regulation exists.