UK Gambling Act reform white paper published

The UK government yesterday published its white paper outlining reforms to the Gambling Act 2005.

To say that the paper has been much anticipated is quite the understatement. It caps a process beginning back in 2020. For well over a year now the industry has been speculating on release date and contents.

16,000 submissions, 2 and half years, 3 Prime Ministers, a global pandemic, Ukraine invasion, cost of living crisis and Brexit related economic disruptions later… it has finally arrived.

The paper was handed down yesterday by the Department of Culture Media and Sport (DCMS).

You can read the full paper here. A summary of key recommendations follows below.

Why the need for change?

The reasons for such an extensive review and reform of online gambling regulation in the UK are addressed in the Ministerial Forward (from Lucy Frazer) and Executive Summaries of the paper.

The UK was one of the first countries to legislate and regulate online gambling back in 2005. In the almost 20 years since, the online gambling landscape has changed to an extent unforeseen, largely due to quantum leaps in technology. These technology leaps have made online gambling more accessible, more engaging and generally more pervasive than imagined.

Now, this is not a problem for the vast majority of gamblers. Almost half the UK adult population gambles at least monthly and most do it responsibly. But an estimated 300,000 fall into the category of problem gamblers defined as those whose gambling, ‘disrupts or damages family, personal or recreational pursuits’.  Another 1.8 million are considered to be in a risk category.

The aim of the reforms is to be targeted enough to protect those in risk categories, while minimising restrictions on freedoms enjoyed by responsible gamblers. Always a tricky balance to strike.

The Process

Calls for submissions from effected gamblers, industry groups and other stakeholders began in 2020 and were open until March 2021.

Direct advice was also sought from key stakeholder, the Gambling Commission. Its advice was published alongside the paper and many of its recommendations were taken on board.

From here the aim is adopt key recommendations into regulation, some subject to legislative change, others subject to further consultation, as soon as practical.

Key recommendations

New problem gambling protections

New obligations will be imposed on operators to check that customers can afford losses. These new requirements will impact and estimated 3% of accounts.

• passive background checks will be required at moderate levels of spend – £125 net loss within a month or £500 within a year
• detailed enquiries of a customer’s financial position (ie direct contact) will be required for £1,000 net loss within 24 hours or £2,000 within 90 days (amounts halved for customers 18 to 24 years old)

Slots stake limits are to be imposed. On the back of findings that slots are a particularly high risk product, associated with large losses, long sessions, and binge play, the following limits are proposed (for consultation):

• stake limit for online slots, between £2 and £15 per spin
• consideration of further limits for 18-24 yr olds who are considered particularly at risk

Advertising, sponsorship and branding restrictions

• Customers are to have greater control over the types of marketing they receive, needing to opt-in for online bonuses and offers, rather than opt-out.
• Operators will be asked to go further in their use of technology to target online adverts away from children and vulnerable people. This adds to rules recently added to:
  – prohibit prominent sportspeople, in particular Premier League footballers from promoting gambling
  – remove gambling logos from the front of players’ shirts from the 2026/27 season (Premier League voluntary commitment)

The Gambling Commission’s powers and resources expanded

The Gambling Commission was created by the 2005 Act as the primary regulator for the sector. Recognising that it will need more resources and powers to effectively regulate going forward, the following is proposed:

• an increase in operators fees during 2024
• increased powers to support disruption and enforcement activity, such as to pursue court orders which require internet service and payment providers to take down or block access to illegal gambling sites.
• a statutory levy paid by operators and collected and distributed by the Gambling Commission for research, education and treatment (RET) into problem gambling

Customer dispute resolution

• creation of independent ombudsman as single point of contact for player complaints, dispute resolution
• if the ombudsman does not attract sufficient cooperation from operators, legislative changes forcing cooperation will be made

Easing of land based casino restrictions

Curiously, while the online sector was generally subject to increased restrictions, land based casinos saw an easing of certain restrictions, including:

• being allowed to offer sports betting
• eased limits on slot machine numbers

Expected impacts

The DCMS have had a crack at quantifying the effect these new measures will have on industry, and it’s substantial. A reduction in gross yield of 8% to 14% is expected for online operators.

No surprises there. The aim of the reforms is to ‘narrowly target’ only 3% of customers. But the reality is those customers contribute proportionally more to operators’ bottom line.