UK’s Gambling Act 2005 Explainedby Steven Hubbard
Gambling Act 2005 Explained
The UK is known for having some of the most relaxed rules and regulations for the gambling industry. This is partly due to the UK’s Gambling Act 2005, a key piece of regulation that opened the door for a large increase in activity in the sector.
Today, the total gross gambling yield of the industry in the country is over £14 billion, which indicates how important the sector has become to the UK’s economy in recent years.
Not only are there more than 7,500 betting shops in the UK, but the country has also seen a large spike in internet gambling at websites such as betting sites & online casinos.
This has led to suggestions there needs to be an increased level of control over the industry.
Planned updates to the Gambling Act 2005 could result in major changes to the sector, then, which is why it is so important to understand the rules and regulations as they stand right now.
Here is our complete guide to the UK’s Gambling Act 2005.
What Is the Gambling Act 2005?
The Gambling Act 2005 was rubber-stamped in April, with its creation designed to control all the UK’s various forms of gambling.
There were three main objectives behind the Gambling Act 2005. The first of these was to stop gambling in the UK from being a source of crime or disorder.
Second, to make sure gambling is conducted in a fair and open way in the UK and, lastly, to protect children and people who are vulnerable from being exploited.
Opinion is split on whether or not the Gambling Act 2005 – which permits betting companies to advertise on television and radio – has been successful or not.
While some point to the money contributed to the economy by the sector, others note that there has been a rise in gambling addiction in the UK.
Now, it is estimated by a survey commissioned by the GambleAware charity that up to 2.7% of adults in Great Britain may be problem gamblers.
This works out as close to 1.4 million individuals, which is a staggering number of people.
However, industry bodies note that the sector provides a lot of jobs, while the majority of people who gamble in the UK are able to do so while staying in control and not becoming addicted.
Why Was the Gambling Act 2005 Introduced?
One of the reasons that the Gambling Act 2005 was introduced to bring in more control over internet gambling. Back then, more than 15 years ago, online gambling was in its infancy but this is now one of the largest sections of the sector not just in the UK but around the world.
Regulation of lotteries was also one of the factors behind the Gambling Act 2005, while categories of gaming machines were defined as part of the legislation as well.
There was some controversy at the time surrounding certain aspects of the Act, including that it paved the way for the creation of the UK’s first-ever so-called super casinos.
It was initially suggested that there would be eight of these facilities spaced out around the country but this was later reduced to just one super casino, with an extensive bidding process put in place to decide which city would get to host the site.
Eventually, it was Manchester that came out on top, but the creation of the super casino never went ahead after prime minister Gordon Brown elected to block the move.
Perhaps the most significant aspect of the Gambling Act 2005, along with giving the green light to betting advertisements, was that it led to the formation of the UK Gambling Commission.
What is the UK Gambling Commission?
Defined as an executive non-departmental public body, the Gambling Commission was set up in the wake of the Gambling Act 2005 being approved by Parliament.
Previously, regulation of the UK’s gambling industry was handled by the Gaming Board for Great Britain, but this changed in 2007 when the Gambling Commission was set up.
Various forms of betting are regulated by the Gambling Commission, including the following:
- Slot machines
- Remote gambling
However, as it is instead regulated by the Financial Conduct Authority, spread betting does not come under the remit of the Gambling Commission, which has its headquarters at Victoria Square in the city of Birmingham.
How Does the UK Gambling Commission Work and What Is Its Role?
The stated aim of the organisation is to “safeguard players and the wider public by ensuring gambling is fair and safe”.
There are a number of ways that the Gambling Commission tries to meet this goal.
Among them are by licensing gambling businesses, creating Licence Conditions and Codes of Practice (LCCP), enforcing compliance and raising standards across the gambling industry.
Additionally, the Gambling Commission is the country’s leading authority on gambling-related statistics and research, which helps to show trends and developments in the sector.
To meet its aims, the Gambling Commission states that it tries to “regulate in a transparent, accountable, proportionate, and consistent way”.
Due to the fact that resources at the Gambling Commission are relatively limited, the body says its main focus is on “gambling businesses that potentially present the greatest risk to the licensing objectives”.
The Gambling Commission also works to battle against betting-related corruption in sports, as well as tackling illegal gambling activities in the UK.
Other regulators team up with the Gambling Commission to keep an eye on the sector, while the organisation also works closely with HM Revenue & Customs and the police.
Compliance is a key area for the Gambling Commission. Ensuring compliance is achieved through reviews and visits, as well as providing advice or guidance to licence holders.
What Does the Gambling Commission Not Cover?
The Gambling Commission has a wide remit, but it does not regulate everything.
Most people might expect the organisation to resolve consumer complaints against gambling operators in the UK, but this is not the case.
Neither is the Gambling Commission able to help customers to get a refund from gambling products such as National Lottery tickets.
Legal advice – for members of the public or gambling operators – is not provided by the Gambling Commission either.
Premises licences are not covered by the Gambling Commission, with responsibility for this area falling on the shoulders of licensing authorities instead.
Changes Since the UK Gambling Act 2005
Given it is more than 15 years since the UK Gambling Act was approved, it is unsurprising that there have been some tweaks made to the legislation since it was first written.
For example, there were a handful of amendments made as part of the Gambling (Licensing & Advertising) Act 2014.
Among them was a new requirement that all offshore gambling brands were told that they now have to apply for a licence from the Gambling Commission.
As well as this, offshore gambling brands were informed that they must submit to a 15% point of consumption tax on their gross profits.
Unlicensed operators were also prohibited from promoting their products in Britain as a result of the updates to the UK Gambling Act 2005 that were passed.
Some critics blasted the changes made in 2014 as a bid to raise more money through taxation.
The Gambling Commission has also pushed through a range of changes for the industry, including banning betting with credit cards.
It is expected that more updates to the UK Gambling Act 2005 could be on the way soon.
Future Changes to Gambling Laws and Regulations in the UK
At the end of 2020, it was announced by the government that a review of the act would be carried out in order to “make sure it is fit for the digital age”.
For many in the industry, this has been long overdue with the UK Gambling Act 2005 having been surpassed by the rapid rise of the online gambling sector in the last few years.
In announcing the move, the government put out a call for evidence, setting a deadline of March 2021, which means it will be some time before any future changes to gambling laws and regulations in the UK will be pushed through.
It has been reported in the media that one of the changes being proposed is a ban on sports sponsorship. Currently, many top football teams in the UK are sponsored by betting brands.
Furthermore, online casino stakes could be limited as a result of new legislation, but it remains to be seen exactly what shape the fresh regulations will take.
Limiting stakes seems set to be brought in after the government previously moved to due the amount that could be bet through a fixed-odds betting terminal from £100 to just £2.
A mandatory levy may also be brought in for the industry to fund gambling addiction treatment.
Responding to the speculation over the future of the Gambling Act 2005, a spokesperson for leading UK industry body the Betting and Gaming Council (BGC) told the media: “It is important that the review is evidence-led and strikes the right balance between protecting the vulnerable, while not spoiling the enjoyment of the estimated 30 million people who enjoy a bet at least once a month – the vast majority of whom do so perfectly safely – and driving them into the arms of the unregulated online black market.”
But the Gambling Commission quickly hit back over claims a black market could develop.
Chief executive of the body Neil McArthur said the Gambling Commission was “not convinced” by the BGC’s argument, claiming talk of a black market had been “exaggerated”.
What is for sure is that the UK Gambling Act 2005 seems set for a long-overdue update.