UK GAMBLING ACT WHITE PAPER
T he gambling sector in the UK has changed significantly since 2005. The industry is a front-runner in the use of new technology and digital products, which has caused certain commentators to argue that existing legislation seems increasingly analogue. While the land-based sector has struggled to compete with its online rivals due to the impact of statutory constraints and, latterly, Covid-19, the huge growth of the online industry has shifted the focus of the regulator increasingly to consumer protection. The Government, in its review of the Gambling Act 2005 (the 2005 Act) and the resulting white paper setting out its policy proposals, aims to: examine whether changes are needed to gambling regulation, particularly due to technological advances; ensure that there is an appropriate balance between consumer freedoms and consumer protection; make sure customers are suitably protected whenever and wherever they are gambling; and promote an equitable approach to the regulation of online and land-based industries. We explore below some of the likely short and long-term implications of key policy proposals in the white paper, including those for online protections, changes to land-based gambling, and changes to Gambling Commission (Commission) powers and consumer redress. We also address the next steps for the industry, including how operators can positively influence the outcome of the white paper consultation process. Land-based gambling A striking feature of the white paper is the Government’s determination to adjust the regulatory balance in favour of land-based gaming. While it proposes significant restrictions on the online industry, restrictions on land-based gambling are being eased, albeit conservatively. The 2005 Act imposed restrictions on both the number of gaming machines permitted in casinos, and on the number of new casinos for which licences could be issued. This resulted in the creation of different categories of casino, which were each permitted to offer a different number of machines, and subject to different table-to-machine ratios. These limitations placed casinos licensed under the Gaming Act 1968 (the 1968 Act) at a significant competitive disadvantage relative to ‘small’ 2005 Act casinos, and small casinos at a disadvantage relative to ‘large’ casinos. They also meant that a maximum of 16 new
casinos could be licensed under the 2005 Act (of which only seven have since opened). Such limitations on supply make little sense now that customers can access a range of casino games from their mobile phones. The white paper goes some way to remedying this, with headline proposals increasing the maximum number of gaming machines from 20 to 80 in 1968 Act casinos (subject to commensurate licence fees and conditions), and a uniform ratio of machines to tables of 5:1, making it easier for smaller casinos to make full use of their machine entitlement. Furthermore, the proposals contemplate unused 2005 Act casino licences being reissued by different licensing authorities, and casinos of all sizes will be permitted to offer sports betting. The Government also intends to work with the Commission to consult on cashless payments in the land- based sector – a much-needed step into the digital age. There are currently 137 active 1968 Act casino licences and 49 dormant licences, each of which can be relocated within the relevant licensing authority area. There are also seven active 2005 Act licences. Of the remaining nine casino licences which were authorised to be issued under the 2005 Act, one was issued but the casino subsequently closed; the other eight have never been issued. The increased gaming machine allowances, adjusted table ratios, and the introduction of sports betting across all casinos, clearly have the potential to reinvigorate investment in the land-based casino sector, although whether these measures will be sufficient to add much needed life to a part of the industry which is a key employer across much of the UK, remains to be seen. Online gambling Whether the white paper will achieve its aim of making gambling legislation ‘fit for the digital age’ in the online sector is doubtful. References to how emerging technologies such as blockchain and cryptoassets might impact the industry are minimal, and no proposals are made for a change to the Commission’s (conservative) approach to the use of crypto, despite the impact of such technologies forming part of the Government’s call for evidence. With a focus on the significant increase in online gambling in recent years, the white paper introduces a raft of policy proposals intended to increase the protection of online
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IMGL MAGAZINE | JULY 2023
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