More than two years since promising a review of the UK’s gambling regulations, the British government published the Gambling Act Review White Paper, setting out proposed reforms, some of which will mark a significant shift in the way gambling is regulated in the UK.
In the UK, gambling is largely regulated by the Gambling Act 2005 (the Act). On its introduction, the Act introduced substantial reforms to existing gambling laws that were, at the time, several decades old. However, fifteen years later, in December 2020 the government announced it was reviewing gambling laws again and issued a call for evidence from industry participants. The government’s review was to focus on making sure gambling regulations are fit for the digital age and to address concerns that the harm caused by gambling remains too extreme.
The White Paper was due to be published in 2020, but was postponed several times, for reasons ranging from political reshuffles, the pandemic and even an awaited decision on the next operator of the National Lottery.
The proposals span a number of topics, including consumer protection, advertising, regulation, dispute resolution, children and young adults and land-based gambling.
The White Paper included a number of consumer protection proposals relating to affordability checks or, as the Government refers to them, “financial risk checks". The first proposal is that for moderate losses of £125 per month or £500 per year, operators should conduct financial vulnerability checks that are “frictionless” for the consumer.
For “binge gambling”, where an account suffers losses exceeding £1,000 in a 24-hour period, operators should conduct enhanced spending checks, which would involve assessing a consumer’s financial situation by accessing more personalised data, potentially through the use of credit reference agencies. The same enhanced spending checks are also proposed where consumers suffer more than £2,000 worth of losses over a 90-day period.
In order to reduce losses suffered by consumers, proposals will include introducing limits for certain “high-risk” products. The Government believes online slots are particularly associated with large losses and binge play and, as such, proposes to introduce stake limits of between £2 and £15 per spin. In recognition of the fact that young people are at higher risk of loss when playing online slots, the Government proposes a lower limit of between £2 and £4 for people aged 18 to 24 or, alternatively, a variable limit based on individual risk factors.
The reform plans state that the Gambling Commission will take a more ambitious approach to enforcement, using data from operators and more specialist staff to improve industry governance. To fund this, the Government intends to introduce a statutory levy on operators. The rate of the levy is subject to consultation but is expected to be around 1% of profits.
The Government also intends to give the Gambling Commission additional powers to assess and regulate the compliance of gambling firms more effectively.
The Government says the proposals “strike the right balance between consumer freedoms on one hand and protection from harm on the other”. However, reactions have been mixed from the industry and beyond.
Some campaigners and public health experts have criticised the lack of an absolute prohibition on advertising gambling products to vulnerable customers. Others have criticised the focus on what the proposals term “vulnerable people” which, they say, ignores the fact that gambling is an addictive product that anyone, not just the vulnerable, could fall victim to.
A significant number of gambling companies back the White Paper, which may indicate that the proposals were not as draconian as some firms had feared
A significant number of gambling companies back the White Paper, which may indicate that the proposals were not as draconian as some firms had feared. Firms seem in favour of raising industry standards, prioritising responsible play and the proposed levy to fund research, education and treatment relating to gambling.
Many of the proposals are subject to further consultation, including those on the levy, online slot game limits and the affordability checks which are planned to commence in summer 2023.
Where legislation is required to implement the proposals, such as new Gambling Commission powers, timeframes will be dictated by parliamentary priorities. With a UK general election likely in 2024, it is possible that a number of the legislative changes will be dependent on the support and implementation of a new government. However, with the reform of gambling laws having broad, cross-party support, the majority of the proposals will survive any potential changes in the country’s political leadership and be implemented in the coming years.
