Casinos legislation

All casinos that operate in the UK, whether they’re on the internet or land base, must be licensed and regulated. From a gambling point of view you’d be much wiser to take your money to a casino where the house edge can be up to fifty times smaller. The next major legislative overhaul came in 2005 with a new Gambling Act that addressed online gambling as well as further loosened regulations across the board. The Gaming Act of relaxed the original rules and paved the way for more casinos. The first casino was opened in 1961 by gaming magnate George Alfred James. There are serious consequences for failing to meet the gambling age in the UK, including denying you your winnings if they find out.

To further raise standards, a more prescriptive and risk-based model will be introduced, where remote operators are required to investigate the customer’s financial circumstances in response to certain loss triggers to understand if their gambling is likely to be harmful to them. However, while these tools are helpful for many online gamblers, they are not enough to fully mitigate the risks, so there are also a range of obligations on operators to identify and prevent gambling-related harm. All online play is account-based, and recent years have seen significant strides in the development of harm detection algorithms which monitor every aspect of a customer’s gambling to spot signs of risk and trigger interventions without human input. The proportion of people suffering harm might also be identified through other sources such as bank transaction analysis, hospital admission data, and operators’ own harm detection algorithms which flag the customers displaying indicators of harmful gambling. It also gives the Secretary of State the power to update specific provisions (such as the maximum stakes and prizes for gaming machines) and to set licence conditions via secondary legislation. A key concern for some of the land-based sectors is the ban on direct use of debit cards on gaming machines and we recognise that substantial changes are happening to how payments in society are being made.

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The Social Market Foundation reported that research by Morgan Stanley estimated that a flat £2 stake limit for all non-slot casino products would reduce GGY from those products in the licensed sector by 92%. Furthermore, stake size can have a more direct functional role in non-slot gameplay compared to slots, for instance in roulette where a higher stakes bet can be divided between different areas, modifying the rate of return to the player and the risk of losses. On that basis, we will also consult on  measures to give greater protections for 18 to 24-year-olds who the evidence suggests may be a particularly vulnerable cohort. However, taking an equitable approach to product regulation should take account of the wider system of protections in place online. Given wider forthcoming changes to the account-based protections considered above, we do not consider that such customer segmentation is yet a sufficiently established safeguard to control access to higher stakes. Operators which heavily weight their risk score by stake size were deliberately excluded from the analysis to avoid giving a false impression of a positive linear correlation.

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Local authorities (for Premises Licences).Sports/horse race betting (if regulated separately to other forms of betting)Fantasy betting (payment to back a ‘league’ or ‘portfolio’ selection over a period of time, for example in relation to sport)LotteriesLotteriesThe Gambling Commission.The Gambling Commission (for Operating Licences). The IA notes, however, that operators are less likely to be small and micro businesses due to the amount of capital and numbers of staff they need to operate. “We will now continue our work to deliver our remaining White Paper commitments, including our programme of evaluation.”

A response from an advocacy organisation opposed the introduction of direct debit card payments on the basis that there is evidence that cashless payments result in increased and unplanned spending when compared non gamstop to cash. One betting shop operator was concerned that allowing direct debit card payments would minimise the interactions a customer has with betting shop staff as their current customer journey requires a certain level of interaction with a staff member. They stated that it would be an unnecessary and disproportionate burden for a low stake and low prize machine.

• GAMSTOP is a free service for all residents of Great Britain and Northern Ireland, allowing them to register online and exclude themselves from all UK gambling sites for at least six months.
• Some licensed betting offices also use a cross-channel digital wallet that can be topped up at cash desks as well as on the operator’s website and used on machines.
• For example, some options may place further emphasis on achieving commercial flexibility than achieving customer choice of higher and lower staking machines, and vice versa.
• While Category D crane grabs may be a lower risk, they are more likely to be played by children and we think a cautious approach to debit card payments should be taken in general.
• Estimates suggest that there are approximately 300,000 problem gamblers in the UK – and problem gambling rates are higher for players in online casino games than those playing in bingo halls, casinos and pubs.

While the use of these tools by customers is voluntary and operators are afforded a degree of discretion around how they are designed, there are requirements attached to certain tools. However, the online environment also provides many opportunities to make sure people are gambling safely. According to the 2018 Health Survey for England, excluding National Lottery draws, 4.2% of people accessing any online gambling were experiencing problem gambling, compared to 1.3% of people accessing any gambling activity.

In contrast, most other respondents (particularly across the health, charity and academic sectors) argued that gambling advertising was in need of significant reform, with several stakeholders in this group advocating for a return to the pre-2005 regime where most advertising was banned. Industry stakeholders (as well as representatives of sectors which benefit from operators’ ability to advertise, such as advertisers, broadcasters and sports governing bodies) broadly took the view that the current regulatory regime is fit for purpose. The questions on advertising and sponsorship in the call for evidence attracted a high number of responses, with strongly polarised views.

The increase in Category B machines will enable bingo halls to better meet customer demand and will likely result in greater GGY. This would result in an overall decrease of over 900 cabinet machines across these venues, predominantly consisting of legacy Category C cabinets. Also, Category C and D gaming machine device types made available for use must be of similar size and scale to Category B. For example, some options may place further emphasis on achieving commercial flexibility than achieving customer choice of higher and lower staking machines, and vice versa. Gambling Commission data, from April to September 2019, indicates that across all land-based sectors, 1.8% of Category B sessions result in a loss of £200 or more.

Having worked closely with the Gambling Commission, we consider it necessary to put new obligations on operators to conduct checks to understand if a customer’s gambling is likely to be unaffordable and harmful. Operators are already required to identify customers at risk of harm and take action, but there have been too many cases of interventions coming too late, or in some cases not at all. We will also develop independent messaging that raises awareness of the risks of gambling harm while helping to remove the fear of stigma that stops people coming forward for help. At the heart of the new regime are tougher affordability checks, a mandatory 1 per cent levy on operators to bankroll harm research and treatment, and sharper design limits for online slot games. In January 2020, the Gambling Commission approved several organisations for these compulsory funding contributions, ensuring that operators direct their financial support to recognised entities working to mitigate gambling harms. The UK Gambling Commission requires operators to contribute financially to organisations focused on research, prevention, and treatment of gambling-related harm.

The machines may be of categories B3A, B4, C or D, but by agreement, only one machine can be of sub-category B3A. The code relates to the provision of facilities for gaming machine gambling and includes requirements around the protection of children and other vulnerable people. To take advantage of this entitlement, the holder of the on-premises alcohol licence must give notice to the licensing authority and pay the prescribed fee. They are divided into categories depending on the maximum stake and prize available, the nature of the prizes and the nature of gambling for which the machine may be used, as well as the premises where it may be used. Licensed bingo premises include a range of establishments such as retail bingo clubs, high street arcades (which have a smaller bingo offer via bingo machines), and bingo venues in holiday parks.

For example, wagering requirements, sometimes called ‘re-wagering’ requirements, are a common feature of bonus offers in the gambling sector, whereby customers have to stake bonus funds a number of times (potentially adding some of their own money) before being permitted to withdraw any winnings. However, we encourage land-based operators to consider any use they make of targeted monetary or free bet bonuses and their purpose and we will continue to monitor whether there is a case for any further restrictions. Loyalty schemes in land-based venues are also a way of encouraging account-based play, meaning that a ban on them could have the unintended consequence of reducing the amount of available data on player behaviour. They emphasise that land-based play allows for close oversight of customers to ensure that bonuses are issued responsibly. In the majority of casinos, targeted offers are often through loyalty programmes that are open to everyone, with higher tier memberships offering higher value rewards. The schemes are intrinsic to high-end casinos’ business models, and the benefits tend to emphasise building a luxury experience rather than monetary rewards and free bets designed to be staked.

Changing the Commission’s fee model will enable it to respond flexibly in the medium to long-term to emerging regulatory challenges and ensure that each sector is paying a fair fee for regulation of the industry. The Commission should be able to show how it intends to spend its income on different sectors within the industry, with (as under the current system) those sectors that require greater regulatory attention being required to pay more than others. Numerous pieces of legislation enable the FCA to charge fees to cover its costs and expenses in carrying out its functions, including the Financial Services and Markets Act 2000. It also produces several other consultations each year, including a specific one relating to its policy on how it raises fees and levies.

This prize pot would be available only to those playing the linked machines and prizes would not exceed the maximum prize ordinarily available for that category of linked machine. The review will include an assessment of the role of session limits across Category B and C machines and the role of safer gambling tools. We have reviewed these proposals alongside evidence of harms of machine game play, evidence from campaign groups and advice from the Gambling Commission. It has taken steps to increase existing protections on machines as well as exploring ways to build friction and safer gambling measures into cashless payments. Initial data from operators indicates that relatively few transactions take place through app-based payments. The Gambling Commission welcomes cashless payment technology, such as app-based digital payments, that can be used to improve safer gambling measures and reduce money laundering risks.

However, there are still too many instances of insufficient age verification in some venues, particularly those such as pubs, which can offer adult-only gaming machines but are not adult-only venues like many gambling premises. We have seen evidence showing that customers who have claimed online bonus offers are more likely to engage in high-risk gambling behaviour, especially those already at a higher risk of harm who are also likely to be targeted with more offers. The moves come in response to concern over what are known as online slot games – that is, games designed to mimic slot machines in real-life betting shops and casinos. Its remit covers arcades, betting, bingo, casinos, slot machines and lotteries, as well as remote gambling, but not spread betting which is regulated by the Financial Conduct Authority.

The number of gaming machines a casino may host depends on its classification. Under Section 20 of the Gambling Act 2005, the Commission replaced the Gaming Board for Great Britain and now has jurisdiction over arcades, betting, bingo, casinos, slot machines, and lotteries. It allowed larger casino establishments to operate with more gaming machines and granted patrons easier access. Benefits to business are increased gross gambling yield for casinos and unquantified benefits to gaming machine suppliers and manufacturers. The Commission has become aware that in some instances, operators who hold a combined non-remote casino licence and betting operating licence, have looked into converting part of their casino premises to betting premises. In Scotland the licensing boards are licensing authorities and continue to have responsibilities for granting permissions for casinos in the form of premises licences.

Figure 11: Category D Gaming machine types including stakes, prizes and speed of play

Our consultation will take into account the differing association of different sectors with harm and/or their differing fixed costs. We will launch a consultation on the details of its design including proposals on the total amount to be raised by the levy and how it will be proportionately and fairly constructed. Government will introduce a statutory levy paid by operators and collected and distributed by the Gambling Commission under the direction and approval of Treasury and DCMS ministers.

Affiliate marketing is a form of marketing whereby a third party receives a commission for promoting a company’s products or services, typically paid per customer referred or with a share of revenue generated by referred customers. It might also risk unintended consequences such as reducing the ability of consumers to distinguish licensed from unlicensed operators. While it is likely that this would reduce the limited level of children’s exposure to gambling adverts, there would be a negative impact on the ability of lotteries to fundraise for good causes, and a risk of adverse consequences from increasing the volume of late-night gambling adverts. It is also clear that children’s exposure to broadcast advertising has declined over the past decade, in all sectors including gambling.

Licence Condition 15.3.1 – Information provision

Responses from industry advocated for either no increase in the maximum chargeable premises fees or a small increase of 10%. This may include increasing staff numbers, with one licensing authority stating that it would consider dedicating one full-time resource to the enforcement of licensed premises. This was reflected by licensing authority responses in regards to how much the maximum premises fee should be raised by. In response to the questions as to how much annual funding is needed for administration and enforcement of licences, the average amount stated by licensing authorities was £45,000. The majority of licensing authorities advocated for the maximum proposed premises fee increase of 30%. Following analysis, we propose to increase the maximum premises fees chargeable by licensing authorities by 15%.

One of the most important aspects of gambling regulation in the UK is the advertising and marketing of these products. It introduced several major amendments, most notably the requirement that all offshore gambling companies apply for a license from the Gambling Commission. All casino games, without exception, may be played only by persons aged 18 or over.

We will use the responses to this consultation as well as wider engagement with the sector to gather data to estimate the likely uptake of additional machines and removal of existing machines under each option. These machines can also offer customers Category C or D content on the same device. Industry trade bodies have provided evidence which suggests that the removal of the 80/20 rule would result in a large-scale reduction of tablets and in-fill machines, although the extent to which tablets will be removed will vary by operator. In addition, there would be limited opportunities for operators to meet customer demand for Category B machines and increase GGY. Consequently, under Option 2 industry as a whole would have the flexibility to reduce the number of Category C and D machines and/or increase the overall number of Category B machines across the sector, saving energy and/or increasing overall GGY. It is possible that operators could use inaccessible tablets and in-fill machines to increase the overall number of Category B3 machines in their venues, undermining the principle of a balanced offer of higher and lower stake machines giving genuine choice to the customer.

These responses also argued that ‘self-regulation’ is too prevalent in gambling advertising and could not be relied upon to reduce harm, particularly with regards to online formats such as social media advertising, affiliates and direct marketing. Recent reforms such as the Gambling Commission’s toughened regulations for VIP schemes or the voluntary suspension of broadcast advertising during the initial COVID-19 lockdown were cited as evidence that the current system is able to respond quickly where new risks emerge or evidence of harm is found. The shift towards online data-driven marketing outlined above is not unique to the gambling sector, and should be considered in the context of the broader digital ecosystem. We welcome industry’s expansion of its commitment to safer gambling messaging to constitute 20% of all advertising across both online and broadcast channels.

The maximum number of gaming machines that may be made available for use on the premises remains unchanged at 80. For every gaming table used in the casino, the effect of the amendment is to increase from two to five the number of gaming machines that may also be made available for use. As well as a fixed numerical maximum, the number of gaming machines must not exceed a specified multiple of the number of gaming tables used in that casino. Thanks to recent legislative changes, the UKGC would have the power to regulate and tax not only online casinos physically based in the United Kingdom, but any gambling sites that serves UK players.

We recognise the importance of affiliates to operators and customers, and that the growth of affiliate marketing is by no means unique to the gambling sector. The industry body Responsible Affiliates in Gambling (RAiG) estimates that there are tens of thousands of gambling affiliates working in the GB market, the majority of which are individuals or very small businesses, and that they drive up to 40% of customer acquisition for remote operators. The evidence did not suggest that broadcast advertising which is compliant with the current, strict rules (especially following the recent updates to the CAP codes) is likely to pose an undue risk of harm, or that the benefits of any further restrictions would outweigh possible negative consequences. Alongside direct marketing and the targeting of individuals discussed above, the general gambling advertising landscape, both online and offline, attracted significant attention in submissions to the call for evidence.