UK Online Betting Reforms Receive Lukewarm Response from Gambling Industry

New plans to increase the regulation of online gambling in the UK contain few surprises, but leave many questions unanswered, according to two legal experts.

U.K. (April 28, 2023) — Reforms proposed in the government’s ‘Gambling reform for the digital age’ policy paper, published yesterday, include a new statutory levy on gambling companies that is set to replace the current voluntary system. Proceeds will be spent by the Gambling Commission on funding for research, education and treatment, including through the NHS, subject to government approval. The levy rate, which will be subject to further consultation, will take into account factors like business size, operating costs and problem gambling rates.

The paper also outlines plans for a new stake limit for online slots to help prevent “large losses, long sessions, and binge play”. Unlike land-based gaming machines, online slots currently have no statutory stake limits. The government will launch a consultation on how high the default maximum stake should be set between £2 and £15 per spin. A second consultation will consider options for specific protections for under-25s, including a lower stake limit or other controls.

Betting companies will also be required to conduct “seamless” player protection checks on high-spending gamblers to ensure that they are not incurring harmful losses. According to the paper, these checks will take place “instantaneously”, and “will not impact gameplay”, unless there are signs of financial harm. It said such checks will be targeted, and that 80% of players will never undergo them. It added that checks will happen in the background against information already available online, so those who are checked will not notice.

Licensing law expert Audrey Ferrie of Pinsent Masons said: “The long-awaited white paper on the reform of gambling laws has lived up to its title and purpose by focusing on strengthening controls in the online sector. In truth, though, it holds few surprises. The proposed stake limit for online slots was always on the cards, as were more prescriptive rules on when online operators must check customers’ financial circumstances through ‘financial risk checks’.”

“This is also the case with the proposed statutory levy and new Ombudsman. The Gambling Commission advocated, and positively encouraged, data sharing between operators, but it will now be mandatory for high-risk customers. The data protection implications of this are unclear at present,” she added.

Ferrie said that local authorities would be pleased by the proposed new powers to conduct cumulative impact assessments when considering new applications, as well as the review of the fees which councils can charge for premise licenses. “In Scotland, at last, local authorities can also look forward to the required technical amendment to the 2005 Gambling Act, which will confirm that they have the same enforcement powers as officials in England & Wales,” she added.

The government’s paper said some people still faced serious financial harm from gambling despite action taken by the Gambling Commission and proposed reforming its fee structure to give officials greater flexibility to respond to “emerging risks”. The Commission will also be given new powers to block unlicensed black market gambling firms from operating in the UK through court orders and work with internet service providers.

The Gambling Commission will also examine how bonus offers, such as free bets and spins, are constructed and targeted. The paper said such bonuses can drive harmful behaviour and that the Commission’s study will form the basis of new rules to prevent people from spending more than they intended.

Gambling regulation Diane Mullenex of Pinsent Masons said: “I suspect that the proposed reforms will not go far enough for some politicians and health professionals, but they will also have an opportunity to contribute to the consultations.” She added that, although the paper was not “ground breaking”, it demonstrated the UK’s determination to remain a leading market in Europe after Brexit.

“The reforms will be delivered by a mix of primary and secondary legislation and Gambling Commission powers. All of this will be subject to consultation over this summer, both by the DCMS and the Commission, so there is a great deal of work to do for operators and their advisers,” Mullenex said.

The government also plans a series of smaller reforms to remove loopholes that allow under-18s to access online gambling, cash prize fruit machines and scratch cards. Ministers will also review online game design rules to limit speed of play and other characteristics that exacerbate risks, and examine the current horserace betting levy to make certain racing continues to be appropriately funded for the future.

SOURCE:  Pinsent Masons LLP (Out-Law News).