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UK Gambling Commission

Table of Contents

Gambling Regulation

The Gambling Act of 2005 granted the UK Gambling Commission (UKGC) the authority to oversee all gambling activities within the United Kingdom. Officially operational since 2007, it replaced its predecessor and eventually merged with the National Lottery Commission to ensure that all gambling activities adhered to the same stringent codes of conduct.

The primary objectives of the regulator are to:

  • Combat crime related to gambling in all its forms.
  • Promote fair play and transparency within the UK.
  • Safeguard vulnerable groups, including children and individuals with gambling problems.

Licensing

No casino or gambling platform is permitted to operate in the UK without a valid UKGC license appropriate for the type of gaming they provide. There is no general license; instead, casino operators must apply for specific licenses for various gambling forms, including Bingo, Casino Games, Gaming Machines, Gaming Software, Lotteries, and Sports Betting.

In addition to gaming licenses, gambling operators must also obtain Personal Management Licences (PML) for each senior staff member involved in operational decision-making.

License Application Procedures

Obtaining a gambling license to operate in the UK is a complex process. Below are the requirements for applying under UKGC regulations:

  • Submission of a concise business plan.
  • A complete company structure, including a list of shareholders with more than 3% equity and employees earning over £200k in the last 12 months.
  • Details of individuals for credit and criminal checks.
  • Evidence of sufficient funds to run the operation effectively.
  • Submission of all software and gaming mechanisms for testing to meet industry standards, along with supplier details for remote casinos.
  • A list of policies and procedures for servicing clients, along with a diagram illustrating end-to-end processes for remote gambling.
  • A three-year financial projection analysis with supporting assumptions and strategy.
  • Existing operators must provide three years of audited financial statements.

As of March 31, 2020, all gambling operators, both existing and prospective, must register with the GamStop self-exclusion online scheme as part of their licensing conditions. This service must be offered to all customers.

Taxation

As the saying goes, “There are only two certainties in life – Death and Taxes.” Unfortunately, taxes are an unavoidable aspect of business operations. The taxes generated by the UKGC ensure the government can maintain its reputation for safe and effective regulation.

Most remote casinos and gambling businesses are taxed in their country of residence. In the UK, even remote gambling agencies are required to pay UKGC taxes to operate. This taxation does not deter many remote casinos and sportsbooks, as the substantial market share in the UK makes it worthwhile.

Currently, offshore casinos face a flat tax rate of 15%. However, this rate is set to increase to 21% starting in October 2019.

Benefits of UKGC Licensing for Operators

While some casinos may forgo acquiring a UKGC license due to high taxes and extensive processes, those that do benefit from several advantages, including:

  • Prestige: The UKGC license is a recognized mark of trust and quality, owing to the rigorous vetting process required for certification.
  • Market Access: The license opens up a vast gambling market for operators, providing access to the largest online gambling market globally, with annual revenue around £4.5 billion shared among approximately 1,000 operators.
  • Strong Currency: Despite the uncertainties surrounding Brexit, the Pound Sterling remains one of the strongest currencies worldwide, offering significant investment opportunities for offshore operations.
  • Protection: The UKGC offers robust protections for operators against consumer abuses and mistreatment, with thorough verification processes even for VIP players.

Benefits of UKGC Licensing for the Public

The UKGC is dedicated to ensuring that gamblers' interests are safeguarded. Gamblers now have a recourse option if they encounter issues with vendors.

The commission emphasizes seven areas of public protection and consistently urges casinos and betting vendors to adhere to these standards to create a responsible gambling environment:

  • Funds Management: Players' funds must be kept separate from operational funds, preventing casinos from using player deposits for overhead expenses.
  • Underage Gambling: The UKGC and its vendors work diligently to prevent minors from gambling. Parents are legally responsible for securing their devices, and there are stricter age verification processes at online casinos, even for free games.
  • Problem Gambler Protection: Vulnerable players are prioritized for protection, with online betting operators required to implement effective controls to identify and assist them.
  • Marketing Practices: The UKGC maintains a strict stance against misleading marketing. Gambling advertisements on UKGC casino sites are straightforward and free of misleading "fine print." Additionally, a ban on all betting advertisements during live televised sporting events was implemented at the end of 2019.
  • Payment Security: UKGC casinos utilize secure and efficient banking methods to protect players' money during transactions.
  • Customer Service: All UKGC casinos have established streamlined processes for the public to seek resolution and lodge complaints, with a strong focus on effective dispute resolution.
  • Quality Platforms: Casino and vendor software undergo auditing to ensure operators maintain their systems for optimal gaming experiences.