Gaming Law 2023 Comparisons

Changing Times

While operating in the gambling industry in Great Britain continues to be challenging, particularly with the Gambling Commission’s ongoing focus on enforcement, 2023 has been a pivotal year for the industry as the review of the Gambling Act 2005 (the “Gambling Review”) progresses and following the publication of the White Paper in April 2023.

The Gambling Review was launched by the UK government in December 2020. Following a series of delays driven by the COVID-19 pandemic and political instability, the long overdue White Paper High stakes: gambling reform in the digital age (the “White Paper”) was published on 27 April 2023, nearly 30 months after the Gambling Review was launched. The White Paper is designed to “protect vulnerable users in [a] smartphone era” by striking a better balance between consumer freedoms and the protection of the vulnerable. It covers the following six sections:

• online protections (players and products);
• marketing and advertising;
• the Gambling Commission’s powers and resources;
• dispute resolution and consumer redress;
• children and young adults; and
• land-based gambling.

The intention is for the proposals to be introduced through a combination of:

• primary and secondary legislation;
• changes to the Licence Conditions and Codes of Practice (LCCP); and
• voluntary action.

Key proposals included in the White Paper are discussed below.

Online protections (players and products)

Proposals include the following.

• Imposing an obligation on licensees to conduct financial vulnerability checks at net losses of GBP125 in a rolling month or GBP500 in a rolling year, and financial risk assessments when net losses exceed GBP1,000 in a rolling 24-hour period or GBP2,000 in a rolling 90-day period. It is proposed that these loss figures be halved for young adults aged 18–24.
• Extending existing responsible game design rules for slots to other online gambling products.
• Introducing stake limits for online slots. The current proposals include:
1. setting a stake limit of GBP2, GBP5, GBP10 or GBP15 per spin for online slots;
2. setting a lower stake limit of GBP2 or GBP4 for customers aged 18–24; or
3. setting a stake limit for all customers, irrespective of age, but implementing wider requirements for operators to consider age as a risk factor for gambling-related harm.
• Making data-sharing compulsory in relation to high-risk customers.
• Enhancing player-centric tools, such as mandating deposit limits with an opt-out option.

Marketing and advertising

Proposals include the following.

• The Gambling Commission will consult on implementing new social responsibility requirements in relation to incentives such as bonuses and free bets.
• Requiring a higher standard of consent for direct marketing of online gambling.
• A new approach to safer gambling messaging, developed independently from the industry by the Department of Culture, Media and Sport (DCMS), the Department of Health and Social Care and the Gambling Commission, drawing on relevant public health expertise.
• From 1 December 2023, the Industry Code for Socially Responsible Advertising will require that:
1. sponsored or paid-for social media adverts be targeted at consumers aged 25+ (unless proven that the adverts were precisely targeted to those aged 18+); and
2. 20% of digital marketing advertising include safer gambling messaging.
• The Gambling Commission and the Advertising Standards Authority shall jointly tackle the issue of “content marketing” that may inappropriately appeal to children.
• Sports-governing bodies to develop a cross-sport code of conduct on gambling advertising.

The Gambling Commission’s powers and resources

Proposals include the following.

• The government is consulting on a new statutory levy to be paid by licensees to the Gambling Commission, to fund the research, education and treatment of gambling harms.
• Legislating to enhance the Gambling Commission’s powers to investigate black market operators, by requiring payment and IP blocking by payment providers and internet service providers, respectively.
• Giving the Gambling Commission the power to self-set fees.

Dispute resolution and customer redress

The government proposes that the industry, along with other stakeholders in the industry, creates an operationally independent ombudsman. The ombudsman would deal with disputes relating to social responsibility or gambling-related harm where operators are unable to resolve those issues, and will provide appropriate redress where a customer suffers losses due to the operator’s social responsibility failures. It is expected that the ombudsman will be established within a year of publication of the White Paper. However, if this is not achieved, the government will legislate to create a statutory ombudsman.

Children and young adults

Proposals include the following.

• Requiring land-based gambling operators to “Think 25” when conducting age verification, instead of the existing “Think 21” system.
• Mandating small land-based operators to conduct test purchasing to ensure they are subject to the same age assurance processes as other land-based venues.
• Raising the minimum age for playing Category D slot machines to 18+.
• Legislating to raise the age limit for society lotteries and football pools products to 18+.

Land-based gambling

Proposals include the following.

• 1968 Act (ie, the Gaming Act of 1968) casinos will be permitted the same number of gaming machines as a small 2005 Act (ie, the Gambling Act 2005) casino if they meet certain size requirements of a small casino, thereby increasing their entitlement from 20 to 80 gaming machines (or on a sliding scale if smaller).
• Increasing the ratio of gaming machines to table games for 1968 Act and small casinos to 5:1, in line with the existing entitlement for large casinos.
• Allowing betting in 1968 Act casinos (already authorised in small and large casinos).
• Reallocating unused 2005 Act casinos to other local authority areas.
• Permitting cashless payments on gaming machines.
• Changing the existing 80:20 ratio relating to the balance of Category C/D to Category B machines in bingo and arcade venues to 50:50.
• Increasing the cap on licensing authority fees for premises licences.

The White Paper is an enormous milestone and a one-in-a-generation opportunity for the industry. However, there is still significant work to be done, and the White Paper is only the end of the beginning of the Gambling Review. At the time of writing, several proposals have already been subject to public consultation, with further consultations expected. The intention is that most key proposals from the White Paper will be implemented by Summer 2024, although this is optimistic, particularly for those changes that require primary or secondary legislation.

See 13.1 Anticipated Reform for more information on the government’s and the Gambling Commission’s public consultations. Please also see the UK Trends & Developments chapter for further insight and commentary.

Enforcement

Anti-money laundering, safer gambling and consumer protection have been continuing areas of key focus across UK gambling sectors in recent years, as reflected in high-profile enforcement action; and this is not set to change. The Gambling Commission has also been carrying out thematic work on fee categories, regulatory returns and source of funding, and it is expected that enforcement regarding these wider LCCP and 2005 Act requirements will be seen in 2023 and 2024.

During the 2022–2023 financial year, the Gambling Commission issued over GBP60 million in penalty packages, as well as three suspensions and one revocation. They also revoked one personal functional licence, and issued warnings to three personal management licence holders. At the time of writing, in 2023/2024, there has already been nearly GBP7.5 million in penalty packages, as well as one suspension.

The new “special measures” process is now a permanent feature of the Gambling Commission’s regulatory toolkit and is used where serious failings are revealed as part of a compliance assessment, with the licensees being invited to submit and agree on an action plan to rectify the failings, to avoid a formal licence review being commenced.

Recent Changes

New remote customer interaction guidance

Following consultation, the Gambling Commission has updated the remote customer interaction guidance which came into effect from 31 October 2023. The guidance accompanies Social Responsibility Code Provision (SRCP) 3.4.3, which was introduced partly in September 2022 and partly in February 2023. Publication of the customer interaction guidance was delayed while the consultation was pending. Under SRCP 3.4.3, licensees are required to take the guidance into account, which has been created to assist them in understanding and complying with the remote customer interaction requirements. However, the guidance is complex, despite issues being raised in response to the Commission’s consultation on the ambiguity of its content.

Marketing and advertising

In April 2023, the Premier League announced its voluntary decision to prohibit Premier Clubs from having gambling sponsors on the front of football shirts. This voluntary prohibition is set to take effect from the end of the 2025–2026 football season.

In July 2023, the government responded to its Online Advertising Programme consultation, which was set up in March 2022 with the purpose of establishing a framework for protecting consumers against harmful paid-for adverts online. The government plans to implement a new statutory framework to combat illegal advertising and better protect children and young people. Firstly, there will be a Ministerial-led taskforce to drive non-legislative action, such as bolstering the evidence base, together with a further consultation to shape and determine the content of the legislation. The response will have consequences for gambling advertisers, including marketing affiliates and the publishers and platforms with which they work.

Anti-money laundering

In June 2023, the Gambling Commission revised its casino AML guidance to explicitly address “proliferation financing”, which pertains to the act of financing the illegal creation, supply or use of chemical, biological, radiological and nuclear-related weapons, goods and technology. Casino operators must now consider any such risk to their business in their policies and procedures and in their money laundering risk assessment.

Changes to the LCCP

In October 2023, the Gambling Commission published its response to its consultation on proposed changes to the LCCP. The Gambling Commission has confirmed that the following changes will be made to the LCCP.

• The multi-operator self-exclusion scheme (GAMSTOP) will be extended to all gambling businesses that make and accept bets by email and telephone. The required changes will be made to SRCP 3.5.5 and will come into force on 1 April 2024.
• Licensees must notify the Gambling Commission when they know or have reasonable cause to suspect that a person who has gambled with them has died by suicide. The required changes will be made to licence condition 15.2.2 and will come into force on 1 April 2024.
• An update will be made to licence condition 5.1.2 to ensure that the provision of payment services reflects both current and future legislative provisions. The changes will come into force on 31 January 2024.

Industry forum

The Gambling Commission announced in September 2023 that it would be establishing an industry forum, to comprise around ten members and representatives of the gambling industry. The members’ role will be to provide the Gambling Commission with further insight into the perspectives of gambling businesses. The recruitment of the Chair began in September 2023.

Economic crime levy

On 1 April 2022, HM Treasury implemented the obligation for firms supervised under the Money Laundering Regulations 2017 to pay a levy in relation to economic crime and anti-money laundering. The Levy was introduced under The Economic Crime (Anti-Money Laundering) Levy Regulations 2022. For casinos (including B2Bs holding a casino (game host) operating licence), the levy is collected by the Gambling Commission, and first payments for the financial year 2022–2023 were due by 30 September 2023. The levy payable is dependent on the casino’s UK revenue (not GGY) for the financial year, as follows.

• Small: UK revenue does not exceed GBP10.2 million – no fee.
• Medium: UK revenue is greater than GBP10.2 million but does not exceed GBP36 million – GBP10,000 fee.
• Large: UK revenue is greater than GBP36 million but does not exceed GBP1 billion – GBP36,000 fee.
• Very large: UK revenue exceeds GBP1 billion – GBP250,000 fee.

The following online sectors are regulated in Great Britain:

• betting (live, in-play, fixed-odds and pari-mutuel, betting exchanges and intermediaries);
• bingo;
• casino;
• fantasy sports;
• gaming machines;
• gambling software;
• lotteries; and
• poker.

Free-to-play social gaming is not regulated. The Gambling Commission concluded, following a scoping review in 2015, that the sector did not require regulation but would continue to be monitored by the Gambling Commission for any potential risks.

See 2.2 Land-Based for product definitions.

The following land-based sectors are regulated in Great Britain.

• For arcades, each arcade category can offer a specific subcategory of gaming machine. Those under 18 years of age may not be allowed access to the adult-only section of a licensed family entertainment centre or an adult gaming centre. Arcades can be divided into three categories:
1. adult gaming centres;
2. licensed family entertainment centres; and
3. unlicensed family entertainment centres.
• Betting (live, in-play, fixed-odds and pari-mutuel, betting exchanges and intermediaries). See 3.2 Definition of Gambling for a definition of betting.
• Bingo is not defined in UK legislation; however, the Gambling Commission has published guidance stating that bingo constitutes “equal chance” gaming. See its website for further guidance.
• “Casino” constitutes arrangements providing people an opportunity to participate in one or more casino games. “Casino game” means a game of chance that is not equal-chance gaming.
• Fantasy sports is not defined in the 2005 Act, but the Gambling Commission has issued guidance on its website regarding this product.
• “Gaming machine” means a machine that is designed or adapted for use by individuals to gamble (whether or not it can also be used for other purposes).
• “Gambling software” is defined as computer software used in connection with online gambling, which does not include software used solely in connection with a gaming machine. Given the complexity of this term, the Gambling Commission issued an advice note in June 2014 on what constitutes gambling software.
• Lotteries (raffles), excluding commercial lotteries. See 3.2 Definition of Gambling for a definition of lotteries.
• Poker – in spite of the skill element, the chance element that the deal of a card introduces means that poker falls within the definition of gaming. See 3.2 Definition of Gambling for a definition of gaming.

The key legislation applicable to the gambling sector is as follows:

• the Gambling Act 2005;
• the Gambling (Licensing and Advertising) Act 2014;
• the National Lottery Act of 1993 (as amended by the National Lottery Act of 2006);
• the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017;
• the Fifth Anti-Money Laundering Directive;
• the Proceeds of Crime Act 2002 (Part 7); and
• the Terrorism Act 2000.

The 2005 Act is set out as follows:

• Part 1 interprets key concepts and contains definitions of important terms;
• Part 2 establishes the Gambling Commission’s powers and duties;
• Part 3 deals with offences;
• Part 4 addresses the protection of children and young persons; and
• Parts 5, 6, 7 and 8 deal with various types of licences.

The Licence Conditions and Codes of Practice (LCCP) is issued under the 2005 Act, Section 24, and is, in the authors’ opinion, the key reference document with which all licence holders should familiarise themselves. See also 1.1 Current Outlook and Recent Changes.

Gambling, in the 2005 Act, means gaming, betting or participating in a lottery.

Gaming means “playing a game of chance for a prize”, including games where the chance element can be eliminated by superlative skill. “Prize” constitutes money or money’s worth and “playing” means a chance of winning, irrespective of whether there is a risk of any loss.

Betting means the making of, or acceptance of, bets on:

• the outcome of an event;
• the likelihood of anything occurring or not; or
• whether anything is true or not.

Subcategories of betting include:

• real-event betting (ie, fixed-odds betting);
• virtual-event betting (based on a random number generator);
• betting intermediary (peer-to-peer); and
• pool betting.

Lotteries are classed as “simple” or “complex” and they cannot be run for private or commercial gain. Lotteries are “simple” if:

• payment is required to participate;
• one or more prizes is allocated to one or more members of a class; and
• the allocation of prizes relies wholly on chance.

Complex lotteries differ on the point of prize allocation, whereby prizes are allocated by a series of processes, the first of which relies wholly on chance.

Subcategories of lotteries include:

• society lotteries (small and large);
• local authority lotteries;
• incidental lotteries;
• private lotteries;
• customer lotteries; and
• the National Lottery (subject to separate legislation).

The 2005 Act also addresses the following cross-category activities in the event that products satisfy more than one of the above definitions of gambling:

• betting and gaming;
• lotteries and gaming; and
• lotteries and betting.

Land-based gambling is not specifically defined under the 2005 Act.

Online gambling is referred to as “remote gambling” and means “gambling in which persons participate by the use of remote communication”. Remote communication includes:

• the internet;
• telephone;
• television;
• radio; or
• any other kind of electronic or other technology for facilitating communication.

Part 3 of the 2005 Act covers all offences; however, key offences are as follows.

• Providing facilities for gambling (2005 Act, Section 33):
1. without authorisation from the Gambling Commission, whether through a licence or acting in the course of another’s business who holds a licence; or
2. in a manner not in accordance with the terms and conditions of any licence held either by the licence holder or in the course of another’s business who holds such licence.

“Providing facilities for gambling” occurs where a person satisfies at least one of the following:

• inviting others to gamble in accordance with arrangements made by them;
• providing, operating or administering arrangements for gambling by others; or
• participating in the operation or administration of gambling by others.

Other key offences of note include:

• inviting, causing or permitting a child (under the age of 16) or young person (not a child, but less than 18) to gamble (2005 Act, Section 46);
• manufacturing, supplying, installing or adapting gambling software, in the course of business, without an operating licence while physically located in the UK (2005 Act, Section 41); and
• cheating at gambling or doing anything to enable or assist another person to cheat at gambling (2005 Act, Section 42).

See 9.5 Sanctions/Penalties for advertising sanctions and penalties.

The penalties for the key offences listed in 3.5 Key Offences and 9.5 Sanctions/Penalties are a maximum of 51 weeks’ imprisonment and/or an unlimited fine.

See 1.1 Current Outlook and Recent Changes and 13.1 Anticipated Reform.

The Gambling Commission and various licensing authorities enforce the 2005 Act. Under the 2005 Act, Part 2, the Gambling Commission’s primary functions include:

• issuing operating licences;
• issuing personal licences;
• specifying general licence conditions for each type of licence and any individual licence conditions that it considers appropriate;
• issuing codes of practice concerning the way in which facilities for gambling are to be provided;
• regulating licence holders;
• investigating and prosecuting illegal gambling and other offences under the 2005 Act;
• issuing guidance to local authorities on their role; and
• advising the Secretary of State on the incidence of gambling, how it is carried out, its effects and its regulation.

The ASA regulates gambling advertising in the UK. See 11. Enforcement.

The Gambling Commission’s approach to regulation is risk-based, with the aim of continuing to raise standards. The Gambling Commission indicated in its Business Plan, of 1 April 2023 to 31 March 2024, that its five strategic objectives continue to be:

• protecting children and vulnerable people from being harmed by gambling;
• a fairer market and more informed consumers;
• keeping crime out of gambling;
• optimising returns to good causes from the National Lottery; and
• improving gambling regulation.

See 1.1 Current Outlook and Recent Changes and 13.1 Anticipated Reform.

The types of licences are:

• generally, for companies – operating licences and, if applicable, premises licences; and
• for individuals – personal licences.

Generally, the operating licence types are:

• non-remote for land-based activities (these will require an accompanying premises licence, as detailed below); or
• remote for online activities.

The 2005 Act enables the Gambling Commission to authorise all regulated land-based and online activities outlined in 2.1 Online and 2.2 Land-Based, including gambling software. Licences authorising multiple licensable activities (for instance, bingo and casino) are classed as a “combined operating licence”. Subject to exceptions, licences are also amenable to “umbrella” arrangements for those acting in the course of another’s business. “Umbrella” arrangements are approved at the Gambling Commission’s discretion following a review of various factors, including:

• consolidation of company accounts;
• ownership structure;
• responsibility for compliance; and
• governance arrangements.

See also 6. Online Gambling.

Premises Licences

Premises licences, issued by the relevant licensing authority (not the Gambling Commission), are available that authorise the following activities:

• casinos;
• bingo;
• an adult gaming centre for making Category B gaming machines available for use;
• a family entertainment centre, for Category C gaming machines; and
• betting.

See 5.1 Premises Licensing for requirements.

Personal Licences

Personal licences are governed by the LCCP and issued by the Gambling Commission. They allow the Gambling Commission to regulate individuals and to hold key decision-makers accountable for any inadvertent or deliberate breaches of the LCCP. General conditions for licences, as stipulated by the 2005 Act, Section 75, are listed under Part 3 of the LCCP.

The two types of personal licences are:

• a personal management licence (PML); and
• a personal functional licence (PFL).

The LCCP requires persons with responsibility for any of the below key positions to hold a PML:

• overall strategy and delivery of gambling operations;
• financial planning, control and budgeting;
• marketing and commercial development;
• regulatory compliance;
• gambling-related IT provision and security; and
• the money-laundering reporting officer.

At the time of writing, specified management offices are subject to a Gambling Commission consultation. The consultation proposes to:

• make it clear that the individual responsible for the overall strategy and delivery of gambling operations should be the CEO or equivalent;
• require a PML from the Board Chair;
• require those responsible for anti-money laundering and counter-terrorist financing to hold a PML; and
• assess, on a case-by-case basis, whether CEOs and directors of “parent companies or subsidiaries in the group” need to hold PMLs.

The consultation closed on 18 October 2023.

Individuals working in a casino who are involved in gaming or handling cash (for example, croupiers, dealers and cashiers) must hold a PFL. Under the 2005 Act, Section 133, personal licences may not be issued to individuals who already hold such a licence, but may authorise the performance of more than one function.

Operating licences and personal licences are readily available subject to the fulfilment of application criteria and payment of the application fee.

Land-based casino premises licences are subcategorised into “small”, “large” and “converted”. Converted casino premises licences were awarded under the repealed Gaming Act 1968. They may be moved to alternative premises within the same licensing authority area, but there are no new licences available. 16 “small” and “large” casino premises licences were issued under the 2005 Act and awarded by the relevant licensing authority area following a public competition. To date, four of the large casino premises licences have been awarded, with one casino since closing. The White Paper proposes to reallocate any unused 2005 Act casino premises licences to other local authority areas. (See Premises Licences in 4.4 Types of Licences.)

Pursuant to the 2005 Act, Section 110, operating licences are indefinite in duration, subject to the payment of annual fees and compliance with licence terms and conditions.

Key Application Requirements for Operators

Operating licence applications must be submitted to the Gambling Commission, which will conduct an extensive investigation (having regard to the licensing objectives) in order to determine the applicant’s suitability to carry out the licensed activities. The Gambling Commission broadly uses the following principles to assess any application:

• identity and ownership;
• finances;
• integrity;
• competence; and
• criminality.

The 2005 Act, Section 69(2), requires that operating licence applications:

• specify the activities to be authorised by the licence;
• specify a UK correspondence address;
• be made in the form and manner decided by the Gambling Commission (applications must now be made via the Gambling Commission’s online system);
• disclose any relevant offences;
• include documents and information requested by the Gambling Commission; and
• be accompanied by the prescribed fee.

Currently, there are no server location or data storage obligations.

Key Differences, If Any, Between Application Requirements for Land-Based and Online Operators

Land-based casinos are generally considered to be a high-impact activity in terms of the Gambling Commission’s work, which means that applications may attract a high level of scrutiny and interest. In addition, non-remote casino operating licence applications must be accompanied by a casino premises licence application, which must be submitted to the licensing authority of the area in which the premises are situated.

Key Application Requirements for Directors, Owners or Senior Management

Individuals who are controllers (generally, with 10% or more equity and/or voting rights) in an existing or proposed licensee, must apply for an Annex A authorisation from the Gambling Commission.

Individuals who occupy a specified management office (known as a key position) must hold a PML.

Key individuals for small-scale operators may be exempt from this requirement to hold a PML and may apply instead to hold an Annex A authorisation. See 4.4 Types of Licences for further information on personal licences.

The Gambling Commission assesses personal licences according to the same suitability criteria listed above for operating licences. Furthermore, the Gambling Commission introduced a strict policy, from April 2018, to reject incomplete applications.

Subject to full information being provided, Gambling Commission guidance indicates that operating licence applications take approximately 16 weeks to process, although the Gambling Commission acknowledges on its website that applications may take longer. In the authors’ experience, this timeframe is often exceeded, depending on several factors, including:

• product complexity;
• ownership structure;
• source of funding; and
• the Gambling Commission’s workload.

Application fees for operating licences are determined by the types of activities and financial projections for the first year. These can be calculated using the Gambling Commission’s online fees calculator. As announced in the White Paper, fees are expected to increase, with a DCMS consultation on reviewing fees expected in 2024.

At the time of writing, application fees for personal licences are GBP370. There is no application cost for Annex A applications.

Annual fees are determined in the same way as application fees, outlined in 4.9 Application Fees. Annual fees may be found on the Gambling Commission’s website or may be calculated using the online fees calculator. As announced in the White Paper, fees are expected to increase, with a DCMS consultation on reviewing fees expected in 2024.

The requirements for a premises licence are:

• that they must be held, or applied for, in conjunction with an operating licence authorising the activity for which the premises are to be used;
• the right to occupy the premises (freehold, leasehold or tenancy); and
• that only one premises licence can apply to particular premises at a time (subject to exceptions).

See 1.1 Current Outlook and Recent Changes and 13.1 Anticipated Reform.

Historically, remote operating licences did not reflect the distinction between B2B and B2C business models. B2B operators hosting games through B2C websites required a licence authorising remote casino, bingo, betting (virtual events) or betting (real events), in addition to gambling software, as hosting games constitutes providing facilities for gambling. However, new legislation introduced in April 2017, the Gambling (Operating Licence and Single-Machine Permit Fees) Regulations 2017 (SI 2017 No 303), created B2B-specific “host” subcategories:

• casinos (game host);
• bingo (game host);
• general betting (host) (real events); and
• general betting (host) (virtual events).

However, these licences are subject to various requirements, including that:

• the company must hold a gambling software operating licence; and
• the company must not contract with players directly.

See 6.1 B2C Licences.

Affiliates are not regulated by the Gambling Commission, as companies only providing advertising services or branding to a gambling operator do not require an operating licence. SRCP 1.1.2 provides that responsibility for third-party compliance lies squarely with the licence holder, who must ensure that third parties “conduct themselves in so far as they carry out activities on behalf of the licensee as if they were bound by the same licence conditions and subject to the same codes of practice as the licensee”. This positive obligation on licensees was confirmed in the White Paper and by the current Gambling Commission Deputy CEO, Sarah Gardner, reiterating the obligation on licensees on 15 June 2023 by stating that “many operators” should check “whether appropriate oversight of affiliates is in place”. 

See 6.3 Affiliates.

See 1.1 Current Outlook and Recent Changes and 13.1 Anticipated Reform.

There are no technical measures in place regarding consumer protection, and the Gambling Commission does not have direct powers to enforce either payment or website blocking. However, it seeks to protect consumers’ rights, through its powers under the 2005 Act for seeking enforcement action.

Responsible gambling – now coined “safer gambling” by the Gambling Commission – is one of the Gambling Commission’s biggest areas of focus, across licensing, compliance and enforcement. Its oversight and requirements are broad, meaning they cannot be summarised in this chapter. The focus, which stems from the third licensing objective (protecting children and other vulnerable persons from being harmed or exploited by gambling), is proper identification and engagement with those who may be at risk of, or experiencing, harm, ensuring that terms and conditions are clear, fair and straightforward for consumers and do not target vulnerable or self-excluded customers.

There have been repeated examples of customers being allowed to gamble significant sums of money in short timeframes, considerably beyond their personal affordability, and without any intervention from the operator.

Key SG requirements include:

• preventing underage gambling and utilising age verification measures;
• detailed requirements regarding customer interaction (see 1.1 Current Outlook and Recent Changes);
• the provision of gambling management tools (see 7.3 Gambling Management Tools);
• that licensees must, as soon as practicable, take all reasonable steps to prevent any marketing material being sent to a self-excluded customer;
• that, at the end of any self-exclusion period chosen by the customer, self-exclusion remains in place, for a further six months, unless the customer takes positive action to gamble again; and
• that, notwithstanding the expiry of the period of self-exclusion chosen by a customer, no marketing material should be sent to them unless and until they have asked for, or agreed to accept, such material.

See 1.1 Current Outlook and Recent Changes and 13.1 Anticipated Reform.

Gambling management tools include:

• making information readily available to customers on how to gamble responsibly and how to access information about, and help in respect of, problem gambling;
• self-exclusion (operator and national) with a minimum of six months (up to 12 months);
• financial limit (deposit, spend or loss);
• timers;
• reality checks; and
• timeouts (24 hours, one week, one month or such period as reasonably requested by the customer, up to six weeks).

The Multi-Operator Self-Exclusion Scheme (MOSES) assists land-based operators with identifying at-risk gamblers. GAMSTOP is the online equivalent, initiated by the Gambling Commission and led by the Remote Gambling Association. Since 31 March 2020, all online gambling operators have been required, under the LCCP, to join GAMSTOP. From 1 April 2024, this requirement extends to all gambling operators that make and accept bets by telephone and email.

The current primary legislation is the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (implementing the Fifth Anti-Money Laundering Directive).

Money-laundering offences are outlined in the Proceeds of Crime Act 2002 (POCA) and the Terrorism Act 2000 (TACT).

The Gambling Commission has also issued guidance for casinos, and separately for non-casinos, regarding their duties and responsibilities under the POCA. The Gambling Commission most recently updated its guidance for casinos in May 2023 to incorporate requirements surrounding “proliferation financing”. Proliferation financing is the act of providing funds for the manufacture, acquisition, use or supply of chemical, biological, radiological or nuclear weapons, goods or technology. The updated guidance requires casino operators to undertake a proliferation financing risk assessment to identify, assess and mitigate the risk of proliferation financing.

See 1.1 Current Outlook and Recent Changes and 13.1 Anticipated Reform.

See 8.1 AML Legislation. The AML requirements are complex and cannot be adequately summarised here, particularly given the Gambling Commission’s ongoing focus and extensive casework in this area. Generally, the Gambling Commission expects licensees to comply fully with the terms of their licence, as relevant to AML and CTF, and to pay close regard to the various guidance documents it issues.

Compliance and enforcement activity continue to reveal that operators’ AML policies, procedures and controls are not fit for purpose and, in many cases, customers are allowed to gamble using the proceeds of criminal activity. The Gambling Commission has warned the industry that “a failure to digest [its] guidance and implement the legislative requirements applicable to Great Britain... must change, for these are not just regulatory matters but breaches of UK law. Those failing to learn these lessons will face further draconian action”.

The ASA regulates UK advertising and, therefore, gambling advertising. However, it does not carry any enforcement powers. Instead, and as the LCCP has specific rules on advertising, any gambling advertising breaches by a licence holder may lead to enforcement action by the Gambling Commission. This includes seeking criminal prosecution, as breach of a licence condition is a criminal offence under the 2005 Act, Section 35.

“Advertising” is widely defined under the 2005 Act, Section 327, and generally encompasses any action that encourages one or more persons, either directly or through an agent, to engage in facilities for gambling. This covers most forms of advertising, including online content and emails to consumers.

See 9.2 Definition of Advertising. Advertising must be socially responsible and comply with the LCCP; in particular, SRCP 5.1.6. The key LCCP advertising provisions are that:

• all advertising of gambling products and services should be undertaken in a socially responsible manner;
• operators should comply with the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (the “CAP Code”), the UK Code of Broadcast Advertising (the “BCAP Code”) and the Industry Code;
• adverts must not include a child or young person, and no one who is, or seems to be, under 25 may be featured participating in gambling;
• operators must satisfy themselves that their adverts are not misleading;
• operators must comply with any provisions of the CAP and BCAP Codes in relation to free bet and bonus offers, including by stating significant terms and directing customers to the full terms, which should be no further than one click away;
• no adverts should appear on any web page that provides advice or information on responsible gambling;
• operators must not place adverts on websites providing unauthorised access to copyrighted content and must take all reasonable steps to ensure that third parties (eg, affiliates) do not do so; and
• operators must be able to terminate contracts with third parties that breach this provision.

The following codes are also applicable:

• all UK gambling advertising – the Gambling Industry Code for Socially Responsible Advertising (the “Industry Code”), administered by the BGC;
• broadcast advertising – the BCAP Code, administered by the ASA; and
• non-broadcast advertising – the CAP Code, administered by the ASA.

The ASA also provides the following additional guidance:

• “Gambling advertising: protecting children and young people” (April 2019);
• “The marketing of gambling on eSports on social media” (April 2020);
• “Gambling advertising: responsibility and problem gambling” (November 2021);
• “Gambling and lotteries guidance – protecting under-18s (October 2022)”;
• “Advertising Guidance – Age-restricted ads online” (November 2022); and
• “Guidance on depiction of under-25s in lottery ads” (July 2022).

The Gambling Commission’s web page “Advertising/marketing rules and regulations” provides an overview covering the various LCCP and industry regulations.

See 9.3 Key Legal, Regulatory and Licensing Provisions. In addition, since 1 November 2014, gambling operators wishing to advertise in the UK must hold a Gambling Commission operating licence pertaining to the type of activity advertised. Separately, the Gambling Commission confirmed that advertising-only licences will not be granted.

Since August 2019, a voluntary “whistle-to-whistle” sports-betting advertising ban initiated by the UK betting sector (including a ban on all TV betting adverts during pre-watershed live sport) has been effective.

In relation to online search activity, from 1 October 2020, the industry introduced a list of negative keywords against which no online gambling advertising should be served. This is a voluntary measure that was introduced in the Industry Code.

In 2022, the Committee of Advertising Practice (CAP) announced the introduction of tough new rules for gambling advertisements. The new rules, which have been in effect since 1 October 2022, comprise a strong appeal test, which prohibits advertisements that are “likely to be of strong appeal to children or young persons, especially by reflecting or being associated with youth culture”, meaning that sportspeople, social media influencers and other celebrities who are prominent in youth culture are prohibited from being used in gambling advertisements.

The White Paper did not materially restrict gambling advertising. However, it proposed that additional protections be required relating to cross-selling, free bets and bonuses, and the need to strengthen safer gambling messaging.

In April 2023, the Premier League made a voluntary commitment to banning advertising on the front of football shirts commencing at the end of the 2025/2026 season. Sports’ governing bodies also made a commitment to developing a cross-sport gambling sponsorship code.

The following constitute criminal offences and attract up to 51 weeks’ imprisonment and/or an unlimited fine.

• Inviting another person under 18 to gamble (Section 46, 2005 Act).
• Advertising unlawful gambling (Section 330, 2005 Act) – except for lottery promotion, advertised gambling is held to be unlawful if:
1. the gambling advertised requires a licence, notice, permit or registration and, at the time of advertising, these arrangements have not been completed; or
2. arrangements for the advertised gambling are not such as to ensure that any exceptions to the offence apply.

The Gambling Commission also has the power to take regulatory enforcement action for breaches, including seeking to prosecute offenders.

See 1.1 Current Outlook and Recent Changes and 13.1 Anticipated Reform.

Disclosure to the Gambling Commission is required within five working days (or as soon as possible) via a key event notification using the Gambling Commission’s eServices, an online self-serve portal.

Separately, a change-of-control application providing detailed information and the appropriate fee must be submitted to the Gambling Commission for assessment of the suitability of the new controller(s) to uphold the licensing objectives regarding the existing licence. The application or notification of licence surrender must be provided within five weeks of the change occurring; otherwise, the licence will be revoked.

Under the 2005 Act, Section 103, advance applications for persons or entities expected to become a controller can also be made prior to the change occurring. Subject to the Gambling Commission’s assessment of all necessary information, which it indicates typically takes around 12 weeks, the existing licence will either be granted continuance under the new controller(s) or will be revoked.

A change of corporate control is defined in Section 102 of the 2005 Act and occurs when a person or legal entity becomes a new “controller” (as derived from the Financial Services and Markets Act 2000, Section 422). This is a complex definition, and needs to be considered in detail, but is generally broken down as:

• 10% or more of the shares in the licensee or in a parent undertaking of the licensee;
• 10% or more of the voting power in the licensee or in a parent undertaking of the licensee;
• 10% or more of the rights to profits/dividends (if the licensee does not have share capital); or
• less than 10%, but with the ability to exercise significant control over management of the licensee.

Where there is a non-alignment, a cumulative assessment must be made.

The same requirements as previously stated in 10. Acquisitions and Changes of Control apply as there are no exemptions for passive investors.

Under the 2005 Act, Part 2, the Gambling Commission has the power to investigate and prosecute offences directly. Its regulatory powers also include calling licences for review and initiating investigations in the following circumstances:

• to establish whether its conditions are being complied with;
• where it fears a licensee has been convicted of a relevant criminal offence;
• where it considers a licensee to be unsuitable to continue holding a licence; and
• generally, where a review is deemed appropriate.

The Gambling Commission’s regulatory powers include:

• giving advice as to conduct;
• issuing a warning to a licence holder;
• attaching an additional condition to a licence;
• removing or amending a condition to a licence;
• suspending a licence;
• revoking a licence; and
• imposing a financial penalty following breach of a licence condition.

The Gambling Commission also has the power to commence a criminal prosecution. Where serious failings are revealed from a compliance assessment, the Gambling Commission may place a licensee in “special measures”, which requires the licensee to prepare, submit and agree to an action plan to remedy the identified failings.

The Gambling Commission’s approach to enforcement is currently set out in three key documents:

• the Statement of principles for licensing and regulation;
• the Licensing, compliance and enforcement, policy statement; and
• the Statement of principles for determining financial penalties.

Contravention of the 2005 Act, including the LCCP (issued under the 2005 Act), results in criminal liability. In August 2017, the Gambling Commission set out its “new vision” for its enforcement, emphasising its focus on putting consumers first. The key changes proposed included:

• putting all regulatory tools, including licence review (both of the operator and personal management licences), on an equal footing by removing the then current bias in favour of settlement;
• introducing higher penalties for breach, particularly where systemic and repeated failings were seen; and
• using time-limited discounts to create better incentives for early settlement.

In recent years, the Gambling Commission has garnered a reputation for taking enforcement against its licensees. In certain cases, a “regulatory settlement” is reached, meaning that it is not a sanction and stops short of a formal licence review. This is subject to the Gambling Commission’s discretion and will only be considered if various factors are met, including:

• the licensee being open and transparent in its dealings with the Gambling Commission;
• the licensee being able to demonstrate that it has insight into apparent failings;
• a timely disclosure of material facts;
• preparedness to agree to the publication of a public statement setting out the failings in order to deter future non-compliance by others and/or share learning;
• preparedness to make a divestment of any amount accrued as a result of the failing;
• preparedness to follow advice and implement procedures to ensure there is no repetition of failings;
• preparedness to contribute to the direct costs to the Gambling Commission of investigating the matter in respect of which regulatory settlement is sought; and
• preparedness to volunteer a payment in lieu of the financial penalty the Gambling Commission might otherwise impose for breach of a licence condition.

The regulatory settlements and licence reviews are detailed in numerous public decisions or public statements issued on the Gambling Commission’s website and usually include a financial penalty. A record penalty package of GBP19.2 million was issued to William Hill Group in March 2023. Recent financial penalties imposed by the Gambling Commission also include a GBP3.25 million fine against Done Bros (Cash Betting) (trading as Betfred) Limited in July 2023, and a GBP2 million fine against Videoslots Limited in June 2023. Both fines were issued as a result of numerous social responsibility and anti-money laundering failures.

A financial penalty imposed by the Gambling Commission will usually consist of two elements:

• an amount to reflect any detriment suffered by consumers and/or remove any financial gain made by the licensee as a result of the contravention or failure; and
• an amount that reflects the seriousness of the contravention or failure, the impact on the licensing objectives and the need for deterrence.

The Gambling Commission will take into account all material circumstances of the case, such as:

• the seriousness and duration of the breach;
• whether it is a first-time offence;
• the involvement of management;
• the level of any financial gain from the breach; and
• the extent of steps taken to remedy the breach.

The Gambling Commission may discount the financial penalty where an operator has been transparent and co-operative.

It is worth noting that the financial elements of regulatory settlement, which are not sanctions, are calculated differently, and the Gambling Commission has the power to impose a financial penalty without carrying out a licence review. 

The Gambling Commission is responsible for issuing and enforcing financial penalties regarding any LCCP breaches. Any contravention of the 2005 Act itself is a criminal offence and will trigger a potentially unlimited fine, enforced by the courts, and imprisonment for up to 51 weeks (see 3.6 Penalties for Unlawful Gambling and 9.5 Sanctions/Penalties).

It is worth noting that any payment made as part of a regulatory settlement is not a financial penalty (as it is not a sanction) and is a payment made in lieu of a financial penalty. These are treated differently by the Gambling Commission and could, theoretically, be enforced by recommencing the licence review.

Following a review of a personal licence, the Gambling Commission may impose:

• a warning;
• additional licence conditions or amending of existing ones;
• a financial penalty (only if a licence condition has been breached);
• suspension; and/or
• revocation.

To date, the Gambling Commission has not imposed a financial penalty or reached a payment in lieu of a financial penalty (as part of a regulatory settlement) in respect of a personal licence.

The Gambling Commission keeps a regulatory sanctions register, which contains details of sanctions imposed on personal licence holders following licence reviews.

The following rates are effective from 1 April 2022 and are applicable at the time of writing.

Bingo:

• 10% of bingo promotion profits.

Betting:

• 15% of “net stake receipts” for fixed-odds bets, totalisator bets on horse or dog races and bets taken on betting exchanges;
• 3% of “net stake receipts” for financial spread bets;
• 10% of “net stake receipts” for all other spread bets; and
• 15% of the commission charges charged by betting exchanges.

Casino (“gaming duty”):

• 15% of gross gaming yield for the first GBP2,686,000;
• 20% of gross gaming yield for the next GBP1,852,000;
• 30% of gross gaming yield for the next GBP3,243,000;
• 40% of gross gaming yield for the next GBP6,845,000; and
• 50% of gross gaming yield for the remainder.

Lottery:

• 12% of the price paid or payable on taking a ticket or chance in a lottery.

Machine games:

• 5% of net takings from dutiable machine games with a maximum cost to play of not more than GBP0.20 and a maximum cash prize of not more than GBP10;
• 20% of net takings from dutiable machine games with a maximum cost to play of not less than GBP0.21 and not more than GBP5, and a maximum cash prize of more than GBP11; and
• 25% of net takings from all other dutiable machine games with a maximum cost to play of more than GBP5.

Remote gaming duty:

• 21% of gross gaming revenues on all remote gaming transactions with customers whose usual place of residence is in the UK.

Please note, the majority of gambling activities are exempt from VAT.

White Paper Consultations

See 1.1 Current Outlook and Recent Changes. Following publication of the White Paper in April 2023, Government and the Gambling Commission have published several consultations regarding implementing the proposals in the White Paper.

The first of these consultations were published in 2023, as follows.

• A consultation by the DCMS on maximum stake limits for online slots (closed on 4 October 2023).
• A DCMS consultation on measures relating to the land-based sector (closed on 4 October 2023).
• A Gambling Commission consultation on proposed changes to the LCCP and changes to the RTS (closed on 18 October 2023). The Gambling Commission’s consultation also included non-White Paper proposals, such as:
1. amendments to its regulatory panel process (including change in composition of the panel and changing the default from oral hearings to paper-based decisions); and
2. extending personal licensing requirements (see 4.4 Types of Licences).

At the time of writing, the responses to these consultations are pending.

On 17 October 2023, the DCMS published its consultation on the statutory levy, including its proposed rates and distribution. At the time of writing, the consultation is still open, and closes on 14 December 2023.

Further consultations in respect of White Paper proposals are expected to be published in November 2023, and are expected to include socially responsible inducements and gambling management tools.

See the UK Trends & Developments chapter for further insight and commentary on the consultations.

Reform of the AML and Counter-terrorism Financing (CTF) Supervisory Regime

In July 2023, HM Treasury published its consultation on reform of the AML and CTF supervisory system, seeking view from stakeholders on four possible models for improving the UK’s current regime. The Gambling Commission is a statutory supervisor for the casino industry. Three of the proposed models would have little impact on the Gambling Commission’s regulation of AML/CTF. However, the fourth model proposes a Single Anti-Money Laundering Supervisor (SAS) which, if implemented, would result in the Gambling Commission relinquishing its supervisory duties.

Given the cross-over between AML/CTF and safer gambling, there has been confusion about the Gambling Commission’s approach to AML/CTF. The SAS model would certainly introduce some consistency to the AML/CTF supervision of UK casinos. However, any appointed SAS would undoubtedly have less industry expertise than the Gambling Commission, and this also opens up the possibility of dual regulation of Gambling Commission licensees.

HM Treasury’s consultation closed on 30 September 2023, and at the time of writing, the response to this consultation is pending.