UK Gambling Commission: New RULES Coming Soon

The United Kingdom has had quite the liberal relationship with just about all forms of gambling for several years now. In fact, the Gambling Act of 2005 has allowed operators from various locations to set up online casinos, poker rooms, sports betting platforms, and more that serve the country. However, this has led to a supposed increase in gambling addiction and other related harms within the UK, and it is this that has been a partial reason for the Gambling Commission to overhaul its regulations.

Now, there are plans in place to introduce new rules, including the banning of credit cards for deposits and forced participation in the self-exclusion program Gamstop . These changes were announced throughout the month of January and threaten to make the online gambling environment much stricter for the corporations that run the sites.

Credit Card Deposits to Be Banned from April

Credit and debit cards have been used in the UK for online gambling purposes for many years now. And while the latter of these instruments allows users to deposit money into betting accounts that they already possess, a credit card is slightly different. Instead, this allows its users to gamble with credit: credit that must then be paid off at the end of the month. Of course, credit card users need to have the money in hand to be able to pay off their bill once it arrives.

Unfortunately, there have been multiple cases reported in the UK of people using credit cards to gamble huge amounts and then not being able to afford to pay the bill upon its arrival. This, naturally, has led them to fall into debt, and in some cases, players try to gamble online even more to attempt to win enough money to pay those debts. In the end, things can spiral out of control this way, and this is where gambling addiction begins to affect players.

The Gambling Commission states that this is the reason that it will ban all credit card use at online gambling sites from April 14, 2020. This is billed as a way to reduce the number of problem gamblers although the effectiveness of this step is questionable at best.

Ban Comes Following Investigation

The ban on credit card usage at online casinos, poker rooms, bingo sites, sportsbooks, et cetera comes following the Commission’s own review of online gambling as well as the Government’s look into both gaming machines and social responsibility. The public was consulted with ideas, information, and suggestions being taken between August and November last year.

It is thought that of the 24 million adults who participate in gambling in the United Kingdom, about 800,000 of them make use of credit cards in order to do so. In separate research that was undertaken by the Gambling Commission, around 22% of those credit card gamblers are considered to be problem gamblers, and there’s an even bigger number of them that are at risk. By introducing a ban on using cards for gambling transactions (with both online and offline products affected), the Commission hopes that there will be an increase in the protection of vulnerable people.

The introduction of this ban does aim to positively serve anyone affected by problem gambling. Yet, it could also have an impact on the operators themselves.

Considering that such a high number of gamblers in the country opt to use credit cards at the moment, this new rule will serve as a stumbling block that will deter anyone, whether a problem gamer or not, from making deposits. And we foresee that those who actually have gambling addictions will seek out alternate mechanisms for funding their accounts whereas those without this problem might decide it's not worth the hassle and look for entertainment elsewhere, to the detriment of the gambling industry.

GAMSTOP Participation Soon to Be Mandatory

As well as complying with the credit card ban, all online gaming firms within the United Kingdom will be required to participate in the GAMSTOP self-exclusion scheme by the end of March this year.

This organization began operating toward the end of 2017, and it allows consumers throughout the country to exclude themselves from internet gambling sites. This is all done through a single website rather than the player having to contact each individual operator separately. Basically, the player enters his or her details into the database, and they will be excluded from all of the companies registered with the system. Major organizations, such as PartyPoker, quickly signed up to participate on their own initiative.

However, whereas before, becoming a part of GAMSTOP wasn’t compulsory, the new regulations coming into effect will require all licensed operators to ensure that they are registered for it. This way, if a player wants to exclude himself from gambling altogether, he can do so through GAMSTOP without the fear of being targeted by any unregistered sites. There are more than 200 online operators providing their gambling services to UK residents, so being able to self-exclude from all in one go should, in theory, help to reduce gambling addiction.

While Chief Executive of the Gambling Commission Neil McArthur said that most operators are already participating in GAMSTOP, the new regulations ensure that 100% of them are registered and on the system. He said:

It is important that self-exclusion schemes are as effective as possible and they will be most effective when used in combination with other blocking tools such as gambling blocking software and payment card blocking.

There's an interesting exception to the requirement that all gambling be covered by the GAMSTOP regime: Users will not be able to self-exclude from draw-based lotteries through GAMSTOP and instead will have to apply for exclusion from each independent operator. Lotteries, incidentally, tend to be loved by bureaucrats the world over for the amount of cash they funnel into government coffers. Another unrelated tidbit is that the minimum gambling age for lotteries in the United Kingdom is 16: less than the 18 that applies to most other forms of real money gaming.

Gambling Commission Chief Exec Neil McArthur

Tightening of the Rules Could Leave Operators Feeling Blue

With both the fact that credit cards won’t be useful for online gambling by the end of April and the new imperative that licensed operators have to become a part of GAMSTOP, it raises the question of if they’re still as enchanted by the UK gambling market as they once were. After all, with tighter regulations and fewer options for people to deposit through, it does make things a lot harder for enterprises when it comes to obtaining a license, maintaining that license, and adhering to all of the rules laid down.

Throughout 2019, various stories emerged of gambling operators being fined by the UKGC for breaching different rules. These included a £5.9 million (about $7.1 million) fine which was handed out to Ladbrokes Coral for failing to conduct social responsibility interactions with customers. Even before this, in 2018, Paddy Power Betfair received a fine of over £2.2 million from the Commission for allowing two people to gamble on its Betfair platform by using stolen funds.

In spite of the UKGC being busy formulating new regulations during the month of January 2020, it still had plenty of spare time to conduct its traditional enforcement functions too. The Commission made a Jan. 27 announcement on its website revealing that it had revoked the license of Malta-based MaxEnt Limited because officials were unsatisfied as to the legitimacy of funds used to finance the business. 

And it hasn’t taken so long for gambling companies to have a change of heart when it comes to being a part of the UK’s gambling market. Online brand Betclic chose to leave it on Oct. 31, 2019, citing a heavy period of low performance in the country’s hugely competitive market as the reason why.

Yet, it’s not only the UK Gambling Commission that has been toughening up its rules and regulations and making operators feel quite the sense of unease. Other organizations have waded in to the scene, such as the Advertising Standards Authority (ASA), which has put its foot down on various types of gambling advertisements in recent times. The Competition and Markets Authority isn't shy about butting in too whenever it suspects monopolistic practices or other corporate wrongdoing, like it did when it halted the Stars Group/SkyBetting merger (albeit temporarily) in July 2018. The latest regulatory body to get in on the game is the Financial Conduct Authority, which began supervising U.K. cryptoasset businesses in January, including any gambling licensees that provide crypto-related services to their customers.

Some of the Regulatory Bodies That Gaming Firms Must Answer To

UKGC Seeks Out Advice from Expert Advisory Groups

It may seem like everything that the Gambling Commission is doing is detrimental to online gambling operators. Perhaps in order to forestall suspicions that it has an agenda against the entire gaming industry, the Commission has sought out information and assistance from two expert advisory groups – the Advisory Board for Safer Gambling (ABSG) and the Digital Advisory Panel (DAP).

The Commission published the details of the independent advice that it had received from each of these groups, which should assist the regulatory body in achieving its goals. The recommendations from the DAP and ABSG suggest that the Commission needs to develop a better understanding of the link between game design and gambling harms as well as trialing new approaches to educate people about gambling harm. McArthur spoke of his positivity at getting to work with the two groups, saying:

The advice from our expert groups reinforces our view that small and gradual improvements by the industry are simply not enough to keep pace with the emerging risks and opportunities presented by online gambling. Only a bold and innovative approach will allow us to achieve the reduction in the numbers of people experiencing or at risk from gambling harm…

He proceeded on to say that this is the reason why the UKGC has set the industry some tough challenges, and he intends to see progression by spring 2020. Working alongside the DAP and ABSG has not only given the Commission some useful information to put into operation when it comes to the reduction of gambling problems in the UK, but it will also provide it with the tools to fully educate people on gambling harm.

Tough Challenges for UK Gambling Industry are Threefold

To be able to follow through with the tough challenges that have been set, the UKGC has formed three industry working groups, which will all tackle their specific tasks so as to combat problem gambling. The three collaboration groups will place their focus on the following areas:

• Game and Product Design
• Advertising Technology
• High Value Customer Incentives to Gamble

These three sectors will be tackled by well-established companies operating in the UK. The SG Gaming and Playtech groups will combine their efforts in a bid to produce an effective Industry Code for Product Design. At the same time, Sky Betting and Gaming will place its efforts solely in the Advertising Technology area, while the third group will be overseen by GVC, which will aim to address issues surrounding VIP players and their incitement to gamble large amounts.

All of the companies involving themselves in these challenges are combining their efforts and working alongside the UKGC to try and combat problem gambling in the UK. However, this has led some to question if there are ulterior motives behind the activities of these huge companies. Could it be a case of larger firms operating together so as to protect their own businesses and in the process make life even harder for newer, smaller enterprises?

Operators Warned to Check Their Games

In another recent move by the Commission, online gambling operators in the UK have been reminded that they should check that all games meet both transparency and safety standards. This follows the discovery by the UKGC that six operators were providing certain slot games that provided feature buy-in options. Through this, players are essentially able to purchase a special feature, such as free spins or a bonus round, without needing to trigger them through standard base gameplay.

Medusa Megaways by NextGen Gaming
An Example of a Slot Where You Can Pay to Activate the Special Feature

However, one of the games provided by the operators in question was charging more than £3,000 (about $3.9k) to allow its players to do this. The Gambling Commission’s Remote Gambling and Software Technical Standards expressly denies the ability for online operators to provide such games though. The following requirements must be met in relation to this:

RTS requirement 14A: Gambling products must not actively encourage customers to chase their losses, increase their stake or increase the amount they have decided to gamble, or continue to gamble after they have indicated that they wish to stop.

All six operators that were found to be guilty of offering such slot games have since removed them from their game lobbies to comply with this.

Offshore Locations for Gaming

While it’s true that online operators within the United Kingdom are starting to feel the pinch of the new rules relating to online gambling, this doesn’t affect offshore platforms. And while many of these aren’t available to U.K. residents in general, there are a select few that have opened their doors to British customers. They're able to do this because they don't base their infrastructure and offices within the British Isles but rather in foreign jurisdictions that are not subject to U.K. law.

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