UK Online Gambling Industry Preparing for Major Changes

The British gambling industry is going to be turned upside down with the new laws based on point of consumption.

Despite all objections coming from major gambling operators, the UK Government is moving forward with its licensing and taxation plans based on point of consumption. Unofficial sources claim the new British gambling law is making companies rethink their offer, close certain websites and transfer players to new online services appropriate for other jurisdictions.

Additional licensing costs, strict control over advertising campaigns, more measures for ownership and jurisdictional transparency, as well as a 15% tax rate. This is what gambling operators can expect in the near future, if they want to cater to players located in the UK.

Relicensing operators

Implementation calendar and deadlines:

• September 16 – applications for licensing
• October 1 – new Act comes into force
• December 1 – new tax regime kicks in
• January 31, 2015 – deadline for using licensed software

While the government is preparing to pass the UK Licensing and Advertising Act of 2014, the gambling authority has informed companies that all applications for a renewed license should be submitted by September 16.

The head of the UK Gambling Commission, Jenny Williams, said the authority has already received a number of applications. The regulator expects up to 150 more before the deadline. But with stricter licensing conditions and higher taxes, it is expected that many operators will try to circumvent the new system and continue to offer their services illegally.

It will be up to the government and the regulator to verify every gambling company catering to local players, and take measures against the ones that don’t obey by the new rules. And this will be quite a challenge.

Officials say there are several measures they can take to stop foreign operators from targeting UK customers, including disrupting financial transactions, blacklisting or blocking them, as well as prosecuting the offenders.

Making it safer for players

The British gambling market is not only vast, but also well established and well built. Gambling companies operating here have access to everything they could ask for, including sophisticated marketing, communications and infrastructure.

But while operators enter a world of opportunities when they open up shop in Britain, players can expect some of their favorite online and mobile casinos to disappear because of the new legislation.

On the bright side, companies that remain on the UK market will have to publish their RTPs (return to player percentage). The gaming regulator has also promised that there will be an active player complaint service, which will actually work properly and offer answers to gamblers’ questions or complaints.

The measures included in the new law are meant to ensure that users feel safer and all software used by online casinos will also have to be accredited and licensed by the Gambling Commission.

Should I stay or should I go?

… is probably the question on everyone’s mind, at the moment. It looks like politicians are done being generous with companies who run online gambling sites in the UK. Knowing full well how valuable the British gambling market is, officials have decided to make operators pay to have full access to it.

Operators with a strong client base outside of the UK will probably withdraw from Britain. But the question is what will the other ones do? Will they accept to pay more for the “privilege” of catering to UK residents? Most believe reputable online operators will suck it up and comply with the regulations.

For operators who are not interested in the UK market, sports sponsorship is likely to create problems. This has become an important promotional activity for international companies, but what’s the point in sponsoring a team when you can’t sell your services to its fans?

In the FAQ section of its website, the Commission observed that online companies who blocked UK punters would still be allowed to maintain their partnerships with British teams, while at the same time acknowledging that only the court can provide a definitive view on the legality of the scheme.