The UK’s Gambling Act Review whitepaper became public in 2023, focusing on enforcing tighter regulation on gambling operators.
Unsurprisingly, this release assured players that as long as they gamble on regulated platforms, they are safe. It also proposed other means to tackle gambling addiction, like changing affordability rates, reviewing the concept of free bets, etc.
It’s been over a year since the act, and from observation, operators are having a difficult time adjusting to the new regulations. This seemingly harmless whitepaper has affected everyone. It touches land-based operators, horse racing, and even online casinos like Betway Casino. No one is above the law. After all, the aim was to enforce maximum standards, but maybe it happened too quickly.
With that said, we will explore the difficulties the gambling industry has faced since the policy came into being.
Overview of the UK Government’s Recent Gambling Regulation
The whitepaper outlining the UK Government’s recommendations was 268 pages long. Obviously, we won’t discuss everything here, so here’s a quick summary of the regulatory changes:
Players between 18 and 24 years can only stake a maximum of £2 on any bet.
Deposits of £500 or more must undergo checks by the operator. By February 2025, this threshold is expected to go as low as £150.
Operators must confirm player age and identity before allowing deposits or access to demo games.
The policy issues a rethink of free bets, bonuses, and wagering requirements. It also includes stricter regulations on the means of promotion of free bets.
If a gambler loses up to £1000 or £2000 within 24 hours or in the space of 3 months respectively, the operator must carry out frictionless affordability checks.
All these and more are the policy changes that come with the UK Gambling Whitepaper Act.
Challenges of this Regulation
Now, let’s look into its accompanying challenges. Here are some of them in depth.
Licensing and Responsibility
All gambling operators must get a licence from the UK Gambling Commission. To receive this licence, they must have fulfilled requirements for anti-money laundering schemes, fair gaming practices, financial stability, etc.
The problem is that meeting these standards requires dedicating funds to conducting background checks on each player. This could be time-consuming and capital-intensive, especially if the operator is a big name with a large number of users.
Heavy Cost of Compliance
Another consideration is the expenses that come with compliance. Due to these regulations, gambling platforms have to spend extra on investing in things like:
Approved technology solutions
Legal expertise
Staff training to put them on track
All these are necessary so they do not break the law.
Finding a Compliant Payment Solution
Considering the need to perform background checks on high-roller players, gambling platforms must partner with a compliant payment company. This may be especially difficult when offering services to international clients. So, casinos and sportsbooks must work with international payment processors with a deep understanding of the industry.
However, this is a hot topic because gambling operators then have to assess a player’s financial status. Only then can they determine if they tend to become addicted to gambling.
Balancing Regulatory Demands with Player Retention
This is another challenge that comes with the UK’s recent reforms. Due to the affordability and other background checks, players have begun to feel violated by the invasive scrutiny. The fear now is that the gambling industry may see a drastic reduction in the number of people who play casino games or wager on sports events.
This burdens each gambling operator to prove to its users that their information remains secure.
Potential Decrease in Gambling Revenue in the Region
Seeing how the number of gamblers may reduce in both online and land-based platforms, it’s only normal to expect a significant decrease in the UK’s gambling revenue. For example, a recent report stated that almost 57% of players in the UK would stop or reduce gambling if they had to undergo these checks. Consequently, the yearly revenue will drop as much, if not more.
Wrap Up
Surely, the UK government has the players’ best interests in mind, but it may need a little evaluation. Just like it has upsides, it also brings about some challenges that are hard to ignore. But will they act on it? We can’t say for sure. We’ll only have to keep looking at what will happen in the near future.
Read more:
Key Regulatory Challenges for the UK iGaming Industry in 2024