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Online Gambling Legislation in the UK

on 8/8/16 /posted by  admin

The UK currently have one of the largest online gambling markets in the world, with everything from sport bets to casino games easily available at the tip of any player’s fingers, where hundreds of online casino and betting operators can be found within a few taps of your phone’s keyboard.

However, to arrive at its current state, the online gambling world available to UK citizens had to go through several regulations, before the vast selection of online casinos could be made legally available to any British citizen like they are today. So, if you’re interested in finding out more about UK’s gambling regulations, take a look at this simplified breakdown. 

 The Gambling Act of 2005

After the previous Gaming Act of 1968 proved to be outdated for the modern casino industry, the UK’s Gambling commission decided to introduce some changes to stay in touch with the modern trends. The Gambling Act of 2005 was then drafted and passed in a hope of clearly outlining the implied sense of the gambling terms encompassed by the new law, but also regulating the scope of operation and manner of licensing of the casino and betting shops, so that social safety can be ensured. 

The most important regulations from the Law addressed the issuing of licenses which was handed off to local authorities (the boroughs) by the Law, the creation of the Gambling Commission, and the definition of the gambling categories, machine categories and the premises where they can be operated. The Act also opened the doors for the creation of “super-casinos”, i.e. large Vegas-style casinos that could be hosted by any bidding town. But, it wasn’t until 2014 that online gambling was specifically addressed by the new act drafted by the (then) decade-old Gambling Commission.

Gambling Licensing and Advertising Act 2014

In 2014, the Gambling Commission created an act that was to regulate the ever-expanding online gambling market. The act was a direct response to the massive numbers of UK citizen’s who played at online casinos which were completely exempt from any tax in the UK. 

The most important changes that the new Act brought was that the taxations of casinos in the UK should be henceforth conducted from the point of consumption (POC) rather than the point of supply (POS) which was the case so far. This basically meant that instead of only taxing casinos that supplied games to UK gamers from within the country, the Gambling Commission would now require taxes to be paid from any casinos that provided games to the country (the point of consumption), regardless of where they are based. The tax imposed was 15% of the gross profits made by UK gamers. 

And the second major provision was that any online casino that wanted to provide casino games to UK citizens or even advertise in the UK, would have to apply for an official UK license from the Gambling Commission, despite already holding a license from one of the white-listed countries previously freely accepted by both the Commission and government. 

Needless to say, the changes were met with shock from game providers, as the new taxation and licensing fees meant that there will be a major slash in profits, but also an unnecessary bureaucratic inconvenience of applying for a new license. The act was even challenged on a local level by the Gibraltar Betting and Gaming Association, but to no avail, as the provisions still remain to this day. 

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