Some Bets are off: Gambling Commission tightens up rules during lockdown

June 3, 2020

2 min read

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What's going on here?

The UK Gambling Commission has released additional guidance for remote gambling operators on 12 May, tightening rules for online gambling during the COVID-19 crisis.

What does this mean?

Under the Gambling Act 2005, gambling is regulated by the Gambling Commission in the UK. The new guidance is a response to shifts in gambling attitudes provoked by the lockdown. Particularly, the Commission was concerned by an increase in online gambling (25% increase in online slot machine usage after one month of lockdown), as well as more “engaged gamblers” who are spending more time and money in gambling pursuits. Substantively, the new rules require online gambling operators to undergo stricter monitoring of customers’ financial circumstances. This includes implementing blocking mechanisms for players with affordability issues and flagging up excessive time spent on the gambling site, to name a few.

What's the big picture effect?

The UK’s shift towards more stringent gambling regulations here is not nor purely due to the COVID-19 pandemic. Previously, the UK Children’s Commissioner called for an amendment of the Gambling Act so that loot boxes in gaming would be classified as gambling. This indicates that concerns about virtual currencies and recreational use of money online is viewed as a threat to public health. The public health concerns in the Children Commissioner’s report are echoed by this most recent Gambling Commission’s report. For instance, both speak of the financial harms of online gambling/in-game purchases and both recommend tracking time spent on the sites. 

These new online gambling regulations may pose a particular issue for foreign operators providing services in the UK. One implication of stricter regulations is that operators have to produce different models of their services; one for the UK and one for other countries, which increases production costs. 

One question here is whether gambling operators will favour regions with more lax regulations. For instance, the EU is infamous for its loose and unpoliced gambling regulations. Fewer than half of the Member States enforce a  “no underage gambling” sign for gambling advertisements (arguably a basic measure), and there is no strict, unitary enforcement of the EU Commission guidelines across the Union. The inclination is to think that  “race to the bottom” deregulation is a clever tactic to attract gambling operators. By this logic, the UK might lose out by having stricter regulations.  However, we need to consider the national demand for gambling services. The UK is the 6th largest loss-making gambling country globally, despite having stricter regulations (e.g. Gambling Act 2005) than most. While compliance with these new laws may irritate gambling firms, they are unlikely to fold on the British market just yet.

Report written by Jacqueline Lee

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