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Angel Hristov April 27, 2023 8 min read
White Paper Offers Ample Changes, Industry Hails Its Arrival
The white paper has finally been published after a long string of delays caused by the turmoil in British politics and the macroeconomic situation.
Gambling in the United Kingdom is about to change as the Gambling Act white paper is finally out. The document outlines a number of proposals that can be taken to lower the problem gambling rates in the country and protect children from harm.
The review seeks to modernize the British law, which has remained largely unchanged since 2005. To that end, the DCMS used an evidence-led approach to probe into the current gambling ecosystem and see what needs to be changed. The department reported that it has received 16,000 submissions from various interested bodies to its Call for Evidence.
When outlining proposals, the government sought to balance customer freedom and player protection. The goal of the policy is to minimize player risks while allowing those who enjoy gambling safely to remain undisrupted. However, the white paper also seeks to prevent gaming companies from placing commercial objectives ahead of customer well-being.
Loss and Stake Limits Made It into the Paper
Gambling is a popular pastime in Britain but around 300,000 customers are currently experiencing problem gambling. Addictive tendencies are proven to be disruptive to people’s lives and relationships and may sometimes even lead to suicide.
As a result, it was imperative to address some of the outdated practices in the Gambling Act 2005 and modernize the law. For example, online gambling is now more popular than it has ever been. Sadly, evidence suggests that the vertical tends to cause more harm than traditional gaming.
Because of that, two of the most suggested measures, namely financial risk checks and stake limits, made their way into the white paper. The UKGC will now consult background checks at moderate and higher levels of spend. The white paper proposes loss limits of £125 net loss within a month or £500 within a year at a moderate level and £1,000 net loss within 24 hours or £2,000 within 90 days at a higher level of spend.
The white paper proposes halving these numbers for young adults aged 18-24. It also promised that these checks will be seamless and will target only 3% of players.
The UKGC will also review the design of iGaming titles, making sure that they are not too addictive. As a result, the white paper proposed a stake limit of between £2 and £15 per spin for online slots.
In addition, operators were advised to take steps to prevent at-risk customers from opening new accounts to circumvent the rules. Data sharing for non-commercial purposes might be the right approach, according to the paper.
Finally, the paper proposes regulating games with highly sought-after prizes such as luxury homes or cars, which can be very appealing to players.
Advertisements to Be Regulated
The white paper also outlines a variety of advertising and marketing changes. Since gambling advertisements are known to exacerbate harm among problem gamblers and are rumored to affect children, amendments are needed.
The white paper noted that the UKGC is already strengthening restrictions on online VIP schemes that may sometimes harm players. The commission will now work on reviewing how bonuses and free bets should be designed so as to not encourage excessive gambling.
In addition, providing extra power to the customers and allowing them to control what ads they receive, is another major proposal. Such controls will be consulted by the UKGC.
Operators, on the other hand, should leverage hi-tech solutions to make sure that their ads do not appear to children and at-risk people. The white paper commended operators that have adopted such measures and advised others to do so too.
Gambling sponsorships were also commented on as the white paper commended the EPL for its decision to remove gambling sponsorships from the front of player jerseys. Celebrities, such as pro athletes can oftentimes affect the opinions of young people, which is why sponsorships are considered very dangerous.
Because of that, the white paper also commended that governing bodies across the sports sector have banded to create a cross-sport gambling sponsorship code that is yet to be fully refined.
In addition to making sure ads do not advertise to vulnerable groups, the white paper proposes strengthening gambling education and teaching more people about the dangers of irresponsible gambling. The UKGC, the DCMS and the Department of Health and Social Care will work together to determine the most effective approach.
The Mandatory Levy Is on the List
Meanwhile, the UKGC fees will be reviewed to make sure that the authority has the resources to continue improving the market. Currently, the commission has less flexibility to adjust its fees than other regulators.
As gambling evolves, the UKGC will become “more proactive” in regulating the market and analyzing data from the UK market. If the commission has more resources, it will be able to better tackle breaches.
The white paper emphasized that some fear that regulation will channel some players toward the black market. However, this does not mean that the legal market should avoid introducing new rules when needed.
The white paper proposed providing the UKGC with more enforcement power, allowing it to request IPS and payment provider blocks for illegal operators – powers that operators in certain markets already have.
In addition, more funding will be needed to continue gambling research, education and treatment (RET), ensuring the long-term sustainability of the sector. Because of that, the white paper advocated for the introduction of the long-discussed statutory levy that would replace the current system of voluntary donations. The exact details of the levy would be further discussed in order to make it fair and proportionate.
At the same time, the government will co-host workshops with UK Research and Innovation to encourage further research on gambling.
An Ombudsman Should Address Customer Complaints
The white paper also addressed the matter of customer complaints. Alternative dispute resolution providers receive as many as 2,000 complaints a year, relating to breaches, gambling harm and safer gambling. However, the UKGC cannot keep up with everything, forcing some customers to seek costly resolutions in court.
Seeking to address that, the white paper proposed the creation of an ombudsman that is fully operationally independent and credible with customers.
The newly-founded body would address complaints, helping customers resolve their problems with gambling operators. Gambling operators will be expected to cooperate with the ombudsman.
The white paper urged for greater care for minors since certain products are still legal for 16 and 17-year-olds. Moreover, minors between 11 and 16 are known to play illegally, making it very important for operators to be vigilant. The white paper advised iGaming operators to at least voluntarily prevent 16 and 17-year-olds from playing.
All operators were also asked to be diligent when verifying the age of their customers. Pubs, for example, are not adult-only venues but oftentimes offer slots that should be for adults only.
The paper added that gambling is legal for young adults but can still be harmful. It asked operators to increase their protections for such vulnerable groups.
Changes to Brick and Mortar Venues Are Also Planned
The white paper also envisions certain changes to the land-based industry. Smaller casinos will be allowed to benefit from more machines on a pro-rata basis. This decision will still take in mind the venues’ non-gambling space and table-to-machine ratio. Furthermore, casinos of all sizes will be allowed to add sports betting to their offerings.
The 80/20 ratio that governs the balance of Category B and C/D machines will be changed to 50/50, providing venues with a higher degree of flexibility. However, the technical standards for session limits across Category B and C machines will be reviewed.
Bingo venues might be allowed to offer side bets in the future, the white paper added.
Taking the precarious macroeconomic situation in mind, the paper proposed allowing high-end casinos to offer credit to international visitors, so long as they have undergone certain checks outlined by the UKGC. This will nurture tourism and help big venues deal with the impacted tourism rates.
The DCMS and the UKGC will also discuss the future of cashless payments and decide whether the prohibition on the direct use of debit cards should be lifted.
Finally, the white paper proposed providing local authorities with more power to govern gaming in their area. In a bid to increase these authorities’ confidence in using these powers, the paper proposes aligning the regimes for alcohol and gambling licensing by introducing cumulative impact assessments.
The Changes Might Hurt the iGaming Sector
In conclusion, the DCMS is confident that the measures outlined in the white paper will improve player protection in the UK and will address practices and products which can cause or exacerbate harm.
Still, the department noted that the exact impact of the proposed measures cannot be reported with exactitude before they have been applied.
The white paper noted that the proposals might cause certain difficulties to the gambling industry, including a projected 3% to 8% reduction in gross gambling yield. The online gambling industry might be further impacted, with the DCMS projecting a GGY reduction of 8% to 14%.
In the future, the DCMS will also review the horserace betting levy which companies will be required to undertake by 2024.
You can read more about the changes proposed by the paper on gov.uk.