History

Horseraces have taken place in England since at least the 16th century, and lotteries began in the Elizabeth era as a means of raising funds for public projects. Card games and other forms of gambling have held varying reputations. Some groups have viewed them as acceptable pastimes and even ways to sharpen the intellect, while others tried to ban them for moral or religious reasons.

Article summary

  1. History
  2. Legislation, Regulation, and Taxation
  3. Requirements for License Holders
  4. Operating Conditions
  5. Player Statistics
  6. Industry Statistics
  7. Projections

Between its proponents and its enemies, gambling has sometimes been banned and always been heavily regulated in England. The list of laws related to gambling stretches all the way back to the Unlawful Games Act 1541, which prohibited all forms of gambling but was never enforced.

Laws that outlawed off-track horserace betting in the mid-to-late 19th century resulted in resourceful bookies discretely setting up shop in pubs and slipping bribes to policemen to look the other way. Other laws in the same time period banned most forms of gambling, forcing it underground and leading it to be associated with various forms of crime.

Two Royal Commissions on Lotteries and Betting were established in the early 1900s to examine how gambling could be reformed in order to reduce crime rates and increase government revenues. Eventually, this led to the 1960 decision that gambling could take place in government-licensed betting shops. A string of other laws followed, regulating casino construction, gambling establishment amenities, and advertising.

For the purposes of establishing clear rules for the gambling business and monitoring and controlling turnover, the Gambling Act 2005 established the Gaming Board for Great Britain, which was replaced by the Gambling Commission in 2007. In addition to the regulation and licensing of gambling, the Gambling Commission also researches the gambling market in the UK.

Compared with other countries, the British model of regulating the gambling business is perhaps the most beneficial for all participants - operators, punters, and the government.

Legislation, Regulation, and Taxation

Gambling in the UK is governed by the Gambling Act 2005, which replaced the previous series of laws with a codified set of regulations. Gambling activities are supervised by the Gambling Commission, which issues licenses for online and land-based gambling. For land-based gambling, operators must also acquire a Premises License from their local authorities.

Operators who want to conduct online gambling activities within the United Kingdom are required to obtain a license. There are different types of license for each online gambling activity:

  • Remote Gambling Software License – for software suppliers;
  • Remote General Betting Standard – for online betting on real and virtual events;
  • Remote Casino License - for online casinos;
  • Remote Society Lottery License - for online lottery operators, including local authority lotteries;
  • Remote Bingo Operating License – for providers of online bingo services.

There are also different licenses for non-remote gambling establishments and gaming equipment manufacturers. Private business owners can obtain a personal management license. Gambling operators are taxed at 15% of gross gambling revenue. Players are exempt from taxes on winnings.

Application and licensing fees depend on yearly Gross Gaming Yield. Find a schedule of application fees for a remote casino operating license below.

Fee Category Annual GGY* Application Fee
F1 Less than £550,000 £2,640
G1 £550,000 or greater, up to but excluding £2 million £6,452
G2 £2 million or greater, up to but excluding £5.5 million £6,452
H1 £5.5 million or greater, up to but excluding £25 million £10,147
I1 £25 million or greater, up to but excluding £100 million £14,896
J1 £100 million or greater, up to but excluding £250 million £23,977
K1 £250 million or greater, up to but excluding £550 million £33,832
L1 £550 million or greater, up to but excluding £1 billion £57,304
M1 £1 billion or greater £57,304

Find a schedule of yearly licensing fees for a remote casino operating license below.

Fee Category Annual GGY* Annual Fee
F1 Less than £550,000 £2,709
G1 £550,000 or greater, up to but excluding £2 million £6,488
G2 £2 million or greater, up to but excluding £5.5 million £9,480
H1 £5.5 million or greater, up to but excluding £25 million £13,307
I1 £25 million or greater, up to but excluding £100 million £35,541
J1 £100 million or greater, up to but excluding £250 million £68,146
K1 £250 million or greater, up to but excluding £550 million £136,455
L1 £550 million or greater, up to but excluding £1 billion £57,304
M1 £1 billion or greater £512,083 plus £125,000 for each complete additional £500 million of annual gross gambling yield above £1 billion

*GGY = Gross Gambling Yield

For complete information on licenses and fees that are required for every class of operator and provider, visit the UK Gambling Commission’s website. The license gives the right to conduct gambling activities on the territory of the United Kingdom for a period of up to 12 months.

Requirements for License Holders

The UKGC (United Kingdom Gambling Commission) license is considered one of the most reputable in the gambling industry. The regulator has high performance requirements for operators in order to protect the interests of the players, so gambling websites are subject to regular inspections.

According to Gambling Commission standards, licensees are required to independently and regularly organise and conduct performance audits, as well as complying with all of the commission’s technical standards.

Operators must implement awareness programmes aimed towards at-risk players in order to control and limit their access to gambling sites. Online casino websites are required to have a warning informing visitors about the risk of gambling addiction. The regulator requires operators to inform users about the dangers of gambling and the self-exclusion option.

In the event of a failure to comply with the rules, the UK Gambling Commission applies penalties to operators, including the loss of their license. However, these stringent regulations of gambling activity result in higher player trust around the world.

Among the well-known license holders operating in the UK are such leading companies as William Hill, BetfairGroup, Microgaming, 888 Holdings, Bet365, Ladbrokes, and others.

Operating Conditions

In the UK, gambling operators must adhere to strict requirements for software reliability, business transparency, social responsibility, and the protection of players’ personal data.

The software used on the online casino website must be licensed, certified, and protected with cryptographic encryption.

The gambling vendor takes full control of the process of collection, storage and transfer of personal data of users to third parties. At the same time, the user must give their consent before his/her personal data can be processed.

Gambling operators must resolve any disputes that arise through independent third-party organizations. Operators must choose an alternative dispute resolution (ADR) body from the approved list available on the Gambling Commission website.

Gambling websites must comply with technical standards and requirements equivalent to international standards (ISO). ISO is used by the UK regulator as a measure of reliability, quality, and security.

The licensee is obliged to provide the regulator with the following information:

  • Suspicious Activity Reports (SAR's) to the National Crime Agency (NCA) regarding potential money laundering;
  • Information for Alternative Dispute Resolution (ADR);
  • Information on developments in the company's management system: change of heads, managers, management updates, etc.;
  • Facts about information security breaches: hacking, unauthorized access, data leakage, etc.;
  • Information about the company’s key events;
  • Risk assessments at the local level;
  • Information on the protection of customer funds;
  • Normative documents;
  • Information about suspicious gambling behavior.

Operators must also ensure that any elements of fraud are excluded, that gameplay is fair and transparent, and that children and at-risk individuals are not allowed to gamble.

Player Statistics

According to a 2018 survey by the UK Gambling Commission:

  • 46% of British citizens had participated in gambling in the last four weeks. This is down from a year earlier, when this figure was 48%.
  • 32% of respondents had gambled in the previous month, excluding those who only participated in the national lottery.
  • 18% of adults have gambled online for the past four weeks, the same percentage as December 2017.
  • 55% of online players have gambled through a mobile phone or tablet, up from 51% in the previous year.
  • 0.7% of respondents are identified as adults at risk of experiencing problem gambling.
  • 3.5% of players are at a low or medium level of risk for problem gambling.
  • 23% of online players bet in-play on sports.This is down from 26% in December 2017.
  • 6% of gamblers have self-excluded, the same as the year before.
  • 30% of respondents consider gambling a fair and trustworthy activity, down from 33% in December 2017.
  • 38% of individuals associate gambling with crime, down from 41% in December 2017.

  • 48% of men and 41% of women participated in some form of gambling
  • The National Lottery is one of the most popular gambling in the UK, but participation is declining.
  • Online gambling is growing significantly, while land-based gambling establishments are becoming less popular.
  • 33% of players gamble at least once a week.

Distribution of online gamblers by gender and age as follows:

As can be seen in the above graph, gambling participation is more common among males than females, and rates of gambling participation rise with age until the age of 64. Curiously, when asked about their motivation for playing, women were more likely than men to respond that they gambled to win, and men were more likely than women to say they gamble for fun and enjoyment.

The most popular online games in 2018 were fruit-themed or other kinds of slots, played by 59% of online gamblers. The next most popular was bingo, followed by casino games and poker.

According to the same survey, 17% of UK gamblers participated in gambling activities once a month, 31% did so more than once a month but less than once a week, 32% gambled once a week, and 20% gambled at least two days a week.

Industry Statistics

According to the UK Gambling Commission, for the year of 2018, the gross gambling yield of the entire UK industry was £14.5 billion. This was a .4% decrease from the year before. However, the remote sector’s GGY was £5.6 billion, an increase of 2.9% from the previous year, indicating that the growth of the online sector may be coming at the expense of the non-remote sector. £2 billion of the total GGY for the remote sector was accounted for by online slots, a 1.7% increase from the previous year. The remote betting, bingo and casino sector has roughly a 39% market share, up from 35% the year before.

Projections

The legislative situation in the United Kingdom has created a safe and profitable environment for both remote and non-remote gambling, and there is a widespread cultural acceptance of it as a pastime.

Overall gambling revenues continue to rise, even if some non-remote revenues are being stolen away by the remote sector, which is experiencing faster growth.

Forecasts indicate that revenues should continue to grow, especially in the online sector, with some expert predictions calling for online gambling revenues alone to climb over £6 billion, a growth of over 7%. However, there are also projections that the industry might have increasing regulations to deal with, as well as an increase in tax rates to 21% for online bingo, casino and poker games.

Tax increases are sometimes interpreted as a government realization that profits have already increased by a substantial amount, and stand to continue doing so. The strong revenue growth predicted in the online sector would cement the UK’s status as the biggest regulated market in the world.

With a number of established industry leaders a good environment for start-ups, the UK online gambling market has strong potential for consistent growth.