What is the UK's Gambling Act 2005?

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Gambling has been around in the United Kingdom in a form that resembles the current legal landscape for decades, with roots reaching even before World War II. The Betting and Gaming Act 1960 opened the way for things such as bingo halls and proper casinos to open in Britain, with the Gaming Act 1968 liberalising the law and making it easy for increasingly commercialized casinos to be built.

The Gambling Act 2005 is the most recent major update to gambling laws in the UK, and the most important for our purposes because it was the first to truly address online gaming. The other changes the Gambling Act 2005 brought about included transferring authority for licensing gambling from the Magistrates’ Court to local authorities or licensing boards, establishing the UK Gambling Commission, the regulation of illegal lotteries, and opening the door for potential “super casinos” in Britain.

Three Primary Objectives

The Gambling Act 2005 was formed with three primary objectives:

  1. Preventing gambling from being a source of crime or disorder, being associated with crime, disorder, or as an accessory to crime.
  2. Ensuring that gambling is conducted in a fair fashion.
  3. Protecting children and other vulnerable persons from being harmed or exploited by gambling.

Gambling Commission

To meet these standards, operators must answer to the Gambling Commission and prove they are financially stable and capable of maintaining that status, as well as proving their games are fair to players. The Commission itself regulates not just online gambling in the United Kingdom, but ALL forms of legal gambling, save spread betting which falls under the purview of the Financial Conduct Authority. By and large the Commission has been successful in its duties.

UK Forced to Address Online Gambling

Online gaming was included in the Gambling Act 2005 due to the increasing number of UK gamblers in recent years, with a 2010 survey showing that 4% of adults in the United Kingdom had bet online, a number that jumps to over 11% if the National Lottery is included. The online sector at the time was shown to be worth a 12% market share of the UK’s entire (regulated) gambling industry in that same time frame, an amount that was valued at nearly $2 billion.

2014 Brings Change

The original bill allowed for the operation of online gaming providers in the United Kingdom, with regulation being left up to the territory in which they obtained their license. As a result, many online gaming companies moved their operations to smaller territories such as Gibraltar, where taxes on business can be as low as 1% of gross revenue. In response to those movements, and with an eye towards stricter regulation and increased tax contributions, a number of sweeping changes were made to the law in 2014.

Following the changes, which came into effect in December 2014, all gambling operators in the United Kingdom must obtain a license directly from the Gambling Commission. They are also required to inform the commission of how they are policing their sites, and those already possessing a license from another jurisdiction are subject to a fee to transition to the Gambling Commission license.