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New regulatory bodies and deposit caps on the cards for UK casinos

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A new report has been released by the Social Market Foundation (SMF), a ‘non-partisan think tank’ that researches and runs events to cover a wide range of social policy areas.

The report in question was released ahead of the UKGC’s revision of the 2005 Gambling Act. Several policy recommendations have been put forward in the report and calls for more control in the gambling sector.

The following 5 key topics are covered in the Gambling Review and Reform report that was published on the 5th of August 2020. The lead authors are Dr James Noyes and Jake Shepherd.

1. A look at gambling licenses

It is claimed by the report that the 2005 Gambling Act is no longer adequate as its integrity, and that of the British gambling licences as a whole, have been eroded. This “erosion” has taken place over time due to regulatory failure and industry malpractice.

The authors recommend that a mandatory kitemark for all licensed operators is introduced. The report also states that the ‘white-label’ scheme should be ended and a new transparent regulatory system be put in place.

2. Limits on stakes

In order to control remote gambling, and in particular, online gambling, the authors of the report recommend that strict limits be placed on online slot games.

This limit would be between £1 and £5 and would apply to all online slots but not to other forms of online gambling. It’s stated that the report “accepts that similar limits would make that content commercially non-viable”.

3. Limit monthly deposits

In order to protect players, on the whole, the report recommends that affordability of players should be analysed based on income and living standards. Based on their own analysis of this data, a £100 monthly “soft cap” should be set on deposits.

The report lead author, Dr James Noyes had this to say about the issue of affordability:

“For too long, gambling operators have talked about the need to protect their customers, but have not worked together in order to make affordability checks a reality. A fixed cap that applies across operators is the only way that consumers can be protected from harmful spend.

Our proposed threshold sets the bar low enough to protect everyone, including those on low income, but is high enough to reflect the vast majority of gambling activity among the general population. Gamblers should be free to spend more than this threshold – but only after they show that their gambling is neither unaffordable nor harmful.”

4. Taxing gambling operators

The report calls on the government to thoroughly overall gambling legislation and how taxes are affected. It’s is recommended by the authors that the onshore ‘footprint’ of operators is assessed in terms of their threshold of capital earned, as well as their presence in the UK, whether in terms of human, social, legal or digital.

“We need to see an end to the problem of offshore gambling tax avoidance. Gambling taxation should be redesigned around a system of incentives which reflect a company’s level of onshore presence,” said Noyes.

“This means that operators could still decide to base their headquarters in locations like Gibraltar, the Isle of Man, or Alderney, but that decision would carry significant tax implications. The message to online gambling operators should be clear: if you want to benefit from the British market, then make a commitment to being based in Britain.”

5. New regulatory framework

Finally, the report calls for a complete overhaul of the current regulatory bodies that exist. They recommend a new ‘Gambling Quartet’ that will include:

  • A Gambling Licensing Authority (to replace the UKGC)
  • A new Gambling Ombudsman
  • Research, Education, and Treatment body
  • Oversight of advertising, the Lottery, and sporting and cultural events

“Our gambling laws were determined by a legislative review that is now almost 20 years old. Since then, online gambling has transformed the industry’s financial and social impact beyond recognition. The forthcoming Government review should be seen as an opportunity for a radical overhaul. Our laws and regulations need to catch up to ensure that British taxpayers get a fair deal,” said Noyes.

Whether or not these recommendations will come into play once the government has looked at the 2005 Gambling Act remains to be seen. But it is clear that transformation of some sort is needed to update and safeguard the gambling industry in the United Kingdom.

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