With 73% of the UK’s 35.5 million counting adult population gambling, according to the the British Gambling Prevalence Survey from 2011, the gambling industry in the UK can be called dynamic. Though this number involves lotteries, casinos, betting shops and bingo clubs too, other numbers show online gambling is rather popular too. It seems that 4% percent of those surveyed had bet online while 13% participated in any form of online gambling such as online poker, casino games or online bingo.
Statistics UK gambling industry
According to the Gambling Commission’s Industry Statistics published on June 2013, the British gambling industry generated gross gaming yield (GGY) of £6.17bn, between October 2011 end September 2012, of which less than 20% generated by online gambling. No big surprise is that half of the entire gambling market in the UK is made up by land-based betting shops , followed by the casinos with a 15% market share. I expected bingo to be bigger in the UK, but it seems that bingo accounted for 12% only, even less than online gambling. The UK gaming industry employs more than 108,000 people of which betting is by far the largest contributor thanks to the impressive amount of 9,112 betting shops that can be find throughout the UK.
Gambling Act 2005
Gambling in the United Kingdom has been prevalent for hundreds of years even though prohibited until 1960, when the first Betting and Gambling Act was introduced. This legislation was replaced by the Gaming Act 1968, which eventually led to the Gambling Act 2005, that came into force in 2007. Until December all forms of online gambling in the UK falls under recent legislations referring to the Gambling Act 2005. This gambling act is the primary piece of UK’s gambling legislation and regulates gambling in the UK, including bingo, lotteries, casinos, gaming machines as well as online gambling (remote gambling).
The UK gambling regulator, the Gambling Commission, has the task to keep the entire gambling industry crime free, to ensure gambling is fair and open, and is responsible for the protection of children and other vulnerable persons from being harmed or exploited by gambling.
Taxing online gambling on a place of consumption basis
So far the UK permits offline gaming, betting and participating in lotteries while having a liberal regime regarding online gambling. This regime allows UK licensed operators, as well as operators licensed within a “white-listed” iGaming jurisdiction or jurisdictions part of the European Economic Area (EEA), to advertise and locate some of their operations in the UK without paying the standard UK gambling taxes. Also does the Gambling Act 2005 not prohibit foreign operators from outside the abovementioned EEA jurisdictions or “white-listed” iGaming jurisdictions to accept players from the UK. The Gambling Act 2005 does prohibit such operators from advertising their sites in the UK or targeting UK residents. This liberal regime is about to change and a new legislation is awaiting debate in parliament as the government moves to introduce point of consumption licensing. This new legislation will bring the current white-list system to an end which will be replaced by place of consumption taxation by December 2014. This simply means that from that moment on all online gambling by UK players will be subject to UK taxation.
The Gambling (Licensing & Advertising) Bill
Published in December 2012, The Gambling (Licensing & Advertising) Bill seeks to introduce a point of consumption licensing system for online gambling in the UK. It is since October 17, 2013, the bill is still awaiting its second reading in the House of Commons. Once approved all operators transacting with UK players would then be required to hold a UK licence.