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UK Casino Licence

The Gambling Act of 2005 modernized the gambling market in the United Kingdom. The modern approach to gambling regulation involved a new licensing system aimed to protect both players and operators.

A bit of British gambling history

Gambling is an activity loved by people like forever! The same goes for the British. All types of gambling were legal until 1541. This year, the English government introduced the Unlawful Games Act 1541 which made virtually all gambling illegal.

An interesting fact is that the country never really enforced the Act. However, it did mean that gambling debts could not be collected through court action.

In 1567, Queen Elizabeth established England’s national public lottery. England used the funds to repair the harbours. Prizes were awarded in 1569 with players receiving their money back following an interest-free loan.

A national lottery

In later decades, the government sold the lottery ticket rights to brokers. They hired agents and runners to sell the lottery tickets. Not many people could afford one lottery ticket, so the brokers sold them a share of a ticket. English lotteries ran for over 250 years, but it was in 1826 that the government, under constant pressure, declared a final lottery.

Meanwhile, the country adapted new acts in 1710, 1728, 1738, 1739, and 1744 with a focus on financial securities, illegal lotteries, and various popular gambling games.

In the 18th century, horse racing became well-established. The better-educated gamblers focused on racing. The telegraph proved to be efficient in spreading horse racing information across the country. A racetrack boom was a fact as the number of active horse racing events doubled between 1837 and 1869.

The Gaming Act 1845 was approved by the Parliament of the United Kingdom and legalized games of skill, made cheating a crime and simplified the regulation of gambling houses. The Act’s principal provision was to deem a wager unenforceable as a legal contract.

Betting houses

In the late 1850s, London, for example, had around 150 betting houses. New laws made such betting houses illegal, but the betting activities moved to the streets and the pubs.

Despite new gambling laws in 1853, 1854, 1874 and 1906, betting establishments remained popular in Great Britain. Casinos saw the light during the Victorian era, and gambling acts targeted such establishments in their efforts to stop gambling.

The Racecourse Betting Act of 1928 regulated betting on horse races, while the 1934 Betting and Lotteries Act took responsibility for the greyhounds. 

Gambling during World War 2

World War 2 came around and resulted in gambling losing popularity between 1939 and 1945. Time for anti-gambling organizations to use the emergency situation to shut down legitimate gambling activities.

Soon after, the government reversed the situation again. It was the government that noticed that gambling was a necessary psychological outlet. Especially in a time of highly restricted leisure opportunities. This led to the introduction of football pools, but also an increase in illegal bookmakers. The increase of football pools was taxed through the Pool Betting Duty of 1947.

Betting shops and casinos

The end of World War 2 also saw a peak in the greyhound racing industry. However, audiences started to decline with the opening of betting shops in 1961. Because that’s when the United Kingdom introduced the Betting and Gaming Act 1960 which also legalized private casinos.

Gambling in the United Kingdom has been prevalent for hundreds of years. Despite the fact it was prohibited until 1960, when the country introduced its first Betting and Gambling Act. This legislation was replaced by the Gaming Act 1968.

In the 1980s, gambling is big business in the United Kingdom. Betting shops are soon available on every high street. Bingo has become a popular form of gambling, which resulted in bingo halls occupying redundant cinemas.

Most national newspapers provide a racing service while offering news about football pools, and even operate their own form of lottery. The British saw their government setting up its National Lottery in 1994.

Gambling Act 2005

The Gambling Act of 2005 established the Gambling Commission and controls all forms of gambling. It gives authority for licensing gambling to local elected authorities. Its goals include breaking links with crime; ensuring that gambling is conducted in a fair and open way; and protecting children and other vulnerable persons from being harmed or exploited. There is a shift from legislative control to market control.

Until December all forms of online gambling in the UK falls under recent legislation 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).

Gambling Commission

The Gambling Act 2005 also established the Gambling Commission (UKGC) with the important task to regulate commercial gambling in the UK.

As a non-departmental public body (NDPB), sponsored by the Department for Culture, Media and Sport (DCMS), the commission regulates most types of gambling in the United Kingdom, including online gambling such as sports betting, poker sites and online casinos.

The Gambling Commission has the following functions:

  • Publication of guidance and advice
  • Licensing, compliance and enforcement
  • Research

As mentioned above, the Gambling Commission is responsible for the licencing of businesses that offer gambling (both offline and online), while providing them with advice and guidance.

The Gambling Commission is also responsible to keep the entire gambling industry crime-free and ensuring gambling is fair and open. More importantly, the commission must protect children and other vulnerable persons from being harmed or exploited by gambling.

Different types of UK casino licences

In order to offer your gambling services to UK customers, there are three types of licence that business owners may need. In certain situations, a business may need a combination of UK casino licences.

  • Operating licence from the UKGC
    • Needed if an operator provides remote gambling and advertises to consumers in the United Kingdom. There are three subtypes: Non-remote, Remote and Ancillary.
  • Personal management licence from UKGC
    • You must hold a PML when responsible for certain activities at licensed gambling operators such as financial services, regulatory compliance, gambling-related IT provision and security, and more.
  • Personal functional licence from UKGC
    • This licence is specifically for people that plan to be involved in gaming or handling cash in relation to gambling at a casino such as dealers and croupiers, cashiers, inspectors, gaming supervisors and security staff.
  • Premises licence from a local licensing authority
    • Companies need a premises licence from a local licensing authority to run a premises-based gambling business, for example, a betting shop, bingo hall or arcade. This is after a company already applied for an operating licence.

Online gambling in the United Kingdom

With the introduction of the Gambling Commission and the licensing system in 2005, all operators that offer online gambling are required under the Gambling Act 2005 to be licensed.

The licence approved by the Gambling Commission depends on the specific activities that they provide online:

  • sports betting
  • online casino
  • online bingo
  • online lottery

This means that gambling sites offering one or more of the above activities needs separate approval for each activity. Software suppliers are granted a licence by the Gambling Commission when their games are deemed safe and reliable, in order to offer their portfolio to operators.

White-listed iGaming jurisdiction

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 brings 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 Casino Licence.