UK LEGAL COMMENT


most regulated gambling jurisdiction in the world?


Is the UK set to become the


Northridge Law partner Melanie Ellis looks at the heavy level of regulation enjoyed in the UK gaming industry


S 30 DECEMBER 2019


ome might see this question and think “it already is!” and justifiably so. The combination of increasing regulatory requirements and enforcement action by the Gambling Commission has led some operators to leave the


market altogether in the past few months. However, the UK (or more accurately Great Britain, as most of the Gambling Act 2005 (the Act) does not extend to Northern Ireland) was one of the first jurisdictions to open the market for remote gambling and allow any company the opportunity to provide gambling services to local residents. The Act is based on the principle that the Commission must “aim to permit” gambling, so long as it is consistent with the licensing objectives, so the starting point is a liberal one. It might fairly be said, however, that the licensing objectives (preventing gambling from being associated with crime and disorder, protecting the young and vulnerable from being harmed by gambling and ensuring gambling is fair and open) have been raised in status over the past 12 years. From their original role as balancing factors to an open market, they seem to have become absolutes, which are to take precedence over all else. In 2007, when the Act came into force, operators based in the EEA and “white listed” jurisdictions (including Alderney, the Isle of Man and Gibraltar) were free to target British residents, alongside those holding a licence from the


Commission itself. Of course, this changed in 2014 when a “point of consumption” licence requirement came into force, with the aim of ensuring all those targeting the market were regulated by the Commission and subject to the same standards. As long as operators could choose to be licensed elsewhere, the Commission was restrained in how rigorous its approach could be – no company would obtain a local licence unless the playing field was reasonably level. However, the local licence requirement paved the way for increasingly burdensome regulation and Commission licensed operators will be only too aware that the cost of compliance has steadily increased since 2014. But, despite onerous requirements in relation to consumer


protection, AML and safer gambling, Great Britain remains very open in terms of the gambling activities that can be offered and the unlimited number of licences for online gambling (land-based casinos are a different story…). Licences are available to companies based anywhere in the world, provided they are able to demonstrate their suitability and that they will be able to comply with their licence conditions and the licensing objectives. The cost of licensing, especially for a start up with relatively low gambling yield, is also very reasonable, compared to many jurisdictions. Nevertheless, fuelled by political and media sentiment, the conditions, codes of practice and other restrictions imposed on operators targeting the British market are creating an increasingly challenging environment. The manifestos of the main political parties have made the direction of travel clear. None of them devote significant space in their manifesto to gambling issues, but all promise to review the current regulatory regime and impose new restrictions.


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