How is Internet Gambling regulated in the UK?

The Gambling Act 2005 for the first time subjected non-terrestrial forms of gambling, such as gambling over the internet, TV or through mobile phones, to regulation. We call these forms of gambling remote gambling. Unfortunately the Act tries to regulate internet gambling by allowing companies to advertise in the UK if they adhere to industry regulated standards. This means that gambling as an activity has become increasingly normalised, moving from the side streets onto the main streets and more and more in your face.

All companies based in the UK have to apply for a license from the Gambling Commission if they wish to offer gambling services of any kind and then can advertise their services. The Commission operates at arms length from government and is funded largely through licensing fees. It is an organization set up by the Gambling Act, and following the General Election in 2010 the Coalition Government have set out plans to merge it with the National Lottery commission. The new Commission will not only handle the licensing of gambling and the national lottery but will also have to ensure that companies keep to a code of conduct which among other things is meant to protect vulnerable people and children from the adverse effects of problem gambling and addiction.

However, because companies that provide remote gambling services to UK citizens are often based outside of the UK, the government needed some way of ensuring these companies would comply with some standard of regulation even though they could not be prosecuted under UK law. What they decided to do was to offer all remote gambling companies the right to advertise if they are based in a jurisdiction that is deemed by the British government to have equal standards of regulation as those found in the UK under the Gambling Commissions licensing code of conduct. These jurisdictions are said to be “on the white list.”

This means for example that a company based in Malta, which is on the white list, can advertise its services and web address on billboards in the UK, because the equivalent of the Gambling Commission in Malta ensures a standard of licensing which is equal to that in the UK. However, this settlement also means that advertising gambling has become more and more prevalent and will lead to an increase in gambling participation, which in turn will likely lead to more problem gambling and addiction.

The Government’s solution is compounded by a further problem, namely trade agreements at the EU level, which mean that all countries in the EU have to be treated equally when it comes to the free market. This means that all countries in the EU are automatically on the white list even though these countries do not have a similar level of regulation to protect the vulnerable or children. For obvious reasons this is not ideal.

Read more about the Licensing Conditions and Codes of Conduct.

Read more about the Gambling Commissions position in relation to remote gambling.