The Social Market Foundation (SMF) has just released a proposed comprehensive new framework of regulation and oversight for the gambling sector as it is now currently dominated by online play. The report’s release is timely as it comes before the UK government’s anticipated review of the 2005 Gambling Act, which ministers have deemed unsuitable for today’s era of online gambling.
UK legislators have identified the need to bring the dated Act in line with the current digital age as online gambling has increased in both popularity and profitability. With the rise of the number of players turning to online gambling, the need to review safeguards has risen as online gambling is not subject to the same regulations and control procedures that land-based content is subject to. This also follows a series of high profile cases such as when the UK’s Gambling Commission’s data collection revealed that betting firms get 83% of all deposits from only 2% of their customers, prompting the regulator to consider banning VIP schemes in Britain.
The SMF’s proposed framework is a roadmap for the gambling industry’s reform. Its recommendations seek to foster market fairness, improved regulation, and ultimately, to ensure that people are better protected from gambling-related harm. The cross-party think-tank has outlined the following key points for the framework:
- Gambling Licenses
- Gambling Content
- Gambling Affordability
- Gambling Tax
- Regulatory Framework for Gambling
For the topic of gambling licenses, the SMF has identified that these have been eroded by both industry malpractice and regulatory failure. The report outlines recommendations of how the confidence and credibility in British gambling licenses can be regained through various methods such as a mandatory kitemark for licensed operators, an end of white label scheme, and the need for a transparent regulatory sanction system, all in line with best practices in other sectors.
For gambling content, the framework prescribes an introduction of remote gambling system controls that are based around limits on stake and speed of play wherein online slot contents can be played with established limits of £1 and £5 per stake while non-slot contents, where similar limits would make the games financially unfeasible, should incorporate limits directly to the game’s design.
The report also touches on gambling affordability. After careful analysis of the UK’s current income and living standards, a soft cap limit of £100 per month is recommended. The cap already takes into consideration what gamblers already spend and accommodates a socially acceptable threshold, ensuring that gambling does not exceed the poverty thresholds of lower-income households in the UK. For those looking to spend more than the allotted weekly recommendations, they must prove that they are able to do so without difficulty.
The framework also recommends a total tax reform on how gambling operators are taxed. It seeks to incentivize onshore gambling operations through tax breaks as it places a greater burden on operators who operate offshore particularly in Gibraltar or the Isle of Man. The framework’s recommendations also heavily emphasize an operator’s footprint wherein more remote operations mean heavier Remote Gaming Duties and Betting Duties.
Finally, the framework also calls for a shake-up of public bodies that oversee gambling operators and gamblers, referring to the structures created by the 2005 Gambling Act as no longer fit for its purpose. The framework recommends that the Department for Digital, Culture, and Sport should no longer have the sole responsibility for gambling policy and must be replaced by a cross-government gambling quartet.