Member Article

Redefining Gambling in the United Kingdom: An Extensive Case Study of the UKGC

The Tenets of UKGC Regulation

The United Kingdom Gambling Commission a.k.a. the UKGC, is the sole regulatory and licensing authority in Great Britain. It is wholly responsible for issuing gambling authorization to individuals, businesses and national lottery providers operating within the United Kingdom. The UKGC is also a progressive institution with wide-ranging powers to control, monitor, and offer assistance to individuals, companies, and gambling providers. This includes issues related to problem gambling activity, charitable fundraising opportunities, and the like.

The United Kingdom Gambling Commission provides a user-friendly approach to stakeholders with a full spread of gambling-related options in the form of consultations, codes of conduct, eServices online applications, et al. The costs and conditions related to online gambling licensing are fully covered by the comprehensive services offered by the UKGC. In the United Kingdom, there are 3 unique types of licenses that businesses may require, including premises licenses from the local authority, UKGC-issued personal management licenses, and UKGC-issued operating licenses.

The fully regulated nature of the UKGC and gambling activity in Great Britain is designed to protect the industry and stakeholders, as well as the public at large. In Britain, personal functional licenses are required by slots attendants, blackjack dealers, Roulette croupiers, casino management and the like. The application process for a gambling license must comply with the terms and conditions of the Gambling Act 2005. According to this legislation, annual fees must be paid in full up front, or the operators may forfeit their license. There are no refunds on license application fees or annual fees, unless an overpayment was made.

The strict compliance requirements are designed to set a high standard in Britain, and this is precisely what the UKGC has succeeded in achieving. Licenses in the United Kingdom are required for a wide range of gambling services including: lotteries, gaming machines, gambling software, bingo, casino, arcades, and betting. Fees are paid in full on non-remote operating licenses, remote operating licenses, and personal licenses. How Effective is UKGC Licensing and Regulation on Gambling in the Britain? Over the years, the UKGC has been instrumental in liberalising gambling activity in Britain to the point where it is now the world’s most progressive gambling economy. The UKGC has conducted extensive surveys, where it evaluates public opinions on gambling. According to the UKGC survey in 2010, 78% of Britons believed that legal-age gamblers should be allowed to play whenever they wanted. This dropped to 67% by 2016.

Additionally, there has been an increase in the number of Britons who believe that gambling should be discouraged, up from the 2010 figure of 36% to 55% by 2016. These statistics point to a rising awareness of gambling risks and benefitsamong legal-age players, thanks to the responsible gambling codes of conduct promoted by the UKGC. The UK has the honour of being the largest active regulated gambling market in the world. Statistics show that there are some 21 million active accounts in the UK, ranging from sports betting, poker, bingo, casino, and lottery-style gambling. UK regulation requires that operators are committed to fairness, customer support and identifying people with gambling problems. The industry makes a point of promoting responsible gambling conduct.

**Public Concerns and Brexit-Related Concerns Weigh on Gambling Activity **

The above graphics indicate a short-term trend in gambling-related interest in the United Kingdom. In the UK Gambling Stats graphic, it is clear that the total gross gambling yield (GGY) in the United Kingdom was £13.8 billion (October 2015 through September 2016). With well over 106,000 employees in the UK gambling industry, Britain remains at the forefront of global gambling. The trends indicate a decline in the total number of employees, betting shops and bingo premises throughout Great Britain. There has also been a decline in the number of gaming machines quarter on quarter. Contributions to charitable causes through the National Lottery are £1.6 billion (April 2016 through March 2017), however this indicates a decline of 15% from April 2015 through March 2016. In much the same way, Public Opinion on Gambling in the UK indicates changing attitudes over time.

The modest declines in the performance of the UK gambling market are largely attributed to Brexit-related concerns. On June 23, 2016, Britain voted 52%/48% to break from the EU. The GBP plunged to a 31-year low in short order, falling from 1.48 to the USD to 1.19. This resulted in rising import costs, tightness in labour markets, and slow real wage growth. This has affected the personal disposable incomes of Britons, and has been attributed to the marginal declines in gambling activity. Data indicates that gamblers in Britain are more inclined to use social media for their gambling activity, with 26% of gamblers on Facebook, and 15% of gamblers following gambling companies on Twitter. A total of 21% of legal age Britons have played online gambling-style casino, bingo, lottery, slots and table games. In Britain, the UKGC works diligently to achieve a socially responsible agenda. The gambling enforcement policy has expanded the range of powers for land-based and online gambling operators in Britain. To this effect, the Raising Standards Conference was recently hosted, geared towards informing operators and providing the necessary education to stakeholders. Such is the progressive nature of gambling activity in Britain, that the UKGC published a report stating that some 1,900 gambling operators have seen fees reduced by at least 10%. Greater efficiency of operations, control mechanisms and licensing procedures have helped to bring down costs dramatically.

**Fees Received by the UKGC **

Further, the UKGC has streamlined testing operations to allow minor technical glitches to be corrected without third-party testing to be conducted. According to official stats, some 2800 operators are managed by the licensing department of the UKGC, and some 18,000 individuals are under its control. In 2016, the UKGC processed some 280 license applications and some 2300 individual license applications.

The UKGC is also one of the strictest industry watchdogs for online gambling activity, having enforced 71 criminal and regulatory investigations in 2016, including a prosecution of £3 million against a lottery operator named Camelot. The no-nonsense approach to regulation has made the UKGC one of the most respected gambling authorities. According to the UKGC, betting remains the biggest income generator with 27% of all income, followed by casino at 27%, business-to-business supply at 24%, arcades at 7%, lotteries at 6%, bingo at 5%, and personal licenses at 4%.

The pre-stated objectives of the UKGC are the empowerment and protection of consumers, raising of standards across gambling sectors, the improvement of regulation, understanding and partnerships, and fair play for National Lottery games. The UKGC is responsible for collecting, and collating comprehensive sets of data on gambling activity. The Gambling Behaviour in Great Britain report from 2015 found that 4% of gamblers are problem gamblers, with 6.4% of them at risk.According to the report, 63% of people 16+ years of age gambled within the past 1 year, and men have a higher propensity for gambling than women (66% versus 59%). Britons enjoy lotteries (15% of gamblers) Scratchcards (23% of gamblers), and National Lottery draws (46%).

**What is the correlation between land-based casinos and online casinos in Britain? ** In the United Kingdom, all gambling activity – land-based and online – falls under the jurisdiction of the United Kingdom Gambling Commission. Online casinos have created a niche market for players who seek greater comfort, convenience, and cost effectiveness. Land-based casinos have seen a steady decline in the number of players. And numbers at online casinos, online bingo rooms, and online scratch card game providers are increasing. For example, traditional bingo halls in the UK have decreased sharply since the smoking ban took effect, and the advent of online bingo rooms.

As a case in point there are significantly fewer bingo halls in the United Kingdom today than at any point in recent history. Online bingo has captured a large slice of the market. In much the same fashion, traditional casinos are sharing the same player base with an increasingly large number of online casino operators. Regulation is geared towards increasing the effectiveness, efficiency, and convenience of gambling. Since online gambling activity is universally popular, and pervasive, Britons are tending towards this option in greater numbers. The explosive growth of online gambling in the UK casino industry has been extensively documented by leading writers such as Andrew McDermott (see above and below images)

These trends are likely to continue, given the popularity of mobile gambling with iOS and Android apps. According to Statista,consumer spending on mobile gaming in the UK reached £995.1 million in 2016, and the following UK gambling industry stats by sector were reported:

These trends reveal interesting statistics for casino gambling activity, which rose steadily between April 2009 and March 2015. Since then, there has been a slight decline in casino revenues. However, there have been increases in overall betting activity, and a sharp uptick in remote gambling activity from £816.86 million in April 2008 to £4,468.64 million by March 2016. The total value of all gambling industry activity in the United Kingdom by March 2016 was valued at £13,631 million. Remote gambling has substantially impacted land-based gambling activity, and this trend has strong growth prospects.

This was posted in Bdaily's Members' News section by Hicks Crawford .