1.2 Specify: (i) the law and regulation that applies to the Relevant Products in your jurisdiction; and (ii) – in broad terms – whether it permits or prohibits the offer of Relevant Products to persons located in your jurisdiction.

The main legislation governing gambling in the three forms identified in English law (gaming, betting and participating in a lottery) is the Gambling Act 2005. It is important to note that this instrument does not extend to Northern Ireland, where legislation based on the Gaming Act 1968 continues to apply. Originally the Gambling Act 2005 applied only to those persons who had a physical connection with Great Britain; for example, land-based gambling businesses located in Great Britain or items of remote gambling equipment located in Great Britain. This so-called 'point-of-supply' legislative scheme was reversed (in the case of remote gambling) by the Gambling (Licensing and Advertising) Act 2014, which converted the British system into a so-called 'point-of-consumption' regime, which criminalised any person in any jurisdiction who makes available facilities for gambling to British players on a remote basis without British licences. This instrument brought the British system into line with various of the European so-called 'regulated markets', where the requirement to obtain a licence for that market and account for gambling duty extends to remote providers of gambling outside the jurisdiction.
There is extensive gambling regulation in Great Britain, mostly imposed upon licensees by the various conditions and codes of practice attached to their gambling licences, which are colloquially referred to by the acronym 'LCCP'. These LCCP impose extensive obligations upon licensees in, amongst others, the fields of social responsibility, anti-money laundering and the prevention of terrorist financing, consumer fairness and transparency and responsible advertising. Other regulation also applies. Gambling operators are subject to the advertising regulations of the British Advertising Standards Authority and the industry of the British 'Industry Group for Responsible Gambling'. In addition, certain major gambling businesses did, in the course of 2017, provide a series of undertakings to the British consumer protection authority, the CMA, in relation to player promotions such as free wagers, spins, bonuses and so on, designed to ensure transparency and fairness to consumers and guarantee the ability of consumers to withdraw deposit monies from their accounts.
In addition to the main LCCP, the British regulator also publishes extensive 'remote technical standards' for gambling products as well as a large body of literature comprising regulatory advice, policies and guidance. Of particular importance are the now numerous 'public statements' detailing the acts and omissions of operators that have triggered regulatory action, as an example of 'what to avoid' for other operators.
The financial regulation of gambling is set out mostly in the British Finance Acts and provides for various levels of duty upon different types of gambling. Following the reduction of the maximum stakes for B2 gaming machines, the UK Government announced an increase to the remote gaming duty, from 15 to 21% of gross gaming yield. Pursuant to the Finance Act 2014, as amended by the Finance Act 2019, online licence holders must pay a tax of 21% of their gross gaming yield in relation to accounting periods beginning on or after 1 April 2019, generated from UK customers, even if the operator is located outside the UK.

2 Application for a Licence and Licence Restrictions

2.1 What regulatory licences, permits, authorisations or other official approvals (collectively, "Licences") are required for the lawful offer of the Relevant Products to persons located in your jurisdiction?

The Gambling Act 2005 provides for a range of licences to be granted to both non-remote (i.e. land-based) as well as remote businesses. Points to note are that land-based casino licences are not freely available and the rollout of major casino resorts envisaged when the legislation was passed has generally not occurred. Casinos in the UK are generally operated under historic licences that were rolled forward under the 'new' Gambling Act 2005. Suppliers of gambling machines made available for use in landbased environments similarly need to obtain their own licence.
As far as remote gaming and betting is concerned, licences are readily available to suitable applicants. Two features of the British licensing regime that potential applicants should note are its requirements that: (i) persons who are not gambling operators but who develop, supply or maintain gambling software may need to possess their own 'gambling software operating licence', quite separate to the licences needed to actually operate gambling; and (ii) the 'key personnel' in any gambling business should possess personal licences or permits. Hence, the typical remote gambling business will require three types of British licence to lawfully offer remote gambling to British residents – an 'operating' licence, a software 'operating' licence and a suite of personal licences for its main personnel.
Generally, gambling licences are either 'remote' or 'non-remote'. This distinction cannot be ignored and the regulator has no power to grant a licence that authorises both remote and land-based activity. Other than that, different types of gambling activity conducted by the same media can be combined – for example, a 'remote' gambling operating licence might well have betting, gaming and software operation endorsed upon it.
There are no tender or bidding processes, other than in the occasional case of land-based casino franchises being proposed. Persons wishing to enter the British land-based casino market have typically purchased existing businesses.
As well as an operating licence, an operator wishing to make gambling facilities available in a land-based environment (e.g. casino, betting shop, bingo hall or arcade centre) will also need to apply for a premises licence authorising that activity from the relevant local authority.
As in many jurisdictions, the main monopoly incumbent is the National Lottery, which has a monopoly on commercial lottery activity. That said, there are numerous charitable lottery operators which operate under certain regulatory constraints, much to the annoyance of the incumbent monopoly. Furthermore, bookmakers are free, under current British legislation, to offer bets on lottery results other than the British National Lottery.
Licences are available to persons based outside the United Kingdom. Remote licences are, in fact, a legal requirement for any business, wherever located, to offer facilities for gambling to British residents.

2.2 Where Licences are available, please outline the structure of the relevant licensing regime.

Eligibility for a British gambling licence depends upon the Gambling Commission's assessment of a variety of factors, primarily the integrity and probity of the applicant and the applicant's ability to conduct gambling in a solvent and responsible manner in compliance with law and regulation. Extensive disclosure of beneficial ownership is demanded and the regulator will also wish to see financial plans, business plans, management structures and the experience and competence of key personnel. Where applications are submitted in good order, with all associated information duly provided and application fees paid, the Gambling Commission aspires to process them in approximately sixteen (16) weeks.

2.3 What is the process of applying for a Licence for a Relevant Product?

The process is as described above. The application fees are assessed pursuant to a somewhat complex online calculation engine on the regulator's website, but the point to note is that they are extremely low as compared to – for example – certain US jurisdictions.

2.4 Are any restrictions placed upon licensees in your jurisdiction?

Generally, all betting and gaming products may be offered. Commercial lotteries are prohibited and small and large lotteries must have a charitable dimension. Betting on the National Lottery is prohibited. In terms of the regulatory obligations imposed upon licensees by British licences, these are described above.

2.5 Please give a summary of the following features of any Licences: (i) duration; (ii) vulnerability to review, suspension or revocation.

Operating licences are generally indefinite. Personal licences tend to have a five-year duration and must, however, be renewed. The regulator retains wide powers to suspend or terminate gambling licences, but perhaps its most frequently-used regulatory tool (at least to date) has been its power to review gambling licences in the event of misconduct by the operator. This process of formal review – Section 116 of the Gambling Act 2005 – can result in almost any sort of penalty from the regulator.
To date, the regulator has usually reached so-called 'regulatory settlements' with operators who have breached their licences which usually comprise: (i) a divestment of funds to an identified victim which represents the benefit to the operator resulting from the breach, or a donation of an equivalent amount to a charity; and (ii) a payment in lieu of a formal fine. These sanctions can run into millions of pounds and several high-profile operators have fallen foul of the British regulator and suffered this outcome. Where an operator is deemed to be seriously deficient, there is the possibility of a licence suspension and a small number of licensees have suffered licence suspensions.
The sorts of events that typically trigger this process are where the operator accepts money from players that has been stolen, sometimes via obviously abnormal deposit patterns, and has failed to make appropriate enquiries as to the source of those funds, or the analogous situation where a player gambles far in excess of his means and the operator similarly fails to engage with him, resulting in social harm. An appeal process and an objective tribunal does exist and operators are free to make representations to that body as well as, ultimately, before the courts.

2.6 By Relevant Product, what are the key limits on providing services to customers? Please include in this answer any material promotion and advertising restrictions.

The British regime is not particularly restrictive in this regard and persons located in Great Britain are generally free to gamble as they please. For example, so-called 'Novelty Bets' are permitted on non-sporting events and, as mentioned above, betting on lotteries (apart from the British National Lottery) is also permitted. There are extensive marketing and consumer protection restrictions and these are described above. At present (2020), there is an acute regulatory focus in the UK on the advertising and promotion of gambling, and the industry is under considerable pressure in relation to the amount and the content of gambling advertising, particularly where there is a perceived attractiveness to children or young persons or where there is the potential for customers to be misled. Affiliates are also coming under increased scrutiny (at least politically) and the links between gambling advertising and sport are coming under increased political scrutiny. The exclusive right to run a lottery for commercial gain is reserved for a monopoly provider (currently Camelot).

2.7 What are the tax and other compulsory levies?

Tax and Rate

General Betting Duty:

• 15% for fixed-odds and totalisator bets
• 3% for financial spread bets
• 10% for all other spread bets
• 15% of the commission charges charged by betting exchanges to users who are UK citizens
• 15%
• 21%

Pool Betting Duty

• 15%

Remote Gaming Duty

• 21%

Land-Based Casino Gaming Duty

• The first £2,471,000 - 15% Rate
• The next £1,703,500 - 20% Rate
• The next £2,983,000 - 30% Rate
• The next £6,296,500 - 40% Rate
• The remainder - 50% Rate

2.8 What are the broad social responsibility requirements?

Gambling may not be made available or advertised to persons under the age of 18. There are limited exceptions for traditional activities, such as the football pools and the National Lottery, where the relevant age is instead 16. Exemptions also exist for products such as fairground amusements. The bulk of the social responsibility obligations imposed upon British gambling licensees are set out in the second part of the 'Licence Conditions and Codes of Practice' or 'LCCP', as referred to above. Operators are expected to execute robust age verification systems and stakes are required to be refunded to children and young persons and wagers voided. More widely, operators are expected to undertake a risk assessment for their players, both in relation to the potential for money laundering and problem gambling. Operators are expected to understand the affordability of the gambling undertaken by their players, particularly where players are high-spenders. Operators are expected to have systems in place to identify where players are exhibiting behaviours which indicate potential harm. Where it is appropriate to trigger an interaction with a player, operators are expected to recommend socially responsible measures such as cool-off periods and breaks from gambling or self-exclusion. Operators are expected to have in place measures to detect self-excluded persons who might wish to re-register using different details. A centrally co-ordinated self-exclusion database ('GAMSTOP') also exists in the UK, which operators must subscribe to.

2.9 How do any AML, financial services regulations or payment restrictions restrict or impact on entities supplying gambling? Does your jurisdiction permit virtual currencies to be used for gambling and are they separately regulated?

British regulation passes through the full effect of EU antimoney laundering and terrorist financing measures. Otherwise, payment processing per se is not licensable under British gambling law and the main restrictions are that land-based bingo and casinos may not offer credit for wagers and remote gambling operators may not accept credit card payments (including through money services providers).

3 Online/Mobile/Digital/Electronic Media

3.1 How does local law/regulation affect the provision of the Relevant Products in online/mobile/digital/ electronic form, both from: (i) operators located inside your jurisdiction; and (ii) operators located outside your jurisdiction?

All gambling hosted by electronic means and available to persons in Great Britain must be licensed by the Gambling Commission.

3.2 What other restrictions have an impact on Relevant Products supplied via online/mobile/digital/electronic means?

There are no other restrictions.

3.3 What terminal/machine-based gaming is permitted and where?

A variety of gaming machines are available, categorised according to stakes and payouts, subject to strict regulation as to the limits of those stakes and payouts and the number of machines in any one location. Of particular social and regulatory concern recently have been so-called 'fixed odds betting terminals' located in land-based betting shops in the UK, which are seen as causing social problems. As of 1 April 2019, the maximum stake that can be offered on these sorts of gaming machines dropped from £100 to £2 per spin. The new rules are intended to reduce the risks that players can lose large amounts of money in a short space of time. In relation to gaming machines, businesses in the UK have to take careful note of a very difficult and complex statutory definition which has the potential to categorise as 'gaming machines' all sorts of end-user devices, other than 'traditional' fruit or symbol-cabinets, depending upon how much gambling functionality is loaded onto them and who is responsible for it. The uploading of gambling functionality onto electronic end-user devices should always be considered carefully.

4 Enforcement and Liability

4.1 Who is liable under local law/regulation?

As far as players are concerned, they generally only commit an offence where they attempt to gamble whilst underage or cheat. However, the way that British legislation addresses gambling is to set up a whole series of criminal offences and then provide that the possession of the appropriate licence is a defence. Offences cover the unlicensed offer of gambling, the unlicensed use of premises for gambling, the promotion or facilitation of a lottery and so on. The legal approach is to completely criminalise gambling but then to make exceptions for persons who comply with the licensing regime, pay the applicable tax, observe the applicable regulation and so on. Alternatively, there are exceptions in the legislation for low-level or private gambling.

The definitions in British gambling law are extremely broad. Anyone who is involved to any material extent in the provision of gambling, or gambling software, may be committing an offence in the UK if they are not correctly licensed or if they cannot take advantage of one of the limited range of exemptions in the legislation. Software suppliers, games suppliers, sportsbook platforms and certain other B2B suppliers may all be potentially licensable. That said, non-gambling services are generally carved out of this wide net – payment processing, marketing affiliates and other ancillary services such as fraud prevention and age verification are per se not regarded as 'gambling'.

4.2 What form does enforcement action take in your jurisdiction?

The British regulator is currently (2020) embarked on a series of enforcement actions against its licensees, as described above, including follow-ups from previous enforcement actions. The usual pattern of regulatory enforcement is for the regulator to instigate a review of the operating licence in question, with the consequences described above. At the time of writing, the regulator has not yet seen fit to prosecute mainstream gambling operators for failures in compliance, although there are frequent prosecutions of plainly illegal gambling operations – primarily unlicensed land-based operations. To date, the typical outcome has been a substantial financial settlement which the operator has negotiated with the regulator in lieu of a formal statutory penalty. The regulator is also beginning to make use of the system of personal management licences to act against individuals and there have been licence suspensions in cases where the regulator considered the operator to be substantially non-compliant.

4.3 Do other non-national laws impact upon liability and enforcement?

To date, the Gambling Commission has relied on its statutory powers under British law and its contacts with fellow European regulators. To the surprise of the writer, the British point-of-consumption legislation survived a judicial challenge from the Government of Gibraltar in 2014 and has not been widely questioned as incompatible with the Treaty on the Functioning of the European Union ('TFEU').

4.4 Are gambling debts enforceable in your jurisdiction?

In Great Britain, yes.

4.5 What appetite for and track record of enforcement does your local regulatory authority have? Have fines, licence revocations or other sanctions been enforced in your jurisdiction?

The British regulatory authorities have taken something of a global lead in the enforcement of regulation, particularly in relation to 'source of wealth' and 'proceeds of crime' omissions and also failures in social responsibility obligations owed by operators to players. Substantial fines have been imposed, individuals have been sanctioned pursuant to their 'personal management licences' and licences have been suspended.

5 Anticipated Reforms

5.1 What (if any) intended changes to the gambling law/regulations are being discussed currently?

The British Government passed the Gambling Act 2005 with the intention that centuries of morally motivated restriction of gambling should be replaced with a libertarian regime that treated gambling as a valuable contribution to the digital economy and participation in gambling as a 'non-pathological' leisure choice on the part of the gambler. In the intervening years, however, the absence of political support, press hostility and vociferous opposition from minority groups have given rise to a far less supportive atmosphere verging by 2020 on outright official hostility. In fiscal terms, operators have already suffered the removal of tax-exempt status for free bets and a ban on the use of credit cards, and a revenue-hungry Government may well look again at rates of duty. Advertising regulations have tightened and there is almost constant negative Parliamentary scrutiny of gambling and in particular remote gambling, often phrased in highly emotive terms and highlighting individual cases. The British House of Lords published a report in July 2020 with 66 proposals for tightening or restricting gambling including restrictions on tie-ups with sport, the licensing of affiliates and increased affordability assessments. Future changes to law or regulation may well reflect some or all of this. In the recent 2020 British elections, both major parties committed to review current gambling law on the basis that the existing legislation does not adequately protect the vulnerable.

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