UK Slots Sites and 2014 Gambling Law

Why pick a UK slots site?

When you play slots online, you have to give personal information and financial details to the slots site, and could potentially be depositing quite a large sum of money.  Who wouldn’t want the security of knowing that the slots site played at is UK based, with the protection of UK law?  But in fact as of June 2014 very few slots sites are actually based in the UK even if owned by large UK companies.  Take Bet365, for instance.  Their sports betting operation is regulated in the UK and their offices are in Stoke on Trent – but their casino, bingo and slots are licensed in Gibraltar.  Or take Paddy Power – offices in Dublin, a chain of shops in both parts of Ireland and in Great Britain, and two slots sites one of which is regulated in the Isle of Man along with their sports betting operation, and the other of which is regulated in Alderney (in the Channel Islands).  Confused yet?

 

The position up until summer 2014 – the whitelist

The Gambling Act 2005 created a whitelist of jurisdictions whose gambling licences were approved by the UK Gambling Commission.  As well as the UK itself the list included EEA jurisdictions (Gibraltar and Malta), Alderney, Isle of Man, Antigua and Tasmania.  In order to be allowed to advertise in the UK, gambling sites had to be regulated somewhere on the whitelist.

 

The whitelist indicates regulatory standards that are in line with those of the UK itself.  It does NOT mean that the UK Gambling Commission has any authority (currently) over those gambling sites.  Should you have a problem with a site that is regulated offshore, it is to that regulator that any complaints must be made (unless it is a complaint about UK advertising which would be handled by the ASA).  Here, for instance, is a page from the Gibraltar Gambling Commission regarding complaints – and which things you should not bother complaining about.

 

The following are some examples of licences from places that are NOT included in the UK whitelist – Curaçao, Kahnawake, Costa Rica, Belize and Netherlands Antilles.  While it is not illegal to play at this type of site, if you played there and had a problem you would again have to deal with a foreign licensing authority, and this time it would be one that had not been deemed to meet UK standards (and in the case of Costa Rica, not meeting UK regulatory standards consists of not having any regulation at all apart from banning Costa Rican gambling sites from taking any bets from inside Costa Rica).

 

Why did so many slots sites choose whitelist regulation instead of UK regulation?

One word – tax.  By locating the servers and offices somewhere like Gibraltar they could enjoy a much lower rate of tax, but by doing so they made UK regulation out of the question as until the 2014 legislation comes into effect only sites that are physically located in the UK can be regulated there.

 

Will I notice any difference when I play at a UK regulated site?

One important difference is that the UK regulations limit autoplay to 25 spins at a time (to help people stay in control of their gambling).  However, the Gambling Commission has said that operators need not comply with this right away and is going to be holding a consultation about it (and about consumer protection in general).

 

The future

Things are set to get much simpler!  From 1st November 2014 all gambling sites for UK players must have a UK Gambling Commission licence and (provisionally from December 2014) will be taxed at the point of consumption (which is in the UK, so the tax advantages for gambling sites of being somewhere like Gibraltar will disappear).  Sites that were previously regulated somewhere on the whitelist will have a interim licence provided that they have applied for a UK licence before the deadline (which is in mid September).  A further change will take place in January 2015 to require the software providers (as well as the slots sites) to have a UK licence and new games to undergo testing to UK set standards to ensure fairness.

We could even see more sites entering the UK market as they will no longer need to have their server situated onshore in order to apply for a UK licence.  There is a big backlog of applications to be cleared first though.

 

What to do now?

It does not necessarily follow that all slots sites which had whitelist licences will successfully obtain – or even apply for – a UK licence.   Depending on the current size of their UK customer base, what action they would need to take to meet UK requirements and what effect the UK rate of taxation would have on their business some may not bother and may instead stop accepting customers from the UK and indeed a number of sites have already exited the UK market and others have restructured to separate their UK operations from their global operations.  It remains to be seen what further effect the new taxation regime will have when it comes in.   If you want to be sure of playing at a UK legal site, then perhaps you should think twice, for the time being,  about depositing any large sums with casinos unless they are owned by the sort of large British company that advertises on TV and has not only applied for but is pretty much a dead cert for actually getting the UK licence.