The United Kingdom is currently regarded as one of the top online casino markets in the world, so there’s no surprise that they have comprehensive licensing and regulations. Believe it or not, this protects players and operators, ensuring that everyone is of legal age and playing fairly.

If you’re curious how the UK online casino licensing and regulations affect and protect you, then let’s look at them in detail. Being aware of the current rules will help you when choosing the top-rated online casinos, letting you know if your choice is safe or not. 

Licensing and regulations overview

All gambling activities in the UK today are regulated based on the Gambling Act of 2005, a revision of the Betting and Gaming Act of 1960. The 2005 revision relaxed many strict rules, making things easier for players and operators.

Another change introduced in the Gambling Act of 2005 is the inclusion of more games. As online betting and casinos gained popularity, expanding the Act’s scope to help it keep up with modern changes made sense.

Which types of gambling are regulated in the UK?

According to the Gambling Act of 2005, the following types of gambling are regulated in the UK:

  • Arcades, including gaming centres aimed at both adults and families
  • Casinos, including both online and brick-and-mortar locations
  • Betting, both online and in-person betting
  • Lotteries, includes raffles, sweepstakes, tombolas, and actual lottery-like contests
  • Bingo, both online and in bingo halls
  • Gaming machines, including any machine designed to aid in any gambling activities, such as betting terminals

Currently, these categories are broad enough to cover current popular gambling methods. As time passes and new ways are introduced, the UK’s Gambling Act will likely need to be updated again to keep everyone safe.

How does the Gambling Act of 2005 affect players?

For players, the Gambling Act of 2005 exists primarily for their protection. The Act’s strict rules and regulations for operators ensure that players interact with a reputable firm. It also ensures that players have some recourse in case of problems or disputes.

At the same time, the Act also prevents players from developing harmful habits. Aside from setting a minimum playing age, the Act establishes a set of offences that players must avoid or they will face a fine and, possibly, jail time.

Lastly, the Act makes it easier for players to partake in their chosen activity. For example, they no longer have to wait 24 hours after joining a casino to play; it’s now an instantaneous process. Players also don’t need a licence to play; they’re free to join any casino they want, whenever they want.

Tax requirements

A common question some beginner players ask is if they have to pay taxes when they play. It’s a valid question; after all, the activity involves money.

Thanks to the Gambling Act of 2005, players don’t have to pay any tax if they’re not playing professionally. The activity is considered recreational, so any money you get is yours to keep.

However, if you think you have a higher skill level than most and start proving it in various competitions, you’ll need an accountant. Professional players, such as those who play high-stakes poker, must pay tax.

Penalties for illegal gambling

Despite the relatively relaxed Act regarding players, some people still manage to sidestep the rules and gamble illegally. 

The most common offence is underage gambling, which comes with a £1,000 fine for the offender. The minimum age for gambling in the UK is 18.

Another common offence is cheating or assisting another person to cheat, carrying 51 weeks imprisonment and a £5,000 fine. Cheating is a grave offence as it makes the game unfair for the rest of the players, so much so that the punishment applies even to unsuccessful cheating attempts.

How does the Gambling Act of 2005 affect online casino operators?

As expected, the Gambling Act of 2005 affects online casino operators more than the players. This is intended to ensure that operators are reputable and that the games are fair and safe.

The Act is very detailed when it comes to its expectations for online casino operators, so we’ll try to cover the significant bits for you.

Licensing scope of activities

Generally speaking, the Gambling Act of 2005 allows the UK government to issue licences based on the applicant’s operation. Online casino operators must get a separate licence for any betting activities, bingo, casino games, gambling software and lottery games. For a comprehensive online operator, that means getting at least five separate licences.

Location requirements for online casinos

The Gambling Act of 2005 sets clear rules regarding which operators require a licence and which don’t.

Operators with physical locations in the UK must have a licence — no exceptions.

However, with the rise of online gaming, location requirements have become trickier. This is how the Act handles overseas operators:

  • Operators who do not have any equipment in the UK do not need a licence.
  • If any overseas operators wish to advertise their games in the UK, their website must be based in one of the following areas:
  • Alderney
  • Antigua and Barbuda
  • Gibraltar
  • Isle of Man
  • Tasmania
  • Countries in the European Economic Area (EEA)

Any overseas operators that don’t register their websites in one of the above countries must apply for a licence in the UK and meet all the requirements.

Application process

Operators wishing to obtain a UK licence undergo an extensive application process. Applicants can start their journey by completing an online application on the Gambling Commission’s website.

The form consists primarily of a series of questions, all aimed at determining the following:

  • Verifying the identity of owners and any beneficiaries/stockholders
  • The company’s history and suitability for holding a licence
  • How the business is funded
  • The operator’s business plan and financial projections
  • How the applicant will comply with imposed requirements after acquiring a licence

Once the form is submitted, the Commission typically takes 15 to 20 weeks to perform their checks. Most of the time is spent identifying owners and shareholders, ensuring that no one uses the company as a money-laundering front. Depending on their stake in the company, a more comprehensive background check may be required.

If everything is as it should be, the Commission awards a licence to the operator. Licences last indefinitely, although an annual fee is required.

Penalties for non-compliance and wrongdoing

Occasionally, the Commission conducts periodic reviews to ensure compliance from licence holders. For most operators, it’s a part of business, and everything goes through without a hitch. For some, the Commission may find faults that may or may not be intentional.

In such cases, the Commission may send a warning letter, impose a fine, restrict the licence or revoke the licence. The action taken depends on the severity of the wrongdoing.

For example, minor infractions may incur the operator a penalty while still allowing them to continue operations. However, for more severe violations, such as allowing underage gambling or tampering with machines to cheat players, operators will have their licence revoked, a fine levied and incur prison time of up to two years.

Advertising and marketing regulations

Broadly speaking, there aren’t any specific rules when it comes to advertising and marketing for online casino operators. However, a few guidelines do exist, and the Commission expects licenced operators to adhere to the following:

  • Foreign operators with no equipment in the UK must operate their website from one of the exempted countries.
  • Foreign, unlicenced operators must refrain from deliberately enticing British citizens into using their platform.
  • Operators who have equipment in the UK must apply for and obtain a licence.

The Commission also works closely with various sporting bodies to ensure they don’t accept sponsorship deals with foreign, unlicenced operators.

Tax requirements

The Commission sets various tax requirements depending on how the operator is structured:

  • Companies operating as online casinos or bookmakers pay the standard corporate tax rate.
  • Sole traders are subject to personal income tax.
  • In-person gambling duty is set to 15 per cent of net profits.
    • Remote gambling duty has a higher rate of 21 per cent.
  • Lotteries not run by the National Lottery are not subject to lottery duty. However, the lottery organiser must use at least 20 per cent of the proceeds for good causes, such as charities.

Final thoughts

The Gambling Act of 2005 is more comprehensive than what we’ve covered above, but it also involves a lot of details that simply don’t pertain to the everyday player. However, it’s important to know the basics so that you can be better informed when choosing a casino to join. The last thing you want is to lose your hard-earned money to an unscrupulous casino operator.

The next time you sign up for a new online casino, take a moment and see if they hold a valid UK licence or have a valid exemption. Your vigilance and awareness will save not only you but other players as well.

Scroll to top