Know your Rights: UK Gambling Taxes and Regulation

Gambling in the UK has been growing since the 17th century. In the 1800s and 1900s, the trend was to bet through shops located in nearly every High Street in England, Scotland, North Ireland and Wales.

Since 2000s, High Street-based casinos and betting shops have been on a decline. Instead, people are gambling on the Internet, even when they don’t know the laws surrounding it. So, what are the gambling regulations that government gambling in the UK?

The Gambling Act of 2005

The Gambling Act of 2005 came to legalize online gambling and to streamline all forms of betting in the UK. Under the law, the Gambling Commission would license and regulate all sportsbooks and casino businesses that operate in the UK.

It would also work with HM Revenue & Customs to tax casinos and sports betting operators. Fifteen years later, the Gambling Commission has licensed over 1000 gambling businesses in England, Scotland, Wales and North Ireland.

For clarity, the Gambling Act legalized sports betting, bingo, casino games, lotto and fixed odds betting terminals. In other words, online gambling wasn’t really regulated in the UK before 2005. However, land based casinos and sportsbooks existed thanks to the Gambling Act of 1960.

Gambling Taxes

The UK is one of the best places to be a gambler for one reason. Players don’t pay taxes on their wins. It doesn’t matter how much you win--£100, £100000 or £20 million. If you won it fairly, you’re allowed to keep the entire amount.

Unfortunately, we can’t say the same about gambling Businesses. They’ve been experiencing tax hikes since the industry became legal. Under the 1960 act, iGaming businesses paid 6.75% of their gross profits to HM Revenue. Interestingly, bookmakers would pass on the tax to players by withholding 9% of their wins.

In 2001, the government abolished the 6.75% betting levy and replaced it with a flat 15% tax of their profits. It helped punters play without paying taxes on their wins. But many casinos exploited some of its loop holes—they only had to pay taxes based on their revenues in the countries where they were located.

In Gibraltar, they were also cushioned with a law that capped gambling taxes to £400,000. That’s why the small British revenue became home to many of the UK’s gambling brands. The UK adjusted the tax terms with the Gambling Act of 2005 but retained the 15% rate until 2019, when it increased the rate to 21%.

For clarity, the tax amount also varies on the profits made, more so for land-based casinos. Learn more about UK gambling laws here, including a breakdown of the taxes casinos pay based on their gross income.

Legal Gambling Age

The legal gambling age in the UK is 18 years. It’s the legal age for engaging in nearly all forms of gambling—casino games, sports betting, bingo, betting machines, everything. In all fairness, you can buy lottery tickets and play bingo in some places if you’re above 16 years.

However, 18 years is the allowed age when you visit most commercial casinos and betting shops. How do online casinos ensure every customer is above the legal age? They perform KYC verification.

KYC means Know Your Customer and involves verifying personal and financial documents to comply with British laws. That’s why you must provide an ID, driving license, bank statement, photo and more documents before you can withdraw money from online casinos.

Fair Games

One of the UKGC’s roles s to ensure casinos provides fair games. It audits slots and card games for this same reason. And if it finds rigged games, it bans the games or the software providers involved.

So far, the UKGC allows over 50 software providers to offer their games in the UK. Some of these companies based in British territories—Blueprint Gaming, Microgaming and Elk Studios are all based in the UK.

Another element of fairness the UKGC mandates is payout rates. Games are not just supposed to be fair. They also need to payout to players at rates of over 85%, whether you play on your Samsung phone or desktop computer. Lucky for you, many slots and card games at British online casinos payout at much higher rates, up to 100% for some video poker games.

Transparency

Under British laws, casino players have a right to transparency, whether it’s during data collection or bonus policies. In fact, casinos are required to work transparently even when handling complaints about their services.

Let’s start with data collection. The UK uses data collection policies that are similar to the EU’s General Data Protection Regulations (GDPR). These laws mandate iGaming businesses to ask for your consent before they collect your personal information.

What’s more, they must tell you their intent of collecting your data. You also have the right to withdraw your consent, especially if you think a casino is misusing your personal information.

Besides data privacy and transparency, casinos are required to be transparent about payments and bonuses. For example, they must reveal their limits, fees, bonus terms and everything else needed to help you make an informed decision.

Problem Gambling Protection

Gambling addiction is a real issue, which is why the UKGC addresses it through partnerships with casinos and Non-Government Organizations. For example, it helped created Gamstop to allow players to suspend their accounts from online casinos a couple of years ago.

These days, nearly every casino in Britain must work with Gamstop. Usually, players join Gamstop voluntarily and determine the time to suspend their accounts. They can choose one month, six months or five years. And during this period, they can’t access any online casino in the UK.

Gamstop aside, casinos are required to monitor their players regularly. In turn, they must help these players find the help they need. For example, they can refer them to gambling therapy companies or close their accounts.

Conclusion

Gambling is a regulated industry in the UK. That means sportsbooks and casinos have a lot of rules to follow. They also need to run their businesses professionally, usually by also respecting their customers’ rights to data privacy, transparency and fair games.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes