What Will the Future of the Online Gambling Industry in the UK Be

The UK's is one of the most developed and strictly regulated gambling markets in the world. In fact, this was the first country to legalize online gambling, a step which led to the unprecedented growth of this sector, with a 73% increase in gross gaming yield from £8.4 billion to £14.5 billion for the decade leading to 2017/2018.

But a lot has changed since the country's online gambling regulations first came into effect in 2005. Despite its huge financial success, the UK gambling industry is dealing with increasing public disapprobation and summons for political action and stricter regulations.

Stringent Regulations May Affect Some UK-Licensees Negatively

The public uproar has caused the odds to shift in favor of more rigid regulations that may have a pronounced effect on the UK's gambling sector. For starters, the maximum allowed stake on the infamous Fixed-Odds Betting Terminals (FOBT) is to be reduced from £100 to £2 in April this year.

Restrictions on gambling advertising were also discussed toward the end of 2018, with betting operators agreeing not to air gambling-related adverts during the television broadcasts of live sporting events.

But it did not end there as became evident by the latest decision of the UK Gambling Commission (UKGC). The regulator is to enforce new requirements for identity verification of online casino customers in May 2019.

The new rules aim at making online gambling fairer, safer, and inaccessible for minors by requiring the operators to perform identity verification checks before the customers have actually deposited money into their accounts.

Prior to this decision, players were expected to submit their verification documents before requesting a withdrawal of their funds. Thus, the winnings of customers were locked into their accounts until the verification's completion, which ultimately resulted in frustration and multiple complaints to the UKGC.

While these stricter rules work to the benefit of the consumer and protect minors from the harmful effects of gambling, they may prove to be problematic for UK-licensed operators. The trouble is the regulatory body has not prescribed how exactly this improved verification process is to take place. It is up to operators themselves to figure it out. Gambling sites in breach of the new regulatory rules are at risk of serious financial penalties which may drive some operators from the market.

The early verification procedure is to also impact the operator' affiliates, causing a drop in their profits from bringing in new customers to UK-licensed betting sites. Many prospective customers may be put off by the verification before depositing and pick gambling sites operating with a foreign license, instead.

A Parallel with the Situation in the US

A parallel can be drawn with the online gaming climate in the United States where regulated virtual gambling is still in its infancy. Forms of interactive betting are currently legal in New Jersey, Pennsylvania, Delaware, and Nevada.

The introduction of new laws in California has been mulled where the regulation of online gambling is concerned. At the present moment, only online pari-mutuel wagering is allowed in the Golden State under the regulations of the California Horse Racing Board. WatchandWager is one of the select few licensees to legally offer such services to local residents.

Yet, an increasing number of casinos operating outside the country continue to accept wagers from US bettors without local licenses. The absence of adequate regulations exposes local players to a higher risk since they have no one to turn to in the case of any ensuing disputes.

But there are more ill effects of the operations of such offshore betting providers. According to LA Times, such gambling sites have become popular destinations for fraudsters, who often use them for the purposes of money laundering.

Brexit and Its Potential Effects on UK's Online Gambling Industry

Let's not forget Brexit may prove to be one of the biggest threats looming over the UK gambling industry. It is impossible to predict the exact impact Britain's departure from the EU will have on the gambling sector but there is a good chance some companies may choose to relocate their operations in other European countries like Malta, for example.

This decision may be prompted by the possibility of a post-Brexit increase in taxes. UK-based companies will no longer be able to benefit from the European Internal Market. As a result, such operators may face greater tax burdens.

Despite all these setbacks, the future of the online gambling industry in the UK is not looking all that grim. UK-licensed gambling operators have defied the odds on multiple occasions in the past and will manage to survive the latest changes in this constantly evolving industry. Check out our rating of casino sites to find a trusted UK-friendly online gambling spot.

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