Casino guidance update

The Gambling Commission raised concerns that arcade and bingo venues have sought to maximise their number of Category B machines under the current rules by providing Category C and D gaming on tablets and in-fill machines. As outlined in the white paper, we strongly encourage operators to continue to improve player safety controls on Category B3 machines. In addition, we noted that some player safety improvements have been made to modern Category B3 machines which cannot easily be replicated on older machines, and that customers can and do play at lower stakes than the maximum on Category B3 machines. As above, 1968 Act casinos will retain the option of continuing to operate under the existing regime should they not wish to increase their machine allocations. Premises licence fees are collected by licensing authorities for applications and annual renewals to cover the cost of administration of their gambling duties and gambling enforcement. Currently, annual fees for 1968 Act casinos are between 65% and 90% of the annual fees that 2005 Act casinos in the equivalent fee category are required to pay.

In updating this ratio, we intend to amend the definition of “gaming table” for the purposes of section 172(3) to (5) of the Gambling Act 2005 so that only tables where the apparatus is controlled or operated by casino staff count for the purposes of the ratio. These respondents would prefer to see table games as the most common activity under a casino licence, highlighting that table games are more likely to lead to breaks in play. We will give further consideration to these casinos having the option of reverting back to the existing (current) regime, as this will be a decision unavailable to 2005 Act Small casinos. In making this proposal we acknowledge some concerns from industry stakeholders about the necessity of a table gaming area requirement.

The government understands some of the arguments put forward by industry, particularly about the potential impact on player behaviour if net position and time was permanently on display on the machine. Industry also stated that it is a different environment to online gambling where this information can be displayed at all times without impacting the customer’s privacy or influencing other player’s behaviours. This work could then feed into the messaging that is displayed on machines. This will ensure that the breaks designed to allow customers to make more informed or dispassionate decisions about their gambling are supplemented by safer gambling messaging and not used for any other purposes, such as promotional offers. This research recommended that the use of personalised messaging based on an individual’s own patterns of gambling may be more effective than generic messages.

In April 2019, the Commission strengthened the rules, requiring online operators to verify a customer’s age and identity before allowing them to deposit funds, play free-to-play games or gamble with their own or bonus funds. The new requirements will include provisions to ensure any consumer data is effectively protected and only used for the purposes of harm prevention. The intention is for this to be done through the Gambling Commission updating the licence conditions and codes of practice on all remote operators, but if necessary we would consider legislation. Work to commence real-world trials of a SCV solution has been progressing alongside this Review through the ICO’s sandbox process and the sharing of real high-risk player data has now started. Given the privacy implications for the majority who gamble with no ill effect, we do not think the creation of such a system including a national database of all gamblers (even if anonymised) is justified at this time.

Industry responses stated that in addition to the ability to increase GGY, a central component of increased commercial flexibility for many operators is the ability to remove underused gaming machines. However, to mitigate against gambling-related harm, the reform of the rule also seeks to ensure that a genuine offer of lower staking Category C and D machines remain available for customers. A central objective behind the reform of the 80/20 rule is to enable operators to have greater commercial flexibility over their product offer of Category B, C and D gaming machines.

The Commission has a broad range of powers that enable it to regulate the industry effectively but there are some small changes that could be made around its ability to investigate operators, including improving the Commission’s responsiveness to changes of corporate control. The Gambling Commission will take a more ambitious approach to enforcement, using data from operators and more specialist staff so it can continue to improve regulation of the industry and keep pace with technological changes. A few submissions to our call for evidence highlighted the esports sector, which is growing fast and has significant appeal to children and young people, and increasingly to betting operators – with GGY from the esports betting sector growing from around £50,000 in March 2019 to over £1.5m in March 2020. Overall, indirect exposure to gambling marketing around sport is high, including among children, and can be particularly challenging for those already suffering gambling-related harms.

• An important part of the Gambling Commission’s work is to ensure that licence holders are compliant.
• The UK government has increased Remote Gaming Duty (RGD) from 21% to 40% of gross gambling yield for online operators.
• Children and young people aside, concerns have been raised about people who are old enough to take part legally in the full range of commercial gambling activities but may still be particularly susceptible to harm for a variety of reasons.
• The Gambling Commission’s review of gaming machine technical standards will be relevant here and is described in more detail in the following section.

Advances made in online advertising and adtech in the time since the Gambling Act was passed are no less significant than the growth we have seen in online play, and it is only right that the advertising rules see reform to reflect the risks and opportunities of the digital age. In particular, we are already clear that any direct marketing to self-excluded customers by affiliates will be regarded as a breach of licence conditions by the licensee on whose behalf the affiliate is contacting the customer. While we welcome efforts from industry to raise standards for affiliates, this does not dilute the clear responsibilities the Gambling Commission will continue to place on operators for all activities undertaken in their name. New licence conditions were introduced on operators and their affiliates in 2018, following a series of cases (LeoVegas, Lottoland, and BGO) where the Gambling Commission took action against an operator for failings by its affiliates. In the gambling sector, online affiliate marketers range from large and well-established sites to individual ‘tipsters’ working on social media. Affiliate marketing is predominantly online and widespread across many sectors, with common forms including influencer marketing on social media and ‘advertorial’ content on news sites and blogs.

Under this option, for every device with higher maximum staking there would be a lower maximum staking machine of equivalent size and nature available to customers. The same rule would apply to all other gaming machine device types. This is in addition to a 9 percent increase in the overall number of B3 machines, representing approximately 900 machines across the total AGC estate. Projections on the impact of this proposal for the AGC sector suggest there will be a 10 percent reduction in the number of Category C machines and a 20 percent reduction in the number of Category D games, in-fills, and tablets.

Currently, gambling treatment services and support in both countries are mainly provided through primary care and the voluntary sector, though those in need of more specialist treatment services may be referred to the National Problem Gambling Clinics in London and elsewhere in England. While the majority agreed that operator data regarding consumer behaviours at the individual account level would be fundamental to any repository, others also argued for datasets around treatment demand and access, complaints, and wider commercial data. There was widespread support for the creation of a data repository which would be available to researchers, though specific proposals as to the extent of the repository and the sort of data it would collect ranged widely. Three researchers account for nearly 40% of all British studies published on gambling in academic journals between 2019 and 2021.

Similarly, PHE’s evidence review found no substantial evidence to establish that exposure to advertising is a risk factor for harmful gambling, although this may only indicate a lack of evidence rather than a lack of relationship as PHE only examined systematic review level evidence. We are calling on operators to take existing commitments in the industry code further, and use the full potential of available advertising technology to target all online advertising away from children and vulnerable people and those showing indicators of harm. The Commission will also take forward work to strengthen consent for direct marketing for online gambling, with both new and existing customers given more choice on what offers they want (including requiring consent to ‘cross-selling’ new products) and how marketing is sent to them. Although there are no specific laws preventing customers’ use of cryptoassets to fund gambling, operators may only accept them as payment if they can comply with all Gambling Commission requirements, including anti-money laundering, ‘know your customer,’ and safer gambling measures. Not only is self-exclusion an unsuitable substitute for account closure in most circumstances, but it is also a key proxy for harm used by operators to learn how to identify potentially harmful gambling within play data.

We will work with the relevant trade bodies and operators to understand the feasibility of this proposal and the frequency of any reporting to DCMS. We also propose that industry fund, conduct, and, crucially, report on the outcomes of voluntary test purchasing to DCMS. In addition, operating costs have risen significantly over this period, especially as a result of rising energy costs, which have increased by over 225% for some operators. This is in addition to improvements in monitoring and staff supervision of customers. The characteristics of land-based products have substantially improved since the introduction of the Gambling Act 2005.

There was broad support amongst respondents for alignment, including from the Lotteries Council and the Chartered Institute of Fundraising. Little evidence was received to support the inconsistency between the minimum age of 18 to play the National Lottery and the minimum age of 16 for large society lotteries. We also received specific evidence on the vulnerabilities of the under 18 to 24 age group which are considered in Section 5.4 below. Some operators highlighted policies to limit access to VIP/HVC incentives for young adults, and reported that they set lower deposit limits and intervention triggers for those aged 18 to 24. We expect operators to continually review and improve their age verification procedures as new technologies or capabilities are developed, such as digital identity, which is discussed in section 1.2 above.

We do not currently have sufficient data to estimate the likely reduction of Category C and D machines under each option. This will include assessing the role of sessions limits across Category B and C machines alongside safer gambling tools. Player protections can be used to mitigate increases in the risk of gambling harm.

Overview of the land-based sector

These sectors include arcades, betting (includes online), bingo (includes online), casino (includes online), lotteries, and gaming machines. Using data on the number of machines currently in casinos and information provided in an industry call for evidence response, we estimate that this could increase the number of Category B machines in the current national casino estate from 2,800 to 5,400. Our proposals to make the regulation more consistent would provide a maximum of 80 machines, subject to a ratio of one gaming table for every five gaming machines, for 1968 casinos that meet the minimum requirements for overall gambling space and non-gambling space of a Small 2005 Act casino. Based on Betting and Gaming Council data, there are currently 137 active casino licences originating from the Gaming Act 1968 which are limited to a maximum of 20 Category B gaming machines. Its advice is that RNG (virtual) games should be made available only on gaming machines where risk can be mitigated through stake and prize limits and technical standards (on for example limit setting), especially given the increased availability of B1 machines to casinos arising from our proposals above. For example, as mentioned above, Category B1 machines are only permitted in casinos, whereas Category B3 machines are also found in betting shops, adult gaming centres and licensed bingo premises.

What do you think are the potential impacts of raising licence fees on licensing authorities? In order to produce a more robust estimate for funding raised, we require additional data on the current number of licence applications and live licences. The additional annual cost per premises is an average across all premises types and in reality, will differ depending on the type of licence held. The additional annual cost per premises and the total additional annual funding for licensing authorities has been estimated using existing premises numbers.

Increased machine allowance to 80

For example, 40% of online gamblers who had experienced mental health problems agreed they did not feel like they were spending real money online, compared to 26% of those with no experience of mental health problems. In 2015, just 23% of online gamblers had used a mobile phone to gamble online in the previous 4 weeks, compared to 50% in 2020. Perhaps more significant change has occurred underneath this wider channel shift, as new technologies have also reshaped where, when and how people gamble online. While the lasting impacts of the COVID-19 pandemic remain to be seen, it seems likely that the shift towards online participation, as we have seen in many other sectors, will continue. In the year to December 2022, 18.6% of British adults had gambled online in the last four weeks, excluding National Lottery products, compared to 14.4% in the year to December 2018. This is because they offer a free entry route (for instance via ordinary post) or have a skill-based element.

In addition, as the maximum stake on these machines is 10p, these machines are less likely to be played in an area where there are Category C machines which have a maximum stake of £1 and can often be played at different staking levels up to this maximum. They do not have any age restricted areas as they have no adult-only machines. Bacta reports that this typically includes locating the machines close to a supervisor’s booth or other more visible locations, and they state that it works well in ensuring under-18s do not access the machines. As set out in the white paper, Bacta did not include Category D ‘ticket-out’ slot-style machines within this ban. However, as set out in the white paper, there are concerns that ‘cash-out’ slot-style machines share similarities with higher stake machines, restricted for adults.

We have taken into account that these machines currently account for approximately two thirds of Category D slot style machines. While many welcomed this voluntary move, some respondents called for the restriction to become mandatory, while others like the Gambling Related Harm APPG wanted it to be extended to ticket-out slot style machines too. The distinction with ticket-out machines was drawn on the basis that while cash can be reinserted for further play (potentially facilitating behaviours like chasing losses), tickets cannot and have no value beyond what they can be redeemed for within the venue. Industry has recognised the concerns around slot style machines and in March 2021, Bacta members updated their Social Responsibility Charter and Code of Practice to voluntarily implement a ban on under 18s using cash out slot style machines. 18% of 11 to 16-year-olds had played on fruit style machines where you win tickets to ‘buy’ prizes and 10% on fruit style machines with small cash prizes. The tickets these machines pay out can be exchanged for a small physical prize such as stickers, sweets or a toy.

Likewise, our understanding of gambling-related harms and gambling disorder has developed enormously over recent years. Land-based gambling also finds itself in a very different place in light of these changes, with some of the assumptions which prevailed 18 years ago looking increasingly outdated. Newly available data and technology can both increase risks to players and facilitate innovative protections. Multinational tech businesses now provide gambling services which customers can engage with from almost anywhere and at any time of day or night. In the past year or so, the Gambling Commission has introduced a series of curbs on gambling, including raising the age limit for playing the National Lottery and banning the use of credit cards.

How much funding do you estimate is needed for administration and the enforcement of licences annually? If you are a local authority/ licensing board, do you currently charge the maximum fees as set out in the Gambling Act 2005? However, given the relatively low level of annual fees per premises at present, we consider this to be unlikely.

A consultation on measures relating to the land-based gambling sector. Online gambling operators in Great Britain face an increasingly exacting regulatory landscape. The clustering of high-stakes machines in concentrated areas will be closely monitored by the Gambling Commission, particularly where it may encourage extended play or deter supervision. 2025 marks a turning point for the UK’s land-based casino sector. Higher remote gaming duty rates, continuous expansion of safer-gambling controls, increased governance reporting, and more resources invested casinos not on gamestop in illegal market disruption.

A statutory levy will help problem gamblers access the right care at the right time, complementing our commitment to provide NHS gambling addiction treatment clinics in every region across the country. Today’s white paper is a huge step towards protecting people from the damaging impacts of gambling. As the detailed implementation of the review now begins, we will also be reiterating to all operators that the Commission will strongly maintain its focus on consumer protection and compliance.

Our consultation will take into account the differing association of different sectors with harm and/or their differing fixed costs. We will launch a consultation on the details of its design including proposals on the total amount to be raised by the levy and how it will be proportionately and fairly constructed. Government will introduce a statutory levy paid by operators and collected and distributed by the Gambling Commission under the direction and approval of Treasury and DCMS ministers.

We have considered the potential risk of harm from increasing the machine allowance and think that the mix of products is appropriate for the environment if the safer gambling tools described above are applied effectively. Of the other jurisdictions that apply a machine-to-table ratio, all currently permit a greater proportion of gaming machines compared to Great Britain. It has 75 customers for every gaming machine at busy times and could easily absorb 60 additional machines without impacting its wider leisure offer. Some licensing authorities, as well as the Local Government Association (LGA), specifically suggested that cumulative impact assessments (CIAs) should be introduced for gambling premises licences. However, licensing authority responses to our call for evidence suggested that further powers were needed to give them a real say on gambling premises in their areas and protect communities.

The proposals put forward by industry for new machine games are not yet fully developed and will require further exploration with the government and the Gambling Commission. We have identified two areas for change — proposals for new machine games and re-assessing the balance of Category B machines in venues — which we explore below. The call for evidence asked whether any rules for the land-based sector should be changed in order to meet the objectives set out in the Review. A consultation will allow the industry to respond to any principles and specific requirements that the government and Gambling Commission require in order to ensure that the introduction of cashless payments does not lead to an increase in risk to consumers.

It also highlighted that inflexible funding negatively impacts ‘the Commission’s ability to ensure consumers are protected from … new risks’. The National Audit Office found that the requirement to adjust fees by statutory instrument “makes it more difficult for the Commission to invest in new skills to quickly address changing risks”. Some industry submissions suggested those who demonstrate effective governance and procedural controls should pay lower fees, although a number of other submissions from industry were strongly against such a proposal. They pointed out that the resources of the Commission are small compared to the financial power of the industry that it regulates and relative to other regulators.

The review found mostly cross-sectional studies linking gambling to harm, with more longitudinal research needed to isolate the causative role of gambling in the harms people experience in order to estimate a more accurate cost. Conversely, industry argued that calculating the social costs of gambling in order to recoup these costs is inherently complex. Canadian provinces tend to have high levels of expenditure addressing gambling harm paid for out of general taxation; but all have specific proportions of their total revenue derived from specific taxes on gambling. GambleAware also produces national safer gambling campaigns to raise awareness and encourage behaviour change in relation to gambling-related harms.