Gambling Act 2005 – UK

The legislation’s three main objectives endeavour to protect vulnerable persons from exploitation, ensure fairness and prevent crimes and disorder in gambling. An outline for licensing offers legal guidelines for gaming companies.

Protecting Vulnerable Persons

Gaming companies may apply for a license by proving fitness for doing business in the United Kingdom. The gambling act of 2005 in the UK requires licensing applicants to have the necessary funds to meet requirements for establishing a safe and trustworthy environment for a transparent and fair operation. Issuance of a licence leads to a review process that ensures that licensees maintain standards of safe gambling. The law provides regulatory action that can sanction any company that flaunts licensing terms.

Consequences can result in revocation of a license or in criminal prosecution. A main aspect of the Gambling Act is to prevent children and young persons from gambling or entering adult-only gaming premises. The intent of the law ensures that children are not “harmed or exploited by gambling.” It prohibits close proximity to gaming activities or presentation of advertising that makes gambling attractive to children. In addition to children and young people, the “vulnerable persons” who benefits from the Gambling Act’s protections include those who:

  • gamble beyond their means
  • cannot make informed decisions about gambling because of the influence of alcohol or drugs
  • have a mental impairment
  • gamble more than they prefer

Ensuring Fairness in Gambling

A main aspect of the Gambling Act requires fairness, and gaming companies can use scientific methods to ensure it. Games must meet testing standards and receive verification of functionality, return to player (RTP) calculation, random number generator (RNG), display and rules. All gambling products that licensed gaming operators use must receive approval from the Gambling Commission.

  • RNG software generates random numbers and symbols that fail to demonstrate a pattern in millions of plays. Manufacturers of the software must meet rigorous tests and receive certification as fair and random by authorized testing houses.
  • Theoretical RTP gives a player an estimated percentage of the potential expected return of money placed on bets over millions of plays. The actual RTP percentage results from the periodic review of game outcomes. Regular analysis ensures that the actual RTP percentages maintain a close relationship with theoretical RTPs.
  • Statistical analysis of performance verifies the fairness of live gaming with scientific measures that resemble those used for RNG and RTP. Visual monitoring and recordings can confirm dealer mistakes in the operation of equipment or in the handling of cards.

Preventing Crimes and Disorder in Gambling

Licensing authorities consider the premises, among other matters, when reviewing applications to avoid the potential for criminal activity in areas that are noted for disorderly occurrences. Authorities can impose requirements to guard against crime and disorder. The Gambling Commission’s licensing conditions and codes of practice1 (LCCP) set out good standards that responsible operators follow. The LLCP requires licensees to manage risks and to ensure the effectiveness of their practices. As the first major reform in more than 25 years, the Gambling Act presented inspirational goals that expected operators to comply with good standards.

Premises licensing is likely the focus of regulatory issues that arise from the prevention of a disorder. When serious disorders occur and an operator has failed to exercise adequate measures to prevent them, the licensing authority notifies the Gambling Commission. Consideration of operator licensing can lead to evaluation of an operator’s suitability to hold an operating license.

Understanding Licensing Guidelines

The Gambling Commission offers guidelines to licensing authorities on the proper exercise of their duties. Existing operating license holders may obtain a premise license for these purposes:

  • casinos
  • adult gaming centres
  • family entertainment centres
  • bingo
  • betting (including tracks)

The Online gambling act in the UK defines remote gambling as activities in which persons can participate in gaming by using remote communication. Any kind of technology that facilitates distant communication meets the standard. Typical forms of remote communication include these:

  • the Internet
  • radio
  • Television
  • telephone

Operators require a relevant license to run a remote or online gaming service when:

  • any part of the equipment is based in Great Britain
  • the equipment base lies outside of Great Britain but the operator advertises to or transacts with persons in the UK

The Gambling Act of 2005 covers remote gaming in addition to betting, casinos, adult gaming centres, lotteries (except the National Lottery), arcades, gaming in pubs and clubs, arcades and bingo.