The United Kingdom Gambling Commission, established under a 2005 law, came into full power on September 1, 2007. The UK Gaming Commission covers remote gaming and several segments of the brick-and-mortar industry.
The first wave of regulation created by the UK Gambling Commission was to form licensing procedures for sites located in the UK that offered online gaming. Subsequently, these companies paid for licensing and taxes in exchange for permission to operate within the UK borders.
Companies outside the UK could avoid the expense and hassle of licensing and still gain access to the country’s market under the system first proposed in 2005. Additionally, there was a procedure for white-listing offshore companies. This involved an offshore company gaining licensure through a gaming commission considered to be legitimate by the United Kingdom. These were mostly jurisdictions that are members of the European Union.
One advantage to taking the white-listing route was that taxes could be paid to the local gaming commission. This permitted sites outside the UK to advertise on local media stations and over the Internet to Brits without paying taxes to the country. Consequently, there was essentially no difference between UK and offshore sites.
These venues included tax havens like Gibraltar and Isle of Man. While most European online gaming commissions are legitimate, player complaints were pointless if the site was not in the UK. The UK Gambling Commission could not compel offshore sites to pay players.
The Betfair Happy Hour debacle was one example of this. Initially, the company offered a favorable promotion and after the fact changed the terms and conditions. This took cash from thousands, maybe even tens of thousands of players.
Gamblers had no recourse if they got stiffed by Betfair in the UK. These players had to deal with the less effective Lotteries and Gaming Authority in Malta, where Betfair obtained their license for casino games.
Betfair did run into trouble with the Advertising Standards Authority in the UK, who found that Betfair had falsely advertised the promotion to UK residents. The punishment was that Betfair could not run the same promotion again in the UK. This was little consolation to players promised cash prizes but were never paid by Betfair.
UKGC expansion of power in 2014
The UK Gambling Commission received a substantial increase in power for the country’s remote gaming industry in 2014. This required all companies that operate online gaming in the UK to receive a license in the country.
Each and every segment of gaming offered required licensing. This included poker, casino games, sports betting, bingo and lotteries. Additionally, it provided for a 15 percent tax rate on gross gaming revenue.
This caused ripples in the country’s gaming industry. As a result, many gaming sites chose to abandon the market instead of complying with the licensing requirements. In addition, some companies that remained in the UK market decided to only license one gaming brand if it operated multiple ones in the country.
Some companies that stayed in the UK decided to pass on some of the taxes to customers. For example, PokerStars dropped VIP payouts to UK players, citing the costs of the new regulations as the reason. This decision was later reversed upon the alteration of the entire PokerStars VIP program to favor recreational players over professional ones.
Advantages of UK Gambling Commission licensing
Remote gaming companies with a UK gaming license offer players many advantages over ones that operate illegally. Since a registration process vets each of the licensed companies, it screens out unsuitable individuals and entities from the industry.
Gaming sites must hold player funds in a separate account from operating cash. The UK Gambling Commission also reviews software and policies for fairness. A player that has a dispute with an online gaming company can hold the site accountable. The Advertising Standards Authority can review marketing procedures to ensure fairness.
Offshore sites operating without a license are doing so illegally. This could eventually end with seizures and criminal charges for sites that do not abide by UK online gambling laws. Additionally, these companies are evading taxes. Players have no recourse against sites that don’t pay players or get caught cheating.
Sites not licensed in the UK often operate illegally in other countries. This increases exposure to potential legal action where player funds are at risk.
How to file a complaint with the UK Gambling Commission
The UK Gambling Commission set up a procedure for players to file a dispute. First of all, players contact the site for this procedure.
Players should make sure to put the full issue in dispute into writing every step of the way. This includes communication with the site via email or phone. Additionally, players need to keep a log of this and any responses during the resolution process.
If you are unhappy with the resolution, it can escalate to an Alternative Dispute Resolution party. The group that hears disputes depends on the segment of betting. You can find the list on the UK Gambling Commission’s site. Finally, any unsatisfactory ruling after this point must go into the civil court system.