United Kingdom Gambling Commission Licence (April 2023)
UK Gambling Commission
Gambling in the UK is regulated by the UK Gambling Commission. The Gambling Commission is an executive body that is responsible for making and supervising gambling laws in Great Britain. Casinos, slot machines, lotteries, sports betting, bingo, and remote gambling is all covered by the Gambling Commission. The law is far less ambiguous in the UK than it is in many other countries, as it has clear-cut legislation for all types of gambling. It can issue licences to operators, in the interest of protecting player interests and enhancing the industry.
Gambling in the UK
The Gambling Commission was formed in 2007, as a result of the Gambling Act 2005. The act was made with three objectives in mind:
- To prevent any criminal activity in the gambling sector
- To ensure that the quality of the gambling met industry standards for fairness
- To protect children and vulnerable people from being harmed or exploited to gambling
Origins of Gambling
The UK has always had a fascination with gambling. Whilst it can’t be proven how far back this fascination goes, we do know when it was first legislated. In 1190, King Richard of England made the first gambling law. It dictated that only noblemen could bet and they could bet a maximum of 20 shillings a day. Richard III was the next king to close down on games of chance when he introduced laws in the late 14th century that banned dice games and restricted gaming to non-work days. In 1541, the Unlawful Games Act was decreed by Henry VIII. It banned “several new despised games” including card games, dice, and even tennis, which Henry VIII had excelled at in his youth.
With games of skill struck off, the public turned to horse racing and to lotteries. England launched its first lotteries in 1569, which were exclusively for the rich. At 10 shillings a ticket, only noblemen could afford to gamble with the lottery. Interestingly, the top prize was £4,000 and a get-out-of-jail-free card – for any crime except treason or murder. It was not long before more lotteries were made and the public got stuck right in.
Crime and Gambling
In the 18th century, more gaming acts were made to regulate betting on horse racing. These were made to cut out illegal operations and give the public more financial security. The Gaming Act of 1845 legalized games of skill (from the Unlawful Games Act of 1541), and made cheating a crime. More laws were introduced in the 19th century, but bookmakers still found ways around the law. Finally, in 1960 the government issued the Betting and Gaming Act 1960. This legalised private casinos, taking gambling off the streets and cutting out criminal activity by bookmakers. The act remained in place until the British government launched the Gambling Act 2005.
Types of Licences
The Gambling Commission is very organised when it comes to issuing licences. There are three types of licences: remote, non-remote and ancillary. Remote licences are for online establishments. Non-remote licences are for land-based casinos or arcades. Ancillary licences are for operators that supply betting through telephones or emails.
To set up an online casino or sportsbook in Great Britain, the provider must apply for a remote licence. The way the business is operated will determine what type of licence is needed.
- Arcades – for adult and family gaming/entertainment centres
- Betting – remote and non-remote licences for betting on live events or virtual ones. There are also licences for betting intermediaries
- Bingo – remote and non-remote licences for bingo games, and game host also needs to be licensed
- Casino – remote and non-remote licences to supply casino games (depending on casino size) and game host also needs to be licensed
- Gambling Software – remote and non-remote licences to provide gambling software, and separate licences for linked software
- Gaming Machines – licences for fruit machines, betting terminals, slot machines, video poker machines, and similar gambling machines
- Lottery – remote and non-remote licences for lotteries, the manager also needs to be licenced
There are over 30 different types of licences that the UK Gambling Commission can issue. Operators may need to apply for more if they want permission to supply more services. There are also categories for each type of casino licence, depending on the services provided.
When an application is sent to the UK Gambling Commission for a remote operating licence, it takes around 16 weeks to be processed. A lot of information is required from the Gambling Commission to review the application.
- Ownership structure diagrams
- Management structure
- LCCP policies and procedures
- Rules and Terms and conditions
- Copies of any other licences
- Bank statement of all accounts for the last 6 months
- Business plan
- Proof of funding
- Annual returns
- List of individuals compensated over £200k in the last year
- Personal Management Licence application
- Annex A declaration form and supporting documents from each person who owns 10% or more shares in the applicant
Applicants may need to supply even more documents if requested. The business activities also need to be stated with the application and from those, the fee will be calculated. The fee needs to be paid with the submission of the application. This fee can vary, so it is best to show two examples.
Remote Casino Licence (Not Game Host)
In the first example, a casino operator wants to obtain a licence to supply games to the British market. The operator is not a developer (that is, it does not create its own games), but instead supplies its customers with a number of games from a developer it is partnered with. In this case, the operator should go for the remote casino licence and not the remote casino (game host) licence.
The category for the application fee will depend on the annual gross gambling yield. From £550,000 and under to £1 billion or greater, there are 9 different fee categories. The application fees range from £4,224 to £91,886. The fee categories also apply for annual fees, the first of which is paid 30 days after your licence is issued. In the following years, it is paid before the anniversary of when the licence was issued and is 25% less. The annual fees range from £4,199 and go up to £793,729 plus £125,000 for each complete additional £500 million above the AAGY of £1 billion.
Remote General Betting Standard Real Events Licence
In the second example, let’s look at a sportsbook. The operator wants to provide sports bets on real events (and not virtual) on a website. The operator does not want to host the events through another operator’s platform (which would be the remote betting host real events licence), so it would need to apply for the remote general betting standard real events licence. The same fee categories apply, and application fees range from £4,693 to £41,243. The annual fees range from £5,282 and go up to £1,077,027 plus £200,000 for each complete additional £500 million above the AAGY of £1 billion.
Taxation and How to Calculate Fees
The application fee is a one-time payment and annual fees are to be paid each year. An application that is approved will instantly be given a 5-year licence (shorter term is also negotiable). The annual fees need to be pair for each year the company is in operation, and after that, they need to pay tax on the winnings. Taxation on gambling is 15% in the UK. This needs to be paid by gambling operators, and players do not pay any tax on their winnings.
There is also a UK GC licence fee calculator, with which you can calculate exactly how much a company would need to pay to obtain its licence (or licences).
Pros for Players
What do you think when you see a casino/sportsbook has a UK GC licence? Here are some of the first things that should pop into your head.
It Is Popular
The UK has a massive market for gamers and punters alike. This can be seen in the sheer volume or casinos, sportsbooks, and game developers who get licences to spread their content over the country. Most sites should have a big collection of casino titles that come from the most reputable developers around. Competition is high, so you will probably find some great bonuses and deals too.
Utmost Safety For Players
Recently, the UK banned casinos from accepting credit card deposits. This is just another step in its long crusade to make a safer and healthier environment for players. Casinos and sportsbooks that obtain UK GC licences have to comply with tonnes of regulation that honours players. If you ever need to reach out, then they should also supply links to organisations such as BeGambleAware, GamCare, and the like.
Almost Unlimited Coverage
There are licences for all types of operations. Though the licences require a lot of paperwork, the market is open to game software providers, ancillary betting operations, host betting operations, and lots more. Companies, therefore, have more flexibility in what they can offer players and how they can offer it.
Cons for Players
Though there are not many, it is important to highlight some areas where the UK Gambling Commission fall short.
No Spread Betting
Whether it is a good thing or not, the UK GC does not cover financial spread betting. Financial gambling is regulated by the Financial Conduct Authority. But anyway you should not expect to have the option to buy trades whilst spinning your favourite slot, right?
D Category Gambling Machines
Gambling machines have been causing the Gambling Commission a headache for years now. Specifically fruit machines; how they are exposed to children and how dangerous that can be. Now, owning a gambling machine needs to be licenced by the UK GC, unless it is a D Category machine. These are the penny machines where the maximum stake is £1 and prize can be £50. These D Category machines can still be owned by pubs or arcades without licences.
The UK Gambling Commission is extremely organised but at the expense of taking a lot of time to enforce new rules. The Gambling Commission is starting to get its head around cryptocurrency, but it is a bit of a grey area. The anonymity that cryptocurrencies provide is difficult for the Gambling Commission to monitor. Therefore, you may not find a lot of casinos and sportsbooks offering crypto support.
The UK Gambling Commission is in charge of which casinos/sportsbooks can operate in the UK. In addition to establishments that have been licenced by the Commission, gambling operators can also provide their services if they are licenced by one of the whitelisted jurisdictions. These are:
- EEA Countries
- Antigua and Barbuda
- Isle of Man
There is a reason why the UK GC is one of the most coveted licences in the business. It is highly reliable and has access to one of the biggest gambling markets – the UK public. As a player, seeing the UK GC licence at a casino or sportsbook is one of the most encouraging signs as to whether they should play there or not.
Lloyd is passionate about online gambling, he lives and breathes blackjack and other table games, and he enjoys sports betting.