Labour MP Reveals Plans to Establish New Gambling Act for the UK

A Labour MP says the UK government is looking into establishing a new Gambling Act to reflect the changes to the industry since the passing of the Gambling Act 2005.

Alex Ballinger, MP for Halesowen, who is also Co-chair of the All Party Parliamentary Group for Gambling Reform, spoke at a presentation hosted by cross-party think tank the Social Market Foundation (SMF).

Ballinger said:

“We would like to look in the medium term for a new Gambling Act to recognise the complete change that we’ve seen in the types of gambling, the new forms of online gambling and the like.”

What was the Gambling Act 2005?

The Gambling Act 2005 marked a very significant moment in the history of gambling in the UK, establishing a comprehensive regulatory system for the industry in the wake of the growth of online gambling.

The Act led to licenses being created for remote gambling operators, as well as the creation of British regulator the Gambling Commission in 2007.

However, a number of significant regulatory changes have occurred since the Act was introduced. Controversially, the Act allowed for operators licensed in certain jurisdictions such as Gibraltar to operate and advertise legally in Great Britain while also paying tax at very low rates. This was updated in 2014 with the point of consumption tax being introduced, ending taxation at the point of supply.

In 2019, the maximum stakes on fixed-odds betting terminals were slashed from £100 to £2, which had a severe impact on retail betting. This was followed by a ban on gambling with credit cards in 2020, prior to the publishing of 2023 Gambling White Paper, which outlined more than 60 proposals to update the country’s gambling laws.

Among the terms recommended were affordability checks, improved identification checks, a statutory levy, and a cap on the maximum stakes on online slots at £5 for older adults and £2 for younger adults. The UK industry also now has to contend with a new tax regime introduced this year.

From the start of April, remote gaming duty, paid on online casino bets, was raised from 15% of gross gambling yield (GGY) to 25%. In addition, general betting duty, paid on online sports bets, will go up from 15% of GGY to 25% in April 2027; bets on horseracing will be exempt from the increase. All these post-2005 measures can make the Gambling Act appear outdated.

SMF’s MGD proposal

Ballinger’s comments came after the SMF released a report suggesting machine games duty (MGD) on Category B machines in the UK should be raised to 40% of net takings. MGD rates are currently at a maximum of 25%.

Ballinger, who wrote the foreword for the report, mentioned he believes it would be “easy to do”, that “this seems like an easy win” and that the SMF’s proposals are a “no brainer”.

The SMF wants a tax rate to encompass all Category B machines, arguing the government needs to raise revenue, and that more harmful types of gambling should lead to higher rates of tax. The SMF’s basis for this is that one in four (27%) casino game users on machines gambles at risky or harmful levels - the highest of any major category.

According to the SMF’s modelling, the harms associated with machine gaming has led to economic losses worth £2.33 billion, including fiscal costs worth £669 million through welfare, housing, crime and health payments.