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Legalized betting in the U.K. started with the Betting and Gaming Act of 1960, which allowed for betting on bridge and other games of skill, also permitted betting shops to legally operate and offer whatever forms of betting were legal at the time. (1) The idea was to bring the widespread gambling that went on in the country off the streets and into places that could be much better controlled.
In the first six months, about 10,000 betting shops were set up, so this caught on like a landslide. Two more bills were passed, in 1963 and 1968, further expanding what type of betting could be offered by these betting shops. From the point where they became legalized, betting shops became a strong fixture of the culture in the U.K., which remains the case today.
During this time things operated pretty much under an unregulated atmosphere, however in 1970 the government sought to exercise more control over the industry by placing restrictions on gaming and also requiring establishments to be licensed and abide by the rules of the licenses. (2)
The Gaming Act of 1968 permitted the expansion of not just betting shops but commercial casinos, and in 2005 this was expanded to permit much larger casinos such as found in Las Vegas, although there were strict limits on how many could be built. (3)
The Gambling Act of 2005 also regulated online gambling for the first time, and online gambling, particularly sports gambling which residents of the U.K have always been particularly fond of, comprises a large part of the market nowadays, although the land based betting shops still do a huge amount of business. There are also lots of places to play live poker as well.
The U.K.’s Online Poker Scene
Playing online poker in the U.K. is perfectly legal, and in fact that’s been the case throughout the history of online poker, although it did start to become regulated in 2005, where online poker rooms operating in the U.K. had to be licensed.
A lot of the online business went offshore though, as there are a few licensed online poker rooms in the U.K. but most are located in other jurisdictions, and the U.K, based companies have had particular liking for Gibraltar.
Being licensed in the U.K. meant paying taxes to the U.K. government though, and poker rooms could easily find other places to operate which were more tax friendly, such as Gibraltar and other locales.
As time went on the U.K. government tried to get these poker rooms to comply with U.K. law voluntarily but as you might imagine, this wasn‘t a very effective approach for them to take.
One of the real problems was that there actually was no real requirement for anyone to require a license to offer gambling to U.K. residents if they did not have any “key gambling equipment” in the U.K. (4). So the law had to be updated.
The solution was the current 2014 Gambling Bill which requires offshore poker rooms and other offshore gambling sites to obtain a license if they want to offer play to U.K. residents. Instead of looking at the situation from where the gambling is provided from, the “point of supply,” this new bill looks to regulate gambling at the “point of consumption,” in this case, in the U.K. where U.K. residents are placing the bets.
What This Means To U.K. Online Poker Players
The first thing that players worry about when it comes to seeing poker being regulated like this is that they will no longer be able to access the international player pool. So what generally happens is now you can’t play against players from all over the world anymore, you can only play against players from your own country, which tends to make a big difference.
Not all regulated poker is set up to cordon off players like this though, for instance players in Belgium can play against players from all over the world, although the site that they play from is set up as Belgium only, similar to a skin on a network.
So since there are no restrictions that would disallow U.K. players on licensed poker sites from playing against players from other countries, they will be spared this problem, and in fact requiring poker sites to cordon off players like this isn’t in the interests of anyone, as it leads to less play, less profit from these players to the poker room, and therefore less tax revenue to the jurisdiction.
This is actually one of the big complaints among players from countries such as France who have cordoned off their poker rooms to residents of France only. Pokerstars.fr has quite a bit of traffic for instance, but the main PokerStars site has 20 times more traffic, for example.
This does leave us with the issue of the extra taxes that must be paid and there will be more tax as this is what this is all about. However, the U.K.’s taxation rate is at least more reasonable than has been levied in countries like France and Italy, although a little higher than what’s being charged in Belgium, which this scheme is similar to.
The problem remains as far as how poker rooms are going to recoup the extra tax that must be paid, and of course this always comes down to players having to bear the burden, they aren’t about to say well we’re feeling generous, let’s just reduce our profits, that’s not how business works.
It wouldn’t be fair or make sense to have the entire world community pay for it either though, so it’s expected that it will be set up like Belgium does, where affected players, in this case U.K. players, would earn frequent player rewards at a lower rate than those in other non regulated countries.
So that’s really not so bad if that’s the upshot of this and it’s certainly much better than how some other countries are handling this. Winnings from online poker and gambling in general are still tax free in the U.K. which is certainly a big plus, and if you have to pay a little tax via reduced frequent player points and still get to play at the same sites essentially that isn’t a big deal really.