The Credit Crunch is Doing Little to Stem Rising Number of Britons Gambling Online

More Britons than ever before are trying their hand at online gambling despite the ever worsening economic climate. This comes as no surprise to me, as the credit crunch has meant that more and more people are opting to stay in rather than go out, and what better way is there for people to spend their time indoors then by winning money!

The results of an extensive survey by the UK Gambling Commission released in recent weeks have shown that the quality of online gaming sites and the prizes, bonuses and jackpots on offer continue to attract hoards of players due to their increase in potential monetary value.

Research conducted by ICM show that a survey dealt with last year (including the final quarter of the year when recession loomed) found an increase in the amount of people who said they had used one remote form of gambling or another.

The news will come as a major boost to the online gambling sector within the UK as it prepares for a difficult year with the current economic climate looking to worsen before it finally resides.

The Commission’s study revealed that a whopping 9.7 percent of the 8,000 adults surveyed had gambled using a computer, mobile phone or interactive/digital television set over the last month. This compares with 8.8 percent for 2007 and 7.2 percent for 2006.

The trend seems to be that – as gambling online becomes more accessible thanks to the likes of 3G mobile technology and improvements in digital TV people are spending more time gambling online than ever before.

This trend is likely to continue as long as the recession bites which will benefit the online casino industry tenfold during these hard times.

Erim Jones

How Internet Gambling Became a Multi-Billion Dollar Industry

Online wagering only began in the 1990s, but it didn’t take long for it to become a multi-million dollar business. The catalyst for the explosion in online gaming came in 1994, when the government of Antigua Barbuda, an island nation in the Caribbean, passed a law allowing online casinos to operate from their country.

Naturally, many people saw this as a huge opportunity, and two of them, Andrew and Mark Rivkin, formed a company called Cryptologic to write software enabling safe handling of finances in online gambling with till-then unequalled encryption practices. Another big company was formed in 1994 too: Microgaming.

Cryptologic and Microgaming were the two leading companies as afar as gaming technology. Cryptologic was first to make a fully operational gaming platform with electronic money account management. By the end of 1996, InterCasino was up and operational on the web – one of the very first online casinos. It wasn’t long before online casinos were a multi-million dollar industry. Not long after that it stepped up to being a multi-billion dollar industry.

In 1997, Microgaming released Cash Splash, the first online progressive slots game. At this time, players from the US were a large chunk of the online betting population, and this fact drew the attention of Senator John Kyl (R-AZ), who started drafting various legislative bills to stop people from gambling online. The first of these, the Internet Gambling Prohibition Act, did not pass, and Americans continued their love affair with online
betting.

Other world players coming on board the internet casino train during the late 1990s included Argentina, and UK territories Gibralter and Isle of Man, which began online sports betting sites. By 2001, the British Channel Islands legalized online betting, and later that year, there was a push to legalize internet wagering in the UK as a whole.

In 2005, the UK Gambling Act was approved, and it was a boon for the internet casino industry. The law created the UK Gambling Commission to oversee all enforcement of regulations in licensing online gaming sites, preventing underage gambling and ensuring software fairness accreditation and reporting of monthly payout percentages. The Commission also investigates and prosecutes illegal gambling and basically is a very comprehensive online wagering regulatory agency. The UK’s internet wagering oversight is now considered a model for other countries that want to regulate online gambling.

In October 2006, US legislators tried to legislate an end to betting online by American citizens with the Unlawful Internet Gambling Enforcement Act. Then-Senate Majority Leader Bill Frist (R-TN), attached the bill to a “must-pass” bill on Port Security aimed at combating global terrorism, claiming that online wagering proceeds were used by offshore companies to fund terrorism. But just before enforcement of this act was to go into place, new legislation was written allowing US citizens to participate in online gaming. Though it has passed from committee, there is no guess as to when or if it will be passed by the House and Senate. That means that currently, US online gamblers exist in a gray area of the law, though public sentiment is growing behind full legalization of online gambling in the US.

Poker and Gambling Spend – UK

Gambling spend per household in the UK is on the up, particularly in the online sector and more so with online poker. Since the recent launch of Sky Poker TV channels, coupled with the list of high profile names now playing the game, the profile of the poker game itself has been raised along with expenditure. Online gambling has increased in general, and with the influx of online poker sites, poker gambling has become part of many people’s lifestyles, and indeed many people currently earn their living playing poker all year around.

Currently there are 4 poker channels that can be viewed by UK Sky subscribers and over 200 poker sites that can be played around the globe, making online gambling a form of entertainment and recreation that ranks alongside the cinema and bowling in terms of visits.

People in the UK love to gamble. The UK has one of the highest populations with the propensity to gamble (some 62%) only just behind Australia and Sweden, though surprisingly slightly less per population than the US where only 62% of the population gamble.

The Gambling Commission which was set up in 2005 following the UK Gambling Act of that year (the most significant change in gambling law in over 50 years) reports that the UK also has one of the biggest gambling spend per capita of any other country in Europe. A figure of £1266 per capita, collectively £76 billion a year, and 7.7% of GDP has been quoted in some press releases, compared to that of £600 per capita in 2004.

So of the 33 million people in the UK that gamble, what types of gambling are people spending their money on and where does poker fit in that list.

Well let us look first at the forms of gambling that are considered. You have betting on sports like dog racing and horse racing. You also have bingo, national lotteries, pools and scratch cards. There is also casino gambling and slot machine gambling, and then you have online gambling

The National lottery is the most popular form of gambling in the UK with 65% of the population buying lottery tickets. The next most popular is scratch cards which 22% of UK residents buy each week. Slot machine gambling comes in next with 14%, followed by horse/dog racing 13%, and pools, 9%.

It may come as a surprise that still only 3% of the population actually gamble online in online casinos or poker rooms. However, this just proves that there is still room for growth in the UK market. In general more men than women gamble online, except in the bingo sector where the percentage is 70% female to 30% male.

How much is being spent?

Average figures, provided by the Gambling Commission, show around £3.80 per household is spent each week on the National Lottery and some £4.00 per week spent on pools, scratch cards and other lotteries. £7.20 each week is spent on bingo, £5.00 for sports betting, and approximately £20 in land-based casinos. Approximately £10 per week is spent on online gambling and £5.00 on slot machines.

It is clear the online gambling is one of the major gambling expenditures in the UK. It is not clear how much is actually spent on online Poker, but considering poker sites makes up 75% of online gambling visits the amount is likely to be around £7.00 per household.

What is clear is that people love playing poker and it is not only men who have taken up this pastime. High profile female figures have begun to enjoy poker and the BBC reported one woman helping to support her family by playing poker at home.

With changes to the UK Gambling Act coming into force in September 2007, the government are suggesting that the Act will help reduce people propensity to gamble and will also protect children and problems gamblers. I will be a long time before proof of this is seen, but one thing is for sure, the profits raked in by the government on gambling taxes are set to grow alongside people’s desire to play their favourite game of online poker.

UK Gambling Laws

Your visit to the city of London or Manchester can just not be complete without you visiting any one of the casinos. Specifically now, as the gambling laws have been relaxed, a ‘punter’ in literal terms can have a ‘relaxed’ visit to the casino and play the game he wants. ‘Relaxed’ may be a pun in the context as Casinos brim with action at all times. One thing is for sure, UK Gambling Laws have been formed now in such a way that gambling can indeed be treated as a fun activity.

What are the UK Gambling Laws?

o Establishment a single regulatory authority – The latest change to the UK Gambling Laws has been to establish a single regulatory authority that will regulate and monitor the activity of gambling in the United Kingdom. This authority will regulate and prescribe rules to entities that promote and conduct gambling activities.

o The UK Gambling Commission – In the United Kingdom, it is believed now that the word gambling starts and ends with “The UK Gambling Commission”. This is the single regulatory authority which we discussed a while before. The UK Gambling Commission’s major role is to provide licenses to all the gambling operators. With workers in casinos and gambling outlets a major factor to customer’s experience, the commission also regulates licenses to key workers in the gambling outlets.

o Tests for Gambling Operators – Gambling operators in the UK have never had it so tough in the UK to get their licenses. Now, it is mandatory for the gambling operators to undergo a three part test also known as the Fit and Proper Test. This is done for them to get an operating license. The Fit and Proper test examines the applicant’s suitability to the role, financial stability, knowledge and competence in gambling. The applicant is required to pass all the three examinations to be considered eligible to get the operating license. The UK Gambling Commission conducts monitoring and inspection activities on the applicant and the casino. This is a due diligence activity carried out by the UK Gambling Commission to ensure that all the standards prescribed to the gambling operators are met consistently.

o Licenses for Corporate clients – Should you be a director of a casino, you would be considered as a corporate client. In all probabilities, you and other key members of your management team would need to undergo a test conducted by the UK Gambling Commission.

As per the new gambling laws in the UK, every application is thoroughly examined, monitored and if necessary, the candidates would be interviewed before an operating license is given to the individual or the entity.

If people think that all these laws have been introduced to shy people away from opening and visiting casinos, they are wrong. The objective of restructuring the UK Gambling Laws is to ensure that gambling no longer is considered an illegal activity. Now, if you are in UK, you do not need to hide from the cops if you wish to go gambling.

Betting & Gaming Licensing News – Gambling Commission Does the Splits

The Gambling Commission has notified the trade of its continued tough line on operators who attempt to increase the number of gaming machines on their premises, either by splitting their premises or by applying for a license for which they have no intention of operating the primary activity of the license.

In a letter to a number of trade bodies, the Commission warns that since it published a supplement to its License Conditions and Codes of Practice in May last year, it has made what it calls targeted representations against a number of premises license applications where it has perceived operators have overstepped the mark laid down in the supplementary code.

In particular, the Commission’s letter mentions:

… [a] proposal to split what had been one betting premises into two betting premises and another which proposed to change the premises license in a building which contained two adult gaming centres into a betting premises and an adult gaming centre.

The supplementary code makes it clear what factors should be evident to show that operators are providing the primary gambling activity under the premises license and the Commission has signalled it is working with LACORS and local authorities in making representations.

In the eighteen cases it has made representations, each application has been withdrawn. This issue is clearly not yet settled. If you have any plans to split your licensed premises then you should consult a specialist betting and gaming licensing solicitor. The Gambling Commission or your local Licensing Authority (the local council) may also be able to assist you.

Maitland Walker LLP

We have prepared this information as a general guide. We recommend you seek specific professional advice before acting on any information. We accept no liability for action taken or not taken because of this information.