The rules and regulations surrounding the online gambling industry will vary depending on where you are based. While countries such as China, Thailand and even the United States make it virtually impossible to gamble online, regulators are far more relaxed in the UK. In fact, not only is it perfectly legal to play online slots in the UK, but the industry is thriving.
If you are interested in learning about the UK regulations surrounding online gambling, and more specifically – online slots, then be sure to spend the time reading our interesting and informative article.
We will discuss some of the most important information that we think you should know, such as matters relating to KYC, tax, and even limits.
Let’s start by looking at the main gambling framework in the UK.
UK Gambling Legislation Regarding Online Slots
The laws surrounding the UK slots arena has gone through a major transition over the past few decades. While the origins of the original slot machine dates back to the early 1900s, it was not until the late 1960s that the interest became mainstream. Back then, the only place that you would find a slot machine would be at an arcade venue. Think the likes of Butlins and Pontins, and maybe local fairgrounds.
The early design of a fruit machine was based on the concept of a one-armed bandit. In other words, there was no presence of features, holds, nudges, or bonuses. On the contrary, you simply inserted a token, pulled the level, and hoped for the best. In terms of actual legislation, it was not until 2005 that the UK slot machine space was accustomed to any stringent regulation.
Known as the Gambling Act 2005, this crucial piece of legislation now governs the entire UK gambling industry. Not only did it create a safe and secure environment for people, slots in pubs, bars, arcade venues and casinos, but the Gambling Act 2005 created a sea-change for online slots.
The key reason for this is that prior to 2005, the online slots industry was largely unregulated. Slot casinos would come and go, subsequently taking player funds with them, knowing full well that a lack of regulation gave these unsavoury operators a significant advantage.
Things are a lot different these days, not only because of the Gambling Act 2005, but because the online slots industry has a highly stringent watchdog in the name of the Gambling Commision. In a nutshell, the UK Gambling Commission are tasked with the responsibility of keeping the UK slots space safe, and thus, ensuring that casino operators remain legal.
So now that you have a bit of background of legislation in the UK gambling arena, in the next section of our guide we are going to explore how tighter regulations keeps online slots legal.
How the UK Gambling Commission Ensure That Online Slots are Legal
When assessing the legality of online slots in the UK, it is not as simple as the operator following the regulations set out in the Gambling Commission. On the contrary, there is a plethora of factors that online slot sites need to consider well before they are able to open their doors. First and foremost, it is a legal requirement for all online casinos to offer their services to UK players to be in receipt of a gambling license issued by the Gambling Commission.
It must be noted that obtaining a license is no easy feat, as the slots operator must meet a range of requirements as set out by the Gambling Commission. This includes a number of things, such as having the necessary safeguards in place to keep player funds safe, ensuring that the platform has a transparent mechanism to guarantee the randomness of slots, and installing stringent controls against the threats of fraud.
Not only this, but online slots sites looking to obtain a license must also agree to keep player funds separate from their main operating cash flows. In other words, they hold all deposits and bets into a segregated account to ensure that they have enough money to pay-out players winnings. This is in direct response to the early days of online gambling, where a number of shady operators had to close down because they did not have enough money to honour player withdrawals. This is something that should not, and will not, happen again in the online UK slots space.
Who can Legally Play Online Slots in the UK?
The Gambling Act 2005, as well as a number of other key pieces of legislation, also dictates who can and who cannot play slots online. Firstly, there are strict regulations on age.
Age Restrictions in the UK Online Slots Space
For those looking to play slots and other casino-related products online, it is a legal requirement for the player to be at least 18 years old.
This is interesting, as it is legal for those aged under 18 to access other gambling products in the UK. This includes the National Lottery, which allows players as young as 16 to buy a ticket. Furthermore, some types of slot machines – such as those with much lower stakes found in family arcade centres, do not have a minimum age at all.
When it comes to the early days of online slots in the UK, banks did not have the required technology to verify a person’s age when a transaction was processed. This meant that it was a friction-less process if an underage person wanted to play slots online, not least because they could use a debit card linked to their bank account without it getting flagged. As we will discuss further down in our article, online slots site would not ask for any ID verifying the player’s identity either.
Social Responsibility in the online UK Slots Space
The other key area of legislation that dictates whether a casino can legally take bets from a player is with respect to social responsibility. This means that online slot sites have a legal responsibility to protect players that have issues with problem gambling.
In other words, if a player demonstrates that they may be gambling more than they can afford to lose, then the slot site needs to step in. This links back to the process of obtaining a license from the Gambling Commission, insofar that online slot sites must demonstrate that they have the required safeguards in place to protect players from addiction.
In order to achieve this in the modern world of online gambling, operators will install algorithms that will understand playing habits, and essentially, detect when the player might be gambling more than they should. If this is the case, then the casino will make contact with the player to make sure they are comfortable playing with the stakes they are playing with. If the online slots site is not satisfied that the player is able to control their gambling, they might seek to restrict their limits, and worse, ban them from using their platform.
When assessing the legal aspect of social responsibility, the most important thing for online UK casinos to consider is self exclusion. For those unaware, each and every online slots site that services UK players must have an option that allows the player to easily exclude themselves from accessing the site. All the player needs to do is choose how long they want to be self excluded for (usually from one month to indefinitely), and then they will no longer be able to access their account.
Ultimately, if a player self excludes themselves, but the online slots site still allows them to play, then they would not be operating in a legal manner, as per UK regulations.
So now that we have covered age restrictions and social responsibility, in the next part of our article we are going to explore ID. verification.
KYC in the UK Slots Space: Why it is Important
While ensuring that the laws surrounding age restrictions and social responsibility are still crucial, there is nothing more important than the process of identifying players. Back in the early days of online slots, players could deposit and withdraw funds without providing the casino with any ID, subsequently allowing them to gamble anonymously. After all, why would the online slots site care who was using their platform, so long as they were spending money?
Not only did such practices fail to confirm that players were of a legal age to gamble online, but it had no regard to the current laws we have surrounding anti-money laundering (AML). As per UK regulations such as the Proceeds of Crime Act 2002 and the Money laundering Regulations 2017, it is a legal requirement for all online casinos operating in the UK (and throughout the EU), to identify each and every player that uses their platform. This is to ensure that players are not using online casinos with the view of laundering their criminal proceeds.
The KYC Process
The process of meeting AML laws is known as Know-Your-Customer, or simply KYC. Regardless of which UK slots site you are using, you will be required to meet KYC guidelines. Initially, this will require you to provide the platform with a range of personal information when you first sign up. This includes your full name and address, date of birth, nationality, and phone number.
Once your account is open, you will need to verify this information at a later stage. As per UK regulations, this needs to be within 72 hours of opening your account or when you make your first withdrawal – whichever comes first. In order to do so, the casino will ask you to upload a copy of your government issued ID. This will need to be either a passport or driver’s licence.
It is also likely that you will need to prove your home address. You can do this by uploading a copy of a bank statement, utility bill or tax statement, or possibly a number of other documents as stipulated by the casino. In some cases, you might also be asked to upload a copy of the debit/credit card you used to fund your account. In order to meet the legal requirements of data protection, slot sites will ask that you cover the first six and last four digits of your card, prior to uploading it.
So now that we have covered the legal framework of KYC, in the next section of our guide we are going to explore taxation in the online slots space.
Do I Need to pay tax when Playing Online Slots in the UK?
The short and simple answer to this question is no – you do not have to pay any tax when you play online slots in the UK. However, this was not always the case, as we will explain below.
Prior to 2001, all UK gambling companies passed on a betting duty of 9% on their customers. This means that had you won a £1,000 slots jackpot, you would have to pay £90 in tax. Fortunately for you, the then UK Prime Minister Gordeon Brown scrapped the taxation policy in 2001, meaning that players can now enjoy tax-free profits on all of their winnings – regardless of the amount.
This makes the UK slots space one of the most attractive markets for online players, especially when one considers the rules in other countries such as the U.S. Although it is extremely difficult for online slot platforms to offer their services in the U.S., if they are able to obtain a licence, U.S. players need to pay tax. Although the specific rate varies depending on the state, this is all-but certain to be a double-digit tax.
As a result of not having to pass on tax to their players, UK slots sites responded by offering highly favorable house-edges on the games they host. This is even greater news for the player, as it means that the underlying RTP (Return-to-Player) on online slot games is as high as it has ever been.
So now that we have covered legal concerns surrounding taxation, in the next part of our article we are going to explore the regulations on gambling limits.
What Limits do Online Slot Sites in the UK Impose?
If you remember the very early days of physical fruit machines found within pubs and bars, you might remember how low the jackpots were. In fact, even today, the most that you can win on a traditional pub-based fruit machine is £100. In terms of the stakes, this is now capped at 50p per spin. While for the average player this is perfectly fine, some of you might have an appetite to gamble larger amounts.
This is even more pertinent when one considers the recent reduction on the Fixed-Odds Betting Terminals (FOBTs) that you find in the UK. From a high of £100 per spin, a lack of social responsibility safeguards and threats of money laundering abuse forced the government to accept proposals on a reduction to just £2 per spin.
Fortunately for you, the legal framework of the online slots industry allows you to gamble with significantly higher stakes in comparison to the offline fruit machine arena. In fact, in terms of the legalities, there is not actually a maximum stake size when it comes to playing slots online in the UK per-say, not least because this is decided by the specific casino in question.
High Stake Sizes are Legal in the UK
However, you should not be surprised to see online slot games that allow you to take up to £500 per spin. While for most of us a total bet size of £500 would be beyond the realm of logic, those that fall within the high-rollers category, this is exactly what they want. It is important to note that while UK slot sites can install their own stake limits as they see fit, they must still ensure that they meet their legal obligations concerning social responsibility.
As we discussed earlier, UK slot sites are still required to ensure that the players using their platform are not problem gamblers. As such, those betting with higher-than-average stake sizes are likely to be flagged. This is not to say that you will have your stakes reduced automatically, or at worse – banned from the platform completely, more so the casino will want to ensure that you can afford to bet with the stake sizes you are using.
Is Playing Online Slots in the UK Legal?
In summary, if you have read our article all the way through, you should now have a really good understanding of how the legal framework in the UK ensures that players can use online slots sites in a safe and secure way. Largely due to the presence of the UK Gambling Commission, online casinos must follow a stringent set of rules if they want to continue offering their gambling services to the UK market. Not only does this centre on keeping player funds safe, but also with respect to age restrictions and social responsibility. Moreover, in order to keep crime out of the online gambling space, slot sites must also ensure that they identify each and every player that uses their platform. As a result, UK casinos remain fully compliant with all of their legal obligations.