The UK Strict Regulation of Casino Bonus – Consequences for Operators and Players

The UK Government under the Department of Her Majesty’s Revenue and Customs (HMRC) together with the Competition and Markets Authority (CMA) has enforced new regulation changes affecting online casinos and bookmakers. The new regulation which includes taxation of online casino bonuses plus new rules governing the promotions is bound to change the dynamics of casino in the UK.

A roulette wheel in a casino

The UK Government has enforced new rules following an investigation by the CMA looking into the adherence of the gambling industry to the stipulated consumer protection laws. According to the investigation, the relevant legal bodies have formulated and enforced new regulations, and these rules will have long-lasting consequences for both the casino operators and UK players.

What Casino Bonuses Entail?

So, what exactly online casino bonuses stand for that prompted amendments of the existing laws covering UK casino offers? Right before delving deep into the effects of the new rules and regulations on bonuses online casinos have nothing to do but abide, let’s look at the significance of bonuses provided by casino operators and why the UK authorities consider them necessary to be limited.

Casino bonuses are promotions run by British casino sites to captivate new users and retain the existing customers by providing some sort of incentives. In a highly competitive era of operating a casino website, incentives such as promotions or bonuses are crucial for houses to gain an edge over the competitors.

The standard bonuses casino provides are as follows.

Online Casino Bonuses

No-Deposit Bonuses

To motivate users to stake, the gambling house rewards players with a free amount to gamble with and get real winnings. No payment or playing history is required for one to access a no-deposit bonus. This is real gaming cash, which a gambler can advantage by playing the games of chance for real money wins.

Gambling chips and playing cards

Each gambling site has its own unique requirements regarding this bonus wagering. For example, some casinos limit the choice of games to play using the bonus and set a minimum number of possible times to wager the bonus over up until the winnings can be withdrawn.

Match Deposit Bonuses

To encourage users to make higher and more frequent deposits, casinos pledge a player’s first deposit match or match a deposit after a long time since the user’s last deposit. As a rule, the bonus amount matches the deposit by 100%. The winnings accumulated from betting these bonuses are subject to the determined conditions for a gambler to follow before withdrawing them. It’s imperative, therefore, for users to read and check the conditions as well as pay attention to the terms of the bonus prior to accepting it.

Free Spins Bonus

Free spin is another form of bonuses which is actively used by casino operators to lure in new users and reward the existing ones. The online and mobile casinos provide players with the opportunity to wager free spins no deposit whether as standalone bonuses or a part of promotion. The bonus spins valid for certain games of chance fall under the stipulated wagering requirements. The gamblers are demanded to meet them before they may cash out the winnings accumulated using the bonus.

Slots Bonuses

Online slot machines are the preferred choice of British players and form top games in a list of each casino site. Therefore, slot bonuses vary and range a lot – from bonus rounds and free spins to bonuses first deposit depending on the offered games.

Three slot machines in a casino

Blackjack Bonuses

Typically, online casinos provide two main types of blackjack bonuses. These are cashable blackjack bonuses and sticky bonuses. Sticky bonuses let you bet and keep the winnings, however, don’t let you withdraw the bonus funds. Specifically, if the bonus was worth £10 and you win £60, then you get to cash out the winning which is £50.

Unlike sticky bonuses, cashable ones enable you to keep both the bonuses and the winnings you gained. The casino sites apply strictly defined wagering requirements, which are necessary conditions to meet for everyone who wants to withdraw the winning amount.

Roulette Bonuses

Because of the great variety of roulette variants available to enjoy online roulette bonus offers are correspondingly diverse. The sticky and cashable bonuses are similar to those of blackjack, reload bonuses reward loyal customers for every new deposit, plus some other bonuses which depend on the particular variant of roulette game the player chooses to play at online casinos.

High Roller Bonuses

High roller casino bonus UK customers receive when they deposit and wager substantial amounts of money. Such rewards are personalized and are presented as gifts to these players to stimulate them to keep depositing big sums.

A stack of twenty pound notes

Referral Bonuses

The referral bonuses work for players who refer a friend to register an account and gamble in a given casino. The referred people don’t obtain the bonus immediately after the registration, but they are required to make a minimum deposit and then the bonuses will be credited to their accounts. Such bonuses can be released, but in the case you follow the peculiar wagering requirements.

Why are Casino Bonuses Regulated?

Casino companies employ bonus campaigns as the key instrument of marketing and businesses’ promoting. The casino company can tweak them as they wish to captivate as many customers as possible. Unfortunately, though, some bookmakers and casinos abuse the bonuses and go against the fixed consumer protection and competition regulations.

Certain online bonuses are exploitative for their consumers. By setting very stringent bonus terms and conditions gambling sites make them nigh impossible for the players to follow and still collect winnings. The conditions of some bonuses require a player to participate in publicity campaigns intended to promote the casino brand before letting a player to release the winnings.

The vast majority of bonuses online casinos offer have very ambiguous terms. When players accept these bonus offers, they have no idea what they are signing up for exactly. Thus, users gamble with bonus cash without knowing the wagering requirements. This lack of clear guidelines on casino bonuses terms goes against consumer protection rights.

There is, therefore, need for the regulatory bodies in the United Kingdom to set rules and regulations to guide the casinos on how to define the terms and condition of various bonuses. The supervisory authorities clarify the maximum deposit that online casinos operating in the UK can offer, the minimum wagering requirements, the max bet, the withdrawal limits, etc. These regulations protect both the customer and casinos from unfair competition arising from bonus deals which are too lucrative.

In the United Kingdom, various departments and regulatory bodies oversee the betting industry, including the United Kingdom Gambling Commission aimed at managing the entire gambling industry, Advertising Standards Authority, CMA, HMRC and many others which control various aspects of gambling as a business in the United Kingdom.

The New UK Strict Rules and Regulations Governing Casino Bonuses

Since 2017, there have been several amended laws and regulations. The most recent changes and what they mean for the gambling industry are as follows.

Tax buttons on a Euro calculator

Tax Regulation Changes on No Deposit Bonus Offers

This regulation is like a culmination of the British Finance Bill published in 2017, which requires that all casino free and discounted bonuses get taxed. Parliament approved the draft bill and the law officially entered into force for British casino companies as from August 1, 2017.

To abide by the law, casino websites are required to pay 15 percent on promotions, bets, or bonuses with a purpose to captivate more users and promote the brand. This law is a part of the UK regulatory policy and a result of numerous measures the government is taking to maximize customer protection, reduce the adverse effects of gambling encouraging users to play responsibly and also raise more revenue.

Regarding the law, the UK Government projects the income addition from taxation of the no deposit bonuses to be as high as £100 million by the year 2021.

The adjustments of regulatory policy are targeting remote gambling sites, which provide their services through mobile casinos and online betting. The Exchequer is targeting the remote gambling operators because of how popular they are and their alarmingly increased usage of free bonuses to obtain the maximum out of the market.

Sign Up Promotion Bonus Regulation Changes

The other change that has had a tremendous effect in the gambling industry at large is the regulatory updates on the signup promotions imposed by the CMA. Following a probe by the CMA back in October 2016, the body discovered that most casinos and bookmakers in the UK offer unfair signup promotions and bonuses which entice new players.

The CMA further established that these bonuses and promotions lacked clear terms and conditions which leads to users’ confusion. Players end up joining the promotions they don’t fully understand. These unclear and confusing terms trick the players into making less informed decisions which they end up regretting later.

If casino sites want to render services they must adhere to certain rules:

  • Clearly outline the terms and conditions of any promotion or free spin, any casino bonus or free bet, or any mobile casino bonus afforded to the users. Vague or unclear terms will attract punitive action from the UKGC.
  • Casinos and gambling companies must not oblige users to participate in publicity stunts aimed at promoting the services of the bookmakers or casino sites for them in order to draw out the winnings earned from wagering bonuses and promotion freebies.
  • UK online casinos have to clearly state the restrictions and limitations of different free bonuses and bets given to the users. Casino companies should not withhold any gambler’s money based on the vague terms, requirements or conditions attached to the bonuses awarded to them.

All casinos operating in the UK are expected to fall along with this new set of regulations lest they face disciplinary action from the United Kingdom Gambling Commission.

So, what do these regulations mean for the casinos and players and what are the consequences of new rules for both? Here are reviews of the implications of the new rules and regulations and how they are shaping up the future of the UK casino industry.

Consequences of UK Strict Regulation of Casino Bonus for Casinos and Players

Casino Operators

All the introduced rules and regulations have telling effects on the activity of casino companies in the UK. The new laws on taxation of casino bonuses, in particular, have obliged casino operators to change their strategies a little.

Gambling companies have been forced to reduce their marketing campaigns and promotions to cut the tax burden imposed by the new law. Casinos no longer spend lots of money advertising the free exclusive bonus offers and free bets which were the primary tool of attracting new customers. With a downturn in the promoting efforts comes a decreased flow of new users and consequently lower revenues.

Two gamblers in a casino

According to the owners of casino websites, this move hinders the expansion of gambling as a whole market. The increasing tax burden on the casinos means stagnation of the businesses as they explore new ways to offset it.

In terms of the regulatory changes pertaining to the conditions and terms of promotions, casinos have started reviewing their previous terms and coming up with new, clearer and definitive conditions for their offers and promotions to make them comprehensible for users.

Players

UK casino players can smile because the amendments to the regulatory system contribute to their safe playing process. The regulations will help to improve their experience in online or mobile casinos operating in the UK regions. British casinos now start to clearly state the conditions of the bonuses and their terms to assure the players are fully aware of what they are doing beforehand. The casino bonus offers will have clear instructions and players can, therefore, make the most out of them.

The taxation of free bonuses doesn’t affect the casino users directly, but they will see a decline in the total bonus offers, extra spin offers, and all kinds of bonuses that a gaming site offers the players.

In conclusion, the new regulatory changes are a collective measure to turn the gambling industry into a more ethical one and promote transparent business operations. The taxation of the bonuses might result in the reduced number of offers by British casinos. But eventually, once the casinos have devised alternatives to offset the burden, the casino bonuses will be more valuable to the players and see increased gambling activity.

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