It has been a long time coming. The new gambling reform white paper was recently published with 244 pages describing reforms of gambling regulations. There has been speculation that crypto gambling would be restricted. However, there seem to be no regulations on crypto-assets.
The New Regulations
Since gambling became legal in the UK in 2005, there have been big changes in the gambling landscape. New technologies set the stage for new features and new designs, which has made the industry much more innovative. And with the introduction of online crypto games, it has opened up a new world for many players. But the crypto games have also puzzled policymakers, which led to discussions of regulations. Yet, there aren’t any mentions in the document of specific laws which would prevent customers from using crypto assets as payment.
The UK government does stress that the use of crypto assets is only allowed if the operators comply with the requirements issued by the Gambling Commission. But as mentioned in the white paper there won’t be any new impact on the crypto gambling sector, as the Gambling Commission will continue to monitor the sector. Even though there won’t be big changes in crypto, the gambling white paper still prepares for more control in the industry.
Crypto-assets in the EU
Other institutions have been vigorous in imposing regulations on crypto assets. Last year, The Basel Committee voiced concerns about the risks of blockchain technology and called for banks to minimize the risk of crypto assets.
When looking at the neighbours of the UK, there are other approaches to taking on crypto assets. In April of this year, 529 members of the European Parliament voted in favour of allowing trace crypto-asset transfers. The purpose of this is to protect the consumers against deception and fraud as one rapporteur says in a press release, as the crypto assets would be monitored to prevent money laundering among others.
The Process Leading to the Reform Paper
There were three principles with the first gambling act in the UK. To protect the youth and vulnerable people in a fair and open sector with crime-free gambling. As the current gambling legislation was first enacted in 2005, there haven’t been any larger updates to the legislation until now. Therefore, the new gambling reform white paper has been highly anticipated as it is the first review since the first gambling act. Especially because of the arrival of smartphones which would transform the industry forever. New games appeared on the market, and casino revenues skyrocketed.
In the meantime, regulations have failed to keep up with the new developments. Initially, the review began in 2020 but was halted due to the pandemic. The review aimed to keep up with the pace of digital developments while still protecting consumers.
Establishing an Ombudsman
In order to protect customers, the Gambling Commission in the UK will have a more proactive approach. Therefore, it is stated in the white paper that the commission will create an ombudsman, a government official who will take care of complaints. More specifically, the ombudsman will be in charge of disputes concerning lost money if a customer suffers losses due to the mistakes of the operator. The process for the appointment of the ombudsman is to begin very soon, in the summer of 2023.
Future Regulations in the Crypto Gambling Industry
Before Rishi Sunak became prime minister, he had an ambition of making Britain a “global hub for crypto asset technology”. This also underlines the difference between the UK and the US, where the Federal Reserve recently raised interest rates which could affect the crypto industry. In the US, regulators have taken action against cryptocurrency firms, while there haven’t been any imposed regulations on the like in the UK. The UK government, however, has teamed up with a crypto exchange to find a solution that supports crypto asset innovation under authority.
Even though the white paper has been long awaited, we will have to wait for the measures to be implemented. The measures will most likely become effective in the summer of next year, and it is estimated that this will cost around 800 million pounds a year for the betting firms. However, many operators are still relatively satisfied with the outcome of the reform paper.