What Can The US Gambling Industry Learn From UK Regulation?

There’s no denying that the UK and US gambling industries are operating on different wavelengths. 

In simple terms, the UK’s industry; its mistakes and its achievements, had served as a benchmark for gambling in America; both a system to look up to and a cautionary tale. 

While UK firms are currently processing the potential impacts of the government introducing the long-awaited gambling White Paper, their compatriots across the pond are exploring brave new territories of what digital gambling can offer to its over half-a-billion-strong population. 

So how can the US use the UK model of industry regulation to succeed whilst avoiding the pitfalls the UK has fallen into?

Firstly, the UK has a well-established and comprehensive regulatory framework for the gambling industry, which has overseen safe and secure casino sites and operators for many years. However, the framework, along with many of the UK’s other gambling protections and systems, is currently the subject of an enormous overhaul, but many basic principles remain key.

An all-encompassing framework of regulation would be a welcome addition to a US gambling market that has exploded in recent years; beginning when the Supreme Court overturned the Professional and Amateur Sports Protection Act in 2018 that enabled states to legalise sports betting. 

But the proliferation of betting now across US states means a centralised rule system that would apply to all is all but impossible for the near future; it’s a regulatory wild west out there and is likely to remain so for the medium term. 

An issue that does not require a macrocosmic rule-set however would be tackling problem gambling. 

Currently, UK operators are required to have robust responsible gambling policies, provide self-exclusion programs, offer tools for setting betting limits, and promote awareness about problem gambling. 

The measures in these respective areas are expected to get even tighter since the UK government’s unveiling of the White Paper last month, much to the apparent chagrin and concern of many industry operators.

Unsurprisingly, the number of ‘regular’ US gamblers has risen since the Supreme Court action, numbering 15% pre-2018, to around 25% last year. 

Furthermore, measures already in existence to protect against the dangers of problem gambling in the UK have already been bypassed in the US. 

US bettors can use credit cards for online gambling where UK bettors can’t and betting can be openly discussed by sports broadcasters stateside during sports action, a practice forbidden in the UK. 

The UK’s Committee for Advertising Practice has also outlawed celebrity endorsement or promotion of gambling and betting through advertising, whereas across the pond, it is commonplace to see stars of stage, screen and the pitch promoting gambling companies. 

A UK gambling practice the US would hugely stand to benefit from adopting is the former’s approach to consumer protection. UK regulations prioritize consumer protection by ensuring fair and transparent gambling practices. The US can learn from this approach by implementing strict regulations to safeguard player funds, ensuring fair gaming practices, and establishing clear dispute resolution mechanisms.

This also extends to data protection and privacy.  The UK has robust data protection laws, such as the General Data Protection Regulation (GDPR), which provide individuals with control over their personal data. The US gambling industry currently has no such implementation that can safeguard against personal data as effectively.

That said, US lawmakers and gambling companies will be carefully monitoring how the UK’s White Paper shakes out. As part of the legislation, the government is proposing monitoring bettors’ activity and carrying out ‘affordability checks’ on those who spend over certain thresholds. 

These checks range from scouring of public records looking for court proceedings and bankruptcy filings, to closer checks involving a bettor’s financial records and credit history. The latter will likely be a topic of great debate in the scheduled consultation with UK gambling groups as the White Paper looks to pass into law and the US will surely watch to see what sort of measures are likely to be imposed and whether or not they could fit the US market. 

Another area where the UK has shown the way and will be crucial to the development of the US gambling industry is the ability to foster a collaborative approach to regulation. This roadmap ensures that the views and concerns of all relevant parties are taken into account via open discussions and consultations with operators, consumer groups, and treatment providers, to develop and refine regulations. 

The UK has embraced technological advancements in the gambling industry, such as online gambling and mobile betting, though the US has far surpassed the UK with regards to the variety of smartphone-enabled betting avenues. 

True enough, the UK likely still leads the US in ‘in-play’ betting, with 75 to 80% of sports bets being in play, to the US’s 40 to 50%, according to the National Council on Problem Gambling (NCPG) figures from last year. However, consider the proliferation of fantasy sports apps in the US, or the ‘gamification’ of gambling.

The strength of enthusiasm for this aspect of sports betting, led by firms like DraftKings and FanDuel, comes in the fetishisation of data-driven sports analysis in the US. 

Gone are the days of wagering simple win/loss bets on games of baseball, American football and basketball; there are now literally hundreds of metrics, outcomes and eventualities that a player can wager on via their phone before games and instantaneously during them. 

As a result, keeping an eye on the continued growth of these potential addictive betting patterns and facilitations are key to ensuring continued growth for a gambling industry that feeds sports and state income in a responsible fashion that minimises the risk of developing more and more ‘problem gamblers’.

Studying the UK's regulatory framework in its current state is difficult, considering the wide-ranging upheaval the government’s White Paper could have on the industry, its operators and the general public.

Moreover, the US gambling industry is set to far outpace the UK’s in terms of volume and financial significance in the coming years and will likely stand head and shoulder above the rest of the world, driven by and interwoven with the country’s obsession with sports. 

However, here and there, the US can gain insights into best practices, particularly with regards to ground-up consumer protection measures and effective oversight, from the UK though implementing them across its state-driven system will remain a significant challenge. 

This post was authored by an external contributor and does not represent Benzinga's opinions and has not been edited for content. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice. Benzinga does not make any recommendation to buy or sell any security or any representation about the financial condition of any company.