Trans-Atlantic collaboration is quickly becoming a trending topic in the world of online gambling policy. On Monday, Feb. 5, the National Council of Legislators from Gaming States (NCLGS) announced that it would enlist the help of the United Kingdom Gambling Commission (UKGC) in preparing its model iGaming legislation. The following day, the UKGC’s Executive Director Tim Miller told an audience at ICE London that the British regulator expects to learn from the exchange as well.
Each country has something different to bring to the exchange because they’re at opposite extremes of the online gambling timeline. The UK never attempted prohibition and quickly adopted domestic regulation for the new form of gambling in its 2005 Gambling Act. Conversely, the US cracked down on offshore sites in 2006 with the Unlawful Internet Gambling Enforcement Act (UIGEA), and it wasn’t until 2013 that a few states began authorizing sites to operate locally.
Even now, only eight states have some form of legal iGaming. However, the repeal of the Professional and Amateur Sports Protection Act in 2018 has meant the more widespread adoption of online sports betting.
That means that the UKGC has a longer history from which to draw lessons. On the other hand, US regulators and lawmakers may have given more thought to new technology, having written their rules more recently.
CDC Gaming Reports quotes Miller telling ICE attendees:
If you go back to when we first started regulating online gambling, it was a fairly new thing[…] In North America, they’re developing systems with a very different set of technology with AI and things like that in the background. There’s an opportunity for us to learn from them as they develop those models and apply that to our existing approach to regulation.
The NCLGS announcement described the UK regulator in even more glowing terms. It quotes West Virginia Delegate and NCLGS President Shawn Fluharty as saying:
NCLGS will now have the unique opportunity to leverage the wisdom and expertise of one of the most respected regulatory bodies worldwide in an effort to produce model legislation to strengthen the US market, shrink the black market, and protect consumers.
The NCLGS Model iGaming Legislation Effort
NCLGS has two meetings each year: one in the winter and the other in the summer. At the 2024 winter meeting in January, legislators unveiled their model legislation plan. The hope is to have a draft ready in time for the summer meeting in July.
In the US, gambling laws are almost entirely a state responsibility. That has produced a patchwork of legislation. Not only do states vary in what forms of gambling they allow, but the rules can also differ considerably. That includes everything from tax policy to responsible gaming requirements, to the number of available licenses. Sometimes, it even impacts what games an online casino can offer.
It’s confusing for players and operators alike. Compliance failures occur more frequently when a site operates in multiple jurisdictions with differing requirements.
As gaming industry veteran Richard Schuetz once put it, policymakers have “a choice between sustainability and chaos.”
The more states legalize online gambling, the more chaotic the situation will become. Unless, that is, there’s a move to develop standards first. The NCLGS model legislation project is that move, though it remains to be seen how willing other states will be to adopt its recommendations.
Collaboration Doesn’t Mean an International Standard
Although the UKGC has indicated it hopes to benefit from collaboration as well, the goal isn’t to produce model legislation that would work in both countries. The UK may take some lessons from US regulators, but Miller was clear that he doesn’t believe in a one-size-fits-all solution.
Per CDC Gaming Reports, he told ICE:
I’m not sure whether any of us are really seeking to have a single unified approach to regulation across the world. I’m not sure it’s ever possible, because the strongest regulatory systems are those that recognise the unique circumstances in the countries that they operate in.
On the sports betting front, for instance, US regulators have wrung their hands endlessly over the issue of betting on college sports. That isn’t a concern in the UK because collegiate athletics aren’t part of the culture in the same way they are in the US.
Likewise, the question of in-state or out-of-state live dealer casino game studios isn’t something UK regulators need to think about. Keeping jobs in the country is a priority for the UK, but there isn’t the same economic rivalry between counties as there is between US states.
There are also differences in what sort of policies might be politically acceptable. The UK is currently mulling the possibility of mandatory affordability checks for online gamblers. Even there, the proposed intrusion into personal privacy is proving to be controversial with the general public. American attitudes toward individualism and fears of government overreach being what they are, such a proposal would probably be a non-starter on this side of the Atlantic.
Willingness to Learn From Mistakes Will Be Crucial
Most public response to news of the UKGC’s involvement in NCLGS’s effort has been positive. However, there is likely some quiet skepticism as well. The British regulator has come under fire from European analysts and even some domestic politicians in recent years for what’s often billed as a suddenly heavy-handed approach.
However, the UK’s negative experiences could prove even more valuable to US policymakers than its positive ones, provided the participants are willing to approach them from the perspective of learning from the past.
The UKGC’s crackdown has included license suspensions and the issuance of numerous multi-million-dollar fines to operators, including several over $10 million. Its record currently sits at £19.2 million ($24.2 million), handed down to William Hill last year. By contrast, six-figure fines from the Ohio Casino Control Commission were considered remarkable enough in the US to make headlines.
This approach didn’t come from nowhere, however. The crackdown was a response to public backlash after a long period of laissez-faire regulation led to an industry run amok and soaring rates of problem gambling.
There’s some risk that the US could find itself on a similar trajectory. Already, we see media backlash and a public that’s growing sick of gambling messaging. News of compliance failures is not uncommon—BetMGM was recently discovered to have taken 15,000 illegal sports bets in Massachusetts, for instance—yet the penalties for such in fractions have thus far remained small.
Avoiding a repeat of the UK’s 180-degree pivot to draconian regulatory enforcement would be a worthy goal for this collaboration. The need to develop a sustainable strategy for an online gambling market will surely be at the forefront of the minds of everyone involved in the model legislation effort.