Online Gambling Comparison: The United Kingdom vs New Jersey

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Online gambling regulations can be a bit of minefield, particularly when it comes to understanding how they vary between different jurisdictions.

The United Kingdom has the most established regulatory framework in the world and is often used by other countries as the most effective template to follow.

While the UK’s gambling regulations are pretty much set in stone, many other regions are still working towards a fully-formed structure.

That is certainly the case where the United States is concerned, with their online gambling sector suffering from a lack of consistency across the different regions.

While the likes of New Jersey, Pennsylvania and others have embraced the relaxation of the laws pertaining to online gambling, many other states are still arguing about the finer details.

Read on as we take a closer look at the latest state-of-play for online gambling in the UK and New Jersey with a view to comparing how they differ.

Gambling Act Central to UK Framework

The gambling industry in the UK is regulated by the Gambling Act 2005, which sets out the legal framework for the entire sector.

This includes remote gambling such as sportsbooks and online slot games, land-based gaming machines, football pools and scratch cards.

The UK National Lottery, non-commercial gaming and betting, charitable gaming and prize gaming at travelling fairs are also covered by the act.

All gambling activity falls under the control of the UK Gambling Commission, which audits gaming companies operating in the jurisdiction and can issue hefty fines for non-compliance.

Offshore Taxation for UK Firms

Further regulations were introduced in the UK during 2014, with the Gambling (Licensing & Advertising) Bill introduced to address taxation issues.

This bill imposed a Point-of-Consumption Tax (POCT), which targeted UK gambling firms that located elsewhere to avoid paying higher taxes.

This included Gibraltar, Malta and the Isle of Man and was set at 15 percent to ensure that any company accepting UK gamblers were appropriately taxed.

The new regulations also had an impact on online sports betting taxes, which were raised from 6.75% to 15% under the same law.

‘Games of Chance’ Targeted for Higher Tax

The UK implemented an even higher rate of POCT in October 2019, with ‘games of chance’ subjected to a rate of 21%.

Casino games such as slots, blackjack, poker, roulette and others were impacted by the tax, which is applied to the profits made by any casino site operating in the UK.

Players can expect to be impacted by this, with operators offering lower odds and Return to Player (RTP) rates in order to make up the shortfall.

Some firms have already decided to pull out of the UK market due to this decision, although the majority are unlikely to follow suit.

New Jersey Jumps on Gambling Bandwagon

New Jersey has been quick to cash-in on the online gambling boom and is now established as one of the biggest markets in the United States.

Online casinos were approved by the New Jersey Legislature back in February 2013 for an initial trial period of 10 years.

This was introduced with the proviso that players must be least 21 years old and need to be located within the state limits of New Jersey.

The state subsequently took advantage of the Supreme Court’s decision in 2018 to allow online and in-person sports betting within its jurisdiction.

NJ Generates Impressive Growth

New Jersey’s Department of Law & Public Safety: Division of Gaming Enforcement oversees the gambling industry in New Jersey.

Their 2019 reports show that the changes in the regulatory landscape have helped to generate huge annual revenues for operators in the state.

Total gaming revenue was $3.469 billion for 2019 compared to $2.903bn in the prior period, an increase of 19.5%, with much of that growth coming from online sites.

Tax rates range from eight to 15% across the different gambling sectors, while additional taxes are applied to casinos offering sports wagering services.

Online Gambling in the UK & NJ – The Final Word

There are many similarities between the online gambling industries in the UK and New Jersey, with strong regulation perhaps being the most notable.

While each jurisdiction is at a different point in their journey within the sector, both are reaping the rewards from having a clearly defined legal framework to operate in.

The UK gambling scene remains an excellent example for other countries to follow and New Jersey is well on its way to achieving the same status in the US.

 

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