The UK used to be an amazing place to take a punt on sports or any number of classic casino games. Whether it was online, or instore, thanks to favourable legislation in the early part of the evolution of virtual casinos, British customers were afforded a huge array of gambling opportunities. The Gambling Act of 2005 complemented the long-standing love of wagering here in the UK and as such many online casinos flocked to provide their services on our shores. With such competition, being able to stand out from the pack became increasingly important. A frequent tactic of companies was to lure punters to their service using welcome bonuses.

Mason Jones from the prominent site, NoDepositRewards, said, “Free spins and no deposit offers are the life blood for any new casino entering the market. Without these offers, people will simply go elsewhere.”

Of course, once a customer has gone through the trouble of creating an account, it’s likely that the next time they decide to have a few spins on a slot, or place a punt of the footy, they’ll revisit the service that they’re familiar with. Similar follow up perks would ensure that customers weren’t tempted to check out some of the competition on offer.

As more companies competed over the same customer base, increasingly elaborate welcome bonuses and gratuity packages became the norm. This was the case until very recently when a series of events changed the landscape of the UK gambling industry. Promotions first came under scrutiny early in 2014. According to a report by the Department for Media Culture and Sport, increases in the scale of advertising for online casinos had become cause for concern. This data was supported later in the year by the ASA, an advertising regulation group, who added that misleading representations of promotions on adverts were also problematic. Of particular concern was the fact that casino operators would often neglect to include any reference to the terms and conditions associated with bonus funds and free bets on online banner adverts. This prompted action from the UK Gambling Commission. They quickly published alterations to their Codes of Practice, including amendments to the rules on how casinos could market and promote themselves. The goal was to create a closer representation of bonus offers, rather than continuing the “free cash” narrative that had dominated the industry previously. In 2015, a Bill was introduced seeking to provide guidance on “unfair” terms. It also aimed at creating a blacklist of conditions that a player could never be bound to. However, as frustrating as it might be for casino operators who frequently use juicy sounding bonus offers to lure new customers in, it was hardly enough to cause the demise of free bets that we’re currently seeing today at UK casinos.

Further changes to the online gambling landscape were on the way thanks to the Finance Bill of 2014. In a move to generate more government revenue, the Bill sought to ensure that all gambling activity taking place on UK soil was to be taxed at the point of consumption, rather than the point of issuance. Previously, companies had been able to base themselves outside of the British Isles whilst continuing to offer their products and services there. Of course, being a non-UK company, they were under no obligation to pay the UK government any tax. The 2005 Gambling Act had taxation occur at the point of supply meaning that it was entirely legal for the companies to take cash out of the British economy and pay tax elsewhere where the rates were more favourable. The 2014 Bill changed this and made sure that every company offering their services within the UK would have to pay 15% betting duty on any bet placed by a British punter, as well as being fully licensed by the UK Gambling Commission.

Naturally, this had a huge impact on companies who were currently offering their services in the UK. Many of those who had previously enjoyed the favourable conditions of the legislative environment here simply left. Whilst numerous remained, they were now burdened with an additional 15% tax on bets placed. This resulted in a situation where there was considerable less competition to drive the creation of free bets and those companies that stuck it out had far less profit margin to play with when considering their promotional needs. This started the drying up of free bets we are seeing today. However, bonuses still existed, they were just much less plentiful than they had been previously. In addition, extra wagering requirements within terms and conditions were implemented to reduce the casinos’ potential to lose money thanks to their promotions. By fiddling the numbers, and making rollover amounts higher, or free bet triggers less likely, the casinos were still able to provide the offers that they’d become accustomed to luring new customers with but with much less likelihood of ever having to pay out from their profits.
What might be the final blow to free bets in the UK would be an amendment to the 2014 legislation penned in March of 2016. Chancellor of the exchequer, George Osbourne introduced plans to include free bets in the 15% taxation policy. Previously, only those placed with real money were to be covered by the legislation. Now every bet placed would have the rate levied against it. According to Osbourne’s figures, thanks to this proposal and others announced at the same time, there’d be an additional £3 billion at the government’s disposal by 2019. What’s unclear is if the chancellor had considered the fact that the online casino market stands to shrink thanks to the amendment, or if service providers will even bother to offer free bets at all now the incentive has dried up.

Naturally, having to pay the government some percentage of something that never really existed hasn’t sat too well with online gambling operators. We’ve already started to see the effects of this in the market. Many online casinos have changed their free bets in some way to make them harder to profit from for customers. Either that or they’ve reduced the amounts or even cancelled them all together. One example is the old Bet365 welcome offer. For a long time, their bet £200, receive £200 in bonus funds was one of gambling’s most generous promotions. This has now been slashed in half. Today, new customers receive a free bet of £100 when they sign up and deposit £100. There are also new wagering requirements with their new offer too making it harder to actualise any profit from it. It’s understandable as win or lose, Bet365 will owe £15 to the UK government every time a new customer decides to try for the full welcome promotion.

It’s much too soon to know how these developments will pan out for the UK gambling industry long-term. Will casinos find a new way of incentivising customers to play? Will the gambling market begin to dry up as fewer customers are lured in with juicy welcome promotions? Will punters decide to take their custom elsewhere and dodge legislation by playing at one of an ever-expanding list of Bitcoin casinos who seemingly operate without borders? Time will of course tell. What is sure, however, is that the UK gambling industry is in a period of transition from what will probably go down as the golden age for online casinos.