How Taxes and Regulations Killed the Creativity of UK Online Casinos
The late 2000s and early 2010s were exciting times for the UK online casino scene. It was all about innovation, which promised new possibilities for both operators and players. When it came to operators, each was leaving its distinctive mark on the country’s online gambling landscape. Apart from games, they provided fresh and original experiences. They all had recognisable designs and relied on different ways to draw in players and increase their engagement.
Unfortunately, times have dramatically changed. High taxes, complex Know Your Customer (KYC) procedures and strict marketing regulations (and fines) have impacted the industry’s creativity and innovation.
If you check Sister Sites Index, a popular casino groups aggregator, you will see that there are almost no stand alone casinos left, all unique brands have merged into a blend of similar casinos with almost nothing to separate between them. But lets go step by step.
Back in the Day
The leading names in the UK had unique offers once. LeoVegas was known for its mobile-first approach, Royal Panda boasted a user-friendly interface, while Mr Green had an instantly recognisable theme with an emphasis on fair play and fun.
These distinctive features helped operators establish a name in the business and carve out a niche of their own. In addition to attracting numerous players, they became communities of loyal customers. By delivering unique playing experiences, they ensured British gamblers would return for more. There were potential winnings, but many of the players came to enjoy the experience.
What Happened in the Meantime?
Today, the country’s online casino market is far from its glory days. A major blow to the once-creative industry was the introduction of high takes in 2014. The Point of Consumption Tax of 15% significantly impacted operators. The knockdown happened in 2019 after the Remote Gambling Tax increased to 21% (from the previous 15%), forcing many companies to focus solely on surviving.
Complicated KYC processes only worsened the situation. Don’t get us wrong, they play a key part in preventing fraud and ensuring responsible gambling, but new procedures were overcomplicated. It became increasingly difficult for operators to attract new players, let alone retain them. As the user base began to decrease, it led to a lack of funds that could have been used to develop new functionalities.
More stringent marketing regulations limited operators when it came to promoting their platforms. The main idea behind these regulatory changes was to protect vulnerable individuals, but despite their importance for consumer safety, they’ve significantly limited the operators’ creativity.
Results Were Devastating
These factors led to the homogenisation of the British online casino market. With no room for innovation and limited financials, online casinos turned to mergers and acquisitions. Over the past couple of years, many gambling platforms have been absorbed into large business entities, losing their uniqueness along the way.
Also, white-label solutions have further added to the monotony. They offer a quick and easy way for new casinos to enter the market, but virtually all look the same. Despite specific differences, they don’t have any room for innovation and distinctiveness. As a result, we have a plethora of sites that offer different branding, but they don’t stand out in any other way.
What about the Future?
Currently, UK operators are facing many challenges, but is there hope for the market in the future? There’s more to it than simply replying “yes” or “no”.
There’s still room for innovation, and operators who overcome these obstacles can look forward to success in the long run. Some of the ways of doing so include implementing new technologies to increase player engagement and boost the overall experience. Social media offer help here, as they can bypass the limits imposed by traditional marketing.
Hopefully, we’ll see regulatory reform in the future. More balanced regulations would be able to protect gamblers in the UK and still offer the flexibility operators need to grow.
Let’s be fair, the UK online casino market has seen better days, but there’s no point in crying over spilt milk. High taxes, strict marketing regulations and complicated KYC procedures have significantly impacted the British iGaming landscape.
Operators face many challenges, but finding new ways of dealing with them can help them become creative and distinctive once again. Hopefully, the future will provide additional manoeuvring space and offer much-needed freedom. The golden age of the UK online casinos may have passed, but it doesn’t mean their story is over. On the contrary, the right approach can add a fresh new twist to this lucrative industry.