The online gambling sector is under siege. Shady business practices, aggressive marketing and a rise in gambling-related issues have lead to almost unprecedented interventions by governmental and regulatory bodies. Historically, only the tobacco industry has endured similar crackdowns. As a result, web-based operators are beginning to feel the bite. So what does the future hold for online casinos?

Further misery seems to be the answer. A recent report published by a cross-party parliamentary group called the APPG, has called for the introduction of new measures including a £2 stake limit on online slots, an end to credit card betting and a restriction on VIP accounts. If implemented, the effects of these measures could have a major impact on both operators and customers.

To cover losses arising from stake limits, online casinos may well have to charge their customers more to play their games. For perhaps the first time, the casinos that feature prominently on the likes of Inside Casino and Ask Gamblers now face an uncertain future.

While many of the new gambling regulations are born out of a genuine concern for the public good, some have been implemented to boost government coffers. Take tax legislation for example. Introduced in 2001, the original rate of 15% applied to the gross profits of bookmakers. However, it applied to the ‘point of supply’ meaning that offshore companies only had to pay local taxes. Unsurprisingly, this didn’t sit terribly well with the UK treasury.

To escape the new levy, British betting companies started relocating to places like Gibraltar which capped their tax rates at a mere 1% of all profits or a maximum of £400,000.

So in 2014, an amendment was made to the 2005 Gambling Act which applied a 15% tax ‘at the point of consumption’. From this point on, all offshore companies were required to pay the same taxes as UK-based enterprises.

This has since risen to 21% and is imposed on all games of chance. The future therefore looks decidedly gloomy for UK-based online casinos. Already, companies are taking their operators abroad where regulations are less stringent and tax rates more favourable.

Stricter regulations may also drive certain operators towards block-chain based platforms. Some of those already in existence use smart contracts to reward cryptocurrencies for verifying the movement of funds – this of course falls outside the remit of anti-money laundering legislation. In many cases, an account isn’t required which means that gamers can gamble anonymously. It may be the case then that online gambling platforms will become more decentralised and operate according to peer-based arrangements – no doubt something the UK government will attempt to address further down the line.