They will also have to comply with British licence requirements including the protection of children and vulnerable people, and will have to demonstrate how they will contribute to the research, education and treatment of problem gambling in Britain.

The 'whitelisting' system will remain a fundamental part of any future regulatory system. ‘Whitelist’ countries currently include Antigua and Barbuda, Tasmania, the States of Alderney and the Isle of Man, all of whose regulatory frameworks have been assessed before being granted permission to advertise their services in the UK. Gibraltar and Malta come under the EU umbrella: in setting up the current system, the government was not able to discriminate against other EU member states, so that gaming operations based there gained automatic entry to the British market. But such firms are not directly licensed by the Gambling Commission, and it is this that the government now says it wants to correct.

The proposals follow a review of the system of online gambling regulation in Great Britain, focusing on consumer protection and ways to ensure that overseas operators contribute towards regulation, problem gambling treatment and the Horserace Betting Levy.

The review has looked in some detail at the way the system currently works, as well as exploring the significant regulatory changes taking place in Europe and beyond.

The Government is still investigating ways to secure fair contributions from overseas operators to the Horserace Betting Levy.

Gerry Sutcliffe explained that:

"British gamblers form one of the largest customer bases for online gambling in the EU. Yet, for many reasons, increasingly few companies active in the British market are now regulated by the (UK Gambling) Commission"

“This is about making sure overseas firms contribute their fair share towards regulatory costs and vital services like problem gambling treatment."

“In terms of the Horserace Betting Levy, I remain firmly of the view that all operators taking bets on British races should pay their fair share. There is more to do but I am committed to making sure this happens."

“The new system outlined today will also ensure that all businesses offering online gambling to our consumers adhere to our rules – not someone else’s. The Gambling Act is already one of the best regulatory frameworks in the world and these changes will ensure that it sets the standard for all online gambling companies that target British consumers."