The UK government has opened a consultation on plans to raise operating licence fees paid to the Gambling Commission (GC) by UK-facing companies.
The consultation window will run until 29 March, with a view to potentially implementing the changes by 1 October.
As part of the consultation, three different proposals for licence fee increases have been outlined. The consultation was confirmed on Tuesday (27 January) just before 5pm, following a leak of the document that was swiftly taken down at 10.30am.
The first option, which is favoured and proposed by the GC, would see a 30% increase to annual licence fees, which include application costs and annual payments.
The second option would raise Commission fees by 20%, while the third proposal would be for a 20% increase to fees, with a further 10% ringfenced for tackling illegal markets and protecting licensed operators’ revenue from criminal activity.
Both of those proposals are alternatives proposed by the government. The government has said it prefers option three to be implemented come October.
The regulator also noted that the percentages represent overall increases and would not be distributed evenly across all types of licence.
For the GC’s preferred option, the regulator explained the figure “represents the shortfall between the Commission’s current fee income and the cost to the Commission of carrying out all its chargeable functions, adjusted for required efficiency savings”.
The GC said: “This option would provide the level of funding required to maintain the Commission’s current work programme at a steady state, enabling it to continue to deliver its 2024 to 2027 corporate strategy and subsequent priorities.
“However, this option does not include any growth for the Gambling Commission or investment in additional regulatory functions.”
The GC added that the full-year effect of a 30% increase in licence fees would be an additional £8.7m worth of funding, also stating that the body would still be required to deliver efficiency savings of around £3.2m.
Based on total industry gross gambling yield (GGY) for the 2024-25 financial year of £13.4bn (excluding the National Lottery), a 30% increase would mean that the GC’s total income as a proportion of industry revenue would increase from 0.21% to 0.28%.
The 20% option would generate £5.6m worth of funding for the GC, leading the regulator to have to make savings of £15.8m over the next six years.
The GC noted that the second proposal would “require the Commission to reverse the expansion of its recent regulatory activity and revert to a level of regulation more consistent with its pre-white paper position”.
The regulator also warned that any cuts to its regulatory activity would impact its efforts to tackle the black market.
The GC continued: “A reduction in the Commission’s work to disrupt illegal gambling in the long term, after the next three years of grant-in-aid funding from HM Treasury to address this area.
“This would enable greater levels of consumer spending with the unlicensed market, where that revenue might otherwise be protected and remain with the regulated industry.”
The final option would see £2.6m of ringfenced funding to tackle black-market operators, with the GC needing to “divert around £1.4m to £1.5m per annum from other areas of work in order to fund the ‘ringfenced’ illegal markets work”.
The £2.6m would be used to make sure it is hard for illegal operators to scale up in the UK, in addition to protecting the integrity of the licensed gambling market from other criminal threats.
The GC stated: “The ringfenced option would still necessitate efficiencies across the rest of the organisation commensurate with the 20% option.
“Specialist skills and experience will be needed to support the increased focus on illegal markets work, but redeployment will be considered where possible.
“DCMS and the Commission will agree an appropriate framework for providing assurance that the ringfenced funds are deployed as intended.
“This will include a mechanism for approving the use of ringfenced funds for urgent work which is not within the scope of “illegal markets and revenue protection” such as the collapse of a major operator or a widespread issue within the licensed industry.”
Operating licence fees were last reviewed by the GC in 2021.
The regulator attested that fighting against the black market, in addition to implementing reforms outlined in the white paper, has led to the organisation operating with successive annual budget deficits which “eroded its financial reserves”.
The GC said: “At the end of the 2025 to 2026 financial year the Commission will be close to its minimum reserve level of £4m.
Forecasted costs will increase in future years, and without a fee uplift in October 2026 the Commission’s reserves are expected to be completely exhausted during the 2026 to 2027 financial year.
“The Commission plans to absorb some future inflationary pressures, but without an uplift it forecasts a deficit of £7m in 2027 to 2028, rising to £9.5m in 2030 to 2031.”
The industry was left reeling by November’s Autumn Budget, which announced an increase in remote gaming duty from 21% to 40%, which will come into effect in April.
Remote betting duty, excluding horseracing, is set to increase from 15% to 25% 12 months later.
The post UK licence fees could be hiked by as much as 30% this year first appeared on EGR Intel.
Government presents three proposals for raising average application expenses and annual costs for operators, with a view to implementing changes by 1 October 2026
The post UK licence fees could be hiked by as much as 30% this year first appeared on EGR Intel.