The UK’s Department for Digital, Culture, Media, and Sport (DCMS) has announced that the cost of license fees in the gambling industry will be increased starting October 1st, 2021. This notice follows a public consultation that ran between January 29th to March 26th, 2021. The consultation received feedback from a cross-section of gambling industry members alongside clinical and academic researchers and House of Lords group Peers for Gambling Reform.
After the consultation, the DCMS has now confirmed that the cost of licensing in the UK’s gambling industry will be adjusted as follows, effective October 1st this year:
- Annual fees for all gambling software and remote operating licenses for all three regulated gambling products in the UK (bingo, casino, and betting) – 55% increase
- ‘Flat’ additional annual fees payable for combined operating licenses for offering two or three gambling products – 50% increase
- Annual fees for ‘host’ licenses (business who use another B2C operation to provide gambling services) – 55% increase
- ‘Flat’ additional annual fees for ‘host’ licenses combining two or three gambling products – 55% increase
- All application fees for UKGC licenses – 60% increase
- Annual fees for non-remote and remote society lottery and external lottery manager (ELM) licenses – 15% increase
- Annual fees for all gaming machine technical licenses – 15% increase
- Yearly Fees for land-based operating licenses – 15% increase (effective from April 1st, 2022 to give the business some more breathing space after the impact of the pandemic)
- Removal of 5% discount offered on annual fees for operators with combined licenses
According to the UK Gambling Commission (UKGC) estimates, the yearly fees paid by gambling industry license holders is only 0.16% of the sector’s Gross Gambling Yield (GGY). When the increase is implemented, the figure will increase to 0.22% of the gambling industry GGY. However, the GGY here is not inclusive of the revenue generated by the UK National Lottery.
What is the Significance of the Increased License Fees?
Gambling industry license fees were last revised in 2017. According to the DCMS, the increase will assist the UKGC in staff training and responding to arising risks plus technology-based developments that lead to an escalation in the costs associated with its existing regulation.
Further, the revision of the fee structure will assist the National Audit Office and the Public Accounts Committee in addressing areas that have been identified to require improvement. For instance, one area that is expected to particularly benefit from the increased fees per the National Audit Office and the Public Accounts Committee assessments is the use of data and intelligence.
Through the financial boost, there will be more effective regulation of the gambling industry that has grown exponentially since the previous revision of the license fees. In a statement published on Monday, June 14th, on the Government’s website, the DCMS said:
The uplift in fees will provide the Gambling Commission with greater resources to tackle new challenges such as product and payment innovation. This new structure will mean that the Gambling Commission is better equipped to deal with the changing landscape of the gambling industry which has become increasingly global in nature. The regulator will also be better placed to address the risks associated with unlicensed operators and the need to protect consumers and the industry from ‘black market’ encroachment.
This revision in costs associated with licensing fees is part of the UK government's efforts to regulate the industry better as the region’s Gambling Act Review continues. The regulatory review will also factor in the future flexibility of application and licensing fees that the UKGC establishes.