Gambling Commission mulls 55% licence fee hike from October

Application and licence fees payable by gambling operators serving the UK market could rise by more than 50% from October 2021 under new proposals outlined by the Gambling Commission (UKGC).

Under the plans, annual fees for online casino, sports betting and bingo licences would jump by 55%, with a pre-existing 5% discount applied for operators holding multiple licences being removed.

In addition, the regulator has proposed an increase to the so-called ‘flat’ additional annual fee payable by remote operators with a combination of online casino, bingo or virtual event betting licences.

If a combined licence includes any two of those licence types, the flat additional annual fee payable will rise from £2,500 to £5,000. In the event the combined licence includes all three of those types, the additional flat annual fee would go from £5,000 to £10,000.

Annual fees payable by white-label operators would also increase by 55%, with additional annual fees for licences that combine two or three ‘host’ licence types (betting, casino, bingo) doubling under proposals.

Fees would increase from £1,875 to £3,750 for licences that combine two host licence types and from £3,750 to £7,500 for those that combine all three.

“It is predominantly these types of licensee that are driving the increased regulatory burden,” the UKGC said. “They are also the licensees that would benefit most from increasing efforts to reduce consumer access to illegal online operators,” the regulator added.

As justification for the increase, the regulator highlighted industry innovation, the need to invest in compliance tools, developing partnerships with international regulators and increasing efforts to block unlicensed operators from the UK market.

Licence fees payable by non-remote (i.e. land-based operators) would increase by 15% under proposals, however this will not come into effect until April 2022.

Addressing the need for the increases, the UKGC has pointed to “significant impact” of Covid-19 on the sector, particularly in respect of land-based operators, which have been hardest hit by closures during lockdown.

“The commission forecasts that without increases in fees it will see a decline in income in 2021-22. It has seen a decline in the number of premises-based (non-remote) gambling operators and the rate of growth of online is now slowing,” the regulator explained.

“It has also seen merger and acquisition activity in the industry which has reduced income. The cost of pension contributions has also increased,” the consultation states.

The UKGC has said that, according to its estimates, every £1bn of reduced industry GGY [gross gaming yield] would lead to a reduction of around £1.5m in its fee income, approximately 7% of its current yearly income.

It has said without changes to fees, the deficit between its income and expenditure would amount to around £3m per year by 2023-24.