UK Gambling Firms Set for Stiff Licence Fee Hike from October 2021

Licences FolderThe government, in conjunction with the UK Gambling Commission, has revealed that all licensed gambling firms can expect a considerable hike in their licence fee as of October this year.

The decision comes in response to a consultation opened in January, which directly explored whether an increase in fees would be fair or exploitative.

And in reviewing the data collected, the government has decided to issue a staggering 55% rise in fees for online gambling operators.

The extra revenue will be handed to the Commission as a resource for them to use in their ongoing quest to address key industry concerns, principally problem gambling research and action.

That is, of course, an important area of improvement, but will pricing operators out of the regulated market – and perhaps encouraging gamers to seek them out on the black market instead – a smart way to go?

Regulator on the Run

UK Flag Satin Effect

You could argue that a fee increase was both inevitable and necessary, given that the last hike came back in 2017.

The Commission has confirmed that the increase in their revenue will also be used to respond to ‘new risks’ and technological developments, while responding to their own rising costs of regulating the sector.

At a time when their sheer existence and fitness for purpose has been questioned, the Commission will be looking to prove their worth to the government as a regulator worth its salt – the increased fee income will be used to address the concerns outlined by the National Audit Office, who queried the watchdog’s use of data intelligence in keeping gamers safe and looked after.

One of the few bright notes to come out of the fee hike is that land-based casinos, who have been shut or operating at reduced capacity for well over a year now, will only be subject to a 15% fee increase – and that won’t be mandated until April 2022.

Even so, you wonder if that rise will be enough to force those operators struggling to survive over the edge….

A press release, published on the government’s Gov.uk portal, read:

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.”

While existing operators will feel the pinch, those looking to enter the UK market might be dissuaded altogether. As well as the licence fee increase, those applying for a new licence will be subject to a 60% increase on the previous application charge – and the discounts for those operating in multiple channels will also be removed.

All of the above forms part of the government’s overarching review of the Gambling Act 2005, and more changes are expected as ministers seek to bring the legislation into line with the digital age.

With the consultation period coming to a close in March, it is expected that a white paper setting our findings and recommendations will be published in the fourth quarter of 2021.