UK Government Approves Measures to Increase Operator Licence Fees

The Department for Digital, Media, Culture, and Sport (DCMS) has published its response to an open consultation into the funding of the UK Gambling Commission.

In an official statement issued on Monday, the Department approved proposals to increase annual fees for online operators and all application fees starting October 1. The decision comes after extensive consultations with industry stakeholders between January 29 and March 26.

In the response, the government noted that the hike is necessary to enable the Commission to meet its expenses and respond to new challenges. The three regulatory challenges highlighted in the consultation document are:

• Increased technological developments such as product innovation and digital payments.
• Dramatic changes in the size and shape of the regulated industry due to an increase in the number of global operators in the UK market.
•  Rise in illegal gambling due to a growing black market.

To address these issues, the DCMS has recommended a set of measures that will allow the Commission to bring in more specialist staff. As well as that, it will allow investment in technology, to improve compliance and manage the available data more effectively.

The proposed measures will be enacted by 2022 and 2024, and the improvements are set to cost roughly $2.5 million when fully implemented.

Remote Operators to Pay 55% More in Annual Fees

To enable the Gambling Commission to raise more funds to meet regulatory costs and carry out the proposed changes, the DCMS has announced a revised fee structure that will see all remote casino, bingo, and sportsbooks operators pay 55% more for annual operating permits as from October 1, 2021.

The flat annual fee for online operators offering more than one service will also increase from £2,500 to £5,000 for two licence types, and £5,000 to £10,000 for businesses authorized to offer all three.

Operators in the land-based sector, on the other hand, will see a 15% hike across all fee bands. However, the implementation of the revised fee structure for non-remote licensees will not take off until April 2022, due to the impact of the Covid-19 pandemic on land-based establishments.

The proposed increase for both online and land-based lottery societies and ELMs contracted to administer lotteries on their behalf is 15%, while holders of gambling software permits will be required to pay 55% more.

The revised fee structure further scraps off the 5% discounts in annual fees granted to operators with combined licences. This includes businesses with both remote and land-based permits.

Licence Application Fees to Increase by 60%

Besides proposing uplifts in annual operating fees, the DCMS has also announced changes to application fees starting October 1.

Under the new structure, businesses applying for new operating permits will pay 60% more to enter the regulated UK gambling market. Those seeking to vary or change their permits will also be required to pay the new application fee. The new rates will apply to operators in both the online and land-based sectors.

However, discounts for new applications as well as businesses seeking to change or vary their licences to include multiple activities and services will remain unchanged. The Gambling Commission fee structure was last updated in 2017.