UK Consults on Potential Licence Fee Hike to Strengthen Gambling Regulation and Tackle Black Market

The UK government is weighing a possible increase in gambling operator licence fees, as part of a consultation aimed at securing additional funding for the Gambling Commission’s enforcement work and its efforts to combat illegal gambling.

The consultation, launched by the Department for Culture, Media and Sport (DCMS) on 27 January, will remain open until 30 March and seeks input from operators, industry trade bodies, consumer organisations, local authorities and members of the public.

At the centre of the consultation is a proposal to raise licence fees, with a 30% uplift among the options being considered. According to the Gambling Commission, higher fees are necessary to address a funding shortfall and ensure the regulator can continue to effectively oversee the UK gambling market.

“Since operating licence fees were last reviewed in 2021, the commission has increased its investment in areas including disrupting the illegal gambling market, implementing reforms from the Gambling Act Review White Paper and developing its data capabilities,” the consultation document said.

“As a result of this investment and additional pressures such as inflation, the commission has operated with successive annual budget deficits and has eroded its financial reserves.”

In the UK, licence fees differ depending on gambling vertical, licence type and the size of the business.

Annual operating fees are currently calculated using turnover-based fee bands, and any increase would be applied to each operator’s existing fee level. By way of example, remote casino operators generating more than £1 billion in annual gross gaming yield currently pay £793,729 per year, plus an additional £125,000 for every extra £500 million above the £1 billion threshold. The same fee structure applies to remote sports betting and bingo operators.

Three main options have been outlined in the consultation, each involving some degree of increase in annual operating licence fees.

The first option, which the Gambling Commission has identified as its preferred approach, would introduce an average 30% rise in fees. The regulator said this reflects the gap between its current fee income and the actual cost of delivering its chargeable regulatory functions. It estimates that a 30% uplift would generate an additional £8.7 million ($12 million) per year.

“This option would therefore provide the level of funding required to maintain our current work programme at a steady state, enabling it to continue to deliver its 2024 to 2027 corporate strategy and subsequent priorities,” the document said.

“However, this option does not include any growth for the Gambling Commission or investment in additional regulatory functions.”

A second option would see annual licence fees rise by 20%. While this would provide extra income, the commission said it would still need to identify savings of £15.8 million over the six-year period to 2030-31, potentially through workforce reductions.

“The commission would need to reprioritise its work, resulting in the slowing or stopping of some areas in order to focus its resources on its statutory duties and core regulatory activities,” the document said.

“Compliance and enforcement effort would need to be focused on more serious cases, meaning some suspected breaches of requirements would likely not be investigated. The commission estimates that a headcount reduction of around 10% would also be needed under this option.”

The third and final option is the approach favoured by the government. Under this model, licence fees would also rise by 30%, but the additional revenue would be divided. A 20% increase would support the commission’s general operating costs, while a further 10% would be ring-fenced for specific regulatory priorities rather than day-to-day expenses.

These priorities would include tackling illegal gambling and strengthening enforcement activity.

If adopted, it is estimated that approximately £2.6 million would be allocated to these ring-fenced initiatives.

“The funds would be used by the commission to ensure it is difficult to provide illegal gambling at scale to GB consumers,” the document said.

“This is to protect consumers from the risks posed by unlicensed businesses and ensure consumer gambling spend remains with the licensed industry. It will also protect the integrity of the licensed gambling market from other criminal threats.”

Once the consultation closes on 30 March, DCMS will assess the responses before determining whether to proceed with any changes. Should reforms be approved, they would be implemented through secondary legislation and are expected to take effect from October 2026.

A rise in licence fees would add to a series of regulatory and fiscal changes already reshaping the UK gambling sector. In November, the government confirmed that licensed operators will face higher Remote Gaming Duty and a new General Betting Duty. Remote Gaming Duty is set to increase from 21% to 40% in April, while General Betting Duty for remote betting will rise from 15% to 25% by April next year.

These tax increases have drawn criticism from operators, trade associations and some Members of Parliament, with concerns raised that heavier burdens could push more consumers toward illegal gambling channels.

The proposed fee increases also follow the introduction of the UK statutory levy last April, alongside tighter marketing rules on cross-selling and the rollout of financial vulnerability checks across the industry. All of these measures stem from the reforms outlined in the 2024 Gambling Act Review White Paper.

By fLEXI tEAM