UK Operator License Fees to Go Up
The UK government has announced changes to license fees for gambling operators. Fees will be raised from October 1st. The decision follows a consultation that was launched in January to assess the Gambling Commission’s funding structures.
Land-based casinos and betting shops will have longer than their online counterparts to adjust to the license fee hike. ©Javon Swaby/Pexels
DCMS Publishes Consultation Response
The government’s new license fee structure will affect all business verticals operating within the UK’s gambling industry. From October 1st, operators can expect to pay more to offer their services and products to UK customers. The news comes as the Department for Digital, Culture, Media and Sport has published its response to a regulatory consultation.
The consultation, which was launched on January 29th and ran until March 25th, looked into how the UK’s gambling regulator structures its funding. It received responses from across the gambling industry, and from researchers at the House of Lords group Peers for Gambling Reform.
The Gambling Commission proposed that fees for operators be raised, a suggestion that the government has now agreed to. As part of its assessment, the DCMS has decided that industry license fees will be elevated across the board.
This will allow the Gambling Commission to boost its funds to regulate more effectively and ensure that it can cover all of its running costs. In a statement, the Commission welcomed the DCMS’s response. It added that while it is a relatively small regulator, it must keep pace with a fast-moving industry in order to regulate successfully.
The Commission also highlighted some of the other ways that it is striving to making gambling safer for British consumers. These include the creation of clear guidance for operators that run VIP schemes, stricter measures to make online gambling products safer by design and a ban on gambling with credit cards.
The new license fee changes will enable the Gambling Commission to fund more research into new risks and technological development. It will also drive progress in protecting consumers from gambling harms. Fees payable by operators to the Gambling Commission were last revised in 2017, and the industry has grown significantly since then.
55% Rise for Online Operators
The increase will see fees for online operators uplifted by 55 per cent. Fees for land-based operators will go up 15 per cent, and these increases will take effect from April 6th 2022. The extra time for land-based operators takes into account the impact of the coronavirus pandemic on these businesses. Betting shops, casinos and bingo halls were forced to close to the public during the lockdowns, and now face financial difficulties as a result.
As well as the increases to fee bands for annual operating licenses, application fees are set to rise by 60 per cent all round. Operators will no longer be able to receive discounts for holding licenses for multiple activities. To bring all of these changes into effect, the DCMS has said that a statutory instrument will be laid.
In its statement, the DCMS said that the uplift in fees would allow the regulator to better its resources to combat new issues facing the industry, such as product and payment innovation. The new funding structure will also better equip the regulator to cope with the increasingly global nature of the gambling industry.
It is hoped that the changes will also result in boosted protections for consumers from unlicensed operators. With stricter rules coming in to reign in the industry, there are concerns that a black market could emerge. Unlicensed operators put customers at risk of gambling harms and don’t offer adequate consumer protections.
The Betting and Gaming Council, which represents the UK’s casinos, bookmakers and online operators, has warned against complacency when it comes to the threat of black-market operators. In February, it published a report it commissioned from PwC into unlicensed gambling in the UK.
The study found that in two years the number of consumers using unlicensed betting sites has grown from 210,000 to 460,000. During that time, the amount of money staked on black market sites was also found to have doubled, from £1.4 billion to £2.8 billion.
Government Reviewing Commission Powers
The consultation came separately to the government’s own review into the 2005 Gambling Act. The government review has been a long time coming, with pressure from campaigners and MPs mounting over the years. It hopes to bring what it has described as “analogue laws” into the digital age.
The 2005 Gambling Act was brought in by former Prime Minister Tony Blair’s Labor government. It sought to liberalize the UK’s gambling laws, and even drafted plans for eight “super casinos”. Those plans were scrapped shortly after Gordon Brown was elected as Prime Minister, but the act did have a positive impact in allowing the gambling industry to boom.
The act regulated on online gambling for the first time ever in the UK. However, more than fifteen years later and the way we use the internet has evolved almost beyond recognition. It is widely accepted that there is a need to modernize the UK’s gambling legislation, in particular where online casino and betting products are concerned.
As part of its Gambling Act review, the government is looking at the Gambling Commission’s powers and resources, to determine whether it is fit for purpose. Some critics, such as MP Carolyn Harris and MP Sir Ian Duncan Smith, have called the regulator ineffective and called for a new gambling watchdog to be brought in to replace it.
Following the closure of the call for evidence in March, the review is now going through the responses carefully. It is expected that a White Paper detailing the findings of the review will be published before the end of this year.
The government is still accepting responses from those impacted by the recent collapse of online betting platform Football Index. The government is conducting its own review into how the Gambling Commission regulated the self-styled stock market for football, which went into administration in March. At its peak the platform served 500,000 accounts, and it is thought that customers may have lost up to £90 million.
