The UK government's Department for Culture, Media and Sport (DCMS) has revealed a new plan for increasing Gambling Commission licence and application fees, which will take effect on 1 October 2026. This announcement, made on Tuesday, replaces earlier proposals that included options for a 20% or 30% increase. Instead, a standard increase of 25% has been approved for the majority of licence categories, although a few targeted exceptions, such as society lotteries, will not be affected.
From 27 January to 30 March, DCMS collected 47 responses during a public consultation primarily from gambling operators and industry representatives. In January, the department indicated that the proposed fee increases would help address funding shortfalls and enhance enforcement measures against illegal gambling operators. This announcement arrives just months after the government implemented significant tax increases that have already raised operational costs for businesses in the sector.
Originally, DCMS had considered fee increases of 20%, 30%, or a combination of a 20% increase along with an additional 10% earmarked for combating illegal activities. Ultimately, they decided upon a straightforward 25% rise, impacting various fees including operating licences, application charges, first annual fees, personal licences, variations, and corporate control changes. Notably, the first annual fees will still be charged at 75% of the full annual rate, while supplementary operating licence and single machine permit fees will also rise by 25%.
However, in order to protect funds intended for good causes, the fees for society lotteries will remain unchanged, and ancillary society lottery licence fees will also stay at their current rates. Also, for on-course bookmakers, the fee structure for general betting (limited) operating licences will transition from being based on the number of operating days to a market share model based on gross gambling yield (GGY). This change is projected to lower fees for approximately 44% of operators in this category, while about 53% will see only minimal increases, typically around £22.
DCMS dismissed a proposal from the Gambling Commission to earmark a portion of fees specifically for tackling the illegal gambling market. Instead, it confirmed that the Gambling Commission would continue to implement its strategy against illegal gambling with the aid of a separate £26 million funding commitment from HM Treasury over the next three years.
Both DCMS and the Gambling Commission stressed the importance of the fee increase in preserving regulatory activities, as the regulator faces an annual budget shortfall estimated at about £4 million. Even with the new 25% fee hike, it will still require an additional £8 million in efficiency savings over the next five years.
DCMS reiterated that the licence fees are calculated on a cost-recovery basis to cover the Commission's operating expenses. The revised fee structure tailors charges to operator activity or market share, meaning larger operators with annual GGY over £100 million will see their fees increase from roughly 0.1% to about 0.15% of GGY. For sizable remote and non-remote operators, annual fees may exceed six figures, commensurate with their substantial market presence.
The response from the industry has been largely negative, with most consultation participants voicing opposition to the fee hikes. They raised concerns about the financial strain resulting from recent duty changes and the implementation of a statutory levy, as well as the fairness of applying uniform percentage increases to lower-harm activities and funding strategies for illegal gambling enforcement.
When the fee increase was first proposed, Bethan Lloyd, a senior associate at Wiggin LLP, acknowledged that while the added charges would be challenging, she didn’t believe they would severely impact the sector. These changes are set to become law through secondary legislation and will be implemented on 1 October 2026.
