The UK government has confirmed an increase in Gambling Commission licence fees set to take effect on 1 October 2026. This announcement from the Department for Culture, Media and Sport (DCMS) revealed a standard 25% rise across most licence categories, dismissing the three options considered earlier this year, which included potential increases of 20% and 30%, as well as a model that would earmark additional fees for illegal gambling enforcement.
The decision follows a public consultation conducted between 27 January and 30 March, which received 47 responses from gambling operators, suppliers, and representatives in the sector. DCMS indicated that the fee increases are intended to address funding shortfalls and bolster enforcement efforts against illegal operators.
This fee hike comes on the heels of significant tax increases that have already impacted the cost of doing business in the sector. The standard increase will apply to application fees, operating licence fees, first annual fees, personal licences, variations, and corporate control changes. First annual fees will continue to be charged at 75% of the full annual amount, while supplementary operating licence fees and single machine permit fees will also see a 25% rise.
Notably, some sectors will remain unaffected by these increases; society lotteries will see their fees frozen to ensure additional funds for good causes. This exemption also applies to ancillary society lottery licence fees.
For on-course bookmakers, the framework for general betting (limited) operating licences will transition from a daily operating model to one based on market share measured by gross gambling yield (GGY). This adjustment is anticipated to lower fees for 44% of operators in that category, while 53% will face moderate increases averaging around £22.
DCMS has opted not to reserve any fees specifically for combating the illegal gambling market. The Gambling Commission will maintain its enforcement strategy with the aid of a £26 million funding commitment from HM Treasury over the next three years. Both the DCMS and the Gambling Commission believe the fee increase is crucial for maintaining regulatory activities, given the regulator's projected £4 million annual budget deficit. Even with the fee rise, an additional £8 million in savings is needed over the next five years.
The fee structure is designed to recover costs incurred by the Commission, adjusting charges based on operator activity or market share. Major operators with an annual GGY exceeding £100 million will see their fees rise from approximately 0.1% to about 0.15% of GGY. The department noted that for larger operators, whether remote or non-remote, annual fees could reach six figures, reflecting their significant market presence.
Feedback from the consultation indicated widespread opposition to the fee increases. Respondents raised concerns about the cumulative financial strain from recent duty changes, the introduction of a statutory levy, the fairness of applying flat percentage increases to lower-risk activities, and the funding methods for illegal gambling enforcement. As Bethan Lloyd, a senior associate at Wiggin LLP, noted, while the new fees would be challenging for the industry, they are unlikely to be insurmountable. The changes will be enacted through secondary legislation and are set to come into force on 1 October 2026.
