The Department for Culture, Media and Sport (DCMS) has confirmed a 25% increase in Gambling Commission licence fees, which will take effect on October 1, 2026. This decision, announced on Tuesday, comes after the department decided against three previously considered options, opting instead for a uniform uplift in most licence categories. Exceptions to this increase will include society lotteries, which will not see any changes to their fees.
A public consultation held from January 27 to March 30, which received 47 responses from gambling operators, suppliers, and representatives from the sector, influenced this decision. In January, the DCMS mentioned that the fee increases would help address funding gaps and bolster enforcement efforts against illegal operators.
This fee hike follows a series of substantial tax increases imposed on the sector, raising concerns about the financial burden on businesses. Initially, the DCMS considered raising fees by 20%, 30%, or a combination of a 20% rise with an additional 10% designated for cracking down on the illegal market. However, after receiving industry feedback, the department settled on a flat 25% increase across most licensing categories.
The new fee structure applies to a range of areas including operating licence fees, application fees, first annual fees, personal licences, variations, and corporate control changes. First annual fees will continue to be charged at 75% of the total annual fee, and supplementary operating licence fees and single machine permit fees will also rise by 25%.
Certain groups are protected from these increases; fees for society lotteries will remain unchanged to ensure continued funding for good causes, and ancillary society lottery licence fees will also stay the same.
Additionally, the fee structure for general betting (limited) operating licences for on-course bookmakers will transition from being based on operating days to a market share model determined by gross gambling yield (GGY). DCMS anticipates that this adjustment will reduce fees for 44% of operators within this category, while 53% may only see slight increases, averaging around £22.
DCMS declined the Gambling Commission's proposal to ringfence fees specifically for combating illegal gambling. Instead, the commission will persist with its strategy against illegal activities, backed by a £26 million funding commitment from HM Treasury over three years. Both the DCMS and the Gambling Commission asserted that the fee increase is critical to avoid significant cuts in regulatory activities. Presently, the regulator faces a budget shortfall of about £4 million annually, and despite the fee increases, an additional £8 million in efficiency savings will be necessary over the next five years.
The DCMS reiterated that licence fees are set based on a cost-recovery model to fund the Commission’s operational costs, with the updated structure reflecting operator activity or market share. For example, larger operators generating over £100 million annually in GGY will see their fees rise from around 0.1% to roughly 0.15% of their GGY. For major remote and non-remote operators, annual fees could escalate to six figures or more due to their substantial market presence.
Responses to the consultation indicated widespread opposition to the fee increases. Many expressed concerns regarding the overall financial pressure stemming from recent tax changes and the implementation of a statutory levy, as well as the fairness of applying a flat percentage increase to lower-harm activities and the funding strategies for illegal gambling enforcement. In light of the proposed changes, Bethan Lloyd, a senior associate at Wiggin LLP, stated that while the additional costs would be challenging, "this isn’t going to be the straw that breaks the camel’s back.” The changes will be enacted through secondary legislation, with the new fees set to take effect on October 1, 2026.
