The UK betting industry is bracing itself for another financial hit as the government considers a 30% increase in operator licence fees.
The Department For Culture, Media and Sport (DCMS) has launched a consultation process looking into proposed changes.
Among the measures being considered is a 30% hike in annual fees charged by the Gambling Commission.
That would generate an additional £8.7 million in annual funding.
Any changes would come into effect on October 1, 2026.
Increased Costs For The Sports Betting Industry
Sports betting companies are already bracing themselves for the April tax rises being introduced as a result of the autumn Budget.
Remote Gaming Duty will increase from 21% to 40% on April 1 and General Betting Duty jumps from 15% to 25% in April 2027.
The Gambling Commission’s annual charges are based on a company’s Gross Gambling Yield (GGY) so naturally the bigger the firm and number of licenses required, the higher the fees.
News of the proposed fee increase has landed in the same week that popular bookmaker Coral withdrew its sponsorship of the Cheltenham Festival.
Owner Entain has pulled the betting brand’s 74-year association with the meeting in cost-cutting measures.
Simon Clare, Entain UK consumer PR director, put the blame solely on the new tax levies.
“Coral has been the longest-running sponsor at the Cheltenham Festival since 1974.
“But the sheer size of the government’s recent tax increase on betting operators means we are having to take very difficult decisions as we look to mitigate some of the huge impact.
“None more difficult or regrettable than bringing our sponsorship at Cheltenham to an end.”
Louie French, Shadow Minister for Gambling reacted angrily on social media.
“We warned Labour that hiking taxes would negatively impact funding for UK sports, cost jobs and fuel the black market.
“If bookies are cancelling funding for Cheltenham, lower-profile sporting events will surely be next.”
Smaller Operators Also Hit
Betgoodwin cut all its horse racing sponsorships after the tax rises were announced, affecting racing at Plumpton and Fontwell.
Owner Juian Head described April’s tax increase as “a black armband day for small to mid-sized UK online bookmakers”.
James Lovell of DragonBet wrote a passionate blog giving a ‘small bookmaker’s view of a big problem for racing’.
“I haven’t counted precisely but we must be close to having sponsored two hundred races since launch, plus a racing stable and a jockey.
“All of that now has to be reconsidered and quite possibly dropped.”
First Fee Review Since 2021
The Gambling Commission has welcomed the review into its fee structures which haven’t changed since 2021.
The Commission says that an increase is needed to make up a shortfall in current funding.
The consultation document explains this further.
“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.
“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.”
At the same time there has been a sharp increase in gambling company revenues.
Annual charges are based on a company’s Gross Gambling Yield (GGY).
The bigger the firm and number of licenses required, the higher the fees.
From 2020/21 to 2024/25, the total gambling industry’s annual GGY (excluding the National Lottery) increased from £9.1 billion to £13.4 billion.
Remote casino GGY increased from £3.2 billion in 2019/20 to £5 billion in 2024/25.
Proposed Fee Changes
The three options under review are:
- Option 1: 30% Increase
- Option 2: 20% Increase
- Option 3: 20% + 10% ringfenced for tackling illegal markets and protecting licensed operators’ revenue from criminal activity.
The third option is the one thought to be most favoured by the government.
“The funds would be used by the commission to ensure it is difficult to provide illegal gambling at scale to GB consumers.
“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.”
Fee bands will also be assessed to ensure they match the present-day marketplace.
Example Of A Large Firm
The consultation paper gives an example of a “large sized operator in the GB market” who holds a remote casino and real events licence.
If the operator’s overall fee is presently £1.05 million the new fee model would see this increase to £1.56 million.
That takes into account a fee structure change where remote casino’s share of the fee increases from 57% to 74%.
Entain is the brand owner of Coral, Ladbrokes and bwin among others.
It operates under multiple licences for betting, remote casino and bingo.
As such it is one of the companies that will face paying a considerably larger fee moving forward.
