The UK Government’s Department of Culture, Media and Sport (DCMS) has proposed an increase in licensing fees to provide the UK Gambling Commission (UKGC) with improved funding.
The news was reported over the weekend and, according to Intergameonline.com, comes as part of a new consultation from the DCMS which will run through to March 25th. As part of the consultation, the DCMS has proposed a 55% increase in the annual British remote gaming license fees paid by gambling operators.
Reports suggest that the price hike, which is not part of the Government’s review of the Gambling Act 2005, could begin in October this year with a 15% license renewal fee increase for land-based operators planned for 2022 after operators have had time to recover from the Covid-19 pandemic.
What’s more, the DCMS has suggested in its consultation that the UKGC should remove the 5% annual fee discount for combined remote and non-remote operating licenses to help the regulator streamline its licensing process.
The DCMS hopes that the price hike will help increase funding for the UK Gambling Commission and will help it better regulate the ever-changing gambling industry and take on the illegal online black market.
In a statement, the DCMS clarified some details of its proposals, saying: “For a small non-remote business applying for a new operating license (e.g., an adult gaming centre, bingo or general betting applicant with a projected annual GGY of £250,000), the 60% increase would mean that the new proposed application fee would represent 0.6% of that applicant’s projected GGY.
“For a small remote casino operator with a projected GGY of £250,000, the proposed application fee would represent 1.7% of its projected GGY.”
Responding to the DCMS’ suggestions, a spokesperson for the Commission said: “We welcome this DCMS consultation as it will explore much need changes to our fee income to enable us to continue to regulate effectively. We would encourage everyone impacted by the proposals to have their say.
“We are already making gambling safer – having strengthened age and identity verification, introduced strict new guidance for so-called VIP schemes and banning gambling with credit cards – but further resources will mean we are able to make greater and faster progress in making gambling safer and protecting consumers in the years to come.”
The UKGC’s Challenges
In its consultation document, the DCMS claimed that the UKGC faces three challenges; the threat of the illegal online black market, the large scale of many gambling operators, and fast technological development.
The DCMS has suggested that the UKGC should bring in more technical staff as well as additional staff to work with other gambling regulators on international regulation and to investigate operators with large corporate structures.
According to the DCMS, the British regulator should invest in tools to improve compliance, should make better use of its data, and should invest in more resources to investigate and tackle illegal gambling. These changes will cost an estimated £3.5 million by 2023 and 2024, the DCMS has said.
The Department of Culture, Media and Sport also explained that the UKGC has already drawn on much of its reserved funds and making the DCMS’ suggested changes would lead the Commission to face a £4.7 million funding gap between 2023 and 2024. The price hike in license fees will help generate the regulator an additional £7.7 million by 2024.
UK Chancellor’s Affordability Check Concerns
News of the DCMS’ consultation comes as Chancellor of the Exchequer Rishi Sunak has expressed concerns regarding the UKGC’s proposed affordability measures required by all gambling operators.
According to a report by FocusGN, Sunak raised the concerns directly with the Department for Culture, Media and Sport after receiving complaints from senior figures from the British horse racing industry who fear that the proposed affordability measures could harm the racing industry and lose them an estimated £60 million a year.
The UK Gambling Commission’s proposed affordability measures include a “safety threshold” that will allow players to lose a maximum of £100 before being asked to provide identification and evidence that they can afford to bet.
In a letter for Sunak, several horse racing figures from the Chancellor’s Richmond North Yorkshire constituency claimed that the measure would impact the horse racing industry’s revenue. Sunak, in turn, has contacted the DCMS regarding the concerns and British Horseracing Authority CEO Julie Harrington has raised the concerns with Neil McArthur, the UKGC boss, warning that the industry cannot afford to lose more funds amidst the ongoing Covid-19 pandemic.
Michael Dugher, the head of the Betting and Gaming Council (BGC), has also criticised some of the UKGC’s proposed measures, warning the regulator that overregulation could push players in the UK to the illegal online gambling black market where there is no safety or protection.
However, the UK Gambling Commission has rejected the claims and last month issued a statement criticising the “exaggerated” concerns of the illegal online gambling black market in the UK. Neil McArthur rebutted claims that over-regulation would lead to a surge in users playing at illegal overseas websites.
The news comes as the UK Government carries out its review of the Gambling Act 2005 and is expected to introduce a series of changes to the gambling industry. Some of these changes may include a ban on shirt sponsorships, stake limits, as well as tighter verification measures.
Meanwhile, the UK Gambling Commission recently fined operator White Hat Gaming after conducting an investigation into the group and discovering several anti-money laundering and safer gambling failings, including allowing several users to lose large amounts of money in quick succession.