UK gambling operators face new fee structure in 2017


uk-gambling-commission-fee-structureUK-licensed online gambling operators face a new fee structure in 2017, with most operators seeing a discount, although a select few will see their fees rise.

The UK Gambling Commission (UKGC) posted a notice on its website this week detailing the findings of its consultation with the Department for Culture, Media and Sport (DCMS) regarding its proposed license fee structure, which is set to take effect on April 6, 2017.

The consultation was launched following the changes brought about by the Gambling (Licensing & Advertising) Act 2014, which included the new 15% online point-of-consumption tax on all online revenue generated from UK punters.

According to the UKGC, the net effect of the new regime will “reduce the overall fee burden across the industry by over 10%.” The UKGC says around 1,900 licensees will see their fees reduced by anywhere from 2% to 75%, while a further 1,000 licensees will continue to pay their current rates.

An unlucky 100 or so larger operators will be subject to fee hikes as high as 140% of their current level. The 20 largest operators could face an additional annual payment of £164k, or approximately 0.05% to 0.1% of gross gambling yield (GGY). First-time online licensees will get a 25% discount on their first-year fees.

The revamped fee structure was designed in part to ensure that the UKGC’s costs were “recovered on a proportionate basis from different types and sizes of operator.” For example, the UKGC says it will alter its fee formula by replacing the “number of premises” with GGY as the basis for fee categories across a number of licenses.

The UKGC also plans to realign its cost recovery more proportionately in relation to GGY, and certain fee categories will be subdivided into smaller categories to ensure a more equitable cost recovery.

The UKGC also plans to issue a new ‘game host’ licence aimed at B2B suppliers who host their own games through B2C remote casino or bingo sites. Under the current regime, these suppliers must hold both B2B and B2C licenses, while the new ‘game host’ license “would attract lower fees than current remote casino and bingo licenses.”