Three Options for Fee Increases
The consultation outlines three distinct approaches to fee increases:
Option 1 (Commission’s recommendation): A 30% headline increase across annual fees, designed to maintain current regulatory operations and deliver the Commission’s 2024-2027 corporate strategy.
Option 2: A 20% headline increase, which would require the Commission to make savings of £15.8 million over six years and result in approximately 10% headcount reduction.
Option 3 (Government’s preferred option): A 20% increase plus an additional 10% ringfenced specifically for tackling illegal markets and protecting licensed operators’ revenue from criminal activity.
Refined Fee-Setting Approach
Beyond the headline increases, the proposals introduce a fundamentally revised approach to calculating fees. The new methodology would base fees on market share weighted by regulatory risk, moving away from the generic increases applied in 2021.
Key changes to the fee structure include:
- Harmonised and revised category bandwidths across licence types to allow for growth
- Fees more closely aligned with the Commission’s actual regulatory costs per licence type
- Harmonisation of non-remote Casino 1968 Act and Casino 2005 Act fees
- Fixed percentage increases for General Betting Limited, External Lottery Manager, and Society Lotteries licences
Financial Pressures Drive Review
The Gambling Commission has operated with successive annual budget deficits since the last fee review in 2021. In 2024-25, the regulator utilised £3.1 million of its reserves, with a further £5 million forecast to be drawn down in 2025-26. Without a fee uplift, the Commission’s reserves are expected to be completely exhausted during the 2026-27 financial year.
The Commission currently receives annual income of £27.9 million (excluding National Lottery regulation), representing just 0.21% of total industry gross gambling yield. Under the maximum proposed option, this would increase to 0.28% of industry GGY.
The regulator has significantly expanded its activities since 2021, including increased investment in disrupting illegal gambling markets, implementing reforms from the 2023 Gambling Act Review White Paper, and developing enhanced data capabilities.
Sector-Specific Impact
The proposals would result in significantly different impacts across gambling sectors, with remote casino operators facing the largest increases. Under Option 1 (30% increase), annual fees for the remote casino sector would more than double from £5.4 million to £12.2 million collectively.
For the smallest remote casino operators, fees would increase from approximately 1.5% of GGY to between 5.4% to 5.8% of GGY. For the largest remote casino operators, fees as a percentage of GGY would increase from approximately 0.08% to between 0.10% to 0.12%.
Remote general betting standard operators would see more modest changes, with total fees moving from £6.2 million to between £6 million and £6.5 million depending on the option selected.
Small operators with GGY up to £15 million per licence type account for 96% of all licence types but would generate only 8% of the income increase under the proposals.
Illegal Markets Funding
Tackling illegal gambling has emerged as a central priority. HM Treasury announced in the Autumn Budget that the Commission would receive £26 million in grant-in-aid over three years specifically for combating illegal gambling. However, after this three-year period ends, sustainable funding would be required to maintain these operations.
Under Option 3, approximately £2.6 million would be ringfenced annually for illegal markets work and revenue protection activities. This would fund intelligence gathering, enforcement actions, legal resources, and investigations into match-fixing, suspicious betting activity and cheating offences.
In 2024-25, the Commission issued 516 cease and desist notices to unlicensed operators and 352 to advertisers and affiliates of unlicensed operators. Collaboration with search engines and technology companies resulted in 95,705 illegal gambling URLs being removed.
Regulatory Context
The fee review takes place against a backdrop of significant changes to gambling taxation. From 1 April 2026, remote gaming duty will increase from 21% to 40%, while a higher rate of general betting duty will apply to remote bets at 25%. Bingo duty will be removed entirely.
The government acknowledges these tax changes will increase costs for operators, but notes that even under the maximum proposed fee option, licence fees would represent just 0.28% of total industry GGY.
Since operating licence fees were last reviewed in 2021, the gambling market has grown substantially. Total industry GGY (excluding the National Lottery) increased from £9.1 billion in 2020-21 to £13.4 billion in 2024-25. Remote casino GGY increased from £3.2 billion in 2019-20 to £5 billion in 2024-25.
Implications of Each Option
Under Option 1 (30% increase), the Commission would maintain current regulatory capacity and continue programmes including illegal market disruption, data and evaluation work, stakeholder engagement, policy development, and technology system upgrades. The Commission would still need to deliver efficiency savings of around £3.2 million.
Under Option 2 (20% increase), the Commission would need to reverse recent expansion of regulatory activity and revert to pre-white paper regulatory levels. This would mean reduced illegal gambling disruption work after the grant-in-aid period ends, limited data and evaluation capacity, reduced compliance interventions focused only on serious cases, and workforce reduction of approximately 10%.
Under Option 3 (20% + 10% ringfenced), the Commission would maintain enhanced focus on illegal markets and revenue protection work while requiring efficiencies across other areas commensurate with the 20% increase scenario. The ringfenced £2.6 million would fund ongoing illegal market disruption, match-fixing investigations, suspicious betting activity work, and anti-money laundering enforcement.
Future Fee-Setting Framework
The government has signalled its intention to reform the fee-setting framework when Parliamentary time allows. Future changes would remove the current requirement for the Secretary of State to approve fee changes by statutory instrument, instead allowing the Commission to consult on and implement fee changes itself, similar to other regulators such as Ofcom and the Financial Conduct Authority.
Any changes approved through this consultation would remain in place until either changed again under the existing framework or replaced by the new fee-setting framework, which would require primary legislation.
The consultation includes detailed fee tables showing proposed fees for each licence category under all three options, with implementation targeted for 1 October 2026 in line with common commencement dates.
As of March 2025, the Gambling Commission licenses 2,179 operators and approximately 19,300 personal licence holders across the Great Britain gambling market.
Source: UK Government
