A government paper advising an increase in United Kingdom Gambling Commission (UKGC) licence fees, released apparently in error yesterday, could see operators facing another steep rise in operating costs.
Four documents were briefly released on the government’s website yesterday (January 26) before being quickly taken down. They have since been restored and have been published under the page title: Proposed changes to Gambling Commission fees.
Papers pose October 1 implementation date
A roll-out date of October 1 has been suggested as part of the new proposals, with some operators bracing for one of three options on the table.
Those choices include a potential licence fee increase of up to 30%, a potential licence fee increase of up to 20% or a 20% annual fee rise plus 10% more that would be ringfenced for tackling the illegal market.
The papers seemed to suggest a governmental preference for the latter option, while the regulator would like the former.
The fees are expected to depend on the type of licence and calculated based on market share and regulatory risk. However, according to the paper, holders of the General Betting Limited, External Lottery Manager, and Society Lotteries licences will get a flat percentage increase.
Each of three choices aimed to fill regulator black hole, according to paper
The study comes as the UKGC struggles to meet financial obligations.
According to the papers: “At the end of the 2025 to 2026 financial year the UKGC will be close to its minimum reserve level of £4 million. Forecasted costs will increase in future years,
Without a fee uplift in October 2026 the UKGC’s reserves are expected to be completely exhausted during the 2026 to 2027 financial year.”
The paper adds that millions of pounds are required to cover deficits driven by rising costs and expanded enforcement activity.
How will the licence fee increase work?
The UKGC’s preferred 30% increase would generate £8.7 million annually, allowing the UKGC to maintain its current programme, continue issuing cease and desist notices to unlicensed operators, and remove illegal gambling URLs. It would also sustain data programmes and stakeholder engagement, though efficiency savings of around £3.2 million would still be needed.
A smaller 20% increase would generate £3.1 million less than the preferred option, forcing significant cutbacks. The UKGC would be limited to reactive work on complaints, scaling back proactive enforcement, URL removal, data programmes, and stakeholder engagement.
Headcount reductions of roughly 10% and savings of £15.8 million over six years would be required, potentially delaying its Corporate Strategy 2027–2030.
The government’s preferred approach combines a 20% general increase with 10% ring-fenced funding for illegal market work, effectively delivering a 30% headline rise.
Around £2.6 million annually would be dedicated to tackling illegal gambling, supporting cease and desist actions, interventions in the B2B supply chain, and investigations into match-fixing and suspicious betting. Efficiency measures would still be necessary, with £1.4–1.5 million diverted from other areas to fund the ring-fenced activity.
Licence fee increase comes in same fiscal year as tax hike for gambling industry in UK
Chancellor Rachel Reeves’ 2025 Budget included steep increases in gambling taxes, particularly on online activity, with remote gaming duty set to rise from 21% to 40% from April 2026 and online betting duty rising to 25% in 2027.
These changes are projected to raise about £1.1 billion annually by 2029–30, but operators warn the extra cost will bite into profits, hit jobs and dampen investment in the sector.
Major gambling companies have already signaled trouble ahead. Evoke, the owner of William Hill and 888, has seen profits and share prices suffer and is exploring strategic changes after warning the tax changes could increase its annual costs by more than £125 million, while Flutter said the duty rises would cut hundreds of millions from its earnings.
Industry bodies such as the Betting & Gaming Council (BGC) have criticised the Budget as a “devastating hammer blow” that could undermine jobs, reduce growth and potentially drive punters toward illegal gambling sites, since higher taxes and lower odds could make unregulated platforms comparatively more attractive.
