The UK government’s Department for Culture, Media and Sport (DCMS) has confirmed a new 25% licence and application fee is coming into effect from October 1st, 2026, after the results of a consultation were published.
The body said it received 47 responses, mainly from gambling operators, suppliers and trade bodies, before settling on a single 25% increase across most licence categories..
Some sectors spared as bookmaker fees are restructured
The 25% increase will apply to operating licences, application fees, first annual fees, personal licences, licence variations and corporate control changes. First annual fees will remain set at 75% of the standard annual rate.
Society lotteries were excluded from the increase, with licence and ancillary fees remaining unchanged to protect funding for charitable causes.
The government will also overhaul fees for on-course bookmakers. Charges for general betting (limited) operating licences will move from a system based on operating days to one linked to gross gambling yield and market share.
According to DCMS, the revised structure is expected to reduce fees for 44% of on-course bookmakers, while 53% will face only modest increases. The announcement comes months after broader gambling tax increases added further costs for licensed operators.
UKGC budget deficit targeted by government
In its statement, the government said UKGC has been operating with an annual budget deficit of about £4 million, arguing the fee increase is needed to maintain current regulatory activity. Even with the additional income, they say, the regulator will still be required to deliver at least £8 million in efficiency savings over the next five years while prioritizing its 2026-27 business plan.
Officials rejected calls from operators to phase in the increases over several years, saying licence fees represent only a small proportion of operators’ gross gambling yield. DCMS argued that delaying implementation would deepen the Commission’s financial shortfall and force it to scale back work on consumer protection, crime prevention and market oversight.
The consultation also revealed widespread opposition from the industry to funding enforcement against the black market through higher licence fees. In response, the government dropped proposals to earmark part of the increase for illegal gambling enforcement, instead pointing to a separate £26 million Treasury funding package over three years that will support expanded investigations, automation and disruption of unlicensed operators.
Despite industry claims that compliance standards have improved, DCMS said regulatory oversight remains necessary after around one quarter of the Gambling Commission’s crime prevention and consumer protection assessments in 2025-26 uncovered significant failings or placed operators into special measures. The department warned that reducing compliance activity could allow consumer protection issues to go undetected.
The government also defended its decision to freeze fees for society lotteries, citing concerns that higher regulatory costs would reduce money raised for charitable causes. At the same time, it noted that the Commission identified 438 suspected illegal lotteries in 2025 and received 544 reports involving society lotteries presented as free prize draws or competitions, arguing that continued enforcement remains necessary to protect the regulated market.
Industry warns of mounting regulatory costs
The government plans are scaled back from its original proposals following industry feedback, abandoning options for a 20% or 30% increase and a plan to ringfence additional funding for enforcement against illegal gambling operators.
Trade groups nonetheless warned the increase adds to mounting financial pressures facing licensed operators, following recent gambling tax hikes and the introduction of the statutory levy. They argued the cumulative cost of reforms risks weighing on investment and growth.
The Betting and Gaming Council (BGC) previously described the proposed licence fee increases as a “significant cost burden,” urging ministers to consider the combined impact of higher taxes and expanding regulatory obligations on the regulated sector.
However, the decision was welcomed by society lotteries after the government exempted them from the increase. Their licence fees will remain unchanged, preserving more funding for charitable and community causes.
