British annual remote license fees may increase by 55% in an effort to provide the Gambling Commission with funding to regulate the rapidly expanding industry and tackle the rising unlicensed market.
The Commission Would Need £2.5M to Tackle All Challenges by 2023/2024
The Department for Digital, Culture, Media & Sport (DCMS) has launched an open consultation proposing an increase of the Gambling Commission fees in order to help the Commission to continue to recover its costs and respond to new challenges.
The objective is to implement the proposed annual fee increases for remote licenses and all application fee increases by October 1, 2021. However in the case of existing non-remote operators, the annual license fees would rather be uplifted as of April 2022 taking into account the situation of the land-based sector caused by the Covid-19 pandemic.
The consultation document highlights three major challenges in regulation that will gain momentum in the near future and need to be addressed. The challenges include increased technological developments (such as product and payment innovation), the arrival of a bigger number of global operators and a rising black market.
Concerning the first point, the DCMS proposes expanding the number of the specialist technical employees at the Commission, as well as investing in tools to improve compliance and better manage the available data. The improvements will cost £1.2 million when they are fully implemented in 2023/24.
The measures in response to the second challenge would cost £1 million and would include focusing on international regulatory agenda, interrogating and understanding complex corporate structures, as well as increasing legal capacity.
Finally, in response to the increasing number of unlicensed operators, DCMS proposed bringing in more staff to identify the scale of the black market and acquiring more resources to tackle the issue, such as increased ability to prosecute illegal operators. The investment needed to tackle this challenge is estimated at £300,000.
A recent report carried out by consultancy firm PWC claimed that around 200,000 bettors spent £1.4 billion on the black market over a 12 month period between 2018 and 2019. However, the Commission responded to the findings of the report saying that it exaggerated the real scale of the illegal market.
Delayed Increase in Fees for the Land-Based Sector
Under the proposal, annual license renewal fees for remote and software licensees, excluding lotteries, would undergo a 55% hike within every fee band as of October 2021. Operators offering Random Number Generator (RNG) games, such as online casinos and slots, would pay £2,500 or £5,000 more. The non-remote sector would face a 15% renewal fee increase, to come into effect in April 2022, with the delay aimed at helping the businesses affected by the pandemic.