UKGC calls for licence fee review

UKGC calls for licence fee review

Thursday, September 3, 2015
The fee structure was criticised in a Parliamentary report

UK licensing costs could be set to change after the Gambling Commission (UKGC) announced that it would advise the government to amend fees.

The fee structure was criticised for several reasons in ‘The Gambling Act 2005: A bet worth taking?’, a 2012-13 Culture, Media and Sport Committee report which suggested that there should be a review following the implementation of new online gaming laws.

With the first full year's data post the Gambling (Licensing and Advertising) Act 2014 to be released before the end of the year, the UKGC has now begun a process of collecting information from the industry in time to put proposals forward to the government.

However, while the 2012-13 report suggested a reduction in fees – which rose 28.6 per cent year-on-year to £17.1m (€23.2m/$26.1m) during 2014-15 following last year’s remote licence changes – UKGC said in a discussion paper sent out to the industry, and seen by TotallyGaming.com, that short- and long-term changes in the sector meant it could not yet confirm what advice it would give.

“The recent extension of licensing to overseas operators has created a dividend for our finances from remote operators which was difficult to predict with any accuracy,” said the paper. 

“However, the scale of that dividend may yet turn out to be significantly diminished by mergers, by the impact of the gambling tax changes (as less competitive operators withdraw from the market) and by operators reducing fee category.

“The immediate impacts of the changes to remote gambling regulation, in terms of the effect on the Commission’s costs and income, should be clearer by the end of 2015 as newly-licensed operators based overseas decide whether to retain their Commission licences, and at what level.

“The main modelling and development of our advice to government on specific fee proposals cannot therefore be completed before the end of this year when we get these figures.”

The 2012-13 Parliamentary Select Committee report identified several companies that had seen their licence fees rise exponentially in the years after the creation of the UKGC and the changes introduced by the Gambling Act 2005. It quoted a witness statement from adult gaming centre operator Praesepe, which said that there had been a “12-fold increase in fees for the majority of operators since the introduction of the new Act”.

The report said that the UKGC should introduce a new licence fee structure which gives a much clearer reflection of the amounts charged per shop, with both small independent and large operators paying less.

“We remain unconvinced by arguments from the Gambling Commission that changing the licence fee banding system would lead to too much complexity,” said the report. “On the contrary, the current system is too simplistic.

“We recommend that an independent review of Gambling Commission expenditure be carried out as soon as possible after a new system for remote licensing is in place.”

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