Whitehall leak reignites debate over 30% gambling licence fee rise

A leaked Whitehall consultation has thrown the spotlight back onto the funding of the UK gambling regulator, after proposals emerged to raise licence fees by as much as 30%. The plans, published briefly before being taken down, form part of a wider review into how the Gambling Commission is funded. With the regulator warning that its financial reserves are close to being exhausted, the consultation has reopened a sensitive debate over how much of the growing cost of regulation should be borne by the industry.

Why are licence fees back under review?

The consultation, launched by the Department for Culture, Media and Sport (DCMS), is the first full review of Gambling Commission fees since 2021. It follows several years of increased regulatory activity, including:

• Work to disrupt the illegal gambling market.
• Reforms set out in the Gambling Act Review White Paper.
• Improvements in the Commission’s data and intelligence capabilities.

These expanded responsibilities, combined with inflationary pressures, have left the regulator running annual budget deficits.

In the 2024/25 financial year, the Commission drew £3.1 million from its reserves, with a further £5 million forecast for 2025/26. By the end of that period, reserves are expected to sit close to the Commission’s minimum operating level of £4 million.

Without changes to fee levels, the Government warns that reserves could be fully depleted during 2026/27.

"Since 2021, the income that the Gambling Commission receives in respect of some types of licence has drifted away from the actual costs of regulating them, and the costs to the Commission of regulation now increasingly exceeds the level of the fee set in 2021." - Department for Culture, Media & Sport, open consultation and proposed changes to Gambling Commision fees

Three fee increase options on the table

To address the funding gap, the consultation sets out three potential approaches to increasing annual operating licence fees:

• Option 1: A flat 30% increase across fees
• Option 2: A 20% increase
• Option 3: A 20% increase plus an additional 10% ringfenced for tackling illegal gambling and protecting licensed operators from criminal activity

A full 30% increase would generate an additional £8.7 million in funding once fully implemented.

Impact on operators and who pays most

While the headline percentage increase has drawn attention, the consultation highlights that the majority of the financial impact would fall on larger operators. Small businesses (defined as those with gross gambling yield (GGY) of up to £15 million per licence type) make up 96% of all licences. These would contribute just 8% of the total increase in fee income.

The remaining 4% of licence types (operators with GGY above £15 million) would account for 92% of the additional revenue raised.

What happens next?

Any fee changes would be introduced through secondary legislation. DCMS is aiming for new rates to come into effect from 1 October 2026. The consultation is open until 29 March 2026.

The Government has also signalled longer-term structural changes. In future, and subject to Parliamentary time, the Gambling Commission could be given greater autonomy to consult on and implement fee changes itself. This would bring it into line with regulators like Ofcom and the Financial Conduct Authority.