The UKGC and UK government have announced increased gambling license fees & applications cost! How could this harm the UK market? (Photo by Beatriz Pérez Moya on Unsplash)
The United Kingdom Government announced at the start of the week that all local and foreign gambling operators must now pay more for the services of the UKGC (United Kingdom Gambling Commission). It is the first time since 2017 that the figures have been revised and will affect both existing and any new brands or online casinos under existing brands to enter the UK iGaming, sports betting, and land-based casino markets. The changes have been declared following a lengthy 2-month consultation that took place at the start of the year!
It is expected that the increase in revenue will help the UK industry in a variety of ways. As the UK online and land-based gambling sectors are constantly developing, it is hard to argue that the increase in cost was not fair-minded or unnecessary. The price hikes should allow for improvements across the entire UK online iGaming and sports betting sectors as well as land-based gambling such as casinos, bingo halls, and sports betting venues. And the move is one that many involved see as something that is certainly required after a year of unprecedented events.
For sustainability purposes, the UK Gaming Commission which governs UK online gambling as well as all land-based gambling needs to address changes in technology, certain risks, the increase in current fees, regulation and intelligent data requirements. It is hoped that the subtle increase in cost will go a long way to providing the tools necessary for these issues.
The NAO (National Audit Office) and PAC (Public Accounts Committee) worked alongside the government in identifying issues and coming up with a realistic plan that will satisfy all parties involved. The UKGC has existing costs that have been increasing for the past few years, so spreading the cost over to all those involved, seems to be the fair way to go.
What Exactly are the Additional Costs Involved?
There are a couple of changes that will affect operators, with the first change coming into force during the last quarter of 2021, currently scheduled for 1st October. On that day, online gambling operators will see a 55% rise in fee band costs for their yearly licenses. Early 2022 will see another rise, but this time it won’t affect the online operators. April 6th will bring about an increase in fee band license fees for gaming operators who operate from a building (i.e. bricks-and-mortar gaming establishments). All increases have been made with the impact of the coronavirus, Covid-19, in mind.
More Resources will Bring More Regulations from the UKGC for the Benefit of the UK Industry
It must be said that all increases went through a thorough consultation in which a number of different parties involved were allowed to respond. Several of the gambling seconds were present, along with several researchers and representatives from The House of Lords. All parties were able to agree upon the reasons behind the increases, with a number of parties recognising the changes in payment systems and product innovation that consistently alter the gambling industry.
One major concern over the years has been the presence of illegal operations that taint the UK industry. With smarter technology, illegal setups have been able to capitalise on areas that have been sub-par in system protection, but with this additional revenue, the UKGC is confident that they will be able to combat this. Customer protection is paramount for the sustainability of the industry and, as such, this should be considered an area of unquestionable importance.
There are more. There will be an increase in price for every application. The applications will be subject to a bigger increase in price than the fee bands, with fees currently expected to be raised by 60%. Finally, ‘multiple activities’ discounts are set to be scrapped. Currently, institutes that offer multiple gaming opportunities are given a discount.
We could also set the UK Gambling Act 2005 to change, as it is rumoured that the UKGC needs more power to keep up with an industry that is closer and closer to becoming completely digitalised. There could be further talks as the responses of all concerned parties are considered, with an update to the reviews scheduled for publication by late 2021!
Could the Move Harm the UK’s Gambling Industry after so Many Recent Changes?
The UKGC has implemented so many changes to the UK gambling market across multiple sectors. In the sports retail market, betting kiosks a.k.a. ‘Fixed Odds Betting Terminals (FOBTs) can only accept a max bet of up to £2 which many retail stores say has hit them hard. More recently, online slots have come under scrutiny with spins on video slots now not allowed to turn up a result for at least 2.5 seconds while quick play and autoplay features must all be removed. There was also the banning of credit cards used to fund online gambling, which by all accounts is a good move as people should not gamble using credit, but it has also affected the bottom line of gambling companies operating in the UK. This is not to mention talk of setting affordability checks and the possibility of placing maximum bet limits on the amuounts UK gamblers are allowed to bet online per month.
Adding to this, there are the rules casino must follow to prevent problem gambling and money laundering which are resulting in some hefty fines dished out by the UKGC. One company, Nektan Ltd, even had its license suspended and as a result another company connected to the firm, GlobaliGaming announced that it had to exit the UK market. Is this the sign of things to come?
All these new rules are quashing the market, and now with increased application fees, some believe that this could be detrimental to the success of the market which is the opposite of the reasons given by the UKGC and the UK government’s joint effort to increase costs for all gambling licenses!
The truth: The UK gambling market is booming and one that is continuously growing. The figures speak for themselves, and the casinos and sports betting firms are still making a killing. Yes, their bottom lines are being affected which never helps the objectives of any business which is to increase the bottom line! However, any losses as a direct result of the UKGC’s tinkering can be written off as external influences that are out of the control of the casino!
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