Whitehall mistake reveals scheme to impose new charges on outraged gambling sector

Labour’s Proposed Increase in Gambling Licence Fees Revealed

Plans by Labour to significantly raise costs for Britain’s gambling sector were inadvertently made public due to a government oversight.

On Tuesday, documents accidentally uploaded online disclosed that Culture Secretary Lisa Nandy is considering increasing licence fees for gambling operators by up to 30%.

The Department for Digital, Culture, Media and Sport (DCMS) briefly published a consultation outlining proposed fee hikes by the Gambling Commission, before quickly removing it. The consultation was later reinstated, with officials stating its release was always planned for that day.

Among the options under review, the regulator has suggested a 30% rise, while the government’s preferred approach would also see a 30% increase, with 10% of the new funds earmarked to combat illegal gambling. A 20% increase is also being considered.

A 30% hike would mean the industry faces over £8 million in additional annual charges.

Stakeholders will be invited to provide feedback on these proposals, which are expected to take effect in October.

The initial publication of the consultation was followed by a statement explaining it was released in error, before being republished later the same day. According to a DCMS source, the consultation was always intended for release on that date.

The announcement has reignited frustration within the gambling industry, which is still dealing with substantial tax increases introduced in Rachel Reeves’s November Budget.

In that Budget, the Chancellor announced that the tax rate on online casinos would nearly double from 21% to 40% starting in April. The general betting duty—which applies to most sports betting except horse racing—will rise from 15% to 25%.

Lisa Nandy has outlined plans to increase gambling licence fees by up to 30%. (Photo: Henry Nicholls/AFP via Getty Images)

Rachel Reeves announced a near doubling of the online casino tax in her November Budget. (Photo: Simon Walker/HM Treasury)

The Betting and Gaming Council responded by warning that these fee increases would place even greater financial pressure on licensed operators, who are already absorbing major tax hikes.

According to the Council, the highest proposed increase would result in an extra £8.7 million in annual fees. They emphasized support for measures to address the black market, but called for any fee rises to be fair, transparent, and cost-effective.

Currently, the Gambling Commission collects £26.3 million in fees each year. A 30% increase would push this figure to just under £35 million.

These proposals follow Labour’s recent tax changes, which the industry claims could threaten up to 40,000 jobs.

Major gambling firms anticipate losses in the hundreds of millions, with executives warning that higher costs could drive billions of pounds into the untaxed black market.

Industry Response and Company Actions

Evoke, the parent company of 888 and William Hill, announced on Tuesday that it has begun closing unprofitable stores as part of a broader effort to cut costs. The company is also considering selling parts or all of its business in response to the new tax environment. Following these developments, Evoke’s share price fell by as much as 10%.

Why Are Licence Fees Being Raised?

Officials argue that increased licence fees are necessary to fund the Gambling Commission’s efforts to tackle illegal gambling and implement new safety regulations.

The Commission has reported consecutive annual losses and has depleted much of its financial reserves. Without a fee increase, it expects to face a £9.5 million deficit by the end of the decade, with reserves potentially running out entirely next year.

Meanwhile, annual revenues for UK gambling companies have grown from £9.1 billion to £13.4 billion since the last fee review in 2021, reflecting the industry’s recovery from the pandemic.

DCMS acknowledged that higher fees would add to the burden of recent tax increases, but insisted that the proposed changes would represent only a small fraction of the sector’s total income.

Additionally, officials have proposed removing the requirement for the Secretary of State to approve fee increases through legislation. Instead, the Gambling Commission would be empowered to consult on and implement its own fee changes, similar to other regulators like Ofcom and the Financial Conduct Authority.

The Gambling Commission currently licenses around 2,000 operators and over 19,000 individuals. Its fees do not cover its work regulating the National Lottery, which is funded separately through charitable contributions.

However, the regulator is facing rising costs related to the National Lottery, including a £1.3 billion legal dispute with media mogul Richard Desmond over a failed licence bid. The Commission’s expenses related to the National Lottery doubled to £28.8 million in the year to March, largely due to increased legal fees.

Recent Government Missteps

This consultation mishap follows another recent error, when the full Budget was accidentally published online nearly an hour before the Chancellor’s official announcement in Parliament. Richard Hughes, chairman of the Office for Budget Responsibility, resigned over the incident, which was described as the worst failure in the OBR’s 15-year history.

DCMS has been approached for comment.