UK LEGAL COMMENT
There may be trouble ahead…
Northridge Law’s Melanie Ellis looks at seismic changes for the UK gambling sector
T 26 FEBRUARY 2020
his month saw the announcement of proposals for significant fee increases for UK licensed gambling operators, as well as increased restrictions on the operation of online slot games. Most of these changes will come into
effect from October 2021, although land-based gambling operators have been given relief from the fee increases until April 2022.
Fee increases
Licence application and annual fees were last reviewed in 2017 and, since that date, regulatory expectations have increased significantly. All UK licensees will be familiar with the increased levels of regulation by the Commission, from investigations into shareholders and investors to detailed compliance reviews. It is not surprising that the cost to the Commission of processing applications and regulating each licensee has increased, however it is far from clear that the size of proposed increases is justified. Under the proposals, land based operators would be subject to a 15-21% uplift on their annual fees, however
the brunt of the additional costs would be borne by remote licensees whose annual fees would increase by between 55% and 72%.
In addition, all application fees would increase by 60%. This will have a particularly detrimental affect on start-up operators, who need to fund these costs before they can even be sure they will be licensed to operate the proposed business. Operators considering selling all or a significant part of their share capital should also be aware that this will increase the application fee for a change of corporate control by 60%. The fee must be paid separately for each new controller of the company, so the total cost can already rack up where the ownership structure of the investor means there are a number of new controllers. These significant fee increases are explained by three key challenges the Commission expects to face in the coming years: increased technological developments, changes to the size and shape of the market and increasing risks associated with unlicensed operators. It is unclear exactly how the additional £7m the Commission would receive per year from 2022/3 onwards will be spent to address these
Maksym Yemelyanov/Adobe Stock
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