UK LEGAL COMMENT
fully address the fact that many gambling software licences are held in addition to another operating licence, which may be a B2C licence (for example a remote betting operator that has developed their own bookmaking software) or a B2B licence (for example a remote casino host who develops their own games). Such operators are unlikely to have any profits directly attributable to software activities, so it remains to be seen whether they will pay the levy as a percentage of GGY from the provision of facilities for gambling or a percentage of overall gross profits. Presumably they will not be expected to pay both. The levy is expected to raise £90-100m to year by 2027. In
setting the proposed rates for the levy, the Government suggests that it has worked backwards from this figure, which it determined is needed to deliver “improvements and an expansion of projects and services across all three aspects of RPT”. Coincidentally, this meant it arrived at exactly the same levy rates as had been offered by the four biggest operators in 2019 and offered by the membership of the BGC during the Gambling Act Review (1% for online and 0.4% for land-based casinos). Annual levy payments will be made to the Gambling
Commission and treated as if it were due by way of an annual fee. This means that failure to pay the levy will result in revocation of the operating licence, unless the Commission chooses to disapply this provision because it thinks the failure to pay was due to administrative error.
Distribution of funds The Government proposes that the majority of the funds raised by the levy will go to the NHS for treatment of gambling-related harm (40-60% of contributions). 15-30% would go to prevention of gambling harm and 10-20% to research. This is to be compared with the funds raised through the voluntary system in 2022-23, which was a total of £53m in contributions of which over £46m (87%) went to GambleAware for onward distribution. It likely won’t have escaped readers’ attention that in its
consultation the Government has chosen to adopt the terminology ‘research, prevention and treatment’ rather than the previously favoured ‘research, education and treatment’. Certainly, measures which might fall within ‘prevention’ of
gambling-related harm will be wider ranging than educational programs. It seems these funds may support some of the work of the Gambling Commission, as the consultation includes “regulatory restrictions on products, place and provider” in the range of relevant measures. The proposal that all funds for treatment of gambling harms
will go to the NHS represents a major change from the current arrangements, whereby a range of charities currently deliver the majority of treatment. Whilst there are surely benefits to treatment being provided directly by the NHS, diverting funds away from treatment programs that have and continue to provide help and support to so many affected individuals does not seem likely to be an efficient or effective approach. Decisions as to how exactly the funds are distributed by the
Gambling Commission will be led by an informal Advisory Group, made up of experts across disciplines and chaired by DCMS. A Levy Board will also be created as a “central oversight mechanism” for the Government, including representatives from DCMS, the Treasury, the Department for Health and Social Care, the Department for Science, Innovation and Technology and the Scottish and Welsh governments. The Levy Board may be responsible for formal sign-off of decisions by the Gambling Commission to distribute funds. Levy rates and distribution are to be reviewed every 5 years. The Government’s consultation exercise closes on 14
December, with a final decision to be announced in early 2024.
Melanie is a gambling regulatory lawyer with 13 years’ experience in the sector. Melanie advises on all aspects of gambling law including licence applications, compliance, advertising, licence reviews and changes of control. She has acted for a wide range of gambling operators including major online and land-based bookmakers and casinos, B2B game and software suppliers and start-ups. She also frequently advises operators of raffles, prize competitions, free draws and social gaming products. Melanie has a particular interest in the use of new technology for gambling products and novel product ideas.
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