The UK government has launched a public consultation on proposed increases to Gambling Commission licence fees. It has also warned that without the extra funding, the gaming regulator could deplete its finances as early as 2027 and then struggle to regulate the constantly expanding online casino sector.
The consultation, published by the Department for Culture, Media and Sport on January 29, 2026, outlines three options for raising operating licence fees, with the government eyeing a model that combines a 20% increase with an additional 10% levy set aside specifically for tackling illegal gambling and protecting licensed operators’ gains.
Any changes would be implemented through secondary legislation and are expected to take effect from October 1, 2026.
Gambling Commission Struggles Financially
The Gambling Commission, which regulates gambling in Great Britain, currently generates £27.9 million a year in fee income. However, this is the equivalent of just 0.21% of the total industry gross gambling yield. Still, DCMS said that the figure no longer reflects the true cost of regulation, particularly as iGaming expands and enforcement should be strengthened.
Since the last fee review in 2021, the Commission has expanded work to disrupt illegal gambling, implement reforms from the Gambling Act Review White Paper, and build new data and technology tools. Inflation and rising operational costs have pushed the regulator into consecutive annual deficits, which have ultimately forced it to rely on its reserves.
That’s why DCMS warns that without a fee hike, the Commission’s reserves would be fully exhausted during the 2026-27 financial year, with projected deficits rising to £9.5 million by 2030-31.
Three Fee Increase Options on the Table
The consultation presents three headline options:
- Option 1: A 30% average increase in licence fees, the Gambling Commission’s preferred option
- Option 2: A 20% average increase
- Option 3: A 20% increase plus an additional 10% ringfenced for illegal market disruption and revenue protection, which is also the government’s preferred option
Under the most expansive options, total licence fee income would rise from approximately £26.3 million to nearly £35 million annually. This is projected to boost the Commission’s share of industry GGY from 0.21% to around 0.28%.
DCMS stressed that even under the highest increase, licence fees would remain a small fraction of operators’ revenues.
Online Casino Operators Face Steepest Rises
The proposals would significantly affect how fees are calculated, and shift toward a market share- and risk-based model designed to better align regulatory costs with industry activity.
Remote casino operators, which account for roughly one-third of industry GGY, would get the largest hikes. Depending on the option selected, total fees paid by the sector would more than double, rising from £5.4 million to as much as £12.5 million.
For comparison, some land-based sectors, including non-remote bingo and casinos, could see smaller increases or even fee reductions, as their lower regulatory risk is taken into account by the government.
DCMS further explained that the revised structure would also reduce differences that currently see smaller operators paying disproportionately higher fees as a percentage of their revenue compared with large gambling brands.
Illegal Gambling and Revenue Protection in Focus
A central feature of the government’s preferred Option 3 is the earmarking of around £2.6 million a year for illegal gambling enforcement and revenue protection.
In recent years, the Commission has significantly expanded this work and has issued hundreds of cease-and-desist notices annually. It’s also working with technology firms to remove tens of thousands of illegal gambling websites from the search engines of local consumers.
In the meantime, officials remarked that stronger enforcement will protect consumers and could prevent revenue leakage from the regulated sector. This could help safeguard tax revenue and licensed operators’ operations.
The set aside funds would also support investigations of match-fixing, suspicious betting activity, and potential cheating, as well as enforcement related to cryptocurrencies and unlicensed supply chains.
Pressure Mounts as Gambling Taxes Rise
The latest consultation comes amid extensive discussions for increasing the taxes on the gambling industry. From April 2026, online gaming duty is set to spike from 21% to 40%, while online gambling could face a higher tax rate of 25%. However, for bingo, the duty could be removed.
DCMS acknowledged that higher licence fees would further grow these pressures, but argued that better-funded regulation could potentially benefit compliant operators by reducing competition from illegal markets.
Next Steps
The consultation is open to industry stakeholders, consumer groups, and the public, with responses expected to inform final decisions later this year. DCMS said further fee reviews could follow if enforcement demands continue to grow.
In the longer term, the government plans to give the Gambling Commission more freedom and independence to set its own fees, similar to regulators such as Ofcom and the Financial Conduct Authority. However, such a change would require new primary legislation.
For now, officials concluded that the proposed fee reforms are necessary to ensure the regulator remains “effective, resilient, and fit for a digital age.”
