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UK Gambling Sites Will See New UKGC Licensing Fees

Date Posted: January 10, 2017

UKGC will restructure their license fees this year and will take effect on April 2017.

To address the concerns of some operators, UKGC announced that the license fee restructure will benefit a majority of license holders. Only large casinos will be the one to experience an increase in the licensing fees, but Bitcoin sports betting sites and casinos should also pay attention.

New license fee structure

UKGC plans to lower the license fees for more than 1,900 of its license holders. On the other hand, 1000 licensed operators will only see a small decrease or zero changes in their license fees. These UK online gambling sites, including those that also accept Bitcoin like NetBet and Tonybet, might see a reduction of as small as two percent or a large 75 percent off of their license fees.

While the majority of operators will benefit from the new license fee structure, about 75 operators will see an increase in their license fees. Operators of the biggest casinos will see a hike of a 140-percent increase in their fees. These fees fix their gross gambling yield (GGY) percentage. These percentages are usually within 0.05 to 0.1 percent. One or more of the 75 operators could be paying an annual fee of more than £160,000.

New online operators to benefit

New online casinos will enjoy the new UKGC license fee structure on April this year. They will experience a reduction of 25 percent on their first annual license fee. The discount could lead to an increase in new Bitcoin gambling sites or casinos that accept different cryptocurrencies.

Business-to-business (B2B) companies will also benefit from the changes in license structure. In April, UKGC will release a new ‘game host’ license, which will enable remote casinos and bingo licenses pay for only one license every year.  Prior to this new structure, B2B companies must have two licenses for their business. This means they need to pay for the annual fees for both licenses.

UKGC cost recovery

UKGC, which gave the green light in in-play sports betting last year, is having problems with making ends meet with their operational cost ever since 2007. The current license fee structure results in a majority of insufficient operator commissions. The amount the UKGC receives each year is not enough to cover their annual operating costs. Even with the Gambling (Licensing & Advertising) ACT 2014 law that saw a 15-percent online point-of-consumption tax, the revenue was still not enough.

The Department for Culture, Media and Sport (DCMS) and UKGC held a joint consultation activity that lasted from July 8 to Sep. 9 in 2016. The result of the joint consultation is a new licensing structure that can help distribute the burden of the fees evenly among license holders. By balancing the brunt of the fees, the UKGC can recover its operation costs at a proportionate basis.