Is the UKGC doing enough to justify increasing licence and application fees payable by operators?

Comments by David Clifton feature in an EGR Intel article entitled “Footing the bill: are operators paying for the UKGC’s regulatory shortcomings?”

The article focuses on proposals for very considerably increased Gambling Commission fees, contained in a DCMS consultation published on 29 January 2021 that runs until 25 March 2021.

Addressing EGR’s question: “Is the UKGC doing enough to justify increasing licence and application fees payable by operators?”, David has commented in the article as follows:

As a starting point, it must be accepted that, to regulate effectively, the Gambling Commission requires sufficient funding to satisfactorily fulfil its regulatory duties. The DCMS consultation is not short on detail in terms of justifications for increasing the Commission’s fees.

That said, both the scale and timing of the increased fee proposals do raise the following questions:

  1. Coming less than four years since the last fee changes (in April 2017) saw fee reductions for 1,900 licence holders, no change in fees for 1,000 and increased fees for just 75, integrated within a plan for the Commission to draw on its reserves, did someone get the fee calculations or strategic forward-thinking wrong back then?
  2. Given that one of the Commission’s justifications for the very considerably increased fees is “the need to maintain public confidence in regulation”, is its intended recruitment drive for more specialist staff influenced by the harsh criticisms levelled against it last year by four different parliamentary bodies (and the accompanying adverse media reports) and, if so, is it fair that the cost of this should be borne by licence-holders?
  3. Another justification is the challenge created by changes in the size and shape of the market partially caused by consolidation. Given that GGY is the basis for nearly all of the Commission’s fee categories, to what extent has consolidation reduced its overall fee income?
  4. Very notably, a further justification cites “increasing risks associated with unlicensed operators and the need to protect consumers and the industry from ‘black market’ encroachment”. How does the Commission reconcile this risk assessment with its Chief Executive’s comment a fortnight earlier that the industry has exaggerated the impact of the illegal market?
  5. With knowledge that, as part of its Review of the Gambling Act 2005, the Government is considering whether there is a case for enabling a more flexible approach to setting fees (including, for example, the scope for financial incentives to operator compliance), did the Commission give any thought to this before, seemingly, dismissing it from its fee proposals?