UKGC Licence Fees Rise 25% as Operator Cost Squeeze Deepens

⏱ 3 min read

UKGC operating licence fees rose by 25% on 1 October 2026, the first significant fee increase in years, after the Department for Culture, Media and Sport (DCMS) confirmed the change in a government response published at the end of June 2026. The hike takes effect precisely as the sector is still absorbing a near-doubling of Remote Gaming Duty to 40%, which came into force on 1 April 2026.

The Gambling Commission has been running an annual budget deficit of roughly £4 million, a structural shortfall that drove the consultation and ultimately the 25% settlement. Larger operators — those generating more than £100 million in gross gambling yield — will see their annual licence costs climb from approximately £100,000 to £150,000, while the smallest operators with GGY below £10 million will actually pay less in cash terms under the restructured bands.

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What Changed on 1 October

The DCMS consulted between 27 January and 30 March 2026, receiving 47 responses — mostly from operators, suppliers, and trade bodies. Three options had been floated during the consultation: a flat 30% rise, a flat 20% rise, or a 20% rise with a 10% ringfence earmarked for illegal market enforcement. DCMS rejected all three consulted options and settled on a standalone 25% headline increase with no ringfencing attached.

The affected fee categories include: operating licence annual fees, application fees, first annual fees (charged at 75% of the full annual rate), personal licence fees, supplementary operating licence fees, single-machine permit fees, operating licence variation fees, and change-of-corporate-control fees.

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How Fees Are Calculated

Operating licence fees are banded by gross gambling yield (GGY) — the net revenue retained by the operator after paying out winnings. The fee is expressed as a percentage of GGY within each band. Under the new structure:

• Operators with GGY above £100 million: fee rate moves from approximately 0.10% to 0.15% of GGY.
• Operators with GGY between £10 million and £100 million: rate moves from approximately 0.18% to 0.22% of GGY.
• Operators with GGY below £10 million: over 1,100 smaller licence holders will pay less in absolute cash terms due to restructured thresholds.

On-course bookmakers operating under general betting (limited) licences move from a fee model based on number of operating days to a GGY market-share model. DCMS projects that 44% of operators in this category will see fee reductions, while 53% face modest increases of around £22.

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The Wider Cost Squeeze on Operators

The licence fee increase lands on top of a compounding set of regulatory costs that have reshaped operator economics in 2026. The Remote Gaming Duty — covering online casino, slots, bingo, and instant-win products — rose from 21% to 40% on 1 April 2026, a near-doubling that the UK Treasury expects to generate more than £1 billion in additional annual revenue. When RGD stood at 21%, tax obligations represented roughly 26% of net gaming revenue after promotional spend; at 40%, that proportion climbs to close to 50%.

Operators also absorbed the statutory levy introduced in September 2025, which directs funds toward research, education, and treatment of gambling harms. The UKGC's Industry Statistics annual report for financial year April 2025 to March 2026 shows total market GGY reaching £17.5 billion, up 4.4% year-on-year — growth that has not shielded the sector from regulators and government pressing for a larger share of those revenues.

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Exemptions and Exceptions

Society lottery annual licence fees are frozen at current levels. DCMS cited the risk that higher fees would reduce the amounts lotteries can pass on to good causes. However, external lottery managers — commercial operators that administer society lotteries — are explicitly excluded from that exemption and face the full 25% rise.

A separate structural change accompanies the fee increase: the government intends to remove the requirement for the Secretary of State for Culture, Media and Sport to amend licence fees by statutory instrument. If legislated, future fee changes would be set by the Gambling Commission itself following its own consultation, removing Parliament as a gatekeeper in the process.

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Fee Impact by Operator Size

Operator GGY Band	Old Fee Rate (approx.)	New Fee Rate (approx.)	Cash Impact (£100m GGY example)
Above £100 million	~0.10% of GGY	~0.15% of GGY	£100,000 → £150,000
£10m – £100m	~0.18% of GGY	~0.22% of GGY	Proportionate increase
Below £10 million (1,100+ operators)	Varies by band	Restructured — lower cash cost	Net reduction in absolute fee
Society lotteries	Current rate	Frozen — no change	£0 increase
On-course bookmakers (GL limited)	Based on operating days	GGY market-share model	44% pay less; 53% rise ~£22

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Sources

Primary and trade sources used in the preparation of this article, in order of authority.

The Commission is currently operating with an annual budget deficit of around £4 million and will still need to find at least £8 million in further efficiency savings over the next five years, even after the fee rise.

— DCMS, Government Response to Proposed Changes to Gambling Commission Fees · June 2026