2026 was already going to be a worrying financial one for the UK’s online casino industry. Now in addition to the upcoming tax increases, a rise in the cost of UK Gambling Commission licence fees is being proposed.
Running up to 30 March is a consultation period on the cost of licence fees. Companies require one to be able to operate legally in the UK. It’s possible their cost may be increased by as much as 30%.
Any possible increase is worrying but this news comes at a time when it is becoming difficult for UK operators. Last year saw stricter regulation being introduced as a way of dealing with the problem of gambling harm, particularly online.
Maximum stakes were introduced for online slots, though these do not seem to have been hurting the huge amounts they earn. Q3 of the 2025-26 financial year saw online slots produce Gross Gambling Yield (GGY) of £788 million. That was a figure 10% higher than recorded in the previous financial year. It was also considerably higher than the £747 million reported for Q2 of this financial year. There have been falls though in the average length of sessions dropping from 18 to 16 minutes.
Those Q3 financial results were mixed ones for the online industry. Total GGY for the online industry was an impressive £1.5 billion but that was 2% down on the Q3 figures for the previous financial year. However, the total was higher than the £1.42 billion recorded for Q2. It was better news for the online sector than real event betting. Their GGY fell by 18% year-on-year to £530 million.
A mandatory levy aimed at raising £100 million a year also came into force last year. This raises funds to help carry out research into gambling harm and treatment of sufferers. The Autumn Budget produced further worrying news for UK online casinos, reported British Gambler. Remote Gaming Duty will rise from 21% to 40% in April 2026 and now comes news of future licence fee costs.
Why are operators now facing licence fee increases? There has been a previous promise to ensure the UKGC has enough funding to carry out its duties. These have been increasing in recent years and a shortfall in the amounts the UKGC needs has been created. In addition, the commission has also seen their reserves eroded so action is needed.
There is plenty of work to do for the UKGC and not just dealing with those they have issued licences to. A growing problem is the unregulated market and more funds are needed as the UKGC attempts to deal with them. The unregulated sites take business away from legal operators, do not need to adhere to the new rules being introduced and they are not making any tax or mandatory levy payments.
As seems to be the general way forward these days, rather than just making a decision a consultation period is taking place. This will see UK operators, consumer groups, gambling industry trade organisations, the general public and local authorities participating.
Three core options are being considered at present. It is the first time that operating licence fees have undergone a review in five years. Currently a remote casino operator with an annual GGY of £1 billion + pays £739,729 a year. A further £125,000 must be paid for every additional £500 million above £1 billion.
The UKGC are pressing for an average 30% rise in licence fees and believe this will bring in an additional £8.7 million every year. The additional funding would make it possible for them to “continue to deliver its 2024 to 2027 corporate strategy and subsequent priorities.”
Another option is a 20% increase but the UKGC say that if this went ahead, they would need to make savings of £15.8 million in the next six years to 2030-31. It is also possible that staff cuts of 10% would need to be made. They would also find it difficult to investigate some suspected regulatory breaches. Such investigations have seen them issue large fines to several UK operators.
The other option is the one preferred by the government. The licence would rise by 30% but only 20% would be used for commission-related costs. As for the other 10%, that would be ring-fenced and aimed at certain regulatory priorities. These include strengthening enforcement capabilities and dealing with illegal operators
Once the consultation period comes to a close, the evidence will be reviewed and a decision made. Secondary legislation would be needed to enforce any changes and they would be implemented in October of this year.
Just what is decided will be important for the UK’s gambling industry. Online casinos are already facing increased costs thanks to the tax increases that will take place in April with more on the way in 2027. If licence fees also rise, then some companies may decide to focus more on their interests in other global markets.
