DCMS slips up
The UK government’s Department for Digital, Culture, Media and Sport (DCMS) was left red-faced after it mistakenly published plans to hike license fees for gambling firms by as much as 30%.
The plans published online Tuesday morning revealed Culture Secretary Lisa Nandy’s plans to raise fees charged by the UK Gambling Commission (UKGC) from October.
quickly pulled Nandy’s mistakenly published document
The DCMS, however, quickly pulled Nandy’s mistakenly published document and added: “Consultation publication delayed.” Later on Tuesday, the DCMS republished the plans, which Parallel Parliament shared on X:
A 30% rise in UKGC fees would amount to £8.7m ($12m) in extra costs for the gambling industry, and has “triggered renewed anger across Britain’s gambling sector” – which is on the ropes after major tax increases in November.
An early casualty is William Hill and 888 parent Evoke, which announced on Tuesday that it had started shuttering unprofitable retail shops in an effort to cut costs.
Pressure rises
According to UK mainstream media, Evoke CEO Per Widerström stated his firm’s quick and decisive cost-cutting action includes “the closure of retail stores that are no longer sustainable.” Evoke had warned pre-Budget that around 200 retail shops could be at risk.
Widerström and his co-execs are also mulling a sale of all or part of Evoke in response to the tax rises, news that sent shares in the firm plummeting as much as 10%.
the DCMS also prefers 30% but wants to keep 10% for tackling the black market
While the 30% license fee hike option is favored by the UKGC, the DCMS also prefers 30% but wants to keep 10% for tackling the black market. The third option is a 20% increase.
The Betting and Gaming Council (BGC), meanwhile, stated the license fee hikes would “add a further significant cost burden on licenced operators at a time when the sector is already absorbing major tax rises from the autumn Budget”.
As part of Rachel Reeve’s November Budget, alongside tax rises to 40% for online casinos and 25% for sports betting, the Chancellor also budgeted a further £26m ($35.8m) in funding for the UKGC to bankroll its work against black market operators.
The trade body added that while the BGC supported tackling the black market, the DCMS and the UKGC “must ensure any increase is proportionate, transparent and delivers clear value for money.”
Cash needed
The DCMS acknowledged the license fee rise would exacerbate the imminent tax hikes, but insisted the UKGC charges represented a “very small proportion” of the gambling industry’s overall profits. According to reports, the cash coming into UK gambling firms each year has increased from £9.1bn ($11.6bn) to £13.4bn ($18.5bn) since 2021.
Nandy’s plans also proposed giving the UKGC the power to “consult on and enforce its own fee changes” instead of via legislation.
The UKGC has, however, burned through its reserves and is cash hungry because of successive annual losses and legal costs. That includes £28.8m ($39.7m) in a legal battle with porn baron Richard Desmond over his failed bid for National lottery license.
The UKGC reportedly expects a deficit of £9.5m ($13.1m) by 2030 if it doesn’t raise fees.
The DCMS’s error, meanwhile, comes after the Budget was mistakenly published in full online nearly an hour before Reeves delivered it, in what was described as the “worst failure” in the office’s history.
