The UK online gambling industry is facing an all-around cost squeeze. Following the spring budget announcement that the remote gaming tax would nearly double, the Gambling Commission has proposed to increase operator license fees by almost 30% from 2026. At the same time, stricter affordability checks, marketing restrictions, and compliance requirements are also being advanced. This series of measures has put licensed operators under pressure, worrying that the continuously rising compliance costs will weaken the competitiveness of the UK's regulated market, and might even push consumers towards unregulated overseas or black market platforms. Therefore, this fee review consultation is seen as a critical test of whether the UK can maintain its global leading position in the regulated market while strengthening regulation.
Multiple pressures compounded: The industry's dilemma under dual tax increases
This proposal for a license fee increase is seen by many operators as the "final blow" at the wrong time. PASA's official website has pointed out when analyzing global regulatory trends that the policy overlay effect is key to assessing market attractiveness. This is exactly the situation UK operators are currently facing:
Significant tax increase: The recent budget has significantly raised the tax rate for remote gaming.
Proposed license fee increase: The Gambling Commission proposes an average fee increase of almost 30% to bridge funding gaps and strengthen enforcement (including combating illegal operators).
Other compliance costs: New affordability checks, marketing rules, and data compliance requirements are also increasing operational expenses.
An industry lawyer frankly stated that although the fee review was previewed in the 2023 white paper, its introduction following the tax increase indicates that "there is indeed a lack of consideration for the current financial difficulties faced by UK operators." Another lawyer believes that a single fee increase may not be the last straw that breaks the camel's back, but it symbolizes the broad pressure the regulated market is enduring.
Core controversy: Who pays to combat the black market?
The most controversial point in the consultation document is the claim that the increased fees will be specifically used to combat illegal operators. The regulated industry generally agrees that the black market is a problem, but questions the effectiveness and fairness of the fees:
Causal link questioned: Experts have directly pointed out, "Increased taxes will inevitably push traffic towards unregulated markets." Making licensed operators pay for combating the black market demand generated by regulatory friction is unsettling logic, likened to "those who arrive on time being blamed for others' lateness."
Pessimistic forecast of effects: Consultants predict that the UK black market share could soon reach "20%-30%" of total business volume, accompanied by rising problem gambling and sharp tax revenue declines, which would be a "public policy disaster."
Fund usage transparency: The industry is skeptical about the "earmarked funds" promise, believing that without independent auditing, it cannot be proven that the funds are used for the claimed purposes, which might simply be an opportunity to increase revenue.
European comparison: The UK is not the most expensive, but relies on "high diversion rates"
Comparing the UK within the context of mature European markets helps understand its competitive position:
•Current UK fees: Using a tiered system, initial license fees range from £3,100 to £67,700, with annual renewal fees from £4,000 to over £940,000. These numbers will be higher after the proposed increase.
•Premium market (Italy): Requires a one-time payment of €7 million for a franchise fee, plus other charges, clearly an outlier in terms of costs, but its large stable market has borne the high costs.
•Mid-range markets (Sweden, Denmark): Application fees are approximately 400,000 Swedish kronor and 304,000-426,000 Danish kroner, respectively, also imposing high GGR taxes (Sweden 18%).
•Relatively affordable market (Malta): Application fee about €5,000, annual fee about €25,000.
The comparison shows that the UK is neither the most expensive nor the cheapest market. Its uniqueness lies in being one of the world's largest regulated online gambling markets, which has long relied on "high diversion rates", ensuring that the vast majority of gamblers gamble through legal channels. Industry insiders warn that the cumulative effect of taxes "might make some operators considering entering the UK market look elsewhere."
The tipping point is near? The difficult balance between innovation and investment
The increase in license fees is not an isolated event; it is part of the narrative of rising regulatory costs. Facing stricter marketing restrictions, affordability checks, and data compliance requirements, operators' compliance costs will continue to rise, possibly requiring significant investment in personnel and systems.
The future key will be innovation. Operators need to invest in developing products that can safely deliver marketing and are attractive to players under cost pressure. But this itself requires funds. A lawyer summarized the dilemma: "When costs are squeezed, operators need to make choices in the coming years about where to spend money—and where to save it."
The ultimate policy dilemma is that if the UK makes the costs of the regulated market too high, it may be losing the customers it tries to protect. Market maturity does not guarantee stability, and the coming years will reveal whether the UK can maintain a competitive regulatory model or will become another European jurisdiction where regulation drives gambling underground.
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This article is from "PASA-Global iGaming Leaders" gambling industry news channel: https://t.me/pasa_news
Original deep channel for gambling: https://t.me/gamblingdeep
Free data reports: @pasa_research
PASA Matrix: @pasa002_bot
PASA official website: https://www.pasa.news
