In a landmark decision, the UK Government has implemented a statutory levy on gambling operators, aiming to raise £100 million ($126 million) annually to address gambling-related harms. This initiative, replacing the previous voluntary contribution system, marks a significant shift in the regulation of gambling activities in the country. The funds will be directed toward research, prevention, and treatment (RPT) of gambling harms, ensuring a more equitable and comprehensive approach to industry responsibility.

UK Government Introduces Statutory Levy on Gambling Operators to Combat Gambling Harms

A New Framework for Addressing Gambling Harms

1. Replacing the Voluntary Contribution System

The statutory levy supersedes the voluntary contributions under the Gambling Commission’s Social Responsibility Code, which raised £50 million in the 2023/24 fiscal year. Critics of the previous system argued that it allowed certain operators to underfund RPT efforts, leaving larger companies to cover a disproportionate share of the costs. The new levy ensures all operators contribute equitably, addressing long-standing imbalances in funding.

2. Tiered Levy Rates Based on Gross Gambling Yield (GGY)

The levy introduces a tiered rate system, designed to reflect the varying levels of harm associated with different gambling sectors:

• 1.1% for online operators.
• 0.5% for land-based casinos and betting shops.
• 0.2% for adult gaming centers and bingo premises.
• 0.1% for society lotteries and external lottery managers (ELMs).

Operators with payments under £10 are exempt from the levy, ensuring small-scale operators are not disproportionately impacted.

The Financial Impact on the Gambling Industry

1. Doubling Industry Contributions

Under the new system, total contributions are expected to double compared to the 2023/24 fiscal year. While this represents a significant increase, many observers view it as a fair trade-off given the industry’s avoidance of higher gambling taxes in recent budget proposals.

2. Balancing the Burden Across Sectors

Richard Williams, a gambling partner at Keystone Law, highlighted the financial implications for various sectors. Land-based operators, already grappling with economic pressures such as recent National Insurance increases, will benefit from reduced rates compared to online operators. This proportional approach aligns with risk levels, ensuring products with higher harm potential bear greater responsibility.

Key Benefits of the Statutory Levy

1. Enhanced Funding for RPT Initiatives

The statutory levy is expected to provide consistent and adequate funding for research, prevention, and treatment programs, supporting efforts to mitigate gambling-related harms effectively.

2. Promoting Fairness and Accountability

By mandating contributions from all operators, the levy promotes fairness across the industry and holds operators accountable for the societal impact of their activities. This shift addresses criticisms of the voluntary system, which allowed some operators to avoid their fair share of responsibility.

GambleAware’s Perspective on the Levy

1. Welcoming the Levy

GambleAware, a leading charity in the gambling harm prevention space, has welcomed the introduction of the statutory levy and related measures, such as online slot stake limits for under-25s. These initiatives are seen as crucial steps toward reducing gambling-related risks and safeguarding vulnerable populations.

2. Urging a National Strategy

GambleAware has emphasized the importance of a cohesive national strategy to maximize the effectiveness of the new system. The charity has called on the levy board to develop this strategy as part of its remit, ensuring a unified approach to combating gambling harms.

3. Appointment of a Prevention Commissioner

To ensure continuity in addressing gambling-related harms, GambleAware has stressed the urgency of appointing a prevention commissioner. This role would oversee the implementation of harm prevention measures and coordinate efforts across the industry.

Implications for the Future of Gambling Regulation

1. Strengthening Consumer Protection

The statutory levy is part of a broader regulatory overhaul aimed at strengthening consumer protections and promoting responsible gambling practices. These measures are expected to foster greater public trust in the industry.

2. Encouraging Industry Collaboration

The introduction of the levy highlights the need for greater collaboration between the government, regulatory bodies, operators, and advocacy groups. By working together, stakeholders can create a safer and more sustainable gambling environment.

3. Addressing Emerging Challenges

As gambling technologies and platforms continue to evolve, the levy provides a framework for addressing emerging challenges. By allocating funds to research and prevention, the system ensures the industry remains equipped to tackle new risks effectively.

Conclusion: A Pivotal Step 

The UK Government’s statutory levy on gambling operators represents a significant milestone in the fight against gambling-related harms. By mandating contributions from all sectors and allocating funds toward research, prevention, and treatment, the initiative sets a new standard for industry responsibility and accountability. As the levy board develops a national strategy and appoints key leadership roles, the focus remains on protecting consumers and fostering a safer gambling environment.

FAQs About UK Government Statutory Levy on Gambling Operators

1. What is the statutory levy introduced by the UK Government?

The statutory levy is a mandatory payment imposed on gambling operators in the UK to raise £100 million annually for research, prevention, and treatment (RPT) of gambling-related harms. It replaces the previous voluntary contribution system.

2. How does the new levy differ from the voluntary contribution system?

Under the voluntary system, operators contributed approximately £50 million in 2023/24, but contributions were inconsistent, with larger operators shouldering a disproportionate burden. The statutory levy ensures all operators contribute equitably based on their gross gambling yield (GGY).

3. What are the levy rates for different gambling sectors?

The levy rates vary by sector:

• 1.1% for online operators.
• 0.5% for land-based casinos and betting shops.
• 0.2% for adult gaming centres and bingo premises.
• 0.1% for society lotteries and external lottery managers (ELMs).
  Operators with payments under £10 are exempt.

4. Why are the levy rates tiered?

The tiered system aligns with the level of harm associated with each gambling sector. Products with higher harm potential, such as online gambling, bear higher rates, while lower-risk sectors contribute less.

5. What is the total expected contribution under the new levy?

The statutory levy is expected to double industry contributions to approximately £100 million annually, compared to £50 million in 2023/24.

6. How will the funds raised by the levy be used?

The funds will be allocated to research, prevention, and treatment (RPT) initiatives to address gambling harms, support vulnerable populations, and promote responsible gambling practices.

7. Who benefits from the reduced rates for land-based operators?

Land-based casinos and betting shops, already under financial strain from economic challenges like National Insurance increases, will pay lower rates compared to online operators. This adjustment reflects the reduced risk associated with their services.

8. What role does GambleAware play in the new system?

GambleAware has welcomed the statutory levy and emphasized the importance of developing a national strategy for combating gambling harms. The charity has also called for the appointment of a prevention commissioner to oversee harm reduction efforts.

9. How does the statutory levy promote fairness in the industry?

By mandating contributions from all operators, the levy ensures a level playing field, holding every operator accountable for addressing gambling-related harms and preventing underfunding of RPT efforts.

10. What additional measures have been introduced alongside the levy?

The government has also implemented online slot stake limits for under-25s, aiming to reduce gambling risks for younger players.

11. Will the levy impact gambling consumers?

While the levy imposes costs on operators, it is not expected to directly impact consumers. However, improved funding for RPT initiatives will enhance consumer protections and support harm prevention.

12. How will the statutory levy address emerging challenges in gambling?

The levy provides consistent funding for research and prevention, enabling the industry to adapt to evolving technologies and platforms, thereby tackling new risks effectively.