How will the introduction of a statutory levy impact gambling operators?

The Government has confirmed that, if approved by Parliament, the first mandatory levy will come into force from 6 April 2025 and will be paid by gambling operators from 1 October 2025.

Mandatory levy payments will replace the current RET (research, prevention and treatment) arrangements, which require all licensees to make an annual financial contribution under the Commission’s Social Responsibility Code. However, currently the level of RET contributions is advisory only. In 2023/24 the industry made RET contributions of £50 million.

Statutory levy payments have now been confirmed at 1.1% of GGY for online operators, 0.5% for land-based casino and betting operators, 0.2% for adult gaming centres, on-course bookmakers and bingo premises and 0.1% for other licensees, including society lotteries and ELMs. Operators with levy payments of below £10 will not be required to pay.  The figures were slightly increased from those originally imposed, in order to raise sufficient funding.

What is the purpose of the levy?

It is estimated that the statutory levy will raise £90-100 million for gambling treatment by 2027.  The levy will be administered by the Gambling Commission under the direction of the Government. 50% of the levy will be paid to the NHS to fund treatment, with 30% going towards prevention and 20% towards research. The levy will be reviewed after five years.

Whilst the gambling industry avoided gambling tax increases in the Budget, the announcement of a mandatory levy will mean the gambling industry needs to pay out £40-50 million+ in additional costs from 2025. In 2023/24, 94% of the £50 million RET contributions were paid by the four major gambling operators in the UK. Whilst operators were previously required to make RET contributions, the level of contributions was not specified. This led to criticism that some operators were not pulling their weight financially to address gambling harm. Land-based gambling operators, who are still reeling from the National Insurance increases announced in the Budget, will benefit from lower levels of contributions. Society lotteries and ELMs will only be required to contribute 0.1% of GGY, in light of the low risk of gambling harm associated with lotteries. These reductions are sensible and require those operators whose products have higher risk of gambling harm to contribute more to prevent it.

The levels of contributions are broadly similar to the figures consulted upon, but will add additional costs to an already stretched industry. However, many observers will argue that the industry can afford these additional overheads and should be responsible for funding the harm that it causes. Certainly, things could have been a lot worse for remote gambling operators, had the feared increases in remote gambling duty been implemented in the Budget.

If you have questions or concerns about the statutory levy, please contact Richard Williams.