The UK Gambling Commission has provided clarity on the fees that each licensee will be required to pay for the new statutory levy. The government aims to generate £100 million through this initiative to support efforts aimed at preventing harm related to gambling.
New Levy Forces Operators to Support Gambling Harm
The UK statutory levy, introduced in the previous government’s Gambling Act white paper in 2023, was implemented on 6 April. It was driven by the conviction that operators were not adequately contributing to addressing gambling-related harms through the voluntary levy.
Baroness Twycross, the gambling minister, addressed the Betting & Gaming Council’s AGM in February, describing the new UK statutory levy as a “huge step forward” for the gambling sector, expressing optimism that it will help mitigate problem gambling.
What purpose does the Levy serve?
£100 million annually is a significant sum, but what will it be allocated towards? The primary objective is to mitigate the adverse impacts of the gambling sector. The UKGC is set to concentrate its efforts and allocate resources across three primary sectors:
Mitigating the risks associated with gambling
Securing financial support for treatment
Backing investigations
The funds will be allocated to various organisations and charities dedicated to these three key areas of focus. The Office for Health Improvement and Disparities (OHID) is set to oversee distribution efforts in England, while health agencies in Scotland and Wales will take on similar responsibilities.
The UKGC’s introduction of this levy aims to foster trust and transparency within the gambling sector. Baroness Twycross, the Gambling and Heritage Minister, has described it as a “huge step forward” in the effort to mitigate problem gambling.
Distributing the gathered resources
Distributing the collected funds is undoubtedly a challenging endeavour, and it has raised significant concerns. In England, the Office for Health Improvement and Disparities (OHID) will oversee the distribution of the collected resources. In late 2024, a proposal was put forth regarding the distribution of funds in the following manner:
Half or £50 million allocated to treatment services
30% or £30 million allocated to prevention services
20% or £20 million allocated for research
A multitude of charities will compete for their share of the levy, with each stream being managed separately and funds distributed accordingly among various organisations. The NHS plans to allocate funds to enhance the National Gambling Treatment Network (NGSN) within the treatment stream. This will encompass clinics and treatments managed by the NHS, as well as services provided by charitable organisations and NGOs.
What is the significance of this? Potential consequences and outcomes
What implications will the levy have? This news will have implications for three key groups: the players, the industry, and the general public. Now, let’s examine each one individually.
For players facing challenges: Above all, the levy is set to provide crucial support for those in need of help. Funding for support services aimed at individuals impacted by gambling harms will become more stable, leading to improved results for players in need of assistance.
For the remaining players, the effect is expected to be minimal. Nonetheless, there is a chance that certain operators may attempt to pass the burden of the levy onto their players. While it’s a small fraction, there is a possibility that some players may seek a more favourable experience, such as casino bonuses, elsewhere, potentially turning to unlicensed operators who do not contribute to the levy.
Operators: For the casinos that have been contributing voluntarily, there won’t be significant alterations ahead. Nonetheless, for individuals who contributed just £1 annually or not at all, this will signify a hit to their earnings. Smaller operators are poised to face greater challenges, which may necessitate some implementing cutbacks.
The introduction of a mandatory levy reflects the gambling industry’s dedication to addressing and mitigating harm, shaping public perception in a positive light. This development is undoubtedly positive for the industry’s image. While it may not fully satisfy those opposed to gambling, it’s certainly a positive step forward.
Any concerns?
Earlier this month, a group of researchers focused on gambling harms expressed their worries regarding the industry’s impact on research that the levy will finance.
The panel cautioned that previously, researchers had been hesitant to accept funding from the industry due to concerns about its potential impact on research outcomes.
The impact of gambling harm may touch a small fraction of players, yet it represents a significant concern for those individuals and must be addressed with utmost seriousness. Recent data from the Gambling Commission, along with findings from a 2018 report by Public Health England, indicate that approximately 0.4% of the population is impacted by problem gambling.
The figure has dipped as low as 0.2%, indicating a downward trend from 0.7% over several years. Recent data released by the Gambling Commission through its Gambling Survey for Great Britain suggest that the prevalence of harm may be higher as a proportion of the population than previously assumed. However, there is no indication that gambling-related harm is increasing year after year.
Recent treatment data from GambleAware highlights a significant 25% decrease in referrals since 2019, underscoring a notable trend in the landscape. It’s unlikely that many will feel sorry for the gambling industry facing this hefty levy. However, we must keep in mind that this is public money, and we have a responsibility to ensure it is utilised effectively.
It raises a significant alarm that we are on the verge of investing over £100 million into an initiative lacking strong governance and a clear rationale for such a substantial financial commitment.
Final Thoughts
While the levy may have its flaws, it represents a constructive move forward. Implementing a fixed percentage for charging operators ensures a steady and largely predictable stream of funding for organisations that perform outstanding work. With a more consistent revenue stream, these organisations can enhance their performance, launching new initiatives that can significantly benefit the players who need support the most.
Certainly, there is potential for improvement. The National Lottery enjoys an exemption because of its contributions to charitable causes. However, it’s difficult to overlook how this exemption distinguishes it from all other operators. In a framework designed for equity, the Lottery’s 0% contribution could face scrutiny in the future.
Beyond that, it’s an exceptional beginning. It remains to be seen how impactful this levy will prove to be. Still, at this moment, the assurance of funding for dedicated organisations is undoubtedly a step in the right direction.
Read more:
From Levies to Safeguards: How Gambling Taxes Can Boost Responsible Play
