Threat of statutory levy hangs over UK operators

United Kingdom

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

Unless UK operators make firm commitments to a voluntary funding structure for problem gambling treatment before Christmas, the Government has indicated that it is likely to introduce a statutory levy.

Following the Gambling Commission's findings that the gambling industry's current voluntary funding arrangements for the treatment of problem gambling are not working effectively, the DCMS has given the go-ahead for the implementation of a problem gambling levy, as it is entitled to do under section 123 of the Gambling Act 2005. According to the Commission, the opportunity for the industry to agree a voluntary arrangement is still very much available. However, the industry has been informed that the window of opportunity will close over the festive season, when the legislative process will pass the point of no return.

The Government's move towards legislation shows its frustration with the failure of UK operators, who only met this year's funding targets set by the Responsibility in Gambling Trust (RIGT) when the "big 3" of Ladbrokes, William Hill and Gala Coral committed to donate significant funds at the last minute.

If a statutory levy is introduced, the Gambling Commission has suggested a minimum funding level of £5 million per year. This is below the targets previously set by the RIGT (0.07% of gross gambling yield from operators, plus similar proportions of revenue from software and machine suppliers), which reflects the uncertainty over how the current economic crisis will affect the gambling industry in the medium term. The money is likely to go principally towards research, education and treatment. However, the Act also allows the funds to be spent on any of the other licensing objectives (i.e. keeping crime out of gambling, and ensuring that gambling is fair and open).

If the Government does go down the legislative route then, despite losing control of their own destiny in this area, operators may be comforted by the fact that any statutory scheme would aim to ensure that all UK licensees contribute equitably to the fund.