The UK Gambling Commission (UKGC) has issued guidance to licensees outlining how the Statutory Levy will be calculated for payments due from 1 September, with rates set between 0.1% and 1% of relevant revenue depending on the type of gambling activity.

Recognised as the flagship measure of the Gambling Act Review, the levy will see operators make a mandatory payment from yearly revenues, which will be directed towards a new system of funding for gambling harm research, education and treatment (RET).

Treatment funding and commissioning of projects will be overseen by the NHS, with NHS England chosen to do this although it is now being dissolved by the government. Prevention and education will be overseen by the Office for Health Improvement and Disparities (OHID) and research by UK Research and Innovation (UKRI).

Levy number crunching

As noted above, the UKGC has set the rates for operator revenues paid towards the RET levy at between 0.1% and 1%. When a company’s levy value is calculated at £10 or less for the levy period it will not be required to pay, with different types of companies assigned different levy periods.

The levy has been in place since 1 July for most operators, chiefly betting, casino and bingo firms, and since 1 April for society lotteries. Invoices for the levy will be issued on 1 September annually and based on financial activity from the previous financial year.

Prior to the launch of the Levy system, DCMS updated gambling licences confirming that the levy would impose the specific rates of:

The mechanics of the Gambling Levy, deem that the system of funding will be overseen by the Commission as a regulatory remit assigned by DCMS. As previously cited, the calculations of rates are varied depending on business category of between 0.1% and 1.1% depending on the type of licence.

The calculation applied to determine the applicable levy payments for UK licensed B2C non-lottery operators equates to “Levy Amount = Stakes + Other Income – (Prizes Paid Out)”. The calculation will be used to determine what levyable amount can be charged on non-lottery B2C operators.

The ‘other income’ of B2C operators can be viewed as competition entry fees, tournament subscriptions, poker rake, and game monetisation features.

For lottery operators (B2C), the statutory levy is calculated on the net income they receive from lottery sales minus prizes paid out to determine the levy amount to be charged on subject to the category rate.

A third calculation is required for Societal lotteries. In which the levy amount is drawn from net income generated from operating lotteries on behalf of charities and good causes. The calculation is determined as total fees earned – prizes paid to partners.

Paying and preparing – what is expected of operators?

The Commission has confirmed, as stated above, that invoices for the new statutory levy will go live on eServices on 1 September, with licensees required to pay in full by 1 October.

As the payment of the levy is a licence condition, operators risk losing their licence if they fail to meet the deadline, unless the authority accepts that the delay was due to an administrative mistake.

For the levy’s first year, firms will be issued with a single invoice covering GB activity, and a second one if any non-GB operations are reported. Payments cannot be made in instalments however, and must be done via bank transfer or GovPay into the account listed on the invoice.

The Commission also made it clear that every detail – from quoting the invoice number in full to the exact amount – must be followed, adding that any errors could see payments rejected and licenses put at risk.

With the first statuary levy deadline approaching, operators are being advised to get their house in order. That means making sure regulatory returns are filed on time and correctly, confirming they can access eServices and checking that the Commission has all the right contact details on its record.

The UKGC also assured that further guidance is to follow over the next few months as UK gambling companies adopt one of the biggest licensing requirements it has seen since the 2005 Gambling Act was passed.

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