UKGC begins consultation on problem gambling levy

On 12 December 2018, the Gambling Commission began a consultation on whether it should change the Licence Conditions and Code of Practice (LCCP). Social Responsibility Code Provision 3.1.1. LCCP SR 3.1.1(2) states that “Licensees must make an annual financial contribu­tion to one or more organisation(s), which between them research into the prevention and treatment of gambling-related harm, develop harm prevention approaches and identify and fund treatment to those harmed by gambling.” At present the amount that is contributed and to whom the contributions are made is entirely voluntary, provided that the recipient carries out the activities specified in the condition.

The new wording proposed states that the organisations to whom operators make contribu­tions must be “approved by the Gambling Commission”. The Com­mission states that this will allow it to better scrutinise whether the organisation follows the National Gambling Strategy and to investi­gate whether it provides adequate research and treatment for those harmed by gambling. The Commis­sion does plan to allow operators to submit organisation approval requests, so they can make contri­butions to their preferred bodies.

However, the proposed changes do not deal with one of the key issues: the amount that must be contributed by each operator, which is not specified in the LCCP. Compliance with the LCCP just requires some financial contribution.

The only guidance available is from GambleAware, which states that the recommended minimum dona­tion is 0.01% of an operator’s gross gambling yield. Most contributions are made to GambleAware.

These contributions must be reported to the Commission on quarterly returns, so the figures can be verified. Whispers in the industry suggest some large operators are not pulling their weight financially.

In December, Mims Davies MP stated that if more was not done by operators to fund research and treatment, the Government will be forced to impose a statutory levy. The Labour Party called for this to be imposed immediately. The pro­posed LCCP wording will therefore not please groups lobbying for more financial contributions from operators.

This wording changes little, and operators are not likely to be concerned. However, a levy would be of more concern to the remote industry, which is still reeling from the increase in RGD to 21%. It might be sensible to check those 0.01% contributions, because if a levy is imposed, it may well be at a rate higher than that.

By Richard Williams, partner and joint head of the gambling, licensing & regulatory team at Joelson.