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Even Bitcoin Casinos Must Mind UKGC Licensing Fees

The UK Gambling Commission’s licensing fees will change in April 2017. The restructuring of the UKGC licensing fees can benefit many small casino operators.

Every online casino will experience the change in fees by the start of Q2 this year. This includes Bitcoin gambling sites such as NetBet and other Bitcoin casino sites since Bitcoin is now a cash equivalent by UKGC license condition.

Change in license fees and others

There are many operators who have expressed concern over the restructuring of the license fees due to a fee hike. Thankfully, the licensing fee will be lower for majority of license owners. A few of the large casino operators will take most of the hit of the new license fees.

In the new licensing fees structure, more than 1,900 casinos will have lower tax payments this coming April. Around 1,000 operators may not be affected or might experience a small difference in their fees. The ones who will feel the brunt of the new fee structure are the 75 operators of large casinos.

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Large casino operators are going to see a 140-percent increase in their license fees. The fees calculated their Gross Gambling Yield (GGY) percentage to be 0.05 to 0.1 percent. Some of the 75 operators of large casinos might be looking at a £164,000 fee per year.

For other operators, though, they will see their fees go down by two to 75 percent UKGC is also encouraging new casino operators to start their business in the UK. Casinos with a new license can have a 25-percent decrease in the licensing fees of their first year.

UKGC is releasing a new type of license, ‘game host’ license, in April. The “game host” license is for companies that conduct business-to-business (B2B) supplies to online business-to-consumer (B2C) casinos.

In the current license fee structure, B2B suppliers must have a “B2B license” and a “B2C license”. Companies that hold these licenses must pay for both of them. The “game host” license solves this problem by having B2B companies pay for only one license.

New UKGC Licensing Fees

Reasoning behind the restructuring of the licensing fees

UKGC recently requested for a consultation with the Department for Culture, Media and Sport (DCMS). The goal of the consultation is to find a way of reducing the burden from the licensing fees by at least 10 percent.

The UKGC launched the consultation with the DCMS to correct the changes done with the Gambling (Licensing & Advertising) ACT 2014. One of the changes of this act includes an additional 15-percent online point-of-consumption tax for the revenue generated by UK players in online casinos. The new license fee structure can help the UKGC do an efficient cost recovery on a proportionate basis from various kinds of operators.

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