Distribution
The administration of the distribution of levy funds
We remain of the view, as set out in our Full advice to Government - Review of the Gambling Act 2005, that any new funding arrangement will require more than just a sufficient quantum of funding in order to be successful and that to have the greatest impact, available funds should be distributed based on agreed national priorities that meet an identified need, and in a manner that is independent, coordinated, and effective with clear roles for each of the organisations involved.
We are clear that the Gambling Commission does not have the expertise to advise government or be responsible for decisions regarding the proportion of funds to be distributed across the elements of a levy such as research, prevention and treatment. This is not our role as the industry regulator and we will work with government to develop an appropriate mechanism to set out government’s strategic direction for levy funding and/or the conditions under which government would approve levy spending, in line with the statutory framework.
The Commission's view is that government should set out in directions the basis on which approval would be given under Section 123 of the Gambling Act 2005 (opens in new tab) and the Commission would seek approval for the practical arrangements that would meet these directions, alongside forecasting of levy receipts and reporting on variations. This means that the Commission would secure Department for Digital, Culture, Media and Sport (DCMS) and HM Treasury approval for the extent to which the Commission should only collect the levy dues from gambling operators and distribute them to bodies determined under the strategic direction of government.
We envisage that it would be appropriate for the Commission to be a recipient of a proportion of levy funding allocated towards research, alongside other research bodies. In the case of the Commission, this would be to conduct or commission regulatory focused research. As a potential recipient of levy funds this would be a further reason why it would not be appropriate for the Commission to be involved in setting the level of any levy or determining the destination of funding.
The overriding principle is that collection of a levy should be net zero cost to the Commission, including taking into account the proportion of fixed costs that should be attributable to collection of the levy, which will be administratively more burdensome and resource intensive to administer than other examples such as the Economic Crime Levy. We have not been able to estimate the administrative costs at this time as the levy structure and system is not yet finalised, pending the outcome of the current government consultation exercise. We would expect to be accountable for ensuring value for money in costs of administering the collection and distribution of the levy.
As we stated in previous advice the key objectives for the levy should be around fairness and transparency of contributions, sustainability of funding, the ability to plan longer-term in a more coordinated way and greater trust in the system.
Government may wish to consider whether there are different structures for the different components or elements of a potential future levy framework for addiction, harm, and the licensing objectives more generally.
Previous pageLevy advice - The administration of collecting a levy Next page
Levy advice - Governance and accountability
Last updated: 16 November 2023
Show updates to this content
No changes to show.