Introduction
The Gambling Commission is the independent regulator of commercial gambling in Great Britain. As part of its role, the Commission provides formal statutory advice to the Secretary of State under Section 26 of the Gambling Act 2005 (opens in new tab) (the Act).
From December 2020 to March 2021, the Department for Digital, Culture, Media and Sport (DCMS) conducted a Call for Evidence on the effectiveness of the Gambling Act 2005 (opens in new tab) which sets out how gambling in Great Britain is regulated.
The Secretary of State asked the Commission to provide advice on government policy and legislation in relation to gambling and specifically on each of the topics of the Gambling Act Review. The subsequent White Paper, High stakes: gambling reform for the digital age (opens in new tab) and our Full advice to Government - Review of the Gambling Act 2005 were published on 27 April 2023.
One of the commitments in the White Paper was that government would introduce a statutory levy paid by gambling operators and collected and distributed by the Commission under the strategic direction and approval of HM Treasury and DCMS ministers. Government committed to consult on the details of how the levy will be designed including proposals on the total amount to be raised by the levy and how it will be constructed, ensuring that a rate is fairly and proportionately set, and taking into account the differing association of different sectors with harm and/or their differing fixed costs.
In our formal advice to Government in April 2023, we recommended that ‘the mechanism for funding research, prevention and treatment should no longer be based upon a system of voluntary contributions’ and that ‘Long-term, sustainable funding mechanisms are needed, though these may differ for each of research, prevention and treatment.’ We also noted that the Gambling Act Review provided government ‘with an opportunity to resolve the longstanding issues that are inherent with a voluntary system and implement a more robust approach that will deliver an effective, sustainable, and appropriately funded reduction in harms from gambling.’.
Our advice sets out that despite the additional funding commitments made by the largest gambling operators in recent years, increased funding alone will not fully address the issues or achieve the principles of an effective system for funding research, prevention and treatment which we believe must:
- deliver a system for collecting funds that (where it depends on gambling operator contributions), covers all gambling operators fairly and has a high degree of transparency
- ensure a high degree of certainty about the level of funding available for a minimum 5-year timeframe to enable proper planning of services and programmes
- generate a level of funding that matches need
- deliver a system for distributing funds and commissioning and coordinating activity that:
- reflects national priorities and has clear measures of success
- generates a high level of trust, including by ensuring independence from the perception or reality of inappropriate influence by the industry and others
- ensures that there is effective coordination of activity, stakeholder engagement and evaluation against success measures.
This is why we felt that a new, long-term, sustainable funding approach was needed and why we identified that government may consider it appropriate to have funding approaches that differ for research, prevention and treatment, as long as the core principles of equity of contributions, certainty of funding, funding levels based on need, and independence and perception of independence were met.
We also advised that any new funding arrangement would require more than just a sufficient quantum of funding in order to be successful and that to have the greatest impact, available funds would need to be distributed based on agreed national priorities, and in a manner that is independent, coordinated, and effective with clear roles for each of the organisations involved.
We also recommended that should government decide that a statutory levy will be part of any new funding arrangement, it might be beneficial to convene a working group of key stakeholders to help design the options for implementation.
We were also clear that while the gambling industry is a key stakeholder in the decision of whether or not to introduce a levy, in our view the gambling industry should not play any part in determining how such a levy is collected or how and where it is distributed.
We also recommended that as part of this process government should consider the costs and benefits of the potential options available to it and determine whether and what mix of a statutory levy, the use of general taxation and/or increases in gambling operator license fees should be applied to create a more robust, long-term, and sustainable funding mechanism going forward.
Government has recently published its Consultation on the statutory levy on gambling operators (opens in new tab) and officials asked the Commission to provide advice on the following key themes to help inform that consultation and ongoing considerations during the consultation period:
- setting the quantum of a levy and proportions across different sectors within the gambling industry
- the administration of collecting a levy
- the administration of the distribution of levy funds
- the governance and accountability needed for a levy, including decisions on destinations and commissioning.
Our advice on this topic from April 2023 remains valid and we have used it as the basis for this supplementary advice to Government on these themes.
As set out in the White Paper and our previous advice, we have restricted this supplementary advice to matters relating to the administration of a levy. This is because matters relating to the quantum, amounts to be paid by gambling operators and the destinations of levy funding are properly matters for government to consider, and they have set out their considerations to date in their recently published consultation.
For completeness, we have also provided some information on other changes that both government and the Commission considers appropriate following the introduction of a statutory levy, including consulting on the removal of paragraph two of the existing Social Responsibility (SR) Code Provision 3.1.1 – Combating problem gambling which currently requires gambling operators to make an annual financial contribution for research, prevention and treatment.
Advice to Government - Design and implementation of a statutory levy Next page
Levy advice - Summary of our advice
Last updated: 16 November 2023
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