The administration of collecting a levy
The Gambling Commission considers that streamlining the collection of a levy will reduce the costs and therefore increase the amounts which can be distributed for the purposes set out in Section 123 of the Gambling Act 2005 (opens in new tab).
We consider that the following points are relevant to support ongoing government decision-making.
Data: Aligning with current and future data sources to enable the calculation of levy due. The Commission gathers data in the form of regular regulatory returns, and we consider that allowing this existing data source to be used for the purposes of the levy would be appropriate and efficient. It is important to ensure that the supporting legislation is drafted in such a way as to ensure that the levy system and changes to the regulatory return system that may emerge over time remain in alignment.
Time period: Consideration of current or past-year data. The use of past-year data enables the calculation of amounts due without a complicated forecast and amendment process which is in place for other levies.
Set-up costs: The Commission would require support from government in managing the set-up costs of a levy in its introduction, as well as potentially some ongoing administration costs.
Data
The Gambling Commission gathers data on Gross Gambling Yield (GGY) or equivalent (such as proceeds for the lottery sector) through regulatory returns. Therefore, this reference point may be the most appropriate starting point, from the perspective of administrative simplicity.
Time period
Forecasting is much simpler and administratively effective when it is based on past year or past period data points (such as GGY in a previous year). This reduces the need for in-year forecasting and amendments and increases certainty for both gambling operators and commissioning bodies.
Set-up costs
It is likely that the Commission’s role in the collection and administration of a levy would require additional resources, particularly around governance and finance, including likely upfront financial resources to cover limited set-up costs we will incur to operationalise the levy. This is most likely to be costs for IT amendments, for which the Commission should not apply licence fee income where the development costs are not incurred for regulatory purposes. There are likely to also be some ongoing administration costs, but a levy design can help to minimise these costs. However, the recently published government consultation includes some proposals which would support efficient implementation - such as referring to existing data collection mechanisms to support levy administration.
While at this stage it is not easy to quantify these costs until final policy decisions have been made following the recently published government consultation exercise, we will continue to work with government as their consultation and proposals develop to ensure that administrative issues are considered and enable the Commission to fulfil this new function efficiently and to minimise associated administration costs.
Additional issues for consideration by government in due course
Further consideration will also need to be given by government to the following:
- the timing of the payment of the levy avoiding overlap with the current research, prevention and treatment (RET) voluntary system
- issues such as part-year entrants or gambling licence surrenders during the year
- the data reference points that will be used for different sectors such as society lotteries and external lottery managers for whom GGY does not apply
- consideration of an appropriate De Minimis1 amount.
References
1A legal term meaning too small to be meaningful or taken into consideration.
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Levy advice - Distribution
Last updated: 16 November 2023
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