Report
Annual Report and Accounts 2021 to 2022
The Gambling Commission's 2021 to 2022 Annual Report and Accounts.
Financial review
Gambling Commission funding
The Commission is an independent public body. We are funded in two ways:
- by application and licence fees set by the Secretary of State, approved by Parliament and paid by the gambling industry. These fees fund all gambling regulation except that for the National Lottery
- in respect of National Lottery functions, by grant-in-aid from the National Lottery Distribution Fund (this grant-in-aid is not treated as income in accordance with FReM).
Income
Our total income from fees and other sources was £20.176 million for the year (£18.868 million for 2020-21). This figure does not include the £26.968 million (2020-21 £19.521 million) of grant-in-aid funding in respect of the National Lottery functions which is transferred directly to reserves.
Our fee income for the year was made up of the following:
- operator application fee income was £1.21 million (2020-21: £0.66m)
- fees for personal licences £0.67 million (2020-21 £0.58 million)
- operator annual licence fees £18.02 million (2020-21 £17.22 million)
- miscellaneous income of £0.28 million (2020-21 £0.41 million). This was mainly attributable to contributions to compliance and enforcement costs received from operators.
Annual operator fee income by sector 2020-21
Total fee income has been analysed by industry sector in the following table.
| Sector | Annual operator fee income (percentage) |
|---|---|
| Arcades | 14% |
| Machines | 21% |
| Betting | 29% |
| Bingo | 4% |
| Casino | 26% |
| Lotteries | 6% |
Expenditure
During the year, total expenditure on operational costs including depreciation was £45.19 million (2020-21 £38.17 million), an increase of £7.02 million on the prior financial year (18 percent).
Expenditure on gambling regulation totalled £18.93 million (2020-21 £20.57 million) National Lottery functions accounted for £26.26 million (2020-21 £17.60 million). This included £23.66 million on the National Lottery 4th licence competition (2020-21 £14.84 million).
Employee costs for the year were £19.17 million (2020-21 £21.26 million), a decrease of £2.09 million. Employee costs for gambling regulation were £13.80 million (2020-21 £15.80 million) and National Lottery regulation £5.36 million (2020-21 £5.45 million). Of this, £3.23 million related to the National Lottery 4th licence competition (2020-21 £3.19 million).
For comparative purposes, the following table shows year-on-year operational expenditure comparison for gambling and National Lottery regulation expenditure, and the costs of Horserace Betting Levy activity which was funded by the Horserace betting levy and ceased in 2018-19.
Year-on-year operational expenditure for gambling and National Lottery regulation
| Data definitions | 2017-18 (£ million) | 2018-19 (£ million) | 2019-20 (£ million) | 2020-21 (£ million) | 2021-22 (£ million) |
|---|---|---|---|---|---|
| National Lottery regulation | 2.98m | 2.80m | 2.96m | 2.76m | 2.60m |
| National Lottery competition | 0.64m | 4.08m | 13.29m | 14.84m | 23.66m |
| Gambling regulation | 19.53m | 20.54m | 21.20m | 20.57m | 18.93m |
| Horserace Betting Levy activity | 0.04m | 0.16m | - | - | - |
| Total costs of operation | 23.19m | 27.58m | 37.45m | 38.17m | 45.19m |
Net expenditure for the year
During the year, the regulation of gambling under the 2005 Gambling Act, as amended and updated by the Gambling (Licensing and Advertising) Act 2014 (opens in a new tab), produced an income and expenditure surplus of £1.254 million. A small deficit of £0.366m for the year was budgeted under the Commission’s medium-term financial plan using reserves created from the fee income collected in prior years because of the continuing expansion of the gambling industry, particularly within the remote sector.
The deficit set was planned on the assumption that the Covid-19 impact on our non-remote licence fee income streams would be considerably more pronounced than they have been. The Commission has revised its reserve policy in year to hold a minimum of two and a half months of annual operating expenditure and to fund future investment in Gambling Regulation. The total income and expenditure deficit arising for the year is £25.019 million, including regulating the National Lottery. This deficit is due to the requirement to transfer grant-in-aid funding in respect of National Lottery regulation direct to reserves and not being included as income.
Statement of financial position
At 31 March 2022 the book value of non-current assets was £3.98 million (2020-21 £5.19 million). Assets less liabilities at 31 March 2022 amounted to £6.14 million (2020-21 £4.19 million). The year-end closing cash balance at 31 March 2022 was £27.33 million (2020-21 £17.56 million). The cash balance reaches its peak between August and November each year, after the largest tranche of annual fees fall due, which are paid in advance by operators.
Grant-in-aid to fund National Lottery regulation is drawn down monthly as required, satisfying the normal conventions applying to Parliamentary control over income and Payment performance.
The Commission’s policy is to pay all invoices within 30 days of receipt unless a longer payment period has been agreed or the amount billed is in dispute. In the year to 31 March 2022, 100 percent (target 95 percent, 2020-21 71 percent) of invoices totalling £24.32 million were paid within 30 days of receipt.
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