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  3. Annual report and accounts 2023 to 2024

Report

Annual report and accounts 2023 to 2024

The Gambling Commission's 2023 to 2024 Annual report and accounts. For the period 1 April 2023 to 31 March 2024.

Published
17 October 2024

Last updated
17 October 2024 - Changes

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  1. Contents
  2. Performance report
  3. Performance analysis

Performance analysis

Following the review of organisational performance detailed so far in the Performance Report section of the Annual Report, this section provides a summary of the financial performance of the Gambling Commission for the financial year detailing:

  • funding
  • income
  • expenditure
  • prompt payment
  • net expenditure
  • statement of Financial position
  • going concern.

Funding

The Commission is an independent public body. We are funded in 2 ways. We are funded by application and licence fees set by the Secretary of State for Culture, Media and Sport, approved by Parliament and paid by the gambling industry. These fees fund all gambling regulation except for the National Lottery.

We are also funded, in respect of National Lottery functions, by Grant-In-Aid (GIA) from the National Lottery Distribution Fund. This GIA is not treated as income in accordance with the 2023 to 2024 Financial Reporting Manual (FReM) issued by HM Treasury.

Income

Our total income from fees and other sources was £26.18 million for the year (£26.09 million for 2022 to 2023). This figure does not include the £14.44 million (2022 to 2023 £22.56 million) of GIA 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 (2022 to 2023, £2.05 million)
  • fees for personal licences £0.75 million (2022 to 2023, £0.76 million)
  • operator annual licence fees £23.86 million (2022 to 2023, £22.89 million)
  • miscellaneous income of £0.36 million (2022 to 2023 £0.39 million).

Expenditure

During the year, total expenditure on operational costs including depreciation was £40.41 million (2022 to 2023, £40.91 million), a decrease of £0.5 million on the prior financial year (1 percent).

Expenditure on gambling regulation totalled £21.07 million (2022 to 2023, £19.33 million). National Lottery functions accounted for £19.34 million (2022 to 2023, £21.58 million). This included £17.03 million on the National Lottery Fourth Licence competition (2022 to 2023, £19.15 million).

Employee costs for the year were £23.31 million (2022 to 2023, £19.02 million), an increase of £4.29 million. Employee costs for gambling regulation were £18.46 million (2022 to 2023, £13.97 million) and National Lottery regulation £4.85 million (2022 to 2023, £5.05 million). Of this, £2.86 million related to the National Lottery Fourth Licence competition (2022 to 2023, £3.18 million).

For comparative purposes, the following table shows the year-on-year comparison for gambling and National Lottery regulation expenditure.

Year-on-year operational expenditure for gambling and National Lottery regulation

Year-on-year operational expenditure for gambling and National Lottery regulation
Expenditure 2019 to 2020
£ million		 2020 to 2021
£ million		 2021 to 2022
£ million		 2022 to 2023
£ million		 2023 to 2024
£ million
National Lottery regulation 2.96 2.76 2.60 2.43 2.31
National Lottery competition 13.29 14.84 23.66 19.15 17.03
Gambling regulation 21.20 20.57 20.07 19.33 21.07
Total costs of operation 37.45 38.17 46.331 40.91 40.41

Prompt payment

The Commission strongly supports the policy to pay all suppliers promptly. The 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. The Government target is 95 percent of invoices should be paid within 30 days. In the year to 31 March 2024, 100 percent of invoices were paid within 30 days of receipt for this year totalling value £22.6 million (2022 to 2023 100 percent, £24.8 million).

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 new tab), produced an income and expenditure surplus of £1.01 million (2022 to 2023, £7.05 million). A surplus of £0.5 million (2022 to 2023, surplus of £3.5 million) for the year was budgeted under the Commission’s medium-term financial plan.

The budgeted surplus was set with the expectation that the Gambling Act Review White Paper would be released during the financial year, generating the need for investment activity which has been delayed into 2024 to 2025.

The comprehensive net expenditure for the year is £13.9 million, including regulating the National Lottery. This deficit is due to the requirement to transfer GIA funding of £14.4 million (2022 to 2023, £22.6 million) in respect of National Lottery regulation direct to reserves and not being included as income.

Statement of financial position

At 31 March 2024 the book value of non-current assets was £2.8 million (2022 to 2023, £3.4 million). Assets less liabilities at 31 March 2024 amounted to £13.6 million (2022 to 2023, surplus £13.0 million). The Commission holds reserves as a matter of prudent financial management, as set out in Note 1(l), Reserves.

The year-end closing cash balance at 31 March 2024 was £31.1 million (2022 to 2023, £30.1 million). During the year 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.

The cash position at year end reflects money collected from Gambling Regulation income from 3 sources.

The cash position at year end reflects money collected from Gambling Regulation income
Source of cash £ million
Deferred income 14.6
Reserves 13.6
Cash in bank 2.9
Total 31.1

GIA to fund National Lottery regulation is drawn down monthly only as required, satisfying the normal conventions applying to parliamentary control over income and payment performance.

Going concern

There are no current or expected going concern issues for the Commission. The current reserves policy is to maintain reserves at £7.0 million, the balance at the 31 March 2024 is £13.6 million. We hold Reserves for prudent financial management, particularly due to the fact we are fees funded and do not have any other source of income, should we be impacted as a result of changes in the industry impacting our fees, and for unpredictable events such as a judicial review.

The Board and Department of Culture, Media and Sport (DCMS) are aware of the reserve excess and a review of the reserves policy will be undertaken in 2024 to 2025. The Board, DCMS and HM Treasury have approved the use of £4.1million of the reserves during 2024 to 2025, which is expected to reduce the reserves to £9.5 million by 31 March 2025.

References

12021 to 2022 numbers were restated.

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