UK Gambling Commission reports rising legal costs in 2024–25

The UK Gambling Commission has reported a significant increase in annual expenditure for the financial year 2024–25, with the regulator’s legal costs associated with the fourth National Lottery licence competition emerging as the primary factor behind the rise. The report underscores the growing financial pressures faced by the Commission while highlighting its ongoing efforts to maintain compliance and consumer protection across the gambling sector.

Annual operating costs surge

According to the Commission’s financial report, total operating costs for 2024–25 amounted to £60.3 million, a substantial increase from £40.4 million in the 2023–24 fiscal year. This 49% year-on-year rise is largely attributed to legal fees incurred during litigation related to the fourth National Lottery licence competition. The increase reflects the complex nature of regulatory oversight and the financial implications of defending legal challenges in the sector.

Legal costs alone reached £14.2 million during the year, compared with £353,000 in the previous year. Of this total, £13.4 million was spent defending claims brought by The New Lottery Company, an unsuccessful bidder in the National Lottery licence process. The majority of these expenses were associated with work conducted by two external law firms engaged to manage the litigation.

National Lottery litigation

The litigation stems from allegations by The New Lottery Company that it was misled into committing substantial resources to a tender process it contends it had little realistic chance of winning. The claims focus on aspects of bid evaluation and subsequent adjustments to the enabling agreement and licence terms. The trial commenced in October 2025 and remains a key component of the Commission’s current legal workload.

Despite the surge in expenditure, the regulator maintained reserves of £10.9 million at the close of the financial year, down from £13.6 million in 2023–24. The figures illustrate the financial strain associated with major litigation while highlighting the regulator’s ongoing capacity to meet its operational obligations.

Income and funding

Revenue from gambling regulation fees increased modestly during the period, rising to £27.9 million from £26.2 million the previous year. Meanwhile, grant-in-aid funding allocated for National Lottery operations saw a marked increase, reaching £29.1 million compared with £14.4 million in 2023–24. These figures reflect the regulator’s dual funding model, combining fee-based income from operators with public funding for lottery oversight.

Staff costs also rose significantly, totaling £27.8 million, up from £24 million in the prior year. The increase is largely attributed to an 11.5% rise in headcount, with the total number of employees reaching 416 as of 31 March 2025, up from 373 a year earlier. The report emphasized that this expansion supported enhanced regulatory and compliance activities across the gambling industry.

CEO highlights regulatory priorities

In his foreword to the annual report, Chief Executive Andrew Rhodes underscored the scale and importance of the Commission’s work throughout the year. He emphasized that the organization’s increased activity aligns with its wider objectives of promoting safer and fairer gambling while reducing criminal activity within the sector.

“The substantial work done in 2024-25 gives the Commission a great opportunity to make further steps forward in our work to make gambling safer, fairer and crime free. This is an opportunity everyone at the Commission is fully dedicated to making the most of in the year ahead,” Rhodes stated.

The comments highlight the regulator’s ongoing commitment to balancing robust enforcement with industry development and consumer protection.

Increase in compliance activity

The annual report also documented a substantial rise in compliance operations. The Commission’s operations directorate carried out more than 9,700 compliance activities during the year, more than double the 4,200 recorded in 2023–24. This represents an increase of approximately 3,000 activities over any previous year, reflecting the regulator’s intensified focus on monitoring operators and enforcing licensing requirements.

Enforcement action was taken against 24 gambling operators, resulting in £4.2 million in fines and regulatory settlements. While this figure is lower than the previous year, the Commission suggested that it may indicate improved compliance standards among licensed operators. These measures demonstrate the regulator’s proactive approach in addressing breaches and promoting adherence to established rules.

Addressing unlicensed activity

Efforts to curb unlicensed gambling activity also intensified during the period. The Commission issued 516 cease and desist notices to unlicensed operators, up from 384 in 2023–24. In addition, 95,705 illegal gambling URLs were removed following referrals to search engines, illustrating the regulator’s ongoing commitment to protecting consumers from unauthorized and potentially unsafe gambling offerings.

The regulator also sent 352 cease and desist notices to advertisers and affiliates promoting unlicensed operators. These actions are part of a broader strategy to disrupt the online activities of unauthorized entities and reinforce the integrity of licensed gambling operations.

High-profile investigations

The Sports Betting Intelligence Unit played a key role in several high-profile investigations, including inquiries linked to betting offences during the UK General Election. These investigations resulted in 15 individuals being charged with offences under the Gambling Act 2005 related to cheating. The Commission’s work in this area reflects its dedication to maintaining public confidence in the fairness and legality of gambling activities.

Compliance assessment results

The Commission also conducted compliance assessments to evaluate operators’ adherence to licensing requirements. For consumer protection standards, 33.8% of licensees received a “good” rating, while 39.4% were rated “satisfactory.” However, 19.7% of operators were found to have significant failings, highlighting areas where the regulator plans to increase oversight and intervention.

For fair and open gambling requirements, the results were more positive, with 73.2% of licensees achieving good ratings. These findings illustrate the regulator’s nuanced approach, identifying both strengths and areas requiring improvement within the sector.

Licensing and transparency

During 2024–25, the Commission processed 4,525 licence applications, maintaining a 97% response rate to freedom of information requests. This high level of responsiveness demonstrates the regulator’s commitment to transparency and accountability in its operations.

Implications for the gambling sector

The financial and operational developments reported by the UK Gambling Commission have significant implications for the broader gambling sector. The rise in legal costs associated with the National Lottery licence competition highlights the potential financial risks for regulators when engaging in high-stakes licensing and procurement processes. At the same time, the increase in compliance and enforcement activities suggests a sector under closer scrutiny, with operators expected to meet stringent regulatory standards.

The findings also underscore the importance of proactive governance and risk management among licensed operators. Companies operating within the UK gambling sector must remain vigilant in adhering to regulatory requirements, particularly concerning consumer protection, fairness and transparency.

Outlook for 2025–26

Looking ahead, the Commission has indicated that its focus will remain on enhancing consumer protection, addressing unlicensed activity and ensuring fair and transparent gambling operations. The organization’s increased staffing levels and intensified compliance activities provide a foundation for these objectives.

The legal challenges surrounding the National Lottery licence are likely to remain a key factor influencing the regulator’s expenditures and operational priorities in the coming year. The resolution of ongoing litigation will be closely watched by both industry stakeholders and policymakers.

Conclusion

The UK Gambling Commission’s 2024–25 annual report highlights a period of considerable activity and financial pressure. While legal costs linked to the National Lottery licence competition drove a sharp increase in expenditure, the regulator also demonstrated a commitment to maintaining compliance, enforcing licensing standards and protecting consumers from unlicensed operators. Chief Executive Andrew Rhodes emphasized the importance of the Commission’s work in advancing safer, fairer and crime-free gambling, underscoring the regulator’s role in upholding the integrity of the UK gambling sector.

The report offers a detailed insight into the challenges and priorities of a regulator navigating complex legal, operational and financial landscapes. As the Commission moves into 2025–26, its continued focus on compliance, enforcement and consumer protection will be central to shaping a responsible and well-regulated gambling industry.

FAQs

What caused the UK Gambling Commission’s expenditure to rise in 2024–25?
The primary driver was legal costs related to litigation over the fourth National Lottery licence, particularly defending claims by The New Lottery Company.

How much did the Gambling Commission spend on legal fees during 2024–25?
Legal fees totaled £14.2 million, up from £353,000 in the previous year.

Who brought the claims against the Gambling Commission?
The claims were brought by The New Lottery Company, an unsuccessful bidder in the National Lottery licence process.

What is the nature of the claims made by The New Lottery Company?
The company alleges it was misled into investing resources in a tender process it had little realistic chance of winning.

How did the Commission’s income from fees change in 2024–25?
Income from gambling regulation fees increased slightly to £27.9 million from £26.2 million in 2023–24.

What were the Commission’s reserves at the end of 2024–25?
The regulator’s reserves were £10.9 million, down from £13.6 million the previous year.

How many compliance activities did the Commission carry out?
The Commission completed over 9,700 compliance activities, more than double the previous year.

What action was taken against unlicensed operators?
The Commission issued 516 cease and desist notices and removed over 95,000 illegal gambling URLs.

How did licensees perform in compliance assessments?
For consumer protection, 33.8% of licensees received good ratings, 39.4% satisfactory and 19.7% had significant failings.

What is the Commission’s focus for 2025–26?
The Commission will continue to prioritize consumer protection, compliance, enforcement and monitoring unlicensed gambling activity.