Why proposed licence fee hikes put UK charity lotteries at risk

By Tam Watson – Head of Operations, Jumbo Interactive UK

Could increased regulatory costs render smaller charity lotteries financially unviable?

As Head of Operations for Jumbo in the UK, I spend a lot of time talking with good causes about how we can help them do more of what matters most: supporting patients, funding research, and sustaining vital community services. Charity lotteries are one of the most effective ways we do that together, quietly generating millions of pounds of predictable, unrestricted income for good causes every year.

Today, that engine of social impact is under real pressure. The Department for Culture, Media and Sport (DCMS) is consulting on proposals that would see Gambling Commission operator licence fees rise by up to 30%, on top of the new statutory gambling levy and a host of other cost pressures already hitting the sector. For commercial gambling, that might be a painful but manageable line item; for charity lotteries on the other hand, it’s quite simply money taken directly from the front line.

Every extra pound in fees is a pound not going to patients and recipients

StarVale supports a wide range of national and regional charities, hospices and not‑for‑profit organisations across the UK, including household names such as Age UK, Macmillan Cancer Support and Alzheimer’s Society. Similarly, our sister ELM Gatherwell helps 17,000 good causes raise unrestricted funding to support their vital work which forms the backbone of civil society. From local authority and CVSs, to grassroots sports clubs, and schools, communities rely on lottery funding to aid their work. For many of these partners, lotteries are not a nice‑to‑have extra; they are a critical, stable income stream that keeps services running, research programmes on track and support teams in post.

When the cost of operating these lotteries rises, there is no cushion of commercial profit to absorb the blow. Every additional pound we are required to spend on fees and compliance is a pound that cannot be invested in cancer research, dementia support or hospice care. The proposed 30% increase in Gambling Commission fees, outlined in this open consultation, would land at a time when charities are already grappling with rising costs, reduced public donations and wider economic uncertainty. That is not just unfortunate timing; it is a direct threat to service delivery for some of the most vulnerable people in our communities.

A low‑risk product treated like high‑risk gambling

What makes this situation particularly frustrating is that society lotteries are widely recognised as a low‑risk form of gambling. Participation levels, spend per player and frequency of play are inherently modest, with most draws operating at just £1 per ticket per week. The evidence consistently shows very low levels of gambling‑related harm associated with these products, especially when compared to higher‑risk online gambling activities.

Despite this, fee proposals and wider regulatory cost increases are being applied in a way that does not meaningfully distinguish between low‑risk charity lotteries and high‑risk commercial products. That runs counter to the principle of proportionate regulation, where oversight and cost should be aligned to the actual level of risk and regulatory intervention required. If low‑risk operators are asked to shoulder the same proportional burden as higher‑risk businesses, we end up using regulation as a blunt funding mechanism rather than a targeted tool to protect consumers.

Charity lotteries carry a heavier burden than comparable activities

It is important to remember that society lotteries and External Lottery Managers (ELMs) already operate under a significantly higher regulatory burden than many other fundraising and subscription models with similar or lower risk profiles. Enhanced compliance requirements, detailed reporting, regular audits and stringent technical standards are all now part of the day‑to‑day reality for our sector.

Unfair competition

None of us are arguing against robust regulation; on the contrary, StarVale and our charity partners are firmly committed to the highest standards of player protection and governance. But when you compare charity lotteries with other ways people support causes or consume subscription products that are subject to far lighter oversight and cost, it is clear that we are already at a structural disadvantage. Further fee increases do not just add pressure; they actively risk dampening innovation and investment in a part of the market that delivers clear public benefit with minimal associated harm.

Charity lotteries are a cornerstone of fundraising that cannot simply ‘put prices up’

One of the great strengths of charity lotteries is that they provide charities and community organisations with predictable, unrestricted income. Unlike many grants or project‑based funding streams, lottery revenue is flexible and can be directed to the priorities that matter most at any given time. That is exactly the sort of funding that helps charities plan, invest and sustain services over the long term.

The risk of declining margins

However, these lotteries typically operate on tight margins and at a fixed, low price point of £1 per ticket per week. In practice, that means there is very little scope to pass on new regulatory costs to players without risking participation and undermining the very stability that makes lotteries so valuable. Unlike commercial operators, charity lotteries do not have the pricing flexibility to simply increase stakes or introduce higher‑margin products. Any substantial, rapid increase in fees introduced by October 2026, as currently proposed, leaves little time for thoughtful financial planning or mitigation. The result is likely to be fewer funds for frontline services, fewer grants to local groups and less support for those most in need.

What needs to change

From StarVale and Gatherwell’s perspective, and on behalf of the charities and beneficiaries we serve, we fully accept the need for an effective, well‑resourced Gambling Commission website. Good regulation is a precondition of public trust and long‑term sector health, but the way we fund that regulation matters. We believe the current proposals, taken together with the statutory levy and other recent measures, go too far, and too fast for low‑risk operators whose core purpose is to raise money for good causes.

• Reconsideration of the scope of the levy: We’re therefore calling on DCMS and the Gambling Commission to rethink both the scale and structure of the proposed fee increases. In particular, we would like to see much clearer differentiation – and where appropriate, exemptions – for low‑risk ELMs and society lottery operators.  
• Consideration of the combined impact: We also urge policymakers to factor in the cumulative impact of the levy and other compliance cost increases, rather than assessing each change in isolation. 
• Reconsideration of the timeframe: Finally, a longer, more phased implementation period would give charities and their lottery partners the time they need to plan responsibly and protect returns to good causes.

We will continue to engage constructively with government, regulators, and sector partners to find a balanced solution. Our ask is simple: let’s ensure that the regulatory framework for gambling reflects real‑world risk, protects players, and allows charity lotteries to keep doing what they do best – providing sustainable, flexible funding for the organisations that hold our communities together.

Contact our expert charity lottery fundraising team for more information on this or related topics.