Consultation response
2023 Consultation on proposed changes related to financial penalties: Consultation Response
This response sets out our position in relation to the consultation on the proposed changes to the Statement of Principles for Determining Financial Penalties.
Contents
- Executive summary
- Introduction
- Summary of responses and our position
-
- Proposal 1: Principles for determining financial penalties
- Proposal 2: The framework of policies and procedures
- Proposal 3: The legal framework
- Proposal 4: The scope of this document
- Proposal 5: Key considerations
- Proposal 6: The purpose of imposing a financial penalty
- Proposal 7: Criteria for the imposition of a financial penalty
- Proposal 8: Criteria for determining the quantum of a financial penalty
- Proposal 9: Step 1 - Detriment to consumers and/or financial gain to the licensee
- Proposal 10: Step 2 (a) - The seriousness of the breach to determine the starting point of the penal element
- Proposal 11: Step 2 (b) - Determining the starting point of the penal element of the fine
- Proposal 12: Step 3 - Mitigating and aggravating factors
- Proposal 13: Step 4 - Adjustment for deterrence
- Proposal 14: Step 5 - Discount for early resolution
- Proposal 15: Step 6 - Affordability
- Proposal 16: Step 7 - Proportionality
- Proposal 17: Procedural matters, payment plans, time limits and payments in lieu of financial penalties
- Proposal 18: Indicative sanctions guidance
- Proposal 19: Impact of the proposals on protected characteristics stated in the Equality Act 2010
- Annex
Proposal 13: Step 4 - Adjustment for deterrence
In line with the principle that non-compliance should be more costly than compliance, and that our enforcement should deliver effective deterrence against future non-compliance, we proposed that any adjustment to the level of the fine for deterrence be considered separately to the process for determining the seriousness of the breach.
Under the existing process for determining financial penalties, adjustment for deterrence was considered at the same time as the other factors. In the consultation document we proposed to only include consideration of any adjustment for deterrence as a distinct step separate from the assessment of seriousness of the breach or the consideration of mitigating and aggravating factors, and any discount for early resolution. We sought views on:
- whether an adjustment for deterrence should be separate from the process for determining the starting point for the penalty at Step 2
- whether an adjustment for deterrence should be applied after Step 3 (aggravating and mitigating factors).
We also invited any other comments.
Consultation questions
Questions 44 to 46, as detailed in Annex 2, related to this document.
Respondents' views
Most of the respondents who responded to this section disagreed with the inclusion of a step for deterrence (rather than the sequencing), with few agreeing.
It was suggested that the penalty itself is a deterrent, and the inclusion of a separate step would constitute double-counting and be disproportionate. One respondent suggested that the deterrence adjustment should be capped at a maximum of 10 percent.
It was also suggested that if the Gambling Commission intends to adjust for deterrence, it is important that we clearly set out the basis upon which we might reach the view that the amount calculated at Steps 1 to 3 might not be an adequate deterrent and should therefore be adjusted.
Our position
We have considered the comments raised by stakeholders in the consultation responses and the Commission is grateful for the feedback received. Our position remains as stated in the consultation document specifically in relation to the separate step will provide transparency and should reduce the risk or perceived risk of duplication of this as a factor considered. We did not propose a cap on the deterrence adjustment in the consultation and do not consider it is appropriate to add in now. We have therefore made no substantial changes to the wording of paragraph 2.26 of the amended Statement of Principles for Determining Financial Penalties (SoPfDFP).
Final wording
This requirement will come into force on 10 October 2025.
Paragraph 2.26 of the amended SoPfDFP
Step 4: Adjustment for deterrence
2.26. Having regard to the principle that non-compliance should be more costly than compliance, and that enforcement should continue to deliver strong deterrence against future non-compliance of the licensee or others, if the Commission considers the figure arrived at after Step 3 is insufficient to deter the licensee, or the wider industry, from committing further or similar breaches the Commission may increase the penal element. The Commission will exercise its judgment as to what additional sum for deterrence is required on the facts of an individual case. The uplift will be applied to the figure determined after Step 3.
Proposal 12: Step 3 - Mitigating and aggravating factors Next section
Proposal 14: Step 5 - Discount for early resolution
Last updated: 10 July 2025
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