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
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- 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 6: The purpose of imposing a financial penalty
In the consultation document it was proposed that the wording of this section of the existing version of the Statement of Principles for Determining Financial Penalties (SoPfDFP) be amended to better reflect the principles relating to the purpose of imposing a financial penalty. Specifically, that financial penalties should take into account, and be proportionate to, the financial resources of the licensee; and should be proportionate to the nature of the breach and the harm caused so that non-compliance is more costly than compliance. We sought views on:
the amended wording of paragraph 2.1 in the proposed version as stated in the consultation document, in particular, the changes to the list of primary aims of financial penalties as recorded in the amended paragraph
the proposed principles which underpin the detailed proposed amendments to the SoPfDFP as set out in the proposed version at paragraph 2.2.
Consultation questions
Questions 17 and 18, as detailed in Annex 2, related to this section.
Respondents’ views
Most respondents disagreed with the proposed wording of paragraph 2.1 and suggested that the wording should reflect the Act more closely, and in particular section 22.
The majority of respondents agreed with the proposed principles as set out in the amended paragraph 2.2. In respect of those who disagreed, the comments showed the disagreement was in relation to the proposed wording rather than the principles themselves. Some alternative wording was proposed, including the suggestion by one respondent to include provision for “potential harm” to ensure that the language does not unjustly imply direct harm where it may not exist.
One respondent suggested that the proposed wording of paragraph 2.2 should be amended to include a reference to the impact of financial penalties on Society Lotteries.
Our position
We have considered the comments raised by stakeholders in the consultation responses and have made the following changes to the wording of paragraph 2.1 to ensure consistency with the Act:
We have added the words “as well as potential harm” after “the harm” in paragraph 2.2 of the amended version of the SoPfDFP in line with the feedback received.
We have considered the suggestion regarding the inclusion of a reference to the impact of financial penalties on Society Lotteries and have not made any amendments to the proposed wording in this regard as we are content that this is adequately addressed under the next sections of the amended SoPfDFP including “Criteria for the imposition of a financial penalty” and “Step 2(b) Determining the starting point of the penal element of the fine”. No changes to the proposed version of paragraph 2.2 are therefore required.
Final wording
This requirement will come into force on 10 October 2025.
Paragraphs 2.1 and 2.2 of the amended SoPfDFP
The purpose of imposing a financial penalty
2.1. When exercising its regulatory powers, the Commission has a duty to pursue the licensing objectives as set out at section 1 of the Act. The Commission regulates gambling in the interest of consumers and the wider public. In exercising our regulatory powers this may have a punitive effect on the licensee. The primary aims of financial penalties will be to:
- change the behaviour of the licensee
- eliminate any financial gain or benefit from non-compliance with licence conditions
- deter future non-compliance of other licence holders.
2.2. In order to change behaviour, deter licence condition breaches and to promote a culture of compliance across the licensees’ business (including groups) and the wider industry, the level of the penalty should be set at a level where non-compliance is more costly than compliance and at a level which takes account of the financial resources of the licensee. In addition, it should also be proportionate to the nature of the breach of licence condition and, where relevant, the harm as well as potential harm caused.
Proposal 5: Key considerations Next section
Proposal 7: Criteria for the imposition of a financial penalty
Last updated: 10 July 2025
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