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  3. 2023 Consultation on proposed changes related to financial penalties: Consultation Response

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.

Published
10 July 2025

Last updated
10 July 2025 - Changes

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Contents

Proposal 9: Step 1 - Detriment to consumers and/or financial gain to the licensee

We proposed to make 2 changes to the existing approach to quantifying disgorgement. Firstly, in circumstances where an accurate divestment amount cannot be calculated from information provided by the licensee, we proposed that no sum will be calculated under Step 1. Instead, the detriment to consumers and/or gain to the licensee will be factored into the penal element of the penalty under Step 2 (considering seriousness of the breach). Secondly, where it is possible to calculate an accurate divestment amount, this will be calculated under Step 1 and then the Gambling Commission will add the disgorgement element to the penal element at Step 6 to reach the total amount of the fine.

We sought views on:

  • making disgorgement a separate step in the process
  • whether the amount of detriment to consumers and/or financial gain to the licensee as a direct result of the breach should constitute the “disgorgement” sum and be added to the penal element of the fine
  • whether, if the level of detriment to consumers and/or financial gain to the licensee cannot be calculated at Step 1, this should be considered as a relevant factor in assessing seriousness under Step 2.

We also invited any other comments in relation to this section.

Consultation questions

Questions 25 to 28, as detailed in Annex 2, related to this document.

Respondents' views

The respondents mostly agreed with, neither agreed nor disagreed, or did not answer the proposal to make disgorgement a separate step in the process. However, the responses indicated that there was some disagreement with aspects of the disgorgement calculation method itself and the impact on the other steps in the process. We have summarised the feedback received from providers as follows:

Some respondents requested clarity around situations where it may not be straight forward to determine any financial gain on the part of the offending licensee and some respondents requested clarification regarding how the Commission would assess “financial detriment suffered by consumers”.

Our position

We have considered the comments raised by stakeholders in the consultation responses and have made the following changes to the wording of paragraphs 2.9 and 2.10 of the amended Statement of Principles for Determining Financial Penalties (SoPfDFP). We understand that on many occasions it will not be possible to accurately identify a figure for disgorgement. In these circumstances there would not be a disgorgement element to the financial penalty.

To make this clearer we have reworded paragraphs 2.9 and 2.10.

The proposed version of the SoPfDFP paragraph 2.9 read:

“Where the Commission can accurately identify (based on information provided by the Licensee) the financial detriment suffered by consumers and/or the financial gain to the Licensee derived directly from the breach, this sum will constitute the disgorgement element. At Step 6, the disgorgement element will be added to the penal element of the financial penalty calculated at Steps 2 to 5.”

It now reads:

“Where the Commission can accurately identify the financial detriment suffered by consumers and/or the financial gain to the licensee derived directly from the breach, this sum will constitute the disgorgement element. At Step 5, the disgorgement element will be combined with the penal element of the financial penalty calculated at Steps 2 to 5.

The proposed version of paragraph 2.10 read:

“Where the disgorgement cannot be accurately calculated, detriment to consumers/financial gain to the Licensee will not result in a disgorgement element under Step 1 although these factors may be relevant in assessing seriousness under Step 2.”

It now reads:

“Where the disgorgement cannot be reasonably accurately identified then detriment to consumers and/or financial gain to the licensee will not result in a disgorgement element under Step 1. However, the number of consumers suffering detriment and/or the amount of actual, potential or intended financial gain from the breach, either directly or indirectly may be factors relevant in assessing seriousness under Step 2.”

Final wording

This requirement will come into force on 10 October 2025.

Paragraphs 2.9 and 2.10 of the amended SoPfDFP

Step 1: Detriment to consumers and/or financial gain to the licensee

2.9. Where the Commission can accurately identify the financial detriment suffered by consumers and/or the financial gain to the licensee derived directly from the breach, this sum will constitute the disgorgement element1. At Step 5, the disgorgement element will be combined with the penal element of the financial penalty calculated at Steps 2-5.

2.10. Where the disgorgement cannot be reasonably accurately identified then detriment to consumers and/or financial gain to the licensee will not result in a disgorgement element under Step 1. However, the number of consumers suffering detriment and/or the amount of actual, potential or intended financial gain from the breach, either directly or indirectly may be factors relevant in assessing seriousness under Step 2.

References

1This sum is net of tax.

Previous section
Proposal 8: Criteria for determining the quantum of a financial penalty Next section
Proposal 10: Step 2 (a) - The seriousness of the breach to determine the starting point of the penal element
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