Consultation response
Amending section 2.39 of the Statement of principles for determining financial penalties: Consultation Response
This response sets out our position in response to the consultation on amending section 2.39 in the Statement of principles for determining financial penalties.
Executive summary
In February 2026 we published an 8-week consultation on amending section 2.39 of the Statement of principles for determining financial penalties (opens in new tab) to propose that in future regulatory settlements are paid directly to the Consolidated Fund (opens in new tab), aligning with the process that is in place for financial penalties as set out in the Gambling Act 2005.
Regulatory settlements are an alternative form of enforcement action to financial penalties, which can be taken by the Gambling Commission, and which may involve payments in lieu of a financial penalty. Historically these regulatory settlement amounts have followed a different process which was developed before the introduction of the statutory gambling levy in April 2025, which raises around £100 million annually for the research, prevention and treatment of gambling-related harm.
Regulatory settlements, including those that involve a financial amount in lieu of a financial penalty are an important option in the Commission’s regulatory toolkit. They can allow the Commission to reach an appropriate regulatory outcome without the need for a formal licence review, or to conclude such a review more quickly bringing a swifter resolution which ultimately benefits consumers.
However, regulatory settlements were never intended to be and should never have been seen as part of the core funding system for gambling research, prevention or treatment.
In the 2023 White Paper, High Stakes: gambling reform for the digital age (opens in new tab) government announced that it would be introducing a statutory levy on gambling operators and the Commission committed to considering what impact the levy might have on the destination of any future regulatory settlements, including the extent to which it might be possible to mirror any arrangements which came into place for the levy.
Until now, section 2.39 of the Statement of principles for determining financial penalties has stated that payments made in lieu of a financial penalty as part of a regulatory settlement did not need to be paid into the Consolidated Fund (as financial penalties are) and there would instead be a presumption that they would be paid to GambleAware to be used for specific agreed purposes that accelerate their commissioning plans. However, GambleAware ceased trading on 31 March 2026 meaning there is no longer an automatic destination for regulatory settlement funds, and the statement is currently out of date.
In our consultation, we were clear that any replacement of the current default destination for regulatory settlements must ensure that a central body is responsible for making decisions on the use of funds (whether for tackling gambling harm or other purposes), and that effective commissioning and evaluation as well as alignment with the new levy system was in place. This is beyond the Commission’s regulatory role and is the role of government and the levy commissioning bodies.
As we explained in the consultation, prior to consulting we had explored a range of options with the Department for Culture, Media and Sport (DCMS) including the extent to which it might be possible to mirror any arrangements which came into place for the levy. DCMS had explored the matter on our behalf with the levy commissioning bodies; UK Research and Innovation (UKRI), the Office for Health Improvement and Disparities (OHID), NHS England and the Scottish and Welsh Governments and the consensus at that time was that the complexity and potential volatility of regulatory settlement funds could create significant challenges for levy commissioning bodies, particularly because their levy allocations should already enable and support effective and sustainable research, prevention and treatment. Therefore, this option was ruled out as being unviable.
Our consultation proposed that in future, regulatory settlement money would go directly to the Consolidated Fund, and government could make decisions on the use of such funds whether for tackling gambling harm or for other purposes.
We asked
We consulted on amending section 2.39 of the Statement of principles for determining financial penalties to propose that in future regulatory settlements are paid directly to the Consolidated Fund, aligning with the process that is in place for financial penalties as set out in the Gambling Act 2005.
This would mean that government would be responsible for making decisions on the use of such funds whether for tackling gambling-related harm or for other purposes.
We requested views from respondents on their level of agreement or disagreement with the proposal, any suggested alternatives and their views on the proposed timeline for implementation.
You said
Stakeholders, including gambling businesses, charitable and not for profit organisations, trade associations, and members of the public were invited to share their views on the proposals and provide a response to the proposed changes.
The consultation ran until 2 April 2026.
Responses from stakeholders show that:
- those in support of the proposal agreed that this was really the only viable option in the absence of a central body or bodies who could receive and spend regulatory settlement funds
- those who did not support the proposal were concerned that funds would be leaving the gambling ecosystem and would be used by government for non-gambling priorities and that there would no longer be a 'polluter pays' principle for regulatory settlements.
We did
We have carefully considered the responses to the consultation and have taken on board the different views. However, on balance and in the absence of a viable alternative, we have decided to proceed with our proposal to amend section 2.39 of the Statement of principles for determining financial penalties so that in future all regulatory settlements will be paid directly to the Consolidated Fund. This change will come into effect immediately and will apply to all regulatory settlements that are finalised on or after this date and which include an amount in lieu of a financial penalty.
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Introduction - Statement of principles for determining financial penalties: Consultation Response
Last updated: 22 July 2026
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