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Consultation response

Changes to information requirements in the LCCP, regulatory returns, official statistics, and related matters

Parts I and II of the consultation response that sets out our position in relation to the information the Gambling Commission requires licensees to provide us.

Published
30 July 2020

Last updated
16 March 2023 - Changes

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Contents

Proposal 6: Changes to licence condition 15.2.1 (reporting key events – operator status)

Proposal

Licensees are required to notify us of key events that could have a significant impact on the nature of their business. The full suite of key events is contained within licence condition 15.2.1. Licence conditions 15.2.1 (1), (2) and (3) concern the reporting of the presenting of a winding up order or petition, entering into administration or receivership, bankruptcy, sequestration, or an individual voluntary arrangement. We proposed to improve the readability of these requirements by merging them into a single key event, and to expand it to include shareholders.

Consultation question

Question 1.6. Do you agree with the proposed changes to the licence condition?

Respondents' views

Some respondents noted that the merged key events were more concise and easier to read, which would in turn increase understanding and ease of compliance. One respondent suggested that we specify a need to report 'any other event which could result in an impact on player funds or an operator’s ability to guarantee or protect player funds or ability to pay players'. Another respondent queried why, as a non-departmental public body, we could not obtain this information from other government bodies.

Some respondents considered the requirement to report on incidences involving any 'shareholder or anyone named as part of the licence' to be unnecessarily burdensome; one suggested shareholder should be replaced with the term 'controller', as in our Change of Corporate Control definition. Clarification was sought as to whether the proposed phrase 'named as part of the licence' referred to anyone named on the licence or included anyone in a 'key position'. One respondent queried the requirement to report on incidences that occur to any company within a group and asked whether this would only apply in respect of those in the direct parent company and/or ownership chain of any Gambling Commission licensed entity.

Our position

We note the concern over expanding the requirement to all shareholders and we will modify the text so that it only applies to shareholders holding 3 percent or more of the issued share capital of the licensee or its holding company. This is consistent with our definition of relevant shareholders contained elsewhere within the Licence Conditions and Codes of Practice (LCCP) and is more appropriate than the term 'controller' for our regulatory needs.

We also note the request for clarification about the term 'anyone named as part of the licence'. In this case, we will replace the term with 'any person holding a key position'. Again, this is consistent with our definition of relevant persons contained elsewhere within the LCCP.

In response to the comment about whether the occurrence types would only apply in respect of those in the direct parent company and/or ownership chain of any Commission licensed entity, we intend to maintain our existing definition for 'group company' defined at the end of licence condition 15.2.1 ('any subsidiary or holding company of the licensee and any subsidiary of such holding company').

We have reviewed the suggestion to specify anything which impacts on player funds or an operator’s ability to guarantee or protect player funds or ability to pay players. Licensees must set out clearly in the terms and conditions whether customer funds are protected in the event of insolvency, the level of such protection and the method by which this is achieved. We do not propose to introduce additional reporting requirements in respect of this topic at this stage.

While we recognise that we can, and do, obtain some occurrence information from other sources (for example other governmental and non-governmental bodies), our processes and systems are not currently robust enough to capture this information for all relevant persons or companies to which the licence condition applies.

We have removed the wording 'or ensure the Commission is provided with' to make the language consistent with the removal of this phrase from elsewhere in the LCCP. This change reinforces the principle that responsibility for meeting the licence condition rests with licensees, not third parties.

The following changes will take effect from 31 October 2020.

Final wording of amended licence condition 15.2.1 (reporting key events - operator status)

Licence condition 15.2.1
Reporting key events
All operating licences

A key event is an event that could have a significant impact on the nature or structure of a licensee’s business. Licensees must notify the Commission, in such form or manner as the Commission may from time to time specify, of the occurrence of any of the following key events as soon as reasonably practicable and in any event within five working days of the licensee becoming aware of the event’s occurrence1.

1 Any of the following applying to a licensee, any person holding a key position for a licensee, a group company, or a shareholder or member (holding 3 percent or more of the issued share capital of the licensee or its holding company):

  • • presenting of a petition for winding up
  • • making of a winding up order
  • • entering into administration or receivership
  • • bankruptcy (applicable to individuals only)
  • • sequestration (applicable in Scotland), or
  • • an individual voluntary arrangement.

References

1 Key events are to be reported to us online via the ‘eServices’ digital service on our website.

Previous section
Proposal 5: Additional licence condition 15.1.3 (reporting of systematic or organised money lending) Next section
Proposal 7: Changes to licence condition 15.2.1 (reporting key events – relevant persons and positions)
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