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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: Link the requirement for licensees to submit quarterly or annual returns to the aggregate maximum GGY permitted by all their licences

Proposal

We proposed to change the requirement to submit quarterly or annual regulatory returns from a sector-based approach, to one based on the aggregate maximum Gross Gambling Yield (GGY) permitted by each of the licence types an operator holds. To determine whether a licensee submits a quarterly or an annual return, we would add together the ‘upper level’ of GGY permitted by the fee category for each licensed activity the licensee holds a licence for. This would give us an aggregated ‘total maximum’ GGY amount for each operator. For example, an operator with the following fee categories would be allowed to generate the following maxima of GGY in reliance on each licence:

Example

Adult Gaming Centre (AGC) – Category A1 – maximum GGY of £200,000
Bingo – Category A2 – maximum GGY of £750,000

Maximum aggregated GGY equals £950,000

We would then set a GGY level across the industry above which a quarterly return would be required. If an operator’s aggregated total permissible GGY is below this threshold, we would only require them to submit an annual regulatory return. For example, larger bingo operators may change from annual returns to quarterly returns, whereas small remote sector operators, with no or few other licensed activities, may change from quarterly returns to annual.

Consultation question

Question 2.6. Do you agree with the proposal?

Respondents' views

This proposal was supported by half of respondents, particularly by licensees in the remote sector who generate lower levels of Gross Gambling Yield (GGY) but are currently required to submit quarterly returns. It was acknowledged that the changes would make the regulatory reporting process less burdensome whilst improving data quality. Further information was requested by some on how the GGY threshold would be generated, applied and whether it be subject to review.

Objections to this proposal were received from the bingo and non-commercial society lotteries sectors. Representatives of the bingo sector commented that the change would increase the administrative burden for larger bingo operators and that it does not recognise the low risk profile of licensed bingo clubs. Several society lotteries stated that, if the aggregate maximum GGY level is set at £5 million, that this would put many society lotteries in scope for the quarterly return requirement. They added that if larger society lotteries moved to quarterly returns, this would incur additional costs which would reduce funds available to be contributed to good causes. Like the bingo sector, they commented that their sector has a lower risk profile and that we should determine the frequency of reporting requirements based the risk of gambling harm, rather than on GGY.

Alternative suggestions included the introduction of an approach where only key financial data is submitted quarterly, with other data (such as social responsibility related data) submitted only annually.

Our position

We are changing how we determine whether a licensee is required to submit either quarterly or annual returns to improve our visibility of individual licensees who generate the higher levels of Gross Gambling Yield (GGY). In doing so, we also aim to reduce the total number of returns required from the industry.

Many smaller operators who currently submit quarterly returns will move to annual submissions with this new approach. Some large operators who now submit annual returns, will move to quarterly submissions.

We recognise that the shift from annual to quarterly submissions will increase the regulatory reporting burden for those licensees affected, but we consider this appropriate given the amount of GGY they generate from consumers. While individual products differ in their risk profile, we also have an interest in the risks posed by the licensee as an operator of those products. We use a licensee’s total GGY as a component of our risk profiling and therefore we judge that quarterly returns from larger operators is more appropriate.

With respect to the concerns raised by larger non-commercial society lottery licensees, our view is that the society lottery regulatory return – which is comprised mainly of quantitative safer gambling questions, does not contain any financial data (except for total amount of voluntary contributions to research, education and treatment) and consists of less than 20 questions – is not an undue burden to complete quarterly. We note also that most society lotteries will still only need to submit annual returns under the new approach. While the External Lottery Manager return includes 8 financial questions, it is similarly short.

Noting the concerns raised, we commit to working with industry trade bodies to further develop this proposal – or a variation of it - before we implement the change.

Work on this will start in autumn 2020, with implementation not before April 2021.

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Proposal 7: Improve our digital service for regulatory returns collection (eServices)
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