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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 9: Changes to licence condition 15.2.1 (reporting key events - legal or regulatory proceedings or reports)

Proposal

We proposed to:

  • amend licence condition 15.2.1 (19a) to simplify our definition of which persons the key event relates to
  • simplify the wording of licence condition 15.2.1 (19b) and add the need to report to us of any criminal investigations by a law enforcement agency involving persons in a key position
  • remove licence condition 15.2.1 (20) as we have determined that we no longer require this information to be reported to us as a key event
  • amend licence condition 15.2.1 (21) to provide further examples of the types of third parties who may raise material concerns about the provision of facilities for gambling that are referred to a licensee’s Board, or persons performing the function of an audit or risk committee
  • amend licence condition 15.2.1 (21) to reflect our expectation that licensees notify us of any material concerns raised and not just those 'which are expressed... as requiring attention as a high priority'.

Consultation question

Question 1.9. Do you agree with the proposed changes to the licence condition?

Respondents' views

Overall respondents were supportive of the proposals on the grounds that the changes were either deregulatory or made the key events simpler to understand.

Some respondents queried the decision to retain licence condition 15.2.1 (19a) and the requirement to notify us of any investigation that 'could result in the imposition of a sanction or penalty'. It was suggested that, given the range of sanctions or penalties available to government, professional, and regulatory bodies such a requirement could apply to low level matters, which could not reasonably be expected to raise doubts about the licensee’s continued suitability to hold a Gambling Commission licence. It was proposed that we narrow the scope of the requirement and instead request details of any investigations which could reasonably be expected to raise doubts about the licensee’s continued suitability to hold a Commission licence.

One respondent suggested that we revise the wording of licence condition 15.2.1 (19a) such that we will only require to be informed of the conclusion of an investigation. Also, that we state that we do not require licensees to report to us any investigation initiated by ourselves. It was further suggested that we provide examples of the types of investigations that needed to be reported to us.

Another respondent suggested that we replace the term 'a person in a key position' (as defined in licence condition 1.2.1) with the wording 'a person in a specified management office'

On licence condition 15.2.1 (19b), one respondent stated that the removal of the word 'reasonably' would significantly widen the range of reportable events.

In relation to licence condition 15.2.1 (21) a respondent asked for clarification on what matters we consider to be of 'material concern'. Other respondents queried whether a 'professional body' referred to an individual (for example as an auditor) or an organisation, and that 'lawyer' be specified among the listed bodies. One respondent commented that the key events did not include a timeframe by which these matters should be reported to us.

Our position

These proposals seek to amend licence conditions 15.2.1 (19a), (19b) and (21). Also, to remove licence condition 15.2.1 (20).

The rationale for the change to licence condition 15.2.1 (19a) is to simplify our definition of which persons the key event on the reporting of investigations by a professional, statutory, regulatory or government body into the licensee’s activities relates to. We want to know about investigations as they are initiated, rather than at their conclusion, such that we can take risk-based actions in a timely manner, should they be required.

We want to remove the term 'if imposed' because it has, in some instances, led to licensees not reporting the matter to us because a sanction or penalty has not yet been imposed. The final part of the event already makes it clear that this is a sanction or penalty which would bring into question suitability to hold a licence with us.

On licence condition 15.2.1 (19b) we have removed the word 'reasonably' as part of our drive to make licence conditions and codes of practice more concise and easier to understand to drive greater compliance.

'Key position' is defined in Licence condition 15.2.1 (8). The term key position is used to include both specified management offices which apply to licensees who are not small-scale operators and to qualifying positions which apply to licensees who are small-scale operators.

We consider that providing examples of the types of investigations that need to be reported would be counterproductive. Examples would not cover the breadth and depth of investigations and may lead to licensees focussing only on those types of investigations covered by the examples. We will not require licensees to report to us investigations conducted by us but do not consider it necessary to amend licence condition 15.2.1 (19a) to reflect this.

We want to change licence condition 15.2.1 (21) to provide further examples of the types of third parties who may raise material concerns about the provision of facilities for gambling that are referred to a licensee’s Board, or persons performing the function of an audit or risk committee, and that we wish to be reported to us. The wording 'a professional, statutory, regulatory or government body' is consistent with our use of this term elsewhere in the Licence Conditions and Codes of Practice (LCCP).

We will also remove the words 'which are expressed (in whatever terms), as requiring attention as a high priority' from licence condition 15.2.1 (21) as we wish to be informed of any material concerns raised.

As will all key events for operating licence holders, we require these matters be reported to us within five working days of the licensee becoming aware of the event’s occurrence.

The proposed changes will take effect from 31 October 2020.

Final wording of amended licence condition 15.2.1 (reporting key events - legal or regulatory proceedings or reports)

Legal or regulatory proceedings or reports

18 [No change]

19a Any investigation by a professional, statutory, regulatory or government body (in whatever jurisdiction) into the licensee’s activities of a person in a ‘key position’, where such an investigation could result in the imposition of a sanction or penalty which could reasonably be expected to raise doubts about the licensee’s continued suitability to hold a Gambling Commission licence.

19b Any criminal investigation by a law enforcement agency in any jurisdiction in which the licensee, or a person in a ‘key position’ related to the licensee, is involved and where the Commission might have cause to question whether the licensee's measures to keep crime out of gambling had failed.

20 [Removed and renumbered]

21 The referral to the licensee’s Board, or persons performing the function of an audit or risk committee, of material concerns raised by a third party (such as an auditor, or a professional, statutory or other regulatory or government body (in whatever jurisdiction)) about the provision of facilities for gambling: a summary of the nature of the concerns must be provided.

22 [No change]

23 [No change]

24 [No change]

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Proposal 8: Changes to licence condition 15.2.1 (reporting key events – financial events) Next section
Proposal 10: Changes to licence condition 15.2.1 (reporting key events – gambling facilities)
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