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  3. Financial key event reporting: Reporting changes in ownership and interests: Consultation response

Consultation response

Financial key event reporting: Reporting changes in ownership and interests: Consultation response

The consultation response on reporting changes in ownership and interests as a key event.

Published
18 December 2025

Last updated
18 December 2025 - Changes

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Contents

Proposal 2: Amendment to paragraph 2 of Licence Condition 15.2.1 to expand the application of ‘relevant persons’ to include shareholders, but also other entities with both direct and indirect interests in the licensee of 5 percent or more

Proposal

We proposed amendment to paragraph 2 of Licence Condition 15.2.1 to expand the application of ‘relevant persons’ to include not just shareholders of the licensee, but also other entities (including, but not limited to, partnerships, trusts, charities and investment funds) with both direct and indirect interests in the licensee of 5 percent or more so that these are reported to the Gambling Commission. Indirect interests are where the interest is held through additional entities rather than directly with the licensee or its holding company.

This proposal involved amendment to the wording of paragraph 2 which would become paragraph 2a (relating to issued share capital) and the addition of paragraphs 2b (relating to voting rights), 2c (relating to dividends or profits) and 2d (relating to beneficial ownership).

The consultation included separate questions for each subsection of paragraph 2. However, a number of respondents provided comprehensive replies covering all 4 subsections, including general comments about the wording of paragraph 2 as a whole. We have highlighted comments relating to a particular subsection where they were clearly identified and have ensured that more generalised comments are also included.

Consultation question on paragraph 2a

To what extent do you agree with the proposed change at Licence Condition 15.2.1 paragraph 2a to add the requirement to report 5 percent or more direct or indirect ownership of share capital, to reflect a risk-based approach?

Respondents’ views on paragraph 2a

Although there was some support, the majority disagreed with the proposal.

One supportive respondent noted that it would be proportionate for the Commission to require listed companies to pass on shareholder notifications to the Commission (in the same manner as they do so to the relevant stock exchange).

Respondents from the society lottery sector have concerns that the proposed change could introduce disproportionately onerous burdens on non-commercial licensees and questioned whether the value the Commission would gain in respect of requiring such information from the society lotteries sector is proportionate to the burdens being introduced on that sector. These respondents have suggested the Commission should consider retaining the existing Licence Condition 15.2.1 paragraph 2 in respect of the society lotteries sector, even if the new requirements are introduced in the other gambling sectors.

The majority of objections were raised by operators in public ownership who object to the expansion of the reporting requirement to cover indirect investors on the grounds that this proposal is unduly onerous, disproportionate, and unreasonable.

Responses highlight that the proposal does not consider that, in many cases, companies may have no visibility of indirect ownership and no legal authority to compel this information from shareholders.

Some respondents detailed challenges facing listed companies with underlying shareholders that have an indirect interest who typically invest through brokers and funds, often in omnibus accounts (where funds from multiple underlying investors are pooled) meaning their identities would not be available to the listed company.

Another issue raised was that the only way that a licensee which is US-listed or has a US-listed parent, could, in the absence of Securities and Exchange Commission (“SEC”) notifications from beneficial owners, report on indirect interests in the listed entity would be by commissioning detailed, complex, and costly investigative work, which itself is not guaranteed to yield the desired results, and even if it could, the cost would be prohibitive and the results could quickly go out of date without the licensee knowing.

Some respondents advised that the task of monitoring both direct and indirect ownership changes could lead to the diversion of legal and compliance resources away from other monitoring and compliance activities.
Some respondents further argued that public companies are already subject to comprehensive regulation by stock market authorities, which have established detailed rules and definitions for relevant and reportable interests. These respondents believe that taking a risk-based approach means that it should not be necessary to further regulate public companies in circumstances where they are already subject to a separate, relevant regulatory framework that is in place to mitigate the same or similar risks as the Gambling Commission. They felt that imposing additional regulatory layers on public entities and their investors could be seen as an unnecessary 're-regulation', and an overreach into financial regulation by the UK gambling regulator.

Some respondents pointed to the Gambling Commission's Statement of Principles which provides that it will "have regard to the desirability of promoting economic growth", and that it will not "impose unnecessary regulatory burdens in upholding the licensing objectives in the Act, and [will] not unduly hinder the economic progress of licensees". These respondents believe that the proposed measures are not only unnecessary, but also impractical for public companies, imposing a significant economic and regulatory burden due to the administrative requirements and investment in resources that would be necessary to achieve compliance (and the potential for licensees to breach the licence condition inadvertently).

The consultation also asked for comments on the proposed new wording of Licence Condition 15.2.1 paragraph 2a and whether respondents could foresee any difficulties in complying with the proposed change.

Some respondents commented that the proposed wording was not sufficiently clear, and that further clarification should be provided in relation to the proposed new requirements and to whom they apply if they are to be implemented effectively and consistently. It has also been suggested that the Commission should distinguish between public and private companies.

One respondent suggested that if the proposed requirements are introduced, licensees should only be expected to use their ‘reasonable endeavours’ to secure the necessary information.

Some respondents have commented that the reference to “issued share capital” is problematic because SEC filings are usually based on the total shares outstanding of the company as reported in the most recent quarterly report filed with the SEC, meaning percentages are calculated using an historic outstanding share count potentially over 3 months old. The outstanding share count excludes Treasury shares which do not carry voting rights and is usually used to calculate voting rights. The issued share count includes Treasury shares and is usually used to calculate ownership percentages.

Consultation question on paragraph 2b

To what extent do you agree with the proposed change to Licence Condition 15.2.1 paragraph 2(b) to add the requirement to report 5 percent or more direct or indirect control of the voting rights of the licensee, to reflect a risk-based approach?

Respondents’ views on paragraph 2b

Whilst there was some support for the proposal, the majority of respondents strongly disagreed.

The consultation also asked for comments on the proposed new wording of Licence Condition 15.2.1 paragraph 2b and whether respondents could foresee any difficulties in complying with the proposed change.

Respondents from the society lottery sector have concerns that the new Licence Condition 15.2.1 paragraph 2(b) will impact particularly on their sector, especially as the effect will be to include entities which do not have share capital. It is claimed that the bureaucracy involved with licensees in the society lotteries sector dealing with such administration seems disproportionate to any benefit the Gambling Commission seems likely to obtain from obtaining such information.

Respondents have suggested that the meaning of “voting rights” is unclear for the purpose of the new paragraph 2(b) and have suggested that if it is intended to have the same meaning as paragraph 14 of Schedule 1A to the 2006 Companies Act, it may help to avoid confusion to expressly state this.

Respondents have indicated that it would be helpful to have some examples of the Gambling Commission's interpretation of how this new provision is intended to apply to companies not having share capital, for example, companies limited by guarantee.

Again, the majority of objections were raised by operators in public ownership who are against the inclusion of indirect interests for the reasons already highlighted previously.

These respondents have called for more clarification as to the exact circumstances that would trigger reporting obligations with regard to indirect voting rights.

Respondents have explained that determining the extent of an entity´s voting rights within a licensee involves a more intricate assessment than simply identifying share capital ownership – due to the potential for indirect control and complex contractual rights. As with indirect shareholding, should changes in the percentage of indirect voting rights occur without affecting the direct ownership threshold, it is likely that licensees will not be notified as it may not be a legal requirement to do so.

Another issue raised is that voting rights and share ownership are not always aligned, particularly with investment funds where legal ownership of shares is held by a fund, and voting rights may be held by a different entity such as an investment adviser. In such circumstances, companies would need to liaise directly with each party to obtain the necessary information, creating unreasonable financial and regulatory burdens for licensees. In the case of highly regulated investment funds or trusts, this may involve confidential and commercially sensitive information, and it may put at risk the relationship between the company and their shareholder and/or investors.

Consultation question on paragraph 2c

To what extent do you agree with the proposed change to Licence Condition 15.2.1 paragraph 2(c) to add the requirement to report 5 percent or more direct or indirect entitlement to dividends or profits of the licensee, to reflect a risk-based approach?

Respondents’ views on paragraph 2c

The majority of respondents strongly disagreed with the proposed change.

The consultation also asked for comments on the proposed new wording of Licence Condition 15.2.1 paragraph 2c and whether respondents could foresee any difficulties in complying with the proposed change.

Respondents from the society lottery sector stated that it seems unclear from the consultation what the Commission mean by being “directly or indirectly entitled to 5 percent or more of the dividends or profits of the licensee” and asked for more guidance on this, particularly how this is intended to work in situations where the licensee is itself a charity as may often be the case in the society lotteries sector.

Other objections from respondents representing publicly listed companies specifically directed at the proposed inclusion of entitlement to dividends and profits as a measure of interest included that this information is not required as part of an operating licence application and all disclosure requirements during the licensing lifecycle should be aligned. Furthermore it was argued that entitlement to dividends and profits are only considered under section 422(4)(c)(i) of the Financial Services and Markets Act 2000 (“s.422 FSMA”) (definition of a controller), in the very unlikely scenario where a company does not have share capital, for example, a private company limited by guarantee, and that this is not reflected in the proposal.

Consultation question on paragraph 2d

To what extent do you agree with the proposed change to Licence Condition 15.2.1 paragraph 2(d) to add the requirement to report becoming 5 percent or more direct or indirect beneficial owner of the licensee, to reflect a risk-based approach?

Respondents’ views on paragraph 2d

Views of respondents were split on this proposed change.

Some respondents from publicly listed companies disagreed with the proposal on the basis that the reporting of share capital ownership is sufficient to indicate relevant financial information, and going beyond that requirement would create undue burden on licensees.

One respondent provided the following helpful explanation in relation to SEC filings.

“Under current SEC rules, a beneficial ownership report must be filed by any individual or an entity that acquires more than 5% of the voting rights of any class of a public company's equity securities (pursuant to Sections 13(d) and (g) of the Exchange Act and related SEC rules). The regulatory framework in the US includes extensive guidance on what constitutes beneficial ownership of securities and the information that must be reported under section 13(d), which includes personal information about the person reporting, the source and amount of funds or other consideration used or to be used in purchasing the securities, and descriptions of any contracts, arrangements or understandings with any person regarding any securities of the issuer. In certain circumstances, a shorter report may be filed under section 13(g) if the investor is considered a 'passive investor'”.

The consultation also asked for comments on the proposed new wording of Licence Condition 15.2.1 paragraph 2d and whether respondents could foresee any difficulties in complying with the proposed change.

Some respondents who agreed with the proposal submit that the wording of the licence condition should be amended to make clear, firstly, that reporting beneficial ownership under (d) is an alternative to the proposed reporting requirements under (a), (b) and (c); and, secondly, beneficial ownership is clearly defined taking into consideration jurisdictional discrepancies. As regards to the definition, a number of respondents have pointed out that Schedule 1A of the Companies Act 2006 requires disclosure of persons with significant control which generally means ultimate ownership or control of more than 25 percent of a company’s shares or voting rights, or significant influence, and this threshold is both in line with global norms set by the Financial Action Task Force for what is considered “beneficial ownership” and deemed appropriate by Government.

Respondents’ general views on paragraph 2

Some respondents have highlighted that ownership may be measured differently depending on the jurisdiction, citing the US as an example.

Some respondents have questioned whether the Gambling Commission has the jurisdiction to proceed in the manner proposed in the consultation.

Our position

We do not accept the challenges to our jurisdiction to proceed in the manner proposed in the consultation.

We have noted concerns that the drafting of our proposal suggested that all metrics (that is, issued share capital, voting rights, entitlement to profit and beneficial ownership) should be considered, irrespective of the constitutional form of the licensee. This was not our intention. The proposal was intended to provide alternative measures of interest to capture all persons or entities who have a reportable interest in a licensee, but are not currently captured as they do not have share capital. So each licensee should determine which is the most appropriate and complete measure to report to us based on their constitution and the information available to them in their jurisdiction. We intend to make this clear in the guidance notes published on our website LCCP Information requirements (opens in new tab) (“the guidance notes”).

In response to comments by respondents that the reference to share capital could be seen as problematic, we can reassure that the existing practice of reporting beneficial ownership rather than share capital (for example by US companies) will continue to be seen as acceptable by the Gambling Commission.

We acknowledge that it would be helpful to have some examples of the Gambling Commission's interpretation of how this new provision is intended to apply to entities not having share capital (such as partnerships) and intend to provide examples in the guidance notes.

The Gambling Commission accepts the suggestion that “voting rights” should be expressly defined as having the same meaning as paragraph 14 of Schedule 1A to the 2006 Companies Act.

We note the concerns raised in respect of society lottery licensees and the undue regulatory and administrative burden the proposed expansion of this licence condition, in no longer being confined to entities having share capital, would impose on that sector for little regulatory gain. We have therefore amended the proposal in respect of society lottery licensees, so that it only applies to such licensees where they have share capital.

The argument that entitlement to dividends and profits as a measure of interest is not required as part of the operating licence application is not correct. If an applicant or a parent undertaking of an applicant is an entity that does not have a share capital, we will make enquiries about and/or expect provision of entitlement to profits or dividends to identify controllers and relevant persons in accordance with s.422 FSMA and s70(9) of the Gambling Act 2005, respectively.

The Gambling Commission acknowledges the confusion caused by the inclusion of beneficial ownership as a separate measure in the proposed paragraph 2(d) and therefore we have decided to remove this subsection.

After careful consideration of the objections to the expansion of the reporting requirement to include indirect interests, we have concluded that it would be difficult to provide a definition that would apply across all jurisdictions and we are persuaded by the argument that this would impose an undue regulatory and administrative burden on licensees. We have therefore removed reference to indirect interests from our proposal.

It should be noted that the Gambling Commission currently explores what may be relevant indirect interests, both at initial licence application stage and upon an application for a licence to continue to have effect following a change in control and we reserve the right to continue to do so.

The Gambling Commission has considered, but rejects, the suggested wording that licensees should only be expected to use their “reasonable endeavours” to secure the necessary information on the basis that the interpretation would be too subjective and open to abuse. The Gambling Commission accepts that publicly traded companies must rely on public filings and there is no expectation that licensees undertake additional costly investigation. The current requirement, which will continue, is that licensees notify the Gambling Commission within 5 working days of becoming aware of a reportable event.

The Gambling Commission’s decision is that the final requirements of paragraph 2 will apply to all licensees, with the exception of society lotteries. Having revised the final wording to exclude the need to report all indirect interests over 5 percent, the Gambling Commission is satisfied that this new requirement will not be unduly burdensome on any other category of licensee.

Final wording

This amendment will come into force on 19 March 2026.

Updated Licence Condition 15.2.1, paragraph 2

  1. In the case of licensees who are companies, bodies corporate, or other legal entities (but excluding society lottery licensees where stated), the name and address of any person or entity who (whether or not already a shareholder):
  1. becomes a shareholder holding 5% or more of the issued share capital of the licensee or its holding company; or
  2. controls 5% or more of the voting rights of the licensee or its holding company, excluding society lottery licensees; or
  3. is entitled to 5% or more of the dividends or profits of the licensee, excluding society lottery licensees.

Applies to: All operating licences excluding society lottery licensees where stated.

Previous section
Proposal 1: Raising the reporting threshold for ‘operator status’ and ‘relevant persons and positions’ from 3 percent to 5 percent Next section
Proposal 3: Amendment to paragraph 3 of Licence Condition 15.2.1 to include the reporting of entering into financial agreements or arrangements with third parties and/or the receipt of financial assistance from a group company
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