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.
Contents
- Executive summary
- Introduction
- Summary of responses
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- Proposal 1: Raising the reporting threshold for ‘operator status’ and ‘relevant persons and positions’ from 3 percent to 5 percent
- 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 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
- Proposal 4: Introduction of a new requirement for licensees to report to the Commission the details of individuals who acquire the equivalent of £50,000 or more worth of new shares in a rolling 12-month period
- Proposal 5: Amendment to the Licensing, Compliance and Enforcement Policy Statement under the Gambling Act 2005 to raise the threshold of shareholders to be listed from 3 percent to 5 percent
- Equalities considerations
- Business impacts and implementation
- Annexes
Proposal 4: Introduction of a new requirement for licensees to report to the Commission the details of individuals who acquire the equivalent of £50,000 or more worth of new shares in a rolling 12-month period
Proposal
We proposed the introduction of a new requirement (to become paragraph 3 at Licence Condition 15.2.1) for licensees to report to the Gambling Commission the details of individuals who acquire the equivalent of £50,000 or more worth of new shares in a rolling 12-month period or entities that acquire the equivalent of £1 million or more worth of new shares in a rolling 12-month period, along with the value of the acquisition and evidence of source of funds for that investment.
Consultation questions
To what extent do you agree with the proposed introduction of Licence Condition 15.2.1 paragraph 3 to add the requirement to report details of individuals who acquire the equivalent of £50,000 or more worth of new shares in a rolling twelve-month period or entities that acquire the equivalent of £1 million worth or more of new shares in a rolling twelve-month period, and also disclose the value of the acquisition and provide evidence of source of funds for that investment?
Do you think the thresholds in the proposed introduction of Licence Condition 15.2.1 paragraph 3 of £50,000 (or equivalent) for individuals and £1 million (or equivalent) for entities, are right, and, if not, do you have any evidence to support where the thresholds should be set?
Respondents’ views
The majority of the respondents disagreed with this proposed change and did not believe that the thresholds were correct.
Respondents who agreed with the proposal made the following comments.
The Commission should be informed when large quantities of new shares are being acquired, regardless of the individual or entity who is acquiring them. The inclusion of this paragraph is supported as it promotes transparency and accountability in the gambling industry, ensuring that the Commission have a clear understanding of the financial activities within the sector.
These thresholds strike a balance between ensuring transparency and accountability in the gambling industry while also being practical for operators to implement. They provide a clear and straightforward framework for reporting significant share acquisitions, which is essential for the Commission to effectively monitor and regulate the sector. Additionally, these thresholds are consistent with industry standards and practices, making them a reasonable and appropriate choice for the proposed Licence Condition 15.2.1 paragraph 3.
The consultation also asked for comments on the proposed new wording of Licence Condition 15.2.1 paragraph 3 and whether respondents could foresee any difficulties in complying with the proposed change.
The majority of respondents representing publicly listed companies are strongly opposed to the proposal. It is generally felt that the blanket application of arbitrary thresholds does not reflect a risk-based approach, imposes unjustified and unnecessary regulatory burden, has a negative economic impact for certain groups of licensees, and is wholly disproportionate.
Concerns have been raised that the proposed thresholds are extremely low for the average type of licensee (except for start-ups) and that investments at the proposed levels could represent percentage shareholdings significantly below the proposed ownership reporting threshold in key event 15.2.1(2)(a).
Further concerns were raised about using fixed figure thresholds, rather than percentage thresholds, to trigger the reporting requirement, could result in the Commission testing every £1 of an investment, resulting in significant additional work for the Commission and the licensee.
Some respondents have advised that licensees listed on certain stock exchanges may not be notified of individuals acquiring the equivalent of £50,000 or more worth of new shares or entities acquiring £1 million worth or more of new shares, unless this represents 5 percent or more of total shares. Therefore, the requirement to report such changes would likely perpetuate the problems currently experienced with the 3 percent threshold as many licensees are simply not notified of such changes, and would have to apply for exemption from this requirement.
Some respondents are concerned that if licensees are required to obtain source of funding evidence at these thresholds, it is inevitable that it will stifle equity investments in Commission-licensed gambling businesses, as many, if not most, prospective investors will refuse to provide information that has not been required by any other regulator (gambling or financial).
Some respondents have argued that it would be administratively unworkable for a company to obtain source of funds evidence from a qualifying shareholder base which may number in the hundreds or thousands, given the thresholds proposed and have highlighted that issues of new shares in an equity raise are subject already to a timetable strictly governed by the FCA and often need to be launched at pace.
Respondents have pointed out that third parties who are set up to manage the interactions with shareholders of listed companies are unlikely to have the capability, systems or existing resources to undertake a due diligence exercise of the scale that the Commission’s proposals would entail.
Some respondents are concerned that the proposed requirement is also likely to capture employee share save schemes. which would unnecessarily overcomplicate the administration of such schemes and add further administrative burden on the Commission. It is argued that such a measure would seem completely disproportionate to the Commission’s aim of “keeping crime out of gambling” given that there would be no risk from such shareholdings.
Some respondents have highlighted that the purchase of shares in listed companies is already subject to regulation and that the existing regulatory environment ensures that such transactions are already subject to checks for financial impropriety, including money laundering and terrorist financing.
Some respondents have raised concerns about the proposed wording, pointing out that it refers only to the acquisition of shares, without specifying that they are newly issued shares despite this being the Commission’s intention.
Another issue raised is the length of time that obtaining the required source of funding evidence could take resulting in licensees having difficulty providing this information within the required timeframe for a key event.
Some respondents have noted that even if a corporate shareholder voluntarily discloses the source of its funds, the information itself may be of limited use. For example, an investor may confirm that it has raised funds from more than one investor, and even identify them to the licensee if it is able to. However, the licensee would have no direct relationship with these third parties or any legal ability to compel them to provide any information. Further, Institutional Investors are likely to be under strict terms of confidentiality with the underlying investors, so would not be able to disclose any information to the licensee.
Some respondents have raised various legal challenges around the Commission’s jurisdiction and the interaction of existing regulation (for example by the FCA) and existing legislation, such as Anti Money Laundering, the European Convention of Human Rights, the Regulators’ Code and the Growth Duty.
A number of respondents have requested that we consider an exemption for listed companies or groups as the risk is low given the existing regulatory framework that these companies operate within.
Some respondents criticised the lack of data published in support of the proposal and others have highlighted the omission of a validated impact assessment of the costs and benefits of the proposal from the consultation. One respondent strongly encourages the Commission to provide anonymised details of its casework and the reasons for proposing to impose a blanket requirement without taking into consideration the type of licensee. Another respondent believes that the proposed threshold and the rolling timeframe requires further research and requests the detail of the research that the Commission has relied upon to arrive at these figures and/or reporting cycles. Another requested that the Commission publish its detailed rationale and decision-making behind selecting the thresholds.
Our position
We will not be proceeding with the proposed new requirement at this time. This decision was not due to the legal challenges raised by respondents which we have concluded have no merit.
In respect of the other challenges raised by respondents, particularly in relation to the proposed thresholds and the accessibility of the information, we have decided to request information from a sample of licensees under paragraph 1 of 15.3.1 of LCCP to enable us to further assess the impact of the proposal. It is envisaged that this will provide us with more robust evidence of the consequences of this proposal on operators, taking into account the variety of scale and complexity of the entities that we regulate. We anticipate that this will take place over the next eighteen months. Depending on the outcome of our assessment we may initiate a new consultation on this issue.
Final wording
Licence Condition 15.2.1 (Reporting Key Events) will be unchanged in respect of Proposal 4. We will not be adding this new requirement at this time (and the paragraph numbering of this Licence Condition will therefore be unchanged).
Applies to: All operating licences.
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 Next section
Proposal 5: Amendment to the Licensing, Compliance and Enforcement Policy Statement under the Gambling Act 2005 to raise the threshold of shareholders to be listed from 3 percent to 5 percent
Last updated: 18 December 2025
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