Enforcement policy in relation to the National Lottery
Stage two of reaching decisions
Having assessed the case by reference to the factors at Stage One, the decision maker should then consider the purpose of any sanction in line with the following sanction principles (this should not be read as a list or as principles that all need to be present)4:
A sanction should aim to change non-compliant behaviour
To ensure that the operator changes in behaviour and moves back to compliance.
A sanction should aim to eliminate any operator financial gain or benefit from non-compliance5
In doing so, sanctions will ensure that any benefit to the operator or loss to good causes following on from licence breaches, financial or otherwise, can be recouped, removing any incentive towards non-compliance.
A sanction should aim to be responsive and consider what is appropriate for the operator and the regulatory issue
Discretion should be used in imposing sanctions, taking into account the reason for compliance failure. The aim will always be to bring the operator back to compliance and therefore a flexible approach is necessary in order to uphold a credible enforcement and sanctioning regime.
A sanction should aim to be proportionate to the offence and harm caused
The individual circumstances of the case should be considered, taking into account the nature and duration of the non-compliance and also the consequences including the extent of harm caused or the risk of harm posed.
A sanction should aim to restore the harm caused by regulatory non-compliance, where appropriate
In addition to ensuring the operator takes responsibility for its actions, consideration should be given to arrangements adopted by the operator for compensating disadvantaged players and to restoring any detriment to good causes.
A sanction aims to deter future non-compliance
It is important that the operator should expect that non-compliance with regulatory requirements will be investigated, and, if appropriate, be subject to enforcement action in accordance with this policy.
In order to reflect our unique regulatory position in relation to our National Lottery duties, in that we regulate one business operation and have a specific duty to maximise the returns to good causes, the wording of the principles has been adapted so we can apply these principles appropriately.
Following the use of any sanction or other action we will normally undertake assurance reviews and/or compliance checks on case issues. This will be in a timely manner dependent on the seriousness of the regulatory concerns and will assist in focusing the operator on future compliance and in the measuring of regulatory success. If matters remain unresolved it may be appropriate to take further enforcement action.
4 These principles are adopted from the Macrory Report. Regulatory Justice: making Sanctions Effective. Cabinet Office November 2006.
5 NB Insofar as this is in accordance with former Director General of the National Lottery's publication Financial Penalties: Principles and Procedures (contained at Appendix A (PDF)) which states ‘...where there is a clear and direct financial loss of this kind I will not necessarily seek to recover all the loss’.
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Stage three of reaching decisions
Last updated: 6 May 2022
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