Cookies on the Gambling Commission website

The Gambling Commission website uses cookies to make the site work better for you. Some of these cookies are essential to how the site functions and others are optional. Optional cookies help us remember your settings, measure your use of the site and personalise how we communicate with you. Any data collected is anonymised and we do not set optional cookies unless you consent.

Set cookie preferences

You've accepted all cookies. You can change your cookie settings at any time.

Skip to main content


Fourth National Lottery Licence: Regulatory Handbook

The Commission’s regulatory handbook sets out our regulatory approach to the National Lottery.

  1. Contents
  2. Volume four: Enforcement Policy  
  3. 28. Approach to formal investigations

28. Approach to formal investigations

28.1 If a decision is made to commence a formal investigation, we will issue a ‘notice of investigation’ in writing to the Licensee and begin an investigation. Our approach to an investigation includes three stages.27

28.2 The rest of this section is split into separate sub-sections, one for each stage of our investigation process:

  • Stage one – gather relevant evidence
  • Stage two – consider circumstances and purpose of any sanction
  • Stage three – consider the appropriate regulatory action.

Stage one – Gather relevant evidence

28.3 During the first stage of our investigation, we may hold an initial meeting with the Licensee to clarify and narrow the issues and to establish any further information we will require during our investigation.

28.4 In addition to requesting specified information, we may also wish to interview persons who we consider can supply relevant information in connection with the investigation. These interviews may be recorded and if this is the case, we will inform the Licensee in advance. We reserve the right to use the contents of the interview as evidence. Our requirements for the Licensee to provide timely evidence and representations are captured in Condition 24 in the Fourth Licence.

28.5 We will only request documents or records from the Licensee or third party which we believe are necessary. The Licensee is obliged to provide the requested information to allow us to carry out our role and duties and exercise our powers under the Act. We have powers to request personal information from the Licensee or third party and this is within the bounds of data protection regulation.

Stage two – Consider circumstances and purpose of any sanction

28.6 After gathering and reviewing the evidence we will consider the circumstances of the case and consider the purpose of any sanction in line with our sanction principles.

28.7 We will consider all the circumstances of the case in determining what regulatory action (if any) we should take including, but not limited to, the extent to which our statutory duties have been compromised or placed at risk.

28.8 The following paragraphs provide an example of factors we will consider when reviewing the circumstances of the case.

Outcomes for the National Lottery

The extent to which the statutory objectives under Section 4 of the Act have been compromised or placed at risk.

The extent to which the National Lottery reputation is affected or potentially affected.

The duration of the circumstances giving rise to the investigation and whether these continued after the Licensee became aware of the matter.

The effectiveness and timeliness of any corrective action taken by the Licensee.
The speed with which the Licensee brings the issue to our attention.

Any compensatory measures taken or proposed to reduce the loss in sums paid to Good Causes.

Outcomes for Participants involved

The extent to which any Participants involved are disadvantaged, misled, and/or treated unfairly.

The Licensee’s pro-active role in making Participants aware of their complaints procedure and that participants may refer issues to us if they remain dissatisfied.

The restorative measures taken or proposed for Participants who have been disadvantaged.

Outcomes for Good Causes

Extent to which proceeds to Good Causes are impacted upon

Any compensatory measures taken or proposed to reduce the loss in sums paid to Good Causes.

Licensee’s financial gain from non-compliance

The Licensee’s financial gain or the potential for financial gain from non-compliance with Section 5 or 6 Licence conditions.

Licensee’s governance and controls

The adequacy of steps taken to prevent recurrence.

Whether the matters would have been apparent to a diligent Licensee.

Whether the matters were the result or reckless or negligent actions.

Whether the matters were the result of deliberate actions.

The extent of historically similar matters or root cause problems.

The Licensee’s effectiveness in managing Licensee staff, contractors and retailers.

The actions taken by the Licensee in bringing the case to our attention and its degree of cooperation with us.

The extent to which the Licensee attempted to conceal matters from us.

The prior involvement of senior management or lack of action on the part of senior management.

Additional factors specific to circumstances

The impact on any sanction or other action on the commercial viability of the Licensee.

28.9 Having considered the circumstances of the case, we will consider the purpose of any sanction, applying the following principles28.

We aim to change non-compliant behaviour. To ensure the Licensee changes behaviour and moves back to compliance.

We aim to eliminate any Licensee financial gain or benefit from noncompliance. In doing so, we will ensure any benefit to the Licensee or loss to Good Causes following on from any Section 5 or 6 Licence breaches, financial or otherwise, can be recouped, removing any incentive towards non-compliance.

We aim to be responsive and consider what is appropriate for the Licensee and the regulatory issue. We will use discretion in imposing sanctions and consider the reason for compliance failure. Our aim is always to bring the Licensee back to compliance and therefore a flexible approach is necessary in order to uphold a credible enforcement and sanctioning regime.

We aim to be proportionate to the breach and harm caused. We will assess the individual circumstances of each case, considering the nature and duration of the non-compliance and the consequences including the extent of harm caused or the risk of harm posed.

We aim to restore the harm caused by regulatory non-compliance where appropriate. In addition to ensuring the Licensee takes responsibility for its actions, we will consider Licensee arrangements for compensating disadvantaged Participants and to restoring any detriment to Good Causes Contribution.

We aim to deter future non-compliance. We consider it important the Licensee expects us to investigate risk of non-compliance with and, if appropriate, be subject to enforcement action in accordance with this policy.

Stage three – Consider the appropriate regulatory action

28.10 After considering the specific circumstances of the case, and taking into account Licensee speed of disclosure of all relevant facts and appropriate admissions, we will consider the appropriate regulatory action, including any sanctions.

28.11 The appropriate action will be considered within the framework of our general enforcement principles. We will decide between the following options:

  • no formal enforcement action
  • a formal enforcement action.

28.12 Further information on specific regulatory actions we may take is provided separately in section 29.

28.13 The steps will enable us to reach a view of the facts of the case and the appropriate action for us to take. This will be reflected in preliminary findings of the investigation; the next section sets out the process for arriving at a final decision.


27 Though these stages would apply to any investigation, the nature of each specific investigation may vary, in line with our general enforcement principles (for example, proportionality) and depending on the specific circumstances of each case. In circumstances where the relevant evidence is easily obtainable and unambiguous (for example, in the case of a very clear and isolated error), it is likely that an investigation can be conducted and concluded in a more timely fashion than in other cases.

28 Our principles are adapted from the Macrony report “Regulatory Justice: making sanctions effective”. Cabinet Office (2006). Note: In order to reflect our unique regulatory position in relation to our National Lottery duties (we regulate one business operation and have a specific duty to maximise the Good Causes Contribution), we adapted the wording of some so we can apply these appropriately.

Previous section
27. What will trigger an investigation
Next section
29. Process to our final decision
Is this page useful?
Back to top