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Fourth National Lottery Licence: Regulatory Handbook

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

  1. Contents
  2. Overview
  3. 2. Background

2. Background

2.1: In this section we provide:

  • an overview of our Regulatory Model
  • the process for updating this document

An overview of our Fourth Licence Regulatory Model

2.2: Our Regulatory Model sits within a legislative framework of the National Lottery Act and Secretary State Directions and Regulations, alongside the Fourth National Lottery Licence and Section 6 Licences and is intended to secure our statutory duties. This document provides supporting guidance to stakeholders, split across four volumes. The four volumes consist of: Volume one – Regulatory Approach, Volume two – Monitoring Performance Framework, Volume three – Assurance and Regulatory Reporting Requirements and Volume four – Enforcement Policy.

2.3: The legislative framework includes the Act, which specifies our statutory duties and provides enforcement powers. This is complemented by Secretary of State Directions and Regulations2.

2.4: Under the Fourth Licence, the Licensee is granted the authority to operate the National Lottery. We grant a single Licence under Section 5 of the Act to authorise the running of the National Lottery (“Fourth Licence” or “Section 5 Licence”) and, separately, Licences under Section 6 of the Act to authorise the promotion of National Lottery Games (“Section 6 Licences”).

2.5: The other elements of the Regulatory Model, as covered in this Handbook, are closely interrelated.

In summary:

Volume one: Regulatory Approach explains, in high level terms, key features of the more outcomes-focused regulatory approach we will adopt for the Fourth Licence. It provides the context for the changes in our approach from the Third Licence and enhances the ability of stakeholders to better understand how our regulatory decisions and assessments will be made in a range of circumstances.

Volume two: Monitoring Performance Framework provides guidance for certain Fourth Licence conditions and Section 6 Licence conditions where we consider such guidance will support the delivery of our statutory duties. Our guidance includes aspects of compliance, alongside further detailed information around the Licensee Exit Plan and potential adjustments under the Incentive Mechanism.

Volume three: Assurance and Regulatory Reporting Requirements provides guidance that we expect the Licensee to demonstrate it has appropriate risk management processes in place to protect the delivery of the outcomes in the Fourth Licence and Section 6 Licences. Our reporting requirements set out where we require timely access to key data needed to regulate the National Lottery effectively. We will use Licensee assurance and reporting information to monitor compliance risk.

Volume four: Enforcement Policy sets out our approach to enforcement and explains how we will use our powers in an appropriate and proportionate manner. It details the enforcement measures available and the factors we are likely to consider when deciding on regulatory action.

The process for updating this document

2.6: Before the start of the Fourth Licence, we will engage with the Incoming Licensee (as defined in the Enabling Agreement) and update our Regulatory Handbook as necessary, for example where elements of the Regulatory Handbook are dependent on the Licensee’s business plan.

2.7: Going forward, we expect to update our Regulatory Handbook during the Fourth Licence itself, for example to provide further guidance in relation to any emerging or novel issues, in light of experience of the Fourth Licence, or in response to Licensee performance.

2.8: We expect the extent and frequency of any updates to vary by volume. For example, we expect our Regulatory Approach (volume one) and Enforcement Policy (volume four) to provide a largely fixed reference point that endures throughout the Fourth Licence. In contrast we expect to update the Monitoring Performance Framework (volume two) and Assurance and Regulatory Reporting Requirements (volume three) on a more regular basis. We will only make changes where we consider these appropriate and proportionate, given our statutory duties and other obligations.

2.9: If we propose to vary our Regulatory Handbook we will, as set out in Condition 24.9 of the Fourth Licence, consult with the Licensee for a period of at least 20 Business Days before issuing an updated document.

Previous section
1. Introduction
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