Licensing, compliance and enforcement under the Gambling Act 2005
4 - Compliance
Once an operator or individual holds a licence, the Commission seeks to ensure, through its compliance work, that the licensee remains suitable to hold licences and that they conduct themselves in a way which is consistent with the licensing objectives, the requirements of the Act, and the conditions of their licences and related codes of practice, both in letter and spirit.
This chapter of the document outlines the manner in which the Commission will carry out its compliance activities.
The Commission requires licences to ensure that their gambling products have been tested by a test house before they are released to the market, where applicable. The Commission have published a list of test houses that are approved to test compliance against our technical standards and requirements including:
- gaming machines technical standards
- remote gambling and software technical standards
- bingo and casino technical requirements.
Advice and assessment
The Commission will undertake compliance activity in a variety of ways. The Commission will provide advice to licensees to help them comply with the requirements of the legislation and the licence conditions and codes of practice which apply to them.
The Commission may conduct remote compliance assessments for the purposes of determining whether activities are being carried on in accordance with the conditions of the operator's licence or determining the suitability of the licensee to carry on the licensed activities. Such assessments may be conducted using video conferencing platforms such as Skype. During such assessments the Commission may request sight of documents and records held by the licensee, including customer records and the audit trail in relation to customer accounts.
The Commission may also undertake desk based assessment, or may telephone licensees to assess compliance.
The purpose of assessments
The purpose of an assessment is to:
- ensure that the licensee remains suitable to hold a licence
- check that the licensee is conducting their activities in a manner which is consistent with the licensing objectives
- ensure that the licensee is complying with the requirements of the Act and relevant regulations
- ensure that the licensee is complying with the Commission’s Licence Conditions and Codes of Practice (LCCP) that apply to the licence held.
Assessments, which may include visits, will be used proportionately as the Commission will seek to target those areas of greatest risk to the licensing objectives.
Assessments also offer an opportunity for the Commission to promote good practice, as well as offering licensees an opportunity to seek advice and to provide feedback to the Commission, which can be used to continually improve its processes and procedures.
The Commission may give advance notice of its intention to visit a licensee and provide details of the process and procedures to be followed. This will provide the licensee with clarity about what will be required and gives the licensee an opportunity to prepare and to minimise potential disruption to the licensed activities being undertaken. However, assessment visits may be made without prior notice.
The frequency of assessments
The frequency and focus of assessments, including visits, is based on the risk assessment of the licensee, which takes into account a variety of factors including the likelihood and potential impact of non-compliance by the licensee.
The Commission will:
- act reasonably in discharging its powers under the Act and conducting assessments
- exercise its powers under the Act fairly, responsibly, and with due respect for other parties involved
- explain what information is required, and why, to ensure requests are appropriate, proportionate, minimise disruption to the business, and enable the relevant person to comply fully with the request
- seek the co-operation of others wherever possible and only use its statutory powers when necessary.
Requests for information
A request for the production of any records or to provide an explanation of records will be made either orally or in writing, dependent upon the individual circumstances of each case. Wherever possible, licensees will be given a reasonable period of time to comply with the request. The Commission will seek to take into account the burden placed on the individual or business when removing records so that it causes minimal disruption.
The Commission will only ask a licensee to produce documents or records which it believes it needs and will only remove them if it is considered necessary. Generally, the Commission will copy documents or records and leave the original records with the licensee. When any document or record is removed, the Commission will give an explanation of why it considers this is necessary and provide a receipt. Any documents which have been removed will be returned as soon as possible after the need for their retention has passed. Where an information request is made orally on a visit a record will be made of the request, what has been requested and the time and place for its production.
Data Protection Law
The Commission has powers under the Act to request information from licensees which sometimes includes personal information that they hold. The Commission will ensure that it will only request personal information that is necessary in order for it to carry out its functions. Further information about how the Commission processes personal information can be found on our website. Licensees must ensure that their privacy notices advise data subjects that their personal information may be shared with the Commission for this purpose.
Publication of assessment reports
When an assessment has been carried out, the licensee will be notified of the result and any further action that is being taken, or should be taken, as soon as possible. The Commission will not normally give, either orally or in writing, any indication as to the result of the assessment at the time it is conducted.
Dealing with compliance issues
During the course of an assessment visit, compliance issues may be identified which require improvements to be made. Wherever possible, the Commission will explain to the licensee why any changes need to be made, the basis for requiring the changes and a timeframe in which required improvements must be carried out. Failure to make the changes required may lead to the Commission taking enforcement action against the licensee.
Complaints about licensees
Whilst the Commission does not have a specific statutory duty to investigate complaints about licensees, depending on the issues raised the Commission may decide to look into matters relating to the complaint. Further details of the Commission’s approach to complaints can be found in the Commission’s Complaints Policy which is on our website.
Risk assessment and proportionality
The decision about how best to deal with any issues will be informed by an assessment of risk. This will ensure that the Commission’s resources are focussed primarily on those operators, individuals and activities which present the greatest risks to the licensing objectives.
As part of its compliance activities, the Commission will:
- assess and evaluate compliance consistently and in accordance with the Commission’s risk assessment methodology
- consider the ongoing suitability of the licensee by looking at the following factors, plus other matters, where appropriate.
The following list is not exhaustive:
The Commission will also:
- consider whether the licensed activities are being conducted in a manner which is consistent with the licensing objectives
- check that the licensee is complying with the requirements of the Act
- ensure compliance with the licence conditions and codes of practice that apply to the licence, amongst other things by reference to the controls which the licensee has put in place.
In carrying out this assessment, the Commission will use the following framework:
This indicates a substantial risk to the licensing objectives, or significant concerns about the licensee’s suitability, or significant non-compliance with the requirements of the Act and the Commission’s LCCP.
This indicates that the licensee has not met some of the minimum requirements of the Act or the Commission’s LCCP. However, we do not believe that there is significant concern about the licensee’s suitability or a substantial risk to the licensing objectives.
This indicates that the licensee is unlikely to pose a risk to the licensing objectives, the licensee appears to be suitable to carry on the licensed activities in question, the licensee appears to be meeting the requirements of the Act and the Commission’s LCCP.
Where the assessment of a licensee identifies an issue which needs to be addressed, where appropriate the Commission will seek to encourage the licensee to take action to address the issue. This may be done by officials, in addition to issuing standard documentation required under the inspection regulations, providing information to the licensee. Where such information is provided, the Commission will endeavour to distinguish between what are mandatory requirements and what is advice or guidance about what is desirable but not mandatory.
Concerns about suitability
Where the Commission’s compliance activities give rise to concerns about the suitability of the licensee to carry out the licensed activities, or concerns about the circumstances under which the licensed activities are being carried on, the matter may be dealt with in accordance with the Commission’s procedures for enforcement, which are set out in Chapter 5 - Regulatory enforcement and Chapter 6 - Criminal enforcement.
If serious failings are revealed during or because of a compliance assessment, then the Commission may decide that it is appropriate to place the licensee into Special Measures.
The effect of Special Measures is that the licensee will be invited to submit and agree an urgent action plan to rectify the regulatory failings identified. This may include divestment of any financial benefits derived from the failings. If the licensee fails to agree an action plan, or fails to implement the agreed action plan, the Commission is likely to proceed to review the licence. Compliance with the action plan does not prevent the Commission from reviewing the licence in any event, but such compliance will be treated as a mitigating factor. Where the licensee has fully complied with the action plan, it may request release from Special Measures. The Commission will consider such a request following a further compliance assessment.Previous section
3 - Licensing Next section
5 - Regulatory enforcement
Last updated: 23 June 2022
Show updates to this content
Various updates have been made throughout this content following the now closed Consultation on changes and updates to our Licensing, Compliance, and Enforcement Policy.