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This response sets out our position in relation to the consultation on the proposed changes to the Statement of Principles for Determining Financial Penalties.
Published: 10 July 2025
Last updated: 10 July 2025
This version was printed or saved on: 12 July 2025
Online version: https://www.gamblingcommission.gov.uk/consultation-response/2023-consultation-on-proposed-changes-related-to-financial-penalties
In December 2023, the Gambling Commission consulted on proposed changes to its Statement of Principles for Determining Financial Penalties (SoPfDFP) (the consultation). The consultation (opens in new tab) ran from 15 December 2023 until 15 March 2024.
The SoPfDFP details the Commission’s approach to determining financial penalties imposed on license holders.
In the consultation we proposed to make changes to the criteria for imposing a financial penalty and the methodology for determining the amount of a penalty. The proposed changes aimed to enable the Commission to better achieve the objectives and duties imposed under the Gambling Act 2005 (the Act) by making the Commission’s approach to financial penalties more transparent and addressing stakeholder concerns about the lack of transparency and consistency with regards to the existing approach. Further, the proposed changes were intended to make the decision-making processes clearer therefore reducing the time and resources involved in determining financial penalties. Respondents were invited to share their views and comments on the proposals.
There were 29 respondents in total, and the number of responses submitted by the pool of respondents to each of the 61 questions asked in the consultation document varied slightly between the questions.
Those respondents who consented to the publication of their name are listed at Annex 1.
We have reviewed and carefully considered the responses to the questions for each of the proposed changes as set out in the consultation document before making a decision.
Following consultation, and in response to the feedback received, we have made some significant changes to the existing SoPfDFP. It is not possible to outline all of the changes to the SoPfDFP in detail in this summary, therefore we have outlined them broadly as follows.
Provide a clear and distinct 7 step process the Commission will follow when assessing and imposing a financial penalty.
Provided added clarity as to how and when the Commission will calculate the ‘disgorgement’ element of the penalty where clear consumer detriment and/or financial gain by the licensee has resulted directly from the breach.
Identified which factors would determine the seriousness of the breach and form part of the assessment of the starting point of the penal element, as distinct from constituting aggravating or mitigating factors.
Included a defined methodology for determining the starting point for the penal element of the penalty by reference to the seriousness of the breach and a percentage of Gross Gambling Yield (GGY) or equivalent income generated during the period of the breach.
Detailed the inclusion of society lotteries and external lottery managers in instances where it is not appropriate for the starting point of the financial penalty to be based on a percentage of GGY.
Included a defined methodology for addressing situations involving multiple breaches during a period
Included a defined methodology for making adjustments to the penalty for aggravating and mitigating factors, deterrence and early resolution, as distinct and separate from the process for determining the seriousness and starting point of the penal element of the penalty.
The revised SoPfDFP will come into effect on 10 October 2025. On or after this date, where the Commission notifies the holder of an operating licence that the Commission proposes to require it to pay a penalty in accordance with s121(2)(a) the revised SoPfDFP will apply.
Under section 121 of the Gambling Act 2005 (the Act), the Gambling Commission may require the holder of an operating licence to pay a financial penalty if it thinks that a condition of the Licence has been breached. Our Statement of Principles for Determining Financial Penalties (SoPfDFP) is produced in accordance with section 121(6) of the Act which requires the Commission to, among other things, prepare a statement setting out the principles it will apply in exercising its powers to impose a financial penalty on a holder of an operating Licence or a personal Licence, and to have regard to the statement when exercising a power under this section. The Commission is required to review this statement from time to time and to revise it when necessary.
In our Winter consultation (opens in new tab) on Financial Penalties conducted between 15 December 2023 and 15 March 2024, we set out proposed changes to the SoPfDFP. The proposed revisions to the SoPfDFP included significant changes to the criteria for imposing a financial penalty and the methodology for determining the amount of the penalty as well as general revisions and updates to the existing wording.
In total we received 29 individual responses to the consultation from the following categories of respondents:
Annex 1 lists the organisations and the individual that consented to the publication of their name when responding to the consultation.
There were 61 questions asked in relation to this consultation. Annex 2 sets out the consultation questions. The first 10 questions are not included in Annex 2 as they were administrative questions regarding the respondent’s information, rather than substantive questions regarding the proposed changes to the SoPfDFP. Generally, the substantive questions were two-fold in that firstly, they sought confirmation from the respondents regarding their level of agreement or disagreement with the proposed changes in the form of the following multiple-choice answers:
Secondly, a free text box was provided for the respondents to substantiate their answers and submit written feedback to the question.
The consultation document presented each section of the proposed new SoPfDFP in the order they appear in the full SoPfDFP, with associated questions at the end of each section. Similarly, in this response we have summarised the responses received, and the decisions made by the Commission in respect of each section of the proposed new version of the SoPfDFP as they appear in the full statement, separately.
Due to the number of questions in the consultation, it has not been possible to list every question posed, the responses received and the Commission’s decision in this response. Therefore, we have sought to focus on the significant issues and themes raised through the consultation process which have influenced the changes made to the SoPfDFP.
This response does not detail the statistical breakdown of the answers to the multiple-choice questions, rather we have sought to provide a summary of the respondents’ views based on our consideration of both the answers to the multiple-choice part of the question and any accompanying comments. The reason for doing so is largely due to the fact that, in many instances, the multiple-choice answer did not align with the accompanying comment. This mostly occurred where the respondent selected “disagree” or “strongly disagree” as their answer to the first part of the question.
Question 44 was “To what extent do you agree with the proposal that any adjustment for deterrence should be separate from the process for determining the starting point for the penalty at Step 2?”.
A respondent may have selected “strongly disagree” in response to this question, however the accompanying comment expressed disagreement with the proposed principle of the step, and not that it was an additional step, separate from the process for determining the starting point of the penalty.
As a result, we have avoided presenting the overall levels of agreement or disagreement based solely on the statistical breakdown of the answer to the multiple-choice part of the questions, and we sought to consider these answers in conjunction with the accompanying comments, where made.
In summary, this response sets out:
The wording of paragraphs 1.1 and 1.2 of the proposed version of the Statement of Principles for Determining Financial Penalties (SoPfDFP) remained the same as the wording in the existing version as stated in the consultation document. We sought views on whether the wording of these paragraphs is adequate.
Responses were mixed with most comments relating to the choice of wording and it not reflecting the purpose of the SoPfDFP or matters dealt with elsewhere in the consultation.
We have considered the comments raised by stakeholders in the consultation responses and have made minor wording and formatting changes to these paragraphs. They are not substantive changes to the proposed version.
This requirement will come into force on 10 October 2025.
Paragraphs 1.1 and 1.2 of the amended SoPfDFP
The purpose of this statement of principles for determining financial penalties
1.1. This statement sets out the principles that the Gambling Commission (the Commission) will apply and have regard to in exercising its powers to require the holder of an operating licence or the holder of a personal licence to pay a financial penalty.
1.2. This statement of principles applies both to circumstances in which the Commission exercises its powers to impose a financial penalty under section 121 of the Gambling Act 2005 (the Act), or when the Commission is considering the matter of a payment in lieu of a financial penalty as part of a regulatory settlement with a licensee. Therefore, references to financial penalties within this document should also be read to include payments in lieu of financial penalties.
1 Question 16 allowed for respondents to make general comments and suggestions on Section 1 of the SoPfDFP. Comments and feedback received in response to Question 16 have been incorporated into the relevant sub-sections, where appropriate.
The wording of paragraph 1.3 of the proposed version of the Statement of Principles for Determining Financial Penalties (SoPfDFP) remained the same as the wording in the existing version as stated in the consultation document. We sought views on whether the wording of these paragraphs is adequate.
Respondents either agreed, or, neither agreed nor disagreed. There was no disagreement, and no substantive comments were made.
No changes are required.
1 Question 16 allowed for respondents to make general comments and suggestions on Section 1 of the SoPfDFP. Comments and feedback received in response to Question 16 have been incorporated into the relevant sub-sections, where appropriate.
The wording of paragraph 1.4 of the proposed version of the Statement of Principles for Determining Financial Penalties (SoPfDFP) remained the same as the wording in the existing version as stated in the consultation document, except that the Gambling Act 2005 is referred to as “the Act”. We sought views on whether the wording of this paragraph, as proposed, is adequate.
Responses were mixed with most comments suggesting that the wording should be amended to mirror section 121(5) of the Gambling Act 2005 (the Act) accurately.
We have considered the comments raised by stakeholders in the consultation responses and have made minor changes to the wording to ensure consistency with the Act. They are not substantive changes to the proposed version of the SoPfDFP.
This requirement will come into force on 10 October 2025.
Paragraphs 1.4 of the amended SoPfDFP
The legal framework
1.4. Section 121 of the Act provides that the Commission may require the holder of an operating licence to pay a penalty if the Commission thinks that a condition of the licence has been breached2. The Commission may impose a financial penalty following a review under section 116(1) or (2) of the Act. The Commission also has the power to impose a financial penalty without carrying out a licence review. Once a financial penalty has been imposed the Commission pays received monies into a Consolidated Fund, once it has deducted its direct costs, and a reasonable share of its expenditure which is indirectly referable to the investigation by the Commission of the matter in respect of which the penalty is imposed (whether by review under section 116 or otherwise), or the imposition and enforcement of the penalty, as set out at section 121(5)(c) of the Act.
1 Question 16 allowed for respondents to make general comments and suggestions on Section 1 of the SoPfDFP. Comments and feedback received in response to Question 16 have been incorporated into the relevant sub-sections, where appropriate.
2It will, by virtue of section 82, include breach of a provision in a social responsibility code of practice.
The wording of paragraph 1.5 of the proposed version Statement of Principles for Determining Financial Penalties (SoPfDFP) remained the same as the wording in the existing version as stated in the consultation document. We sought views on whether the wording of this paragraph is adequate.
We also asked whether any other references, documents or content should be taken into account.
There was no disagreement, and no substantive comments were made.
One respondent suggested that reference should also be made to the Regulators’ Code in this paragraph of the SoPfDFP.
It is our view that the relevant principles set out in the Regulators’ Code are either already covered elsewhere in the amended version of the SoPfDFP or in the Gambling Commission’s Indicative Sanctions Guidance2, therefore no changes are required.
This requirement will come into force on 10 October 2025.
Paragraphs 1.5 of the amended SoPfDFP
The scope of this document
1.5. Section 121(6) of the Act requires the Commission to, among other things, prepare a statement setting out the principles to be applied by decision makers in exercising the Commission’s powers to impose financial penalties, and to have regard to the statement when exercising a power under this section. The Commission shall review this statement of principles from time to time and revise it when necessary to do so.
1 Question 16 allowed for respondents to make general comments and suggestions on Section 1 of the SoPfDFP. Comments and feedback received in response to Question 16 have been incorporated into the relevant sub-sections, where appropriate.
2The Indicative Sanctions Guidance sets out a framework of matters that are relevant to decisions as to whether the Commission should exercise its powers of regulatory enforcement, and if so, what the appropriate sanction might be.
We removed paragraph 1.5 from the proposed version of the Statement of Principles for Determining Financial Penalties (SoPfDFP) as stated in the consultation document, on the basis that the “key considerations” are captured in subsequent sections of the amended version of the SoPfDFP. We sought views on the proposed removal of this paragraph.
There was no disagreement, and no substantive comments were made.
The paragraph is deleted from the amended version of the SoPfDFP.
1 Question 16 allowed for respondents to make general comments and suggestions on Section 1 of the SoPfDFP. Comments and feedback received in response to Question 16 have been incorporated into the relevant sub-sections, where appropriate.
In the consultation document it was proposed that the wording of this section of the existing version of the Statement of Principles for Determining Financial Penalties (SoPfDFP) be amended to better reflect the principles relating to the purpose of imposing a financial penalty. Specifically, that financial penalties should take into account, and be proportionate to, the financial resources of the licensee; and should be proportionate to the nature of the breach and the harm caused so that non-compliance is more costly than compliance. We sought views on:
the amended wording of paragraph 2.1 in the proposed version as stated in the consultation document, in particular, the changes to the list of primary aims of financial penalties as recorded in the amended paragraph
the proposed principles which underpin the detailed proposed amendments to the SoPfDFP as set out in the proposed version at paragraph 2.2.
Questions 17 and 18, as detailed in Annex 2, related to this section.
Most respondents disagreed with the proposed wording of paragraph 2.1 and suggested that the wording should reflect the Act more closely, and in particular section 22.
The majority of respondents agreed with the proposed principles as set out in the amended paragraph 2.2. In respect of those who disagreed, the comments showed the disagreement was in relation to the proposed wording rather than the principles themselves. Some alternative wording was proposed, including the suggestion by one respondent to include provision for “potential harm” to ensure that the language does not unjustly imply direct harm where it may not exist.
One respondent suggested that the proposed wording of paragraph 2.2 should be amended to include a reference to the impact of financial penalties on Society Lotteries.
We have considered the comments raised by stakeholders in the consultation responses and have made the following changes to the wording of paragraph 2.1 to ensure consistency with the Act:
We have added the words “as well as potential harm” after “the harm” in paragraph 2.2 of the amended version of the SoPfDFP in line with the feedback received.
We have considered the suggestion regarding the inclusion of a reference to the impact of financial penalties on Society Lotteries and have not made any amendments to the proposed wording in this regard as we are content that this is adequately addressed under the next sections of the amended SoPfDFP including “Criteria for the imposition of a financial penalty” and “Step 2(b) Determining the starting point of the penal element of the fine”. No changes to the proposed version of paragraph 2.2 are therefore required.
This requirement will come into force on 10 October 2025.
Paragraphs 2.1 and 2.2 of the amended SoPfDFP
The purpose of imposing a financial penalty
2.1. When exercising its regulatory powers, the Commission has a duty to pursue the licensing objectives as set out at section 1 of the Act. The Commission regulates gambling in the interest of consumers and the wider public. In exercising our regulatory powers this may have a punitive effect on the licensee. The primary aims of financial penalties will be to:
2.2. In order to change behaviour, deter licence condition breaches and to promote a culture of compliance across the licensees’ business (including groups) and the wider industry, the level of the penalty should be set at a level where non-compliance is more costly than compliance and at a level which takes account of the financial resources of the licensee. In addition, it should also be proportionate to the nature of the breach of licence condition and, where relevant, the harm as well as potential harm caused.
The wording of paragraph 2.2 of the existing Statement of Principles for Determining Financial Penalties (SoPfDFP) remained unchanged in the proposed version as stated in the consultation document, except that this paragraph has been renumbered to 2.3.
In the consultation document it was proposed that the wording of paragraph 2.3 of the existing version of the SoPfDFP (renumbered to paragraph 2.4 in the proposed version) be amended to clearly and transparently set out a range of factors which may be relevant when the Gambling Commission is considering whether a financial penalty would be an appropriate and proportionate outcome. We also sought views on the proposed amended list of factors the Commission may have regard to as set out in paragraph 2.4 of the proposed version.
The wording of paragraph 2.4 of the existing Statement of Principles for Determining Financial Penalties (SoPfDFP) remained unchanged in the proposed version, except that this paragraph has been renumbered to 2.5. We sought views on the extent to which the list of proposed circumstances in which a financial penalty would not normally be imposed is adequate.
Most respondents agreed with the list of factors as set out in paragraph 2.4 of the proposed version of the SoPfDFP (previously paragraph 2.3 of the existing SoPfDFP). In respect of those who disagreed, the comments showed that the disagreement was largely in relation to the proposed wording rather than the factors themselves. We have summarised the feedback provided by the respondents as follows:
In respect of the wording of factor “a”, some respondents suggested that we include the phrase “and whether the licensee has previously been subject to regulatory enforcement action”.
In respect of the wording of factor “b”, some respondents suggested that this be re-phrased to better align with the Commission’s practice around public statements. Other respondents suggested that this factor be removed from the list on the basis that all cases are different and that learning from previous cases involving other licencees is not always possible.
In respect of the wording of factor “h”, some respondents suggested that we include the phrase “and the extend of that impact”.
In respect of the wording of factor “i”, some respondents suggested that we include the phrases “where it could reasonably be concluded that the breach” and “might have damaged confidence in the gambling industry”.
Most respondents indicated disagreement with the list of proposed circumstances in which a financial penalty would not normally be imposed as set out in paragraph 2.5 of the proposed version (previously paragraph 2.4 of the existing version of the SoPfDFP). We have summarised the feedback provided by the respondents as follows.
Some of the respondents suggested the inclusion of Society Lotteries; registered charities (or where the beneficiaries are good causes) and PL holders as an additional circumstance where a financial penalty would not normally be imposed, on the basis that imposing a financial penalty on such organisations or categories of people would result in funds being diverted away from the beneficiary or ‘good cause’ or have a disproportionate financial effect.
Most of the feedback received from those respondents who indicated disagreement with question 20 suggested that more clarity was required in respect of when the Gambling Commission would not normally impose a financial penalty. Some respondents suggested that it would be helpful for the Commission to provide examples for each of the listed criteria in paragraph 2.5 of the proposed version. Some respondents also requested clarification on the meaning of “minor in nature” and in what circumstances the Commission would consider “other regulatory action [to be] more appropriate”.
In respect of paragraph 2.4 of the amended version of the SoPfDFP, we have considered the comments raised by stakeholders in the consultation responses and have made changes to the wording of factors “a”; “b”; “h” and “i” in line with the suggestions received.
We have considered the comments raised by stakeholders in the consultation responses and have made the following changes to the wording of paragraph 2.5 of the amended SoPfDFP (previously 2.4 in the existing version).
In response to the feedback received in the consultation, we have changed the word “minor” in paragraph 2.5a) of the amended version of the SoPfDFP to “trivial” and we have added the phrase “in that it does not pose a risk to the Licensing objectives, the interest of consumers and the wider public”. Although these are not substantive changes to the proposed version, it is the Commission’s view that the amended version is sufficiently clear.
We have not included society lotteries, charities or personal licence holders as suggested by some of the respondents as we do not think it is appropriate to do so. The Act affords the Commission the power to consider imposing a financial penalty if we consider it the most appropriate sanction available regardless of the type of licence holder.
This requirement will come into force on 10 October 2025.
Paragraphs 2.3 to 2.5 of the amended SoPfDFP
Criteria for the imposition of a financial penalty
2.3. By virtue of section 121(7) of the Act, in considering the imposition of a penalty, the Commission must have regard to:
2.4. The Commission may also have regard to such matters as it considers relevant including (but not limited to):
The scope of this document
2.5. A financial penalty will not normally be used in the following circumstances (the list is not exhaustive):
This section of the Statement of Principles for Determining Financial Penalties (SoPfDFP) included proposals which are distinctly different from the existing SoPfDFP and represent the substantive changes to the way in which the Gambling Commission proposes to determine financial penalties.
These proposals:
We sought views on:
We also invited any other comments on the proposed process as set out in the consultation document.
Questions 20 to 24, as detailed in Annex 2, relate to this document.
Generally, there was broad agreement with the proposed process from the respondents. A few respondents indicated disagreement with the overall proposal to move to a clearly defined 6 step approach but the accompanying comments were about the content or wording of the steps rather than the structure and sequencing of the process. The feedback received in relation to each of the steps is addressed in this response.
Broadly, no major changes to the proposed process as set out in the consultation document have been made except that an additional step, Step 7, has been added. Step 7 has been added to the process to provide for the consideration of whether an adjustment should be made to ensure the sum of the financial penalty as calculated at Step 6, is proportionate.
The reason for this addition is explained under the section entitled “Step 2(b) Determining the starting point of the penal element of the fine”.
We have also made minor changes to the wording of some of the steps in order to ensure clarity but these are not substantive changes to the proposed process or its application.
This requirement will come into force on 10 October 2025.
Paragraphs 2.6 to 2.8 of the amended SoPfDFP
Criteria for determining the quantum of a financial penalty
2.6. Although the Act does not set a limit for a financial penalty, a penalty will be set at a level which the Commission considers to be proportionate to the breach.
2.7. The total amount payable by a licensee will normally be made up of two elements:
2.8. The Commission will ordinarily approach the quantum of a financial penalty in the following way:
1Gross Gambling Yield (GGY) is the total amounts paid to the licensee by way of stakes, plus the total of any amounts that will otherwise accrue to the licensee, minus the total amounts deducted in respect of the provision of prizes or winnings. Further details of how GGY is calculated are available on the Commission’s website.
2This is the financial detriment suffered by consumers and/or the financial gain to the licensee derived directly from the breach.
3An assessment will only be made when the figures can be calculated.
We proposed to make 2 changes to the existing approach to quantifying disgorgement. Firstly, in circumstances where an accurate divestment amount cannot be calculated from information provided by the licensee, we proposed that no sum will be calculated under Step 1. Instead, the detriment to consumers and/or gain to the licensee will be factored into the penal element of the penalty under Step 2 (considering seriousness of the breach). Secondly, where it is possible to calculate an accurate divestment amount, this will be calculated under Step 1 and then the Gambling Commission will add the disgorgement element to the penal element at Step 6 to reach the total amount of the fine.
We sought views on:
We also invited any other comments in relation to this section.
Questions 25 to 28, as detailed in Annex 2, related to this document.
The respondents mostly agreed with, neither agreed nor disagreed, or did not answer the proposal to make disgorgement a separate step in the process. However, the responses indicated that there was some disagreement with aspects of the disgorgement calculation method itself and the impact on the other steps in the process. We have summarised the feedback received from providers as follows:
Some respondents requested clarity around situations where it may not be straight forward to determine any financial gain on the part of the offending licensee and some respondents requested clarification regarding how the Commission would assess “financial detriment suffered by consumers”.
We have considered the comments raised by stakeholders in the consultation responses and have made the following changes to the wording of paragraphs 2.9 and 2.10 of the amended Statement of Principles for Determining Financial Penalties (SoPfDFP). We understand that on many occasions it will not be possible to accurately identify a figure for disgorgement. In these circumstances there would not be a disgorgement element to the financial penalty.
To make this clearer we have reworded paragraphs 2.9 and 2.10.
The proposed version of the SoPfDFP paragraph 2.9 read:
“Where the Commission can accurately identify (based on information provided by the Licensee) the financial detriment suffered by consumers and/or the financial gain to the Licensee derived directly from the breach, this sum will constitute the disgorgement element. At Step 6, the disgorgement element will be added to the penal element of the financial penalty calculated at Steps 2 to 5.”
It now reads:
“Where the Commission can accurately identify the financial detriment suffered by consumers and/or the financial gain to the licensee derived directly from the breach, this sum will constitute the disgorgement element. At Step 5, the disgorgement element will be combined with the penal element of the financial penalty calculated at Steps 2 to 5.
The proposed version of paragraph 2.10 read:
“Where the disgorgement cannot be accurately calculated, detriment to consumers/financial gain to the Licensee will not result in a disgorgement element under Step 1 although these factors may be relevant in assessing seriousness under Step 2.”
It now reads:
“Where the disgorgement cannot be reasonably accurately identified then detriment to consumers and/or financial gain to the licensee will not result in a disgorgement element under Step 1. However, the number of consumers suffering detriment and/or the amount of actual, potential or intended financial gain from the breach, either directly or indirectly may be factors relevant in assessing seriousness under Step 2.”
This requirement will come into force on 10 October 2025.
Paragraphs 2.9 and 2.10 of the amended SoPfDFP
Step 1: Detriment to consumers and/or financial gain to the licensee
2.9. Where the Commission can accurately identify the financial detriment suffered by consumers and/or the financial gain to the licensee derived directly from the breach, this sum will constitute the disgorgement element1. At Step 5, the disgorgement element will be combined with the penal element of the financial penalty calculated at Steps 2-5.
2.10. Where the disgorgement cannot be reasonably accurately identified then detriment to consumers and/or financial gain to the licensee will not result in a disgorgement element under Step 1. However, the number of consumers suffering detriment and/or the amount of actual, potential or intended financial gain from the breach, either directly or indirectly may be factors relevant in assessing seriousness under Step 2.
1This sum is net of tax.
Under the existing process the Gambling Commission considers a number of factors in determining the seriousness of the breach. Some of these factors are considered at the same time and in concert with factors more associated with mitigating or aggravating factors. Therefore, we proposed to separate Step 2 into 2 distinct stages to avoid the risk of double-counting or duplication, as follows:
Under Step 2(a) we proposed setting out a non-exhaustive but detailed list of factors which the Commission may have regard to when assessing seriousness, separate and distinct from the factors which may be considered mitigating or aggravating factors (to be considered under Steps 3 and 4). We also proposed categorising the seriousness of the breach using a 5-point scale.
We sought views on:
We also invited general comments.
Questions 29 to 32, as detailed in Annex 2, related to this document.
The responses to questions 29 to 32 were very mixed.
In relation to question 29, most respondents disagreed with the list of factors proposed under paragraph 2.11 on the basis, generally, that there was a lack of clarity in the way that they were drafted. Many respondents provided suggested alternative wording for which the Commission is grateful.
In relation to questions 30 and 31, most respondents who responded either agreed or neither agreed nor disagreed with the proposed 5-point scale for the categorisation of the seriousness of the breach. In respect of those who disagreed, the accompanying comments suggested that the respondents agreed with the principle of a 5-point scale, but their disagreement was largely in relation to the proposed wording of the factors in the table provided at paragraph 2.14 rather than the factors themselves, and with the proposed methodology for determining the level of seriousness of the breach.
We have considered the comments raised by stakeholders in the consultation responses and have made the following changes to the wording of paragraphs 2.11, 2.12, 2.13 and 2.14 of the amended Statement of Principles for Determining Financial Penalties (SoPfDFP):
At paragraph 2.11 we included the phrase “(this is not an exhaustive list)” to clarify that the list of circumstances for determining seriousness of the breach is not intended to be finite. In respect of the changes made to the list of circumstances at paragraph 2.11, the following changes have been made:
We have swapped the order of paragraphs 2.12 and 2.13 of the proposed version of the SoPfDFP in the amended version to improve the clarity of this section.
At paragraph 2.12 of the amended version (previously 2.13 of the proposed version) we have amended the wording to improve the clarity of the paragraph in line with the feedback received.
In respect of the table of factors listed under paragraph 2.14, we have made numerous changes to improve the clarity of the wording in line with the feedback received.
This requirement will come into force on 10 October 2025.
Paragraphs 2.11 to 2.14 of the amended SoPfDFP
Step 2: The seriousness of the breach to determine the starting point of the penal element
Step 2(a) Determining the seriousness of the breach
2.11.The Commission will first make an assessment to determine the level of seriousness of the breach(es) taking account of all of the circumstances to the case, which may include consideration of (this is not an exhaustive list):
2.12. The Commission will exercise its judgment to determine the level of seriousness, taking into account all the circumstances of the case and considering all factors it considers to be relevant.
2.13. Based on the Commission’s assessment of the relevant factors a level of seriousness will be assigned. The level of seriousness ranges from Level 1 (least serious) to Level 5 (most serious). Level 5 is reserved for the most serious cases.
2.14. The table below describes the factors the Commission may consider when assessing the level of seriousness. It is not intended to be a prescriptive list, and it is ultimately a matter of judgment for the Commission to consider by reference to the circumstances of a case. It is not necessary for all factors listed to be present in order to determine a breach at a particular level. In some circumstances a minimal number of factors may be sufficient to determine that a breach falls within a particular category of seriousness.
| Levels of seriousness 1 to 5 | Factor(s) |
|---|---|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Level 4 |
|
| Level 5 |
|
Under Step 2(b) we proposed using the level of seriousness of the breach determined at Step 2(a) to inform the starting point of the penal element of the fine. In summary, we proposed that:
We sought views on:
We also invited general comments on this section.
Questions 33 to 40, as detailed in Annex 2, related to this document.
Overall, approximately half of respondents answered questions 33 to 40 and most of those who answered indicated varying levels of disagreement with the proposals but provided helpful feedback which is summarised as follows.
Some respondents disagreed with the proposed method of calculation for instances where the breach period was a ‘one off’ or lasted less than 3 months and suggested that the GGY calculation should be based on the actual period of breach, where known, rather than on the preceding quarter as proposed. Several respondents also disagreed with the proposal for using GGY generated during the period of the breach (rounded to the nearest month) and suggested that using GGY for the actual period of the breach would be more appropriate.
Some respondents disagreed with the proposed wording regarding the approach to instances where the breach period is sustained and suggested that the amended Statement of Principles for Determining Financial Penalties (SoPfDFP) should set out the approach to be taken in these cases more clearly.
Most respondents agreed with the proposed approach to determine the appropriate percentage range by reference to the level of seriousness of the breach.
Most of the feedback received in relation to the proposed percentage ranges suggested that there was concern amongst some of the respondents regarding the exceptional circumstances in which the Commission might use the higher limit of 15 percent. Several respondents suggested that the approach to be followed in these situations should be made clearer.
Several respondents indicated that using GGY as the starting point for determining the level of the financial penalty for society lotteries was not appropriate and proposed that this category of licence holder be added to the examples of instances where it would not be appropriate to use GGY as the starting point for determining the penal element of the financial penalty.
Some respondents also suggested that breaches in relation to marketing should also be added to the list of examples of instances where it would not be appropriate for the starting point to be based on a percentage of GGY.
We have considered the feedback raised by stakeholders in the consultation responses and have made the following changes to the wording of paragraphs 2.15 to 2.21 of the amended SoPfDFP:
At paragraph 2.15 of the amended SoPfDFP we have removed the last sentence entirely such that the approach that the Commission will adopt in determining the starting point figure, in most cases, is by reference to a percentage of GGY derived during the period of the breach.
We have conflated paragraphs 2.17 and 2.18 in the amended SoPfDFP and made the following amendments:
At paragraph 2.19 of the amended SoPfDFP we have slightly amended the wording to make it clearer the Commission will apply the appropriate percentage of GGY according to the level of seriousness (as determined at stage 2a).
In the table at paragraph 2.19 we have also slightly amended the wording in parentheses for the level 5 parameter to make it clearer that, in exceptional circumstances, the Commission retains the discretion to increase the upper limit higher than 15 percent and, where this is done, will provide rationale for doing so.
At paragraph 2.20 we have added “cases relating to society lotteries or external lotteries” as a fifth example of circumstances where it may not be appropriate for the starting point to be based on a percentage of GGY. The list at this paragraph is not exhaustive and there will be other examples which will fall into this category which the Commission will consider. For this reason, we have not added breaches in relation to marketing.
This requirement will come into force on 10 October 2025.
Paragraphs 2.15 to 2.21 of the amended SoPfDFP
Step 2(b) Determining the starting point of the penal element of the fine
2.15. The ‘level of seriousness’ assessed under Step 2(a) is used to determine the appropriate starting point for the penal element. In most cases, the Commission will determine the starting point figure by reference to a percentage of the licensee’s Gross Gambling Yield (GGY)1 derived during the period of the breach.
2.16. The GGY will be ascertained from the licensee’s regulatory returns for its licensed activities in the UK. It will not include GGY accrued from activities which do not fall to be licensed by the Commission or from activities which fall outside the licence that has been breached.
2.17. The period of the breach will dictate the number of months of GGY that is inputted into the calculation for the starting point of the penal sum. Where there is a distinct period of breach, the Commission will determine the level of seriousness by taking a singular or holistic review of the breach(es) present during the distinct period. Where there are multiple breach periods over varying dates, the Commission will consider each distinct breach period in isolation and determine the level of seriousness of the breach(es) for each specific breach period by taking a singular or holistic review of the breach(es) present during the distinct period. The level of seriousness for each identified period would then be added together and aggregated to calculate the overall level of seriousness covering the whole period.
2.18. The Commission will, where possible, set out within its preliminary findings what it considers to be the breach period or breach periods.
2.19. Having determined the GGY for the relevant period, the Commission will then decide on the percentage of that GGY which will form the starting point of the penal element of the fine. The appropriate percentage range will be determined by the ‘level of seriousness’ assigned at Step 2(a). The Commission will use its judgement on a case-by-case basis to decide upon the appropriate percentage within that range.
| Level of seriousness | Percentage of GGY over relevant period |
|---|---|
| Level 1 | 0% to 0.99% |
| Level 2 | 1% to 2.99% |
| Level 3 | 3% to 4.99% |
| Level 4 | 5% to 9.99% |
| Level 5 | 10% to 15% (in exceptional circumstances the Commission retains the discretion to increase the upper limit higher and should it do so will provide rationale for this) |
2.20. The Commission recognises that in some circumstances it will not be appropriate for the starting point to be based on a percentage of GGY. Examples may include, but are not limited to:
2.20.1. the licensee’s business model is not reliant on GGY (such as white label operators)
2.20.2. in cases relating to Personal Functional and Management Licence (PFL/PML) holders.
2.20.3. in cases where there may be a specific single issue relating to a part of a licensee’s business (such as failings at a single premises within an estate of licensed premises)
2.20.4. where there is no potential of GGY being generated from the breach such as failing to report key events or
2.20.5. in cases relating to society lotteries or external lottery managers.
1Gross Gambling Yield (GGY) is the total amounts paid to the licensee by way of stakes, plus the total of any amounts that will otherwise accrue to the licensee, minus the total amounts deducted in respect of the provision of prizes or winnings. Further details of how GGY is calculated are available on the Commission’s website
Under Step 3 we proposed that the consideration of mitigating and aggravating factors be a distinct step, separate from the consideration of those factors associated with determining seriousness of the breach. The proposal included the separation of the Gambling Commission’s consideration of how the licensee responds to the breach in terms of their own actions and how they engage with the Commission during the investigation of the breach, from the seriousness of the breach itself.
We sought views on:
We also asked for general comments.
Questions 41 to 43, as detailed in Annex 2, related to this document.
Of the respondents who responded to the consultation, none disagreed with the proposed approach to provide clarity and transparency on the factors or with the proposal to consider aggravating and mitigating factors as a separate step to the consideration of the seriousness of the breach. The Commission is grateful for the detailed feedback from respondents regarding the aggravating and mitigating factors themselves and the way they were worded in the proposed version of the Statement of Principles for Determining Financial Penalties (SoPfDFP) set out in the consultation document.
We have considered the comments raised by stakeholders in the consultation responses and have not made any substantial changes to the wording of paragraphs 2.22, 2.23, 2.24 and 2.25 of the amended SoPfDFP. However, we have added an additional factor at paragraph 2.23.
This requirement will come into force on 10 October 2025.
Paragraphs 2.22 and 2.25 of the amended SoPfDFP
Step 3: Mitigating and aggravating factors
2.22. The Commission may increase or decrease the sum calculated at Step 2, to take into account factors which aggravate or mitigate the breach.
2.23. The following list of factors may have the effect of aggravating the breach (this list is not exhaustive):
2.23.1. whether there has been a repeated breach or failure by the licensee or other licensees within the same group of companies
2.23.2. whether the licensee had previously undertaken to carry out a particular course of action but did not
2.23.3. whether the breach arose in circumstances that were similar to previous cases the Commission has dealt with which resulted in the publication of guidance such as ‘Public statements’ or guidance documents alerting the wider industry.
2.23.4. the licensee’s regulatory history (such as previous sanctions imposed, whether the licensee has been through the special measures process defined within the Licensing, compliance and enforcement policy (LCE)
2.23.5. the failure to take action at pace to address the failings after becoming aware of the commencement of the Commission’s investigation
2.23.6. the deliberate targeting of a vulnerable group of consumers
2.23.7. any attempt to conceal relevant information or provide misleading information to the Commission’s investigation team
2.23.8. where illegal markets activity has been identified (such as supply chain failures by B2B or B2C operators) 2.23.9. any other factor deemed relevant and not already considered at Step 2.
2.24. The following list of factors may have the effect of mitigating the breach (the list is not exhaustive):
2.24.1. appropriate action was taken to resolve the breach shortly after it was identified, and it was resolved in a timely manner
2.24.2. the extent of steps taken to address or remedy the breach and ensure future similar failings were prevented
2.24.3. the licensee’s early and voluntary reporting of the breaches to the Commission
2.24.4. timeliness and degree of co-operation the licensee showed with any investigation undertaken by the Commission.
2.24.5. any other factor deemed relevant and not already considered at Step 2.
2.25. Having considered any aggravating and mitigating factors, the Commission will consider whether it is appropriate to increase or decrease the starting point for the penal element calculated at the end of Step 2 by an appropriate sum.
In line with the principle that non-compliance should be more costly than compliance, and that our enforcement should deliver effective deterrence against future non-compliance, we proposed that any adjustment to the level of the fine for deterrence be considered separately to the process for determining the seriousness of the breach.
Under the existing process for determining financial penalties, adjustment for deterrence was considered at the same time as the other factors. In the consultation document we proposed to only include consideration of any adjustment for deterrence as a distinct step separate from the assessment of seriousness of the breach or the consideration of mitigating and aggravating factors, and any discount for early resolution. We sought views on:
We also invited any other comments.
Questions 44 to 46, as detailed in Annex 2, related to this document.
Most of the respondents who responded to this section disagreed with the inclusion of a step for deterrence (rather than the sequencing), with few agreeing.
It was suggested that the penalty itself is a deterrent, and the inclusion of a separate step would constitute double-counting and be disproportionate. One respondent suggested that the deterrence adjustment should be capped at a maximum of 10 percent.
It was also suggested that if the Gambling Commission intends to adjust for deterrence, it is important that we clearly set out the basis upon which we might reach the view that the amount calculated at Steps 1 to 3 might not be an adequate deterrent and should therefore be adjusted.
We have considered the comments raised by stakeholders in the consultation responses and the Commission is grateful for the feedback received. Our position remains as stated in the consultation document specifically in relation to the separate step will provide transparency and should reduce the risk or perceived risk of duplication of this as a factor considered. We did not propose a cap on the deterrence adjustment in the consultation and do not consider it is appropriate to add in now. We have therefore made no substantial changes to the wording of paragraph 2.26 of the amended Statement of Principles for Determining Financial Penalties (SoPfDFP).
This requirement will come into force on 10 October 2025.
Paragraph 2.26 of the amended SoPfDFP
Step 4: Adjustment for deterrence
2.26. Having regard to the principle that non-compliance should be more costly than compliance, and that enforcement should continue to deliver strong deterrence against future non-compliance of the licensee or others, if the Commission considers the figure arrived at after Step 3 is insufficient to deter the licensee, or the wider industry, from committing further or similar breaches the Commission may increase the penal element. The Commission will exercise its judgment as to what additional sum for deterrence is required on the facts of an individual case. The uplift will be applied to the figure determined after Step 3.
Discount for early resolution is part of the existing process for determining financial penalties, but it is considered at the same time as other factors. In the consultation document we proposed to include consideration of a discount for early resolution as a distinct step separate from the process of assessing the seriousness of the breach, and consideration of aggravating and mitigating factors, and any adjustment for deterrence.
We proposed that the level of discount to the penal element that could be applied to account for early resolution should range between 5 percent and 30 percent, in line with other regulators and criminal procedures.
We sought views on:
We also invited any other comments.
Questions 47 to 51, as detailed in Annex 2, related to this document.
Of the respondents who responded to the consultation, the majority of respondents agreed with the sequencing of this step and its inclusion. Most of the respondents suggested that clarification regarding what would constitute “immediately after” the issuing of the preliminary findings would be helpful. The Gambling Commission is grateful for the feedback received from respondents.
We have considered the comments raised by stakeholders in the consultation responses and have not made any substantial changes to the wording of paragraphs 2.27, 2.28 and 2.29 of the amended Statement of Principles for Determining Financial Penalties (SoPfDFP), except that we have made the following minor amendments:
This requirement will come into force on 10 October 2025.
Paragraphs 2.27 to 2.29 of the amended SoPfDFP
Step 5: Discount for early resolution
2.27. The Commission may apply a discount to the penal element if it considers there have been early and voluntary admissions and/or disclosures leading to an early resolution of the Commission’s investigation/enquiries.
2.28. If admissions and/or disclosure occur prior to, or immediately after the issuing of the Commission’s preliminary findings (within the 28-day representation period), or at an appropriately early stage in enquiries made outside of a review then a discount may be applied for early resolution.
2.29. The level of discount will range between 5% and 30% and will be assessed on a case-by-case basis. The key factors for determining the appropriate level of discount will be based on the level of insight, cooperation and speed of resolution which, if present, may influence a higher level of discount. The discount will be applied to the figure determined after Step 4.
Under Step 6 we proposed to review and, if necessary, make adjustments to the financial penalty to ensure that the total sum is affordable and to safeguard against serious financial hardship on behalf of the licensee.
The proposed approach to considering affordability includes taking into account the financial resources of any parent or group company or ultimate beneficial owner of the licensed entity. In circumstances where the affordability review results in a reduction of the final penalty amount, we propose to publish the original penalty amount as well as the adjusted amount so that there is transparency for stakeholders in terms of the nature and seriousness of the breach, our process in determining the financial penalty, and in order to maintain the deterrence principle.
We sought views on:
We also invited any other comments.
Questions 52 to 56, as detailed in Annex 2, related to this document.
Of the respondents who responded to the consultation, the majority of respondents agreed with the proposal that the final penalty amount will be the sum of the amount calculated at Step 1 (where it has been possible to identify) and that at the end of Step 5. Most respondents also agreed with the proposal to take affordability into account, and to mitigate against financial hardship.
Most respondents disagreed with the proposal to take into account the financial resources of any parent or group or ultimate beneficial owner, in addition to the licensee’s own resources, when considering affordability. The feedback received suggested that this may risk penalising entities that are not involved in the gambling industry or who are unaware of their related entities breaches.
There was also some disagreement regarding whether the Commission should publish the level of financial penalty prior to any reduction applied at Step 6 and it was argued that it would not be necessary to do so.
We have considered the comments raised by stakeholders in the consultation responses and have not made any substantial changes to the wording of paragraphs 2.30, 2.31, 2.32 and 2.33 of the amended Statement of Principles for Determining Financial Penalties (SoPfDFP). As to do so, in relation to paragraph 2.31 would have deviated from the Commission’s existing policy as detailed at paragraph 5.29 of the Licensing, compliance and enforcement policy (LCE) which had not been proposed.
In line with our standard procedure for the publication of sanctions licensees are provided with the wording in advance of publication on the register and are able to provide representations. On that basis we have decided not to remove that we will set out in the publication the financial penalty we would have imposed prior to any reduction on affordability grounds.
This requirement will come into force on 10 October 2025.
Paragraphs 2.30 to 2.33 of the amended SoPfDFP
Step 6 Affordability
2.30. The total amount to be paid by the licensee will be either the sum of the figures determined at Step 1 (if calculated) and Step 5, or Step 5 alone if no figure is calculated at Step 1.
2.31. It is recognised that the impact of financial penalties on licensees may differ depending on the nature of the licensee. Accordingly, the Commission may consider a reduction on affordability grounds if the total penalty is likely to cause significant financial hardship such as to endanger the solvency of the licensee or its ability to continue trading.
2.32. The Commission may request financial information regarding the financial resources available to a licensee, including but not limited to its own resources and those of any parent or group company or ultimate beneficial owner as set out at paragraph 5.29 of LCE. In the absence of sufficient information to the contrary, the Commission will conclude that the licensee has the resources to pay such financial penalty as is appropriate in the circumstances of the case.
2.33. In circumstances where the total has been reduced at this step, the Commission will still set out the financial penalty it would have imposed (prior to any reduction on affordability grounds) in its sanctions register and any other publications.
Step 7 was not included in the proposed version of the Statement of Principles for Determining Financial Penalties (SoPfDFP) or provided for in the consultation document.
There were numerous instances in the feedback provided by the respondents throughout the responses to the consultation document where the need for proportionality was raised.
We have considered the comments raised by stakeholders in the consultation responses and have included an additional step, Step 7, in the amended version of the SoPfDFP. This step has been included to allow for the Gambling Commission to consider whether the sum of the financial penalty, arrived at after Step 6, is proportionate in all the circumstances.
This requirement will come into force on 10 October 2025.
Paragraph 2.34 of the amended SoPfDFP
Step 7 - Proportionality
2.34. As a final step, the Commission will consider whether the sum which is proposed as a financial penalty as a result of Step 6 is proportionate in all the circumstances.
These sections largely remained unchanged in the proposed version of the Statement of Principles for Determining Financial Penalties (SoPfDFP) as set out in the consultation document, except that we proposed the inclusion of an additional section on payment plans.
We sought views on:
We also invited any other comments.
Questions 57 and 58, as detailed in Annex 2, related to these sections.
The majority of respondents agreed with inclusion of these sections.
One respondent suggested that the timeframe for licensees to make representations (normally 14 days), should be extended to 28 days on the basis that this would be more feasible for smaller companies.
Most respondents disagreed with the proposal concerning payment plans. It was submitted that the proposal was too rigid, and that payment plans should be considered “where appropriate” rather than only being considered in exceptional circumstances.
One respondent commented that the list of principles concerning payments in lieu of financial penalties was inconsistent, and that it was not clear whether the responsibilities listed related to the Commission or the licensee.
The amended version of the SoPfDFP includes these sections as proposed save except that minor changes have been made to the wording and numbering of the paragraphs.
We do not agree the time frame for representations should be extended to 28 days as we consider the proposed wording, “The Commission will normally give licensees 14 days to make representations”, allows for some flexibility should the circumstances of the case require it.
We consider the acceptance of payment plans will only be done in exceptional circumstances and therefore consider changing to “where appropriate” would not accurately reflect the Commission’s approach. However, we have amended the wording the clarify what those exceptional circumstances may be.
We note the comment in relation to payments in lieu of financial penalties, in due course we will need to consider the impact of a statutory levy on the destination of payment in lieu of financial penalties and therefore not changes have been made to this section.
This requirement will come into force on 10 October 2025.
Paragraphs 2.35 to 2.39 of the amended SoPfDFP
Procedural matters
2.35. Section 121 imposes a number of procedural steps which must be taken before the Commission can impose a financial penalty. Before imposing a requirement on a licensee to pay a penalty under this section the Commission must notify a licensee:
2.35.1. - that the Commission proposes to require it to pay a penalty
2.35.2. - of the amount of the proposed penalty
2.35.3. - of the Commission's reasons
2.35.4. - of a period within which the licensee may make representations to the Commission.
2.36. The Commission will normally give licensees 14 days to make representations, and these representations will be considered prior to a final decision being made.
Payment plans
2.37. The Commission will only agree to a payment plan in exceptional circumstances, notably where affordability concerns are so serious that the size of the financial penalty if paid immediately would have a significant impact on the viability of the licensee, and in circumstances where such an arrangement is necessary and proportionate.
Time limits
2.38. By virtue of section 121(3) of the Act, the Commission may not give a notice in respect of the breach of a condition after the end of the period of two years beginning with the day on which the breach occurred or began to occur, or, if later, the day on which the breach came to the knowledge of the Commission.
Payments in lieu of financial penalties
2.39. Payments made in lieu of a financial penalty as part of a regulatory settlement do not need to be paid into the Consolidated Fund in the same way that financial penalties imposed under section 121 of the Act do. As a result, there is more flexibility about how such monies may be used. However, the Commission will apply the following principles in approaching such agreed payments:
2.39.1. The Commission reserves the power to approve the destination of monies paid as part of a regulatory settlement
2.39.2. Licensees must not generate positive publicity from the regulatory settlement
2.39.3. Payments need to be demonstrably over and above 'normal' Research, Education and Treatment (RET) contributions, or any levy amounts due under Section 123 of the Act
2.39.4. Where practicable, the operator should return money to any identified victims
2.39.5. If victims cannot be identified or there are no victims, the monies should be given to charity for socially responsible purposes
2.39.6. Socially responsible purposes would include purposes which address gambling related harm or in some way promotes one or more of the licensing objectives
2.39.7. Where payments are made with the aim of addressing gambling-related harm, the presumption is that the money would be paid to GambleAware to be used for specific agreed purposes that accelerate their commissioning plans
2.39.8. Licensees should have no interest in organisations who will receive divested funds
2.39.9. There should be meaningful evaluation of the effectiveness of projects or research funded by specific regulatory settlements
2.39.10. Research findings must be made public to help raise standards
2.39.11. Clear timeframes should be set for payment of monies and for delivery of work paid for from those monies.
The Statement of Principles for Determining Financial Penalties (SoPfDFP) is supported by the Indicative sanctions guidance (“ISG”), specifically the section on “Financial Penalties” from paragraph 2.18 to 2.20. In order to ensure consistency across these 2 documents we proposed amendments to paragraphs 2.18 to 2.20 of the current version of the ISG to reflect the changes made to the SoPfDFP.
The proposed amendments to the ISG included:
We sought views on whether the proposed amendments to the ISG adequately reflected the proposed amended version of the SoPfDFP.
Question 60, as detailed in Annex 2, related to this document.
In relation to the proposed change to paragraph 2.18 of the ISG, most respondents disagreed with the proposed deletion of point 3 in paragraph 2.18 on the basis that the proposal resulted in inconsistencies between paragraph 2.18 as proposed, section 121 of the Act, and paragraph 2.1 of the existing version of the SoPfDFP.
Some of the feedback received suggested that we retain the existing wording of paragraph 2.18 and one group of respondents suggested the following alternative wording for the introductory text of paragraph 2.18:
The amended version of the ISG includes these sections as proposed exceptsave that minor changes have been made to the wording of paragraphs 2.18 and 2.20 to mirror the changes made to the amended SoPfDFP.
This requirement will come into force on 10 October 2025.
Paragraphs 2.18 to 2.21 of the amended ISG
Financial penalties
2.18. Financial penalties can only be imposed when the Commission consider that a licence condition has been breached. A financial penalty should aim to:
2.19. By virtue of section 121(7) of the Act, in considering the imposition of a penalty, the Commission must have regard to:
2.20. The Commission may also have regard to such matters as it considers relevant including (this is not an exhaustive list):
2.21. More detailed guidance on financial penalties can be located in the Commission’s ‘Statement of Principles for Determining Financial Penalties’. Decision makers considering a financial penalty must apply the principles outlined in this document.
As the proposals in the amended Statement of Principles for Determining Financial Penalties (SoPfDFP) constitute a new approach and methodology regarding how the Gambling Commission will determine financial penalties, we gave consideration as to whether the proposals had an impact on the protected characteristics stated in the Equality Act 2010.
Our assessment was that the proposals do not present a negative impact on the protected characteristics stated in the Equality Act 2010, nor do they contribute towards unlawful discrimination, harassment or victimisation, or other conduct prohibited by the Equality Act 2010.
We sought views regarding whether any respondents had any evidence or information which might assist the Commission in considering any equalities impacts, within the meaning of section 149 of the Equality Act 2010, in the context of any of the proposals outlined in the consultation document.
Question 61, as detailed in Annex 2, related to this consideration.
We received 14 responses, and 2 respondents shared personal insights and comments which are unrelated to the question poised.
There was nothing for the Commission to action in relation to the comments received.
Annex 1 lists organisations that consented to the publication of their name when responding to the consultation. If the organisation name was not available, the name of the individual who submitted the response and consented to the publication of their name has been listed. All names of organisations or individuals have been presented as provided by the respondents that submitted the response.
Organisations and individuals representing organisations that consented to the publication of their name when responding to the consultation.
These questions were asked in the Winter 2023 consultation on proposed changes to the Statement of Principles for Determining Financial Penalties (SoPfDFP), which ran between December 2023 and March 2024.
Questions 1 to 10 were introductory questions about the respondent. They did not concern the SoPfDFP and are not recited here.
Question 11: To what extent do you agree that the wording in paragraphs 1.1 to 1.2 adequately describes the purpose of this statement of principles for determining financial penalties?
Question 12: To what extent do you agree that the wording in paragraph 1.3 adequately describes the framework of policies and procedures that the statement of principles for determining financial penalties should be read in conjunction with?
Question 13: To what extent do you agree that the wording in paragraph 1.4 adequately describes the legal framework within which the statement of principles for determining financial penalties sits?
Question 14: To what extent do you agree that the wording in paragraph 1.5 adequately describes the scope of the document?
Question 15: To what extent do you agree with the proposal to remove paragraph 1.6 – key considerations – to avoid duplication of content that appears later in the proposed document?
Question 16: Are there any other references, documents or content the Commission should consider including, or take account of, in this section of the SoPfDFP?
Question 17: To what extent do you agree with the proposed wording at paragraph 2.1 and in particular the primary aims of financial penalties?
Question 18: To what extent do you agree with the principles set out in paragraph 2.2 which underpin the detailed proposed amendments set out in this consultation?
Question 19: To what extent do you agree with the proposed list of factors the Commission may have regard to when considering the imposition of a financial penalty, as set out in paragraph 2.4?
Question 20: To what extent do you agree with the proposed circumstances in which a financial penalty would not normally be imposed, as set out in paragraph 2.5?
Question 21: To what extent do you agree with the overall proposal to move to a clearly defined six step approach?
Question 22: To what extent do you agree with the proposal set out in paragraph 2.7, to separate the calculation of the disgorgement element of the fine from the calculation of the penal element, with these added together at Step 6?
Question 23: To what extent do you agree with the steps proposed and the sequencing of these steps as set out in paragraph 2.8?
Question 24: Do you have any further comments on this section that the Commission should take into account?
Question 25: To what extent do you agree with the proposal for the Commission to attempt to identify the amount of detriment to consumers and/or financial gain to the Licensee as a direct result of the breach as the first distinct step in the process?
Question 26: To what extent do you agree with the proposal that the amount of detriment to consumers and/or financial gain to the Licensee as a direct result of the breach should constitute the “disgorgement” sum added to the penal element of the fine?
Question 27: To what extent do you agree with the proposal that if the level of detriment to consumers and/or financial gain to the Licensee cannot be calculated at Step 1, this should be considered as a relevant factor in assessing seriousness under Step 2?
Question 28: Do you have anything further to add in relation to this section, for the Commission to take into account?
Question 29: To what extent do you agree with the list of factors proposed under paragraph 2.11 that the Commission would consider in order to determine the seriousness of the breach?
Question 30: To what extent do you agree with the proposal for consideration of those factors to inform categorisation of the seriousness of the breach using a five-point scale?
Question 31: To what extent do you agree with the factors and descriptions proposed at paragraph 2.14 to determine the levels of seriousness of the breach?
Question 32: Do you have anything further to add in relation to this section, for the Commission to take into account?
Question 33: To what extent do you agree with the proposal to use GGY generated during the period of the breach (rounded to the nearest month) as the starting point for determining the level of the financial penalty?
Question 34: In the case of one-off or events lasting short time periods, to what extent do you agree with the proposal that GGY derived during the quarter preceding the end of the breach should be considered the starting point for determining the level of the financial penalty?
Question 35: In the case of multiple breaches of varying duration, to what extent do you agree with the proposal to use the aggregated breach period, taking account of different levels of seriousness within that breach period, or if this is not appropriate, for the Commission to use judgement to reach a fair and proportionate period?
Question 36: To what extent do you agree with the proposal that the starting point for the financial penalty will be calculated by adopting a percentage of GGY derived during the period of the breach, where this percentage is set by reference to the level of seriousness of the breach?
Question 37: To what extent do you agree with the percentage ranges proposed to inform the starting point of the penal element, associated with the level of seriousness of the breach?
Question 38: To what extent do you agree with the proposal for the Commission to reserve the right to impose a percentage of GGY in excess of 15% in exceptional circumstances for the most serious breaches?
Question 39: Do you have any comments on the circumstances in which it would not be appropriate to use GGY as the starting point for this calculation? Please include here any other examples we should consider adding to paragraph 2.20.
Question 40: Do you have any further comments to add on the proposals for Step 2(b) Determining the starting point of the penal element of the fine?
Question 41: To what extent do you agree with the proposed approach to provide clarity and transparency on the factors which may contribute to increasing or decreasing the sum of the financial penalty?
Question 42: To what extent do you agree that this step [Step 3: Mitigating and aggravating factors] should be separate from the process for determining the starting point for the penalty at Step 2?
Question 43: Do you have anything further to add in relation to this section, for the Commission to take into account?
Question 44: To what extent do you agree with the proposal that any adjustment for deterrence should be separate from the process for determining the starting point for the penalty at Step 2?
Question 45: To what extent do you agree with the proposal that any adjustment for deterrence should be applied after Step 3: Mitigating and aggravating factors?
Question 46: Do you have anything further to add in relation to this section, for the Commission to take into account?
Question 47: To what extent do you agree with the proposed approach to provide transparency around the application of any discount for early resolution?
Question 48: To what extent do you agree that this step should be separate from the process for determining the starting point for the penalty at Step 2?
Question 49: To what extent do you agree with the proposal that any discount for early resolution should be applied after Step 4 – Adjustment for deterrence?
Question 50: Do you have any comments on the proposed percentage range which may be applied to determine the level of the discount?
Question 51: Do you have anything further to add in relation to this section, for the Commission to take into account?
Question 52: To what extent do you agree with the proposal that the final penalty amount will be the sum of the amount calculated at Step 1 (disgorgement, where it has been possible to identify) and that at the end of Step 5?
Question 53: To what extent do you agree with the proposal to take affordability into account, and to mitigate against financial hardship?
Question 54: To what extent do you agree that when considering affordability, the Commission should take into account the financial resources of any parent or group or ultimate beneficial owner, in addition to the Licensee’s own resources?
Question 55: To what extent do you agree the Commission should also publish the level of financial penalty prior to any reduction applied at Step 6 in any publications regarding the case?
Question 56: Do you have anything further to add in relation to this section, for the Commission to take into account?
Question 57: To what extent do you agree with the inclusion of the sections on Procedural matters, Time limits and Payments in lieu of financial penalties as part of the proposed new SoPfDFP, as was the case in the existing SoPfDFP?
Question 58: To what extent do you agree the Commission should only consider payment plans in exceptional circumstances?
Question 59: If you have any other comments on the proposed new SoPfDFP that have not been addressed individually within this document, please state them here, using paragraph numbers for reference.
Question 60: To what extent do you agree that the amendments proposed to the Indicative sanctions guidance reflect the proposed Statement of principles for determining financial penalties as set out in this consultation?
Question 61: Do you have any evidence or information which might assist the Commission in considering any equalities impacts, within the meaning of section 149 of the Equality Act 2010, in the context of any proposal considered in this consultation?