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This response sets out our position in response to the consultation on amending section 2.39 in the Statement of principles for determining financial penalties.
Published: 22 July 2026
Last updated: 22 July 2026
This version was printed or saved on: 22 July 2026
Online version: https://www.gamblingcommission.gov.uk/consultation-response/amending-section-2-39-of-the-statement-of-principles-for-determining-financial-penalties-consultation-response
In February 2026 we published an 8-week consultation on amending section 2.39 of the Statement of principles for determining financial penalties (opens in new tab) to propose that in future regulatory settlements are paid directly to the Consolidated Fund (opens in new tab), aligning with the process that is in place for financial penalties as set out in the Gambling Act 2005.
Regulatory settlements are an alternative form of enforcement action to financial penalties, which can be taken by the Gambling Commission, and which may involve payments in lieu of a financial penalty. Historically these regulatory settlement amounts have followed a different process which was developed before the introduction of the statutory gambling levy in April 2025, which raises around £100 million annually for the research, prevention and treatment of gambling-related harm.
Regulatory settlements, including those that involve a financial amount in lieu of a financial penalty are an important option in the Commission’s regulatory toolkit. They can allow the Commission to reach an appropriate regulatory outcome without the need for a formal licence review, or to conclude such a review more quickly bringing a swifter resolution which ultimately benefits consumers.
However, regulatory settlements were never intended to be and should never have been seen as part of the core funding system for gambling research, prevention or treatment.
In the 2023 White Paper, High Stakes: gambling reform for the digital age (opens in new tab) government announced that it would be introducing a statutory levy on gambling operators and the Commission committed to considering what impact the levy might have on the destination of any future regulatory settlements, including the extent to which it might be possible to mirror any arrangements which came into place for the levy.
Until now, section 2.39 of the Statement of principles for determining financial penalties has stated that payments made in lieu of a financial penalty as part of a regulatory settlement did not need to be paid into the Consolidated Fund (as financial penalties are) and there would instead be a presumption that they would be paid to GambleAware to be used for specific agreed purposes that accelerate their commissioning plans. However, GambleAware ceased trading on 31 March 2026 meaning there is no longer an automatic destination for regulatory settlement funds, and the statement is currently out of date.
In our consultation, we were clear that any replacement of the current default destination for regulatory settlements must ensure that a central body is responsible for making decisions on the use of funds (whether for tackling gambling harm or other purposes), and that effective commissioning and evaluation as well as alignment with the new levy system was in place. This is beyond the Commission’s regulatory role and is the role of government and the levy commissioning bodies.
As we explained in the consultation, prior to consulting we had explored a range of options with the Department for Culture, Media and Sport (DCMS) including the extent to which it might be possible to mirror any arrangements which came into place for the levy. DCMS had explored the matter on our behalf with the levy commissioning bodies; UK Research and Innovation (UKRI), the Office for Health Improvement and Disparities (OHID), NHS England and the Scottish and Welsh Governments and the consensus at that time was that the complexity and potential volatility of regulatory settlement funds could create significant challenges for levy commissioning bodies, particularly because their levy allocations should already enable and support effective and sustainable research, prevention and treatment. Therefore, this option was ruled out as being unviable.
Our consultation proposed that in future, regulatory settlement money would go directly to the Consolidated Fund, and government could make decisions on the use of such funds whether for tackling gambling harm or for other purposes.
We consulted on amending section 2.39 of the Statement of principles for determining financial penalties to propose that in future regulatory settlements are paid directly to the Consolidated Fund, aligning with the process that is in place for financial penalties as set out in the Gambling Act 2005.
This would mean that government would be responsible for making decisions on the use of such funds whether for tackling gambling-related harm or for other purposes.
We requested views from respondents on their level of agreement or disagreement with the proposal, any suggested alternatives and their views on the proposed timeline for implementation.
Stakeholders, including gambling businesses, charitable and not for profit organisations, trade associations, and members of the public were invited to share their views on the proposals and provide a response to the proposed changes.
The consultation ran until 2 April 2026.
Responses from stakeholders show that:
We have carefully considered the responses to the consultation and have taken on board the different views. However, on balance and in the absence of a viable alternative, we have decided to proceed with our proposal to amend section 2.39 of the Statement of principles for determining financial penalties so that in future all regulatory settlements will be paid directly to the Consolidated Fund. This change will come into effect immediately and will apply to all regulatory settlements that are finalised on or after this date and which include an amount in lieu of a financial penalty.
On 5 February 2026 we issued our consultation on amending section 2.39 in the Statement of principles for determining financial penalties (opens in new tab). The consultation ran for 8 weeks until 2 April 2026.
We received 28 responses from the following categories of respondents:
We consulted on amending section 2.39 of the Statement of principles for determining financial penalties to propose that in future regulatory settlements are paid directly to the Consolidated Fund, aligning with the process that is in place for financial penalties as set out in the Gambling Act 2005. This would mean that the government would be responsible for making decisions on the use of such funds whether for tackling gambling-related harm or for other purposes.
We did not propose any changes to the process and criteria for considering the appropriateness of a regulatory settlement, such as whether it includes a financial aspect or any divestment as part of our regulatory enforcement activity. Therefore, the position as set out in section 5 of our Licensing, Compliance and Enforcement Policy Statement remains unchanged.
To what extent do you agree with the proposal to amend section 2.39 of Statement of principles for determining financial penalties to make it clear that in future all regulatory settlements agreed as part of Gambling Commission enforcement action will be directed to the Consolidated Fund as financial penalties are?
Can you foresee any issues related to amending the destination for future regulatory settlements to the Consolidated Fund?
Do you consider that there is an alternative destination for future regulatory settlements that we have not considered?
Are there any additional issues related to amending the destination for future regulatory settlements that we should consider?
Do you have any views on the proposed timetable for implementation?
Can you foresee any issues related to amending the destination for future regulatory settlements to the Consolidated Fund?
Of the 28 responses to the consultation, around a third of respondents (mostly from gambling businesses) and a trade association agreed or strongly agreed with our proposal. Just over half of respondents, mostly from charity and third sector organisations, members of the public and those affected by gambling harm disagreed or strongly disagreed and the remaining respondents were neutral in their views.
Those in support of the proposal to send regulatory settlements to the Consolidated Fund in future generally agreed that this was really the only viable option in the absence of a central body or bodies who could receive and spend regulatory settlement funds. They agreed that to direct regulatory settlement funds outside of the new levy structures would risk inconsistency, duplication, and misalignment with centrally agreed commissioning priorities and some respondents also noted that our proposed approach would be consistent with that of other regulators.
Some respondents also acknowledged that regulatory settlements were never intended to form part of the core funding mechanism for addressing gambling-related harm and that while the historic approach was pragmatic at the time, it was no longer suitable or appropriate in the context of a statutory levy system.
Those in support also agreed that the unpredictable and irregular nature of regulatory settlement funds makes them unsuitable for integration into the new levy commissioning structures, which require stability and forward planning to enable the delivery of effective outcomes. Some respondents agreed that the introduction of the statutory levy represents a fundamental change to the funding and commissioning of gambling research, prevention and treatment and that the levy provides a planned, transparent and accountable mechanism for funding such activities, with decisions appropriately resting with government and the designated levy commissioning bodies. However, there was still some level of support for government choosing to spend any regulatory settlement funds received in the Consolidated Fund on gambling prevention and treatment if at all possible.
Respondents who did not support the proposal were concerned that funds would be leaving the gambling ecosystem and would be used by government for non-gambling priorities and that there would no longer be a 'polluter pays' principle for regulatory settlements where funds should be used to mitigate any harm created by gambling businesses rather than being sent to the Consolidated Fund. There was a belief that without this connection, regulatory settlements would no longer act as a deterrent.
In terms of alternative proposals, some respondents felt that regulatory settlements should still be added to the overall levy pot and used by the levy commissioning bodies whereas others supported a more flexible approach which could be more easily accessed by smaller third sector organisations who may not receive any direct funding from the levy system. As explained in the consultation, we are clear that this option is not something the Commission could or should have a role in.
A few respondents who were against the proposal did understand our intention to align regulatory settlement payments with the process used for financial penalties but were concerned that this would remove transparency around how regulatory settlements are used. Not being clear what monies sent to the Consolidated Fund are spent on was a common theme among those respondents not in support of the proposal with some respondents suggesting that any regulatory settlements should be ring-fenced within the Consolidated Fund to be spent only on activity that would address gambling harm; this would be a decision for government. A small number of respondents were also concerned that the proposal was too focused on efficiency and simplicity, and a few were simply worried that they would no longer have access to regulatory settlements as a potential additional funding stream.
We have carefully considered all of the responses to the consultation and have decided to proceed with the proposal to amend section 2.39 of the Statement of principles for determining financial penalties so that in future all regulatory settlements will be paid directly to the Consolidated Fund.
As part of our analysis and decision-making processes the Department for Culture, Media and Sport (DCMS) and the levy commissioning bodies reconsidered the possibility of future regulatory settlements being added to the overall levy pot and distributed among levy commissioning bodies to consider if the original concerns remained or whether the position had changed since the consultation.
Having carefully considered the views of all respondents and stakeholders, the Commission considers regulatory settlement payments should be sent to the Consolidated Fund. Concerns around the complexity and potential volatility of regulatory settlement funds are felt to create more challenges for levy commissioning bodies while existing levy allocations should already be large enough to enable and support effective and sustainable research, prevention and treatment across the system without the need for additional ad hoc regulatory settlement funds. We consider that the deterrent effect of a regulatory settlement is not affected by this decision and that regulatory settlements will continue to reinforce regulatory standards and deter misconduct. The deterrent effect comes from other factors such as the actions required of an operator by the settlement, the amount of any financial element in lieu of a financial penalty and the publicity involved.
We acknowledge that our decision to send future regulatory settlements to the Consolidated Fund will be unpopular with some respondents, particularly those who have received regulatory settlement funding in the past. However, despite the lack of overall support for the proposal, given the limited alternative options available to us we still believe that in the absence of a central commissioning body or bodies that can receive and spend regulatory settlement funds in a coordinated way, that sending regulatory settlements to the Consolidated Fund in future remains our only viable option.
We understand the strength of feeling from some stakeholders who feel that regulatory settlement funds should be used to mitigate any harm created by a gambling licensee rather than being sent to the Consolidated Fund, where the use of such funds may not be hypothecated to purposes connected with gambling. However, we remain of the view that the new statutory levy system should mean that there is sufficient funding to deliver a sustainable and equitable funding system for research, prevention and treatment of gambling-related harm that will be distributed in line with the strategic direction of the government and commissioned by the levy commissioning bodies. Government can still choose to direct funds from the Consolidated Fund for any purpose they wish, and this could include those connected with gambling-related harm. If they choose to do so, the delivery of this work can be commissioned, properly evaluated and aligned to the broader programme of work being conducted under the levy system. In addition, it is important that regulatory settlements continue to be applied by the Commission as one option in the regulatory toolkit and solely for regulatory purposes.
This amendment will come into force with immediate effect.
Applies to: All regulatory settlements that are finalised on or after this date and which include an amount in lieu of a financial penalty.
2.39. Payments made in lieu of a financial penalty as part of a regulatory settlement will be paid into the Consolidated Fund, in the same manner as financial penalties imposed under section 121 of the Act.
As this change only relates to the destination of where future regulatory settlements are sent, we do not anticipate undertaking any evaluation.
We are committed to ensuring that our proposals do not have a negative impact on the protected characteristics outlined in the Equality Act 2010 and do not give rise to unlawful discrimination, harassment, victimisation or other conduct prohibited under the Act. As set out in our consultation we are of the view that this proposal does not give rise to any known negative impacts in the context of protected characteristics under the Equalities Act but we invited views, evidence or information from respondents which might assist us in considering any equalities impacts in the context of the consultation proposal. There were no comments in relation to any equalities impacts for the specific proposal to direct future regulatory settlements to the Consolidated Fund. We remain of the view that this change does not raise any issues connected with Equalities considerations.
The implementation of this amendment to the destination of future regulatory settlements does not require operators to make changes to their systems or processes, and we are not required to provide a 3-month notice period for changes to our Statement of principles for determining financial penalties as would ordinarily be the case with changes to our Licence Conditions and Codes of Practice (LCCP), other than in cases of urgency. As a result, we intend to enforce the change to section 2.39 of the Statement of principles for determining financial penalties with immediate effect. This change will apply to all regulatory settlements that are finalised on or after this date and which include an amount in lieu of a financial penalty.