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The consultation response on reporting changes in ownership and interests as a key event.
Published: 18 December 2025
Last updated: 18 December 2025
This version was printed or saved on: 19 December 2025
Online version: https://www.gamblingcommission.gov.uk/consultation-response/financial-key-event-reporting-reporting-changes-in-ownership-and-interests
In December 2023, we launched a consultation on proposed changes related to financial penalties and financial key event reporting (opens in new tab). The first response on the proposed changes to the financial penalties was published in July 2025.
In the second part of the consultation we proposed changes to the Licence Conditions and Codes of Practice (LCCP) Licence Condition 15.2.1 and the addition of some new key reporting requirements to ensure that we are notified of changes to finances, ownership and interests within gambling licensees at the appropriate levels. The proposed changes to the LCCP would also be reflected in our Licensing, Compliance and Enforcement Policy Statement.
Licence Condition 15.2.1. (Reporting Key Events) sets out specific key events relating to operator status, relevant persons and positions, as well as financial events which licensees are required to report to us.
A key event is an event that could have a significant impact on the nature or structure of a licensee’s business and licensees are required to report the occurrence of key events to the Gambling Commission as soon as reasonably practicable and in any event within 5 working days of the licensee becoming aware of the event’s occurrence.
Currently, gambling licensees are required to report to the Commission when persons become 3 percent or more shareholders in the licensee (or its holding company) and also if the licensee enters into a loan with an entity that is not regulated by the Financial Conduct Authority (FCA).
The proposed changes are driven by gambling licensees being linked to complex, modern day, global business structures meaning that their ownership and interests are not always clear. Similarly, their financing arrangements are not always straightforward.
The current requirements risk potential gaps in our understanding of licensees’ financial positions and associations with others. Furthermore, many gambling licensees are now linked to jurisdictions where the governance arrangements mean that some licensees cannot meet the 3 percent shareholder reporting requirement because they cannot access information about shareholdings below 5 percent. This has led to some licensees having additional conditions added to their licence to allow a 5 percent threshold reporting requirement to apply to them. The current reporting requirements are therefore difficult to apply consistently across all licensees.
We consulted on 5 proposals:
These Licence Conditions would apply to all operating licences.
The proposed changes aimed to:
The effect of these proposals would be to narrow the scope of information we require from licensees in some areas (proposals 1 and 5) and to significantly, but proportionately, expand the scope of information we require from licensees in other areas (proposals 2, 3 and 4).
Respondents were invited to share their views and comments on the changes we proposed.
There were 29 respondents in total, and the number of responses submitted by the pool of respondents to each of the 25 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: List of respondents who consented to publication of name and organisation.
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.
For the avoidance of doubt, we do not propose to change the wording of the introductory paragraph and the numbering of the paragraphs will not change.
We are amending paragraph 1 of Licence Condition 15.2.1 to raise the reporting threshold for ‘operator status’ and ‘relevant persons and positions’ from 3 percent to 5 percent.
We are amending paragraph 2 of Licence Condition 15.2.1 to expand the application of ‘relevant persons’ to include entities that are not companies with share capital, but which nevertheless have direct interests in the licensee or its holding company of 5 percent or more by virtue of voting rights or entitlement to dividends or profits.
We are not proceeding with the proposal to include indirect interests in the licensee or its holding company. We have excluded society lottery licensees from these changes.
We will not be proceeding with the changes as proposed, but we intend to slightly amend the wording of paragraph 3 to ensure that all loans are included, whether or not agreements are in writing.
We will not be proceeding with this proposal at this time, but we intend to request information from a representative sample of licensees to allow us to further assess the impact of the proposal and may revisit this issue in the future.
We are amending paragraph 3.25 of the Licensing, Compliance and Enforcement Policy Statement under the Gambling Act 2005 to raise the threshold of shareholders to be listed from 3 percent to 5 percent Licensing, compliance and enforcement under the Gambling Act 2005 - 3 - Licensing.
The proposed amendments affect all licensees and the proposed amendments to Licence Conditions and Codes of Practice and the Licensing, Compliance and Enforcement Policy Statement under the Gambling Act 2005 (the Act) will come into force on 19 March 2026.
Applicable changes to our eServices system will be made to coincide with the changes to LCCP.
There have been a number of requests for guidance on specific elements of our existing LCCP information requirements and as a result we intend to improve our guidance and provide worked examples where relevant.
For ease of reference, we have included the following summaries as annexes to this response.
Annex 1: List of respondents who consented to publication of name and organisation.
Annex 2: Summary of proposed changes to the Licence Conditions and Codes of Practice and the Licensing, Compliance and Enforcement Policy Statement under the Gambling Act 2005.
On 15 December 2023 we issued our consultation on Financial Key Event Reporting: Reporting changes in ownership and interests (opens in new tab).
The consultation ran for 13 weeks until 15 March 2024.
We received 29 written responses to the consultation from the following categories of respondents:
Annex 1 lists organisations that consented to the publication of their name when responding to the consultation.
We proposed amendment to paragraph 1 of Licence Condition 15.2.1 to raise the reporting threshold for ‘operator status’ and ‘relevant persons and positions’ from 3 percent to 5 percent.
To what extent do you agree with the proposed change to raise the reporting threshold at Licence Condition 15.2.1 paragraph 1 from 3 percent to 5 percent or more of direct ownership of issued share capital of the licensee or its holding company, to reflect a risk-based approach?
The majority of respondents agreed with the proposal. Comments included:
One argument against the proposal was that the current reporting requirement of 3 percent is a critical safeguard that ensures the Gambling Commission maintains a comprehensive understanding of the investors and that by maintaining the 3 percent threshold, operators are held to a high standard of accountability, and the Commission can maintain a clear and informed perspective on the financial activities within the gambling sector.
The consultation also asked for comments on the proposed new wording of Licence Condition 15.2.1 paragraph 1 and whether respondents could foresee any difficulties in complying with the proposed change.
Some respondents commented that the revised Licence Condition 15.2.1(1) should clearly state that publicly traded licensees need only report interests over 5 percent to the Commission once they become aware of such interests, rather than there being a positive obligation on a listed operator to monitor shareholdings that regularly fluctuate, and in relation to which it has limited visibility.
We have decided to proceed with the proposed amendment to reflect the more complex modern day global business structures of our licensees and to align better with many other jurisdictions where the reporting requirements are at a threshold of 5 percent. This is in line with the Commission’s risk-based approach to regulation and our duty to make sure our regulatory approach does not impose unnecessary regulatory burdens in upholding the licensing objectives in the Act.
We have noted concerns that publicly listed companies would face difficulties in complying because of limitations on the information available to them. However, the introductory paragraph of Licence Condition 15.2.1 states that licensees must notify the Commission of key events within five working days of the licensee “becoming aware of the event’s occurrence” and we consider this adequately addresses this concern. For the avoidance of doubt, we did not propose to change the wording of the introductory paragraph, and this wording will remain in place.
This amendment will come into force on 19 March 2026.
Updated Licence Condition 15.2.1, paragraph 1
Any of the following applying to a licensee, any person holding a key position for a licensee, a group company or a shareholder or member of the licensee (holding 5% or more of the issued share capital of the licensee or its holding company):
Applies to: All operating licences.
We proposed amendment to paragraph 2 of Licence Condition 15.2.1 to expand the application of ‘relevant persons’ to include not just shareholders of the licensee, but also other entities (including, but not limited to, partnerships, trusts, charities and investment funds) with both direct and indirect interests in the licensee of 5 percent or more so that these are reported to the Gambling Commission. Indirect interests are where the interest is held through additional entities rather than directly with the licensee or its holding company.
This proposal involved amendment to the wording of paragraph 2 which would become paragraph 2a (relating to issued share capital) and the addition of paragraphs 2b (relating to voting rights), 2c (relating to dividends or profits) and 2d (relating to beneficial ownership).
The consultation included separate questions for each subsection of paragraph 2. However, a number of respondents provided comprehensive replies covering all 4 subsections, including general comments about the wording of paragraph 2 as a whole. We have highlighted comments relating to a particular subsection where they were clearly identified and have ensured that more generalised comments are also included.
To what extent do you agree with the proposed change at Licence Condition 15.2.1 paragraph 2a to add the requirement to report 5 percent or more direct or indirect ownership of share capital, to reflect a risk-based approach?
Although there was some support, the majority disagreed with the proposal.
One supportive respondent noted that it would be proportionate for the Commission to require listed companies to pass on shareholder notifications to the Commission (in the same manner as they do so to the relevant stock exchange).
Respondents from the society lottery sector have concerns that the proposed change could introduce disproportionately onerous burdens on non-commercial licensees and questioned whether the value the Commission would gain in respect of requiring such information from the society lotteries sector is proportionate to the burdens being introduced on that sector. These respondents have suggested the Commission should consider retaining the existing Licence Condition 15.2.1 paragraph 2 in respect of the society lotteries sector, even if the new requirements are introduced in the other gambling sectors.
The majority of objections were raised by operators in public ownership who object to the expansion of the reporting requirement to cover indirect investors on the grounds that this proposal is unduly onerous, disproportionate, and unreasonable.
Responses highlight that the proposal does not consider that, in many cases, companies may have no visibility of indirect ownership and no legal authority to compel this information from shareholders.
Some respondents detailed challenges facing listed companies with underlying shareholders that have an indirect interest who typically invest through brokers and funds, often in omnibus accounts (where funds from multiple underlying investors are pooled) meaning their identities would not be available to the listed company.
Another issue raised was that the only way that a licensee which is US-listed or has a US-listed parent, could, in the absence of Securities and Exchange Commission (“SEC”) notifications from beneficial owners, report on indirect interests in the listed entity would be by commissioning detailed, complex, and costly investigative work, which itself is not guaranteed to yield the desired results, and even if it could, the cost would be prohibitive and the results could quickly go out of date without the licensee knowing.
Some respondents advised that the task of monitoring both direct and indirect ownership changes could lead to the diversion of legal and compliance resources away from other monitoring and compliance activities.
Some respondents further argued that public companies are already subject to comprehensive regulation by stock market authorities, which have established detailed rules and definitions for relevant and reportable interests. These respondents believe that taking a risk-based approach means that it should not be necessary to further regulate public companies in circumstances where they are already subject to a separate, relevant regulatory framework that is in place to mitigate the same or similar risks as the Gambling Commission. They felt that imposing additional regulatory layers on public entities and their investors could be seen as an unnecessary 're-regulation', and an overreach into financial regulation by the UK gambling regulator.
Some respondents pointed to the Gambling Commission's Statement of Principles which provides that it will "have regard to the desirability of promoting economic growth", and that it will not "impose unnecessary regulatory burdens in upholding the licensing objectives in the Act, and [will] not unduly hinder the economic progress of licensees". These respondents believe that the proposed measures are not only unnecessary, but also impractical for public companies, imposing a significant economic and regulatory burden due to the administrative requirements and investment in resources that would be necessary to achieve compliance (and the potential for licensees to breach the licence condition inadvertently).
The consultation also asked for comments on the proposed new wording of Licence Condition 15.2.1 paragraph 2a and whether respondents could foresee any difficulties in complying with the proposed change.
Some respondents commented that the proposed wording was not sufficiently clear, and that further clarification should be provided in relation to the proposed new requirements and to whom they apply if they are to be implemented effectively and consistently. It has also been suggested that the Commission should distinguish between public and private companies.
One respondent suggested that if the proposed requirements are introduced, licensees should only be expected to use their ‘reasonable endeavours’ to secure the necessary information.
Some respondents have commented that the reference to “issued share capital” is problematic because SEC filings are usually based on the total shares outstanding of the company as reported in the most recent quarterly report filed with the SEC, meaning percentages are calculated using an historic outstanding share count potentially over 3 months old. The outstanding share count excludes Treasury shares which do not carry voting rights and is usually used to calculate voting rights. The issued share count includes Treasury shares and is usually used to calculate ownership percentages.
To what extent do you agree with the proposed change to Licence Condition 15.2.1 paragraph 2(b) to add the requirement to report 5 percent or more direct or indirect control of the voting rights of the licensee, to reflect a risk-based approach?
Whilst there was some support for the proposal, the majority of respondents strongly disagreed.
The consultation also asked for comments on the proposed new wording of Licence Condition 15.2.1 paragraph 2b and whether respondents could foresee any difficulties in complying with the proposed change.
Respondents from the society lottery sector have concerns that the new Licence Condition 15.2.1 paragraph 2(b) will impact particularly on their sector, especially as the effect will be to include entities which do not have share capital. It is claimed that the bureaucracy involved with licensees in the society lotteries sector dealing with such administration seems disproportionate to any benefit the Gambling Commission seems likely to obtain from obtaining such information.
Respondents have suggested that the meaning of “voting rights” is unclear for the purpose of the new paragraph 2(b) and have suggested that if it is intended to have the same meaning as paragraph 14 of Schedule 1A to the 2006 Companies Act, it may help to avoid confusion to expressly state this.
Respondents have indicated that it would be helpful to have some examples of the Gambling Commission's interpretation of how this new provision is intended to apply to companies not having share capital, for example, companies limited by guarantee.
Again, the majority of objections were raised by operators in public ownership who are against the inclusion of indirect interests for the reasons already highlighted previously.
These respondents have called for more clarification as to the exact circumstances that would trigger reporting obligations with regard to indirect voting rights.
Respondents have explained that determining the extent of an entity´s voting rights within a licensee involves a more intricate assessment than simply identifying share capital ownership – due to the potential for indirect control and complex contractual rights. As with indirect shareholding, should changes in the percentage of indirect voting rights occur without affecting the direct ownership threshold, it is likely that licensees will not be notified as it may not be a legal requirement to do so.
Another issue raised is that voting rights and share ownership are not always aligned, particularly with investment funds where legal ownership of shares is held by a fund, and voting rights may be held by a different entity such as an investment adviser. In such circumstances, companies would need to liaise directly with each party to obtain the necessary information, creating unreasonable financial and regulatory burdens for licensees. In the case of highly regulated investment funds or trusts, this may involve confidential and commercially sensitive information, and it may put at risk the relationship between the company and their shareholder and/or investors.
To what extent do you agree with the proposed change to Licence Condition 15.2.1 paragraph 2(c) to add the requirement to report 5 percent or more direct or indirect entitlement to dividends or profits of the licensee, to reflect a risk-based approach?
The majority of respondents strongly disagreed with the proposed change.
The consultation also asked for comments on the proposed new wording of Licence Condition 15.2.1 paragraph 2c and whether respondents could foresee any difficulties in complying with the proposed change.
Respondents from the society lottery sector stated that it seems unclear from the consultation what the Commission mean by being “directly or indirectly entitled to 5 percent or more of the dividends or profits of the licensee” and asked for more guidance on this, particularly how this is intended to work in situations where the licensee is itself a charity as may often be the case in the society lotteries sector.
Other objections from respondents representing publicly listed companies specifically directed at the proposed inclusion of entitlement to dividends and profits as a measure of interest included that this information is not required as part of an operating licence application and all disclosure requirements during the licensing lifecycle should be aligned. Furthermore it was argued that entitlement to dividends and profits are only considered under section 422(4)(c)(i) of the Financial Services and Markets Act 2000 (“s.422 FSMA”) (definition of a controller), in the very unlikely scenario where a company does not have share capital, for example, a private company limited by guarantee, and that this is not reflected in the proposal.
To what extent do you agree with the proposed change to Licence Condition 15.2.1 paragraph 2(d) to add the requirement to report becoming 5 percent or more direct or indirect beneficial owner of the licensee, to reflect a risk-based approach?
Views of respondents were split on this proposed change.
Some respondents from publicly listed companies disagreed with the proposal on the basis that the reporting of share capital ownership is sufficient to indicate relevant financial information, and going beyond that requirement would create undue burden on licensees.
One respondent provided the following helpful explanation in relation to SEC filings.
“Under current SEC rules, a beneficial ownership report must be filed by any individual or an entity that acquires more than 5% of the voting rights of any class of a public company's equity securities (pursuant to Sections 13(d) and (g) of the Exchange Act and related SEC rules). The regulatory framework in the US includes extensive guidance on what constitutes beneficial ownership of securities and the information that must be reported under section 13(d), which includes personal information about the person reporting, the source and amount of funds or other consideration used or to be used in purchasing the securities, and descriptions of any contracts, arrangements or understandings with any person regarding any securities of the issuer. In certain circumstances, a shorter report may be filed under section 13(g) if the investor is considered a 'passive investor'”.
The consultation also asked for comments on the proposed new wording of Licence Condition 15.2.1 paragraph 2d and whether respondents could foresee any difficulties in complying with the proposed change.
Some respondents who agreed with the proposal submit that the wording of the licence condition should be amended to make clear, firstly, that reporting beneficial ownership under (d) is an alternative to the proposed reporting requirements under (a), (b) and (c); and, secondly, beneficial ownership is clearly defined taking into consideration jurisdictional discrepancies. As regards to the definition, a number of respondents have pointed out that Schedule 1A of the Companies Act 2006 requires disclosure of persons with significant control which generally means ultimate ownership or control of more than 25 percent of a company’s shares or voting rights, or significant influence, and this threshold is both in line with global norms set by the Financial Action Task Force for what is considered “beneficial ownership” and deemed appropriate by Government.
Some respondents have highlighted that ownership may be measured differently depending on the jurisdiction, citing the US as an example.
Some respondents have questioned whether the Gambling Commission has the jurisdiction to proceed in the manner proposed in the consultation.
We do not accept the challenges to our jurisdiction to proceed in the manner proposed in the consultation.
We have noted concerns that the drafting of our proposal suggested that all metrics (that is, issued share capital, voting rights, entitlement to profit and beneficial ownership) should be considered, irrespective of the constitutional form of the licensee. This was not our intention. The proposal was intended to provide alternative measures of interest to capture all persons or entities who have a reportable interest in a licensee, but are not currently captured as they do not have share capital. So each licensee should determine which is the most appropriate and complete measure to report to us based on their constitution and the information available to them in their jurisdiction. We intend to make this clear in the guidance notes published on our website LCCP Information requirements (opens in new tab) (“the guidance notes”).
In response to comments by respondents that the reference to share capital could be seen as problematic, we can reassure that the existing practice of reporting beneficial ownership rather than share capital (for example by US companies) will continue to be seen as acceptable by the Gambling Commission.
We acknowledge that it would be helpful to have some examples of the Gambling Commission's interpretation of how this new provision is intended to apply to entities not having share capital (such as partnerships) and intend to provide examples in the guidance notes.
The Gambling Commission accepts the suggestion that “voting rights” should be expressly defined as having the same meaning as paragraph 14 of Schedule 1A to the 2006 Companies Act.
We note the concerns raised in respect of society lottery licensees and the undue regulatory and administrative burden the proposed expansion of this licence condition, in no longer being confined to entities having share capital, would impose on that sector for little regulatory gain. We have therefore amended the proposal in respect of society lottery licensees, so that it only applies to such licensees where they have share capital.
The argument that entitlement to dividends and profits as a measure of interest is not required as part of the operating licence application is not correct. If an applicant or a parent undertaking of an applicant is an entity that does not have a share capital, we will make enquiries about and/or expect provision of entitlement to profits or dividends to identify controllers and relevant persons in accordance with s.422 FSMA and s70(9) of the Gambling Act 2005, respectively.
The Gambling Commission acknowledges the confusion caused by the inclusion of beneficial ownership as a separate measure in the proposed paragraph 2(d) and therefore we have decided to remove this subsection.
After careful consideration of the objections to the expansion of the reporting requirement to include indirect interests, we have concluded that it would be difficult to provide a definition that would apply across all jurisdictions and we are persuaded by the argument that this would impose an undue regulatory and administrative burden on licensees. We have therefore removed reference to indirect interests from our proposal.
It should be noted that the Gambling Commission currently explores what may be relevant indirect interests, both at initial licence application stage and upon an application for a licence to continue to have effect following a change in control and we reserve the right to continue to do so.
The Gambling Commission has considered, but rejects, the suggested wording that licensees should only be expected to use their “reasonable endeavours” to secure the necessary information on the basis that the interpretation would be too subjective and open to abuse. The Gambling Commission accepts that publicly traded companies must rely on public filings and there is no expectation that licensees undertake additional costly investigation. The current requirement, which will continue, is that licensees notify the Gambling Commission within 5 working days of becoming aware of a reportable event.
The Gambling Commission’s decision is that the final requirements of paragraph 2 will apply to all licensees, with the exception of society lotteries. Having revised the final wording to exclude the need to report all indirect interests over 5 percent, the Gambling Commission is satisfied that this new requirement will not be unduly burdensome on any other category of licensee.
This amendment will come into force on 19 March 2026.
Updated Licence Condition 15.2.1, paragraph 2
Applies to: All operating licences excluding society lottery licensees where stated.
We proposed amendment to paragraph 3 of Licence Condition 15.2.1 to include the reporting of entering into financial agreements or arrangements with third parties and/or the receipt of financial assistance from a group company that has entered into such financial agreement or arrangements so that these are reported to the Gambling Commission. We proposed to move this to LCCP 15.2.1 paragraph 6 (changing the current paragraphs 6 and 7 to paragraphs 7a and 7b, accordingly).
To what extent do you agree with the proposed new requirement at Licence Condition 15.2.1 paragraph 6 to add any type of financial arrangement entered into with any persons not authorised by the FCA (Financial Conduct Authority)?
Whilst there was some support for this proposal the majority of respondents disagreed.
The consultation also asked for comments on the proposed new wording of Licence Condition 15.2.1 paragraph 6 and whether respondents could foresee any difficulties in complying with the proposed change.
The main objections to the proposal were:
Respondents suggested that the Commission should provide a list of those regulators that it deems to have appropriate regulatory frameworks in place that can be said to be equivalent to that put in place by the FCA. Some respondents suggested this should include, at the very least, the Australian Prudential Regulation Authority, the Australian Securities and Investments Commission, the US Security and Exchange Commission, and all financial services regulators in EU and EEA countries. To the extent that the Commission feels that it does not have sufficient information about these systems, the proper action for it to take would be to commence a call for evidence in respect of the same, or liaise with its counterparts in other jurisdictions to satisfy itself as to the adequacy of their financial regulations.
One respondent suggested that the Commission might want to amend the current licence provision to state that the notification requirement applies to loans "whether or not in writing" and that, where a loan is not in writing, the licensee must provide the Commission with details of the key terms of the loan.
After careful consideration of the issues and objections raised to the proposed expansion of the reporting requirement to include all financial arrangements and financial assistance from group companies, we have concluded that we will retain the existing wording of paragraph 3 of Licence Condition 15.2.1, with one minor amendment for clarification only.
We will update our guidance notes to address the following issues that we have noted through casework:
The LCCP currently exempts the need to report loans from FCA regulated entities. Whilst we are supportive of the view that retaining the exemption only for FCA regulated loans does not reflect the increasingly international nature of the industry, we have been unable to formulate a clear mechanism to identify FCA equivalent financial regulators at this time.
The Commission cannot undertake to publish a list of FCA equivalent regulators as this would be overly burdensome to compile and keep up to date (as a regulator of gambling activities, not financial services) and would thus divert resources away from our core purpose.
We note from the responses that there appears to be a misunderstanding as to requirements to report loans between entities in the same group (i.e. intra group loans). We have received multiple queries about this in recent years and we accept that the current guidance is not sufficiently clear. For the avoidance of doubt, the Commission does not need to be notified of borrowing by group entities of our licensees if the funds do not ultimately flow into the licensee (in whole or in part).
Occasionally, the non FCA loans notified to us are not supported by a written agreement or contract (for example, the loan to the licensee may be an informal personal loan from a shareholder without any contract drawn up). These are, and will continue to be, reportable events as we may want to undertake follow up enquiries in relation to the source of funds. We have therefore decided to add the words ‘(if any)’ after the requirement to attach a copy of the relevant contract or loan agreements to the key event notification, to make it clear that such loans are reportable even if there is no agreement in writing.
This amendment will come into force on 19 March 2026.
Updated Licence Condition 15.2.1, paragraph 3
Applies to: All operating licences.
We proposed the introduction of a new requirement (to become paragraph 3 at Licence Condition 15.2.1) for licensees to report to the Gambling Commission the details of individuals who acquire the equivalent of £50,000 or more worth of new shares in a rolling 12-month period or entities that acquire the equivalent of £1 million or more worth of new shares in a rolling 12-month period, along with the value of the acquisition and evidence of source of funds for that investment.
To what extent do you agree with the proposed introduction of Licence Condition 15.2.1 paragraph 3 to add the requirement to report details of individuals who acquire the equivalent of £50,000 or more worth of new shares in a rolling twelve-month period or entities that acquire the equivalent of £1 million worth or more of new shares in a rolling twelve-month period, and also disclose the value of the acquisition and provide evidence of source of funds for that investment?
Do you think the thresholds in the proposed introduction of Licence Condition 15.2.1 paragraph 3 of £50,000 (or equivalent) for individuals and £1 million (or equivalent) for entities, are right, and, if not, do you have any evidence to support where the thresholds should be set?
The majority of the respondents disagreed with this proposed change and did not believe that the thresholds were correct.
Respondents who agreed with the proposal made the following comments.
The Commission should be informed when large quantities of new shares are being acquired, regardless of the individual or entity who is acquiring them. The inclusion of this paragraph is supported as it promotes transparency and accountability in the gambling industry, ensuring that the Commission have a clear understanding of the financial activities within the sector.
These thresholds strike a balance between ensuring transparency and accountability in the gambling industry while also being practical for operators to implement. They provide a clear and straightforward framework for reporting significant share acquisitions, which is essential for the Commission to effectively monitor and regulate the sector. Additionally, these thresholds are consistent with industry standards and practices, making them a reasonable and appropriate choice for the proposed Licence Condition 15.2.1 paragraph 3.
The consultation also asked for comments on the proposed new wording of Licence Condition 15.2.1 paragraph 3 and whether respondents could foresee any difficulties in complying with the proposed change.
The majority of respondents representing publicly listed companies are strongly opposed to the proposal. It is generally felt that the blanket application of arbitrary thresholds does not reflect a risk-based approach, imposes unjustified and unnecessary regulatory burden, has a negative economic impact for certain groups of licensees, and is wholly disproportionate.
Concerns have been raised that the proposed thresholds are extremely low for the average type of licensee (except for start-ups) and that investments at the proposed levels could represent percentage shareholdings significantly below the proposed ownership reporting threshold in key event 15.2.1(2)(a).
Further concerns were raised about using fixed figure thresholds, rather than percentage thresholds, to trigger the reporting requirement, could result in the Commission testing every £1 of an investment, resulting in significant additional work for the Commission and the licensee.
Some respondents have advised that licensees listed on certain stock exchanges may not be notified of individuals acquiring the equivalent of £50,000 or more worth of new shares or entities acquiring £1 million worth or more of new shares, unless this represents 5 percent or more of total shares. Therefore, the requirement to report such changes would likely perpetuate the problems currently experienced with the 3 percent threshold as many licensees are simply not notified of such changes, and would have to apply for exemption from this requirement.
Some respondents are concerned that if licensees are required to obtain source of funding evidence at these thresholds, it is inevitable that it will stifle equity investments in Commission-licensed gambling businesses, as many, if not most, prospective investors will refuse to provide information that has not been required by any other regulator (gambling or financial).
Some respondents have argued that it would be administratively unworkable for a company to obtain source of funds evidence from a qualifying shareholder base which may number in the hundreds or thousands, given the thresholds proposed and have highlighted that issues of new shares in an equity raise are subject already to a timetable strictly governed by the FCA and often need to be launched at pace.
Respondents have pointed out that third parties who are set up to manage the interactions with shareholders of listed companies are unlikely to have the capability, systems or existing resources to undertake a due diligence exercise of the scale that the Commission’s proposals would entail.
Some respondents are concerned that the proposed requirement is also likely to capture employee share save schemes. which would unnecessarily overcomplicate the administration of such schemes and add further administrative burden on the Commission. It is argued that such a measure would seem completely disproportionate to the Commission’s aim of “keeping crime out of gambling” given that there would be no risk from such shareholdings.
Some respondents have highlighted that the purchase of shares in listed companies is already subject to regulation and that the existing regulatory environment ensures that such transactions are already subject to checks for financial impropriety, including money laundering and terrorist financing.
Some respondents have raised concerns about the proposed wording, pointing out that it refers only to the acquisition of shares, without specifying that they are newly issued shares despite this being the Commission’s intention.
Another issue raised is the length of time that obtaining the required source of funding evidence could take resulting in licensees having difficulty providing this information within the required timeframe for a key event.
Some respondents have noted that even if a corporate shareholder voluntarily discloses the source of its funds, the information itself may be of limited use. For example, an investor may confirm that it has raised funds from more than one investor, and even identify them to the licensee if it is able to. However, the licensee would have no direct relationship with these third parties or any legal ability to compel them to provide any information. Further, Institutional Investors are likely to be under strict terms of confidentiality with the underlying investors, so would not be able to disclose any information to the licensee.
Some respondents have raised various legal challenges around the Commission’s jurisdiction and the interaction of existing regulation (for example by the FCA) and existing legislation, such as Anti Money Laundering, the European Convention of Human Rights, the Regulators’ Code and the Growth Duty.
A number of respondents have requested that we consider an exemption for listed companies or groups as the risk is low given the existing regulatory framework that these companies operate within.
Some respondents criticised the lack of data published in support of the proposal and others have highlighted the omission of a validated impact assessment of the costs and benefits of the proposal from the consultation. One respondent strongly encourages the Commission to provide anonymised details of its casework and the reasons for proposing to impose a blanket requirement without taking into consideration the type of licensee. Another respondent believes that the proposed threshold and the rolling timeframe requires further research and requests the detail of the research that the Commission has relied upon to arrive at these figures and/or reporting cycles. Another requested that the Commission publish its detailed rationale and decision-making behind selecting the thresholds.
We will not be proceeding with the proposed new requirement at this time. This decision was not due to the legal challenges raised by respondents which we have concluded have no merit.
In respect of the other challenges raised by respondents, particularly in relation to the proposed thresholds and the accessibility of the information, we have decided to request information from a sample of licensees under paragraph 1 of 15.3.1 of LCCP to enable us to further assess the impact of the proposal. It is envisaged that this will provide us with more robust evidence of the consequences of this proposal on operators, taking into account the variety of scale and complexity of the entities that we regulate. We anticipate that this will take place over the next eighteen months. Depending on the outcome of our assessment we may initiate a new consultation on this issue.
Licence Condition 15.2.1 (Reporting Key Events) will be unchanged in respect of Proposal 4. We will not be adding this new requirement at this time (and the paragraph numbering of this Licence Condition will therefore be unchanged).
Applies to: All operating licences.
We proposed an amendment to the Licensing, Compliance and Enforcement Policy Statement under the Gambling Act 2005 to raise the threshold of shareholders to be listed from 3 percent to 5 percent under the section about Licensing (under the heading, ‘Identity and Ownership’).
To what extent do you agree with the proposed change to raise the threshold of shareholders to be listed from 3 percent to 5 percent or more within the Licensing, Compliance and Enforcement Policy Statement under the Gambling Act 2005, under the section about Licensing (under the heading, ‘Identity and Ownership’)?
The majority of respondents agreed with the proposal. Comments included:
A counter argument put forward was that a lower threshold of 3 percent ensures that the Gambling Commission has a comprehensive understanding of the financial activities within the gambling industry, promoting transparency and accountability and that this level of oversight is crucial for ensuring the integrity and legitimacy of the industry.
In line with our decision on Proposal 1 we have decided to go ahead with the proposal to change the reporting threshold from 3 percent to 5 percent.
This amendment will come into force on 19 March 2026.
Applies to: All operating licences.
Paragraph 3.25 of the Licensing, Compliance and Enforcement Policy Statement under Gambling Act 2005
The Commission will also want to ensure that it can establish who benefits from the gambling provided and therefore require that any shareholders with a 5% shareholding are listed, and that those with over 10% holding complete an Annex A form to enable further checks to be carried out on them. This requirement is without prejudice to the Commission’s decision-making authority. If the beneficiary of any business is a Trust then the Commission will want to know who the beneficiaries of that Trust are. Similarly, where a person or entity holds shares as a nominee, the Commission will want to know who the true owners are.
We invited views, evidence or information which might assist the Commission in considering any equalities impacts in the context of the proposals.
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?
We did not receive any responses to this question.
The lack of responses is not surprising as our proposals have no direct impact on consumers and/or the general public. The proposed changes only impact licensees and we are satisfied have no equalities impact.
In our consultation we invited respondents to comment on any difficulties that they foresaw in complying with each proposed changes and these views have been summarised above. We also asked respondents to provide an estimate of the costs associated with implementing these proposals.
Please provide an estimate, including any evidence, of the direct costs associated with implementing these proposals, identifying to which proposals the estimated costs relate. Please give us your evidence below.
None of the respondents provided an estimate of costs involved in implementing the proposals. A few respondents stated that it was not possible to provide an estimate until the changes were finalised as there were too many unknowns.
One respondent stated that raising the reporting threshold from 3 percent to 5 percent for the reporting of direct share capital would appropriately decrease costs. On the other hand, they believed that should additional reporting of voting rights, dividend and/or profit entitlements, and so on, especially of indirect participants, become necessary, the associated costs might increase exponentially.
We have taken on board all the views expressed on the business impact of implementing the proposed changes in determining how we will proceed in relation to each proposal and are satisfied that our approach is proportionate and will reduce some regulatory burdens.
Annex 1 lists organisations that consented to the publication of their name when responding to this consultation topic. All names of organisations 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:
Amendment to paragraph 1 and 2 of Licence Condition 15.2.1 to raise the reporting threshold for ‘operator status’ and ‘relevant persons and positions’ from 3 percent to 5 percent.
Amendment to paragraph 2 Licence Condition 15.2.1 to expand the application of ‘relevant persons’ to include shareholders, but also other entities with both direct and indirect interests in the licensee of 5 percent or more so that these are reported to the Commission.
Amendment to paragraph 3 of Licence Condition 15.2.1 to include the reporting of entering into financial agreements or arrangements with third parties and/or the receipt of financial assistance from a group company so that these are reported to the Commission (and moving the requirement to become Licence Condition 15.2.1 paragraph 6, changing the current paragraphs 6 and 7 to paragraphs 7a and 7b, accordingly).
Introduction of a new requirement for licensees to report to the Commission the details of individuals who acquire the equivalent of £50,000 or more worth of new shares in a rolling 12-month period or entities that acquire the equivalent of £1 million or more worth of new shares in a rolling 12-month period, along with the value of the acquisition and evidence of source of funds for that investment (to become paragraph 3 at Licence Condition 15.2.1).
Amendment to the Licensing, Compliance and Enforcement Policy Statement under the Gambling Act 2005 to raise the threshold of shareholders to be listed from 3 percent to 5 percent under the section about Licensing (under the heading, ‘Identity and Ownership’).