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Frequency of regulatory returns: Consultation Response

The Gambling Commission's consultation response to amend licence condition 15.3.1 to require all licence holders to submit regulatory returns quarterly.

Published: 27 March 2024

Last updated: 1 May 2024

This version was printed or saved on: 29 May 2024

Online version: https://www.gamblingcommission.gov.uk/consultation-response/frequency-of-regulatory-returns-consultation-response

Executive summary

Regulatory return submissions from gambling licensees are a vital source of information for us, government and the public. They provide an understanding of the size and shape of the gambling market in Great Britain as well as other key regulatory data. Some gambling licensees send us annual submissions, whilst others are submitted quarterly.

From November 2023 to February 2024, we consulted on proposed amendments to licence condition 15.3.1 of the Licence Conditions and Codes of Practice (LCCP). We proposed to increase the frequency for licensees that submit annual returns, so that all regulatory returns would be required quarterly. This would provide us with a timelier and more accurate assessment of the gambling market.

This consultation response summarises the responses received and explains our position.

In total, we received 45 individual responses. Two of these respondents provided multiple copies of the same response. We have therefore only counted one of their responses each.

We will amend licence condition 15.3.1 to require all licence holders to submit regulatory returns quarterly.

This will:

Additional changes to the regulatory returns submittal process, that are not part of this consultation, but some of which were previously agreed in the 2020 Consultation: Changes to information requirements in the LCCP will be introduced at the same time.

These include:

These changes will come into force from 1 July 2024 for all licensees.

This means that the first set of quarterly regulatory returns (relating to the quarterly return period 1 July 2024 to 30 September 2024) must be submitted by all licensees by 28 October 2024. Further detail about the transition to quarterly returns and the harmonisation of reporting periods will be set out in communications to all licensees in the period April to June 2024.

Introduction

Gambling operators are required to send to the Gambling Commission a regulatory return for each type of activity for which they hold a licence.

The Gambling Commission uses the data to:

The requirement to provide regulatory returns is contained within Licence condition 15.3.1 of our Licence Conditions and Codes of Practice (LCCP).

In our Autumn 2023 consultation on proposed changes to Licence Conditions and Codes of Practice (LCCP) and Remote Gambling and Software Technical Standards (RTS) (opens in new tab) conducted between 29 November 2023 and 21 February 2024, we set out a proposal to licence condition 15.3.1 of the LCCP relating to the frequency of regulatory returns submitted by licensees.

In total, we received 45 individual responses. Two of these respondents provided multiple copies of the same response. We have therefore only counted one of their responses each.

The respondent breakdown is as follows:

Annex 1 lists organisations that consented to the publication of their name when responding to the consultation.

A summary of the responses we received to the consultation question, along with our position in view of those responses, is provided in the following sections.

Summary of responses and our position

Proposal

Amendment to licence condition 15.3.1 – General and regulatory returns

We sought views on our proposal to change the frequency by which all licensees submit regulatory returns required by licence condition 15.3.1 of the Licence Conditions and Codes of Practice (LCCP) to quarterly for all licensees.

Consultation question

To what extent do you agree or disagree with the proposed change to regulatory return submissions from annual to quarterly? - Please give reasons.

Respondents’ views

In total, around half (49 percent) of the respondents stated that they agreed or strongly agreed with the proposal, compared to around one third who disagreed or strongly disagreed with the proposal; with a minority of respondents (15.5 percent) who neither agreed nor disagreed with the proposal.

Agree or strongly agree with the proposal

The highest percentage of respondents (around 49 percent, 22 respondents) either agreed or strongly agreed with the proposal, with the responses coming from a mix of those representing gambling businesses, professional bodies, charities, and individuals who had worked with the industry or trade bodies, and the public.

These respondents considered that the proposal would:

In addition, for some respondents there was little perceived extra cost from responding on a quarterly basis and limited issues with its implementation. It was also noted that several larger operators already submit quarterly returns so will not be negatively affected.

Disagree or strongly disagree with the proposal

Around one third of respondents (around 36 percent, 16 respondents) either disagreed or strongly disagreed with the proposal, with the responses coming from a mix of those representing gambling businesses, charities, and trade bodies.

These respondents considered that the proposal would increase the administrative burden. Some respondents who manage lotteries thought that managing this extra burden would take financial resources away from charitable causes. One respondent from a trade organisation estimated that the cost of completing three additional returns using an external accountant would rise from £500 to £1,500 per year, which would be a problem for respondents.

The proposal would place an extra burden on the Gambling Commission (the Commission) to manage quarterly returns and may impact the Commission’s ability to respond to licensees.

It was noted that the proposal could highlight a disparity between the Commission’s intention to ‘introduce a ‘risk informed’ approach’ in how they interact with operators.

The respondents considered the proposal would not be easy to manage for charities since lotteries are not a part of their core business.

The proposal for quarterly returns would not provide any improved insight compared to annual returns which better capture the rate of change.

Without support, the proposals could raise a risk of further penalties over missed deadlines.

One respondent raised a concern over the implementation period, proposing a 12-month period would be preferable. Of the 16 respondents who disagreed or strongly disagreed with the consultation proposal:

Some respondents suggested ways to mitigate these concerns.

Some proposed that a more proportionate and risk-based approach should be applied to quarterly returns, whereby higher risk operators report quarterly but those considered to be lower risk (such as society lotteries) report annually.

One respondent suggested increasing the time permitted for completion of returns from 28 days to 42 days to help with the extra administrative burden.

Another suggestion was the Commission alleviating the burden of quarterly reporting with a simplified, “more meaningful” submittal process.

Equalities considerations

We received three comments on the potential impacts of the proposal in relation to equalities considerations. However, in all cases a link to the proposal was not established.

One licensee stated a direct link to an increased risk of problem gambling by race, gender, and the vulnerability of those with neurodiversity and mental health challenges. However, this referred to the impacts of problem gambling in these communities, rather than making a direct connection to the proposal for more frequent regulatory returns submissions.

Two other respondents referred to the added burden on lottery operations through the change to quarterly reporting and the consequent reduction in available funds. Since no direct link was made to protected characteristics, we consider this a blanket consideration against the quarterly returns proposal rather than one relating to equalities considerations.

Our position

We will amend licence condition 15.3.1 to require all licence holders to submit regulatory returns quarterly. In arriving at our conclusion, our primary focus has been on the advantages to be gained by moving licensees to submit quarterly returns, alongside the harmonisation of reporting periods and unified submission dates. This will:

  • have a material impact on the Commission’s ability to budget, through an improved ability to understand income levels on a more regular basis and forecast accurately
  • provide a timelier, deeper and more accurate picture of the gambling sector, in line with the Commission’s aspirations and the intentions of the government’s White Paper (opens in new tab)
  • provide simplicity of requirement
  • facilitate simpler systems development for the Commission
  • simplify internal processes and improve the quality of industry statistics as reporting periods align.

We remain of the view set out in our consultation document that these advantages will also directly improve the Commission’s ability to use data to:

  • ensure licensees are within the correct fee category, applying the legislation fairly and correctly
  • provide vital information to ensure we regulate effectively, and enable comparisons between sectors
  • publish industry statistics on the size and shape of the gambling market in Great Britain.

Given the fast-moving nature of the industry we regulate, quarterly returns will support our aim to be a risk-based, evidence-led, and outcomes-focused regulator. This includes the ability to be better informed about market conditions, to provide a timelier and more accurate picture of the gambling sector, and to better support the Commission to understand and be responsive to any impact of market developments and of gambling regulatory changes. By aligning reporting periods across the industry, the quality of our data will improve as we will no longer need to apportion data from each operator to the financial year. For licensees with multiple licences, it will simplify the administration required for submitting regulatory returns as they can all be done at the same time across the same time periods.

In considering the advantages we have weighed those against any regulatory burdens. We acknowledge that some licensees are concerned about the potential extra administrative burden and costs associated with the proposal. In particular, the Commission recognises the concern from the lottery sector that the potential extra burden of administration could lead to reduced funds being available for charitable activities, and a concern that the pace of change in this sector is better tracked through annual rather than quarterly submissions.

We are satisfied however that other changes we are making to regulatory returns such as streamlining the number of questions that need to be completed each quarter and improving the guidance which is published alongside regulatory returns to make it clearer what data we are asking for will compensate for this increase. We do not believe that asking for regulatory data on a quarterly basis is overly burdensome.

With regards to the streamlining of regulatory returns, we will be removing around 600 fields in total across all licence types, some of which are calculated fields and some of which are questions that appear on every return. These were identified and agreed for removal in a consultation in 2020 and relate to non-GB information, workforce questions and many of the questions on the Gaming Machine Technical and Gambling Software returns. As an example, 5 of the 20 questions will be removed from the Society Lottery return and 33 of the 72 questions will be removed from the Bingo return.

In addition, rather than having to submit returns at different times throughout the year, all submissions will be aligned to the same reporting period which will make the process more efficient for operators completing returns and for the Commission. We also intend to make improvements to the way we collect data which will simplify the submission process.

The period mandated for the submission of regulatory returns will be 28 days. This is consistent with the current requirement window for quarterly returns. We recognise that some licensees preferred a 42-day window for submissions, but have decided that 28 days for the collation and submission of quarterly data is sufficient.

All of the changes and improvements to Licence Conditions and Codes of Practice (LCCP) 15.3.1, namely the move to quarterly returns for all license types, alongside the changes to the range of data required, alignment of reporting periods across the industry, the availability and clarity of guidance, and improving the functionality for submitting and quality assuring data, will be further communicated in full with support for the industry in the period leading up to the implementation date of 1 July 2024.

In regards to equalities considerations, we do not currently consider that the proposal has any negative impacts.

Final wording of amended General and regulatory returns Code Provision 15.3.1.

15.3.1 - General and regulatory returns

Applies to: all operating licences

  1. On request, licensees must provide the Commission with such information as the Commission may require, in such a form or manner as the Commission may from time-to-time specify, about the use made of facilities provided in accordance with this licence and the manner in which gambling authorised by this licence and the licensee’s business in relation to that gambling are carried on. 
  2. In particular within 28 days of the end of each quarterly period licensees must submit an accurate Regulatory Return to the Commission containing such information as the Commission may from time to time specify.

Annex

Annex 1: List of organisations that responded and consented to the publication of their name

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.

Duplicate responses submitted by one person on behalf of different organisations were treated as one response for the purposes of the previously detailed respondent breakdown totals. For reference, these are captured in a single bullet point however, the views of each organisation were taken into account.

Organisations that consented to the publication of their name when responding to the consultation: