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Guidance for submitting a proposal for Regulatory Settlement funding

Guidance around submitting a proposal for Regulatory Settlement funding including what Regulatory Settlement funds are and criteria for proposals.

Published: 4 May 2022

Last updated: 4 May 2022

This version was printed or saved on: 3 December 2022

Online version: https://www.gamblingcommission.gov.uk/guidance/guidance-for-submitting-a-proposal-for-regulatory-settlement-funding

Section 1 - What are Regulatory Settlements?

What are Regulatory Settlement funds?

One possible outcome of regulatory action against an operator can be a payment in lieu of the financial penalty the Gambling Commission might otherwise impose for breach of a licence condition. This is known as a regulatory settlement. Regulatory Settlements are set in accordance with the Statement of Principles for Determining Financial Penalties.

The Commission publishes the details of those enforcement cases and regulatory settlements on our news page. For more information, see our approach to regulating the gambling industry.

Where a regulatory settlement includes a payment in lieu of a financial penalty, the funds are not paid to the consolidated fund, and must be applied for socially responsible purposes, which address gambling related harm or in some way promote one of the licensing objectives.

As part of the regulatory settlement process, the Commission reserves the power to approve where money goes to that has been paid in lieu of a financial penalty. The Commission does this by assessing proposals for socially responsible projects and then matching regulatory settlement funds to approved projects. Decisions on suitable projects are made by the Social Responsibility Funds Group.

The Commission does not take possession of regulatory settlement funds at any time; the money is paid direct from the operator to the organisation delivering the approved project. If staged payments are agreed between the operator and the delivering organisation, and the operator withdraws from the UK market or becomes insolvent before all of the funds have been paid, the Commission will attempt to re-match the project with an alternative source of funds but cannot guarantee this will be possible.

Regulatory settlement funds are different to the annual financial Licence Conditions and Codes of Practice (LCCP) Research, Education and Treatment (RET) contributions that gambling operators must make as a condition of their licence to operate.

Typically, activities funded by regulatory settlements are kickstart projects. Social Responsibility Funds Group will want to know about how you will evaluate the impact of your project and your plans for sustaining the activity once regulatory settlement funding has ended.

Our role with Regulatory Settlements

The Gambling Commission reserves the power to approve the destinations of payments in lieu of financial penalties, which are agreed as part of a regulatory settlement in line with the Commission’s Statement of Principles for Determining Financial Penalties. Note the following extract:

"Payments in lieu of financial penalties

"2.14 Payments made in lieu of a financial penalty as part of a regulatory settlement do not need to be paid into the Consolidated Fund as financial penalties imposed under section 121 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:

In applying the above principles, the Commission takes into account the following points, where relevant:

The Commission does not oversee the delivery of projects funded through regulatory settlements, nor does it have a role in monitoring the governance of the recipient organisation.

Strict rules for operators

Under the terms of a settlement, there is to be no publicity or benefit for the operator in connection with the amount and we ask that it is recorded as a payment in relation to a regulatory settlement rather than a donation (to the extent that it is possible to clarify this in the records).

We usually specify that the operator makes the payment as a restricted donation using the following wording:

"In accordance with the regulatory settlement agreed with the Gambling Commission in lieu of a financial penalty, the monies represent a restricted donation to XXX to to reduce gambling harms and to be allocated to projects approved by the Commission."

This wording is used to demonstrate that the delivery of the projects is free from influence of the operators.

It may also be relevant to see the type of information we put out when sharing details of regulatory settlements. The following example demonstrates the way in which the operator’s role is set out publicly, "This settlement consists of: £4.8 million payment in lieu of a financial penalty which will be directed towards delivering the National Strategy to Reduce Gambling Harms…".

Section 2 - Criteria for proposals

Who can submit a proposal?

Most organisations who submit proposals are in the third sector or public sector. Regulatory settlement funds must be used for socially responsible purposes and the Gambling Commission has an expectation that research, evaluation, or materials produced will be publicly accessible. This means regulatory settlement funds are not usually suitable for commercial organisations unless working in partnership with other bodies.

We recommend that organisations focus on the quality of a bid and only submit one proposal. If you feel that you can submit more than one proposal, then there will be a maximum of two proposals from an organisation for each round.

What kind of proposals can be submitted?

Proposals must be for socially responsible purposes which address gambling related harm or other licensing objectives and should demonstrate how they will accelerate progress to reduce gambling harms.

From time to time the Commission may indicate priority issues, within the up to date statement on regulatory settlements, where proposals would be particularly welcome. This does not mean that other proposals will automatically be unsuccessful, nor that all proposals covering a priority issue will be successful.

Approvals will take account of the potential for overlap of funding of projects or programmes of work with funding or commissioning from other organisations (where known).

In most cases, regulatory settlement funds are best used as one-off payments for projects or programmes of work, rather than ongoing, core funding.

The body to be in receipt of the funds must be willing to accept the money with clear associated paperwork that the monies are part of a settlement in lieu of financial penalty, not a voluntary donation.

Proposals should clearly articulate how the project or pilot will be evaluated to demonstrate what effects it had, for whom and why. Good evaluations help us to understand what works and what does not work, and to build on this understanding for the future. Proposals should include a clear articulation of what an intervention is intended to do, the outcomes it is intended to achieve, and how it is envisaged these outcomes will come about. The chosen evaluation approach should be proportionate, matching design and choice of methods to the scale of the intervention and available resources. Proposals should also set out how findings will be shared and disseminated with relevant stakeholders.

What will not be supported?

Proposals may not include gambling operators as interested parties.

Regulatory settlements will not normally be applied to wholly commercial endeavours or partnerships where the results of the funds will primarily:

Regulatory settlement funds will not be applied for the purposes of campaigning or lobbying.

Proposals that duplicate existing services or projects are unlikely to be successful unless they pilot new approaches.

We will only approve proposals that fund treatment services (including aftercare and support) in expectional circumstances. The Commission generally considers that regulatory settlements are not an appropriate route for the funding of treatment delivery – which requires a routine and predictable source of income, and needs to be linked to clinical regulation to ensure appropriate treatment and safeguarding is in place.

For similar reasons, we will not usually approve projects relating to blocking software because we take the view that these products should be commissioned alongside wider treatment and support systems.

We will not usually approve projects for delivery in schools unless there is a link to regulated education provision, for example local authority and/or Ofsted oversight.

The Commission does not typically offer input to projects funded through regulatory settlements. If your proposal relies on engagement/input from or facilitation by the Commission, please make this clear in the proposal you submit.

Section 3 - Making a proposal for Regulatory Settlement funding

How to submit a proposal

The process has two stages:

Organisations who wish to submit a proposal should provide the following at stage one:

Organisations who wish to submit a proposal should provide the following at stage two:

What makes a good proposal?

Before starting your proposal, think about the why, what, who, where and when of your project:

When reviewing your proposal, consider the following prompts:

Send your proposal in on time. Details of deadlines can be found on the regulatory settlements page.

Who will make the decision?

The Social Responsibility Funds Group makes decisions at Stage one and Stage two. The Group is made up of senior staff at the Commission. They are supported by the Major Projects and Evaluation team and the Governance team.

The group consider Stage one proposals and provide limited feedback. Proposals that are successful at Stage one will be invited to prepare a more detailed proposal for consideration at Stage two. If a proposal is successful at Stage two, it is approved for funding and will be matched with settlement funds as and when they are available.

As part of our commitment to transparency, we publish details of proposals which have received funding on our website.

How long will it take for a decision?

Proposals will be reviewed once the closing date has passed.

It will take at least 8 weeks for the internal review process to be conducted. Please do not contact the Commission until at least 8 weeks after the closing date for updates on the outcome of your proposal. For example, if the closing date is 30 September 2022, we would not expect to communicate any decisions until after 25 November 2022.

Appeals

If you disagree with the decision of the Social Responsibility Funds Group, you can ask for a review within 28 days of the date the decision was communicated to you. Appeals for both stage one and stage two will be a paper-based process only.

Appeals of decisions at stage one will be resubmitted to the Chair of the Social Responsibility Funds group for review.

Appeals at Stage two of the process will be conducted by a panel of two Commissioners who have had no previous involvement with the application.

When you request a decision to go to appeal you must provide the following information:

In the outcome letter we will advise of the last date to submit an appeal. All appeals from a particular round will be submitted to the panel of Commissioners after the 28 days for appeals to be submitted and we will endeavour to review them within 28 days of the date stated in the letter.

For example, if an outcome letter is sent by the Commission on 30 September 2022, you will have until 28 October to appeal the decision. The Commission will wait for the deadline and send all appeals to either the Chair of the Responsibility Funds Group or the panel of two Commissioners for review (depending on which stage of the process you are at). Decisions will be communicated within 28 days of the closing date for appeals, in this example, by 25 November 2022.

Example dates are shown in the following table.

Example dates for an appeal process
Decision point Deadline date
Outcome letter sent by Commission. 30 September 2022
You must notify the Commission that you want to appeal the decision within 28 days of the outcome letter. 28 October 2022
An outcome letter from the appeal will be sent within 28 days from the date appeals closed. 25 November 2022

There may be times when we are unable to meet these deadlines, if this is the case, we will inform you as soon as we are able.

What you can expect from the Gambling Commission when submitting a proposal

You can expect your proposal to be judged on its merits and against the criteria set out when evaluating your proposal.

In most cases we will provide brief feedback on unsuccessful proposals at Stage one and Stage two.

Proposals can be resubmitted, however we would expect you to have addressed any feedback given before doing so.

Our published timescales are indicative and not guaranteed. In exceptional circumstances we may need to adjust timescales, but wherever possible we will inform you of any delays by email or an update on our website.

These funds come from regulatory settlements – which are unpredictable, and, as they are a product of industry non-compliance, undesirable – meaning there is not a regular funding source to put towards projects. We will pause accepting proposals if no settlement funds are available.

Overview of the process

  1. Stage 1 submission

    Stage one proposals are submitted to the Gambling Commission.

  2. Stage 1 reviewed

    Stage one proposals are reviewed by the Social Responsibility Funds Group. Feedback is then sent back to the organisation.

  3. Stage 2 submission

    Those successful at stage one are invited to submit more detailed stage two proposals.

  4. Stage 2 reviewed

    Stage two proposals are reviewed by the Social Responsibility Funds Group.

  5. Successful proposals

    Successful proposals are then matched with availiable funds.