Annual Report and Accounts 2022 to 2023
n) Treatment of penalty packages
Section 121 of the Gambling Act 2005 provides that the Gambling Commission may require the holder of an operating licence to pay a penalty if the Commission determines that a condition of the licence has been breached. The Commission may impose a financial penalty following a review under section 116(1) or (2) of the Act. The Commission also has the power to impose a financial penalty without carrying out a licence review. Once a financial penalty has been imposed the Commission pays received monies into a Consolidated Fund, once it has deducted its costs and a reasonable share of its expenditure, as set out at section 121(5)(c).
Where the Commission has issued a penalty in respect of a regulatory failing or breach, in the majority of cases the penalty is paid directly to a benefactor (where a benefactor has been identified) or to a nominated responsible gambling charity. The Commission only recovers any direct costs as a result of undertaking the investigation or the imposition and enforcement of the penalty. The amounts retained by the Commission are shown within the accounts as other income.
In the event that a fine is issued for a regulatory breach, the Commission will collect the fine and pay it to the Consolidated Fund having deducted the costs of its investigation under the principle outlined in the previous paragraph.
Cost recovery or amounts due to be passed over to the Consolidated Fund at the year end are shown within Note 5(d), Consolidated fund income.
The Commission's approach to the impairment of financial assets, to provide for expected credit losses on trade receivables relating to the Consolidated Fund as described by International Financial Reporting Standards (IFRS) 9. This requires the use of lifetime expected credit loss provisions for all trade. These provisions are based on an assessment of risk of default and expected timing of collection, and an allowance for loss is made for potentially impaired receivables during the year in which they are identified based on a periodic review of all outstanding amounts. Allowance losses are recorded within Consolidated Fund receivables in Note 11, Trade and other receivables, when there is objective evidence that an asset is impaired.
Last updated: 18 October 2023
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