Report
Trust Statement 2024 to 2025
The Gambling Commission's Trust Statement for the period 1 April 2024 to 31 March 2025
1 - Statement of accounting policies
1.1 Basis of accounting
The Trust Statement is prepared in accordance with the accounts direction issued by HM Treasury pursuant to section 2(3) of the Exchequer and Audit Departments Act 1921. The Trust Statement is prepared in accordance with the accounting policies detailed. These have been agreed between the Gambling Commission and HM Treasury and have been developed with reference to International Financial Reporting Standards and other relevant guidance. The accounting policies have been applied consistently in dealing with items considered material in relation to the accounts.
The revenue and associated expenditure contained in these statements are those flows of funds which the Commission handles on behalf of the Consolidated Fund.
The Trust Statement and associated notes have been prepared on a going concern basis. The financial information contained in the statements and in the notes is rounded to the nearest £000.
1.2 Accounting convention
The Trust Statement has been prepared in accordance with the historical cost convention.
1.3 Significant judgements and estimates
Financial Penalties
The main area of judgement relates to estimating expected credit losses on Consolidated Fund receivables. These estimates are based on historical recovery data, default risk, and claim classification (preferential vs non-preferential). Receivables are measured at amortised cost in accordance with IFRS 9 Financial Instruments and FReM guidance. In line with IFRS 9, receivables are presented net of any impairment allowance. The Commission applies the simplified expected credit loss approach, reflecting low credit risk based on historical payment patterns and absence of significant prior losses. Judgements and forward-looking assumptions are applied when assessing expected credit losses, including consideration of future economic conditions, but the resulting provision is considered proportionate.
Expected credit losses are recorded within Consolidated Fund receivables in Note 4.2.
Economic Crime Levy
The ECL revenue is a key source of estimation uncertainty at the end of the reporting period, which has a risk of material adjustment to the carrying amounts of assets and liabilities. The accrued income is in relation to the estimated amount due from licence holders in respect of the Economic Crime Levy. The Levy is based on bandings which are based on an estimate of UK revenue which will not be validated until the following year when the payment is due.
The requirements of a person liable to pay the levy are where a person is liable to pay the levy, are to:
- notify the Commission of that liability
- make a return (“an economic crime (anti-money laundering) levy return”) to the Commission
- pay the levy on or before 30 September after the end of the financial year for which the liability arises (“the due date”).
The Levy is invoiced based on an economic crime (anti-money laundering) levy return that is derived from UK Revenue in the previous accounting period. There are some cases where a return has not been submitted or there is a change in the banding. Management makes an estimate in respect of the Levy and, in forming this estimate, management considers factors such as payment of the levy in previous years, historic data and the knowledge of the gambling industry.
1.4 Revenue
Financial Penalties
The Commission can impose a financial penalty following a review under section 116(1) or (2) of the Gambling Act 2005. 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 the Consolidated Fund, once it has deducted its costs and a reasonable share of its expenditure, as set out at section 121(5)(c).
In accordance with FReM (8.2), financial penalties are considered non-exchange transactions and therefore fall outside the scope of IFRS 15 and are measured at the fair value of the amount receivable.
As per the FReM (11.3.9), fines and penalties are recognised at the time that the fine or penalty is imposed and becomes receivable by the Commission. Where, on appeal, or for other legal reasons, the financial penalty is cancelled, the amount receivable is derecognised at the date of the successful appeal.
Economic Crime Levy
The Trust Statement recognises ECL in accordance with IFRS 15 Revenue from Contracts with Customers as interpreted by the FReM. The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration which the entity expects in exchange for those goods or services.
The Commission recognises the ECL revenue in accordance with that core principle by applying the following steps:
- identifying the contract(s) with customers
- identifying the performance obligations in the contract
- determining the transaction price
- allocating the transaction price to the performance obligations in the contract
- recognising revenue when the entity satisfies a performance obligation.
Under IFRS 15 as interpreted by the FReM, the Commission is deemed to have contracts with those licence holders subject to the Money Laundering Regulations 2017. By virtue of Part 3 of the Finance Act 2022, this requires the Commission to collect monetary contributions from casino licence holders to help fund initiatives to tackle money laundering.
Individual licence holders do not receive a direct benefit as a consequence of the payment of the Economic Crime Levy and neither do they influence directly how the levy income is spent; however, the Levy indirectly benefits them through the activities to tackle money laundering. This indirect link means that, under IFRS 15 as interpreted by the FReM, the Commission is deemed to have a performance obligation to the licence holders of collecting the statutory Levy and the funds are then applied for the purposes set out in the underlying legislation.
Levy revenue is recognised on the 31 March and is based on estimates of UK revenue provided by the licence holders in their levy returns. The transaction price is confirmed in the following year when the licence holders submit their annual revenue declaration, which verifies the amount of Levy due for the preceding year. Any under or over collection during the year results in either a top up payment by the licence holder or a refund being issued.
Comparative information
The prior and current year revenue for ECL presented in this Trust Statement differs from those disclosed in the Consolidated Fund note within the Gambling Commission’s 2024 to 2025 and 2023 to 2024 Annual Report Accounts.
This difference arises because the ECL revenue is recognised in the Trust Statement on an accruals basis in the financial year the levy becomes liable, ahead of the invoice being issued in the following financial period. In contrast, the Commission’s ARAs disclosed revenue in the financial period the ECL was invoiced and collected (see Note 17: Amounts of income to the Consolidated Fund in the Commission’s Annual Report and Accounts).
1.5 Expenditure
The Commission is entitled to deduct reasonable administrative and IT costs incurred in exercising its obligations in collecting both sources of revenue. This authority is provided under section 121(5)(c) of the Gambling Act 2005 for financial penalties and under Part 3, section 59(2) of the Finance Act 2022 for the Economic Crime Levy. These costs are deducted from amounts paid into the Consolidated Fund, as permitted by legislation.
1.6 Receivables
Receivables are shown net of impairments in accordance with the requirements of IFRS 9.
1.7 Impairments
Under IFRS 9, the Commission assesses at each reporting date whether the credit risk associated with a financial asset has increased significantly since initial recognition. The decision as to whether a loss allowance is made is based upon the 12-month expected credit losses and a review of credit risk since initial recognition. Credit risk is based on the Commission’s review of historic information, licence data and future events.
Where a financial asset’s credit risk has not increased significantly since initial recognition, expected credit losses are calculated based on default events that are possible within 12 months from the reporting date. If the credit risk has increased significantly since initial recognition, lifetime expected credit losses will be made.
This means that expected credit losses are calculated based on all possible default events over the expected life of the financial instrument. An allowance for expected credit losses is recognised when there is objective evidence of impairment, consistent with IFRS 9 and FReM requirements. Allowance losses are presented within receivables in Note 4.
1.8 Financial Instruments
The Commission accounts for financial instruments in accordance with IAS 32 Financial Instruments: Presentation; IFRS 9: Financial Instruments and IFRS 7: Financial Instruments: Disclosures.
A financial instrument is any contract that gives rise to a financial asset in one entity, and a financial liability in another. The Commission has classified all receivables and payables as measured at amortised cost. Financial assets and financial liabilities are recognised in the statement of financial position when the entity becomes a party to the contractual provisions of the instrument.
1.9 Accounting standards that have been issued but not yet adopted
IFRS 17 – Insurance Contracts 43 IFRS 18 – Presentation and Disclosure in Financial Statements FReM 2025 to 2026 – Changes to Non-Investment Asset Valuation
These standards have not been adopted as they are not applicable to the nature of transactions reported in the Trust Statement.
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Last updated: 16 March 2026
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