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  3. Raising Standards for consumers - Compliance and Enforcement report 2019 to 2020

Report

Raising Standards for consumers - Compliance and Enforcement report 2019 to 2020

The Gambling Commission's report on Compliance and Enforcement action 2019 to 2020

Published
6 November 2020

Last updated
27 July 2023 - Changes

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  1. Contents
  2. 5 - Personal Management Licence Reviews

5 - Personal Management Licence Reviews

The Commission has been signalling for the past few years that we will increasingly focus on the role played by Personal Management Licence holders (PML) when undertaking Compliance and Enforcement investigations.

PML licences are required to be held by anyone with responsibilities for:

  • Overall strategy and delivery of gambling operations
  • Financial planning, control and budgeting
  • Marketing and commercial development
  • Regulatory compliance
  • gambling related IT provision and security
  • Management of licensed activity for a particular area in Great Britain where you have five or more sets of premises for which you hold a premises licence.
  • Management of a single set of bingo and/or casino licensed premises.

We recognise that these roles can be challenging and we have seen progress in leadership within companies as Board and Executive teams drive cultural change. Sadly, we continue to identify failings and had to sanction individuals fulfilling these roles.

Common failings have emerged from:

  • Failures to assess if decisions being made at Executive level are being implemented within businesses. Often linked to the risk framework of the business not being robust and challenging questions not being asked.
  • Overly complicated lines of decision making and accountability, with PML holders unclear who was responsible for issues, particularly when passed from premises to headquarters and back.
  • Lack of technical knowledge and oversight of areas they have specific responsibility for, especially in respect of AML.
  • Prioritising commercial outcomes over regulatory responsibility.

The Commission expects PML holders to adhere to the terms of their licence in particular; ‘Suite of general conditions to be attached to personal licences under Section 75 of the Gambling Act 2005’, which includes:

‘Personal licence holders must take all reasonable steps to ensure that the way in which they carry out their responsibilities in relation to licensed activities does not place the holder of the operating or any relevant premises licence in breach of their licence conditions’.

The Commission’s Statement of principles for licensing and regulation (June 2017) (section 4.3) sets out that we expect individuals occupying senior positions, whether or not they hold PMLs, to, amongst other things:

  • Uphold the licensing objectives and ensure compliance of operators with the Licence conditions and codes of practice (LCCP).
  • Organise and control their affairs responsibly and effectively.
  • Have adequate controls to keep gambling fair and safe.
  • Conduct their business with integrity.
  • Act with due care, skill and diligence.
  • Have due regard to the information needs of consumers and communicate with them in a way that is clear, not misleading, and allows them to make an informed judgment about whether to gamble.
  • Manage conflicts of interest fairly.
  • Disclose to the Commission anything which the Commission would reasonably expect to know.
  • Work with the Commission in an open and cooperative way.
  • Comply with both the letter and spirit of their licence, the licence of their operator, and associated Commission regulations.

We have an expectation that senior PML holders ask questions, intervene and ensure compliance with the licence conditions. We will continue to hold PML holders to account for when there are regulatory failings within operators and PML holders fail to take appropriate and reasonable steps in a timely manner to halt these breaches.

During this reporting period we have commenced section 116 reviews on 49 PML holders. Outcomes have included the requirement for training, additional licence conditions, warnings and licence revocations. Cases resulting in warnings over the past year included:

  • A Director of Gaming at a land-based casino who played a role in failing to ensure a casino complied with the requirement to complete a risk assessment, had appropriate policies, procedures and controls to prevent money laundering and terrorist financing and comply with social responsibility code of practice requirements.
  • A Money Laundering Reporting Officer (MLRO) at a land-based casino who failed to ensure a casino had put into effect adequate anti-money laundering controls (including a risk assessment) and the requirements of social responsibility Code 3.4.1.
  • An MLRO of an online casino who failed to ensure the licensee had in place an adequate risk assessment with effective underpinning policies, procedures and controls. The risk assessment and policies and procedures should have been implemented effectively and kept under review to mitigate the risk of money laundering and terrorist financing.
  • A PML holder responsible for overall management and direction of an online operator who failed to adhere to Licence condition 1.2.1(1) by ensuring that the person occupying a key position held a personal management licence (PML).They also failed to put into effect adequate anti-money laundering controls (including a risk assessment) and notify the Commission of a key event – that a person holding a key position had ceased to occupy that position.
  • A PML holder responsible for regulatory compliance at an online operator who failed to ensure the licensee had put into effect adequate anti-money laundering controls (including a risk assessment).

The Commission has previously communicated its acknowledgement that businesses do not make decisions – people do. Licensees can expect us to continue to take action against accountable individuals to ensure standards are raised to the levels required, whether in relation to the business or individual capability.

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