Financial Penalty Update Issued by Gambling Commission
UK regulator, the Gambling Commission, has announced an update to its rules regarding potential penalties, including fines for companies that break regulations.
UKGC’s financial penalty rules are being updated. © Tingey Injury Law Firm, Unsplash
Key Facts:
- UKGC has a seven-step process by which it imposes fines
- There will be five levels of seriousness for potential breaches
- UKGC is also making adjustments to the penalty for aggravating and mitigating factors, deterrence and early resolution
- Aim is to strengthen the transparency and consistency of fines
The body said it aims to boost transparency for the way penalties are handed out, with the consistency of fines imposed also an area it wants to improve.UKGC will now be using a seven-step process to impose penalties.
Potential breaches will be assessed with five levels of seriousness brought in by the UKGC to help the regulator decide how large the announced financial punishment should be.
After a consultation, UKGC’s statement of principles for determining financial penalties will now be republished with the changes being introduced. All of the changes that UKGC is bringing in will be effected on 10 October.
Extensive Consultation
In its statement, UKGC outlined how it will work out the starting point for the penal element of the penalty by assessing the breach’s seriousness.
It will also take into account a percentage of Gross Gambling Yield (GGY) – or equivalent income generated – during the period when the breach occurred.
John Pierce, UKGC’s director of enforcement and intelligence, said the regulator is making the changes to “strengthen the transparency and consistency of how we impose financial penalties”.
He added: “These proposals were subject to extensive consultation, and the views shared by all our stakeholders have been taken into account.”
“The resulting changes will strengthen our decision-making and streamline the calculation of penalties – helping to improve the efficiency and effectiveness of our enforcement work. Crucially, the new approach also encourages compliance at the earliest opportunity, supporting the protection of consumers alongside fair and proportionate outcomes for operators.”
Lotteries and Charity Exemptions
Pierce went on to note how not all businesses and organisations will have to follow the new rules introduced in the UK by the Gambling Commission.
He said: “Where fines are imposed on society lotteries, registered charities or personal licence holders, these will not be based upon a percentage of the GGY accrued during the breach period, rather an appropriate alternative will be used.”
Various businesses have fallen foul of UKGC rules and have been fined so far this year.
Spreadex, a platform combining spread betting and fixed odds sports markets, was ordered to pay a £2 million fine over social responsibility and money laundering failures.
Issues at Spreadex were uncovered in a 2023 compliance check by the UKGC. Taichi Tech Limited – trading as Fafabet – was recently handed a financial penalty of £170,000 for regulatory failures, including using unfair terms and conditions.
