The Gambling Commission has announced its new formula for calculating and imposing penalties for UK operators, with the new framework including fines based on firms’ gross gambling yield (GGY).
The change, which will come into effect on 10 October, will also feature a five-level seriousness scale and a new seven-step process from the regulator when determining what size penalty to impose.
The most serious breaches are set to carry a potential penalty equivalent to 15% of an operator’s GGY during the offending period, and perhaps even higher in special circumstances.
The shift comes after a consultation period that ended in March 2024 and saw 29 respondents take part, including operators Entain and evoke and charities GambleAware and Gambling with Lives.
The regulator’s director of enforcement and intelligence, John Pierce, said the shift would “improve the efficiency and effectiveness” of the Gambling Commission’s activity.
Pierce added: “Crucially, the new approach also encourages compliance at the earliest opportunity, supporting the protection of consumers alongside fair and proportionate outcomes for operators.”
Here, EGR gauges the opinions of industry lawyers on what potential implications the changes could have for the sector.
Melanie Ellis, partner at Northridge Law
“Any improvement to the transparency of the Commission’s decision making around financial penalties is a positive development, as historically operators have found it challenging to anticipate the size of fines or understand the rationale behind penalties they have received.
“The inclusion of a five-level scale of seriousness, each resulting in a range of possible percentage of GGY penalties, is welcome and reflects the approach used by the FCA.
“However, the seriousness scale relies heavily on subjective language, leaving licensees scratching their heads as to whether their breach represented, for example, a ‘serious’ or ‘very serious’ threat to the licensing objectives and whether it affected a ‘limited’ or ‘moderate’ number of consumers.
“This will make consistent interpretation difficult. In addition, the framework allows fines to exceed the stated maximum of 15% of GGY in the relevant period in undefined ‘exceptional circumstances’.
“Ultimately, I think it is unlikely that the final amounts of fines will be much altered from the calculations under the existing principles, particularly given the opportunity for a further subjective adjustment in the final step to ensure the fine is proportionate.”
Elizabeth Dunn, partner at Bird & Bird
“For operators, these changes will introduce some much-needed transparency to the calculation of fines by the Commission. While the principles underpinning the framework have not substantially changed, there is now at least a clear starting point for the penal element of the fine for the first time.
“The banded percentage levels of GGY for each ‘seriousness level’ will particularly assist those undergoing a review in determining an appropriate level for a regulatory settlement proposal.
“However, despite the increased transparency brought by the new framework, there remains significant scope for subjectivity in the process.
“Specifically, the decision whether to increase the penal element to ensure it acts as a sufficient deterrent, and by how much, remains at the Commission’s discretion and is uncapped. This will remain a concern for many, and we will have to wait and see how that is put into practice by the Commission.”
Richard Williams, gambling and regulatory partner at Keystone Law
“It’s taken 16 months since the consultation on proposed changes to its Statement of Principles for Determining Financial Penalties (SoPfDFP) closed for the Commission to publish its revisions, which will come into effect on 10 October 2025.
“At one time, working out a financial penalty was a finger in the air exercise, with operators quite rightly asking why there was no consistency between penalties and a feeling that some of the larger operators were getting off lightly. The Commission now has a far more structured and transparent process for determining financial penalties.
“As a regulatory lawyer, the process of assessing financial penalties now follows a similar process to guidelines issued by the sentencing council for health and safety and food safety offences, where culpability, harm and the size of the organisation by turnover are all relevant factors in determining an appropriate fine for an offence. This type of structured approach makes it easier to advise clients about the likely financial penalty that will be imposed following an operating licence review.
“The Commission will now follow a seven-step process when determining a financial penalty, which includes a new seventh step to ensure the financial penalty calculated in steps one to six is proportionate to the breach.
“Penalties will continue to be based on a penal element, calculated by reference to the seriousness of the breach, and a disgorgement element, calculated by reference to a percentage of GGY earned during the breach period. As before, early resolution will lead to a reduction in the total penalty.
“Operating licence reviews commenced by the Commission have slowed down remarkably over the last 18 months, as operators have taken on board lessons learned from AML and social responsibility failings following earlier reviews.
“The industry is certainly in far better regulatory shape today. Actions plans are often preferred by the Commission to formal regulatory action where these failings are identified.
“That’s not to say there will be no more high-profile reviews with record financial penalties in future, but it appears that a combination of reviews and changes introduced by the white paper have led to a significant improvement in operator compliance.”
The post Industry reaction to the Gambling Commission’s new fine framework first appeared on EGR Intel.
Top sector lawyers give their opinion on the changes due to come into effect from 10 October, which include a new seriousness scale to determine the size of penalties for breaches
The post Industry reaction to the Gambling Commission’s new fine framework first appeared on EGR Intel.