Consultation on amending section 2.39 in the Statement of Principles for Determining Financial Penalties in relation to the destination of future regulatory settlements

Overview

One form of enforcement action which can be taken by the Gambling Commission is the application of financial penalties, which are paid to the Consolidated Fund [1]. Regulatory settlements are an alternative form of enforcement action which may involve payments in lieu of a financial penalty and these regulatory settlement amounts currently follow a different process which was developed before the introduction of a statutory levy system for research, prevention and treatment.   

In the April 2023 White Paper, High Stakes: gambling reform for the digital age (opens in new tab) the Government committed to introducing a statutory levy as provided for in Section 123 of the Gambling Act 2005. Following consultation and the necessary legislative processes, the statutory levy came into force in April 2025 (opens in new tab). 

In the Commission’s supplementary advice to Government on the design and implementation of a statutory levy (opens in a new tab) published in November 2023 we identified that one outcome of the levy was that the Commission would need to give due consideration to the future destination of regulatory settlements which can be an outcome when the Commission takes regulatory action against a licensee. The process for determining the destination of a regulatory settlement, also referred to as a payment in lieu of a financial penalty, is currently set out in section 2.39 of our Statement of principles for determining financial penalties (opens in a new tab). 

The Commission committed to working with Government and the levy commissioning bodies to explore how any regulatory settlement process could, as far as possible, mirror the new levy commissioning structures and avoid a dual system or any duplication of work being funded by the statutory levy. 

Following discussions with Government and the new levy commissioning bodies it has been concluded that this would not be feasible given the complexity and potential volatility of regulatory settlement funds. The Commission is now consulting on a proposed amendment to section 2.39 of our Statement of principles for determining financial penalties (opens in a new tab) that would see any future regulatory settlements being sent to the Consolidated Fund as financial penalties are. This would ensure that any future regulatory settlements, which are an important option in the Commission’s regulatory toolkit, are paid quickly to the Consolidated Fund and Government could decide on its use as it does with financial penalties. It would avoid the risk of activity separate to the new levy system taking place outside of proper commissioning and evaluation processes or developing in an uncoordinated manner. 

[1] The Consolidated Fund receives the proceeds of taxation and other government receipts which fund public expenditure

Why your views matter

This consultation sets out a proposal that would amend or remove wording in our Statement of principles for determining financial penalties (opens in a new tab). All stakeholders, including consumers, gambling licensees and members of the public are invited to share their views on these proposals and provide a response to the proposed amendment. These views will help us further consider the appropriateness of our proposal.