The UK Gambling Commission (UKGC) is set to implement significant changes to its approach in calculating and enforcing financial penalties. These changes, slated for introduction on October 10, come after extensive consultations and aim to provide greater clarity and consistency in how the regulator handles breaches of gambling regulations. The revisions are part of a broader effort to enhance transparency in the enforcement process, which has faced criticism for lacking clear guidelines on determining the severity of infractions and calculating corresponding penalties.

Key features of the new approach:

The UKGC’s updated penalty structure includes a clearly defined seven-step process to assess breaches, which will now be ranked across five levels of seriousness. The gravity of an offence, coupled with the financial impact of the breach—measured as a percentage of the operator’s Gross Gambling Yield (GGY) or equivalent income during the period of violation—will determine the base amount of any penalty imposed. Adjustments will then be made based on various factors, including the presence of aggravating or mitigating elements, the need for deterrence, and whether early resolution of the issue occurred.

These reforms aim to increase transparency, ensuring that both operators and consumers understand the basis on which penalties are applied. As stated in the regulator’s press release, John Pierce, Director of Enforcement and Intelligence at the Gambling Commission, explained, “We are making changes to strengthen the transparency and consistency of how we impose financial penalties. These proposals were subject to extensive consultation, and the views shared by all our stakeholders have been taken into account.”

One of the major shifts in the UKGC’s revised approach is the introduction of a detailed process to calculate penalties for breaches. This will help to eliminate any ambiguity surrounding how the penalties are determined. By ranking violations across five seriousness levels, the UKGC aims to create a more nuanced system that accurately reflects the scale of non-compliance. This structure also enhances the Commission’s ability to apply a proportionate and fair penalty, with flexibility built into the system to account for various circumstances.

Importantly, the new model will allow for the penal element to be based on a percentage of the operator’s GGY or similar income during the period of the breach. Adjustments will be made depending on the aggravating or mitigating factors, as well as whether an operator took proactive steps to resolve the issue before the matter escalated. Pierce added, “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.”

Additionally, penalties imposed on society lotteries, personal licence holders, or registered charities will not be based on GGY, but rather an alternative approach that is deemed more appropriate for these sectors.

Increased focus on encouraging early compliance:

A key element of the new framework is its emphasis on encouraging early compliance. By providing more transparency in the process and offering a clearer understanding of how penalties will be assessed, the UKGC aims to motivate operators to resolve potential issues before they escalate. The Commission’s ultimate goal is to reduce the frequency of enforcement actions by promoting proactive compliance with regulations.

Pierce expressed confidence that the new framework would help prevent many cases from requiring heavy penalties. “Crucially, the new approach also encourages compliance at the earliest opportunity, supporting the protection of consumers alongside fair and proportionate outcomes for operators,” he said.

The UKGC is known for its rigorous enforcement activities within the gambling industry. Its proactive approach has led to significant penalties in recent years, with notable actions taken against major operators like Entain and William Hill. These operators were fined £17m and £19m, respectively, in 2022 and 2023 for anti-money laundering and social responsibility failures.