Beware the Gambling Commission’s change of corporate control process

Yesterday, the Gambling Commission announced that with, effect from 18 June 2019, it is revoking the operating licence of a Malta-based remote casino operator, Maxent Limited (trading most recently as MaxEnt, with the domain names and

Its regulatory sanctions register entry states as follows:

After a hearing before the Regulatory Panel, the Commission has decided to revoke the operating licence under section 102(4)(b) of the Gambling Act 2005. This is because the Commission is not satisfied that it would have … granted the operating licence to the licensee had the new controller been a controller of the company when the application for the operating licence was made.

In particular, the Commission is not satisfied as to the source of funds used to acquire and support the Licensee at the time of, and following, the change of corporate control. The Commission also identified concerns relating to the new controller’s suitability, in that it appeared that he had provided conflicting information and had failed to be full and frank in his dealings with the Commission.

In an article for SBC News entitled “Beware the Gambling Commission’s change of corporate control process” (that can be downloaded below), David Clifton warns that, amongst the major lessons to be learned from the experience of Maxent is that, when selling shares in a licence-holding company or its parent (particularly when they amount to 10% or more of the company’s shareholding), the vendor should:

  • undertake its own full due diligence enquiries on the intending purchaser, including in relation to the origin of the monies to be used for the purchase,
  • tread very carefully indeed if it senses that the purchaser is being less than fully transparent on that or any other relevant issue and
  • bear firmly in mind that its operating licence will be considerably less at risk of revocation if, instead of application for change of corporate control being made within five weeks after the transaction has completed, an advance such application is made with time allowed for determination of that application by the Commission before the transaction completes.

As David says in his article, this is an area in which Clifton Davies Consultancy Limited has had considerable experience, including the provision of advice when an operating licence-holder realises that it has inadvertently failed to submit a change of corporate control application within the required five-week period. This is also a potentially extremely serious position for a licence-holder, bearing in mind that section 102(5) of the 2005 Act provides that, if the Gambling Commission becomes aware of any such failure, it “shall revoke the relevant operating licence”.

Anyone requiring advice on the consequences of changes of corporate control when an operating licence-holding company is subject to a change of ownership (or funding by a new investor occurs) should not hesitate to contact us because, if matters are not approached properly, the same fate could befall that company as has just befallen Maxent Limited.


1. On 6 June 2019, Maxent Limited published on its website the following statement, indicating its intention to appeal against the Gambling Commission’s decision to revoke its operating licence.

Company Statement

As of the 4th June 2019 the UK Gambling Commission made public their intent to revoke Max Entertainment’s licence to offer online gambling in the United Kingdom.  Max Entertainment are in the process of lodging an appeal against this revocation, as permitted by the Commission.  The deadline for submission of an appeal is 18th June 2019. UKGC had an option to revoke the licence with immediate effect but have granted right of appeal.

In the Findings, as issued by the Commission, the Commission states that the business is adequately funded both now and for the future, and that they are happy with the source of funding.  Their concerns all relate to the transition period which happened prior to the change of management.  As part of the appeal we will seek to have proper regard of the change of management taken.

From the statement we received from UKGC after the Panel it is clear that, were Max Entertainment to apply for a licence today, it would be granted by the Commission.

We are disappointed that the Commission has chosen to write: “This follows identification of concerns relating to the operator’s finances and information supplied to the Commission” on their website as this is, in light of what was written in the findings, misleading.  Readers willing to click through for further details do however find an accurate statement, in full context.

The Commission’s issues with the controller are not connected with the way the business is run or with how customers are treated, but solely with availability of documentary evidence from two years ago.  We feel that the Commission’s decision is not sufficiently objective, hence why we are appealing.  We do not intend to leave the UK market at this time.

We are hopeful of a positive outcome following our appeal, but we will be carefully considering our position in the UK market, nonetheless.  We believe that other markets show great potential for a responsible, prudent operator such as ourselves.

MaxEnt Ltd.

Information on appeals to the First-tier Tribunal (Gambling), an independent body set up to hear appeals against decisions of the Gambling Commission, can be found here.

2. The Gambling Commission subsequently confirmed that, having been informed that MaxEnt had appealed against its decision to revoke its licence, the “licence revocation is stayed until the outcome of the appeal”.

3. On 30 December 2019, MaxEnt published on its website the following statement announcing its immediate withdrawal from the UK market, meaning that it will no longer pursue its appeal against revocation by the Gambling Commission of its operating licence:

Company Statement

MaxEnt Limited has decided to withdraw from the UK market as of January 2020 due to strategic business reasons. We will be disallowing registrations from UK citizens with immediate effect and will keep the websites open to existing account holders for a short period for the purposes of withdrawing funds only. After that period ends any person still having funds with MaxEnt may retrieve them by contacting customer services and proving that they are the account owner.

The looming threat of Brexit has been a source of concern and now that it is assured, we feel that we are better focusing on other well-regulated European markets.

Maxent are not ruling out the possibility of returning to the UK in the future, after Brexit has happened and the market is settled, but for the moment there are promising developments in other markets around the world, and as European countries each move to the local-licensing model there are many opportunities present that would be hard to grasp if the UK also needed attention.

We take this decision with a heavy heart. We would like to take this opportunity to thank every one of our clients from the United Kingdom for their loyalty over the years. We hope that you’ve enjoyed the journey as much as we’ve enjoyed providing it, and we wish you the absolute best going forward.

Maxent Ltd.

4. iGaming Business has subsequently reported on this latest development as follows:

MaxEnt to withdraw from UK market over Brexit

2 January 2020

Malta-based Slotty Vegas operator Max Entertainment (MaxEnt) has opted to withdraw from the UK market, citing the UK’s forthcoming departure from the European Union as the reason.

In a release dated 30 December, the operator announced that UK customers will no longer be able to register with MaxEnt with immediate effect but the site will remain open for a “short period” so that existing customers may withdraw money.

The operator said that it made the decision following the December 2019 UK general election, in which the Conservative Party won a significant majority of seats. MaxEnt said that, as this made Brexit a “practical certainty,” it was no longer worthwhile to be active in the UK market.

“We take this decision with a heavy heart,” said Greg Bennett, chief executive of MaxEnt, said. “We’ve been watching the market for some time, and the looming threat of Brexit has been a source of concern for us. Now that the Conservative Party have won and can push it through, we feel that we are better focusing on well-regulated European markets.”

The operator’s licence was revoked by the British Gambling Commission in June following a change in ownership, due to concerns about the source of funds used for the deal and question marks over its new ownership. The decision to withdraw from the market means that MaxEnt will no longer contest this decision as it had originally intended.

MaxEnt said it was “not ruling out the possibility of returning to the UK in the future,” but in the shorter-term its focus would be on the rest of Europe as many countries adopt the local-licencing model.

The operator said it expects to receive its Swedish licence early this month and will look at applying for a Dutch licence when its market opened.

MaxEnt also announced that it has launched a new no-registration plan, GoSlotty, to be launched in Germany and Finland this month.