The Gambling Commission has commenced a consultation (that runs from 1 May 2020 until 26 June 2020) in relation to proposed changes to its corporate governance framework that (according to the Commission) are designed to “ensure that [its] Regulatory Panels are best equipped to deal with [its] evolving casework”.
Responses to the survey can be given by way of an online survey, accessible here. However, you can download below the entire consultation document, the overview to which states as follows:
Through effective licensing and regulatory enforcement activity, the Commission aims to protect consumers and the wider public, and to raise standards in the gambling industry.
There are a variety of ways that the Commission can deal with non-compliance by Licensees, ranging from enhanced compliance procedures and regulatory settlements to licence reviews and formal enforcement action.The Commission is also responsible for determining applications for new operating and personal licences and ensuring that those that hold a licence remain suitable to do so.
Cases can be referred to a Regulatory Panel for determination at the request of the Applicant/ Licensee and/or if their scale, complexity, or novelty are of strategic importance to the Commission.
Due to changes in the gambling market and gambling regulation, the cases that are heard by Regulatory Panels are becoming increasingly complex and legalistic.
We are consulting on a number of proposals to ensure that our Regulatory Panels are best equipped to deal with our evolving casework.
The proposals are set out within the consultation document as follows:
Under the proposals we shall employ between four and six Adjudicators, who are legally qualified persons employed solely for the purposes of sitting on Regulatory Panels.
The quorum for conduct of any business by the Regulatory Panel is proposed as one Commissioner and one Adjudicator for matters relating to an operating licence and one Adjudicator for matters relating to a personal licence.
Usually, for an operator enforcement case or an operator licensing case, quorum will be one Commissioner and one Adjudicator and for a personal licence case (either enforcement or licensing application), quorum will usually be one Adjudicator.
The reason for the proposed difference in quorum is based on our experience of the likely complexity of these different types of hearing.
We propose that a Regulatory Panel may also occasionally be asked by Commission staff to provide steers on regulatory settlement proposals / indication of an appropriate figure for a financial penalty (on the condition that a differently constituted panel would hear any subsequent enforcement case) when necessary. Delegation for approval of settlements will remain with Executive Directors.
We would retain the option for a legal adviser to attend Panel hearings, but the presumption is that ordinarily a legally qualified panel member would provide the legal advice to the Panel. As occurs now, this advice would need to be announced to both parties.
Advantages to this option:
(a) a mixed Panel will bring a broader range of combined experience and ensure such skills do not atrophy by being regularly utilised
(b) greater availability of Panel members to hear cases brings more flexibility in listing cases and shorter waiting times for hearings
(c) the mixed Panel model is adopted by a number of other regulators
(d) saving on costs of legal adviser to Panel meaning that costs awarded against the losing party will be lower overall
We are satisfied that this proposal represents a cost- effective way of conducting hearings. In order to be open and transparent, we have set out our estimate of costs and savings below.
(a) Day rate for legally qualified adjudicator bearing in mind case volume, and depending on the quality of applicant sought. Based on an average salary for this type of work (38 days per annum), we might budget an extra £40,000 for a year’s adjudications.
(b) In addition, we would need to have at least one training day per annum (6 x day rate, plus Commission staff costs of facilitating this)
(c) Time will be needed for Board oversight of the Panel members, including:
i. Each member to be observed and performance reviewed by the Chair of the Panel, with the Chair observed by the Chair of the Commission during their term for appraisal purposes
ii. Annual report to Board
(d) Overheads relating to their status as employees, agents or contractors. We would propose to model the employment contract on our existing contracts e.g. advisory panels/ independent members.
(e) Governance time in managing the Panel, appointing hearing dates etc – assume this would be like-for-like as against existing arrangements.
(f) Recruitment time / costs on a three-year cycle once their terms expire, assuming there is no need to terminate early, as per the above item.
Savings would be made in not having a separate legal adviser to the panels. As external panel legal advice costs range from £2,000 per case to £10,000 for the most complex cases, we would estimate this saving would contribute approximately £30,000 towards the annual cost of the panel.
The decision as to whether we pay Panel members for time incurred if the hearing does not take place (due to the licensee, for example, abandoning their opposition in the meantime) has the potential to impact on actual costs.
The above figures do not account for hearings abandoned at that stage and there are usually two to three such hearings per year. It is proposed that we pay for work done once the papers have been provided to Panel members – if we do not offer to pay for time incurred, this will have a detrimental effect on the attractiveness of the role.
In the same way as we currently recover costs, some of the above costs may be recovered from operators in some cases. This would be where:
(a) costs can fairly be attributed to a particular enforcement case
(b) the official’s decision on breach is upheld
(c) a fine is ordered to be paid;
(d) the fine is in excess of investigation costs; and
(e) the fine is in fact paid in full.
In order to improve how we regulate, and to provide further clarity to applicants and licensees on how the Panel will decide on matters of procedure, we have set out some proposed changes.
In particular, we are looking to expand the sections on ‘Documentary and other evidence’ and ‘Representations and evidence’, and the circumstances in which it will be possible to admit late evidence.
In respect of regulatory decisions, we have proposed further guidance in the financial penalties section in terms of representations. We have also proposed extended timescales for submission of bundles prior to the hearing, payment of financial penalties and dates for decisions.
If implemented, these proposals will fundamentally change the way in which Regulatory Panel hearings are determined by by the Gambling Commission. Likely to attract particular comment/controversy are:
- what it is exactly that has led the Commission to the conclusion that “cases … heard by Regulatory Panels are becoming increasingly complex and legalistic”?
- to what extent would implementation of these proposals result in hearings suffering from (a) less obvious fairness and (b) a potential loss of demonstrable independence from the decisions and recommendations of Commission officers?
You can also downloaded below the following documents, also published by the Commission as part of its consultation papers:
- PDF of tracked changes – Appendix 6 – Delegation of licensing and regulatory decisions in respect of gambling
- PDF of tracked changes – Regulatory decisions: Procedures and guidance for regulatory hearings
- PDF of tracked changes – Licensing decisions: Procedures and guidance for licensing hearings
UPDATE: An interesting article on this subject – entitled “Under fire GC seeks to diminish turbulent priests” – accessible here – has been written by Scott Longley for iGamingBusiness.