UKGC publishes updated Licensing, Compliance & Enforcement Policy with immediate effect following its consultation response

On 18 November 2021, as reported by us here, the Gambling Commission commenced a consultation on changes and updates to its Licensing, Compliance and Enforcement Policy. That consultation ran until 9 February 2022, receiving 66 responses.

The Commission has now published its response to that consultation (a full copy of which you can download below) and has, as expected, made changes to its above-mentioned Policy.

It has also published its updated Licensing, Compliance and Enforcement Policy (that you can also download below), incorporating each of the above-mentioned changes that take immediate effect. The content of the updated policy can be accessed online by means of the following links:


  1. Introduction
  2. Assessing risk
  3. Licensing
  4. Compliance
  5. Regulatory enforcement
  6. Criminal enforcement
  7. Publicity

Content of the Gambling Commission’s consultation response

The entire consultation response merits careful study. Each aspect of it (including the proposals contained within the consultation) can be accessed by following the below links:

You can print a hard copy of the entire consultation response by downloading that document below.

The Commission’s stated position in relation to each of the consultation proposals following consideration of responses to the consultation

We set out below the Commission’s stated position in relation to each of the proposals that were contained in its consultation:

Proposal 1: Policy position in relation to dual regulation products

In the absence of legislative change at this time and given that we cannot licence products that fall outside of our remit, the best approach is to provide clarity to customers about what is licensed by us, what is not licensed by us, and what protections they are afforded.

We do not agree that this approach stifles innovation or is inconsistent with our duty to permit gambling in so far as it is reasonably consistent with pursuit of the licensing objectives. Gambling innovation must occur within the boundaries of the Gambling Act 2005 (opens in a new tab) and we consider that presenting a product as something it is not, via use of language and imagery most commonly associated with the financial sector, is not reasonably consistent with the licensing objectives which refer to gambling being conducted in a fair and open way and protecting people from being harmed or exploited by gambling.

Where gambling products with names, marketing and games rules contain language associated with financial products, we will apply a principles and risk-based approach aimed at ensuring that the language used is not misleading and that customers can readily determine if they are placing a bet, playing a game of chance or taking part in activity that falls to be regulated by others. The words listed in the policy proposal were for illustrative purposes and not an exhaustive list.

Some respondents sought clarity on the exceptions that may apply to the policy. Applications are reviewed on a case-by-case basis, and applicants will have the option of altering product offerings to bring them entirely within or take them entirely outside of our remit, thus addressing concerns over regulatory uncertainly. Furthermore, for products entirely within our remit, applicants will have the ability to change their product presentation and marketing to ensure our policy objectives are met.

Based on the above, we will proceed to implement the policy we proposed which we conclude provides clarity to consumers and operators and best mitigates the risks of consumer confusion and exposure to financial risk and possible harm.

Proposal 2: Changes to complete applications

Guidance for the forms is embedded throughout the online application process and is available on our website to prepare for completing and submitting the application. However, the Commission is committed to continuously improving its services and regularly gathers feedback and implements relevant changes. Information about what constitutes a complete application is already available on our website, however it is clear from some of the comments that this could be improved. These improvements will be taken forward in the new financial year.

When an application is considered incomplete, Licensing writes to the applicant, informing them of the information that is missing and giving them 10 working days to provide it. Only if the information is still not provided after that period, do we reject the application as incomplete.

Suggestions that applicants should be able to engage with the Licensing team are noted. Engagement currently takes place through the application process however pre-application support is necessarily limited to general advice. The Commission is responsible for assessing and making decisions about applications and there would be a clear conflict of interest if we assist applicants by providing more detailed support and advice beyond the general advice. The Commission’s current fee structure supports our licensing, compliance and enforcement work but does not extend to pre-application services.

Proposal 3: Clarification of relevant persons

Whilst the Commission has made a minor amendment to the paragraph following responses, we do not intend to provide further examples because this is a policy statement and not intended to provide exhaustive lists.

The Gambling Act 2005 necessarily gives the Commission discretion as to who are considered relevant persons. It is an applicant’s responsibility to identify who might be relevant, bearing the Policy in mind, but the Commission will, on a case-by-case basis, identify and ask for information about who it considers may be relevant persons not identified by an applicant.

Proposal 4: Timescale for using licence

Whilst the Commission understands the comments about defining what a ‘reasonable’ period is, the Commission does not intend to define this because it is right that we consider each application on its own merits. Whilst it might be reasonable, based on the information provided with the application and the type of application, to expect one applicant to begin to use their licence within a couple of months of it being granted, it may not be reasonable for another applicant.

In respect of personal licence holders who may be in between jobs, it should be noted that this new paragraph applies specifically to applicants for licences.

It should be noted that this applies to all personal licence applicants. Those applying for a personal licence purely to provide consultancy services and who do not intend to take up a role that requires them to hold a personal licence are unlikely to be granted a licence.

Proposal 5: Clarification of suitability criteria

Whilst the Commission has made a minor amendment to the proposed paragraph, we do not intend to provide further examples of relevant persons within a policy statement. The Commission disagrees that the statement is jargon-filled and we do not intend to give further definitions of certain words as this is a policy statement.

Whilst an operator undoubtedly must consider the competence of people it employs, the Commission’s consideration of suitability must also include competence because we need assurance that individuals will not adversely impact the licensing objectives.

Where the Commission has concerns about an application, for example, because a person or entity has not demonstrated their willingness to comply with regulatory responsibilities, the Commission will set out specific examples related to that specific case in any correspondence with the applicant.

It would not be appropriate to differentiate between public and private companies; the suitability criteria apply to all applicants although the Commission will take a risk-based and proportionate approach when applying the criteria. This includes whether individuals or entities are already approved by the Commission or another regulator.

Proposal 6: Clarification of financing arrangements

Following the responses, the Commission has removed the phrase ‘tainted by illegality’ from paragraph 3.25 within the Policy and replaced it with wording that more closely aligns with the first licensing objective.

In relation to providing clearer guidance and examples of documents that would satisfy evidence requirements, we do not intend to provide these because this is a policy statement and funding arrangements can vary significantly. The types of documents that may evidence on source of funding may not be applicable to others.

As set out in the Commission’s Statement of principles for licensing and regulation and elsewhere in the Policy, the Commission takes a risk-based and proportionate approach, including in respect to the amount and detail of information an applicant is required to provide. The Commission acts in line with legislation and will continue to do so.

The intention of the new paragraph is to make much clearer to applicants their responsibilities in satisfying the Commission as to source of funding and to make clear the importance of the first licensing objective in relation to source of funding.

Proposal 7: Addition of new examples to update the Commission about

The intention of the addition of examples is not to provide an exhaustive list of all matters that licensees should report to the Commission and we agree that these matters are set out in the LCCP and/or on our website. However, some licensees are not reporting these changes, submitting regulatory returns, or submitting variation and/or change of control applications in the required timescales. We remain of the view that the addition of some key examples highlights to licensees the importance of these matters and, by extension, the importance of reading and understanding their licence conditions thoroughly and putting in place mechanisms to comply.

It should be noted that licences do not have an expiry date and changes to this would require changes to the Gambling Act 2005.

In respect of timely submission of variation applications, it remains the responsibility of the licensee to have controls in place to monitor its activities and ensure it is complying with requirements. This includes understanding when they may be nearing their fee category limit and submitting the application in sufficient time to allow the Commission to consider and grant it before the fee category is exceeded. The fee category limits are clearly set out on all licences.

An application for a licence is granted because the applicant has demonstrated their ability to comply with requirements, so the onus is very firmly and rightly on a licensee to make sure they are operating compliantly.

Proposal 8: Minor updates to reflect minor changes to processes in the policy

It is clear from some of the comments that providing the online application service ‘help and guidance’ in one document available for download would be of great value to applicant and licensees. This improvement will be explored in the new financial year, as part of continuous improvement, and taken forward as soon as practicably possible.

The Commission has deliberately excluded mention of it being mandatory for all applications to be made online as certain types of application cannot currently be made in this way; the Commission continues to accept these specific applications by email. Again, as part of continually updating and improving our services, we are working towards all applications being submitted online only.

It should be noted that the Commission checks associated companies within the same group structure or under common ownership already as part of the application process. In respect of further defining company structure, we do not intend to do this because this is a policy statement and company structures can vary enormously.

In respect of concerns about identity requirements, the Commission no longer requires photographs from personal licence applicants because we have a robust online identity verification process in place.

Proposal 9: Remote assessments

In implementing the change as proposed, we have considered the proportionality and legality of using this method of assessment and we are satisfied that we have appropriate controls in place to ensure that laws relating to data protection are complied with.

It is important that we have the flexibility to conduct assessments in a number of ways as we have a diverse range of operators based across the world. We will maintain the option to conduct assessments either face to face or via remote means. We acknowledge comments about preferences and visibility of the Commission and will ensure that we make the best use of the resource we have considering resource and the most appropriate and efficient means for conducting each assessment.

We have conducted many assessments remotely, and since the beginning of the Covid-19 pandemic most of our work has been conducted remotely using various different technology.

We allow opportunities for those being assessed to provide feedback and clarify anything we have asked. We also ensure that a summary of our findings is provided post an assessment to ensure that a licensee has an opportunity to respond to our findings.

We reference ‘Skype’ only as an example of video conferencing software.

Proposal 10: Assessment framework

We use the summary of our assessment findings, which we send out to licensees after every assessment to clarify where we believe an issue is a breach of a licence condition or where there is an issue of concern, that could be categorised in different terms as a minor non-conformity. We do not consider that additional subcategories are required.

‘Improvement required’ is used to reflect circumstances where a licensee may be in breach of a licence condition or social responsibility code, or any other requirement attached to a licence. However, we would not use this description where we judge that there is likely to be a significant impact on consumers, the licensing objectives, or the reputation of the industry. We would also expect clear assurances that a licensee will make immediate changes to ensure that there is no future risk. As an outcome focussed regulator we will consider the impact, or potential impact of non- compliance.

Some respondents have requested that the outcome descriptions are more prescriptive. However, our focus in on achieving consistency and so additional categories are not helpful. We are committed to communicating the findings of our assessments in writing with clear details around the actions required.

Proposal 11: Special Measures

At present we do not announce the outcome of our assessment work, only our enforcement casework. As a proportionate regulator we would consider publication of information about the Special Measures process only as part of a piece of work to look at publication of assessment outcomes in general. To do otherwise would not provide a balanced picture. We will be evaluating the effectiveness of the Special Measures process as part of our review of the outcomes of its introduction.

The Special Measures process includes a requirement that a licensee takes immediate steps to mitigate risk to consumers and the licensing objectives. Where we judge that the consumer risk is too high, we are likely to consider measures other than Special Measures.

The comments on divestment fall outside of the parameters of this consultation. A decision on divestment to customers, where this is outside of a formal regulatory investigation, is for the licensee. By not divesting back to consumers the licensee risks a separate claim from a consumer. We do not have legal powers to settle an individual dispute.

While it is open to a licensee to refuse Special Measures, this would most likely mean that the licensee, based on the identified failings, would be considered for review of its licence. As part of that review process, we would want to understand why the operator was unwilling to work to achieve compliance at pace. The review process allows for the licensee to make representations about the Commission’s findings and proposed course of action.

We will be implementing the proposal as set out in the consultation document.

Proposal 12: Commencing a review of an individual licence

We consider it important that our processes are transparent and available to licensees and their advisers. There are many occasions when engagement is not withheld to the point of obstruction but is not as effective as it could be. In these instances, clarifying the process and the opportunity for representations is important to manage the process and relationship.

Similarly, whilst every effort will be made to issue only one set of preliminary findings, where required we must have the flexibility to ensure fair weight is given to the available information.

It is not envisaged that this amendment would be utilised solely for the benefit of the Commission and officials will continue to expect licensees to engage comprehensively at the earliest opportunity. It is anticipated this would be used exceptionally, rather than routinely.

The Commission will make available to licensees under review projected timescales for case progression at the outset of an investigation and these will be monitored on an ongoing basis as applicable to the facts of each individual case. The Commission already provides detailed rationale in its decision letters and notices and will ensure this continues to apply.

The Commission intends to continue with its proposals to amend paragraphs 5.10 and 5.19 of the Policy.

Proposal 13: Financial penalties

The Commission intends to proceed with the proposed amendment.

We acknowledge views about the Commission publishing a formula explaining penalty calculations. It remains our position that to do so could encourage noncompliance by facilitating licensees to cost their actions, which could increase risk to consumers. Equally, we appreciate the need for licensees to understand what factors have informed our decision making and, mitigating and aggravating factors. The Commission will continue to ensure these elements are articulated in correspondence during the review.

The Act stipulates that the Commission will have regard to the affordability of a proposed penalty. The Act is not prescriptive on the definition of financial resources but for a group structure where dividends and loans are available to move monies around the group it follows that a licensee has more financial resources available to it than a stand-alone company and should be assessed accordingly. In addition, consideration of the group finances removes the ability of the licensee to move monies available to fund a penalty out of reach during the investigation period.

As with a licensee that appears to have financial resources available to fund a penalty, there is an opportunity to provide clarity and evidence on what funds are available or are not available in a group or a company to fund a penalty. On a case-by-case basis and proportionate to the identified failings, the Commission will decide what level of penalty is appropriate and whether it requires additional financial information from the business structure either prior to communication of the penalty or if affordability is raised during representations.

Proposal 14: Suspension

The Commission recognises the significant impact suspensions have on licensees and undertakes such action only when there is a reasonably held belief that this is the only action which will appropriately mitigate the alleged breaches whilst further enquiries are undertaken.

We recognise the need to engage at an early point and will work to ensure that if suspension is believed to be required, we will engage with the licensee initially. Should those efforts not yield the results we expect then suspension will follow its procedural route. Where such a decision is challenged it would be before different officials and as such we will continue with the amendment. Commissioners are not employees of the Commission and afford a layer of separation from officials which will help act as a safeguard to test our decision making.

Proposal 15: Regulatory settlements

We introduced settlements to provide alternative resolution to reviews which can be lengthy and complex. We sought to recognise constructive early engagement and mitigation of issues to the benefit of consumers, the licensee and the Commission. We have already published guidance which covers what criteria will be assessed in making decisions on Regulatory Settlements.

The Commission does not invite, nor negotiate settlements. If a licensee wishes to submit a settlement the Commission up until now has been duty bound to consider it, irrespective of the stage submitted however our view that settlement is a privilege and not a right remains.

We will continue to consider settlements until the representation window post issuance of preliminary findings concludes. We note that within the review process, the licensee will have had multiple opportunities to engage with the Commission and provide information to us and understand our position.

If the licensee can clearly demonstrate factual inaccuracies in the Commission’s position, this ought to be contained with the settlement offer to explain why parts of our findings may not be accepted. If a further preliminary finding is issued by the Commission, the clock would be reset to the last preliminary findings. The Commission will maintain its position of not negotiating settlements but detailed reasons for decisions, whether acceptance or rejection will continue to be provided within this revised timeframe.

The Commission will therefore proceed with the amendment.