UKGC to Calculate Future Fines on Gross Gaming Revenue
The UK Gambling Commission (UKGC) is set to implement a comprehensive revision of its enforcement procedures by introducing a new framework for calculating financial penalties, set to take effect on October 10. The revised system will fundamentally alter how fines are determined, linking them directly to an operator's Gross Gambling Yield (GGY) and establishing a transparent and consistent enforcement process through a structured seven-step model.
LISTEN TO THIS ARTICLE:Under the updated Statement of Principles for Determining Financial Penalties, the United Kingdom Gambling Commission will apply a tiered approach to breaches, assigning one of five seriousness levels to each case. These levels will determine a base percentage of the GGY generated during the period in which the breach occurred, which will serve as the starting point for the financial penalty.
Related: UK Gambling Commission's New Rules to Improve TransparencyThe most severe violations could result in fines equal to 15% of GGY or more in exceptional circumstances, reinforcing the Commission's commitment to penalizing significant misconduct effectively.
The enforcement overhaul includes detailed procedures for assessing aggravating and mitigating circumstances that may influence the final penalty. The framework also introduces a "deterrence uplift" mechanism to increase fines where necessary to discourage repeat or industry-wide misconduct. Affordability will also be considered to ensure that penalties remain proportionate and enforceable while still holding operators accountable.
Additionally, the UKGC will formally separate any "disgorgement" amount from the penal element of a fine. Disgorgement relates to consumer harm or illicit financial gain associated with the breach and will be calculated and applied before the final financial penalty is determined. This approach allows for clearer delineation between restitution to affected parties and punitive measures directed at the operator.
The regulator has stated that the intent of these changes is to enhance transparency in regulatory actions, provide greater consistency in the application of financial penalties, and promote early compliance among gambling operators. By clearly outlining how fines are derived and what factors influence enforcement decisions, the UKGC aims to streamline its processes and ensure that all parties understand the regulatory expectations and consequences.
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UKGC Reportedly Responds to Industry Feedback
According to the UKGC's director of enforcement and intelligence, the changes reflect the input of a wide range of stakeholders and were shaped by extensive consultation. He noted that the updated framework not only improves the clarity and efficiency of penalty decisions but also supports the overarching goal of consumer protection by incentivizing operators to comply with regulations at the earliest possible stage.
The framework also contains special considerations for society lotteries, registered charities, and personal license holders. Since a GGY-based calculation may not be appropriate for these groups, the UKGC has introduced alternative methods for determining penalties in such cases, ensuring that enforcement remains fair and contextually relevant across different segments of the gambling industry.
The new model follows a formal consultation period conducted between December 2023 and March 2024. During this time, 29 organizations, including licensed operators, trade associations, and charitable entities, submitted their responses. While many supported the direction of the proposed changes, several contributors requested further clarification on key issues such as affordability, the use of deterrence uplifts, and the application of non-GGY-based fine models.
In response to the feedback received, the UKGC made several adjustments to its proposals before finalizing the updated framework. One notable addition is a seventh step in the penalty calculation process, designed to ensure that final fines are proportionate to the circumstances of each case. The regulator also provided clearer guidance on when alternative fine determination methods would be used, particularly for entities not driven by GGY.
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