The UK Gambling Commission (UKGC) is evaluating whether the final destination for regulatory settlements paid by British betting operators should change.
Consultations are now open until 2 April on the potential amendment of section 2.39 of the UKGC’s ‘Statement of principles for determining financial penalties’.
Under the current texts, payments made as part of regulatory settlements do not need to be paid into the government’s Consolidation Fund.
The Consolidation Fund collects government proceeds from means such as taxation, which are then used to subsidise public initiatives. These include compulsory financial penalties imposed by the UKGC in relation to regulatory breaches under section 121 of the Gambling Act 2005.
However, as stated above, regulatory settlements – which are negotiated agreements at heart – do not currently end up in the Consolidation Fund, which the UKGC is now looking to amend.
“This would ensure that any future regulatory settlements, which are an important option in the Commission’s regulatory toolkit, are paid quickly to the Consolidated Fund and the Government could decide on its use as it does with financial penalties,” the regulator said.
“This proposal takes account of the new levy commissioning structures and avoids a dual system or any duplication of work funded by the statutory levy.”
Regulatory settlements can often by hefty sums. Two of the biggest in recent memory included the record breaking £17m paid by Entain in 2022 and £19m paid by William Hill the year after.
New changes to the levy structure
The new levy commissioning structures that the UKGC is referring to relates to the upcoming closure of GambleAware, the outgoing commissioner of research, education and treatment funds structured around gambling harm prevention.
GambleAware is closing in March, with new commissioners taking on its duties across England, Scotland and Wales under the new statutory levy system that was implemented in accordance with the 2023 Gambling Review White Paper.
The NHS is replacing GambleAware as the main commissioner of treatment services, while the Office for Health Improvement and Disparities (OHID) will take on prevention and the UK Research and Innovation (UKRI) will take on research.
The closure means that the UKGC will no longer have an automatic destination for regulatory settlements in the face of GambleAware, which was the designated body to commission gambling harm programmes and services while monitoring their delivery.
In essence, the regulator outlined that the change is necessary to avoid uncoordinated activity, gaps and duplications, especially given the volatility of regulatory settlement funds, whose amounts and payment dates can be unpredictable.
Lastly, the UKGC wants to shut down any criticism that may arise in the future if the system remains the same, such as being accused of using enforcement to increase revenue for research.
The regulator concluded that paying enforcement settlements directly to the government is the most viable and appropriate option in the context of the new statutory levy landscape.