HomeInsightsGambling Commission consults the industry on its approach to licensing, compliance and enforcement

Article by

The Gambling Commission has today commenced a consultation on the proposed changes and updates to its Licensing, Compliance and Enforcement Policy (‘the Policy’).

The current Policy came into force in 2017 and, in the four years since, has provided the foundation for the Commission’s approach towards assessing licence applications, evaluating operators’ compliance with their regulatory obligations and the regulatory enforcement that can ensue from operators’ failure to meet those obligations.  It is fair to say that the majority of operators’ interactions with the Commission will be governed the Policy.

The Policy is a product of the Commission’s statutory obligation to prepare, publish and keep under review a statement that sets out the principles which will govern the exercise of its functions and, in particular, explain how those principles will assist the Commission in its pursuit of the licensing objectives.  In doing so, the Commission publishes its Statement of Principles for Licensing and Regulation and flowing from that, it then publishes the Policy which should be read in conjunction with those principles.

Notable issues being considered by the consultation are: –

  • Measures to address the issues arising from dual-regulated products, clearly following the Football Index debacle.
  • Updates to the process of suitability assessments that the Commission will undertake in the context of any application for an operating licence. Notably, this will look in more detail at the identity and ownership of applicants and those who finance them and responds to the constant challenge that the Commission faces when presented with complicated ownership and trust structures. There is a clear indication the Commission will need to see all the way through to the individuals they consider to be the ‘true owners’.
  • A clear statement that the Commission will ‘not grant an operating licence until it is fully satisfied that the operation will not be financed by the proceeds of crime’.
  • The introduction of ‘remote compliance assessments’. The Commission envisages that it will ‘request sight of documents and records held by the licensee, including customer records and the audit trail in relation to customer accounts’.  Clearly any response to this consultation around this point needs to draw in the GDPR-related constraints that operators and the regulator itself are under here.
  • A formalisation of the ‘Special Measures’ concept which the Commission has been trialling during the course of the last year. For those operators that have experienced this, a published process governing it will be welcome.
  • Enshrining the ability for the Commission to issue what they consider ‘further consolidated preliminary findings’ during any enforcement process. This is a technical point which those who have experienced enforcement will appreciate and be concerned about.
  • Confirmation that the Commission would ‘not normally accept offers of regulatory settlement offers after the licensee had made representations on the Commission’s preliminary findings’. However, there is no clarity as to how early a settlement offer could actually be made which would be worthy of a response to the consultation.

We will provide a more detailed assessment of the consultation document and the implications of it in due course.

The industry will be somewhat sceptical about the Commission’s approach to consultations. A recent justification for such scepticism arose from the Commission’s response to the Regulatory Panel Reform consultation published earlier this year. In that consultation, the Commission made four proposals and then confirmed that the majority of respondents (us included) objected to all of them. Yet, the Commission clearly indicated an intention to proceed regardless of those objections.

We would implore the industry to digest this consultation and respond to it.  Whilst the Commission’s procedures may be of limited interest to many participants within the industry, for those who operate within the legal and compliance teams of the sector, this warrants real attention.

The consultation closes on 9 February 2022 and can be accessed here.