The Gambling Commission (UKGC) has opened a consultation on proposals to bring greater clarity to the way its financial penalties are calculated.
The proposals come in the wake of escalating financial penalties in the UK for regulatory violations, with the UKGC chief noting in the past that the body was responsible for the majority of global regulatory action.
Relations between the gambling regulator and UK industry are currently at a low ebb.
An acrimonious debate is raging in the press concerning the ongoing process of gambling reform, particularly the exact shape of the Commission’s affordability checks proposals.
And now, the UKGC is consulting on seven proposed changes to its statement of principles for determining financial penalties that would see such action become more transparent.
Interested parties who wish to give feedback have a 13-week period in which to do so, with a 15 March closing date.
Questions remain over whether this represents a wholesale change in strategy for the UKGC’s approach to enforcement.
Under the leadership of CEO Andrew Rhodes, the regulator has escalated penalties for repeat offenders to ensure that regulatory action is not considered just the “cost of doing business”.
Operators could face penalties of up to 15% GGY
Under the proposed regulations, financial penalties would be calculated under a new six-step process.
With this system, the seriousness of the breach will be judged on a five-point severity scale, similar to methods used by other regulators such as the FCA and OFGEM.
This scale would be linked to gross gambling yield (GGY), with the size of the penalty determined by checking the severity of the breach against the amount of time the violation took place.
The five severity bands would see penalties rise to a maximum of 15% of GGY for the most serious cases.
While the industry has called for greater transparency in the past, under the proposed rules a maximum imposed penalty could be greater than previous fines.
However, improved compliance procedures undertaken by UK businesses leading up to the Gambling Act review makes the most severe penalties less likely than they were in the past.
“These consultations are part of our continued drive to ensure Britain has the world’s most effectively regulated gambling sector,” said Commission executive director of operations Kay Roberts.
“We would urge all our stakeholders to take the time out to have their say on these consultations as all views on proposed changes will be considered.”
Commission consults on new financial key event rules
The Commission is also asking for feedback on proposals to amend its rules on financial key event reporting.
This is intended to take into account the greater complexity of the industry and the globalisation of gaming.
The consultations follow up from those launched weeks ago as part of the government’s package of reforms to the gambling industry.
