Gambling Commission Introduces GGY-Based Penalty Model with Seven-Step Process
Great Britain’s Gambling Commission has announced a comprehensive update to its enforcement procedures, introducing a new seven-step process for assessing and imposing financial penalties on regulated gambling companies. Gambling Commission GGY penalty model
These changes are set to take effect from 10 October and represent a significant shift toward a more transparent and structured approach. At the core of the new framework is the decision to base penalties on a percentage of the licensee’s gross gambling yield (GGY) or an equivalent measure of income generated during the breach period. This GGY-based model aims to create a fairer and more consistent method for determining fines.
The update follows an extensive consultation process with industry stakeholders, conducted from 15 December 2023 to 15 March 2024. The regulator sought input on how best to refine its penalty regulations, which ultimately led to amendments in its statement of principles for determining financial penalties (SoPfDFP). The SoPfDFP had last been revised in 2021, with its initial publication dating back to June 2017. Previously, the Gambling Commission considered only a limited set of factors—such as the seriousness of the breach, the licensee’s awareness, recurrence, resolution speed, previous violations, and financial resources—when issuing penalties.
The new approach introduces a clear, seven-step process designed to enhance transparency and consistency in penalty decisions. The commission also intends to clarify how the seriousness of each breach is assessed. John Pierce, the commission’s Director of Enforcement and Intelligence, explained that the GGY-based model would not be applied to certain entities, including society lotteries, registered charities, or personal license holders. For these groups, “an appropriate alternative will be used,” ensuring the framework remains tailored to different types of licensees.
A notable aspect of the revised system is the establishment of five distinct levels of breach seriousness, ranging from Level 1 for the least severe violations to Level 5 for the most serious. Penalties will be aligned with these levels, taking into account a variety of circumstances. These include whether the licensee has demonstrated lessons learned from previous cases, the timeliness of their admissions and remedial actions, whether the breach was intentional or reckless, if it could have been prevented, and whether systemic failures contributed. The potential or actual harm caused to consumers is also a critical consideration, with the severity of harm influencing the penalty level. The commission emphasized that it may adjust penalties based on aggravating or mitigating factors, such as the presence of repeat offenses, which could lead to higher fines, or early disclosures, which could warrant reductions.
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The regulator aims to incentivize compliance by allowing for penalty reductions if operators help settle cases early. Specifically, if disclosures or admissions are made within 28 days of preliminary findings, a discount may be applied. Additionally, the process will continue to prioritize proportionality and affordability, aiming to prevent penalties that would impose “significant financial hardship” on licensees. Pierce highlighted that these changes are intended to strengthen the transparency and consistency of the commission’s enforcement actions, and that stakeholder feedback played a vital role in shaping the new framework.
Industry experts have responded positively to these developments. Melanie Ellis, a partner at Northridge Law, welcomed the increased transparency, noting that the previous opacity made it difficult for operators to predict penalty outcomes or understand the rationale behind fines. She pointed out that the introduction of a scale from 1 to 5 for breach seriousness, each associated with a range of GGY percentages, could serve as a useful tool for estimating potential fines. Nonetheless, Ellis also flagged some uncertainties, particularly regarding the vagueness of the seriousness scale itself. She observed that the possibility of adjusting penalties to ensure they are “proportionate” could introduce an element of subjectivity into the process, which may warrant further clarification. Gambling Commission GGY penalty model
