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The Gambling Commission's new criteria for imposing fines will help increase the transparency around predicting fine amounts, but some concerns remain over how the rules impact ultimate beneficial owners (UBOs), according to legal experts.
On July 10, 2025, the Gambling Commission reported its plans to improve its approach to calculating and imposing financial penalties on gambling companies that violate its regulatory framework.
A Gambling Commission spokesperson told Vixio GamblingCompliance: "Although we have made some minor changes to the criteria for imposing fines, we do not anticipate this will result in us issuing penalties in circumstances where they would not have previously been issued."
The Commission’s changes come into effect from October 10, 2025, and include a clear and distinctive seven-step process when assessing and imposing a financial penalty, five new levels for classifying the seriousness of a breach and new calculations for determining fines based on severity and a percentage of Gross Gambling Yield (GGY) or equivalent income generated.
Penalties will also be adjusted for aggravating and mitigating factors, deterrence and early resolution.
Melanie Ellis, a partner at Northridge Law, said the “biggest impact” of the new framework will be “a better ability for the operator to assess the likely amount of any financial penalty that may be imposed”.
“This will assist them in financial planning for the penalty and if they plan to make an offer for voluntary settlement,” Ellis told Vixio.
Despite the increased transparency, she predicts several factors will still limit the certainty of fine predictions.
“The subjective nature of the seriousness scale, which employs vague terms like ‘limited effect’ and ‘moderate threat’, introduces an element of ambiguity. The provision for the maximum 15 percent of GGY level to be exceeded in undefined 'exceptional circumstances', coupled with the potential for adjustments to ensure the fine is proportionate and affordable, adds further subjectivity,” Ellis said.
Ultimately, she believes the new framework is an “improvement to the way fines have been calculated” but it does “not provide full predictability for operators due to the subjective decisions that need to be made by the Commission”.
This means that while operators will have a clearer understanding of the process of penalty assessment, some degree of unpredictability in the final amount will persist.
Steve Ketteley, partner at law firm Wiggin, said that when he has worked on significant enforcement cases, a recurring theme is “the inability to properly advise a client on the likely outcome due to the opacity of the current system”.
“We are often left scratching our heads as to how a penalty is calculated, which is not ideal when you remember this is in the context of a public body’s statutory decision-making."
He also believes the new framework “needs real transparency in how it is implemented to ensure there is clarity, proportionality and consistency in decision making, without which the Commission simply leaves itself open to challenge”.
However, he finds it disappointing that responses to a consultation “are noted by the Commission and then promptly ignored”.
“One such example is the ability for the Commission to pierce the corporate veil and reach into the pockets of UBOs to cover the fines levied against licensees. By comparison, the Financial Conduct Authority (FCA) does not reach as far up as UBOs but can take into account a parent undertaking’s resources when considering whether a financial penalty imposed on a licensee holder would cause it hardship,” Ketteley told Vixio.
Felix Faulkner, associate solicitor at licensing law firm Poppleston Allen, said the Commission’s incorporated changes mean it may request financial information of a licensee’s parent company or beneficial owner, despite many consultation respondents disagreeing with the approach.
He says, "including this within their updated Statement of Principles for Determining Financial Penalties possibly shows the Commission's intention to rely on this more often in any future enforcement."
Faulkner believes it creates a risk of penalising companies that are not involved in licensable activities at all and could be entirely unaware of their potential liability.
“It also calls into question the apparent improved consistency of the Commission if they intend to punish operators based on their parent companies’ financial reserves, and not the circumstances of and severity of the actual breach,” he said.
In terms of next steps, the Gambling Commission expects all operators to carefully read its response document to see how the changes may impact them.
