New guidance aims to boost transparency, fairness, and enforcement clarity for operators
The UK Gambling Commission (UKGC) has announced a major overhaul of its approach to calculating financial penalties for gambling operators. From 10 October 2025, a new version of the Statement of Principles for Determining Financial Penalties (SoPfDFP) will come into effect, featuring a structured seven-step process and revised definitions of breach severity.
This regulatory refinement follows a consultation concluded in March 2024, which engaged 29 industry stakeholders, with 21 agreeing to be publicly identified in the final summary report.
A New Seven-Step Enforcement Process
At the heart of the revised approach is a seven-step framework designed to clarify how the Gambling Commission arrives at financial penalties. According to John Pierce, Director of Enforcement and Intelligence, the changes aim to “strengthen our decision-making and streamline the calculation of penalties.”
This structure will help licensees and stakeholders understand each phase of the enforcement process, from breach identification to penalty calculation, and finally to the application of mitigating or aggravating factors.
Breach Severity and GGY-Based Starting Points
One of the key reforms is the introduction of a five-tiered seriousness metric that differentiates between minor procedural issues and major systemic failings. Each breach level corresponds with a starting penalty amount based on a percentage of the operator’s Gross Gambling Yield (GGY).
This move aligns the UKGC with other financial regulators that use income-based proportionality models to ensure consistency and fairness in sanctions.
However, society lotteries and external lottery managers are excluded from this GGY-based model. The Commission has carved out special provisions acknowledging the unique financial structures and objectives of these operators.
Transparency and Fairness in Focus
Another notable shift lies in the Commission’s emphasis on transparency and early compliance. The new framework includes clearer definitions for what constitutes aggravating and mitigating factors, providing a transparent lens through which penalty adjustments will be made.
Operators who take swift remedial action, self-report issues, or demonstrate improved compliance structures could see their penalties significantly reduced under the new system. Conversely, repeated breaches or attempts to obscure misconduct may now carry heavier consequences.
Industry Engagement and Broader Implications
The industry consultation featured a 61-question document and was broadly welcomed by operators and compliance professionals who have long called for greater clarity and predictability in the enforcement process.
While the updated SoPfDFP is only one part of the Commission’s ongoing reform efforts, it signals a renewed regulatory posture focused on risk-based enforcement, proactive compliance, and consumer protection.
Conclusion
With rising regulatory scrutiny in the gambling sector, the new penalty framework coming into force in October 2025 reflects the UKGC’s ambition to build trust, reduce ambiguity, and deliver proportionate enforcement outcomes. By standardising fine calculations while allowing room for discretion based on operator conduct, the Commission is reinforcing its commitment to both fair play in the market and the safeguarding of players.
Operators are advised to review the new guidelines in full and assess their current compliance posture, ensuring alignment with the updated criteria to avoid unintended financial exposure in the future.
