On 5 February 2026, the Gambling Commission opened a consultation on amending section 2.39 of its Statement of Principles for Determining Financial Penalties. The proposal is that future regulatory settlements (payments in lieu of a financial penalty) be paid into the Consolidated Fund, which receives the proceeds of taxation and other government receipts to fund public expenditure. This would align the funding’s destination with financial penalties under the Gambling Act 2005 (the Act).

Background

The regulatory framework provides that the Gambling Commission may impose financial penalties, which are paid to the Consolidated Fund under the Act. The Gambling Commission may also enter into regulatory settlements as an alternative enforcement mechanism. Regulatory settlements, which may involve payments in lieu of a financial penalty, enable the Gambling Commission to reach an appropriate regulatory outcome without initiating a formal licence review.

Currently, the Commission’s Statement of principles for determining financial penalties sets out that payments made in lieu of a financial penalty as part of a regulatory settlement do not need to paid into the Consolidated Fund in the same way as financial penalties. Instead, the Commission has the power to approve the destination of the monies paid as part of a regulatory settlement, which could include returning monies to any identified victims or directing money to charities for socially responsible purposes.

Following the April 2023 White Paper, a statutory levy was introduced and came into force in April 2025. The statutory levy funding is used for the purposes of research, prevention and treatment. In its November 2023 supplementary advice to Government, the Commission identified the need to consider the future destination of regulatory settlement monies in light of the levy and to avoid a dual system.

The proposal

Section 2.39 of the Statement of principles for determining financial penalties to be amended to confirm that payments in lieu of financial penalties are directed to the Consolidated Fund, in the same way as financial penalties.

The proposed wording is as follows:

Payments made in lieu of a financial penalty as part of a regulatory settlement will be paid into the Consolidated Fund in the same way that financial penalties imposed under section 121 of the Act are.

Rationale for the proposal by the Gambling Commission

1.  Alignment with the levy system

The Gambling Commission explored mirroring settlement flows with the levy’s commissioning structures to avoid duplication. After discussions with Government and levy commissioning bodies, this was deemed not feasible due to the complexity and potential volatility of regulatory settlement funds.

2.  Avoiding a dual system

Paying settlements into the Consolidated Fund would prevent parallel funding streams or duplication of work being funded by the statutory levy.

3.  Administrative efficiency

Directing settlements to the Consolidated Fund would facilitate prompt payment and enable Government to determine their use, as is the case for financial penalties.

Next steps

The consultation will run for 8 weeks and will close on Thursday 2 April 2026. Responses can be submitted online or by post to: Policy Team, Gambling Commission, 4^th Floor, Victoria Square House, Birmingham, B2 4BP

Please get in touch with us if you have any questions about the consultation.