Gambling Commission announces changes to key event reporting obligations
On 18 December 2025, the Gambling Commission announced changes to licensee key event reporting obligations. The new rules, which relate to changes in ownership and financing, are set to come into force on 19 March 2026 and are intended to deal with the increase in complexity of mergers and acquisitions of gambling companies, which often mean that licensee ownership structure is not straightforward.
Background
In December 2023, the Commission consulted on proposed changes to licence condition 15.2.1 (Reporting Key Events) of the Licence Conditions and Codes of Practice (LCCP), which sets out specific significant events that licensees are required to report to the Commission.
Currently, amongst other reportable events, licensees must notify the Commission where: (i) any shareholder owns share capital of 3% or more in the licensee entity or its holding company, (ii) any such shareholder (as per (i)) is subject to insolvency proceedings, or (iii) the licensee enters into a loan with an entity that is not regulated by the Financial Conduct Authority (or receives a loan from a group company that has entered into such loan).
Given the uptick in complex and increasingly global business structures, the Commission was concerned that licensees’ financing arrangements and ownership structures were not always clear. In addition, in some cases licensees that are publicly listed overseas are unable to comply with the 3% shareholder notification requirements because they cannot access information about shareholdings of such a size – it is common for the threshold to be set at 5%. Consequently, in some cases, the Commission has had to add bespoke conditions to gambling licences, allowing for a 5% threshold instead.
The Commission was concerned that this was resulting in gaps in the Commission’s understanding of licensee operations and inconsistency in applying the requirements. It therefore concluded that an update to the LCCP was required.
Operator status
Currently, as required by licence condition 15.2.1(1) of the LCCP, licensees must notify the Commission where a shareholder holding 3% or more of a licensee’s share capital (or that of its holding company) is to be wound up, enter administration/receivership, become bankrupt or enter into an individual voluntary arrangement (or Scottish equivalent), as applicable. This ownership threshold will now be increased to 5%.
Relevant persons and positions
Licence condition 15.2.1(2) of the LCCP requires that the Commission is notified of the name and address of any person who is or becomes a shareholder holding 3% or more of a licensee’s share capital (or that of its holding company). This ownership threshold will be increased to 5%, and such change will also be reflected in paragraph 3.25 of the Licensing, Compliance and Enforcement Policy Statement under Gambling Act 2005.
In addition, notifications will now need to be made where a person: (i) controls 5% or more of the voting rights of the licensee or its holding company, or (ii) is entitled to 5% or more of the dividends or profits of the licensee. Such additional notifications aim to take account of other types of direct interests in licensees (i.e. where the licensee does not have issued share capital), and are consistent with the information that the Commission typically requires to be disclosed during its licensing process.
The new notifications ((i) and (ii), above) are not required in respect of society lottery licensees. This is because the Commission accepted concerns from the society lottery sector that were raised during the consultation process that the additional obligations would place a disproportionate regulatory and administrative burden on them as non-commercial licensees.
The consultation had also proposed that indirect interests in licensees should be reported (i.e. where the interest is held through additional entities rather than directly with the licensee or its holding company). However, responses to the consultation on this point highlighted concerns around the proposal being unduly onerous on licensees. Similarly, some licensees were concerned that it may not be possible to obtain such information, as they have no legal authority to compel it from shareholders. Whilst these concerns were also made by the industry in relation to the proposal around direct interests, the Commission accepted that they had merit in the context of reporting indirect interests and chose not to proceed with such change.
Other proposed changes that will not be made
The Commission confirmed that they will not proceed with two of the proposals.
One proposal sought to widen the types of notifiable financial arrangements of licensees (under licence condition 15.2.1(3)) but the Commission ultimately decided to retain the current wording, with a small tweak to clarify that notifiable loans must be reported to the Commission whether or not they are documented in a written agreement.
The Commission also considered adding a new requirement to licence condition15.2.1 for licensees to report the details of individuals who acquire the equivalent of £50,000 or more worth of new shares in a rolling 12-month period or entities that acquire the equivalent of £1 million or more worth of new shares in a rolling 12-month period, along with the value of the acquisition and evidence of source of funds for that investment. Whilst this new requirement will not be included in the LCCP for now, the Commission will further consider this proposal and may revisit it in the future.
Our thoughts
The decision to increase the ownership threshold from 3% to 5% is welcome. The Commission has always been somewhat of an outlier in requiring disclosures below 5%, with most overseas regulators setting this at 5% or higher. The need to agree additional conditions for this to be relaxed was a somewhat cumbersome remedy for this, and a change to the LCCP is therefore sensible.
Whilst few licensees will thank the Commission for expanding the obligation to also notify of voting and economic interests over the threshold (as opposed to only share capital), this does mirror the approach to disclosure that the Commission takes in the licensing process, and therefore also makes sense.
