Funds generated through UK Gambling Commission regulatory settlements will now be redirected into the government’s wider consolidated fund, taking immediate effect after a closed consultation.
The change has sparked serious concerns across the gambling harms sector that money generated from regulatory settlements will effectively leave the industry entirely.
While financial penalties have always flowed directly into the consolidated fund, payments in lieu of penalties were historically channelled back to gambling harms research, treatment and prevention projects.
GambleAware frequently distributed these funds, and alongside voluntary industry donations, this arrangement formed the foundational funding framework for gambling harms support services.
The statutory levy changed GambleAware’s central role in this system, prompting the government to take direct ownership of the settlement funding process.
GambleAware officially closed on 31 March 2026, just weeks after the commission launched the consultation proposing changes to the existing rules.
The commission’s proposal made clear that all money generated via regulatory settlements must align with the statutory levy objectives and the 2023 Gambling White Paper’s broader ambitions.
This requirement meant the default destination had to be a centralised body, ruling out independent organisations like GambleAware from receiving settlement funds going forward.
The UKGC determined that managing these funds fell beyond its remit as a regulator, while the Department for Culture, Media and Sport concluded that existing statutory levy commissioning bodies could not absorb this responsibility either.
This process led the commission to select the consolidated fund as “the only viable option,” even though alternative proposals were submitted by some of the 28 consultation respondents.
Those alternatives included adding settlement money to the overall levy pot or directing funds toward third sector organisations that do not currently receive direct levy funding.
More than half of consultation respondents disagreed with the proposal, yet the commission proceeded with implementing the change regardless of that majority opposition.
Previously, section 2.39 of the statement of principles for determining financial penalties allowed settlements agreed in lieu of penalties to bypass the consolidated fund entirely, subject to commission approval.
Under the old framework, operators were required to ensure that “payments need to be demonstrably over and above normal Research, Education and Treatment contributions,” with strict transparency obligations attached.
Rules also stipulated that “operators must not generate positive publicity from the settlement,” preserving the integrity and purpose of those redistributed funds.
Where licensing infractions had identifiable victims, the former rules prioritised returning money directly to those individuals or channelling it to socially responsible causes when no victims could be identified.
The consolidated fund itself is a centralised repository for public money drawn from tax revenues, licence fees, fines and numerous other sources across all sectors of the economy.
Opponents of the proposal lamented the loss of the so-called polluter pays principle, arguing that operators should remain directly accountable to the communities harmed by their licensing breaches.
The government maintains that regulatory settlements should not be considered core funding for gambling research, prevention or treatment, framing them as separate from the statutory levy system.
The critical outstanding question is whether this structural shift will leave gambling research, treatment and prevention services underfunded as wider government spending priorities absorb what was once ring-fenced sector money.
