The UK Gambling Commission releases new corporate offence for fraud, which officially came into effect on 1 September under the Economic Crime and Corporate Transparency Act 2023.
The new “failure to prevent fraud” offence places liability on large organisations if employees, subsidiaries, agents, or other associated persons commit fraud for the organisation’s benefit. Examples include misleading sales practices, concealing key information from consumers or investors, or engaging in dishonest behaviour in financial markets.
While the law primarily targets larger companies, the Commission stressed that principles set out in the Home Office’s November 2023 guidance represent best practice for smaller operators as well. Licensees are expected to ensure gambling is not used as a source of crime or disorder and to put robust anti-fraud measures in place.
Lord David Hanson, Minister of Fraud Responsibility, said:
Fraud is a pernicious crime, and we are determined to root it out wherever it takes place. This guidance marks the first steps towards a corporate culture shift around fraud prevention.
Organisations facing prosecution must prove they had reasonable safeguards against fraud at the time of the offence. Serious Fraud Office director Nick Ephgrave warned that corporate fraud undermines trust in UK businesses and costs taxpayers, urging companies to act quickly or risk criminal investigation.
The legislation mirrors the “failure to prevent bribery” rules introduced in 2010, with the aim of fostering stronger anti-fraud cultures across industries. With fraud representing around 40% of all recorded crime in England and Wales, the law underscores the urgency of tighter corporate accountability.
The Gambling Commission advised any licensees unsure about their obligations to seek professional legal guidance.
