Betting and gaming

News: Demand Test Confirmed

  • Date: 08/05/2008
  • Author/Solicitor: Nick Walton

Gaming Act 1968
Judicial Review of the decision of the Magistrates Court to refuse to grant a Casino Licence to the Appellant TC Projects.

In the dying days of the 1968 Gaming Act, applicants who made applications before the cut off date to obtain Casino Licences under the Act continue to do battle through the Courts in order to secure their licences even though the New Gambling Act (and its restriction on Casino Licences) is in force.

Under the 1968 Act applicants for casino licences are required to demonstrate to the licensing committee that there is unmet demand for the gaming offering they propose. Should they fail to show to the satisfaction of the licensing committee that there is unmet demand for their offering the licensing authority may refuse to grant the licence.

Recent focus in this area has centred on an application refused by the licensing justices which went all the way to the Appeal Court.

The Claimants' TC Projects applied under the 1968 Act for a casino licence for premises in Newcastle upon Tyne. Under the 1968 Act the application was heard by the Betting and Gaming Licensing Committee at the Magistrates Court in Newcastle upon Tyne.

The application for the grant of the licence was refused and the Applicants lodged an appeal at the Crown Court. They also lodged an application for permission to apply for a judicial review of the decision of the licensing committee.

The judicial review was heard in the Court of Appeal (Civil Division) on 7 & 8 April 2008.

The Gaming Act 1968 was designed to protect the British citizen from a proliferation of illegal gambling premises. The grounds for refusing to grant a new licence are set out in the Act. The licensing Authority may refuse to grant a licence if the applicant is unable to demonstrate to the satisfaction of the licensing authority that a substantial demand already exists on the part of potential players for the type of gaming facilities as proposed by the applicant.

This is only the first stage of the process however, as the applicant is also required to demonstrate that the demand for the gaming facilities as proposed are not currently being met by existing facilities. (or, there are no existing facilities to meet the demand)

In reaching their decision not to grant the casino licence for TC Projects the licensing justices directed themselves to the principles set out in an appeal by Oasis Casino Limited in the Preston Crown Court in 2004. In the Oasis case the court proceeded on the basis that even if unmet demand had not been demonstrated there was a "residual discretion" to grant the application and that other "material factors" were capable of outweighing the absence of unmet demand.

In the TC Projects case the magistrates decided that there was substantial demand for the type of gaming proposed by the applicant, but there was no unmet demand. As the applicant had failed to demonstrate other "material factors" why the licence should be granted, it was refused.

The Claimants boldly argued before the Appeal Court that there is no requirement under the Act to justify the grant of a licence and the licence should be granted unless it is shown that it should be refused in the public interest.

Counsel for the Claimant suggested that the relevant part of the Act has two functions;

1. To ensure that unmet demand is met by the grant of the licence in such circumstances (subject to other grounds being met such as suitability of premises, suitability of the applicant etc.) and

2. A discretion to refuse the licence if there is no unmet demand.

However he also suggested that the absence of unmet demand was not in itself a factor in favour of exercising the discretion to refuse, but merely the consequence in that the authority has discretion. It therefore cannot be the case that in the absence of unmet demand that discretion is exercised adversely to the applicant.

Lord Justice Richards stated that the requirement of the section of the Act had been construed correctly by the approach of the licensing justices. The Act identifies the absence of unmet demand as a ground for refusal. "If something is a ground for refusal, it must inform the exercise of discretion and it provides in its self a reason for exercising the discretion so as to refuse the licence"

Whilst the exercise of the discretion to refuse the licence in the absence of unmet demand may be outweighed by other relevant considerations, in the absence of such considerations unmet demand is sufficient reason for the refusal of a licence and there will be no basis for exercising the discretion otherwise than to refuse the licence.

Master of the Rolls Sir Anthony Clarke in agreeing with the decision also added that "the authority in reaching its decision must have regard to all the relevant circumstances in the local area, whether they point one way or another and decide where the overall balance lies" and local circumstances should be looked at broadly in reaching a decision.

The requirements of the 1968 Act are confirmed by the decision with regard to the issue of unmet demand. However there may be some room to argue that other "relevant circumstances" may influence the licensing justices in favour of a grant, particularly so since the Master of the Rolls states they should be looked at broadly in reaching a decision.

For further information, please contact Nick Walton