Gambling licensing update

Law and procedure update

Greene King

The outcome of the Gambling Commission’s appeal to the Upper Tribunal in respect of Greene King’s application for a non-remote bingo Operating Licence has yet to be announced although the final  determination has been due since October last year.  The potential impact of that determination is eagerly awaited by operators and local authorities alike.

Controlling where gaming machines are played

Back in November 2015 the Gambling Commission issued its consultation on the control of where gaming machines can be played. The Commission has stated that fundamental to the control of machine gambling under the Gambling Act 2005 is in respect of the regulation of the type and number of gaming machines provided in particular types of premises.

The consultation seeks to add conditions to the Licence Conditions and Codes of Practice, which apply to holders of Operating Licences.The consultation aims to address the Gambling Commission’s concerns as to whether category B gaming machines can be provided in premises other than licensed betting, bingo and casino premises.  It remains the Gambling Commission’s position that other than for limited low risk gambling, all gambling activity such as higher stake machines should be restricted to venues where the gambling is not ancillary to another primary purpose, such as the provision of alcohol, food or other regulated entertainment. 

The Commission has confirmed that regardless of the outcome of the pending Greene King operating licence application that it intends to prevent premises such as pubs and restaurants from obtaining gambling premises licences, as the provision of gambling is not their primary purpose. 

The Gambling Commission first announced its intention to revisit this area of regulation as part of its consultation on strengthening social responsibility back in October 2014.  The Commission has confirmed that continued discussions with the Department for Culture, Media and Sport have affirmed that distinctions between the varying types gambling premises should be maintained to enable the strict control of the provision of category B gaming machines.  The gambling Commission has also affirmed that should it be unable to achieve its aims under the current regulatory framework that additional regulations may be needed under the Act to effectively control the circumstances under which gaming machines can be made available for use.

The Commission has stated that in order to achieve its objectives, betting, bingo and casino premises should be distinctive in appearance and function whilst providing their specific gambling activities.  Therefore, the sum of all gambling activity should be clearly identifiable as the principle purpose of the premises to ensure that potential customers are aware of the nature of premises and the gambling activity provided.  The Gambling Commission’s approach appears consistent with its prior stance on primary gambling activity, albeit now identified as appropriate licensing environment. 

The amendments to the social responsibility provisions may provide that within licensed premises gaming machines may only be made available for use where there are substantive facilities for named non-remote gambling activities.

Considering the proposed changes there could be a significant impact upon a number of licensed operators, particular e-casinos and those providing licensed bingo services, such as in holiday parks, where the provision of bingo is combined with other entertainment facilities within combined park complexes.  This could be of particular concern when reviewing the primary purpose of designated premises and the evaluation of any ancillary services.

Responses to the Consultation were due by the 22nd February 2016.

Crime and Disorder consultation

In September 2015 the Gambling Commission issued a consultation on proposed amendments to the LCCP that would apply to all operators in respect of keeping gambling free from crime and being associated with crime.  The Commission has stated that it accepts that the ongoing development of the industry’s understanding of the potential manifestation of crime from gambling activities and how risks can be managed will continue although the current review intends to strengthen the industry’s defences against potential crime.

The review was instigated in consideration of the implementation of the 4th European Union Anti-Money Laundering Directive, which we discussed in a previous article. 

The Commission has stated that it intends to provide clarification on its reporting requirements as current provisions may provide a disincentive for some operators to share information relating to crime.  The Commission is aware that additional reporting measures will have an impact upon operators and that a number of potential criminal offences and investigations may have little or no impact upon the delivery of the licensing objectives.  The consultation has therefore sought to obtain views on the most proportionate and effective way to balance reporting requirements with the potential regulatory burden.

Proposed changes include:

  • the reporting of defined key events that could have an impact upon the nature of licensees’ businesses, such as criminal investigations by or against licencees, employees or third parties.  Conditions have also been proposed which require some operators to conduct appropriate assessments followed by an annual review of the risk of their business being used for money laundering purposes;

 

  • Implementation of appropriate policies to identify and monitor gambling activities and the accounts of customers identified with a heightened money laundering risks;

 

  • Notification to the Gambling Commission where a licensee discontinues a business relationship with customers following determination of heightened money laundering risks;

 

  • Increased obligations regarding the monitoring of cash based transactions and the use of payment services; and

 

  • Implementation of suspicious activity reporting requirements within terms of employment and measures to prevent the misuse of information acquired by employees for the purpose of placing bets either with their own employers or with external operators.  

 

The consultation also contained extensive revision of its guidance to remote and non-remote casinos for the prevention of money laundering and combating the financing of terrorism, providing further assistance with regard to record keeping and the assessment of risk and reporting guidelines.

 

Consultations responses were due by the end of last year and the Gambling Commission aims to introduce its new or amended provisions during 2016.

 

Local Authority enforcement

There have been a number of recent cases following failed test purchases and association with crime, which have resulted in subsequent enforcement proceedings including prosecution and review issued by local authorities.

Recent cases in Blackpool involved two premises owned by the same operator failing to prevent under age volunteers from entering premises and placing bets on Fixed Odds Betting Terminals.  Both remises were brought to review although ultimately no sanctions were implemented.  In both cases it was determined that due to the positioning of category B2 machines, staff members could not effectively monitor and supervise their use.   Before the review hearing the operator improved the layout of both premises and built barriers to direct the flow of customers passed the customer counter to ensure that effective supervision could be maintained.  Further cases in Blackpool have involved the prosecution of an operator’s CEO for the failure to implement effective of age verification processes within licensed betting premises and also enforcement against operators of Adult Gaming Centres.

Westminster City Council brought a William Hill premises to review following continued association with antisocial behavior and alleged alcohol consumption within the premises and association with criminal activities concerning drug dealing and exchange of stolen goods. Having considered revocation and measures implemented by the operator to address concerns raised, the Licensing Authority determined to vary the premises licence attaching 31 conditions which included improved CCTV provision, minimal staffing requirements, the provision of a licensed security guard from midday to close of business each day, improved training, review and reporting procedures, improved security measures on site and the limitation on the placement of marketing information to ensure a clear line of site to external areas. 

The increased level of enforcement activities carried out by regulators highlights that operators must maintain vigilance of their operational policies and procedures.  Risks must be regularly assessed at premises with particularly emphasis on staff training and the implementation of effective supervision and monitoring of gaming areas and gambling activities.

For further information on this issue contact Partner and Head of Betting & Gaming, Nick Arron, or solicitor Richard Bradley on 0115 953 8500.