Smith & Monkcom: The Law of Gambling 9781784512095, 9781784512125, 9781784512118

Table of contents :
Preface to the fourth edition
Table of statutes
Table of cases
Introduction The pre-Gambling Act framework
Introduction
Early gambling legislation
Objectives of earlier legislation
Early betting and gaming legislation
The Betting and Gaming Act 1960
Gaming machines
Gaming, gaming machines and the 1960 Act
Lotteries
British Gambling Industry
The betting industry
Bookmaking industry
The gaming industry (excluding gaming machines)
The gaming machine industry
Lotteries
The coming of the Gambling Act 2005
Attitudes
Demand
The technological revolution
Lotteries
Chapter 1 Introduction to the Gambling Act 2005
The coming of the Gambling Act 2005
Interpretation of the new legislation
The basic structure of the Act
The licensing objectives
Definition of the licensing objectives
Preventing crime and disorder
Illegal gambling
Licensing powers
Review
Money laundering
Fraud
Disorder
‘Fair and open’ gambling
Protecting children and vulnerable persons
Operating licences – further provisions
Remote gambling
Application
Requirement of operating licence
Types of operating licence
Casino operating licence
Bingo operating licence
General betting operating licence
Pool betting operating licence
Betting intermediary operating licence
Gaming machines
Personal licences
Appeals in connection with operating licences and personal licences
Premises licences
Appeals against decisions of licensing authorities
Temporary use notices
Gaming machines
Category D
Category C
Category B
Category A
Other use of gaming machines
Incidental gaming
Lotteries – the previous position
Societies lotteries
Local lotteries
External lottery managers
Lotteries under the Gambling Act 2005
Advertising of gambling
Enforcement of gambling contracts
Devolution
Scottish devolution
Welsh devolution
Chapter 2 Some fundamental terminology
Gambling: the primary definition
Betting: general
Wagers
Betting and choice
Betting – section 9
Prize competitions: section 11
Betting with bookmakers at fixed odds
Spread bets and similar transactions: section 10
Pool betting
Lotteries and betting
Wagering and lotteries prior to the Gambling Act 2005
Betting and lotteries under the Gambling Act 2005
Gambling Act 2005: section 18
Betting intermediary
Gaming
Playing a game of chance – general principles
Some special cases
Playing a game – the case law
Section 6 definition
‘Casino games’ and ‘equal chance gaming’ – sections 7 and 8
Betting and gaming – section 16
Lotteries and gaming – section 17
Remote gambling – section 4
Providing facilities for gambling – section 5
Section 5(1)
Exemptions – section 5(2)
Section 5 – some questions
Chapter 3 The Gambling Commission
Introduction
Overview of the Gambling Commission’s functions
The Gambling Commission and Licensing Authorities
The Gambling Commission’s statutory powers and duties
Part 2 of the 2005 Act
The Commission’s constitution
Promotion of the licensing objectives
Codes of practice
Guidance to licensing authorities
Advice to Secretary of State
Compliance and investigation and prosecution of offences
Information powers
Consultation
Parts 5 and 6 of the 2005 Act
Part 15 of the 2005 Act
Chapter 4 General offences
Introduction
Efficacy of the regulatory system
Furtherance of the licensing objectives
The offences under Part 3 of the Gambling Act 2005
Offenders and prosecutors
The time limit for prosecutions under the Gambling Act 2005
Section 33 – providing facilities for gambling
The offence
The exceptions
Sentencing powers
Section 37 – using premises, or causing or permitting premises to be used, to provide facilities for certain forms of gambling activity
The offence
The exceptions
Sentencing powers
Section 41 – gambling software
The offence
Sentencing powers
Section 42 – cheating
The offence
Sentencing powers
Section 43 – ‘chain-gift schemes’
The offence
Sentencing powers
Section 44 – the provision of unlawful facilities abroad
The offence
Sentencing powers
Chapter 5 Offences relating to children and young persons
Introduction
The offences under Part 4 of the Gambling Act 2005
Offenders and prosecutors
Statutory defences
Saving when children and young persons are used in enforcement operations
The time limit for prosecutions under the Gambling Act 2005
Sentencing powers
Section 46 – inviting, causing or permitting a child or young person to gamble
The offence
The exceptions
Section 47 – inviting or permitting a child or young person to enter certain premises
The offences
Section 48 – gambling by a young person
The offence
The exceptions
Section 49 – entry by a young person to certain premises
The offences
Section 50 – the provision of facilities for gambling by a young person
The offence
The exceptions
Section 51 – employing a child or young person to provide facilities for gambling
The offence
The exceptions
Section 52 – employing a child to provide facilities for gambling in connection with a lottery or football pools
The offence
Section 53 – employing a child to perform any function on bingo and club premises
The offence
Section 54 – employment of a child or young person to perform any function on premises with gaming machines
The offences
Section 55 – employment of a child or young person in certain premises in respect of which a premises licence has effect
The offences
The exceptions
Section 56 – inviting, causing or ­permitting a child to participate in a lottery
The offence
The exceptions
Section 57 – inviting, causing or ­permitting a child to participate in ­football pools
The offence
Section 58 – failing to return a stake to a child or young person, or giving a prize to a child or young person
The offence
Chapter 6 Operating licences
Introduction
The operating licence: Parts 3 and 5 of GA 2005
Part 3: the operating licence as authorisation
Operating licences: general application
Operating licences: lotteries and gaming machines
Territorial extent: remote gambling equipment
Part 5: Kinds of operating licence
The ten basic kinds of operating licence
Remote gambling
Combined operating licence
Applying for an operating licence
General: the Commission’s approach to licensing
Suitability and criminal convictions
The licensing objectives
The Act’s ethos
Demand
Club membership
The application
Consideration of applications: general principles
Substantive principles
The licensing objectives
The applicant’s suitability: criteria
Integrity
Competence
Financial and other circumstances
The applicant’s suitability: forming an opinion
The suitability of equipment to be used in connection with the proposed activities
Applications for a non-remote casino operating licence
Consideration of applications: criminal convictions
Consideration of applications: procedure
Determination of the application
Licence conditions
Introduction
General conditions imposed by the Commission
Individual conditions imposed by the Commission
Conditions imposed by the Secretary of State
Scope of powers to attach conditions
Conditions applying to all operating licences
Credit and inducements
Definitions
Controls
Compliance with code of practice
Return of stakes to children and young persons
Restrictions on conditions relating to premises
Equipment other than gaming machines
Gaming machines
Membership
Information
Rules for particular kinds of licence
Maintenance of the operating licence
Annual fee
Change of circumstance
Change of corporate control
Variation of an operating licence
Amendment of licence
Register of operating licences
Copy of an operating licence
Production of an operating licence
Conviction
Duration of an operating licence
Power to limit duration
Surrender and lapse of an operating licence
Forfeiture of an operating licence
Regulation
Review
Regulatory powers
Levy
Chapter 7 Personal licences
Introduction
The relationship between operating licences and personal licences
General requirement for a personal licence
Application of Part 5 of the Gambling Act 2005 to Part 6 of the Act
Applying for a personal licence
Application requirements
Consideration of the application – general principles
Consideration of the application – criminal record of the applicant
Significance of a relevant offence
Consideration of the application – procedure
Determination of the application
The attachment of conditions to personal licences
General conditions attached by the Gambling Commission
Individual conditions attached by the Gambling Commission
Secretary of State’s power to attach conditions to personal licences
Scope of powers to attach conditions
Automatic condition – compliance with code of practice
Automatic condition – return of stakes to children
Maintenance of personal licences
Fees
Change of circumstance
Applying to vary a personal licence
Amendment of a personal licence
Maintenance of a register
Copy of personal licence
Production of personal licence
Criminal conviction of holder of personal licence
Offence
Prosecutors
Offence
Prosecutors
Regulation
Review
Regulatory powers
Suspension
Revocation
Financial penalty
Duration of personal licences
Surrender
Lapse
Forfeiture
Revocation
Chapter 8 Appeals
Appeals against decisions of the Gambling Commission
Jurisdiction
Procedure
Time limits, formalities etc
Fees
Effect of appeal
The hearing
Costs
Appeals from the First-tier Tribunal
Appeals against decisions of a licensing authority
Introduction
Jurisdiction
Time limits
Effect of appeal
Procedure at the hearing
The nature of the appeal and relevance of the decision below
Powers on determination
Costs
Chapter 9 The licensing authority: constitution and procedure
Licensing authority functions
Premises licences
Temporary use notices
Miscellaneous functions
The local authority context
Local authorities’ general powers of delegation and ‘executive arrangements’
Delegation under the GA 2005
Conduct of committee members
Proceedings of licensing committees and sub-committees
Chapter 10 Premises licences
The functions of premises licensing
Requirement for a premises licence
Exceptions to the requirement for a premises licence
The licensing authority
Three-year licensing policy
Revisions
Consultation on policy
Consequences of defective consultation
Miscellaneous section 25 guidance
Publication and advertisement of the policy statement
Licensing Authority Fees
Applications for premises licences
Procedure on applications
Defective notice of application
Defective publication
Split premises and use of premises for their ‘primary purpose’
Responsible authorities and interested parties
Determination of application
Principles to be applied by the licensing authorities in the discharge of their functions
Licensing policy: basic principles
Interpretation of policy
Licensing principles and policy specific to the GA 2005
Non-section 153 functions
Licensing authority functions subject to section 153 principles
The duty to aim to permit
Codes of practice and section 25 Guidance
Demand and casino premises licences
Planning permission and building approval
Exclusivity of section 153 factors
Premises licence conditions
Conditions imposed by the GA 2005
Prohibited conditions
Mandatory conditions
Default conditions and individual conditions
Mandatory and default conditions laid down by regulation
Conditions imposed by licensing authorities
Steps to be taken on grant of application
Steps to be taken on rejection of application
Particular types of premises
Casinos
Bingo premises licences
Adult gaming centre premises licences
Family entertainment centre premises licences
Betting premises licences
Duration of premises licence
The licence
Variation of premises licence
Transfer of premises licence
Termination of premises licences
Review of a premises licence
Provisional statement
Appeals
Procedure
Chapter 11 The temporary use of premises
Introduction
Prohibitions and restrictions on temporary use notification
Certain premises
Delegation of licensing authority functions
Referral back to the licensing authority
The temporary use notification procedure
Form of notice
Giving a temporary use notice
Licensing authority to acknowledge receipt of the temporary use notice
Objections to the temporary use notice
Hearing of objections
Modification of the temporary use notice by agreement
Counter-notice
Dismissal of objection(s) to the temporary use notice
Endorsement of notice
Withdrawal of temporary use notice
Display and production of temporary use notices
Display of notice
Production of notice
Offence
Maintenance of a register
Chapter 12 Clubs, pubs and fairs
Introduction
The associations to which Part 12 applies
Members’ clubs
Commercial clubs
Miners’ welfare institutes
Premises in respect of which an ‘on-premises alcohol licence’ has effect
Travelling fairs
Equal chance gaming by some associations
Which offence-creating sections of the GA 2005 are disapplied?
High turnover bingo
Club gaming permits
Which offence-creating sections of the GA 2005 are disapplied?
High turnover bingo
Applications for club gaming permits
Club machine permits
Which offence-creating sections of the GA 2005 are disapplied?
Applications for club machine permits
Exempt gaming by some premises in respect of which an on-premises alcohol licence has effect
Which offence-creating sections of the GA 2005 are disapplied?
High turnover bingo
Gaming machines – automatic entitlement of some premises in respect of which an on-premises alcohol licence has effect
Which offence-creating sections of the GA 2005 are disapplied?
Licensed premises gaming machine permits
Which offence-creating sections of the GA 2005 are disapplied?
Applications for licensed premises gaming machine permits
Gaming machines at travelling fairs
Which offence-creating sections of the GA 2005 are disapplied?
Schedule 12 – club gaming permits and club machine permits
Introduction
Applying for a club gaming permit or a club machine permit
Fast-track procedure for holder of club premises certificate
Form and maintenance of permits
Duration, lapse, cancellation and forfeiture of permits
Renewal of permits
Appeals
Maintenance of a register
Exercise of functions by licensing authority
Schedule 13 – licensed premises gaming machine permits
Introduction
Applying for a licensed premises gaming machine permit
Form and maintenance of permits
Duration, cancellation and forfeiture of permits
Transfer of permits
Appeals
Maintenance of a register
Chapter 13 Betting
Developments before GA 2005
General betting operating licence
Pool betting operating licence
Betting intermediary operating licence
Betting intermediary (trading room only) operating licence
Betting premises licence
Primary gambling activity
Power of Gambling Commission to void bet
Chapter 14 Gaming
Casinos
Introduction
Categories of casino
The new licensing regime
Casino games
Card room and other games of equal chance
Poker
Virtual games
Advertising
Bingo
Introduction
Types of bingo
Cash bingo
Prize bingo
Bingo authorisations
Gaming machines
Application for prize gaming permit and prize gaming conditions
Bingo operating licence
Premises licences – transitional provisions
Applications for premises licences – existing operators
Premises licences – new operators
Other regulations
Premises licences conditions
Mandatory conditions set out in the Act
Mandatory conditions on bingo premises licences set out in regulations under section 167
Default conditions on bingo premises licences
Individual conditions imposed by the licensing authority
Removal of conditions from bingo premises licences
Conditions which do not apply to bingo premises licences by way of exemption under the Act
Conditions not permitted to be attached to bingo premises licences under the Act
Matters to be dealt with by way of conditions attached to operating licences
Matters to be dealt with by way of codes of practice
Exempt and permitted gaming (bingo in private clubs)
Bingo in alcohol licensed premises
Bingo equipment
Multiple and linked bingo
Children and bingo
Demand
Advertising
Impact of the Health Act 2006 relating to smoke-free premises
Chapter 15 Lotteries
Introduction
Early English lotteries
English lotteries 1694–1826
The elements of a lottery
Lotteries at common law
Definition of a lottery under the GA 2005
Types of lottery
Lotteries and competitions
Payment
The allocation of prizes
Wholly on chance
Assessing the character of a scheme
Types of scheme
No genuine skill etc requirement
Significant proportion
The attitude of the Commission
Complex lotteries
Wholly on chance
Spot the ball competitions
Tie-breakers
Snowball, pyramid, chain-gift and similar schemes
The permitted lotteries
Non-commercial society lotteries
Society lotteries
Large society lotteries
Local lotteries
An operating licence from the Commission
Mandatory conditions of lottery operating licences
Commission conditions
Post
Regulations
Lottery machines
The exempt lotteries
Small society lotteries
Registration of a society
Appeal
Cancellation
Annual fee
Records
Incidental non-commercial lotteries
Private lotteries
Customer lotteries
Advertisements and exempt lotteries
Lottery offences
Promoting a non-exempt lottery without a licence
Facilitating a non-exempt lottery without a licence
Misusing the profits of a lottery
Misusing the profits of an exempt lottery
Breaches of condition of small society lotteries
Children and lotteries
Penalties
Foreign lotteries
External Lottery Managers
Chapter 16 The National Lottery
Introduction
The licensing system
The Gambling Commission
The section 5 licence
The section 6 licence
Licence to promote the ‘National Lottery Game’
Licences to promote instant lotteries
Licences under sections 5 and 6: prospective amendments
Licences under sections 5 and 6: further provisions
Variation of conditions in licences
Enforcement of conditions in licences
Revocation of licences granted under sections 5 and 6
Procedure on revocation
Appeals against revocation
Financial penalties for breach of conditions in licences
Appeals against financial penalties
Annual levy
Regulations as to the promotion of lotteries forming part of the National Lottery
Directions to the National Lottery Commission under section 11 of the National Lottery etc Act 1993
Further controls relating to the National Lottery
False representations as to the National Lottery
Control of betting on the National Lottery
Control of advertising relating to the National Lottery
Protection of confidentiality of prize winners’ identity
Distribution of National Lottery proceeds
The National Lottery Distribution Fund
Distribution of funds to the distributing bodies
Payment to the distributing bodies
Distribution by the arts councils and the British Film Institute
Distribution by the sports councils
Distribution by the Trustees of the National Heritage Memorial Fund
Distribution by the Big Lottery Fund
Delegation by distributing bodies of their powers of distribution
Joint schemes for distribution of money by distributing bodies
Distribution of funds: publicity
Strategic plans for distributing bodies
Devolution
Draws/schemes based on the National Lottery
Lotteries/schemes using the National Lottery draw
‘Second chance’ schemes
Chapter 17 Remote gambling
Introduction
The definition of remote gambling
Remote gambling equipment
The new territorial application provisions
The need for a licence
Betting
Gaming
Software
Personal licences
Responsibilities of licence holders
License Conditions and Codes of Practice
Technical Standards
Testing
Advertising
Chapter 18 Advertising
Introduction
Regulatory framework for advertising
Territorial application of regulations and ability to advertise
Non-broadcast advertisements
Limits on ASA Powers
CAP Code
General rules
Gambling-specific rules
Prize promotions
Adjudications
Lotteries
Television and radio advertising
BCAP codes
Television and radio advertising
Television scheduling and sponsorship
Gambling Industry Code for Socially Responsible Advertising
Warning and educational messages
Television and radio advertisements
Sponsorships
Review
Spread betting adverts
Enforcement
Recent adjudications and guidance by CAP and BCAP
General grounds of taste
Connection with sexual prowess
Appeal to minors
Gambling as a solution to personal issues
Misleading advertisements
Social games
Affiliates
Offences
Unlawful gambling
Lotteries
Conclusion
Organisations relevant to the advertising of gambling
Chapter 19 Gambling and tax
Part 1 – Direct tax
Taxes on income
Taxes on gains
Part 2 – VAT
The exemption from VAT
Calculation
Part 3 – ‘Point of consumption’ gambling duties
Introduction
Primary legislation
Secondary legislation and notices
General betting duty
The current regime
General betting duty on ‘general bets’
General betting duty on ‘spread bets’
General betting duty on Chapter 1 pool bets
General betting duty levied on bet-brokers and betting exchanges
Pool betting duty
Remote gaming duty
Point of consumption gambling duties – administration
Security and UK representatives
Record keeping
Penalties
Fraudulent evasion
Part 4 – Other gambling duties
Gaming duty
Charge to duty
Bingo duty
Lottery duty
Amusement machine licence duty
Machine games duty
Calculation of the duty
Part 5 – Horserace betting levy
Levy schemes
Payments on account of levy
Recent developments
Chapter 20 Contractual aspects of gambling
Introduction and definitions
The enforcement regime under the Gambling Act 2005
Formation of a contract
General
‘Honour clauses’
Consideration
Time of making the contract
Distance selling
E-commerce
Concurrent duty of care arising out of voluntary self exclusion agreements, or generally?
Unfair contract terms – Unfair Terms in Consumer Contracts Regulations 1999; Consumer Rights Act 2015
Unfair contract terms – alternative dispute resolution clauses
Arbitration clauses
Expert determination or other ADR
Unfair Contract Terms – Unfair Contract Terms Act 1977
Gambling upon objectionable subject matter
Illegality
Introduction
Gambling legislation as a class-protecting statute
Illegality – participation of children and young persons in gambling
Children as agents
Offences by gamblers
Injunctions against organised cheating
Illegality under foreign law
Illegal bets – money deposited with stakeholder
Use of stolen or unlawfully obtained funds for gambling
Restitution for third parties
Liability for ‘knowing receipt’
Claims to prizes and contributions in illegal lotteries and chain gift schemes
Recovery of prizes in illegal lotteries
Recovery of contributions to an illegal lottery or chain gift scheme
Claims in respect of illegal gambling – professional conduct issues
Gambling through agents
Lawful gambling through agents
Illegal gambling through or by agents
Gambling on credit
Meaning of credit
Cheques as credit
Lawful credit
Credit by payment of gambling debts – ‘in connection with’ gambling
Illegal credit
Effect of illegal credit on otherwise lawful gambling
Credit provided for gambling abroad
Securities in respect of gambling or credit for gambling
Lawful lotteries, prize draws and skill competitions as contracts
Lotteries
Instant lotteries
Prize draw competitions
Skill competitions
Sweepstakes or ‘sweeps’
Contribution lotteries – quasi-contractual analysis
Contribution lotteries – trust analysis
Determination of winners of sporting events
Determination of winners in lotteries and prize draws
Lotteries on sporting events
Determination by a promoter or third party
Implied terms and restrictions on a ‘decision is final’ clause
Erroneous declaration of winners
False prizes
Conduct of a lottery or prize draw
Determination of winners of skill ­competitions
Lotteries and prize draws – unclaimed prizes
Conclusion
Lawful and unlawful contribution lotteries
Non-contribution lotteries: rights and liabilities of promoter and participants
Gambling and family law
Chapter 21 Gambling syndicates
Introduction
Forms of syndicate
Legal rights and liabilities
Establishing an agreement
Rights and liabilities between syndicate members
In contract
In trust
Rights to share in the winnings when the member has not paid
Rights and liabilities between the syndicate organiser and the members
Generally
Syndicate organisers gambling on their own account
Formal syndicate agreements
Insurance
Chapter 22 Prize gaming
Introduction
Bingo licensed premises
Adult gaming centres and licensed family entertainment centres
Prize gaming permits and family entertainment centre gaming machine permits
Definition of prize gaming
Conditions for prize gaming
First condition
Second condition
Third condition
Fourth condition
Permitted prize gaming
Prize gaming permits
Prize gaming and entertainment centres
Non-licensed family entertainment centres
Bingo halls
Fairs
Power to restrict exemptions
Chapter 23 Private and non-commercial gaming and betting
Betting
Private betting
Workers’ betting
Private gaming
‘Domestic gaming’
Residential gaming
Non-commercial gaming
Conditions for non-commercial prize gaming
Conditions for non-commercial equal-chance gaming
Non-commercial betting
Chapter 24 Licensing Boards and some Scottish aspects of gambling
Gambling remit of the Licensing Boards
Administration of Licensing Boards
Licensing Board membership
The convener
The clerk
Meetings
Disqualifications
Training
Delegation of functions
Policies and guidelines
Investigation and prosecution of offences
Appeal process in Scotland
Stay pending appeal
Further appeal
Temporary use notices
Gambling and devolution
Chapter 25 Gaming machines
History
Overview of the Gambling Act 2005
Gaming machine definition under the Gaming Act 1968
A gaming machine under the Gambling Act 2005
Meaning of machine
Exceptions to the gaming machine definition
Categories of gaming machine
Category A
Category B1
Category B2
Category B3
Category B3A
Category B4
Category C
Category D
Available for use
Prizes
Charge for use
Skill with prizes machines
Gaming machine licences
Gaming machine operating licences
Linked licences
Personal licences
Premises licence
Single-machine supply and maintenance permits
‘Where machines may be situated’
Machines in casinos
Bingo halls
Betting premises
Fairs
Adult gaming centres (‘AGCs’)
Family entertainment centres (‘FECs’)
Licences
Gambling Commission’s Licence Conditions and Codes of Practice
Premises licences for AGCs and licensed FECs
Unlicensed family entertainment centres
Application
Consideration of the application
Form of permit
Duration
Renewal
Maintenance of the permit
Appeal process
Register
Offences
Offences under sections 37 and 242
Exceptions
Fairs
Section 240 regulations
Manufacture, supply etc
Definitions
Linked machines
Credit
Penalties
Children and young persons
Chapter 26 Enforcement of the regulatory system of the Gambling Act 2005
Introduction
Powers of entry
Powers following entry
Enforcement officers, authorised persons etc
Enforcement officers
Authorised persons
Authorised local authority officers
General
Compliance and enforcement policy guidance
Safeguards
Dwellings
Timing of the exercise of a power under or by virtue of Part 15
Evidence of identity and authority
Exercise of powers in relation to records
Information
Securing premises after entry
Powers
Compliance
Suspected offence
Inspection of gambling
Operating licence holders
Family entertainment centres
Premises licensed for alcohol
Prize gaming permits
Members’ clubs, commercial clubs and miners’ welfare institutes
Licensed premises
Lotteries: registered societies
Temporary use notices
Production of authorisations
Offences under Part 15 of the Gambling Act 2005
Offenders and prosecutors
The time limit for prosecutions under the Gambling Act 2005
Chapter 27 Money laundering
Introduction
What is money laundering?
Part 7 of the Proceeds of Crime Act 2002
The money laundering offences
Criminal property
Authorised disclosure
Arrangements
What sort of factors are likely to justify suspicion of money laundering?
The regulated sector
Tipping off
The Money Laundering Regulations 2007
The Terrorism Act 2000
Civil liability for money laundering
Chapter 28 Gambling and planning
The need for planning permission
Use Classes Order
The planning application
The decision-making process
National planning policy and planning guidance
Reasons
The resolution to grant planning permission and the grant of permission
The local authority decision-maker
Estoppel by representation
Planning control
Powers of entry onto land
Making preliminary enquiries
Means of planning enforcement
Temporary stop notice
Enforcement action
Stop notice
Breach of condition notice
Injunctive relief
Index

Citation preview

The Law of Gambling

Smith & Monkcom:

The Law of Gambling Fourth Edition General Editors Gerald Gouriet QC BMus of the Inner Temple Jeremy Phillips BA of the Inner Temple, Barrister Consultant Editor Stephen Monkcom BA (Oxon) of the Middle Temple, Barrister Contributors Christopher Bamford LLB of the Inner Temple, Barrister Graham Chase LLB, CTA (Fellow), Solicitor, Partner, Olswang LLP John Dillon BA, DPhil, Solicitor, Legal Services Director and Company Secretary, Camelot Michael Fealy QC of the Middle Temple, Barrister Audrey J Ferrie LLB Solicitor, Legal Director, Pinsent Masons LLP Susanna FitzGerald QC LLB Hons of the Inner Temple, Barrister Kevin de Haan QC LLB, LLM of the Inner Temple Christopher Harper LLB Solicitor, Consultant, GRM Law Stephen Hignett, BA (Oxon), CTA, Solicitor, Partner, Olswang LLP Juan Lopez LLB of Lincoln’s Inn, Barrister Philip Rainey QC LLB, MCIArb of the Middle Temple, Barrister Hilary Stewart-Jones LLB, LLM Solicitor, Consultant Partner, DLA Piper UK LLP

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Preface

This is the 4th edition of the work formerly entitled Smith & Monkcom: The Law of Betting, Gaming and Lotteries. In it, we attempt to provide a comprehensive treatment of the law governing gambling in England and Wales at the close of 2016. The principal piece of governing legislation is the Gambling Act 2005, but there are a number of other sources of legislation and regulation, and these have been included in order to present as full a treatment as possible. In his preface to the 3rd edition Stephen Monkcom wrote that no one who had undertaken the tasks of writing or editing the book had anticipated ‘… the blizzard of Licence Conditions, Codes of Practice, Statutory Guidance, Statements of Principles, Policy Statements, Technical Specifications, etc, etc, etc which emanated from the regulatory authorities.’ That was in 2008. It is a testament to the industry of those authorities that there has been no lull in the snow-storm of regulation in the years following. If editing a textbook on gambling in Great Britain is rightly analogous to painting the Forth Railway Bridge (see the preface to the 3rd edition), it could be said that in order to keep pace with the Gambling Commission’s cascading updates to its licence conditions and codes of practice, statutory guidance and non-statutory guidance, the draft of this book has been re-painted four times in the last twelve months. Pursuing the analogy, this edition sets out the essential structural features of gambling law in Great Britain; we describe the main component parts, the steel joists and cantilever arms, and how they interact with each other and keep ‘the bridge’ standing up; we examine the cost of traversing the bridge, and the penalties if one is found travelling without a ticket; but there is no attempt to examine every one of the 6.5 million rivets of its construction, still less to catalogue every coat of paint that has been applied and re-applied – sometimes while the previous coat was still wet. Accordingly, we recommend that readers consulting this book for guidance on specific topics do not fail to seek illumination from the Gambling Commission website, where detailed information may be found in abundance, as well as news of the steady flow of consultations, which signal regulatory changes as yet undreamed of. Those parts of the book that deal with the Gambling Act, that is to say the Introduction and Chapters 1–15, 17–18, 22–23 and 25–26 were written by the following editors whose names appear in alphabetical order and not the order of their chapter contributions: Christopher Bamford of Tanfield Chambers; v

Preface Kevin De Haan QC of Francis Taylor Building; Susanna FitzGerald QC of One Essex Court; Gerald Gouriet QC of Francis Taylor Building; Christopher Harper of GRM Law; Stephen Monkcom of Tanfield Chambers; Jeremy Phillips of Francis Taylor Building; and Hilary Stewart-Jones of DLA Piper. The Gambling Act applies to England, Wales and Scotland but there are important differences between the subordinate legislation which brings it into effect in England and Wales and that which brings it into effect in Scotland. The book focuses on the position in England and Wales but it is hoped that it may be of some assistance to a Scottish reader. In order to give a Scottish perspective Chapter 24 – Licensing Boards and Some Scottish Aspects of Gambling – provides an account of Scottish licensing procedure and thanks are due to Audrey Ferrie of Pinsent Masons for writing this chapter. Other chapters have been written by contributors who, in addition to their experience of the gambling field, have brought to bear specialist knowledge and insight from other areas of practice. Taking them in (approximately) alphabetical order Graham Chase and Stephen Hignett, Tax Partners at Olswang, provided Chapter 19 on Gambling Duties, VAT and Betting Levy. John Dillon, Solicitor, of Camelot Group plc’s Legal Department provided Chapter 16 on The National Lottery. Juan Lopez, Barrister of Francis Taylor Building has provided the perspective of planning practitioners in writing in Chapter 28 on planning law aspects of the regulatory process. Michael Fealy QC of One Essex Court, has brought to bear his specialist knowledge of the law against money laundering in writing Chapter 27 on that topic. Philip Rainey QC of Tanfield Chambers, has updated and expanded Chapter 20 – Contractual Aspects of Gambling – a chapter which reflects one of the revolutionary aspects of the Act of 2005 – namely its provision for the civil enforceability of gambling contracts. In addition he has updated Chapter 21 – Gambling Syndicates – to expand it to deal with syndicates on all forms of gambling. The three named Editors, as well as providing their own chapters, have read and commented on the entire Work, dividing up that task among them. Jeremy Phillips and I should add that we owe a substantial debt of gratitude to Stephen Monkcom; who, for all his modest claim that he is but one of three editors, remains ‘the onlie begetter of the ensving book’, without whose kind omnipresence and authoritative input we other two might have foundered. We would all like to acknowledge the support and assistance we have received from our publishers Bloomsbury Professional and their staff, and to thank Charles Streeten, Barrister of Francis Taylor Building for his invaluable help in further revising the final draft of the book in order to incorporate the July version of the LCCP. We have attempted to state the law as at October 2016. Gerald Gouriet QC Francis Taylor Building October 2016

vi

Contents

Preface to the fourth edition  v Table of statutes  xxvii Table of cases  lxvii Introduction  The pre-Gambling Act framework  1 Introduction 1 Early gambling legislation  4 Objectives of earlier legislation  5 Early betting and gaming legislation  8 The Betting and Gaming Act 1960  17 Gaming machines  18 Gaming, gaming machines and the 1960 Act  19 Lotteries 26 British Gambling Industry  28 The betting industry  29 Bookmaking industry  30 The gaming industry (excluding gaming machines)  34 The gaming machine industry  40 Lotteries 44 The coming of the Gambling Act 2005  46 Attitudes 46 Demand 47 The technological revolution  50 Lotteries 59 Chapter 1  Introduction to the Gambling Act 2005  61 The coming of the Gambling Act 2005  61 Interpretation of the new legislation  63 The basic structure of the Act  66 The licensing objectives  69 Definition of the licensing objectives  72 Preventing crime and disorder  72 Illegal gambling  74 Licensing powers  74 Review 74 Money laundering  75 vii

Contents Fraud 75 Disorder 76 ‘Fair and open’ gambling  81 Protecting children and vulnerable persons  83 Operating licences – further provisions  85 Remote gambling  86 Application 87 Requirement of operating licence  88 Types of operating licence  90 Casino operating licence  90 Bingo operating licence  91 General betting operating licence  92 Pool betting operating licence  93 Betting intermediary operating licence  94 Gaming machines  95 Personal licences  98 Appeals in connection with operating licences and personal licences  100 Premises licences  100 Appeals against decisions of licensing authorities  103 Temporary use notices  103 Gaming machines  104 Category D  104 Category C  105 Category B  105 Category A  105 Other use of gaming machines  106 Incidental gaming  107 Lotteries – the previous position  108 Societies lotteries  109 Local lotteries  109 External lottery managers  109 Lotteries under the Gambling Act 2005  110 Advertising of gambling  112 Enforcement of gambling contracts  112 Devolution 112 Scottish devolution  113 Welsh devolution  113 Chapter 2  Some fundamental terminology  115 Gambling: the primary definition  119 Betting: general  119 Wagers 124 Betting and choice  129 Betting – section 9  132 Prize competitions: section 11  135 Betting with bookmakers at fixed odds  145 Spread bets and similar transactions: section 10  147 Pool betting  171 Lotteries and betting  180 Wagering and lotteries prior to the Gambling Act 2005  182 Betting and lotteries under the Gambling Act 2005  196 Gambling Act 2005: section 18  198 viii

Contents Betting intermediary  199 Gaming 205 Playing a game of chance – general principles  207 Some special cases  218 Playing a game – the case law  221 Section 6 definition  242 ‘Casino games’ and ‘equal chance gaming’ – sections 7 and 8  252 Betting and gaming – section 16  257 Lotteries and gaming – section 17  259 Remote gambling – section 4  262 Providing facilities for gambling – section 5  265 Section 5(1)  267 Exemptions – section 5(2)  270 Section 5 – some questions  273 Chapter 3  The Gambling Commission  279 Introduction 279 Overview of the Gambling Commission’s functions  280 The Gambling Commission and Licensing Authorities  281 The Gambling Commission’s statutory powers and duties  282 Part 2 of the 2005 Act  283 The Commission’s constitution  283 Promotion of the licensing objectives  285 Codes of practice  286 Guidance to licensing authorities  288 Advice to Secretary of State  289 Compliance and investigation and prosecution of offences  290 Information powers  291 Consultation 295 Parts 5 and 6 of the 2005 Act  295 Part 15 of the 2005 Act  297 Chapter 4  General offences  299 Introduction 299 Efficacy of the regulatory system  300 Furtherance of the licensing objectives  302 The offences under Part 3 of the Gambling Act 2005  303 Offenders and prosecutors  304 The time limit for prosecutions under the Gambling Act 2005  304 Section 33 – providing facilities for gambling  305 The offence  305 The exceptions  306 Sentencing powers  318 Section 37 – using premises, or causing or permitting premises to be used, to provide facilities for certain forms of gambling activity  318 The offence  318 The exceptions  319 Sentencing powers  333 Section 41 – gambling software  333 The offence  333 Sentencing powers  333 Section 42 – cheating  334 ix

Contents The offence  334 Sentencing powers  335 Section 43 – ‘chain-gift schemes’  335 The offence  335 Sentencing powers  336 Section 44 – the provision of unlawful facilities abroad  337 The offence  337 Sentencing powers  337 Chapter 5  Offences relating to children and young persons  339 Introduction 339 The offences under Part 4 of the Gambling Act 2005  341 Offenders and prosecutors  343 Statutory defences  343 Saving when children and young persons are used in enforcement operations 344 The time limit for prosecutions under the Gambling Act 2005  345 Sentencing powers  345 Section 46 – inviting, causing or permitting a child or young person to gamble 346 The offence  346 The exceptions  346 Section 47 – inviting or permitting a child or young person to enter certain premises 351 The offences  351 Section 48 – gambling by a young person  353 The offence  353 The exceptions  353 Section 49 – entry by a young person to certain premises  354 The offences  354 Section 50 – the provision of facilities for gambling by a young person  356 The offence  356 The exceptions  356 Section 51 – employing a child or young person to provide facilities for gambling 356 The offence  356 The exceptions  357 Section 52 – employing a child to provide facilities for gambling in connection with a lottery or football pools  357 The offence  357 Section 53 – employing a child to perform any function on bingo and club premises 358 The offence  358 Section 54 – employment of a child or young person to perform any function on premises with gaming machines  358 The offences  358 Section 55 – employment of a child or young person in certain premises in respect of which a premises licence has effect  359 The offences  359 The exceptions  359 Section 56 – inviting, causing or ­permitting a child to participate in a lottery 360 x

Contents The offence  360 The exceptions  360 Section 57 – inviting, causing or ­permitting a child to participate in f­ ootball pools 361 The offence  361 Section 58 – failing to return a stake to a child or young person, or giving a prize to a child or young person  362 The offence  362 Chapter 6  Operating licences  363 Introduction 363 The operating licence: Parts 3 and 5 of GA 2005  364 Part 3: the operating licence as authorisation  364 Operating licences: general application  364 Operating licences: lotteries and gaming machines  365 Territorial extent: remote gambling equipment  365 Part 5: Kinds of operating licence  366 The ten basic kinds of operating licence  366 Remote gambling  367 Combined operating licence  368 Applying for an operating licence  371 General: the Commission’s approach to licensing  371 Suitability and criminal convictions  372 The licensing objectives  372 The Act’s ethos  373 Demand 374 Club membership  375 The application  375 Consideration of applications: general principles  377 Substantive principles  377 The licensing objectives  377 The applicant’s suitability: criteria  380 Integrity 381 Competence 382 Financial and other circumstances  383 The applicant’s suitability: forming an opinion  384 The suitability of equipment to be used in connection with the proposed activities 385 Applications for a non-remote casino operating licence  385 Consideration of applications: criminal convictions  387 Consideration of applications: procedure  388 Determination of the application  389 Licence conditions  389 Introduction 389 General conditions imposed by the Commission  390 Individual conditions imposed by the Commission  394 Conditions imposed by the Secretary of State  394 Scope of powers to attach conditions  395 Conditions applying to all operating licences  396 Credit and inducements  399 Definitions 399 Controls 400 xi

Contents Compliance with code of practice  402 Return of stakes to children and young persons  403 Restrictions on conditions relating to premises  404 Equipment other than gaming machines  406 Gaming machines  407 Membership 408 Information 408 Rules for particular kinds of licence  409 Maintenance of the operating licence  410 Annual fee  410 Change of circumstance  411 Change of corporate control  411 Variation of an operating licence  413 Amendment of licence  414 Register of operating licences  414 Copy of an operating licence  415 Production of an operating licence  415 Conviction 415 Duration of an operating licence  416 Power to limit duration  416 Surrender and lapse of an operating licence  417 Forfeiture of an operating licence  417 Regulation 417 Review 418 Regulatory powers  420 Levy 424 Chapter 7  Personal licences  427 Introduction 427 The relationship between operating licences and personal licences  General requirement for a personal licence  429 Application of Part 5 of the Gambling Act 2005 to Part 6 of the Act  Applying for a personal licence  435 Application requirements  435 Consideration of the application – general principles  436 Consideration of the application – criminal record of the applicant  Significance of a relevant offence  439 Consideration of the application – procedure  439 Determination of the application  441 The attachment of conditions to personal licences  443 General conditions attached by the Gambling Commission  443 Individual conditions attached by the Gambling Commission  445 Secretary of State’s power to attach conditions to personal licences  Scope of powers to attach conditions  445 Automatic condition – compliance with code of practice  448 Automatic condition – return of stakes to children  450 Maintenance of personal licences  451 Fees 451 Change of circumstance  451 Applying to vary a personal licence  452 Amendment of a personal licence  454 Maintenance of a register  455 xii

427 434

438

445

Contents Copy of personal licence  455 Production of personal licence  456 Criminal conviction of holder of personal licence  457 Offence 457 Prosecutors 458 Offence 458 Prosecutors 458 Regulation 459 Review 459 Regulatory powers  460 Suspension 460 Revocation 462 Financial penalty  463 Duration of personal licences  464 Surrender 464 Lapse 464 Forfeiture 465 Revocation 466 Chapter 8 Appeals 467 Appeals against decisions of the Gambling Commission  467 Jurisdiction 468 Procedure 468 Time limits, formalities etc  469 Fees 469 Effect of appeal  470 The hearing  470 Costs 472 Appeals from the First-tier Tribunal  472 Appeals against decisions of a licensing authority  472 Introduction 472 Jurisdiction 473 Time limits  474 Effect of appeal  474 Procedure at the hearing  475 The nature of the appeal and relevance of the decision below  475 Powers on determination  482 Costs 482 Chapter 9  The licensing authority: constitution and procedure  487 Licensing authority functions  487 Premises licences  487 Temporary use notices  488 Miscellaneous functions  488 The local authority context  489 Local authorities’ general powers of delegation and ‘executive arrangements’ 491 Delegation under the GA 2005  492 Conduct of committee members  499 Proceedings of licensing committees and sub-committees  504 xiii

Contents Chapter 10  Premises licences  511 The functions of premises licensing  511 Requirement for a premises licence  513 Exceptions to the requirement for a premises licence  515 The licensing authority  515 Three-year licensing policy  516 Revisions 520 Consultation on policy  520 Consequences of defective consultation  525 Miscellaneous section 25 guidance  526 Publication and advertisement of the policy statement  527 Licensing Authority Fees  527 Applications for premises licences  532 Procedure on applications  534 Defective notice of application  538 Defective publication  539 Split premises and use of premises for their ‘primary purpose’  540 Responsible authorities and interested parties  543 Determination of application  557 Principles to be applied by the licensing authorities in the discharge of their functions 558 Licensing policy: basic principles  559 Interpretation of policy  565 Licensing principles and policy specific to the GA 2005  567 Non-section 153 functions  569 Licensing authority functions subject to section 153 principles  572 The duty to aim to permit  574 Codes of practice and section 25 Guidance  575 Demand and casino premises licences  577 Planning permission and building approval  580 Exclusivity of section 153 factors  580 Premises licence conditions  581 Conditions imposed by the GA 2005  582 Prohibited conditions  583 Mandatory conditions  584 Default conditions and individual conditions  584 Mandatory and default conditions laid down by regulation  585 Conditions imposed by licensing authorities  590 Steps to be taken on grant of application  599 Steps to be taken on rejection of application  600 Particular types of premises  600 Casinos 600 Bingo premises licences  600 Adult gaming centre premises licences  600 Family entertainment centre premises licences  600 Betting premises licences  601 Duration of premises licence  602 The licence  602 Variation of premises licence  604 Transfer of premises licence  605 Termination of premises licences  606 Review of a premises licence  608 xiv

Contents Provisional statement  618 Appeals 623 Procedure 624 Chapter 11  The temporary use of premises  625 Introduction 625 Prohibitions and restrictions on temporary use notification  628 Certain premises  628 Delegation of licensing authority functions  631 Referral back to the licensing authority  632 The temporary use notification procedure  633 Form of notice  633 Giving a temporary use notice  634 Licensing authority to acknowledge receipt of the temporary use notice 636 Objections to the temporary use notice  636 Hearing of objections  637 Modification of the temporary use notice by agreement  637 Counter-notice 639 Dismissal of objection(s) to the temporary use notice  640 Endorsement of notice  642 Withdrawal of temporary use notice  643 Display and production of temporary use notices  644 Display of notice  644 Production of notice  644 Offence 644 Maintenance of a register  645 Chapter 12  Clubs, pubs and fairs  647 Introduction 647 The associations to which Part 12 applies  648 Members’ clubs  648 Commercial clubs  651 Miners’ welfare institutes  652 Premises in respect of which an ‘on-premises alcohol licence’ has effect 653 Travelling fairs  653 Equal chance gaming by some associations  654 Which offence-creating sections of the GA 2005 are disapplied?  654 High turnover bingo  656 Club gaming permits  657 Which offence-creating sections of the GA 2005 are disapplied?  657 High turnover bingo  658 Applications for club gaming permits  659 Club machine permits  660 Which offence-creating sections of the GA 2005 are disapplied?  660 Applications for club machine permits  661 Exempt gaming by some premises in respect of which an on-premises alcohol licence has effect  661 Which offence-creating sections of the GA 2005 are disapplied?  661 High turnover bingo  662 xv

Contents Gaming machines – automatic entitlement of some premises in respect of which an on-premises alcohol licence has effect  664 Which offence-creating sections of the GA 2005 are disapplied?  664 Licensed premises gaming machine permits  665 Which offence-creating sections of the GA 2005 are disapplied?  665 Applications for licensed premises gaming machine permits  667 Gaming machines at travelling fairs  667 Which offence-creating sections of the GA 2005 are disapplied?  667 Schedule 12 – club gaming permits and club machine permits  667 Introduction 667 Applying for a club gaming permit or a club machine permit  668 Fast-track procedure for holder of club premises certificate  670 Form and maintenance of permits  671 Duration, lapse, cancellation and forfeiture of permits  673 Renewal of permits  676 Appeals 676 Maintenance of a register  677 Exercise of functions by licensing authority  678 Schedule 13 – licensed premises gaming machine permits  678 Introduction 678 Applying for a licensed premises gaming machine permit  679 Form and maintenance of permits  681 Duration, cancellation and forfeiture of permits  682 Transfer of permits  685 Appeals 686 Maintenance of a register  687 Chapter 13 Betting 689 Developments before GA 2005  689 General betting operating licence  691 Pool betting operating licence  692 Betting intermediary operating licence  695 Betting intermediary (trading room only) operating licence  695 Betting premises licence  696 Primary gambling activity  696 Power of Gambling Commission to void bet  697 Chapter 14 Gaming 701 Casinos 701 Introduction 701 Categories of casino  701 The new licensing regime  704 Casino games  706 Card room and other games of equal chance  708 Poker 708 Virtual games  710 Advertising 710 Bingo 711 Introduction 711 Types of bingo  713 Cash bingo  714 Prize bingo  715 xvi

Contents Bingo authorisations  716 Gaming machines  717 Application for prize gaming permit and prize gaming conditions  719 Bingo operating licence  720 Premises licences – transitional provisions  721 Applications for premises licences – existing operators  722 Premises licences – new operators  722 Other regulations  724 Premises licences conditions  725 Mandatory conditions set out in the Act  725 Mandatory conditions on bingo premises licences set out in regulations under section 167  726 Default conditions on bingo premises licences  732 Individual conditions imposed by the licensing authority  734 Removal of conditions from bingo premises licences  734 Conditions which do not apply to bingo premises licences by way of exemption under the Act  734 Conditions not permitted to be attached to bingo premises licences under the Act  735 Matters to be dealt with by way of conditions attached to operating licences 735 Matters to be dealt with by way of codes of practice  737 Exempt and permitted gaming (bingo in private clubs)  738 Bingo in alcohol licensed premises  740 Bingo equipment  742 Multiple and linked bingo  742 Children and bingo  744 Demand 746 Advertising 747 Impact of the Health Act 2006 relating to smoke-free premises  748 Chapter 15 Lotteries 751 Introduction 751 Early English lotteries  753 English lotteries 1694–1826  754 The elements of a lottery  762 Lotteries at common law  762 Definition of a lottery under the GA 2005  765 Types of lottery  767 Lotteries and competitions  773 Payment 773 The allocation of prizes  782 Wholly on chance  788 Assessing the character of a scheme  791 Types of scheme  794 No genuine skill etc requirement  795 Significant proportion  797 The attitude of the Commission  801 Complex lotteries  802 Wholly on chance  804 Spot the ball competitions  806 Tie-breakers 808 xvii

Contents Snowball, pyramid, chain-gift and similar schemes  812 The permitted lotteries  816 Non-commercial society lotteries  820 Society lotteries  820 Large society lotteries  829 Local lotteries  830 An operating licence from the Commission  830 Mandatory conditions of lottery operating licences  831 Commission conditions  835 Post 839 Regulations 839 Lottery machines  839 The exempt lotteries  840 Small society lotteries  840 Registration of a society  842 Appeal 844 Cancellation 845 Annual fee  845 Records 845 Incidental non-commercial lotteries  847 Private lotteries  848 Customer lotteries  855 Advertisements and exempt lotteries  856 Lottery offences  857 Promoting a non-exempt lottery without a licence  857 Facilitating a non-exempt lottery without a licence  863 Misusing the profits of a lottery  864 Misusing the profits of an exempt lottery  864 Breaches of condition of small society lotteries  865 Children and lotteries  866 Penalties 866 Foreign lotteries  866 External Lottery Managers  871 Chapter 16  The National Lottery  873 Introduction 873 The licensing system  876 The Gambling Commission  877 The section 5 licence  879 The section 6 licence  883 Licence to promote the ‘National Lottery Game’  884 Licences to promote instant lotteries  885 Licences under sections 5 and 6: prospective amendments  886 Licences under sections 5 and 6: further provisions  887 Variation of conditions in licences  888 Enforcement of conditions in licences  888 Revocation of licences granted under sections 5 and 6  889 Procedure on revocation  890 Appeals against revocation  892 Financial penalties for breach of conditions in licences  893 Appeals against financial penalties  895 Annual levy  896 xviii

Contents Regulations as to the promotion of lotteries forming part of the National Lottery 896 Directions to the National Lottery Commission under section 11 of the National Lottery etc Act 1993  900 Further controls relating to the National Lottery  903 False representations as to the National Lottery  903 Control of betting on the National Lottery  904 Control of advertising relating to the National Lottery  904 Protection of confidentiality of prize winners’ identity  905 Distribution of National Lottery proceeds  906 The National Lottery Distribution Fund  907 Distribution of funds to the distributing bodies  908 Payment to the distributing bodies  909 Distribution by the arts councils and the British Film Institute  911 Distribution by the sports councils  913 Distribution by the Trustees of the National Heritage Memorial Fund 914 Distribution by the Big Lottery Fund  916 Delegation by distributing bodies of their powers of distribution  918 Joint schemes for distribution of money by distributing bodies  919 Distribution of funds: publicity  920 Strategic plans for distributing bodies  920 Devolution 921 Draws/schemes based on the National Lottery  921 Lotteries/schemes using the National Lottery draw  921 ‘Second chance’ schemes  925 Chapter 17  Remote gambling  929 Introduction 929 The definition of remote gambling  932 Remote gambling equipment  933 The new territorial application provisions  937 The need for a licence  940 Betting 940 Gaming 941 Software 942 Personal licences  949 Responsibilities of licence holders  949 License Conditions and Codes of Practice  949 Technical Standards  949 Testing 950 Advertising 951 Chapter 18 Advertising 955 Introduction 955 Regulatory framework for advertising  956 Territorial application of regulations and ability to advertise  957 Non-broadcast advertisements  960 Limits on ASA Powers  961 CAP Code  962 General rules  963 Gambling-specific rules  966 xix

Contents Prize promotions  969 Adjudications 969 Lotteries 970 Television and radio advertising  971 BCAP codes  971 Television and radio advertising  973 Television scheduling and sponsorship  977 Gambling Industry Code for Socially Responsible Advertising  979 Warning and educational messages  979 Television and radio advertisements  981 Sponsorships 981 Review 982 Spread betting adverts  982 Enforcement 983 Recent adjudications and guidance by CAP and BCAP  986 General grounds of taste  986 Connection with sexual prowess  987 Appeal to minors  988 Gambling as a solution to personal issues  988 Misleading advertisements  988 Social games  989 Affiliates 989 Offences 990 Unlawful gambling  990 Lotteries 991 Conclusion 994 Organisations relevant to the advertising of gambling  995 Chapter 19  Gambling and tax  997 Part 1 – Direct tax  997 Taxes on income  998 Taxes on gains  988 Part 2 – VAT  1003 The exemption from VAT  1003 Calculation 1006 Part 3 – ‘Point of consumption’ gambling duties  1012 Introduction 1012 Primary legislation  1013 Secondary legislation and notices  1013 General betting duty  1014 The current regime  1017 General betting duty on ‘general bets’  1027 General betting duty on ‘spread bets’  1030 General betting duty on Chapter 1 pool bets  1031 General betting duty levied on bet-brokers and betting exchanges  1035 Pool betting duty  1038 Remote gaming duty  1051 Point of consumption gambling duties – administration  1056 Security and UK representatives  1060 Record keeping  1061 Penalties 1062 Fraudulent evasion  1062 xx

Contents Part 4 – Other gambling duties  1063 Gaming duty  1063 Charge to duty  1063 Bingo duty  1069 Lottery duty  1080 Amusement machine licence duty  1092 Machine games duty  1092 Calculation of the duty  1092 Part 5 – Horserace betting levy  1095 Levy schemes  1096 Payments on account of levy  1097 Recent developments  1098 Chapter 20  Contractual aspects of gambling  1101 Introduction and definitions  1101 The enforcement regime under the Gambling Act 2005  1101 Formation of a contract  1103 General 1103 ‘Honour clauses’  1103 Consideration 1105 Time of making the contract  1105 Distance selling  1105 E-commerce 1106 Concurrent duty of care arising out of voluntary self exclusion agreements, or generally?  1106 Unfair contract terms – Unfair Terms in Consumer Contracts Regulations 1999; Consumer Rights Act 2015  1107 Unfair contract terms – alternative dispute resolution clauses  1113 Arbitration clauses  1113 Expert determination or other ADR  1114 Unfair Contract Terms – Unfair Contract Terms Act 1977  1115 Gambling upon objectionable subject matter  1116 Illegality 1118 Introduction 1118 Gambling legislation as a class-protecting statute  1119 Illegality – participation of children and young persons in gambling  1121 Children as agents  1122 Offences by gamblers  1122 Injunctions against organised cheating  1122 Illegality under foreign law  1123 Illegal bets – money deposited with stakeholder  1124 Use of stolen or unlawfully obtained funds for gambling  1125 Restitution for third parties  1125 Liability for ‘knowing receipt’  1125 Claims to prizes and contributions in illegal lotteries and chain gift schemes 1126 Recovery of prizes in illegal lotteries  1126 Recovery of contributions to an illegal lottery or chain gift scheme  1126 Claims in respect of illegal gambling – professional conduct issues  1128 Gambling through agents  1129 Lawful gambling through agents  1129 Illegal gambling through or by agents  1130 xxi

Contents Gambling on credit  1131 Meaning of credit  1131 Cheques as credit  1131 Lawful credit  1131 Credit by payment of gambling debts – ‘in connection with’ gambling 1132 Illegal credit  1133 Effect of illegal credit on otherwise lawful gambling  1133 Credit provided for gambling abroad  1134 Securities in respect of gambling or credit for gambling  1134 Lawful lotteries, prize draws and skill competitions as contracts  1136 Lotteries 1136 Instant lotteries  1136 Prize draw competitions  1137 Skill competitions  1137 Sweepstakes or ‘sweeps’  1138 Contribution lotteries – quasi-contractual analysis  1138 Contribution lotteries – trust analysis  1139 Determination of winners of sporting events  1140 Determination of winners in lotteries and prize draws  1141 Lotteries on sporting events  1141 Determination by a promoter or third party  1141 Implied terms and restrictions on a ‘decision is final’ clause  1143 Erroneous declaration of winners  1145 False prizes  1146 Conduct of a lottery or prize draw  1146 Determination of winners of skill ­competitions  1148 Lotteries and prize draws – unclaimed prizes  1148 Conclusion 1149 Lawful and unlawful contribution lotteries  1149 Non-contribution lotteries: rights and liabilities of promoter and participants 1150 Gambling and family law  1151 Chapter 21  Gambling syndicates  1153 Introduction 1153 Forms of syndicate  1153 Legal rights and liabilities  1154 Establishing an agreement  1154 Rights and liabilities between syndicate members  1156 In contract  1156 In trust  1157 Rights to share in the winnings when the member has not paid  1160 Rights and liabilities between the syndicate organiser and the members 1162 Generally 1162 Syndicate organisers gambling on their own account  1162 Formal syndicate agreements  1164 Insurance 1166 Chapter 22  Prize gaming  1167 Introduction 1167 xxii

Contents Bingo licensed premises  1169 Adult gaming centres and licensed family entertainment centres  1170 Prize gaming permits and family entertainment centre gaming machine permits 1170 Definition of prize gaming  1170 Conditions for prize gaming  1172 First condition  1172 Second condition  1174 Third condition  1174 Fourth condition  1174 Permitted prize gaming  1175 Prize gaming permits  1175 Prize gaming and entertainment centres  1177 Non-licensed family entertainment centres  1177 Bingo halls  1178 Fairs 1179 Power to restrict exemptions  1180 Chapter 23  Private and non-commercial gaming and betting  1181 Betting 1182 Private betting  1185 Workers’ betting  1186 Private gaming  1187 ‘Domestic gaming’  1190 Residential gaming  1192 Non-commercial gaming  1194 Conditions for non-commercial prize gaming  1195 Conditions for non-commercial equal-chance gaming  1196 Non-commercial betting  1197 Chapter 24  Licensing Boards and some Scottish aspects of gambling  1199 Gambling remit of the Licensing Boards  1199 Administration of Licensing Boards  1200 Licensing Board membership  1200 The convener  1201 The clerk  1202 Meetings 1202 Disqualifications 1203 Training 1203 Delegation of functions  1204 Policies and guidelines  1204 Investigation and prosecution of offences  1206 Appeal process in Scotland  1207 Stay pending appeal  1207 Further appeal  1208 Temporary use notices  1208 Gambling and devolution  1208 Chapter 25  Gaming machines  1211 History 1211 Overview of the Gambling Act 2005  1215 Gaming machine definition under the Gaming Act 1968  1218 xxiii

Contents A gaming machine under the Gambling Act 2005  1219 Meaning of machine  1221 Exceptions to the gaming machine definition  1222 Categories of gaming machine  1226 Category A  1227 Category B1  1228 Category B2  1228 Category B3  1229 Category B3A  1229 Category B4  1229 Category C  1230 Category D  1230 Available for use  1231 Prizes 1232 Charge for use  1234 Skill with prizes machines  1235 Gaming machine licences  1238 Gaming machine operating licences  1238 Linked licences  1239 Personal licences  1241 Premises licence  1241 Single-machine supply and maintenance permits  1241 ‘Where machines may be situated’  1242 Machines in casinos  1243 Bingo halls  1244 Betting premises  1244 Fairs 1244 Adult gaming centres (‘AGCs’)  1245 Family entertainment centres (‘FECs’)  1245 Licences 1245 Gambling Commission’s Licence Conditions and Codes of Practice  1246 Premises licences for AGCs and licensed FECs  1248 Unlicensed family entertainment centres  1250 Application 1251 Consideration of the application  1251 Form of permit  1253 Duration 1253 Renewal 1254 Maintenance of the permit  1255 Appeal process  1255 Register 1256 Offences 1256 Offences under sections 37 and 242  1256 Exceptions 1257 Fairs 1259 Section 240 regulations  1259 Manufacture, supply etc  1259 Definitions 1260 Linked machines  1263 Credit 1264 Penalties 1264 Children and young persons  1264 xxiv

Contents Chapter 26  Enforcement of the regulatory system of the Gambling Act 2005 1267 Introduction 1267 Powers of entry  1268 Powers following entry  1268 Enforcement officers, authorised persons etc  1269 Enforcement officers  1269 Authorised persons  1270 Authorised local authority officers  1270 General 1271 Compliance and enforcement policy guidance  1271 Safeguards 1272 Dwellings 1272 Timing of the exercise of a power under or by virtue of Part 15  1273 Evidence of identity and authority  1273 Exercise of powers in relation to records  1273 Information 1274 Securing premises after entry  1275 Powers 1275 Compliance 1275 Suspected offence  1275 Inspection of gambling  1277 Operating licence holders  1279 Family entertainment centres  1280 Premises licensed for alcohol  1281 Prize gaming permits  1282 Members’ clubs, commercial clubs and miners’ welfare institutes  1283 Licensed premises  1284 Lotteries: registered societies  1285 Temporary use notices  1285 Production of authorisations  1287 Offences under Part 15 of the Gambling Act 2005  1288 Offenders and prosecutors  1288 The time limit for prosecutions under the Gambling Act 2005  1289

Chapter 27  Money laundering  1291 Introduction 1291 What is money laundering?  1291 Part 7 of the Proceeds of Crime Act 2002  1294 The money laundering offences  1294 Criminal property  1295 Authorised disclosure  1298 Arrangements 1300 What sort of factors are likely to justify suspicion of money laundering? 1305 The regulated sector  1306 Tipping off  1308 The Money Laundering Regulations 2007  1309 The Terrorism Act 2000  1311 Civil liability for money laundering  1313 xxv

Contents Chapter 28  Gambling and planning  1315 The need for planning permission  1315 Use Classes Order  1317 The planning application  1318 The decision-making process  1318 National planning policy and planning guidance  1320 Reasons 1322 The resolution to grant planning permission and the grant of permission 1322 The local authority decision-maker  1323 Estoppel by representation  1325 Planning control  1326 Powers of entry onto land  1326 Making preliminary enquiries  1326 Means of planning enforcement  1327 Temporary stop notice  1328 Enforcement action  1328 Stop notice  1330 Breach of condition notice  1331 Injunctive relief  1331 Index 1333

xxvi

Table of statutes

All references are to paragraph numbers

Act for Suppressing of Lotteries 1699 . . . . . . . . . . . . . . . . . . . . . . 0.59; 15.27; 20.114 Act to provide for the prevention of Gaming in public places in Scotland 1869 . . . . . . . . . . . . . . . . 0.10 Air Weapons and Licensing (Scot­ land) Act 2015 . . . . . . . . . . . . . .  24.4, 24.18 s 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.14 Arbitration Act 1950 . . . . . . . . . . . . . . . 20.28 s 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.42 Arbitration Act 1979 . . . . . . . . . . . . . . . 20.28 Arbitration Act 1996 . . . . . . . . . . .  20.28, 20.43, 20.44 s 6(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 20.42 68 . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.127 89 . . . . . . . . . . . . . . . . . . . . . . .  20.28, 20.42 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 20.42 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 20.28 90 . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.28 91(1) . . . . . . . . . . . . . . . . . . . . . . . . . 20.28 Art Unions Act 1846 . . . . . . . . . . . 15.26, 15.168; 20.4 Banking and Financial Dealings Act 1971 . . . . . . . . . . . . . . . . . . .  10.40, 10.186, 10.195 Bankruptcy (Scotland) Act 1985 s 12(1) . . . . . . . . . . . . . . . . . . . .  10.177; 25.138 Betting Act 1853 . . . . . . . . . . . . 0.26, 0.30, 0.31, 0.32, 0.33, 0.41 s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.189

Betting and Gaming Act 1960 . . . . . . . 0.7, 0.10, 0.13, 0.32, 0.36, 0.37, 0.38, 0.39, 0.42, 0.43, 0.46, 0.49, 0.50, 0.53, 0.77; 1.22; 2.194, 2.195; 13.1, 13.3, 13.5; 14.92; 15.173; 25.1, 25.2, 25.7 Pt I (ss 1–14) . . . . . . . . . . . . . . . . . . . 0.39 Pt II (ss 15–22) . . . . . . . . . . . . . . . .  0.39; 2.193 s 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.13 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.241 (1) . . . . . . . . . . . . . . . . . . . . . . .  0.43; 2.239 (b) . . . . . . . . . . . . . . . . . . . . . . 0.44 (c) . . . . . . . . . . . . . . . . . . . . . . . 0.45 (7)(b) . . . . . . . . . . . . . . . . . . . . . . 0.47 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.208 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 2.190 (b) . . . . . . . . . . . . . . . . . . . . . . 25.31 21 . . . . . . . . . . . . . . . . . . . . . . . 2.194; 15.173 Pt III (ss 23–25) . . . . . . . . . . . . . . . . . 0.39 Sch 1 Pt I . . . . . . . . . . . . . . . . . . . . . . . . . 0.13 Betting and Gaming Act 1976 . . . . . 0.1, 0.2, 0.4 Betting and Gaming Duties Act 1972: 19.88 Betting and Gaming Duties Act 1981 . . . . . . . . . . . . . . . . 19.8, 19.64, 19.66, 19.75, 19.88, 19.231, 19.232, 19.233, 19.235, 19.320, 19.337, 19.381 Pt I (ss 1–11) . . . . . . . . . . . . . . . . . . . . 19.379 s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.64 (1)(a) . . . . . . . . . . . . . . . . . . . . .0.125; 2.158 2 . . . . . . . . . . . . . . . . . . . 19.64, 19.94, 19.228 3 . . . . . . . . . . . . . . . . . . . . . . . . 19.64, 19.228 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . 19.135 (3)(a), (b) . . . . . . . . . . . . . . . . . . . . 19.137 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . 19.138

xxvii

Table of statutes Betting and Gaming Duties Act 1981 – contd s 4 . . . . . . . . . . . . . . . . . . . 19.64, 19.75, 19.97, 19.158 5 . . . . . . . . . . . . . . . . . . . . . . . .  19.64, 19.103 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . 19.146 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . 19.111 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . 19.106 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . 19.109 (6)(a) . . . . . . . . . . . . . . . . . . . . . . . .19.147 (b) . . . . . . . . . . . . . . . . . . . . . . . 19.104 (c) . . . . . . . . . . . . . . . . . . . . . . . . 10.105 5AA . . . . . . . . . . . . . . . . . . . . . . . . . 19.112 5A . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.64 5B . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.64 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 19.149 5C . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.64 (1)(a) . . . . . . . . . . . . . . . . . . 19.126, 19.129 (b) . . . . . . . . . . . . . . . . . . . . . . 19.122 5D, 6 . . . . . . . . . . . . . . . . . . . . . . . . . 19.64 7 . . . . . . . . . . . . . . . . . . 19.64, 19.157, 19.228 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . 19.185 (3) . . . . . . . . . . . . . . . .  2.43; 19.205, 19.207, 19.210, 19.211, 19.212, 19.215, 19.216 7A . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.165 7B(2) . . . . . . . . . . . . . . . . . . . . . . . . . 19.228 7C(2) . . . . . . . . . . . . . . . . . . . . . . . . 19.169 (3) . . . . . . . . . . . . . . . . . . . . . . . . 19.171 7E(2) . . . . . . . . . . . . . . . . . . . . . . . . . 19.165 7F(2) . . . . . . . . . . . . . . . . . . . . . . . . . 19.221 7ZA . . . . . . . . . . . . . . . . . . . . . . . . . 19.186 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.64 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . 19.223 8A . . . . . . . . . . . . . . . . . . . . . . .  19.64, 19.184 8B . . . . . . . . . . . . . . . . . . . . . . .  19.64, 19.219 8C . . . . . . . . . . . . . . . . . . . . . . .  19.64, 19.73 (1) . . . . . . . . . . . . . . . . . . . . . . . . 19.163 (2) . . . . . . . . . . . . . . . . . . . . . . . . 19.164 (4) . . . . . . . . . . . . . . . . . . . . . . . . 19.169 9 . . . . . . . . . . . . . . . . . . . . . . . .  19.64, 19.231 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . 15.309 9A, 9B . . . . . . . . . . . . . . . . . . .  19.64, 19.231 10 . . . . . . . . . . . . . . . . . . . .  2.2, 2.110, 2.118; 19.64, 19.212 (1) . . . . . . . . . . . . . . . . . . . . .  19.76, 19.77 (b) . . . . . . . . . . . 19.212, 19.213, 19.215 (2) . . . . . . . . . . . . . . . . . . . . .  19.79, 19.214 (b) . . . . . . . . . . . . . . . . . . . . . . 19.216 (3) . . . . . . . . . . . . . . .  2.117; 19.78, 19.375 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 19.375 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.64 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.64 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 19.162 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 19.74 (4) . . . . . . . . . . . . . . . . . . . . .  19.96, 19.136 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.303 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 19.303 (a) . . . . . . . . . . . . . . . . . . . . . . .19.303 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 19.322 (5) . . . . . . . . . . . . . . . . . . . . . . . . . 19.303 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.303 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.303

xxviii

Betting and Gaming Duties Act 1981 – contd s 19(1)–(3) . . . . . . . . . . . . . . . . . . . . . .19.307 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.303 (1) . . . . . . . . . . . . . . 19.309, 19.333, 19.334 (2) . . . . . . . . . . . . . . 19.309, 19.310, 30.311 (3), (4) . . . . . . . . . . . . . . . . . 19.310, 19.311 (5) . . . . . . . . . . . . . . . . . . . . . 19.310, 19.312 (ii) . . . . . . . . . . . . . . . . . . . . . . 19.312 20A . . . . . . . . . . . . . . . . . . . . . . . . . . 19.303 (1)(b) . . . . . . . . . . . . . . . . . . . . . 19.314 (2), (3) . . . . . . . . . . . . . . . . 19.261; 19.315 20B . . . . . . . . . . . . . . . . . . . . . . 19.303, 19.313 20C . . . . . . . . . . . . . . . . . . . . . . . . . . 19.303 (1) . . . . . . . . . . . . . . . . . . . . . . . 19.325 (2) . . . . . . . . . . . . . . . . . . . 19.303, 19.327 (3) . . . . . . . . . . . . . . . . . . . 19.303, 19.304 (4) . . . . . . . . . . . . . . . . . . . . . . . 19.304 21 . . . . . . . . . . . . . . . . . . . . . . . 19.372, 19.372 (1) . . . . . . . . . . . . . 19.379, 19.388, 19.405, 19.410 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 19.379 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 19.389 (3AA) . . . . . . . . . . . . . . . . . . . . . . 19.393 (4) . . . . . . . . . . . . . . . . . . . . . 19.324, 19.390 (a)–(c) . . . . . . . . . . . . . . . . . . . 19.391 (5) . . . . . . . . . . . . . . . . . . . . . . . . . 19.324 (a) . . . . . . . . . . . . . . . . . . . . . . .19.388 (b)(i)–(iii) . . . . . . . . . . . . . . . . 19.388 (c)(i), (ii) . . . . . . . . . . . . . . . . . 19.388 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.372 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 19.394 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.372 (1)(a), (b) . . . . . . . . . . . . . . . . . . . 19.394 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 19.396 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 19.395 24 . . . . . . . . . . . . . . .  19.372, 19.409, 19.410 (3), (4) . . . . . . . . . . . . . . . . . . . . . .19.404 (5), (6) . . . . . . . . . . . . . . . . . . . . . .19.405 25 . . . . . . . . . . . . . . .  19.372, 19.373, 19.400 (1C) . . . . . . . . . . . . . . . . . . . . . . . 19.377 (a), (b) . . . . . . . . . . . . . . . . . . 19.377 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 19.378 26 . . . . . . . . . . . . . . . . . . . . . . . 19.372, 19.379 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 19.380 26A–26C . . . . . . . . . . . . . . . . . . . . . 19.272 26D . . . . . . . . . . . . . . . . . . . . . . 19.272, 19.286 26E . . . . . . . . . . . . . . . . . . . . . . . . . . 19.272 (2) . . . . . . . . . . . . . . . . . . . . . . . . 19.289 (3) . . . . . . . . . . . . . . . . . . . . . . . . 19.290 26F . . . . . . . . . . . . . . . . . . . . . . 19.272, 19.291 26G . . . . . . . . . . . . . . . . . . . . . . . . . . 19.272 26H . . . . . . . . . . . . . . . . . . . . . 19.272, 19.283 26I . . . . . . . . . . . . . . . . . . . . . . . . . . .19.272 (2) . . . . . . . . . . . . . . . . . . . . . . . . 19.295 26J . . . . . . . . . . . . . . . . . . . . . . 19.272, 19.297 (2) . . . . . . . . . . . . . . . . . . . . . . . . 19.298 26K . . . . . . . . . . . . . . . . . . . . . . . . . . 19.272 26L . . . . . . . . . . . . . . . . . . . . . . . . . . 19.272 (1) . . . . . . . . . . . . . . . . . . . . . . . . 19.299 (2), (3) . . . . . . . . . . . . . . . . . . . . 19.300 (4) . . . . . . . . . . . . . . . . . . . . . . . . 19.301 26M . . . . . . . . . . . . . . . . . . . . . 19.272, 19.302

Table of statutes Betting and Gaming Duties Act 1981 – contd s 26N . . . . . . . . . . . . . . . . . . . . . . . . . .19.272 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.336 29A(1)–(3) . . . . . . . . . . . . . . . . . . . . 19.337 32(1), (2) . . . . . . . . . . . . . . . . . . . . . .19.325 33(1) . . . . . . . . . . . . . . . . . . . . . . . . . 19.281 35(1) . . . . . . . . . . . . . . . . . . . . . . . . . 19.325 (2) . . . . . . . . . . . . . .  19.64, 19.274, 19.303 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Sch 1 para 3 . . . . . . . . . . . . . . . . . . . . . . . 19.222 4(1) . . . . . . . . . . . . . . . . . . . . . 19.140 (2) . . . . . . . . . . . . . . . . . . . . . 19.141 5 . . . . . . . . . . . . . . . . . . . . . . . 19.217 6 . . . . . . . . . . . . . . . . . . . 19.152, 19.240 10 . . . . . . . . . . . . . . . . . . . . . . 19.239 13(1) . . . . . . . . . . . . . . . . . . . . 19.241 (2A), (3) . . . . . . . . . . . . . . . 19.242 Sch 3 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.303 Pt I (paras 1–7) . . . . . . . . . . . . . . . 19.317 para 1 . . . . . . . . . . . . . . . . . . . . . 19.317 2 . . . . . . . . . . . . . . . . . . . . . 19.318 2A(3)–(5) . . . . . . . . . . . . . . 19.319 2B . . . . . . . . . . . . . . . . . . . . 19.320 5(1)(aa) . . . . . . . . . . . . . . . 19.321 (1)(c) . . . . . . . . . . . . . . . . 19.321 (2) . . . . . . . . . . . . . . . 19.321, 19.322 6 . . . . . . . . . . . . . . . . . . . . . 19.323 Pt II (paras 8–17) para 8 . . . . . . . . . . . . . . . . . 19.326, 19.327 9(1), (2) . . . . . . . . . . . . . . . 19.325 10 . . . . . . . . . . . . . . . . . . . . 19.334 (1) . . . . . . . . . . . . . . 19.326, 19.337 (1A) . . . . . . . . . . . . . . . . 19.326 (2), (3) . . . . . . . . . . . . . . 19.326 13(1) . . . . . . . . . . . . . . . . . . 19.331 (a), (b) . . . . . . . . . . . . 19.331 (2) . . . . . . . . . . . . . . . . . . 19.331 15(1), (2) . . . . . . . . . . . . . . 19.333 16(1)(a), (b) . . . . . . . . . . . . 19.334 (2) . . . . . . . . . . . . . . . . . . 19.334 (a) . . . . . . . . . . . . . . . 19.334 (3) . . . . . . . . . . . . . . . . . . 19.335 Sch 4 . . . . . . . . . . . . . . . . . . . . . . 19.372, 19.408 para 1(1), (2) . . . . . . . . . . . . . . . . . 19.385 (3), (4) . . . . . . . . . . . . . . . . . 19.386 4(1) . . . . . . . . . . . . . . . . . . . . . 19.400 (2) . . . . . . . . . . . . . . . . . . . . . 19.401 (4), (4A) . . . . . . . . . . . . . . . . 19.400 (5) . . . . . . . . . . . . . . . . . . . . . 19.401 (6), (7) . . . . . . . . . . . . . . . . . 19.401 (7A) . . . . . . . . . . . . . . . . . . . 19.400 (7AA) . . . . . . . . . . . . . . 19.400, 19.401 (8) . . . . . . . . . . . . . . . . . 19.400, 19.401 5 . . . . . . . . . . . . . . . . . . . . . . . 19.406 (1) . . . . . . . . . . . . . . . . . . . . . 19.402 6 . . . . . . . . . . . . . . . . . . . . . . . 19.402 7A . . . . . . . . . . . . . . . . . . 19.402, 19.408 8(1), (2) . . . . . . . . . . . . . . . . . 19.402 11 . . . . . . . . . . . . . . . . . . . . . . 19.402 (1) . . . . . . . . . . . . . . . . . . . . 19.402 12 . . . . . . . . . . . . . . . . . . . . . . 19.403

Betting and Gaming Duties Act 1981 – contd Sch 4 – contd para 14 . . . . . . . . . . . . . . . . . . . . . . 19.407 16 . . . . . . . . . . . . . . . . . . 19.408, 19.409 17 . . . . . . . . . . . . . . . . . . . . . . 19.409 (2) . . . . . . . . . . . . . . . . . . . . 19.409 18 . . . . . . . . . . . . . . . . . . . . . . 19.410 Sch 4A . . . . . . . . . . . . . . . . . . . . . . . . 19.372 Betting and Lotteries Act 1934 . . . . .  0.1, 0.35, 0.39, 0.59, 0.61; 2.194; 15.15, 15.27, 15.29, 15.170, 15.173, 15.311, 15.312, 15.327, 15.329; 20.4 s 3(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 23.12 21 . . . . . . . . . . . . . . . . 15.324, 15.325, 15.326 22 . . . . . . . . . . . . . . . 15.212, 15.311, 15.326, 15.328 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 15.311 (a) . . . . . . . . . . . . . . . . . . 15.212, 15.311 (b) . . . . . . . . . . 15.311, 15.312, 15.313, 15.324, 15.325, 15.327 (c) . . . . . . . . . . . . . . . . . . . . . . . 15.311 (f) . . . . . . . . . . . . . . . . . . . . . . . 15.273 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.169 (3)(d) . . . . . . . . . . . . . . . . . . . . . . 15.212 24 . . . . . . . . . . . . . . . 15.169, 15.212, 15.266, 15.282 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 15.273 (3)(d) . . . . . . . . . . . . . . . . . . . . . . 15.212 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 15.212 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.215 Betting, Gaming and Lotteries Act 1963 . . . . . . . . . . . . .0.1, 0.2, 0.4, 0.39, 0.53, 0.61, 0.66, 0.75, 0.115; 1.100; 2.2, 2.42, 2.135, 2.196; 7.26; 8.42; 10.1, 10.2; 13.11; 15.29, 15.174, 15.175; 25.1, 25.2, 26/7 s 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 23.2 (b) . . . . . . . . . . . . . . . . . . . . . . . 0.70 (4A)–(4D) . . . . . . . . . . . . . . . . . . . 0.75 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . 0.70 2 . . . . . . . . . . . . . . . . . . . . . . 0.66, 0.68; 1.55; 2.158; 13.8; 23.2 4 . . . . . . . . . . . . . . . . . . . . .  0.75; 2.42, 2.108, 2.109, 2.119 (1)(a) . . . . . . . . . . . . . . . . . . . . . . . .0.73 (b) . . . . . . . . . . . . . . . .  0.71, 0.74; 13.11 (2) . . . . . . . . . . . . . . . . . . . 1.56; 2.104; 13.11 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.71 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.2 9 . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.72; 13.8 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . 0.70 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.71 10A . . . . . . . . . . . . . . . . . . . . . . . . . . 0.72 13 . . . . . . . . . . . . . . . . . . . .  0.70; 1.56; 13.11 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 0.70 14 . . . . . . . . . . . . . . . 0.73; 1.56; 2.108; 13.11

xxix

Table of statutes Betting, Gaming and Lotteries Act 1963 – contd s 14(3) . . . . . . . . . . . . . . . . . . . . . . . . . 2.104 15(2) . . . . . . . . . . . . . . . . . . . . . . . . . 0.71 16 . . . . . . . . . . . . . . . . . . . .  0.71; 1.56; 2.108; 13.11 (1)(b), (c) . . . . . . . . . . . . . . . . . . . 0.74 16A . . . . . . . . . . . . . . . . . . .  0.74; 1.56; 13.11 24 . . . . . . . . . . . . . . . . . . . . . . .  0.70; 19.412 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.414 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.415 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.419 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.419 (6), (7) . . . . . . . . . . . . . . . . . . . . . .19.419 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.424 32(1) . . . . . . . . . . . . . . . . . . . . . . . . . 0.43 (ii) . . . . . . . . . . . . . . . . . . . . . . 0.47 (b) . . . . . . . . . . . . . . . . . . . . . . 2.196 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.45 (b) . . . . . . . . . . . . . . . . . . . . . . . . . 0.47 45 . . . . . . . . . . . . . . . . . . . . . . . .  0.61; 15.29 47(1)(a)(i) . . . . . . . . . . . . . . . . . . . . . 2.201 (b) . . . . . . . . . . . . . . . . . . . . . . 2.201 49 . . . . . . . . . . . . . . . . . . . . . . . . . .  0.53; 25.7 54 . . . . . . . . . . . . . . . . . . . . . . . . . .  25.2, 25.3 55 . . . . . . . . . . . . . . . .  0.5, 0.66, 0.125; 2.55, 2.110, 2.158; 23.2 Sch 1 . . . . . . . . . . . . . . .  0.55, 0.66, 0.68, 0.72; 1.55; 2.20; 13.8; 16.62 para 15, 16 . . . . . . . . . . . . . . . . . . . 0.68 19 . . . . . . . . . . . . . . . . . . .  0.72; 10.46 (a) . . . . . . . . . . . . . . . . . . .  0.72; 10.2 (b) . . . . . . . . . . . . . . . . . . . . 10.2 (i) . . . . . . . . . . . . . . . . . . 0.72 (ii) . . . . . . . . . . . . .  0.72; 10.110 27(4) . . . . . . . . . . . . . . . . . . . . 0.68 28A–28D . . . . . . . . . . . . . . . . 0.72 29 . . . . . . . . . . . . . . . . . . . . . . 0.72 (1) . . . . . . . . . . . . . . . . . . . . 0.68 Sch 2 . . . . . . . . . . . . . . . . .  1.56; 2.104, 2.108, 2.109, 2.119; 13.11 para 4 . . . . . . . . . . . . . . . . . . . . . . . 0.75 13 . . . . . . . . . . . . . . . . . . . . . . 2.42 (a) . . . . . . . . . . . . .  2.21, 2.28, 2.108 (c) . . . . . . . . . . . . . . . . . . . . 0.75 13A . . . . . . . . . . . .  0.75; 2.109, 2.114 Sch 3 . . . . . . . . . . . . . . . . . . . . . . . . . . 0.71 para 7, 8, 13 . . . . . . . . . . . . . . . . . . 0.71 Sch 4 para 1 . . . . . . . . . . . . . . . . . . . .  0.72, 0.122 10 . . . . . . . . . . . . . . . . . . . . . . 0.72 10A . . . . . . . . . . . . . . . . . . .  0.72, 0.98 10B, 10C . . . . . . . . . . . . . . . . 0.72 Sch 5ZA . . . . . . . . . . . . . . . . . . . . . . . 0.74 Betting, Gaming and Lotteries Act 1964 . . . . . . . . . . . . . . . . . . . . . . . . .25.1 s 2 . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.52; 25.6 (2) . . . . . . . . . . . . . . . . . . . . . . . . .  0.52; 25.6 3(2)(a) . . . . . . . . . . . . . . . . . . . . . .  0.52; 25.6 Betting Levy Act 1961 . . . . . . . . . . . . . 19.412

xxx

Bills of Exchange Act 1882 . . . . . . . . . 20.107 s 29(1)(a) . . . . . . . . . . . . . . . . . . . . . . .20.107 30(2) . . . . . . . . . . . . . . . . . . . . . . . . . 20.107 38(2) . . . . . . . . . . . . . . . . . . . . . . . . . 20.107 92 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.359 Broadcasting Act 1990 . . . . . . . . . . . . . 18.67 Pt I (ss 1–71) . . . . . . . . . . . . . . . . . . . 18.64 Pt III (ss 83–126) . . . . . . . . . . . . . . . . 18.64 Broadcasting Act 1996 . . . . . . . . . . . . . 18.67 Pt I (ss 1–39) . . . . . . . . . . . . . . . . . . . 18.64 Pt II (ss 40–72) . . . . . . . . . . . . . . . . . . 18.64 Caravan Sites and Control of Development Act 1960 . . . . . . . . 10.138 Charities Act 2006 s 2(3)(d) . . . . . . . . . . . . . . . . . . . . . . . 2.215 Cinematograph Act 1909 . . . . . . . . . . . 10.143 Civic Government (Scotland) Act 1982 . . . . . . . . . . . . . . . . . . . . . . . . .12.11 Pt II (ss 9–44) . . . . . . . . . . . . . . . . . . . 10.138 s 58(1) . . . . . . . . . . . . . . . . . . . . . . . . . 6.81 Civil Liability (Contribution) Act 1978:

20.79

Coal Industry Act 1994 . . . . . . . . . . . . 0.85 Commons Registration Act 1965 s 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.210 Communications Act 2003 . . . . .  18.66, 18.67 s 319 . . . . . . . . . . . . . . . . . . . . . . . . . . 18.68 Companies Act 1948 . . . . . . . . . . . . .  4.22; 12.8 s 448 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.150 Companies Act 1985 s 447 . . . . . . . . . . . . . . . . . . . . . . . . . . 16.15 448A(2) . . . . . . . . . . . . . . . . . . . . . . 16.15 449, 453A . . . . . . . . . . . . . . . . . . . . . 16.15 727 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.150 Sch 15D para 23, 24 . . . . . . . . . . . . . . . . . . . 16.15 Companies Act 1989 s 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.223 Companies Act 2006 s 948 . . . . . . . . . . . . . . . . . . . . . . . . . . 16.15 1157 . . . . . . . . . . . . . . . . . . . . . . . . . 19.150 1159 . . . . . . . . . . . . . . . . . . . . . . . . . 6.154 1224A . . . . . . . . . . . . . . . . . . . . . . . . 16.15 Sch 2 para 40, 41 . . . . . . . . . . . . . . . . . . . 16.15 Sch 11A para 46, 47 . . . . . . . . . . . . . . . . . . . 16.15 Consumer Credit Act 1974 . . . . . . . . . 6.113 s 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.78

Table of statutes Consumer Rights Act 2015 . . 1.38; 20.21, 20.24, 20.26, 20.28, 20.31, 20.39, 20.41, 20.44, 20.46, 20.48 s 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.25 61(1) . . . . . . . . . . . . . . . . . . . . . . . . . 20.34 62(4) . . . . . . . . . . . . . . . . . . . . .  20.28, 20.29 64(1) . . . . . . . . . . . . . . . . . . . . . . . . . 20.33 (a) . . . . . . . . . . . . . . . . . . . . . . .20.31 (b) . . . . . . . . . . . . . . . . . .  20.31, 20.32 (2) . . . . . . . . . . . . . . . . . . . . .  20.31, 20.33 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 20.31 73(1)(a) . . . . . . . . . . . . . . . . . . . .  20.31, 20.33 Sch 2 Pt I . . . . . . . . . . . . . . . . . . . . . . . . . 20.24 para 1, 2 . . . . . . . . . . . . . . . . . . . 20.34 20 . . . . . . . . . . . . . . . . . . . . 20.44

Environmental Protection Act 1990 . . 1.36

Contracts (Applicable Law) Act 1990: 20.70

Finance Act 1982 Sch 6 Pt IV para 10(2) . . . . . . . . . . . . . . . . . . 19.326

Copyright Act 1956 . . . . . . . . . . . . . . . 23.10 Copyright, Designs and Patents Act 1988 s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.99 3(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.100 16–18, 20, 30 . . . . . . . . . . . . . . . . . . 16.101 Costs in Criminal Cases Act 1967 . . . 10.99 Crime and Disorder Act 1998 . . . . . . . 1.30 Criminal Justice Act 1988 s 93A . . . . . . . . . . . . . . . . . . . . . . . . . . 27.36 (1)(a) . . . . . . . . . . . . . . . . . . . . . 27.41 Customs and Excise Management Act 1979 . . . . . . . . . . .  6.81; 19.64, 19.243, 19.274, 19.303 s 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 19.303 116 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.355 Dangerous Drugs Act 1965 s 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.6 Data Protection Act 1998 . . . . . . . . . . . 3.25 Divorce (Insanity and Desertion) Act 1958 s 1(1)(a) . . . . . . . . . . . . . . . . . . . . . . . .23.10 Dormant Bank and Building Society Accounts Act 2008 s 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.92 Sch 3 Pt 4 Para 14(2) . . . . . . . . . . . . . . . . . . 16.92 Education Act 1980 . . . . . . . . . . . . . . . 10.19 Enterprise Act 2002 . . . . . . . . . . . . . . . 19.370 Pt VIII (ss 210–236) . . . . . . . . . .  16.57, 16.60 s 230 . . . . . . . . . . . . . . . . . . . . . .  16.57, 16.60 251 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.370

Estate Agents Act 1979 . . . . . . . . . . . . 1.22 Finance Act 1897 . . . . . . . . . . . . . . . . . . 19.88 Finance Act 1952 s 4(5) . . . . . . . . . . . . . . . . . . . . . . . . . . 19.169 Finance Act 1956 s 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.164 Finance Act 1964 s 7(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 19.171 Finance Act 1966 s 12(5) . . . . . . . . . . . . . . . . . . . . . . . . . 19.108

Finance Act 1983 s 5(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 19.386 Finance Act 1988 s 112(1)(c) . . . . . . . . . . . . . . . . . . . . . . 19.334 Finance Act 1993 . . . . . . . . . . . . . . . . . . 19.368 s 24(1)(a) . . . . . . . . . . . . . . . . . 19.338, 19.340 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 19.340 (4)(a)–(d) . . . . . . . . . . . . . . . . . . . 19.340 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.358 (1)–(3) . . . . . . . . . . . . . . . . . . . . . .19.344 26(1)–(3) . . . . . . . . . . . . . . . . . . . . . .19.345 27(1) . . . . . . . . . . . . . . . . . . . . . . . . . 19.351 (2) . . . . . . . . . . . . .  19.350, 19.351, 19.352 (3)(a)–(c) . . . . . . . . . . . . . . . . . . . 19.350 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 19.351 28(1), (2) . . . . . . . . . . . . . . . . . . . . . .19.362 29 . . . . . . . . . . . . . . . . . . . . .  19.345, 19.346 (1) . . . . . . . . . . . . .  19.338, 19.345, 19.352 (2)(a), (b) . . . . . . . . . . . . . . . . . . . 19.352 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 19.353 (a) . . . . . . . . . . . . . . . . . . . . . . .19.353 (b) . . . . . . . . . . . . . . . .  19.355, 19.357 (c) . . . . . . . . . . . . . . . . . . . . . . . 19.357 (5)(a), (b) . . . . . . . . . . . . . . . . . . . 19.357 (6), (8) . . . . . . . . . . . . . . . . . . . . . .19.357 31(1) . . . . . . . . . . . . . . . . . . .  19.364, 19.366 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 19.364 (3) . . . . . . . . . . . . . . . . . . .  19.364, 19.366 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 19.365 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.367 33(1), (2) . . . . . . . . . . . . . . . . . . . . . .19.366 34 . . . . . . . . . . . . . . . . . . . . .  19.368, 19.370 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.369 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.369 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.338 40(2), (3) . . . . . . . . . . . . . . . . . . . . . .19.340 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.338 Sch 23 Pt I . . . . . . . . . . . . . . . . . . . . . . . . . 19.338

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Table of statutes Finance Act 1994 . . . . . . . . . . . . . . . . . . 19.201 s 9 . . . . . . . . . . . . . . . . 19.299, 19.334, 19.351, 19.357, 19.362, 19.405, 19.408 12 . . . . . . . . . . . . . . . . . . . . . . . 19.236, 19.332 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.332 14–16 . . . . . . . . . . . . . . . . . . . . 19.238, 19.332 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.332 Sch 4 Pt VI para 66 . . . . . . . .  19.351, 19.357, 19.362 67 . . . . . . . . . . . . . . . . . . . . 19.351 68 . . . . . . . . . . . . . . . . 19.357, 19.362

Finance Act 2006 – contd s 11(1), (4) . . . . . . . . . . . . . . . . . . . . . . 19.371 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.324 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 19.378

Finance Act 1995 . . . . . . . . . . . . . . . . . . 19.380

Finance Act 2008 . . . . . . . . . . . . . . . . . . 19.61 s 22(1) . . . . . . . . . . . . . . . . . . . . . . . . . 19.254 113, 118 . . . . . . . . . . . . . . . . . . . . . . 19.61 124 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.62 Sch 36 . . . . . . . . . . . . . . . . . . . . . . . . . 19.61 para 63(4) . . . . . . . . . . . . . . . . . . . . 19.61 Sch 39 . . . . . . . . . . . . . . . . . . . . . . . . . 19.61

Finance Act 1997 . . . . . . . . . . . . . . . . . . 19.246 s 10, 11 . . . . . . . . . . . . . . . . . . . . . . . . 19.243 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.243 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 19.260 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 19.261 13, 14 . . . . . . . . . . . . . . . . . . . . . . . . 19.243 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.243 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 19.261 Sch 1 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.243 para 1 . . . . . . . . . . . . . . . . . . . . . . . 19.265 3 . . . . . . . . . . . . . . . . . . . . . . . 19.266 (1)(b) . . . . . . . . . . . . . . . . . . 19.268 (4)(a)–(c) . . . . . . . . . . . . . . . 19.267 (6) . . . . . . . . . . . . . . . . . . . . . 19.269 4(2) . . . . . . . . . . . . . . . . . . . . . 19.268 6 . . . . . . . . . . . . . . . . . . . . . . . 19.270 (4) . . . . . . . . . . . . . . . . . . . . . 19.270 7 . . . . . . . . . . . . . . . . . . . . . . . 19.271 8(1) . . . . . . . . . . . . . . . . . . . . . 19.263 (2) . . . . . . . . . . . . . . . . . . . . . 19.264 (10) . . . . . . . . . . . . . . . . . . . . 19.263 9(1) . . . . . . . . . . . . . . . . . . . . . 19.258 Sch 2 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.243 Finance Act 2001 . . . . . . . . . . . . . . . . . . 19.89 s 6 . . . . . . . . . . . . . . . . . . .  0.125; 2.158; 19.7 Sch 1 . . . . . . . . . . . . . . . . .  0.125; 2.158; 19.7 Sch 25 para 8 . . . . . . . . . . . . . . . . . . . . . . . 19.314 Finance Act 2002 . . . . . . . . . . . . . . . . . . 19.64 s 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.7 Sch 4 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.7 Finance Act 2003 . . . . . . . . . . . .  19.112, 19.129, 19.186, 19.305, 19.313 s 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.7 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . 19.303 69(b) . . . . . . . . . . . . . . . . . . . . . . . . . 16.93 Sch 43 Pt I para 2 . . . . . . . . . . . . . . . . . . . . . . . 19.333 Finance Act 2006 . . . . . .  19.98, 19.323, 19.324, 19.371, 19.392 s 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.324

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Finance Act 2007 s 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.243 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.8 Sch 1 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.8 Sch 25 Pt II para 12(2) . . . . . . . . . . . . . . . . . . 19.320 12(3) . . . . . . . . . . . . . . . . . . 19.321

Finance Act 2012 Sch 24 para 2(2)–(6) . . . . . . . . . . . . . . . . . 19.321 5, 6 . . . . . . . . . . . . . . . . . . . . . 19.324 7 . . . . . . . . . . . . . . . . . . . . . . . 19.322 (3), (9) . . . . . . . . . . . . . . . . . 19.322 8(1) . . . . . . . . . . . . . . . . . . . . . 19.322 (b) . . . . . . . . . . . . . . . . . . 19.323 9 . . . . . . . . . . . . . . . . . . . . . . . 19.324 14 . . . . . . . . . . . . . . . .  19.324, 19.325 15 . . . . . . . . . . . . . . . . . . . . . . 19.325 18 . . . . . . . . . . . . . . . . . . . . . . 19.325 19 . . . . . . . . . . . . . . . . . . . . . . 19.325 24 . . . . . . . . . . . . . . . . . . . . . . 19.324 Finance Act 2014 . . . . . . . . . 19.74, 19.75, 19.76, 19.108, 19.126, 19.134, 19.136, 19.138, 19.143, 19.153, 19.157, 19.163, 19.201, 19.226 s 122(1) . . . . . . . . . . . . . . . . . . . . . . . . 19.251 Pt 3 (ss 125–198) . . . . . . . . . . . . . . . . 19.223 Pt 3 Ch 1 (ss 125–142) . . . . . . . . . . . . 19.74 s 126 . . . . . . . . . . . . . . . . . . . . . .  19.87, 19.122 127(1), (2) . . . . . . . . . . . . . . . . . . . . .19.121 (3) . . . . . . . . . . . . . . . . . . . . . . . . 19.124 (4) . . . . . . . . . . . . . . . . . . . . . . . . 19.127 128 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.87 (1) . . . . . . . . . . . . . . . . . . . . . . . . 19.133 (2) . . . . . . . . . . . . . . . . . . . . . . . . 19.131 129(2) . . . . . . . . . . . . . . . . . . . . . . . . 19.132 130(2) . . . . . . . . . . . . . . . . . . . . . . . . 19.132 131 . . . . . . . . . . . . . . . . . . . .  19.125, 19.135 132 . . . . . . . . . . . . . . . . . . . .  19.126, 19.135 133 . . . . . . . . . . . . . . . . . . . . . .  2.161; 19.87 (1)(a) . . . . . . . . . . . . . . . . . . . . . .19.147 (b) . . . . . . . . . . . . . . . . . . . . . 19.145 134 . . . . . . . . . . . . . . . . . . . . . . 19.87, 19.137 (5), (6) . . . . . . . . . . . . . . . . . . . . .10.140 135(2) . . . . . . . . . . . . . . . . . . . . . . . . 19.136 (4) . . . . . . . . . . . . . . . . . . . . . . . . 19.142

Table of statutes Finance Act 2014 – contd s 136 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.139 137 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.140 138 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.141 139(1) . . . . . . . . . . . . . . . . . . . . . . . . 19.91 (2) . . . . . . . . . . . . . . . . . . . . . . . . 19.93 (3) . . . . . . . . . . . . . . . . . . . . . . . . 19.91 (4) . . . . . . . . . . . . . . . . . . . . . . . . 19.95 (5) . . . . . . . . . . . . . . . . . . . . . . . . 19.93 (6) . . . . . . . . . . . . . . . . . . . . . . . . 19.91 140(1) . . . . . . . . . . . . . . . . . . . . . . . . 19.97 (2)(a) . . . . . . . . . . . . . . . . . . . . . .19.96 (b) . . . . . . . . . . . . . . . . . . . . . 19.97 141 . . . . . . . . . . . . . . . . .  0.125; 2.161; 19.87 (1) . . . . . . . . . . . . . . . . . . . . . . . . 19.148 (2) . . . . . . . . . . . . . . . . . . . . . . . . 19.149 (4) . . . . . . . . . . . . . . . . . . . . . . . . 19.149 142(2)(b) . . . . . . . . . . . . . . . . . . . . . 19.219 (3)(a)–(c) . . . . . . . . . . . . . . . . . . 19.219 (4) . . . . . . . . . . . . . . . . . . . . . . . . 19.219 Pt 3 Ch 2 (ss 143–153) . . . . . . . . . . . . 19.74 s 143(5), (6) . . . . . . . . . . . . . . . . . . . . .19.140 144(1), (2) . . . . . . . . . . . . . . . . . . . . .19.155 (4) . . . . . . . . . . . . . . . . . . . . . . . . 19.167 146 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.140 147 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.141 148(1), (2) . . . . . . . . . . . . . . . . . . . . .19.158 (3) . . . . . . . . . . . . . . . . . . . .  2.43; 19.160 (4) . . . . . . . . . . . . . . . . . .  19.158, 19.162 149(3) . . . . . . . . . . . . . . . . . . . . . . . . 19.165 150(1) . . . . . . . . . . . . . . . . . . . . . . . . 19.163 (2) . . . . . . . . . . . . . . . . . . . .  2.43; 19.160 151(1)(b) . . . . . . . . . . . . . . . . . . . . . 19.219 (2)(b), (c) . . . . . . . . . . . . . . . . . . 19.219 153 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.166 Pt 3 Ch 3 (ss 154–162) . . . . . . . . . . . . 19.74 s 154(1) . . . . . . . . . . . . . . . . . . . . . . . . 19.201 (2), (3) . . . . . . . . . . . . . . . . . . . . .19.140 155(1) . . . . . . . . . . . . . . . . . . . . . . . . 19.202 (2) . . . . . . . . . . . . . . . . . . . . . . . . 19.203 (3) . . . . . . . . . . . . . . . . . . . . . . . . 19.201 (4) . . . . . . . . . . . . . . . . . . . . . . . . 19.207 (5) . . . . . . . . . . . . . . . . . . . . . . . . 19.212 156(1) . . . . . . . . . . . . . . . . . . . . . . . . 19.207 157 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.140 (1), (2) . . . . . . . . . . . . . . . . . . . . .19.207 158 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.141 159(1) . . . . . . . . . . . . . . . . . . . . . . . . 19.208 (2) . . . . . . . . . . . . . . . . . . . . . . . . 19.208 (3) . . . . . . . . . . . . . . . . . . . . . . . . 19.207 160 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.209 (2) . . . . . . . . . . . . . . . . . . . . . . . . 19.210 161(1) . . . . . . . . . . . . . . . . . . . . . . . . 19.205 (2)–(4) . . . . . . . . . . . . . . . . . . . . .19.201 162(1) . . . . . . . . . . . . . . . . . . . . . . . . 19.219 (3) . . . . . . . . . . . . . . . . . . . . . . . . 19.219 Pt 3 Ch 4 (ss 163–198) . . . . . . . . . . . . 19.74 s 163 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.212 164 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.212 (1) . . . . . . . . . . . . . . . . . . . . . . . . 19.214 (3)(a) . . . . . . . . . . . . . . . . . . . . . .19.214 165 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.212 (1)–(3) . . . . . . . . . . . . . . . . . . . . .19.215

Finance Act 2014 – contd s 166, 167 . . . . . . . . . . . . . . . . .  19.212, 19.217 168 . . . . . . . . . . . . . .  19.212, 19.221, 19.222 169 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.212 170 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.212 (1)–(4) . . . . . . . . . . . . . . . . . . . . .19.220 171 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.212 (1)–(4), (6), (7) . . . . . . . . . . . . . . 19.220 172, 173 . . . . . . . . . . . . . . . .  19.212, 19.220 174 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.212 (1)–(3) . . . . . . . . . . . . . . . . . . . . .19.224 175 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.212 (1) . . . . . . . . . . . . . . . . . . . . . . . . 19.218 (3)(c) . . . . . . . . . . . . . . . . . . . . . . 19.217 (d) . . . . . . . . . . . . . . . . . . . . . 19.218 (4) . . . . . . . . . . . . . . . . . . . . . . . . 19.218 176 . . . . . . . . . . . . . . . . . . . .  19.212, 19.218 177 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.212 178 . . . . . . . . . . . . . . . . . . . .  19.212, 19.223 179, 180 . . . . . . . . . . . . . . . . . . . . . . 19.212 181 . . . . . . . . . . . . . . . . . . . .  19.105, 19.212 182 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.212 183 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.109 184(1) . . . . . . . . . . . . . . . . . . . . . . . . 19.110 (2) . . . . . . . . . . . . . . . . . . . . . . . . 19.111 185 . . . . . . . . . . . . . . . . . . . . . . . . . . 0.64 (1) . . . . . . . . . . . . . . . . . . . . . . . . 19.113 (a), (b) . . . . . . . . . . . . . . . . . . 19.114 (c) . . . . . . . . . . . . . . . .  19.114, 19.117 (d) . . . . . . . . .  19.114, 19.118, 19.119 (e) . . . . . . . . . . . . . . . .  19.114, 19.120 (2) . . . . . . . . . . . . . . . . . . . . . . . . 19.112 186 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.102 (1) . . . . . . . . . . . . . . . . . . . . . . . . 19.100 (3) . . . . . . . . . . . . . . . . . . . . . . . . 19.102 187(1) . . . . . . . . . . . . . . . . . . . . . . . . 19.106 188 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.202 189 . . . . . . . . . . . . . .  19.89, 19.133, 19.145 Finance (No 2) Act 1947 s 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.167 Financial Services Act 1986 . . . 2.68, 2.69, 2.70, 2.78, 2.81, 2.98 s 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.135 63 . . . . . . . . . . . . . . . . .  2.69, 2.81, 2.87, 2.94 Sch 1 . . . . . . . . . . . . . . . . . . . . . . . . . . 2.81 para 9 . . . . . . . . . . . . . . . . .  2.69, 2.87, 2.94 12 . . . . . . . . . . . . . . . . . . . . . . 2.74 28(1) . . . . . . . . . . . . . . . . . . . . 2.74 Financial Services Act 2012 Pt 2 (ss 6–49) . . . . . . . . . . . . . . . . . . . 2.71 s 7(1)(a), (c), (d) . . . . . . . . . . . . . . . . . 2.71 Financial Services and Markets Act 2000 . . . . . . . . . . . .  0.1; 2.3, 2.9, 2.59, 2.61, 2.62, 2.63, 2.64, 2.65, 2.66, 2.67, 2.68, 2.71, 2.75, 2.77, 2.90, 2.91, 2.100; 4.3; 18.116; 19.65 s 22 . . . . . . . . . . . . . . 2.60, 2.71, 2.74, 2.76; 3.7 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 2.71

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Table of statutes Financial Services and Markets Act 2000 – contd s 22(4) . . . . . . . . . . . . . . . . . . . . . . . .  2.71, 2.74 (5) . . . . . . . . . . . . . . . . . . . . . . . .  2.61, 2.71 (6) . . . . . . . . . . . . . . . . . . . . . . . . . 2.71 23, 25 . . . . . . . . . . . . . . . . . . . . . . . . 27.19 422 . . . . . . . . . . . . . . . . . . . . . . . . . . 6.152 Firearms Act 1968 . . . . . . . . . . . . . . . . . 7.26 Fire Precautions Act 1971 s 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.5 Football (Disorder) Act 2000 . . . . . . . . 1.29 Football (Offences and Disorder) Act 1999 . . . . . . . . . . . . . . . . . . . . . . . . .1.29 Fraud Act 2006 . . . . . . . . . . . . . . . . . . . 6.81 s 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.81 Sch 3 . . . . . . . . . . . . . . . . . . . . . . . . . . 6.81 Freedom of Information Exchange Act 2000 . . . . . . . . . . . . . . . . . . . . . 16.15 s 3(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.15 Sch 1 . . . . . . . . . . . . . . . . . . . . . . . . . . 16.15 Gambling Act 2005 . . . . . .  0.1, 0.2, 0.3, 0.4, 0.5, 0.10, 0.17, 0.28, 0.39, 0.57, 0.59, 0.62, 0.63, 0.82, 0.89, 0.105, 0.106, 0.127, 0.128; 1.1, 1.2, 1.3, 1.4, 1.10, 1.11, 1.12, 1.14, 1.19, 1.29, 1.33, 1.41, 1.44, 1.47, 1.49, 1.51, 1.52, 1.57, 1.59, 1.60, 1.67, 1.72, 1.73, 1.76, 1.77, 1.80, 1.82, 1.91, 1.95, 1.96, 1.100, 1.101, 1.104, 1.105; 2.4, 2.6, 2.8, 2.20, 2.21, 2.41, 2.43, 2.45, 2.59, 2.60, 2.61, 2.63, 2.64, 2.65, 2.66, 2.70, 2.82, 2.102, 2.108, 2.109, 2.124, 2.126, 2.127, 2.130, 2.131, 2.134, 2.140, 2.141, 2.147, 2.166, 2.171, 2.172, 2.185, 2.192, 2.193, 2.197, 2.202, 2.230, 2.240, 2.251, 2.254, 2.255; 3.3, 3.4, 3.7, 3.12, 3.13, 3.28; 4.3, 4.7; 5.12; 6.1, 6.11, 6.12, 6.26, 6.27, 6.213; 7.1, 7.38; 8.23; 9.1, 9.8, 9.10, 9.11, 9.14, 9.17, 9.18, 9.19, 9.20; 10.2, 10.4, 10.5, 10.46, 10.47, 10.64, 10.149; 11.7, 11.11; 12.10, 12.11, 12.51, 13.1, 13.2, 13.6, 13.7, 13.12, 13.13, 13.18, 13.20, 13.21; 14.1, 14.2, 14.3, 14.7, 14.11, 14.12, 14.20, 14.21, 14.22, 14.30, 14.33, 14.44, 14.51, 14.52, 14.60, 14.61, 14.63, 14.64, 14.70, 14.72, 14.82,

xxxiv

Gambling Act 2005 – contd 14.113, 14.119, 14.120, 14.121, 14.124, 14.131, 14.142, 14.149, 14.150, 14.164, 14.172, 14.181, 14.184, 14.25, 14.27, 14.28, 14.31, 14.32, 14.197, 14.42, 14.43, 14.207, 14.53, 14.54, 14.62, 14.80 14.84, 14.99, 14.107, 14.282; 15.1, 15.15, 15.25, 15.28, 15.29, 15.30, 15.45, 15.47, 15.135, 15.164, 15.180, 15.181, 15.193, 15.208, 15.217, 15.303, 15.330; 16.2, 16.8, 16.9, 16.11, 16.55, 16.62, 16.95, 16.106; 17.1, 17.2, 17.5, 17.23; 18.1, 18.2, 18.8 ,18.20, 18.38, 18.51, 18.55, 18.58, 18.90, 18.124, 18.125, 18.112, 18.114, 18.124, 18.127, 18.131, 18.161, 18.172, 18.173; 19.8, 19.18, 19.32, 19.65, 19.231, 19.233, 19.234, 19.235, 19.245, 19.246, 19.249, 19.273, 19.275, 19.277, 19.278, 19.281, 19.282, 19.321, 19.371; 20.1, 20.7, 20.12, 20.14, 20.17, 20.33, 20.37, 20.54, 20.57, 20.61, 20.62, 20.63, 20.66, 20.72, 20.73, 2.74, 20.77, 20.80, 20.81, 20.85, 20.91, 20.94, 20.96, 20.97, 20.99, 20.103, 20.104, 20.106, 20.107, 20.111; 23.1, 23.2; 24.1, 24.6, 24.21, 24.30; 25.11, 25.13, 25.20, 25.26, 25.27, 25.83, 25.132, 25.172, 25.179, 25.181; 26.1; 27.28 Pt I (ss 1–19) . . . . . . . . .  1.14; 2.1, 2.6, 2.262; 4.83; 6.81; 17.6 s 1 . . . . . . . . . . . . . . . .  1.10, 1.14, 1.15; 3.12; 4.8; 5.2; 6.47; 7.22, 7.86, 7.90; 10.74; 11.30; 12.44, 12.75; 14.42; 15.30, 15.167; 18.124; 19.334; 25.144; 27.1 1(a) . . . . . . . . . . . . . . . .  1.29, 1.33, 1.34; 4.8 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8 (c) . . . . . . . . . . . . . . . . .  4.8, 4.83; 5.2; 7.57; 7.57; 18.52 2 . . . . . . . . . . . . . . . . 3.4; 4.6; 6.28; 7.1; 9.12; 10.9; 11.6; 12.41; 26.5, 26.6, 26.24, 26.38 (1)(a), (b) . . . . . . . . . . . . . . . . . . . . 9.1 (c) . . . . . . . . . . . . . . . . . . . . . . . . 9.1; 24.1 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1; 10.9 3 . . . . . . . . . . . . . . . .  1.10, 1.61; 2.8, 2.166, 2.258, 2.261; 4.1, 4.3; 5.46, 5.48, 5.50; 6.28; 7.5; 12.1; 15.30, 15.55; 23.3; 25.3 1

Table of statutes Gambling Act 2005 – contd s 4 . . . . . . . . . . . . . . . 1.44; 2.203, 2.204, 2.212, 2.255, 2.257, 2.258; 4.85; 6.28; 15.30; 17.5 (1) . . . . . . . . . . . . . . . . .  2.255; 4.17; 14.41, 14.99; 17.5 (e) . . . . . . . . . . . . . . . . . . . . . . . . 2.257 (2) . . . . . . . . . . . . . . . . .  2.255, 2.272; 4.17; 14.41, 14.99; 17.5 (e) . . . . . . . . . . . . . . . . . . . . . . . . 2.256 (3) . . . . . . . . . . . . . . . . . . . . . . .  2.255; 17.5 5 . . . . . . . . . . . . .  2.159, 2.165, 2.203, 2.259, 2.260, 2.261, 2.262, 2.274, 2.275, 2.276; 3.29; 4.16; 5.4, 5.46, 5.48, 5.50, 5.63; 6.4; 7.5; 11.1; 15.30; 23.1, 23.6, 23.16; 26.24 (1) . . . . . . . . . . . . . . . .  2.260, 2.263, 2.270, 2.274, 2.275, 2.276 (a) . . . . . . . . . . . . . .  2.260, 2.263, 2.267, 2.274; 4.16 (b) . . . . . . . . . . . . .  2.260 ,2.263, 2.264, 2.267, 2.271, 2.274, 2.275, 2.276; 4.16 (c) . . . . . . . . . . . . . .  2.260, 2.263, 2.271, 2.274, 2.275, 2.276; 4.16 (2) . . . . . . . . . . . . .  2.269, 2.270, 2.273; 4.16 (a) . . . . . . . . . . . . . . . . . . . . . . . .2.261 (b) . . . . . . . . . . . . . . . . . . . . . . . 2.271 (c) . . . . . . . . . . . . . .  2.260, 2.267, 2.272, 2.273; 17.10, 17.11 (3) . . . . . . . . . . . . . . . . .  2.260 2.269, 2.273; 4.16; 17.10, 17.11 (a)–(c) . . . . . . . . . . . . . . . . . . . . 2.273 (4) . . . . . . . . . . . . . . . . . . . . . . .  2.260; 4.16 6 . . . . . . . . . . . . . . . . . .  0.5; 2.2, 2.5, 2.7, 2.8, 2.45, 2.166, 2.168, 2.169, 2.170, 2.197, 2.198, 2.203, 2.212, 2.214, 2.228, 2.229, 2.242, 2.245, 2.246, 2.247, 2.248, 2.249, 2.253; 3.7; 5.47, 5.49; 6.11, 6.12, 6.17; 11.1; 12.1; 15.30; 16.11; 22.2, 22.13; 25.160, 25.162 (1) . . . . . . . . . . . . . . . . .  2.212, 2.213; 25.30 (2) . . . . . . . . . . . . . . . . . . .  0.6; 2.214; 25.84 (a)(i) . . . . . . . . . . . .  2.172, 2.197, 2.221, 2.222 (ii) . . . . . . . . . . . . . . . . .  2.197, 2.224 (iii) . . . . . . . . . . .  2.197, 2.225; 25.85 (b) . . . . . . . . . . . . . . . .  0.5; 2.171, 2.214, 2.215, 2.217 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.226 (a) . . . . . . . . . . . . . . . . . . . . . . . .2.170 (b) . . . . . . . . . . . . . . . . . . . . . . . 2.226 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.227 (a) . . . . . . . . . . . . . . . . . . . . . . . .2.227 (b) . . . . . . . . . . . . . . . . . . .  2.228; 25.162 (5) . . . . . . . . . . . . . . . . . . . . . .  2.213; 22.13

Gambling Act 2005 – contd s 6(6) . . . . . . . . . . . . . . . . . 2.229, 2.243, 2.247, 2.248, 2.253; 25.83 7 . . . . . . . . . . . . . . . .  2.2, 2.5, 2.166, 2.231, 2.235, 2.240; 4.5, 4.6; 5.47, 5.49; 11.1; 12.1; 14.10; 22.13; 26.28 (1) . . . . . . . . . . . . . . . . .  2.232; 14.2; 15.43 (2) . . . . . . . . . . . . .  2.232, 2.236; 14.9; 25.51 (3) . . . . . . . . . . . . . . . . . . . . . .  2.234; 14.10 (4) . . . . . . . . . . . . . . . . . . . . . . .  2.233; 14.2 (b) . . . . . . . . . . . . . . . . . . . . . . . 17.6 (5) . . . . . . . . . . . . . . . .  14.45, 14.47, 14.133 (6), (7) . . . . . . . . . . . . . . . . . . . . . . .14.133 (9) . . . . . . . . . . . . . . . . . . . . . . . . . . 9.19 8 . . . . . . . . . . . . . . . .  2.2, 2.5, 2.166, 2.231, 2.236; 5.47, 5.49; 7.58; 12.1, 12.12; 14.28; 22.13; 23.21, 23.26; 25.51 (1) . . . . . . . . . . . . . . . . . . .  4.22, 4.51; 25.51 (a), (b) . . . . . . . . . . . . . . . . .  2.241; 5.33 (2) . . . . . . . . . . . . . . . . .  2.236; 5.33; 25.51 9 . . . . . . . . . . . . . . . .  0.5, 0.59; 2.2, 2.3, 2.8, 2.9, 2.10, 2.22, 2.31, 2.39, 2.45, 2.50, 2.60, 2.65, 2.82, 2.91, 2.113, 2.116, 2.118, 2.125, 2.147, 2.152, 2.164, 2.242, 2.244; 4.5, 4.6; 5.47, 5.49; 15.37; 25.160; 26.28 (1) . . . . . . . . . . . . . . . . . . . . . . . . .  2.46, 2.60 (a) . . . . . . . . . . . . 2.32, 2.37, 2.38, 2.46, 2.49, 2.50, 2.51 (b) . . . . . . . . . . .  2.32, 2.35, 2.36, 2.38, 2.46, 2.49, 2.50, 2.51, 2.52 (c) . . . . . . . . . . . .  2.33, 2.36, 2.37, 2.38, 2.46, 2.49, 2.50, 2.51 (2) . . . . . . . . . . . . . . . . . . . . . . . . .  2.33, 2.39 (3) . . . . . . . . . . . . . . . . . . . . . . . . .  2.36, 2.39 10 . . . . . . . . . . . . . . .  0.5; 2.2, 2.3, 2.9, 2.45, 2.59, 2.60, 2.67, 2.71, 2.91, 2.125; 3.1, 3.7; 4.5, 4.6; 5.47, 5.49; 26.28 (2), (3) . . . . . . . . . . . . . . . . . . . . . .2.61 11 . . . . . . . . . . . . . . .  0.5, 0.59; 2.2, 2.3, 2.4, 2.9, 2.40, 2.45, 2.46, 2.47, 2.48, 2.51, 2.52, 2.111, 2.113, 2.116, 2.117, 2.123, 2.125, 2.126, 2.152, 2.164, 2.204, 2.245; 4.5, 4.6; 5.47, 5.49; 15.37, 15.98, 15.112, 15.145; 16.11; 25.160; 26.28 (1)(b) . . . . . . . . . . . . . . . . . . . . 2.53, 2.113 (c)(i), (ii) . . . . . . . . . . . . . . . . . 2.49 (2) . . . . . . . . . . . . . . . . . . . . . .  2.49, 2.51 12 . . . . . . . . . . . . . . .  0.5; 2.2, 2.4, 2.9, 2.10, 2.47, 2.101, 2.104, 2.108, 2.109, 2.111, 2.112, 2.115, 2.118, 2.119, 2.120, 2.121, 2.123, 2.125, 2.152, 2.164, 2.243, 2.244; 5.47, 5.49; 13.16; 16.11; 25.160

xxxv

Table of statutes Gambling Act 2005 – contd s 12(1)(a) . . . . . . . . . . . . .  2.113, 2.114, 2.115, 2.121; 14.2 (b) . . . . . . . . . . . . . . . . . .  2.116, 2.121 (c) . . . . . . . . . . . . . .  2.112, 2.117, 2.121 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 13.16 13 . . . . . . . . . . . . . . .  2.2, 2.4, 2.154, 2.159, 2.160, 2.161, 2.162, 2.163, 2.164, 2.165; 5.47, 5.49; 23.7 (1) . . . . . . . . . . . . . . . . . . .  4.5, 4.6; 26.28 (2) . . . . . . . . . . . . . . . . . . . . . .  2.154; 23.7 14 . . . . . . . . . . . . . .  0.57; 1.95, 1.96; 2.2, 2.3, 2.4, 2.8, 2.41, 2.42, 2.123, 2.147, 2.148, 2.151, 2.248, 2.249, 2.250; 4.5; 5.29, 5.47, 5.49, 5.56, 5.60; 15.31, 15.36, 15.38, 15.50, 15.53, 15.54, 15.59, 15.60, 15.63, 15.69, 15.70, 15.81, 15.85, 15.100, 15.103, 15.161, 15.162, 15.308; 16.107; 18.56; 20.81; 25.160; 26.28 (1) . . . . . . . . . . . . . . . . . . . . .  15.43, 15.44 (2) . . . . . . . . . . . . . . . .  2.41; 14.26; 15.39, 15.44, 15.57, 15.83 (a) . . . . . . . . . . . . . . . . . .  2.150; 16.106 (b) . . . . . . . . . . . . . . . . . .  15.82; 16.106 (c) . . . . . . . . . . . . . . . . . . . . . . . 16.106 (3) . . . . . . . . . . . . . . .  2.151; 15.40, 15.44, 15.46, 15.50, 15.57 (b) . . . . . . . . . . . . . . . . . . . . . . 15.82 (d) . . . . . . . . . . . . . . . . . .  15.98, 15.156 (4) . . . . . . . . . . . . . . .  2.150; 15.44, 15.48, 15.49, 15.86, 15.87, 15.92 (a) . . . . . . . . . . . . . . . . . . .  15.86, 15.88 (b) . . . . . . . . . . . . .  15.49, 15.60, 15.86 (5) . . . . . . . . . . . . 2.51; 15.44, 15.55, 15.98, 15.100, 15.104, 15.105, 15.112, 15.118, 15.120, 15.124, 15.126, 15.137, 15.138, 15.139, 15.145, 15.155 (a) . . . . . . . . . . . . . . . . . .  15.99, 15.147 (b) . . . . . . . . . . . . . . . . . . . . . . 15.99 (6) . . . . . . . . . . . . . . . . . . . . .  15.44, 15.58 (7) . . . . . . . . . . . .  2.7, 2.153, 2.248, 2.253; 15.44, 15.81; 16.107, 16.108 15 . . . . . . . . . . . . . . . . .  0.105; 1.95; 2.2, 2.8, 2.253; 3.1, 3.7; 20.5 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 16.11 (2) . . . . . . . . . . . . . . . . . . . . . .  1.95; 16.11 (3) . . . . . . . . . . . . . . . . . . . .  2.253; 16.11 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 16.11 (5) . . . . . . . . . . . . . . . . . . 1.95; 16.14, 16.55 16 . . . . . . . . . . . . . . . . . . . .  0.5, 2.243, 2.245 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 2.246 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 2.244

xxxvi

Gambling Act 2005 – contd s 16(4) . . . . . . . . . . . . . . . . . . . . . . . . . 2.247 17 . . . . . . . . . . . . . . .  0.6; 2.5, 2.248, 2.249, 2.253; 15.174 (2)–(4) . . . . . . . . . . . . . . . . .  2.249, 2.250 (5) . . . . . . . . . . . . . . . . . . . . . . . . . 2.253 (4) . . . . . . . . . . . . . . . . . . . . . .  22.2, 22.14 18 . . . . . . . . . . . . . . . . . 2.4, 2.5, 2.108, 2.119, 2.123, 2.125, 2.126, 2.147, 2.152 (1) . . . . . . . . . . . . . . . . . . . . .  2.152, 2.153 (3), (4) . . . . . . . . . . . . . . . . . . . . . .2.153 19 . . . . . . . . . . . . . . . 15.171, 15.172, 15.178, 15.195, 15.197, 15.202, 15.240, 15.322 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 23.27 (a)–(c) . . . . . . . . . . . . . . . . . . . 15.200 (2) . . . . . . . . . . . . .  15.178, 15.199, 15.202 (a), (b) . . . . . . . . . . . . . . . . . . . 23.27 (3) . . . . . . . . . . . . . . . . . . . . .  15.200; 23.27 Pt II (ss 20–32) . . . . . .  3.1, 3.7, 3.8; 4.4; 5.15; 6.81; 7.1; 7.25, 7.28, 7.38, 7.59, 7.63, 7.66, 7.70, 7.75, 7.86, 7.90; 11.27, 11.39; 12.44, 12.75; 18.165, 18.171; 26.4, 26.24 s 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 (1), (2) . . . . . . . . . . . . . . . . . . . . . .3.8 21 . . . . . . . . . . . . . . . . . .  3.8; 13.13; 19.369 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 3.8 (2) . . . . . . . . . . . . . . . . . . . . . . . .  2.122; 3.8 (3)–(6) . . . . . . . . . . . . . . . . . . . . . .3.8 22 . . . . . . . . . . . . . . 1.15; 3.12; 10.88, 10.105, 10.106, 10.107; 14.16 (a) . . . . . . . . . . . . . . . . . . . . . .  1.15; 6.32 23 . . . . . . . . . . . . . . . . . 1.12; 3.30; 6.28, 6.46, 6.62, 6.83, 6.173; 7.25, 7.30, 7.41; 10.88 (1)–(4) . . . . . . . . . . . . . . . . . . . . . .3.13 (5) . . . . . . . . . . . . . . . . . . . . . .  3.13; 6.93 24 . . . . . . . . . . . . . . . . .  1.12, 1.42; 3.3, 3.14, 3.15, 3.17; 4.24, 4.53, 4.57, 4.59, 4.60; 6.55, 6.123; 7.55; 8.10; 10.49, 10.106; 11.44; 12.34; 14.34, 14.94, 14.114, 14.154, 14.258, 14.103; 15.253; 17.32, 17.94; 18.2, 18.123; 22.10; 25.54, 25.117; 27.1 (1) . . . . . . . . . . . . . . . . . . . . . .  3.14; 6.122 (2) . . . . . . . . . . . . . . . . . .  3.15; 6.122; 7.55 (3) . . . . . . . . . . . . . . . . . . . . .  3.15; 18.124 (4), (6), (7) . . . . . . . . . . . . . . . . . . 3.14 (8) . . . . . . . . . . . . .  3.16; 6.6, 6.115, 6.123; 14.165, 14.82; 15.253 (9) . . . . . . . . . . . . . . . . . .  3.14, 3.16; 6.123; 14.165, 14.82, 14.103 (10), (11) . . . . . . . . . . . . . . . . .  3.15, 3.18

Table of statutes Gambling Act 2005 – contd s 25 . . . . . . . . . . . . .  1.12, 1.18; 3.3, 3.18, 3.19; 10.12, 10.13, 10.15, 10.18, 10.24, 10.28, 10.45, 10.49, 10.50, 10.53, 10.58, 10.60, 10.61, 10.66, 10.67, 10.68, 10.70, 10.71, 10.72, 10.74, 10.75, 10.84, 10.87, 10.88, 10.89, 10.90, 10.92, 10.93, 10.94, 10.101, 10.104, 10.107, 10.109, 10.111, 10.123, 10.132, 10.134, 10.136, 10.139, 10.147; 11.44; 12.44, 12.71, 12.75; 22.23; 26.8 (1) . . . . . . . . . . . . . . . . . .  1.77; 3.18; 10.74 (2) . . . . . . . . . . . . . . .  10.74, 10.75, 10.84, 10.89, 10.93, 10.94, 10.100, 10.101 (3)–(6) . . . . . . . . . . . . . . . . . . . . . .3.18 26 . . . . . . . . . . . . . . . . . . . . .  1.12; 3.3, 3.21 (1)–(3) . . . . . . . . . . . . . . . . . . . . . .3.21 27 . . . . . . . . . . . . . . . . . . . . . . . . . .  1.12; 3.22 28 . . . . . . . . . . . . . . . . .  1.12; 3.3, 3.22; 4.13; 5.12; 7.11, 7.62, 7.69, 7.74, 7.78, 7.81; 11.62; 24.24; 26.4, 26.60 (1), (2) . . . . . . . . . . . . . . . . . . . . . .3.22 29 . . . . . . . . . . . . . . . . . . . . . . . .  3.24; 10.12 (1)–(3) . . . . . . . . . . . . . . . . . . . . . .3.24 30 . . . . . . . . . . . . . . .  3.25, 3.26, 3.27; 10.12; 16.15 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 3.25 (2) . . . . . . . . . . . . . . . . . . . . . .  3.25; 16.14 (3), (4) . . . . . . . . . . . . . . . . . . . . . .3.25 (5) . . . . . . . . . . . . . . . . . . . . . . . . . 3.26 (6), (7) . . . . . . . . . . . . . . . . . . . . . .3.25 (9) . . . . . . . . . . . . . . . . . . . . . . . . . 16.15 31(1), (2) . . . . . . . . . . . . . . . . . . . . . .3.28 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.28 Pt III (ss 33–44) . . . . .  4.1, 4.2, 4.4, 4.9, 4.10, 4.11, 4.12, 4.18; 5.1, 5.2, 5.3; 6.4, 6.5; 7.10, 7.37; 11.1; 12.2; 18.171; 26.3, 26.20, 26.24 s 33 . . . . . . . . . . . . . . .  1.42, 1.43, 1.47, 1.96; 2.255, 2.258, 2.259, 2.261, 2.262, 2.268, 2.270, 2.274; 4.10, 4.15, 4.16, 4.18, 4.19, 4.20, 4.22, 4.23, 4.29, 4.30, 4.32, 4.33, 4.36, 4.39, 4.42, 4.43, 4.77; 5.40; 6.4, 6.9, 6.12, 6.123; 7.10; 12.1, 12.2, 12.12, 12.14, 12.15, 12.17, 12.19, 12.21, 12.23, 12.29, 12.31, 12.33; 13.16; 14.114, 14.91; 17.15, 17.17, 17.19, 17.30; 20.62, 20.55, 20.85, 20.97; 23.1, 23.3, 23.4. 23.9, 23.16, 23.26, 23.30; 25.99, 25.167; 26.24, 26.25

Gambling Act 2005 – contd s 33(1) . . . . . . . . . . . . .  1.51; 2.61, 2.203; 3.16; 4.15, 4.17; 6.6, 6.8; 17.32; 25.155 (a) . . . . . . . . . . . . . . . . . . . . 4.19; 26.24 (b)(i) . . . . . . . . . . . . . . . . .  4.20, 4.21 (ii) . . . . . . . . . .  4.22, 4.23, 4.27 (iii) . . . . . . . . . . . . . . . . . . . 4.29 (iv) . . . . . . . . . . . . . . . . . .  4.30, 4.32 (v) . . . . . . . . . . . . . . . . . . .  4.33, 4.36 (2) . . . . . . . . . . . .  1.51; 2.61, 2.258, 2.259; 3.16; 4.17; 6.6, 6.128; 20.62; 26.24 (a) . . . . . . . . . . . . . . . . . . . . 2.154; 4.19 (b) . . . . . . . . . .  1.23, 1.42; 4.19; 17.32 (3) . . . . . . . . . . . . . . . . . .  2.267; 3.16; 6.6, 6.128; 26.24 (a), (b) . . . . . . . . . . . . . . . . . . . 4.19 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 6.7 (a)–(c) . . . . . . . . . . . . . . . . . . . 4.39 (7)(d) . . . . . . . . . . . . . . . . . . . . . . 4.55 34 . . . . . . . . . . . . . . .  1.43, 1.96; 2.262; 4.20; 6.4, 6.8, 6.14; 15.303 35 . . . . . . . . . . . . . . .  1.43; 2.261; 4.21; 6.8; 25.155 36 . . . . . . . . . . . . . . 1.48; 6.4; 17.2, 17.3, 17.4, 17.10, 17.12, 17.13, 17.14, 17.20, 17.22, 17.25, 17.35 (1) . . . . . . . . . . . . 17.15, 17.16, 17.17, 17.18 (a), (b) . . . . . . . . . . . . . . . . . . . 4.17 (2) . . . . . . . . . . . . . . . .  6.12; 17.15, 17.16, 17.17, 17.18 (3) . . . . . . . . . . . . . . .  1.3, 1.49, 1.51; 4.17; 6.12; 17.13, 17.15, 17.16, 17.17, 17.18, 17.19, 17.20, 17.24, 17.30, 17.36, 17.111 (b) . . . . . . . . . . . . . . . . . . .  1.51; 17.36 (4) . . . . . . . . . . . . .  1.3, 1.50; 17.19, 17.24, 17.25, 17.30, 17.31, 17.34, 17.35; 18.17, 18.13 (a) . . . . . . . . . . . . . . 4.17; 17.20, 17.26, 17.30, 17.31 (b) . . . . . . . . . . . . .  4.17; 17.22, 17.27 (c) . . . . . . . . . . . . . .  4.17; 17.28, 17.29 (d) . . . . . . . . . . . . . . . . . . .  4.17; 17.29 (5) . . . . . . . . . . . . . . . . . .  1.50; 4.17, 4.85; 17.31, 17.33 (b) . . . . . . . . . . . . . . . . . . . . . . 17.31 37 . . . . . . . . . . . . 1.43, 1.73; 4.10, 4.13, 4.40, 4.41, 4.42, 4.43, 4.44, 4.46, 4.47, 4.48, 4.49, 4.50, 4.51, 4.58, 4.59, 4.61, 4.63, 4.64, 4.66, 4.67, 4.70, 4.73, 4.77; 5.40; 6.4; 7.37; 10.148; 11.1; 12.1, 12.2, 12.12, 12.14, 12.19, 12.26, 12.29, 12.35, 12.36, 12.37, 12.38, 12.40; 14.56, 14.43; 20.62; 23.1, 23.3, 23.4, 23.5, 23.8, 23.9, 23.16, 23.26, 23.30; 25.127, 25.158, 25.159, 25.160, 25.163, 25.164; 26.24, 26.25

xxxvii

Table of statutes Gambling Act 2005 – contd s 37(1) . . . . . . . . . . . . .  2.61; 4.49; 10.54; 11.1, 11.2; 13.18; 17.8; 25.120, 25.156; 26.50, 26.52 (a) . . . . . . . . . . . 4.40; 10.5; 11.1; 14.57 (b) . . . . . . . . . .  4.40; 10.5; 11.1; 14.46 (c), (d) . . . . . . . . . . . . .  4.40; 10.5; 11.1 (e) . . . . . . . . . . . . . . . .  2.154; 4.40; 10.5; 11.1; 13.18; 23.7 (2) . . . . . . . . . . . . .  2.61; 10.54; 11.1, 11.2; 25.120; 26.24, 26.50 (3) . . . . . . . . . . . . .  4.44; 10.5; 11.1, 11.2; 17.9; 26.24, 26.30 (4) . . . . . . . . . . . . .  2.155; 4.45; 11.1, 11.2; 13.9; 26.24, 26.30 (5) . . . . . . . . . . . . . . . . . . . . . . . .  4.45; 11.1 (6) . . . . . . . . . . . . .  1.74; 2.61, 2.154; 4.46; 10.6; 11.1; 13.18; 17.8 (7) . . . . . . . . . . . . . . .  11.1; 25.120, 25.156 (a) . . . . . . . . . . . . . . . . . . . . .  4.47, 4.48 (b) . . . . . . . . . . . . . . . . . . .  4.49; 26.50 (c) . . . . . . . . . . . . . . . . . . . . . . . 4.50 (d) . . . . . . . . . . . . . . . . . . . . . . 4.58 (e) . . . . . . . . . . . . . . . . . . . . . . . 4.61 (f) . . . . . . . . . . . . . . . . . . . . . . . 4.63 (g) . . . . . . . . . . . . . . . . . . . . .  4.64, 4.66 (h) . . . . . . . . . . . . . . . . . . . . .  4.67, 4.70 (8)(a)–(c) . . . . . . . . . . . . . . . . . . . 4.73 (9) . . . . . . . . . . . . . . . . . . . . . . . . . 4.73 38(1), (2) . . . . . . . . . . . . . . . . . . . . . .4.41 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 2.61 39 . . . . . . . . . . . . . . . . .  1.13, 1.75; 4.3, 4.47; 5.42, 5.45, 5.54; 6.15; 10.8 (2)–(5) . . . . . . . . . . . . . . . . . . . . . .4.47 (6) . . . . . . . . . . . . . . . . . . . . . . . . . 4.47 (a) . . . . . . . . . . . . . . . . . . . . . . .4.47 (7) . . . . . . . . . . . . . . . . . . . . . . . . . 4.47 40 . . . . . . . . . . . . . . . . . . . . . . . . . .  1.75; 10.8 (1), (2) . . . . . . . . . . . . . . . . . . . . . .4.48 41 . . . . . . . . . . . . . . .  1.44, 1.67; 4.10, 4.74, 4.76, 4.77; 17.68, 17.69 (1) . . . . . . . . . . . . . . . . . . . . . . . .  1.67; 4.74 (2) . . . . . . . . . . . . 1.67; 3.7; 4.5, 4.74; 26.28 (3)(a), (b) . . . . . . . . . . . . . . . . . . . 4.75 (4)(a)–(c) . . . . . . . . . . . . . . . . . . . 4.76 42 . . . . . . . . . . . . . . . . . 0.28; 1.23, 1.27, 1.38, 1.95; 3.7; 4.10, 4.11, 4.77, 4.79, 4.80, 4.81; 13.22; 16.11; 20.34 20.36, 20.67; 23.1 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 4.78 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 4.79 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 4.80 (a), (b) . . . . . . . . . . . . . . . . . . . 4.79 (4)(a), (b) . . . . . . . . . . . . . . . . . . . 4.81 43 . . . . . . . . . . . . . . .  1.104; 4.10, 4.11, 4.81, 4.84; 14.2; 15.54, 15.157, 15.160 (1)(a), (b) . . . . . . . . . . . . . . . . . . . 4.83 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 15.160 (a), (b) . . . . . . . . . . . . . . . . . . . 4.82 (3) . . . . . . . . . . . . . . . . . . . . .  4.82; 15.160

xxxviii

Gambling Act 2005 – contd s 43(4)(a)–(c) . . . . . . . . . . . . . . . . . . . 4.84 44 . . . . . . . . . . . . . . .  4.10, 4.85, 4.86; 17.4 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 4.85 (2) . . . . . . . . . . . . . . . . . . . . . . . .  4.85, 4.86 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 4.86 Pt IV (ss 45–64) . . . . .  1.40; 4.1; 5.1, 5.2, 5.3, 5.4, 5.5, 5.6, 5.7, 5.11, 5.13, 5.14, 5.16, 5.17, 5.19, 5.20, 5.42, 5.45, 5.47, 5.48, 5.49, 5.50, 5.53, 5.54, 5.63; 6.125, 6.127, 6.128, 6.129; 11.1; 14.101, 14.103; 18.164; 25.193, 25.194; 26.3, 26.20 s 45 . . . . . . . . . . . . . . . . .  5.6, 5.54, 7.20, 7.57, 7.58; 14.103 (1) . . . . . . . . . . . . . . . 1.40; 4.27, 4.29, 4.48, 4.55; 5.2, 5.11, 5.13, 5.14, 5.19, 5.20, 5.21, 5.46, 5.52, 5.56, 5.60; 12.62; 14.116 (2) . . . . . . . . . . . . .  4.27, 4.29, 4.48, 4.55; 5.2, 5.11, 5.14, 5.19, 5.20, 5.21; 14.116; 20.64 46 . . . . . . . . . . . . . . . . . .  5.3, 5.8, 5.20, 5.21, 5.22, 5.44; 14.58, 14.64, 14.102; 15.313 (1) . . . . . . . . . . . . .  5.23, 5.26, 5.29, 5.30, 5.31, 5.32, 5.34, 5.35, 5.36, 5.38, 5.40; 10.54; 18.164 (2)(a) . . . . . . . . . . . . . . . . . . . . . . .5.23 (b) . . . . . . . . . . . . . . . . . . . . . . 5.26 (c) . . . . . . . . . . . . . . . . . . .  5.29; 15.313 (d) . . . . . . . . . . . . . . . . . . . . . . 5.30 (e) . . . . . . . . . . . . . .  5.31; 14.64; 25.70, 25.111, 25.164 (f) . . . . . . . . . . . . . . . . . . . .  5.32; 22.25 (g) . . . . . . . . . . . . . . . . . . .  5.34; 22.27 (h) . . . . . . . . . . . . . . . . . . .  5.36; 22.29 (i) . . . . . . . . . . . . . . . . . . . .  5.38; 22.33 (3) . . . . . . . . . . . . . . . . . . .  15.313; 18.164 (a), (b) . . . . . . . 5.21, 5.58, 5.61; 18.164 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 15.313 (a), (b) . . . . . . . . . . . . .  5.22, 5.59, 5.62 (5) . . . . . . . . . . . . . . . .  5.59, 5.62; 15.313 (a), (b) . . . . . . . . . . . . .  5.22, 5.59, 5.62 (6) . . . . . . . . . . . . . . . . . . . . .  5.22; 15.313 47 . . . . . . . . . . . . . . . . . .  5.3, 5.8, 5.42, 5.45; 14.115, 14.116, 14.101; 20.64 (1) . . . . . . . . . . . . . . . . . . . . . . . .  5.42, 5.45 (4) . . . . . . . . . . . . . . . . . . . . . . . .  5.42, 5.45 (5) . . . . . . . . . . . . . . . . . .  5.42, 5.45; 10.54; 25.187 (a) . . . . . . . . . . . . . . . . . . . . . . .22.27 (6) . . . . . . . . . . . . . . . . . . . . . . . .  5.42, 5.45 (7) . . . . . . . . . . . . . . . .  5.42, 5.45; 25.187 (a), (b) . . . . . . . . . . . .  5.42, 5.45; 22.27 (c) . . . . . . . . . . . . . . . . . . . . . .  5.42, 5.45

Table of statutes Gambling Act 2005 – contd s 48 . . . . . . . . . . . . . . . . . .  5.3, 5.8, 5.43, 5.44; 14.102; 15.312 (1) . . . . . . . . . . . . . . . .  5.43; 20.64; 25.188 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 20.64 (a), (b) . . . . . . . . . . . . . . . . . . . 5.44 (c) . . . . . . . . . . . . . . . . . . .  5.44; 15.312 (d) . . . . . . . . . . . . . . . . . . . . . . 5.44 (e) . . . . . . . . . . . . .  5.44; 25.111, 25.188 (f)–(i) . . . . . . . . . . . . . . . . . . . . 5.44 49 . . . . . . . . . . . . . . .  5.3, 5.8, 5.45; 14.116, 14.101; 20.64; 25.187 50 . . . . . . . . . . . . . . .  5.3, 5.8, 5.46; 14.172 (1) . . . . . . . . . . . . . . . . . . .  3.25; 5.46, 5.47 (2)(a)–(e) . . . . . . . . . . . . . . . . . . . 5.47 51 . . . . . . . . . . . . . . . . . .  5.3, 5.9, 5.48, 5.50; 14.172 (1) . . . . . . . . . . . . . . . .  5.48, 5.49; 14.103 (2)(a)–(e) . . . . . . . . . . . . . . . . . . . 5.49 52 . . . . . . . . . . . . . . . . . .  5.3, 5.9, 5.49, 5.50, 5.57; 14.103 53 . . . . . . . . . . . . . . . . .  5.3, 5.9, 5.51; 14.103 (a) . . . . . . . . . . . . . . . . . . . . .  5.51; 14.103 (b) . . . . . . . . . . . . . . . . . . . . . . . . . 5.51 54 . . . . . . . . . . . . . . .  5.3, 5.9, 5.53; 25.189 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 5.53 (a), (b) . . . . . . . . . . . . . . . . . . . 5.53 (2) . . . . . . . . . . . . . . . .  5.53, 5.54; 14.103 55 . . . . . . . . . . . . . . .  5.3, 5.9, 5.54; 14.172; 25.190 (1) . . . . . . . . . . . . . . . . . . . . . . . .  5.54, 5.55 (a)–(c) . . . . . . . . . . . . . . . . . . . 5.54 (2) . . . . . . . . . . . . . . .  5.55; 14.116; 25.190 (a) . . . . . . . . . . . . . . . . . . . . . . .5.55 (3) . . . . . . . . . . . . . . . . . . . . .  5.55; 14.116 (4) . . . . . . . . . . . . . . . .  5.54, 5.55; 14.172; 25.190 56 . . . . . . . . . . . . . . . . .  5.3, 5.10, 5.56, 5.57, 5.59, 5.60; 15.226, 15.253, 15.304, 15.313, 15.314; 18.164 (1) . . . . . . . . . . . . . . . .  5.56, 5.60; 15.313, 15.314 (a)–(c) . . . . . . . . . . . . . . . . . . . 5.57 (2) . . . . . . . . . . . . . . . .  5.58, 5.59; 15.313 57 . . . . . . . . . . . . . . . . .  5.3, 5.10, 5.60, 5.62; 18.164 (2) . . . . . . . . . . . . . . . . . . . . . . . .  5.61, 5.62 58 . . . . . . . . . . . . . . .  5.3, 5.10, 5.63; 6.128, 6.130 59 . . . . . . . . . . . . . . .  5.3, 5.10, 5.17; 14.102; 25.70 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 25.192 60(1) . . . . . . . . . . . . . . . . . . . . . . . .  5.42, 5.45 (2) . . . . . . . . . . . . . . . . . . . . . . . .  5.42, 5.54 61 . . . . . . . . . . . . . . . . . . . . .  5.48, 5.51, 5.54, 5.63; 14.103 (1)(a), (b) . . . . . . . . . . . . . . . . . . . 5.5 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 62 . . . . . . . . . . . . . . .  5.19, 5.42, 5.43, 5.46, 5.48, 5.50, 5.56, 5.60, 5.63 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 25.193

Gambling Act 2005 – contd s 62(1)(a)–(c) . . . . . . . . . . . . . . . . . . . 5.19 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 25.193 63 . . . . . . . . . . . . . . . . .  6.129, 6.130; 15.253; 18.171; 25.194 (1)(a), (b) . . . . . . . . . . . . . . . . . .  5.13, 5.14 64 . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.17 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 5.16 (a), (b) . . . . . . . . . . . . . . . . . . . 5.16 Pt V (ss 65–126) . . . . 1.43; 2.258, 2.259, 2.261; 3.3, 3.4, 3.7, 3.23, 3.29; 4.4; 6.5, 6.32, 6.35, 6.83, 6.157, 6.174, 6.180; 7.1, 7.2, 7.3, 7.17, 7.18, 7.19, 7.65, 7.66, 7.79, 7.86; 8.9; 11.2; 12.15, 12.21, 12.31; 26.3, 26.15, 26.24, 26.53 s 65 . . . . . . . . . . . . . . .  6.17, 6.20; 14.41; 17.7; 23.16 (1) . . . . . . . . . . . . . . . .  4.5; 6.5, 6.28; 17.7 (1)(g) . . . . . . . . . . . . . . . . . . . . . . 1.65 (2) . . . . . . . . . . . . .  1.43; 6.13, 6.21, 6.26; 7.18; 14.41; 26.28 (a) . . . . . . . . . . . 2.203; 4.5; 22.5; 26.28 (b) . . . . . . . . .  4.5; 12.15, 12.21, 12.31; 14.32; 26.28 (c) . . . . . . . . . . . . . . . .  4.5; 17.7; 26.28 (d) . . . . . . . . . .  1.59; 2.104; 4.5; 13.14; 26.28 (e) . . . . . . . . . . .  2.154, 2.165; 4.5; 6.26, 26.28 (f) . . . . . . . . . . . . .  1.64; 4.5; 6.20, 6.24, 6.25; 26.28 (g) . . . . . . . . . . . .  4.5; 6.20, 6.24, 6.25; 26.28 (h) . . . . . . . . . .  1.66; 4.5; 6.26; 25.21; 26.28 (i) . . . . . . . . . . . . .  1.67; 4.5; 6.26; 26.28 (j) . . . . . . . . . . . . . 1.43, 1.97; 2.252; 4.5; 6.26; 26.28 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 7.37 (4) . . . . . . . . . . . . . . .  4.5; 6.13; 7.18; 26.28 (5) . . . . . . . . . . . . . . . . . .  4.5; 7.18; 26.28 66 . . . . . . . . . . . . . . . . . . . .  6.16, 6.149; 7.60 (1)(a) . . . . . . . . . . . . . . . . . . . . . . .7.36 (c) . . . . . . . . . . . . . .  7.36; 14.156, 14.77 (2)(a), (b) . . . . . . . . . . . . . . . . . . . 7.36 67 . . . . . . . . . . . . . . .  1.44; 2.154, 2.258; 4.5; 6.17, 6.20; 14.41, 14.40; 17.7; 26.28 (1)(a) . . . . . . . . . . . . . . . . . . . . . . 2.258 (b) . . . . . . . . . . . . . . . . . . .  1.44; 2.258 (2) . . . . . . . . . . . . .  1.44; 2.258; 6.18; 17.7 (f), (g) . . . . . . . . . . . . . . . . . . . 6.137 (3) . . . . . . . . . . . . . . . .  2.258; 6.18; 14.41 68 . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.42 (1) . . . . . . . . . . . . . . . . . .  6.21, 6.22; 14.41 (3) . . . . . . . . . . . . . . . . . .  6.21, 6.22, 6.24 (b) . . . . . . . . . . . . . . . . . . .  2.203; 22.5 (4) . . . . . . . . . . . . .  6.21, 6.23, 6.24; 14.21 (5) . . . . . . . . . . . . . . . . . .  6.21, 6.25, 6.137 (a) . . . . . . . . . . . . . . . . . . . . . . .6.25 (b) . . . . . . . . . . . . . . . . . .  6.25; 14.41

xxxix

Table of statutes Gambling Act 2005 – contd s 68(5)(c), (d) . . . . . . . . . . . . . . . . . . . 6.25 (6) . . . . . . . . . . . . . . . . . . . . . . . . . 6.26 69 . . . . . . . . . . . . . . . . . . . . . . . .  6.28, 6.158 (1) . . . . . . . . . . . . . . . . . . . . . . . .  6.40; 7.20 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 6.41 (a) . . . . . . . . . . . 6.88, 6.104; 7.20, 7.32 (b), (c) . . . . . . . . . . . . . . . . . . . 7.20 (d), (e) . . . . . . . . . . . .  6.41, 6.167; 7.20 (f) . . . . . . . . . . . . . . . . . . . .  6.75; 7.20 (g) . . . . . . . . . .  6.42, 6.43, 6.48; 7.14, 7.20, 7.31 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 6.40 (a) . . . . . . . . . . . . . . . . . . . . . . .7.20 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 6.40 (a), (b) . . . . . . . . . . . . . . . . . . . 7.21 (5) . . . . . . . . . . . . . . . . . . . . . . . .  6.42; 7.20 70 . . . . . . . . . . . . . . .  1.45; 6.28, 6.30, 6.31, 6.34, 6.46, 6.67, 6.68, 6.80, 6.81, 6.155; 7.28 (1) . . . . . . . . . . . . . . . . . .  3.30; 6.46, 6.48 (a) . . . . . . . . . . . 6.32, 6.48, 6.75, 6.76, 6.80; 7.22 (b) . . . . . . . . . .  6.58, 6.67, 6.80, 6.186; 7.23 (c) . . . . . . . . . . . . . . . . . . . . . .  6.69, 6.70 (d) . . . . . . . . . . . . . . .  6.69, 6.70, 6.135 (2) . . . . . . . . . . . . .  3.30; 6.46, 6.58, 6.67, 6.79, 6.80, 6.186 (a) . . . . . . . . . . . . . . . .  6.61, 6.62; 7.24 (b) . . . . . . . . . . . . . . . . . . . . .  6.63; 7.24 (c) . . . . . . . . . . . . . . . . . . . . . .  6.65; 7.24 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 6.46 (a), (b) . . . . . . . . . . . . . . . . . .  6.74, 6.70 (4) . . . . . . . . . . . . . . . . . . . . . . . .  6.46; 7.25 (5) . . . . . . . . . . . . . . . . . .  6.46, 6.73, 6.74 (a)–(c) . . . . . . . . . . . . . . . . . .  6.73; 7.25 (d) . . . . . . . . . . . . . . . . . . . . . . 7.25 (e) . . . . . . . . . . . . . . . . . . . . . .  7.25, 6.78 (f) . . . . . . . . . . . . . . . . . . . . . . . 6.78 (6) . . . . . . . . . . . . . . . . . . . . . . . .  6.46, 6.79 (7) . . . . . . . . . . . . .  6.46, 6.62, 6.70, 6.73 (8) . . . . . . . . . . . . . . . . . .  6.46, 6.70, 6.73 (9)(a) . . . . . . . . . . . 6.60, 6.67, 6.70; 7.23, 7.29, 7.39, 7.54 (b) . . . . . . . . . . . . . . .  6.59, 6.60, 6.80 (10) . . . . . . . . . . . . . . . . . . . . .  6.69, 6.135 71 . . . . . . . . . . . . . . .  1.22; 6.28, 6.31, 6.155 (1) . . . . . . . . . . . . .  6.80, 6.83, 6.170; 7.28 (2) . . . . . . . . . . . . . . . . . . . . . . . .  6.31; 7.28 72 . . . . . . . . . . . . . .  1.45; 6.28, 6.155; 14.106 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 6.36 (b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.37 73 . . . . . . . . . . . . . . . . . . . . . . . .  6.28, 6.155 (1) . . . . . . . . . . . . . . . . . . . . . .  6.75, 6.76 (a), (b) . . . . . . . . . . . . . . . . . . . 7.29 (2) . . . . . . . . . . . . . . . . . . . . . .  6.75; 7.29 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 6.82 (a) . . . . . . . . . . . . . . . . . . . . . . .7.29 (4)(a) . . . . . . . . . . . . . . . . . . . . 6.83; 7.30 (b) . . . . . . . . . . . . . . . . . . .  6.85; 7.30 (c) . . . . . . . . . . . . . . . . . . . .  6.86; 7.30 (5) . . . . . . . . . . . . . . . . . . . . . . . .  6.42; 7.31

xl

Gambling Act 2005 – contd s 74 . . . . . . . . . . . . . . . . . . . .  6.28, 6.88, 6.159 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 6.31 (a) . . . . . . . . . . . . . . . . . . . . .  6.88; 7.33 (b), (c) . . . . . . . . . . . . . . . . . . . 7.33 (2) . . . . . . . . . . . . . . . . . . . . . . . .  6.88; 7.34 (3) . . . . . . . . . . . . . . . . . . . . . . . .  6.88; 7.34 75 . . . . . . . . . . . . . . . . . 1.45; 3.17, 3.31; 6.16, 6.22, 6.23, 6.59, 6.89, 6.93, 6.94, 6.97, 6.100, 6.101, 6.105, 6.106, 6.108, 6.114, 6.117, 6.118, 6.124, 6.132, 6.135, 6.136, 6.138, 6.139, 6.141, 6.149, 6.150, 6.183; 7.7, 7.47, 7.53, 7.54, 7.56, 7.66; 13.10, 13.16; 14.21, 14.156, 14.77; 15.235; 17.32, 17.94, 17.95; 18.123; 22.8, 22.9, 22.30; 25.17 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 6.90; 7.7 (a) . . . . . . . . . . . . . . . . . . . . . . .7.39 (b) . . . . . . . . . . . . . . . . . . . . .  6.90; 7.39 (2) . . . . . . . . . . . . .  6.90, 6.92, 6.99, 6.100 (a)–(c) . . . . . . . . . . . . . . . . . . . 7.39 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 6.92 76 . . . . . . . . . . . . . . .  3.31; 6.89; 7.66; 13.16; 14.21, 14.156, 14.77; 18.123 (1) . . . . . . . . . . . . . . . . . . . . . . . .  6.93; 7.40 (2)(a) . . . . . . . . . . . . . . . . . . . . .  6.93; 7.41 (b) . . . . . . . . . . . . . . . . . . . . . . 7.41 (3) . . . . . . . . . . . . . . . . . . . . . . . .  6.96; 7.41 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 6.95 (a) . . . . . . . . . . . . . . . . . . . . .  6.94; 7.43 (b) . . . . . . . . . . . . . . . . . . . . . . 6.94 (c) . . . . . . . . . . . . . . . .  6.96, 6.160; 7.43, 7.44, 7.66 (5) . . . . . . . . . . . . . . . . . . . . . . . . . 6.95 (b) . . . . . . . . . . . . . . . . . . . . . . 7.43 (c) . . . . . . . . . . . . . . . .  6.96; 7.43, 7.44 (6) . . . . . . . . . . . . . . . . . . . . . . . . . 6.96 (a), (b) . . . . . . . . . . . . . . . . . . . 7.44 77 . . . . . . . . . . . . . . .  1.45; 3.31; 6.16, 6.22, 6.23, 6.59, 6.89, 6.97, 6.100, 6.105, 6.106, 6.108, 6.114, 6.117, 6.118, 6.124, 6.132, 6.135, 6.136, 6.138, 6.139, 6.141, 6.149, 6.157, 6.183; 7.7, 7.36, 7.45, 7.47, 7.53, 7.54, 7.56; 13.10, 13.16; 15.235; 17.32; 18.123; 22.8, 22.9, 22.30; 25.17 78 . . . . . . . . . . . . . . .  1.45; 6.16, 6.89, 6.99, 6.100, 6.101, 6.105, 6.106, 6.108, 6.114, 6.117, 6.118, 6.124, 6.132, 6.133, 6.135, 6.136, 6.138, 6.183; 7.8, 7.46, 7.47, 7.54, 7.56; 13.10, 13.16; 14.29; 17.32, 17.94, 17.95; 18.123; 22.30 79 . . . . . . . . . . . . . . .  6.89, 6.100; 7.36, 7.47, 7.56; 14.33; 18.123

Table of statutes Gambling Act 2005 – contd s 79(2) . . . . . . . . . . . . . . . . . . . . . . . . . 6.100 (a)–(c) . . . . . . . . . . . . . . . . . . . 7.48 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 6.100 (a)–(c) . . . . . . . . . . . . . . . . . . . 7.49 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 6.100 (5) . . . . . . . . . . . . . . . . . . . . . .  6.100; 7.50 (6), (7) . . . . . . . . . . . . . . . . . . . . . .6.100 (8) . . . . . . . . . . . . . . . . . . . . . .  6.100; 7.51 (9) . . . . . . . . . . . . . . . . . . . . . . . . . 6.100 (a)–(c) . . . . . . . . . . . . . . . . . . . 7.52 80 . . . . . . . . . . . . . . . . .  1.70; 3.29; 4.4; 6.59, 6.89, 6.102, 6.104, 6.106, 6.108, 6.122; 7.3, 7.5; 8.4; 18.123 (1) . . . . . . . . . . . . . . . . . . . . .  6.105, 6.108 (a), (b) . . . . . . . . . . . . . . . . . . . 7.7 (2) . . . . . . . . . . . . . . . . . . . . . . . .  6.117; 7.8 (3) . . . . . . . . . . . . . . .  6.106; 14.157, 14.32, 14.79 (4) . . . . . . . . . . . . . . . . . . . . .  6.106; 14.157 (a), (b) . . . . . . . . . . . . . . . . . . . 7.8 (5) . . . . . . . . . . . . .  1.70; 6.104; 7.33, 7.55 (a)–(d) . . . . . . . . . . . . . . . . . . . 7.3 (6) . . . . . . . . . . . . .  1.70; 6.104, 6.106; 7.4, 7.32, 7.33, 7.55, 7.57 (8) . . . . . . . . . . . . . . . . . .  6.104, 6.106; 7.2 (9) . . . . . . . . . . . . . . .  6.108; 7.7, 7.8, 7.12 81 . . . . . . . . . . . . . . . . . .  6.89, 6.102, 6.110; 14.131, 14.132, 14.54, 14.66; 18.123; 20.98; 25.185 (1) . . . . . . . . . . . . . . . . . . . . .  6.110, 6.114 (a) . . . . . . . . . . . . . . . . . . .  6.115; 20.97 (b) . . . . . . . . . . . . . . . . . .  6.116, 6.117 (c) . . . . . . . . . . . . . . . . . . . . . . . 6.117 (2) . . . . . . . . . . . . . . .  6.110, 6.115, 6.117; 20.97 (b) . . . . . . . . . . . . . . . . . . . . . . 20.99 (3) . . . . . . . . . . . . . . . . . . . . .  6.118; 20.99 (a), (b) . . . . . . . . . . . . . . . . . . . 6.118 (4) . . . . . . . . . . . . . . . . . . . . .  6.113; 20.93 (a) . . . . . . . . . . . . . . . . . . . . . . .6.113 (b) . . . . . . . . . . . . . . . . . . . . . . 20.94 (5) . . . . . . . . . . . . . . . . . . . . .  6.113, 6.119 82 . . . . . . . . . . . . . .  6.2, 6.6, 6.57, 6.72, 6.89, 6.102, 6.115, 6.121, 6.183, 6.205; 7.55; 14.114, 14.165, 14.82; 15.253; 18.123, 18.125; 25.118 (1) . . . . . . . . . . . . .  1.42; 3.16; 6.122; 7.55 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 3.15 (a), (b) . . . . . . . . . . . . . . .  6.122; 7.55 (3) . . . . . . . . . . . . . . . . . . . . .  6.124; 7.56 (4)(a) . . . . . . . . . . . . . . . . . . . . . . .7.55 (5) . . . . . . . . . . . . . . . . . . . . . . . . . 7.55 83 . . . . . . . . . . . . . .  5.63, 6.89, 6.102, 6.125, 6.127, 6.128, 6.130; 14.56; 18.123; 20.65; 25.191 (1) . . . . . . . . . . . . . . . .  1.40; 6.127, 6.128; 7.57; 20.65; 25.115 (a) . . . . . . . . . . . . . . . . . .  6.125, 6.130

Gambling Act 2005 – contd s 83(1)(b) . . . . . . . . . . . . . . . . . . . . . . 6.126 (1A)(a), (b) . . . . . . . . . . . . . . . . . .7.57 (1B) . . . . . . . . . . . . . . . . . . . . . . . . 7.58 (2) . . . . . . . . . . . . . . . . . . . . .  6.127; 25.191 (a) . . . . . . . . . . . . . . . . . . . . .  5.63; 7.58 (b) . . . . . . . . . . . . . . . . . . . . . . 7.58 (3)(a), (b) . . . . . . . . . . .  6.126; 7.58; 20.65 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 6.126 (b) . . . . . . . . . . . . .  6.127, 6.128; 7.58 (5) . . . . . . . . . . . . . . . . . .  6.126; 7.57, 7.58 84 . . . . . . . . . . . . . . . . . .  6.89, 6.102, 6.131; 18.123 (1)(a) . . . . . . . . . . . . . . . . . . . . 6.132; 7.54 (i)–(iii) . . . . . . . . . . . . . . . . .7.54 (b) . . . . . . . . . . . . . . . . . . . . . . 6.133 (i), (ii) . . . . . . . . . . . . . . . . . 6.133 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 6.134 85 . . . . . . . . . . . . . . . . . .  6.89, 6.102; 14.95; 18.123 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 6.136 (a), (b) . . . . . . . . . . . . . . .  6.136; 14.95 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 6.135 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 6.135 86 . . . . . . . . . . . .  6.89, 6.102, 6.137, 6.139; 18.123; 25.18 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 25.114 (a) . . . . . . . . . . . . . . . . . .  6.138; 13.21 (c) . . . . . . . . . . . . . . . . . . . . . . . 6.138 (2) . . . . . . . . . . . . . . . . . . . . .  25.18, 25.114 (b) . . . . . . . . . . . . . . . . . . . . . . 6.138 87 . . . . . . . . . . . . . .  6.39, 6.89, 6.102, 6.140; 14.151, 14.74; 18.123 (a), (b) . . . . . . . . . . . . . . . . . . . . . 6.39 88 . . . . . . . . . . . . . . . . . .  6.89, 6.102, 6.141; 18.123 (1) . . . . . . . . . . . . . . . . . . . . . .  6.142; 7.53 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 6.143 (a) . . . . . . . . . . . . . . . . . . . . 6.143; 7.53 (b) . . . . . . . . . . . . . . . . . . . . . . 7.53 (i) . . . . . . . . . . . . . . . . . . . . 6.143 (ii), (iii) . . . . . . . . . . . . . . . . 6.144 (2A) . . . . . . . . . . . . . . . . . . . . . . . 7.53 (4), (5) . . . . . . . . . . . . . . . . . . . . . .10.213 89 . . . . . . . . . . . . . . . . .  6.5, 6.18, 6.70, 6.89, 6.145; 14.43; 17.32, 17.34, 17.94, 17.95 (2) . . . . . . . . . . . . . . . . . . . . . . . .  1.51; 17.3 (3) . . . . . . . . . . . . . . . . . .  1.51; 6.189; 17.3 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 14.43 90 . . . . . . . . . . . . . . . . . 6.5, 6.18, 6.89, 6.145; 14.11; 17.32, 17.94 (2) . . . . . . . . . . . . . . . . . . . . .  20.33; 22.29 (b) . . . . . . . . . . . . . . . . . . . . . . 14.11 91 . . . . . . . . . . . . . . . . . 6.5, 6.18, 6.89, 6.145; 14.20, 14.78; 17.32, 17.94 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 22.30 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 14.29 (f) . . . . . . . . . . . . . . . . . . .  14.78; 25.50 (g), (h) . . . . . . . . . . . . . . . . . . . 14.99 92 . . . . . . . . . . . . . . .  6.5, 6.18, 6.89, 6.145; 10.149; 13.10; 17.32, 17.94

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Table of statutes Gambling Act 2005 – contd s 92(1) . . . . . . . . . . . . . . . . . . . . . . . . . 13.10 (2) . . . . . . . . . . . . . . .  2.257; 2.223; 13.10 93 . . . . . . . . . . . . . . .  1.59; 2.104; 6.5, 6.18, 6.89, 6.145; 10.149; 13.14; 17.32, 17.94 (1) . . . . . . . . . . . . . . . . . . . . .  13.15; 26.53 (2) . . . . . . . . . . . . . . .  13.15; 26.53, 26.54 (3) . . . . . . . . . . . .  4.48; 13.15; 26.53, 26.54 (5) . . . . . . . . . . . . . . . . . . . . . . . . . 13.15 (7) . . . . . . . . . . . . . . . . . .  1.57; 2.257 13.12 94 . . . . . . . . . . . . . . .  2.104; 6.5, 6.18, 6.89, 6.145; 10.149; 17.32, 17.94 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 26.54 (6) . . . . . . . . . . . . . . . . . . . . . . . . . 2.247 (7) . . . . . . . . . . . . . . . . . . . . . . . . . 13.16 95 . . . . . . . . . . . . . . . . .  2.20; 28.4; 6.5, 6.18, 6.89, 6.145; 16.62; 17.32; 18.169; 0.68; 23.18, 17.94 (1), (2) . . . . . . . . . . . .  13.10, 13.16, 13.17 96 . . . . . . . . . . . . . . .  6.5, 6.18, 6.89, 6.138, 6.145; 17.32; 25.17, 25.21, 25.22, 25.114, 17.94 (4)(a), (c) . . . . . . . . . . . . . . .  25.17, 25.21 97 . . . . . . . . . . . . . . .  6.5, 6.18, 6.89, 6.145; 17.32, 17.34, 17.94 98 . . . . . . . . . . . . . . . . .  1.43, 1.68, 1.97; 6.5, 6.18, 6.89, 6.145; 15.163, 15.203; 17.32, 17.94 (1) . . . . . . . . . . . . . . .  1.97; 2.153; 15.119, 15.205 (b) . . . . . . . . . . . . . . . . . . . . . . 15.203 (2) . . . . . . . . . . . . . . . . . . . .  15.206, 15.234 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 15.234 (b) . . . . . . . . . . . . . . . . . . . . . . 15.234 (4) . . . . . . . . . . . . . . . . . . . . .  2.257; 15.236 (5) . . . . . . . . . . . . . . . . . . . . . . . . . 15.236 (6) . . . . . . . . . . . . . . . . . . . . . . . . . 15.235 (7)(a)–(c) . . . . . . . . . . . . . . . . . . . 15.203 99 . . . . . . . . . . . . . . .  1.97; 6.5, 6.18, 6.145; 15.194, 15.207, 15.214, 15.234, 15.82; 17.32, 17.94 rr (3)(b) . . . . . . . . . . . . . . . . . . . . . . 15.209 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 15.210 (5) . . . . . . . . . . . . . . . . . . .  15.212, 15.214 (6) . . . . . . . . . . . . . . . . . . .  15.214, 15.215 (c) . . . . . . . . . . . . . . . . .  15.229, 15.308 (7) . . . . . . . . . . . . . . . . . . . . . . . . . 15.214 (8) . . . . . . . . . . . . . . . . . . . . . . . . . 15.216 (10) . . . . . . . . . . . . . . . . . . . . . . . . 15.234 (11) . . . . . . . . . . .  15.208, 15.209, 15.210, 15.237 100 . . . . . . . . . . . . .  6.43, 6.200, 6.210; 7.59 (1)(a), (b) . . . . . . . . . . . . . . . . . . 6.146 (2) . . . . . . . . . . . . . . . . . . . . . . . . 6.147 101 . . . . . . . . . . . . . . . . . . .  6.160; 7.88, 7.91 (1) . . . . . . . . . . . . . . . . . . . . . . . . 7.60 (a) . . . . . . . . . . . . . . . . . . . . . .6.148 (2) . . . . . . . . . . . . . . . . . . . . . . . . 6.149

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Gambling Act 2005 – contd s 101(2)(a), (b) . . . . . . . . . . . . . . . . . . 7.60 (3) . . . . . . . . . . . . . . . . . . . . . . . . 6.149 (a), (b) . . . . . . . . . . . . . . . . . . 7.60 (4) . . . . . . . . . . . . . . . . . . . . .  6.149; 7.60 (5) . . . . . . . . . . . . . . . . . . . . . . . . 6.148 (6), (7) . . . . . . . . . . . . . .  6.150; 7.61, 7.68 (8) . . . . . . . . . . . . . . . . . . . . . . . . 6.148 102 . . . . . . . . . . . . . . . . . . . . . . .  6.45, 6.151 (2) . . . . . . . . . . . . . . . . . . . .  6.152, 6.153 (a) . . . . . . . . . . . . . . . . . . . . . .6.152 (b) . . . . . . . . . . . .  6.152, 6.153, 6.156 (3) . . . . . . . . . . . . . . . . . . . .  6.152, 6.154 (4) . . . . . . . . . . . . . . . . . . . . . . . . 6.156 (a), (b) . . . . . . . . . . . . . . . . . . 6.155 (5) . . . . . . . . . . . . . .  6.153, 6.154, 6.156 (6) . . . . . . . . . . . . . . . . . . . .  6.153, 6.154 103 . . . . . . . . . . . . . . . . . . . . . . . . . . 6.151 (1) . . . . . . . . . . . . . . . . . . . . . . . . 6.151 104 . . . . . . . . . . . . .  1.97; 6.45, 6.157, 6.160; 7.14, 7.65 (1) . . . . . . . . . . . . . . . . . . . . . . . . 6.157 (a) . . . . . . . . . . . . . . . . . . . . . .7.63 (b) . . . . . . . . . . . . . . . . . .  7.14, 7.63 (c) . . . . . . . . . . . . . . . . . . . . . . 7.63 (2) . . . . . . . . . . . . . . . . . . . . .  6.157; 7.64 (3) . . . . . . . . . . . . . . . . . . . . .  6.157; 7.65 (4) . . . . . . . . . . . . . . . . . . . . . . . . 6.157 (a)–(d) . . . . . . . . . . . . . . . . . . 7.65 (5) . . . . . . . . . . . . . . . . . . . . .  6.158; 7.14 (a) . . . . . . . . . . . . . . . . . . . . . .7.65 (b) . . . . . . . . . . . . . . . . . . . . . 7.65 (ii) . . . . . . . . . . . . . . . . . . . 6.158 (6) . . . . . . . . . . . . . . . . . . . . . . . . 6.159 (a), (b) . . . . . . . . . . . . . . . . . . 7.65 105 . . . . . . . . . . . . . .  6.204; 7.66, 7.88, 7.91 (1) . . . . . . . . . . . . . . . . . . . . . . . . 6.160 (a)–(d) . . . . . . . . . . . . . . . . . . 7.66 (f) . . . . . . . . . . . . . . . . . . . . . . 7.66 (2) . . . . . . . . . . . . . . . . . . . . .  6.161; 7.67 (3), (4) . . . . . . . . . . . . . . . . . . . . .6.161 (5) . . . . . . . . . . . . . . . . . . . . . . . . 6.160 106(1) . . . . . . . . . . . . . . . . . . . . . . . . 6.162 (a)–(c) . . . . . . . . . . . . . . . . . . 7.70 (2), (3) . . . . . . . . . . . . . . . . . . 6.163; 7.70 107 . . . . . . . . . . . . . . . . . . . . . . .  6.45, 6.149 (1) . . . . . . . . . . . . . . . . . . . . .  6.164; 7.71 (2)(a), (b) . . . . . . . . . . . . . . .  6.164; 7.71 (3) . . . . . . . . . . . . . . . . . . . . .  6.165; 7.71 108 . . . . . . . . . . . . . . . . . . . . . . .  7.72, 7.73 (1) . . . . . . . . . . . . . . . . . . . . . . . . 6.166 (2), (3) . . . . . . . . . . . . . . . . . . . . .6.166 109 . . . . . . . . . . . . . . . . .  6.167, 6.170, 6.178 (1) . . . . . . . . . . . . . . . . . . . . .  6.168; 7.75 (2) . . . . . . . . . . . . . . . . . . . . . . . . 7.75 (3) . . . . . . . . . . . . . . . . . . . . .  6.169; 7.76 (4), (5) . . . . . . . . . . . . . . . . . . 6.170; 7.77 110 . . . . . . . . . . . . . . . . .  6.171, 6.172, 6.182 (a) . . . . . . . . . . . . . . . . . . . . . . . . 6.171 (b) . . . . . . . . . . . . . . .  6.171, 6.172, 6.182 111 . . . . . . . . . . . . . . . .  6.171, 6.172, 6.174, 6.182 (2) . . . . . . . . . . . . . . . . . . . . . . . . 6.172

Table of statutes Gambling Act 2005 – contd s 111(4) . . . . . . . . . . . . . . . . . . . . . . . . 6.173 112 . . . . . . . . . . . . . . . . . . . . . .  6.160, 6.174 113 . . . . . . . . . . . . . . . . .  1.46; 6.152, 6.171, 6.175 (a), (b) . . . . . . . . . . . . . . . . . . . . .7.98 114 . . . . . . . . . . . . . . . . .  1.46; 6.171, 6.176 (1) . . . . . . . . . . . . . . . . . . . . . . . . 6.176 (a) . . . . . . . . . . . . . . . . . . . . . . 7.99 (b) . . . . . . . . . . . . . . . . . .  6.176; 7.99 (c) . . . . . . . . . . . . . . . . . . . . . . 7.99 (2) . . . . . . . . . . . . . . . . . . . . . . . . 6.177 (3) . . . . . . . . . . . . . . . . . . . .  6.156, 6.159 (5) . . . . . . . . . . . . . . . . . . . . . . . . 6.176 115 . . . . . . . . . . . . . . 1.46; 6.168, 6.171; 7.76 (1) . . . . . . . . . . . . . . .  6.178, 6.179; 7.100 (2) . . . . . . . . . . . . . . .  6.179; 7.100, 7.101 (3) . . . . . . . . . . . . . . . . . . . .  7.100, 7.101 (4), (5) . . . . . . . . . . . .  6.179; 7.100, 7.101 116 . . . . . . . . . . . . .  1.25, 1.46; 6.182, 6.192, 6.196 (1) . . . . . . . . . . . . . .  6.183, 6.184, 6.188, 6.192, 6.193, 6.199 (2) . . . . . . . . . . . 3.31; 6.184, 6.185, 6.186, 6.187, 6.188, 6.192, 6.194, 6.195, 6.199 (a) . . . . . . . . . . . . .  6.185, 6.194; 7.82 (b) . . . . . . . . . . . .  6.168, 6.170, 6.185, 6.194; 7.82 (c) . . . . . . . . . . . . . . . 6.186, 6.194; 7.82 (i) . . . . . . . . . . . . . . . . . . . . . . 6.185 (3) . . . . . . . . . . . . . . . . . . . . .  6.200; 7.82 (a) . . . . . . . . . . . . . . . . . . . . . . 6.186 (b) . . . . . . . . . . . . . . . . . .  6.186, 6.195 (4), (5) . . . . . . . . . . . . . . . . . .  6.187; 7.83 117 . . . . . . . . . . . . . . . . .  1.46; 6.160, 6.187, 6.188, 6.190, 6.191 (1) . . . . . . . . . . . . . . . . . . . .  6.189, 6.190 (a) . . . . . . . . . . . . . . . . . . .  6.189; 7.84 (b), (c) . . . . . . . . . . . . . . . . . . 6.189 (e)–(g) . . . . . . . . . . . . . . . . . . 6.189 (2) . . . . . . . . . . . . . . . . . . . . . . . . 7.85 (3) . . . . . . . . . . . . . . . . . . . . .  6.189; 7.85 118 . . . . . . . . . . . . . . . .  6.184, 6.192, 6.198, 6.201 (1) . . . . . . . . . . . . . .  6.168, 6.197, 6.202; 7.86 (2) . . . . . . . . . . . . . .  6.193, 6.194, 6.195, 6.202; 7.87 (3) . . . . . . . . . . . . . .  6.150, 6.161, 6.196, 6.203; 7.88 (4) . . . . . . . . . . . . . . . . . . . . . . . . 6.197 (a) . . . . . . . . . . . . . . . . . . . . . . 7.89 (b)(i), (ii) . . . . . . . . . . . . . . . . 7.89 (4)(c) . . . . . . . . . . . . . . . . . . . . . . 7.89 (5) . . . . . . . . . . . . . . . . . . . . .  6.197; 7.89 119 . . . . . . . . . . . . . . . .  6.156, 6.171; 15.250 (1) . . . . . . . . . . . . . .  6.168, 6.199, 6.202; 7.90 (2) . . . . . . . . . . . . . .  6.150, 6.153, 6.161, 6.199, 6.204; 7.90, 7.91 (3) . . . . . . . . . . . . . . . . . . . . .  6.146; 7.92 (4) . . . . . . . . . . . . . . . . . . . . . . . . 7.93

Gambling Act 2005 – contd s 120(1) . . . . . . . . . . . . . . . 6.192, 6.193, 6.194, 6.195, 6.199, 6.202; 7.87 (a) . . . . . . . . . . . . . . . . . . . .  7.86; 7.90 (b), (c) . . . . . . . . . . . . . . . . .  7.86, 7.90 (d) . . . . . . . . . . . . . .  6.168; 7.86, 7.90 (2) . . . . . . . . . . . . . .  6.150, 6.161, 6.196, 6.199, 6.204 (a), (b) . . . . . . . . . . . . . . . . .  7.88, 7.91 (3) . . . . . . . . . . . . . . . . .  6.203; 7.86, 7.90 121 . . . . . . . . . . . . . . . . . . . . . . . . . . 6.208 (1) . . . . . . . . . . . . . . . . . . . . .  6.205; 7.94 (2)(a)–(d) . . . . . . . . . . . . . . . . . . 7.94 (3) . . . . . . . . . . . . . . . . . . . . .  6.207; 7.94 (4) . . . . . . . . . . . . . . . . . . . . . . . . 7.94 (5)(a)–(c) . . . . . . . . . . . . . . . . . . 7.95 (6) . . . . . . . . . . . . . . . . . . . . . . . . 6.206 (a)–(e) . . . . . . . . . . . . . . . . . . 7.96 (7) . . . . . . . . . . . . . . . . . . . . . . . . 7.96 (9) . . . . . . . . . . . . . . . . . . . . . . . . 7.96 122 . . . . . . . . . . . . . . . . . . . . . . . . . . 6.209 (1) . . . . . . . . . . . . . . . . . . . . .  3.23; 6.209 (2), (3) . . . . . . . . . . . . . . . . . . . . .6.209 (5), (6) . . . . . . . . . . . . . . . . . . . . .6.209 123(1)–(3) . . . . . . . . . . . . . . . . . . . . .6.210 (5) . . . . . . . . . . . . . . . . . . . . . . . . 6.211 125 . . . . . . . . . . . . . . . . . . . .  6.83; 7.20, 7.28 (a) . . . . . . . . . . . . . . . . . .  6.83; 7.20, 7.28 126 . . . . . . . . . . . . . . . . . . . . . . . 6.168, 6.178 (1) . . . . . . . . . . . . . .  7.3, 7.20, 7.23, 7.28, 7.29, 7.39, 7.49, 7.54, 7.60, 7.63, 7.90 (2) . . . . . . . . . . . .  1.22; 7.20, 7.75, 7.79, 7.82 (a) . . . . . . . . . . . . . . . . . . . .  6.81; 7.27 (b) . . . . . . . . . . . . . . . . . . . .  1.22; 7.27 (3) . . . . . . . . . . . . . .  6.81; 7.75, 7.79, 7.82 (a), (b) . . . . . . . . . . . . . . . . . . 7.27 (6) . . . . . . . . . . . . . . . . . . . . . . . . 6.181 Pt VI (ss 127–139) . . . . . . . . 1.70; 3.3, 3.4, 3.7, 3.29; 4.4; 6.160; 7.1, 7.2, 7.5, 7.9, 7.17, 7.18, 7.19, 7.58, 7.65; 8.9; 15.220; 26.3, 26.15 s 127 . . . . . . . . . . . . . . . .  1.70; 2.259; 4.4; 8.4 (1)(a), (b) . . . . . . . . . . . . . . . . . . 7.5 (2) . . . . . . . . . . . . . . . . . . . . . . . . 7.5 128 . . . . . . . . . . .  1.25, 1.71; 4.4; 7.18, 7.20, 7.23, 7.24, 7.25, 7.28, 7.29, 7.31, 7.32, 7.33, 7.34, 7.36, 7.39, 7.40, 7.41, 7.42, 7.43, 7.44, 7.45, 7.46, 7.47, 7.48, 7.49, 7.52, 7.53, 7.54, 7.55, 7.56, 7.57, 7.58, 7.60, 7.61, 7.63, 7.64, 7.65, 7.66, 7.67, 7.68, 7.70, 7.71, 7.72, 7.73, 7.75, 7.76, 7.77, 7.83, 7.84, 7.85, 7.86, 7.87, 7.88, 7.89, 7.90, 7.91, 7.92, 7.93, 7.94, 7.95, 7.96, 7.98, 7.99, 7.100 (1)(a)–(c) . . . . . . . . . . . . . . . . . . 7.18 (2) . . . . . . . . . . . . . . . . . . . . . . . . 7.18

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Table of statutes Gambling Act 2005 – contd s 129 . . . . . . . . . . . . . . . . . . .  1.70; 6.108; 17.8 (1)–(3) . . . . . . . . . . . . . . . . . . . . .7.12 130(2)–(4) . . . . . . . . . . . . . . . . . . . . .7.29 131 . . . . . . . . . . . . . . . . . . . . . . . . . . 7.97 132 . . . . . . . . . . . . . . . . . . . . . . . . . . 7.92 (1)–(3) . . . . . . . . . . . . . . . . . . . . .7.59 133(1), (2) . . . . . . . . . . . . . . . . . . . . .7.6, 7.35 134(1)(a)–(c) . . . . . . . . . . . . . . . . . . 7.72 (3) . . . . . . . . . . . . . . . . . . . . . . . . 7.73 135 . . . . . . . . . . . . . . . . . . . . . . . . . . 1.25 136 . . . . . . . . . . . . . . . . . . . . . . . . . . 7.76 (1)–(3) . . . . . . . . . . . . . . . . . . . . .7.101 137(1)(a) . . . . . . . . . . . . . . . . . . . . . .7.89 (b) . . . . . . . . . . . . . . . . . . . . . 7.93 (c) . . . . . . . . . . . . . . . . . . . . . . 7.100 (d) . . . . . . . . . . . . . . . . . . . . . 7.101 (2) . . . . . . . . . . . . 7.89, 7.93, 7.100, 7.101 138 . . . . . . . . . . . . . . . . . . . . . . . . . . 7.79 (1), (2) . . . . . . . . . . . . . . . . . . . . .7.79 (3), (4) . . . . . . . . . . . . . . . . . . . . .7.80 (5), (6) . . . . . . . . . . . . . . . . . . . . .7.79 139 . . . . . . . . . . . . . . . . . . . .  7.9, 7.10, 7.11 (1)(a)–(c) . . . . . . . . . . . . . . . . . . 7.9 (2)–(5) . . . . . . . . . . . . . . . . . . . . .7.10 Pt VII (ss 140–149) . . . . . . . . . .  7.14; 18.171 s 140 . . . . . . . . . . . . . . . . . . . . . . . . . . 1.72; 8.1 141 . . . . . . . . . . . . . . . . . . .  8.1, 8.22; 18.35 (2) . . . . . . . . . . . . . . . . . . . .  6.98, 6.106 (6) . . . . . . . . . . . . . . . . . . . . . . . . 6.191 (7) . . . . . . . . . . . . . . . . . . . . . . . . 6.198 (8) . . . . . . . . . . . . . . . . . . . . . . . . 6.201 (9) . . . . . . . . . . . . . . . . . . . . . . . . 6.208 142 . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 (1) . . . . . . . . . . . . . . . . . . . . . . . . 8.4 (2) . . . . . . . . . . . . . . . . . . . . . . . . 8.4, 8.17 143 . . . . . . . . . . . . . . . . . . . . . . . . .  7.14; 8.22 (3)(c) . . . . . . . . . . . . . . . . . . . . . . 7.14 144(1) . . . . . . . . . . . . . . . . . . . . . . .  8.16, 8.17 (2) . . . . . . . . . . . . . . . . . . . . . . . . 8.17 (3), (4) . . . . . . . . . . . . . . . . . . . . .8.10 145(1) . . . . . . . . . . . . . . . . . . . . . . . . 8.9 (2) . . . . . . . . . . . . . . . . . . . . . . . . 8.9, 8.17 146 . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 147 . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7 149 . . . . . . . . . . . . . . . . . . . . . . . . . . 8.21 Pt VIII (ss 150–213) . . . . .  1.37; 3.3, 3.4, 3.19; 4.4; 5.42, 5.45, 5.54; 6.15, 6.24, 6.25, 6.107, 6.117, 6.131, 6.137; 7.1, 7.13; 8.30; 9.2, 9.13, 9.16, 9.18, 9.35; 10.1, 10.104, 10.105, 10.117, 10.130, 10.205; 11.2, 11.6, 11.16, 11.54; 12.71, 12.72, 12.69; 14.52, 14.56, 14.57, 14.61, 14.66, 14.94, 14.99, 14.105, 14.120, 14.46; 16.56, 16.62; 19.321; 24.17, 24.29; 26.3, 26.6, 26.15, 26.24, 26.47, 26.50 s 150 . . . . . . . . . . . . . .  1.13, 1.43, 1.73; 10.46; 14.45, 14.57, 14.153, 14.46; 23.16

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Gambling Act 2005 – contd s 150(1) . . . . . . . . . . . . . . . . . . . . . . . 1.52; 14.47 (a) . . . . . . . . . . .  1.53; 4.6; 5.42, 5.45, 5.54; 7.13; 10.5, 10.132 (b) . . . . . . . . . . .  1.53; 4.6; 5.54; 7.13; 10.5; 14.32, 14.46 (c) . . . . . . . . . . . .  1.64; 4.6; 5.42, 5.45; 10.5, 10.54, 10.155 (d) . . . . . . . . . . .  1.65; 4.6; 5.35, 5.42; 10.5, 10.156 (e) . . . . . . . . . . . .  1.59; 4.6; 5.42, 5.45; 10.5, 10.157; 13.8, 13.9, 13.14; 17.7 151 . . . . . . . . . . . . . . . . . . . . . . . . . . 10.151 (1) . . . . . . . . . . . . . . . . . . . . . . . . 10.164 (g) . . . . . . . . . 10.148, 10.151, 10.167; 14.47 152 . . . . . . . . . . . . .  1.75; 10.7; 14.118, 14.59 (1)(b) . . . . . . . . . . .  10.203; 14.58, 14.59 153 . . . . . . . . . . . . .  1.16, 1.77; 10.13, 10.49, 10.53, 10.54, 10.56, 10.59, 10.63, 10.64, 10.65, 10.71, 10.92, 10.93, 10.101, 10.103, 10.104, 10.112, 10.113, 10.114, 10.115, 10.117, 10.118, 10.119, 10.120, 10.121, 10.124, 10.125, 10.126, 10.127, 10.128, 10.129, 10.130, 10.136, 10.147, 10.188, 10.199, 10.207, 10.212; 14.131, 14.145, 14.147, 14.54, 14.69, 14.70, 14.237; 24.14, 24.19 (1) . . . . . . . . . . . . . . .  1.17; 3.19; 10.105; 14.143, 14.67 (a) . . . . . . . . . . 6.35; 10.106, 10.107, 10.108, 10.109, 10.120, 10.121, 10.122, 10.123, 10.125, 10.126; 11.44 (b) . . . . . . . . .  6.35; 10.107, 10.108, 10.109, 10.120, 10.121, 10.122, 10.123, 10.125, 10.126; 11.44 (c) . . . . . . . . . .  6.35; 10.108, 10.109, 10.120, 10.121, 10.122, 10.123, 10.125, 10.126; 11.44 (d) . . . . . . . . . 10.109, 10.120, 10.121, 10.122, 10.123, 10.125, 10.126; 11.44 (2) . . . . . . . . . . . . . . .  6.38; 10.3, 10.71, 10.110, 10.112, 10.113, 10.114, 10.207; 14.26, 14.106 154 . . . . . . . . . . . . . . . .  9.4, 9.13, 9.18; 10.9; 12.71, 12.69; 25.130 (1) . . . . . . . . . . . . . . . . . .  9.2, 9.11; 11.16 (2) . . . . . . . . . . . . . . . . . . . . . . . . 14.26 (a)–(c) . . . . . . . . . . . . . . .  9.12; 11.16 (3) . . . . . . . . . . . . . . . . . . . . . . . . 9.13 (b) . . . . . . . . . . . . . . . . . . . . . 9.14

Table of statutes Gambling Act 2005 – contd s 154(4) . . . . . . . . . . . . . . . . .  9.11, 9.14; 12.71 (a)–(e) . . . . . . . . . . . . . . . . . . 24.17 (5) . . . . . . . . . . . . . . . . . . . . . . . . 9.16 155 . . . . . . . . . . . . . .  1.75; 9.4, 9.11; 24.17; 25.130 (1) . . . . . . . . . . . . . . . . .  9.2, 9.11; 24.17 (2) . . . . . . . . . . . . . . . . . . . . . . . . 24.17 (a) . . . . . . . . . . . . . . . . . . . . . .9.11 156 . . . . . . . . . . . . . . . . . . . . . . . . .  1.13; 24.9 (1), (3), (4) . . . . . . . . . . . . . . . . . 10.164 157 . . . . . . . . . . . . . 1.77; 10.50; 14.62, 14.63 (a) . . . . . . . . . . . . . . . . . . . . . . . . 10.181 (h) . . . . . . . . . . . . . . . . . . . . . . . . 10.12 (j) . . . . . . . . . . . . . . . . . . . . . . . . 14.173 158 . . . . . . . . . . . . . 1.77; 10.12, 10.52, 10.53, 10.54, 10.55, 10.56, 10.57, 10.58, 10.59, 10.63, 10.71 (a) . . . . . . . . . . . . . . . . . . . . . . . . 10.62 (b) . . . . . . . . . . . . . . . . . . . .  10.62, 10.71 159 . . . . . . . . . . . . . . . .  3.20; 9.2, 9.35; 10.9, 10.34, 10.35, 10.46, 10.213; 14.53, 14.62, 14.66, 14.89, 14.44 (1) . . . . . . . . . . . . . . . . . . . . . . . . 14.57 (2) . . . . . . . . . . . . . . . . . . . . . . . . 14.57 (3) . . . . . . . . . . . 3.7; 10.34, 10.203; 12.31; 14.53, 14.57, 14.46 (b) . . . . . . . . . . . . . . . . . . . . . 10.71 (4) . . . . . . . . . . . . . . . . . . . . .  10.34; 14.7 (5) . . . . . . . . . . . . . .  10.34, 10.46, 10.203; 14.53, 14.57, 14.46 (6) . . . . . . . . . . . . . . . . . . . . . . . . 10.34 (c) . . . . . . . . . . . .  10.30; 14.57, 14.69, 14.49 160 . . . . . . . . . . . . . . . . . . . . . . . . . . 14.89 161 . . . . . . . . . . . . . . . .  10.41, 10.48; 14.89, 14.99 162 . . . . . . . . . . . . . . . .  10.46, 10.73; 14.89, 14.144, 14.68 (1) . . . . . . . . . . . . . .  9.35; 14.148, 14.236 (a), (b) . . . . . . . . . . . . . . . . . . 10.206 (c) . . . . . . . . . . . . . . . .  10.135, 10.206 (2) . . . . . . . . . . . . . . .  9.35, 9.44; 10.135; 14.148 (3) . . . . . . . . . . . . . . . . . . . . . . . . 10.73 (c) . . . . . . . . . . . . . . . . . .  14.46, 14.51 (4) . . . . . . . . . . . . . . . . . . . . . . . . 10.73 163 . . . . . . . . . . . . . . . . .  10.46; 14.89; 24.1 (1)(a), (b) . . . . . . . . . . . . . . . . . . 14.109 (2) . . . . . . . . . . . . . . .  1.28; 10.73; 14.46 164 . . . . . . . . . . . . . . . . .  9.2; 10.150; 14.89 (1)(b), (c) . . . . . . . . . . . . . . . . . . 10.150 (2)(b), (c) . . . . . . . . . . . . . . . . . . 10.150 165 . . . . . . . . . . . . . . . . . . . .  10.152; 14.89 (2) . . . . . . . . . . . . . . . . . . . . . . . . 10.152 166 . . . . . . . . . . . . .  6.38; 9.12; 10.9, 10.104, 10.112, 10.113, 10.114, 10.115; 11.16; 14.26, 14.27, 14.28, 14.29, 14.31, 14.110, 14.277; 24.1, 24.17 (1) . . . . . . . . . . . . . . . . . . . . . . . . 14.26 (2) . . . . . . . . . . . . . . . . . . . .  10.113; 14.26

Gambling Act 2005 – contd s 166(3)(a) . . . . . . . . . . . . . . . . . . . . . .10.114 (4) . . . . . . . . . . . . . . . . . . . . . . . . 14.27 (5) . . . . . . . . . . . . . . . . . . . . . . . . 10.112 (6) . . . . . . . . . . . . . . . . . . . . . . . . 10.113 167 . . . . . . . . . . . . . . . .  1.78; 10.131, 10.133, 10.205; 14.112, 14.117, 14.128, 14.52, 14.57; 22.30; 25.124 (1) . . . . . . . . . . . . . . . . . . . . . . . . 10.134 (2) . . . . . . . . . . . . . . . . . . . . . . . . 10.134 (3) . . . . . . . . . . . . . . . . . . . . . . . . 10.134 168 . . . . . . . . . . . . . . . .  1.78; 10.73, 10.131, 10.150, 10.198, 10.205; 14.112, 14.143, 14.52, 14.67; 25.124 (1) . . . . . . . . . . . . . . . . . . . . . . . .  10.135 (2) . . . . . . . . . . . . . . . . . . . . . . . . 10.135 (3) . . . . . . . . . . . . . . . . . . . . . . . .  10.135 169 . . . . . . . . . . . . . . . .  1.78; 10.73, 10.131, 10.137, 10.198, 10.205; 14.104, 14.112, 14.52; 22.30 (1) . . . . . . . . . . . . . . . . . .  10.73; 14.146 (a) . . . . . . . . .  10.135, 10.150, 10.164; 14.144, 14.146, 14.147, 14.55, 14.234, 14.70 (b) . . . . . . . .  10.135, 10.164; 14.143, 14.144, 14.146, 14.148, 14.67, 14.68, 14.234, 14.236 (2) . . . . . . . . . . . .  10.135; 14.143, 14.67 (3) . . . . . . . . . . . . . . . . . . . . . . . . 10.135 (4) . . . . . . . . . . 3.7; 10.133, 10.135; 12.31; 14.153, 14.70, 14.73 170 . . . . . . . . . . . . . . . .  6.39; 10.133; 14.151, 14.70, 14.74 171 . . . . . . . . . . . . . . . . 10.133; 14.150, 14.75 172 . . . . . . . . . . . . . . . . .  1.64, 1.88; 10.132, 10.133; 14.42, 14.49, 14.129; 25.16, 25.59, 25.71, 25.121 (1) . . . . . . . . . . . . . . .  10.7, 10.54; 25.63, 25.112 (2) . . . . . . . . . . . . . . 10.7, 10.155; 25.113, 25.121 (3) . . . . . . . . . . . . . .  10.7; 25.60, 25.107 (4), (5) . . . . . . . . . . . . . . . .  10.7; 25.107 (7) . . . . . . . . . . . . . .  10.7; 14.34, 14.41, 14.64; 25.63, 25.109 (8), (9) . . . . . . . . . .  10.7, 10.157; 25.62, 25.110 (10) . . . . . . . . . . .  10.133; 14.153, 14.76; 25.121 173 . . . . . . . . . . . . . .  10.132, 10.157; 14.21 174 . . . . . . . . . . . . . . . .  10.132; 14.41, 14.78 (1) . . . . . . . . . . . . . . . . . . . .  14.47, 14.56 (2) . . . . . . . . . . . . . . . . . . . . . . . . 14.17 (3) . . . . . . . . . . . . . . .  4.45; 14.21; 26.55 (a) . . . . . . . . . . . . . . . . . . . . . .14.32 (4) . . . . . . . . . . . . . . .  4.45; 6.22; 14.48, 14.32; 26.55 (5) . . . . . . . . . . . . . . . . . . . . . . . . 14.277

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Table of statutes Gambling Act 2005 – contd s 174(6) . . . . . . . . . . . . . . . . . . . . . . . . 14.128 (7) . . . . . . . . . . . . . . . . . .  14.47, 14.136 175 . . . . . . . . . . . . . . . . .  6.36; 14.31, 14.45, 14.83, 14.91, 14.110 (2), (3) . . . . . . . . . . . . . . . . . . . . .14.89 (4) . . . . . . . . . . . 6.36; 14.45, 14.83, 14.87, 14.89, 14.92, 14.100, 14.110 (5)–(7) . . . . . . . . . . . . . . . . . . . . .14.89 (8) . . . . . . . . . . . . . . .  14.31, 14.45, 14.89 176 . . . . . . . . . . . . . . . .  3.17; 10.132; 14.115, 14.154, 14.169 (2)(b)(i) . . . . . . . . . . . . . . . . . . . 14.115 (3) . . . . . . . . . . . . . . . . . . . . . . . . 10.132 177 . . . . . . . . . . . . . .  6.117, 6.118; 10.132; 14.131, 14.132, 14.54, 14.66 (3)(b) . . . . . . . . . . . . . . .  14.131, 14.54 (c) . . . . . . . . . . . . . . . . . . . . . . 14.54 178 . . . . . . . . . . . . . .  10.132; 14.154, 14.55, 14.72 179 . . . . . . . . . . . . . .  2.104; 10.132, 10.158, 10.159 (1), (2) . . . . . . . . . . . . . . . . . . 1.59; 13.14 180 . . . . . . . . . . . . . .  2.104; 10.132, 10.158, 10.159; 19.160 (1) . . . . . . . . . . . . . . . . . . . . .  1.59; 13.14 (2) . . . . . . . . . . . . . . . . . . . . . . . .  13.14 (4) . . . . . . . . . . . . . . . . . . . . . . . . 1.59 181(1) . . . . . . . . . . . . . . . . . . . . . . . . 10.160 (2) . . . . . . . . . . . . . . . . . . . . . . . . 14.139 182 . . . . . . . . . . . . . . . . .  5.42, 5.45; 10.132 (1), (2) . . . . . . . . . . . . . . . . . . . . .10.161 183 . . . . . . . . . . . . . . . . . . . .  10.132; 14.145 184 . . . . . . . . . . . . . . . . . . . . . . . . . . 14.76 (1) . . . . . . . . . . . . . .  10.165; 14.74, 14.97, 14.50 (b) . . . . . . . . . . . . . . . . . . . . . 10.30 185(1) . . . . . . . . . . . . . . . . . . . . . . . . 10.165 186(1), (2) . . . . . . . . . . . . . . . . . . . . .10.166 (3) . . . . . . . . . . . . . . . . . . . . . . . . 10.166 (4), (5) . . . . . . . . . . . . . . . . . . . . .10.166 187 . . . . . . . . . . . . . .  1.79; 9.2, 9.35; 10.35, 10.213; 14.104, 14.155, 14.71; 24.1 (1) . . . . . . . . . . . . . . . . . . . . . . . . 10.167 (2) . . . . . . . . . . . . . . . . . . . .  10.48, 10.167 (3) . . . . . . . . . . . . . . . . . . . .  10.30, 10.103 (5), (6) . . . . . . . . . . . . . . . . . . . . .10.167 (7) . . . . . . . . . . . . . . . . . . . . . . . . 10.168 188 . . . . . . . . . . . . . .  1.79; 9.2, 9.35; 10.35, 10.213; 24.1 (1) . . . . . . . . . . . . . . . . .  10.169, 10.170 (a) . . . . . . . . . . . . . . . . . . . . . .10.170 (2) . . . . . . . . . . . . . .  10.30, 10.48, 10.103 (3) . . . . . . . . . . . . . . . . . . . . . . . . 10.170 (4) . . . . . . . . . . . . . . . . . .  10.169, 10.171 (5)(a)–(c) . . . . . . . . . . . . . . . . . . 10.171 (6) . . . . . . . . . . . . . . . . . .  10.172, 10.173 189 . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4 (2), (3) . . . . . . . . . . . . . . . . . . . . .10.170 (5) . . . . . . . . . . . . . . . . . .  10.48, 10.169

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Gambling Act 2005 – contd s 190(1) . . . . . . . . . . . . . . . . . . . . . . . . 10.165 (2) . . . . . . . . . . . . . . . . . .  10.30, 10.165 (3)–(5) . . . . . . . . . . . . . . . . . . . . .10.165 191 . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2 (1)–(4) . . . . . . . . . . . . . . . . . . . . .10.162 192 . . . . . . . . . . . . . . . . . . . .  1.79; 9.2; 11.2 (1), (2) . . . . . . . . . . . . . . . . . . . . .10.175 193 . . . . . . . . . . . . . . . . . . .  9.2; 10.176; 11.2 194 . . . . . . . . . . . . . . . . . . . . . . . . .  1.79; 11.2 (1)–(3) . . . . . . . . . . . . . . . . . . . . .10.177 195 . . . . . . . . . . . . . .  1.79; 9.2, 9.35; 10.35, 10.213; 11.2; 24.1 (1), (2) . . . . . . . . . . . . . . . . . . . . .10.177 (3) . . . . . . . . . . . . . .  10.30, 10.48, 10.103 (4) . . . . . . . . . . . . . . . . . . . . . . . . 10.177 (5) . . . . . . . . . . . . . . . . . .  10.177, 10.178 196 . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2 (1) . . . . . . . . . . . . . . . . . . . . . . . . 10.177 (2)(a), (b) . . . . . . . . . . . . . . . . . . 10.177 (4) . . . . . . . . . . . .  10.48, 10.177, 10.178 (5) . . . . . . . . . . . . . . . . . . . . . . . . 10.178 197 . . . . . . . . . . . . .  1.13, 1.79; 9.35; 10.213; 11.2; 26.48 (1) . . . . . . . . . . . . . . . . . . . . . . . . 10.48 (6) . . . . . . . . . . . . . . . . . . . . . . . . 10.48 198 . . . . . . . . . . . . . . . . . . .  1.13; 11.2; 26.48 (1)(a) . . . . . . . . . . . . . . . . 10.103, 10.188 (b)–(f) . . . . . . . . . . . . . . . . . . 10.188 (2)–(4) . . . . . . . . . . . . . . . . . . . . .10.188 199 . . . . . . . . . . . . . . . . . . .  1.13; 11.2; 26.48 (2) . . . . . . . . . . . . . . . . . . . . . . . . 10.188 200 . . . . . . . . . . . . . . . . . . .  1.13; 11.2; 26.48 (1) . . . . . . . . . . . . . . . . . . . . . . . . 10.190 (2) . . . . . . . . . . . . . . . . . . . . . . . . 10.190 (a), (b) . . . . . . . . . . . . . . . . . . 10.191 (3)(a) . . . . . . . . . . . . . . . . 10.192, 10.194 (b) . . . . . . . . . . . . . . .  10.192, 10.195 (5) . . . . . . . . . . . . . . . . . .  10.48, 10.192 201 . . . . . . . . . . . . . . . .  9.2, 9.14; 11.2; 24.1; 26.48 (1) . . . . . . . . . . . . . . . . . . . . . . . . 10.198 (a) . . . . . . . . . . . . . . . . . . . . . .10.188 (2) . . . . . . . . . . . .  10.188, 10.189, 10.198 (3) . . . . . . . . . . . . . . . . . . . . . . . . 10.198 (4) . . . . . . . . . . . . . .  9.35; 10.189, 10.197 (a) . . . . . . . . . . . . . . . . . . . . . .9.44 (5) . . . . . . . . . . . . . . . . .  10.103, 10.199 202 . . . . . . . . . . . . . . . . . .  1.13, 1.79; 10.213; 11.2; 26.48 (1) . . . . . . . . . . . . . . . . . . . . . . . . 10.198 (2) . . . . . . . . . . . . . . . . . . . . . . . . 10.199 (3) . . . . . . . . . . . . . . . . . .  10.127, 10.199 203 . . . . . . . . . . . . . . . . . . .  1.13; 11.2; 26.48 (1) . . . . . . . . . . . . . . . . . . . . . . . . 10.200 204 . . . . . . . . . . . . . . . . 1.13; 9.2, 9.35; 10.35, 10.201, 10.213; 11.2; 14.51, 14.57, 14.65, 14.89, 14.45, 14.46; 24.1 (1) . . . . . . . . . . . . . . . . . . . . . . . . 10.202 (2) . . . . . . . . . . . .  10.30, 10.103, 10.205, 10.206, 10.212

Table of statutes Gambling Act 2005 – contd s 204(4) . . . . . . . . . . . . . . . . .  10.203, 10.205 205 . . . . . . . . . . . . . . . . .  1.13; 10.201; 11.2 (2) . . . . . . . . . . . . . .  10.209; 14.51, 14.96 (3)(a), (b) . . . . . . . . . . . . . . . . . . 10.211 (4) . . . . . . . . . . . . . . . . . . . .  10.212; 14.96 206 . . . . . . . . . . . . . .  1.80; 8.30; 11.2; 24.25, 24.28 (1) . . . . . . . . . . . . . . . . . .  10.213; 14.105 (2) . . . . . . . . . . . . . . . . . . . .  8.30; 10.213 (3) . . . . . . . . . . . . . . . . . . . .  10.213; 24.25 (4) . . . . . . . . . . . . . . . . . . . . . . . . 10.213 207 . . . . . . . . . . . . . . . . . . . . . . . . .  1.80; 11.2 (1) . . . . . . . . . . . . . . . . . . . .  8.29; 10.213 (5) . . . . . . . . . . . . . . . . . . . . . . . . 24.25 (a) . . . . . . . . . . . . . . . . . . . . . .14.105 208 . . . . . . . . . . . . . . . . . . . . . . . . . 11.2; 24.26 (1) . . . . . . . . . . . . . . . . . . . . . . . . 8.30 (2) . . . . . . . . . . . . . . . . . . . .  8.30; 14.105 209 . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2 (b) . . . . . . . . . . . . . . . . . . . . . . . . 24.28 210 . . . . . . . . . . . . . . . .  10.46, 10.51, 10.207; 11.2; 14.46, 14.51 (1) . . . . . . . . . . . . . . . . . . . . . . . . 10.116 (2) . . . . . . . . . . . . . .  10.116; 14.46, 14.51 211 . . . . . . . . . . . . . . . . . . . . . . . . .  10.9; 11.2 (1)(a)–(d) . . . . . . . . . . . . . . .  10.9; 10.34 (4) . . . . . . . . . . . . . . . . . . . . . . . . 10.51 212 . . . . . . . . . . . . . .  9.12; 10.9; 11.2, 11.54 (1) . . . . . . . . . . . . . . . . . . . . . . . . 10.31 (2)(d) . . . . . . . . . . . . . . . . . . . . . 10.32 213 . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2 Pt IX (ss 214–234) . . . . .  4.3, 4.49; 5.42, 5.45, 5.54; 6.15; 9.3; 10.8, 10.9; 11.1, 11.2, 11.5, 11.6, 11.15, 11.16, 11.18, 11.19, 11.20, 11.23; 14.44; 23.16; 24.29; 26.50, 26.51 s 214 . . . . . . . . . . . . . . . . . . . . . . . . .  1.13; 4.49 (1) . . . . . . . . . . . . . . . . . . . . . . . . 26.50 (a), (b) . . . . . . . . . . . . . . . . . . 11.2 215 . . . . . . . . . . . . . . . . . . . . . . .  1.13; 26.50 (1) . . . . . . . . . . . . . . . . . . . . . . . . 4.49 (a), (b) . . . . . . . . . . . . . . . . . . 11.2 (2) . . . . . . . . . . . . . . . . . . . . . . . . 11.2 216 . . . . . . . . . . . . . . . . . . . . . . . . . . 1.13 (1)(a), (b) . . . . . . . . . . . . . .  11.21; 26.50 (c) . . . . . . . . . . . . . . .  11.5, 11.6, 11.21, 11.22; 26.50 (d) . . . . . . . . . . . . . .  11.5, 11.21; 26.50 (e), (f) . . . . . . . . . . . . . . . . . . . 11.21 (g) . . . . . . . . . . .  11.21, 11.24, 11.26, 11.32, 11.37, 11.38, 11.52 (h) . . . . . . . . . . . . . . . . . . . . . 11.21 (3) . . . . . . . . . . . . . . . . . . . . . . . . 11.21 217 . . . . . . . . . . . . . . . . . . .  1.13; 11.5; 26.50 218 . . . . . . . . . . . . .  1.13; 11.5, 11.10, 11.11, 11.15, 11.21; 26.50 (1), (2) . . . . . . . . . . . . . . . . . . . . .11.10 (3) . . . . . . . . . . . . . . . . . . . . . . . . 11.13 (4), (5) . . . . . . . . . . . . . . . . . . . . .11.14 (6) . . . . . . . . . . . . . . . . . . . . . . . . 11.14

Gambling Act 2005 – contd s 218(7) . . . . . . . . . . . . . . . . . . . . . . . . 11.15 (8) . . . . . . . . . . . . . . . . . . . . . . . . 11.10 219 . . . . . . . . . . . . .  1.13; 11.15, 11.22, 11.26, 11.30, 11.33, 11.35, 11.41, 11.45, 11.51; 24.1, 24.29 (1) . . . . . . . . . . . .  1.17; 11.6, 11.22, 11.37 (2) . . . . . . . . . . . . . . . . . . . .  11.14 ,11.24 (3)(a) . . . . . . . . . . . . . 11.24, 11.37, 11.52, 11.53 (b)(i), (ii) . . . . . . . . . . . . . . . . 11.24 (4) . . . . . . . . . . . . . . . . . . . . .  1.13; 11.37 (a) . . . . . . . . . . . . . . . . . .  11.27, 11.39 (b)(i), (ii) . . . . . . . . . . . .  11.27, 11.39 (c) . . . . . . . . . . . . . . . . . .  11.27, 11.39 (5) . . . . . . . . . . . . . . .  11.24, 11.26, 11.37, 11.38 (6) . . . . . . . . . . . . . . . . . . . . . . . . 11.6 (a) . . . . . . . . . . . . . . . . . .  11.22, 11.28 (b) . . . . . . . . . . . .  11.22, 11.28, 11.40, 11.41 (7)(a), (b) . . . . . . . . . . . . . .  11.27, 11.39 (8) . . . . . . . . . . . . . . . . . . . . . . . . 11.24 220 . . . . . . . . . . . . . . . . . . . . . .  1.13; 11.29 221 . . . . . . . . . . . . .  1.13; 11.25, 11.30, 11.33, 11.35, 11.41, 11.45, 11.51 (1) . . . . . . . . . . . . . . . . . . . . . . . . 11.30 (2) . . . . . . . . . . . . . . . . . . . . .  1.17; 11.30 (3) . . . . . . . . . . . . . . . . . . . . . . . . 11.30 (4) . . . . . . . . . . . . . . . . . . . .  11.32, 11.52 (5)(a), (b) . . . . . . . . . . . . . . . . . . 11.31 (6) . . . . . . . . . . . . . . . . . . . .  11.32, 11.51 222 . . . . . . . . . . . . .  1.13; 11.35, 11.41; 24.1 (1) . . . . . . . . . . . . . . . . . . . . . . . . 11.33 (a), (b) . . . . . . . . . . . . . . . . . . 11.33 (2)(a)–(c) . . . . . . . . . . . . . . . . . . 11.33 (3) . . . . . . . . . . . . . . .  11.25, 11.30, 11.34 223 . . . . . . . . . . . . . . . . . . . . . . . . . . 1.13 (1)(a)–(c) . . . . . . . . . . . . . . . . . . 11.35 (2) . . . . . . . . . . . . . . . . . . . . . . . . 11.35 (3)(a) . . . . . . . . . . . . . 11.36, 11.38, 11.39, 11.40 (b) . . . . . . . . . . . . . . . . .  11.36, 11.51 (4) . . . . . . . . . . . . . . .  11.38, 11.39, 11.40 224 . . . . . . . . . . . . .  1.13, 1.17; 11.15, 11.18, 11.25, 11.30, 11.41, 11.42; 24.29; 26.50 (1)(a)–(c) . . . . . . . . . . . . . . . . . . 11.41 (2), (3) . . . . . . . . . . . . . . . . . . . . .11.42 (4)(a)–(c) . . . . . . . . . . . . . .  11.15, 11.43 (5) . . . . . . . . . . . . . . . . . . . . . . . . 11.43 (6) . . . . . . . . . . . . . . . . . . . .  11.15, 11.43 (7) . . . . . . . . . . . . . . . . .  1.13, 1.17; 10.92, 10.93, 10.103; 11.44 (8) . . . . . . . . . . . . . . . . . . . .  11.15, 11.43 225 . . . . . . . . . . . . .  1.13; 11.25, 11.30, 11.45 (1)(a)–(c) . . . . . . . . . . . . . . . . . . 11.45 (2)(a), (b) . . . . . . . . . . . . . . . . . . 11.45 226 . . . . . . . . . . . . . . . . . . . . . . . . . . 1.13 (1)(b) . . . . . . . . . . . . . . . . . . . . . 11.46 (2) . . . . . . . . . . . . . . . . . . . . . . . . 11.49 (a), (b) . . . . . . . . . . . . . . . . . . 11.46 (3)(a)–(c) . . . . . . . . . . . . . . . . . . 11.47

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Table of statutes Gambling Act 2005 – contd s 226(4) . . . . . . . . . . . . . . . . . . . . . . . . 11.48 (5) . . . . . . . . . . . . . . . . . . . . . . . . 11.48 (6)(a)–(d) . . . . . . . . . . . . . . . . . . 11.49 (7) . . . . . . . . . . . . . . . . . . . . . . . . 11.49 (8) . . . . . . . . . . . . . . . . . . . . . . . . 11.50 (9) . . . . . . . . . . . . . . . . . . . .  11.47, 11.49 (e) . . . . . . . . . . . . . . . . . . . . . . 11.50 227 . . . . . . . . . . . . . . . . . . . . . . .  1.13; 11.51 (1) . . . . . . . . . . . . . . . . . . . . . . . . 11.51 (2)(a), (b) . . . . . . . . . . . . . . . . . . 11.52 (3)(a), (b) . . . . . . . . . . . . . . . . . . 11.53 (4) . . . . . . . . . . . . . . . . . . . . . . . . 11.51 (6) . . . . . . . . . . . . . . . . . . . . . . . . 11.54 (a), (b) . . . . . . . . . . . . . . . . . . 11.54 228 . . . . . . . . . . . . . . . . . . . . . . . . . . 1.13 (1) . . . . . . . . . . . . . . . . . . . . . . . . 11.30 (2) . . . . . . . . . . . . . . . . . . . .  11.25, 11.30 (5) . . . . . . . . . . . . . . . . . . . . . . . . 11.53 229 . . . . . . . . . . . . . . . . . . .  1.13; 11.57, 11.62 (1)(a) . . . . . . . . . . . . . . . . . . . . . .11.58 (b)(i)–(iv) . . . . . . . . . . . . . . . 11.59 (2) . . . . . . . . . . . . . . . . . . . .  11.60, 11.61 (3) . . . . . . . . . . . . . . . . . . . . . . . . 11.60 230 . . . . . . . . . . . . . . . . . . . . . . . . . . 1.13 (a), (b) . . . . . . . . . . . . . . . . . . . . 11.56 231 . . . . . . . . . . . . . . . . . . .  1.13; 11.5, 11.21 (1)(a) . . . . . . . . . . . . . . . . . . . . . .11.8 (b), (c) . . . . . . . . . . .  11.6, 11.9, 11.23 (d) . . . . . . . . . . . . . . . . . .  11.9, 11.23 (2) . . . . . . . . . . . . . . . . . . . . . . . . 11.6 (a)–(d) . . . . . . . . . . . . . . . . . . 11.23 232 . . . . . . . . . . . . . . . . . . . . . . . . .  1.13; 11.6 (1) . . . . . . . . . . . . . . . . . . . . . . .  9.3; 11.16 (2)(a) . . . . . . . . . . . . . . . . . . . . . .11.17 (b) . . . . . . . . . . . . . . . . . . . . . 11.18 (3) . . . . . . . . . . . . . . . . . . . . . . .  9.3; 11.18 (4) . . . . . . . . . . . . . . . . . . . . .  11.19, 11.20 233 . . . . . . . . . . . . . . . . . . .  1.13; 11.6, 11.16; 24.17, 24.29 (1), (2) . . . . . . . . . . . . . . . . . . 9.3; 24.29 234 . . . . . . . . . . . . . . . . . . . . . . . . . . 1.13 (1)(a)–(c) . . . . . . . . . . . . . . . . . . 11.63 (2), (3) . . . . . . . . . . . . . . . . . . . . .11.63 Pt X (ss 235–251) . . . . . .  1.43, 1.61; 4.6, 4.21; 6.8, 6.10, 6.24, 6.25, 6.70, 6.136, 6.137, 6.138; 12.2; 14.95; 25.14 s 235 . . . . . . . . . . . . . .  1.10, 1.61; 2.6, 2.261; 4.5, 4.24, 4.25, 4.56, 4.57, 4.59, 4.60; 5.17, 5.31, 5.35, 5.37, 5.42, 5.45, 5.53; 6.133; 7.58; 11.1; 12.1, 12.20, 12.27, 12.35, 12.37, 12.40; 14.139; 15.238; 22.7; 25.14, 25.59, 25.160; 26.28, 26.30, 26.43 (1) . . . . . . . . . . . . . .  25.27, 25.160; 27.31 (2) . . . . . . . . . . . . . .  25.30, 25.36, 25.37 (a) . . . . . . . . . . . .  25.19, 25.35, 25.37 (b) . . . . . . . . . . . . . . . . .  25.35, 25.41

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Gambling Act 2005 – contd s 235(2)(c) . . . . . . . . . . . . . . . . . .  10.160; 25.42 (d) . . . . . . . . . . .  15.238; 25.19, 25.43 (ii) . . . . . . . . . . . . . . .  15.238; 25.43 (e) . . . . . . . . . . . . . . . . . . .  14.95; 22.8 (i), (ii) . . . . . . . . . . . . . . . . 25.44 (f) . . . . . . . . . . . . . . . 14.95; 22.9; 25.53 (g) . . . . . . . . . . . . . . . . . . . . . 22.10 (i)–(iii) . . . . . . . . . . . . . . . 25.54 (h) . . . . . . . . . . . . . . . . . . . . . 25.55 (i), (ii) . . . . . . . . . . . . . . . . 25.55 (i) . . . . . . . . . . . . . . . . . .  14.129; 25.56 (3)(a) . . . . . . . . . . . . . . . . . . . 25.34; 26.3 (b) . . . . . . . . . . . . . . . . . . . . . 25.177 (c) . . . . . . . . . . . . . . . . . . . . . . 25.34 (i) . . . . . . . . . . . . . . . . . . . . 25.178 (ii) . . . . . . .  25.174, 25.176, 25.181 (d) . . . . . . . . . . . . . . . . .  25.34, 25.173 (e) . . . . . . . . . . . . . . . . . .  25.31, 25.177 (f) . . . . . . . . . . . . . . . . . . . . . . 25.38 (5) . . . . . . . . . . . . . . . . . . . . . . . . 25.33 236 . . . . . . . . . . . . . . . .  1.83; 4.6, 4.59; 5.10, 5.17, 5.35, 5.53, 5.63; 6.138; 10.133; 12.20, 12.27, 12.35, 12.40; 25.14, 25.16, 25.17, 25.59, 25.114, 25.121; 26.30 (1) . . . . . . . . . . . . . . . . . . . . . . . . 25.58 (6) . . . . . . . . . . . . . . . . . . . . . . . . 25.59 237 . . . . . . . . . . . . .  1.65; 5.37; 6.20; 25.112, 25.126; 26.30 238 . . . . . . . . . . . . . . . .  1.65; 4.5; 5.35, 5.37; 6.20; 7.58; 19.321; 25.126, 25.131; 26.28, 26.30 239 . . . . . . . . . . . . . . . . 25.72, 25.159, 25.160, 25.163 (b) . . . . . . . . . . . . . . . . . . . . . . . 25.162 240 . . . . . . . . . .  6.53, 6.138; 10.133; 14.125; 25.14, 25.17, 25.59, 25.114, 25.121, 25.165 (1) . . . . . . . . . . . . . . . . . . . . . . . . 25.17 (2)(f) . . . . . . . . . . . . . . . . . . . . . . 25.17 241 . . . . . . . . . . . . . . . .  6.138; 10.133; 25.14, 25.17, 25.78, 25.114, 25.121, 25.166, 25.185 242 . . . . . . . . . . . . .  1.43, 1.62; 2.261, 2.271; 6.10; 12.1, 12.2, 12.19, 12.26, 12.36, 12.37, 12.38, 12.40; 25.15, 25.64, 25.114, 25.127, 25.155, 25.159, 25.160, 25.161, 25.163, 25.164 (1) . . . . . . . . . . . . . . .  4.21; 6.10; 25.114 (a) . . . . . . . . . . . . . . . . . . . . . .4.21 (b) . . . . . . . . . . . . . . . . . . . . . 25.155 (2) . . . . . . . . . . . . . . . . . . . . . . . . 25.165 243 . . . . . . . . . . . . . . . . 1.43, 1.44, 1.62, 1.66; 6.10; 25.15, 25.34, 25.160, 25.163, 25.166 (1) . . . . . . . . . . . . . . . . .  4.21; 6.10; 25.99, 25.166, 25.167

Table of statutes Gambling Act 2005 – contd s 243(1)(a) . . . . . . . . . . . . . . . . . . . . . .4.21 (2) . . . . . . . . . . . . . . . . . .  25.166, 25.185 (3) . . . . . . . . . . . . . . . . . .  25.166, 25.185 244(1) . . . . . . . . . . . . . . . . . .  25.183, 25.184 244(3) . . . . . . . . . . . . . . . . . . . . . . . . 25.184 245 . . . . . . . . . . . . . . . . . . . .  25.78, 25.185 246(1), (2) . . . . . . . . . . . . . . . . . . . . .25.186 247 . . . . . . . . . . . . . .  1.13, 1.17, 1.65, 1.82, 1.88; 9.4; 16.56; 22.28; 24.1; 25.113, 25.126, 25.127, 25.131, 25.158; 26.30 (1) . . . . . . . . . . . . . . . . . . . .  4.50; 25.127 (2) . . . . . . . . . . . . . . . . . . . . .  4.50; 26.30 248 . . . . . . . . . . . . . . . .  1.89; 25.158, 25.159, 25.161 (1) . . . . . . . . . . . . . . . . . . . . . . . . 4.50 (2) . . . . . . . . . . . . . . . . . .  25.103, 25.166 249 . . . . . . . . . . . . . . . . . . . . . . . 1.89; 25.158 (1) . . . . . . . . . . . . . . . . . . . .  4.50; 25.163 (a) . . . . . . . . . . . . . . . . . . . . . .25.163 (2) . . . . . . . . . . . . . . . . . . . . . . . . 25.163 (b) . . . . . . . . . . . . . . . . . . . . . 4.50 (3) . . . . . . . . . . . . . . . . . . . . . . . . 10.16 250 . . . . . . . . . . . . . . . .  25.98, 25.99, 25.100, 25.103, 25.158, 25.166, 25.167 (1) . . . . . . . . . . . . . . . . . . . .  25.99, 25.167 (3) . . . . . . . . . . . . . . . . . . . . . . . . 25.100 (4), (5) . . . . . . . . . . . . . . . . . . . . .25.101 (6) . . . . . . . . . . . . . . . . . . . . . . . . 25.102 (7) . . . . . . . . . . . . . . . . . . . .  25.98, 25.102 Pt XI (ss 252–265) . . .  1.43, 1.96; 2.262; 4.20; 5.47, 5.49, 5.57; 6.8, 6.9; 15.315, 15.321, 15.330; 16.11; 18.165, 18.168; 26.3, 26.20 s 252 . . . . . . . . . . . . . .  15.83, 15.197, 15.297, 15.312, 15.318 (1) . . . . . . . . . . . .  15.306, 15.311; 18.165 (2) . . . . . . . . . . . . 15.306, 15.307, 15.309, 15.311 (a), (b) . . . . . . . . . . . . . . . . . . 15.307 (c) . . . . . . . . . . . . . . . .  15.307, 15.314 (e) . . . . . . . . . . . . . . . .  15.307, 15.310 (f)–(i) . . . . . . . . . . . . . . . . . . . 15.307 (j) . . . . . . . . . . . . . . . .  15.307, 15.329 (k) . . . . . . . . . . . . . . . . . . . . . 15.307 (3) . . . . . . . . . . . . . . . . . .  15.306, 15.310 253 . . . . . . . . . . . . .  15.213, 15.289, 15.299, 15.306, 15.313 (1) . . . . . . . . . . . .  15.214, 15.289, 15.308 (2) . . . . . . . . . . . .  15.289, 15.308, 15.329 (3) . . . . . . . . . . . . . . . . . .  15.289, 15.308 254 . . . . . . . . . . . . . . . . . . . . . . . . . . 15.298 (1) . . . . . . . . . . . .  15.202, 15.208, 15.242 255 . . . . . . . . . . . . . . . . . . . .  15.213, 15.298 256 . . . . . . . . . . . . . . . . . . . . . . . . . . 15.82 (1) . . . . . . . . . . . . . . . . . . . . . . . . 15.210 (2)(a) . . . . . . . . . . . . . . . . . . . . . .15.211 257 . . . . . . . . . . . . . . . . . . . . . . .  6.9; 15.345

Gambling Act 2005 – contd s 258 . . . . . . . . . . . . . .  1.13, 1.43, 1.96; 2.262; 4.20; 5.58; 6.9; 15.83, 15.119, 15.163, 15.239, 15.243, 15.248, 15.304, 15.305, 15.312, 15.318, 15.323, 15.328, 15.329; 16.11; 18.166 (1) . . . . . . . . . . . . . . . . . . . . . . . . 4.20; 6.9 (b) . . . . . . . . . . . . . . . . . . . . . 15.239 (2) . . . . . . . . . . . . . . . . .  4.20; 6.9; 15.248 (3) . . . . . . . . . . . . . . . . . . . . . 4.20; 15.248 (4) . . . . . . . . . . . .  15.248, 15.317; 16.11 259 . . . . . . . . . . . . . 4.20; 6.9; 15.119, 15.163, 15.239, 15.243, 15.248, 15.304, 15.306, 15.311; 16.11; 18.166 (1) . . . . . . . . . . . . . . . . . . . . . . . . 15.318 (b) . . . . . . . . . . . . . . . . . . . . . 15.239 (2) . . . . . . . . . . . . . . . . . .  15.311; 18.160 (3) . . . . . . . . . . . . . . . . . . . . .  6.9; 15.318 (4) . . . . . . . . . . . . . . . . . . . .  15.319; 16.11 (a)–(c) . . . . . . . . . . . . . . . . . . 15.319 (5) . . . . . . . . . . . . . . . . . . . . . . . . 15.318 260 . . . . . . . . . . . . . . . . . . . . . .  4.20; 15.320 (3) . . . . . . . . . . . . . . . . . .  15.320, 15.321 (4) . . . . . . . . . . . . . . . . . . . . . . . . 15.320 (5) . . . . . . . . . . . . . . . . . .  15.314, 15.320 261 . . . . . . . . . . . . . . . . . . . . . .  4.20; 15.321 (3) . . . . . . . . . . . . . . . . . . . . . . . . 15.321 262 . . . . . . . . . . . . . . . .  4.20; 15.121, 15.323 (a) . . . . . . . . . . . . . . . . . . . . . . . . 15.324 (b) . . . . . . . . . . . . . . . . . . . . . . . . 15.326 263 . . . . . . . . . . . . . . . .  4.20; 15.121, 15.315 (2) . . . . . . . . . . . . . . . . . . . . . . . . 15.315 264 . . . . . . . . . . . . . . . .  4.20; 16.11; 18.165 265 . . . . . . . . . . . . . . . . . . . . . .  4.20; 15.321 (2) . . . . . . . . . . . . . . . . . . . . . . . . 15.321 265(3) . . . . . . . . . . . . . . . . . . . . . . . . 15.322 Pt XII (ss 266–287) . .  12.1, 12.2, 12.3, 12.10; 23.16; 25.59 s 266 . . . . . . . . . . . . .  4.22, 4.51; 7.7, 7.8, 7.12; 12.12, 12.19, 12.25, 12.26, 12.28, 12.41; 14.88; 26.42 (1) . . . . . . . . . . . . . . . . . . . . . . .  4.22, 4.51 (a) . . . . . . . . . . 4.22, 4.51; 12.4; 14.88 (b) . . . . . . . . . . . . . . . . . . . . . 12.4 (c), (d) . . . . . . . . . . . . . . . . .  4.51; 12.4 (2) . . . . . . . . . . . . . . . . .  4.22, 4.51; 12.5 267 . . . . . . . . . . . . .  4.22, 4.51; 7.7, 7.8, 7.12; 12.12, 12.25, 12.26, 12.28; 14.88; 26.42 (1)(a) . . . . . . . . . . . . . 12.6, 12.14; 14.88 (b), (c) . . . . . . . . . . . . . . . . . . 12.6 (2) . . . . . . . . . . . . . . . . . . . . . . . . 12.7 268 . . . . . . . . . . . . . . . .  7.7, 7.8, 7.12; 12.19, 12.25, 12.26, 12.28, 12.41; 14.88; 26.41 (1) . . . . . . . . . . . . . . . . . . . . . . .  4.22, 4.51 (a), (b) . . . . . . . . . . . . . . . . . . 12.8 (2) . . . . . . . . . . . . . . . . . . . . . . .  4.22, 4.51 (3) . . . . . . . . . . . . . . . . . . . . . . .  4.22, 4.51

xlix

Table of statutes Gambling Act 2005 – contd s 268(3)(a)–(d) . . . . . . . . . . . . . . . . . . 12.9 (4) . . . . . . . . . . . . . . . . . . . . . . .  4.22, 4.51 (a) . . . . . . . . . . . . . . . . . . . . . .12.8 (b)(i)–(iii) . . . . . . . . . . . . . . . 12.8 269 . . . . . . . . . . . . . .  1.43, 1.75, 1.90; 4.22; 10.8; 12.5, 12.7, 12.12, 12.13, 12.14; 14.88, 14.90, 14.91, 14.92; 19.19, 19.253; 26.44, 26.45 (1) . . . . . . . . . . . .  4.22, 4.27, 4.51, 4.55; 12.13; 26.44 (a), (b) . . . . . . . . . . . . . . . . . . 12.12 (c), (d) . . . . . . . . . . . . . . .  4.22; 14.88 (e) . . . . . . . . . . . . . . . . . . . . . . 12.12 (2) . . . . . . . . . . . .  1.90; 4.22, 4.51; 12.12 (3) . . . . . . . . . . . .  1.90; 4.22, 4.26, 4.51, 4.54; 12.12, 12.20 (4) . . . . . . . . . . .  1.90; 4.22, 4.26, 4.51, 4.54; 12.12, 12.20; 14.92 (5) . . . . . . . . . . . .  1.90; 4.22, 4.26, 4.51, 4.54; 12.12, 12.20; 14.90 (6) . . . . . . . . . . . . . . . . . 1.90; 12.12, 12.20 (6)(a), (b) . . . . . .  4.22, 4.26, 4.51, 4.54 270 . . . . . . . . . . . . . . . . . . . . . . . . . . 26.44 (1) . . . . . . . . . . . .  4.22, 4.27, 4.51, 4.55; 12.13 (2) . . . . . . . . . . . .  4.22, 4.26, 4.51, 4.54 (3) . . . . . . . . . . . . . . . . .  4.22, 4.51; 12.20 (4) . . . . . . . . . . . . . . . . . . . . . . . . 12.20 (5) . . . . . . . . . . . .  4.22, 4.26, 4.27, 4.51, 4.54; 12.20 (6) . . . . . . . . . . . .  4.22, 4.26, 4.51, 4.54; 12.20 271 . . . . . . . . . . . . . .  1.13, 1.18, 1.43, 1.75, 1.90; 9.4; 10.8; 14.91, 14.260; 24.1; 25.64, 25.65, 25.70, 25.158; 26.42 (1) . . . . . . . . . . . . . . . . .  4.23; 5.52; 12.19 (2) . . . . . . . . . . . .  4.23, 4.52; 5.52; 12.19, 12.41; 26.42 (3) . . . . . . . . . . . . . . . . . . . . . . . . 1.89 (a) . . . . . . . . . . . . . .  4.25, 4.56; 12.20 (b) . . . . . . . . .  4.25, 4.26, 4.54; 12.20 (c) . . . . . . . . . . . . . . .  1.90; 4.25; 12.20 (e) . . . . . . . . . . . . . . . . . . . . . . 25.64 (4)(a) . . . . . . . . . . . . . . . . . . . .  4.27, 4.55 (b)–(d) . . . . . . . . . . . . . . . . .  4.27, 4.55 (5) . . . . . . . . . . . . . . . . .  4.27, 4.55; 12.20 (6) . . . . . . . . . . . . . . . . . . . . . . . . 12.20 (a), (b) . . . . . . . . . . . . . . . . .  4.24, 4.53 (7) . . . . . . . . . . . . . . . . . .  12.20; 26.164 (a), (b) . . . . . . . . . . . . . . . . .  4.24, 4.53 272 . . . . . . . . . . . . . . . . . . . . . . . . . . 26.42 (1) . . . . . . . . . . . . . . . . . . . . .  4.27; 12.20 (2) . . . . . . . . . . . . . . . . .  4.27, 4.55; 12.20 (3) . . . . . . . . . . . . . . . . .  4.27, 4.55; 12.20 (a)–(c) . . . . . . . . . . . . . . . . . . 4.53 (4) . . . . . . . . . . . .  4.27, 4.53, 4.55; 12.20

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Gambling Act 2005 – contd s 273 . . . . . . . . . . . . . . . .  1.13, 1.75, 1.89; 9.4; 10.8; 24.1; 25.64, 25.65, 25.70, 25.158; 26.43 (1) . . . . . . . . . . . . . . .  4.58; 12.26, 12.37 (2) . . . . . . . . . . . . . . .  4.56; 12.26, 12.27, 12.41; 25.64; 26.43 (3) . . . . . . . . . . . . . . . . . . . . . . . . 12.27 (a), (b) . . . . . . . . . . . . . . . . . . 4.57 (4) . . . . . . . . . . . . . . . . . . . . . . . . 12.27 (a) . . . . . . . . . . . . . . . . . . . . . .4.57 (b) . . . . . . . . . . . . . . . . . . . .  4.57, 4.59 (5) . . . . . . . . . . . . . . . . . . . . . . . 4.57; 12.27 274 . . . . . . . . . . . . . . . . .  4.56; 12.25, 12.28, 12.39; 26.43 275 . . . . . . . . . . . . . . . .  6.108; 12.12, 12.16, 12.19, 12.22, 12.32; 14.91; 26.42, 26.44 (1) . . . . . . . . . . .  4.22, 4.23; 12.15, 12.17, 12.21, 12.23, 12.31, 12.33 (2)(a), (b) . . . . . . . . .  12.16, 12.22, 12.32 (3)–(5) . . . . . . . . . . . . 12.17; 12.23, 12.33 (6) . . . . . . . . . . . . . .  12.18, 12.24, 12.34; 14.91 (7), (8) . . . . . . . . . . . . 12.18, 12.24, 12.34 (9) . . . . . . . . . . . . . . .  12.16, 12.22, 12.32 277 . . . . . . . . . . . . . . . . . . . . . . . . .  1.89; 24.1 (a) . . . . . . . . . . .  4.28, 4.59; 12.10, 12.30, 12.35, 12.37, 12.72, 12.77 (b) . . . . . . . . . . .  4.28, 4.59; 12.10, 12.30, 12.35, 12.37, 12.72, 12.77; 24.1; 26.33 (c) . . . . . . . . . . . . . . . . . . . . .  4.29; 12.10 278 . . . . . . . . . . . . . .  1.75, 189; 10.8; 14.92 (1)(a) . . . . . . . . . . . . . .  4.29, 4.59; 12.30, 12.35, 12.37 (b) . . . . . . . .  4.29, 4.59; 12.30, 12.35, 12.37; 14.92; 24.1 (c) . . . . . . . . . . . . . . .  4.29, 4.59; 12.30, 12.35, 12.37 279 . . . . . . . . . . . . . .  1.43, 1.75, 1.90; 4.29; 9.4; 10.8; 12.10, 12.29, 12.30, 12.31, 12.33; 14.92, 14.93; 19.252; 24.1; 26.35 (1) . . . . . . . . . . . . . . . . . . . . . . . . 1.90 (a), (b) . . . . . . . . . . . . . . .  4.29; 12.29 (2), (3) . . . . . . . . . . . . . . . . . . . . .4.29 (4) . . . . . . . . . . . . . . . . . . . . .  4.29; 14.92 (5), (6) . . . . . . . . . . . . . . . . . . . . .4.29 (9) . . . . . . . . . . . . . . . . . . . . . . . . 14.91 280 . . . . . . . . . . . . . . . . . . . . . . . . . . 12.10 (1), (2) . . . . . . . . . . . . . . . . . . . . .4.29 281 . . . . . . . . . . . . . . . .  12.10, 12.29; 26.37 282 . . . . . . . . . . . . . . . .  1.13, 1.75, 1.89; 9.4; 10.8; 12.10, 12.35, 12.37; 24.1; 25.66, 25.70, 25.158 (1) . . . . . . . . . . . . . . . . . . . . . . . . 9.4 (2) . . . . . . . . . . . . . . . . . . . . .  4.59; 12.35 (3) . . . . . . . . . . . . . . . . . . . . . . . . 12.35 (4) . . . . . . . . . . . . . . . . . . . . .  4.59; 12.36

Table of statutes Gambling Act 2005 – contd s 282(5)(a) . . . . . . . . . . . . . . . . . . . . . .4.59 283 . . . . . . . . . . . . . .  1.13, 1.18, 1.75. 1.89; 9.1, 9.4; 10.8, 10.9; 12.10; 25.66, 25.70, 25.158 (1) . . . . . . . . . . . . . . . . . . . . . . . . 4.61 (2) . . . . . . . . . . . . . . . . . . . . .  4.60; 26.34 (3) . . . . . . . . . . . . . . . . . . . . . . . . 4.60 (4) . . . . . . . . . . . . . . . . . . . . .  4.61; 12.38 (5) . . . . . . . . . . . . . . . . . . . . . . . . 24.1 284 . . . . . . . . . . . . . .  4.29; 9.4; 12.10; 14.92; 24.1 285 . . . . . . . . . . . . . . . . . . . . . . . . . .  24.1 286 . . . . . . . . . . . . . . . . .  4.32; 12.40; 22.31 (a), (b) . . . . . . . . . . .  4.62; 5.39; 12.11; 25.111, 25.164 287 . . . . . . . . . . . . .  1.75; 10.8; 12.11; 25.111, 25.158, 25.164 287(a) . . . . . . . . . . . . . . . . . . . . . . . . 12.40 Pt XIII (ss 288–294) . . . .  6.127, 6.136; 19.252; 22.1, 22.2, 22.5, 22.7, 22.8, 22.9, 22.10, 22.11, 22.14; 25.59, 25.105; 26.40 s 288 . . . . . . . . . . . . . .  1.90; 4.30, 4.64; 5.37, 5.49; 10.155, 10.156; 14.30, 14.65; 22.5, 22.12, 22.14, 22.16; 23.26, 23.28; 25.53; 26.38 289 . . . . . . . . . . . . . . . . 1.13, 1.17, 1.43; 10.8; 14.37; 19.19; 22.5, 22.10, 22.23, 22.25, 22.34 (1) . . . . . . . . . . . . . . . . . . . . . . .  4.30, 4.64 (2) . . . . . . . . . . . .  1.90; 4.30; 5.33; 26.38 290 . . . . . . . . . . . . . .  1.43, 1.75, 1.90; 10.7, 10.8; 19.19; 22.27, 22.34 (1) . . . . . . . . . . .  4.32, 4.63, 4.66; 10.155, 10.156; 22.5, 22.9, 22.26 (b) . . . . . . . . . . . . . . . . . . . . . 10.54 (ii) . . . . . . . . . . . . . . . . . . . 22.27 (2) . . . . . . . . . . . .  1.90; 4.32, 4.66; 22.5, 22.10, 22.13, 22.28, 22.29 291 . . . . . . . . . . . . . .  1.43, 1.75, 1.90; 4.32, 4.66; 10.7; 14.31, 14.32, 14.33, 14.39; 19.19; 22.5, 22.8, 22.34 (1)–(4) . . . . . . . . . . . . . . . . . . . . .22.30 292 . . . . . . . . . . . . . .  1.43, 1.75, 1.90; 5.38, 5.40, 5.44, 5.47, 5.49; 10.8; 12.11; 14.103; 19.19; 22.5, 22.13, 22.31, 22.32, 22.33, 22.34 (a) . . . . . . . . . . . . . . . . . . . . . . .  4.66; 5.40 (b), (c) . . . . . . . . . . . . . . . . . . . . .5.40 293 . . . . . . . . . . . . . . . .  5.41; 10.155; 12.11; 14.33, 14.38, 14.39; 22.5, 22.11, 22.16, 22.17, 22.30 (1) . . . . . . . . . . . .  4.31, 4.65; 5.41; 22.17 (2) . . . . . . . . . . . .  4.31, 4.65; 5.41; 22.17, 22.18, 22.30 (3) . . . . . . . . . . . . . . . . . . . . . 22.17, 22.20

Gambling Act 2005 – contd s 293(3)(a), (b) . . . . . . . . . . . .  4.31, 4.65; 5.41 (c) . . . . . . . . . . . . . . . .  4.31, 4.65; 5.41 (4) . . . . . . . . . . . .  4.31, 4.63, 4.65; 5.41; 22.17, 22.21, 22.30 (5) . . . . . . . . . . . . . . . . .  4.31, 4.65; 5.41; 22.17, 22.22 (6) . . . . . . . . . . . .  4.63, 4.65; 5.41; 22.17 294 . . . . . . . . . . . . . . . . . . . . . . . . . . 22.34 Pt XIV (ss 295–302) . .  4.70; 23.1, 23.9, 23.17, 23.25 s 295 . . . . . . . . . . . . . . . . 4.33, 4.67; 5.49; 23.1, 23.9; 26.26 296 . . . . . . . . . . . . . . . . 1.43, 1.75, 1.90; 10.8; 23.1, 23.4, 23.12, 23.17 (1) . . . . . . . . . . . . . . . . . . . . . . . . 23.9 (a), (b) . . . . . . . . . . . . . . . . . . 4.33 (2) . . . . . . . . . . . . . . . . . . . . . . . . 23.9 (a), (b) . . . . . . . . . . . . . . . . . . 4.67 (3) . . . . . . . . . . . . . . . . .  23.1, 23.5, 23.8 297 . . . . . . . . . . . . . .  1.90; 5.47, 5.49; 23.1, 23.25 (1), (2) . . . . . . . . . . . . 5.25; 23.27; 26.27 (3) . . . . . . . . . . . . . . . . . . . . .  5.25; 26.27 (a), (b) . . . . . . . . . . . . . . . . . . 23.27 298 . . . . . . . . . . . . . .  1.43, 1.75, 1.90; 10.8; 23.1, 23.25, 23.30 (1)(a), (b) . . . . . . . . . . . . . . .  4.36; 23.26 (2)(a), (b) . . . . . . . . . . . . . . .  4.70; 23.26 299 . . . . . . . . . . . . . . . . .  19.19; 23.1, 23.25, 23.26 (1) . . . . . . . . . . . . . . . . . . . . . . .  4.37, 4.71 (2), (3) . . . . . . . . . . . . .  4.37, 4.71; 23.28 (4)(a)–(c) . . . . . . . . . . . . . . . . .  4.37, 4.71 (5) . . . . . . . . . . . . . . . . . . . . . . .  4.37, 4.71 (6) . . . . . . . . . . . . . . . . .  4.37, 4.71; 23.28 300 . . . . . . . . . . . . . . . . .  19.19; 23.1, 23.25, 23.26, 23.30 (2) . . . . . . . . . . . . . . . . .  4.38, 4.72; 23.29 (3) . . . . . . . . . . . . . . . . . . . . . . .  4.38, 4.72 (4) . . . . . . . . . . . . . . . . . . . . . . . . 23.29 (a)–(c) . . . . . . . . . . . . . . . . .  4.38, 4.72 (5), (6) . . . . . . . . . . . . . . . . . . . . .23.29 (7), (8) . . . . . . . . . . . . .  4.38, 4.72; 23.29 301 . . . . . . . . . . . . . . . . .  23.1, 23.25, 23.30 (1)–(5) . . . . . . . . . . . . . . . . . . . . .23.30 302 . . . . . . . . . . . . .  5.47, 5.49, 23.25; 26.27 (a), (b) . . . . . . . . . . . . . . . . . . . . 5.28 Pt XV (ss 303–326) . . . . 1.13; 3.7, 3.32; 10.12, 10.190; 11.55; 12.53, 12.81; 26.1, 26.2, 26.3, 26.7, 26.9, 26.10, 26.11, 26.13, 26.14, 26.15, 26.18, 26.20, 26.57, 26.58, 26.59, 26.60 s 303 . . . . . . . . . . . . . . . . .  6.166; 7.72; 11.59; 15.266; 25.146; 26.1, 26.7, 26.10, 26.14, 26.15, 26.18, 26.20, 26.21, 26.29, 26.31, 26.32, 26.34, 26.39, 26.40, 26.45, 26.47, 26.48, 26.49, 26.51, 26.52, 26.54, 26.56, 26.58, 26.60

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Table of statutes Gambling Act 2005 – contd s 303(1) . . . . . . . . . . .  3.23; 5.15; 12.53, 12.81 (a), (b) . . . . . . . . . . . . . . . . . . 26.4 (2) . . . . . . . . . . . . . . . . . . . . . . . . 26.4 304 . . . . . . . . . . . . . . . .  5.15; 15.266; 25.146; 26.1, 26.5, 26.6, 26.7, 26.10, 26.14, 26.15, 26.18, 26.20, 26.49, 26.58, 26.60 (1) . . . . . . . . . . . . . . . . .  11.59; 26.5, 26.6 (b) . . . . . . . . . . . . . . . . . . . . . 26.1 (2) . . . . . . . . . . .  11.59; 26.1, 26.6, 26.31, 26.32, 26.34, 26.39, 26.40, 26.46 (3) . . . . . . . . . . . . . . .  24.24; 26.5, 26.47, 26.48, 26.51, 26.52 (4) . . . . . . . . . . . . . .  24.24; 26.47, 26.48, 26.51, 26.52 (a)–(d) . . . . . . . . . . . . . . . . . . 26.5 305 . . . . . . . . . . . . . . . . . . . . . . . . .  3.23, 3.32 (a), (b) . . . . . . . . . . . . . . . . . . . . 26.20 306 . . . . . . . . . . . . . . . . . . . . . . . . .  3.23; 26.2 (1) . . . . . . . . . . . . . . . . . . . . . .  3.32; 26.21 (2) . . . . . . . . . . . . . . . . . . . . .  3.32; 26.22 (a)–(c) . . . . . . . . . . . . . . . . . . 26.22 (3)(a)–(d) . . . . . . . . . . . . . . . . . . 26.22 (4) . . . . . . . . . . . . . . . . . . . . . . . . 26.22 (5) . . . . . . . . . . . . . . . . . . . . . . . . 26.23 307 . . . . . . . . . . . . . . . . . . .  3.23, 3.32; 26.2, 26.25, 26.26 (1), (2) . . . . . . . . . . . . . . . . . . . . .26.26 (3)(a)–(c) . . . . . . . . . . . . . . . . . . 26.26 308 . . . . . . . . . . . . . . . . . . .  3.23, 3.32; 26.29 (1)–(3) . . . . . . . . . . . . . . . . . . . . .26.29 309 . . . . . . . . . . . . . . . . . . . . . . . . .  3.23, 3.32 (1) . . . . . . . . . . . . . . . . . . . . . . . . 26.31 (2) . . . . . . . . . . . . . . . . . . . . . . . . 26.32 310 . . . . . . . . . . . . . . . . . . .  3.23, 3.32; 26.34 (1) . . . . . . . . . . . . . . . . . . . . . . . . 26.39 (2)(a) . . . . . . . . . . . . . . . . . . . . . .26.35 (b)(i), (ii) . . . . . . . . . . . . . . . . 26.36 (c) . . . . . . . . . . . . . . . . . . . . . . 26.37 311 . . . . . . . . . . . . . . . . . . . . . . . . .  3.23, 3.32 (2) . . . . . . . . . . . . . . . . . . . . . . . . 26.40 312 . . . . . . . . . . . . . . . . . . .  3.23, 3.32; 26.41 (1) . . . . . . . . . . . . . . . . . . . . . . . . 26.45 (2) . . . . . . . . . . . . . . . . . . . .  26.41, 26.45 (3)(a), (b) . . . . . . . . . . . . . . . . . . 26.45 (4) . . . . . . . . . . . . . . . . . . . . . . . . 26.46 313 . . . . . . . . . . . . . . . . . . . . . . . . .  3.23, 3.32 (1) . . . . . . . . . . . . . . . . . . . .  26.47, 26.51 (2) . . . . . . . . . . . . . . . . . . . .  26.48, 26.52 314 . . . . . . . . . . . . .  3.23, 3.32; 15.266; 26.49 315 . . . . . . . . . . . . . . . . . . . . . . . . .  3.23, 3.32 316 . . . . . . . . . . . . . . . . . . . . . . .  3.23; 26.57 (1), (2) . . . . . . . . . . . . . . . . . . . . .26.54 (3), (4) . . . . . . . . . . . . . . . . . . . . .26.56 (5) . . . . . . . . . . . . . . . . . . . .  26.57, 26.58 317 . . . . . . . . . . . . . . . . . . .  3.23, 3.33; 12.37 (1)(a)–(f) . . . . . . . . . . . . . . . . 26.3, 26.15 318 . . . . . . . . . . . . . . . . . . . . . . . . .  3.23, 3.32 (1) . . . . . . . . . . . . . . . . . . . . . . . . 26.11 (2)(a), (b) . . . . . . . . . . . . . . . . . . 26.11

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Gambling Act 2005 – contd s 318(3)(a)–(d) . . . . . . . . . . . . . . . . . . 26.11 (4) . . . . . . . . . . . . . . . . . . . . . . . . 26.11 (5) . . . . . . . . . . . . . . . . . . . . . . . . 26.12 319 . . . . . . . . . . . . . . . . . . . . . . . . .  3.23, 3.33 (1) . . . . . . . . . . . . . . . . . . . .  26.15, 26.16 (2), (3) . . . . . . . . . . . . . . . . . . 3.33; 26.16 (4) . . . . . . . . . . . . . . . . . . . . . . . . 26.17 320 . . . . . . . . . . . . . . . . . . . . . . .  3.23; 26.13 321 . . . . . . . . . . . . . . . . .  3.23; 11.55; 26.14 322 . . . . . . . . . . . . . . . . . . . . . . . . .  3.23, 3.33 (1)–(3) . . . . . . . . . . . . . . . . . . . . .26.18 323 . . . . . . . . . . . . . . . . .  3.23; 26.10, 26.21 (1)–(3) . . . . . . . . . . . . . . . . . . . . .26.2 324 . . . . . . . . . . . . . . . . . . . . . . . . .  3.23; 26.7 325 . . . . . . . . . . . . . . . . . . . . . . .  3.23; 26.20 326 . . . . . . . . . . . . . . . . . . . . . . .  3.23; 26.58 (1), (2) . . . . . . . . . . . . . . . . . . . . .26.58 Pt XVI (ss 327–333) . . . . . . . . . . .  18.4, 18.16 s 327 . . . . . . . . . . . . .  15.309, 15.314, 15.320; 17.112; 18.6 328 . . . . . . . . . . . . . . . . . . .  18.4, 18.9, 18.10, 18.12, 18.64, 18.126 (4) . . . . . . . . . . . . . . . . . . . . . . . . 18.4 330 . . . . . . . . . . . . .  15.321; 17.104, 17.113; 18.9, 18.18 (1) . . . . . . . . . . . . . . . . . . . . . . . . 18.160 (3) . . . . . . . . . . . . . . . . . . . . . . . . 18.160 (4) . . . . . . . . . . . . . . . . . . . . . . . . 18.160 (6) . . . . . . . . . . . . . . . . . . . . . . . . 18.162 331 . . . . . . . . . . . . . . . .  1.104; 14.2; 15.321; 17.104; 18.10; 19.46, 19.64, 19.231 (1) . . . . . . . . . . . . . . . . . . . . . . . . 15.321 (2)(b) . . . . . . . . . . . . . . . . . . . . . 17.3 (3) . . . . . . . . . . . . . . . . . . . . . . . . 17.3 (4) . . . . . . . . . . . . . . . . . . . . . . . . 17.3 332 . . . . . . . . . . . . . . . . . . . . . . . . . . 18.9 333 . . . . . . . . . . . . . . . . . . . . . . . . . . 18.12 (1) . . . . . . . . . . . . . . . . . . . . . . . .  18.17 (9)(b) . . . . . . . . . . . . . . . . . . . . . 18.17 Pt XVII (ss 334–338) . . . . . . . . . . . . . 1.101 s 334 . . . . . . . . . . . . . . . . . . . . . . . . . . 1.101 (1) . . . . . . . . . . . . . . . . . . . . . . .  20.4, 20.5 (2) . . . . . . . . . . . . . . . . . . . . . . . . 20.5 335 . . . . . . . . . . . . . . . . . . .  1.101; 3.7; 16.11; 20.5, 20.70 (1) . . . . . . . . . . . . . . . . . . . . . . . . 20.49 336 . . . . . . . . . . . . . . . . .  1.38, 1.101; 6.144; 7.538.4; 20.38 (1) . . . . . . . . . . . . . . . . . . . .  13.22, 13.24 (2), (3) . . . . . . . . . . . . . . . . . . . . .13.22 (4) . . . . . . . . . . . . . . . . . . . . . . . . 13.22 (d) . . . . . . . . . . . . . . . . .  20.34, 20.67 (5)–(7) . . . . . . . . . . . . . . . . . . . . .13.22 337 . . . . . . . . . . . . . . . . . . . . . .  13.23; 20.38 (1)–(6) . . . . . . . . . . . . . . . . . . . . .13.23 (7) . . . . . . . . . . . . . . . . . . . . . . . . 13.22 338 . . . . . . . . . . . . . . . . .  1.101; 13.24; 20.38 (1)–(8) . . . . . . . . . . . . . . . . . . . . .13.24 Pt XVIII (ss 339–362) . . . . . . . . . . . .  3.25 s 339 . . . . . . . . . . . . . . . . .  2.45; 15.37, 15.55, 15.98, 15.113, 15.317

Table of statutes Gambling Act 2005 – contd s 340 . . . . . . . . . . . . . . . . . . . . . . .  1.104; 14.2 341 . . . . . . . . . . . . . . . . . . .  4.12; 5.11; 11.61; 15.266, 15.323; 26.59 (1)–(5) . . . . . . . . . 4.12; 5.11; 11.61; 26.59 (7) . . . . . . . . . . . . . . . . .  4.12; 5.11; 11.61; 15.266; 26.59 342 . . . . . . . . . . . . . . . . . . . . . . . . . . 1.23 343(3) . . . . . . . . . . . . . . . . . . . . . . . . 25.77 344 . . . . . . . . . . . . . . . . . . . . . .  22.18, 22.19 (1)(a) . . . . . . . . . . . . . . . . . . . . . .14.92 (c) . . . . . . . . . . . . . . . . . . . . . . 22.18 (2), (3) . . . . . . . . . . . . . . . . . . . . .22.18 346 . . . . . . . . . . . . . .  4.13; 5.12; 7.11, 7.69, 7.78, 7.81; 10.12; 11.62; 26.6, 26.9, 26.60 (1) . . . . . . . . . . . .  4.13; 5.12; 7.11, 7.62, 7.74, 7.78, 7.81; 11.62; 26.6, 26.60 (a) . . . . . . . . . . . . . . . . . . . .  4.13, 4.42 (k) . . . . . . . . . . . . . . . . . . . . . 26.60 (2) . . . . . . . . . . . .  5.12; 7.11, 7.62, 7.74, 7.78, 7.81; 11.62; 26.6, 26.60 347(1), (2) . . . . . . . . . . . . 4.13; 5.18; 26.61 349 . . . . . . . . . . . . . . . .  1.16, 1.77; 9.2, 9.11, 9.12; 10.9, 10.24, 10.74, 10.84, 10.90, 10.104, 10.109, 10.112; 11.16, 11.44; 14.94; 24.17, 24.18 (1) . . . . . . . . . . . . . . . . . . . . .  10.10; 26.9 (a), (b) . . . . . . . . . . . . . . . . . . 10.10 (2) . . . . . . . . . . . . . . . . . . . . . . . . 10.10 (3), (4) . . . . . . . . . . . . . . . . . . . . . 10.10 (6) . . . . . . . . . . . . . . . . . . . . . . . . 10.10 (7) . . . . . . . . . . . . . . . . . . . . . . . . 14.100 350 . . . . . . . . . . . . . . . . . . .  3.25, 3.26; 10.12 (1)–(3) . . . . . . . . . . . . . . . . . . . . .3.25 351(1)–(4) . . . . . . . . . . . . . . . . . . . . .3.26 353 . . . . . . . . . . . . . . . . .  2.48, 2.113, 2.116; 10.46; 14.58; 15.184, 15.250, 15.297, 15.298, 15.302; 22.8, 22.18; 23.27; 25.46, 25.50, 25.168; 26.5 (1) . . . . . . . . . . . .  2.112, 2.212; 4.5, 4.6, 4.28, 4.40; 5.30, 5.42, 5.47, 5.49, 5.51, 5.53, 5.54; 7.54; 10.9, 10.34; 11.1, 11.7; 12.42, 12.73; 15.182, 15.289, 15.295, 15.307; 22.18; 26.1, 26.6, 26.11, 26.19, 26.21, 26.24, 26.25, 26.28, 26.29 (2)(b) . . . . . . . . . . . . . .  15.314, 15.320 (j) . . . . . . . . . . . . . . . . . . . . . . 15.306 (3) . . . . . . . . . . . . . . . . . . . . .  4.17; 25.42 (c)(ii) . . . . . . . . . . . . .  25.169, 25.171 (4) . . . . . . . . . . . . . . . . . . . . .  2.229; 7.99 355(4) . . . . . . . . . . . . . . . . . . . . . . . . 14.10 356 . . . . . . . . . . . . . . . .  0.17; 2.45, 2.70; 12.1 (3) . . . . . . . . . . . . . . . . . . . . .  16.11; 20.5 (f), (g), (i) . . . . . . . . . . . . . . . 7.26

Gambling Act 2005 – contd s 356(4) . . . . . . . . . . . . . . . . . . . . . 16.11, 16.62 361(1), (2) . . . . . . . . . . . . . . . . . . . . .1.104 Sch 1 . . . . . . . . . . . . . .  2.47, 2.49, 2.53; 9.12 para 9 . . . . . . . . . . . . . . . . . . . . . . . 2.7, 2.53 Sch 2 . . . . . . . . . . . . . .  0.57; 1.95, 1.96; 15.31, 15.41, 15.44, 15.57, 15.58, 15.59, 15.60, 15.61, 15.63, 15.66, 15.69, 15.70, 15.76; 16.106, 16.107, 16.108 para 2 . . . . . . . . . . . . . .  15.59, 15.69, 15.71 (c) . . . . . . . . . . .  15.50, 15.60, 15.131, 15.133; 16.95 3 . . . . . . . . . . . . . .  15.59, 15.64, 15.71 4 . . . . . . . . . . . . .  15.59, 15.64; 16.108 5 . . . . . . . . . . . . .  15.59, 15.64; 16.108 (1) . . . . . . . . . . . . . . . . . . . . . 15.61 (2)(a) . . . . . . . . . . . . . . . . . . 15.62 (b) . . . . . . . . . . . . . .  15.65, 15.72 6 . . . . . . . . . . . . . . . . . . .  15.67; 16.95 7 . . . . . . . . . . . . . . . . . . . . . . . 15.67 8 . . . . . . . . . . . . . . . . . . .  15.80, 15.129 (1) . . . . . . . . . . . . . . . . .  15.57, 15.70 (b) . . . . . . . . . . . . . . . . . . 15.75 (i) . . . . . . . . . . . . . . . . 15.72 (ii) . . . . . . . . . . . . . . . . 15.74 (c) . . . . . . . . . . . . . . . . . . 15.77 (d) . . . . . . . . . . . . . . . . . . 15.80 (2) . . . . . . . . . . . . . . . . . . . . . 15.70 9 . . . . . . . . . . . . . . . . . . .  15.81; 16.107 Sch 3 . . . . . . . . . . . . . . . . . . . . . . .  1.95; 6.212 para 2 . . . . . . . . . . . . . . . . . . . . . . . 16.14 3 . . . . . . . . . . . . . . . . . . . . . . . 16.11 Sch 4 . . . . . . . . . . . . . . . . . . .  3.1, 3.7, 3.8, 3.9, 3.10; 6.84 para 1–4 . . . . . . . . . . . . . . . . . . . . . 3.9 5 . . . . . . . . . . . . . . . . . . . . . . . 3.9, 3.10 6, 7 . . . . . . . . . . . . . . . . . . . . . 3.9 8 . . . . . . . . . . . . . . . . . . . . . . . 3.9, 3.10 9–17 . . . . . . . . . . . . . . . . . . . . 3.9 Sch 5 . . . . . . . . . . . . . . . . . . . . . .  3.7, 3.8, 3.11 para 4 . . . . . . . . . . . . . . . . . . . . . . . 19.369 Sch 6 . . . . . . . . . . . . . .  3.7, 3.26, 3.27; 10.12 Pt I . . . . . . . . . . . . . . . . . .  3.25, 3.26; 16.14 Pt II . . . . . . . . . . . . . . . . . . . . . . . .  3.25, 3.26 Pt III . . . . . . . . . . . . . . . . . . . . . . . . 3.26 Pt IV . . . . . . . . . . . . . . . . . . . . . . . . 16.14 Sch 7 . . . . . . . . . . . . . . . . 1.22; 3.31; 6.81; 7.26, 7.27; 15.250, 25.142 para 1 . . . . . . . . . . . . . . . . . . . . . . . 7.26 (a)–(f) . . . . . . . . . . . . . . . . . . 7.26 2–6 . . . . . . . . . . . . . . . . . . . . . 7.26 7 . . . . . . . . . . . . . . . . . . . . . . .  7.26 8–17 . . . . . . . . . . . . . . . . . . . . 7.26 18, 19, 20 . . . . . . . . . . . . . . . .  7.26 21, 22 . . . . . . . . . . . . . . . . . . . 7.26 Sch 9 . . . . . . . . . . . . .  10.173, 10.213, 10.214; 14.46, 14.67, 14.89, 14.91, 14.104, 14.107 para 2 . . . . . . . . . . . . . . . . . . . . . . . 14.92 (1) . . . . . . . . . . . . . . . . . . . . . 14.107

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Table of statutes Gambling Act 2005 – contd Sch 9 – contd para 4 . . . . . . . . . . . . .  14.91, 14.94, 14.103, 14.105, 14.111 (1) . . . . . . . . . . . . . . . . . . . . . 10.213 (2)(c) . . . . . . . . . . . . . .  14.91, 14.109 5 . . . . . . . . . . .  10.125, 10.213; 14.94, 14.103, 14.105, 14.106, 14.109 (3)(a) . . . . . . . . . . . . . . . . . . 14.101 (b) . . . . . . . . . . . . . .  14.81, 14.104 6 . . . . . . . . . . . . . . . . . . .  14.98, 14.100 7 . . . . . . . . . . . . . . . . . . . . . . . 14.104 8 . . . . . . . . . . . . . . . . . . . . . . . 10.213 (4) . . . . . . . . . . . . . . . . . . . . . 10.213 9 . . . . . . . . . . . . . . . . . . . . . . . 10.214 10(3) . . . . . . . . . . . . . . . . . . . . 10.214 (4) . . . . . . . . . . . . . . . . . . . . 10.214 (b) . . . . . . . . . . . . . 10.214; 14.111 Sch 10 . . . . . . . . . . . . .  1.13, 1.17, 1.65, 1.82; 9.4; 14.120; 22.28; 24.1; 25.87, 25.113, 25.126, 25.144, 25.145; 26.30 para 2 . . . . . . . . . . . . . . . . . . . . . . . 25.128 (2) . . . . . . . . . . . . . . . . . . . . . 25.128 3 . . . . . . . . . . . . . . . . . . . . . . . 25.128 4 . . . . . . . . . . . . . . . . . . .  25.126; 26.30 5(a)–(d) . . . . . . . . . . . . . . . . . 25.129 6 . . . . . . . . . . . . . . . . . . . . . . . 25.130 7 . . . . . . . . . . . . . . . . . .  10.101; 25.130 8(1), (2) . . . . . . . . . . . . . . . . . 25.131 (3), (4) . . . . . . . . . . . . . . . . . 25.134 9 . . . . . . . . . . . . . . . . . . . . . . . 25.131 10 . . . . . . . . . . . . . . . . . . . . . . 1.17 (1)(a), (b) . . . . . . . . . . . . . . 25.133 (2)(a)–(c) . . . . . . . . . . . . . . 25.133 11(1) . . . . . . . . . . . . . . . . . . . . 25.135 (2)(a), (b) . . . . . . . . . . . . . . 25.135 12(a), (b) . . . . . . . . . . . . . . . . 25.136 13(1) . . . . . . . . . . . . . . . . . . . . 25.137 (2) . . . . . . . . . . . . . . . . . . . . 25.136 14 . . . . . . . . . . . . . . . . . . . . . . 25.137 15(1) . . . . . . . . . . . . . . . . . . . . 25.138 (2) . . . . . . . . . . . . . . . . . . . . 25.139 (3) . . . . . . . . . . . . . . . . . . . . 25.140 16 . . . . . . . . . . . . . . . . . . . . . . 25.141 17(1)–(3) . . . . . . . . . . . . . . . . 25.142 (5) . . . . . . . . . . . . . . . . . . . . 25.142 18 . . . . . . . . . . . . . . . . . . . . . . 25.136 (1) . . . . . . . . . . . . . . . . . . . . 25.143 (2)(a), (b) . . . . . . . . . . . . . . 25.143 (3), (4) . . . . . . . . . . . . . . . . 25.144 (5), (6) . . . . . . . . . . . . . . . . 25.145 19 . . . . . . . . . . . . . . . . . . . . . . 25.146 20(1), (2) . . . . . . . . . . . . . . . . 25.146 21 . . . . . . . . . . . . . . . . . . . . . . 25.147 22(1) . . . . . . . . . . . . . . . . . . . . 25.148 (2)(a)–(c) . . . . . . . . . . . . . . 25.149 (3) . . . . . . . . . . . . . . . . . . . . 25.150 (e) . . . . . . . . . . . . . . . . . 25.150 (4) . . . . . . . . . . . . . . . . . . . . 25.151 23(1), (2) . . . . . . . . . . . . . . . . 25.152 24 . . . . . . . . . . . . . . . . . . . . . . 25.126

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Gambling Act 2005 – contd Sch 11 . . . . . . . . . . . . .  1.98; 9.4; 6.9; 15.239, 15.266, 15.296, 15.304, 15.321; 18.166, 18.171 Pt I (paras 1–8) . . . . . . . . . . . . . . . 5.57 para 1 . . . . . . . . .  15.169, 15.267, 15.321 (a), (b) . . . . . .  2.153, 2.248, 2.252 2 . . . . . . . . . . . . . . . . . 15.267, 15.321 3 . . . . . . . . . . . . . . . . . . . . . 15.267 4 . . . . . . . . . . . . . . . . . 15.267, 15.321 5 . . . . . . . . . . . . . . . . . 15.267, 15.321 6 . . . . . . . . . . . . . . . . . . . . . 15.268 7 . . . . . . . . . . . . . . . . . . . . . 15.269 (1) . . . . . . . . . . . . . . . . . . . 15.308 Pt II (paras 9–19) . . . . 5.57; 15.119, 15.271; 18.171 para 10 . . . . . . . . . . . . . .  15.169, 15.266 (1) . . . . . . . . . . . . . . . . . . 15.272 (a), (b) . . .  2.153, 2.248, 2.252 (2) . . . . . .  15.272, 15.273, 15.322 (3) . . . . . . . . . . . . . . . . . . 15.272 (4) . . . . . . . . . . . . . . . . . . 15.59 11 . . . . . . . . . . . . . .  15.169, 15.285 (1)(a), (b) . . .  2.153, 2.248, 2.252 12 . . . . . . . . . . . . . . . . . . . . 15.286 (1)(a), (b) . . . . . . . . . . . . 2.153 13 . . . . . . . . . . . . . . . . . . . . 15.322 (1) . . . . . . . . . . . .  15.272, 15.321 (2) . . . . . .  15.285, 15.286, 15.293 14 . . . . . . . . . . . . . . . . . . . . 15.292 15 . . . . . . . . . . . . . . . . . . . . 15.289 16(1) . . . . . . . . . . . . . . . . . . 15.290 (2) . . . . . . . . . . . . . .  15.74, 15.290 17(a) . . . . . . . . . . . . . . . . . . 15.294 18 . . . . . . . . . . . . . . . . . . . . 15.287 (c) . . . . . . . . . . . . .  15.289, 15.308 19 . . . . . . . . . . . . . . . . . . . . 15.176 Pt III (paras 20–29) . . . . . . . . . . . . 15.119 para 20 . . . . . . . . . . . . . . . . . 1.99; 15.296 (1)(a) . . . . . .  2.153, 2.248, 2.252 (b) . . . . . . 2.153, 2.248, 2.252; 15.297 (3)(a), (b) . . . . . . . . . . . . 15.297 21 . . . . . . . . . . . . . . . . . 1.99; 15.298 22 . . . . . . . . . .  1.99; 15.298; 18.171 23, 24 . . . . . . . . . . . . . . . . . 15.299 25, 26 . . . . . . . . . . . . . . . . . 15.86 27, 28 . . . . . . . . . . . . . . 1.99; 15.298 29 . . . . . . . . . . . . . . . . . . . . 15.298 30(1)(a), (b) . . .  2.153, 2.248, 2.252 Pt IV (paras 30–40) . . 1.13; 15.177, 15.201, 15.240, 15.242, 15.243 para 30 . . . . . . . . . . . . . . . . . . . . 15.240 31 . . . . . . . . . . . . . . . . . . . . 15.201 (1) . . . . . . . . . . . . . . . . . . 15.241 (2)–(5) . . . . . . . .  15.201, 15.242 32 . . . . . . . .  15.240, 15.321, 15.322 33 . . . . . . . . . . . . . . . . . . . . 15.244 34 . . . . . . . . . . . . . . . . . . . . 15.244 35(1), (2) . . . . . . . . . . . . . . 15.244 36 . . . . . . . . . . . . . . . . . . . . 15.245 (2) . . . . . . . . . . . . . . . . . . 15.246 37 . . . . . . . . . . . . . . . . . . . . 15.247

Table of statutes Gambling Act 2005 – contd Sch 11 – contd Pt IV – contd para 38 . . . . . . . . . . . . . . . . . 15.249; 24.1 39 . . . . . . . . . .  15.265, 15.325; 24.1 (2) . . . . . . . . . . . . . . . . . . 15.262 (3) . . . . . . . . . . . . . . . . . . 15.263 (4)(b) . . . . . . . . . . . . . . . 15.263 40 . . . . . . . . . . . . . . . . . . . . 15.263 Pt V (paras 41–56) . . . 15.249, 15.324; 26.49 para 4 . . . . . . . . . . . . . . . . . . . . . 15.105 41(c) . . . . . . . . . . . . . . . . . . 24.1 42 . . . . . . . . . . . . . . . . . . . . 15.249 (2) . . . . . . . . . . . . . . . . . . 15.249 43 . . . . . . . . . . . . . . . . . . . . 15.249 44, 45 . . . . . . . . . . . . . . . . . 15.254 46 . . . . . . . . . . . . . . . . . . . . 15.254 (1) . . . . . . . . . . . . . . . . . . 15.254 47–49 . . . . . . . . . . .  15.250, 15.251 50 . . . . . . . . . . . . . . . . . . . . 15.251 (1) . . . . . . . . . . . . . . . . . . 15.255 (2) . . . . . . . . . . . .  15.255, 15.256 51(2) . . . . . . . . . . . . . . . . . . 15.256 (3) . . . . . . . . . . . . . . . . . . 15.258 52 . . . . . . . . . . . . . . . . . . . .  15.259 53 . . . . . . . . . . . . . . . . . . . . 15.259 54 . . . . . . . . . . . . . . . . . . . . 15.260 (2) . . . . . . . . . . . . . . . . . . 15.261 (4) . . . . . . . . . . . . . . . . . . 15.260 55 . . . . . . . . . . . . . . . . . . . . 15.264 (1)(a) . . . . . . . . . . . . . . . 15.50 56 . . . . . . . .  15.249, 15.254, 15.261 61 . . . . . . . . 15.292, 15.298, 15.301, 15.314 62 . . . . . . . . . . . . . .  15.285, 15.296 63 . . . . . . . .  15.295, 15.297, 15.302 Sch 12 . . . . . . . . . . . . .  1.13, 1.18; 4.23, 4.56; 9.4; 12.25, 12.28, 12.39, 12.41, 12.43, 12.44, 12.49, 12.52, 12.56, 12.58, 12.58, 12.66, 12.71; 14.120; 25.64; 26.42, 26.43 para 1(1) . . . . . . . . . . . . . . . . . . . . . 12.25 (2) . . . . . . . . . . . . . . . . .  12.25, 12.28 2 . . . . . . . . . . . . . . . . . . . . . . . 12.48 (a), (b) . . . . . . . . . . . . . . . . . 12.42 (c), (d) . . . . . . . . . . . . . . . . . 12.42 (e) . . . . . . . . . . . . . . . . . . . . . 12.42 3(1), (2) . . . . . . . . . . . . . . . . . 12.43 4 . . . . . . . . . . . . . . . . . . . . . . . 12.43 5 . . . . . . . . . . . . . . . . . . . . . . . 12.44 6 . . . . . . . . . . . . . . . . . . . . . . . 10.101 (1)(a)(i), (ii) . . . . . . . . . . . . . 12.44 (b) . . . . . . . . . . . . . . . . . . 12.44 (c) . . . . . . . . . . . . . . . . . . 12.44 (d) . . . . . . . . . . . . . .  12.44, 12.67 (2) . . . . . . . . . . . . . . . . . . . . . 12.44 7 . . . . . . . . . . . . . . . . . . . . . . . 10.28 (1) . . . . . . . . . . .  12.45, 12.50, 12.56 (2) . . . . . . . . . . .  12.45, 12.50, 12.56 8(1)(a), (b) . . . . . . . . . . .  12.46, 12.50 (2) . . . . . . . . . . . . . . . . .  12.46, 12.50 9 . . . . . . . . . . . . . . . . . . . . 12.47, 12.56

Gambling Act 2005 – contd Sch 12 – contd para 10 . . . . . . . . . . . . .  12.48, 12.58, 12.59 (2) . . . . . . . . . . . . . . . . . . . . 12.48 (b) . . . . . . . . . . . . . . . . . 12.50 (3)(a)–(c) . . . . . . . . . . . . . . 12.49 (4) . . . . . . . . . . . . . . . . . . . . 12.51 11 . . . . . . . . . . . . . . . . . . . . . . 12.52 (1)(a) . . . . . . . . . . . . . . . . . 12.52 12 . . . . . . . . . . . . . . . . . . . . . . 12.53 13(1), (2) . . . . . . . . . . . . . . . . 12.53 14(1)(a), (b) . . . . . . . . . . . . . . 12.54 (2), (3) . . . . . . . . . . . . . . . . 12.54 15(1) . . . . . . . . . . . . . . . . . . . . 12.55 (2)(a), (b) . . . . . . . . . . . . . . 12.55 (3) . . . . . . . . . . . . . . . . . . . . 12.55 (4)(a), (b) . . . . . . . . . . . . . . 12.55 (5) . . . . . . . . . . . . . . . . . . . . 12.56 (6), (7) . . . . . . . . . . . . . . . . 12.55 16(1)–(4) . . . . . . . . . . . . . . . . 12.57 17 . . . . . . . . . . . . . . . . . . . . . . 12.58 (1)(a), (b) . . . . . . . . . . . 12.58, 12.66 (2)(a), (b) . . . . . . . . . . . . . . 12.58 (c) . . . . . . . . . . . . . . . . . 12.58 18(1) . . . . . . . . . . . . . . . . . . . . 12.59 (2) . . . . . . . . . . . . . . . . . . . . 12.59 19(1), (2) . . . . . . . . . . . . . . . . 12.60 20 . . . . . . . . . . . . . . . . . . . 12.61, 12.62 21 . . . . . . . . . . . . . . . . . . . . . . 12.71 (1)(a), (b) . . . . . . . . . . . . . . 12.62 (2) . . . . . . . . . . . . . . . . . . . . 12.67 (a)–(c) . . . . . . . . . . . . . . 12.62 (d) . . . . . . . . . . . . . . 12.62, 12.67 (4)(a), (b) . . . . . . . . . . . . . . 12.62 (5)(c) . . . . . . . . . . . . . . . . . 12.62 22(1), (2) . . . . . . . . . . . . . . . . 12.63 23 . . . . . . . . . . . . . . . . . . . . . . 12.65 (1) . . . . . . . . . . . . . . . . . . . . 12.64 (2)(a)–(c) . . . . . . . . . . . . . . 12.64 (3) . . . . . . . . . . . . . . . . . . . . 12.65 (4) . . . . . . . . . . . . . . . . . . . . 12.65 (5) . . . . . . . . . . . . . . . . . . . . 12.65 24(1) . . . . . . . . . . . . . . . . . . . . 12.66 (2)(a), (b) . . . . . . . . . . . . . . 12.66 (3) . . . . . . . . . . . . . . . . . . . . 12.66 (4) . . . . . . . . . . . . . . . . . . . . 12.66 (5) . . . . . . . . . . . . . . . . . 12.58, 12.66 25 . . . . . . . . . . . . . . . . . . . 12.67, 12.68 (1) . . . . . . . . . . . . . . . . . . . . 12.67 (2) . . . . . . . . . . . . . . . . . . . . 12.67 (4) . . . . . . . . . . . . . . . . . . . . 12.67 (5)(a)–(c) . . . . . . . . . . . . . . 12.68 (6)(a)–(e) . . . . . . . . . . . . . . 12.69 (8) . . . . . . . . . . . . . . . . . . . . 12.67 26(1)(a) . . . . . . . . . . . . . . . . . 12.70 (b) . . . . . . . . . . . . . . . . . 12.70 (c) . . . . . . . . . . . . . . . . . 12.70 (2)–(4) . . . . . . . . . . . . . . . . 12.70 27 . . . . . . . . . . . .  1.18; 10.101; 12.44 (a), (b) . . . . . . . . . . . . . 12.44, 12.71 28 . . . . . . . . . . . . . . . . . . . . .  9.4; 12.71 (2) . . . . . . . . . . . . . . . . . . . . 9.4 29 . . . . . . . . . . . . . . . . . . . . . . 12.42

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Table of statutes Gambling Act 2005 – contd Sch 12 – contd para 30 . . . . . . . . . . . .  12.42, 12.52, 12.54, 12.57, 12.62 Sch 13 . . . . . . . . . . . .  1.13, 1.18; 9.1, 9.4; 10.9; 12.39, 12.72, 12.74, 12.77, 12.82, 12.83, 12.84, 12.87, 12.89, 12.95, 12.100; 14.120; 24.1; 25.66 para 1 . . . . . . . . . . . . . . . .  9.4; 12.37, 12.87 (1) . . . . . . . . . . . . . . . . . . 12.72; 26.34 (2) . . . . . . . . . . . . . . . . . . . . . 12.72 (a)–(e) . . . . . . . . . . . . . . . 12.73 2 . . . . . . . . . . . . . . . . . . . . . . . 12.87 3 . . . . . . . . . . . . . . . .  9.4; 12.74, 12.87 (d) . . . . . . . . . . . . . . . . . . . . 12.101 4 . . . . . . . . . . . . .  10.101; 12.75, 12.87 (1) . . . . . . . . . . . . . . . . . . . . . 12.75 (2)(a), (b) . . . . . . . . . . . . . . . 12.75 (c)(i)–(iii) . . . . . . . . . . . . 12.75 5 . . . . . . . . . . . . . . . . . . . . . . . 12.87 (1) . . . . . . . . . . . . . . . . . . . . . 12.76 (2), (3) . . . . . . . . . . . . . . . . . 12.76 6 . . . . . . . . . . . . . . . . . . . . . . . 12.87 (1) . . . . . . . . . . . . . . . . . . . . . 12.77 (2)(a)(i)–(iii) . . . . . . . . . . . . 12.77 (b) . . . . . . . . . . . . . . . 12.77, 12.95 (3) . . . . . . . . . . . . . . . . . . . . . 12.78 (4) . . . . . . . . . . . . . . . . . . . . . 12.78 7 . . . . . . . . . . . . . . . . . . . . . . . 12.87 (1) . . . . . . . . . . . . . . . . . . . . . 12.79 (a)–(d) . . . . . . . . . . . . . . . 12.79 (2)(a), (b) . . . . . . . . . . . . . . . 12.80 8 . . . . . . . . . . . . . . . . . . . . . . . 12.81 9(1)(a), (b) . . . . . . . . . . . . . . . 12.82 (2) . . . . . . . . . . . . . . . . . . . . . 12.82 10(1), (2) . . . . . . . . . . . . . . . . 12.81 11(1)–(5) . . . . . . . . . . . . . . . . 12.83 12 . . . . . . . . . . . . . . . . . . . . . . 12.84 13(a), (b) . . . . . . . . . . . . . . . . 12.85 14 . . . . . . . . . . . . . . . . . . . . . . 12.86 15(1) . . . . . . . . . . . . . . . . . . . . 12.87 (2) . . . . . . . . . . . . . . . . . . . . 12.87 16 . . . . . . . . . . . . . . . . . . . . . . 12.101 (1)(a)–(d) . . . . . . . . . . . . . . 12.88 (2)(a)–(d) . . . . . . . . . . . . . . 12.89 (3) . . . . . . . . . . . . . . . . . . . . 12.90 (4)(a), (b) . . . . . . . . . . . . . . 12.90 17(1), (2) . . . . . . . . . . . . . . . . 12.91 18 . . . . . . . . . . . . . . . . . . . . . . 12.93 (1) . . . . . . . . . . . . . . . . . . . . 12.92 (2)(a)–(c) . . . . . . . . . . . . . . 12.92 (3) . . . . . . . . . . . . . . . . . . . . 12.93 (4) . . . . . . . . . . . . . . . . . . . . 12.93 (5) . . . . . . . . . . . . . . . . . . . . 12.93 19(1)(a)(i), (ii) . . . . . . . . . . . . 12.94 (b) . . . . . . . . . . . . . . . . . 12.94 (2), (3) . . . . . . . . . . . . . . . . 12.95 (4) . . . . . . . . . . . . . . . . . . . . 12.95 20(1)(a), (b) . . . . . . . . . . . . . . 12.96 (2), (3) . . . . . . . . . . . . . . . . 12.96 21 . . . . . . . . . . . . .  12.87, 12.97, 12.98 (1)(a), (b) . . . . . . . . . . . . . . 12.97

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Gambling Act 2005 – contd Sch 13 – contd para 21(2)(a) . . . . . . . . . . . . . . . . . 12.98 (b) . . . . . . . . . . . . . . . . . 12.98 (c) . . . . . . . . . . . . . . 12.90, 12.98 (3)(a) . . . . . . . . . . . . . . . . . 12.99 (b) . . . . . . . . . . . . . . . . . 12.99 (c), (d) . . . . . . . . . . . . . . 12.99 (e) . . . . . . . . . . . . . . . . . 12.99 (4) . . . . . . . . . . . . . . . . . . . . 12.97 (5) . . . . . . . . . . . . . . . . . . . . 12.95 22(1)(a)–(c) . . . . . . . . . . . . . . 12.100 (2), (3) . . . . . . . . . . . . . . . . 12.100 (4) . . . . . . . . . . . . . . . . . . . . 12.100 23 . . . . . . . . . . . .  12.73, 12.79, 12.82, 12.83, 12.89 Sch 14 . . . . . . . . . . . . . . .  1.17, 1.90; 4.30; 9.4; 14.37; 22.5, 22.23; 26.38 para 3 . . . . . . . . . . . . . . . . . . . . . . . 22.23 4 . . . . . . . . . . . . . . . . . . . . . . . 22.23 (1) . . . . . . . . . . . . . . . . . . . . . 1.18 5 . . . . . . . . . . . . . . . . . . . . . . . 22.23 6 . . . . . . . . . . . . . . . . . . . . . . . 22.23 (e) . . . . . . . . . . . . . . . . . . . . . 22.23 7 . . . . . . . . . . . . . . . . . . . . . . . 9.4 8 . . . . . . . . . . . . . .  1.17; 10.28, 10.101 (1)–(3) . . . . . . . . . . . . . . . . . 22.23 9–13 . . . . . . . . . . . . . . . . . . . . 22.23 14–17 . . . . . . . . . . . . . . . . . . . 22.24 18 . . . . . . . . . . . . . . . . . . . . . . 22.23 21–24 . . . . . . . . . . . . . . . . . . . 22.24 Sch 15 . . . . . . . . . . . . .  4.67; 5.27; 23.9, 23.10, 23.18; 26.26 Pt I (paras 1–5) . . . . . .  5.47, 5.49; 19.252 para 1 . . . . . . . . . . . . . . . . . . . . . 23.19 2(1) . . . . . . . . . . . .  4.34, 4.68; 5.24; 23.22; 26.26 (2) . . . . . . . . . . . .  4.34, 4.68; 5.24; 23.24; 26.26 (a), (b) . . . . . . . . . . . . . 23.24 3 . . . . . . . . . . . . . . . . . . . . . 23.19 (1), (2) . . . . . . . .  4.34, 4.68; 5.24; 23.20; 26.26 4 . . . . . . . . . . . . . . . . .  23.19, 23.21 (1), (2) . . . . . . . .  4.34, 4.68; 5.24; 23.21; 26.26 5 . . . . . . . . . . . . . .  4.34, 4.68; 5.24; 23.19; 26.26 Pt II (paras 6–8) . . . . . . . . . . . . . .  5.47, 5.49 para 6 . . . . . . . . . . . . . .  4.35, 4.69; 5.27; 23.10; 26.26 7(1), (2) . . .  4.35, 4.69; 5.27; 26.26 8 . . . . . . . . .  4.25, 4.69; 5.27; 23.11, 23.12; 26.26 Sch 16 para 3(3) . . . . . . . . . . . . . . . . . . . . . 0.79 (5)(a) . . . . . . . . . . . . . . . . . . 14.49 17 . . . . . . . . . . . . . . . . . .  14.154, 14.72 Sch 17 . . . . . . . . . . . . .  0.17; 1.104; 2.45, 2.70; 6.37; 12.1; 14.2; 15.175; 16.11, 16.62 para 17 . . . . . . . . . . . . . . . . . . . . . . 10.132

Table of statutes Gambling Act 2005 – contd Sch 18 Pt I (paras 1–4) . . . . . . . . . . . . . . . 14.56 para 5 . . . . . . . . . . . . . . . . . . . . . 14.43 Gambling (Licensing and Advertis­ ing) Act 2014 . . . . . . . .  1.3, 1.4, 1.47, 1.51, 1.100; 4.17; 6.12; 17.13, 17.105; 18.2, 18.9, 18.17, 18.25, 18.85 s 3(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 17.109 4(3) . . . . . . . . . . . . . . . . . . . . . . . . . . 17.109 Gaming Act 1664 . . . . . . . . . . . . . . . .  0.16, 0.17 s 1, 2, 5 . . . . . . . . . . . . . . . . . . . . . . . . 0.17 Gaming Act 1710 . . . . . 0.6, 0.17; 20.95, 20.106 s 1 . . . . . . . . . . . . . . . . . . . . . . . . .  0.17; 20.93 2, 5 . . . . . . . . . . . . . . . . . . . . . . . . . .  0.17 Gaming Act 1739 . . . . . . . . . . . . . . . . . 0.19 Gaming Act 1744 . . . . . . . . . . . . . . . . . 0.19 Gaming Act 1802 . . . . . . . . . . . . . . . . . 15.318 Gaming Act 1835 . . . . . . . . . . . . . .  0.17; 1.101 s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.106 Gaming Act 1845 . . . . . . .  0.6, 0.7, 0.13, 0.27, 0.28, 0.29; 2.68, 2.99; 20.39, 20.42, 20.73, 20.74, 20.77, 20.95 s 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.28 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9, 0.28 18 . . . . . . . . . . . . . . .  0.30; 1.101; 2.22, 2.59, 2.69, 2.70, 2.87, 2.90; 20.4, 20.7, 20.13, 20.72, 20.73, 20.76 Gaming Act 1854 . . . . . . .  2.224; 20.39, 20.77, 20.95 Gaming Act 1892 . . . . . . . .  2.68; 20.39, 20.77, 20.95 s 1 . . . . . . . . . . . . . . . .  1.101; 2.59, 2.69, 2.70; 20.87, 20.98 Gaming Act 1968 . . . . .  0.1, 0.2, 0.3, 0.4, 0.10, 0.39, 0.52, 0.53, 0.54, 0.55, 0.56, 0.76, 0.77, 0.79, 0.81, 0.84, 0.93, 0.94, 0.95, 0.112, 0.118, 0.119; 1.10, 1.12, 1.22, 1.52, 1.90, 1.100; 2.169, 2.192, 2.200, 2.202, 2.204, 2.205, 2.230, 2.239; 6.1, 6.15, 6.39, 6.136; 7.26; 10.1; 12.1; 14.1, 14.3, 14.7, 14.8, 14.9, 14.10, 14.11, 14.13, 14.17, 14.19, 14.20, 14.21, 14.23, 14.24, 14.27, 14.30, 14.32, 14.39, 14.40, 14.44, 14.45, 14.49, 14.56, 14.57,

Gaming Act 1968 – contd 14.64, 14.65, 14.66, 14.67, 14.70, 14.82, 14.94, 14.114, 14.118, 14.119, 14.120, 14.126, 14.131, 14.141, 14.142, 14.151, 14.164, 14.173, 14.181, 14.25, 14.28, 14.31, 14.43, 14.44, 14.207, 14.44, 14.49, 14.58, 14.63, 14.93, 14.101, 14.105; 15.174; 18.7, 18.51; 19.371; 20.39, 20.77, 20.85, 20.94, 20.95; 22.2, 22.4; 23.13, 23.15; 25.6, 25.9, 25.12, 25.24, 25.31, 25.59, 25.61, 25.62, 25.107; 27.19 s 1(2)(b) . . . . . . . . . . . . . . . . . . . . . . . 0.90 2 . . . . . . . . . . . . . . . . . . . . . . . . .  0.77; 23.14 (1)(a)–(c) . . . . . . . . . . . . . . . . . . . . 23.14 (2) . . . . . . . . . . . . . . . . . . . . . .  0.119; 23.24 3 . . . . . . . . . . . . . . . . . . . . .  0.81, 0.85; 23.13 4 . . . . . . . . . . . . . . . . . . . . .  0.85, 0.87; 23.13 5 . . . . . . . . . . . . . . . . . . .  0.85, 0.119; 23.13 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.13 (1), (3) . . . . . . . . . . . . . . . . . . . . . . .14.93 Pt II (ss 9–25) . . . . . . .  0.55, 0.86, 0.88, 0.89, 0.90, 0.95; 2.204, 2.205; 14.28, 14.35, 14.89; 19.334; 22.4; 25.8 s 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.205 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.86 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 0.88 12 . . . . . . . . . . . . . . . . .  0.118, 0.121; 2.205; 14.151, 14.74; 17.1, 17.6 (1) . . . . . . . . . . . . . . . . . .  0.79, 0.81; 14.99 (2) . . . . . . . . . . . . . . . . . . . . . .  0.79, 0.81 (a) . . . . . . . . . . . . . . . . . . . . . . .0.81 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 0.79 (6) . . . . . . . . . . . . . . . . . . . . . . . . . 0.88 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.77 14 . . . . . . . . . . . . . . . . . . . . . . .  19.32, 19.33 14(2)(a) . . . . . . . . . . . . . . . . . . . . . . .0.81 (b) . . . . . . . . . . . . . . . . . . . . . . 0.88 16 . . . . . . . . . . . . . .  0.79; 6.109, 6.110, 6.117; 14.131; 20.94, 20.100 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.99 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.145 19 . . . . . . . . . . . . . . . . . . . .  0.79; 1.69; 14.79 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.99 (2) . . . . . . . . . . . . . . . . . . . . . .  0.81; 2.193 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 0.81 (5) . . . . . . . . . . . . . . . . . . . . . . . . . 14.74 (6) . . . . . . . . . . . . . . . . . . . . . . . . . 14.101 21 . . . . . . . . . . . . . . . . .  14.56, 14.184, 14.35, 14.36, 14.283; 19.32, 19.33; 22.4 (2)(a), (c) . . . . . . . . . . . . . . . . . . . 22.4 24 . . . . . . . . . . . . . . . . . . . . . . .  17.94; 25.66 Pt III (ss 26–39) . . . . . . . 0.55, 0.89, 0.91, 0.92, 0.95, 0.97; 2.191; 19.334; 25.8, 25.9, 25.10

lvii

Table of statutes Gaming Act 1968 – contd s 26 . . . . . . . . . . . . . . . . . . . . .  0.92; 1.61; 22.7 (1) . . . . . . . . . . . . . . . . . . . . . . 25.24, 25.36 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 22.7 27 . . . . . . . . . . . . . . . . . 0.56, 0.94; 1.66; 25.9, 25.103 28 . . . . . . . . . . . . . . . . . . . . .  0.56, 0.94; 25.9 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.95 31 . . . . . . . . . . . . . . . 0.89, 0.95; 14.56, 14.35 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 14.34 (3), (5) . . . . . . . . . . . . . . . . . . . . . .0.95 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.95 34 . . . . . . . . . . . . . .  0.112; 1.30, 1.65; 14.34, 14.35, 14.38; 22.2, 22.32; 25.8, 25.79 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 25.70 (a), (aa) . . . . . . . . . . . . . . . . . . 0.97 (c) . . . . . . . . . . . . . . . . .  0.82, 0.97; 22.2 (d) . . . . . . . . . . . . . . . . . . . . . . 0.97 (2), (3) . . . . . . . . . . . . . . . . . . . . . .0.96 (5A), (5B) . . . . . . . . . . . . . . . . . . . 0.98 (5C) . . . . . . . . . . . . . . . . . . . . . .  0.96, 0.98 (5E) . . . . . . . . . . . . . . . . .  0.98; 1.64; 25.66 (b) . . . . . . . . . . . . . . . . . . . . . 0.99 40 . . . . . . . . . . . . . .  0.86, 0.87; 14.24, 14.89 (1)(a)(ii) . . . . . . . . . . . . . . . . . . . . 0.87 41 . . . . . . . . . . . . . . . . .  0.86, 0.89, 0.90, 0.91 42 . . . . . . . . . . . . . . . . . . . . . . .  0.118; 15.309 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 14.32 51A(1) . . . . . . . . . . . . . . . . . . . . . . . 0.90 52 . . . . . . . . . . . . .  0.5; 2.2, 2.5, 2.168, 2.192, 2.221, 2.222, 2.228 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 2.168 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 0.85 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 2.250 (6) . . . . . . . . . . .  2.201, 2.208, 2.209, 2.210 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.119 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.3 Sch 1 . . . . . . . . . . . . .  3.8; 15.187, 15.188; 25.8 Sch 2 . . . . . . . . . . . . . . . . . . . . . . . . . .  para 1 . . . . . . . . . . . . . . . . .  0.55, 0.78; 25.8 3 . . . . . . . . . . . . . . . . . . . . . .  0.77; 14.3 4 . . . . . . . . . . . . . . . . . . . . . .  0.77; 14.3 (5) . . . . . . . . . . . . . . .  0.77; 6.58; 14.3 (6) . . . . . . . . . . . . . . . . . . . . . 6.58 5 . . . . . . . . . . . . . . . . . . . . . . . 0.79 18 . . . . . . . . . .  0.78; 10.2; 14.3, 14.25 (1) . . . . . . . .  10.110; 14.24, 14.105 (ii) . . . . . . . . . . . . . . . . . 0.109 19 . . . . . . . . . . . . . . . . . . . . . . 14.3 20 . . . . . . . . . . . . . . . . . . . . . . 14.3 (1) . . . . . . . . . . . . . . . . . . . . 10.2 19, 20 . . . . . . . . . . . . . . . . . . . 0.78 21 . . . . . . . . . . . . . . . . . . . . .  0.78; 14.3 2, 23 . . . . . . . . . . . . . . . . . . . . 14.3 25(3) . . . . . . . . . . . . . . . . . . . . 1.53 Sch 3 . . . . . . . . . . . . . . . . . . . . . . . . . . 0.86 para 7, 18 . . . . . . . . . . . . . . . . . . . . 0.88 Sch 5 Pt I . . . . . . . . . . . . . . . . . . . . . . . . . 0.79 Sch 6 . . . . . . . . . . . . . . . . . . . . . . . . .  0.56; 25.9 Sch 7 para 8 . . . . . . . . . . . . . . . . . . . . . . . 0.95

lviii

Gaming Act 1968 – contd Sch 9 . . . . . . . . . . . . . . . . . . . .  0.56; 10.1; 25.8 para 1(a) . . . . . . . . . . . . . . . . . . . . . 0.99 3 . . . . . . . . . . . . . . . . . . . . . . . 0.97 5(1A) . . . . . . . . . . . . . . . . . . . 0.98 10A . . . . . . . . . . . . . . . . . . . . . 0.99 10B(3) . . . . . . . . . . . . . . . . . . 0.98 Gaming (Amendment) Act 1987 s 1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 14.145 Gaming and Lotteries Act 1970 s 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.144 Gaming (Bingo) Act 1985 . . . . . .  2.187; 14.98, 14.268 s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.193 Gaming Houses Act 1854 . . . .  0.28, 0.29, 0.41 s 4 . . . . . . . . . . . . . . . . . . . . . . . .  2.189, 2.224 Health Act 2006 . . . . . . . . . . . . . . . . . . 14.281 Health and Safety at Work etc Act 1974 s 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.5 Horserace Betting and Olympic Lottery Act 2004 . . . . . . .  0.33, 0.61, 0.104; 16.2, 16.6, 16.9, 16.15, 16.31, 16.67, 16.69, 16.86; 19.430 s 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13.13 Pt III (ss 21–37) . . . . 16.6, 16.13, 16.59, 16.67 s 21 . . . . . . . . . . . . . . . . . . . . . . .  0.104; 16.10 21(1) . . . . . . . . . . . . . . . . . . . . . . . . . 16.22 (2) . . . . . . . . . . . . . . . . . . . . .  16.17, 16.59 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 16.17 22(1) . . . . . . . . . . . . . . . . . . . . . . . . . 16.10 (2) . . . . . . . . . . . . . . . . . . . . .  16.13, 16.67 (3)(b) . . . . . . . . . . . . . . . . . . . . . . 16.22 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 16.22 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.68 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.13 (1) . . . . . . . . . . . . . . . . . . . . .  16.10, 16.17 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 16.36 25 . . . . . . . . . . . . . . . . . . 16.13, 16.67, 16.68, 16.69, 16.71 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 16.70 (2), (3) . . . . . . . . . . . . . . . . . . . . . .16.70 26(1) . . . . . . . . . . . . . . . . . . . . . . . . . 16.72 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 16.72 (4)(a) . . . . . . . . . . . . . . . . . . . . . . .16.10 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.68 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.68 (3)(a) . . . . . . . . . . . . . . . . . . . . . . .16.10 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.86 30 . . . . . . . . . . . . . . . . . . . . . . .  16.87, 16.92 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 16.86 (6) . . . . . . . . . . . . . . . . . . . . . . . . . 16.86 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.92 32(2)(a)(i) . . . . . . . . . . . . . . . . . . 16.13, 16.67 (3)(a) . . . . . . . . . . . . . . . . . . . . . . .16.10

Table of statutes Horserace Betting and Olympic Lottery Act 2004 – contd s 33(1) . . . . . . . . . . . . . . . .  16.86, 16.87, 16.92 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 16.86 34(1) . . . . . . . . . . . . . . . . . . . . . . . . . 16.16 (2) . . . . . . . . . . . . . . . . . . . . .  16.13, 16.67 (3) . . . . . . . . . . . . . . . . . . . . .  16.16, 16.17 (5) . . . . . . . . . . . . . . . . . . . . . . . . . 16.36 (6) . . . . . . . . . . . . . . . . . . . . .  16.51, 16.68 (7) . . . . . . . . . . . . . . . .  16.13, 16.59, 16.67 (8) . . . . . . . . . . . . . . . . . . . . . . . . . 16.68 (9)(b) . . . . . . . . . . . . . . . . . . . . . . 16.69 (11) . . . . . . . . . . . . . . . . . . . .  16.67, 16.68 Pt IV (ss 38–42) . . . . . . . .  16.6, 16.13, 16.15 s 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.6 Sch 1 . . . . . . . . . . . . . . . . . . . . . . . . . . 16.17 Sch 2 . . . . . . . . . . . . . . . . . . . . . . . . . . 16.17 Sch 3 . . . . . . . . . . . . . . . . . . . . . . . . . . 16.17 Sch 5 . . . . . . . . . . . . . . . . . . . . . .  16.6, 16.86 para 1 . . . . . . . . . . . . . . . . . . . . . . . 16.86 Sch 6 . . . . . . . . . . . . . . . . . . . . . . . . . . 16.6 Horserace Betting Levy Act 1969 s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.416 2, 3 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.419 Horserace Betting Levy Act 1981 s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.420 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.421 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.422 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . 19.422 (6), (7) . . . . . . . . . . . . . . . . . . . . . . .19.423 Horserace Totalisor and Betting Levy Boards Act 1972 . . . . . . . . . . . . . . 2.20 s 1(1)(b) . . . . . . . . . . . . . . . . . . . . . . . 2.20 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.413 Horserace Totalisor Board Act 1997 . . 2.20 s 1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 0.67 Housing Act 1985 . . . . . . . . . . . . . . . . . 10.99 Housing Act 1988 . . . . . . . . . . . . . . . . . 23.23 Hovercraft Act 1968 . . . . . . . . . . . . . .  4.40; 5.42 Human Rights Act 1998 . . . .  6.129; 8.35, 8.37; 14.63; 19.407, 19.408; 20.53 s 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.99 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 10.99 Immigration Act 1971 s 25(1) . . . . . . . . . . . . . . . . . . . . . . . . . 2.159 Income and Corporation Taxes Act 1988 s 6 . . . . . . . . . . . . . . . . . . . . . . . . . 19.37, 19.39 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . 19.37 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.37 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 19.37 18 Sch D Case I . . . . . . . . . . . . . . . . 19.39

Income and Corporation Taxes Act 1988 – contd s 18 Sch D Case VI . . . . . . . . . . . . . . 19.51 768 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.313 839 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.309 Income Tax Act 2007 s 3, 6 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.37 Income Tax (Trading and Other Income) Act 2005 s 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.39 Insolvency Act 1986 Pt I (ss 1–7) . . . . . . . . . . . . . . . . . . . . 16.39 s 381 . . . . . . . . . . . . . . . .  7.99; 10.177; 25.138 247(2) . . . . . . . . . . . . . . . . . .  10.177; 25.139 Sch B1 para 14, 22 . . . . . . . . . . . . . . . . . . . 16.39 Interpretation Act 1978 . . . . . . . . . . . . 5.11 s 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.303 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.19 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.49 16 . . . . . . . . . . . . . . . . . . . . . . . . 16.39; 20.49 Sch 1 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.303 Landlord and Tenant Act 1954 . . . . . . 23.24 Law Reform (Miscellaneous Provi­ sions) (Scotland) Act 1990 . . . . . . 24.4 Legislative and Regulatory Reform Act 2006 s 21(2) . . . . . . . . . . . . . . . . . . . . . . . . . 16.57 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.57 Licensing Act 1872 . . . . . . . . . . . . . . . . 0.41 Licensing Act 1910 . . . . . . . . . . . . . . . . 0.41 Licensing Act 1964 . . . . . .  0.110; 10.146; 11.11 s 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.96 Licensing Act 2003 . . . .  0.63, 0.110; 1.11, 1.89, 1.90; 8.44; 9.16, 9.17, 9.19, 9.20, 9.35; 10.9, 10.46, 10.47, 10.51, 10.64, 10.84; 12.1, 12.10, 12.35, 12.37, 12.72, 12.74; 14.22, 14.23, 14.46, 14.51, 14.52, 14.58, 14.63, 14.71, 14.72, 14.75, 14.96, 14.120, 14.149, 14.44, 14.51, 14.69, 14.237, 14.258, 14.92, 14.94; 25.11; 26.34 s 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.76 6 . . . . . . . . . . . . . . . . . . .  9.2, 9.3, 9.11, 9.13, 9.18; 11.16; 12.71 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.13 (9) . . . . . . . . . . . . . . . . . . . . . . . . . 9.13; 11.17

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Table of statutes Licensing Act 2003 – contd s 9 . . . . . . . . . . . . . . . .  9.13, 9.18; 11.19, 11.20 (1) . . . . . . . . . . . . . . . . . . . . . . .  9.16; 11.19 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . 9.16 (a)–(e) . . . . . . . . . . . . . . . . . . . . 11.19 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.19 10 . . . . . . . . . . . . . . . . . . . .  9.13, 9.14; 11.18 (2), (3) . . . . . . . . . . . . . . . . . . . . . .9.14 (4) . . . . . . . . . . . . . . . .  9.14; 11.18; 12.71 (5) . . . . . . . . . . . . . . . . . . . . . . . . . 9.14 Pt III (ss 11–59) . . . .  4.28, 4.59; 12.10, 12.35, 12.37, 12.72, 12.77; 26.33 s 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.10 12(3)(a) . . . . . . . . . . . . . . . . . . . . . . .14.62 13 . . . . . . . . . . . . . . . . . . . . . . .  10.47, 10.51 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 10.47 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 10.50 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.51 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.47 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.94 29–32 . . . . . . . . . . . . . . . . . . . . . . . . 10.201 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.94 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.96 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.95 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.94 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.47 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.75 72 . . . . . . . . . . . . . . 12.48, 12.52, 12.58, 12.59 181 . . . . . . . . . . . . . . . . . . . . . . . . .  8.43, 8.44 (2)(c) . . . . . . . . . . . . . . . . . . . . . . 8.42 182 . . . . . . . . . . . . . . . .  10.46, 10.68, 10.78; 14.46, 14.51 Sch 6 para 58 . . . . . . . . . . . . . . . . . . . . . . 9.18 Licensing (Amendment) (Scotland) Act 1992 . . . . . . . . . . . . . . . . . . . . . 24.4 Licensing (Scotland) Act 1976 . . . . 24.4, 24.21, 24.29 s 1 . . . . . . . . . . . . . . . . . . .  3.4; 9.1; 10.9; 24.1 9(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 4.29 133 . . . . . . . . . . . . . . . . . . . . . . . . . . 24.1 Licensing (Scotland) Act 2005 . . .  12.35; 14.22, 14.23; 24.1, 24.4, 24.9, 24.10, 24.13, 24.18, 24.21, 24.24, 24.26 s 5 . . . . . . . . . . . . . . . . . . . . . . . . .  24.5, 24.12 6 . . . . . . . . . . . . . . . . . . . . . . . . . 24.14, 24.18 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . 24.12 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.19 122 . . . . . . . . . . . . . . . . . . . . . . . . . . 24.26 123(7), (7A) . . . . . . . . . . . . . . . . . . . 24.26 132(8) . . . . . . . . . . . . . . . . . . . . . . . . 24.27 142 . . . . . . . . . . . . . . . . . . . . . . . . . . 24.14 Sch 1 para 1 . . . . . . . . . . . . . . . . . . . . . .  24.5, 24.6 2 . . . . . . . . . . . . . . . . . . . . . . . 24.7 (4) . . . . . . . . . . . . . . . . . . . . . 24.7 3 . . . . . . . . . . . . . . . . . . . . .  24.5, 24.15 (1)(b)–(e) . . . . . . . . . . . . . . . 24.15

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Licensing (Scotland) Act 2005 – contd Sch 1 – contd para 3(2), (3) . . . . . . . . . . . . . . . . . 24.15 4, 5 . . . . . . . . . . . . . . . . . . . . . 24.7 6 . . . . . . . . . . . . . . . . . . . . . . . 24.8 (6) . . . . . . . . . . . . . . . . . . . . . 24.23 7 . . . . . . . . . . . . . . . . . . . . . . . 24.8 8(2) . . . . . . . . . . . . . . . . . . . . . 24.9 10 . . . . . . . . . . . . . . . . . . . . . . 24.17 11 . . . . . . . . . . . . . . . . . . . . . . 24.16 (3), (4) . . . . . . . . . . . . . . . . 24.16 12 . . . . . . . . . . . . . . . . . . . . . . 24.13 (1) . . . . . . . . . . . . . . . . . . . . 24.12 (3) . . . . . . . . . . . . . . . . . . . . 24.23 (5), (6) . . . . . . . . . . . . . . . . 24.11 Local Government Act 1972 . . . . . . . . 9.8 s 2(3) . . . . . . . . . . . . . . . . . . . . . . . . . . 9.5 14(2) . . . . . . . . . . . . . . . . . . . . . . . . . 9.5 21(2), (3) . . . . . . . . . . . . . . . . . . . . . .9.5 33(1), (2) . . . . . . . . . . . . . . . . . . . . . .9.5 101 . . . . . . . . . . . . . . . . . . . .  9.8, 9.18; 28.29 (4) . . . . . . . . . . . . . . . . . . . . . . . . 28.33 102 . . . . . . . . . . . . . . . . . . . . . . . . . . 9.18 (1)(a), (c) . . . . . . . . . . . . . . . . . . 9.17 104 . . . . . . . . . . . . . . . . . . . . . . . . . . 7.63 111 . . . . . . . . . . . . . . . . . . . . . . . . . . 9.6 (1) . . . . . . . . . . . . . . . . . . . . . . . . 3.27 (4) . . . . . . . . . . . . . . . . . . . . . . . . 9.6 222 . . . . . . . . . . . 4.13; 5.12; 7.11, 7.62, 7.69, 7.74, 7.78, 7.81; 11.62; 26.6 270 . . . . . . . . . . . . . . . . . . . . . . . . . . 9.5 Local Government Act 2000 . . . . . . . . 9.10 Pt II (ss 10–48) . . . . . . . . . . . . . . . . . . 9.9 s 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.10 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.10 (2), (3) . . . . . . . . . . . . . . . . . . . . . .9.10 Pt III (ss 49–83) . . . . . . . . . . . . . . . . . 9.28 s 49(1), (2) . . . . . . . . . . . . . . . . . . . . . .9.28 50(1), (2) . . . . . . . . . . . . . . . . . . . . . .9.29 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.32 52, 54 . . . . . . . . . . . . . . . . . . . . . . . . 9.34 Local Government and Housing Act 1989 . . . . . . . . . . . . . . . . . . . . . . . . .9.17 s 15(7) . . . . . . . . . . . . . . . . . . . . . . . . . 9.17 Sch 1 . . . . . . . . . . . . . . . . . . . . . . . . .  9.17, 9.18 para 1, 2 . . . . . . . . . . . . . . . . . . . . . 9.17 Local Government etc (Scotland) Act 1994 s 2 . . . . . . . . . . . . . . . . . . . . . . . .  10.51; 15.203 Local Government (Miscellaneous Provisions) Act 1982 . . . . . . . . 10.3, 10.138 Sch 1 . . . . . . . . . . . . . . . . . . . . . . . . . . 10.138 Sch 3 para 4(1) . . . . . . . . . . . . . . . . . . . . . 15.121 Localism Act 2011 . . . . . . . . . . . . . . . . . 9.33 Pt 1 Ch 7 (ss 25–37) . . . . . . . . . . . . . . 9.33 s 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.33

Table of statutes Lotteries Act 1722 . . . . . . . . . . . . . 15.316, 15.317 s 4 . . . . . . . . . . . . . . . . . . . . . . . . 15.313, 15.317 Lotteries Act 1823 . . . . . . . 0.41, 0.57, 0.58, 0.59; 15.24, 15.27, 15.36, 15.298 s 41 . . . . . . . . . . . . . . . 15.311; 15.313, 15.314, 15.315, 15.319, 15.320 Lotteries Act 1975 . . . .  0.1, 0.61; 15.29, 15.175 Lotteries and Amusements Act 1976 . . . . . . . . . . . . . .  0.1, 0.59, 0.60, 0.61, 0.62, 0.63, 0.76, 0.82, 0.97, 0.100, 0.101; 1.90, 1.91; 2.41, 2.43; 7.26; 14.30, 14.31, 14.98; 15.28, 15.29, 15.112, 15.158, 15.175, 15.185, 15.190, 15.207, 15.208, 15.209, 15.215, 15.219, 15.257, 15.311, 15.313, 15.330; 16.1; 19.340; 22.2; 25.62, 25.78, 25.79; 27.19 s 1 . . . . . . . . . . . . . . . . . . .  0.62, 0.101; 15.41, 15.303; 16.11 2 . . . . . . . . . . . . . . . . . .  0.101; 15.41, 15.303, 15.311; 16.11 3 . . . . . . . . . . . . . . .  0.62, 0.101; 1.91; 15.270 (3)(b) . . . . . . . . . . . . . . . . . . . . . . . 15.268 4 . . . . . . . . . . . . . . . . . .  0.62, 0.102; 15.272, 15.273; 19.340 5 . . . . . . . . . . . . . . . 0.62, 0.103; 1.92; 15.171, 15.180, 15.187, 15.276, 15.277; 19.340 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . 15.199 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . 1.92 (c) . . . . . . . . . . . . . . . . . . . . . . . . 1.92 (3A) . . . . . . . . . . . . . . . . . . . . . . . . 1.92 6 . . . . . . . . . . . . . . . . . . . . .  0.62, 0.103; 1.93; 15.180; 19.340 7, 8 . . . . . . . . . . . . . . . . . . . . . . . . . . 15.180 9 . . . . . . . . . . . . . . . . . . . . . . . .  1.94; 15.180 9A . . . . . . . . . . . . . . . . . . . . . . .  0.103; 1.69 (1) . . . . . . . . . . . . . . . . . . . . . . . . 2.144 10 . . . . . . . . . . . . . . . . . . . . . . . . . . .  15.180 11 . . . . . . . . . . . . . .  0.103; 1.92, 1.93; 15.180 12, 13 . . . . . . . . . . . . . . . . . . . . . . . . 15.180 14 . . . . . . . . . . . . . . .  0.59; 2.43, 2.45; 15.27, 15.55, 15.98 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 15.120 (a) . . . . . . . . . . . . . . . . . . . . . . .15.142 (i) . . . . . . . . . . . . . . . . . . . . . 15.141 (b) . . . . . . . . . .  15.138, 15.143, 15.145 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 19.322 15 . . . . . . . . . . . . . . . . . . . . . . .  1.91; 19.340 16 . . . . . . . . . . . . . . 14.60, 14.31; 22.2, 22.14; 25.10, 25.24, 25.31, 25.79, 25.80, 25.81, 25.122 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 22.14 (a) . . . . . . . . . . . . . . . . . . . . .  0.82; 22.2 (b) . . . . . . . . . .  0.82, 0.97; 22.2, 22.26

Lotteries and Amusements Act 1976 – contd s 16(1)(c) . . . . . . . . . . . . . . . . . . . . . . . 22.2 (3) . . . . . . . . . . . . . . . . . . . . . . . . . 0.83 (a), (c) . . . . . . . . . . . . . . . . . . . 22.3 23 . . . . . . . . . . . . . . . 15.182, 15.188, 15.191, 15.265, 15.314 Sch 1 . . . . . . . . . . . . . . . .  0.103; 1.92; 15.180, 15.277 Sch 1A . . . . . . . . . . . . . .  0.103; 1.92; 15.180, 15.277 Sch 2 . . . . . . . . . . . . . . . . . . . . . . . . . . 15.180 Sch 2A . . . . . . . . . . . . . .  0.103; 1.94; 15.180 Sch 3 . . . . . . . . . . . . . . . . . . .  10.1; 14.31; 22.2 Lotteries and Gaming Act 1962 . .  0.60; 15.28, 15.29, 15.172 Magistrates’ Courts Act 1980 s 53(3) . . . . . . . . . . . . . . . . . . . . . . . . . 8.31 64(1) . . . . . . . . . . . . . . . . . . . . . . . .  8.43, 8.44 127(1) . . . . . . . . . . . . . . . . .  4.14; 5.18; 26.61 Merchant Shipping Act 1995 s 256 . . . . . . . . . . . . . . . . . . . . . . . . . . 26.5 Metropolitan Police Act 1839 . . . . . . . 0.41 Metropolitan Streets Act 1867 . . . . . . .0.31 s 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.31 Mining Industry Act 1920 s 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.8 Misuse of Drugs Act 1971 . . . . . . . . . . 7.26 National Audit Act 1983 Pt II (ss 6–9) . . . . . . . . . . . . . . . . . . .  3.25, 3.26 National Heritage Act 1980 s 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.79 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.79 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.79 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.80 National Heritage Act 1997 s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.79 National Lottery Act etc 1993 . . . . . .  0.1, 0.61, 0.75, 0.100, 0.104; 1.91, 1.95, 1.103, 1.104, 1.105; 2.20, 2.135; 3.1, 3.7; 4.3; 6.212, 6.213; 7.26; 15.15, 15.29, 15.30, 15.163, 15.165, 15.166, 15.167, 15.176; 16.2, 16.4, 16.5, 16.7, 16.9, 16.10, 16.12, 16.13, 16.14, 16.15, 16.64, 16.68, 16.74, 16.76, 16.78, 16.81, 16.82, 16.84, 16.85, 16.90, 16.96; 19.353; 20.5; 25.24

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Table of statutes National Lottery Act etc 1993 – contd Pt I (ss 1–20) . . . . . . . . .  16.13, 16.17, 16.62 s 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.10 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.3 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 3A . . . . . . . . . . . . . . . . . . . . . . .  0.105; 16.12 4 . . . . . . . . . . . . . . . . . .  15.167; 16.13, 16.67 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.31 (3) . . . . . . . . . . . . . . . . . . . . . . . 16.10, 16.13 4A . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.14 4B . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.15 (6) . . . . . . . . . . . . . . . . . . . . . . . . . 16.15 4C . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.15 5 . . . . . . . . . . . . . . .  0.105; 16.3, 16.9, 16.10, 16.16, 16.17, 16.18, 16.19, 16.21, 16.28, 16.30, 16.31, 16.32, 16.34, 16.35, 16.37, 16.39, 16.47, 16.48, 16.54, 16.55, 16.56, 16.59, 16.63, 16.68; 19.350, 19.352, 19.353, 19.355 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.17 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.16 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.17 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.17 (6) . . . . . . . . . . . . . 16.3, 16.17, 16.36, 16.68 (6A) . . . . . . . . . . . . . . . . . . . . . . . . 16.17 6 . . . . . . . . . . . . . . .  0.105; 16.3, 16.9, 16.10, 16.18, 16.22, 16.24, 16.25, 16.26, 16.27, 16.28, 16.31, 16.32, 16.34, 16.35, 16.37, 16.39, 16.39, 16.40, 16.47, 16.48, 16.54, 16.55, 16.56, 16.59, 16.63 (4), (5) . . . . . . . . . . . . . . . . . . . . . . .16.23 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.25 7 . . . . . . . . . . . . . . . . . .  16.10, 16.32, 16.59 (1), (1A), (1B) . . . . . . . . . . . . . . . . 16.32 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.32 (a)–(g) . . . . . . . . . . . . . . . . . . . . 16.32 (3A)–(3C) . . . . . . . . . . . . . . . . . . . . 16.69 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.33 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.24 7A . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.24 (1) . . . . . . . . . . . . . . . . . . . . . 16.10, 16.17 8 . . . . . . . . . . . . . . . . . . . . . . . . . 16.10, 16.59 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.34 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.34 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.34 (b) . . . . . . . . . . . . . . . . . . . . . . . 16.34 (4)–(6) . . . . . . . . . . . . . . . . . . . . . . .16.34 9 . . . . . . . . . . . . . . . . . . . . . . . . . 16.10, 16.59 (1) . . . . . . . . . . . . . . . . . . . . . . . 16.35, 16.36 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.35 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.36 10 . . . . . . . . . . . . . . . . .  16.10, 16.40, 16.41, 16.42, 16.43, 16.44, 16.45, 16.46, 16.59 (1), (2) . . . . . . . . . . . . . . . . . . . . . .16.37 (3)(a), (b) . . . . . . . . . . . . . . . . . . . 16.39 10A . . . . . . . . . . . . . . . .  16.10, 16.48, 16.54, 16.59 (1) . . . . . . . . . . . . . . . . . . . . . . . 16.48

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National Lottery Act etc 1993 – contd s 10A(2) . . . . . . . . . . . . . . . . . . . . . . . 16.48 (3) . . . . . . . . . . . . . . . . . . . . . . . 16.49 (4) . . . . . . . . . . . . . . . . . . . . 16.49, 16.50 (5) . . . . . . . . . . . . . . . . . . . . . . . 16.50 (6), (7) . . . . . . . . . . . . . . . . . . . . 16.50 (9)–(11) . . . . . . . . . . . . . . . . . . . 16.51 (12) . . . . . . . . . . . . . . . . . . . 16.49, 16.51 (13), (14) . . . . . . . . . . . . . . . . . . 16.51 (15) . . . . . . . . . . . . . . . . . . . 16.51, 16.68 10B . . . . . . . . . . . . . . . . . . . . . . . . . . 16.48 (1), (2) . . . . . . . . . . . . . . . . . . . . 16.52 (3)–(5) . . . . . . . . . . . . . . . . . . . . 16.53 (6), (7) . . . . . . . . . . . . . . . . . . . . 16.52 10C . . . . . . . . . . . . . . . . .  16.10, 16.15, 16.55 (5)–(8) . . . . . . . . . . . . . . . . . . . . 16.55 11 . . . . . . . . . . . . . . . . . .  16.9, 16.13, 16.48, 16.59, 16.67 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.56 13 . . . . . . . . . . . . . . . . . . . . . . . . 16.56, 16.57 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 16.57 14 . . . . . . . . . . . . . . . . . . . . . . . . . . .  16.59 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7 16 . . . . . . . . . . . . . . . . .  16.60, 16.96, 16.99, 16.102, 16.103 18 . . . . . . . . . . . . . . . . . . . . . . . . 0.115; 16.62 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.11 Pt II (ss 21–44) . . . . . . . . . . . . . . . 16.39, 16.67 s 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.24 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 16.68 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 16.68 22 . . . . . . . . . . . . . . . . .  0.104; 16.10, 16.68 (3) . . . . . . . . . . . . . . . . . . . . .  16.69, 16.70 (3B)(e) . . . . . . . . . . . . . . . . . . . . . 16.7 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 16.69 23 . . . . . . . . . . . . . . . . . . . . . . .  16.68, 16.70 (1), (2) . . . . . . . . . . . . . . . . . . . . . .16.70 (4)–(6) . . . . . . . . . . . . . . . . . . . . . .16.70 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.70 25 . . . . . . . . . . . . . . . . .  16.76, 16.78, 16.80, 16.83 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 16.91 (1A), (2A) . . . . . . . .  16.76, 16.78, 16.80, 16.83 (2C) . . . . . . . . . . . . .  16.76, 16.78, 16.80, 16.83 (4) . . . . . . . . . . . . . . . . . . . . . . . . . 16.80 (5) . . . . . . . . . . . . . . .  16.76, 16.78, 16.80, 16.83 (6) . . . . . . . . . . . . . . .  16.76, 16.78, 16.80, 16.83 (b) . . . . . . . . . . . . . . . . . . . . . . 16.7 25B(1)–(3) . . . . . . . . . . . . . . . . . . . . 16.88 25C(1) . . . . . . . . . . . . . . . . . . . . . . .  16.91 (2), (3) . . . . . . . . . . . . . . . . . . . . 16.91 (4) . . . . . . . . . . . . . . . . . . . . . . . 16.93 (5) . . . . . . . . . . . . . . . . . . . . . . . 16.91 6) . . . . . . . . . . . . . . . . . . . . . . . 16.91 (7) . . . . . . . . . . . . . . . . . . . . . . . 16.91 25E . . . . . . . . . . . . . . . . . . . . . . . . . . 16.90 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.75 (1) . . . . . . . . . . . . . . . . . . . . . . . . .  16.91 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.69

Table of statutes National Lottery Act etc 1993 – contd s 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.70 29A . . . . . . . . . . . . . . . . . . . . . . . . . . 16.70 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.68 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.10 (1), (3) . . . . . . . . . . . . . . . . . . . . . .16.68 33 . . . . . . . . . . . . . . . . . .  16.13, 16.67, 16.68 (4)–(10) . . . . . . . . . . . . . . . . . . . . .16.68 34 . . . . . . . . . . . . . . . . . . 16.76, 16.78, 16.81, 16.85 (2A) . . . . . . . . . . . . . . 16.76, 16.78, 16.81, 16.85 35 . . . . . . . . . . . . . . . . . .  16.76, 16.78, 16.81 36A . . . . . . . . . . . . . . . . . . . . . . . . . . 16.82 36B . . . . . . . . . . . . . . . . . . . . . . . . . . 16.83 (2)–(5) . . . . . . . . . . . . . . . . . . . . 16.84 36C, 36D . . . . . . . . . . . . . . . . . . . . . 16.84 36E . . . . . . . . . . . . . . . . . . . . . .  16.84, 16.91 (1)(a) . . . . . . . . . . . . . . . . . . . . . 16.86 44(1) . . . . . . . . . . . . . . . . . . . . .  16.69, 16.83 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.75 58(1), (3) . . . . . . . . . . . . . . . . . . . . . .2.109 60(2) . . . . . . . . . . . . . . . . . . . . . . . . . 16.70 Sch 1 . . . . . . . . . . . . . . . . . . . . . . . . . . 16.11 para 3(2), (5) . . . . . . . . . . . . . . . . . 16.39 4, 5 . . . . . . . . . . . . . . . . . . . . . 16.39 Sch 2 . . . . . . . . . . . . . . . . . . . . . . . . . . 16.11 Sch 2A para 9 . . . . . . . . . . . . . . . . . . . . . . . 16.12 Sch 3 . . . . . . . . . . . . . . . . . . . . . .  16.10, 16.47 Pt I . . . . . . . . . . . . . . . . . . . . . . . . . 16.39 para 3(5) . . . . . . . . . . . . . . . . . . . 16.39 4, 5 . . . . . . . . . . . . . . . . . . . 16.39 11 . . . . . . . . . . . . . . . . . . . . 16.39 Pt II para 6(1), (2) . . . . . . . . . . . . . . . 16.39 7(1) . . . . . . . . . . . . . . . . . . . 16.40 (2) . . . . . . . . . . . . . . . . . . . 16.41 8(1), (2) . . . . . . . . . . . . . . . 16.42 9(1) . . . . . . . . . . . . . . . . . . . 16.43 (2), (3) . . . . . . . . . . . . . . . 16.44 10 . . . . . . . . . . . . . . . . . . . . 16.45 11 . . . . . . . . . . . . . . . .  16.45, 16.46 (2) . . . . . . . . . . . . . .  16.44, 16.47 Sch 3A . . . . . . . . . . . . . . . . . . . . . . . . 16.89 Sch 4 condition 3 . . . . . . . . . . . . . . . . . . . 16.63 Sch 4A . . . . . . . . . . . . . . . . . . . . . . . . 16.82 para 1(1), (2) . . . . . . . . . . . . . . . . . 16.82 (5), (6) . . . . . . . . . . . . . . . . . 16.82 para 21 . . . . . . . . . . . . . . . . . . . . . . . . 16.85 National Lottery Act 1998 . . . . . . .  0.61, 0.100, 0.104; 7.26; 15.29; 16.2, 16.5, 16.9, 16.67 s 1(4) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.48 (5) . . . . . . . . . . . . . . . . . 16.16, 16.17, 16.22, 16.23, 16.24, 16.32, 16.39, 16.34, 16.35, 16.37, 16.38, 16.39, 16.40, 16.41, 16.43, 16.45, 16.48 2 . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.1; 16.48 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.48

National Lottery Act 1998 – contd s 4(1), (3) . . . . . . . . . . . . . . . . . . . . . . .16.41 5(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.68 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.69 9(1) . . . . . . . . . . . . . . . .  16.76, 16.78, 16.80, 16.83 10 . . . . . . . . . . . . . . . . .  16.76, 16.78, 16.80, 16.83 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.93 19(7) . . . . . . . . . . . . . . . . . . . . . . . . . 16.69 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.93 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.69 27(5) . . . . . . . . . . . . . . . . . . . . . . . . . 16.45 Sch 1 para 4 . . . . . . . . . . . . .  16.17, 16.22, 16.23, 16.24, 16.32, 16.34, 16.35, 16.37, 16.38, 16.39, 16.40, 16.41, 16.43, 16.45, 16.48 5 . . . . . . . . . . . . . . . . . . . . . . . 16.16 Sch 4 . . . . . . . . . . . . . . . . . . . . . . . . . . 16.93 Sch 5 Pt II . . . . . . . . . . . . . . . . . . . . . . . . . 16.69 National Lottery Act 2006 . . . . . . . . .  0.61; 16.9 s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.7 2 . . . . . . . . . . . . . . . . . . . . . . . . .  16.7, 16.15 3 . . . . . . . . . . . . . . . . . . .  16.7, 16.16, 16.17, 16.22, 16.23 (d) . . . . . . . . . . . . . . . . . . . . . . . 16.30, 16.32 (e) . . . . . . . . . . . . . . . . . . . . . . . 16.30, 16.37 4 . . . . . . . . . . . . . . . . . . . . . . . . .  16.7, 16.32 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.32 5 . . . . . . . . . . . . . . . . . . .  16.7, 16.17, 16.24, 16.37 (1) . . . . . . . . . . . . . . . . . . . . . . . 16.17, 16.24 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.37 6 . . . . . . . . . . . . . . . . 16.3, 16.7, 16.10, 16.17 (1), (2) . . . . . . . . . . . . . . . . . . . . . . .16.30 7(1) . . . . . . . . . . . . . . . . . . . . . . .  16.7, 16.71 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.7 (b) . . . . . . . . . . . . . . . . . . . . . . . 16.69 (3) . . . . . . . . . . . . . . . . . . . . . . . 16.69, 16.71 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.17 8 . . . . . . . . . . . . . . . . . . . . . . . . .  16.7, 16.70 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.70 9 . . . . . . . . . . . . . . . . . . . . . . . . .  16.7, 16.68 10 . . . . . . . . . . . . . . . . . .  16.7, 16.78, 16.80, 16.83 11 . . . . . . . . . . . . . . . . . . . . . . . .  16.7, 16.90 12 . . . . . . . . . . . . . . . . . .  16.7, 16.76, 16.78, 16.81, 16.85 13(1) . . . . . . . . . . . . . . . .  16.7, 16.78, 16.80, 16.83 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 16.7 14 . . . . . . . . . . . . . . . . . . . . . . . .  16.7, 16.82 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 16.85 15 . . . . . . . . . . . . . . . . . . . . . . . .  16.7, 16.83 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 16.70 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.7 17, 18 . . . . . . . . . . . . . . . . . . . . .  16.7, 16.83 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.7 20 . . . . . . . . . . . . . . . . . . . . . . . .  16.7, 16.83

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Table of statutes National Lottery Act 2006 – contd s 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.7 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.7 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 16.7 23, 24 . . . . . . . . . . . . . . . . . . . . . . . . 16.7 Sch 1 . . . . . . . . . . . . . . . . .  16.7, 16.10, 16.16, 16.30, 16.31 para 1 . . . . . . . . . . . . . . . . . . . .  16.3, 16.17 2 . . . . . . . . . . . . . . . . . . . . . . . 16.3 4 . . . . . . . . . . . . . . . . . . . .  16.3, 16.31 5 . . . . . . . . . . . . . . . . . . . . . . . 16.32 6 . . . . . . . . . . . . . . . . . . . . . . . 16.17 7(a) . . . . . . . . . . . . . . . . . . . . . 16.34 8(a) . . . . . . . . . . . . . . . . . . . . . 16.35 (b) . . . . . . . . . . . . . . . . . . . . . 16.36 9(c) . . . . . . . . . . . . . . . . . . . . . 16.39 (d) . . . . . . . . . . . . . . . . . . . . 16.37 10 . . . . . . . . . . . . . . . . . . . . . . 16.48 (b) . . . . . . . . . . . . . . . . . . . . 16.48 11 . . . . . . . . . . . . . . . . . . . . . . 16.69 13 . . . . . . . . . . . . . . . . . . . . . . 16.68 14 . . . . . . . . . . . . . . . . . . . . . . 16.39 16(1) . . . . . . . . . . . . . . . .  16.17, 16.22 (2)(a) . . . . . . . . . . . . . . . . . 16.22 (b) . . . . . . . . . . . . . . . . . 16.17 (6) . . . . . . . . . . . . . . . . . . . . 16.68 Sch 2 . . . . . . . . . . . . . . . . . . . . . . . . . . 16.7 Sch 3 . . . . . . . . . . . . . . . . . . . . . . . . . . 16.7 National Lottery (Funding of Endow­ ments) Act 2003 . . . . . . . . . . . . . . 0.61 s 1 . . . . . . . . . . . . . .  16.76, 16.78, 16.80, 16.83 (8) . . . . . . . . . . . . . . . . . . . . . . . . . . 16.69 Physical Training and Recreation Act 1937 . . . . . . . . . . . . . . .  2.218, 2.219, 2.220 s 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.219 Planning and Compensation Act 1991 s 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.96 Planning and Compulsory Purchase Act 2004 s 38(6) . . . . . . . . . . . . . . . . . . . . .  28.12, 28.13 Police Act 1996 s 101(1) . . . . . . . . . . . . . . . . . . . .  11.27, 11.39 Police Act 1997 s 115 . . . . . . . . . . . . . . . . . . . . . . . 

6.82; 7.29

Police and Criminal Evidence Act 1984 . . . . . . . . . . . . . . . . . . . . . . . . .3.33 s 114 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.409 Police Offence Act 1927 s 3D . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.31 Private International Law (Miscel­ laneous Provisions) Act 1995 . . . 20.73 Private Security Industry Act 2001 . . 10.132; 14.154, 14.55, 14.72

lxiv

Proceeds of Crime Act 2002 . . . . .  3.22; 6.52; 14.166, 14.83; 27.42, 27.55, 27.69, 27.74, 27.75 Pt VII (ss 327–340) . . . . 27.5, 27.6, 27.7, 27.8, 27.9, 27.12, 27.16, 27.29, 27.49, 27.51, 27.56 s 327 . . . . . . . . . . . . . . . . .  27.9, 27.17, 27.20 (1) . . . . . . . . . . . . . . . . . . . . . . . . 27.10 (2) . . . . . . . . . . . . . . . . . . . . . . . . 27.22 328 . . . . . . . . . . . . .  27.8, 27.9, 27.17, 27.20, 27.21, 27.27, 27.28, 27.29, 27.30, 27.31, 27.32, 27.33, 27.35, 27.36, 27.39, 27.44, 27.45, 27.48, 27.54, 27.71 (1) . . . . . . . . . . . . . . . 27.10, 27.21, 27.27, 27.39 (2) . . . . . . . . . . . . . . . . . . . . . . . . 27.22 329 . . . . . . . . . . . . . . . . .  27.9, 27.11, 27.17, 27.20, 27.48 (1) . . . . . . . . . . . . . . . . . . . . . . . . 27.10 (2) . . . . . . . . . . . . . . . . . . . . . . . . 27.22 (c) . . . . . . . . . . . . . . . . . . . . . . 27.11 330 . . . . . . . . . . . . . . . .  17.106, 17.107; 27.8, 27.12, 27.33, 27.50, 27.51, 27.52, 27.53, 27.54, 27.72, 27.75 (2) . . . . . . . . . . . . . . . . . . . . . . . . 27.50 (b) . . . . . . . . . . . . . . . . . . . . . 27.39 (3), (3A) . . . . . . . . . . . . . . . . . . . 27.53 (4) . . . . . . . . . . . . . . . . . . . . . . . . 27.53 (6) . . . . . . . . . . . . . . . . . . . . . . . . 27.53 (7) . . . . . . . . . . . . . . . . . . . . . . . . 27.51 (7B) . . . . . . . . . . . . . . . . . . . . . . . 27.53 (8) . . . . . . . . . . . . . . . . . . . . . . . . 27.51 331 . . . . . . . . . . . . .  17.106, 17.108, 17.109; 27.12, 27.23, 27.33 332 . . . . . . . . . . . . . . . . . . . . . . . . . . 27.23 333 . . . . . . . . . . . . . . . .  17.107; 27.46, 27.47 (3)(b) . . . . . . . . . . . . . . . . . . . . . 27.58 (9) . . . . . . . . . . . . . . . . . . . . . . . .  17.110 333A . . . . . . . . . . . . . . . . . . . . .  27.12, 27.47 (1) . . . . . . . . . . . . . . . . . . . . . . 27.56 (3) . . . . . . . . . . . . . . . . . . . . . . 27.56 333B . . . . . . . . . . . . . . .  27.12, 27.47, 27.58 (1) . . . . . . . . . . . . . . . . . . . . . . . 27.58 333C . . . . . . . . . . . . . . .  27.12, 27.47, 27.58 333D . . . . . . . . . . . . . . .  27.12, 27.47, 27.58 (3), (4) . . . . . . . . . . . . . . . . . . . 27.57 333E . . . . . . . . . . . . . . . . . . . . .  27.12, 27.47 335 . . . . . . . . . . . . . . . . . . . . . . . . . . 27.22 336(1) . . . . . . . . . . . . . . . . . . . . . . . . 27.23 338 . . . . . . . . . . . . . . . . .  27.22, 27.24, 27.26 (2A) . . . . . . . . . . . . . . . . . . . . . . 27.24 (3) . . . . . . . . . . . . . . . . . . . . . . . . 27.24 (b) . . . . . . . . . . . . . . . . . . . . . 27.24 (4) . . . . . . . . . . . . . . . . . . . . . . . . 27.25 340 . . . . . . . . . . . . . . . . .  27.14, 27.15, 27.16 (2)(a) . . . . . . . . . . . . . . . . . . . . . .27.16

Table of statutes Proceeds of Crime Act 2002 . . . . . . . . 1.26 s 340(3) . . . . . . . . . . . . . . . . . . . .  27.13, 27.32 (5) . . . . . . . . . . . . . . . . . . . . . . . . 27.14 (9) . . . . . . . . . . . . . . . . . . . . . . . . 27.14 (11) . . . . . . . . . . . . . . . . . . . . . . . 27.9 342 . . . . . . . . . . . . . . . . . . . . . .  27.59, 27.60 (3)(a), (c) . . . . . . . . . . . . . . . . . . 27.60 (4)(a) . . . . . . . . . . . . . . . . . . . . . .27.60 Sch 9 . . . . . . . . . . . . . . . . .  27.12, 27.49, 27.72 Public Bodies Act 2011 . . . . . . . . . . . . . 0.1, 0.61 Public Health Act 1961 . . . . . . . . . . . . 22.31 s 75 . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.11 Public Order Act 1986 s 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.30 Racecourse Betting Act 1928 . . . . .  0.33, 0.34; 2.103 Ready Money Football Betting Act 1920 . . . . . . . . . . . . . . . . . . . . . . . . .2.114 Refreshment Houses Act 1860 . . . . . . 0.41 Rehabilitation of Offenders Act 1974 s 1(4) . . . . . . . . . . . . . . . . . . . . . . . . .  6.83; 7.28 4 . . . . . . . . . . . . . . . . . . . . . .  6.83; 7.20, 7.28 Rent Act 1957 . . . . . . . . . . . . . .  10.140; 19.326; 23.23 Road Traffic Regulation Act 1984 . . . . 10.17 Scotland Act 1998 . . . . . . . . . . . . . . . . . 1.104 Scotland Act 2016 . . . . . . . . . . . . . . . . . 24.30 Serious Organised Crime and Police Act 2005 . . . . . . . . . . . . . . . . . . . . . 27.17 s 102 . . . . . . . . . . . . . . . . . . . . . . . . . . 27.17 Small Lotteries and Gaming Act 1956 . . . . . . . . . . . . . . . . .  0.60; 0.61; 15.28, 15.29, 15.171, 15.172, 15.179 Statute Law (Repeals) Act 2004 s 1(1) . . . . . . . . . . . . . . . . . . . . . . .  0.58; 15.26 Sch 1 Pt 17 Group 3 . . . . . . . . . . . . . . . .  0.58; 15.26 Street Betting Act 1906 . . . . . . . . . . 

0.31, 0.32

Sunday Entertainments Act 1932 . . . . 10.143 Sunday Observance Act 1625 . . . . . . . 0.14 Taxation of Chargeable Gains Act 1992 s 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.38

Terrorism Act 2000 . . . . . .  27.47, 27.54, 27.69, 27.75 s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.68 Pt III (ss 14–31) . . . . . . . . . . . . . . . . . 27.68 s 15–17 . . . . . . . . . . . . . . . . . . . .  27.73, 27.74 18 . . . . . . . . . . . . . . . . .  27.51, 27.71, 27.73, 27.74, 27.75 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 27.70 (2) . . . . . . . . . . . . . . . . . . . . . . . . . 27.71 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.74 21A . . . . . . . . . . . . . . . .  27.51, 27.72, 27.73 (5) . . . . . . . . . . . . . . . . . . . . . . . 27.73 (10) . . . . . . . . . . . . . . . . . . . . . . 27.72 21ZA, 21ZB . . . . . . . . . . . . . . . . . . . 27.71 Sch 3A . . . . . . . . . . . . . . . . . . . . . . . . 27.72 Theft Act 1968 . . . . . . . . . . . . . . . . . . . . 6.81 Theft Act 1978 . . . . . . . . . . . . . . . . . . . . 6.81 Town and Country Planning Act 1947 . . . . . . . . . . . . . . . . . . . . . . . . .8.42 s 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.138 Town and Country Planning Act 1971 . . . . . . . . . . . . . . . . . . . . . . 8.42; 9.42 s 29 . . . . . . . . . . . . . . . . . . . . . .  10.95, 10.138, 10.140 Town and Country Planning Act 1990 . . . . . . . . . . . . . . . . .  8.42; 10.95; 28.2, 28.3, 28.11 s 54A . . . . . . . . . . . . . . . . . . . . . .  10.96, 10.97, 10.98 (1) . . . . . . . . . . . . . . . . . . . . . . . . . 28.3 (1A) . . . . . . . . . . . . . . . . . . . . . . . 28.4 (2)(a) . . . . . . . . . . . . . . . . . . . . . . .28.4 57(1) . . . . . . . . . . . . . . . . . . . . . . . . . 28.1 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.11 70(2) . . . . . . . . . . . . . . . . . . . . .  10.95, 10.98; 28.12 75(2), (3) . . . . . . . . . . . . . . . . . . . . . .28.3 90 . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.138 106 . . . . . . . . . . . . . . . . . . . . . . . . . . 28.18 171A(1) . . . . . . . . . . . . . . . . . . . . . . 28.41 171B(4) . . . . . . . . . . . . . . . . . . . . . . . 28.52 171C(1) . . . . . . . . . . . . . . . . . . . . . . 28.43 171C(4) . . . . . . . . . . . . . . . . . . . . . . 28.44 171D(1) . . . . . . . . . . . . . . . . . . . . . . 28.45 171E–171H . . . . . . . . . . . . . . . . . . . 28.47 172 . . . . . . . . . . . . . . . . . . . . . . . . . . 28.49 (1) . . . . . . . . . . . . . . . . . . . . . . . . 28.46 (2) . . . . . . . . . . . . . . . . . . . . . . . . 28.49 (3) . . . . . . . . . . . . . . . . . . . .  28.49, 28.50 (4) . . . . . . . . . . . . . . . . . . . . . . . . 28.50 173(1A)(a) . . . . . . . . . . . . . . . . . . . . 28.52 (11) . . . . . . . . . . . . . . . . . . . . . . . 28.51 179(6)–(8) . . . . . . . . . . . . . . . . . . . . .28.54 183 . . . . . . . . . . . . . . . . . . . . . . . . . . 28.56 187B . . . . . . . . . . . . . . . . . . . . . . . . . 28.59 196A–196C . . . . . . . . . . . . . . . . . . . 28.42 285 . . . . . . . . . . . . . . . . . . . . . . . . . . 28.54 336(1) . . . . . . . . . . . . . . . . . . . . .  28.2, 28.3

lxv

Table of statutes Tribunals, Courts and Enforcement Act 2007 Sch 7 . . . . . . . . . . . . . . . . . . . . . . . 16.47, 16.54 Tribunals and Inquiries Act 1992 s 11(1) . . . . . . . . . . . . . . . . . . . . . . . . . 19.332 Unfair Contract Terms Act 1977 . .  1.38; 20.13, 20.46; 25.115 s 3(2) . . . . . . . . . . . . . . . .  20.46, 20.47, 20.48 Unlawful Games Act 1541 . . . . .  0.6, 0.7, 0.11, 0.13, 0.15, 0.28 Unlawful Hames Act 1728 . . . . . . . . . 0.13 Vagrancy Act 1824 . . . . . . . . . . . . . . . . 2.225 Vagrancy Act 1868 . . . . . . . . . . . . . . . . 2.225 Vagrancy Act 1873 . . . . . . . . . . . . . . . . 2.225 Vagrant Act Amendment 1873 . . . . . . 0.31 Value Added Tax Act 1994 . . . . . .  2.28, 2.201; 19.324 s 23 . . . . . . . . . . . . . . . . .  19.17, 19.35, 19.388 (4) . . . . . . . . . . . . . . . . . . .  19.374, 19.376 (5) . . . . . . . . . . . . . . . . . . . . . . . . . 19.376 (a) . . . . . . . . . . . . . . . . . . . . . . .19.375 (b) . . . . . . . . . . . . . . . . . . . . . . 19.324 (ii) . . . . . . . . . . . . . . . . . . . . 19.375 (c)(ii) . . . . . . . . . . . . . . . . . . . . 19.375 (6) . . . . . . . . . . . . . . . . . . . . . . . . . 19.376 (a) . . . . . . . . . . . . . . . . . . . . . . .19.374 (b)–(d) . . . . . . . . . . . . . . . . . . . 19.376 (f) . . . . . . . . . . . . . . . . . . . . . . . 19.374 (h) . . . . . . . . . . . . . . . .  19.374, 19.376

lxvi

Value Added Tax Act 1994 – contd s 23(7) . . . . . . . . . . . . . . . . . . . . . . . . . 19.376 Sch 1 para 1 . . . . . . . . . . . . . . . . . . . . . . . 19.298 Sch 9 . . . . . . . . . . . . . . . . . . . . . .  2.197, 2.200 Group 4 . . . . . . . . . . .  2.200; 19.15, 19.17, 19.23, 19.281, 19.289 item 1 . . . . . . . . . . . . . . . . . . . . . 19.15 2 . . . . . . . . . . . . . . . . .  2.216; 19.15 (1) . . . . . . . . . . . . . . . . . . . . 19.17 (1)(b) . . . . . . . . . . . . . . . . . 19.32 (2) . . . . . . . . . . . . . . . . . . . . 19.18 (3) . . . . . . . . . . .  2.197; 19.18, 19.34 (4) . . . . . . . . . . . . . . . .  2.197; 19.15 (5) . . . . . . . . . . .  2.197; 19.17, 19.19 (6) . . . . . . . . . . . . . . . .  2.197; 19.19 Water Resources Act 1991 s 221(1) . . . . . . . . . . . . . . . . . . . . . . . . 10.51 Westminster Bridge Act 1737 . . . . . . . 15.169 AUSTRALIA QUEENSLAND Charitable and Non-Profit Gaming Act 1999 . . . . . . . . . . . . . . . . . . . . . 2.187 INDIA Gaming Regulatory Act . . . . . . . . . . . .2.187 SOUTH AFRICA National Gambling Act 2004 s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.187

Table of cases

All references are to paragraph numbers

A A-G v Corke (1933) 1 Ch 89, [1932] All ER Rep 711 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.35 A-G ex rel Co-operative Retail Services Ltd v Taff-Ely BC (1981) 42 P & CR 1 . . . . . . . . . 28.31 A-G v Great Eastern Railway Co (1880) App Cas 473 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.27; 9.6 A-G v Healy (1972) IR 393 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.132 A-G v Luncheon & Sports Club Ltd [1929] AC 400, 98 LJKB 359, 141 LT 153, 45 TLR 294 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.10, 2.103, 2.106, 2.107, 2.114, 2.139 A-G v PYA Quarries Ltd (1957) 2 QB 169 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.35 A-G v Walkergate Press Ltd (1930) 28 LGR 235, 94 JP 90, 29 Cox CC 68, 74 SJ 106, 142 LT 408, 46 TLR 177 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.311 A-G’s Reference (No 5 of 2002) [2004] UKHL 40, [2005] 1 AC 167, [2004] 3 WLR 957, [2004] 4 All ER 901, [2005] 1 Cr App R 20, [2004] HRLR 37, [2005] Crim LR 220, (2004) 101(42) LSG 29, (2004) 148 SJ LB 1215 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9 AR Dennis & Co Ltd v Campbell [1978] QB 365, [1978] 2 WLR 429, [1978] 1 All ER 1215, [1978] ICR 862, (1977) 121 SJ 790 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.89 Abrahams v Trustee in Bankruptcy of Abrahams [1999] EWHC Ch 253, [1999] 31 LS Gaz R 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20.118, 21.12, 21.13 Abrahart v Webster [1925] 1 KB 563 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.23 Adcock v Wilson [1967] 2 QB 683, [1967] 2 WLR 1189, [1967] 1 All ER 1028, (1967) 131 JP 292, (1967) 111 SJ 294; aff’d [1969] 2 AC 326, [1968] 1 All ER 929, [1968] 2 WLR 914, 132 JP 234, 112 SJ 213 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.171, 2.182, 2.193, 2.196, 2.201, 2.209 Agriculture, Horticultural & Forestry Industry Training Board v Aylesbury Mushrooms Ltd [1972] 1 WLR 190, [1972] 1 All ER 280 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.17 Ahmed (Mohammad) v HM Advocate [2009] HCJAC 60, 2009 SLT 794, 2009 SCL 1093 2009 SCCR 821 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.50 Allen v Hearn 99 ER 969, (1785) 1 TR 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.53, 20.57 Allen, Re [1962] 377 P 2d 280 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.222 Allport v Nutt 135 ER 826, (1845) 1 CB 974, 3 Dow & L 233, 14 LJCP 272, 9 Jur 900, 5 LTOS 308 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15.46, 20.80, 20.114 Alpha Club, Re [2002] EWHC 884 (Ch), [2004] BCC 754, [2002] 2 BCLC 612 . . . . . . . . . . 15.159 Andren v Stubbings (The Times, 16 October 1924) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.102 Antonelli v Secretary of State for Trade & Industry [1998] QB 948, [1998] 2 WLR 826, [1998] 1 All ER 997, (1998) 10 Admin LR 75, [1998] 1 EGLR 9, [1998] 14 EG 133, [1998] COD 178, (1997) 94(35) LSG 35, (1997) 141 SJ LB 198, [1997] NPC 123 . . . . . . 1.22 Appleson v Littlewoods Pools Ltd [1939] 1 All ER 464, 83 SJ 236 . . . . . . . . . . . . . . . . . . . . 20.13 Armstrong v DPP [1965] AC 1262, [1965] 1 All ER 1012, 129 JP 266, 109 SJ 192, sub nom DPP v Armstrong [1965] 2 WLR 765; aff’d sub nom Armstrong v DPP [1965] AC 1262, [1965] 2 All ER 745, [1965] 3 WLR 344, 129 JP 493, 109 SJ 534 . . . . . . 2.193, 2.195, 2.196, 2.201, 2.207, 2.209

lxvii

Table of cases Ashdown v Telegraph Group [2001] Ch 685, [2001] 2 WLR 967, [2001] 2 All ER 370, [2001] ECDR 21, [2001] EMLR 20, [2001] HRLR 30, [2001] RPC 34, (2001) 98(8) LSG 47, (2001) 151 NLJ 58, (2001) 145 SJ LB 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.101 Aspinall’s Club Ltd v Al-Zayat [2007] EWCA Civ 1001, [2008] Bus LR D13 . . . . . . . . . . 20.100 Associated Provincial Picture Houses Ltd v Wednesbury Corpn [1948] 1 KB 223, [1947] 2 All ER 680, (1947) 63 TLR 623, (1948) 112 JP 55, 45 LGR 635, [1948] LJR 190, (1947) 177 LT 641, (1948) 92 SJ 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6.60, 6.69, 8.53, 10.26, 10.81, 10.131, 10.136, 16.20 Athesia Druck Srl v Minsterio dell’Economia e delle Finanze (Case C-1/80) [2009] STC 1334, [2009] ECR I-1255 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.70 Atkinson v Murrell [1972] 2 QB 274, [1972] 2 WLR 509, [1972] 2 All ER 31, 136 JP 379, 116 SJ 140; aff’d [1973] AC 289, [1972] 2 All ER 1131, [1972] 3 WLR 465, 136 JP 611, 116 SJ 632 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.128, 2.130, 15.33, 15.43, 15.91, 15.159 Aviation & Shipping Co Ltd v Murray (Inspector of Taxes) [1961] 1 WLR 974, [1961] 2 All ER 805, [1961] 1 Lloyd’s Rep 513, 39 TC 595, (1961) 40 ATC 143, [1961] TR 133, (1961) 105 SJ 441 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.24 B Bankers Trust v PT Dharmala Sakti Sejahtera (No 2) [1996] CLC 518 . . . . . . . . . . . . . . . . 2.91 Bank of Credit & Commerce International (Overseas) Ltd v Akindele [2001] Ch 437, [2000] 3 WLR 1423, [2000] 4 All ER 221, [2000] Lloyd’s Rep Bank 292, [2000] BCC 968, [2000] WTLR 1049, (1999-2000) 2 ITELR 788, (2000) 97(26) LSG 36, (2000) 150 NLJ 950 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.78 Barclay v Pearson [1893] 2 Ch 154, 62 LJ Ch 636, 3 R 388, 42 WR 74, sub nom Barclay v Pearson, Oppler v Pearson 37 SJ 268, 68 LT 709, 9 TLR 269 . . . . .  15.115, 15.116, 20.60, 20.81, 20.82, 20.83, 20.144 Barker v Wood (1932) 76 SJ 307, 48 TLR 402 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.333 Barnard v National Dock Labour Board [1953] 2 QB 18, [1953] 2 WLR 995, [1953] 1 All ER 1113 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.31 Barnes v Strathern 1929 JC 41, 1929 SLT 37 . . . . . . . . . . . . . . . . . . . . . . . .  2.130, 15.43, 15.54, 15.91, 15.158, 15.159, 15.161 Bartlett v Parker [1912] 2 KB 497[1912] 2 KB 497, 76 JP 280, 81 LJKB 857, 23 Cox CC 16, 106 LT 869 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.130, 15.43, 15.54 Barvis Ltd v Secretary of State for the Environment [1971] 22 P & CR 710 . . . . . . . . . . . . 28.2 Batson v Newman (1875-76) 1 CPD 573, 25 WR 85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.81 Battelley v Finsbury Borough Council [1958] 56 LGR 165 . . . . . . . . . . . . . . . . . . . . . . . . . . 28.33 Bell v Alfred Franks & Bartlett Co Ltd [1980] 1 WLR 340, [1980] 1 All ER 356, (1980) 39 P & CR 591, (1979) 253 EG 903, (1979) 123 SJ 804 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.23 Bendenoun v France (1994) 18 EHRR 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.280 Bilta (UK) Ltd (in liquidation) v Nazir [2015] UKSC 23, [2016] AC 1, [2015] 2 WLR 1168 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.57 Blaxtone v Pye 2 Wils 309 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.96 Blum v Secretary of State for the Environment [1987] JPL 278 . . . . . . . . . . . . . . . . . . . . . . 28.6 Blyth v Hulton & Co Ltd (1908) 72 JP 401, 52 SJ 599, 24 TLR 719 . . . . . . . . . 15.108, 15.109, 15.114, 15.151, 15.152, 15.154, 15.155; 20.124, 20.128 Boddington v British Transport Police [1999] 2 AC 143, [1998] 2 WLR 639, [1998] 2 All ER 203, (1998) 162 JP 455, (1998) 10 Admin LR 321, (1998) 148 NLJ 515 . . . . . . . . . . 9.7 Bottomley v DPP (1914) 79 JP 153, 84 LJKB 354, 24 Cox CC 578, 112 LT 458, 31 TLR 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15.309, 15.314 Bovis Homes v New Forest DC [2002] EWHC 483 (Admin) . . . . . . . . . . . . . . . . . . . . . . . . 9.27 Bowman v Fels [2005] EWCA Civ 226, [2005] 1 WLR 3083, [2005] 4 All ER 609, [2005] 2 Cr App R 19, [2005] 2 CMLR 23, [2005] 2 FLR 247, [2005] WTLR 481, [2005] Fam Law 546, (2005) 102(18) LSG 24, (2005) 155 NLJ 413, (2005) 149 SJ LB 357, [2005] NPC 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27.8, 27.25, 27.29, 27.30 Bradford City Metropolitan District Council v Booth (2000) 164 JP 485, (2001) 3 LGLR 8, [2000] COD 338, (2000) 164 JPN 801 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8.65; 12.69 Breen v Amalgamated Engineering Union [1971] 2 QB 175, [1971] 2 WLR 742, [1971] 1 All ER 1148, 10 KIR 120, (1971) 115 SJ 203 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.13 Bretherton v United Kingdom Totalisator Co Ltd [1935] 1 Ch 373 . . . . . . . . . . . . . . . . . . . 2.41 Bretherton v United Kingdom Totalisator Co Ltd [1945] KB 555, [1945] 2 All ER 202, 43 LGR 169, 110 JP 45, 114 LJKB 517, 89 SJ 414, 173 LT 126, 61 TLR 468 . . . . . . .  2.41, 2.42, 2.107

lxviii

Table of cases Bridger v Savage (1885) 15 QBD 363, 49 JP 725, 54 LJQB 464, 33 WR 891, 53 LT 129, 1 TLR 585 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20.7, 20.90 Bristol Alliance Nominee No 1 Ltd v Bennett [2013] EWCA Civ 1626, [2014] 1 EGLR 9, [2014] 1 P & CR DG15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.74 British Basic Slag Ltd’s Agreements, Re [1963] 1 WLR 727, [1963] 2 All ER 807, (1963) 107 SJ 457 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.29 British Beer & Pub Association & others v Canterbury City Council [2005] EWHC 1318 (Admin), (2005) 169 JP 521, [2006] BLGR 596, (2005) 169 JPN 859, [2005] NPC 82 . . 10.81, 10.82 British Oxygen Co Ltd v Minister of Technology [1971] AC 610, [1969] 2 WLR 892, [1970] 3 WLR 488, [1970] 3 All ER 165 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.81, 10.92 Bromsgrove District Council v Secretary of State for the Environment (1988) 56 P & CR 221, [1988] 1 PLR 59, [1988] JPL 257 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.137, 10.138 Brown v Overbury 156 ER 1018, (1856) 11 Ex 715, 4 WR 252 . . . . . . 20.116, 20.117, 20.119, 20.123, 20.124, 20.126, 20.127 Brown v Patch [1899] 1 QB 892 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.30 Browning v Morris 98 ER 1364, (1778) 2 Cowp 790 . . . . . . . . . . .  20.59, 20.60, 20.82, 20.83, 20.144 Burdge v Pyne (HM Inspector of Taxes) [1969] 1 WLR 364, [1969] 1 All ER 467, 45 TC 320, [1968] TR 383, (1968) 112 SJ 947 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.14, 19.15, 19.32 Burroughs Day v Bristol City Council [1996] 1 PLR 78, [1996] 1 EGLR 167, [1996] 19 EG 126, [1996] EG 10 (CS), [1996] NPC 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.4 C C & E Comrs v Annabel’s Casino Ltd [1995] STC 225 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.53 C & E Comrs v Barclays Bank [2006] UKHL 28, [2007] 1 AC 181, [2006] 3 WLR 1, [2006] 4 All ER 256, [2006] 2 All ER (Comm) 831, [2006] 2 Lloyd’s Rep 327, [2006] 1 CLC 1096, (2006) 103(27) LSG 33, (2006) 156 NLJ 1060, (2006) 150 SJ LB 859 . . . . . . . . . . . 27.78 C & E Comrs v Dodd [1961] 1 WLR 144, [1961] 1 All ER 269, (1961) 105 SJ 89 . . . . 2.14, 2.27, 2.28, 2.107, 19.163 C & E Comrs v Griffiths [1924] 1 KB 735 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.11; 25.122 C & E Comrs v Hedon Alpha Ltd [1981] QB 818, [1981] 2 WLR 791, [1981] 2 All ER 697, (1981) 125 SJ 273 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.219 C & E Comrs v News International Newspapers Ltd [1996] V & DR 434 . . . . . . 0.114; 2.43, 2.107 C & E Comrs v News International Newspapers Ltd [1998] V & DR 267, (1998) 142 SJ LB 130 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.7, 2.14, 2.107 C & E Comrs v Schindler (Case C-275/92) [1994] QB 610, [1994] 2 All ER 193, [1994] 3 WLR 103, [1994] ECR I-1039, [1995] 1 CMLR 4, ECJ . . . . . . . . . . . . . . . . . . . . . .  15.166, 15.344 C & E Comrs v Top Ten Promotions Ltd [1969] 3 All ER 39; on appeal [1969] 3 All ER 39, 112 SJ 725; restored [1969] 3 All ER 39, [1969] 1 WLR 1163, 113 SJ 568 . . . . . . . . . . . . 19.161 CHT Ltd v Ward [1965] 2 QB 63, [1963] 3 WLR 1071, [1963] 3 All ER 835, (1963) 107 SJ 907 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.99 Calvert v William Hill Credit Ltd [2008] EWCA Civ 1427, [2009] Ch 330, [2009] 2 WLR 1065 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20.15, 20.19, 20.20 Calvert v William Hill Credit Ltd [2008] EWHC 454 (Ch), (2008) 105(14) LSG 28 . . . . . 6.65 Camelot Group plc v Beech (unreported, 16 November 1996) . . . . . . . . . . . . .  20.63, 20.66, 20.110 Carapanayoti & Co Ltd v Comptor Commercial Andre et Cie SA [1972] 1 Lloyd’s Rep 139, (1972) 116 SJ 96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.271 Carlill v Carbolic Smoke Ball Co [1892] 2 QB 484, 56 JP 665, 61 LJQB 696, 36 SJ 628, 8 TLR 680; aff’d [1893] 1 QB 256, 57 JP 325, 62 LJQB 257, 4 R 176, 41 WR 210, [1891–4] All ER Rep 127, 67 LT 837, 9 TLR 124 . . . . . . . . . . . . . . . . . . . . . . . 2.10, 2.16, 2.17, 2.22, 2.24, 2.96, 2.97, 19.108; 20.109, 25.52 Carlton Clubs Ltd v HMRC [2015] UKUT 682 (TC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.258 Carney v Plimmer [1897] 1 QB 634, 61 JP 324, 66 LJQB 415, 45 WR 385, 41 SJ 403, 76 LT 374, 13 TLR 317 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.99 Casino Club (Bolton) v Parr [1966] 64 LGR 155, [1966] 110 SJ 88 . . . . . . . . . . . . . . . . . . . . 0.47 Chambers v DPP [1995] Crim LR 896, [1995] COD 321 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.30 Charter plc v City Index Ltd [2007] EWCA Civ 1382, [2008] Ch 313, [2008] 2 WLR 950, [2008] 3 All ER 126, [2008] 2 All ER (Comm) 425, [2007] 2 CLC 968, [2008] PNLR 16, (2008) 105(2) LSG 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.78, 20.79 Chelmsford Borough Council v Secretary of State for the Environmnt & Halifax Building Society [1985] JPL 554 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.100 Cheshire CC v Secretary of State for the Environment [1988] JPL 30 . . . . . . . . . . . . . . . . . 28.32 Chichester District Council v Secretary of State for the Environment [1992] 3 PLR 49 . . 10.137

lxix

Table of cases Chief Constable of Cumbria v Wright & Wood [2006] EWHC 3574 (Admin), [2007] 1 WLR 1407 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9 Christensen & Co Ltd v Byers [1967] NZLR 416 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.94 Christison v McBridge (1881) 9 R 34, 19 SLR 19, Ct of Sess . . . . . . . . . . . . . . . . . . . . . . . . . 20.144 Church, Vice Horseman v News Ltd [1933] SASR 70 . . . . . . . . . . . . . . . . . . . . 2.201; 15.144, 15.145 Cipriani v Burnett [1933] AC 83, 102 LJPC 118, 148 LT 148 . . . . . . . . . . . . . .  20.124, 20.125, 20.136 City Index Ltd v Leslie [1992] QB 98, [1991] 3 WLR 207, [1991] 3 All ER 180, [1991] BCLC 643, (1991) 141 NLJ 419 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.3, 2.59, 2.69, 2.74, 2.78, 2.81, 2.82, 2.98 City of Edinburgh Council v Secretary of State for Scotland [1997] 1 WLR 1447, [1998] 1 All ER 174, 1998 SC (HL) 33, 1998 SLT 120, 1997 SCLR 1112, [1997] 3 PLR 71, [1998] JPL 224, [1997] EG 140 (CS), (1997) 94(42) LSG 31, (1997) 141 SJ LB 228, [1997] NPC 146, 1997 GWD 33-1693 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.17 City of London Corpn v Secretary of State for the Environment [1971] 23 P & CR 169 . 10.131 Clayton v Clayton 1937 SC 619, 1937 SLT 318 . . . . . . . . . . . . . . . . . .  15.312, 15.313, 15.338, 15.342, 15.344 Clockfair Ltd v Sandwell Metropolitan Borough Council & Grosvenor Casinos Ltd [2012] EWHC 1857 (Admin), [2013] PTSR 675, [2012] LLR 845 . . . . . . . . . . . . . . . 10.7, 10.195 Close v Wilson [2011] EWCA Civ 5, [2011] LLR 453 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.90, 20.91 Cohen v Kittell (1889) 22 QBD 680, 53 JP 469, 58 LJQB 241, 37 WR 400, 60 LT 932, 5 TLR 345 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.89 Cole v Crain [1989] NSW Lexis 11361 BC 8901838 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.21 Coles v Oldhams Press Ltd [1936] 1 KB 416, 34 LGR 34, 100 JP 85, 105 LJKB 208, 30 Cox CC 329, [1935] All ER Rep 598, 79 SJ 860, 154 LT 218, 52 TLR 119 . . . . 15.116, 15.135, 15.136 Corfield v Dolby (1935) 34 LGR 97, 100 JP 75, 30 Cox CC 341, [1935] All ER Rep 801, 80 SJ 128, 154 LT 266, 52 TLR 139 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.312, 15.338, 15.3242, 15.343, 15.344, 21.1 Cosmo Leisure Ltd v R & C Comrs [2012] UKFTT 733 (TC), [2013] LLR 320 . . . . . . . . . . 19.258 Cox v Army Council [1963] AC 48, [1962] 2 WLR 950, [1962] 1 All ER 880, (1962) 46 Cr App R 258, (1962) 106 SJ 305 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.17 Cran v Camden London Borough Council [1995] RGR 346 . . . . . . . . . . . . . . . . . . . . . . . . 10.26 Cranage Parish Council v First Secretary of State [2004] EWHC 2949 (Admin), [2005] 2 P & CR 23, [2005] JPL 1176, [2005] ACD 79 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.89, 10.90 Crawley Borough Council v Attenborough [2006] EWHC 1278 (Admin), (2006) 170 JP 593, (2007) 171 JPN 69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.66 Curl v Angelo [1948] 2 All ER 189, [1948] LJR 1756, (1948) 92 SJ 513 . . . . . . . . . . . . . . . . . 23.23 D DDP of Mauritius v Bholah [2011] UKPC 44, [2012] 1 WLR 1737, [2012] Lloyd’s Rep FC 406 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.13 DPP v Bradfute & Associates Ltd [1967] 2 QB 291, [1967] 2 WLR 459, [1967] 1 All ER 112, (1967 131 JP 117, (1967) 111 SJ 31 . . . . . . . . . . . . . . . . . . . . . .  15.40, 15.86, 15.87, 15.131, 15.132 DPP v Essoldo Circuit (Control) Ltd [1966] 1 QB 799, [1965] 3 WLR 837, [1965] 3 All ER 421 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.47 DPP v Phillips [1935] 1 KB 391, 32 LGR 464, 98 JP 461, 104 LJKB 73, 30 Cox CC 195, [1934] All ER Rep 414, 78 SJ 735, 152 LT 190, 51 TLR 54 . . .  2.130, 2.134, 15.43, 15.54, 15.88, 15.89, 15.90, 15.91, 15.102, 15.159, 15.161 DPP v Regional Pool Promotions Ltd [1964] 2 QB 244, [1964] 2 WLR 209, [1964] 1 All ER 65, (1964) 128 JP 150, 62 LGR 82, (1963) 107 SJ 984 . . . . . . . . . . . . . .  2.182, 2.193, 2.194, 2.195, 2.201, 2.207, 2.209 Da Costa v Jones (1778) 2 Cowp 729 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.53 Delfin International (SA) Ltd, Re, Re Delfin Marketing (UK) Ltd (orse Re a Company No 004355 & 004356 of 98) (unreported, 9 September 1998) . . . . . . . . . . . . . . . . . . . . . . . 2.7 Delfin International (SA) Ltd, Re, Re Delfin Marketing (UK) Ltd [2000] 1 BCLC 71 . .  2.7, 15.159 Delta Design & Engineering Ltd v Secretary of State for the Environment (2000) 80 P & CR 76, [2000] 4 PLR 1, [2000] JPL 726 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.134 De Mattos v Benjamin (1894) 63 LJQB 248, 10 R 103, 42 WR 284, 38 SJ 238, 70 LT 560, 10 TLR 221 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.90 Dew v DPP (1920) 18 LGR 829, 85 JP 81, 89 LJKB 1166, 26 Cox CC 664, [1920] All ER Rep 532, 124 LT 246, 37 TLR 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.315 Diggle v Higgs (1877) 2 Ex D 422, 42 JP 245, 46 LJQB 721, 25 WR 777, 37 LT 27, [1874–80] All ER Rep Ext 1717 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20.74, 20.75, 20.81

lxx

Table of cases Dimes v Proprietors of Grand Junction Canal 10 ER 301, (1852) 3 HL Cas 759 . . . . . . . . 9.21 Dines v Wolfe (1869) LR 2 PC 280 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20.124, 20.128 Down v Compston [1937] 2 All ER 475 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19.30, 19.31, 19.32 Dyason v Secretary of State for the Environment & Chiltern District Council (1998) 75 P & CR 506, [1998] 2 PLR 54, [1998] JPL 778 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.41 E Elderton v United Kingdom Totalisator Co Ltd [1946] Ch 57, [1945] 2 All ER 624, 44 LGR 113, 115 LJ Ch 81, 89 SJ 565, 173 LT 384, 62 TLR 53 . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.42, 2.49 Ellesmere (Earl) v Wallace [1929] 2 Ch 1, 98 LJ Ch 177, 73 SJ 143, 140 LT 628, 45 TLR 238, [1929] All ER Rep Ext 751 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.10, 2.11, 2.22, 2.97, 2.107, 2.135, 15.49; 19.186 Enfield London Borough v Secretary of State for the Environment & another (1974) 233 EG 53, [1975] JPL 155 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.100 English Bridge Union Ltd v HMRC TC/2012/0526 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.216 Everett v Shand [1931] 2 KB 522, 29 LGR 390, 95 JP 147, 100 LJKB 612, 29 Cox CC 309, [1931] All ER Rep 650, 75 SJ 393, 145 LT 216, 47 TLR 415 . . . . . . . . . . . . . . . . . . . . . . . 2.103 Express Newspapers plc v Liverpool Daily Post & Echo plc [1985] 1 WLR 1089, [1985] 3 All ER 680, [1986] ECC 204, [1985] FSR 306, (1985) 129 SJ 606 . . . . . . . . . . . . . . . . . . 16.102 F Fawcett Properties Ltd v Buckingham County Council [1961] AC 636, [1960] 3 WLR 831, [1960] 3 All ER 503, (1961) 125 JP 8, 59 LGR 69, (1961) 12 P & CR 1, (1960) 104 SJ 912, 176 Estates Gazette 1115 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.131, 10.137 Feldman v Nissim [2010] EWHC 1353 (Ch), [2010] BPIR 815, [2010] LLR 401 . . . . . . .  20.6, 20.50 Ferguson v Littlewoods Pools Ltd [1997] SLT 309, OH . . . . . . . . . . . . . . .  20.4, 20.12, 20.13, 20.47 Ferrera v Littlewoods Pools Ltd [1999] EWCA Civ 618 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.13 Fielding v Turner [1903] 1 KB 867 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.189 Fielding & Platt v Najjar [1969] 1 WLR 357, [1969] 2 All ER 150, (1969) 113 SJ 160 . . . . . 20.71 Financial Services Authority v Anderson [2010] EWHC 599 (Ch), [2011] Bus LR D22 . . 23.24 Finanzamt Gladbeck v Linneweber [2008] STC 1069, [2005] ECR I-1131, [2005] 1 CMLR 53, [2005] CEC 548, [2007] BTC 5258, [2007] BVC 227, [2005] STI 255 . . . . . . . . . . . . 19.55 Fisher v Bell [1961] 1 QB 394, [1960] 3 WLR 919, [1960] 3 All ER 731, (1961) 125 JP 101, (1960) 104 SJ 981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.126 Football League Ltd v Littlewoods Pools Ltd [1959] Ch 637, [1959] 2 All ER 546, [1959] 3 WLR 42, 103 SJ 490 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.102 Forest of Dean v Secretary of State for the Environment [1995] JPL B184 . . . . . . . . . . . . . 28.6 Fox v Adamson [1968] 1 QB 765, [1967] 3 All ER 902, [1968] 2 WLR 42, 132 JP 44, 112 SJ 30; aff’d [1970] AC 552, [1968] 2 All ER 411, [1968] 3 WLR 416, 66 LGR 673, 132 JP 518, 112 SJ 502 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.2 Fox v Stirk [1970] 2 QB 463, [1970] 3 WLR 147, [1970] 3 All ER 7, 68 LGR 644, (1970) SJ 397 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.10 Freddie Williams Bookmakers v East Ayrshire Licensing Board & William Hill Organisation Ltd [2012] Scot (D) 25/11, [2012] CSIH 89, 2013 SC 62, 2013 SLT 85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.205 Futures Index , Re (The Times, 12 October 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.68 G GASP (Group Against Smoker’ Pollution) v Manitoba Lotteries Licensing Board (1980) 111 DLR (3d) 760, [1980] 6 WWR 367 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20.118, 20.141 GLI (Galaxy Lifestyles) Ltd, Re [2005] All ER (D) 104 (Aug) . . . . . . . . . . . . . . . . . . . . . . . . 15.159 Gaby v Driver 148 ER 1036, (1828) 2 Y & J 549, 31 RR 629 . . . . . . . . . . . . . . . . . . . . . . . . . . 20.116 Gallagher v Post Office [1970] 3 All ER 712, 9 KIR 78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.17 Gasus Dosier und Fordertechnik GmbH v Netherlands (1995) 20 EHRR 403 . . . . . . . . . 19.280 Gateshead Council v Graham Crozier [2014] EWHC 2097 (Admin) . . . . . . . . . . . . . . . .  8.55, 8.59 Gatty v Field (1846) 9 QB 431, 15 LJQB 408, 10 Jur 980 . . . . . . . . . . . . . . . 20.80, 20.81, 20.82, 20.114 Georgiou v United Kingdom [2001] STC 80, 3 ITL Rep 145, [2001] STI 70 . . . . . . . . . . . . 19.280 Gibbons v Proctor (1891) 55 JP 616, 64 LT 594, 7 TLR 462 . . . . . . . . . . . . . . . . . . . . . . . . . . 20.109 Gibraltar Betting & Gaming Association Ltd v Secretary of State for Culture, Media & Sport [2014] EWHC 3236 (Admin), [2015] 1 CMLR 28, [2015] LLR 6 . . . . . 1.51; 17.15, 17.111 Gidden v Mikes [1925] 2 KB 713 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.23 Gideons International Service Mark [1991] RPC 141 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.213

lxxi

Table of cases Godfrey v Demon Internet Ltd [2001] QB 201, [2000] 3 WLR 1020, [1999] 4 All ER 342, [1999] EMLR 542, [1998-99] Info TLR 252, [1999] ITCLR 282, [1999] Masons CLR 267, (1999) 149 NLJ 609 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.256 Gordon v Dunlevy [1928] IR 595 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.189, 2.224 Gorenstein v Feldmann (1911) 27 TLR 457 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15.312, 15.313 Graham v Green (Inspector of Taxes) [1925] 2 KB 37 . . . . . . . . . . . . . . . . . 2.55, 19.18, 19.24, 19.28, 19.29, 19.31 Grainger & Son v Gough (1896) AC 325 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.24 Gransden (EC) v Secretary of State for the Environment (1987) 54 P & CR 86, [1986] JPL 519 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.89 Green v Portsmouth Stadium Ltd [1953] 2 QB 190, [1953] 2 WLR 1206, [1953] 2 All ER 102, (1953) 97 SJ 386 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.83 Greene King Brewing & Retailing Ltd v The Gambling Commission 2016 UKUT 50 (AAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.3; 1.15, 1.16;3.6; 6.143; 10.35; 12.34A; 14.42, 14.92; 25.106 Grizewood v Blane (1851) 11 CB 525, 138 ER 578 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.96 Groveside Properties v Westminster Medical School (1983) 9 HLR 118, (1984) 47 P & CR 507, (1983) 267 EG 593 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.24 Guardearly Ltd, Re, The Secretary of State for Trade & Industry v Freedom International (UK) & another (unreported, 14 March 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.7, 15.159 H HJ Glawe Spiel- und Unterhaltungsgeräte Aufstellungsgesellschaft mbH & Co KG v Finanzamt Hamburg-Barmbeck-Uhlenhorst [1994] STC 543, [1994] ECR I-1679, [1995] 1 CMLR 70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.43 HMRC v Pendragon plc [2015] UKSC 37, [2015] 1 WLR 2838, [2015] 3 All ER 919 . . . . . 2.210 HR (Portugal) v Home Secretary [2009] EWCA Civ 371, [2010] 1 WLR 158, [2010] 1 All ER 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.10 Hakki v Secretary of State for Work & Pensions [2014] EWCA Cv 530, [2015] 1 FLR 547, [2014] BTC 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.27; 20.149 Hall v Cox [1899] 1 QB 198, 68 LJQB 167, 47 WR 161, 43 SJ 95, 79 LT 653, 15 TLR 82 . . . 20.112 Hall & Co v Shoreham-by-Sea Urban District Council [1964] 1 WLR 240, [1964] 1 All ER 1, (1964) 128 JP 120, 62 LGR 206, (1964) 15 P & CR 119, (1963) 107 SJ 1001 . . .  10.131, 10.136 Halloway v Cuozzo [1999] EWCA Civ 746 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.13, 20.47 Hampden v Walsh (1876) 1 QBD 189, 45 LJQB 238, 24 WR 607, 33 LT 852 . . . .  2.12, 20.74, 20.75, 20.81 Hankins v Ottinger 115 Cal 454, 47 P 254 (1896) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.138 Hardwick v Lane [1904] 1 KB 204, 68 JP 94, 73 LJKB 96, 20 Cox CC 576, 52 WR 591, [1900–3] All ER Rep 571, 48 SJ 133, 89 LT 630, 20 TLR 87 . . . . . . . . . . . . . . . . . . . . . . . 15.46 Harris v Amory [1865] 13 LT 504 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.24 Harris v Bowden (1587) Cro Eliz 90, 78 ER 348 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8 Harrow London Borough Council v Shah [2000] 1 WLR 83, [1999] 3 All ER 302, [1999] 2 Cr App R 457, (1999) 163 JP 525, [2000] Crim LR 692 . . . . . . . . . . . . . . . . . . . . . . . . . . 16.56 Hastelow v Jackson (1828) 8 B & C 221, 6 LJOSKB 318, 2 Man & Ry KB 209, [1824–34] All ER Rep 529 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.74, 20.82 Hastingwood Property Ltd v Saunders Bearman Anselm (a firm) [1991] Ch 114, [1990] 3 WLR 623, (1990) 134 SJ 1153, (1990) 140 NLJR 817 . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.116 Hawke v Dunn [1897] 1 QB 579 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.30 Hazell v Hammersmith & Fulham LBC [1992] 2 AC 1, [1991] 2 WLR 372, [1991] 1 All ER 545, 89 LGR 271, (1991) 3 Admin LR 549, [1991] RVR 28, (1991) 155 JPN 527, (1991) 155 LG Rev 527, (1991) 88(8) LSG 36, (1991) 141 NLJ 127 . . . . . . . . . .2.67, 2.83, 2.87, 2.94, 9.6 Head v Head [1963] P 357, [1963] 3 WLR 326, [1963] 3 All ER 640 . . . . . . . . . . . . . . . . . . . 23.10 Henkin v Gerss 170 ER 1199, (1810) 2 Camp 406 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.51 Higgins v Beauhamp [1914] 3 KB 1192 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.24 Hill v Fox (1859) 4 H & N 359, 157 ER 879 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.99 Hillside (New Media) Ltd v Baasland [2010] EWHC 3336, [2010] 2 CLC 986, [2010] Info TLR 409 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.73 Hills (Patents) v University College Hospital Board of Governors [1956] 1 QB 90, [1955] 3 WLR 523, [1955] 3 All ER 365, (1955) 99 SJ 760 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.24 Hoddinott v Hoddinott [1949] 2 KB 406, (1949) 93 SJ 286, 65 TLR 266 . . . . . . . . . . . . . .  21.5, 21.6 Hodson v Terrill (1833) 1 Cr & M 797, 2 LJ Ex 282, 3 Tyr 929 . . . . . . . . . . . . . . . . . . . . . . . 20.82 Hogan v DPP [2007] EWHC 978 (Admin), [2007] 1 WLR 2944, (2008) 172 JP 57, (2008) 172 JPN 341 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.18, 27.48

lxxii

Table of cases Homeserve Membership Ltd (formerly Homeserve GB Ltd) v HMRC [2009] EWHC 1131 (Ch), [2009] STC 2366, [2010] Lloyd’s Rep IR 47 . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9 Hope & Glory Public House Ltd v City of Westminster Magistrates’ Court [2010] EWCA (Civ) 707 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.39, 8.40, 8.41, 8.53, 8.60 Horan v O’Reilly [2004] IEHC 425 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.20, 21.21 Horsham DC v Secretary of the State for the Environment (1992) 63 P & CR 219, [1992] 1 PLR 81, [1992] JPL 334, [1992] COD 84, [1991] EG 84 (CS) . . . . . . . . . . . . . . . . . . . . 10.89 Howgate v Ralph (1929) 27 LGR 432, 93 JP 127, 28 Cox CC 633, 73 SJ 253, 141 LT 512, 45 TLR 426 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.91, 15.102 Hudson v Chamberlain (1949) 47 LGR 131, [1949] WN 501, 113 JP 64 . . . . . . . . . . . . . . . . 15.273 Hussein v Chang Fook Kan [1970] AC 942, [1970] 2 WLR 441, [1969] 3 All ER 1626, (1970) 114 SJ 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.40 Hyams v Stuart King [1908] 2 KB 696, 77 LJKB 794, 52 SJ 551, 99 LT 424, 24 TLR 675 . . 20.15 I IFX Investments Co Ltd v HMRC; ‘Spotting the Ball’ Partnersip v R & C Comrs; Sportech plc v R & C Comrs [2014] UKUT 398 (TC), [2015] STC 294, [2014] BVC 535; revs’d [2016] EWCA Civ 436, [2016] 1 WLR 3952, [2017] 1 All ER 45 . . . . . .  2.171, 2.188, 2.199, 2.209; 25.28 ITP (London) Ltd v Winstanley [1947] KB 422, [1947] 1 All ER 177, 45 LGR 56, 111 JP 68, [1947] LJR 426, 91 SJ 132, 176 LT 117, 63 TLR 70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.307 Imperial Tobacco Ltd v A-G [1979] QB 555, [1979] 2 All ER 592, [1979] 2 WLR 805, 123 SJ 283; on appeal [1981] AC 718, [1980] 1 All ER 866, [1980] 2 WLR 466, 124 SJ 271 . . 0.101, 0.126, 1.91, 2.41, 2.127, 2.128, 2.130, 15.32, 15.33, 15.43, 15.50, 15.54, 15.55, 15.60, 15.92, 15.124 Institute of Chartered Accountants v C & E Comrs [1999] 1 WLR 701, [1999] 2 All ER 449, [1999] STC 398 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.24 Intensa San Paolo SpA v Regioe Piermonte [2013] EWHC 1994 (Comm) . . . . . . . . . . . . . 2.91 International Securities Corpn Ltd, Re (1908) 99 LT 581, 24 TLR 837; on appeal (1909) 25 TLR 31, 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.95, 15.332 Ivey v Genting Casinos UK Ltd (t/a Crockfords Club) [2014] EWHC 3394 (QB), [2015] LLR 98, (2014) 158 (46) SJLB 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7; 1.27; 4.80; 20.34, 20.35, 20.37, 20.67, 20.69 J JM Allan (Merchandising) Ltd v Cloke [1963] 2 QB 340, [1963] 2 WLR 899, [1963] 2 All ER 258, 61 LGR 304, (1963) 107 SJ 213 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.47; 2.239 JSC BTA Bank v Abylazov [2009] EWCA Civ 1124, [2010] 1 WLR 976, [2010] CP Rep 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.27, 27.28 J Seven Ltd (VAT & Duties Tribunal decision LON/2024) . . . . . . . . . . . . . . . . . . . . . . . . . 19.54 John v Rees [1970] Ch 345, [1969] 2 WLR 1294, [1969] 2 All ER 274, (1969) 113 SJ 487 . . 10.27 John Wagstaffe Ltd v Police [1965] NZLR 973 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.102 Joker Club LLC v Hardin [2007] 643 SE 2d 626 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.222 Jones v Carter (1845) 8 QB 134, 15 LJQB 96, 10 Jur 33, 6 LTOS 170 . . . . . . . . . . . . . . . . . . . 20.114 Jones v Vernons Pools Ltd [1938] 2 All ER 626 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.4, 20.12, 20.13 K K Ltd v National Westminster Bank plc [2006] EWCA Civ 1039, [2007] Bus LR 26, [2007] 1 WLR 311, [2006] 4 All ER 907, [2006] 2 All ER (Comm) 655, [2006] 2 Lloyd’s Rep 569, [2006] CP Rep 45, (2006) 103(31) LSG 24, (2006) 150 SJ LB 982 . . . . . . 27.33, 27.42, 27.45, 27.46, 27.58 KFTCI v Icori Estero SpA (28 June 1991), Paris CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.23 Kearley v Thomson (1845) 8 QB 134, 15 LJQB 96, 10 Jur 33, 6 LTOS 170 . . . . . . . . . . . . 20.60, 20.83 Keehan v Walters [1948] 1 KB 19, 45 LGR 526, 91 SJ 494, 177 LT 552, 63 TLR 483 . . . . . . 15.273 Kelland v Raymond [1964] 2 QB 108, [1964] 2 WLR 662, [1964] 1 All ER 564, (1964) 128 JP 254, 62 LGR 272, (1964) 108 SJ 280 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.47; 2.239 Kelly v Murphy 1940 SC 96, 1940 SLT 108 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.106, 2.107, 20.4, 20.12 Kerslake v Knight (1925) 23 LGR 574, 89 JP 142, 94 LJKB 919, 28 Cox CC 27, [1925] All ER Rep 679, 69 SJ 607, 133 LT 606, 41 TLR 555 . . . . . . . . . . . . . . . . . . . . . . 15.87, 15.102, 15.131 King v Eaton Ltd (No 1) 1996 SC 74, 1997 SLT 654, 1996 SCLR 232, [1996] IRLR 199 . . . 10.20 Kingsway Investments (Kent) Ltd v Kent County Council [1971] AC 72, [1970] 2 WLR 397, [1970] 1 All ER 70, 68 LGR 301, (1970) 21 P & CR 58, (1970) 114 SJ 73 . . . . . . . . 10.139

lxxiii

Table of cases Kleinwort Benson Ltd v Sandwell BC see Westdeutsche Landesbank Girozentrale v Islington LBC Kleinwort Benson Ltd v South Tyneside Metropolitan BC [1994] 4 All ER 972 . . . . . . . . 2.87 Koscot Interplanetary (UK) Ltd, Re (unreported, 1972) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.159 Kowloon Stock Exchange Ltd v Inland Revenue Comrs [1985] 1 WLR 133, [1985] 1 All ER 205, [1984] STC 602, [1985] PCC 155, [1985] FLR 114, (1984) 81 LSG 3502 . . . . . . 23.24 Kucukkoylu v Ozcan [2014] EWHC 1972 (QB) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21.8, 21.9, 21.11 Kursaal Casino Ltd v Crickitt (No 2) [1968] 1 WLR 53, [1968] 1 All ER 139, (1968) 132 JP 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.47 L Ladbroke (Football) Ltd v Perrett [1971] 1 WLR 110, [1971] 1 All ER 129, 135 JP 181, 114 SJ 930 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.201; 15.141 Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273, [1964] 1 All ER 465, (1964) 108 SJ 135 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.102 Lambeth Borough Council v Grewal (1986) 82 Cr App R 301, (1986) 150 JP 138, [1986] Crim LR 260, (1986) 150 JPN 111 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.121 Langford Property Co v Goldrich [1949] 1 KB 511, [1949] 1 All ER 402, [1949] LJR 663, (1949) 93 SJ 133 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.23 Lawson v Serco [2006] UKHL 3, [2006] 1 All ER 823, [2006] ICR 250 . . . . . . . . . . . . . . . . . 2.210 Lee v Mumm (1817) 8 Taunt 45, 1 Moore CP 481 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.116 Les Laboratoires Servier v Apotex [2014] UKSC 55, [2015] AC 430, [2014] 3 WLR 1257 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.57 Lever Finance Ltd v Westminster (City) LBC [1971] 1 QB 222, [1970] 3 WLR 732, [1970] 3 All ER 496, 68 LGR 757, (1970) 21 P & CR 778, [1971] JPL 115, (1970) 114 SJ 651 . . 28.38 Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548, [1991] 3 WLR 10, [1992] 4 All ER 512, (1991) 88(26) LSG 31, (1991) 141 NLJ 815, (1991) 135 SJ LB 36 . . . . . 20.15, 20.76, 20.77, 20.78, 20.101, 20.102 Locabail (UK) Ltd v Bayfield Properies Ltd [2000] QB 451, [2000] 2 WLR 870, [2000] 1 All ER 65, [2000] IRLR 96, [2000] HRLR 290, [2000] UKHRR 300, 7 BHRC 583, (1999) 149 NLJ 1793, [1999] NPC 143 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9.21, 9.22, 9.23, 9.25 Luganda v Service Hotels [1969] 2 Ch 209, [1969] 2 WLR 1056, [1969] 2 All ER 692, (1969) 20 P & CR 337, (1969) 113 SJ 165 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.35 Lunn v Colston-Hayter (1991) 89 LGR 754, 155 JP 384, [1991] Crim LR 467 . . . . . . . . . . . 23.19 Luxury Leisure Ltd v Gambling Commission [2015] LLR 122 . . . . . . . . 6.25, 6.27, 6.94, 6.96, 6.97, 6.149; 13.21 M McCarthy & Stone (Developments) Ltd v Richmond-upon-Thames London Borough Council [1992] 2 AC 48, [1991] 3 WLR 941, [1991] 4 All ER 897 . . . . . . . . . . . . . . . . . 3.27 McCollom v Wrightson [1968] AC 522, [1968] 2 WLR 578, [1968] 1 All ER 514, (1968) 132 JP 261, 66 LGR 343, (1968) 112 SJ 132 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.228 MacDonald v Green [1951] 1 KB 594, [1950] 2 All ER 1240, (1950) 94 SJ 804, [1951] 1 TLR 111 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.96, 20.99 McKay v Gillies [1956] 3 All ER 583, [1956] 1 WLR 1402, 120 JP 587, 100 SJ 820 . . . . . . . 15.311 MacNee v Persian Investment Corpn (1890) 44 Ch D 306, 59 LJ Ch 695, 38 WR 596, 62 LT 894, 6 TLR 280 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.314, 15.331, 15.344 Malizia (Barry) & Chohan (Paul) v Gambling Commission GA/2012/0001, 0002 . . . . 1.71; 7.54, 7.86 Marleasing SA v La Comercial [1990] ECR I-4135 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.5 Marshall v Nottingham Corpn [1960] 1 WLR 707, [1960] 1 All ER 659, (1960) 124 JP 222, 58 LGR 226, (1960) 11 P & CR 270, (1960) 104 SJ 546 . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.6 Maynard v Williams [1955] 1 All ER 81, [1955] 1 WLR 54, 119 JP 137, 99 SJ 7 . . . . . 15.179, 15.199, 15.281, 15.284 Mearing v Hellings 153 ER 661, (1845) 15 LJ Ex 168, 14 M & W 711 . . . . . . . . . . 15.46; 20.80, 20.114 Medicaments & Related Classes of Goods (No 2), Re [2001] 1 WLR 700, [2001] ICR 564 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.24 Melser v Police [1967] NZLR 437 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.31 Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500, [1995] 3 WLR 413, [1995] 3 All ER 918, [1995] BCC 942, [1995] 2 BCLC 116, (1995) 92(28) LSG 39, (1995) 139 SJ LB 152 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.48 Metropolitan Police Comr v Weston [1969] 1 WLR 847, [1969] 2 All ER 897, (1969) 133 JP 486 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.47

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Table of cases Metropolitan Properties Co (FGC) Ltd v Barder [1968] 1 WLR 286, [1968] 1 All ER 536, (1968) 19 P & CR 304, (1967) 112 SJ 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.23 Midasplayercom Ltd v Watkins [2006] EWHC 1551 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.69 Mills v Mackinnon [1964] 2 QB 96, [1964] 2 WLR 363, [1964] 1 All ER 155 . . . . . . . . . . . . 0.47 Milne v Comr of Police for the City of London [1940] AC 1, [1939] 3 All ER 399, (1940) 27 Cr App R 90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.1 Minty v Sylvester (1915) 13 LGR 1085, 79 JP 543, 84 LJKB 1982, 25 Cox CC 247, 114 LT 164, 31 TLR 589 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.91 Mixnam’s Properties Ltd v Chertsey Urban District Council [1965] AC 735, [1964] 2 WLR 1210, [1964] 2 All ER 627, (1964) 128 JP 405, 62 LGR 528, (1964) 15 P & CR 331, [1964] RVR 632, (1964) 108 SJ 402 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.131 Moore v Elphick [1945] 2 All ER 155, 43 LGR 142, 110 JP 66 . . . . . . . . . . . . . . . . . . . . . . . . 15.116 Moores v DPP [1992] 1 QB 125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.30 Morgan Grenfell & Co Ltd v Welwyn Hatfield District Council (Islington Borough Council, Third Party) [1995] 1 All ER 1 . . . . . . . . . . . . . . . 2.67, 2.75, 2.86, 2.87, 2.90, 2.91, 2.92, 2.94, 2.96, 2.97, 2.98, 2.99, 2.100 Morris v Baguley [1937] BTRLR 73 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.250 Morris v Blackman 159 ER 378, (1864) 2 Hurl & C 912, (1864) 2 H & C 912, 10 Jur NS 520 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.91, 15.102 Moyna v Secretary of State for Work & Pensions [2003] UKHL 44, [2003] 1 WLR 1929, [2003] 4 All ER 162 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.210 Mugford v Midland Bank plc [1997] ICR 399, [1997] IRLR 208 . . . . . . . . . . . . . . . . . . . . . 10.20 N Namberry Craft Pty Ltd v Watson [2011] VSC 136 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.22 Nejad v City Index Ltd (unreported, 12 July 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.78 Newbury District Council v Secretary of State for the Environment [1981] AC 578, [1980] 2 WLR 379, [1980] 1 All ER 731, 78 LGR 306, (1980) 40 P & CR 148, [1980] JPL 325, (1980) 124 SJ 186 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.131, 10.132, 10.134, 10.135, 10.136, 10.137, 10.138 News International Newspapers Ltd v C & E Comrs [1995] V & DR 274 . . . . . . .  0.114; 2.24, 2.43 News International Newspapers Ltd v C & E Comrs [1998] EWCA Civ 569, [1998] V & DR 267 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.114; 2.24, 2.43, 2.44, 19.171, 19.172, 19.184, 19.189, 19.190 News of the World Ltd v Friend [1973] 1 WLR 248, [1973] 1 All ER 422, [1973] Crim LR 237, (1973) 117 SJ 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.41, 2.201, 2.209; 15.98, 15.116, 15.129, 15.141, 15.142, 15.143, 15.145 Nextia Properties Ltd v Royal Bank of Scotland plc [2013] EWHC 3167 (QB) . . . .  2.87, 2.88, 2.92 Niemietz v Germany (1993) 16 EHRR 97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.277 Norfolk CC v Secretary of State for the Environment [1973] 1 WLR 1400, [1973] 3 All ER 673, 72 LGR 44, (1973) 26 P & CR 273, (1973) 117 SJ 650 . . . . . . . . . . . . . . . . . . . . . . . . 28.40 Northavon DC v Secretary of State for the Environment [1993] JPL 761 . . . . . . . . . . . . 10.89, 10.90 Nottingham CC & Brostowe BC v Secretary of State for the Environment, Transport & the Regions [1999] EGCS 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.16 O Oasis Technologies Ltd (UK) v HMRC (VAT) [2010] UKFTT 292 (TC), [2010] BVC 2362 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.197, 2.199, 2.201 O’Callaghan v Coral Racing Ltd [1998] EWCA Civ 1801 . . . . . . . . . . . . . . . . . . .  20.39, 20.41, 20.42 Office of the King’s Prosecutor (Brussels) v Cando Arma [2005] UKHL 67, [2006] 2 AC 1, [2006] 1 All ER 647 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.22 O’Shea, Re, ex p Lancaster [1911] 2 KB 981, 81 LJKB 70, 18 Mans 349, [1911–13] All ER Rep 628, 105 LT 486 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.96 O’Sullivan v Thomas [1895] 1 QB 698, 59 JP 134, 64 LJQB 398, 15 R 253, 43 WR 269, 39 SJ 266, 72 LT 285, 11 TLR 225 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.75 One Life Ltd v Roy & another [1996] 2 BCLC 608 . . . . . . . . . . . . . .  2.7, 2.130, 15.43, 15.54, 15.159; 20.83, 20.83, 20.144 Ordre de Barreaux Francophone v Council (Case C-305/05) (26 June 2007) . . . . . . . . . . 27.29 Overy (Alfred) v Paypal (Europe) Ltd [2012] EWHC 2659 (QB), [2013] Bus LR D1 . . . . 20.23, 20.25, 20.26 Oxford CC v Oxfordshire City Council [2006] 2 AC 708 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.210

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Table of cases P P v National Association of Schoolmasters / Union of Women Teachers (NASUWT) [2003] UKHL 8, [2003] 2 AC 663, [2003] 2 WLR 545 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9 P v P (ancillary relief: proceeds of crime) [2003] EWHC 2260 (Fam), [2004] Fam 1, [2003] 3 WLR 1350, [2003] 4 All ER 843, [2004] 1 FLR 193, [2003] 3 FCR 459, [2003] WTLR 1449, [2004] Fam Law 9, (2003) 100(41) LSG 33, (2003) 153 NLJ 1550, (2003) 147 SJ LB 1206 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.28 Padfield v Minister of Agriculture, Fisheries & Food [1968] AC 997, [1968] 2 WLR 924, [1968] 1 All ER 694, (1968) 112 SJ 171 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.81 Panama (Piccadilly) Ltd v Newberry [1962] 1 WLR 610, [1962] 1 All ER 769, (1962) 126 JP 140, 60 LGR 503, (1962) 106 SJ 154 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.19 Parkes v Secretary of State for the Environment [1978] 1 WLR 1308, [1979] 1 All ER 211, 77 LGR 39, (1978) 36 P & CR 387, (1978) 248 EG 595, [1979] JPL 33, (1978) 122 SJ 349 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.5 Partridge v Mallandaine (Surveyor of Taxes) (1887) LR 18 QBD 276, 2 TC 179 . . . . . . 2.55, 19.11, 19.12 Payne v Bradley [1962] AC 343, [1961] 2 QB 44, [1961] 3 WLR 281, [1961] 2 All ER 882, (1961) 125 JP 514, 59 LGR 364, (1961) 105 SJ 566 . . . . . . . . . . . . . . . . . . . . .  15.171, 15.172; 25.3 Peck v Lateu [1973] 117 SJ 185 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21.7, 21.11 Pearse v Hart [1955] 1 WLR 67n, [1955] 1 All ER 91n, (1955) 99 SJ 78 . . . . .  15.281, 15.283, 15.284 Peers v Caldwell [1916] 1 KB 371, [1914-15] All ER Rep 497 . . . . . . . . . . . . . . . . . . . . . . . . 2.189 People v Ambrose [1953] 122 Cal App 2d Supp, 265 P 2d 191 . . . . . . . . . . . . . . . . . . .  2.137, 2.237 People v Carroll 18 Cal 153, 22 P129 (1889) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.136, 2.237 People v Postma [1945] 160 P 2d 221 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.135 Pepper (Inspector of Taxes) v Hart [1993] AC 593, [1992] 3 WLR 1032, [1993] 1 All ER 42, [1992] STC 898, [1993] ICR 291, [1993] IRLR 33, [1993] RVR 127, (1993) 143 NLJ 17, [1992] NPC 154 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5, 1.6, 1.8, 10.118 Pessers v Catt LXXVII JP 429 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.189 Phonograohic Performance Ltd v Pontin’s Ltd & another [1968] 1 Ch 290 . . . . . . . . . . . . 23.10 Pitts v The Evening Standard Co Ltd (unreported, 17 July 1972) . . . . . . . . . . . . . . .  15.309, 15.314 Porter v Magill [2001] UKHL 67, [2002] 2 AC 357, [2002] 2 WLR 37, [2002] 1 All ER 465, [2002] HRLR 16, [2002] HLR 16, [2002] BLGR 51, (2001) 151 NLJ 1886, [2001] NPC 184 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.24, 9.26 Potters (a firm) v Loppert [1973] Ch 399, [1973] 2 WLR 469, [1973] 1 All ER 658, (1973) 25 P & CR 82, (1972) 116 SJ 862 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.116 Powell v Kempton Park Racecourse Co Ltd [1899] AC 143 . . . . . . . . . . . . . . . . . . . . . . . . . 0.30 Prestcold (Central) Ltd v Minister of Labour [1969] 1 WLR 89, [1969] 1 All ER 69, 6 KIR 449, [1969] ITR 1, [1968] TR 317, (1968) 112 SJ 865 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.270 Prince Albert Agricultural Society v Dobson [1939] 2 DLR 784, [1939] 1 WWR 719 . . . . 20.133, 20.134 Prize Provision Services Ltd v Revenue & Customs [2006] LLR 85 . . . . . . . . . . . . . . . . .  2.7, 2.141 Procter & Gamble v HMRC [2009] EWCA Civ 407, [2009] STC 1990, [2009] BTC 5462 . 2.210 Prothero v Watson (1931) 95 JP 184, 145 LT 643 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.333 Pugh v Jenkins (1841) 1 QB 631, 10 LJQB 201, 1 Gal & Dav 40, 5 Jur 1082 . . . . . . . . . . . . 2.12 Purely Creative Ltd v Office of Fair Trading (Case C-428/11) [2013] Bus LR 985, [2013] 1 CMLR 35, [2013] CEC 691 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.135 Pyx Granite Co Ltd v Ministry of Housing & Local Government [1958] 1 QB 554, [1958] 2 WLR 371, [1958] 1 All ER 625, (1958) 122 JP 182, 56 LGR 171, (1958) 9 P & CR 204, (1958) 102 SJ 175 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.131, 10.139 Q Quarrier v Colston (1842) 1 Ph 147, 12 LJ Ch 57, 6 Jur 959 D21 . . . . . . . . . . . . . . . . . . . . . 20.103 Quinn v Mackinnon [1963] 1 QB 874, [1963] 2 WLR 391, [1963] 1 All ER 570, (1963) 127 JP 222, 61 LGR 219, (1963) 107 SJ 95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.47; 2.239 R R v Afolabi [2009] EWCA Crim 2879, [2010] Lloyd’s Rep FC 314 . . . . . . . . . . . . . . . . . . . . 27.48 R v Anwoir [2008] EWCA Crim 1354, [2008] 4 All ER 582, [2008] 2 Cr App R 36 . . . . . . . 27.13 R v Arnhope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8 R v Betsworth 1734) 2 Barn KB 420 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8 R v Birmingham City DC, ex p O [1983] 1 AC 578, [1983] 2 WLR 189, [1983] 1 All ER 497, 81 LGR 259, (1983) 127 SJ 105 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.29

lxxvi

Table of cases R v Bow Street Metropolitan Stipendiary Magistrate, ex p Pinochet Ugarte (No 2) [2000] 1 AC 119, [1999] 2 WLR 272, [1999] 1 All ER 577, 6 BHRC 1, (1999) 11 Admin LR 57, (1999) 96(6) LSG 33, (1999) 149 NLJ 88 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9.21, 9.23 R v Brent London Borough Council, ex p Gunning & others (1985) 84 LGR 168 . . . . . . . 10.20, 10.23, 10.26 R v Bristol County Council, ex p Anderson (2000) 79 P & CR 358, [2000] PLCR 104, [1999] COD 532, (1999) 96(25) LSG 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.135 R v British Coal Corpn & Secretary of State for Trade & Industry, ex p Price [1994] IRLR 72, [1993] COD 482 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.20 R v Broadcasting Standards Commission, ex p BBC [2001] QB 885, [2000] 3 WLR 1327, [2000] 3 All ER 989, [2001] BCC 432, [2001] 1 BCLC 244, [2000] EMLR 587, [2000] HRLR 374, [2000] UKHRR 624, [2000] COD 322, (2000) 97(17) LSG 32, (2000) 144 SJ LB 204 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.277 R v Broxtow Borough Council, ex p Bradford [2000] IRLR 329, [2000] BLGR 386 . . . . 10.27, 10.28 R v Burt & Adams [1999] 1 AC 247, [1998] 2 WLR 725, [1998] 2 All ER 417, (1998) 162 JP 263, (1998) 162 JPN 365, (1998) 95(18) LSG 33, (1998) 148 NLJ 515, (1998) 142 SJ LB 127 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.76, 25.77 R v CD [1976] 1 NZLR 436 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.101 R v Chester Crown Court, ex p Pascoe & Jones (1987) 151 JP 752, (1987) 151 JPN 574 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.81, 10.82, 10.83, 10.84, 10.85 R v Chichester Crown Court, ex p Forte [1995] 160 JP 285, [1995] COD 431, (1996) 160 LG Rev 462 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.109 R v Chief Constable of Thames Valley Police, ex p Cotton [1990] IRLR 344 . . . . . . . . . 10.27, 10.28 R v Da Silva [2006] EWCA Crim 1654, [2007] 1 WLR 303, [2006] 4 All ER 900, [2006] 2 Cr App R 35, [2007] Crim LR 77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27.36, 27.40, 27.42, 27.45 R v Derbyshire County Council, ex p Woods [1998] Env LR 277, [1997] JPL 958 . . . . . 10.89, 10.90 R v Environment Secretary, ex p Spath Holme Ltd [2001] 2 AC 349, [2001] 2 WLR 15, [2001] 1 All ER 195, (2001) 33 HLR 31, [2001] 1 EGLR 129, [2000] EG 152 (CS), (2001) 98(8) LSG 44, (2000) 150 NLJ 1855, (2001) 145 SJ LB 39, [2000] NPC 139 . . . . . . . . . . 1.6 R v Fazal (Mohammed Yassen) [2009] EWCA Crim 1697, [2010] 1 WLR 694, [2010] 1 Cr App R 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.20 R v GH [2015] UKSC 24, [2015] 1 WLR 2126, [2015] 4 All ER 274 . . . . . . . .  27.2, 27.8, 27.14, 27.15, 27.30 R v Geary (Michael) [2010] EWCA Crim 1925, [2011] 1 WLR 1634, [2011] 2 All ER 198 . 27.32 R v Governor of Brixton Prison, ex p Sjoland [1912] 3 KB 568 . . . . . . . . . . . . . . . . . . . . . . 0.9; 2.225 R v Greater London Council & another, ex p Westminster City Council (The Times, 27 December 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.6 R v Gwent County Council & the Secretary of State for Wales, ex p Bryant [1988] COD 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.20 R v Hammersmith & Fulham London Borough Council, ex p Beddowes [1987] QB 1050, [1987] 2 WLR 263, [1987] 1 All ER 369, (1986) 18 HLR 458, 85 LGR 270, [1987] RVR 189, (1986) 83 LSG 3001, (1986) 130 SJ 696 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.17, 10.23 R v Herrod, ex p Leeds City District Council [1976] QB 540, [1974] 3 All ER 362, [1974] 1 WLR 1275, 73 LGR 9, 138 JP 733, 118 SJ 613; revs’d [1976] QB 540, [1976] 1 All ER 273, [1976] 2 WLR 18, 74 LGR 70, 119 SJ 867; aff’d sub nom Walker v Leeds City Council [1978] AC 403, [1976] 3 All ER 709, [1976] 3 WLR 736, 141 JP 1, 120 SJ 769 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.186, 22.31, 25.49 R v Hillingdon London Borough Council, ex p Royco Homes Ltd [1974] QB 720, [1974] 2 WLR 805, [1974] 2 All ER 643, 72 LGR 516, (1974) 28 P & CR 251, (1974) 118 SJ 389 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.131, 10.133, 10.139 R v Hobbs [1898] 2 QB 647, 62 JP 551, 67 LJQB 928, 19 Cox CC 154, 47 WR 79, 42 SJ 717, 79 LT 160, 14 TLR 573, CCR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.46 R v Holborn Licensing Justices, ex p Stratford Catering Co (1927) 36 LT 278 . . . . . . . . . . 10.81 R v Inner London Crown Court, ex p Sitki [1992] 157 JP 523 . . . . . . . . . . . . . . . . . . . . . . . 10.139 R v Interactive Telephone Services (Telemillions Case)(Southampton Magistrates’ Court, 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15.124, 15.129 R v Jefferson [1994] 1 All ER 270, (1994) 99 Cr App R 13, (1994) 158 JP 76, [1993] Crim LR 880, (1993) 157 JPN 699 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5 R v Kanesarajah see R v Naillie R v Kelly [2008] EWCA Crim 137, [2008] 2 All ER 840, [2008] 2 Cr App R 11, (2008) 172 JP 231, (2008) 172 JPN 474 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.168, 2.172, 2.176, 2.208, 2.210, 2.221, 2.222; 14.18; 20.4 R v LCC, ex p Corrie [1918] 1 KB 68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.81

lxxvii

Table of cases R v Lloyd (1802) 4 Espinasse 209 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.35 R v Madden [1975] 1 WLR 1379, [1975] 3 All ER 155, (1975) 61 Cr App R 254, [1975] Crim LR 582, (1975) 119 SJ 657 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.35 R v Mendip DC, ex p Fabre (2000) 80 P & CR 500, [2000] JPL 810, [2000] COD 372 . . . . 28.37 R v Metropolitan Police Comr, ex p Blackeburn [1968] 2 QB 118, [1968] 2 WLR 893, [1968] 1 All ER 763 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.48 R v Millennium Commission, ex p The Asha Foundation [2003] EWCA Civ 88, [2003] ACD 50, (2003) 100(11) LSG 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16.78, 16.80, 16.82, 16.85 R v Ministry of Defence, ex p Walker [2000] 1 WLR 806, [2000] 2 All ER 917, [2000] COD 153, (2000) 97(19) LSG 43, (2000) 144 SJ LB 198 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.89 R v Montila [2004] UKHL 50, [2004] 1 WLR 3141, [2005] 1 All ER 113, [2005] 1 Cr App R 26, [2005] Crim LR 479, (2005) 102(3) LSG 30, (2004) 148 SJ LB 1403 . . . . . . . . . . . . . 1.9; 27.13 R v Moore (1832) 3 B & Ad 184 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.35 R v Moore [1914] 10 CAR 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.225 R v Naillie [1993] AC 674, [1993] 2 WLR 927, [1993] 2 All ER 782, (1993) 97 Cr App R 388, (1993) 143 NLJ 848 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.159 R v National Lottery Commission, ex p Camelot Group plc [2001] EMLR 43 . . . . . . . . . 16.20 R v Newcastle Licensing Justices (on the application of TC Projects Ltd) [2008] EWCA Civ 428 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.38 R v North & East Devon Health Authority, ex p Coughlan [2001] QB 213, [2000] 2 WLR 622, [2000] 3 All ER 850, (2000) 2 LGLR 1, [1999] BLGR 703, (1999) 2 CCL Rep 285, [1999] Lloyd’s Rep Med 306, (2000) 51 BMLR 1, [1999] COD 340, (1999) 96(31) LSG 39, (1999) 143 SJ LB 213 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.20, 10.21, 10.24 R v North Hertfordshire District Council, ex p Cobbold [1985] 3 All ER 486 . . . . .  10.131, 10.139 R v Peers & Brown (1917) 12 Cr App Rep 210 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.189 R v Port of London Authority, ex p Kynoch Ltd [1919] 1 KB 176 . . . . . . . . . . . . . . . . . . . . 10.81 R v Registrar of Joint Stock Companies, ex p More [1931] 2 KB 197, 29 LGR 452, 95 JP 137, 100 LJKB 638, 145 LT 522, 47 TLR 383, [1931] All ER Rep Ext 864 . . . . . . . . . . . 15.334 R v Rimmington [2005] UKHL 63, [2006] 1 AC 459, [2005] 3 WLR 982, [2006] 2 All ER 257, [2006] 1 Cr App R 17, [2006] HRLR 3, [2006] UKHRR 1, [2006] Crim LR 153, (2005) 102(43) LSG 28, (2005) 155 NLJ 1685, [2006] Env LR D3 . . . . . . . . . 1.33, 1.35, 1.36, 1.37 R v Rochdale MBC, ex p Milne [2001] Env LR 22, (2001) 81 P & CR 27, [2001] JPL 229 (Note), [2001] JPL 470, [2000] EG 103 (CS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.17 R v Rogers (Bradley David) [2014] EWCA Crim 1680, [2015] 1 WLR 1017, [2014] 2 Cr App R 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.8 R v Rose [2008] EWCA Crim 239, [2008] 1 WLR 2113, [2008] 3 All ER 315, [2008] 2 Cr App R 15, [2008] 2 Cr App R (S) 80, [2008] Crim LR 650 . . . . . . . . . . . . . . . . . . . . . . . 27.15 R v Rotherham Licensing Justices, ex p Chapman [1939] 2 All ER 710 . . . . . . . . . . . . . . . 10.81 R v Royal Borough of Kensington & Chelsea, ex p Bayani (1990) HLR 406 . . . . . . . . . . . 10.101 R v Royal Borough of Kensington & Chelsea, ex p Blennerhasset [1996] CLY 3958 . . . . 15.185, 15.192, 15.197, 15.276, 15.277 R v Ruffell (1992) 13 Cr App Rep (S) 204 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.35 R v St Edmundsbury BC, ex p Walton [1999] Env LR 879, (1999) 11 Admin LR 648, [1999] 3 PLR 51, [1999] JPL 805, [1999] EG 53 (CS), (1999) 143 SJ LB 175, [1999] NPC 44 . . 28.31 R v Secretary of State for Communities & Local Government, ex p Martin Perrett [2009] EWCA Civ 1365, [2010] 2 All ER 578, [2010] PTSR 1280 . . . . . . . . . . . . . . . . . . . . . . . . 8.38 R v Secretary of State for the Environment, ex p Brent London Borough Council [1982] QB 593, [1982] 2 WLR 693, [1983] 3 All ER 321, 80 LGR 357, (1982) 126 SJ 118 . . . . . 10.26 R v Secretary of State for the Environment, ex p Hillingdon LBC [1986] 1 WLR 807, [1986] 2 All ER 273, (1988) 55 P & CR 241, [1987] RVR 6, [1987] JPL 717, (1986) 83 LSG 2331, (1986) 130 SJ 481 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.29 R v Secretary of State for the Environment, ex p Kirkstall Valley Campaign Ltd [1996] 3 All ER 304, [1997] 1 PLR 8, [1996] JPL 1042, [1996] COD 337, (1996) 160 JP Rep 699, [1996] EG 46 (CS), (1996) 146 NLJ 478, [1996] NPC 41 . . . . . . . . . . . . . . . . . . . . . . . . . 9.26 R v Secretary of State for the Home Department, ex p Ozminnos [1994] Imm AR 287 . . 10.89 R v Sheffield City Council, ex p Mansfield 77 LGR 126, (1979) 37 P & CR 1, (1978) 247 EG 52, [1978] JPL 465 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.17 R v Sheffield Crown Court, ex p Consterdine (1992) Licensing Review 19 . . . 10.82, 10.83, 10.85, 10.86 R v Sheffield Crown Court, ex p Mead [2002] LLR 730 . . . . . . . . . . . . . . . . . . . . . . . . . . 10.85, 10.86 R v Stafford Crown Court, ex p Wilf Gilbert (Staffs) Ltd [2001] LLR 138 . . . . . . . . . . . . . 8.64 R v Tan [1983] QB 1053 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.30 R v Teignbridge DC, ex p Teignbridge Quay Co Ltd [1995] JPL 828 . . . . . . . . . . . . . . . . . 28.43

lxxviii

Table of cases R v Torbay Licensing Justices, ex p White [1982] All ER 25 . . . . . . . . . . . . . . . . . . . . . . . . . 10.82 R v Torquay Licensing Justices, ex p Brockman [1951] 2 KB 784, [1951] 2 All ER 656, 49 LGR 733, 115 JP 514, 95 SJ 641, [1951] 2 TLR 652 . . . . . . . . . . . . . . . . . . . . . . 10.81, 10.81, 10.82 R v Tower Hamlets LBC, ex p Chetnik Developments Ltd [1988] AC 858, [1988] 2 WLR 654, [1988] 1 All ER 961, 86 LGR 321, [1988] RA 45, [1988] EG 36 (CS), (1988) 138 NLJ Rep 89, (1988) 132 SJ 4621 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.13 R v Tower Hamlets LBC, ex p Ojo (1991) 23 HLR 488, [1991] COD 292 . . . . . . . . . . . . . . 10.101 R v Walsall Justices (1854) 18 JP 757 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.81, 10.82 R v Weisz, ex p Hector MacDonald Ltd [1951] 2 KB 611, [1951] 2 All ER 408, (1951) 95 SJ 433[1951] 2 TLR 337 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.84 R v Westminster City Council, ex p Legg (2000) 2 LGLR 961, [2000] BLGR 611 . . . . . . . . 9.6 R v Wicks (The Times, 26 May 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.54 R v Williams [2013] EWCA Civ 1262 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.15 R v Windsor Licensing Justices, ex p Hodes [1983] 2 All ER 551, [1983] 1 WLR 685, 147 JP 353, 127 SJ 378, [1983] LS Gaz R 1138 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.82 R v Yeovil BC, ex p Trustees of Elim Pentecostal Church, Yeovil [1971] 23 P & CR 39 . . 28.33, 28.35 R & C Comrs v Newey (t/a Ocean Finance) (Case C-653/11) [2013] STC 2432, [2013] BVC 259, [2013] STI 2304 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.70 R & C Comrs v Rank Group plc [2013] EWCA Civ 1289, [2014] STC 470, [2013] BVC 526 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.61 R & C Comrs v Rank Group plc (Case C-259/10) [2012] STC 23, [2011] ECR I-10947, [2012] CEC 884 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.65 R & C Comrs v Rank Group plc [2015] UKSC 48, [2015] 1 WLR 3472, [2015] 4 All ER 77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.63 R (Beale) v London Borough of Camden [2004] EWHC 6 (Admin), [2004] HLR 48, [2004] BLGR 291, [2004] NPC 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.24 R (on the application of Betting Shop Services Ltd) v Southend-on-Sea Borough Council [2008] EWHC 105 (Admin) . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.20, 10.35, 10.47, 10.141, 10.195 R (on the application of Blackwood) v Birmingham Magistrates (1), Birmingham City Council (2), M & B Leisure Retail Ltd (as interested Party) [2006] EWHC 1800 (Admin), (2006) 170 JP 613, (2007) 171 JPN 19, [2007] Env LR D3 . . . . . . . . . . . . . . . 14.51 R (on the application of Bridgerow Ltd) v Cheshire Council [2014] EWHC 1187 (Admin), [2015] PTSR 91, [2014] BLGR 485 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.16 R (on the application of British Casino Association Ltd) v Secretary of State for Culture, Media & Sport [2007] EWHC 1312 (Admin), (2007) 104(26) LSG 30, (2007) 151 SJ LB 811 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.11 R (on the application of Burkett) v Hammersmith & Fulham LBC [2002] UKHL 23, [2002] 1 WLR 1593, [2002] 3 All ER 97, [2002] CP Rep 66, [2003] Env LR 6, [2003] 1 P & CR 3, [2002] 2 PLR 90, [2002] JPL 1346, [2002] ACD 81, [2002] 22 EG 136 (CS), (2002) 99(27) LSG 34, (2002) 152 NLJ 847, (2002) 146 SJ LB 137, [2002] NPC 75 . . . . 28.26 R (on the application of Bushell & others) v Newcastle upon Tyne Licensing Justices & another [2006] UKHL 7, [2006] 1 WLR 496, [2006] 2 All ER 161, (2006) 170 JP 132, (2006) 170 JPN 216, (2006) 103(10) LSG 27, (2006) 156 NLJ 329, (2006) 150 SJ LB 225, [2006] NPC 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7 R (on the application of Camelot UK Lotteries Ltd) v The Gambling Commission & The Health Lottery (ELM) Ltd [2012] EWHC 2391 (Admin), [2013] PTSR 729, [2012] LLR 930 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15.54, 15.185, 15.188, 15.193, 15.197, 15.198, 15.279, 15.345 R (on the application of Carlton-Conway) v Harrow LBC [2002] EWCA Civ 927, [2002] 3 PLR 77, [2002] JPL 1216, [2002] ACD 104, [2002] 26 EG 138 (CS), (2002) 99(26) LSG 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.31 R (on the application of Chief Constable of Lancashire) v Preston Crown Court [2001] EWHC Admin 928, [2002] 1 WLR 1332, [2002] UKHRR 31 . . . . . . . . . . . . . . . . . . . . . 8.35 R (on the application of Comninos) v Bedford BC [2003] EWHC 121 (Admin), [2003] BLGR 271, [2003] ACD 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.6 R (on the application of Developing Retail Ltd) v East Hampshire Magistrates’ Court [2011] EWHC 618 (Admin) [2011] LLR 319 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.53 R (on the application of English Bridge Union Ltd) v The English Sports Council, The Secretary of State for Culture, Media & Sport intervening [2015] EWHC 2875 (Admin), [2016] 1 WLR 957, [2016] ACD 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.218 R (on the application of Gibraltar Betting & Gaming Association Ltd) [2015] EWHC 1863 (Admin), [2016] STC 151, [2015] LLR 829 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.15

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Table of cases R (on the application of Hemming (t/a Simply Pleasure Ltd)) v Westminster City Council [2015] UKSC 25, [2015] AC 1600, [2015] 2 WLR 1271 . . . . . . . . . . . . . . .  6.158; 10.34A R (on the application of Hestview Ltd) v Snaresbrook Crown Court [2001] EWHC Admin 144, [2001] LLR 214 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.111, 0.112 R (on the application of JD Wetherspoon plc) v Guildford Borough Council[2006] EWHC 815 (Admin), [2007] 1 All ER 400, [2006] BLGR 767, [2006] JPL 1710, [2006] ACD 82, [2006] 16 EG 147 (CS), (2006) 150 SJ LB 541, [2006] NPC 48 . . . . 10.82, 10.86, 10.87, 10.89 R (on the application of Jones) v First Tier Tribunal (Social Entitlement Chamber) [2013] UKSC 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.210 R (on the application of Marper) v Chief Constable of South Yorkshire see R (on the application of S) v Chief Constable of South Yorkshire R (on the application of Moseley) v Haringey [2014] UKSC 56, [2014] 1 WLR 3947, [2015] 1 All ER 495 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.20 R (on the application of London Borough of Newham) v Thames Magistrates’ Court (unreported, 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.102 R (on the application of Reprotech (Persham) Ltd) v East Sussex CC [2002] UKHL 8, [2003] 1 WLR 348, [2002] 4 All ER 58, [2003] 1 P & CR 5, [2002] 2 PLR 60, [2002] JPL 821, [2002] 10 EG 158 (CS), [2002] NPC 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.39 R (on the application of Richardson) v North Yorkshire County Council [2003] EWCA Civ 1860, [2004] 1 WLR 1920, [2004] 2 All ER 31, [2004] Env LR 34, [2004] BLGR 351, [2004] 2 P & CR 15, [2004] JPL 911, [2004] ACD 62, [2004] 2 EG 93 (CS), (2004) 101(6) LSG 32, (2004) 101(2) LSG 31, (2004) 148 SJ LB 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.33 R (on the application of S) v Chief Constable of South Yorkshire [2004] UKHL 39, [2004] 1 WLR 2196, [2004] 4 All ER 193, [2004] HRLR 35, [2004] UKHRR 967, 21 BHRC 408, [2004] Po LR 283, [2005] Crim LR 136, (2004) 101(34) LSG 29, (2004) 154 NLJ 1183, (2004) 148 SJ LB 914 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9 R (on the application of Spearing) v London Borough of Hammersmith & Fulham & Ablethird Ltd [2001] EWHC Admin 1109, [2002] LLR 401 . . . . . . . . . . . . . . . . . . . . . 0.112 R (on the application of Springhall) v Richmond-upon-Thames London Borough Council [2006] EWCA Civ 19, [2006] BLGR 419, [2007] 1 P & CR 30, [2006] JPL 970, [2006] ACD 50, (2006) 103(8) LSG 26, (2006) 150 SJ LB 165, [2006] NPC 7 . . . . . . . . . 10.91 R (on the application of TC Projects Ltd) v Newcastle Licensing Justices [2008] EWCA Civ 428, [2008] LLR 555 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.112; 9.45 R (on the application of Taylor) v Maidstone BC [2004] EWHC 257 (Admin) . . . . . . . . . 28.35 R (on the application of Townlink Ltd) v Thames Magistrates Court [2011] EWHC 898 (Admin), [2011] LLR 392 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.51 R (on the application of UMBS Online Ltd) v SOCA [2007] EWCA Civ 406, [2007] Bus LR 1317, [2008] 1 All ER 465, (2007) 104(20) LSG 29, (2007) 151 SLJB 608 . . . . . . . . . 27.22 R (on the application of Wainwright) v Richmond upon Thames LBC [2001] EWCA Civ 2062 (2002) 99(9) LSG 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.17, 10.18, 10.28 R (on the application of Westminster City Council) v Middlesex Crown Court & Chorion plc [2002] LLR 538 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.82, 10.83, 10.88 R (on the application of Westminster City Council) v National Asylum Service [2002] UKHL 38, [2002] 1 WLR 2956, [2002] 4 All ER 654, [2002] HLR 58, [2003] BLGR 23, (2002) 5 CCL Rep 511, (2002) 146 SLJB 241 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5, 1.7, 1.8, 1.9 R (on the application of William Hill Organisation Ltd & the Horserace Betting Levy Board) [2012] EWHC 2039 (Admin), [2012] 1 WLR 3504, [2013] 1 All ER 109 . . . . 0.125; 2.7, 2.55, 2.157, 2.210 Ralli v Anguillia (1917) 15 SSLR 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.72 Ranger v Herbert A Watts (Quebec) Ltd (1970) 10 DLR (3d) 395; aff’d (1971) 20 DLR (3d) 65 (Ont CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.140 Rank Group plc v R & C Comrs [2009] LLR 225 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.57 Rank Group plc v R & C Comrs [2008] 3 CMLR 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.58 Rank Group plc v R & C Comrs [2009] UKFTT 363 (TC), [2010] BVC 2129, [2010] SFTD 473; revs’d [2012] UKUT 347 (TCC), [2013] STC 420, [2012] BVC 1861 . . . . . . . . . . 19.49, 19.65 Rann v Secretary of State for the Environment (1980) 40 P & CR 113, (1979) 254 EG 1095, [1980] JPL 109 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.8 Ranson v Burgess (1927) 25 LGR 378, 91 JP 133, 28 Cox CC 425, [1927] All ER Rep 667, 137 LT 530, 43 TLR 561 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15.311, 15.315 Read v Anderson (1882) 10 QBD 100, 47 JP 311, 52 LJQB 214, 31 WR 453, 48 LT 74; aff’d (1884) 13 QBD 779, 49 JP 4, 53 LJQB 532, 32 WR 950, [1881–5] All ER Rep 1104, 51 LT 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.87

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Table of cases Reader’s Digest Association Ltd v Williams [1976] 3 All ER 737, [1976] 1 WLR 1109, 141 JP 52, 120 SJ 570 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.57, 0.101, 0.126; 1.91, 2.127, 2.128, 2.130, 15.25, 15.32, 15.33, 15.35, 15.41, 15.43, 15.54, 15.57, 15.67, 15.124 Rhyl UDC v Rhyl Amusements Ltd [1959] 1 WLR 465, [1959] 1 All ER 257, 57 LGR 19, (1959) 103 SJ 327 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.38 Ricketts v Registration Officer for the City of Cambridge see Fox v Stirk Rio Properties Inc v Al-Midani (unreported, 2 August 2002) . . . . . . . . . . . . . . . . . . . . . . . 20.103 Ritz Hotel Casino v Al-Geabury [2015] EWHC 2294 (QB), [2015] LLR 860 . . . 20.15, 20.20, 20.54, 20.55, 20.85 Ritz Hotel Casino Ltd v Daher [2014] EWHC 2847 (QB), [2015] 4 All ER 222, [2014] CTLC 265 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20.6, 20.50, 20.93, 20.94, 20.97 River Wear Comrs v Adamson (1876-77) 2 App Cas 743 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7 Robertson v Anderson 2003 SLT 235, 2002 GWD 40-1330 . . . . . . . . . . . . . . . . . . . .  20.9; 21.7, 21.10 Rockeagle Ltd v Alsop Wilkinson (a firm) [1992] Ch 47, [1991] 4 All ER 659, [1991] 3 WLR 573, [1991] NLJR 1188 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.116 Rogers v Cowley [1962] 1 WLR 770, [1962] 2 All ER 683, (1962) 126 JP 385, 60 LGR 304, (1962) 106 SJ 512 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.186, 2.204, 2.241; 25.49 Rollo v Minister of Town & Country Planning [1947] 2 All ER 488, 63 TLR 499, (1947) 111 JP 534, [1948] LJR 23, (1947) 91 SJ 505 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.23, 10.26 Rolls v Miller (1884) LR 27 Ch D 71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.24 Rose (Mr David) t/a Logic Ltd (decision no 13934) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.47 Rosenbaum v Burgoyne [1964] 2 All ER 670, 62 LGR 339; revs’d [1965] AC 430, [1964] 2 All ER 988, [1964] 3 WLR 277, 128 JP 530, 108 SJ 579 . . . . . . . . . . . . . . . . . . . . . . . 2.190; 25.29 Ross, Banks & Dyson v The Queen [1968] 70 DLR (2d) 606 . . . . . . . . . . . . . . . . . . . . . . 2.175, 2.221 Rowell v Hubbard [1995] IRLR 195 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.20 Russell v Fulling & Page,(2000)40 LR 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.116 S S v AG (Financial Remedy: Lottery prize) [2011] EWHC 2637 (Fam), [2012] 1 FLR 651, [2011] 3 FCR 523 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.146 Saffery v Mayer [1901] 1 KB 11, 64 JP 740, 70 LJQB 145, 49 WR 54, 45 SJ 29, 83 LT 394, 17 TLR 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.99 Sagnata Investments v Norwich Corpn [1971] 2 QB 614, [1971] 3 WLR 133, [1971] 2 All ER 1441 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.35 Samuel v Adelaide Club [1934] 2 KB 69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.1 Satanita, The [1895] P 248; aff’d sub nom Clarke v Earl of Dunraven & Mount-Earl, The Satanita [1897] AC 59, 66 LJP 1, 8 Asp MLC 190, 75 LT 337, 13 TLR 58 . . . . . . . . . . 21.11 Savage v Madder (1867) 31 JP 519, 36 LJ Ex 178, 15 WR 910, 16 LT 600 . . . . . . . . . . . . . 20.74, 20.81 Saxby v Fulton [1909] 2 KB 208, 78 LJKB 781, [1908–10] All ER Rep 857, 53 SJ 397, 101 LT 179, 25 TLR 446 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.103 Schinotti v Bumsted (1796) 6 Term Rep 646 . . . . . . . . . . . . . . . . . . . . . . . . . . .  20.124, 20.130, 20.139 Schnable v Allard [1967] 1 QB 627, [1966] 3 WLR 1295, [1966] 3 All ER 816, (1966) 110 SJ 831 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.271 Scott v DPP [1914] 2 KB 868, 78 JP 267, 83 LJKB 1025, 24 Cox CC 194, [1914–15] All ER Rep 825, 111 LT 59, 30 TLR 396 . . . . . . . . . . . . . . . . . . . . .  15.100, 15.107, 15.109, 15.116, 15.149 Scrivens v Ethical Standards Officer [2005] EWHC 529 (Admin), [2005] BLGR 641, [2005] NPC 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.33 Seay v Eastwood [1976] 1 WLR 1117, [1976] 3 All ER 153, (1976) 120 SJ 734 . . . . . . 2.7, 2.29, 2.134, 2.190, 15.36 Secretary of State v Global Pioneers Ltd (unreported, 2 November 1994) . . . . . . . . . . . . 15.159 Senator Hanseatische Verwaltungsgesellschaft mbH & another, Re [1996] 2 BCLC 562, [1997] BCC 112; on appeal [1996] 4 All ER 933, [1997] 1 WLR 515, [1996] 2 BCLC 562 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.7, 2.128, 2.130, 2.134, 15.31, 15.33, 15.43, 15.54, 15.90, 15.91, 15.159, 15.161, 15.162 Shah v HSBC Private Bank [2009] EWHC 79 (QB), [2009]1 Lloyd’s Rep 328, [2009] Lloyd’s Rep FC 225 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.33, 27.46 Shanley MJ Ltd (in liquidation) v Secretary of State for the Environment [1982] JPL 380 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.137 Sherman v C & E Comrs (1971) SJ 657 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.94 Short v Tower Hamlets London Borough Council (1986) 18 HLR 171 . . . . . . . . . . . . . . . . 10.23 Shuttleworth v Leeds Greyhound Association Ltd [1933] 1 KB 400 . . . . . . . . . . . . . . . . . . 2.103

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Table of cases Simpkins v Pays [1955] 1 WLR 975, [1955] 3 All ER 10, (1955) 99 SJ 563 . . . . . . . .  21.6, 21.7, 21.11 Simpson v Edinburgh Corpn 1960 SC 313, 1961 SLT 17 . . . . . . . . . . . . . . . . . . . . . . . .  10.100, 28.12 Singette v Martin [1971] AC 407, [1970] 3 All ER 938, [1971] 2 WLR 13, 135 JP 157, 114 SJ 951 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.21, 2.28, 2.108, 2.119, 2.124, 15.110, 15.114, 15.116 Skinner v Jack Breach Ltd [1927] 2 KB 220 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.24 Smith v Anderson (1880) LR Ch D 247 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.24 Smith v Wyles (or Wiles) [1959] 1 QB 164, [1958] 3 All ER 279, [1958] 3 WLR 528, 56 LGR 379, 122 JP 468, 102 SJ 758 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.250, 2.251 Smith’s Advertising Agency v Leeds Laboratory Co (1910) 54 SJ 341, 26 TLR 335 . . . . . 15.109, 15.114, 15.151, 15.154, 15.155 Société Stenuit v France (1992) 14 EHRR 509 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.280 South Bucks v Porter [2003] UKHL 26, [2003] 2 AC 558, [2003] 2 WLR 1547, [2003] 3 All ER 1, [2003] HRLR 27, [2003] UKHRR 1344, [2003] BLGR 449, [2003] 2 PLR 101, [2003] JPL 1412, [2003] 23 EG 135 (CS), (2003) 100(22) LSG 32, (2003) 147 SLJB 626, [2003] NPC 70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28.60 South Bucks v Porter (No 2) [2004] UKHL 33, [2004] 1 WLR 1953, [2004] 4 All ER 775, [2005] 1 P & CR 6, [2004] 4 PLR 50, [2004] 28 EG 177 (CS), (2004) 101(31) LSG 25, (2004) 148 SJ LB 825, [2004] NPC 108 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.24 ’Spotting the Ball’ Partnership v HMRC [2013] UKFTT 210 (TC), [2013] SFTD 1004, [2013] LLR 845 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.199, 2.200; 15.146 Spreadex Ltd v Battu (unreported, 11 July 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.81 Squirrell Ltd v National Westminster Bank plc [2005] EWHC 664 (Ch), [2006] 1 WLR 637, [2005] 2 All ER 784, [2005] 1 All ER (Comm) 749, [2005] 2 Lloyd’s Rep 374 . . . 27.21 Stacey v Wilkins [1946] KB 271, [1946] 1 All ER 293, 44 LGR 84, 110 JP 182, 115 LJKB 222, 90 SJ 201, 174 LT 227, 62 TLR 243 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.212, 15.245, 15.294 Stepney Borough Council v Joffe [1949] 1 KB 599, [1949] 1 All ER 256, 65 TLR 176 . . . . 8.47 Stoke-on-Trent Borough Council v Cheshire County Council [1915] 3 KB 699 . . . . . . . . 23.10 Stovell v Jameson [1940] 1 KB 92, [1939] 4 All ER 76, 37 LGR 616, 103 JP 369, 109 LJKB 259, 31 Cox CC 353, 83 SJ 851, 161 LT 355, 56 TLR 18 . . . . . . . . . . . . . . . . . . . . . . . 2.114, 23.12 Strathern v Scottish Greyhound Racing Co 1930 JC 24, 1930 SLT 419 . . . . . . . . . . . . . . . . 2.103 State v Stroupe [1953] 76 SE 2d 313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.222 Stewart (AP) (Respondent) v Perth & Kinross Council (Appellants) (Scotland) [2004] UKHL 16, 2004 SC (HL) 71, 2004 SLT 383, 2004 SCLR 849, (2004) 148 SJ LB 472, [2004] 28 SLLP 32, 2004 GWD 12-273 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.131 Stichting Uitvoering Financiele Acties v Staatssecretaris van Financien (Case 348/87) [1989] ECR 1737, [1991] 2 CMLR 429 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.36 Straggs v Prentice [1950] EGD 313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.23 Stringer v Minister for Housing & Local Government [1970] 1 WLR 1281, [1971] 1 All ER 65, 68 LGR 788, (1971) 22 P & CR 255, [1971] JPL 114, (1970) 114 SJ 753 . . . . . . . . . . 28.18 Stuart v Stephen (1940) 84 SJ 393, 56 TLR 571 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.93 Stubbs v Dick (1949) NE 2d 480 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.222 Sunlife Assurance Co of Canada (UK) Ltd v HMRC [2010] EWCA Civ 394, [2010] STC 1173, [2010] BTC 526 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9 Sweet v Parsley [1970] AC 132, [1969] 2 WLR 470, [1969] 1 All ER 347, (1969) 53 Cr App R 221, (1969) 133 JP 188, (1969) 113 SJ 86 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.6 T Tarmac Heavy Building Materials UK Ltd v Secretary of State for the Environment, Transport & The Regions [1999] EGCS 97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.134 Tatam v Reeve [1893] 1 QB 44, 57 JP 118, 5 R 83, 41 WR 174, [1891–4] All ER Rep 391, 67 LT 683, 9 TLR 39, sub nom Tatham v Reeve 62 LJQB 30 . . . . . . . . . . . . . . . . . . . . . . . . 20.99 Taylor v Smetten (1883) 11 QBD 207, 48 JP 36, 52 LJMC 101 . . . . . . . . . .  2.128, 15.33, 15.50, 15.94, 15.95, 15.96 Taylor v Smith (1995) 128 DLR (4th) 548 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.11, 21.21 Tehrani v Rostron 1971] 2 All ER 304, [1971] 1 WLR 659, 135 JP 350, 115 SJ 306; aff’d [1972] 1 QB 182, [1971] 3 All ER 790, [1971] 3 WLR 612, 136 JP 40, 115 SJ 641 . . . . . . 19.332 Thacker v Hardy (1878) 4 QBD 685 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.96 Thomas Cheshire & Co v Vaughan Bros & Co [1920] 3 KB 240, 84 JP 233, 89 LJKB 1168, 15 Asp MLC 69, 25 Com Cas 242, 123 LT 487, 3 Ll L Rep 213 . . . . . . . . . . . . . . . .  20.89, 20.90 Thomas Estates Ltd (t/a Beacon Bingo) v R & C Comrs [2013] UKFTT 268 (TCC), [2016] STC 1938 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.258 Thompson v Mason [1904] 90 LT 649 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.189

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Table of cases Thompson v Oxford City Council [2013] EWHC 1819 (Admin), [2013] 3 EGLR 75, [2014] LLR 165 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.22 Thompson v Stimpson [1961] 1 QB 195, [1960] 3 All ER 500, [1960] 3 WLR 818, 104 SJ 912, 176 Estates Gazette 1179 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.271 Tinsley v Milligan [1994] 1 AC 340, [1993] 3 WLR 126, [1993] 3 All ER 65, [1993] 2 FLR 962, (1994) 68 P & CR 412, [1993] EG 118, [1993] NPC 97 . . . . . . . . . . . . . . . . . . . . . . . 20.101 Titan International Inc, Re [1998] 1 BCLC 102 . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.130, 15.43, 15.54 Titan International, Re (No 2) (unreported, 9 August 1996) . . . . . . . . . . . . . . . . . . .  15.111, 15.159 Tollett v Thomas (1871) LR 6 QB 514, 35 JP 359, 40 LJMC 209, 24 LT 508 . . . . . . . . . . . . . 2.103 Tomkins v East [2004] EWHC 1825 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.27 Tote Investors Ltd v Smoker [1968] 1 QB 509, [1967] 3 WLR 1239, [1967] 3 All ER 242, (1967) 131 JP 489, (1967) 111 SJ 540 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.11, 2.105, 2.106, 20.4 Touche Ross & Co v Baker [1992] 2 Lloyd’s Rep 207, [1992] 28 LS Gaz R 31, 136 SJ LB 190 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.11 Town Investments Ltd v Department of the Environment [2005] EWHC 2774, [1978] AC 359 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.73, 23.24 Treasure Traders Corpn Ltd, in the matter of [2005] EWHC 2774 (Ch) . . . . . . . . . . . . . . . 15.159 Trimble v Hill (1879) 5 App Cas 342, 49 LJPC 49, 28 WR 479, 42 LT 103 . . . . . . . . . . . . 20.74, 20.81 Tunbridge Wells Borough Council v Quietlynn Ltd [1985] Crim LR 594 . . . . . . . . . . . . . 15.123 Tynewydd Labour Working Men’s Club & Institute Ltd v C & E Comrs [1979] STC 570, (179) 123 SJ 406 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.46 U United Utilities plc v C & E Comrs (unreported, 26 February 2001) . . . . . . . . . . . . . . . . . 2.160 United Utilities plc v C & E Comrs [2002] EWHC 2811 (Ch), [2003] STC 223, [2003] BTC 5369, [2003] BVC 425, [2003] STI 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.160 United Utilities plc v C & E Comrs [2004] EWCA Civ 245, [2004] STC 727, [2004] BTC 5531, [2004] BVC 590, [2004] STI 587, (2004) 101(13) LSG 36 . . . . . . . . . . . . . . . . . . . . 2.275 United Utilities plc v C & E Comrs [2006] STC 1423, [2006] ECR I-6813, [2006] 3 CMLR 41, [2006] BTC 5616, [2006] BVC 686, [2006] STI 1883 . . . . . . . . . . . . . . . . . . . . . . . . . . 19.52 Universal Stock Exchange Ltd v Strachan (1896) AC 166 . . . . . . . . . . . .  2.65, 2.68, 2.74, 2.78, 2.96 Uratemp Ventures Ltd v Collins [2001] UKHL 43, [2002] 1 AC 301, [2001] 3 WLR 806, [2002] 1 AlL ER 46, (2001) 33 HLR 85, [2002] L & TR 15, [2001] 3 EGLR 93, [2002] RVR 162, [2001] 43 EG 186, (2001) 98(41) LSG 35, [2001] NPC 145, [2002] 1 P & CR DG15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.23 Uttlesford District Council v English Heritage [2007] EWHC 816 (Admin), [2007] LLR 273 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.68 V Vakuta v Kelly [1989] 167 CLR 568 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.23 Vanilla Accumulation Ltd & others, Re (The Times, 24 February 1998) . . . . . . . . . . . .  2.7, 15.159 Van Rassel v Kroon (1953) 87 CLR 298, [1953] ALR 190, 27 ALJ 75 (HC Australia) . . . . 21.26 Varney v Hickman (1847) 12 JP 38, 5 CB 271, 5 Dow & L 364, 17 LJCP 102, 10 LTOS 248 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20.74, 20.75, 20.81 Varsani v Relfo (in liquidation) [2010] EWCA Civ 560, [2011] 1 WLR 1402, [2010] 3 All ER 1045 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.10 Victor Chandler International Ltd v Comrs for Customs & Excise [1999] 1 WLR 2160, [2000] 1 AlL ER 160, (1999) 96(31) LSG 42, (1999) 143 SLJB 219 . . . . . . . . . . . .  15.309, 15.314 Victoria Sporting Club v Hallam [1970] AC 55, [1969] 2 WLR 454, [1969] 1 All ER 369 . 0.47 W WMT Entertainments Ltd v C & E Comrs (unreported, 20 November 1992) . . . 0.80; 2.185, 25.47 Walker v Leeds City Council. See R v Herrod, ex p Leeds City District Council Walters v National Beverages Inc 422 P (2d 524 Utah SC 1967) . . . . . . . . . . . . . . . . . . . . . 20.138 Wandsworth London Borough Council v Secretary of State for Transport, Local Government & Regions [2003] EWCA Civ 142, [2003] 9 EG 196 (CS), (2003) 100(8) LSG 31, [2003] NPC 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.90 Wandsworth London Borough Council v Winder (No 1) [1985] AC 461, [1984] 3 WLR 1254, [1984] 3 All ER 976, (1985) 17 HLR 196, 83 LGR 143, (1985) 82 LSG 201, (1985) 135 NLJ 381, (1984) 128 SJ 838 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.7 Warwick RDC v Miller-Mead [1962] Ch 441, [1962] 2 WLR 284, [1962] 1 All ER 212, (1962) 126 JP 143, 60 LGR 29, (1961) 105 SJ 1124 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.32

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Table of cases West Berkshire District Council v Department for Communities & Local Government [2015] EWHC 2222 (Admin), [2016] PTSR 215, [2015] BLGR 884 . . . . . . . . . . . . . . . . 6.100 Westdeutsche Landesbank Girozentrale v Islington London BC [1996] AC 669, [1996] 2 All ER 961, [1996] 2 WLR 802, 95 LGR 1, [1996] NLJR 877, 140 SJ LB 136 . . . . . . . . . 2.87 Western Canada Lottery Foundation & Toronto Dominion Bank v Paul [1981] 6 WWR 456 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.134 Western Fish Products v Penwith DC [1981] 2 All ER 204, 77 LGR 185, (1979) 38 P & CR 7, [1978] JPL 627, (1978) 122 SJ 471 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.39 Western Telcon Inc v California State Lottery [1917] P 2d (1996) . . . . . .  2.131, 2.135, 2.139, 2.237 Westminster City Council v Zestfair Ltd (1989) 153 JP 613, LGR 288, (1989) 153 LG Rev 828, (1989) 133 SJ 1262 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.34 Westmite Pty Ltd v Law Society of South Australia (1999) 73 SASR 454 . . . . . . . . . . . . . 8.37 Whitbread & Co Ltd v Bell [1970] 2 QB 547, [1970] 2 All ER 64, [1970] 2 WLR 1025, 134 JP 445, 114 SJ 263 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.49, 2.128, 2.130, 15.33, 15.43, 15.54 Wigg v Architects Board (1984) 36 SASR 111 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8.36, 8.60 Wilkinson v Godefroy (1839) 9 Ad & El 536, 3 Per & Dav 411 . . . . . . . . . . . . . . . . . . . . . . 20.116 William Hill v Horserace Betting Levy Board & Betfair [2013] EWCA Civ 487, [201]3 1 WLR 3656, [2013] 3 All ER 297 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.66; 2.55; 19.326, 19.341 William Hill (Park Lane) Ltd v Hofman [1950] 1 All ER 1013, 66 TLR (Pt 1) 915, [1950] WN 221 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.106 Williams v Carwardine (1833) 5 C & P 566, 172 ER 1101 . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.109 Wilson v Burnett [2007] EWCA Civ 1170, (2007) 151 SLJB 1399 . . . . . . . . . . . . . . . . . . . . . 21.10 Wilson v First County Trust Ltd [2003] UKHL 40, [2004] 1 AC 816, [2003] 4 All ER 97 . . 1.9 Witty v World Service Ltd [1936] Ch 303, 34 LGR 150, 100 JP 68, 105 LJ Ch 63, 30 Cox CC 375, [1935] All ER Rep 243, 79 SJ 966, 154 LT 491, 52 TLR 235 . . . . . . . . . . . . . . . . . . . 15.139 Woolf v Freeman [1937] 1 All ER 178, 80 SJ 995, 156 LT 219 . . . . . . . . . . . . . . . . . . . . . . . . 20.99 Woolway (Valuation Officer) v Mazars LLP [2015] UKSC 53, [2015] AC 1862, [2015] 3 WLR 386 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.48 Wright v Howell (1947) 92 SJ 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.23 Wright v Zetters Pools Ltd [1999] EWCA Civ 1204 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20.4, 20.13 Z Zeidman v Owen [1950] 1 KB 593, [1950] 1 All ER 290, 48 LGR 280, 114 JP 139, 94 SJ 180, 66 (Pt 1) TLR 221 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.106, 2.107

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Introduction The pre-Gambling Act framework

INTRODUCTION 0.1 The Gambling Act 2005 is the first major piece of new legislation governing gambling in Great Britain for nearly 50  years. It replaces the regimes contained in the Betting, Gaming and Lotteries Act 1963 (governing betting), the Gaming Act 1968 (governing gaming and gaming machines) and the Lotteries and Amusements Act 1976 (governing lotteries and certain competitions). The first two of these statutes reflected the major legislative changes introduced in the 1960s which were initiated by the Betting and Gaming Act 1960; the third was a consolidation of measures originally found principally in the Betting and Lotteries Act 1934, the Betting, Gaming and Lotteries Act 1963 and the Lotteries Act 1975. The Gambling Act 2005 builds on the foundations laid down by these statutes and brings within the scope of one Act the legislation governing all major forms of gambling. As enacted it governed all major forms of gambling with the exception of the National Lottery (which remained governed by its own specific legislation – principally the National Lottery Act 1993) and ‘spread betting’ which remained governed by the FSA under the Financial Services and Markets Act 2000. ‘Spread betting’ remains governed by the FSA1 but substantial changes led to the Gambling Commission taking over the regulatory functions of the National Lottery Commission over the National Lottery with effect from 1 October 2013.2 Excise duties on various forms of gambling are imposed under various revenue statutes which are discussed in Chapter 19. 1 According to the Gambling Commission website so-called ‘binary options’ when bettors make fixed odds bets on the likelihood of an event occurring or not occurring in the financial markets are governed under the Gambling Act 2005 (GA 2005) even though they involve bets on financial markets. The entry on the website indicates that it is the Commission’s intention to transfer these bets to be regulated by the FSA at some future date. 2 The National Lottery Act 1993, s 3 created the office of the Director General of the National Lottery. By the National Lottery Act 1998, s 3 the office of the Director General was replaced by the National Lottery Commission. Under the Public Bodies Act 2011 and the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013, SI  2013/2329 the Gambling

1

The pre-Gambling Act framework Commission and the National Lottery Commission were ‘merged’ with effect from 1 October 2013 when the National Lottery Commission was abolished and its functions transferred to the Gambling Commission.

0.2 It is suggested that there are essentially three driving forces behind the new legislation. First, there is the perception of a relaxation in public attitudes towards gambling generally with a willingness to see it as a form of leisure activity which is not to be restricted by the attitudes of moral censure which were common in the past. To the extent that the Gambling Act reflects this, it is a liberalising measure. Second, however, there is a clear recognition that gambling can be a source of social harm if not properly regulated. Such harm may be general to society, as where, for example, organised crime gains a hold on the provision of gambling facilities; or it may be specific to individuals, where people are tempted by the ready availability of gambling facilities to spend more than they can afford, or where children or young persons are tempted to gamble. To the extent that the Gambling Act reflects these concerns and strengthens provisions for the control of gambling, it is a regulating measure. The third driving force behind the Act is technological advance. The 1963, 1968 and 1976 Acts pre-dated the arrival of the internet, of online digital technology, of interactive TV and of mobile phone networks, which have become common platforms for the provision of gambling services. It was often difficult to tell how, if at all, the legislation of the 1960s and 1970s applied to these media. The Gaming Act legislates specifically to deal with online gambling and thereby to provide for the first time a specific regulatory framework for it. 0.3 There are six principal elements to the new framework. They can be summarised as follows: (1) There is a new body, known as the Gambling Commission, which has been set up to act as the gambling regulator. Although the Commission is a new statutory creation, the Act provides for the conversion of the Gaming Board, established under the Gaming Act 1968, into the Commission. The Commission was set up as the regulator for all significant forms of gaming (in casinos and bingo halls), gaming machines and lotteries (excluding the National Lottery). To that extent its powers mirrored those of the old Gaming Board. However, unlike the Gaming Board, it was also set up to be the regulator for betting and pool betting. Also (see 0.1 above) it has since 1 October 2013 been the regulator for the National Lottery. (2) The Act creates three ‘licensing objectives’, namely— (a) preventing gambling from being a source of crime or disorder, being associated with crime or disorder, or being used to support crime; (b) ensuring that gambling is conducted in a fair and open way; and (c) protecting children and other vulnerable persons from being harmed or exploited by gambling. The Commission is under a duty to aim to pursue and, wherever appropriate, to have regard to the licensing objectives, although it is under a duty to permit gambling in so far as it thinks it reasonably consistent with the pursuit of those objectives.1 2

The pre-Gambling Act framework (3) The Act provides detailed definitions of the terms ‘betting’, ‘pool betting’, ‘gaming’, ‘gaming machine’ and ‘lottery’. It also defines the concept of ‘remote gambling’ as a step on the way to regulating both terrestrial gambling and gambling via remote communication such as the internet, telephone, TV, radio or other online means of communication. (4) In order to provide any form of gambling, whether terrestrially or online, an operator will normally need to apply to the Commission for an ‘operating licence’. Section 65 of the Act provides, in principle, for 18 different types of operating licence (if both ‘non-remote’ and ‘remote’ operating licence (see below) are taken into account). The Gambling Commission has also created a number of additional licences principally to allow certain types of gambling activities to be undertaken as ancillary to other, principal, gambling activities. Details of these are contained on the Gambling Commission website. The grant of operating licences is a crucial element in the Commission’s functions as a regulator, since it gives it the opportunity to examine (in great depth, if necessary) the applicant’s suitability to carry on the proposed gambling activities. An operating licence may be one of two kinds – either a ‘non-remote’ operating licence which will authorise the provision of land-based gambling (such as a terrestrial casino or betting office) or a ‘remote’ operating licence which will authorise the operation of remote gambling such as a cyber-casino or an internet betting site. A second regulatory power conferred on the Commission is its power to grant ‘personal licences’. Individuals performing certain specified management offices or certain specified operational functions in connection with gambling will be required to obtain from the Commission a personal licence to discharge their duties. Again, this requirement will give to the Commission the opportunity to investigate the background and suitability of individuals who are to carry out important functions in gambling businesses. (5) Where a gambling business proposes to use premises for the provision of gambling facilities which customers will use on the premises, it will normally need to obtain a ‘premises licence’. Premises licences will be granted by the relevant ‘licensing authority’, ie  the local authority in whose area the premises are situated. In carrying out its duties, the licensing authority is obliged to have regard to guidance given by the Gambling Commission. It is also obliged to produce its own three-year licensing policy setting out its approach to the exercise of its licensing powers, and of certain other powers which it possesses. (6) The local authority also has powers to grant permits for certain kinds of relatively small-scale gambling, and for the use of gaming machines. It also has regulatory powers to review the use made of gambling premises in its area, to inspect premises and to enforce conditions on licences which it has granted. The Gambling Act is essentially a framework Act which sets out broadly the activities which are caught by the legislation and which establishes the main regulators and confers their powers. However, the detailed regulation of gambling is contained in regulations, Codes of Practice and conditions 3

The pre-Gambling Act framework imposed on operating licences and premises licences. The object of the legislation is to create a flexible system of regulation so that regulators can react swiftly to commercial and technological developments in the gambling industry. 1 For a description of the central importance of the licensing objectives to the Gambling Commission’s functions see the decision of the Upper Tribunal Administrative Appeals Chamber in Gambling Commission v Greene King Brewing and Retailing Ltd [2016]  UKUT  0050 (AAC) reversing the decision of the Firsttier Tribunal, General Regulatory Chamber, Gambling Tribunal Reference GA/2014/001 and GA/2014/002.

0.4 This introduction attempts to provide a context for understanding the new legislation and regulatory framework. Its purpose is to provide a sketch of the British gambling industry as it existed at the date of coming into force of the new Act, and to show how the legislation contained in the 1963, 1968 and 1976 Acts applied to it. The two topics relate naturally to each other because the British gambling industry has grown up to reflect the regulatory framework laid down by the legislation. As has been noted above, much of that framework derives from legislation enacted in the 1960s, but legislation regulating gambling has existed for centuries and it can be informative to see how certain themes and concerns have recurred. Accordingly, a historical review begins with the earliest material and leads up to the 1960s legislation. Paragraphs 0.11 to 0.39 deal with the legislation relating to betting and gaming, as historically gaming legislation was often closely associated with betting legislation. Paragraphs 0.40 to 0.56 deal with the gaming machine, a more recent phenomenon. Paragraphs 0.57 to 0.62 deal with the legislation relating to lotteries, reflecting the fact that historically lottery legislation has tended to be kept distinct from betting and gaming legislation. Having established the historical background, paragraphs 0.63 to 0.105 provide an overview of the gambling industry as it developed within the framework laid down by the legislation. This account is designed to be freestanding, so that it can be read in its own right without reference to the historical introduction. Finally, paragraphs 0.106 to 0.128 set out to describe a number of developments commencing in the 1990s which, in different ways, profoundly changed both attitudes towards gambling and the means by which gambling facilities could be provided. It was these developments which rendered the old legislation increasingly out of date and led to calls for fundamental reform and which finally produced the Gambling Act 2005. This account is also designed to be free-standing.

EARLY GAMBLING LEGISLATION 0.5 From very early times legislation designed to control or to curtail gambling has been enacted piecemeal, often in response to perceived contemporary social mischiefs. In considering such legislation where it relates to gaming and betting, it is as well to remember that a number of assumptions and distinctions which modern legislation makes between the two activities were not recognised in earlier periods.1 Under modern legislation, where players of a game bet on the outcome (eg  in blackjack 4

The pre-Gambling Act framework or roulette), this counts as ‘gaming’ and not as ‘betting’. Betting normally involves bets on events in which the bettor does not participate (for example, where an ordinary punter places a bet on a horse race). In addition, bets on sports and athletic games are not generally regarded as involving ‘gaming’;2 rather ‘gaming’ is more naturally associated with table games and indoor activities. 1 The Gambling Act 2005 contains specific definitions of ‘betting’ (ss 9, 10, 11 and 12) and of ‘gaming’ (s 6). Where a transaction satisfies the definition of ‘betting’ in s 9 and also of ‘gaming’ in s 6, then (except in the case of pool betting) the transaction is to be treated as ‘gaming’: s  16. See also Gaming Act 1968, s  52 and Betting, Gaming and Lotteries Act 1963, s 55. 2 GA 2005, s 6(2)(b).

0.6 In earlier legislation these distinctions were not so clear-cut. Indeed, the first significant statute, ‘The Unlawful Games Act’, passed in 1541, rendered unlawful the playing in certain circumstances of a number of named games, some of which were sports (eg  tennis), and these were prohibited whether or not betting and wagering actually took place on them. It was only subsequently that statutes, particularly during the eighteenth century, began to make a distinction between gaming (or ‘gaming wagers’) where players wagered on the game they were playing, and other nongaming bets or wagers.1 Secondly, modern legislation proceeds on the basis that ‘gaming’ involves the playing of a game which is determined either by pure chance or by a combination of skill and chance.2 Earlier legislation enacted before the Gaming Act 1845 periodically included within the description of proscribed games, games of skill such as tennis and quoits. Thirdly, where a game is one of pure chance (eg  where the result depends solely upon the draw of cards or the roll of dice), it could in certain circumstances amount to a lottery. Modern legislation caters for this possibility by laying down rules to determine when such an arrangement shall amount to ‘gaming’ and when it shall amount to a ‘lottery’.3 No such provision was made in earlier legislation, and some forms of gaming (especially with cards and dice) fell within the legislation proscribing lotteries as well as that proscribing gaming. 1 See the Gaming Act 1710. 2 GA 2005, s 6(2). 3 GA 2005, s 17.

Objectives of earlier legislation 0.7 As noted above, the objectives of gambling legislation have varied from time to time, but it is possible to identify certain recurring themes. These can be summarised as follows: (1)

The earliest legislation was principally concerned to control the playing of games on the basis that this activity deflected time and energy from more valuable activities – particularly the practice of archery. As the importance of archery to the nation declined, this rationale for antigambling legislation declined with it, but the theme that gambling 5

The pre-Gambling Act framework encourages idleness and is a misuse of time, energy and resources recurs in eighteenth- and nineteenth-century legislation. (2) A  second theme has been the desire of the legislature to prevent the offering of gambling and betting facilities by way of business. In particular, the Unlawful Games Act 1541 rendered it illegal to set up a gaming house, and this provision remained in force until repealed by the Betting and Gaming Act 1960. Apart from the intrinsic undesirability of allowing such businesses to promote the activity of gambling in society and concerns about fraud, parliament may well also have been motivated by the belief that professional gamblers would almost inevitably enjoy an unfair advantage over ordinary players. (3) Thirdly, a recurring theme has been the wish to prevent participants in gambling suffering from the effects of excessive gambling. Such losses could lead to personal disaster for the individual and for his immediate family, but they could also lead to a loss of inherited wealth and prejudice the orderly transmission of landed estates. This concern became of particular significance in the eighteenth century and a number of the laws then passed, particularly those avoiding securities offered for gaming debts, were designed to deal with these concerns. Finally, in the Gaming Act 1845, gaming and wagering debts were rendered unenforceable. (4)

A connected concern related to the risks inherent in gaming and betting on credit and a number of the early statutes were designed to restrict gaming on credit.

(5) A  fifth recurring concern has been that gambling can too often be associated with crime and disorder ranging from the attempts of unpaid winners to enforce their gambling debts to the efforts of those engaged in unlawful gambling to evade detection. (6) Finally, wherever gambling takes place, fraud and cheating are its almost invariable companions. A number of statutes were designed to strike at cheating in various ways. Cheating is such an important topic in the context of gambling that a brief detour on the subject seems in place.1 1 For a recent discussion of the concept of ‘cheating’ in civil law see Ivey v Genting Casinos UK Ltd T/A Crockfords Club [2016] EWCA Civ 1093.

0.8 There is evidence of cheating at gaming from English sources from earliest times. In 1311 Elmer de Multone was prosecuted for cheating by the use of false dice1 and in 1376 one Prestone was prosecuted for gaming with false dice and a biased gaming table.2 The problem of false dice was to prove a continuing one, giving rise to litigation during the reigns of Elizabeth I and James I. Harris v Bowden 1 Croke’s Reports 30 Eliz, p 90 is a report of an action to recover money which the plaintiff had lost to the defendant at the game of ‘Five or Nine’ where the defendant had used false dice. The plaintiff’s action succeeded. Martin Leeser’s case (reported in Crokes Reports 16 Jac 1, p 497) concerns a prosecution brought against Leeser for stealing money by the use of false dice and play. The case of R v Arnope, heard in the reign of Charles II, was a prosecution for cheating with false cards at the game of whist and 6

The pre-Gambling Act framework with false dice at the game of passage.3 The case of R v Betsworth, heard in the reign of James II, was a prosecution for cheating with false dice at the game of hazard.4 In his Compleat Gamester, published in 1674, Charles Cotton gives details of three methods by which false dice were manufactured in London towards the end of the seventeenth century (namely by attaching a hog’s bristle to the corners of the die to deflect it, by drilling it and filling it with quicksilver, or by filing and rounding it).5 Further afield, two pairs of loaded dice were found in the ruins of Pompeii and are now in the Naples National Archaeological Museum. The oldest known dice (unloaded) were found in Mesopotamia and date from 24C BC. 1 Ashton The History of Gambling in England (London 1898), p  13 citing the letter books of the Corporation of the City of London. 2 Ibid, pp 14–15. 3 Reported in Tremaine’s Pleas of the Crown (Dublin 1793), p 92. 4 Ibid, p 93. 5 Cotton’s Compleat Gamester, cited by Ashton (op cit), p 19.

0.9 Concern over cheating, and in particular the use of false dice and false cards, is reflected in the eighteenth-century legislation (discussed at 0.17–0.20 below). The legislation was of limited effect and a further attempt to control cheating and fraud was made by parliament in the Gaming Act of 1845, s 17 which created a specific offence of ‘cheating at play’.1 The section was used in several prosecutions in the early twentieth century in connection with the playing of the ‘three card trick’, a game which may, depending on the facts, be played honestly (see R v Governor of Brixton Prison, ex p Sjoland [1912] 3 KB 568) or dishonestly (see R v Moore [1914] 10 CAR 54). 1 See also ‘An Act to provide for the prevention of Gaming in public places in Scotland’ 1869 (32 & 33 Vict ch  87) which imposed penalties for cheating on ‘…  chain-droppers, thimblers, loaded-dice players, card sharpers, and other persons of similar description’.

0.10 It is clear also from parliamentary debates on the Betting and Gaming Act 1960 and the Gaming Act 1968 that Parliament was very conscious of the problem of fraud and cheating. In the House of Commons Standing Committee debate on the former Act, reference is made to a game called ‘Spinning Jenny’ played on Epsom Downs which involved spinning a needle on a board or table with winnings being paid to players depending upon where the needle ended up. Operators used magnets or other devices which enabled them to stop the wheel at any part of the table which was profitable to them.1 In debates on the Gaming Act 1968 consideration was given to the difficulties in identifying loaded dice at a craps table and loaded packs of cards or loaded shoes in chemin de fer. Concerns were also expressed over the electronic control of roulette tables.2 Tackling fraud and cheating was, of course, a central purpose of the Gaming Act 1968 and it remains one of the principal concerns of the Gaming Act 2005, reflected in both the first and second licensing objectives. 1 House of Commons Standing Committee D Col 1,110–40. 2 House of Commons Standing Committee B Col 493–5.

7

The pre-Gambling Act framework

Early betting and gaming legislation 0.11 At common law, neither betting nor gaming were unlawful, with the result that winnings were recoverable by action at law. The earliest legislation was principally directed to controlling the playing of games and, as noted above, its object was to prevent such play interfering with the practice of archery. This was the object of an Act passed in 1388 which was to prevent the playing of games on the Sabbath. In 1477, during the reign of Edward IV, penalties were imposed on persons who allowed their premises to be used for the playing of unlawful games. A concern to reverse a decline in the practice of archery also underlay the Unlawful Games Act 1541.1 The statute made various provisions including imposing a requirement on all able-bodied men aged 60 and below to own a bow and arrow and to practise archery. As to the playing of games, the statute did not seek to restrict the private playing of games, whether for money or not. Rather it struck at the setting up of gambling businesses by opening premises offering the opportunity to play specified games. In addition, it made it unlawful for certain specified tradesmen to play specified games (whether for money or not) except at Christmas time. The Act made it a criminal offence to keep open for gain any house or place for the playing of a number of specified games, namely bowling, coiting (ie  quoits), cloysh-cayls, half bowl, tennis, dicing-tables or carding or ‘any other manner of game prohibited by any statute heretofore made, or any unlawful new game now invented or made, or any other new unlawful game hereinafter to be invented, found, had or made  …’ Penalties were imposed on the keeper of the house or place and also on persons resorting there to play the games. Justices were authorised to search suspected gaming houses and to arrest and punish the keepers and persons found resorting there to play. 1 ‘The bill for the maintaining artillery, and the debarring of unlawful games’ (33 Hen 8 C 9).

0.12 It will be noted that the prohibition was not specifically directed at ‘gaming’ (ie playing a game for money) in the modern sense, and indeed only two of the games listed (dicing-tables and carding) were games that were habitually associated with gaming in that sense. Further, the games included games of skill (like bowls and quoits) and skilful sports (like tennis) which are far removed from the modern concept of gaming. All this was consistent with the principal purpose of the legislation, which was to prohibit leisure activities which might distract time and energy from archery. 0.13 As to the second principal method of control, the Act provided that ‘no manner of artificer or craftsman of any handicraft or occupation, husbandman, apprentice, labourer, servant at husbandry, journeyman, or servant or artificer, mariners, fishermen, watermen or any serving-man’ should play at ‘the tables, tennis, dice, cards, bowles, clash, coiting, logating (ie a game in which attempts were made to hit with a piece of wood a stake driven into the ground)’ or ‘any other unlawful game’, except at Christmas. This provision was, it seems, widely ignored.1 The prohibition on gaming houses was, however, to be subject to amendments to reflect changing social needs, and would remain in force until repealed by the Betting and Gaming Act 1960.2 By the Unlawful Games Act 1728 (2 Geo 2 c 28) justices 8

The pre-Gambling Act framework were empowered to act upon hearsay evidence to suppress gaming houses under the 1541 Act. More significantly, as we shall see below, the Gaming Act 1845 (8 & 9 Vict c 109) repealed the provisions of the 1541 Act which struck at games of pure skill (eg bowling, quoits, cloysh-cayls, half bowl and tennis) together with the provisions designed to support the practice of archery. The amendments thus converted the Act into a more recognisably modern gambling statute, the purpose of which was to prohibit the establishment of gaming houses for the playing of games of chance, in practice for money. 1 Ashton The History of Gambling in England (London 1898), p 40. 2 Betting and Gaming Act 1960, s 15 and Sch 1, Pt I.

0.14 In 1625 the Sunday Observance Act was passed. Its main object was to prevent people from meeting out of their own parishes on Sundays for the purpose of any sports or pastimes. It also enacted that certain activities such as bear-baiting, bull-baiting and other unlawful games or exercises were unlawful wherever and whenever performed. As recently as December 1931 fines were imposed under this statute on persons attending a greyhound race meeting on a Sunday. 0.15 During the Commonwealth, attempts were made to suppress gambling among the lower orders, together with other kinds of loose pleasure.1 However, the restoration of the Stuart monarchy instituted a period extending to the eighteenth century in which gambling of all forms, and especially betting on horse races and gaming at cards, dice and gaming tables, became widespread activities at all levels of society. Despite the tone of moral censure often adopted in contemporary discussions of these phenomena, not least in the various statutes passed to control them, the governing classes (including the Court) were at the forefront of these developments. Gaming at Court took place under the auspices of the Groom-Porter, a Court official who was allowed to authorise gaming as a perquisite of office and whose Court apartment furnished gaming tables which were patronised by royalty as well as by courtiers and others. Gaming also flourished at the newly fashionable spa towns such as Bath and Tunbridge Wells and also in clubs such as Boodles (founded in 1752), White’s (rebuilt as a club in 1736), Almack’s (later Brooks, founded in 1764), and later Crockfords (founded in 1828). At these exclusive establishments leading statesmen, politicians and members of the nobility played at the gaming tables, often for huge stakes, and bet on a whole host of subjects. These activities were unlawful under the 1541 Act, but the elevated status of the clubs’ patrons made it practically impossible to enforce the law. Where the upper orders of society went, the lower orders were not slow to follow, and the ‘gold and silver clubs’ of St James’s were matched by a number of ‘copper hells’ for the less affluent gamer. Again, their activities were illegal, but again the law was inadequately enforced. 1 Miers Regulating Commercial Gambling (OUP 2004), p 24, citing Birley Sport and The Making of Britain (1993) pp 84–6.

0.16 Parliament passed a series of statutes to try to curb the worst abuses. The Gaming Act 16641 (16 Ch  2 c  7) had two objectives, namely to curb 9

The pre-Gambling Act framework cheating and to curb the risks attached to excessive gaming, especially on credit. Reciting that ‘all lawful Games and Exercises should not be otherwise used than as innocent and moderate Recreations, not as constant Trades or Callings to gain a Living, or make unlawful Advantage thereby’, it enacted that anyone who should ‘by any fraud, shift, cousenage, circumvention, deceit or unlawful device or ill practice’ in playing at certain specified games (including cards and dice – a particularly prevalent form of cheating), or at certain named sports (‘Cock-fightings, Horse-races, Dog-matches, Foot-races or other Pastimes, Game or Games’) or in ‘betting on the sides or hands’ of the players or participants should forfeit a sum equal to three times their winnings. This was the first of a series of provisions aimed at cheating which were to follow throughout the eighteenth century. The second principal purpose of the Act related to gaming on credit and to the risk that, unless gaming losses were paid in cash as they accrued, gamblers could incur excessive and legally enforceable debts. The Act provided that gaming debts, and betting debts ‘on the sides or hands’ of gamers in excess of £100 incurred on credit at any one time or meeting should be unenforceable to the extent that they exceeded £100 and, further, that the winner should forfeit treble the value of the winnings above £100. In addition, any securities given for the debts were rendered void. This latter provision reflected a growing concern that the social order was being subverted by the grant by losing gamblers of securities such as mortgages and conveyances for their indebtedness, with the consequence that their estates were being lost to their heirs and successors. 1 ‘An Act against deceitful, disorderly and excessive Gaming’.

0.17 However, the Act of 1664 proved inadequate to deal with these concerns.1 This led to the Gaming Act 1710 (9 Ann c  19).2 Section  1 of this Act extended the provisions of the 1664 Act by providing that securities (including bills of exchange and mortgages) given to secure the payment of gaming debts and gaming wagers or to secure the repayment of money knowingly lent for such gaming or betting should be void. With one important amendment this provision remained in force until repealed by the Gambling Act 2005.3 Section  2 provided that where any person lost £10 or more in gaming or gaming wagers at one time or sitting and paid the money over, he could sue to recover it within the next three months. Section 5 provided that persons winning £10 or more by cheating at gaming or gaming wagers should, on criminal conviction, forfeit five times the sum won and should be punished as if for perjury. 1 See Miers Regulating Commercial Gambling (OUP 2004), p 27 referring to an article in The Connoisseur in May 1754: ‘Thus it happens that estates are almost as frequently made over by whist and hazard as by deeds and settlements, and the chariots of our nobility may be said (like Count Basset’s in the play) to roll upon the four aces’ (cited in Colson White’s 1693–1950 (London 1951)). 2 ‘An act for the better preventing excessive and deceitful gaming’. 3 See GA 2005, s 356 and Sch 17. The amendment referred to was enacted in 1835. As s 1 of the Gaming Act 1710 rendered securities void, its effect was that innocent third parties who had given value for securities (especially bills of exchange) so avoided were unable to enforce them. This defect was cured by the Gaming Act 1835 (5 & 6 Will 4 c 41) which provided that securities within s 1 of the 1710 Act

10

The pre-Gambling Act framework should no longer be void but should be deemed to have been given for an illegal consideration, thus enabling a ‘holder in due course’ of a bill of exchange (ie one who took a bill – provided it was regular on its face and not overdue – for value, in good faith, and without notice of the illegality) to sue on it.

0.18 The legislation appears to have been of limited effect, and an anonymous pamphleteer in 1722 complained that: ‘… the wholesome laws now in being against excessive and deceitful gaming and gamesters being entirely ineffectual: the evil is now above ten times greater than when the last law was made in the ninth year of the late Queen; … thousands of families since that time have been ruined in Gaming only; and it daily increases.’1 The mischief attached in particular to certain bankers’ games which increased in popularity as the eighteenth century advanced, in particular the bankers’ card games of faro, basset and ace of hearts, and the bankers’ dice game of hazard. These could be, and were, vehicles for outright cheating and fraud, but their status as bankers’ games,2 in which the player acting as banker enjoyed an advantage over other players, meant that the sophisticated gamer would inevitably in time win money from the simple and the uninitiated player.3 1 Miers Regulating Commercial Gambling (OUP 2004), p 29, citing a quotation from Radzinowicz A  History of English Criminal Law and its Administration from 1750 (London 1956). 2 See 0.28 and 0.43 below. 3 As to faro, Hoyle, in The Complete Hoyle’s Games (Wordsworth Reference, revised edn, 1994), p 270 comments: ‘… the game has for long been in pretty bad odour through the large sums of money that may be lost at it and through the almost unlimited opportunities that are offered to (and often taken by) an unscrupulous banker to “fleece the lambs”’. As to basset, Parlett, in A  History of Card Games (OUP  1991), p  77 quotes from Seymour’s Court Gamester of 1725: ‘basset, a French Game – thought only fit for Kings, Queens, Great Princes, Noblemen etc to play at, by reason of such great losses, or advantages, as may possibly be on one side or another, during the time of play … the dimmest eye may easily see, without a pair of spectacles, how much and considerable the design of this court game is in the favour of the Banker.’ In France the role of banker was reserved for the sons of noblemen: Miers op cit, p 19 citing A Steinmetz The Gaming Table (1870) ii 306.

0.19 The Gaming Act 1738 (12 Geo 2 c  28)1 specifically prohibited the playing of ace of hearts, faro, basset and hazard. Predictably enough, a new dicing game, passage, was introduced to replace them, and this was prohibited by the Gaming Act 1739 (13 Geo 2 c 19).2 Not to be thwarted, the promoters of gaming introduced ‘roulet or roly-poly’ a forerunner of modern roulette in which a ball rolled across a table determined winners and losers. Parliament reacted to this ‘pernicious game’ by the Gaming Act 1744 (18 Geo 2 c 34)3 which prohibited the keeping of any place for the playing of roulet or ‘any other game, with cards or dice, already prohibited by the laws of this realm.’ The Act went on to make it an offence to win or lose £10 or more at 11

The pre-Gambling Act framework play or by betting at any one time or to win or lose £20 or more within the space of 24 hours, the penalty on conviction being a fine of five times the value of the sum won or lost. 1 ‘An Act for the more effectual preventing of excesses and deceitful Gaming’. 2 ‘An Act to restrain and prevent the excessive Increase of Horse Races, and for amending an Act made in the last Session of Parliament, intituled, An Act for the more effectual preventing of excessive and deceitful Gaming.’ 3 ‘An act to explain, amend, and make more effectual the laws in being, to prevent excessive and deceitful gaming; and to restrain and prevent the excessive increase of horse-races’.

0.20 The effectiveness of the legislation passed in the first half of the eighteenth century in suppressing gambling is a matter of uncertainty and debate. To the extent that it was effective, however, it was largely designed to protect the wealthier members of society from the effects of high-stake gambling. However, as the century passed its mid-point concern was increasingly expressed as to the effects of gambling on the poorer members of society, especially in London. In particular, Henry Fielding, writing from the perspective of a London stipendiary magistrate, raised awareness of the degrading effects of gaming and drunkenness on the vast, impoverished and potentially unstable underclass of the Metropolis. These observations did not have an immediate effect: indeed, it has been said that ‘During the last quarter of the 18th Century and through the Prince of Wales’ Regency and succession as George IV, gaming among the upper classes reached its zenith,’1 but seeds of doubt had been planted and, as the eighteenth century gave way to the nineteenth, there were an increasing number of voices deploring the prevalence and effects of gambling and of the failure of the legislation to control it. In particular, the statutes against gaming houses were only haphazardly enforced when they were enforced at all. In addition, the opportunities for betting on horse racing were becoming more widely available, and this merits some attention. 1 Miers Regulating Commercial Gambling (OUP 2004), p 34.

The growth of horse-racing 0.21 The growth of a substantial betting market with recognisably modern features is intimately bound up with the development of horse-racing during the eighteenth and nineteenth centuries. The original stimulus for horseracing was the wish to improve the breed of horses, ultimately for military purposes, and this explains the leading role which the Stuart monarchs in particular played in the development of horse-racing. The racing of horses on Newmarket Heath appears to have begun during the reign of James  I. Charles  II imported Arab stallions with the intention of improving native stock, and during his reign racing on Newmarket Heath reached something of a peak. However, these races normally took the form of a match between two horses for a prize and the betting on the race took place between individuals (usually drawn from the nobility and gentry) who were invited to attend what was essentially a private occasion. After Charles’s death, racing faded and was not revived until the middle of the eighteenth century, again under royal patronage. Queen Anne put up prizes for competitions 12

The pre-Gambling Act framework and was responsible for laying out the Royal Ascot racecourse in 1714. Later in the eighteenth and nineteenth centuries, King’s Plates or Queen’s Plates were offered as prizes for races and incentives to improve native stock. 0.22 As time went by, the pattern of thoroughbred racing changed. Even in cases where the race took the form of a match between two horses, it was not uncommon to find a number of mounted spectators pursuing the matched horses. The performance of these pursuers themselves became the subject of bets between participants and spectators. Finally, there developed the practice of racing numbers of horses against each other in a field. 0.23 These alterations in the pattern of horse-racing, together with its substantial growth during the eighteenth century, necessitated a new mechanism to regulate wagering on the outcome of races. In a two-horse race it is simple enough for a bettor wishing to back one runner to identify other bettors who will be willing to bet against him. Where, however, there is a substantial field of runners and there is a large crowd of potential bettors on the race, it is much less practicable for an intending investor who fancies a particular horse to locate someone who is prepared to take a contrary bet against the horse and, in effect, to back the field against him. It was to provide this facility that the professional bookmaker emerged on course towards the end of the eighteenth century. 0.24 There were a number of developments which contributed to the bookmaker’s emergence. In particular, horse-racing developed its own means of self-regulation, a necessary condition if betting was to develop in a reasonably orderly and honest way. The Jockey Club was founded at Newmarket in or about 1750 and it soon undertook responsibility to arbitrate on the rules of racing and bets. In 1766 Richard Tattersall set up in business in London as a horse auctioneer. Unsurprisingly, most of his patrons were aristocrats and were members of the Jockey Club. For the convenience of his patrons Tattersall set aside space, eventually known as the Subscription Rooms, in which each Monday bets were to be settled. Anyone failing to pay would be ruled off the course. Thus a defaulter could not make good his losses by future bets and a practical means of ensuring that bets would be honoured was achieved. 0.25 It was the development of horse-races run under the control of the Jockey Club and of betting controlled by the Jockey Club and Tattersall’s that paved the way for the emergence of the bookmaker as a figure who would create a betting market by agreeing to bet on any horse in a race. Most accounts give the name of the first known bookmaker as Ogden and 1795 as he year in which he began operations on course. As the eighteenth century gave way to the nineteenth century, the number of bookmakers increased, servicing a betting market which is recognisably like that of modern times. 0.26 On course, a bookmaker could bet on credit (as he would doubtless do in the case of an aristocratic patron) or he could insist upon receiving cash from the bettor. Likewise, off course, either credit betting or cash betting were permissible. However, in the case of working-class customers betting small sums, the bookmaker would obviously want to receive cash. During the nineteenth century this led to bookmakers plying their trade in public streets or in cash betting offices set up for the purpose. This, in due 13

The pre-Gambling Act framework course, led to the enactment of the Betting Act 1853, which was designed to curtail such activities. However, before examining this statute we must return to the topic of gaming and the legislation designed to control it. 0.27 In 1844 the House of Commons appointed a Select Committee ‘to enquire into the existing statutes against gaming of every kind, to ascertain to what extent these statutes are evaded, and to consider whether any and what amendment should be made in such statutes.’ The Committee investigated in some depth the question why the police had failed so lamentably to enforce the laws against gaming houses, with the immediate result that the number of raids on gaming establishments rose markedly. However, the Committee came to the conclusion that the laws against gaming houses needed strengthening, and this was one of the principal purposes of the Gaming Act 1845 (8 & 9 Vict c 109).1 In addition, the Committee concluded that the effect of the existing legislation was to provide protection against the damaging consequences of gambling to the wealthier members of society who were least in need of it, but to ‘leave comparatively unprotected those of an inferior class, who may be sufferers from apparent small losses.’2 This conclusion, together with the perception that too much court time was being absorbed in litigation over gaming debts and wagers, led to the second principal provision of the 1845 Act, contained in s  18 which rendered all gaming and wagering debts void and unenforceable. 1 ‘An act to amend the Law concerning Games and Wagers’. 2 House of Commons (1844), p  v, cited by Miers Regulating Commercial Gambling (OUP 2004), p 59.

0.28 The 1845 Act did not repeal the Unlawful Games Act 1541 but, as has been noted above, updated it by repealing the prohibition on various games of skill and on sporting activities which were not perceived to be occasions for serious gambling, and by focusing attention on bankers’ games and games of unequal chance which experience had shown were particularly likely (even when honestly played) to lead to heavy losses, and which were, in any case, all too frequently played dishonestly. Section  2 of the Act provided that a place would be deemed to be a common gaming house within the 1541 Act if it was used for the playing of an unlawful game and if a bank was kept there, or if the chances of any game played there were not equally favourable to all the players (including the banker as a player). The effect was to convert the 1541 Act into a recognisably modern piece of gambling legislation which prohibited the commercial provision of certain specified games and of banking games and games of unequal chance, with their attendant risks. The statute also provided that there could be a conviction under the Act even though it could not be proved that any person found playing at a gaming premises was playing for any money, wager or stake. Further, instruments of gaming such as dice, cards and tables found on the premises were evidence that the premises were a common gaming house, even though no one was observed playing any game. In addition, a new and specific offence of cheating at play was created by s 17, and this remained in force until it was repealed by the Gambling Act 2005 and replaced by an updated version in s 42. Finally, s 18 provided that gaming and wagering contracts were null and void. This provision also remained in force until repealed by the Gambling Act 2005, ss 334–335. 14

The pre-Gambling Act framework The Gaming Houses Act 1854 (17 & 18 Vict c 38)1 strengthened the powers of those seeking to search for gaming houses and made it an offence to obstruct such searches. 1 ‘An act for the suppression of Gaming Houses’.

0.29 The enactment of the Acts of 1845 and 1854 coincided with a decline in the importance of gaming in British life, though it is quite possible that this was due to social developments rather than to the effectiveness of the Acts themselves.1 Miers suggests that social conditions in Victorian Britain were not conducive to excessive gaming and points to the rise of a philosophy of ‘rational recreation’ among the increasingly dominant middle classes. However, as the nineteenth century gave way to the twentieth, some of the concerns that had once attached to gaming at tables were transferred to gaming machines (see 0.40 below). In addition, horse-race betting came to the fore as a vehicle for gambling and to some extent supplanted gaming.2 This led to a new set of problems. 1 Miers Regulating Commercial Gambling (OUP 2004), p 61. 2 Ibid, p 61.

0.30 As has been noted at 0.26 above, bookmakers were well established by the beginning of the nineteenth century and could lawfully bet for cash or on credit either on course or off course. However, the enactment of s 18 of the Gaming Act 1845, which rendered gaming and wagering contracts void and unenforceable, made it essential for a bookmaker to bet on cash terms unless he was very sure of his customer’s credit. Accordingly, a number of betting houses sprang up to which customers could resort for the purpose of cash betting with bookmakers. The Betting Act 1853 (16 & 17 Vict c 119)1 was designed to suppress such establishments. It provided that no ‘house, office, room or other place’ should be ‘open, kept or used’ for the purpose of betting with persons resorting to the premises. It therefore struck at cash betting where the customer has perforce to resort to premises to pay his stake, as distinct from credit betting where a customer could bet by post (or later phone) and could settle his account without resorting to premises to pay in cash. The drafting of the Act was complex and its impact upon certain well established forms of bookmaker betting was uncertain. At one stage, for example, it was interpreted to mean that betting with bookmakers was unlawful in the ring on course as well as at off course betting establishments.2 Although this interpretation was overruled by a decision of the House of Lords,3 there remained uncertainty as to the scope of the Act in regulating the activities of bookmakers on course4 which would only finally be resolved by legislation in 1928. 1 ‘An act for the suppression of Betting Houses’. 2 See Hawke v Dunn (1897) 1 QB 579. 3 Powell v Kempton Park Racecourse Co Limited (1899) AC 143. 4 See eg Brown v Patch (1899) 1 QB 892.

0.31 However, the principal, and unintended, result of the Betting Act 1853 was to drive bookmakers onto the streets. In order to combat this nuisance, the Metropolitan Streets Act 1867 (30 & 31 Vict c 134),1 s 23 made it an offence to assemble in the street for the purpose of betting, and by the 15

The pre-Gambling Act framework Vagrant Act Amendment 1873 (36 & 37 Vict c 38), s 3 offenders were deemed to be rogues and vagabonds and were to be punished as such. The Street Betting Act 1906 (6 Edw 7 c 43) provided for the imposition of penalties on persons frequenting or loitering in streets or public places for the purpose of bookmaking or betting. 1 ‘An act for regulating the traffic in the Metropolis and for making provision for the greater security of persons passing through the streets’.

0.32 The Street Betting Act 1906 proved, however, inadequate to suppress street betting, which continued to flourish. The problem was that the law was deeply discriminatory. The wealthy bettor could either bet on course with a bookmaker or could obtain facilities for credit betting with an offcourse bookmaker, there being nothing in the Betting Act 1853 to prevent the setting up of an off-course credit betting office where bets could be taken by post or telephone without the need to resort to the premises. The working man, however, who could not easily get to the race-course and who had neither sufficient credit nor easy access to a telephone to allow him to bet on credit could only have recourse to the street bookmaker. It was the recognition that there existed a huge demand for off-course cash betting which eventually led to the legalisation of betting offices under licence by the Betting and Gaming Act 1960. 0.33 Before dealing with these developments, however, some consideration must be given to the development of on-course betting. Following some uncertainty as to the impact of the Betting Act 1853 upon the conduct of on-course bookmaking,1 the position was clarified by the Racecourse Betting Act 1928 (18 & 19 Geo 5 c 40). This provided for the setting up of a Racecourse Betting Control Board which had the power to issue certificates of approval for racecourses, which were then to become ‘approved racecourses’. The Betting Act 1853 was disapplied from such approved racecourses so that bookmaking could lawfully be carried on there. Moreover, the Racecourse Betting Control Board was given the exclusive statutory right to operate totalisators on such approved racecourses for the purpose of effecting pool betting transactions on racecourses. The Board’s profits were to be devoted to the improvement of racing. Its functions were taken over by the Horserace Totalisator Board (‘The Tote’). In July 2011 the Tote was sold into the private sector under provisions contained in the Horserace Betting and Olympic Lottery Act 2004 which made provision for the dissolution of the Tote, the transfer of its assets to a successor company and the grant by the Gambling Commission to the successor company of an exclusive licence for seven years to carry on pool betting business on horse races. In July 2011 the bookmaking company Betfred bought the Tote and it now trades under the brand Totesport. 1 See 0.30 above.

Dog-racing 0.34 The reforms of the 1928 Act meant that both bookmaking and totalisator betting could lawfully be made available on-course in the case of horse-racing. We turn now to the requirements of dog-racing. It is 16

The pre-Gambling Act framework believed that the first race between greyhounds using an artificial hare took place in 1876. The sport grew and the National Greyhound Racing Club, the governing body for greyhound racing, was formed on 1  January 1928. The Club supervised the sport in Great Britain. Greyhound racing rapidly became the working man’s alternative to horse-racing. By the early 1930s, whilst there were only seven horse racecourses within 15 miles of Charing Cross with 187 days’ racing, there were in the same area 23 greyhound tracks with over 4,000 days’ racing a year. In the city of Glasgow there were no horse racecourses, but there were five greyhound tracks with 1,400 racing days in the year. Although bookmaking took place on such tracks, totalisator betting was unlawful. 0.35 The Betting and Lotteries Act 1934 (24 & 25 Geo 5 c 58) empowered local authorities to grant licences authorising the provision of betting facilities on tracks, and laid down the procedure for the grant or refusal of such licences. It provided that on such tracks betting was not to take place on more than 104 days in any year; subject to that restriction, bookmaking on such tracks was lawful. Further, the Act permitted the occupier of a dog racecourse, or any person authorised by him, to set up a totalisator for the purpose of betting on dog races run on the track. The effect of the Betting and Lotteries Act 1934 was thus, effectively, to place betting on dogs on-course in the same position as betting on horses on-course: subject to statutory restrictions, both bookmaking and totalisator betting were permitted. 0.36 The problem, however, remained of a total absence of lawful outlets for off-course betting. Illegal street betting flourished, sometimes with the assistance of a ‘factory runner’, a species of bookmakers’ agent, the legality of whose operations was, in any case, open to doubt. Attempts to enforce the laws against off-course betting were almost wholly ineffectual. Street bookmakers and their agents were completely undeterred by the imposition of fines. Throughout the country cash bets were accepted at offices which were, on occasions, raided by the police. However, the prosecution of the proprietors did not lead to the closing of such offices, which continued to trade regardless. It was this state of affairs that led to the enactment of the Betting and Gaming Act 1960.

The Betting and Gaming Act 1960 0.37 The Royal Commission on Betting, Lotteries and Gaming 1948–1951 was set up to examine the impact of gambling in post-war Britain. As to gambling generally, the Royal Commission concluded that ‘gambling as a factor in the economic life of the country, or as a cause of crime, is of little significance, and its effects on social behaviour, in so far as they are a suitable object for legislation, are in the great majority of cases less important than has been suggested.’1 The principal concern related to the prevalence of unlawful betting – both street betting and cash betting – and unlawful betting offices. As to betting, the Commission recommended that the placing of bets in betting offices should be made legal, provided they were licensed, and a system of permits for bookmakers should be instituted. 1 1951, Cmd 8190.

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The pre-Gambling Act framework 0.38 As to gaming, the Commission’s approach was to try to strike a balance between the liberty of the individual to gamble if he wished, on the one hand, and the need to check the evils and abuses of uncontrolled commercial gaming, on the other. Whilst the Commission did not go so far as positively to recommend the introduction of commercial gaming, it recognised the need for such facilities to be available in clubs and for legislation to permit the making of charges for the right to take part in gaming, provided that the amount of such charges was no more than would be reasonably required to meet the actual cost of the facilities provided. 0.39 After some delay, parliament enacted the recommendations of the Committee in the Betting and Gaming Act 1960. Part  I  of the Act contained the provisions relating to betting, Part II the provisions relating to gaming, and Parts II and III the provisions relating to gaming machines. Lotteries remained governed by the Betting and Lotteries Act 1934 until the consolidating Betting, Gaming and Lotteries Act 1963 consolidated the 1960 and the 1934 Acts. The success of the Betting and Gaming Act 1960 in achieving its objectives was mixed – spectacularly so. The provisions relating to betting created a framework (licensing of premises and granting of permits to operators) which was almost wholly successful in curbing the problems of street betting and illegal cash betting offices and which remained the regulatory framework for the bookmaking industry until the provisions were replaced by the Gambling Act 2005. These provisions permitted bookmaking to mature into a successful and well run industry. The provisions governing gaming and gaming machines, by contrast, contained flaws which enabled an unregulated, and often criminal, gaming industry to develop and which had to be repealed and replaced by a wholly new Act, the Gaming Act 1968, within a mere eight years. Before these developments are examined, a word must be said about the history of the gaming machine.

Gaming machines 0.40 The modern gaming machine1 is believed to have been invented in the US in 1895 when Charles Frey, a mechanic, produced a three-reel fruit machine. Such machines soon found their way to Great Britain, the so-called ‘Today Vendor’ being an early fruit machine with three revolving drums. However, much of the controversy generated in the early twentieth century related to rather simpler forms of machine, and in particular the ‘All Win’ machine, which resembled an upright bagatelle board with pins through which a metal ball or coin could be projected by a spring lever so as to land in one or other of several compartments, one or some of which would award a prize whilst the others would not. A subsequent refinement, the ‘Clown’ machine, allowed players to manipulate a container to try to catch the ball or coin and thereby win a prize. Such machines were to be found in amusement premises (such as arcades), but also in shops, cafés, public houses and other places of public resort. 1 See Miers Regulating Commercial Gambling (OUP 2004), ch 4 for a full discussion of the development of the gaming machine and of government policy.

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The pre-Gambling Act framework 0.41 By 1910, gaming machines were to be found in the Metropolis in large numbers.1 None of the legislation in force was specifically designed to deal with gaming machines, but various pieces were pressed into service to try to secure convictions of businesses which offered such machines. There was some difficulty, in that the legality or otherwise of a machine could depend upon quite technical questions as to how the machine functioned. Miers2 notes that: ‘…  depending on the degree of control exercised by the player, the purpose of the player’s payment to the machine’s proprietor, the prize offered to those who were successful, and the premises on which it was sited, the use of an amusement machine could be caught under any one (or more) of the main heads proscribing gambling. So far as they distributed prizes by chance or lot, they constituted unlawful lotteries under the 1823 Act; so far as these chances were not equally favourable to all the players (including the proprietor) they constituted unlawful gaming under the 1854 Act; so far as the element of chance might be tempered by the opportunity to exercise some skill in determining the outcome, they constituted unlawful betting under the 1853 Act if the object of playing the machine was not to exercise such skill, but was in consideration of money or money’s worth; and even if a machine received a clean bill of health under these headings, its use would be unlawful at common law if it were sited on premises constituting a common gaming house.’ In addition, machines in licensed premises or refreshment houses could be held to be infringing provisions in force under the Metropolitan Police Act 1839, the Refreshment Houses Act 1860 and the Licensing Act 1872 (subsequently the Licensing Act 1910).3 1 Miers Regulating Commercial Gambling (OUP  2004), p  92, citing Home Office documents to that effect. 2 Ibid, pp 92–3. 3 Ibid, pp 96–7.

0.42 Until the enactment of the Betting and Gaming Act 1960, the laws against gaming machines were enforced rather haphazardly and spasmodically, the authorities sometimes showing reluctance to engage in the rather technical arguments over whether a particular machine fell inside or outside the bounds of legality. From time to time proposals were advanced for legislation to deal specifically with gaming machines, but in the absence of government support they came to nothing, and it was not until the Betting and Gaming Act 1960 that legislation was provided to deal with gaming machines in a systematic way. Unfortunately, the legislation had a number of unforeseen consequences which led to a vast expansion of gaming machine provision in Britain, bringing with it problems of crime and racketeering.

Gaming, gaming machines and the 1960 Act 0.43 As has been noted, the Royal Commission was willing to allow clubs to provide gaming subject to certain conditions and to charge for the 19

The pre-Gambling Act framework provision of gaming facilities. However, it was aware of the potential for exploitation which some gaming possesses and it sought to deal with this by prohibiting games of unequal chance, by preventing gaming operators from levying a deduction on stakes paid by players and by prohibiting the making of any charge which varied in accordance with the stakes paid. The first prohibition was contained in s 16(1) of the 1960 Act,1 which provided that gaming should be lawful if, but only if: ‘(a) … either— (i)

the chances in the game are equally favourable to all the players; or

(ii) the gaming is so conducted that the chances therein are equally favourable to all the players’. The principal purpose of these provisions was to prevent the offering of bankers’ games of the sort classically played in casinos such as roulette, blackjack and baccarat. In such a game one player, the banker, bets against all other players, winning their stakes on bets which they lose and paying out to them on bets which they win. Most bankers’ games2 are also games of unequal chance, ie there are aspects of the game which give one player (in the case of bankers’ games, the bank) better chances of winning than other players, so that over time the banker will expect to win more than he will lose at the expense of the other players. The advantage which the bank enjoys may be due to the fact that ‘ties and special cases are invariably designed to favour the banker, who is thereby assured of a small but cumulative profit or rake-off’,3 or it may be due to a deliberate fixing of the odds to secure an advantage to the bank – the classic example being casino roulette played with one 0. Here there will be pockets in the roulette wheel numbered 1–36 and one pocket numbered  0, making a total of 37 pockets into which the ball may fall. Accordingly, a bet that one number will be spun has a 1 in 37 chance of winning (or odds of 36/1). If the bank actually paid out odds of 36/1 on winning bets, it would not enjoy any advantage and the game would be one of equal chance. In practice, however, the bank pays out at odds of 35/1 on single number bets so as to secure for itself an advantage or ‘edge’ of 2.7%. A similar ‘edge’ in favour of the bank exists in the case of other roulette bets (odd/even, black/red etc). As the terms of s  16 made clear, a game of unequal chance may be played in such a way as to be converted to one of equal chance (eg where a bank which enjoys an ‘edge’ against other players is circulated from player to player during the course of play). 1 Re-enacted as s 32(1) of the Betting, Gaming and Lotteries Act 1963. 2 Most, but not all: ‘fan tan’ is a bankers’ game which does not provide any advantage to the bank. 3 Parlett A History of Card Games (OUP 1991), p 75.

0.44 The second restriction of the 1960 Act was imposed by s  16(1)(b), which provided that no money or money’s worth which any of the players had put down as stakes, or paid by way of losses, could be disposed of otherwise than by payment to a player as winnings. 0.45 The third restriction was imposed by s 16(1)(c) which provided that no payment in money or money’s worth could be required for a person to 20

The pre-Gambling Act framework take part in the gaming. However, an important exemption to this restriction was provided to enable clubs to charge for gaming facilities. This was contained in s 16(7),1 which provided that a club could charge for offering gaming facilities to members and guests on condition that the charge was ‘a fixed sum of money determined before the gaming began.’ 1 Re-enacted as s 36 of the Betting, Gaming and Lotteries Act 1963.

0.46 Unfortunately, the Betting and Gaming Act 1960 unwittingly created the ideal conditions for commercial gaming to take hold and flourish. The main impetus was the permission extended to clubs to make a fixed charge for the provision of gambling facilities. There was no requirement that the amount of such a charge should be limited to the true cost of providing such facilities. Nor, in practice, was the right to charge limited to members’ clubs and thus a great number of proprietary clubs emerged. It was this right to make charges, and the ingenuity of the commercial operators in the proprietary clubs in devising arrangements whereby inherently unequal chance games could be played so as to appear to be, at least nominally, equal chance games which led to the establishment of a ‘hard’ gaming industry centred around casinos. 0.47 As to the making of charges for gaming, club proprietors devised a number of ingenious ways of imposing charges, in particular by dividing the gaming up into sessions, each of which could arguably be regarded as involving a separate period of ‘gaming’, and each of which could therefore be subject to a separate charge.1 As to the second method of evading the spirit of the Act, club proprietors developed a number of ways of playing games of unequal chance so that they were at least nominally games in which each player had an equal chance, although in practice the club proprietor could almost invariably expect to win more from the gaming than could the ordinary players. A  number of strategies were adopted, including the provision of players’ pools2 and the making of arrangements whereby the bank in a banker’s game was offered to any player who might wish to take it. In theory, therefore, any player was entitled to hold the bank and to enjoy the ‘edge’ which the bank possessed over other players. In practice, few players could avail themselves of the offer because of the risk that, whilst holding the bank, they might suffer short-term losses for which they would be liable, it being a characteristic of bankers’ games of unequal chance that the banker may suffer losses in the short-term, but can be confident that in the longer term he will win.3 1 The principal cases are as follows: Quinn v Mackinnon [1963] 1 QB 874, [1963] 2 WLR 391, [1963] 1 All ER 570, DC: where roulette was played as a game of equal chance and the club owners sought to make a profit by charging sixpence on every stake wagered on each spin of the wheel, the players were not being required to pay ‘a fixed sum of money determined before the gaming began’ within BGA  1960, s  16(7)(b) because different players might pay different stakes and therefore different amounts in sixpences – so the gaming was unlawful. JM Allan (Merchandising) Limited v Cloke [1963] 2 QB 340, [1963] 2 WLR 899, [1963] 2 All ER 258, CA: where roulette was played as a game of equal chance, a charge of sixpence on any bet placed before the spin of the wheel did not amount to a charge

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The pre-Gambling Act framework of ‘a fixed sum dertemined before the gaming began’ within BGA 1960, s 16(7)(b). This provision contemplated a sum in the nature of an entrance fee determined before the gaming began and the gaming began when the players sat down at the table to participate in a session of gaming and not with each spin of the wheel. Accordingly, the game was unlawful. Mills v Mackinnon [1964] 2 QB 96, [1964] 2 WLR 363, [1964] 1 All ER 155: a gaming club was entitled to charge fees for playing chemin de fer at the rate of £5 per player per shoe where each shoe took about 35 minutes to play. The £5 was a ‘fixed sum of money determined before the gaming began’ within BGA 1960, s 16(7)(b) because there was a ‘natural and conventional break in playing chemin de fer at the end of a shoe’, so that the succeeding shoe could be regarded as a new game for which a separate charge could be made. Kelland v Raymond [1964] 2 QB 108, [1964] 2 WLR 662, [1964] 1 All ER 564: where roulette in a club was played as a game of equal chance, a charge made by the club of 10 shillings per session of play, each session lasting about 20 minutes and being separated from the next session by a period of about 1½ minutes, was not a ‘fixed sum of money determined before the gaming began’ within s 36(b) of the Betting, Gaming and Lotteries Act 1963. This provision contemplated a sum of money paid to entitle a player to take part in a game until the facilities were withdrawn for a substantial period of time. Accordingly, the gaming was unlawful. See also Victoria Sporting Club v Hallam [1970]  AC  55, [1969] 1  All ER  369: a minority of the House of Lords held that there was an unlawful appropriation of stake money on the part of the casino where players of casino roulette which was played as a game of equal chance were paid both in gaming chips and marker chips exchangeable for money and were invited voluntarily to surrender the latter. The minority judgments of the House of Lords concluded that the surrender of the marker chips resulted in the casino unlawfully appropriating part of the money staked and not paying it out as winnings. 2 The cases are as follows: DPP v Essoldo Circuit (Control) Limited [1966] 1 QB 799, [1965] 3 All ER 421: odds weighted in favour of the players’ pool in a roulette style game rendered the game unlawful as one of unequal chance, as the pool was to be treated as a ‘player’. Victoria Sporting Club v Hannam [1970] AC 55, [1969] 1 All ER 369: casino roulette, where the casino held the bank, was not played as a game of equal chance where, although the bank was paid out at the same odds as ordinary players (36/1), such players were paid both in gaming chips and marker chips exchangeable for money, but were invited to volunteer to surrender the latter – and many did so. The House of Lords held (by the majority) that where players ‘gave away’ their marker chips, they were agreeing to be paid at odds of 35/1 and not 36/1, so that the chances were not equal and the gaming was unlawful. Metropolitan Police Commissioner v Weston [1969] 1 WLR 847: a roulette style game where players could join a syndicate was not one of equal chance where the syndicate enjoyed more favourable odds than were available to non-syndicate players. 3 The cases are as follows: Casino Club (Bolton) v Parr [1966] 64 LGR 155, [1966] 110 Sol Jo 88: games of roulette and blackjack played as banker’s games in a casino where the bank enjoyed more favourable odds than ordinary players were not ‘so conducted that the chances in them [were] equally favourable to all the players’ within BGLA 1963, s 32(1) (ii) where, though the bank was offered by the casino to any player who might wish to take it, the rules provided that in such a case the player must share the bank with the casino proprietors, so that in any period of two hours’ play the

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The pre-Gambling Act framework proprietors enjoyed possession of the bank with its advantages for a longer period than any player could. Accordingly, the game was unlawful. Kursaal Casino Limited v Crickitt [1966] 1 WLR 960, [1966] 2 All ER 639: the justices were entitled to find that roulette played in a casino was not played as a game of equal chance where, although the casino offered players the chance to take the bank, the financial status of the players typically playing at the casino made it impossible for them to accept the risk of doing so. Kursaal Casino Limited v Crickitt (No 2) [1968] 1 WLR 53, [1968] 1 All ER 139: casino roulette was not a game of equal chance where, although a genuine offer was made to all players to hold the bank, in practice the offer was almost never accepted. See also Mills v Mackinnon [1964] 2 QB 96, [1964] 2 WLR 363, [1964] 1 All ER 155 for a description of the arrangements for transferring the bank between players at chemin de fer.

0.48 Once it was discovered that gaming clubs could make money by tactics such as those outlined above, there was an explosion in gaming centred on casinos. Most of the strategies adopted by the casino proprietors were eventually ruled unlawful by the courts, but as soon as one strategy was struck down, the proprietors were ready with another.1 By the mid-1960s the development of commercial gaming had got seriously out of control. There was a clear need for action to be taken to check the exploitation of the customer by unscrupulous promoters. Commercial gaming has traditionally been vulnerable to abuse at the hands of a minority criminal element, and the opportunities for criminal behaviour were magnified by the fact that gaming debts were irrecoverable at law. In addition, the provisions of the 1960 Act regulating the provision of gaming machines had also unwittingly created openings for criminal activity. 1 For a résumé see R  v Metropolitan Police Commissioner, ex  p Blackburn [1968] 2 QB 118, in particular Lord Denning’s judgment at 130–3.

0.49 The starting point of the 1960 Act was to divide gaming machines into three types for the purposes of regulation. First, there were gaming machines proper, which were to be lawful provided no more than two of them were made available in non-public places (ie  essentially in clubs) to which persons under 18 did not have access; and provided the maximum stake per game was sixpence; and provided all the stake money was either paid out in winnings or was devoted to purposes other than private gain (eg was used for the purposes of the club providing the machine). Second, there were machines offering amusements in the form of games of chance, or chance and skill, together with money prizes. These machines, colloquially known as ‘amusements with prizes’ (AWP) machines, were to be lawful on premises for which a permit had been granted by the local authority or at a ‘travelling showmen’s pleasure fair’, provided limits on stakes and prizes were observed. Third, there were amusement machines which awarded ‘money back’ or ‘free games’ as prizes: these could be lawfully provided anywhere. 0.50 The expectation was that the sixpenny gaming machines would be used in a modest way by clubs such as golf clubs and working men’s clubs and that the cap on stakes, together with the requirement that stakes should be paid out only in prizes or for purposes other than private gain, 23

The pre-Gambling Act framework would prevent the commercial exploitation of such machines. The legislation imposed no limit, however, on the maximum prizes that such machines could award, and this led to the development of machines which offered substantial jackpots and encouraged repeat playing. The machines became vastly more popular than had been anticipated. Within two years of the enactment of the 1960 Act, a Customs & Excise report showed that some 24,000 machines were in use in various clubs, generating substantial sums of money.1 The machines were often, however, installed under profit-sharing arrangements by which the supplier benefited according to the extent to which the machine was used, and the supply of machines rapidly became associated with criminality in the form of extortion and protection rackets. 1 Cited in Miers Regulating Commercial Gambling (OUP 2004), p 124.

0.51 In the case of amusement with prizes machines, problems of a different sort emerged. With these machines a prize limit was expressed in monetary terms. There was nothing, however, to stop the award of nonmoney prizes of greater value, including tokens exchangeable for such prizes. This fact led to the rapid development of token machines to exploit this loophole. 0.52 Parliament attempted to stem the tide by the Betting, Gaming and Lotteries Act 1964 which, by s 2, limited the value of prizes which could be won,1 but by 1968 things had gone from bad to worse and the gaming machine industry had become notorious. The Home Secretary, James Callaghan, during the second reading of the 1968 Act in the Commons, summarised the situation at the time with respect to gaming machines as follows: ‘Serious abuses also developed from use of gaming machines … Stakes are limited to sixpence, but no limit is placed either on jackpots or on the percentage of stakes which the machine can retain. This has often been quite excessive, and while the law expresses the pious contention that the profit should be used for purposes other than private gain, there is no effective means of ensuring this. The condition has been widely and flagrantly perverted, less often to the profit of the clubs themselves than of the machine dealers. Machines have been forced on premises at high rentals by protection methods, or by rigorous forms of contracts designed to secure that the lion’s share of the profits go to the dealer. There has been bribery and sometimes downright robbery.’2 1 See s  2(2) of BGLA  1964. Section 3(2)(a) of the Act also empowered the local authority to impose a condition limiting the number of machines which could be so provided. 2 See 758 HC Official Report (5th series) col 1164 (second reading).

0.53 Less undesirable, but equally unforeseen, was the widespread appearance of gaming machines in public houses under permits granted by local authorities or, on appeal, by Quarter Sessions, under s 49 of the 1963 Act as a form of amusements with prizes. The draftsmen of the 1960 and 1963 Acts had not foreseen that, by adapting gaming machines so that they could be used with tokens rather than coins, which could then be exchanged for drink or food, it would be worthwhile for licensees of public houses to apply 24

The pre-Gambling Act framework for permits for such amusements with prizes machines. James Callaghan explained to the House the position during the debates on the 1968 Act as follows: ‘When the 1960 and 1963 Acts were passed certainly the Home Office did not think that people in public houses would be able to get permits for what they thought were one-armed bandits. The Committee at the time did not recognise that it would be possible to invent a “disk operated” machine for use in a public house. What happened was that the operators went to counsel in this country and sought advice. As a result of that advice, it was pointed out to publicans, and thus to the brewer, that he could apply for a permit for a machine in his public house provided it returned to the operator a prize not exceeding five shillings. A  machine was specifically designed which led to applications for permits in public houses so that people could engage in this harmless game.’ As with the mushrooming growth of casinos, so with gaming machines: by 1968 it was too late to turn back the clock to times prior to 1960. Jackpot machines, like casinos, were here to stay. So were amusement with prizes machines, which were not only available in numerous public houses, cafés and hotels, but also in amusement centres and arcades and travelling showmen’s pleasure fairs. 0.54 It was impossible for the police and the courts to stem the tide without radical reform of the law. The decisions of the courts in the 1960s and the experience of the police illustrated graphically the shortcomings of the current legislation. The gaming industry was there to be seen, ‘warts and all’, and the government was able to set clear objectives to those responsible for drafting the new legislation. There was no question of attempting to suppress commercial gaming and it was this policy which led directly to the success of the Gaming Act 1968. The controls which the Act imposed are described below, but in summary involved the setting up of a Gaming Board which was to be the central regulatory body for gaming in casinos and bingo halls, for gaming machines and for certain types of lottery. The Act made it possible to provide casino games (with an ‘edge’ giving advantage to the bank) and cash bingo, but only subject to the grant of a licence from justices, and only after the applicant had obtained a ‘certificate of consent’ consenting to the application for a licence from the Gaming Board. This gave the Board extensive powers to vet applicants for licences. In addition, certain key staff involved in the provision of gaming facilities were required themselves to hold certificates of approval from the Board in order to discharge their duties. Taken together, these provisions gave the Board extensive powers to keep undesirable elements out of the gaming industry. 0.55 A  similar approach was adopted in relation to gaming machines. No attempt was made to stamp out their use altogether. Instead, a basic distinction was made between the availability of pure gaming machines, known as ‘jackpot’ (or even ‘jumbo-jackpot’) machines on the one hand and amusements with prizes machines or amusement machines on the other. For the future, the former were only to be available for commercial purposes on premises licensed under the Gaming Act 1968 for gaming, or on club or 25

The pre-Gambling Act framework institute premises registered under Part II or Part III of the Act, and then only on condition that not more than two such machines were to be allowed on any one premises. Thus the control of the use of such machines for gaming was vested in the licensing authority.1 The availability of amusements with prizes machines, on the other hand, although they were treated separately from other kinds of amusements with prizes, was to be under the control of the local authority in the case of premises not licensed for the sale of alcoholic liquor, and under the control of the licensing justices in the case of licensed premises.2 The use3 of automatic machines for purposes of amusement only, with no element of gaming, was subject to no control whatsoever under the gaming laws. 1 For the definition of ‘licensing authority’ see Sch 2, para 1 to the Gaming Act 1968 and Sch 1 to the Betting, Gaming and Lotteries Act 1963. 2 Gaming Act 1968, s  34 and Sch  9. Subsequently licensed betting offices were permitted to have all cash amusement with prizes machines. 3 As distinct from their supply and maintenance.

0.56 The Gaming Act 1968 also took steps to stamp out the abuses which had sometimes occurred in relation to the supply of gaming machines by the operators to the site owners. Important provisions were included in Part III of the Act whereby, first, those who intended to sell, supply or maintain machines constructed or adapted for playing a game of chance had to obtain a certificate from the Gaming Board entitling them to do so1 and, second, a general power was given to the Secretary of State to impose such terms and conditions as he might consider necessary or expedient with regard to the sale, supply or maintenance of such machines and, subject to certain exceptions, sharing arrangements (in the widest sense) were expressly prohibited.2 1 Gaming Act 1968, s 27 and Sch 6. 2 Gaming Act 1968, s 28.

Lotteries 0.57 The Gambling Act 2005 marks an important departure in English lottery legislation by providing, for the first time, a statutory definition of the expression ‘lottery’.1 For centuries English law eschewed a statutory definition of the term, but founded itself upon the concept that a lottery is a system of gambling in which prizes are distributed by chance amongst persons who have given some form of valuable consideration for their chance to take part. As the ensuing historical sketch will show, this concept has been fundamental to the idea of a lottery for centuries.2 For a discussion of the early history of lotteries up to the nineteenth century see Chapter 15. Following extensive public concern over the social impact of lotteries, including State Lotteries, parliament passed an Act in 1823 authorising the final State Lottery but otherwise prohibiting the conduct of lotteries in Great Britain and the sale in Great Britain of tickets in foreign lotteries. 1 Gambling Act 2005, s 14 and Sch 2.

26

The pre-Gambling Act framework 2 For the early history of lotteries see Chapter 15 and see C  L’Estrange Ewen Lotteries and Sweepstakes (1932) London, (1972) Benjamin Blom Inc NY; J Ashton History of Gambling in England (1899) London; Bendar Tickets to Fortune: The Story of Sweepstakes Lotteries and Contests (1938) New Hampshire. For an influential formulation of the essential features of a lottery see Readers Digest Association Ltd v Williams [1976] 1 WLR 1109 where Lord Widgery CJ said: ‘A lottery is the distribution of prizes by chance where the persons taking part in the operation, or a substantial number of them, make a payment or consideration in return for obtaining their chance of a prize’.

0.58 The Act of 1823 established the principle which has governed lotteries in Great Britain ever since, namely that lotteries are unlawful unless specifically permitted by statute. The first statutory incursion into the principle that lotteries are unlawful was made by the Art Unions Act 1846, which made lawful voluntary associations formed for the purpose of distributing works of art by chance or otherwise among their members. The Act, which had been for many years of little practical significance, was finally repealed in 2004.1 1 See the Statute Law (Repeals) Act 2004, s 1(1), Sch 1, Pt 17, Group 3.

0.59 The next significant statute was the Betting and Lotteries Act 1934, which was enacted in the light of the recommendations of the Royal Commission of 1932/3 (Cmd 4341, 1933). This repealed inter alia an Act of 1699 and the 1823 Act, replacing them with its own provisions rendering lotteries unlawful. It provided, however, that certain small lotteries incidental to exempt entertainments, the proceeds of which were not devoted to private gain, and certain private lotteries, should be lawful provided they were conducted in the manner which it laid down. Comparable provisions were carried forward into the Lotteries and Amusements Act 1976, and similar provisions are contained in the Gambling Act 2005. In addition, the BLA 1934 introduced for the first time legislation to control so-called ‘prize competitions’. These were competitions run largely by newspapers which, because they involved a small element of skill, narrowly escaped the prohibition on lotteries. Section 26 of the BLA 1934 rendered unlawful competitions in which prizes were awarded for the forecast of future events and competitions, success in which did not depend to a ‘substantial degree’ upon the exercise of skill. These provisions were carried forward into the LAA  1976, s  14. The provisions have been repealed, and not in terms replaced, by the Gambling Act 2005. However, many competitions which would once have been caught by these provisions will now rank as ‘bets’ for the purposes of s 9 of the 2005 Act in view of the extended definition of ‘betting’ contained in s 11 of the Act. 0.60 The Small Lotteries and Gaming Act 1956 (‘SLGA  1956’) and the Lotteries and Gaming Act 1962 (‘LGA 1962’) made lawful so called ‘societies’ lotteries, that is to say, small public lotteries conducted by societies which were established for charitable purposes, the support of sport and athletics, or purposes not involving private gain. This provision was reproduced in the LAA 1976. 0.61 The Betting, Gaming and Lotteries Act 1963 (‘BGLA 1963’) repealed and consolidated the provisions of the BLA  1934, the SLGA  1956 and the LGA 1962. Next, the Lotteries Act 1975 (‘LA 1975’) repealed the BGLA 1963, 27

The pre-Gambling Act framework s 45, which authorised societies’ lotteries, but re-enacted it to increase their scope and financial limits. It also empowered local authorities to conduct lotteries on conditions substantially similar to those applying to societies’ lotteries. The next step was the consolidation of the BGLA  1963 and the LA 1975 into the LAA 1976. The final step was the enactment of the National Lottery Act 1993 (‘NLA  1993’) authorising the setting up of the National Lottery. This was amended by the National Lottery Act 1998 (‘NLA 1998’). Subsequent amendments to the National Lottery legislation have been enacted in the National Lottery (Funding of Endowments) Act 2003, the Horserace Betting and Olympic Lottery Act 2004, the National Lottery Act 2006, and the Public Bodies Act 2011. 0.62 Accordingly, on the eve of the coming into force of the Gambling Act 2005 the final picture under the LAA 1976 was that lotteries were unlawful (s 1) unless they were ‘small lotteries’ (s 3), were ‘private lotteries (s 4), were ‘societies’ lotteries’ (s  5), were ‘local lotteries’ run by local authorities (s  6) or were lotteries forming part of the National Lottery under the NLA 1993. Although the Gambling Act 2005 is revolutionary in its provision of a statutory definition of ‘lottery’, in other respects it builds on the existing framework, carrying forward provisions relating to ‘small lotteries’, ‘private lotteries’, ‘societies’ lotteries’ and ‘local lotteries’. The National Lottery remains governed by its own legislation and, subject to the fact that the Gambling Commission is now the regulator for the National Lottery (see 0.1), the Act of 2005 has a limited impact upon it.

BRITISH GAMBLING INDUSTRY As it had developed prior to 2005 this could be divided into:

0.63

(1) the betting industry, which could be sub-divided into: •

the bookmaking industry (offering fixed odds bets on a wide variety of events, both on-course and off-course, but with a strong emphasis on horse races and greyhound races);

•

pool betting by means of totalisators – this was conducted exclusively on horse races (both on-course and off-course) and greyhound races on-course;

•

pool betting otherwise than by means of totalisator – this comprised principally football pool betting.

(2) The gaming industry. This could be sub-divided into:

(3)

28

•

gaming in licensed casinos;

•

cash bingo carried on in licensed bingo clubs;

•

prize bingo carried on in amusement centres and amusement arcades;

•

certain gaming carried on in clubs and miners’ welfare institutes.

Gaming machines: these could be found as a form of ancillary gambling in licensed casinos, licensed bingo clubs, certain clubs and in premises

The pre-Gambling Act framework holding a premises licence under the Licensing Act 2003 (eg  public houses). They were also provided as a principal activity in amusement centres and amusement arcades. (4)

Lotteries: the principal public lottery permitted in the United Kingdom is the National Lottery. Except for the fact that the Gambling Commission is the regulator for the National Lottery (see 0.1 above) this is not affected by the Gambling Act 2005. In addition, various societies’ lotteries, local lotteries, private lotteries and small lotteries were permitted by the Lotteries and Amusements Act 1976. The Gambling Act 2005 largely reproduces these provisions.

The betting industry 0.64 At the outset, a distinction needs to be made between an ordinary bet (or, in the now slightly dated terminology, a ‘wager’) and a pool bet. These terms are discussed in detail in Chapter 2 below. In essence, an ordinary bet or wager is a contract between two parties whereby each promises to pay a defined money sum or stake to the other, dependent on the outcome of a future event. The parties may be private individuals who are not gambling by way of business. So A may bet B £10 that a named horse will win a race, and B may bet A £5 that it will not. If the horse wins, B must pay A £10; if it loses A must pay B £5. This is an ordinary bet or wager. Most betting carried on commercially by bookmakers takes this form, the bookmaker agreeing to bet with all comers on all possible outcomes of an event such as a horse race, and quoting the odds (ie the rate of return) he will pay out on winning bets. So, if B is a bookmaker, he may quote odds of 2/1 against horse X. If customer A bets £10 on horse X to win, he knows that if the horse does win he will receive £10 × 2 = £20 plus £10 stake returned, making winnings of £30. B, on the other hand, knows that if horse X loses, then A’s £10 stake will be forfeit to him. So each party to the bet knows that he will win or lose on the bet. Such a bet, known as a bet at fixed odds,1 is the principal type of betting carried on by the bookmaking industry. 1 For a ‘bet at fixed odds’ in the context of betting duty see Finance Act 2014, s 185.

0.65 Pool betting, by contrast, involves an arrangement in which a ‘promoter’ invites bettors to make forecasts about events (classically football matches, or, in the case of totalisator betting, horse or greyhound races) and to back their forecasts with stakes. The stakes are pooled. The promoter, having deducted his expenses and commission from the pooled stakes, distributes the pool amongst those bettors who have made successful forecasts. When a customer makes a pool bet, he cannot predict how much he will win on the bet since this depends upon the total number of persons betting into the pool, and the total number of persons who make successful bets. This distinguishes pool betting from fixed odds betting, where both parties to the bet do know what they will win or lose. In the case of football pools, bets are traditionally made on coupons which are posted to the promoter or delivered to his agents. In the case of totalisator betting on horse races or dog races, bets are typically made at the totalisator office on-course.1 The totalisator continuously aggregates both the total stakes paid into a pool and 29

The pre-Gambling Act framework the stakes paid on the individual runners in the pool, so that it is possible to make a rapid computation of the dividend payable in respect of the stake or stakes betted on any runner, should it win. 1 Though there was provision for bets with the Tote on horse races to be made via terminals in licensed betting offices.

Bookmaking industry Operators 0.66 A bookmaker, essentially, is a person or company who bets by way of business and in order to make a commercial profit. This was reflected in the Betting, Gaming and Lotteries Act 1963, which defined a ‘bookmaker’ as a person who ‘… carries on, whether occasionally or regularly, the business of receiving or negotiating bets … or … holds himself out, or permits himself to be held out, as a person who receives or negotiates bets …’1 Under the 1963 Act an individual or company could only trade lawfully as a bookmaker under the authority of a bookmaker’s permit.2 Such permits authorised a huge range of bookmaking businesses from, at one extreme, sole traders, who plied their business either on-course, or off-course through a single licensed betting office, to large public limited companies operating high volume betting businesses both on-course, and off-course through large estates of betting offices. As at May 2003 there were 3,572 bookmakers’ permits in force.3 1 Betting, Gaming and Lotteries Act 1963, s 55. For a discussion of the s 55 definition see the decision of the Court of Appeal in The Queen on the Application of William Hill Organisation Ltd v The Horserace Betting Levy Board [2013]  EWCA  Civ 487 where it was held that customers who use a betting exchange to make bets with other customers do not receive or negotiate bets within the meaning of the s 55 definition and are therefore not bookmakers. 2 BGLA 1963, s 2 and Sch 1. 3 DCMS  Bulletin: Betting Licensing, Great Britain, June 1990–May 2003 (cited in Gambling Act: Regulatory Impact Assessment 2005).

0.67 In addition, the Horserace Totalisator Board (‘the Tote’), a statutory corporation set up under the 1963 Act – originally to act as a monopoly provider of pool betting on horse races (see below) – was also authorised to carry on ordinary fixed odds betting business and thus to compete with the bookmaking industry.1 As noted in paragraph 0.33 the Tote has now been sold to a private sector bookmaker. 1 Horserace Totalisator and Betting Levy Boards Act 1972, s 1(1)(b) substituted by the Horserace Totalisator Board Act 1997, s 1(2).

0.68 Bookmaker’s permits were granted and renewed by licensing justices sitting as the Betting Licensing Committee.1 There was no need for an applicant to prove that there was unsatisfied demand for the betting facilities he proposed to provide; the criteria on an application for the grant or renewal of a bookmaker’s permit were principally directed to the applicant’s fitness and suitability to hold a permit and to conduct a betting business.2 A permit 30

The pre-Gambling Act framework required to be renewed every three years,3 and could be cancelled on the ground that the holder was no longer fit and proper to hold such a permit.4 1 BGLA 1963, s 2 and Sch 1. 2 BGLA 1963, Sch 1, paras 15 and 16. 3 BGLA 1963, Sch 1, para 29(1), substituted by the Deregulation (Betting Licensing) Order 1997 (SI 1997/947), art 6. 4 BGLA 1953, Sch 1, para 27(4).

0.69 A bookmaker’s permit enabled its holder to conduct betting business either on-course (in which case he would attend a horse racecourse or greyhound track and make bets with customers attending the race meeting), or off-course by post, phone, or (latterly) the internet, or in a licensed betting office where customers attended in person to bet.

Premises 0.70 A bookmaker may use premises in one of two basic ways to conduct his betting business. He may use premises as an office from which he conducts his business by post, telephone or the internet, in which case customers will never visit the office but will place their bets by letter, telephone, email or online and will settle wins and losses by cheque or by credit or debit card payments or bank transfers. Alternatively, the bookmaker may occupy premises to which customers can resort for the purpose of betting over the counter. Such betting is usually carried on as cash betting (though winnings over a certain level may be paid by cheque). Under the 1963 Act, possession of a bookmaker’s permit entitled its holder to conduct his business in either (or both) ways. But under that Act a bookmaker could only use premises to bet with persons resorting to them if the premises were an approved horse racecourse,1 or a licensed track (in practice used for greyhound racing),2 or a licensed betting office.3 An approved horse racecourse was a racecourse used for racing with horses which had received a certificate of approval from the Betting Levy Board.4 The certificate had to be subject to a condition requiring the racecourse management to provide a place on-course where bookmakers could bet with the public and imposing a limit on the amount which a bookmaker could be charged for admission to the enclosure.5 1 2 3 4

BGLA 1963, s 1(1)(b) and (5). BGLA 1963, s 1(1)(b) and (5). BGLA 1963, s 1(1)(b) and s 9(1). BGLA 1963, s 13. The Betting Levy Board is a statutory body set up under s 24 of that Act, whose principal function is to administer the Betting Levy Scheme, a statutory scheme set up to raise money by imposts on horse race betting turnover to be devoted to purposes beneficial to horse racing. For the current status of the Board see Chapter 19. 5 BGLA 1963, s 13(2). The maximum amount for a bookmaker was five times the maximum amount chargeable to members of the public, and, for a bookmaker’s assistant, an equivalent sum.

0.71 A licensed track was a track1 used for races or sporting events for which a track betting licence authorising the provision of betting facilities on the track had been granted by the local authority in whose area the track was 31

The pre-Gambling Act framework situated.2 The grounds on which the authority could refuse a licence related essentially to the impact of the track on the amenity of the neighbourhood and to the suitability of the applicant to hold a track betting licence.3 A licence was granted for a period of seven years,4 but could be revoked in specified circumstances.5 Once the licence was granted, it authorised the track occupier to permit bookmaking on the track and, where totalisator betting was provided on the track6 (see below), the occupier was obliged to make space for bookmakers available on the track where they could carry on bookmaking on dog races run on the track.7 1 Defined as ‘premises on which races of any description, athletic sports or other sporting events take place’: BGLA 1963, s 55. 2 BGLA 1963, s 5 and Sch 3. 3 BGLA 1963, Sch 3, para 7. 4 BGLA 1963, Sch 3, para 8. 5 BGLA 1963, Sch 3, para 13. 6 See BGLA 1963, s 4(1)(b) and 16. 7 BGLA 1963, s 15(2).

Licensed betting offices 0.72 Applications for betting office licences were made to the Betting Licensing Committee1 for the area in which the premises were situated. The applicant had to be the holder of a bookmaker’s permit (or a betting agency permit),2 although the Horserace Totalisator Board was also able to apply for licences for betting offices. The application could be refused on various grounds, some of which related to the premises’ suitability and the impact of the proposed use on the amenities of the neighbourhood.3 The licence could also be refused on ‘demand’ grounds, namely that the grant would be ‘inexpedient, having regard to the demand for the time being in the locality for the facilities afforded by licensed betting offices and to the number of such offices for the time being available to meet that demand.4’ The ‘demand’ test reflected the underlying principle of the gambling legislation of the 1960s that gambling facilities should be sufficient to satisfy ‘unstimulated demand’ for gambling facilities, but should not be allowed to proliferate to a degree which might create demand. Once granted, the licence had to be renewed every three years,5 and could be cancelled on specified grounds.6 The licence authorised use of the premises for fixed odds betting with persons resorting to them,7 and also for pool betting by means of facilities provided by the Tote.8 This meant that customers in betting offices could bet directly into the Tote’s pools on horse racecourses via terminals under the ‘Tote Direct’ scheme. With a very limited number of exceptions, a licensed betting office could be used only for betting.9 As at May 2003 there were 8,804 betting office licences in force.10   1 BGLA 1963, s 9 and Sch 1.   2 BGLA 1963, Sch 1, para 19.   3 BGLA 1963, Sch 1, paras 19(a) and 19(b)(i).   4 BGLA 1963, Sch 1, para 19(b)(ii).   5 BGLA 1963, Sch 1, para 29.   6 BGLA 1963, s 10A and Sch 1, paras 28A–28D.   7 BGLA 1963, s 9.

32

The pre-Gambling Act framework   8 BGLA 1963, s 9.   9 BGLA  1963, s  10 and Sch  4, para  1. Limited refreshments could be provided in the premises; two ‘all cash’ gaming machines were permitted; a limited range of publications could be sold; tickets in a limited number of lotteries could be sold and winnings in those lotteries could be collected; entry forms and stakes in certain skill competitions could be delivered and winnings in such competitions could be collected: Sch 4, paras 10, 10A, 10B and 10C. 10 DCMS  Bulletin: Betting Licensing, Great Britain, June 1990–May 2003 (cited in Gambling Act: Regulatory Impact Assessment 2005).

Totalisator betting on horse races 0.73 Pool betting by totalisator could only be carried on lawfully by the Horserace Totalisator Board on an approved horse racecourse (ie a racecourse certified by the Levy Board – see 0.70 above) on a day when horseraces and no other races were taking place on the course.1 The Board could either itself provide facilities for pool betting or it could authorise the manager of the racecourse to provide them.2 In addition to carrying on pool betting on horse races on approved horse race courses (or authorising others to do so), the Board could itself bet at tote odds (ie could bet on horseraces on terms that winnings would be paid out at odds reflecting the rate of return generated by the totalisator on the particular race),3 or could authorise others to do so. 1 BGLA 1963, s 4(1)(a). 2 BGLA 1963, s 4(1)(a). 3 BGLA 1963, s 14.

Totalisator betting on greyhound tracks 0.74 Pool betting was permitted on greyhound tracks for which a track betting licence was held (see 0.71 above).1 The betting had to be conducted by means of a totalisator operated by the occupier of the track or by someone authorised by him in writing. The totalisator could only be used for making bets on greyhound races run on the track,2 or for making bets on greyhound races on that track and on other greyhound tracks linked to the track under a licensed inter-track betting scheme.3 1 BGLA 1963, s 4(1)(b). 2 BGLA 1963, s 16(1)(c). 3 BGLA 1963, s 16(1)(b) and (c). A ‘licensed inter-track betting scheme’ was a scheme licensed under s 16A and Sch 5ZA for the pooling of bets made by totalisators on greyhound races on different licensed tracks, each of which was a participant in the scheme.

Pool betting otherwise than on-track 0.75 The principal form of off-track pool betting was the football pools. Under the 1963 Act a pools promoter was required to be registered with the local authority which was the registering authority for the area in which his place of business was situated.1 The promoter was required to provide specified information about his business to the registering authority and to 33

The pre-Gambling Act framework file accounts. The legislation imposed a number of limitations on the conduct of pool betting business, one limitation being that all winnings had to be in money,2 and another being that the only funds available for paying prizes in a pool competition were the stakes paid for that competition, together with any stakes carried over or from a previous competition where a ‘carryover’ was in force.3 The practical effect of these provisions was that the prize pool could not be enhanced by the injection of money from other sources. Entries into football pools were made by the completion of coupons which were either posted to the promoter by customers, or were delivered to the promoter’s agents, or were handed in at shop premises authorised by the promoter to receive them, this latter means of delivery being authorised by amendments to the 1963 Act inserted by the National Lottery Act 1993.4 1 2 3 4

BGLA 1963, s 4 and Sch 2, para 4. BGLA 1963, Sch 2, para 13(c). BGLA 1963, Sch 2, para 13A. See BGLA 1963, s 1(4A)–(4D) inserted by the National Lottery etc Act 1993, s 56.

The gaming industry (excluding gaming machines) 0.76 This could be divided into two principal sectors: the casino industry (providing premises for the playing of classic bankers’ games such as roulette, blackjack, baccarat etc), and the bingo industry (providing premises for the playing of bingo, a non-bankers’ game of equal chance). Bingo was played as cash bingo in bingo clubs holding a gaming licence and as prize bingo in amusement centres and amusement arcades holding permits under the Gaming Act 1968 or the Lotteries and Amusements Act 1976, in which case gaming machines were almost invariably offered as additional entertainment. Casinos which provided bankers’ games incorporating an ‘edge’ in favour of the bank typically made no charge for their facilities but relied upon the bank’s advantage to generate their profits. Bingo, by contrast, is an equal chance game in which the promoter enjoys no advantage, so commercial bingo operators made charges for participation in the game to cover expenses and to make a profit.

Casino industry 0.77 The Gaming Act 1968 was designed to impose particularly stringent controls over the provision of bankers’ games and games of unequal chance. This was due in part to the inherent capacity of such games (owing to the bank’s advantage) to lead players to incur heavy losses to the bank and in part to the need to impose order on a casino industry which had proliferated out of control following the passing of the Betting and Gaming Act 1960.1 The approach of the 1968 Act was to provide that bankers’ games and games of unequal chance were illegal2 unless played in premises for which a gaming licence was held under the Act,3 and then only if played strictly in accordance with conditions laid down by regulations.4 In addition, controls over the persons who could apply for a gaming licence and the places where licensed casinos could be located, together with a ‘demand’ test to be applied on applications for the grant and renewal of licences helped to ensure that 34

The pre-Gambling Act framework the criminal element was excluded from the industry and that casinos did not proliferate. As to the first element, no application could be made for a gaming licence unless the applicant had obtained from the Gaming Board a ‘certificate of consent’ for the application,5 such certificate to be granted only if the Board, after full investigation of the applicant’s background and circumstances, was satisfied that the applicant was a fit and proper person to hold a gaming licence.6 1 For a discussion of problems flowing from the Betting and Gaming Act 1960 see above. 2 Gaming Act 1968, s 2. 3 GA 1968, ss 2 and 13. 4 See the Gaming Clubs (Bankers’ Games) Regulation 1994 (SI 1994/2899), which laid down rules for the games of roulette, dice, baccarat, blackjack, casino stud poker, super pan 9, the big six, sic bo, and three card poker. 5 GA 1968, Sch 2, para 3. 6 GA  1968, Sch  2, para  4. The Board was required to ‘…  have regard only to the question whether in their opinion, the applicant was likely to be capable of, and diligent in, securing that the provisions of [the] Act and any regulations made under it will be complied with, and that gaming on [the] premises will be fairly and properly conducted, and that the premises will be conducted without disorder or disturbance’: para 4(5).

0.78 As to the second element, casinos were only permitted to be licensed in 53 ‘permitted areas’ set out in regulations1 made in 1971; these were ­generally the areas of former county boroughs with populations of over 125,000 at that time. As to the third element, applications for the grant or renewal of gaming licences which were made to the ‘licensing authority’ (ie the local justices who acted as the Betting Licensing Committee)2 could be refused in the committee’s discretion if the applicant failed to show that there was demand for the casino gaming facilities which was not satisfactorily met by existing licensed casinos.3 To assist the committee the Gaming Board was entitled to give advice on demand for gaming facilities and the extent to which demand was met.4 Other discretionary grounds for the refusal of a gaming licence related to matters such as the suitability of the premises or their location and the suitability of the applicant.5 1 2 3 4 5

See the Gaming Clubs (Permitted Areas) Regulations 1971 (SI 1971/1538). GA 1968, Sch 2, para 1. GA 1968, Sch 2, paras 18 and 20. GA 1968, Sch 2, para 19. GA 1968, Sch 2, paras 20 and 21.

0.79 Where a licence was granted, the casino had to be run in accordance with various regulations contained in the 1968 Act and in regulations. In particular, gaming licences were granted to named clubs,1 and players could not participate in the gaming unless they were members (or bona fide guests of members) of the club2 and were actually on the premises where the gaming was taking place.3 Until abolished in 2005, there was also a rule that no less than 24 hours should elapse between a person being admitted to membership of a club and his being permitted to game there.4 Other controls related to the qualifications and suitability of certain important casino staff; such employees were required to be the holders of certificates of approval 35

The pre-Gambling Act framework granted by the Gaming Board,5 establishing that they were ‘fit and proper’ to discharge their functions. Other provisions restricted the grant of credit by or on behalf of the casino to players.6 1 2 3 4

GA 1968, Sch 2, para 5. GA 1968, s 12(2). GA 1968, s 12(1). GA 1968, s 12(2) and (3). The rule was abolished by the Gambling Act 2005, Sch 16, para 3(3), brought into effect by the Gambling Act 2005 (Commencement No 2 and Transitional Provisions) Order 2005 (SI 2005/2455), para 2(1). 5 GA 1968, s 19 and Sch 5, Pt I. 6 GA 1968, s 16.

Bingo 0.80 Bingo has traditionally been regarded as a lottery played as a game of equal chance, though recent developments have, in some respects, moved beyond this way of looking at it.1 In its classic form, cards are distributed to players with different combinations of numbers printed on them. There is then a draw of numbers (either by physically drawing numbers from a container or by a random number generator) and the players, who will all be present together in the same premises, follow the draw and mark off their numbers until one of them has a winning combination (four corners, single line, cross, full house etc). That player must then make a claim to be the winner, classically by shouting ‘bingo’. It is the existence of the need to follow the draw, to mark off numbers and to make a claim to be the winner that has traditionally been regarded as conferring upon what is essentially a lottery a sufficient element of competitive participation to convert it into a game. 1 See the definition in the Report of the Royal Commission on Gambling 1978 Cmnd 7,200 Vol 2, cited in WMT Entertainments Limited v The Commissioners of Customs & Excise, 20 November 1992, VAT and Duties Tribunal (unreported).

0.81 There were two commercially significant forms of bingo, namely cash bingo played for money prizes, which was played in bingo clubs licensed under the Gaming Act 1968, and prize bingo (which could be played for money prizes but which was commonly played for prizes in the form of goods or services) played in amusement centres and amusement arcades. As bingo is an equal chance game in which the promoter enjoys no advantage, the promoter needs to be permitted to make charges for the provision of the facilities. The Gaming Act 1968 permitted charges to be made for cash bingo and prize bingo. In the case of cash bingo charges could be made if, but only if (i) the bingo was played on premises for which a gaming licence was in force1 and (ii)  charges were at a rate permitted by regulations.2 Bingo clubs were, therefore, subject to the same gaming licence regime as applied to casinos (with the same requirement to apply for a certificate of consent and the same ‘demand’ criteria applicable on applications for a licence), but with the distinction that bingo clubs were not limited to ‘permitted areas’. As with casinos, bingo licences could only be granted to clubs3 and players were required to be club members or bona fide guests of club members.4 However, an important distinction applied 36

The pre-Gambling Act framework in the case of the requirement that persons could only participate in the gaming if they were present on the premises when the gaming was taking place.5 In the case of licensed bingo clubs, this rule was relaxed to allow ‘linked bingo’ and ‘the National Game’ to be played. In the case of ‘linked bingo’ a number of licensed premises were linked with video technology so that one game of bingo could be played between players in the different participating clubs. Since the prizes derived from the stakes paid by the players in all the clubs, this enabled enhanced prizes to be offered.6 The ‘National Game’ was a game of multiple bingo which was played on different club premises throughout Great Britain7 and in which players could win a ‘national prize’ (calculated by reference to the stakes paid nationally in all the clubs), a ‘regional prize’ (calculated by reference to the stakes paid in clubs in a particular area) and a ‘house prize’ (calculated by reference to the stakes paid in the player’s own club). 1 GA 1968, ss 3 and 14(2)(a). 2 The Gaming Clubs (Hours and Charges) Regulations 1984 (SI  1984/248). The regulations permitted a maximum admission charge of £20 per person per day and a maximum participation charge of £10 for each chance in playing a game (reg 5). 3 GA 1968, s 12(2)(a) and Sch 2, para 5. 4 GA  1968, s  12(2. As with casinos, a 24-hour rule applied until revoked by the Gambling Act 2005, Sch  16, para  3(3), which was brought into force by the Gaming Act 2005 Commencement No 2 and Transitional Provisions Order 2005 (SI 2005/2455), para 2(1). 5 As required by GA 1968, s 12(1). 6 GA 1968, s 20(2) and (3). 7 See the Gaming (Bingo) Act 1985.

Prize bingo 0.82 Prize bingo is a form of bingo played for small stakes and small prizes (sometimes cash prizes, but often prizes in kind) which is available in amusement arcades (often at the seaside) and amusement centres which are typically located in shopping centres and shopping high streets. It is often played using electronic equipment, the bingo numbers being displayed to players on illuminated panels rather than on tickets, as in traditional bingo. Before the Gaming Act 2005 came into force the game was played on premises holding a permit for the provision of ‘amusements with prizes’ granted under the Lotteries and Amusements Act 1976, in which case prize bingo was the exclusive or primary activity carried on on the premises (though such premises were permitted to provide, and in practice almost invariably did provide, amusement machines as an ancillary attraction),1 or on premises holding a permit for the provision of amusement machines under the Gaming Act 19682 (in which case the premises had to be used mainly for the provision of amusement machines and the prize bingo had to be an ancillary attraction).3 1 Lotteries and Amusements Act 1976, s  16(1)(a); for the ‘amusement machine’ entitlement, see GA 1968, s 34(1)(c). 2 GA 1968, s 34. 3 Lotteries and Amusements Act 1976, s 16(1)(b).

37

The pre-Gambling Act framework 0.83 In either case, stakes and prizes were limited by statute. The maximum charge for one chance to win a prize was £0.50,1 and the maximum aggregate charge permitted for one determination of winners (ie  in effect one game) was £90; the maximum cash prize was £25. There was no limit on the value of prizes in the form of goods or services, but in practice the limit on stakes ensured that the value of such prizes was always modest. 1 Lotteries and Amusements Act 1976, s 16(3).

Gaming in clubs and miners’ welfare institutes 0.84 The provisions of the Gaming Act 1968 permitting the licensing of casinos and bingo clubs and the granting of permits for ‘amusements with prizes’ such as prize bingo were designed to allow, but to regulate, the provision of gaming by commercial operators by way of business. But there are many clubs and societies set up essentially for social purposes whose members may wish to play games for money on the club premises, and the Gaming Act 1968 made provision to permit this to occur and to permit clubs to make charges for providing gaming facilities without going through the elaborate procedures required to obtain a licence or permit. 0.85 Provided the gaming took place on the club premises and involved only club members or their bona fide guests, the provisions of the Act1 prohibiting gaming in public places did not apply. But other provisions of the Act prohibiting bankers’ games2 and preventing the making of charges for gaming3 and the levying of stakes on winnings4 applied potentially to clubs as they did to other premises. However, the Act provided specific relaxations of these provisions in the case of certain clubs and miners’ welfare institutes.5 1 2 3 4 5

GA 1968, s 5. GA 1968, s 2. GA 1968, s 3. GA 1968, s 4. Miners’ welfare institutes are associations set up to provide for the social wellbeing and recreation of coal mine employees and closely resemble members’ clubs, but were not in law members’ clubs because they were run by committees of management comprised of representatives of ‘licensed operators’ (within the meaning of the Coal Industry Act 1994) and of persons representing an employee’s organisation or organisations (formerly a combination of the National Coal Board and the National Union of Mineworkers): GA 1968, s 52(2).

0.86 There were essentially two routes by which a club or institute might be able to provide gaming facilities, namely under the provisions of GA, s 40, or by application for a certificate of registration under Part II of the Act as provided by s 11 and Sch 3. In addition, certain clubs and institutes could use the provisions of s  41, which permitted certain types of gaming and entertainments which were not held for private gain.

Section 40 of the Gaming Act 1968 0.87 This provision allowed clubs (both members’ and proprietary clubs) and miners’ welfare institutes to provide non-bankers’ games of 38

The pre-Gambling Act framework equal chance as part of the activities of the club and to charge for doing so, provided the charges amounted to no more than £0.60 per player per day for gaming other than bridge or whist, and £15.00 per player per day where the gaming consisted exclusively of bridge or whist, or both bridge and whist.1 The provision was of particular importance to specialist bridge and whist clubs, which were permitted to make significant charges for their facilities and which (since the section extended to proprietary clubs as well as to members’ clubs) could provide gaming facilities with a view to making a profit. The provision was also used extensively by clubs of many kinds to provide equal chance gaming and, in particular, cash bingo, without the need for any licence or registration under the 1968 Act. Provided the requirements of s 40 were complied with, there was no scope for abuse because the charges were minimal and all the stakes hazarded in the gaming had to be returned to the players as winnings.2 1 GA  1968, s  40(1)(a)(ii) and The Gaming (Small Charges) Order 2000 (SI  2000/ 2802). 2 This was because of the requirements of GA 1968, s 4.

Registration under Part II 0.88 A ‘registration certificate’ was a certificate granted by the licensing authority to a miners’ welfare institute, or to a club which was a permanent bona fide members’ club (and not a proprietary club) of not less than 25 members which did not carry on gaming as its principal purpose or which carried on as its principal purpose gaming limited exclusively to bridge or whist or bridge and whist.1 Where an institute or club was registered, it was permitted to charge members (but not guests)2 taking part in the gaming up to £2 per day, thus enabling a modest profit to be made for its purposes.3 In addition to providing non-bankers’ games of equal chance, institutes and clubs registered under Part  II could provide the bankers’ games of pontoon and chemin-de-fer, provided, in the former case, certain rules as to the circulation of the bank among players were complied with.4 The most popular form of gaming on registered premises was cash bingo, and a principal incentive to institutes and clubs to register was the opportunity to impose charges at £2 per day rather than the £0.60 permitted under GA 1968, s 40. 1 GA 1968, s 11(2) and Sch 3, paras 7 and 18. 2 GA 1968, s 12(6). 3 See GA 1968, s 14(2)(b) and the Gaming Act (Registration under Part II) Regulations 1969 (SI 1969/550), reg 3 as amended. 4 See the Gaming Act (Registration under Part II) Regulations 1969, reg 2.

0.89 Another advantage of Part II registration was that it allowed the institute or club to provide up to three ‘jackpot’ gaming machines (see 0.93 below).1 However, this benefit could also be obtained by registration under Part  III of the Act, and in other respects Part  II registration had become unattractive some time before the 1968 Act was repealed by the Gambling Act 2005. The £2 limit on charges was originally fixed in 1976 and was not increased to reflect inflation, so that its value had become seriously eroded. Moreover, no charge could be made for guests. Finally, where a club or 39

The pre-Gambling Act framework institute was registered under Part II, it could not avail itself of the benefits of s 41 of the Act, which allowed charges to be made at certain entertainments laid on for purposes other than private gain (see 0.90 below). 1 GA 1968, s 31.

Section 41: gaming at entertainments not held for private gain 0.90 Section 41 was designed to allow money to be raised for purposes other than private gain by the promotion of equal chance gaming at entertainments to which the public could be admitted.1 Since money raised for members’ clubs (but not proprietary clubs) and miners’ welfare institutes was regarded as not raised for private gain,2 such clubs and institutes, provided they were not registered under Part II of the Act, were able to promote equal chance gaming at entertainments and to invite the public, charging each player up to £43 by way of charges and stake money combined, provided the proceeds were appropriated to the benefit of the institute or club. The total value of prizes at the entertainment was capped at £400. 1 GA 1968, s 1(2)(b). 2 GA 1968, s 51A(1). 3 GA 1968, s 41.

0.91 As has been noted above, clubs and institutes which had been registered under Part II were not able to avail themselves of the provisions of s 41, but a Part III registration did not have this effect, a fact which helps to explain the decline in the number of Part II registrations as compared with Part III registrations.

The gaming machine industry 0.92 The Gaming Act 1968 did not use the expression ‘gaming machine’, but it did regulate machines which were used for gaming and which fell within the definition provided in Part  III of the Act. Specifically, Part  III applied to a machine (i)  which was constructed or adapted for playing a game of chance by means of the machine and (ii)  which had a slot or aperture for the insertion of cash or tokens.1 The definition further provided that a machine would only fall within Part III if the element of chance was provided by means of the machine. The definition caught classic gaming machines of the fruit machine or ‘one armed bandit’ type (where the game is determined by a mechanism or by software contained within the machine itself and where payment is made by the insertion of coins), but excluded, for example, illuminated fascia of the type used for playing prize bingo, where the element of chance in the game comes not from the machine but from an independent bingo caller drawing numbers from a container, or reading numbers from a random number generator which is independent of the fascia. 1 GA 1968, s 26.

40

The pre-Gambling Act framework 0.93 The 1968 Act permitted the use of essentially two types of Part III machines, namely machines colloquially known as ‘amusement with prizes machines’ (or ‘AWP’ machines) and machines colloquially known as ‘jackpot machines’. The levels of permitted stakes and prizes were regularly increased for both classes of machine, and in 1996, by a statutory deregulation order, the class of AWP machines was subdivided into two types of machine, the ‘traditional’ AWP machine and the ‘all cash’ AWP machine. But the legislation at all times maintained a differential between AWP machines and jackpot machines, in that the former were intended to provide a low stake/ low winnings type of gaming, whilst the latter were intended to provide for (somewhat) larger stakes and substantially larger winnings. 0.94 The 1968 Act regulated the sale and supply of gaming machines, the repair and maintenance of gaming machines, and the types of premises where such machines could lawfully be located and offered for use. Machines could only be lawfully sold or supplied if the seller/supplier held a certificate or (for single transactions) a permit granted by the Gaming Board.1 Machines could not be sold or supplied on terms that gave the seller or supplier any interest in the extent to which the machine was used.2 These provisions were designed to prevent the recurrence of problems which had arisen in the gaming machine industry in the 1960s, when undesirable elements had gained a hold on the supply of machines and had often imposed oppressive profit-sharing arrangements on businesses to which the machines were supplied. In addition, persons maintaining gaming machines were required to hold a certificate from the Gaming Board.3 1 GA 1968, s 27. 2 GA 1968, s 28. 3 GA 1968, s 27.

Premises Jackpot machines 0.95 Jackpot machines were permitted to charge a stake of up to £0.50 per game and were subject to a cap on winnings (as from 31 October 2005) of £4,000 per game.1 Since jackpot machines offered a harder form of gaming than AWP machines, they were, logically enough, permitted in a more restricted class of premises than the latter, and these were premises where other gambling was already permitted and/or premises where the public was not admitted. Premises holding a casino licence could provide up to twenty jackpot machines,2 and premises holding a gaming licence for bingo could provide up to four. Casinos and clubs were, however, able to apply on the grant or renewal of the licence to convert their jackpot entitlement into an entitlement to a larger number of AWP machines, the number being at the discretion of the licensing authority.3 Up to three jackpot machines could be provided on the premises of clubs or miners’ welfare institutes holding registration under Part II.4 Alternatively, a club or miners’ welfare institute could apply to the licensing authority to be registered under Part III of the 1968 Act, and if the application succeeded, the club or institute was permitted to provide up to three jackpot machines.5 Part  III differed from Part  II in 41

The pre-Gambling Act framework that it was possible, subject to the discretion of the licensing authority, for a proprietary club to obtain Part III registration, whereas Part II registration was available only to members’ clubs and miners’ welfare institutes. In other respects the criteria for registration were similar: a Part III registration could be refused if the club applying had less than 25 members, or was of a temporary character, or (where the club was a members’ club) it was not a bona fide members’ club.6 1 GA 1968, s 31(3) and (5) and SI 2005/2775, art 2. 2 GA 1968, s 31. 3 GA 1968, s 32. 4 See 0.90 above. 5 GA 1968, ss 30, 31 and Sch 7. 6 GA 1968, s 30 and Sch 7, para 8.

Amusements with prizes machines 0.96 There were two types of AWP machine, namely the traditional machine and the ‘all cash’ machine. The traditional AWP machine was subject to a maximum stake limit of £0.30 per game1 and to a maximum prize limit per game of £5 in money, or a non-monetary prize not exceeding £8 in value, or a combination of money and a non-monetary prize of a total value not exceeding £8, or tokens exchangeable for each of the above prizes.2 The ‘all cash’ machine had the same maximum stake limit of £0.30 per game, but had a maximum prize limit of £25 in money.3 1 GA 1968, s 34(2). 2 GA 1968, s 34(3). 3 GA 1968, s 34(5C).

Location of traditional AWP machines 0.97 Traditional AWP machines could be located in a number of different types of premises. They could be provided as part of the entertainment of a travelling showmen’s pleasure fair without any need for a permit or licence.1 They could be located as incidental entertainment on premises whose main business was not gambling (eg in taxi offices or hot food takeaway shops), subject to the grant of a permit by the local authority.2 Such permits almost invariably imposed a limit on the number of machines permitted.3 They could also be provided in specialist amusement machine premises, such as amusement centres and amusement arcades, whose principal business was the provision of Part  III machines, where a permit for traditional AWP machines had been granted by the local authority.4 Such permits did not provide for any age limit to be imposed, so that children and young persons could be allowed access to the premises and to the machines, an arrangement that was common at, for example, seaside amusement arcades offering AWP machines and also so-called ‘amusement only’ machines, such as video games and space invaders, for which no permit was required. Some permit holders, however, voluntarily limited entrance to adults, and this was particularly common in amusement centres located in shopping high streets where adults were the primary target patrons. Premises holding a permit for traditional AWP machines were also permitted to provide 42

The pre-Gambling Act framework certain ‘amusements with prizes’ in the form of minor gambling (of which prize bingo was by far the most common), provided the gaming machines remained the principal use to which the premises were put.5 Conversely, premises holding a permit under the Lotteries and Amusements Act 1976 authorising the provision of ‘amusements with prizes’ (such as prize bingo) were also authorised to provide traditional AWP machines on condition that the premises were used principally for the non-machine amusements.6 1 2 3 4 5 6

GA 1968, s 34(1)(d). GA 1968, s 34(1)(aa). Under GA 1968, Sch 9, para 3. GA 1968, s 34(1)(a). See Lotteries and Amusements Act 1976, s 16(1)(b). GA 1968, s 34(1)(c).

Location of ‘all cash’ machines 0.98 All AWP machines were of the traditional kind until 1996 when the ‘all cash’ machine was introduced.1 One purpose was to provide a gaming machine suitable for introduction into licensed betting offices, and licensed betting offices remained premises where ‘all cash’ AWP machines, but not traditional AWP machines, could be located, the limit on numbers being two.2 Licensed betting offices are of course premises where gambling in the form of betting is the primary business and where persons under 18 years are not permitted to enter,3 so the introduction there of machines with higher prize levels was understandable. However, steps were taken at the same time to allow the new machines to be introduced into other types of premises on condition that a similar age limit would be enforced. It became possible for an applicant for a local authority permit to provide AWP machines in specialist amusement machine premises (such as an amusement arcade or an amusement centre) to apply for the permit to allow the provision of either traditional machines or ‘all cash’ machines.4 If the permit was granted for the latter use, an age limit was imposed on the premises so that either no one under the age of 18 years could be admitted to the premises, or the ‘all cash’ machines had to be located in an area which was physically separated from the rest of the premises (where traditional AWP machines and, in some cases, ‘amusement only’ machines were located) and no one under 18 years could be admitted to that physically separated area.5 1 By the Deregulation (Gaming Machines and Betting Office Facilities) Order 1996 (SI 1996/1359). 2 GA  1968, s  34(5A)–(5C) and the Betting, Gaming and Lotteries Act 1963, Sch  4, para 10A. 3 Betting, Gaming and Lotteries Act 1963, Sch 4, para 2. 4 GA 1968, s 34(5E) and Sch 9, para 5(1A). 5 GA 1968, Sch 9, para 10B(3).

0.99 Where premises had been granted a premises licence permitting the on-sale of alcohol under the Licensing Act 2003, the licensing authority could grant a permit permitting either traditional or ‘all cash’ AWP machines to be located in the licensed premises,1 although where an ‘all cash’ machine was provided it had to be located in a bar.2 The fact that children under the age of 16 years are not permitted to be in alcohol licensed premises unless 43

The pre-Gambling Act framework accompanied by an adult3 provided some control over access by children to such machines. 1 GA 1968, s 34(5E)(b) and Sch 9, para 1(a). 2 GA 1968, Sch 9, para 10A. 3 Under Licensing Act 2003, s 145.

Lotteries 0.100 It was justifiable in the context of the gambling legislation of the 1960s to talk about the ‘betting industry’ or the ‘gaming industry’ because the majority of betting and gaming facilities were provided by businesses in the private sector with a view to profit. However, to talk of a ‘lottery industry’ could be regarded as a solecism, since the governing legislation (ie  the Lotteries and Amusements Act 1976, the National Lottery Act 1993 and the National Lottery Act 1998) was designed to prevent the running of public lotteries for commercial profit by private sector operators. Rather the legislation, whilst permitting lotteries to be run for the benefit of certain private groups of people, was designed to ensure that public lotteries could only be run for the public benefit. 0.101 The legislation provided no definition of a ‘lottery’, but a lottery was generally understood to be a scheme in which prizes were distributed by pure chance where the persons taking part in the operation had made some payment or consideration in return for obtaining their chance of a prize.1 Lotteries were unlawful unless specifically permitted by the legislation.2 The Lotteries and Amusements Act 1976 permitted four types of lottery, namely ‘small lotteries’, ‘private lotteries’, ‘society lotteries’ and ‘local lotteries’. ‘Small lotteries’3 were lotteries at events such as bazaars, sales of work, fetes etc, in which small nonmoney prizes could be awarded, it being a condition of the lottery that none of the proceeds of the event should be devoted to private gain. 1 See Readers Digest Association Ltd v Williams [1976] 1 WLR 1109 at 1113, approved by the House of Lords in Imperial Tobacco Ltd v A-G [1981] AC 718. 2 Lotteries and Amusements Act 1976, ss 1 and 2. 3 LAA 1976, s 3.

0.102 ‘Private lotteries’ were lotteries in which the sale of tickets was limited to specific groups of people, namely people who were members of a society (like a club), which was not one run for the purposes of betting, gaming and lotteries, or people who all lived or worked on the same premises.1 This limit on the sale of tickets tended to ensure that private lotteries were not often large, and the risk of commercial exploitation was avoided by further provisions that the proceeds of the lottery had to be spent exclusively on certain defined expenses and on prizes, except where the promoter was a society, in which case some or all of the proceeds could, in addition, be spent on the purposes of the society. 1 LAA 1976, s 4.

0.103 ‘Societies’ lotteries’ were lotteries run by and for the benefit of certain societies,1 and ‘local lotteries’ were lotteries run by and for the benefit 44

The pre-Gambling Act framework of local authorities to raise funds for their purposes.2 In both cases tickets could be sold to members of the public. Lotteries of both types were subject to a number of restrictions: there was a maximum price per ticket of £2.00;3 prizes were capped at £25,000 per prize or 10% of the total value of tickets sold (whichever was the greater); and the total value of tickets which could be sold in any one lottery was £2 million.4 There was a limit of £10 million on the value of tickets which any one society or local authority could sell in lotteries in any one year, and the amounts of the lottery’s proceeds which could be spent on prizes and on the expenses of the lottery were regulated, with the result that a specific proportion of the proceeds of the lottery remained available for the purposes of the society or the authority. Before promoting a society lottery, a society had to be registered either with the local authority, if it was willing to limit its ticket sales to £20,000 per lottery and to a maximum of £250,000 per year,5 or with the Gaming Board, if it wanted to exceed those limits.6 Local authorities were required to register any scheme for a local lottery with the Gaming Board.7 Societies’ lotteries and local lotteries could be managed professionally by commercial lottery managers (known as ‘external lottery managers’) provided they held a certificate from the Gaming Board8 and provided their remuneration fell strictly within the permitted expenditure limits for the relevant lottery. 1 LAA  1976, s  5. The societies were charitable, sporting or cultural societies, or societies not run for the purposes of private gain. 2 LAA 1976, s 6. A local authority could promote a local lottery for any purpose for which it could incur expenditure: s 7(1). 3 LAA 1976, s 11. 4 LAA 1976, s 11. 5 LAA 1976, s 5 and Sch 1. 6 LAA 1976, s 5 and Sch 1A. 7 LAA 1976, s 6. 8 LAA 1976, s 9A and Sch 2A.

National Lottery 0.104 By far the most significant public lottery in the UK is, of course, the National Lottery, which was launched in 1994.1 The purpose of the lottery is to raise funds for specific ‘good causes’, namely the arts, sport, national heritage, charitable expenditure and health, education and the environment.2 With effect from 2004 provision was made for the running of ‘Olympic Lotteries’ to raise funds for the costs of preparations for the London Olympics in 2012.3 For a discussion of the National Lottery see Chapter 16. 1 The governing legislation is to be found principally in the National Lottery Act 1993, the National Lottery Act 1998, the Horserace Betting and Olympic Lottery Act 2004 and the National Lottery Act 2006. 2 National Lottery Act 1993, s 22. 3 Horserace Betting and Olympic Lottery Act 2004, s 21.

0.105 The legislation makes provision for the Gambling Commission,1 to license a body to run the National Lottery.2 Camelot plc has been licensed to run the National Lottery. Lotteries which are to form part of the National Lottery are licensed by the Commission.3 The lotteries may be promoted 45

The pre-Gambling Act framework either by the National Lottery licensee (ie Camelot) or by some independent party under the terms of an agreement made with the licensee. The legislation, and the relevant licences, contain highly detailed provisions governing the conduct of the lotteries, expenditure on the lotteries, the awarding of prizes and the payment of money for expenditure by the relevant ‘good causes’. The Gambling Act 2005 does not, save in certain specific and limited respects, apply to the National Lottery, which remains governed by its own legislation.4 1 National Lottery Act 1993, s 3A. For the ‘merger’ of the Gambling Commission and the National Lottery Commission see 0.1 above. 2 National Lottery Act 1993, s 5. 3 Under National Lottery Act 1993, s 6. 4 Gambling Act 2005, s 15.

THE COMING OF THE GAMBLING ACT 2005 0.106 Between the end of the 1960s and the start of the 1990s the British gambling industry inhabited a stable world in which change happened slowly and incrementally. The major forms of gambling (betting, gaming and lotteries – each governed by its own legislation) occupied clearly defined segments of the gambling market. Most gambling was terrestrially based, the only significant exception being the use of the telephone to make bets. From time to time there were statutory deregulations, but these were modest in scope. With the arrival of the 1990s, however, the pace of change began to quicken and it was the phenomenon of accelerating change that eventually rendered the existing statutory framework inadequate and led to calls for new legislation. This section attempts to chart these developments, beginning with changes in attitude towards gambling, then considering the erosion of the ‘demand’ test as a basis for authorising gambling activities, and finally considering the revolution worked by digital technology in the form of the computer and the internet. Finally, some note is taken of lottery promotion. As the 1990s proceeded, a number of highly technical aspects of lottery law gave rise to increasing dissatisfaction, particularly as they affected the running of prize draws as forms of sales promotion. All these developments led to calls for a complete rethink of gambling legislation, and this led to the setting up of the Gambling Review Body, whose report, published in 2001, underlies the 2005 Act.1 1 DCMS Gambling Review Body: Gambling Review Report CM 5206.

Attitudes 0.107 The Gambling Review Report in 2001 cited evidence establishing that in the UK almost three-quarters (72%) of the population had taken part in some gambling activity within the preceding year, and over half had gambled in the preceding week.1 The three most popular gambling activities were lotteries, most specifically the National Lottery (65%) and scratch cards (22%), followed by fruit machines (14%) and betting (13%).2 There is little doubt that the launch of the National Lottery in 1994 was an important cause of growth in gambling expenditure. The Gambling Review Report 46

The pre-Gambling Act framework cited evidence of a Family Expenditure Survey showing that between 1990 and 1993 weekly gambling payments per household were relatively static at £1.45, but that there were large increases between 1994–5 and 1997–8 when expenditure peaked at £4.30 per week. Much of this increase was due to expenditure on the National Lottery and scratchcards, and it would be difficult to underestimate the importance of the National Lottery in introducing gambling to a wider public. At a time when it was unlawful to advertise the location of betting offices, or to advertise casinos and bingo halls, the National Lottery was able to utilise all the resources of mass advertising (including television) to hold out the lure of fabulous riches for a modest stake. The underlying philosophy of the 1960s legislation, namely that gambling facilities should be made available but only to the extent necessary to meet unstimulated demand, was thrown to the winds as the Lottery became a major weekly (subsequently twice weekly) media event. 1 Gambling Review Report, para 5.2, citing ‘A Prevalence Survey by the National Centre for Social Research’. 2 Gambling Review Report, para 5.3.

0.108 Among the consequences of this were demands from other sectors of the gambling industry for advertising to be liberalised. In due course there was some deregulation of betting office advertising,1 bingo advertising, and later casino advertising;2 in addition there was some deregulation of the gaming machine market by the introduction of the ‘all cash’ amusement with prize machine, and such machines were permitted in licensed betting offices.3 These deregulations were not unimportant in expanding the range of gambling facilities available to the public, but the most important consequences of the launch of the National Lottery are to be found not in statutory deregulation but in the steps taken by various industry sectors, and in particular the bookmaking sector, to claw back market share from the lottery, in the case of the bookmakers by the development of new forms of betting which could be offered in betting offices. These developments are examined at 0.113 to 0.115 below. Before these developments are examined, however, some attention must be paid to the fate of the ‘demand’ criterion for the grant of betting office licences and gaming licences. 1 By the Deregulation (Betting and Bingo Advertising etc) Order 1997. 2 The Deregulation (Casinos) Order 1999. 3 The Deregulation (Gaming Machines and Betting Office Facilities) Order 1996.

Demand 0.109 Consistent with the philosophy of the 1960s legislation that betting and gaming facilities should be adequate, but no more than adequate, to meet existing unstimulated demand, a licensing committee considering an application for a betting office licence1 or for a gaming licence for a casino or bingo hall2 was obliged to consider whether the applicant had shown that there was sufficient demand for the facility he proposed to provide, having regard to existing licensed premises. Although the statutory provisions relating to the grant of permits authorising the provision of amusement with prizes machines did not in terms impose a ‘demand’ test, nonetheless 47

The pre-Gambling Act framework in practice most local authority committees considering permit applications did consider the question of demand and they were entitled to do so.3 1 Betting Gaming and Lotteries Act 1963, Sch 1, para 19(b)(ii). 2 GA 1968, Sch 2, para 18(ii). 3 See R v Chichester Crown Court, ex p Forte [1995] 160 JP Reports 285 where the High Court held that a local authority considering a permit application for machines was entitled to consider whether demand for such machines had been demonstrated.

0.110 The weight to be given to the question of ‘demand’ was always a matter for the relevant licensing authority, but as the 1990s progressed doubts began to be expressed about the relevance of the ‘demand’ test. With gambling freely available on the National Lottery and with gambling facilities becoming increasingly readily available on the internet (see below) the ‘demand’ test began to look outdated and to appear to be achieving little except giving a monopoly position to existing licence holders. Attitudes may well have been coloured by developments in the licensing of premises for the sale of alcohol under the Licensing Act 1964, where again a ‘demand’ criterion had frequently been applied, until guidance in the 1990s from the Justices’ Clerks’ Society recommended that for the future the question of need for additional licensed premises should carry little or no weight in determining applications.1 1 Justices’ Clerks’ Society Good Practice Guide 1999. The recommendation was as follows: ‘3.29  We recommend that when considering the question of need/demand committees do not attach much, if any, weight to the threat from competition and should not consider trade protection as being a matter which is relevant when exercising their discretion on an application for the grant of a new justices’ licence. 3.30  … we consider that in isolation the issue of sufficiency of premises should carry little or no weight in determining applications for new licences and that the issue of need should be seen in the context of public safety and of protecting the public against nuisance and disorder.’ The Licensing Act 1964 has since been repealed and replaced by the Licensing Act 2003. Under that Act ‘need’ is not a relevant consideration on the grant of a premises licence though ‘cumulative impact’ of a large concentration of licensed premises in a particular area may be relevant (HO Revised Guidance issued under s 182 of the Licensing Act 2003: March 2015, para 13.20).

0.111 Eventually these issues were considered by the High Court in the context of betting office licensing. In The Queen on the application of Hestview Limited v Snaresbrook Crown Court1 a Crown Court on appeal from the betting licensing committee had granted a new betting office licence against objections from a firm of bookmakers, Surrey Racing, even though the court had concluded that there was a possibility that demand in the locality was insufficient to support the opening of a new betting office. The court concluded that there was no public interest reason for refusing the licence. Surrey Racing challenged the Crown Court’s decision by an application for judicial review, contending that the court had erred in its approach by granting a licence in the absence of evidence that there was need for a further betting office. The applicant contended that in the absence of positive evidence that existing facilities were insufficient to meet demand the application should have been refused. The High Court rejected this approach and dismissed 48

The pre-Gambling Act framework the application. The High Court in particular concluded that a new betting office licence could lawfully be granted, even though the applicant for the licence hoped to stimulate existing latent demand by providing attractive new facilities. The court concluded: ‘… in deciding whether there is an unmet demand, an authority may feel that it should not be overly concerned with whether the consequence of granting a licence may be that customers will be enticed from existing offices to the proposed new office … in the present case Chase [the applicant for the licence] relied on figures which showed that there might be a shift of custom away from the Claimant and Corals. It is hard to envisage that such evidence would defeat the application. Likewise an authority deciding whether there is an unmet demand may feel that it need not today be overly concerned with whether a new licence would stimulate demand. So much has changed since the legislation of betting shops in 1960. When a betting office can, as now, encourage persons in the office to bet and when it can encourage persons to come into the office by, for example, advertising on the office window the odds being offered or by offering snacks and fruit machines, it seems to me to be unrealistic to be overly concerned with stimulating demand. Furthermore, there are now many ways in which persons minded to “have a flutter” can do so. In addition to telephone credit betting (always permitted), bets may now be placed via the Internet. The Claimant produced a list of 33 off-shore companies providing betting facilities to persons in this country. Because these companies do not have to add a betting duty or add only a lower duty than the duty in force in this country, there may be a financial advantage in betting off-shore. Since 1994 there has been a National Lottery, heavily advertised on television with odds of winning the jackpot of some 14,000,000/1 against. Spread betting is popular. Even if exaggerated there is some truth today in [counsel’s] expression: “No-one is unpuntable.”’2 (Emphasis added.) 1 [2001] EWHC Admin 144; [2001] LLR 214. 2 [2001] LLR 214 at para 62.

0.112 Although Hestview by no means removed the ‘demand’ criterion from betting office licensing, it is clear that its effect was to undercut its importance and pave the way for the recommendation of the Gambling Review Body that demand should no longer be a relevant consideration in betting premises licensing. At around the same time, similar developments took place in the field of casino licensing. The Gaming Act 1968 placed a responsibility on licensing authorities to consider demand for gaming before granting a licence and gave them a discretion to refuse an application if unmet demand was not demonstrated. The Act empowered the Gaming Board to provide advice on demand to authorities and it was open to the Board to lodge an objection on grounds of lack of demand if it considered it appropriate to do so. In its report for 2002/03 the Board stated that it had looked again at the approach it should take on applications for new casino licences or for increases in facilities at existing casinos. It reported that it had: ‘… reached the conclusion that it should in future only object to such applications if a situation arose where, as a regulator, it had reasons 49

The pre-Gambling Act framework to believe that problems of control would result. The Board’s stance is thus, now generally neutral towards all such applications …’1 Again the issue of ‘demand’ was not removed from casino licensing, but it had become a less important issue, consistently with the Gambling Review Body’s recommendation that the question of demand should be irrelevant to premises licensing under new legislation.2 It is clear, therefore, that as the 1990s reached their end a combination of changing attitudes together with the increased availability of gambling opportunities on new technological platforms worked together to undermine the old regulatory framework and to necessitate a new one. It is to the second element in this development namely the advance of technology that we now turn. 1 Gaming Board Report 2002/03, paras 2.11–2.13. 2 Although it is arguable that the decision of the Court of Appeal in R  (on the application of TC Projects Ltd) (Appellant) v Newcastle Licensing Justices (Respondent) and (1)  Grosvenor Casinos Ltd (2)  Stanley Casinos Ltd (3)  Clermont Leisure Ltd (4) Gambling Commission (Interested Parties) [2008] EWCA Civ 428, CA had the effect of re-emphasising the importance of demand in casino licensing. The court held that the absence of unmet demand was a reason in itself for the licensing authority to exercise its discretion to refuse a casino licence, and could be expected to lead to the refusal of a licence unless that reason was outweighed by other material considerations. At about the same time as Hestview in the context of permits for amusement machines under GA  1968, s  34 the status of demand was reduced. In The Queen on the application of Spearing v London Borough of Hammersmith & Fulham and Ablethird Limited [2001] EWHC Admin 1109, [2002] LLR 401 a licensing authority declined to give an oral hearing to objectors to an amusement machine permit application on the grounds that the objections were based on commercial considerations and attracted little weight in the factors that the council should take into consideration when determining the application. The High Court concluded that the authority was entitled to adopt this approach and to take the view that questions of supply and demand were best left to the market, and that objections based on demand grounds should be given little significant weight.

The technological revolution 0.113 There were three factors that led to the explosion of virtual gambling during the 1990s. First, gambling operators began to exploit the enormous potential of the computer to capture and manipulate complex data, in particular numerical data, to create new forms of gambling. Secondly, and most obviously, there was the development of online gambling, particularly via the internet, which allowed people to access on home computers a whole range of gambling offerings on servers located both within and outside Great Britain. Thirdly, there was a concerted effort by sectors of the gambling industry to develop gambling products which would enable them to recapture some of the market threatened by the National Lottery. These developments are dealt with below under the following heads: •

The computer as a generator of new gambling products

•

The National Lottery and numbers bets – 49’s

•

The internet – on-shore and off-shore gambling

•

Numbers bets as virtual ‘games’

50

The pre-Gambling Act framework •

Fixed odds betting terminals

•

Virtual racing

•

Betting exchanges.

The computer as a generator of new gambling products 0.114 During the early 1990s the development of ‘Fantasy Competitions’, usually offered by newspapers, gave evidence of the power of the computer to create new forms of gambling by the capture and processing of data. The most common form was ‘Fantasy Football’, although the format could be, and was, extended to many other sports and was also applied to dealing in stocks and shares. The paper promoting the competition would publish a selection of identified footballers (strikers, midfielders, defenders etc) and would attribute to each of them a notional money value. A competitor was given a notional budget to buy the football team of 11 players that he regarded as best value. In the earliest and simplest version of such competitions he would send in his selection by post and would accompany it by a money payment to cover expenses and contribute towards the prizes. Every week the performance of the footballers in real football matches was monitored and each was awarded or could forfeit points depending upon his performance. So a player who scored a goal might win two points and a player who committed a penalty might forfeit one point. The points won and forfeited by the players in individual teams could be calculated so that the teams could be ranked in a league, the rankings changing weekly. At the end of the football season the top teams won prizes. In the case of fantasy share dealings schemes the footballers were replaced by shares actually quoted on (say) the FTSE 100 and they gained or lost points depending upon real movements in the Stock Exchange. The competitions were made practically possible by the fact that all entries were contained on a computer which could quickly calculate points won and lost for individual teams and rank them accordingly. A further technological advance was subsequently introduced when competitors were enabled to enter their teams on premium rate telephone lines by keying in identification numbers given to each footballer. Under these arrangements there was usually no direct payment made by the competitor to the promoter, the promoter relying upon payments received from the telephone service provider to represent the value to it of the traffic generated on the competition lines. There was a good deal of debate as to the exact status of these competitions and it was left to the courts, in a case involving a claim by HM Customs & Excise to pool betting duty on certain competitions, to decide that competitions of the first type (in which a cash entry payment was made) amounted to ‘pool betting’ (and were therefore liable to pool betting duty), whereas competitions of the second type, where only an indirect payment was made to the promoter, did not amount to pool betting (or indeed to betting of any kind) so that no duty was payable.1 Although the basis of the analysis was perfectly sound, the distinction in the legal status of the two types of competition was arbitrary and was capable of giving rise to difficulties where such a competition amounted to pool betting. Fantasy competitions demonstrated clearly the difficulties that could be encountered in fitting computer generated offerings into the old statutory framework. 51

The pre-Gambling Act framework 1 For these conclusions see News International Newspapers Limited v Customs & Excise Commissioners [1995]  V  &  DR  274 (VAT & Duties Tribunal); Customs & Excise Commissioners v News International Newspapers Limited [1996]  V  &  DR  434 (High Court); Customs & Excise Commissioners v News International Newspapers Limited [1998] V & DR 267 (CA).

The National Lottery and numbers bets – 49’s 0.115 When the National Lottery was launched, steps were taken to deter the bookmakers from offering bets as to which of the numbers would be drawn.1 Nothing daunted, the bookmaking industry set out to devise forms of gambling on numbers which could be got up to resemble the National Lottery but which could lawfully be offered as bets in licensed betting offices. The first such offering was ‘Lucky Choice’, launched in 1995, in which bets were offered on the numbers to be drawn in the Irish National Lottery. This having proved popular, a group of bookmakers set up the ‘49’s’ scheme in 1996. A company, 49’s, was set up to run regular daily draws in which six numbers would be drawn from 49. These draws were televised in licensed betting offices and customers were able to bet that any one, two, three, four or five numbers would be drawn. The bookmaker would offer odds against the numbers (eg one number = 11/2, two numbers = 48/1, three numbers = 511/1 etc). It was fundamental to these arrangements that each bet placed by a customer was an individual transaction between the customer and the bookmaker on which either could win or lose, and that there was no kind of pool out of which winnings could be paid. The 49’s scheme was strongly challenged by Camelot plc, the company licensed to run the National Lottery, on the grounds that it was a lottery and not betting and so could not be lawfully offered in betting offices. Eventually Camelot brought a private prosecution against three firms of bookmakers designed to establish the legal position. The prosecution failed, the court holding that 49’s was essentially a bet and not a lottery and so could lawfully be made available in licensed betting offices. Although the technology used in presenting the 49’s scheme was not particularly advanced (the numbers draw being a mechanical draw of numbered balls – like the National Lottery’s), the important principle that bets on draws of numbers could be offered in licensed betting offices was to prove capable of application on-line, both via the internet and, subsequently, by fixed odds betting terminals. Before these developments are examined, attention must be given to the growth of internet gambling. 1 See National Lottery Act 1993, s 18, amending the Betting, Gaming and Lotteries Act 1963 to provide that a bookmaker who offered bets on the National Lottery would lose his bookmaker’s permit.

The internet – on-shore and off-shore gambling 0.116 The earliest use made of the internet to offer gambling facilities was uncontroversial. For decades it had been lawful for bookmakers to take bets over the telephone, and at first the internet merely provided an alternative means of communication by which bets could be made on traditional events such as horse races, greyhounds and so forth. There was nothing to prevent 52

The pre-Gambling Act framework a bookmaker offering an internet betting service to British customers, provided he held a bookmaker’s permit.1 1 The legality of such arrangements was recognised by the Home Office in ‘The Grant and Renewal of Bookmakers’ Permits: Guidelines for Licensing Justices’, May 1999.

0.117 A  much greater challenge to the existing legal framework was to come, however, in the form of off-shore gaming sites. Under these arrangements a promoter would set up a server outside the UK which could be accessed by customers via computers in the UK. The server would contain software capable of generating a variety of gambling products, but in particular virtual casino games such as roulette, blackjack, dice and so forth. The British customer would be invited to transfer credit to the offshore promoter, almost invariably by credit card transfer, and would then be invited to play the virtual casino games. 0.118 By the mid-1990s this phenomenon had come to the attention of the Gaming Board.1 Certain of its aspects seemed tolerably clear. It was certain that internet gaming could not be located in Great Britain under the authority of a gaming licence granted under the Gaming Act 1968. This was because, where gaming took place under such a licence, it was a requirement that any person participating in the gaming had to be present on the premises where the gaming was taking place.2 Where gaming was taking place, at least in part, on the premises containing the server, this requirement could not be satisfied. In other respects, the application of the gaming legislation (specifically the Gaming Act 1968) to the phenomenon was uncertain. As the 1990s advanced, however, the Gaming Board adopted the position that it was not illegal under the 1968 Act for British residents to game on off-shore internet sites from their own homes, so that the activities of such sites were not illegal, although the advertising of such sites was governed by the restrictions on gaming advertising contained in s 42 of the Act. However, the legality of gaming on off-shore sites from public places such as internet cafés was, so the Board concluded, more debatable. This position is reflected in, for example, an Appendix to the Gaming Board Report for 1999/2000 dealing with internet gambling which stated as follows: ‘4.  In line with all this, an increasing number of Internet sites are offering the means to gamble. Broadly such sites can be characterised as one of two types: •

sites which offer an entry via the Internet to terrestrial gambling. These are often just alternatives to other means of entry such as the post or telephone, using the Internet simply as a communications tool. Examples are football pools entries and credit betting on horseracing and other sports;

•

interactive gaming run exclusively on the Internet, in particular sites which offer virtual casino and slot machine gaming and interactive lotteries …

… 53

The pre-Gambling Act framework The legal position in Great Britain 6.  British gambling legislation – apart from that setting up the National Lottery – is all over a quarter of a century old and was enacted at a time when the power of the Internet could not have been imagined. Unsurprisingly, therefore, that legislation impinges on Internet gambling in ways which were unintended and are erratic. In broad terms, the position as the Board understands it, is as follows. •

Betting bookmakers have for many years been able to accept telephone bets from clients with credit accounts. There is, therefore, nothing to prevent them accepting such bets by e-mail. Likewise, football pools have always been able to accept entries by post and can, therefore, also use e-mail. The reason why bookmakers have been choosing off-shore locations for their telephone and Internet betting operations is because taxes are lower and not because such operations would be illegal here.

•

As for casinos, bingo and gaming machines, such gaming can only take place on licensed and registered premises and, in particular, the persons taking part in the gaming must be on the premises at the time the gaming takes place.

Hence no licence could be obtained by an operator who wished to offer such Internet gaming here and to set up such a site would be illegal. The Board has stated that it would seek to take action against anyone who did so. … •

There is nothing in the legislation which makes it illegal, or seeks to prevent, British residents gambling on the Internet from their own homes. The position in respect of public places such as Internet cafés is less clear and more difficult.

•

Overseas gambling operations are subject to restrictions on the extent to which they can advertise here. In the case of casinos and similar gaming, this does not amount to a total ban but prevents advertisements which, to paraphrase, invite the public to subscribe money or to apply for information about facilities for subscribing money. Some Internet casino operators have begun to advertise within these constraints. Added complications arise because the whole question of what constitutes advertisement on the Internet, and then what can or cannot be done if it is, remains far from clear.’3

1 See Gaming Board Report 1995/6, para 1.39 reflecting concerns about the growth of internet gambling and ‘the potential for the proliferation of uncontrolled and unregulated gambling opportunities’ by this means. The report continues: ‘So far the threat remains largely potential, with only a few operating sites offering worldwide on-line gambling. But, if such opportunities were to increase (for example through the Internet becoming available through cable television receivers or through interactive satellite television), large-scale hard gambling

54

The pre-Gambling Act framework activities could become available in people’s homes with no proper control over such matters as gambling on credit or by children and other young persons.’ 2 GA 1968, s 12. 3 Gaming Board Report 1999/2000, Appendix VIII, paras 4–7.

0.119 The Gaming Board’s stated position provided the basis upon which a number of off-shore companies, including off-shore companies set up by British gambling businesses, offered virtual gaming facilities to British customers. The Board never, however, to the writer’s knowledge, set out the basis upon which it had reached its conclusions. It is believed, however, that the analysis proceeded as follows. The Gaming Act 1968 was limited in its territorial extent to England, Wales and Scotland,1 and accordingly it did not seek to regulate gaming taking place outside those countries. Where an off-shore server provided virtual gaming facilities, then, provided all the central elements of the gaming took place at the server (ie gambling accounts were held on the server, stakes on individual bets were deducted from such accounts and held on the server, the individual player choices – ie numbers in roulette, cards in blackjack etc – were given effect on the server, the results of the game were generated by a RNG on the server and were converted into game results by software on the server), the gaming should be regarded as taking place at or on the server outside Britain, so that the Act of 1968 did not apply to it. So far as players in Britain were concerned, provided they played in their own homes and did not play in public places such as Internet cafés,2 they committed no offence and the gaming was lawful. There were also those who argued that s 2(2) of the 1968 Act permitting bankers’ games of unequal chance to be played on a domestic occasion in a private dwelling could be prayed in aid to justify virtual internet gaming, though it is not clear that this formed part of the Gaming Board’s analysis. 1 GA 1968,  s 54. 2 Gaming in public places was prohibited by GA 1968, s 5.

0.120 It is not necessary now to consider the merits of the Gaming Board’s analysis. Its practical effect, as noted, was to make it possible for a number of virtual casinos to offer their services in Britain, and it was the development of this phenomenon that persuaded the Board that fresh ­legislation was necessary to permit, regulate and tax the on-line casino industry.1 1 See Gaming Board Report 1999/2000, Appendix VIII, paras 21–7.

Numbers bets as virtual ‘games’ 0.121 As noted at 0.118 above, it was not possible to base an on-line gaming facility in Great Britain because a gaming licence would have been required to do so, but the requirement of s 12 of the Gaming Act 1968 that participants in the gaming had to be on the premises where the gaming was taking place could not be satisfied. In due course a method was devised to avoid this dilemma. The 49’s litigation (see 0.115 above) established that it was possible to make bets on the random draw of numbers and that such activity amounted to betting and not a lottery. In the case of 49’s itself, numbers were drawn mechanically, but it was soon realised that if bets could be made 55

The pre-Gambling Act framework on mechanically drawn numbers, there was no reason in principle why bets should not also be made on numbers generated by a random number generator of the type used to produce results in virtual games of chance such as roulette. Indeed, even as played in a terrestrial casino, the game of roulette involves in essence the making of bets on randomly generated numbers. On that basis it should, so the reasoning went, be possible for a promoter who wished to base an on-line gaming site in Great Britain to obtain a bookmaker’s permit and to locate his server onshore on the basis that, albeit the products offered were graphically represented as games of chance, they were on a true legal analysis no more than numbers bets which could lawfully be offered under the authority of such a permit. A  number of internet sites were set up which offered gambling from on-shore servers on this basis. In early formats the products offered were often representations of horse races, dog races or numbers draws such as ‘Keno’. In the case of horse and dog races individual odds were quoted for each ‘runner’ and the likelihood of a runner winning was fixed by a translation table which related that runner to the pool of numbers available to be drawn. Where, for example, the draw was of one number from 1–100 the favourite might be matched with numbers 1–40, the second favourite with numbers 41–60, the third favourite with numbers 61–70 etc. As such sites developed, however, it became possible to apply the principles to games such as roulette and blackjack and even to on-line slot machines, and such onshore sites purportedly offering ‘betting’ became, as a matter of presentation, virtually indistinguishable from off-shore virtual casino sites which were overtly offering ‘gaming’. The difficult questions as to when ‘betting’ might become ‘gaming’ were left unexplored in the case of these permit-based sites, but they were to become a focus of intense controversy between the bookmaking industry and the Gaming Board in the case of ‘fixed odds betting terminals’, which represented the next stage in the development of on-line numbers betting p ­ roducts.

Fixed odds betting terminals 0.122 The fixed odds betting terminal was developed by the bookmaking industry in order to provide virtual gambling products which could be provided under the authority of a bookmaker’s permit in licensed betting offices. Since the legislation provided that the only activity which could lawfully be provided in a licensed betting office was the effecting of betting transactions,1 it was crucial to establish that the gambling amounted to ‘betting’ and nothing else. This issue was to become controversial once various versions of roulette appeared on the terminals and as plans developed to offer other casino style products. 1 Betting, Gaming and Lotteries Act 1963, Sch 4, para 1.

0.123 The technical functioning of the terminals was very like that of the permit-based internet sites described at 0.121 above. The customer in the betting office was confronted by a dedicated terminal into which he would feed credit, usually by inserting cash. He could then select from a number of gambling products, of which roulette was by far the most popular. When playing roulette he would be able to bet on roulette numbers by manipulating virtual chips on a touch-screen graphic of a roulette table. Once he had placed 56

The pre-Gambling Act framework his bets he would activate the terminal. In the case of some FOBT service providers, details of his selected numbers and the stakes on them would be transmitted to the premises of the provider, where there was a server containing an RNG which was constantly generating draws of numbers. The server would compare the customer’s selection with the next draw produced by the RNG and would work out whether it was a winning or losing combination. If it was a losing combination the customer’s stake would be forfeit. If it was a winning combination this fact would be transmitted back to the terminal together with a calculation of the customer’s winnings and an instruction to the terminal to run a graphic showing a winning result (eg, in the case of roulette, showing the customer’s selected number being spun). Technical details varied between providers, and in the case of some providers random numbers were transmitted (either by landlines or satellite technology) from the RNG to the individual terminals, and the comparison of the customer’s selection with the random draw was carried out by the terminal; in other respects the terminals functioned comparably. As with permit based internet sites, the underlying principles could be applied to a wide range of gambling products, including roulette, Keno, bingo, horse and greyhound racing and one-off formats such as penalty shoot-outs. FOBTs began to appear in betting offices in the late 1990s and initially caused little comment. However, towards the end of 2002 the Gaming Board became uncomfortable with developments contending that some, at least, of the offerings on the terminals amounted to gaming and could not, therefore, lawfully be offered in a licensed betting office. The essence of the Gaming Board’s contention was that, at least in the case of offerings such as terminal roulette, the format represented a game and the person using the terminal would perceive himself as playing a game. In those circumstances the activity should be regarded as ‘gaming’, there being no reason in principle why a person should not be held to be ‘playing a game’ on a machine. The Board also contended that the activity could be regarded as involving the playing of ‘a pretended game of chance’ within the Gaming Act’s definition of ‘gaming’. The bookmakers, by contrast, contended that no sustainable distinction could be made between betting on a numbers draw by means of a FOBT and betting on a numbers draw such as 49’s, it being accepted that the latter form of activity was merely ‘betting’. Eventually it was agreed that there should be a test case between the Board and the Association of British Bookmakers (the bookmakers’ trade body) to clarify the status of FOBTs. In November 2003 the test case was settled on agreed terms, which in effect created a voluntary code of practice governing the providing of FOBTs. Limits were placed on the number of machines which could be located in any betting office, and maximum prize and stake levels were agreed. In addition, it was agreed that no casino games other than roulette would be allowed. A committee was formed to monitor the development of FOBTs. The episode illustrates graphically the difficulties which were encountered in fitting the new on-line technologies into the existing legislative framework and pointed again to the need for new legis­lation.

Virtual racing 0.124 The technology underlying FOBTs was also developed to make virtual horse racing and greyhound racing available on television screens in 57

The pre-Gambling Act framework licensed betting offices to form the basis of cash betting conducted over the counter in the normal way. As with FOBTs, a random number generator on a server located in the premises of a third party would determine the outcome of a horse race or greyhound race with the individual ‘runners’ in the race being related to the results of the RNG by a translation table. Prior to the ‘race’, the betting office would offer individual odds on the ‘runners’ and bets would be placed in the office at those odds. The RNG would then produce a number which would determine the ‘result’ of the ‘race’ and a graphic would be run on screen showing the relevant horse or dog winning or being placed. Various branded products such as ‘Portman Park’ and ‘Steepledowns’ (for horses) and ‘Millersfield’ (for greyhounds) were produced and made available to bookmakers. These products were valuable in enabling bookmakers to provide unbroken sequences of betting opportunities throughout the day.

Betting exchanges 0.125 If 49’s, FOBTs and virtual racing represented successes for the bookmaking industry, the rise of the betting exchange (or bet broking site) represented a serious challenge to it. Such sites began to appear towards the end of the 1990s. The basic format was that a website would be hosted on a server in Great Britain to provide an online exchange on which customers could bet with each other.1 Customers wishing to bet would lodge funds with the exchange by credit card and would then post bets on the website which could be accepted by other customers who had themselves lodged funds. When bets were struck, the exchange would deduct the relevant stakes from each of the customers’ accounts and hold them as stakeholder pending the outcome of the bet. Once this was known, it would transfer the stakes to the winning customer, deducting its own commission for the provision of the service. Most exchanges operating on-shore took the precaution of acquiring a bookmaker’s permit on the basis that their activities amounted to bookmaking within the relevant statutory definition.2 One advantage which the exchanges enjoyed over bookmakers in their early days, however, was that no betting duty was payable on bets struck on an exchange because, as the law stood, duty was only payable on a bet ‘made with a bookmaker’,3 and Customs accepted that bets were not made with the exchange proprietor, even assuming he was a bookmaker. This advantage was short-lived as amendments were soon made to the duty legislation to bring bets on exchanges into charge to duty,4 but by then betting exchanges had become an established alternative to bookmaker betting, giving to customers a choice of bets which were often highly attractive. Yet the only control over this burgeoning industry lay in the power of licensing committees to grant or withhold bookmaker’s permits. Here again, regulatory control had not kept pace with technological development. 1 For a description of the functioning of a betting exchange see the judgment of Lord Justice Stanley Burnton in The Queen on the Application of William Hill Organisation Ltd and The Horserace Betting Levy Board [2012] EWHC 2039 (Admin). 2 Betting, Gaming and Lotteries Act 1963, s 55. 3 Betting and Gaming Duties Act 1981, s 1(a). 4 The amendment was contained in the Finance Act 2001, s 6 and Sch 1. See now the provisions of the Finance Act 2014, s 141.

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The pre-Gambling Act framework

Lotteries 0.126 In the case of betting and gaming it was a combination of changing public attitudes and new technology that rendered the existing legislation obsolescent. Dissatisfaction with the law governing lotteries and competitions had rather different causes. A lottery was understood to be a scheme for the distribution of prizes by pure chance in which persons participating made a payment or consideration in return for obtaining their chance of a prize.1 As the 1990s advanced, this definition came to seem unsatisfactory in at least two respects. Central to the definition was the idea that a genuinely free scheme in which no one had to pay to enter did not amount to a lottery, because there could be no prejudice to a participant if he was not required to make a payment to take part. However, this means of avoiding an illegal lottery was not so accommodating as might at first appear. In particular, where the seller of a good or service wished to use a lottery as a sales promotion tool, it did not avail him to show that persons purchasing the good or service could enter an associated prize draw which was ‘free’ in the sense that they did not have as a condition of entry to pay any more than the ordinary commercial price of the good or service. This remained the case even though the price of the good or service had not been ‘loaded’ in any way to reflect the entry into the draw. The House of Lords held in the Imperial Tobacco case2 that on such facts the payment for the good or service was to be regarded as payment also to enter the draw, so that an illegal lottery existed. This conclusion created obstacles in the use of lotteries for the purpose of sales promotions and contrasted with the legal position in, for example, New Zealand, where legislation had been passed to enable lotteries to be used for sales promotion provided the only consideration payable was the ‘unloaded’ price of a good or service. In practice, promoters tried to avoid the problem by introducing a ‘free entry route’ into promotional prize draws on the basis that this rendered them ‘free’ and therefore lawful. Such ‘free entry routes’ often had a high degree of artificiality about them and this aspect of the law had degenerated into technicalities. Many schemes of dubious legality were run, but there were no prosecutions because there was no public interest to be served by prosecuting. 1 Readers’ Digest Association Limited v Williams [1976] 1  WLR  1109, approved in Imperial Tobacco Limited v A-G [1982] WLR 466, HL. 2 Imperial Tobacco Limited v A-G [1982] WLR 466, HL.

0.127 The second area of dissatisfaction in the development of lottery law related to the presence or absence of skill. A scheme was only a lottery if the winning of the prize depended entirely upon chance, so the introduction of some element of skill would, in principle, prevent the scheme from being a lottery. However, difficulties could arise if a requirement placed upon competitors in a competition to exercise skill was followed by a second stage in which chance alone determined who won the prize. For example, competitors might be required to answer a skill question or questions. If a substantial number answered correctly, then the arrangement could be a lottery if the final selection of the winner was determined by a random draw from among those who had answered correctly. Here again, there could be technical arguments about whether sufficient skill was required to render the scheme lawful or whether the element of chance rendered it a lottery. 59

The pre-Gambling Act framework Again prosecutions were rare, a fact which encouraged some promoters to offer so-called ‘skill competitions’ on a commercial basis.1 1 The only widely reported prosecution of such a competition in the decade preceding the Gambling Act 2005 was in 1995 when the CPS successfully prosecuted Interactive Telephone Services Limited for its ‘Telemillion’ premium rate competition.

0.128 It was generally accepted that the uncertainties and technicalities of lottery law needed to be replaced by a properly thought out legal framework which would be comprehensible and which the authorities could police and enforce. The Gambling Act 2005 was designed to produce such a legal framework. So far as sales promotion lotteries are concerned, it adopts the New Zealand model. It also provides a definition of the expression ‘lottery’ which is designed make it easier to decide whether a scheme incorporates enough skill to enable it to avoid being a lottery.

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Chapter 1 Introduction to the Gambling Act 2005

1.1 The purpose of this chapter is to offer an overview of the Gambling Act 2005 within a reasonably compact compass in order to provide the reader with a sketch of the overall architecture of the statute and to show how it links with a body of documentation such as the Gambling Commission’s Codes of Practice and the Gambling Commission’s Guidance to Licensing Authorities. It is hoped that it will enable readers who are new to the Act to get their bearings before turning to consult the sections of the book which are particularly relevant to their sectoral interests and their enquiries.

THE COMING OF THE GAMBLING ACT 2005 1.2 We begin with a brief description of the steps which led to the passing of the Gambling Act 2005. The Introduction has already described some of the ways in which the previous legislation had become obsolete or was proving inadequate (see, in particular, 0.113–0.128 above). In 2000 the government set up a Gambling Review Body under the chairmanship of Sir Alan Budd. The GRB’s terms of reference were to: •

consider the current state of the gambling industry and the ways in which it might change over the next ten years in the light of economic pressures, the growth of e-commerce, technological developments and wider leisure industry and international trends;

•

consider the social impact of gambling and the costs and benefits;

•

consider, and make recommendations for, the kind and extent of regulations appropriate for gambling activities in Great Britain, having regard to their social impact, the need to protect the young and vulnerable, the importance of preventing gambling from being carried out so as allow crime, disorder or public nuisance, the need to keep gambling free from criminal infiltration and money laundering risks, the desirability of enabling gambling to maximise the UK’s economic welfare, the implications for the taxation of gambling, the need for appropriate and streamlined regulation and the availability and effectiveness of treatment programmes for problem gamblers.1 61

Introduction to the Gambling Act 2005 The GRB reported in July 2001. It made 176 recommendations for changes to the law. It explained that its recommendations were designed to simplify the regulation of gambling and to extend choice for adult gamblers whilst seeking to ensure that gambling was crime-free and honest, that players could know what to expect and should not be exploited and that there should be protection for children and vulnerable persons.2 It also stressed the need to ensure that any system of regulation should be flexible so as to respond to future technical developments and so as to enable adjustments to be made to regulations in the light of practical experience. With these purposes in mind it proposed that all gambling regulation should be incorporated into one Act of Parliament, that all gambling activities (including betting) should be regulated by a single regulator (the Gambling Commission), though spread betting should continue to be regulated by the Financial Services Authority and the National Lottery should continue to be regulated separately (though, following a change subsequent to the Gambling Act 2005 the Gambling Commission now acts as regulator for the National Lottery3). Finally, there should be a system of licensing of individuals and companies to provide gambling which should be undertaken by the Gambling Commission, whilst licensing of gambling premises should be undertaken by local authorities. 1 Gambling Review Report, Cm 5206, p 6. 2 Gambling Review Report, Cm 5206. p 2. 3 See Introduction, paragraph 0.1.

1.3 The government’s response to the Report was published in the form of a White Paper in March 2002 entitled ‘A Safe Bet for Success’.1 The White Paper accepted the broad thrust of the GRB’s proposals and the majority of its recommendations. In November 2003, the government published the first draft of the Gambling Bill.2 The Bill was scrutinised by a joint committee of the House of Commons and the House of Lords established in July 2003, which reported in March 2004. The government responded to the report in June 2004. The joint committee was then reconvened to consider the policy on regional casinos, and reported again in July 2004. The government responded to the committee’s second report in September 2004. It accepted 123 of the joint committee’s  141 recommendations. The Gambling Bill was introduced into the House of Commons on 18 October 2004 and published on 19 October 2004. It was given a second reading on 1 November 2004 and assigned for detailed consideration to Standing Committee B, where it was considered in 20 sittings between 9  November 2004 and 11  January 2005. A  number of important changes were made and, in particular, following a good deal of public concern, major changes were made to the proposals relating to casinos. At this stage, however, politics intervened. It became clear that a general election was likely to be called and that parliament was likely to be dissolved in April or May. The Bill returned to the House of Commons for its third reading on 24 January 2005. Following a debate of a mere two hours it was returned to the House of Lords for its first reading on 25  January 2005. It received its second reading in the House of Lords on 22  February 2005 and was considered by the Committee of the Whole House on 10 March 2005 and 7 April 2005. By this time agreement had been reached between the government and the opposition parties to allow the Bill to be enacted. In particular, the government agreed to reduce the number of regional casinos in the first instance from eight to one. So it was that the Bill received Royal Assent on 7 April 2005 and became the Gambling Act 2005. 62

Introduction to the Gambling Act 2005 The Gambling Act 2005 was amended by the Gambling (Licensing and Advertising) Act 2014 which came into force on 1  November 2014. The 2014 Act had the effect of extending the circumstances where a provider of remote gambling facilities is required to hold an operating licence from the Gambling Commission. Under the Gambling Act 2005 as originally enacted a provider of remote gambling facilities required an operating licence if, but only if, at least one piece of remote gambling equipment used in the provision of the facilities was situated in Great Britain.3 ‘Remote gambling equipment’ was defined.4 The effect was that if a piece of ‘remote gambling equipment’ used to provide facilities for remote gambling was situated in Great Britain the operator would require to hold an operating licence and this applied whether the facilities were provided for use in Great Britain or not. If, on the other hand, remote gambling was supplied in circumstances where no ‘remote gambling equipment’ was situated in Great Britain then no licence would be required even though the facilities were available to users in Great Britain and were used by them.5 The Act of 2014 changes this by providing that an operating licence will be required if either: (i) remote gambling equipment is situated in Great Britain; or (ii) the facilities are used in Great Britain (see 1.47). 1 Cm 5397. 2 Cm 6014. 3 GA 2005, s 36(3), as originally enacted. 4 GA 2005, s 36(4). 5 GA 2005, Explanatory Notes, para 138.

INTERPRETATION OF THE NEW LEGISLATION 1.4 When the Gambling Bill was introduced into the House of Commons on 18 October 2004 it was accompanied by a set of Explanatory Notes. When the Bill became the Gambling Act 2005, receiving Royal Assent on 7 April 2005 in the circumstances described above, there was published along with it a further set of Explanatory Notes. Likewise the Bill which was to become the Gambling (Licensing and Advertising) Act 2014 together with the Act itself were published with Explanatory Notes. From time to time in this book reference is made to these Notes, and it is to be anticipated that they will be referred to when the Acts come to be interpreted by the courts. It is therefore appropriate to consider briefly what status such Explanatory Notes on Bills and Acts have in the interpretation of the relevant statute. It is necessary first to consider briefly the status of other documentary material in the interpretation of a statute. The position can be summarised as follows. 1.5 In interpreting a statute the court may consider pre-parliamentary materials such as government Green Papers or White Papers and the reports of advisory committees, the Law Commission, the Royal Commission and the like to identify the purpose of the enactment to which the material relates and also, it seems, to interpret the meaning of the statute where the pre-parliamentary material gives sufficiently clear guidance.1 1 Cross Statutory Interpretation, 3rd edn (1995), pp 106–61, citing the speech of Lord Browne-Wilkinson in Pepper v Hart [1993] 1 All ER 42 at 65 (see also [1993] AC 593 at 635E) and R v Jefferson [1994] 1 All ER 270. The passage from Cross was cited

63

Introduction to the Gambling Act 2005 with approval by Lord Steyn in R  (Westminster City Council) v National Asylum Service [2002] 1 WLR 2956 at para 5.

1.6 Under the rule in Pepper v Hart a court may refer to parliamentary debates on a Bill as an aid in the construction of the subsequently enacted Act if the following conditions are fulfilled, namely: (a) the legislation is ambiguous or obscure, or leads to an absurdity; (b)

the material relied upon consists of one or more statements by a Minister or other promoter of the Bill together, if necessary, with such other parliamentary material as is necessary to understand such statements and their effect; and

(c)

the statements relied upon are clear. 1

1 Pepper (Inspector of Taxes) v Hart [1993] AC 593 at 640C per Lord Browne-Wilkinson. It has been said that the conditions in Pepper v Hart should be strictly insisted upon: R v Environment Secretary, ex p Spath Holme Limited [2001] 2 AC 349 at 392E per Lord Bingham of Cornhill.

1.7 The position of Explanatory Notes accompanying Bills and Acts was considered by Lord Steyn in R (Westminster City Council) v National Asylum Service.1 The discussion is strictly ‘by the way’, but it has been applied in subsequent cases. Lord Steyn begins by explaining that prior to 1999 brief explanatory memoranda used to be printed at the front of a Bill. Such a document was a précis and did not provide background. Ministers, however, were provided with Notes on Clauses which did by and large explain what a clause in a Bill was meant to do. Later, Notes on Clauses were made available to backbenchers. The speech continues: ‘4.  In 1999 a new system was introduced. It involves publishing Explanatory Notes alongside the majority of public Bills introduced in either House of Parliament by a Government minister: … The texts of such notes are prepared by the Government department responsible for the legislation. The Explanatory Notes do not form part of the Bill, are not endorsed by Parliament and cannot be amended by Parliament. The notes are intended to be neutral in political tone: they aim to explain the effect of the text and not to justify it. The purpose is to help the reader to get his bearings and to ease the task of assimilating the law … The Explanatory Notes accompany the Bill on introduction and are updated in the light of changes to the Bill made in the Parliamentary process. Explanatory Notes are usually published by the time the legislation comes into force. Unlike Hansard material there are no costly researches involved. Explanatory Notes for both Bills and Acts are published by Her Majesty’s Stationery Office. The notes are also available on the Internet at: http://www.parliament.uk for Bills and http://www. legislation.hmso.gov.uk for Acts. 5.  The question is whether in aid of the interpretation of the statute the court may take into account the Explanatory Notes and, if so, to what extent. The starting point is that language in all legal texts conveys meaning according to the circumstances in which it is used. It follows that the context must always be identified and considered before the 64

Introduction to the Gambling Act 2005 process of construction or during it. It is therefore wrong to say that the court may only resort to evidence of the contextual scene when an ambiguity has arisen …’ The speech then cites certain authorities relating to the interpretation of contracts and proceeds to refer to the case of River Wear Commissioners v Adamson2 where Lord Blackburn explained the position as follows: ‘I shall … state, as precisely as I can, what I understand from the decided cases to be the principles on which the courts of law act in construing instruments in writing; and a statute is an instrument in writing. In all cases the object is to see what is the intention expressed by the words used. But, from the imperfection of language, it is impossible to know what that intention is without enquiring farther, and seeing what the circumstances were with reference to which the words were used, and what was the object, appearing from those circumstances, which the person using them had in view; for the meaning of words varies according to the circumstances with respect to which they are used.’ 1 [2002] 1 WLR 2956 at 2957. 2 (1877) 2 App Cas 743 at 763.

1.8 Against that background Lord Steyn summarised his views about the relevance of Explanatory Notes as follows: ‘Again, there is no need to establish an ambiguity before taking into account the objective circumstances to which the language relates. Applied to the subject under consideration the result is as follows. In so far as the Explanatory Notes cast light on the objective setting or contextual scene of the statute, and the mischief at which it is aimed, such materials are therefore always admissible aids to construction. They may be admitted for what logical value they have. Used for this purpose Explanatory Notes will sometimes be more informative and valuable than reports of the Law Commission or advisory committees, Government green or white papers, and the like. After all, the connection of Explanatory Notes with the shape of the proposed legislation is closer than pre-Parliamentary aids which in principle are already treated as admissible: see Cross Statutory Interpretation, 3rd edn, 1995, pp 160–1’.1 This, then, appears to be the principal function of Explanatory Notes, namely to provide insight into the context in which the statutory provision came into existence. However, Lord Steyn goes on as follows: ‘If exceptionally there is found in Explanatory Notes a clear assurance by the executive to Parliament about the meaning of a clause, or the circumstances in which a power will or will not be used, that assurance may in principle be admitted against the executive in proceedings in which the executive places a contrary contention before a court. This reflects the actual decision in Pepper v Hart [1993]  AC  593. What is impermissible is to treat the wishes and desires of the Government about the scope of the statutory language as reflecting the will of Parliament. 65

Introduction to the Gambling Act 2005 The aims of the Government in respect of the meaning of clauses as revealed in Explanatory Notes cannot be attributed to Parliament. The object is to see what is the intention expressed by the words enacted.’2 1 R  (Westminster City Council) v National Asylum Service [2002] 1  WLR  2956 at 2959B–C. 2 R  (Westminster City Council) v National Asylum Service [2002] 1  WLR  2956 at 2959E–F.

1.9 Although Lord Steyn’s analysis is strictly ‘by the way’, a reference to Explanatory Notes for the purpose of construing legislation is now commonplace.1 Thus, for example, reference has been made to Explanatory Notes on a Bill to show what problem Parliament was addressing in enacting a particular section of the relevant Act;2 to Explanatory Notes on an Act where the terms of the Notes ‘strongly supported’ the interpretation of a provision in the Act which the court had concluded was the correct interpretation independently of the Notes;3 and to the Explanatory Notes on an Act as identifying ‘the contextual scene’ and confirming the principal purpose of a statutory provision the meaning of which was in issue.4 1 See, for example, R v Montila [2004] UKHL 50 where the Appellate Committee of the House of Lords referring to Lord Steyn’s speech in the Westminster City Council case stated that: ‘It has become common practice for their Lordships to ask to be shown the explanatory notes when issues are raised about the meaning of words used in an enactment’ (para 35). 2 R (on the application of Marper) v Chief Constable of South Yorkshire [2004] 4 All ER 193, HL at para 4 per Lord Steyn. 3 Attorney-General’s Reference (No  5 of 2002) [2004]  UKHL  40 at para  21 per Lord Bingham of Cornhill. 4 Flora v Wakom (Heathrow) Limited [2006]  EWCA  Civ 1103, CA at paras 14–18. See also Wilson v First County Trust Ltd [2003]  UKHL  40, [2003] 4  All ER  97 (comments on use by courts of statements about legislation made in Parliament for the purpose of deciding whether a statutory provision is compatible with a Convention right under the European Convention for the Protection of Human Rights and Fundamental Freedoms 1950); P v National Association of Schoolmasters/ Union of Women Teachers [2003] UKHL 8, [2003] 2 AC 663 (speech of Lord Steyn in R  (Westminster City Council) v NASS on use of Explanatory Notes cited and followed); Chief Constable of Cumbria v Wright and Wood [2006] EWHC 3574 (Admin), [2007] 1 WLR 1407; Sunlife Assurance Co of Canada (UK) Ltd v HMRC [2009] EWHC (Ch), [2010] STC 1173 (doubt expressed whether Explanatory Notes to Finance Bill 2003 admissible); Homeserve Membership Ltd v HMRC [2009] EWHC 1131 (speech of Lord Steyn in R  (Westminster City Council) v NASS followed in considering Explanatory Notes to Finance Bill 1997 (insurance premium tax)).

THE BASIC STRUCTURE OF THE ACT 1.10 We now turn to the basic structure of the Act. The first 19 sections are concerned with defining the principal terms used. For example, the expression ‘gambling’ is defined to mean ‘gaming’, ‘betting’ and ‘participating in a lottery’.1 Each of the expressions ‘gaming’, ‘betting’ and ‘lottery’ is itself defined, as are a number of other expressions, such as ‘casino’, ‘equal chance gaming’ and ‘pool betting’. Although the definition of ‘gaming’ largely mirrors that contained in the Gaming Act 1968 (with some updating to reflect 66

Introduction to the Gambling Act 2005 gaming by modern technology), the provision of a definition of ‘betting’ and ‘lottery’ marks a new departure, as these terms were not defined under the previous legislation. It should be noted that gaming machines are dealt with in Part 10 of the Act and that the definition of ‘gaming machine’ is contained separately in that Part.2 Included at the forefront of the preliminary definitions in ss 1–19 are the three ‘licensing objectives’ which underlie the legislation3 and which are discussed at 1.21–1.42 below. At s 5 is to be found a definition of the circumstances in which a person ‘provides facilities for gambling’, a provision of fundamental importance, because it is the act of providing facilities for gambling which engages the regulatory control of the Gambling Commission. 1 GA 2005, s 3. 2 GA 2005, s 235. 3 GA 2005, s 1.

1.11 The Act provides for two gambling regulators, namely the Gambling Commission and ‘licensing authorities’. In England and Wales the licensing authorities will be local authorities, usually acting through the licensing committees set up under the Licensing Act 2003, and in Scotland the authorities will be those licensing bodies that have responsibility for regulating gambling and the supply of alcohol.1 1 For Scottish licensing authorities see Chapter 24.

1.12 The Gambling Commission has taken over the functions of the Gaming Board, which was set up under the Gaming Act 1968 to regulate licensed casinos and bingo clubs, gaming machines and lotteries. It has been given the additional task of regulating betting (with the exception of spread betting which remains regulated by the Financial Services Authority). Subsequent to enactment of the Gambling Act 2005 it took over the function of regulator for the National Lottery (see Introduction, para 0.1). By far the most important function of the Commission is its power to issue operating licences authorising the holders to provide particular types of gambling (eg  casino gambling, bingo, pool betting etc). Operating licences will only be granted following an in-depth investigation into the suitability of the applicant to hold such a licence. In addition, certain personnel acting for the holder of the operating licence will themselves be required to obtain from the Commission a personal licence, and these too will only be granted following an investigation into the background of applicants to ensure that they are suitable. It will be open to the Commission to impose conditions on operating and personal licences to secure compliance with the objectives of the legislation. Moreover, the Commission will be able to monitor the conduct of licence holders and in particular to review the licence and to take various remedial steps up to and including suspension or revocation of the licence in appropriate cases. In carrying out all its duties under the Act, the Commission is required to promote the three licensing objectives (see below). It is required to prepare a statement of principles which it will apply in exercising its licensing and regulatory functions,1 and it is required to issue codes of practice about the manner in which facilities for gambling are to be provided by licence holders or other persons.2 Licence conditions and Codes of Practice were published on 1  June 2007 and came into force 67

Introduction to the Gambling Act 2005 on 1  September 2007. On 1  October 2008 a new version of the LCCP was published to replace the June 2007 version and the new version took effect on 1  January 2009. In February 2015 a new version of the LCCP (updated April 2015) was published the majority of which took effect on 8 May 2015. The most recent version of the LCCP was published in July 2016 and took effect from 31  October 2016. The LCCP contain detailed provisions for the regulation of those parts of the Gambling Industry that are required to hold operating licences and will form the starting point in any attempt to discover the regulatory obligations imposed upon a licensed operator. In addition, the Commission is required to issue guidance to the licensing authorities as to the way in which they are to exercise their functions under the Act.3 The Commission must give advice to the Secretary of State about the incidence, conduct, effects and regulation of gambling,4 and it has extensive powers to ensure that there is compliance with the provisions of the Act and to investigate and prosecute offences.5 1 GA 2005, s 23 and see Gambling Commission: Statement of principles for licensing and regulation March 2015. 2 GA 2005, s 24. 3 GA 2005, s 25. 4 GA 2005, s 26. 5 GA 2005, ss 27 and 28.

1.13 The licensing authorities are concerned with the regulation of premises where gambling takes place. Their most important function will be the granting of premises licences authorising the use of premises for different forms of gambling such as the operation of a casino, the playing of bingo, the provision of gaming machines and the provision of betting facilities etc.1 In addition there are a large number of other forms of authorisation such as ‘Temporary Use Notices’ and various permits which may be used to authorise gambling on particular premises and which lie under the remit of the licensing authority. The scope of the licensing authority’s functions can be summarised as follows: (i)

grant of premises licences and provisional statements;2

(ii) grant of permits for non-licensed family entertainment centres where Category D gaming machines may be used;3 (iii) the receipt and endorsing of temporary use notices permitting the holder of an operating licence to use premises for gambling for a period of no more than 21 days in any period of 12 months;4 (iv) receipt of occasional use notices authorising the use of a track for betting without a premises licence;5 (v) the grant of prize gaming permits;6 (vi) the grant of club gaming permits;7 (vii) the grant of club machine permits;8 (viii) receipt of written notification of the intention of the holder of an onpremises alcohol licence to make no more than two gaming machines available for use in his premises;9 (ix) grant of a licensed premises gaming machine permit;10 68

Introduction to the Gambling Act 2005 (x) registration of small society lotteries;11 (xi) provision of information to the Gambling Commission; (xii) maintenance of a register of premises licences issued by it;12 (xiii) various enforcement functions, including the exercise of powers to inspect gambling premises;13 and (xiv) conducting reviews of premises licences and taking regulatory steps (including suspension or revocation of the licence) following the review.14   1 GA 2005, s 150.   2 GA 2005, s 150 and ss 204–205.   3 GA 2005, s 247 and Sch 10.   4 GA 2005, ss 214–234.   5 GA 2005, s 39.   6 GA 2005, s 289 and Sch 10.   7 GA 2005, s 271 and Sch 12.   8 GA 2005, s 273 and Sch 12.   9 GA 2005, s 282. 10 GA 2005, s 283 and Sch 13. 11 GA 2005, s 258 and Sch 11, Pt 4. 12 GA 2005, s 156. 13 See GA 2005, Part 15. 14 GA 2005, ss 197–203.

THE LICENSING OBJECTIVES 1.14 Part 1 of the Act is headed ‘Interpretation of Key Concepts’. The first of these is set out in s 1, which is headed ‘The licensing objectives’ and provides as follows: ‘In this Act a reference to the licensing objectives is a reference to the objectives of— (a) preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime, (b) ensuring that gambling is conducted in a fair and open way, and, (c) protecting children and other vulnerable persons from being harmed or exploited by gambling.’ It is clear that the three licensing objectives express the primary purpose which it is intended the Gambling Act 2005 should achieve. The objectives are continually reflected in the provisions of the Act, and also in the regulations and statutory guidance made under the Act. This is unsurprising; the terms of reference of the Gambling Review Body included, amongst other things: •

consideration of the social impact of gambling and the costs and benefits;

•

consideration of the need to protect the young and vulnerable from exploitation and to protect all gamblers from unfair practices; 69

Introduction to the Gambling Act 2005 •

consideration of the importance of preventing gambling from being carried out in a way which allows crime, disorder or public nuisance;

•

the need to keep the industry free of infiltration by organised and other serious crime and from money laundering risks.

1.15 Section 1 sets out the licensing objectives as abstract principles. Subsequent provisions of the Act specify how they are to be given effect in practice. The promotion of the licensing objectives is the principal function of the Gambling Commission. 1 Its duty to promote the objectives is imposed by s 22, which provides as follows: ‘In exercising its functions under this Act the Commission shall aim— (a) to pursue, and wherever appropriate to have regard to, the licensing objectives, and (b) to permit gambling, in so far as the Commission thinks it reasonably consistent with the pursuit of the licensing objectives.’ Thus, in carrying out all its functions as regulator under the Act, the Commission must aim to pursue the licensing objectives. This is its primary responsibility. Admittedly it is also under a duty to aim to permit gambling, but it is only to do this to the extent that it thinks it ‘reasonably consistent’ with the pursuit of the licensing objectives. So pursuit of the licensing objectives comes first; the duty to permit gambling is subsidiary and has effect only if the gambling is reasonably consistent with pursuit of the objectives. The drafting of s 22(a) to the extent that it imposes a separate duty to have regard to the licensing objectives wherever appropriate is curious, since it is difficult to see how the Commission can aim to pursue the objectives (its primary duty) without also having regard to them. 1 For a description of the central role of the Licensing Objectives in the Gambling Commission’s functions see the decision of the Upper Tribunal Administrative Appeal Chamber Gambling Commission v Greene King Brewing and Retailing Ltd [2016] UKUT 0050 (AAC) reversing the decision of the First-tier Tribunal General Regulatory Chamber Gambling at GA/2014/0001 and GA/2014/0002. At the time of publication an appeal to the Court of Appeal is pending.

1.16 There can be little doubt that the principal responsibility for promoting the licensing objectives lies with the Commission, although the precise extent to which such responsibility may overlap with that of the licensing authorities in certain circumstances is the subject of the Greene King litigation noted in the previous paragraph. Licensing authorities similarly will also have to have regard to the licensing objectives in their function of granting premises licences, and there are certain other functions where they will have to have regard, or may have regard, to the objectives. The principles to be applied by a licensing authority in considering a premises licence application are laid down in s 153, a complex provision which is discussed in Chapter 10. To summarise its effect, the licensing authority must ‘aim to permit the use of premises for gambling’ but only in so far as they think it in accordance with any relevant code of practice issued by the Commission and in accordance with any relevant guidance issued to licensing authorities by the Commission. Since the 70

Introduction to the Gambling Act 2005 Commission will, in formulating codes of practice and drafting guidance, be under an obligation to pursue the licensing objectives, both the codes and the guidance should reflect and advance those objectives. The licensing authority are also obliged to consider whether use of the premises for gambling would be reasonably consistent with the licensing objectives, but they must consider this issue subject to the provisions of any relevant code of practice or Commission guidance. Finally, they must have regard to their own three-year licensing policy prepared under s 349 of the Act. This policy will be issued subject to Commission guidance and so should itself reflect the licensing objectives. The objectives therefore feature centrally in consideration of premises licence applications by licensing authorities, although they are brought to bear by means of a rather complex statutory hierarchy. 1.17 The licensing objectives may also be relevant to other functions of the licensing authority. For example, Part  9 of the Act provides for ‘temporary use notices’ permitting premises to be used for gambling without a premises licence for short periods. It is open to certain authorities, including a licensing authority, the Commission, the Police and Customs & Excise1 to object to a ‘temporary use notice’ on the grounds that ‘having regard to the licensing objectives the temporary premises (sic) notice should not have effect, or should have effect only with modification’.2 In that case the licensing authority would have to hear the objections and may either refuse the temporary use notice or grant it with modification. The licensing authority refuses the temporary use notice by giving a counter-notice under s 224, and s 224(7) provides that in deciding whether to give a counter-notice the authority is to apply the approach laid down in s 153(1). In the case of family entertainment centre permits granted under s  247 and Sch  10 and in the case of prize gaming permits granted under s  289 and Sch  14, the licensing authority has a discretion whether or not to consider the licensing objectives. In both cases the Act provides that the authority ‘need not (but may) have regard to the licensing objectives’,3 although in both cases there is an additional duty to have regard to any relevant guidance from the Commission. 1 GA 2005, s 219(1) and (4). 2 GA 2005, s 221(2). 3 GA 2005, Sch 10, para 10 and Sch 14, para 8.

1.18 In deciding whether to grant a club gaming permit or a club machine permit under s 271 and Sch 12, a licensing authority must have regard to any relevant guidance from the Commission and, subject to that guidance, to the licensing objectives.1 In considering an application for the grant of a licensed premises gaming machine permit under s 283 and Sch 13, a licensing authority must ‘consider it having regard to the licensing objectives, any relevant guidance issued by the Commission under s 25 and such other matters as they think relevant’.2 By contrast, in performing their duty to register ‘small society lotteries’ no obligation is placed on the licensing authority to consider the licensing objectives. 1 GA 2005, Sch 12, para 27. 2 GA 2005, Sch 14, para 4(1).

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Introduction to the Gambling Act 2005 1.19 It can be seen therefore that the ‘licensing objectives’ are a thread running right throughout the GA  2005 and that they are likely constantly to require consideration in some form or another by agencies performing duties and functions under the Act. 1.20 The statement of the three licensing objectives, and the duty placed upon the Commission ‘to pursue, and wherever appropriate have regard to, the licensing objectives’ is founded upon a recognition that the provision of gambling opportunities is liable to create mischiefs of the sort referred to in the objectives. A society without gambling would obviously be free from the social evils that gambling can bring with it. The statute recognises, however, that such a state of affairs, even if desirable, is unachievable and that if there is no provision of lawful gambling facilities, then illegal gambling will flourish free from any regulation. The purpose of the licensing objectives is therefore to ensure that the best possible arrangements are made to prevent and mitigate the potentially harmful effects of gambling and that the provision of gambling facilities will always be made subject to the achievement of this objective.

DEFINITION OF THE LICENSING OBJECTIVES Preventing crime and disorder 1.21 As noted above, the first licensing objective is that of: ‘(a) preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime’.

Crime 1.22 The expression ‘crime’ is not defined, but will clearly include any crime under the law of the United Kingdom. It also includes, it is submitted, offences under the law of a country or territory outside the United Kingdom. Whether a reference in a statute to an ‘offence’ or a ‘conviction’ includes an offence committed abroad or a foreign conviction depends on the legislative intention as discerned from the enactment’s purpose.1 For example, it has been held that a conviction for arson in the United States amounted to an offence ‘involving violence’ for the purposes of the Estate Agents Act 1979 justifying the making of an order prohibiting the person convicted from engaging in estate agency work in the UK.2 It is obvious that in considering the suitability of persons to engage in gambling, foreign criminal activity is as relevant as criminal activity within the jurisdiction, and the Act’s definition of ‘relevant offence’3 (conviction of which entitles the Commission to refuse an application for an operating licence)4 includes both offences listed in Sch 7 and ‘an offence under the law of a country or territory outside the United Kingdom (a foreign offence) which prohibits a kind of activity prohibited by an offence listed in [Sch  7] (a domestic offence)’: GA  2005, s  126(2)(b). 72

Introduction to the Gambling Act 2005 This objective, the ‘crime prevention objective’ is clearly of fundamental importance. The potential linkage between gambling and crime is notorious. The perception that large profits may be made by offering gambling facilities has always acted as a magnet for criminals, with inevitably damaging consequences such as fraud and cheating, strong-arm methods to collect gambling debts or rent or instalment payments on gambling equipment such as gambling machines, protection rackets, use of the profits of gambling to fund other criminal activities and the use of gambling to launder the proceeds of other crime. The reader is referred to the Introduction and in particular to 0.46 and 0.54 describing the criminal infiltration of casino gambling and of gaming machine gambling following the introduction of the Betting and Gaming Act 1960. The introduction of the regime contained in the Gaming Act 1968, and in particular the setting up of the Gaming Board, proved to be a very effective means of keeping crime out of gambling, and it is clear that the liberalising measures brought in by the new Act are intended to run in tandem with a strong regulatory regime building upon the work of the Gaming Board. In its Statement of principles for licensing and regulation, March 2015 the Gambling Commission has stated that its licensing, compliance and enforcement processes are designed to prevent gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime, and has stated that it would ensure that: •

only suitable applicants would be granted operating licences and personal licences;

•

the suitability of licence holders will be assessed on an ongoing basis as part of the Commission’s compliance activities;

•

compliance activity is targeted where a risk to the licensing objectives is greatest;

•

the suitability of licence holders will be reconsidered in the light of any subsequent criminal activity or connection with such activity.

The Commission has said that it will take a serious view of applicants and licensees who have convictions for relevant offences. Each case will be considered on its merits, but there will be a presumption in favour of refusing an application or reviewing a licence in such cases.5 The whole regulatory regime of the Act, particularly that entrusted to the Commission, is designed to ensure that gambling facilities will only be provided where the provider has lawful authority to provide, and where it is and remains fit to provide, gambling facilities. There are almost innumerable ways in which crime and gambling may interact. Specific attention may be drawn to the matters set out in the paragraphs below as relevant to the crime prevention objective. 1 Bennion Statutory Interpretation (6th edn, Lexis Nexis 2013), p 353. 2 Antonelli v Secretary of State for Trade and Industry [1998]  QB  948, CA. As to the location of an offence see Office of the King’s Prosecutor Brussels v Cando Armas [2005] UKHL 67, [2006] 1 All ER 647 at [36]–[40]. 3 GA 2005, s 126(2). 4 GA 2005, s 71. 5 Gambling Commission Statement of principles for licensing and regulation, March 2015, para 5.2, 5.3.

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Introduction to the Gambling Act 2005

Illegal gambling 1.23 This means, in the first instance, gambling carried on without any form of authorisation under the Act. It should be noted that the concept of ‘illegal gambling’ extends not only to gambling carried on without any form of lawful authority under the Act, but also to gambling carried on under an appropriate operating licence but where the gambling is carried on in breach of the terms and conditions of the licence.1 The Commission has stated that as a general rule it will not normally pursue a criminal investigation into a licensed operator, as in most cases the matter under investigation is likely to be capable of being dealt with by the exercise of the Commission’s regulatory powers. However, it has noted that there might be circumstances where the commencement of a criminal investigation was merited, for example, if a licensee were suspected of cheating under s 42 of the Act (which carries the possibility of a longer period of imprisonment, if convicted), or if a licensee knowingly misled or provided false information to the Commission, contrary to s 342 of the Act.2 1 GA 2005, s 33(2)(b). 2 Gambling Commission, Licensing, compliance and enforcement under the Gambling Act 2005: policy statement, March 2015.

Licensing powers 1.24 The Commission’s power to grant operating licences and personal licences, and its power to investigate the suitability of applicants, is obviously a crucial provision. The Commission has stated that it will examine the corporate control structures and ownership of operators to enable the Commission to identify and satisfy itself of the integrity of controllers of companies and others relevant to the operation of gambling.1 The Commission has stated that it may seek evidence or opinions about operators or proposed operators from a wide range of agencies and regulators both in the UK and abroad.2 1 Gambling Commission, Statement of principles for licensing and regulation, March 2015, para 5.4. 2 Gambling Commission, Licensing, compliance and enforcement under the Gambling Act 2005: policy statement, March 2015, para 3.7.

Review 1.25 Equally central to the pursuit of the ‘crime prevention objective’ is the power of the Commission to review operating licences and personal licences where it has concerns relating to the provision of gambling under those licences.1 The Commission has noted that where concerns are raised about a licensed operator it may, in appropriate cases, be possible to resolve the matter by a process of ‘enhanced compliance’ and/or ‘voluntary settlement’ which will obviate the need for a formal review, although this approach will not be adopted where regulatory or criminal enforcement is justified as a proportionate means of achieving the licensing objective.2 The Commission 74

Introduction to the Gambling Act 2005 has also given detailed guidance on its approach to its powers to conduct reviews of operating and personal licences.3 1 GA 2005, s 116 (operating licences); ss 128 and 135 (personal licences). 2 Gambling Commission, Licensing, compliance and enforcement under the Gambling Act 2005: policy statement, March 2015, paras 5.1–5.8. 3 Gambling Commission, Licensing, compliance and enforcement under the Gambling Act 2005: policy statement, March 2015, paras 5.11–5.49.

Money laundering 1.26 There is an obvious risk that gambling businesses may become targets for money laundering. A number of regulatory provisions are made to deal with this but specifically it is a licence condition of all operating licenses except gaming machine technical and gambling software licences that licensees must conduct a risk assessment of their business being used for money laundering and terrorist financing and must implement policies to prevent such activities, and it is a licence condition of all remote casino operating licences where any of the licensee’s remote gambling equipment is located outside Great Britain that they comply with Parts 2 and 3 of the Money Laundering Regulations 2007 (SI  2007/2157) as amended by the Money Laundering (Amendment) Regulations 2007 (SI  2007/3299) or the equivalent requirements of any UK  Statutory Instrument amending or superseding those regulations.1 1 Gambling Commission, Licence conditions and codes of practice July 2016 (in force 31 October 2016), p 21.

Fraud 1.27 There is an ever present risk of fraud and cheating where gambling facilities are provided.1 The Act itself creates a new offence of cheating at gambling,2 and it may be anticipated that this will be used along with the Commission’s power to review operating and personal licences to crack down on fraudulent gambling. The Commission has stated that though it will not as a general rule pursue a criminal investigation into a licensed operator where the matter under investigation is likely to be capable of being dealt with by the exercise of the Commission’s regulatory powers (eg by review) a criminal investigation might be merited where a licensee was suspected of cheating under s 42 of the Act.3 1 For a discussion of fraud in gambling see Introduction, paras 0.8–0.10. For a recent discussion of the civil law of cheating in gambling see Ivey v Genting Casinos UK Ltd T/A Crockfords Club [2014] EWHC 3394 (QB); Ivey v Genting Casinos UK Ltd T/A Crockfords Club Court of Appeal (Civil Division) [2016] EWCA Civ 1093. 2 GA 2005, s 42. 3 Gambling Commission, Licensing, compliance and enforcement under the Gambling Act 2005: policy statement, March 2015, para 6.6.

1.28 It seems clear that the Commission will take principal regulatory responsibility for achieving the ‘crime prevention objective’. Licensing authorities are likely to have a smaller role to play in the pursuit of this 75

Introduction to the Gambling Act 2005 objective. In particular, since applicants for premises licences (except occupiers of tracks who do not propose to offer gambling themselves) will have to hold an operating licence from the Commission before the premises licence can be issued, licensing authorities will not need to investigate the suitability of an applicant. If they should receive information causing them to question the suitability of an applicant, they should inform the Commission.1 The Commission has stated that it would generally take the lead in prosecuting the offence of providing facilities for gambling where it is committed in the context of illegal gambling which appears organised and has a potentially national or regional impact, or where there are deliberate, reckless or significant breaches by a licensed operator.2 The Commission’s expectation is that licensing authorities will take prosecutions against those providing or facilitating illegal gambling – in effect gambling without a licence or permit – where the criminality is contained in one premises.3 It is noted that in dealing with illegal poker or illegal or illegally sited machines in specific premises a multi-agency co-ordinated approach involving the licensing authority, the Commission, the Police and sometimes HMRC may often be appropriate.4 1 GA 2005, s 163(2); Gambling Commission, Guidance to Licensing Authorities, (5th edn, 2015), para 5.10. 2 Gambling Commission, Guidance to Licensing Authorities, (5th edn, 2015), para 36.24. 3 Gambling Commission, Guidance to Licensing Authorities (5th edn, 2015), para 36.25. 4 Gambling Commission, Guidance to Licensing Authorities (5th edn, 2015), para 36.26.

Disorder 1.29 Section 1(a) also provides that there is a licensing objective of preventing gambling from being a source of disorder or being associated with disorder. The word ‘disorder’ is not defined, but must be assumed to involve some form of socially undesirable occurrence which does not amount to a criminal offence – otherwise the reference to ‘disorder’ would add nothing to the statutory provisions. The dictionary definitions of the word ‘disorder’ suggest that it means: ‘2 (A) disturbance, (a)  commotion; esp. (a)  breach of public order. 3 A breach of discipline, of orderly conduct, an irregularity.’ 1 The definition of ‘disorderly’ is: ‘1 Opposed to or violating public order or morality or constitutional authority; esp. unruly, turbulent, riotous’. 2 The word ‘disorder’ also appears in the titles to a number of statutes enacted shortly before the GA  2005, namely the Crime and Disorder Act 19983 (repealed in part), the Football (Offences and Disorder) Act 19994 (repealed in part) and the Football (Disorder) Act 20005 (repealed in part). 1 2 3 4 5

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Shorter OED, 5th edn. Shorter OED, 5th edn. 1998 c 37. 1999 c 21. 2000 c 25.

Introduction to the Gambling Act 2005 1.30 It is suggested that ‘disorder’ is something that is easier to recognise than to define. In practice, the principal area of concern over the establishment of gambling premises giving rise to ‘disorder’ has tended to be in connection with the setting up of amusement arcades and amusement premises under GA 1968, s 34. A recurrent ground of objection to such establishments has been that they would lead to a congregation of undesirables both in and near the business. Such persons might not, it was contended, necessarily commit any criminal offence, but their presence could give rise to noise and a threatening atmosphere in the shopping high street where the business was to be located. Though there are decided cases on the meaning of ‘disorderly’, they are of limited assistance. There are a number of cases concerned with the offence of ‘keeping a disorderly house’, but these are unlikely to be of much relevance to gambling businesses, since the expression ‘disorderly house’ is usually a euphemism for a business providing sexual services.1 Some assistance may be derived from cases under public order legislation, with the caveat that they concerned conduct which amounted to a criminal offence in any event. Under the Public Order Act 1986, s 5 a conviction of an offence of ‘using disorderly behaviour within the hearing or sight of a person likely to be caused harassment, alarm or distress thereby’ was upheld where D  interfered with the work of a surveyor by putting his hands in front of a measuring instrument.2 It was held that the question whether behaviour is disorderly is a question of fact for the trial court; there was no need for any element of violence, present or threatened, for there to be disorderly behaviour. 1 See prosecution for ‘keeping a disorderly house’ in Moores v DPP [1992] 1 QB 125 (activities of male stripper in public house); R v Tan [1983] QB 1053 (activities of ‘Mistress’ in providing to ‘submissives’ sexual services of ‘a particularly revolting and perverted kind’). 2 Chambers v DPP [1995] COD 321, DC.

1.31 In a New Zealand case it was held that the defendants were guilty of behaving ‘in a disorderly manner within view of a public place, namely, Parliament grounds’ contrary to s 3D of the Police Offence Act 1927 when they chained themselves to pillars at the entry to Parliament House in order to protest against a visit by the Vice-President of the United States.1 The Court of Appeal held that the defendants’ behaviour was a sufficient breach of the values of orderly conduct and that it caused annoyance to others and that these characteristics brought it within the statutory offence. Giving the leading judgment, North P said: ‘I agree that a person may be guilty of disorderly conduct which does not reach the stage that it is calculated to provoke a breach of the peace, but I am of opinion that not only must the behaviour seriously offend against those values of orderly conduct which are recognised by rightthinking members of the public but it must at least be of a character which is likely to cause annoyance to others who are present’.2 Turner J said as follows: ‘Disorderly conduct is conduct which is disorderly; it is conduct which, while sufficiently ill-mannered, or in bad taste, to meet with the 77

Introduction to the Gambling Act 2005 disapproval of well-conducted and reasonable men and women, is also something more – it must, in my opinion, tend to annoy or insult such persons as are faced with it – and sufficiently deeply or seriously to warrant the interference of the criminal law’.3 McCarthy J said: ‘There must be conduct which not only can fairly be categorised as disorderly, but is also likely to cause a disturbance or to annoy others considerably’.4 1 2 3 4

Melser v Police [1967] NZ LR 437. Melser at 433. Melser at 444. Melser at 446.

1.32 The Gambling Commission has commented on the meaning of ‘disorder’ as follows: ‘In the context of gambling premises licences, licensing authorities should generally consider disorder as activity that is more serious and disruptive than mere nuisance. Factors to consider in determining whether a disturbance was serious enough to constitute disorder would include whether police assistance was required and how threatening the behaviour was to those who could see or hear it. There is not a clear line between nuisance and disorder and the licensing authority should take the views of its lawyers before determining what action to take in circumstances in which disorder may be a factor.’1 It is possible that this formulation overstates the gravity which must be attained before ‘disorder’ arises, but inevitably much will turn on the impression created by particular sets of facts. The Commission has noted that regulatory issues arising from the prevention of disorder are likely to focus almost exclusively on premises licensing rather than operating licences.2 However it is noted that if there are persistent or serious disorder problems that an operator could or should do more to prevent, the licensing authority should bring this to the attention of the Commission so that it can consider the continuing suitability of the operator to hold an operating licence.3 1 Gambling Commission, Guidance to Licensing Authorities (5th edn, 2015), para 5.5. 2 Gambling Commission, Guidance to Licensing Authorities (5th edn, 2015), para 5.6. 3 Gambling Commission, Guidance to Licensing Authorities (5th edn, 2015), para 5.6.

Public nuisance 1.33 As has been noted, the prevention of ‘nuisance’ or ‘public nuisance’ is not one of the licensing objectives under the GA 2005, in contrast to the Licensing Act 2003 where the prevention of ‘public nuisance’ is one of the four licensing objectives.1 Originally the Terms of Reference of the Gambling Review Body included a reference to ‘public nuisance’. Referring to the ‘crime prevention objective’ it noted the importance of preventing crime and 78

Introduction to the Gambling Act 2005 disorder, but also the importance of preventing gambling from allowing ‘public nuisance’.2 When the proposals were published in the form of the Gambling Bill, however, the reference to ‘public nuisance’ was excluded, and the prevention of ‘public nuisance’ is not one of the licensing objectives in the Act itself. Why this factor was omitted is unclear. However, it raises the question whether public nuisance, strictly so called, could in principle be brought within the licensing objective of preventing gambling from being a source of crime (ie within s 1(a)). Public nuisance is a crime at common law as well as giving rise to civil liability in tort. That a common law offence of causing a public nuisance still exists was affirmed by the House of Lords in R v Rimmington in 2006, where it was held that the definition of the offence was sufficiently clear and precise to satisfy the requirements of the common law and of ECHR, Art  7. Their Lordships adopted the definition of public nuisance given by Sir James Stephen in A  Digest of Criminal Law (1877), ch XIX, p 108 as: ‘an act not warranted by law or an omission to discharge a legal duty, which act or omission obstructs or causes inconvenience or damage to the public in the exercise of rights common to all Her Majesty’s subjects’. Likewise the definition in Archbold Criminal Pleading, Evidence and Practice (2005 edn) at para 31–40 was, save in its reference to morals, approved; the definition is: ‘A  person is guilty of a public nuisance (also known as common nuisance), who (a)  does an act not warranted by law, or (b)  omits to discharge a legal duty, if the effect of the act or omission is to endanger the life, health, property, morals, or comfort of the public, or to obstruct the public in the exercise or enjoyment of rights common to all Her Majesty’s subjects’.3 1 Licensing Act 2003, s 4(2). 2 Gambling Review Report 2001, Cm 5206, ch 2. 3 R  v Rimmington [2006] 1  AC  459 at para  36 per Lord Bingham, who gave the leading judgment concurred in by the panel.

1.34 Public nuisance (which amounts both to a crime and a tort) must be contrasted with private nuisance (which amounts only to a tort and which therefore could not fall within GA 2005, s 1(a)). A private nuisance is usually caused by a person doing on his own land a lawful act which extends to the land of his neighbour by: ‘(1) causing an encroachment on his neighbour’s land, when it closely resembles trespass; (2) causing physical damage to his neighbour’s land or buildings or works or vegetation upon it; or (3) unduly interfering with his neighbour in the comfortable and convenient enjoyment of his land.’1 1 Clerk & Lindsell on Torts (21st edn, 2014), para 20.06.

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Introduction to the Gambling Act 2005 1.35 The essence of the offence of public nuisance is that the injury complained of is suffered by the community or a significant section of it as a whole rather than by individuals separately.1 How extensive the injury must be to amount to a public nuisance is a question of fact and degree. In a leading case it was said that: ‘The sphere of the nuisance may be described generally as “the neighbourhood’; but the question whether the local community within that sphere comprises a sufficient number of persons to constitute a class of the public is a question of fact in every case. It is not necessary, in my judgment, to prove that every member of the class has been injuriously affected; it is sufficient to show that a representative crosssection of the class has been so affected for an injunction to issue.’2 The requirement that there be injury suffered by the community or a significant section of it before a public nuisance may exist has the consequence that there will be no public nuisance where a person commits a series of private nuisances (such as making offensive telephone calls or sending offensive communications by post) to a number of different individuals or to the same individual, since these will not, even considered cumulatively, cause common injury to a section of the public.3 It appears that a person’s conduct may amount to public nuisance at common law where he attracts people to his premises in numbers or in circumstances where they cause a nuisance or disturbance on neighbouring premises.4 1 R v Rimmington [2006] 1 AC 459 at para 37 per Lord Bingham. 2 A-G v PYA Quarries Limited (1957) 2 QB 169 at 184 per Romer LJ. In that case public nuisance was found where quarrying activities projected stones and dust and caused vibration which inconvenienced residents in the vicinity of the quarry. The activities affected approximately 28 houses of which the nearest was 35 yards and the furthest 260 yards from the quarry and a farm 250 yards from the quarry. Contrast R v Lloyd (1802) 4 Espinasse 209: a prosecution for public nuisance failed where attorneys with chambers at 14, 15 and 16 Clifford’s Inn were disturbed by the noise of a tinman carrying on his trade in the vicinity. It was held that there was no public nuisance, as the disturbance was confined to the inhabitants of three addresses and could be avoided by shutting windows. See also R v Madden [1975] All ER 155: a prosecution for a hoax 999 bomb call. The telephonist informed police, who informed premises security. Eight security men searched the premises for one hour before the hoax was discovered. Held: no public nuisance. The persons affected were not the public (ie ‘a considerable number of persons or a section of the public’). 3 This was one of the principal points determined by the House of Lords in R  v Rimmington [2006] 1 AC 459. 4 R v Moore (1832) 3 B & Ad 184 where the defendant ran a rifle range in Bayswater where customers shot at pigeons, causing a crowd to assemble outside and in neighbouring fields to shoot at the pigeons which escaped, causing noise, damage, disturbance and mischief. The defendant was convicted. In A-G v Corke (1933) 1 Ch 89 an injunction was granted to restrain nuisance where the defendant owner of a disused brick field licensed ‘travellers’, who caused nuisance off the premises by excreting on neighbouring land, causing noise nuisance on their return from the pub, damaging a neighbour’s fences and allowing horses to run loose, causing damage to fruit trees and property of a neighbour. It was held that it was no defence that the acts were not done on the defendant’s own land. R v Ruffell [1992] 13 Cr App Rep (S) 204 resulted from a conviction of causing a public nuisance by organising an ‘acid house party’. The principal nuisance was noise, but other consequences were traffic congestion and use of adjoining woodlands as a lavatory.

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Introduction to the Gambling Act 2005 1.36 Although the House of Lords in Rimmington affirmed the continued existence of the crime of public nuisance, the speeches acknowledged that the offence has become something of an anomaly in modern times, since most of the conduct formerly chargeable as the crime of public nuisance is covered by express statutory provision. Thus, for example, the Environmental Protection Act 1990 establishes nine categories of statutory nuisance (eg the state of premises, smoke emissions, fumes or gases from dwellings, noise from premises etc) and lays down a procedure for securing abatement, and provides for criminal proceedings and penalties. The speeches concluded that where Parliament has enacted legislation covering acts or omissions which might also amount to a public nuisance it would normally be proper to prosecute the conduct under the statutory provisions and not by way of a prosecution for the common law offence of public nuisance.1 1 R v Rimmington [2006] 1 AC 459 at para 30 per Lord Bingham.

1.37 Against this background, would it be permissible for a licensing authority to take into consideration matters which might amount to a public nuisance in exercising their powers in respect of premises licences (particularly to grant or refuse them, or to attach conditions to them) on the basis that prevention of public nuisance could be treated as part of the ‘crime prevention’ objective? It is suggested that the position (so far as applications for licences is concerned) is as follows: (1) If there is a real concern that the proposed premises might give rise to true public nuisance (as distinct from private nuisance) it will be permissible for a responsible authority or an interested party to raise this in their representations. (2) If, having considered the representations, the authority conclude that there is a real risk that the premises will give rise to a public nuisance, this could justify refusal of the licence or the attachment of conditions to mitigate the nuisance; the fact that public nuisance amounts to a crime would justify the authority having regard to it as part of the ‘crime prevention’ objective. (3) However, the authority should bear clearly in mind the approach laid down by the House of Lords in Rimmington, namely that where statutory provisions exist which are designed to control conduct or activities which might amount to, or give rise to, a public nuisance, then the conduct should normally be dealt with under those provisions and not by reference to the offence of public nuisance. In those circumstances the authority should normally, it is suggested, grant the licence and leave any damaging consequences to be dealt with under the relevant statutory provisions. In practice, therefore, it appears that public nuisance issues will only exceptionally be relevant to considerations relating to premises licences under Part 8 of the Act.

‘Fair and open’ gambling 1.38

The second licensing objective involves: ‘(b) ensuring that gambling is conducted in a fair and open way’. 81

Introduction to the Gambling Act 2005 It is clear that the achievement of the ‘fair and open’ licensing objective will flow, to a considerable extent, from the successful achievement of the ‘crime prevention objective’. If criminals can be kept out of gambling, the risks of fraud, cheating and oppressive behaviour will be much reduced. This objective is reflected in the Act itself and in particular in s 42 (the offence of ‘cheating’) and s 336 (giving the Commission the power to void a bet in circumstances where the bet was ‘substantially unfair’ according to criteria set down). The Commission has stated that it will adopt the following approach to ensuring that gambling is conducted in a fair and open way namely: (i)

it expects that not only is gambling fair in the way it is played but that the rules are transparent to players and they know what to expect;

(ii) it will ensure that the rules are fair and that easily understandable information is made available by operators to players about, for example: the rules of the game, the probability of losing or winning, and the rules and conditions on which business is conducted; (iii) it will ensure that operating and personal licences are issued only to those who are suitable to offer gambling facilities or work in the industry; (iv) it will ensure that appropriate advertising codes continue to be in place to prevent consumers from being misled; (v) it will require operators to make public the results of events and competitions on which commercial gambling takes place; (vi) it will ensure that the licences it issues, together with the licence conditions it imposes and the codes of practice it publishes, set appropriate standards of conduct for licence holders (for example, in respect of terms on which gambling is offered and the transparency of such terms) and appropriate technical standards for gaming machines and other equipment used in connection with any licensed activity; (vii) in the event of non-compliance, it will ensure that sanctions are imposed, or other appropriate steps taken, which among other things, deter future non-compliance on the part of the relevant licence holder and other licence holders more generally; (viii) it will ensure that the investigation and prosecution of offences under the Act – including the offence of cheating under s  42 of the Act – are prioritised by reference to the level of risk posed to the licensing objectives.1 The Licence Conditions and Codes of Practice contain a number of provisions designed to ensure that gambling is ‘fair and open’. For example Licence condition 7.1.1 requires that licensees must satisfy themselves that none of the terms on which gambling is offered are ‘unfair terms’ under the Consumer Rights Act 2015 and must provide an accurate summary of the contractual terms.2 See also, for example, Licence conditions 4.1.1 and 4.2.1 requiring licence holders who hold customer funds to ensure that they are held in a separate client bank account or accounts and to set out clearly whether customer funds are protected in 82

Introduction to the Gambling Act 2005 the event of insolvency, the level of such protection and the method by which this is achieved.3 1 Gambling Commission, Statement of principles for licensing and regulation, March 2015, para 5.13–5.20. 2 Gambling Commission, Licence conditions and codes of practice, July 2016 (effective from 31 October 2016), p 14. 3 Gambling Commission, Licence conditions and codes of practice, July 2016 (in force from 31 October 2016), p 12.

Protecting children and vulnerable persons 1.39

The third licensing objective is that of: ‘(c) protecting children and other vulnerable persons from being harmed or exploited by gambling’.

Children 1.40 A ‘child’ is an individual who is under 16 years of age.1 Part 4 of the Act is headed ‘Protection of Children and Young Persons’ and it contains a number of offences which will be committed whenever gambling facilities are made available to children (and, in some cases, young persons – ie individuals between 16 and 18 years). In addition, s 83 of the Act provides that an operating licence must be subject to the condition that money paid for the use of gambling facilities by a child or young person (whether by way of fee, stake or otherwise) must be returned to them, and that no prize may be awarded to a child or young person.2 The Commission has stated that it will adopt the following approach in pursuing the objective of protecting children: (i)

it has issued and will from time to time revise its Guidance to licensing authorities about how they can ensure that gambling premises are presented in such a way that access by children can be prevented;

(ii) it has issued and will from time to time revise a code about access to casino premises in accordance with s  176, and will require persons operating casinos to take measures, such as supervision of entrances and training of staff, to prevent access by children and young persons; (iii) it will require persons operating remote gambling to ensure that there are adequate age verification measures in place to prevent children and young persons gambling on their sites; (iv) it will work with the Committee of Advertising Practice to develop advertising codes on gambling and will ensure that these are backed by effective enforcement action if those codes are breached.3 The Licensing Conditions and Codes of Practice contain extensive provisions requiring operating licence holders to adopt policies designed to prevent or control access to gambling by children and young persons. 1 GA 2005, s 45(1). 2 GA 2005, s 83(1). 3 Gambling Commission, Statement of Principles for Licensing and Regulation, April 2016, paras 3.2.1–3.2.14.

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Vulnerable persons 1.41 The Act does not define ‘vulnerable persons’ and the Commission has not attempted to do so. However, it has stated that it considers that ‘vulnerable persons’ would include: •

people who spend more money and/or time gambling than they want to;

•

people who gamble beyond their means;

•

people who may not be able to make informed or balanced decisions about gambling, for example  because of health problems, learning disability, or substance misuse relating to alcohol or drugs.1

The Commission has stated that it will adopt the following approach in trying to protect vulnerable persons: (i)

it will issue codes that include social responsibility requirements, setting out minimum requirements and outcomes for operators and ordinary code provision which set out good practice. Operators may adopt alternative approaches to those set out in ordinary code provisions if they have actively taken account of the provisions and can demonstrate that an alternative approach is reasonable in the operator’s particular circumstances; or that to take an alternative approach would be acting in a similarly effective manner;

(ii) it will ensure that marketing practices (including advertising and inducements) do not exaggerate the chances of winning or encourage players to gamble more than they can afford or want to; (iii) it will work with other bodies to build and maintain knowledge about problem gambling and the measures that may be taken to reduce the prevalence of problem gambling and will secure regular prevalence data on gambling participation and problematic gambling behaviour; (iv) whilst it would normally rely on external research it may find it helpful to carry out, or commission, applied research on the effectiveness of various measures. In interpreting the available evidence, the Commission will take a precautionary approach. For example, caution may be justified where evidence is mixed or inconclusive; (v) the Commission’s focus will be in identifying best practice in protecting vulnerable people from being harmed or exploited by gambling, and, where appropriate, placing requirements on operators to put particular measures in place; (vi) it may impose sanctions in the event of non-compliance. The sanctions will be intended to deter future non-compliance on the part of the relevant licence holder and other licence holders more generally.2 1 Gambling Commission Statement of Principles for Licensing and Regulation, March 2015, para 5.25. 2 Gambling Commission Statement of Principles for Licensing and Regulation, March 2014, paras 5.27–5.32.

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Introduction to the Gambling Act 2005 1.42 It should be noted that the Act accords a particularly important status to ‘social responsibility codes’ produced by the Commission under s  24. Section 82(1) provides that an operating licence is to be subject to the condition that the licensee ensures compliance with any relevant social responsibility provision of a code of practice issued under s 24. That obligation is imposed not only on the licensee, but also on anyone employed or engaged by the licensee to perform an operational function under the Act. The significance of this is that under s 33(2)(b) the holder of an operating licence authorising the provision of facilities for gambling will nonetheless commit an offence under s 33 if the activity is carried on in breach of the terms and conditions of the licence. So breach of a social responsibility code which the licence holder is obliged to observe will render him guilty of a s 33 offence.

OPERATING LICENCES – FURTHER PROVISIONS 1.43 The types of operating licence which the Commission may issue are as follows:1 (a) a licence to operate a casino (a casino operating licence); (b) a licence to provide facilities for playing bingo (a bingo operating licence); (c) a licence to provide facilities for betting other than pool betting (a general betting operating licence); (d) a licence to provide facilities for pool betting (a pool betting operating licence); (e) a licence to act as a betting intermediary (a betting intermediary operating licence); (f)

a licence to make gaming machines available for use in an adult gaming centre (a gaming machine general operating licence for an adult gaming centre);

(g) a licence to make gaming machines available for use in a family entertainment centre (a gaming machine general operating licence for a family entertainment centre); (h) a licence to manufacture, supply, install, adapt, maintain or repair a gaming machine or part of a gaming machine (a gaming machine technical operating licence); (i)

a licence to manufacture, supply, install or adapt gambling software (a gambling software operating licence);

(j)

a licence to promote a lottery for a non-commercial society, a local authority or to act as an external lottery manager for such a society or authority (a lottery operating licence).2

All the above types of operating licences may, with the exception of (f) and (g) (adult gaming centres and family entertainment centres) be issued either as a non-remote licence or a remote licence. Adult and family entertainment centre licences can only be issued as non-remote licences. It follows that 85

Introduction to the Gambling Act 2005 (a)–(j) make provision for 18 different kinds of operating licence. In addition the Gambling Commission has developed certain other types of licences which may authorise licensed operators to offer certain types of gambling as ancillary to the principal type or types of gambling facility which they provide. Details of these are contained on the Gambling Commission’s website. There is a power to add a new kind of operating licence or to remove or vary the existing kinds.3 Although these 18 different kinds of operating licence are all in one section of the Act, namely s 65, the provisions imposing an obligation to hold a licence are to be found in different parts of the Act. The requirement to hold a casino operating licence, a bingo operating licence, a general betting operating licence, a pool betting operating licence and a betting intermediary operating licence is imposed by s 33, which makes it an offence to provide facilities for gambling unless a relevant operating licence is held. But s  33 does not apply to the provision of lotteries,4 nor to making gaming machines available for use,5 so that one must look elsewhere in the Act for the provisions imposing requirements to hold operating licences for lotteries and gaming machines. The requirement to hold a lottery operating licence is imposed by Part 11, and specifically s 258; the requirement to hold an adult gaming centre licence or a family entertainment centre licence is imposed by Part 10, and specifically ss 242 and 243. For the requirement to hold a gambling software operating licence see 1.67 below. Note also that the provision of a number of types of relatively small-scale gambling activities is made exempt from the requirement of an operating licence, though in some cases a permit from the licensing authority may be required.6 The second principal means of control over gambling, namely the requirement that before premises can be used for gambling a premises licence must be held is imposed by the interplay of s 37 with s 150, which is examined below. 1 2 3 4 5 6

GA 2005, s 65(2). GA 2005, ss 65(2)(j) and 98. GA 2005, s 65(4). GA 2005, s 34. GA 2005, s 35. Cases where gambling may be provided without an operating licence are: (i) equal chance gaming at a members’ club, a commercial club or a miners’ welfare institute (s 269); (ii) gaming in accordance with a club gaming permit (s 271); (iii) provision of equal chance gaming, subject to prescribed limits in premises holding an on-premises alcohol licence (s 279); (iv) provision of ‘prize gaming’ under a prize gaming permit (s 289); (v) provision of prize gaming at an adult gaming centre or licensed family entertainment centre (s 290); (vi) prize gaming in premises holding a bingo premises licence (s 291); (vii) equal chance prize gaming at fairs (s 292); (viii) private gaming and betting (s 296); and (ix) non-commercial gaming (s 298).

Remote gambling 1.44 One of the principal purposes of the Gambling Act 2005 is to gain control over new forms of on-line gambling which have emerged on media 86

Introduction to the Gambling Act 2005 such as the internet, interactive television, and land-based and mobile telephones etc. A distinction is made in the Act between ‘remote gambling’ and other forms of gambling (ie  non-remote gambling). The expression ‘remote gambling’ is defined to mean ‘gambling in which persons participate by the use of remote communication’ and ‘remote communication’ is defined to mean communication using (a) the internet, (b) telephone, (c) television, (d) radio, or (e) any other kind of electronic or other technology for facilitating communication.1 The definition is wide and will catch not only cyber-casinos functioning on the internet and ‘person-to-person’ internet poker sites, but also telephone betting between a bookmaker and his customers. Where gambling is remote gambling, a remote operating licence will be required to authorise it. Where gambling is non-remote gambling, a non-remote gambling operating licence will be required to authorise it.2 The distinction between remote gambling and non-remote gambling is enforced by the fact that it is not possible to have an operating licence which authorises both remote and non-remote gambling.3 This has consequences which may be unexpected. For example, a bookmaker running a betting office will typically take bets over the counter from customers visiting the premises and may also accept bets by telephone. He will require a non-remote general betting operating licence to carry out the first activity and, subject to the point noted below, a remote general betting operating licence to carry out the second activity. However, the Gambling Commission has fashioned a particular type of remote operating licence, (a remote general betting (limited) licence) authorising the holder of a non-remote general betting operating licence to accept bets by telephone or email also though there are certain restrictions relating to the value of bets taken and the way in which bets are processed.4 Note, however, that an operating licence may combine more than one of the kinds of gambling for which licences are available so that there could be (for example) a licence authorising operating a casino and providing facilities for bingo and general betting, or a licence authorising the provision of facilities for bingo and pool betting and the manufacture of gaming machines. It should be noted that by the interaction of ss 41, 243 and 67(1)(b) a remote operating licence is required not only for the provision of facilities for remote gambling but also, a different point, for the manufacture, supply, installation or adaptation of gambling software and the manufacture, supply, installation, adaptation maintenance or repair of a gaming machine or part of a gaming machine where, in either case, the activity is carried on by means of remote communication. 1 2 3 4

GA 2005, s 4. For the definition of a ‘remote operating licence’ see s 67. GA 2005, s 67(2). See Gambling Commission website: ‘Betting: Do I need a licence?’ and see Chapter 6 and Chapter 17.

Application 1.45 The power of the Gambling Commission to conduct an in-depth examination of applicants for operating licences is one of the principal methods by which the Commission will be able to promote the licensing objectives. All aspects of the applicant’s suitability, including their integrity, competence and financial and other circumstances may be investigated.1 The 87

Introduction to the Gambling Act 2005 Commission may not, in considering whether to grant an operating licence, have regard to the question whether there is a demand for the gambling facilities that would be provided under the licence.2 It has extensive powers to impose both general conditions on all operating licences, or all operating licences of a particular type,3 and individual conditions tailored to a particular licence.4 In addition, the Secretary of State can make regulations providing for a particular condition to be attached to operating licences of a particular type.5 1 2 3 4 5

GA 2005, s 70. GA 2005, s 72. GA 2005, s 75. GA 2005, s 77. GA 2005, s 78.

1.46 Provisions are made in the Act for the variation,1 surrender,2 lapse,3 forfeiture4 and review5 of an operating licence. The power to review a licence is of particular importance, since on completion of the review the Commission has extensive powers ranging from, at one extreme, issuing a warning or attaching an additional condition to the licence, to, at the other, suspending a licence, revoking it or imposing a penalty.6 1 2 3 4 5 6

GA 2005, s 104. GA 2005, s 113. GA 2005, s 114. GA 2005, s 115. GA 2005, s 116. GA 2005, s 117.

Requirement of operating licence 1.47 As noted above, the Act makes it an offence to provide facilities for gambling unless the person providing them holds an operating licence or one of a number of exceptions applies.1 In determining whether an operating licence is required the Act draws an important distinction between nonremote gambling and remote gambling. So far as non-remote gambling is concerned the test to determine whether an operating licence is required was enacted in the Gambling Act 2005 and remains unchanged. So far as remote gambling is concerned the test whether an operating licence is required was set out in the Gambling Act 2005 and it remains still an applicable test. However, an important amendment to the GA 2005 was made by the Gambling (Licensing and Advertising) Act 2014 and this introduces a second test to determine whether an operating licence is required to provide facilities for remote gambling. In summary the original (and continuing) test is that an operator will require a remote operating licence if any piece of ‘remote gambling equipment’ used in providing the facilities is situated in Great Britain. So far as the new test introduced by the 2014 Act is concerned an operator will require a remote operating licence to provide remote gambling facilities if the facilities are used in Great Britain. The first test is concerned with the location of the equipment used to provide the gambling; the second test is concerned with the location of the consumer of the gambling. The second test is discussed at 1.49–1.51 below. 1 GA 2005, s 33.

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Non-remote gambling 1.48 The provision of facilities for non-remote gambling without an operating licence will only amount to an offence ‘if anything done in the course of the provision of the facilities is done in Great Britain’.1 So provision of facilities for casino gaming in a casino in Great Britain or for betting in a betting office in Great Britain will obviously be caught and require a licence. 1 GA 2005, s 36.

Remote gambling 1.49 As enacted the provisions of the GA  2005 in respect of remote gambling are more complex. They appear designed to reproduce in statutory form the position which was generally regarded as representing the law under the previous legislation in cases where gaming was provided on the internet from websites outside the UK in a form which could be accessed by UK citizens. The conventional understanding described in the Introduction at 0.119 above was that, provided all the essential activities involved in the gaming took place on a server outside the UK, the gaming transactions were not caught by UK law, even though players in the UK participated in the gaming on computers there. As enacted the GA 2005 only applied to remote gambling (and a remote gambling operating licence was only required) if at least one piece of ‘remote gambling equipment’ used in the provision of the facilities was situated in Great Britain. It should be stressed that it was the place where the relevant ‘remote gambling equipment’ was located that was crucial and not the place where the gambling facilities were available for use. If one or more pieces of ‘remote gambling equipment’ were situated in Great Britain, a remote operating licence was required, even though the gambling facilities were provided for use outside the United Kingdom.1 If, however, no ‘remote gambling equipment’ was situated in Great Britain, the legislation did not apply to an operation (and no remote gambling operating licence was required), even though the facilities were provided for use either wholly or partly in the United Kingdom.2 As the Explanatory Notes to the GA 2005 comment: ‘…  where gambling takes place remotely, the person providing the facilities for gambling will not fall within the scope of the offence if he does not have the relevant equipment within Great Britain. This is so even if people within Great Britain can receive the gambling he is providing (eg over the internet). On the other hand, where at least one piece of remote gambling equipment is located in Great Britain, a person providing facilities for remote gambling will come within the scope of the offence. Therefore, a person commits the offence if any part of his remote equipment is located in Great Britain and he does not have the required authorisation or is not covered by one of the exceptions. This is so regardless of whether the gambling facilities are provided to people in Great Britain or outside’.3 1 GA 2005, s 36(3). 2 GA 2005, s 36(3). 3 Explanatory Notes to Gambling Act 2005, para 139.

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Introduction to the Gambling Act 2005 1.50 The expression ‘remote gambling equipment’ is defined to mean electronic or other equipment used by or on behalf of a person providing facilities for remote gambling— (a) to store information relating to a person’s participation in the gambling; (b) to present to participants in the gambling a virtual game, virtual race or other virtual event or process by reference to which the gambling is conducted; (c) to determine all or part of a result or the effect of a result; or (d) to store information relating to a result.1 However, electronic equipment such as a computer or a mobile phone which a customer uses to take advantage of remote gambling facilities will not count as ‘remote gambling equipment’ unless the equipment is provided to the user by the provider of the remote gambling facilities.2 1 GA  2005, s  36(4) and see Gambling Commission: Remote gambling equipment Guidance note, March 2008 (updated October 2014). 2 GA 2005, s 36(5).

1.51 So under the GA  2005 as originally enacted the presence of one piece of ‘remote gambling equipment’ within Great Britain brought the remote gambling within the Act and triggered the requirement for a remote operating licence.1 The Gambling (Licensing and Advertising) Act 2014 has not changed this. The combined effect of ss 33(1), (2) and s 36(3) (as amended by the Gambling (Licensing and Advertising) Act 2014) is that an operating licence will be required to provide remote gambling if at least one piece of remote gambling equipment (as defined) used in the provision of the facilities is situated in Great Britain. However the Act of 2014 amends s 36(3) of the 2005 Act to provide that a remote operating licence will be required to provide remote gambling facilities even though no remote gambling equipment is situated in Great Britain if the facilities are used in Great Britain (see GA 2005, s 36(3)(b) as introduced by the Act of 2014). Following an unsuccessful Judicial Review challenge to the legality of the 2014 Act the amended provisions came into force on 1 November 2014.2 1 See GA 2005, s 89(2) and (3), repealed by the Gambling Act 2005 (Repeal) (Remote Operating Licence and Credit) Regulations 2007 (SI 2007/2321). 2 See Gibraltar Betting & Gaming Association Ltd v Secretary of State for Culture, Media and Sport QBD (Administrative Court) 10 October 2014 [2014] EWHC 3236 (Admin), [2015] 1  CMLR  28, [2015]  LLR  6. The Administrative Court held that the regime set out in the Gambling (Licensing and Advertising) Act 2014 for the regulation of remote gambling in the United Kingdom was neither unlawful under domestic law nor a disproportionate restriction on the freedom to provide services guaranteed by TFEU art 56.

TYPES OF OPERATING LICENCE Casino operating licence 1.52 A  non-remote casino operating licence will be necessary to run a traditional casino located in a building. There are two types of non-remote 90

Introduction to the Gambling Act 2005 casino operating licence, namely a ‘non-remote 1968 Act casino operating licence’ (used to run a casino that was originally licensed under the Gaming Act 1968) and a ‘non-remote 2005 Act casino operating licence’ (used to run a casino licensed under the GA 2005).1 The holder of a non-remote casino operating licence can also obtain an ancillary remote operating licence to offer casino games by means such as hand held terminals in the casino provided the gaming takes place on single premises and is not linked to gaming in another set of premises.2 To run such a casino it will, in addition, be necessary for the proprietor to hold a casino premises licence.3 The operating licence and the premises licence in effect replace the single gaming licence necessary to run a casino under the previous legislation. A remote casino operating licence will be required to offer casino games via an online casino, mobile phone, TV or other online service that offers casino games. This includes Poker, Roulette, Blackjack and other casino games if at least one piece of ‘remote gambling equipment’ used in the provision of the facilities is situated in Great Britain or if the facilities are used in Great Britain (see 1.53 above). 1 Gambling Commission: Do I need a licence – casinos? 2 Gambling Commission: Do I need a licence – casinos? 3 GA 2005, s 150(1)(a).

Bingo operating licence 1.53 A non-remote bingo operating licence will be required to operate a physical bingo hall. The proprietor will also need a bingo premises licence.1 The two licences therefore replace the bingo club licence provided for under the previous legislation.2 In addition, certain forms of electronic bingo ticket in a terminal form (‘personal electronic terminals’ or ‘PETs’) are now used by some players in some bingo halls offering traditional games of bingo under the authority of a non-remote bingo operating licence. Such terminals involve the playing of remote bingo, but the Gambling Commission has developed a specific type of remote bingo operating licence, an ‘ancillary remote bingo operating licence’, to authorise the use of such terminals in the course of an ordinary non-remote bingo game.3 1 GA 2005, s 150(1)(b). 2 Gaming Act 1968, Sch 2, para 25(3). 3 Gambling Commission: Do I need a licence – bingo?

1.54 A  person wishing to run online bingo games on a website, through mobile technology, interactive TV services, or radio technology will require a remote bingo operating licence.1 Such a licence will also be required to provide games of linked bingo (where a draw in premises A  forms the basis of a game played in premises A, B, C, D  etc, the premises being linked by remote communication) and for the playing of the National  Game. 1 Gambling Commission: Do I need a licence – bingo?

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General betting operating licence 1.55 The general betting operating licence replaces the bookmaker’s permit provided for under the previous legislation.1  A  bookmaker’s permit was sufficient authority for making bets both physically (eg  by a bookmaker on-course or in a licensed betting office) and by means of remote communication such as by telephone or over the internet. The Gambling Commission has created a number of general betting operating licences to authorise and regulate the activities previously carried out under a bookmaker’s permit. An operator wishing to run a traditional betting office where bets are taken over the counter would be required to hold a ‘non-remote general betting (standard) licence’.2 If an operator running a betting office under such a standard general betting licence intends to use remote platforms (for example betting websites) to back or lay bets as part of running a betting shop they will also require a ‘remote general betting (standard) (remote platform) licence’. In addition if a bookmaker operating a betting office where bets are taken over the counter also takes bets by means of telephone or email they will require a remote general betting operating licence. What type of remote licence they will require depends upon the value of annual turnover in telephone or email bets and the way in which those bets are processed. If telephone and email bets are manually processed by the licence holder up to a maximum annual gross gambling yield of £550,000 the operator will be able to obtain a ‘remote general betting (limited)’ licence.3 If, however, bets are automatically processed by gambling software, or where any other means of remote communication is used to provide facilities for betting, or if the annual gross gambling yield for telephone and/or email bets exceeds £550,000 a ‘remote general betting (standard) operating licence’ will be required. An on-course bookmaker who bets with customers on the course will require a ‘non-remote general betting (limited)’ licence.4 Where an operator is offering a betting service by remote communication a remote general betting (standard) operating licence will be required provided either the service is being provided from remote gambling equipment situated in Great Britain or the betting facilities are used in Great Britain (see para 1.53 above). There are three types of remote general betting (standard) operating licence as follows: (i) a ‘remote general betting (standard) (real events)’ operating licence which is used where a promoter is offering betting on real events (as opposed to virtual events) by means of remote communication; (ii) a ‘remote general betting (standard) (virtual events)’ operating licence which is used where a promoter is offering betting on virtual games, races, events or other processes by means of remote communication; (iii) a ‘remote general betting (standard) (remote platform)’ operating licence which is required where an operator uses remote platforms (for example betting websites) to back or lay bets in the course of their business. Such a remote platform licence is appropriate if the operator uses remote platforms simply to back or lay bets: (a) as part of running a betting shop – so they will also need to apply for a non-remote general betting (standard) operating licence; 92

Introduction to the Gambling Act 2005 (b) as part of running an on-course bookmaking business – and so the operator will have to apply for a non-remote general betting (limited) operating licence; (c)

1 2 3 4 5

as part of a telephone betting business – and so the operator will also have to apply for a remote general betting (limited) operating licence.5

Betting, Gaming and Lotteries Act 1963, s 2, Sch 1. Gambling Commission: ‘Do I need a licence – betting?’ Gambling Commission: ‘Do I need a licence – betting?’ Gambling Commission: ‘Do I need a licence – betting?’ Gambling Commission: ‘Do I need a licence – betting?’

Pool betting operating licence 1.56 The pool betting operating licence under the Gambling Act 2005 replaces three different regimes covering pool betting under the previous legislation. Under the Betting, Gaming and Lotteries Act 1963, off-course pool betting (ie  essentially football pools) was governed by provisions requiring the promoter to be registered with the local authority.1 On-course different regimes governed pool betting on horse racing and on greyhound racing. Pool betting on horse racing was subject to a monopoly in favour of the Horserace Totalisator Board. This had the exclusive statutory right to carry on pool betting business on horse racing conducted on an ‘approved racecourse’.2 The Board could also authorise other persons to conduct pool betting on such horse racing. In addition, the Board could conduct betting ‘at Tote odds’, or could authorise other persons to do so.3 So far as greyhound racing was concerned, pool betting could be conducted by means of a totalisator on a dog racecourse for which a track betting licence was held under the 1963 Act.4 The betting had to be conducted by the occupier of the track or by a person authorised in writing by him. The bets could only be placed on dog races run on the track where the totalisator was located, or under a licensed inter-track betting scheme. 5 1 BGLA 1963, s 4(2) and Sch 2. 2 That is, a racecourse for which there was a certificate of approval granted by the Horserace Betting Levy Board under s 13. 3 BGLA 1963, s 14. 4 BGLA 1963, ss 4(1)(b) and 16. 5 BGLA 1963, ss 16 and 16A.

1.57 So far as off-course pool betting is concerned, a pool betting operating licence under the GA 2005 replaces the provisions for registration by a pools promoter with the local authority. A promoter wishing to conduct football pool betting in the traditional way (ie  by post) will be required to hold a non-remote pool betting operating licence.1 There is a specific provision2 that a non-remote pool betting operating licence is subject to an implied term permitting the use of postal services for the making of bets. A non-remote pool betting operating licence will also be required to conduct pool betting business on sports pools other than football pools and on racecourses (ie  horse racecourses and greyhound tracks – though for the Totesport monopoly on horse race pool betting see below).3 93

Introduction to the Gambling Act 2005 A  pools promoter who wished to permit the making of bets by on-line means, such as e-mail or SMS text messaging, could apply for a remote pool betting operating licence. 1 Gambling Commission: ‘Do I need a licence – betting?’ 2 GA 2005, s 93(7). 3 Gambling Commission: ‘Do I  need a licence – betting?’ The Commission have also expressed the view that a non-remote pool betting operating licence will be required to run ‘fantasy football’ type competitions. The basis of this view is not stated and it is suggested that each competition of this type needs to be looked at individually. Some ‘fantasy football’ competitions may amount to pool betting but others may amount to general betting under the interaction of ss 9 and 11 of the GA 2005.

1.58 So far as on-course pool betting on horse racing is concerned a ‘nonremote pool betting operating licence’ will be required to provide facilities for this. Currently however only Betfred trading as the Tote can carry on pool betting on horse racing in the United Kingdom.1 1 See Introduction 0.33 and Gambling Commission: ‘Do I need a licence – betting?’

1.59 So far as greyhound racing on-course is concerned, a non-remote pool betting operating licence will authorise the provision of pool betting on such racing on track.1 In order for pool betting to be provided on the track, a betting premises licence will be required.2 Such a premises licence will provide that pool betting may only be conducted by the holder of the licence or in accordance with arrangements made by him.3  A  betting premises licence for premises other than a dog track (eg a licensed betting office) will permit pool betting to take place in those premises. As originally enacted the GA 2005 provided that where pool bets were made on dog racing, the licence should require that the bets be taken in accordance with arrangements made with the occupier of the dog track on which the racing took place.4 This provision was introduced to give some financial security to the dog-racing industry, which is reliant upon track betting for income, but the provision lapsed in 2012.5 1 2 3 4 5

GA 2005, s 65(2)(d) and s 93. Under GA 2005, s 150(1)(e). GA 2005, s 179(1) and (2). GA 2005, s 180(1). GA 2005, s 180(4).

Betting intermediary operating licence 1.60 This is a new form of gambling authorisation provided for by the GA 2005 for which there was no true precedent in the previous legislation. The requirement of such a new form of authorisation came about because of the development of internet betting exchanges and bet broking sites where customers bet with each other over the exchange. It is believed that most such internet exchanges obtained bookmaker’s permits under the previous legislation and, to the extent that they did, the betting intermediary operating licence replaces the use of permits for that purpose. There are three types of betting intermediary operating licence namely: 94

Introduction to the Gambling Act 2005 (i) a non-remote betting intermediary licence: this allows the licensee to bring two or more betting parties together to make bets between themselves where the licensee has no liability for their bets. An example of a non-remote betting intermediary is a tic-tac at racecourses.1 (ii) a remote betting intermediary operating licence: this allows the licensee to bring two or more betting parties together to make bets between themselves through remote communication such as the betting exchange.2 (iii) a remote betting intermediary (trading rooms) operating licence: this licence allows the licensee to run a trading room from premises which hold a betting premises licence. The operator of a trading room sets up equipment in the licensed premises that enables people to bet with a third party such as a remote betting exchange or a remote fixed-odds betting operator over the internet or by other remote means.3 1 Gambling Commission: ‘Do I need a licence – betting?’ 2 Gambling Commission: ‘Do I need a licence – betting?’ 3 Gambling Commission: ‘Do I need a licence – betting?’

Gaming machines 1.61 There are three principal operating licences relating to gaming machines, namely a licence permitting an adult gaming centre, a licence permitting a family entertainment centre and a ‘gaming machine technical operating licence’, which is designed to authorise the activities of manufacturers and suppliers of such machines. Although these three are the principal licences relating to gaming machines the Gambling Commission has in fact developed a large number of different kinds of ‘gaming machine technical operating licence’. Most of the provisions relating to gaming machines are contained in Part 10 of the Act. The term ‘gaming machine’ is the subject of a complex and comprehensive definition.1 It departs fundamentally from the concept of a gaming machine contained in the previous legislation.2 Under that legislation there would only be a ‘gaming machine’ if a machine was used for ‘playing a game of chance’ and if there was a slot or other aperture for the insertion of money in the form of cash or tokens. In consequence, a machine used for betting or for entering a lottery was not a gaming machine under the previous legislation. Under the GA 2005 definition a machine will be a ‘gaming machine’ if it is designed or adapted for use by individuals to gamble (ie for gaming or betting or participating in a lottery).3 Moreover, a machine can be a ‘gaming machine’ even though there is no slot for cash or tokens. It follows that a machine such as a fixed odds betting terminal used for the making of bets on virtual events will now rank as a ‘gaming machine’. The GA 2005 definition provides, however, for a large number of exceptions where use of a machine for gambling will not have the effect that the machine is a ‘gaming machine’. 1 GA 2005, s 235. 2 Gaming Act 1968, s 26. 3 GA 2005, s 235 and s 3.

1.62 The requirement for a machine operating licence for an adult gaming centre or a family entertainment centre is imposed by a provision which makes it an offence to make a gaming machine available for use unless the use is in 95

Introduction to the Gambling Act 2005 accordance with an operating licence (or one of a number of other exceptions exists).1 The requirement for a gaming machine technical operating licence is imposed by a provision making it an offence to manufacture, supply, install, adapt, maintain or repair a gaming machine except under the authority of an operating licence (or where an exception applies).2 1 GA 2005, s 242. 2 GA 2005, s 243.

1.63 There are a number of premises other than licensed adult gaming centres and licensed family entertainment centres where gaming machines may be provided. These are discussed below. For the purpose of regulation, gaming machines are divided up into four primary categories: A, B, C and D. Two of these are divided into sub-categories: Category  B  machines are divided into B1, B2, B3, B3A and B4 machines, whilst provision is made for different types of machine to be categorised as D machines depending on their stake and prize value levels. There are five different types of such machine namely a money-prize machine, a non-money-prize machine (other than a crane grab machine), a crane grab machine, a coin pusher or penny fall machine and ‘a machine falling in any other case’ where there is a maximum charge for use of 10 pence and the maximum prize value is no more than £8 of which no more than £5 is a money prize.1 Each of these categories are dealt with at 1.83 below and more fully in Chapter 25. Provision is made setting out the number of machines of different categories which may be provided in different kinds of gambling premises. 1 Categories of Gaming Machine Regulations 2007 (SI 2007/2158), reg 3(3)–(5).

Adult gaming centre 1.64 Premises holding a gaming machine general operating licence for an adult gaming centre may provide a number of Category B gaming machines not exceeding 20% of the total number of gaming machines which are available for use on the premises and any number of Category  C  and  D  gaming machines.1 The adult gaming centre licence in effect replaces amusement with prizes machines permits granted under s  34(5E) of the Gaming Act 1968,2 and adds four higher value machines. In order to run a licensed adult gaming centre, the proprietor will also need to hold an adult gaming centre premises licence granted by the local authority.3 1 The limits are imposed by the interaction of the operating licence and the premises licence regimes. By s 237, ‘adult gaming centre’ is defined as premises for which an adult gaming centre premises licence under s 150(1)(c) is in force. To operate such premises, an adult gaming centre operating licence under s 65(2)(f) will be required. Section 172 (as amended) imposes limits on the types and numbers of machines on the premises licence. 2 Gaming Act 1968, s 34(5E) and Sch 9. 3 GA 2005, s 150(1)(c).

Licensed family entertainment centre 1.65 An operating licence for a licensed family entertainment centre will authorise the provision of any number of Category C and Category D gaming 96

Introduction to the Gambling Act 2005 machines.1 The licence in effect replaces the standard permit for amusement with prizes machines provided for by GA 1968, s 34. The licence holder will also need to obtain a family entertainment centre premises licence from the local authority.2 It should be noted that a proprietor who wishes to run a family entertainment centre which contains Category D gaming machines only may do so under the authority of a family entertainment centre gaming machine permit which is granted by the local authority.3 Where such a permit is held, neither an operating licence nor a premises licence will be required, though the machines provided are limited strictly to Category D  gaming machines. 1 The limits are imposed by the interaction of the operating licence and the premises licence regimes. By s  238 ‘Licensed family entertainment centre’ is defined as premises for which a family entertainment centre premises licence under s 150(1) (d) is in force. To operate such premises a gaming machine general operating licence for a family entertainment centre will be required under s 65(1)(g). Section 172 (as amended) imposes limits on the types and numbers of machines on the premises licence. 2 GA 2005, s 150(1)(d). 3 GA 2005, s 247 and Sch 10.

Gaming machine technical operating licence 1.66 A person commits an offence if he manufacturers, supplies, installs, adapts, maintains or repairs a gaming machine or part of a gaming machine, unless he holds a gaming machine technical operating licence.1 This form of operating licence replaces provisions under the previous legislation which prohibited the sale, supply or maintenance of gaming machines except under the authority of a certificate issued by the Gaming Board.2 The Gambling Commission has developed no less than six different types of gaming machine technical operating licences, three of them non-remote licences and three of them remote licences.3 The licences are a ‘non-remote gaming machine technical – full’ licence, a ‘non-remote gaming machine technical – supplier’ licence, a ‘non-remote gaming machine technical – software’ licence, a ‘remote gaming machine technical – full’ licence, a ‘remote gaming machine technical – supplier’ licence and a ‘remote gaming machine technical – software’ licence.3 Details of the authorisations provided by these licences and the circumstances in which they will be needed are set out on the Commission website. See also the discussion at Chapter 25 below. The Commission has also developed a so-called ‘linked gaming machine licence’ which may be granted where an operator holds, or is applying for, a full operating licence which allows them to provide facilities for gaming machines as part of a gambling business. In such a case they may be able to obtain a linked licence which allows them to supply, install, adapt, maintain or repair a gaming machine, or part of a gaming machine if, but only if, they are making that gaming machine available for use on their own licensed premises. The total cost of the carrying out of these activities must be no more than £50,000 per year. If that amount is exceeded they must apply for a gaming machine technical operating licence. A linked licence may be either a remote or a non-remote licence.3 Where an operator is applying for a non-remote gaming machine operating licence and wants to supply part of their service by email only 97

Introduction to the Gambling Act 2005 they can apply for an ‘ancillary remote’ licence. The concession applies to the supply by email only. If they supply part of their service by any other means of remote communication they will need one of the remote gamine machine technical licences set out above.3 1 GA 2005, s 243 and s 65(2)(h). 2 Gaming Act 1968, s 27. 3 Gambling Commission: ‘Do I need a licence – gaming machines (fruit machines, slot machines)?’

Gambling software operating licence 1.67 It is an offence to manufacture, supply, install or adapt gambling software, except under the authority of a gambling software operating licence.1 This is a form of operating licence introduced by the GA 2005, there being nothing equivalent under the previous legislation. The expression ‘gambling software’ is defined in s 41 to mean ‘computer software for use in connection with remote gambling’ but it does not include anything for use solely in connection with a gaming machine.2 The Gambling Commission has advised that a gambling software operating licence will be required if either: (i) an operator manufactures, supplies, adapts or installs gambling software which is used by operators licensed by the Gambling Commission whether they are based in Great Britain or not, and even though the operator’s company is located abroad; or (ii) an operator is based in Great Britain and manufactures, supplies, installs or adapts gambling software to or for remote operators not licensed by the Gambling Commission who are based abroad.3 There are both remote and non-remote versions of the gambling software licence.3 1 GA 2005, ss 41(1) and 65(2)(i). 2 GA 2005 s 41(2). 3 Gambling Commission: ‘Do I need a licence – gambling software?’

Lottery operating licence 1.68 The lottery operating licence replaces provisions under the previous legislation which provided for ‘societies’ lotteries’ and ‘local lotteries’. A  lottery operating licence cannot be granted for the purpose of running lotteries commercially, but may only be issued to a non-commercial society, a local authority or a person who is proposing to run a lottery for such a society or local authority as an external lottery manager.1 The scope of societies’ lotteries and local lotteries is discussed later in this chapter at 1.92– 1.93 below and in detail at Chapter 15. 1 GA 2005, s 98.

PERSONAL LICENCES 1.69 The control which the operating licence requirement gives to the Gambling Commission over gambling operators is strengthened by an 98

Introduction to the Gambling Act 2005 additional requirement that persons in important and influential positions within a gambling business will be required to hold a personal licence. This requirement gives the Commission the opportunity to carry out an in-depth investigation into the suitability and experience of people who will be engaged in running the operation and gives it a significant degree of control over them should the operation of the gambling give rise to concern. The personal licence provisions of the new legislation reflect, to some degree, the provisions of the previous legislation requiring specified categories of staff in licensed casinos and licensed bingo clubs to hold certificates of approval from the Gaming Board.1 There were five kinds of certificates of approval, depending upon the responsibilities of the individual concerned. In addition, under the previous legislation individuals seeking certification as external lottery managers and their employees2 were subject to careful scrutiny by the Board. In principle, applicants for a bookmaker’s permit could be questioned by the Betting Licensing Committee as to their suitability and experience and, although practice varied, the degree of scrutiny to which applicants were exposed had probably become more stringent in recent times, particularly where a permit was sought to conduct internet betting. 1 Gaming Act 1968, s 19. 2 Under Lotteries and Amusements Act 1976, s 9A.

1.70 The provisions relating to personal licences under the GA  2005 are set out in Part  6. There are essentially two kinds of personal licence, namely a licence authorising an individual to perform the function of a specified management office (a ‘personal management licence’) and a licence authorising an individual to perform a specified operation or function in connection with gambling (a ‘personal functional licence’). Examples of management offices which will require a management licence would be managing director of a company, finance director, compliance director or marketing director. Examples of operational functions which will require a functional licence would include a croupier, cashier or a person involved in the manufacture and supply of a gaming machine.1 The Commission will be responsible for deciding which management offices and which operational functions will require a personal licence in the case of any applicant for an operating licence. The Commission will then impose conditions on the licence to ensure that the offices are only held, and the functions are only discharged, by the holder of a personal licence.2 Where, however, the holder of an operating licence is a ‘small-scale operator’ as defined by regulations, it will not be possible to attach to his operating licence conditions requiring personal licences.3 1 GA 2005, s 127; s 80(5) and (6). 2 GA 2005, s 80. 3 GA 2005, s 129 and see the Gambling Act 2005 (Definition of Small-scale Operator) Regulations 2006 (SI 2006/3266).

1.71 Most of the Commission’s powers in relation to operating licences apply in the same way to personal licences.1 This means in particular that the Commission will have the power to review a personal licence and, following a review, to take one of a number of steps ranging from, at one extreme, the issuing of a warning to, at the other, the suspension or revocation of the 99

Introduction to the Gambling Act 2005 licence. The personal licence provisions therefore give to the Commission a formidable degree of control over key personnel in the gambling industry. It should also be noted that even though an individual may originally be granted a PML on the basis that they are, for example, responsible for the IT function of the gambling business, in the event of wider financial malpractice that may also be held to account for breach of the general conditions on the PML.2 1 GA 2005, s 128. 2 In Malizia and Chohan v The Gambling Commission, FTT, 13 November 2012, Judge NJ Warren observed that ‘the personal licences are personal; they are not restricted to a specific management office or function unless some sort of special condition is attached. Only general conditions were attached to the licences’.

APPEALS IN CONNECTION WITH OPERATING LICENCES AND PERSONAL LICENCES 1.72 The power of the Commission to determine applications for operating licences and personal licences, together with its power to attach conditions to such licences, is subject to an appeal process. As originally enacted the GA  2005 provided for a new Tribunal, the Gambling Appeals Tribunal, to deal with such appeals. The appellate functions of that Tribunal have now been taken over by the First-tier Tribunal.1 1 GA 2005, s 140 (as amended). The powers and procedures of the First-tier Tribunal are discussed at Chapter 8 below.

PREMISES LICENCES 1.73 The premises licence is the third major form of control over gambling provided by the GA 2005, the first being the operating licence and the second being the personal licence. It is the principal, though not the only, form of authority enabling premises to be used for gambling under the Act. It is an offence to use premises, or to cause or permit premises to be used, to operate a casino, to provide facilities for bingo, to make a gaming machine available for use, to provide other facilities for gaming, or to provide facilities for betting unless such use is authorised by a premises licence, or one of a number of other forms of authorisation provided by the Act applies.1 There are five types of premises licence, namely: •

a casino premises licence authorising premises to be used for the operation of a casino;

•

a bingo premises licence authorising premises to be used for the provision of facilities for the playing of bingo;

•

an adult gaming centre premises licence authorising premises to be used for making Category B gaming machines available for use;

•

a family entertainment centre premises licence authorising premises to be used for making Category C gaming machines available for use;

100

Introduction to the Gambling Act 2005 •

a betting premises licence authorising premises to be used for the provision of facilities for betting, whether by making or accepting bets, by acting as a betting intermediary, or by providing other facilities for the making or accepting of bets.2

1 GA 2005, s 37. 2 GA 2005, s 150.

1.74 A premises licence is not required in order to provide facilities for gambling on premises if the facilities are to be used only by persons who: •

are acting in the course of a business; or

•

are not on the premises.1

The Explanatory Notes give as an example of the first case a telephone call centre set up by a betting operator to accept telephone bets, and as an example of the second case, the use of premises to house a server which is used for the purposes of remote gambling.2 The effect is that the provision of remote gambling on and from premises will not normally necessitate obtaining a premises licence, but would do so if, for example, patrons attended the premises to take advantage of the facilities for gambling provided there. 1 GA 2005, s 37(6). 2 Explanatory Notes to Gambling Act 2005, para 149.

1.75 The basic approach of the Act is that premises may only be subject to one premises licence at a time, with the result that the type of gambling permitted will be limited to the particular type authorised by the licence.1 However, there are a number of exceptions to this rule (discussed at Chapter 10): for example, a track can be subject to more than one premises licence at a time, provided each licence relates to a different area of the track, and in a licensed casino various different categories of gaming machines may be provided in addition to the licensed gaming. The Act provides for a number of exceptional cases where gambling can be provided on premises without a premises licence, subject to certain conditions.2 1 GA 2005, s 152. 2 The exceptions are as follows: (i) bets may be accepted on a track under an ‘occasional use notice’: s 39; (ii) written authority may be given to authorise premises for the collection of pool bets and stakes: s 40; (iii) premises may be used for gambling under a temporary use notice under GA 2005, Pt 9; (iv) Category D  gaming machines may be used in premises holding a family entertainment centre gaming machine permit; (v) equal change gaming may be provided in a members’ club, a commercial club or a miners’ welfare institute (s  269); gaming may be provided in accordance with a club gaming permit (s 271); and gaming machines may be provided in accordance with a club machine permit (s 273); (vi) facilities for equal chance gaming may be provided, and no more than two Category C or D gaming machines may be provided, on premises for which an on-premises alcohol licence has effect: ss 278, 279 and 282; a Category C or

101

Introduction to the Gambling Act 2005 D gaming machine may also be provided on such premises in accordance with a licensed premises gaming machine permit: s 283; (vii) one or more Category D gaming machines may be made available for use at a travelling fair: s 287; (viii) ‘prize gaming’ may be provided, subject to specified conditions, on premises for which a premises gaming permit exists (s 289), in an adult gaming centre or a licensed family entertainment centre (s  290), in premises for which a bingo premises licence has effect (s 291), and at a travelling fair (s 292); (ix) no premises licence is required where the gaming or betting provided is private gaming or betting (s 296), nor where facilities are provided for noncommercial prize gaming or non-commercial equal gaming (s 298).

1.76 Detailed provisions are made in the Act for the granting of premises licences for one regional, eight large and eight small casinos. For a discussion see Chapters 10 and 14. 1.77 The body responsible for the grant of a premises licence is the ‘licensing authority’ (ie the local authority) for the area in which the premises are wholly or partly situated.1 Licensing authorities have a number of other functions in connection with gambling (noted at 1.13). Each authority is required to prepare a three-year licensing policy setting out the principles that they propose to apply in exercising their functions under the Act.2 The Gambling Commission is required to issue guidance to local authorities about the manner in which they are to exercise their functions,3 and the authority must have regard to such guidance.4 The Commission has published Guidance to Licensing Authorities (5th edn, September 2015). The Act lays down a somewhat complicated set of criteria which the licensing authority must adopt in deciding whether to grant a premises licence. They are under a duty to ‘aim to permit the use of premises for gambling’ but only in so far as they think it in accordance with any relevant Gambling Commission Code of Practice, in accordance with any relevant guidance from the Commission, reasonably consistent with the licensing objectives (subject to the two above matters) and in accordance with their own policy statement (subject to each of the three above matters).5 They are not entitled to have regard to the expected demand for the gambling facilities.6 The Act provides for representations on applications to be made by certain public authorities (‘responsible authorities’)7 and neighbouring individuals and businesses (‘interested parties’).8 These somewhat intricate provisions are discussed at Chapter 10 below. 1 2 3 4 5 6 7 8

GA 2005, s 159(2). GA 2005, s 349. GA 2005, s 25(1). GA 2005, s 25(1). GA 2005, s 153. GA 2005, s 153. GA 2005, s 157. GA 2005, s 158.

1.78 A  number of different kinds of conditions may be attached to premises licences. The Secretary of State may make regulations providing for specified conditions (‘mandatory conditions’) to be attached to premises

102

Introduction to the Gambling Act 2005 licences generally or to premises licences of a particular kind.1 In addition, the Secretary of State can make regulations providing for a specified condition (a ‘default condition’) to be attached to a premises licence unless the licensing authority excludes it.2 The licensing authority themselves may attach a condition to a licence and they may exclude a ‘default’ condition (in which case they may, though they are not obliged to, replace it by a different condition which they formulate specifically for the licence).3 1 GA 2005, s 167 and see the Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007 (SI 2007/1409). 2 GA 2005, s 168. 3 GA 2005, s 169.

1.79 There are a number of provisions for the variation,1 transfer,2 surrender,3 lapse and reinstatement,4 and review5 of a premises licence. The power to review the licence is of particular significance, since it gives to the licensing authority a powerful continuing means of control over the way in which gambling is conducted on licensed premises. Upon completion of a review, a licensing authority may take a number of steps, ranging from the addition, removal or amendment of a condition at one extreme to suspension or revocation of a licence at the other.6 1 2 3 4 5 6

GA 2005, s 187. GA 2005, s 188. GA 2005, s 192. GA 2005, ss 194 and 195. GA 2005, s 197. GA 2005, s 202.

Appeals against decisions of licensing authorities 1.80 The decisions of a licensing authority under the GA 2005 are subject to appeal, which lies to the magistrates’ court for the local justice area in which the premises are situated.1 The appeal provisions are dealt with at Chapter 8 below. 1 GA 2005, ss 206 and 207.

TEMPORARY USE NOTICES 1.81 Where the holder of an operating licence authorising a particular gambling activity wishes to use premises for a temporary period, he may, instead of seeking a premises licence, use the premises to carry on that activity under the provisions of Part 9 of the Act, which is headed ‘Temporary Use of Premises’. In summary, the procedure involves the giving of a notice by the holder of the operating licence to the relevant licensing authority, providing certain information as to the intention to use premises on a particular date or dates for the purposes of gambling. The notice must be served on the licensing authority and also on certain prescribed bodies which have a right to raise objections. If such objections are made, there will be a hearing by the licensing authority, which may add conditions to the notice or serve a 103

Introduction to the Gambling Act 2005 counter notice which prohibits the temporary use notice from taking effect. There is a right of appeal to the magistrates’ court in the same way as for premises licences. Regulations have been made setting out the procedure and specifying the form and content of the required notices.1 The regulations provide that, at present, a temporary use notice may only relate to the provision of facilities for equal chance gaming where those participating in the gaming are taking part in a competition which is intended to produce a single, overall winner. These provisions are intended, in particular, to facilitate the running of poker tournaments, and are discussed in Chapter 11. 1 The Gambling Act 2005 (Temporary Use Notices) Regulations 2007 (SI 2007/3157).

GAMING MACHINES 1.82 As has been noted above, the GA  2005 makes provision for three principal types of premises where gaming machines are to be the main attraction, namely licensed adult gaming centres,1 licensed family entertainment centres, and family entertainment centres holding a permit granted by the local authority.2 Full details of the general provisions summarised here are set out in Chapter 25 below. 1 GA 2005, s 150(1). 2 GA 2005, s 247 and Sch 10.

1.83 There are, however, a number of other gambling premises where gaming machines may be provided. Some of these are premises for which a premises licence exists; others are premises in which gambling can be carried on under some other exemption in the Act. Different categories of gaming machines may be provided in different kinds of premises and these categories must now be examined. The categories of gaming machine are laid down by regulations.1 The Regulations make a distinction between a ‘money-prize machine’ and a ‘non-money-prize machine’. A ‘money-prize’ means a prize in the form of cash or a cheque (or partly cash and partly cheque) or a document or object which can be exchanged for cash or a cheque (or partly cash and partly cheque). A ‘non-money-prize’ is any prize which is not a money prize. Subject to that gaming machines are categorised as belonging to Categories A, B, C or D. These will be described in reverse order. 1 GA 2005, s 236. Categories of Gaming Machines Regulations 2007 (SI 2007/ 2158).

Category D 1.84 The first sub-category is a money-prize machine where the maximum charge for use is no more than 10 pence and the maximum prize value is no more than £5. The second sub-category is a ‘non-money-prize’ machine (other than a crane grab machine) with a maximum charge for use of no more than 30 pence and a maximum prize value of no more than £8. The third sub-category is a ‘crane grab machine’ with a maximum charge for use of no more than £1 and a maximum prize value of no more than £50. The fourth sub-category is a ‘coin pusher’ or ‘penny fall’ machine with a maximum charge for use of no more than 20 pence and a maximum prize 104

Introduction to the Gambling Act 2005 value of no more than £20 (of which no more than £10 is in the form of a money prize). The fifth sub-category is any other type of machine with a maximum charge for use of no more than 10 pence and a maximum prize value of no more than £8 (of which no more than £5 is a money prize).

Category C 1.85 A machine is a Category C machine if the maximum charge for use is no more than £1 and the maximum prize value is no more than £100.

Category B 1.86 There are five sub-categories of Category B machine namely B1, B2, B3, B3A and B4. Taking these in reverse order a B4 machine has a maximum charge for use of £2 and a maximum prize value of £400. A  sub-category B3A machine may only be used to participate in a lottery made available in a members’ club or a miners’ welfare institute. There is a maximum charge for use of £2 and a maximum prize value of £500. A sub-category B3 machine has a maximum charge for use of £2 and a maximum prize value of £500. A  sub-category B2 machine has a maximum charge for use of £100 and a maximum prize value of £500. A sub-category B1 machine has a maximum charge for use of £5 and a maximum prize value of £10,000 (or £20,000 where the prize value depends wholly or partly on the performance of one or more other sub-category B1 machines).

Category A 1.87 A Category A machine is a machine which is not a Category B, C or D machine. 1.88 The principal entitlements to provide gaming machines in premises may be set out in a tabular form as follows: No Type of Licence/Authorisation

Entitlement

1

Adult gaming centre premises licence

Category B machines in a number not exceeding 20% of the total number of machines and unlimited Category C and D machines.1

2

Family entertainment centre premises licence

Unlimited Category C and D machines.1

3

Family entertainment centre with permit

Unlimited Category D machines.2

4

Regional casino premises licence using at least 40 gaming tables

Up to 25 Category A, B (any type excluding 3A), C or D machines per gaming table and a maximum of 1,250 gaming machines.1

105

Introduction to the Gambling Act 2005 No Type of Licence/Authorisation

Entitlement

5

Large casino premises licence using at least one gaming table (or a regional casino using fewer than 40 gaming tables)

Up to five Category B (any type excluding 3A), C or D machines per gaming table with a maximum of 150 gaming machines.1

6

Small casino premises licence using at least one gaming table.

Up to two Category B (any type excluding 3A), C or D machines per gaming table with a maximum of 80 gaming machines.1

7

Bingo premises licence

Category B machines in a number not exceeding 20% of the total number of gaming machine and unlimited Category C and D machines.1

8

Betting premises licence (including a track licence provided the holder also holds a pool betting operating licence)

Up to four machines of Category B, C or D (the Category B machines being any of B2, B3 or B4).1

1 GA  2005, s  172 as amended by the Categories of Gaming Machine Regulations 2007, reg 6. 2 GA 2005, s 247 and the CGMR 2007, reg 6.

Other use of gaming machines 1.89 There are a number of other cases where gaming machines of different categories may be provided on premises. These are as follows: (1) Club gaming permits granted by a licensing authority to a members’ club or a miners’ welfare institute authorise up to three gaming machines of Category B3A, B4, C or D.1 (2) Club machine permits granted to a members’ club, commercial club or miners’ welfare institute may permit up to three gaming machines of Category B3A, B4, C or D.2 (3) A  premises with an on-premises alcohol licence under the Licensing Act 2003 with a bar for consumption of alcohol on the premises has automatic entitlement to one or two gaming machines of Category C or D, provided— (i)

it notifies the licensing authority and sends the prescribed fee, and

(ii) it complies with a code of practice from the Gambling Commission about the location and operation of the machines.3 (4) Premises with an on-premises alcohol licence under the Licensing Act 2003 with a bar for the consumption of alcohol may apply for a licensed premises gaming machine permit authorising them to provide additional Category C or D machines as set out in the permit. Again, 106

Introduction to the Gambling Act 2005 the holder of the permit must comply with any code of practice issued by the Gambling Commission about the location and operation of the machines.4 (5) One or more Category D gaming machines may be made available at a travelling fair by way of ancillary amusement at the fair.5 (6) Finally, gaming machines may be made available without a premises licence, provided either they offer no prize,6 or the value of the prize given is no greater than the amount used to play the machine.7 1 2 3 4 5 6 7

GA 2005, s 271(3) as amended by the CGMR 2007, reg 6. GA 2005, s 273 as amended by the CGMR 2007, reg 6. GA 2005, ss 277, 278 and 282. GA 2005, s 283. GA 2005, s 287. GA 2005, s 248. GA 2005, s 249.

INCIDENTAL GAMING 1.90 In addition to gaming in the form of casino gaming and gaming in the form of bingo provided in premises for which a premises licence is held, certain types of gaming may be provided in clubs and on other premises without any requirement for an operating licence or a premises licence. These forms of gaming are as follows: (1) Equal chance gaming may be permitted in a members’ club, a commercial club or a miners’ welfare institute, provided the gaming complies with any regulations that may be prescribed and with certain conditions.1 (2)

A club gaming permit may be issued by a licensing authority authorising the provision of facilities for gaming in a members’ club or miners’ welfare institute.2 Such a permit will authorise gaming additional to that described in (1) above. The gaming may be ‘equal chance gaming’ (in which case there will be no prescribed limits on maximum stakes or prizes). In addition, certain banker’s games or games of unequal chance (currently pontoon and chemin de fer) are permitted by regulations to be played in clubs holding club gaming permits,3 thus reproducing the position under the Gaming Act 1968.

(3)

Certain forms of equal chance gaming are permitted in premises holding an on-premises alcohol licence granted under the Licensing Act 2003 where there is a bar at which alcohol is served for consumption on the premises.4 Certain conditions (eg limiting stakes and prizes) will have to be complied with.5

(4) There are a number of miscellaneous provisions permitting prize gaming to be provided in different kinds of premises. Prize gaming is gaming in which neither the nature nor size of the prize played for is determined by reference to— (i)

the number of persons playing, or

(ii) the amount paid for or raised by the gaming.6 107

Introduction to the Gambling Act 2005 The effect of this definition is that prizes will be determined by the operator before play commences and, since there can be no correlation between the prize values and numbers of players and the stakes raised, the tendency will be for prizes to be relatively modest. Prize gaming may be made available in the following circumstances: (a) On premises holding a prize gaming permit granted by the relevant licensing authority.7 Such a permit in effect reproduces prize gaming permits which were authorised under s  16 of the Lotteries and Amusements Act 1976. (b) Prize gaming may be permitted in premises which are a licensed adult gaming centre or a licensed family entertainment centre.8 In addition, prize gaming may be provided in premises for which a family entertainment centre permit has effect.9 (c) Prize gaming may be provided on premises for which a bingo premises licence has effect.10 (d) Prize gaming may be provided at a travelling fair by way of an ancillary amusement.11 (5) Private gaming and private betting (as defined) are permitted, as is the making or acceptance of bets otherwise than in the course of a business.12 In addition, the provision of non-commercial prize gaming subject to certain conditions is also permitted.13   1 GA 2005, s 269. For conditions see s 269(2)–(6) and the Gambling Act 2005 (Exempt Gaming in Clubs) Regulations 2007 (SI  2007/1944) and see also the Gambling Commission ‘Code of Practice for Equal Chance Gaming in Clubs and Premises with an Alcohol Licence’, August 2014.   2 GA 2005, s 271.   3 GA 2005, s 271(3)(c) and the Gambling Act 2005 (Club Gaming Permits) (Authorised Gaming) Regulations 2007 (SI 2007/1945).   4 GA 2005, s 279.   5 GA 2005, s 279(1).   6 GA 2005, s 288.   7 GA 2005, s 289(2) and Sch 14.   8 GA 2005, s 290.   9 GA 2005, s 290(2). 10 GA 2005, s 291. 11 GA 2005, s 292. 12 GA 2005, ss 296–298. 13 GA 2005, s 298.

LOTTERIES – THE PREVIOUS POSITION 1.91 The principal legislation governing lotteries prior to the GA  2005 was to be found in the Lotteries and Amusements Act 1976 and the National Lottery Act 1993. Neither statute contained a definition of a lottery. This was left to be interpreted by reference to decided case law, which established that a lottery was essentially a scheme for the distribution of prizes by pure chance where participants made some payment or contribution for their chance to take part.1 Lotteries were unlawful, except as permitted by the Acts of 1976 and 1993. The National Lottery Act 1993 authorised the running 108

Introduction to the Gambling Act 2005 of lotteries which were part of the National Lottery. The Act of 1976 created a number of types of permitted lottery as follows: (1) small lotteries for non-money prizes to be provided at entertainments (eg  bazaars, fetes, etc) where the proceeds of the entertainment (including the proceeds of the lottery) were to be used for purposes other than private gain;2 (2) private lotteries promoted— •

for members of a society (eg a club),

•

for persons all working on the same premises,

•

for persons all residing on the same premises,

where sale of tickets was limited to the relevant class; (3) societies lotteries and local lotteries. 1 Reader’s Digest Association Ltd v Williams [1976] 1 WLR 1109 approved in Imperial Tobacco Ltd v A-G [1981] AC 714, HL. 2 Lotteries and Amusements Act 1976, ss 3 and 15.

Societies lotteries 1.92 These were lotteries run by societies such as clubs which were run for charitable, sporting, cultural or other non-commercial purposes to raise money for the relevant purpose.1 The society had to be registered with the Gaming Board if the lottery activities of the society exceeded certain limits, or with the relevant local authority if they fell below those limits.2 The lotteries had to be promoted under a scheme approved by the society.3 There were detailed rules setting out the maximum price of tickets, the maximum value of prizes, the maximum value of tickets that could be sold in any one lottery and in all the lotteries promoted in any one year, and the percentage of the proceeds of a lottery that could be spent on the cost of prizes and expenses.4 1 2 3 4

Lotteries and Amusements Act 1976, ss 5 and 11. LAA 1976, s 5(3), (3A) and Schs 1 and 1A. LAA 1976, s 5(3)(c). See generally LAA 1976, s 11.

Local lotteries 1.93 These were provided by local authorities in accordance with schemes which they approved.1 There were limits on ticket prices etc which mirrored those imposed on society lotteries.2 1 LAA 1976, s 6. 2 See generally LAA 1976, s 11.

External lottery managers 1.94 Both society lotteries and local lotteries were subject to the provision that they could only be run by a society or local authority member or 109

Introduction to the Gambling Act 2005 employee, or by an external lottery manager certified by the Gaming Board.1 External lottery managers were professional managers who ran society and local lotteries in order to make a commercial profit for themselves, but who had to comply with the expenditure limits imposed on such lotteries by the legislation. 1 LAA 1976, s 9 and Sch 2A.

LOTTERIES UNDER THE GAMBLING ACT 2005 1.95 The GA  2005 applies to lotteries as follows: first, the new Act reproduces the position under the preceding legislation under which the National Lottery is governed by its own separate legislation. As has been noted in the Introduction at 0.1 subsequent changes have led to the Gambling Commission becoming the regulator of the National Lottery. The National Lottery is excluded (save in three respects) from the provisions of the GA 2005 by a provision which has the effect that participating in the National Lottery does not amount to ‘gambling’ for the purposes of the Act, so that none of the provisions of the Act apply to such a lottery.1 There are three exceptions: first, the definition of the expression ‘lottery’ provided by GA 2005, s 14 and Sch 2 is applied to the National Lottery Act 1993 (see GA 2005, s 15(5) and Sch 3); second, the offence of cheating at gambling created under s 42 does apply to the National Lottery;2 third, the provisions of s 335 providing that gambling contracts may be legally enforceable apply to the National Lottery.3 Apart from these provisions the National Lottery is governed by its own existing legislation. 1 GA 2005, s 15. 2 GA 2005, s 15(2). 3 GA 2005, s 15(2).

1.96 So far as lotteries within the GA 2005 are concerned, the provisions of the Act relating to them are to be found in three places. First, and by way of a major innovation, s 14 and Sch 2 of the Act provide a detailed definition of what a lottery is. The definition is complex. The Explanatory Notes state that the intention of the definition is: ‘… to give statutory effect to the broad definition which the courts have evolved over recent years, while making specific additional provision in relation to arrangements whose status under the current law has proved problematic or uncertain.’1 The statutory definition is considered in detail at Chapter 15 and no attempt will be made to embark on a discussion here. Where a scheme does amount to a lottery, the principal controls over it are contained in Part 11 of the Act (ss  252–265). It should be noted that the provision of facilities for a lottery does not amount to the provision of facilities for gambling under the general terms of s 33, because s 34 specifically provides that s 33 does not apply to the provision of facilities for a lottery. The controls on lotteries are contained in Part 11, and in particular in s 258, which makes it an offence to promote 110

Introduction to the Gambling Act 2005 a lottery unless either (i) the promoter holds an operating licence, or (ii) the lottery is an exempt lottery. 1 Explanatory Notes to Gambling Act 2005, para 67.

1.97 The reader is thus sent back to the third collection of provisions relating to lotteries, namely s  65(2)(j), which provides for the grant of operating licences to promote lotteries by the Gambling Commission, and to s 98, which sets out the conditions which must be imposed on a lottery operating licence. Crucially, s  98 provides that a lottery operating licence may only be issued to a non-commercial society, a local authority, or a person proposing to act as an external lottery manager on behalf of a noncommercial society or a local authority.1 The effect therefore in broad terms is to reproduce the position under the previous legislation, under which (apart from the National Lottery) the only significant public lotteries that could be run were society and local lotteries and the only people who could run them were societies, local authorities or external lottery managers on their behalf. Section 99 of GA 2005 goes on to impose a number of limits and conditions on society lotteries and local lotteries. These in many ways reflect the conditions which were imposed under the previous legislation, although in a number of respects limits have been relaxed so as to enable such lotteries to be run on a larger scale in order to compete with offerings such as the National Lottery. 1 GA 2005, s 98(1).

1.98 Provisions relating to exempt lotteries which may be run lawfully without a licence are contained in Sch  11. This provides for four types of exempt lottery. Such lotteries may be run without a lottery operating licence. Three of them mirror lotteries which were permitted under the previous legislation. The first, a so-called ‘incidental non-commercial lottery’, mirrors the ‘small lotteries incidental to exempt entertainments’ permitted under the previous legislation. The second, a ‘private lottery’, mirrors ‘private lotteries’ under the previous legislation. The third, a so-called ‘small society lottery’, mirrors certain forms of society lotteries which were permitted subject to registration under the previous legislation. It is designed to allow societies to run society lotteries on a modest scale without the need for a lottery operating licence under the new Act. 1.99 Finally, there is provision for a wholly new form of lottery, known as a ‘customer lottery’. This permits the occupier of business premises to promote lotteries in which tickets are sold or supplied to customers on the business premises.1 No profit may be made from the lottery,2 nor may it be advertised except on the business premises where the tickets are sold.3 No prize may exceed £50 in money or money’s worth (or partly the one and partly the other),4 and there may not be any rollover.5 There are various other conditions imposed. 1 2 3 4 5

GA 2005, Sch 11, para 20. GA 2005, Sch 11, para 21. GA 2005, Sch 11, para 22. GA 2005, Sch 11, para 27. GA 2005, Sch 11, para 28.

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Introduction to the Gambling Act 2005

ADVERTISING OF GAMBLING 1.100 The philosophy underlying the legislation of the 1960s (ie the Betting, Gaming and Lotteries Act 1963 and the Gaming Act 1968) was that gambling facilities should be permitted, but only to the extent necessary to satisfy ‘unstimulated demand’. Consistently with this philosophy, stringent controls were placed upon the advertising of gambling facilities. The more liberal philosophy underlying the GA 2005 has resulted in a considerable relaxation of the rules governing the advertising of gambling facilities, although at the cost of the introduction of some complexity. The principal provisions relating to advertising are to be found in Part 16 of the Act. A comprehensive regime is provided governing the regulation of advertising of on-shore and off-shore gambling and of gambling by broadcast and non-broadcast media. On a day to day basis much of the regulation is within the remit of the Committee of Advertising Practice (‘CAP’) and the Broadcast Committee of Advertising Practice (‘BCAP’). Changes to the advertising regime under the GA 2005 were introduced by the Gambling (Licensing and Advertising) Act 2014 which came into effect on 1 November 2014 (see 1.47 above). The provisions are discussed in detail at Chapter 18.

ENFORCEMENT OF GAMBLING CONTRACTS 1.101 An important, indeed revolutionary, feature of the GA 2005 is that it makes gaming and wagering contracts enforceable by ordinary actions at law. The relevant provisions are contained in GA 2005, Pt 17. Section 334 repeals the various provisions which rendered gaming and wagering contracts void and unenforceable.1 Gambling contracts will, speaking generally, now be enforceable like any other contracts subject to defences such as illegality.2 In addition, the Gambling Commission has the power to void a bet accepted by the holder of a general betting operating licence, a pool betting operating licence or a betting intermediary operating licence if it is satisfied that the bet was ‘substantially unfair’.3 Where the Commission has reason to suspect that it may wish to make an order voiding a bet, it may impose an interim moratorium during which any obligation to pay winnings on the bet will be suspended.4 1 2 3 4

Namely GA 1710, s 1; GA 1835; GA 1845, s 18; and GA 1892, s 1. GA 2005, s 335. GA 2005, s 336. GA 2005, s 338.

DEVOLUTION 1.102 The first and second editions of this book limited their consideration of the law of betting, gaming and lotteries to England and Wales and did not purport to deal with the law as it applied to Scotland. However, those editions noted that many of the legal concepts connected with gambling had developed in England and Wales along parallel lines with Scotland and that the statutes governing these activities applied, for the most part, to both 112

Introduction to the Gambling Act 2005 jurisdictions in common. Accordingly, those editions referred to decisions of the Scottish courts, where relevant, and it was suggested that they might be of service to Scottish readers as an introduction. Maintaining that approach, this edition deals principally with the position in England and Wales, and this is particularly so in its treatment of procedural matters. However it is hoped that the work generally (and especially Chapter 24, which provides an overview of matters of Scottish procedure) may be of assistance to the Scottish reader. 1.103 It should also be noted that by the time of the publication of the second edition in 2001 the Scottish Parliament and the Welsh Assembly had come into being and certain powers, principally, though not exclusively, under the National Lottery Act 1993, had been devolved. The second edition described the effects of these devolutions.

SCOTTISH DEVOLUTION 1.104 The GA 2005 applies in its entirety to England, Wales and Scotland.1 The overall architecture of the statute (namely, the provisions setting out the Gambling Commission, the provisions relating to operating licences and personal licences, the provisions relating to premises licences, provisional statements and temporary use notices, and the provisions relating to various kinds of gaming permit together with the lottery provisions) applies equally to England, Wales and Scotland. There are, however, certain procedural differences provided for in the case of Scotland, especially in connection with applications relating to premises licences, provisional statements, temporary use notices and permits, and these reflect the different procedural arrangements in Scotland (applications being made to Licensing Boards rather than to local authorities), together with the need to reflect different requirements, in particular in connection with the fixing of fees. So far as Scotland is concerned, therefore, there are two processes by which powers are devolved to the Scottish government: first, by various provisions in the GA  2005 providing that certain powers shall be devolved and, second, by the continued operation of various devolutions (principally relating to the National Lottery Act 1993) which have been effected under the provisions contained in the Scotland Act 1998. These provisions will need to be considered by any reader seeking to establish the legislative position in Scotland but they are not further considered here. 1 GA 2005, s 361(1) and (2); in addition, ss 43, 331 and 340 (and the related entry in Sch 17) apply to Northern Ireland: s 361(1).

WELSH DEVOLUTION 1.105 The provisions of the GA 2005 apply to Wales in the same way as to England, as does the delegated legislation made under the Act. However, certain powers and functions under the National Lottery Act 1993 are delegated to the Welsh government under various delegation provisions. These will need to be considered by any reader seeking to establish the legislative position in Wales but they are not further considered here. 113

Chapter 2 Some fundamental terminology

2.1 This chapter is concerned with some of the fundamental terminology used in the GA  2005. Part  1 of the Act is entitled ‘Interpretation of Key Concepts’ and comprises nineteen sections, of which fourteen are discussed in this chapter. The material is organised as follows. The Act itself groups the first five sections under the general title ‘Principal concepts’. Section  1 deals with the ‘Licensing objectives’ and these are discussed in Chapter 1. Section 2 deals with ‘Licensing authorities’ and these are discussed at Chapter 9 below. Section 3 contains a general definition of the expression ‘gambling’, and this is set out in this chapter at para  2.8. Section  4 deals with remote gambling and s 5 deals with the provision of facilities for gambling. These are discussed in this chapter at 2.254–2.258 and 2.259–2.276 respectively, but only after the meaning of the expressions ‘betting’ and ‘gaming’ have been considered in detail. In addition, remote gambling is treated fully in Chapter 17 below. 2.2 As the Act is laid out, ss  6–8 provide definitions of ‘gaming’ and allied concepts, ss 9–13 provide definitions of ‘betting’ and allied concepts and ss 14–15 deal with the definition of a ‘lottery’. The Act marks a departure from the previous legislation in providing detailed definitions of each of the three major forms of gambling – gaming, betting and lotteries. The legislation which it replaces provided a definition of ‘gaming’ (Gaming Act 1968, s 52), but no definition of ‘lottery’ or ‘betting’ (although ‘pool betting’ and ‘fixed odds betting’ were defined by s  10 of the Betting and Gaming Duties Act 1981 and this definition was applied to the Betting, Gaming and Lotteries Act 1963 by s 55 of that Act). 2.3 The definition of ‘lottery’ contained in s 14 is a long and complex one and is given a full exposition in Chapter 15. The present chapter deals with the definitions of ‘betting’ and ‘gaming’, reversing the order to deal with betting first. This is because betting can sometimes form a constituent part of the activity known as ‘gaming’ and it seems best therefore to treat it first. Accordingly, the chapter proceeds as follows. After setting out the general definition of ‘gambling’ contained in s 3, it proceeds to deal with ‘betting’. The word ‘betting’ is defined in s 9 which is headed ‘Betting: general’. This provides a basic definition of the concept of ‘betting’. This definition builds 115

Some fundamental terminology upon certain undefined terms, and in particular provides that ‘betting’ means ‘making or accepting a bet’ on certain matters. The word ‘bet’ is not further defined, so that existing conceptions of what a ‘bet’ is remain relevant. The section appears designed to provide a definition which covers all forms of betting, including wagering, betting at fixed odds, spread betting and pool betting.1 However, this primary definition is then qualified by s 10 and extended by s 11. Section 10 provides that activities such as spread betting and index betting which would normally fall within the definition of ‘bet’ as ordinarily understood2 are not to be included within the meaning of ‘bet’ for the purposes of s 9 if they amount to a ‘regulated activity’ within the meaning of s  22 of the Financial Services and Markets Act 2000. The purpose of this exclusion is to ensure that such bets are governed by the Financial Services Authority under that Act rather than falling within the regulatory framework of the GA 2005. The effect of this section is considered at 2.59–2.100 below. Section 11 expands the meaning of ‘betting’ to include certain types of prize competition that have, for reasons that are explained below, hitherto not been regarded as giving rise to the making of ‘bets’. Such prize competitions will now be brought within the definition of ‘betting’ laid down by s 9 and become s 9 bets for all purposes.3 This chapter deals first with the s 9 definition of ‘general betting’ and then with the s 11 extension. A  discussion of the ‘regulated activity’ exemption contained in s  10 then follows. Next, the chapter deals with the definition of ‘pool betting’ contained in s 12. This provides that ‘betting’ as defined in s 9 (as extended by s 11) is pool betting if certain specified conditions are met; if those conditions are not met, the betting will remain general betting under s 9 and it may amount to wagering, fixed odds betting or spread betting. 1 Paragraph 58 of the Gambling Act 2005 Explanatory Notes states as follows: ‘This section defines “betting” for the purposes of the Act. The present law contains no statutory definition of “betting” as an activity. In broad terms it is taken to mean the staking of money or other value on the outcome of a doubtful issue. Betting can be at fixed odds, by means of a spread, or by way of pool betting’. 2 See City Index Ltd v Leslie [1991] 3 WLR 207, CA. 3 Standing Committee B, 9 November 2004 PM, col 52: ‘Betting of the kind defined in clause 11 is not a different and separate kind of betting from that described in clause 9; it is clause 9 betting’, Mr Richard Caborn.

2.4 There then follows a discussion of the relationship between ‘betting’ and ‘lotteries’. Prior to the enactment of the GA 2005 there had emerged a reasonably clear distinction between bets in the form of wagers and lotteries and it is suggested below that this distinction remains a valid one under the GA 2005. However, it appears that under the new legislation it may be possible for an arrangement to amount to a lottery within s  14 and also either pool betting within s 12 or betting in the form of a prize competition under s 11. If such a case should arise, s 18 provides a means of determining whether the arrangements should be treated as a lottery or as betting for the purposes of the GA 2005, and this issue is next discussed. Finally, attention is paid to the concept of a ‘betting intermediary’ contained in s 13 of the Act. 2.5 The focus then switches to ‘gaming’. The definition of ‘gaming’ contained in s 6 is modelled on the definition previously contained in s 52 of the Gaming Act 1968 with modifications to update it and, in particular, 116

Some fundamental terminology to deal with the phenomenon of on-line and internet gaming. Although the definition is a detailed one, it nonetheless builds, as did the 1968 Act definition, upon concepts such as ‘playing a game of chance’, which are not themselves defined. The s 6 definition is set in the context of a discussion of the underlying concept of what is involved in playing a game. The statutory definition is then analysed in detail. Following that, there is a discussion of the associated concepts of ‘casino game’ and ‘equal chance gaming’ contained in ss 7 and 8 respectively. Next, attention is given to s 16, which provides a line of demarcation where a transaction amounts both to betting and gaming within the statutory definitions, and to s 17, which provides a line of demarcation where a transaction amounts both to the playing of a game of chance and the conduct of a lottery. 2.6 It should be noted before parting company with the ‘gaming’ definitions that the definition of ‘gaming machine’ is contained, not in Part 1 of the Act, but in s 235, which falls within Part 10. This definition is discussed in Chapter 26 on gaming machines. 2.7 Before turning to consider the specific definitions in detail, a word should be said about the approach which courts adopt to the interpretation of gambling legislation. As has been noted, the definitions themselves contain a number of undefined terms such as ‘playing a game of chance’ and ‘bet’, which are left to be understood in their ordinary sense. In adopting this approach the Act is applying principles which have been a long-standing feature of gambling legislation in the UK for reasons which are set out in the leading speech of Lord Wilberforce in Seay v Eastwood1 in 1976. The case involved the question whether a specific form of gambling (the provision of fruit machines in betting offices) was ‘betting’, but the approach to the interpretation of gambling legislation and the rationale underlying that approach are of general application. Lord Wilberforce said: ‘Legislation against, or controlling, gaming, wagering and betting is many centuries old in the United Kingdom. With only moderate success Parliament has endeavoured to keep up with the enormous variety of these activities which has arisen from the ingenuity of gamblers and of people who exploit them. It is impossible to frame accurate definitions which can cover every such variety; attempts to do so may indeed be counter-productive, since each added precision merely provides an incentive to devise a variant which eludes it. So the legislation contains a number of expressions which are not, or not precisely, defined: bet, wager, lottery, gaming are examples of this. As to these, while sections appear in various Acts saying that a particular activity is, or is deemed to be, within the word, the general meaning is left to be decided by the Courts as cases arise under the common law. The process, and I think it a very sound one, is then for Magistrates, using their local knowledge, experience of the world and common sense, to give a sensible interpretation of the expressions used, subject to control of their decisions by a Court itself experienced in deciding this type of question. When, as should rarely occur, higher Appellate Courts are required to review these cases, they should, in my opinion, endorse decisions which they can see have been reached, and confirmed in this way. Redefined analytical tools are not suitable instruments in this context’ (at 155). 117

Some fundamental terminology This statement of principle is of cardinal importance and has been repeatedly applied by the courts in recent years.2 The principle amounts to an exhortation to courts to interpret gambling legislation in a common-sense and not overly analytical way. Although the GA  2005 provides definitions of a number of fundamental concepts such as ‘bet’, ‘gaming’ and ‘lottery’, the principle is likely to remain relevant especially where those definitions themselves incorporate concepts such as ‘bet’, ‘playing a game’, ‘sport’ etc. It is one thing, however, to state the principle; it is another thing to apply it. In deciding whether an activity is betting, gaming or a lottery, it may often be essential to analyse the true nature of the contractual relationship into which the parties are entering. During the decade or so before the enactment of the 2005 Act, as various new forms of gambling appeared, it often proved necessary to decide whether these should be categorised as betting or gaming or a lottery or some combination of these forms. For example, it was necessary to decide whether ‘fantasy football’ competitions were betting and, if so, whether it was pool betting or fixed odds betting, and it was necessary to decide whether Keno and a number of variants such as ‘Lucky Choice’, ‘49’s’ and ‘Pronto’ should be characterised as betting or lotteries. In addition, the question whether the activities on fixed odds betting terminals should be characterised as betting or gaming became a major source of controversy between the bookmaking industry and the Gaming Board.3 Such problems of characterisation may arise under the 2005 Act and the principles of interpretation laid down in Seay v Eastwood will remain relevant in dealing with them. Some attempt has, however, been made to pre-empt debates about the proper characterisation of emergent forms of gambling by provisions which are designed to ‘future proof’ the Act. In particular, as will be seen, the definition of ‘gaming’ in s 6 is subject to a provision enabling the Secretary of State to provide that a specified activity is or is not to be treated as a game and thereby to ensure that it is, or is not, caught by the definition of ‘gaming’. Likewise, the definition of ‘lottery’ contains a provision enabling the Secretary of State to provide by regulation that an arrangement of a specific kind is to be or not to be treated as a lottery for the purposes of the Act.4 1 [1976] 3 All ER 153 HL. 2 See: (1) One Life Ltd v Roy [1996] 2 BCLC 608 (Ch). (2) Re Senator Hanseatische Verwaltungsgesellschaft mbH  [1996] 4  All ER  933, [1997] 1 WLR 515, 528, [1996] 2 BCLC 562 (CA Civ). (3) Re Guardearly Ltd; The Secretary of State for Trade and Industry v Freedom International (UK) (14 March 1997, unreported) (Ch Companies Ct). (4) Re Vanilla Accumulation Ltd, Chancery Division (1998) Times, 24 February. (5) Commissioners of Customs & Excise v News International Newspapers Ltd [1998] V & DR 267, 142 SJ LB 130 (CA Civ). (6) Re Delfin International (SA) Ltd; Re Delfin Marketing (UK) Ltd (orse Re a Company No  004355 and 004356 of 98) (9  September 1998, unreported) (Ch Companies Ct). (7) Re Delfin International (SA) Ltd; Re Delfin Marketing (UK) Ltd [2000] 1 BCLC 71 (Ch Companies Ct). (8) Prize Provision Services Ltd v Revenue & Customs [2006]  LLR  85 (VAT and Duties Tribunal, 18 August 2005). (9) R  (on the application of Bushell) v Newcastle upon Tyne Licensing Justices [2006] UKHL 7, [2006] 2 All ER 161, [2006] LLR 303, HL.

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Some fundamental terminology (10) The Queen (on the application of William Hill Organisation Ltd) v The Horserace Betting Levy Board [2012]  EWHC  2039 (Admin), [2012] 1  WLR  3504. The case was cited in argument in the appeal to the Court of Appeal [2013]  EWHC  Civ 487, [2013] 1  WLR  3652 but was not referred to by the Court of Appeal. 3 See 0.123. 4 GA 2005, s 14(7); see also GA 2005, Sch 1, para 9 providing that the Secretary of State may make regulations providing when a specified activity is to be treated as paying to participate in a competition, and Sch 2 para 9 providing for regulations to provide when a specified activity is to be treated as paying to enter a lottery.

GAMBLING: THE PRIMARY DEFINITION 2.8

In the GA 2005 ‘gambling’ means:

(a) gaming (within the meaning of s 6), (b) betting (within the meaning of s 9), and (c) participating in a lottery (within the meaning of s  14 and subject to s 15).1 The Act’s definition of ‘betting’ is dealt with at 2.9 to 2.165 below and the definition of ‘gaming’ at 2.166 to 2.252 below. The definition of ‘lottery’ is dealt with separately in Chapter 15. 1 GA 2005, s 3.

BETTING: GENERAL 2.9 Section 9 provides a basic and general definition of the expression ‘betting’, and this will be the starting point in considering whether any transaction amounts to ‘betting’ under the Act. This general definition is then qualified and extended by ss  10, 11 and  12. Section 10 provides that a transaction which would amount to a ‘bet’ under s 9 will not be treated as a bet for the purposes of the Act if it is a ‘regulated activity’ under the Financial Services and Markets Act 2000. Its effect, therefore, is to restrict the meaning of the term ‘bet’. Section 11, by contrast, extends the meaning of the term ‘bet’ so that it applies to certain types of competition which, for reasons explained below, have not hitherto been regarded as amounting to ‘betting’. Finally, s 12 defines the circumstances in which ‘betting’ which falls within the s 9 definition is to be treated as ‘pool betting’ as distinct from ordinary wagering or fixed odds betting. The exposition which follows changes the order and deals first with s 9 (general betting), next with the extended concept of betting under s 11, next with the exemption of bets falling within the Financial Services and Markets Act 2000 under s 10 and then with pool betting under s  12. Following that, there is a discussion of the possible overlap between betting and lotteries, and this leads to a consideration of s 18 which is designed to provide a demarcation line in cases where such an overlap exists. 119

Some fundamental terminology 2.10

Section 9 provides as follows: ‘Betting: general (1) In this Act “betting” means making or accepting a bet on— (a)

the outcome of a race, competition or other event or process,

(b) the likelihood of anything occurring or not occurring, or (c)

whether anything is or is not true.

(2) A  transaction that relates to the outcome of a race, competition or other event or process may be a bet within the meaning of subsection (1) despite the facts that— (a) the race, competition, event or process has already occurred or been completed, and (b) one party to the transaction knows the outcome. (3) A transaction that relates to the likelihood of anything occurring or not occurring may be a bet within the meaning of subsection (1) despite the fact that— (a) the thing has already occurred or failed to occur, and (b) one party to the transaction knows that the thing has already occurred or failed to occur.’ As has been noted, the definition is wide enough to catch all forms of betting commonly carried on, namely wagering, betting at fixed odds, spread betting and pool betting.1 The use of the undefined term ‘bet’ is capable of applying to any and all of these activities. At the outset, however, it is useful to divide the making of ‘bets’ into two basic kinds, namely bets which are (in the perhaps slightly dated terminology) ‘wagers’ and bets which are ‘pool bets’. The essence of a ‘wager’ is that it involves a bi-lateral contract between two parties, A and B, in which each agrees to pay to the other a stake (usually a money stake) upon the resolution of some uncertain matter (often a future event) as to which they have chosen to take opposite sides. The essence of a ‘pool bet’ is that it involves a number of bettors agreeing to lodge stakes with the pool’s promoter on terms that each of them will make forecasts or assertions about the outcome of some issue (almost invariably, in practice, a future event), the pool to be distributed to those who have been most successful in their forecasts or assertions. Dictionary definitions habitually treat the words ‘bet’ and ‘wager’ as interchangeable. Thus the Shorter OED2 defines the noun ‘bet’ as: ‘The staking of money etc on the outcome of a doubtful issue; a wager; the sum of money etc staked’, and it defines the verb ‘bet’ as ‘Stake (an amount of money etc) against another’s in support of an affirmation or on the outcome of a doubtful event; risk an amount of money etc against (a person) by agreeing to forfeit it if the truth or outcome is not as specified.’ The same Dictionary defines the noun ‘wager’ as: ‘a thing (esp. a sum of money) laid down as a stake; A betting transaction.’ And it defines the verb ‘wager’ as: ‘stake (esp. a sum of money) on the outcome of an uncertain event or on an undecided or unresolved matter; bet (a person) a certain amount that something is or will be so.’ It seems clear that the word ‘bet’ in s  9 is to 120

Some fundamental terminology be understood in a similarly broad sense, although, as has been noted, betting will only amount to ‘pool betting’ for the purposes of the Act if it satisfies the definition contained in s 12. The discussion of s 9 which follows is principally directed to bets which are wagers, though where appropriate the application of s  9 to ‘pool betting’ is noted. Pool betting is discussed separately at paras 2.101 to 2.122 below. As has been noted, the dictionary definitions treat the words ‘bet’ and ‘wager’ as synonymous. Likewise, many judicial dicta treat the two expressions as synonymous. The legal distinction, however, is this: if a bet is to be classified as a wager it must be possible for each party thereto to win or lose.3 This need not necessarily be the case with pool bets. The classic definition of ‘wager’ was given by Hawkins J in the case of Carlill v Carbolic Smoke Ball Co4 (1892) as follows: ‘It is not easy to define with precision what amounts to a wagering contract, nor the narrow line of demarcation which separates a wagering from an ordinary contract; but, according to my view, a wagering contract is one by which two persons, professing to hold opposite views touching the issue of a future uncertain event, mutually agree that, dependent upon the determination of that event, one shall win from the other, and that other shall pay or hand over to him, a sum of money or other stake; neither of the contracting parties having any other interest in that contract than the sum or stake he will so win or lose, there being no other real consideration for the making of such contract by either of the parties. It is essential to a wagering contract that each party may under it win or lose, whether he will win or lose being dependent on the issue of the event, and therefore, remaining uncertain until the issue is known. If either of the parties may win but cannot lose, or may lose but cannot win, it is not a wagering contract.’5 1 See 2.3. 2 Shorter Oxford English Dictionary (5th edn, 2003). 3 The view has been expressed that the effect of the definition of ‘betting’ in the GA 2005, s 9 is to abolish the previous rule that a contract could not be a ‘wager’ if one party could not win or if one party could not lose (Chitty on Contracts (31st edn), Vol II, para 40-006 (Sir Gunter Treitel)). The writer would respectfully disagree. The term ‘wager’ is not defined in the GA  2005 and the definition of ‘betting’ in s 9 incorporates without further definition the expression ‘bet’. To the extent that a wager is a species of bet it must, the writer would contend, have the characteristics recognised at common law as essential to a wager (which includes the characteristic that either party may win or lose) and s 9 does not change this. 4 (1892) 2 QB 484 at 490. 5 See also A-G  v Luncheon and Sports Club Lmd [1929]  AC  400 at 406, per Lord Dunedin: ‘… the essence of a bet is that on the determination of an event in one way the first party wins and the second loses; on the determination the other way the first party loses and the second party wins’; and Ellesmere v Wallace [1929] 2 Ch 1 at 49: ‘I  draw attention to certain features stated to be essential to the existence of a wagering contract. There must be two persons (or groups of persons) to the bet. One (the loser) must be bound to pay money (or money’s worth) to the other (the winner) if an event happens. The other (the loser) must be bound to pay money (or money’s worth) to the one (the winner) if the event does not happen. The bet is decided according as one event does or does not happen’, per Russell LJ.

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Some fundamental terminology 2.11 The above is the classic definition of what constitutes a ‘wager’,1 and it forms the starting point for any discussion of this form of bet. It is suggested, however, that the definition needs to be expanded and qualified in certain respects. 1 The definition has been extensively applied; see Ellesmere v Wallace [1929] 2 Ch 1 and Tote Investors Ltd v Smoker [1968] 1 QB 509.

2.12 First, the definition suggests that wagers always take place on the issue of a future uncertain event. Such wagers are, of course, very common indeed, but not all wagers necessarily take place on future events. It is possible for parties to wager on an existing fact (eg which of two mountains is the highest, or which of two rivers is the longest). In Hampden v Walsh1 the parties wagered on whether the earth is flat (or, perhaps more accurately, whether the curvature of the earth could be successfully demonstrated).2 It is also possible to have a wager on a past event (eg  whether Oxford or Cambridge won the Boat Race in 1900). In Pugh v Jenkins3 the parties wagered on which horse had won the Derby, the wager being made the day after the race had been run. The court held that the wager was not on the ‘event of the race’ (ie its result) but ‘on the accuracy of the information respecting it that either party possessed’ (per Lord Denman CJ). This analysis appears to treat the wager as being one relating to a present fact (ie whether the information was accurate or not), but since that question could only be determined by reference to the historical facts, the distinction may be somewhat artificial. 1 (1876) 1 QBD 189. 2 The court stated that money was staked ‘on an event to be ascertained’, though it did not state what the event was. Possibly it was the opinion of the appointed judge on the question whether the curvature of the earth had been successfully demonstrated. 3 (1841) 1 QB 631.

2.13 Second, it is possible to have wagers on matters which are not ‘events’ in any ordinary or simple sense of the term. It is possible, for example, for parties to wager on whether a share price will go up or down, or whether a share price will be above or below a particular level on a particular date. It is perhaps a somewhat strained use of language to refer to the future level of a share price as an ‘event’; rather, it is the result of a number of interacting factors and events, including the number of purchases and sales of the share during a particular period. It is also possible for parties to wager on the movement of an index such as a share index or currency index. An index has been defined as ‘a number showing the variation (increase or decrease) in the prices or values of some specified set of goods, shares etc since the chosen “base” period (often represented by the number 100)’.1 Again, it is not easy to regard the level of an index as being an ‘event’ in any normal sense. In the case, for example, of a share index, movements will depend upon the movements in price of a large number of shares over a period of time. Some individual shares may go up; some individual shares may go down; some may stay the same. And those share movements will themselves be the results of a large number of sale and purchase transactions in the individual shares. The index movements are an artificial mathematical aggregation of price movements which are themselves based upon a large number of unknown transactions. But it is still possible to wager on an index, even though the 122

Some fundamental terminology bettors will know nothing of the ‘events’ (ie the transactions) underlying the index movements, or of the changes in price of the individual shares, and they do not bet on those factors – they bet on the mathematical aggregation of those factors. 1 A Supplement to the Oxford English Dictionary (1976) Vol II, p 281.

2.14 In the case of pool betting, as in the case of a wager, the parties may bet upon a future event. In Tote betting, for example, bets are made upon the results of a horse race or greyhound race. However, in certain kinds of pool betting, such as football pools, it is possible to regard the bets as being made, not upon some event external to the pool competition, but upon the accuracy and relative success of the entries made by the competitors.1 Likewise, in the case of some ‘fantasy’ competitions which have been held to be pool bets (see 2.42 to 2.44 below) the competitors have been held to be betting upon the issue whether the fantasy teams or portfolios selected by them will win the greatest number of points under the competition’s rules and will therefore rank highest at the end of the competition.2 1 See Customs & Excise Commissioners v Dodd [1961] 1  WLR  144 where LloydJacob J (at 151) described football pool betting as follows: ‘In the known form of football pool betting wherein an entrant indicates his own forecast of the outcome of specified matches, it is accurate to state that he stakes his entry money on the chance of his forecast being more accurate than those of other entrants, thus backing himself against the field … The results of the specified matches will determine the accuracy or otherwise of the forecast which the entrant has made, but the event upon the issue of which success or failure of the bet falls to be determined is the entrant’s forecast, and not the match results themselves.’ 2 See News International Newspapers Ltd v Commissioners of Customs & Excise [1998]  V  &  DR  267, CA, a case involving a fantasy fund manager competition, where it was said that: ‘… in the case of the competition … it is at least a significant feature of the activity that one or more of those who enter wins upon the result of a future event which at the time they enter the competition is of an uncertain nature in that if it turns out that a competitor’s selection turns out to obtain the highest number of points or the greatest value he will win but if it turns out that another or other competitors achieve a higher score or value he will lose’ (per Beldam LJ). See also per Sir Christopher Slade: ‘If (as is my view) the participants are to be taken as betting on the result of a future event, the only relevant event must be the rankings which the portfolios achieve in accordance with the rules of the competition.’

2.15 In summary, it seems that it is possible for parties to wager upon any future, present or past event or events, or upon any future present or past state of affairs. Perhaps it would be simplest to say that a wager can be made upon any issue which the parties may choose for the purpose, and this meaning is reflected in the Shorter OED’s definition of the noun ‘bet’ as: ‘The staking of money etc on the outcome of a doubtful issue’. One consequence of this understanding of the term is that parties to a wager may only formally take up opposing positions on the issue in dispute. It is not necessary for either party actually to believe that the outcome of the event or issue wagered on 123

Some fundamental terminology will be the outcome upon which he has made a stake.1 This fact becomes very apparent where a bookmaker lays odds against each horse in a horse race and is willing to take bets from bettors who wish to back individual horses. The bookmaker may well believe that one horse (perhaps the favourite) is likely to win, but he will still make bets against that horse, backing the field against it. Such bets are clearly wagers. For a discussion of bookmaker betting, see 2.54. It is suggested that a similar analysis could be applied to pool betting and that in principle parties could make pool bets upon any future, present or past event or upon any issue selected for the purpose. In practice, however, it appears that pool bets are almost invariably made upon future events in some form or other (or, as noted at para 2.14 above, are to be regarded as made on the relative success of the entries themselves). 1 See Halsbury’s Laws of England (4th edn, 2002) Re-Issue Vol 4(1), Betting, Gaming and Lotteries, para 11: ‘The statement that the parties to a contract by way of wagering must profess opposite views does not mean that either party is required to avow to the other that he holds a particular opinion upon the event in question. Thus, in an ordinary horse race, a man who simply accepts the odds offered and says no more than that he does so, unquestionably makes a bet, and usually a wager. Where the parties do differ is in their hope, expectation or, possibly, opinion that the issue will belie the odds.’

2.16 The third qualification necessary to the Carlill definition of ‘wagering’ (see 2.10 above) relates to the suggestion that the stake which is won or lost will change hands only upon the determination of the event wagered on. This implies that all wagering is carried out on credit. This is, of course, far from the case. Most bookmaking is conducted on cash terms and the stake is paid when the bet is made. The agreement, therefore, is that if the bettor loses he will forfeit the stake and if he wins he will recover it together with any winnings to which he may be entitled. Pool betting may also be conducted on cash or credit terms (see 2.114 below).

Wagers 2.17 Certain specific aspects of the idea of a ‘wager’ must now be examined. First, as the Carlill formula makes clear, it is the essence of a wager that the only interest which the contracting parties have lies in the stake or stakes that will be won or lost. If either of the parties has an interest in the contract apart from the sum he may win or lose, then the contract will not amount to a wager. It is this consideration that distinguishes wagers from contracts of insurance, where the assured has an interest which the policy is designed to protect. The distinction between insurance and wagers has been explained in a leading work as follows: ‘Both insurance contracts and wagering contracts are aleatory. The risk of loss in a wager, however, is created by the making of the bet itself, and the sole interest of each party consists of the sum or stake he will either win or lose, whereas typically the function of insurance is to protect the assured in respect of the risk of loss to an interest he possesses independently of the conclusion of the insurance contract.’1 124

Some fundamental terminology The fact that the parties to a wager have no interest other than that created by the wager itself can, on occasions, be relevant in distinguishing between a wager and a competition involving no gambling element. Where a competition takes the form of an arrangement in which participants pay a money entry fee in exchange for the chance to win a money prize depending upon the outcome of the competition, the arrangements may have some of the characteristics of a wager (ie there is the possibility of paying or receiving money, depending upon the outcome of a future event). However, it may be possible to distinguish such competitions from wagers on the basis that the competitors’ entry payments are, at least in part, paid to the competition promoter as consideration for his running the competition, whilst the prizes offered by the promoter are consideration paid to the entrants as consideration for their entries. This matter is discussed in more detail at 2.22 below but, speaking generally, such an analysis would lead to the conclusion that the arrangement was not a wagering contract because the money payments paid by the parties were not bare stakes but were consideration for the competition itself. 1 MacGillivray on Insurance Law (12th edn, 2012), para 10012.

Wagers and the exercise of skill 2.18 Although many wagers are made on events such as horse races or dog races where the exercise of skill or knowledge as to form, conditions etc can affect the chances of winning, there is no reason in principle why a wager cannot be made on an event or issue which gives no opportunity for the exercise of skill or knowledge. None of the dictionary or statutory definitions set out above suggests that skill is a necessary element in the making of a wager, and indeed the definition of ‘bet’ adopted by the Royal Commission on Lotteries and Betting in 1933,1 namely, ‘a promise to give money or money’s worth upon the determination of an uncertain or unascertained event in a particular way. It may involve the exercise of skill or judgment …’ makes clear that skill may be, but need not be, involved. 1 Cmd 4341.

2.19 Experience too shows that many events on which people wager give no scope for the exercise of skill. Thus, two people may wager upon which of two flies will first alight on a table, or which of two raindrops will first run down a window. These are perfectly valid and lawful wagers, but no skill is likely to be involved. 2.20 As to legislation, although this has for many years imposed detailed regulation about the places where parties may wager and the circumstances under which wagering conducted as a business may be carried on, no attempt has ever been made to control the events upon which parties may wager. Indeed, legislation has consistently recognised that parties may and do wager on purely random events where no skill can be involved. The reader is referred to the discussion in Chapter 15 of the history of lotteries where reference is made to 18th-century legislation prohibiting the laying of wagers on the drawing of tickets in the State Lotteries.1 This amounted to 125

Some fundamental terminology clear recognition that there could be wagers placed upon a random draw of numbers. When the National Lottery was introduced under the provisions of the National Lottery Act 1993, steps were taken to prevent bookmakers betting on the National Lottery draws by way of business.2 This prohibition is reproduced by the GA 2005, which by s 95 provides that a general betting operating licence, a pool betting operating licence and a betting intermediary operating licence must be subject to the condition that nothing may be done in reliance on the licence in relation to a bet on the outcome of a lottery which forms part of the National Lottery. The prohibition on National Lottery betting led commercial bookmakers to introduce a number of ‘numbers’ bets, which they marketed under various brand names such as ‘Lucky Choice’ (bets on the Irish National Lottery) and ‘49’s’ (bets on random draws specifically generated for the purpose of the betting). Subsequent numbers bets in betting offices have included ‘Rapido’ (bets upon random draws generated by RNGs). For a discussion of numbers betting and the distinction between numbers betting and lotteries see 2.131 to 2.146. 1 See 9 Geo II c 29 (1737): ‘… no Person or persons … shall lay any Wager relating to the drawing of any Ticket or Tickets in the said Lottery ….’. 2 Amendments to the Betting, Gaming and Lotteries Act 1963, Sch  1 (repealed) introduced by the National Lottery Act 1993 provided that renewal of a bookmaker’s permit (or betting agency permit) must be refused if the applicant or an employee had since the permit was granted received or negotiated a bet on the outcome of any lottery forming part of the National Lottery. There was a matching ground upon which a bookmaker’s permit could be cancelled for the same reason. There were also amendments to the regime governing the events upon which the Totalisator Board could take bets. By the Horserace Totalisator Board (Extension of Powers) Order 1996 (SI 1996/2906) the Board was empowered to take bets under s 1 of the Horserace Totalisator and Betting Levy Boards Act 1972 on the outcome of any lottery conducted outside the United Kingdom. So recognition was given to the possibility of betting on a lottery draw. Finally, the Horserace Totalisator Board Act 1997 amended s  1(1)(b) of the 1972 Act so that the Board might ‘by way of business … receive or negotiate bets on any event made otherwise than by way of pool betting, except bets on the outcome of any lottery forming part of the National Lottery …’ Thus, the Board could take bets or make a book on any lottery which did not form part of the National Lottery. Again, this recognised the possibility of a bet on a totally random event where no skill was involved.

2.21 By contrast, as the law stood before the enactment of the GA 2005, pool betting, if it was to be lawfully conducted, was required to give scope for the exercise of skill. This was due to the provisions of the Betting, Gaming and Lotteries Act 1963, Sch 2, para 13(a), which provided that pool betting business carried on by a registered pool promoter must: ‘(a)  …  take the form of the promotion of competitions for prizes for making forecasts as to sporting or other events …’ In the case of Singette v Martin1 the House of Lords held that there is necessarily an element of skill in the making of ‘forecasts as to sporting or other events’ such as were contemplated by para 13(a) and the effect of that provision was to impose a requirement that pool betting should give scope for the exercise of skill. In their Lordships` view, football pools, for example, gave scope for the exercise of skill even though some participants may have no skill or knowledge and others who have such skill or knowledge may choose not to use it. The fact that the pools gave scope for the exercise of skill was sufficient for the purposes of satisfying the statutory requirement. It appears that one effect of the GA 2005 may be to remove the 126

Some fundamental terminology requirement that pool betting should involve the exercise of skill: see the discussion at 2.119 to 2.120 below. 1 [1971] AC 407.

Wagers and competitions 2.22 We now turn to consider the distinction between a wager and a competition. A wager is essentially a bilateral contract between two persons or groups of persons1 to win or forfeit stakes depending upon the outcome of an uncertain issue. A  competition, typically, involves a promoter who agrees to award a prize or prizes to any competitor(s) who carry out, or best carry out, a task laid down by him. The distinction between the two activities was worked out in detail by the Court of Appeal in the case of Earl of Ellesmere v Wallace2 where the Jockey Club offered to allow horse race owners to enter their horses for races on Newmarket Heath, to organise the races and provide the facilities for them, and to award prizes to the winners. There was an entry charge for each race which remained payable in whole or in part if an owner, having entered a horse, withdrew it before the race was run. The defendant nominated a horse for two races but, when the time came for starting, the horse did not run. The defendant declined to pay the entry fees, and when sued for them raised the defence that the contract into which he had entered with the Jockey Club was a contract by way of gaming or wagering and therefore, as the law then stood, unenforceable under the Gaming Act 1845, s 18. At first instance this contention succeeded. Clauson J, relying on the definition of ‘wager’ in Carlill v Carbolic Smoke Ball Company, noted that it was an essential feature of a wagering contract that each party under it may win or lose. In the judge’s view, the defendant risked the loss of his entrance fee on the issue of the race and stood to win the prizes offered by the Jockey Club for the race winner; for its part, the Jockey Club stood to lose the money which it put up for prizes in the races, and it stood to win the defendant’s entrance monies from him. There was thus a wagering contract which could not be enforced. 1 For an analysis of a wager as a bilateral group contract see Ellesmere v Wallace [1929] 2 Ch 1 at 52 per Russell LJ. The view has been expressed that the effect of the definition of ‘betting’ in the GA 2005, s 9 is to remove the requirement that there could only be two parties to a wager, or that, if there were more than two, they had to be divided into two sides (Chitty on Contracts (31st edn), Vol II, para 40-006 (Sir Gunter Treitel)). The writer would respectfully disagree. The GA 2005 provides no definition of the tern ‘wager’. The definition of ‘betting’ in s  9 incorporates without further definition the expression ‘bet’. To the extent that a wager is a species of bet at common law it must, the writer would contend, continue to have those characteristics which made it a bet at common law (which includes the fact it is essentially a bilateral contract), and the GA 2005, s 9 does not change this. 2 [1929] 2 Ch 1.

2.23 The Court of Appeal, however, held that this analysis was wrong. In its view there were essentially two reasons why the contract between the defendant and the Jockey Club could not be classed as a wagering contract. First, it was wrong to regard the Jockey Club as in any sense ‘losing’ to the defendant the prize money which it put up for the races. The Jockey Club did not ‘lose’ that money by reason of the defendant winning (if he won); rather, it had to pay the money in any event to whichever competitor won the race. 127

Some fundamental terminology ‘It is not right to say that the Club agreed in each race to pay to the Defendant if his horse won a prize of 200 sovereigns. The Club agreed to provide and pay away £200 if the race was run at all and upon any result of the race. The Club loses 200 sovereigns, not as against the Defendant or upon any event to be determined with the Defendant. Clauson  J  asks the question, “Does the Club stand to lose anything, and if so, what?” and answers it: “Obviously in the case of the Peel Handicap the 200 sovereigns added money and in the case of the Selling Plate 200 sovereigns.” This is too wide an inference to be drawn from the contracts between the Club and the Defendant. The Club loses once and for all, if either of the races are run, £200. Whether the Defendants’ horse won or another of those nominated was an eventuality of no importance to the Club. The Club agreed to provide for holding the races and to pay to the winner £200.’1 1 [1929] 2 Ch 1 at 21 per Lord Hanworth MR.

2.24 The second factor which distinguished the facts before the court from a wager was the fact that in a wager the only interests which the parties to the wager have lie in the stakes. As the definition in Carlill makes clear, neither of the contracting party to a wager may have any interest in the contract other than the sum or stake he will win or lose, there being no other real consideration for the making of the contract by either of the parties. In the case before it, the court concluded that both the parties had interests other than their interests in the agreed money payments, (ie  the prizes and the entry fees). The Jockey Club provided a race course and extensive facilities for the running of races under the Rules of Racing. It was, so the court concluded, essential for the successful carrying on of its business that race meetings should be well attended by the public, and in order to secure such attendance it was necessary to have an entry for every race. The money prizes were an inducement to racehorse owners to enter their horses in the Club’s races, that being of benefit to the Club. The defendant on the other hand obtained opportunities of testing the speed and endurance of his horses against other racehorses on properly kept racecourses at race meetings officially conducted under the Rules of Racing. Thus, the prizes were valuable consideration offered to owners to enter their horses, and the entrance fees were valuable consideration paid by the owners to the Club in exchange for providing facilities for the races and the races themselves. ‘The provision of such prizes is in no way dependent upon the result of the races; the prizes are given in any event. It cannot, therefore, be said that the Jockey Club is staking its money on the result of the races, which is an essential element of a wagering contract. In the next place the payment by the Defendant of the entrance fee for the plate is in no way dependent upon the result of a race. It has to be paid by him whether his horse wins or loses or whether it runs in the race or not. When paid it becomes the property of the Jockey Club, and is not returned to the winner, who receives the prize and nothing more.’1 (Per Lawrence LJ at 37). ‘… the Learned Judge erred in holding that the Defendant lost money in the event of his horse not winning the race. His liability to pay the £5 128

Some fundamental terminology or £2 did not depend on his not winning the race. It was the price of the right to run his horse in the race.’2 (Per Russell LJ at 57). In many cases this analysis will provide a clear distinction between a wager, and a competition in which a promoter provides and runs the competition offering prizes to secure entries in exchange for entry fees which may be regarded as payments made to the promoter as consideration for providing the competition. In such a case, the promoter’s obligation to pay the prizes to the winners results from his running the competition, and not from the resolution of any contingency between him and any of the individual competitors.3 1 [1929] 2 Ch 1 at 37 per Lawrence LJ. 2 [1929] 2 Ch 1 at 57 per Russell LJ 3 In a case concerning ‘fantasy’ competitions, News International Newspapers Ltd v Commissioners of Customs & Excise, discussed at 2.43 below, the VAT and Duties Tribunal at first instance found that the competitions did not involve betting because, amongst other things, the entrance fees paid by competitors were consideration for the provision by the promoter of the competition and the prizes (see [1995] V & DR 274). This finding was, however, subsequently set aside by the Court of Appeal in respect of one of the competitions (see [1998] V & DR 267). This issue was not relevant to the proper characterisation of the other competitions.

Betting and choice 2.25 Attention must now be given to the question whether it is an essential element of a ‘bet’ that the persons making the bet should exercise freedom of choice over the factors which will determine whether they will win or lose. There is no doubt that in a typical bet such freedom of choice is found. A  bettor making a wager on a horserace selects the horse which he will back and decides whether he will back it to win or to be ‘placed’. A  bettor completing a football pool coupon selects the matches which he predicts will win the highest points in the pool. It may thus be said that the making of a bet normally involves backing some forecast or affirmation or proposition. But is this an essential element of a bet? Suppose, for example, a bookmaker distributed in exchange for stakes betting slips with selections of horses pre-printed on them; or suppose customers could pay stakes on a 49’s draw in exchange for betting slips containing numbers randomly generated, would the fact that the customer has made no choice affect the conclusion that the transaction was a bet? 2.26 There is no modern authority directly on the point, although arguments based on dictionary definitions and from dicta in some relatively old cases can be marshalled to support the conclusion that choice is a necessary element in a bet. As to dictionary definitions, the Shorter OED1 definition of the verb ‘bet’ as ‘Stake (an amount of money etc) against another’s in support of an affirmation or on the outcome of a doubtful event; risk an amount of money etc against (a person) by agreeing to forfeit it if the truth or outcome is not as specified’ (italics supplied) arguably supports the idea that a bet involves a positive affirmation by the parties betting. 1 Shorter Oxford English Dictionary (5th edn, 2003).

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Some fundamental terminology 2.27 This view can be supported by reference to Customs & Excise Commissioners v Dodd.1 The case concerned the question whether a fundraising scheme put on by a football supporters’ association amounted to pool betting. The association issued to its members membership cards, each bearing a separate number. Each week over an approximately two-year period the association sold to its members at a price of one shilling tickets setting out the names of certain football teams who were to play matches in the future. Each team was given an arbitrarily selected number and members who had purchased tickets would win prizes if their code numbers coincided with the combination of numbers allocated to the three teams which happened to score goals which were in the aggregate the highest, second highest or lowest aggregate score for the teams named on the ticket. Members were entitled to change their membership numbers (and could therefore in theory select teams), but in practice the number who did so was ‘de minimis’. The judge concluded that the transactions between members and the association were not ‘bets’ (and therefore not pool bets) because there was absent any process of selection by the members: ‘In the defendants’ scheme … each entrant, by reason of the allotted code numbers, which identified his entry, was required to accept the three corresponding teams arbitrarily selected by the printer as his particular entry, upon which his chance of securing a prize must depend; that necessarily means, to my mind, that any entrant’s chance of qualifying for a prize was not dependent upon any option or action of his own, but was wholly at the mercy of circumstance.’2 The judge went on to note that members could change their numbers (and thus select teams) but that in practice few did so. He said: ‘The existence of that mere possibility, according to the condition of sale, cannot of itself, in my judgment, turn into a betting transaction the purchase of a ticket by a member who did not avail himself of the opportunity to change from the random allocation of teams into a deliberate selection. In the few instances in which this change of code numbers was permitted, it might well be that the notional introduction of a choice, even though the entrant was concerned only to secure attractive numbers rather than attractive corresponding teams, could constitute the transaction a bet, because the intention which a person has in mind in deciding the matter upon which he proposes to wager is not, in my judgment, an essential factor in determining whether or not a wagering contract has been entered into.’3 He therefore concluded that no betting had taken place. The decision clearly supports the view that choice or selection is an element in a bet. 1 [1961] 1 WLR 144. 2 [1961] 1 WLR 144 at 151–2. 3 [1961] 1 WLR 144 at 152.

2.28 The question was considered, but left open, by the House of Lords in Singette Ltd v Martin1 on facts which were not dissimilar. Again a club issued membership cards to its members containing four numbers. Members could 130

Some fundamental terminology accept the numbers or select their own. The club conducted so-called ‘football pools’ in which a number was appropriated to each of 55 football teams playing at home. A  participant’s team in the week’s football competition was determined by relating his membership card numbers to the numbers appropriated to the home teams in the list of football fixtures. Prizes were awarded according to the numbers of goals scored by the teams. Club members could, by exercising their right to select their own four numbers, make their own selection of teams, but in any given week the evidence showed that 99% of the participants remained passive and did not change their numbers. On the question whether this amounted to a pool betting which complied with the legislative requirements then in force,2 the House of Lords found it unnecessary to decide whether or not the participants in the competition were ‘making bets’ or engaging in ‘pool betting’. Giving the leading judgment, Lord Pearson said as follows: ‘It can be argued that for a member merely to stand by and wait to see whether the four numbers on his card might happen to correspond with the numbers allocated by the promoters in a particular week to the four football teams which in that week won their matches and scored the highest aggregate number of goals would not be sufficiently positive or active conduct to constitute a “bet” or “pool betting”. On the other hand it can be argued that a member who in a particular week merely stands by and waits to see what happens is passively making a “bet” that his numbers will be the lucky numbers for that week. The question which of these opposing arguments should be preferred can, and in my view should, be left undecided in this appeal.3 This clearly leaves the point open. The Dodd case was cited in argument but not referred to in the decision, so its effect is not diminished. 1 [1971] AC 407. 2 That is, Betting, Gaming and Lotteries Act 1963, Sch 2, para 13(a). 3 [1971] AC 421 D–F. This conclusion may be questionable. The case involved the question whether the competition complied with the requirements imposed on ‘pool betting’ under the relevant legislation. The House of Lords concluded that it did not so comply; but it is difficult to see how that conclusion could have been reached unless it was first decided that the competition amounted to ‘pool betting’, which was required to comply.

2.29 Finally, some guidance can be obtained from the decision of the House of Lords in Seay v Eastwood.1 The case raised the question whether the use of a fruit machine in a betting office involved the making of bets. The machine was of the usual kind which was activated by coins placed in a slot so that drums were rotated which might, or might not, show a winning combination. Their Lordships unanimously concluded that transactions with the machine did not amount to bets because the machine was geared to ensure a profit of 27% to its owner, who could not therefore lose. However, Lord Russell concluded that there was no ‘bet’ because the person playing the machine made no forecast or estimate. He said: ‘I would also say that the action of inserting a coin, taken by itself, cannot properly be described as the making of a bet by the person inserting it. He is not forecasting an event or series of events: he is not backing 131

Some fundamental terminology his estimate of any outcome: he is simply hoping that some paying combination may turn up: he is gambling but not in any ordinary sense of the word betting.’2 1 [1976] 1 WLR 1117. 2 [1976] 1 WLR 1117 at 1125C.

2.30 The writer would suggest that these dicta, taken together, do support the view that a ‘bet’ will normally involve the making of some choice or forecast, or the backing of some assertion, and that it is difficult to regard purely passive behaviour as the making of a bet. However, it is suggested that a very slight and nominal element of choice will be enough to satisfy this requirement. Thus, for example, an arrangement under which a customer was given a pre-printed choice (of horses, numbers etc) on a betting slip should, it is suggested, qualify as a bet if he has the choice to reject that selection and ask for another one which he is prepared to accept. Such arrangements are common on FOBT offerings of the Keno type, where customers are given lucky dip selections of numbers to bet on which they may change by activating a control on the terminal if they wish. In practice, therefore, the need to exercise choice, to the extent that it is a requirement of a bet, has become a rather technical requirement.

Betting – section 9 2.31 We will now turn to consider the specific definition of ‘betting’ in s 9. Since this definition incorporates the word ‘bet’ without further definition, it seems reasonable to assume that all the characteristics of a ‘bet’ noted above remain relevant for the purposes of the s 9 definition. Indeed, it is suggested that the s 9 definition largely sets out matters that are implicit in the concept of a ‘bet’ as ordinarily understood. The definition provides for three distinct types of issue upon which a bet may be made.

‘The outcome of a race, competition or other event or process’ 2.32 This limb of the definition in s  9(1)(a) clearly provides for betting in its classic form, and it is not thought to give rise to any difficulties of interpretation. It should be clear when a bet is made on the outcome of a race. So far as bets on the outcome of a competition are concerned, the writer would contend that the wording is wide enough to cover both cases where parties bet on a competition in which they are not participants (eg a bet on who will win a chess tournament or wrestling match) and cases where a bet is made on the result of a competition in which the parties are taking part (eg a bet that the team of a competitor in a ‘fantasy’ competition will achieve the highest ranking and therefore win the competition: see 2.14 above). The reference to making a bet on some ‘other event’ merely clarifies that there is in principle no event that could not be made the subject of a bet. The reference to the making of a bet on the outcome of a ‘process’ may perhaps be designed to catch the case where there is room for debate whether there is a sufficiently hard-edged and identifiable ‘event’ to be the subject of a bet. Reference is made to the discussion of betting on share price movements and indices at 2.13 above, where it is pointed out that the subject of the bet 132

Some fundamental terminology is an abstraction, namely the mathematical aggregation of a large number of movements in share prices. An index could, it is suggested, be described as ‘the outcome of a process’, the process being that of measuring the price movements in the relevant shares and calculating whether this had led to a rise or fall in the index. Such betting would, therefore, now seem to be accommodated within s 9(1)(a), although it is arguable that a bet on whether an index will be above or below a particular level at some point in the future could equally fall within s 9(1)(b) (‘the likelihood of anything occurring or not occurring’). The extension of ‘betting’ to accommodate the outcome of a process could also, it is submitted, be applied to bets made on virtual events such as virtual horse races or virtual roulette, where there is no true ‘race’, ‘competition’ or ‘other event’, but where the bet is made on the outcome of a random generation of numbers on an RNG, which is then presented as a virtual race or other event. The virtual offering could quite logically be regarded as ‘the outcome of a process’, namely the process by which the RNG generates a number and that number is translated into the virtual ‘result’. 2.33 There are two additional points that call for comment under this limb of the definition. First, the definition does not specify whether the ‘race, competition or other event or process’ must lie in the future when the bet is made, or whether the definition applies to a bet made on something that has already occurred. It is true that s  9(2) specifically deals with the case where the race, competition or other event or process has already occurred and it makes it plain that a bet may be made on such a historic occurrence. However, s 9(2) is specifically concerned with the case where one party to the transaction knows the outcome. It is suggested that the primary definition within s 9(1)(a) does extend to the case where the matter bet on lies in the past and neither party to the bet knows what the outcome is, as this is consistent with the general expectation that bets may be made on past events (see 2.12 above). It might also be possible to analyse such a bet as falling within s 9(1) (c) as being a bet on whether or not the statement made about the past event is true (see 2.12 above). 2.34 The second point that should be noted is that the first limb refers, not to the ‘result’, but to the ‘outcome’ of a race, competition or other event or process. Although the words ‘outcome’ and ‘result’ are, at one level of meaning, virtually synonymous,1 the word ‘result’ is capable of a narrower application to describe the winning or losing of a sporting event. The Shorter OED2 gives as one meaning of ‘result’: ‘A final mark, score, or placing in an examination or a sporting event.’ If s 9 had defined ‘betting’ as the making of a bet on the ‘result’ of a race, competition etc, there might have been room for argument whether the definition was limited to bets on the result of a race etc in the narrower sense (ie in the case of a horse race, which horses would be placed first, second and third). The use of the word ‘outcome’ may be designed to make clear that parties to a bet may bet on any outcome of a race etc (eg that the winner of a horse race will be disqualified, or that no horses will finish so that the race will have no result in the narrower sense). 1 The Shorter OED  (5th edn, 2003) defines ‘outcome’ as: ‘A  (visible or practical) result, effect or product’; and ‘result’ as: ‘The effect, consequence, issue or outcome of some action, process or design’. 2 5th edn, 2003.

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Some fundamental terminology

‘The likelihood of anything occurring or not occurring’ 2.35 The second limb contained in s  9(1)(b) appears designed to catch bets which are made on issues which cannot easily be described as events. For example, a bet on whether it will snow on Christmas Day or whether aliens will land on the Earth within the next decade would seem to fall more naturally within the second limb than the first. In addition, the second limb, as has been suggested at 2.32 above, may well act as a useful sweeping up provision to catch bets on contingencies, such as the movement of indices, which may only doubtfully fall within the first limb. 2.36 It is debatable whether this limb applies to past occurrences. It is true that s 9(3) deals specifically with the case of a bet on a past occurrence, but it only applies where one party to the transaction knows that the thing has already occurred or failed to occur. It does not, therefore, apply to a bet on a past occurrence as to which both parties are ignorant. The writer would suggest that s 9(1)(b) cannot easily be read to apply to such a case. To read it in that way would involve reading it as if it said: ‘The likelihood of anything having occurred or not having occurred’, and that is not what the words say. It may, however, be that bets on past occurrences can be accommodated within s 9(1)(c) as being bets upon the accuracy of present information. Thus a bet, for example, as to the millennium during which dinosaurs became extinct could probably be accommodated under s 9(1)(c).

‘Whether anything is or is not true’ 2.37 The third limb in s  9(1)(c) appears to be designed to cover bets on questions of present fact (which of two mountains is the highest or which of two rivers is the longest) and also to statements relating to historic facts. Thus, a bet about whether Oxford or Cambridge won the Boat Race in 1900 could be analysed as a bet on the outcome of a past race, competition or event within s 9(1)(a), but it could equally, it is submitted, be regarded as a bet on whether the statement ‘Oxford won the Boat Race in 1900’ is or is not true. 2.38 It is not thought that the third limb is likely to give rise to significant difficulties of interpretation so far as betting generally for the purposes of s 9 is concerned, although it does give rise to significant questions under s 11, which extends the concept of betting to include certain prize competitions where competitors are required to ‘guess’ any of the three sets of issues set out in s 9(1)(a), (b) and (c). In the case of (c), this raises the question whether competitions in which participants are required to state the truth or falsehood of knowledge-based questions are brought within the ambit of ‘betting’. For reasons set out below, the writer would suggest that this is not the case, but the point is not without difficulty. 2.39 Sections 9(2) and (3) cater specifically for the case where a bet is made on some event or matter which has already occurred and one party to the bet knows what has happened, so that he is bound to win. They are designed to make clear that this fact does not prevent such a transaction involving a ‘bet’ for the purposes of s 9. Section 9(2) provides that a transaction that relates to the outcome of a race, competition or other event or process may be a bet 134

Some fundamental terminology for the purposes of s 9 despite the fact that (a) the race, competition, event or process has already occurred or been completed, and (b) one party to the transaction knows the outcome. Section 9(3) provides that a transaction that relates to the likelihood of anything occurring or not occurring may be a bet within s 9 despite the fact that (a) the thing has already occurred or failed to occur, and (b) one party to the transaction knows that the thing has already occurred or failed to occur.

Prize competitions: section 11 2.40 We now turn to consider the treatment of certain forms of prize competition and their relationship to betting. Section 11 of the GA  2005 introduces a wholly new legal framework for ‘prize competitions’, and in particular seeks to make clear when such competitions are to be treated as betting (and therefore within the controls of the 2005 Act) and when they are not. To understand how the section applies, it is helpful to have some understanding of the legal framework which it replaces and of the difficulties which had arisen in connection with that framework. 2.41 Prior to the 2005 Act the principal legislation governing prize competitions was to be found in s 14 of the Lotteries and Amusements Act 1976, which provided that a competition for prizes was illegal if it was conducted in or through a newspaper, or in connection with a trade or business, or in connection with the sale of an article to the public and if, either: (a) it was a competition in which prizes were offered for forecasts of the result of a future event, or of a past event the result of which was not yet ascertained or not yet generally known; or (b) it was a competition in which success did not depend to a substantial degree on the exercise of skill. Bets in the form of wagers were not regarded as falling within the s  14 definition, as they were not regarded as ‘competitions’.1 Specific provision was made by s 14(2) to exclude pool betting from the section; such pool betting was excluded provided it amounted to sponsored pool betting (ie  pool betting carried on by the Horserace Totalisator Board) or pool betting carried on by a bookmaker, though the effect of the provisions was to prevent pool betting being conducted through newspapers or in connection with the sale of an article to the public. Section 14 rendered prize competitions unlawful even in cases where entry was free.2 The provision was unpopular and a good deal of ingenuity was expended in devising competitions which could elude it, in particular the ban on forecasting competitions.3 The requirement that success in competitions should depend to a substantial degree on the exercise of skill was widely regarded as unworkable.4 1 Bretherton v United Kingdom Totalisator Company Ltd [1935] 1 Ch 373 at 381, per Eve J; Bretherton v United Kingdom Totalisator Company Ltd [1945] 1 KB 555 at 559, per Lord Goddard CJ. 2 Imperial Tobacco Ltd v AG [1981] AC 718, HL. 3 See, for example, News of the World Ltd v Friend [1973] 1 WLR 248 (‘spot the ball’ competition). 4 This conclusion was reached by the Royal Commission on Gambling in its Report in 1978; see para 14.90 of its Final Report, Vol 1, Cmnd 7200.

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Some fundamental terminology 2.42 Apart from the provisions of s  14, however, it was necessary to consider whether a prize competition might amount to a bet. For reasons which have been discussed at 2.22 to 2.24 above, a competition was unlikely to amount to a wager because (a) a promoter who offers a prize to the winner of a competition cannot usually be regarded as ‘losing’ the prize in the wagering sense and (b) the offer of the competition will often amount to consideration given for entry payments, so that both competitors and promoter will have non-wagering interests in the arrangements. More difficulty could, however, arise in the case of pool betting, and in certain circumstances competitions which were not designed to involve betting could qualify as pool betting under the legislation then in force. This was not surprising, because certain forms of pool betting such as football pools are readily analysed as competitions. Indeed, the governing provisions of the Betting, Gaming and Lotteries Act 19631 specifically required pool betting to be in the form of ‘competitions for prizes for making forecasts as to sporting or other events’. In addition, a number of decisions of the courts had drawn attention to the fact that football pools are in essence competitions.2 But even though some forms of pool betting may amount to competitions, it does not, of course, follow that all competitions amount to pool betting. The question which types of competitions might qualify as pool betting became a focus of interest in connection with so-called ‘fantasy’ competitions which made their appearance in the United Kingdom in the late 1980s and early 1990s. They were originally an import from the United States. Though they vary in detail, they typically involve certain set features. Participants are invited to select a team of players of some sport who actually exist and who perform in real sporting events. Typically the participant is given a notional cash budget and notional cash values are attributed to the identified players. The competition therefore tests the participant’s skill in ‘buying’ the best players for his team. The participant conveys details of his team to the promoter, usually either by filling in a form, or by means of a premium rate telephone line or over the internet. Where the entry is made on paper or over the internet, the promoter will usually require payment of an entry fee. Where entry is made by premium rate telephone there will usually be an arrangement whereby the promoter shares in the profits generated by the premium rate calls. Performance of the players over a period of time is monitored and points are awarded (or deducted). Thus, each participant’s selected team may gain points (or lose points) over time. At the end of the competition the participants’ teams are ranked in the form of a league and prizes, sometimes in money and sometimes in goods or services, are awarded to those getting the most points. The concept has been applied to football, cricket, tennis, horse racing, Formula One racing, and to activities such as share dealing on the Stock Exchange. It is a common feature of all such competitions that although participants make skilled selections of players, shares etc, the actual result of the competition depends upon events happening in the real world in the future. 1 Section 4 and Sch 2, para 13. 2 See, for example, Bretherton v United Kingdom Totalisator Company Ltd [1945] 1 KB 555; Elderton v United Kingdom Totalisator Company Ltd [1946] 1 Ch 57.

2.43 The relationship of such competitions to the then existing legal framework was a matter of some debate. On the whole, such competitions were not regarded as falling within LAA 1976, s 14, since they clearly gave 136

Some fundamental terminology scope for the exercise of skill and they did not usually involve the making of forecasts as to any specific future events. Given the conclusion which the courts eventually reached on the question whether such competitions could amount to pool betting, the latter conclusion might have been open to question, but the point was never raised under s 14. As to betting, the competitions clearly did not amount to wagers. As to pool betting, however, the position which had been reached prior to the GA 2005 was that fantasy competitions could amount to pool betting if, but only if, a payment was required to be made for entry into the competition, or otherwise in connection with the competition, which could be treated as a stake on a bet. If such a stake could be identified, then the arrangements, it was held, involved competitors in forecasting, the forecasts being as to the relative success of each competitor’s fantasy team, share portfolio etc against the teams, portfolios, etc of the other competitors.1 Where a direct money payment was required for entry to the competition, this was to be treated as a stake, either because it could be regarded as a stake in the normal sense, or because it was deemed to be a stake under statutory deeming provisions then in force.2 However, where there was no such direct payment, there would be no stake, and accordingly there would be no bet and therefore no pool bet, and this would be the case even where entries were made on premium-rate telephone lines, so that entry to the competition involved incurring charges which the subscriber to the telephone line would have to pay at premium rate. Thus, where fantasy competitions promoted by newspaper A were run on premium-rate lines rented by a telephone service provider B  from a telephone company C, and where C  made commission payments to B  of 24.78p per minute in respect of all calls made on the competition lines, there was no stake and therefore no bet, even though B in fact shared the commission payments with A.3 Neither the payments made by subscribers in respect of the telephone calls nor the commission paid by the telephone company, it was held, could be treated as stakes on a bet in the ordinary sense, nor did they fall within the relevant deeming provisions. 1 See the decision of the Court of Appeal in Customs & Excise Commissioners v News International Newspapers Ltd [1998] V & DR 267. As to the element of forecasting, see the judgment of Beldam LJ: ‘… it seems to me that the competitors in the Fantasy Fund Manager’s competition were making a forecast of an uncertain future event, namely whether a portfolio selected by them would have the greatest value on a given date …’ See also the judgment of Sir Christopher Slade: ‘If (as is my view) the participants are to be taken as betting on the result of a future event, the only relevant event must be the rankings which the portfolios achieve in accordance with the rules of the competition.’ 2 See Customs & Excise Commissioners v News International Newspapers Ltd [1996] V & DR 434; Customs & Excise Commissioners v News International Newspapers Ltd [1998] V & DR 267, CA. The relevant deeming provision was then contained within the Betting and Gaming Duties Act 1981, s 7(3) which provided: ‘For the purposes of pool betting duty, any payment which entitles a person to make a bet by way of pool betting or coupon betting shall, if he makes the bet, be treated as stake money on the bet: and this subsection shall apply to any payment entitling a person to take part in a transaction which is, on his part only, not a bet made by way of pool betting or coupon betting by reason of his not in fact making any stake as if the transaction were such a bet, and the transaction shall accordingly be treated as a bet for the purposes of pool betting duty.’ For the current version of the deeming provision see the Finance Act 2014, s 148(3) and s 150(2).

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Some fundamental terminology 3 See News International Newspapers Ltd v Customs & Excise Commissioners [1995] V & DR 274 where, on those facts, the VAT and Duties Tribunal held that neither payments made by the telephone company to the telephone service provider nor payments made by subscribers to the telephone company for the cost of the telephone calls could be characterised as stakes on bets in the ordinary sense, nor did they fall within the Betting and Gaming Duties Act 1981, s  7(3) (as originally enacted), as such payments did not ‘entitle’ anyone to make a bet or to take part in a transaction within the meaning of s  7(3). This decision was upheld by the High Court in Customs & Excise Commissioners v News International Newspapers Ltd [1996] V & DR 434.

2.44 The upshot was that, as the law then stood, where fantasy competitions required the direct payment of an entry charge they were likely to amount to pool betting; where, however, entry was made over a premium rate line they were unlikely to amount to betting, even though charges would accrue to subscribers and the promoter would indirectly derive benefit from them. The position was anomalous. More generally, however, it created some uncertainty as to the circumstances in which a competition might be treated as pool betting. In the second edition of this book the position was tentatively summarised as follows:1 ‘More generally it would appear that wherever a competition involves the making of forecasts as to future events a finding that the competition involves pool betting may well be made. However, it is thought that competitions in which participants use skill in an attempt to achieve the correct solution which has been determined before the launch of the competition (eg competitions to solve a chess problem or a crossword puzzle) are not to be regarded as involving betting as the result does not depend upon an uncertain future event. This, at least, was the distinction proposed in the judgment of the Court of Appeal in the case of News International Newspapers Ltd v Commissioners of Customs & Excise2 where the court considered the status of the fantasy competition and concluded that it was a form of pool betting. It is suggested also that competitions where a judge or panel of judges assess the quality of the entries to select the best entry or entries should likewise not be considered as involving betting. Again, in such competitions competitors are not forecasting that their entries will win nor are they forecasting the result of any future event. They are merely submitting their entries to the skilled assessment of the judges.’3 1 Smith & Monkcom The Law of Betting, Gaming and Lotteries (2nd edn, 2001), para A0.22. 2 [1998] V & DR 267. 3 See generally News of the World Ltd v Friend [1973] 1 WLR 248 on the question of competitions to forecast a future event.

2.45 That is the background against which the reforms of the GA  2005 need to be viewed. The starting point is that LAA 1976, s 14 is repealed and not re-enacted.1 A specific statutory provision is introduced providing that prize competitions are not to amount to gambling for the purposes of the Act unless participation in them amounts to gaming within the meaning of s 6, participating in a lottery within the meaning of s 14 or betting within the meaning of ss 9 to 11.2 Section 11, however, is designed to bring within the general definition of betting contained in s 9 certain activities which would, in the absence of 138

Some fundamental terminology the extending definition, be likely to elude the definition of betting as usually understood. There are, in particular, two types of competition which are likely to be rendered betting through the application of s 11: (1)

Fantasy competitions are likely to be caught by s 11, both in cases where a direct entry payment is made and in cases where entry is made on premium rate lines (see 2.44 above). The Explanatory Notes comment on s 11 as follows: ‘63.  Schemes purporting to be prize competitions will fall within the definition of betting in this Part, even though they may not involve the deposit of a stake in the way normal to betting … 64.  The effect of making such schemes subject to regulation as betting is to ensure that all the relevant protections provided by the Act in respect of betting apply. Therefore, schemes such as “fantasy football” competitions or the Racing Post’s “Ten to Follow” competition will be regulated in the same way as bets placed on single events.’3

(2) Second, competitions may amount to betting within the s 11 definition if they involve a relevant payment and if they involve certain bettinglike characteristics (in particular, the making of forecasts as to events or occurrences), even though they would not amount to wagers (because the promoter could not lose in the relevant sense and/or because there was consideration additional to any stake there might be). However, s 11 is designed to ensure that competitions involving skill and knowledge are not normally to be treated as betting unless, of course, the skill lies in making betting-like forecasts. The Explanatory Notes state that the s 11 definition: ‘… is intended to exclude prize competitions (such as prize crosswords) where the elements of prediction and wagering are not both present.’4 During the course of debate in Standing Committee B, on s  11 as is noted below, a government amendment was made to the clause, the purpose of which was: ‘… to clarify that clause 11 does not apply to knowledge competitions. The amendment makes it clear that the clause applies only to such competitions where all participants are required to guess or predict the answer.’5 1 2 3 4 5

GA 2005, s 356 and Sch 17. GA 2005, s 339. Explanatory Notes to Gambling Act 2005, paras 63–64. Explanatory Notes to Gambling Act 2005, para 64. Mr Richard Caborn, Standing Committee B, 11  November 2004, PM col 104. It should be noted that where a competition falls within s 11, it becomes ‘betting’ within the meaning of s 9.

2.46

We now turn to s 11, which provides as follows: ‘Betting: prize competitions (1) For the purposes of section 9(1) a person makes a bet (despite the fact that he does not deposit a stake in the normal way of betting) if— 139

Some fundamental terminology (a) he participates in an arrangement in the course of which participants are required to guess any of the matters specified in section 9(1)(a) to (c), (b) he is required to pay to participate, and (c)

if his guess is accurate, or more accurate than other guesses, he is to— (i)

win a prize, or

(ii) enter a class among whom one or more prizes are to be allocated (whether or not wholly by chance). (2) In subsection (1) a reference to guessing includes a reference to predicting using skill or judgment. (3) Schedule 1 makes further provision about when a person is to be or not to be treated for the purposes of subsection (1)(b) as being required to pay to participate in an arrangement. (4) In subsection (1)(c) “prize” includes any money, articles or services— (a) whether or not described as a prize, (b) whether or not consisting wholly or partly of money paid, or articles or services provided, by the members of the class among whom the prizes are allocated.’ In summary, s 11 catches arrangements where: •

participants are required to make a payment;

•

participants are required to make guesses about issues which are like those contained in s 9, namely the outcome of a race etc, the likelihood of anything occurring, or whether anything is or is not true. ‘Guessing’ includes a reference to predicting using skill or judgment: and

•

prizes are awarded for successful guesses.

2.47 The starting point is that s 11 only applies to arrangements where a person does not ‘deposit a stake in the normal way of betting’ but where he is ‘required to pay to participate’. Schedule 1 makes detailed provisions about when a person is to be treated as being required to pay to participate. It follows that an arrangement will fall outside s 11 if either participation is dependent upon the paying of ‘a stake in the normal way of betting’ or no payment at all is required. If participants are required to make a ‘stake in the normal way of betting’, then the arrangements will not fall within s 11, but they will fall within the general definition of ‘betting’ contained in s 9 (provided that, of course, in all other respects they satisfy the definition of ‘bet’ contained in that section and provided that they are not excluded by s 10), and the only remaining question will be whether they amount to wagering, or to pool betting within s 12. Conversely, where no payment at all is made to enter, the arrangements will not amount to a bet in the ordinary sense, nor will s 11 apply to convert them into a bet. As has been noted, however, Sch 1 makes provisions about when a person is to be treated as being required to make a payment and, to pre-empt one point, the Schedule’s effect is that where 140

Some fundamental terminology persons enter a competition over a premium-rate telephone line, this is to be treated as making a payment to enter. 2.48 Accordingly, in examining an arrangement to see whether s  11 applies, it becomes important to decide whether participants ‘deposit a stake in the normal way of betting’. The word ‘stake’ is defined for the purposes of the 2005 Act by s 353, which provides as follows: ‘“Stake” means an amount paid or risked in connection with gambling and which either— (a) is used in calculating the amount of the winnings or the value of the prize that the person making the stake receives if successful, or (b) is used in calculating the total amount of winnings or value of prizes in respect of the gambling in which the person making the stake participates.’ The definition applies to gambling stakes generally and not just to betting stakes. However, it clearly catches betting stakes of the two commonest types, namely stakes on wagers or fixed odds bets and stakes on pool bets. In the case of a wager where A bets B £10 at odds of 5/1 that a horse will win a race, his winnings will be £10 × 5 = £50 winnings (plus return of the £10 stake if the bet is a cash bet) and this clearly falls within the first limb of the definition. Stakes on pool bets are probably caught both by limb (a) and limb (b). Where a number of bettors make bets by paying stakes into a pool, the value of the dividend paid to the successful bettors will normally be the total value of the pool (less promoter’s commission, expenses and excise duty) divided by the total number of unit stakes held by the bettors who constitute the winning class. This would seem to fall within limb (a). Alternatively, in such a case the stakes paid by bettors would fall within limb  (b), as they are used ‘in calculating the total amount of winnings or value of prizes’ in respect of the pool bet. 2.49 It should normally be clear whether a participant is required to pay a ‘stake’ in the defined sense or whether he is required to make a payment to enter (having regard to the extending definitions in Sch 1) which does not amount to the ‘deposit of a stake in the normal way of betting’. Assuming he is required to make a payment which is not a stake, attention will then turn to whether or not participants are ‘required to guess’ any of the matters specified in s 9(1)(a)–(c). It is true that in certain circumstances the concept of a ‘guess’ is extended by s 11(2), a matter to which we shall return. Assume, however, that a ‘guess’ of the relevant kind is required, the next question is whether where the participant’s guess is accurate, or more accurate than other guesses, he is to ‘win a prize’ – see s  11(1)(c)(i) – or to ‘enter a class among whom one or more prizes are to be allocated (whether or not wholly by chance) – see s 11(1)(c)(ii). The reference to prizes being awarded where a ‘guess is accurate, or more accurate than other guesses’ appears to provide for two types of competition: the first a competition where prizes are to be awarded to each and every competitor who makes an accurate guess (a ‘vertical competition’),1 and the second a competition in which a prize is awarded to the competitor who makes the most accurate guess, or prizes 141

Some fundamental terminology are awarded to the group of competitors making guesses which are more accurate than those of other competitors (a ‘horizontal’ competition). The reference to guesses entitling participants to enter a class among whom one or more prizes are to be allocated (whether or not wholly by chance) seems designed to cover the case where those making equally successful guesses go into a ‘tie-break’, where the final winner or winners will be determined either by requiring some additional exercise of skill or by chance. 1 For vertical and horizontal competitions see Whitbread & Co Ltd v Bell [1972] QB 549 at 559 per Donaldson J; Elderton v United Kingdom Totalisator Co [1946] Ch 57 at 69 per Du Parcq LJ.

2.50 We must now turn to the important question whether an arrangement is one in which persons are ‘required to guess’ any of the matters specified in s 9(1)(a)–(c). The starting point is that the competition must be one in which participants are required to guess one of the s  9 matters. This formulation is important. There are many competitions where competitors are invited to use skill or knowledge to achieve the right answer, but where they are free to guess the answer (with some chances of success) if they lack the requisite skill and knowledge. For example, a competition might take the form of a series of multi-choice general knowledge questions, each question being accompanied by three answers, one of which is correct. Competitors are invited to use knowledge to select the right answer, but there is nothing to stop them guessing which is the right answer if they do not know it. It will be suggested for reasons which appear below that such an arrangement would not amount to one in which participants are ‘required to guess’ one of the s  9 matters. The importance of the ‘required to guess’ formula was emphasised during the course of the Committee Debates on clause 11 of the Bill. As originally drafted in the October 2004 version of the Bill, clause 11 provided that: ‘… a person makes a bet … if — (a) he participates in an arrangement in the course of which he guesses any of the matters specified in s 9(1)(a) to (c) …’ This formulation, which would have applied to any case where a person in fact guesses was replaced by the present formulation by a government amendment. In introducing the amendment the Minister, Richard Caborn, on behalf of the government explained that the purpose of the amendment was: ‘to clarify that clause 11 does not apply to knowledge competitions. The amendment makes it clear that the clause applies only to such competitions where all participants are required to guess or predict the answer’1 (italics added). The significance in the change of wording is, it is suggested, as follows. The word ‘guess’ can be used to describe the forming of an opinion about a present fact (how many beans there are in a jar) or about a future occurrence, event or matter (which horse will win a race, or whether a share index will be above a particular figure at some date in the future). The dictionary definition2 of the verb to ‘guess’ is: 142

Some fundamental terminology ‘(1) verb trans. Form a rough estimate of (an amount, size, distance etc) without actual measurement or calculation  … (5)  verb trans & intrans. Form an opinion (about), or form the opinion that on the basis of uncertain indications or none; hazard an opinion as to why, who, whether, etc.’ The essential characteristic of a ‘guess’ is that it involves reaching an opinion without knowledge, information or enquiry. Where a person ‘guesses’ a present fact, he forms his opinion without obtaining proper knowledge, either because no such knowledge is available or because he cannot be troubled to obtain the knowledge. Where, however, a person ‘guesses’ the outcome of a future event or matter, the uncertainty is intrinsic to the activity itself. The future cannot be known and any attempt to predict what will happen must necessarily amount to a ‘guess’, though of course some guesses may be better informed than others. 1 Standing Committee B, 11 November 2004, PM col 104. 2 The Shorter OED (5th edn 2002).

2.51 The significance of this consideration becomes apparent when one considers that of the three s  9 matters the guessing of which can amount to a bet under s  11, the first two will normally involve future events or occurrences, whilst the third involves present facts (or perhaps past events). It is at this stage that s  11(2) extending the meaning of guessing becomes significant. Section 11(2) provides that: ‘In subsection  (1) a reference to guessing includes a reference to predicting using skill or judgment’ (italics supplied). So in cases where a ‘guess’ involves making a prediction of a future event or occurrence, the word is to be understood as including both cases where no skill or judgment is used and cases where skill and/or judgment are used. This extended definition will be relevant to guesses concerning the matters set out in s 9(1)(a), namely the outcome of a race, competition or other event or process and in s 9(1)(b), namely the likelihood of anything occurring or not occurring, but it will not be relevant to the matter set out in s 9(1)(c), namely whether anything is or is not true – because this last matter cannot be predicted. It follows that in this last case an arrangement will only fall within s 11 if a person is ‘required to guess’ in the strict sense not extended by s 11(2) (ie is required to form an estimate without actual measurement or calculation, or to form an opinion on the basis of uncertain indications or none). The net effect of all of this is as follows: (1) An arrangement may fall within s  11 if participants are required to guess the outcome of a race, competition or other event or process within s 9(1)(a). In this case the ‘guess’ may be either a prediction in which no skill or judgment is used (ie a guess in the strict sense) or a prediction using skill or judgment as provided by s 11(2). (2)

An arrangement may fall within s 11 if participants are required to guess the likelihood of anything occurring or not occurring within s 9(1)(b). In this case, again, the ‘guess’ may be either a prediction using no skill or judgment in the strict sense, or a prediction using skill or judgment as provided for by s 11(2).

(3) An arrangement may fall within s  11 if participants are required to guess whether anything is or is not true within s 9(1)(c). Such a ‘guess’ 143

Some fundamental terminology cannot involve a prediction, because the third limb is concerned either with statements of present fact (eg ‘Paris is the capital of France: True or False?’) or statements of past fact (eg ‘Oxford won the Boat Race in 1900’: True or False?). In the case of s  9(1)(c) the extended definition of ‘guessing’ to include ‘predicting using skill or judgment’ therefore cannot apply, so the reference to participants being ‘required to guess’ in this context must be a reference to guessing in the strict sense, ie forming a rough estimate without actual measurement or calculation. It is noteworthy that s 11(2), although it extends the concept of ‘guessing’ to include predicting using skill or judgment, does not extend the concept of ‘guessing’ to reach an opinion based upon knowledge.1 1 Contrast the provisions of s  14(5) dealing with the degree of skill, judgment, knowledge etc necessary to prevent a scheme from being a lottery, which provides: ‘A  process which requires persons to exercise skill or judgment or to display knowledge shall be treated for the purposes of this section as relying wholly on chance if …’ (italics added).

2.52 The effect is that a competition in which participants are required either to guess without skill or to predict with skill the outcome of a race, competition or other event or process will be caught by s 11. So a competition to predict the outcome of a horse race, a cricket match or of some other event or process will be caught, and it does not matter whether participants guess in the strict sense or make skilled predictions. It seems likely that ‘guesses’ made for the purposes of fantasy competitions will be caught by this head, since they involve ‘guessing’ the outcome of the ‘event or process’ by which the points won by the fantasy teams are calculated and the teams are ranked (see 2.42 above). Likewise, an arrangement in which participants are required to ‘guess’ the likelihood of anything occurring or not occurring within s 9(1) (b) will fall within s 11, whether or not the ‘guess’ involves a ‘guess’ in the strict sense or a prediction using skill or judgment. So a competition to predict share price movements or share index movements would be caught by this provision, whether or not participants used skill in their predictions or merely guessed in the traditional sense. However, a competition to state whether anything is or is not true will only be caught by s 11 if participants are ‘required to guess’ without using skill or judgment whether the statement in issue is or is not true. It follows that if they are required to use skill or knowledge, or may use skill or knowledge, in reaching their answers the competition will not fall within s 11. This would mean that a competition to answer general knowledge questions with multi-choice answers should not fall within s  11, because participants are not required to guess the answers (though some may do so, and many participants may guess some answers) but are free to, and are clearly expected to, exercise knowledge in answering the questions. The sort of competition dealing with the truth of statements that could, it is suggested, fall within s 11 would be a competition in which a container of beans was displayed with the statement attached ‘This container contains more than 1,221 beans’. Given the difficulties of counting, it is likely that any answer would amount to a ‘guess’ in the traditional sense, so that (provided payment was required) the arrangements would amount to a bet. 2.53 Schedule 1 makes further provision about when a person is to be or not to be treated for the purposes of s  11(1)(b) as being required to pay to participate in an arrangement. The terms of Sch  1 closely mirror those 144

Some fundamental terminology of Sch  2 which make further provision about when an arrangement is to be or not to be treated as requiring persons to pay to enter a lottery. The reader is directed to the discussion of the provisions of Sch 2 in Chapter 15 which applies mutatis mutandis to Sch 1. Schedule 1, para 9 gives power to the Secretary of State to make regulations providing that a specific activity is to be treated, or not to be treated, as paying to participate in an arrangement.

Betting with bookmakers at fixed odds 2.54 Before proceeding to consider other aspects of betting, it may be helpful to provide a brief description of the way in which classic wagering is carried on as a business by bookmakers. Private individuals of course may, and commonly do, enter into bets in the form of wagers on a variety of contingencies. Such bets are entered by way of entertainment and not by way of business. But the same principle underlies a type of betting of major commercial significance, ‘fixed odds’ betting conducted by professional bookmakers. In such betting the bookmaker offers to bet with members of the public on the outcome of events (commonly horse races or dog races) and states the fixed rate of return (ie the ‘odds’) which he is prepared to pay on each runner in the event of its winning. Since the bookmaker is offering to back the field of horses or dogs against any one runner which the bettor may select, he will offer individually calculated odds on each runner in the race, and these will, initially at least, reflect his assessment of the likelihood of that runner winning.1 A bettor who decides to bet on one of the runners at the odds offered either agrees to hazard a fixed stake (in the case of credit betting) or hands over to the bookmaker the agreed stake to abide the event (in the case of cash betting). If the bettor’s choice loses, then his stake is forfeit to the bookmaker; if his choice wins, the bookmaker is committed to pay out winnings which are calculated by multiplying the stake by the odds, and to return the stake itself, if this has been paid over in the case of a cash bet. It follows, therefore, that both the bettor and the bookmaker can calculate exactly what they will win if the bet is a winning bet. If, for example, a bettor backs a horse to win with a stake of £1 at odds of 10/1, he knows that if he loses he will forfeit and the bookmaker will win the stake of £1, whereas if he wins he will recover winnings of £10 together with the return of the £1 stake (if the stake has been paid over). 1 It is conventional to refer to a bookmaker ‘laying’ odds against each individual horse or dog in a field of runners, and to individual bettors ‘backing’ individual runners or combinations of runners. ‘Laying’ against a runner is a bet that it will lose and ‘backing’ a runner is a bet that it will win.

2.55 Although each individual fixed odds bet taken by a bookmaker on a race is a wager, the bookmaker will try to arrange his commitments on the race to achieve a ‘balanced book’. If he succeeds, then he will make a profit whichever runner wins.1 This he will do by fixing, and then modifying, the odds in such a way that the book will show an ‘edge’ or a ‘theoretical betting margin’. The betting margin to which a bookmaker is working on any particular race may be calculated from the odds on that race. The odds on each runner are converted into a ‘percentage’, namely the amount of money which would have to be staked on that runner to return £100 (winnings plus stake) if the runner were to win. To calculate the percentage of any particular 145

Some fundamental terminology runner, 100 is divided by X + 1, where X is the odds relating to that runner. Thus, if there were a six horse race with odds as follows: 1 4/1, 2 6/1, 3 7/2, 4 9/2, 5  9/2, and 6 3/2, then the percentages would work out as follows: 1 2 3 4 5 6

100 4/1 + 1 100 6/1 + 1 100 3.5 + 1 100 4/5 + 1 100 4.5 + 1 100 3/1 + 1



= = = = = =

100 5 100 7 100 4.5 100 5.5 100 5.5 100 4

=

20%

=

14.28%

=

22.22%

=

18.18%

=

18.18%

=

25.00%

Total Percentages:

117.86%

It will be seen that to get a return of £100 at odds of 4/1 a bettor would need to stake £20; to get a return of £100 at odds of 6/1 a bettor would need to stake £14.28, and so on. If the bookmaker can ensure that he takes stakes on the six runners in the proportion of their percentages, then whichever runner wins he will pay out £100 for every £117.86 which he takes in stakes. Thus, his ‘edge’ or ‘theoretical betting margin’ is 17.86%. 1 For bookmakers’ odds see Royal Commission on Gambling Final Report (1978) Cmnd 7200, Vol  2, Annex  B, p  468; J  Turner Gambling: A  Guardian Guide (1995), p  38. For a judicial description of the bookmakers’ system of constructing a ‘book’ see Graham v Green (Inspector of Taxes) [1925] 2  KB  37 where it was held that a bookmaker making a book is engaged in a taxable vocation, whereas a bettor who merely backs horses at ‘starting prices’ is not. See also Partridge v Mallandaine (Surveyor of Taxes) (1886)  LR  18  QBD  276. See also The Queen (on the application of William Hill Organisation Ltd) v The Horserace Betting Levy Board [2012] EWHC 2039 (Admin), [2012] 1 WLR 3504; The Queen (on the application of William Hill Organisation Ltd v The Horserace Betting Levy Board [2013] EWCA Civ 487, [2013] 1 WLR 3656, CA. It was held that customers using an internet betting exchange to bet with each other were not ‘bookmakers’ within the definition contained in the Betting, Gaming and Lotteries Act 1963, s  55 and so were not liable to pay horserace betting levy.

146

Some fundamental terminology 2.56 At the commencement of betting the bookmaker’s odds will reflect his view of the likely chances of the runners. However, as money is placed on various runners, the bookmakers alter their prices. Where a runner is substantially backed, the bookmaker will shorten the odds, partly to limit his own risk but also to deter other bettors from backing it. Conversely, lengthening of the odds reflects lack of support and is supposed to make betting on that runner more attractive to bettors. By altering the odds the bookmaker will try to ensure that the weight of money on the individual runners reflects their percentages, thus ensuring for himself an overall profit. 2.57 The odds generated by on-course bookmakers govern not only the return which the individual bookmakers will pay on a winning bet, but also the Starting Price. The Starting Price is the odds prevailing on-course at the time a particular race begins. It is compiled for each runner by the Starting Price reporters of the racing press on the basis of their observations of the fluctuations in prices on-course. The Starting Prices are frequently the basis on which parties will agree to settle bets, particularly when these are made in betting offices off-course. 2.58 In practice, commercial bookmakers offer an enormous variety of bets. However, to the extent that they are fixed odds bets, it will usually be found that they are properly to be analysed in terms of wagers.

Spread bets and similar transactions: section 10 2.59 We now turn to consider the provisions of s 10, which exclude from the definition of ‘betting’ certain transactions which, albeit they amount to bets, are regulated by the Financial Services and Markets Act 2000. For many years speculators have sought to make money on stock exchanges, and on markets such as commodity markets and currency markets, by speculating on the movements of market prices.1 Such speculative activity will often have many of the characteristics of a bet, and on many occasions courts have held that such activities have amounted to betting. Historically the most important consequence of a finding that a speculative transaction of this type amounted to a bet was that the transaction was not legally enforceable by virtue, in particular, of the provisions of s 18 of the Gaming Act 1845 and s 1 of the Gaming Act 1892 rendering wagering contracts void. That particular concern no longer arises since the enactment of the GA 2005, which has repealed the Acts of 1845 and 1892 together with other legislation which rendered gambling contracts unenforceable.2 However, the fact that certain speculative transactions could amount to bets made it necessary to decide whether such activities should be regulated under the GA  2005 or whether they should be regulated by the Financial Services Authority under the Financial Services and Markets Act 2000. As will be explained below, many such speculative transactions were already governed by this latter Act as forms of ‘regulated activity’. The Gambling Review Body debated whether the FSA should continue to regulate such activities, or whether the task of regulation should be passed to the Commission, or whether the FSA and the Commission should have a split regulatory function. The final conclusion was that the regulation of such speculative activities should remain with the FSA, though it was recognised that the responsibility might pass to 147

Some fundamental terminology the Commission in due course.3 This recommendation was accepted in the White Paper and is given effect to by s 10 of the 2005 Act. 1 For a discussion of the role of speculators in commodity and financial markets see the judgment of Lord Donaldson MR in City Index Ltd v Leslie [1991] 3 WLR 207 at 212B–213A. 2 GA 2005, s 356 and Sch 17. 3 Gambling Review Report, ch 27.

2.60 Section 10 is headed ‘Spread bets, &c’ in recognition of the fact that spread betting is a particular form of speculative transaction which will usually fall within the exemption from the 2005 Act, but that there are other forms of speculative activity, in particular ‘contracts for differences’ and ‘swaps’ which have the potential to fall within the s 10 exemption. Section 10 provides that: ‘For the purposes of section 9(1) “bet” does not include a bet the making or accepting of which is a regulated activity within the meaning of s 22 of the Financial Services and Markets Act 2000’. In considering the application of s 10 to any particular transaction, therefore, two preliminary questions arise: first, does the transaction amount to a ‘bet’ within s 9? If it does not, the Act of 2005 will not apply to it (unless, of course, it amounts to some other form of gambling within that Act). Second, if the transaction does amount to a ‘bet’ within s 9, is the making or accepting of the bet a ‘regulated activity’ within s 22 of the Act of 2000? If it is, then it will not be treated as a ‘bet’ for the purposes of the Act of 2005 but will fall within the regulatory framework of the Act of 2000. If, however, the bet is not a ‘regulated activity’ within the meaning of the 2000 Act, it will be governed by the GA 2005. 2.61 Where a ‘bet’ is excluded from the Act of 2005 by virtue of being a ‘regulated activity’ under the FSMA  2000, the two principal consequences are: first, that the business transacting the betting will not be required to hold an operating licence which would otherwise be required by virtue of the provisions of s 33(1) and (2) of the Act of 2005; and second, that the business offering the bet will not be required to hold a premises licence by virtue of the provisions of s  37(1) and  (2) of that Act.1 Power is conferred on the Secretary of State to remove, by order, the second exemption and to impose a requirement to hold a premises licence on a business conducting betting, even though that betting is a regulated activity under the FSMA 2000 and is therefore in other respects excluded from the Act of 2005.2 The question whether a transaction is a ‘regulated activity’ within the meaning of the FSMA 2000 is determined by definitions laid down in statutory instruments made by HM  Treasury,3 so that the question whether a bet or class of bet qualifies as a ‘regulated activity’ will depend upon the effect of subordinate legislation. Since it is possible that such legislation may change from time to time, s 10(2) provides that where such an order is made which has the effect that a class of bet becomes, or ceases to be, a regulated activity, the order may include transitional provisions relating to the application of the Act of 2005 to the relevant class of bet. 1 Though where trading takes place over the telephone or online, as is the usual case, the need for a premises licence would, in any case, be excluded by the provisions of GA 2005, s 37(6).

148

Some fundamental terminology 2 See GA 2005, s 10(3) and s 38(3). For discussions relating to this provision see the Gambling Review Report, para 27.8 and Standing Committee B, 7th Sitting, Tuesday 30 November 2004, col 223. 3 Financial Services and Markets Act 2000, s 22(5).

2.62 We shall now turn to examine the types of bet the making or accepting of which are likely to amount to a ‘regulated activity’ within the FSMA 2000. This question is best approached by considering the characteristics of a number of typical transactions, some speculative and some not. 2.63 First, a seller may enter into a contract with a buyer to sell a commodity, or some other traded item such as shares or currency, at a price fixed at the date of the contract, both delivery and payment to take place at some future date. Such a contract is a simple commercial contract for sale. It is not a wager, principally because both parties to the contract have an interest in the contract, namely the delivery and receipt of the relevant item, in addition to the money paid; and in any case the purchase price is the consideration for the sale of the item, and not a stake in the betting sense. The contract will not therefore fall within the Act of 2005; nor, as we shall see, would it fall within the FSMA 2000. 2.64 Second, we may consider the case of a ‘futures’ contract. Here, as in 2.63, a seller agrees with a buyer to sell a commodity, or some other item, at a price fixed at the date of the contract, payment and delivery to take place in the future. Such a contract may have a perfectly legitimate commercial purpose. Where the traded item is a commodity, the buyer may be a manufacturer who needs to be able to calculate his future raw materials costs, and the seller may be a supplier who, likewise, wishes to obtain future price certainty. The important feature of the contract is that it relates to a true item of sale and that there is an intention that such item will be delivered at the agreed price at a fixed future date. It is, however, possible that the rights of the buyer and the seller under the contract may be traded in the sense that those rights and liabilities may be transferred, for valuable consideration, to third parties. For example, the seller may commit himself to deliver a specified quantity of a commodity at a fixed price three months hence. A third party may predict that the price of the commodity will fall by the date of performance so that it will be possible to buy the necessary commodity to perform the contract on the market at a price below the contract price, thus producing a profit to the seller. On that basis, the third party may be prepared to pay the seller for the right to take over its obligations under the contract. Such a transaction amounts to a ‘futures’ contract. Such a contract obviously has a speculative element, as parties will make profits or losses depending upon the movements of market prices. But such contracts would not normally amount to bets because underlying the contract there remains an obligation to deliver, and to accept delivery of, the relevant item in exchange for the agreed price. Such contracts would not normally therefore amount to bets falling within the Act of 2005. The question whether they fall within the FSMA 2000 depends, as we shall see, upon whether the contract is made for a ‘commercial purpose’ (in which case it falls outside the Act of 2000) or is made for an ‘investment purpose’ (in which case it is a ‘regulated activity’ falling within the Act of 2000). 149

Some fundamental terminology 2.65 An essential feature of a ‘futures’ contract is that it creates a genuine obligation to deliver, and to accept delivery of, the relevant traded item. With this may be contrasted a ‘contract for differences’.1 A seller enters into such a contract with a buyer to sell a commodity, or some other asset such as shares or currency, delivery to take place at a fixed future date at a price agreed when the contract is made (either by specific negotiation or by reference to the then governing market price). The contract will therefore appear to be an ordinary commercial transaction and will often, indeed, be accompanied by written terms setting out the parties’ obligations to deliver, and to accept delivery of, the traded item. However, in fact both parties intend that neither delivery of the item nor payment for it shall take place on the date fixed for performance, but that there will be a mere payment of the difference between the contract price and the market price governing at that future date. If the market price has risen above the contract price, the seller will pay the difference to the buyer (reflecting the profit which, had the contract been a genuine one for delivery, the buyer could have made by taking delivery at the contract price and selling on at the higher market price). If the market price has fallen below the contract price, the buyer will pay the difference to the seller (reflecting the profit that, had the contract been a genuine one for delivery, the seller could have made by buying the item at the market price to deliver it to the buyer at the higher contract price). Provided it is the intention of both parties that no delivery of the contract item should be made but that there should only be a payment of differences, then such a contract is regarded as a betting contract in the form of a wager, in accordance with a well established line of authority: see, for example, the decision of the House of Lords in The Universal Stock Exchange Ltd v Strachan.2 The above description applies to a ‘contract for differences’ in its classic form where there is a formal contract to deliver the traded item and to take delivery and pay for it but where the true intention of the parties is only to pay differences, their real intention being to speculate on the movement of market prices. Such contracts, amounting to bets in the form of wagers, are therefore capable of falling within the definition in s 9 of the Act of 2005. However, as we shall see below, most such contracts will also amount to ‘regulated activity’ within the FSMA 2000 and will therefore be regulated by the FSA and will fall outside the Act of 2005. 1 The topic of ‘Contracts for Differences’ in their classic form as exemplified in The Universal Stock Exchange Ltd v Strachan is not dealt with in the current, 31st edition of Chitty on Contracts. For a treatment of the topic see Chitty on Contracts (29th edn), Vol 2, paras 40–010 to 49–011. 2 (1896) AC 166.

2.66 The fourth kind of transaction involves arrangements in which parties openly speculate on the movement of market prices without the interposition of a notional contract purporting to require delivery of the item traded. In its simplest form it would involve parties betting on whether the price of a particular commodity or share will go up or down over a particular period. However, such betting, referred to as ‘spread’ betting or ‘index’ betting, usually takes the form of betting on market movements by reference to indices and it is examined in more detail at 2.78 below. Transactions of this nature will usually amount to betting within the meaning of the Act of 2005, but will also amount to ‘regulated activity’ within the FSMA 2000 and so will be governed by the FSA and excluded from the Act of 2005. 150

Some fundamental terminology 2.67 The fifth type of contract relevant in this context is the so-called ‘swap’ contract. These contracts will be considered in more detail at 2.83 below. Such contracts appeared in the world of international finance in about 1981.1 They are financial instruments, the principal commercial purpose of which is to enable a party which is exposed to financial uncertainty through factors such as variations in interest rates and currency exchange rates to mitigate the effects of that uncertainty. In the case of an interest rate swap contract, for example, a party ‘A’, which had borrowed money at a fixed rate of interest for a fixed term, but which believed that interest rates would be likely to fall over the term of the loan, would enter into a ‘swap’ contract with a counter-party, ‘B’ (usually a bank), under which A would agree to pay to B floating interest rate payments and B would agree to pay to A fixed interest rate payments on a notional pre-determined sum of money at the start of each of a number of successive periods. Typically, the parties would not exchange payments representing the total interest accrued, but would simply net off their liabilities. If A’s prediction turned out to be correct and floating interest rates fell, B’s payments under the contract would exceed A’s, and A would be a net gainer. If, on the other hand, contrary to A’s expectations, floating interest rates rose, A would be a net payer to B and would lose out on the arrangement. Such swap contracts obviously have features in common with ‘contracts for differences’ which, as noted above, are traditionally regarded as bets or wagers. It is certainly possible that in some circumstances a swap contract could amount to wagering, though the Morgan Grenfell case is authority for the proposition that the usual presumption, at least in the case of interest rate swap contracts, is that the contracts are not wagers. This is because they are typically regarded as being entered into for the purpose of hedging liability.2 If a swap contract is not a bet or wager, it will not of course fall within the GA 2005. It seems, however, that whether or not amounting to a wagering contract the making of most swap contracts would amount to a ‘regulated activity’ within the FSMA 2000, so that the FSA would be the relevant regulator and the activity would be excluded from the Act of 2005 by virtue of s 10. 1 For a description of the commercial background to swap contracts see the speech of Lord Templeman in Hazell v Hammersmith LBC [1992] 2 AC 1 at 23G–24B. 2 See Morgan Grenfell & Co Ltd v Welwyn Hatfield District Council (Islington London Borough Council, Third Party) [1995] 1 All ER 1, discussed at 2.94–2.100 below.

2.68 It is now necessary to see how the FSMA 2000 is made to apply to contracts such as those discussed above. The legal framework created by that Act derives from that originally contained in the Financial Services Act 1986. Prior to the Act of 1986 the principal difficulty arising in connection with contracts for differences, spread bets, index bets and other such speculative financial instruments lay in the fact that they were liable to be treated as wagers and therefore unenforceable under the relevant provisions of the Gaming Acts 1845 and 1892.1 As was noted by Professor L C B Gower in his report on investor protection,2 it was often difficult to distinguish between legitimate investments and unenforceable gaming contracts. As the report noted: ‘The public have been offered arrangements ranging from betting on whether the quoted price of a listed stock or an index (such as the 151

Some fundamental terminology FT Index) will rise or fall to entrusting a capital sum to a company to invest and to use the income to bet on race-horses. On the face of it, all these seem more akin to gaming and wagering contracts and therefore unenforceable. On the other hand, in the former type the objectives of the participants may be indistinguishable from those when purchasing options or futures. To treat them as gaming contracts would be the worst possible way of protecting investors. The Act must find a way of clearly distinguishing legitimate investments from illegitimate wagers.’3 1 See, for example, Universal Stock Exchange Ltd v Strachan (1896)  AC  166; Re The Futures Index Ltd (1984) Times, 12 October (Ch Div (Companies Court)) (transcript: Marten Walsh Cherer). 2 L  C  B  Gower ‘Review of Investor Protection’, Report: Part I, January 1984, Cmnd 9125. 3 ‘Review of Investor Protection’, Report, Part I, para 4.04.

2.69 The Financial Services Act 1986 provided a solution to this problem in s 63, which provided that contracts to which the section applied should not be rendered void or unenforceable by reason of s 18 of the Gaming Act 1845 or s 1 of the Gaming Act 1892 (or of any rule of law in Scotland rendering gaming or wagering contracts unenforceable), provided one or both of the parties entered into the contract by way of business. The contracts to which the section applied were set out at FSA  1986, Sch  1, para  9 and included contracts for differences and certain contracts analogous to contracts for differences. The wording of these provisions has been carried forward to the FSMA 2000 and will be considered below. The effect of the provisions, as the Court of Appeal held in City Index Ltd v Leslie,1 was to render enforceable contracts which fell within their terms, even though these amounted to bets or wagers. 1 [1991] 3 WLR 207.

2.70 The Financial Services Act 1986 was repealed1 and replaced by the FSMA 2000. Section 412 of that Act as originally enacted contained provisions disapplying s 18 of the Gaming 1845 and s 1 of the Gaming Act 1892 from contracts for differences and analogous contracts which mirrored those which had been contained in the FSA 1986. With the repeal by the GA 2005 of the relevant Gaming Act provisions, s 412 (to the extent that it disapplied those provisions) was rendered redundant and has been amended to exclude references to the relevant provisions of the 1845 and 1892 Acts and to any rule of law in Scotland under which gaming and wagering contracts are not legally enforceable.2 1 The repeal was effected by The Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001 (SI 2001/3649), art 3. 2 GA 2005, s 356 and Sch 17.

2.71 Accordingly, the distinction between bets which fall within the FSMA 2000 and those which do not is now relevant only for the purposes of GA  2005, s  10. To repeat, a bet will not fall within the Act of 2005 if it is a ‘regulated activity’ within the meaning of FSMA 2000, s 22. Section 22 provides as follows: 152

Some fundamental terminology ‘Regulated Activities1 (1) An activity is a regulated activity for the purposes of this Act if it is an activity of a specified kind which is carried on by way of business and— (a) relates to an investment of a specified kind; or (b) in the case of an activity of a kind which is also specified for the purposes of this paragraph, is carried on in relation to property of any kind. (1A) An activity is also a regulated activity for the purposes of this Act if it is an activity of a specified kind which is carried on by way of business and relates to— (a) information about a person’s financial standing, or (b) the setting of a specified benchmark.’2 Section 22(2) provides that Schedule 2 makes provision supplementing the section. By s  22(4) ‘Investment’ is defined to include ‘any asset, right or interest’. By s 22(5) ‘Specified’ means specified in an Order made by the Treasury. 1 Heading substituted by the Financial Services Act 2012, Pt 2, s 7(1)(d) (24 January 2013). 2 Added by the Financial Services Act 2012, Pt 2, s 7(1)(a) (24 January 2013). Section 22(6) (added by the Financial Services Act 2012, Pt 2, s 7(1)(c) (24 January 2013) provides ‘benchmark’ means an index, rate or price that – (a) is determined from time to time by reference to the state of the market, (b) is made available to the public (whether free of charge or on payment), and (c) is used for reference for purposes that include one or more of the following— (i) determining the interest payable, or other sums due, under loan agreements or under other contracts relating to investments; (ii) determining the price at which investments may be bought or sold or the value of investments; (iii) measuring the performance of investments.

2.72 The starting point therefore is to establish whether entering into ‘contracts for differences’, ‘spread betting’, ‘swaps’ etc. amounts to ‘an activity of a specified kind’ which is carried on by way of business and which relates to ‘an investment of a specified kind’. The relevant specifying Treasury order is the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.1 Part II of the Order sets out ‘Specified Activities’ and Part III (as amended) sets out various ‘Specified Investments’ at arts  74–89. Article  84 applies to ‘Futures’ and art  85 applies to ‘Contracts for Differences etc’ (though it should be noted that the terms of art 85 are wide and apply both to ‘a contract for differences’ and also to certain other analogous contracts which, although they may not amount to ‘contracts for differences’ of the classic sort, nonetheless resemble such contracts in many respects). The articles of Part II which are relevant are arts 14 and 21. Article 14 provides that dealing in investments as principal is a specified activity and art 21 provides that dealing in investments as agent is a specified activity. Article 14 reads as follows: 153

Some fundamental terminology ‘Dealing in investments as principal2 (1) Buying, selling, subscribing for or underwriting securities or contractually based investments (other than investments of the kind specified by Article 87, or Article 89 so far as relevant to that Article) as principal is a specified kind of activity. (2) Paragraph  (1) does not apply to a kind of activity to which article 25D applies.’3 The two forms of investments identified as excluded in art 14(1) are those specified by art 87 (funeral plan contracts) and art 89 (rights to or interests in investments). The activity excluded by art  14(2), namely art  25D, is the activity of operating a multilateral trading facility on which Mifid (ie Markets in Financial Instruments Directive) instruments are traded. The expression ‘Mifid instrument’ is defined in art 25D(2). 1 SI 2001/544. 2 Existing art 14 renumbered as art 14(1) by Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No  3) Order (SI  2000/3384), Pt 2, art  5(a) (1 April 2007; substitution has effect on 1 April 2007 for the purposes specified in SI 2006/3384, art 1(2)(a); 1 November 2007 otherwise). 3 Added by Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No 3) Order (SI 2006/3384), Pt 2, art 5(b) (1 April 2007; insertion has effect on 1 April 2007 for the purposes specified in SI 2006/3384, art 1(2)(a); 1 November 2007 otherwise).

2.73 The expression ‘contractually based investments’ is defined in art 3 to mean, inter alia, ‘(b) any investment of the kind specified by any of Articles 83, 84, 85 and 87’. So ‘Futures Contracts’ (art 84) and ‘Contracts for Differences’ (art 85) are ‘contractually based investments’. Accordingly, entering into such contracts will be caught by art 14 if it can be described as ‘buying, selling, subscribing for or underwriting’ such investments. The words ‘buying’ and ‘selling’ are defined in art 3. This provides that ‘“Buying” includes acquiring for valuable consideration’. The expression ‘Selling’ is defined as follows: ‘“Selling”, in relation to any investment, includes disposing of the investment for valuable consideration, and for these purposes “disposing” includes— (a)

in the case of an investment consisting of rights under a contract— (i) surrendering, assigning or converting those rights; or (ii) assuming the corresponding liabilities under the contract; 

(b) in the case of an investment consisting of rights under other arrangements, assuming the corresponding liabilities under the arrangements; and (c) in the case of any other investment, issuing or creating the investment or granting the rights or interests of which it consists;’ 2.74 The word ‘investment’ is defined by FSMA  2000 s  22(4) so as to include ‘any asset, right, or interest’. It seems clear that where a commercial entity enters as principal into a ‘contract for differences’ falling within art 85, it will normally be ‘selling’ a ‘contractually based investment’ within 154

Some fundamental terminology art  14. In the case of the classic ‘contract for differences’, as exemplified in The Universal Stock Exchange Ltd v Strachan, it will be entering into a liability under the contract (eg  to pay the difference between contract price and market price at a fixed future date), which is a ‘corresponding liability’ to that entered into by the other party. Likewise, in the case of a ‘spread bet’ (which may perhaps – see 2.81 below – be regarded as a ‘contract for differences’ in the classic sense, and will in any case fall within the extended definition of the term contained in art  85) the spread betting company will enter into a liability (to pay out if the market rises or falls) which corresponds to that of the customer. And where a commercial entity acquires rights under a pre-existing contract for differences which falls within art 85, it is likely to be ‘buying’ that right within the meaning provided by art  3. Accordingly, where a commercial entity deals as principal in contracts for differences within art  85, the activity is likely to amount to a ‘specified activity’ for the purposes of FSMA, s 22, and will be a ‘regulated activity’ within that section.1 1 This conclusion is supported by the interpretation put upon FSA  1986, Sch  1, para  12 by the Court of Appeal in City Index Ltd v Leslie [1991] 3  WLR  207. This defined ‘dealing in investments’ as: ‘Buying, selling, subscribing for or underwriting investments or offering or agreeing to do so, either as principal or as an agent’. The court observed that the terms ‘buying’ and ‘selling’ were given an extended meaning by Sch  1, para  28(1) which provided that: ‘References to buying and selling include references to any acquisition or disposal for valuable consideration’. The court concluded that parties to spread bets on indices were ‘acquiring rights for valuable consideration consisting of their mutual obligations under the contracts’. Accordingly, the activity fell within FSA 1986.

2.75 ‘Swap’ contracts are likely to fall within the extended definition of ‘contracts for differences’ contained in art  85.1 As such they will fall to be regulated under the Financial Services and Markets Act 2000. Quite apart from this, however, Morgan Grenfell1 is authority for the proposition that the usual presumption, at least in the case of interest swap contracts, is that such contracts are not bets because they are typically carried out with an intention to hedge a liability. This issue is discussed at 2.88 below. 1 That an interest rate swap contract could in principle fall within the equivalent provisions of the FSA 1986 was conceded in Morgan Grenfell & Co Ltd v Welwyn Hatfield District (Islington London Borough Council Third Party) [1995] 1 All ER 1.

2.76 Article 21 of the Order applies where a person deals in investments as agent. It provides: ‘Dealing in investments as agent (1) Buying, selling, subscribing for or underwriting securities or relevant investments1 (other than investments of the kind specified by article 87, or article 89 so far as relevant to that article) as agent is a specified kind of activity. (2) Paragraph  (1) does not apply to a kind of activity to which article 25D applies.’2 For the excluded cases in arts 87, 89 and 25D see 2.72 above. 155

Some fundamental terminology Thus ‘relevant investment’ for the purposes of art 21 includes investments set out at art 84 (Futures) and art 85 (Contracts for differences). Accordingly, for the reasons set out in respect of art  14, trading in such investments as agent will also amount to ‘buying’ or ‘selling’ as agent for the purposes of art 21, so that dealing in futures or contracts for differences as agent, or spread betting as agent or dealing as agent with swaps will fall within art 21, and will amount to an activity of a specified kind within FSMA 2000, s 22. 1 The original wording ‘contractually based investments’ was replaced by ‘relevant investments’ by the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No 2) Order 2003 (SI 2003/1476). 2 Added by Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No 3) Order (SI 2006/3384), Pt 2, art 9(b) (1 April 2007: insertion has effect on 1 April 2007 for the purposes specified in SI 2006/3384, art 1(2)(a); 1 November 2007 otherwise).

2.77 Before discussing ‘Contracts for differences’ under art  85, brief note should be taken of the terms of art 84, which deals with ‘futures’. The original definition of a futures contract in art  84 (which remains in force) has been extensively supplemented by additional definitions describing sets of arrangements which are to be treated as ‘futures’ under the article. The original and continuing definition of the word in art 84(1) makes clear that the defining feature of a futures contract is that it is a contract for the sale of a commodity or property ‘… under which delivery is to be made at a future date and at a price agreed on when the contract is made’. The statutory definition therefore mirrors the distinction between a ‘futures contract’ (where delivery is intended to be made) and a ‘contract for differences’ (where there is no such intention, even though an obligation to make delivery may nominally be created). It is clear that the obligation to make delivery will normally prevent a futures contract from amounting to a bet or wager. Whether it will fall within the FSMA 2000 will depend upon a distinction drawn in art 84 between futures contracts which are made for ‘commercial purposes’ (ie where the contract is made to supply commodities or goods for actual use) and futures contracts made for ‘investment purposes’ (where the purpose of the transaction is to speculate on movements in the relevant market prices). Contracts of the first kind are removed altogether from the statutory definition, so that entering into them is not a ‘regulated activity’ falling within the FSMA, whilst contracts of the second kind remain within the definition of ‘futures’ and are therefore regulated activities governed by the FSA under the Act of 2000. 2.78 Article  85, which is headed ‘Contracts for differences etc’, defines these (so far as material to the present discussion)1 in the following terms: ‘(1) Subject to paragraph (2), rights under— (a) a contract for differences; or (b) any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in— (i)

the value or price of property of any description; or

(ii) an index or other factor designated for that purpose in the contract.’ 1 156

Some fundamental terminology Certain contracts which might fall within the definition are expressly excluded by art 85(2).2 The expression ‘contract for differences’ is not defined, but it would clearly apply to a ‘contract for differences’ of the classic sort considered in Universal Stock Exchange v Strachan3 and at 2.65 above.4 Such contracts, albeit they amount to bets, will now be excluded from the GA 2005 by virtue of s 10. It is more debatable whether the form of betting commonly known as ‘spread betting’ or ‘index betting’ would amount to ‘contracts for differences’ under art  85(1)(a), but the question is likely, in most cases, to be academic, since such betting will normally fall within art 85(1)(b). ‘Spread betting’ or ‘index betting’ can take a number of forms, but typically will involve making bets on projected movements in share prices, currency exchange rates and so forth. Typically the bet will be made on a financial index such as the FTSE 100, or the Wall Street Index or Hang Seng indices. In the case of a share index, the index will show the variation (increase or decrease) in the prices or value of a specified set of shares over a period of time.5 It would of course be possible for parties to make a simple bet on whether the index will rise or fall by a particular date. In the case of spread betting the arrangements are more sophisticated and they involve building into the arrangements an edge in favour of the financial institution offering the bet. In the case, for example, of betting on the FTSE 100 share index, arrangements might work as follows.6 Assume that in July the index stands at 3,568. The index company offering the spread bet projects that in September it will have risen to 3,582. It will then invite people to bet based on a ‘spread’ consisting of two figures, the higher being at or above, and the lower at or below their own undisclosed forecast. Assume the company offers a ‘spread’ of 3,578–3,586. This spread is continually being updated as the company revises its forecast of share price movements. If a customer believes that the September index will be above the upper end of the spread he can make a ‘buy’ contract (ie a bet that on the relevant date in September the index will be above the upper end of the spread) and will stake a sum of (say) £10 per point. If the customer believes that the index will lie beneath the lower figure in the spread, he will place a ‘sell’ contract (ie a bet that at the relevant date the index will lie below the lowest figure in the spread) at (say) £10 per point. 1 Article 85(3) provides that subject to para (4) certain derivative instruments are ‘contracts for differences’. These are: ‘… derivative instruments for the transfer of credit risk – (a) to which neither article 83 nor paragraph (1) applies; and (b) to which paragraph 8 of Schedule C of Annex I to the Markets & Financial Instruments Directive applies.’ By art 85(4) para (3) only applies to derivatives in relation to which – ‘(a) an investment firm or credit institution is providing or performing investment services and activities on a professional basis, (b) a management company is providing, in accordance with article 6(3) of the UCITS  Directive, the investment service specified in paragraph  4 or 5 of Section A, or the ancillary service specified in paragraph I of Section B, of Annex I to the Markets & Financial Instruments Directive, or (c) a market operator is providing the investment service specified in paragraph 8 of Section A of Annex I to the Markets & Financial Instruments Directive.’

157

Some fundamental terminology By art 85(5) ‘Derivative instruments for the transfer of credit risk’ has the same meaning as in the Markets & Financial Instruments Directive. 2 The exclusions are: (a) rights under a contract if the parties intend that the profit is to be secured or the loss is to be avoided by one or more of the parties taking delivery of any property to which the contract relates; (b) rights under a contract under which money is received by way of deposit on terms that any interest or other return to be paid on the sums deposited will be calculated by reference to fluctuations in an index or other factor; (c) rights under any contract under which— (i) money is received by the Director of Savings as deposits or otherwise in connection with the business of the National Savings Bank; or (ii) money is raised under the National Loans Act 1968 under the auspices of the Director of Savings or treated as so raised by virtue of s 11(3) of the National Debt Act 1972; (d) rights under a qualifying contract of insurance (art 85(2)). 3 (1896) AC 166. 4 The members of the Court of Appeal in City Index Ltd v Leslie [1991] 3 WLR 207 were all in agreement that ‘contracts for differences’ in the classic sense amounted to ‘contracts for differences’ within the equivalent provisions of the FSA  1986. However, Lord Donaldson MR and McCowan LJ (at 213E; 216C) considered that the statutory definition was limited to such contracts and could not be extended to ‘spread betting’ whereas Leggatt LJ, whilst agreeing that the definition would apply to traditional contracts for differences (at 217G; 219B) concluded that ‘spread bets’ of the type considered in that case did amount to ‘contracts for differences’ (at 219F). 5 See the definition of ‘index’ as ‘a number showing the variation (increase or decrease) in the prices or value of some specified set of goods, shares, etc, since a chosen “base” period (often represented by the number 100) …’, from A Supplement to the Oxford English Dictionary (1976), Vol II, p 281, cited in City Index Ltd v Leslie [1991] 3 WLR 207 at 219B. 6 The example is based upon that given to the Court of Appeal in Nejad v City Index Ltd (12 July 1999, unreported).

2.79 Assume that on the contract’s expiry date in September the index stands at 3,725. If in July the customer had bought at 3,586 for £10 per point, then he would make a profit: Bought at 3,586     Sold at 3,725 = 139 point profit Multiplied by £10 per point stake = £1,390 profit. If in July the customer had sold at 3,578 for the same unit stake he would incur a loss of: 3,725 – 3,578 = 147 × £10 = £1,470. 2.80 ‘Spread betting’ is typically pursued on financial indices, but it is possible to compile artificial indices for other events, and in particular sporting events. For example, a ‘spread’ could be quoted for the purposes of betting on a cricket innings. If the spread betting company believes that a team will score 350 runs, it could offer a ‘spread’ of 340–360. The ‘spread’ 158

Some fundamental terminology would be modified as the team batted and bets could be made in the same way as on a financial index. 2.81 Spread betting of this type was considered by the Court of Appeal in City Index Ltd v Leslie.1 The view of the majority (Lord Donaldson MR and McCowan LJ) was that such ‘spread betting’ did not amount to a ‘contract for differences’, an expression which was to be understood as applying to contracts for differences of the classic kind where the parties enter into a notional contract for delivery of a traded item in question but where their true intention is only to settle differences between the contract price and the market price (see 2.65 above). They nonetheless concluded that the spread betting contracts under consideration were caught by the provisions now contained in art  85(1)(b), since they were contracts the purpose of which was to ‘secure a profit’ by reference to fluctuations in an index. They rejected an argument advanced on behalf of the defendant that the phrase ‘secure a profit’ could not be applied to an ordinary betting contract but must be understood as applying only where the transaction secured a profit in the sense of protecting a profit that the party, at the time of making the bet, already had the potential of making. The court concluded that ‘secure a profit’ meant no more than ‘obtain a profit’.2 On that basis a ‘spread betting’ contract fell within the provisions of FSA 1986, s  63 and Sch  1 and was legally enforceable even though it amounted to a bet. Leggatt LJ, however, concluded that a ‘spread betting’ contract could be characterised as a ‘contract for differences’, since it fulfilled essentially the same function of allowing bets to be made on movements in share prices as was achieved by contracts for differences in the classic form. He noted that the plaintiff, City Index Limited: ‘… make their money by quoting a figure which represents a margin above the figure at which an index is standing, in the case of a “buy” bet, and a margin below that figure, in the case of a “sell” bet. But the bet price is still a price, and the customer wins or loses according to the movement of the index which results in a difference, one way or the other, between the price quoted and the price at which the transaction is closed out. That is a contract for differences, and it is not prevented from being so by the fact that [City Index] fix the starting price by adjustment of the index price instead of by taking the index price itself.’3 He concluded that for that reason the contract fell within the provisions of the FSA 1986 and was legally enforceable, albeit it was a bet.4 1 2 3 4

[1991] 3 WLR 207. [1991] 3 WLR 207 at 214G and 219H. [1991] 3 WLR 207 at 219F. At first instance, the deputy High Court judge, Mr A R Tyrrell QC, had concluded that the contract was a ‘contract for differences’ within the terms of the FSA 1986. Note too the obiter remark of Rix LJ in Spreadex Ltd v Battu (11  July 2005, unreported), CA: ‘Spread betting is not so much or not merely a bet, although it can be described as such, as a form of contract for differences’.

2.82 It seems clear, therefore, that spread betting in its normal form will qualify as a ‘regulated activity’ within art 85(1) and so will fall outside the GA 2005 under the provisions of s 10. It should be noted too that in City Index 159

Some fundamental terminology v Leslie Leggatt LJ noted that whilst contracts for differences were void prior to the FSA 1986, certain other contracts which were superficially similar were not void because they were entered into for a commercial purpose such as hedging.1 Such contracts would not amount to bets at all and so would not fall within the definition of ‘betting’ within s 9 of the GA 2005. This point is not developed in the City Index judgment but becomes of some significance in considering ‘swap’ contracts (see 2.94 below). 1 [1991] 3 WLR 207 at 218H.

2.83 ‘Swap’ contracts appear to have emerged in the world of international finance in about 1981. Their commercial purpose was to enable traders to solve financial problems arising out of variations in interest rates, currency exchange rates, different taxation regimes and rates of inflation and different creditworthiness.1 Swap contracts may therefore be applied to different types of variable, so that there are interest rate swaps, currency swaps, asset swaps and so on. The underlying principle can be illustrated by reference to a simple interest rate swap.2 An interest rate swap can be described as follows: ‘A  swap is an agreement between two parties by which each agrees to pay the other on a specified date or dates an amount calculated by reference to the interest which would have accrued over a given period on the same notional principal sum assuming different rates of interest are payable in each case. For example, one rate may be fixed at 10%, and the other rate may be equivalent to the six-month London InterBank Offered Rate (“LIBOR”). If the LIBOR rate over the period of the swap is higher than 10% then the party agreeing to receive “interest” in accordance with LIBOR will receive more than the party entitled to receive the 10%. Normally neither party will in fact pay the sums which it has agreed to pay over the period of the swap but instead will make a settlement on a “net payment basis” under which the party owing the greater amount on any day simply pays the difference between the 2 amounts to the other. There are a considerable number of variations of detail possible in a swap transaction ….’.3 Assume there is a borrower ‘B’ who has borrowed £10,000,000 at a fixed rate of 10% for a fixed term.4 If floating interest rates rise above 10%, B’s fixed rate will be advantageous; if, on the other hand, they fall below 10%, B will lose out. If B believes that floating interest rates will fall below 10%, then he may seek to enter into a swap with a counter-party (‘CP’) (such as a bank or financial institution) under which B agrees to pay CP interest at the floating rate on a notional sum of (say) £10,000,000 annually whilst CP agrees to pay B interest at a fixed rate of 10% on the same notional sum. If, in accordance with B’s expectation, floating rates fall to 8%, B will receive £200,000 on the swap as follows: B pays CP 8% floating rate CP pays B 10% fixed rate B receives 160

£800,000 £1,000,000 £200,000

Some fundamental terminology B remains liable to pay fixed interest on his loan but has £200,000 from the swap to put towards the payment. There is, of course, a risk to B that the floating rate may rise. If the floating rate were to rise to 12%, B would have to pay £200,000 to CP as follows: B pays CP 12% floating rate CP pays B 10% fixed rate B pays

£1,200,000 £1,000,000 £200,000

and B would remain liable to pay interest on the original loan. 1 For a discussion of the emergence of the swap market see the judgment of Lord Templeman in Hazell v Hammersmith LBC [1992] 2 AC 1 at 23G–24H. 2 For a description of swap contracts and allied contracts see Appendix A  to the judgment of the Divisional Court in Hazell v Hammersmith and Fulham LBC [1990] 2 QB 697 at 739. 3 Description contained in Appendix A to the judgment of the Divisional Court in Hazell v Hammersmith & Fulham LBC [1990] 2 QB 697 cited by Lord Templeman in Hazell v Hammersmith LBC [1992] 2 AC 1 at 24F. 4 The example given in the text is based upon that given by Lord Templeman at [1992] 2 AC 1 at 25C–26A.

2.84 Assume, however, that the swap is successful from B’s point of view and that floating interest rates fall to 8%. B can then enter a ‘reverse swap’ to lock in his profit of £200,000, by entering into a contract with a counterparty (‘CP’) under which B pays 8% fixed interest on £10,000,000 and CP pays floating rates. If the floating rate were to rise back to 10%, B would receive £200,000 on the reverse swap as follows: B pays CP 8% fixed rate CP pays B 10% floating rate B receives

£800,000 £1,000,000 £200,000

On the original swap B will neither pay nor receive interest: since the fixed rate of 10% is the same as the floating rate, neither party is a net payer to the other, so that B is left with his £200,000 profit on the reverse swap. 2.85 If, however, floating interest rates were to fall below 8% to (say) 6%, B  would still remain £200,000 in profit. Admittedly he would lose on the reverse swap as follows: B pays CP 8% fixed rate CP pays B 6% floating rate B pays CP

£800,000 £600,000 £200,000

However, B would make up his profit on the original swap as follows: B pays CP 6% floating rate CP pays B 10% fixed rate B receives

£600,000 £1.000,000 £400,000

Therefore B’s net gain is £200,000. 161

Some fundamental terminology 2.86 It seems clear that ‘swap’ contracts will normally fall within the extended definition of ‘contracts for differences’ contained in art 85 in that their purpose is— ‘to secure a profit or avoid a loss by reference to fluctuations in: (i)

the value or price of property of any description; or

(ii) an index or other factor designated for that purpose in the contract’. In the case of an interest rate swap, the designated ‘factor’ would be the relevant interest rate. Swaps of other kinds might involve fluctuations in the value of property, or of an index, or of some other designated factor. For a discussion of this issue as it arose in Morgan Grenfell & Co Ltd v Welwyn Hatfield District Council (Islington London Borough Council Third Party)1 see 2.94–2.100 below. 1 [1995] 1 All ER 1.

2.87 There is an enormous variety of terms which the parties to a swap contract may negotiate. It is, for example, not uncommon for the fixed interest rate payer to agree to pay an up-front capital advance to the floating rate payer at the start of the contract. The possible significance of such an arrangement is considered below. The legal nature and effect of swap contracts have been considered principally in litigation over the question whether local authorities are lawfully entitled to enter into such contracts as a means of raising revenue. In Hazell v Hammersmith & Fulham LBC1 the House of Lords held that a local authority has neither express nor implied power to enter into swap contracts, and that accordingly swap contracts entered into by the councils concerned were ultra vires and unlawful.2 However, in litigation arising out of a local authority’s dealings in swaps, the question whether such transactions amounted to wagering contracts, and the question whether they were ‘contracts for differences’ within the terms of Sch 1, para 9 of the Financial Services Act 1986, and therefore enforceable under s 63 of that Act, have been considered. It is clear that swap contracts have a number of features resembling wagering contracts and, in particular, contracts for differences of the traditional sort described at 2.65 above. Each party to a swap contract may win or lose, and the question whether a party wins or loses depends upon future events and, in particular, in the case of an interest rate swap, upon the movement of floating interest rates as against fixed interest rates. This certainly creates the possibility that swap contracts might be used for an essentially speculative or gambling purpose. On the other hand, a party may use a swap contract for the commercial purpose of mitigating risks to which he is exposed by variations in interest rates, currency exchange rates and so on. In such a case, the party entering the swap contract is attempting to secure his position rather than to earn money by speculation. As Lord Templeman put it in his speech in Hazell v Hammersmith & Fulham LBC: ‘The swap market has provided a valuable method of carrying on international trade and finance. Swaps may involve speculation or may eliminate speculation. In most cases the advantage sought by a user of the swap market is the elimination of speculation and uncertainty’. 3 162

Some fundamental terminology The judgment of Hobhouse J  in Morgan Grenfell & Co Ltd v Welwyn Hatfield District Council (Islington London Borough Council, third party)4 is authority for the proposition that interest rate swaps, whilst they are capable of being entered into for speculative purposes (in which case they will be wagers) are not necessarily wagering contracts and in particular where they are entered into by parties or institutions involved in the capital market in the making or receiving of loans the normal inference will be that the contracts are not gaming or wagering but are commercial or financial transactions to which the law will give full recognition and effect ([1995] 1  All ER  10c). The issue was relevant to the Morgan Grenfell case because in that case it was being contended that the swap contract was unenforceable under section 18 Gaming Act 1845. Such a defence is no longer available (see 2.70) so that the issue whether swap contracts are wagers may have become less significant but the point was raised and argued in the High Court and on application for permission to appeal in the Court of Appeal in the case of Nextia Properties Ltd v The Royal Bank of Scotland plc and Anor and this case will be examined before attention is given to the Morgan Grenfell case. 1 [1992] 2 AC 1. 2 For the swaps litigation generally see also the judgments of the Divisional Court and the Court of Appeal in Hazell v Hammersmith & Fulham LBC [1990] 2 QB 697; and see also Westdeutsche Landesbank Girozentrale v Islington London BC, Kleinwort Benson Ltd v Sandwell BC [1994] 4 All ER 890; Kleinwort Benson Ltd v South Tyneside Metropolitan BC [1994] 4 All ER 972; Morgan Grenfell & Co Ltd v Welwyn Hatfield District Council (Islington London BC (Third Party) [1995] 1 All ER 1. 3 [1992] 2 AC 1 at 24B. 4 [1995] 1 All ER 1.

2.88 The judgment of HHJ Behrens sitting as a judge of the High Court on the defendant’s application to strike out Nextia’s claim is cited under number [2013] EWHC 3167 (QB). Nextia was a company in the property development business. At the beginning of March 2008 Nextia had £2 million worth of loans with RBS which it had entered into to fund its business. On 13 March 2008, following discussions with RBS, Nextia entered into a five year interest rate swap contract with RBS in which Nextia was the fixed rate payer and RBS was the floating rate payer. It was a term of the contract that Nextia represented and warranted to RBS that it was entering into the agreement solely for the purposes of reducing the risks associated with fluctuating rates of interest and not for the purpose of speculation.1 Following the making of the swap contract Nextia continued to borrow money from RBS and by mid-2009 its borrowings had increased to more than £4.5 million. All of the loans were repaid by August 2012. The terms of the swap contract became disadvantageous for Nextia and the company brought the proceedings claiming rescission of the swap, damages for breach of contract and/or misrepresentation and damages for breach of statutory duty. On application by RBS the judge at first instance struck out Nextia’s claim on all grounds under CPR  24 on the basis that the claim as pleaded had no realistic prospects of success. A number of issues were canvassed by the parties but this discussion limits itself to the issues whether an interest rate swap is a wager and, if so, what consequences follow. 1 [2013] EWHC 3167 (QB), para 38.

163

Some fundamental terminology 2.89 Central to the dispute between the parties was the market value of the swap. The market value of the swap to the bank is the sum the swap would realise if it were disposed on the open market.1 The market value is sometimes referred to as ‘mark to market’ or ‘MTM’. The market value on the day the swap takes effect is referred to as the Day 1 MTM. It is in the nature of MTM that it fluctuates and that it can be positive or negative. Nextia contended that the value of the Day 1 MTM was approximately £89,500. The bank, whilst not agreeing the figure, agreed that the swap did have a Day 1  MTM  value. The value was not disclosed to Nextia prior to the contract being entered into and central to Nextia’s case was that there was a positive duty to disclose the Day 1 MTM to it. 1 [2013] EWHC 3167 (QB), para 4.

2.90 It appears to have been common ground between the parties that the swap contract was a ‘contract for differences’ and so was in principle enforceable as a regulated activity under the Financial Services and Markets Act 2000. It was also clear that no issue of unenforceability under the Gaming Act 1845, s 18 arose as the contract was entered into after the repeal of that provision. Nextia nonetheless advanced the argument that the swap contract was a wager at common law and that as such it was subject to a common law principle that a contract for a wager must be fair and that it must not knowingly favour one side or the other.1 Nextia argued that by securing an MTM 1 value which was not divulged to it the bank had infringed this principle with the result that the contract was void. Nextia appreciated that the swap contract had been entered into in connection with its borrowings from the bank and appreciated that in accordance with the principles stated in the Morgan Grenfell case a swap contract will not be wager if it is entered into for a commercial purpose such as hedging.2 It sought to deal with this point by arguing that at the date when the swap contract was entered into Nextia’s existing loans had maturity dates of less than a year and that the term of the swap was five years so that for four years of the life of the swap there was no guarantee that there would be any loan against which the swap provided a hedge.3 1 [2013] EWHC 3167 (QB), para 63. 2 [2013] EWHC 3167 (QB), para 54. 3 [2013] EWHC 3167 (QB), para 60.

2.91 (i)

Nextia’s arguments failed on all these points. The judge held: the argument that there was a legal duty on a bank to disclose the MTM of a swap was not consistent with previous authority and in particular the judgment of Mance J  in Bankers Trust v Dharmala1 and Eder J  in Intensa San Paolo SpA v Regione Piermonte;2

(ii) the contract was not a wagering contract. This was for two reasons. First, the judge held that the contract was excluded from being a wager by s 10 of the GA 2005. Second, he held that the question whether the contract was a wager had to be judged at the date of the contract. It was plain from the evidence that at that time Nextia envisaged that the loans would be rolled over for at least five years so that there would be a liability which the swap contract would hedge. On that basis, applying 164

Some fundamental terminology the Morgan Grenfell decision, the swap contract should not be treated as a wager. To the extent that the judge considered that the swap was excluded from being a wager by s 10 of the GA 2005 the writer would respectfully suggest that this may involve a misunderstanding of s 10. The financial services legislation, currently the Financial Services and Markets Act 2000, governs a number of contracts some of which are capable of amounting to wagers at common law. The GA 2005 regulates commercial gambling including commercial betting. The expression ‘betting’ is defined at s 9 and the definition incorporates reference to ‘a bet’ thus proceeding on the basis that the reader will know what a ‘bet’ is. Given that the making of some ‘bets’ is capable of amounting to a ‘regulated activity’ within the FSMA 2000 it was necessary to provide a means of deciding which bets should be governed by that Act and which should be governed only by the GA 2005. This is what s 10 of the GA 2005 is designed to achieve. It does not say that a ‘bet’/‘wager’ which is a ‘regulated activity’ is not a ‘bet’/‘wager’; what it says that it is not a ‘bet’ within s  9 of the GA  2005 and so is not regulated by that Act. In so far, however. as the judge held that there was no wager because it was anticipated that there would be loans which could be hedged for the five year period of the swap this was a finding on the facts which appears to have been open to the judge and was sufficient to lead to the conclusion that the contract was not a wager applying the Morgan Grenfell case; (iii) third, even if the contract was a wagering contract, the judge rejected the argument that this created a duty to disclose the MTM. There was no such duty at common law and it was not possible to imply a term that the wager would be ‘fair’ in the sense that the Day 1 MTM would be zero. The arguments based on the swap as a wager therefore failed as did all the other arguments advanced by Nextia and the action was dismissed. Application was made for permission to appeal to the Court of Appeal3 which came before the Court of Appeal on 14 May 2014. Permission to appeal was refused. As the application was attended by one party only and was for permission to appeal the judgment of the Court of Appeal falls within the terms of the Practice Direction (Citation of Authorities)4 which provides that it may not be cited before any court unless it clearly indicates that it purports to establish a new principle or to extend the present law. By Order of 31 July 20145 Lord Justice Vos has stated that the judgment does not make law of any kind and has recorded that the judgment cannot be published without the permission of the court (which has not been obtained). In those circumstances it is not considered appropriate to discuss the judgment in this text. 1 [1996] CLC 518. 2 [2013] EWHC [1994] (Comm). 3 [2014] EWCA Civ 740. 4 [2001] 1 WLR 1001. 5 Filed on 13 August 2014.

2.92 In another swaps case (involving Swaps and Collars) arguments were again advanced, inter alia, that the swaps and collars were wagering 165

Some fundamental terminology contracts. On an application by the defendant to strike out the claim1 Judge Roger Kaye QC rejected the argument that the contracts were wagers. He relied in particular upon the Nextia analysis concluding that: ‘Morgan Grenfell sets out the modern test that an interest rate swap agreement is not a wager where at least one party entered into the contract for a genuine commercial purpose and not to speculate. That cannot be contradicted as applicable in the present case.’2 1 [2016] EWHC 378 (QB). 2 Paragraph 30.

2.93 It remains to consider Nextia’s argument that there is a common law principle that a contract for a wager must be fair and that it must not knowingly favour one side or the other. The writer would contend that it is difficult to deduce such a principle from the materials available. The principle would be a significant one for gambling operators and their customers and one might have expected to see it spelt out in a number of authorities. Moreover, the principle which Nextia were contending for seems to be inconsistent with the way in which betting/wagering is carried on by commercial providers. In the case of bookmaking it is well established that the bookmaker, in laying odds on a race, will seek to construct his book to incorporate an ‘edge’ or ‘theoretical betting margin’ which will ensure that he will make a profit whichever runner wins (see 2.54–2.58). The effect overall is that the odds are skewed in the bookmaker’s favour but this is not taken to be an objection or to lead to the conclusion that the contracts the bookmaker makes are not wagers. Likewise bookmakers make numbers bets (such as the 49’s bets) which are based upon Keno (see 2.131–2.139). Here again it is a feature that the odds by reference to which payouts are fixed will be shorter than the arithmetical odds against various combinations of numbers being drawn (see 2.131). Here again there has been no suggestion that this feature conflicts with any fundamental principle governing wagers. Likewise in ‘spreadbetting’ (see 2.78) the financial institution offering the bet will build into the arrangements an edge in its own favour. Again it does not appear to have been suggested that this infringes any fundamental principle of wagering. Additionally bets on casino games such as roulette are described as ‘wagers’.1 Such wagers typically are made in accordance with rules which provide an advantage or ‘edge’ to the bank (see 2.238) but it is not suggested that this fact is in some way inconsistent with the relevant bets being wagers at common law or infringes some common law principle relating to wagers. It is therefore difficult to find a basis for Nextia’s argument. 1 See Gambling Commission: Rules of core casino games in Great Britain (June 2011) and previously the Gaming Clubs (Bankers’ Games) Regulations 1994.

2.94 The question whether and when swap contracts will amount to wagering contracts was considered by the High Court in Morgan Grenfell & Co Ltd v Welwyn Hatfield District Council (Islington London Borough Council, Third Party).1 In that case the bankers, Morgan Grenfell (‘MG’), entered into a ten-year interest rate swap contract with Welwyn Hatfield District Council (‘Welwyn’) under which MG would be the fixed interest rate payer and Welwyn would be the floating rate payer. As part of the arrangements MG 166

Some fundamental terminology was to pay Welwyn an up-front payment of £3,270,000. At the same time Welwyn entered into a parallel contract with Islington London Borough Council (‘Islington’) under which Welwyn was to be the fixed rate payer and Islington the floating rate payer. Under that contract Welwyn paid Islington an up-front payment of £3,060,000, so that Welwyn secured for itself a profit of £210,000 on the difference between the up-front payments. In due course the transactions were agreed to be ultra vires in the light of the Hazell litigation, and MG brought proceedings against Welwyn to recover sums paid under the contract. Welwyn, in turn, brought third party proceedings against Islington to recover sums it had paid Islington under its parallel contract. Islington raised the defence that its parallel contract with Welwyn was a wagering contract, so that Welwyn’s claim to recover sums paid was defeated by the Gaming Act. Islington further maintained that, on the assumption that the contract was a wagering contract, it would not be rendered enforceable by the then governing provisions of s 63 of the Financial Services Act 1986, because although, as Islington conceded, the contract was a ‘contract for differences’ and therefore fell within the terms of Sch 1, para 9, it had not (as s 63 required) been entered into by way of business. 1 [1995] 1 All ER 1.

2.95 On the first issue the court concluded that the parallel contract between Welwyn and Islington was not a wagering contract. The court accepted that there were features of the contract that could lead to the conclusion that it was a wagering contract namely that the parties could win or lose money depending upon the uncertain fluctuations in interest rates. However, the court concluded that an interest rate swap contract would be a wagering contract if the sole purpose of the parties in entering into it was to speculate on future interest rate movements. If there was another purpose, and in particular the purpose of hedging commercial liabilities, then the contract would not be a wagering contract. As to the first case the judge summarised his views as follows: ‘Certain contracts are by their very nature gaming or wagering contracts, such as a bet upon what horse will win a particular race. Entering into such a contract inevitably has the purpose of wagering. Other contracts may on their face appear to have nothing to do with any wager but it may be possible to prove that the purported contract was a sham and that the true transaction was a wagering transaction. In between there are, as is visualised by the passages I  have quoted, contracts which may or may not be wagering contracts, depending upon the interests of the parties and their purpose in entering into the particular contract. Interest rate swap contracts are such contracts. Since they provide for payment of differences they are capable of being entered into by way of gaming or wagering. They have, at least potentially, a speculative character deriving from the fact that the obligations of the floating rate player are ascertained by reference to a fluctuating market rate that may be higher or lower than the fixed rate at any given time. Such a contract is capable of being entered into by two parties with the purpose of wagering upon future interest rates.’1 However the judge concluded that interest rate swap contracts: 167

Some fundamental terminology ‘… show no more than a potential for wagering. In the context of interest rate swap contracts entered into by parties or institutions involved in the capital market and the making or receiving of loans, the normal inference will be that the contracts are not gaming or wagering but are commercial or financial transactions to which the law will, in the absence of some other consideration, give full recognition and effect.’.2 Applying this analysis the judge concluded that, in entering into the swap contract Welwyn and Islington had purposes and intentions other than an intention to wager. The purpose of Islington was not to speculate but to raise approximately £19 million by way of up-front payment on the swap so as to incur a revenue liability spread over a period of ten years in exchange for an advance payment which could be used for current expenditure. As to Welwyn their purpose was to receive a non-speculative profit of £210,000 for acting as an intermediary between Morgan Grenfell and Islington. They did this by entering into back-to-back swap contracts with each party in circumstances that insulated them from any speculative risk. Accordingly the contract was not a wager. 1 [1995] 1 All ER 7. 2 [1995] 1 All ER 10.

2.96 The legal basis of the judge’s distinction between interest rate swap contracts which are, and those which are not, wagering contracts is open to question. His reasoning proceeds as follows. First,1 he reproduces Hawkins J’s celebrated definition of ‘gaming or wagering’ in Carlill v Carbolic Smoke Ball Company2 which is reproduced at 2.10 above. He then goes on3 to cite a further passage from Hawkins J’s judgment as follows: ‘It is also essential that there should be mutuality in the contract. For instance, if the evidence of the contract is such as to make the intentions of the parties material in the consideration of the question whether it is a wagering one or not, and those intentions are at variance, those of one party being such as if agreed in by the other would make the contract a wagering one, whilst those of the other would prevent it from becoming so, this want of mutuality would destroy the wagering element of the contract and leave it enforceable by law as an ordinary one … In construing a contract with a view to determining whether it is a wagering one or not, the court will receive evidence in order to arrive at the substance of it, and will not confine its attention to the mere words in which it is expressed, for a wagering contract may be sometimes concealed under the guise of language which, on the face of it, if words were only to be considered, might constitute a legally enforceable contract.’ (italics supplied) It appears to be this passage which forms the basis upon which the judge concluded that, in deciding whether an interest rate swap contract is a wager, the court should examine the ‘interest’ and ‘purpose’ of the parties to see whether they had a wagering intention. The writer would respectfully suggest that the passage does not support this conclusion. It is significant that Hobhouse J omits from the passage the three cases cited by Hawkins J as authority for the proposition he was advancing in the passage. The three 168

Some fundamental terminology cases are Grizewood v Blane4 Thacker v Hardy5 and Blaxtone v Pye.6 The third case is one about a bet on a horse race and has no relevance to the present issue. The first two cases, however, are classic ‘contracts for differences’ cases where the court accepted that the contracts for the sale and purchase of shares could amount to wagers if it was the intention of both parties not to take or receive delivery but merely to settle differences. It seems reasonable to argue that Morgan Grenfell wrongly transposes the Carlill reference to the need to have regard to the parties’ intentions as this was developed in the 19th century ‘contract for differences’ cases to modern interest rate swap contracts. In the 19th century ‘contracts for differences’ cases such as Universal Stock Exchange Ltd v Strachan7 it was established that if parties to a contract for the sale and purchase of an asset such as shares intended to deliver and take delivery of the shares there was no wager, but that where both parties to the contract intended that no shares should be delivered and that ‘differences’ only should be accounted for the contracts were wagering contracts and therefore void. This would be the case even though there was a written contract providing that either party might require completion of the purchase and delivery or receipt of the shares (as was the case in Universal Stock Exchange Ltd v Strachan). In cases such as these the courts went behind the express contract which appeared to show a genuine transaction and took account of the parties’ intention that only differences should be paid and that there should be no delivery or receipt. In those circumstances the evidence of the parties’ true intention overrode the terms of the express contract because, in effect, that contract was a sham. It did not represent the parties’ true intentions. This explains why the agreement that there should be no delivery or receipt of shares had to be that of both parties since there could only be a contract which had the effect of replacing the express contract if both parties had the same intention. There is, however, no similar role for an alternative contractual intention in the case of a modern interest rate swap contract. In the case of such a contract both parties intend to win or lose money depending on the fluctuation of interest rates. The contract which gives effect to that intention, the interest rate swap contract, remains exactly the same whether they have a hedging intention, or some other commercial intention, or not. If both parties know that the contract is being entered into by a bank customer to hedge against rises in interest rates, this in no way replaces the interest rate swap or makes it a sham. The swap functions in exactly the same way whether it is entered into for pure speculation or entered into to hedge a liability of one or both of the parties. The intention of a party, or the parties, to hedge, if that be the intention, in no way replaces the swap contract. 1 [1995] 1 All ER 1 at 6–7. 2 [1892] 2 QB 484. 3 [1995] 1 All ER 1 at 7. 4 11 CB 525. 5 4 QBD 685. 6 2 Wils 309. 7 [1896] AC 166.

2.97 It may therefore be doubtful whether Carlill v Carbolic Smoke Ball Company supports the judge’s analysis in Morgan Grenfell. The judge also relied upon an observation in the Court of Appeal decision in Ellesmere v 169

Some fundamental terminology Wallace1 where Lord Hanworth MR referred to the need in deciding whether a contract was a wagering one to have regard to the purpose with which it was made and the interest of the parties. He said: ‘It is clear from other like cases that the substance of the matter is to be regarded; and if so, it may be more accurate to say that if there is no other purpose in the contract than that of gaming or wagering, it is void the interest of the parties being evidence of the purpose for which it is entered into’.2 This may appear to support the view that in deciding whether a contract is a wagering one the purpose of the parties in entering into it (ie their subjective intentions) can be examined. However, it may be doubted whether the reference to ‘purpose’ or ‘interest’ in Ellesemere v Wallace is to be understood in this way. The case is discussed at 2.22–2.24. It will be seen from 2.24 that one of the central issues in the case was whether the payments made by a horse owner to the Jockey Club to enter his horses in their races and prizes awarded by the Jockey Club to the owners of winning race horses could be characterised as stakes on a bet. This was central because the only interest which the parties to a wager may have lies in the stakes. The Court of Appeal concluded that the payments and the prizes could not be characterised as stakes. This was because in making the payments the race horse owner and the Jockey Club had interests and purposes other than mere wagering. The Jockey Club, by offering the prizes, secured entries to races on its racecourses, which was a matter of commercial interest to the Jockey Club. The race horse owner, in making the entrance payment, secured the opportunity to test his horses on well-run race courses operated by the Jockey Club under the Rules of Racing. Each therefore had an interest beyond that of mere wagering. It will be seen that in making these findings the Court of Appeal was not concerned with the question whether it is appropriate to examine the motives that lead parties to make a wager but was concerned with whether the payments and prizes made could properly be called stakes. If they could not there was no wager in the first place. Again the case does not appear to support the conclusion that it is possible to examine the parties’ motives in entering into an interest rate swap contract in order to determine whether there is a speculative or wagering intention once it is clear that they have entered into a contract with the purpose of winning or losing money on future fluctuations in interest rates. 1 [1929] 2 Ch 1. 2 [1995] 1 All ER 7.

2.98 Hobhouse J also refers to the minority judgment of Leggatt LJ in City Index Ltd v Leslie,1 the spread betting case which is discussed at 2.81–2.82. In that judgment Leggatt LJ had made a distinction between ‘contracts for differences’ and ‘other contracts’ in the following terms: ‘Although before the 1986 Act came into force, contracts for differences were void, other contracts which are superficially similar were not. These were contracts entered into for a commercial purpose, such as hedging. Such contracts may result in no more than the payment of a difference. But because they were made for a commercial purpose, they are not void as wagering contracts’.2 170

Some fundamental terminology Unfortunately it is not clear from this passage exactly what the nature of the ‘other contracts’ (which are said to be prevented from being void because they have a commercial purpose) may be. No examples of such contracts are given in City Index Ltd v Leslie. The passage may be regarded as an unsatisfactory foundation upon which to erect a doctrine that contracts that would be wagering contracts if considered in isolation may be held not to be wagering contracts if there is some kind of commercial intention, such as an intention to hedge, motivating the makers of the contract. 1 [1991] 3 All ER 180. 2 [1991] 3 All ER 180 at 190, cited in Morgan Grenfell at 7.

2.99 It may be added that if there is such a principle it is hard to see where its limits lie. For example, if a hedging function prevents a bet from being characterised as such, where do bookmakers’ hedging bets stand? Hobhouse  J states that bets upon horse races are examples of contracts that are by their very nature gaming or wagering contracts. But suppose bookmaker B1 takes bets from a number of customers who all back horse H to win (B1 backing the field against him). To protect his position B1 backs H  to win with bookmaker B2. This is a hedging bet designed to control the risk that he may have to pay out substantial sums to his customers if H  wins. Following the repeal of the Gaming Act 1845 B1’s liability to pay will be legally enforceable. Given that B1 and B2 are both bookmakers it is highly likely that B2 will realise that B1’s bet is a hedging bet. How does the principle in Morgan Grenfell apply? Does the fact that the bet is a hedging bet mean that it is not a wager or bet at all, or does it fall within a principle that all horse race bets are necessarily wagers? This dilemma may support the view that the legal bases of the Morgan Grenfell doctrine are open to question and may need to be re-visited when an appropriate case arises. 2.100 It may, of course, be that the question whether an interest rate swap amounts to a wager is relatively unimportant now that wagers are legally enforceable and given that, as was conceded in Morgan Grenfell, it seems likely that most such swap contracts will fall within the regulatory regime laid down by the Financial Services and Markets Act 2000.

Pool betting 2.101 Section 12 of the GA 2005 provides a definition of ‘pool betting’ for the purposes of the Act. This definition will be considered below. First, however, a brief description is given of the way in which pool betting is conducted and certain legal issues relating to the conduct of pool betting are considered. 2.102 In classic pool betting participants pay stakes into a pool held by the promoter on terms that the winners will receive some or all of the pooled stakes. There are two commercially significant types of pool betting in the United Kingdom, namely totalisator betting on horse races and greyhound races, and football pool betting. In addition, decisions of the courts prior to the enactment of the GA 2005 had established that certain types of ‘fantasy’ competitions could constitute pool betting.1 1 For fantasy competitions see 2.42.

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Some fundamental terminology

Totalisator betting 2.103 A totalisator is a device for pool betting on horse races or dog races which by continuously aggregating both the total stakes paid into a pool of bets on a race and the stakes bet on the individual runners in the race makes possible a rapid computation of the dividend payable in respect of the stake or stakes betted on any runner, should it win. A bettor wishing to back a particular runner is issued with one or more tickets by the totalisator on that runner, the tickets being all of the same unit value or multiples of that unit value. The proceeds of the tickets sold are pooled. A predetermined percentage of the pool is deducted to cover the expenses of the operator (including betting duty) and his profit. On the result of the race the remainder of the pool is divided equally by the number of winning tickets or units and the resulting amount is the ‘dividend’ payable on each winning unit. Totalisator betting on horse races appears to have originated in France around 1870.1 A mechanical totalisator was first patented and used in New Zealand in 1880 and such betting is now widely practised. In Britain the Racecourse Betting Act 1928 made the use of the totalisator on horse races lawful and placed it under the control of a statutory authority which is now the Horserace Totalisator Board. 1 For early cases on totalisators see: Tollet v Thomas (1871) LR 6 QB 514; AttorneyGeneral v Luncheon & Sports Club Ltd (1929) AC 400; Strathern v Scottish Greyhound Racing Co (1930) JC 24, (1930) SLT 419; Everett v Shand (1931) KB 522; Shuttleworth v Leeds Greyhound Association Ltd (1933) 1 KB 400.

Football pools 2.104 Football pools appeared during the early part of the twentieth century. Persons wishing to make a bet fill in a coupon which is delivered to a promoter. The coupon contains a number of competitions or pools. The prizes for each pool come from the money staked on that pool after deduction of pool betting duty, expenses and commission. The pattern of competitions varies, but typically a bettor is confronted with a list of football fixtures. He has to select a stated number of them which will, in his prediction, gain the highest number of points to be awarded by a scoring system laid down by the rules. The winning pool is divided into dividends according to the published rules, and those making forecasts which give them a qualifying points total share the money allocated to the dividends.1 1 For ‘pool betting’ under GA 2005 see ss 12, 65(2)(d), 93, 94, 179 and 180. Under the previous legislation, totalisator betting was dealt with by the Betting, Gaming and Lotteries Act 1963, s 14(3) and pool betting otherwise than on a track was dealt with by s 4(2) and Sch 2.

2.105 Although both totalisator betting and football pool betting are described as ‘betting’, and although legislation treats them as involving ‘bets’,1 it is clear that such betting differs from ordinary betting in the form of wagering in at least three respects. First, to the extent that there is a bet between the entrant and the promoter, the promoter can neither win nor lose; secondly, to the extent that there are bets between the participants it is difficult, as is noted below, to analyse these in strict wagering terms. Thirdly, 172

Some fundamental terminology unlike the typical wager where the amount to be won will be agreed or fixed beforehand, in a pool bet a party cannot know how much he will win, as this will depend upon the number of people who pay into the pool and the number of winners. The cases have drawn attention to two separate sets of contractual relationships in a pool bet, namely the relationship between the participants and the promoter and the relationship between the participants as between themselves. 1 In Tote Investors Ltd v Smoker [1968] 1 QB 509 at 517 Lord Denning (apparently) and at 518 Lord Wilberforce treated transactions carried out through the Horserace Totalisator Board as bets, but as bets which were not wagers.

Participants and promoter 2.106 The present state of the authorities in England and Wales seems to establish that even if the contract between the entrant to a pool and the pool promoter can be characterised as a bet, such a bet is not a wager, since the promoter can neither win nor lose on the outcome of the event betted on.1 1 See A-G  v Luncheon & Sports Club Ltd (1929)  AC  400 where club members who used a totalisator provided and run by the club to bet on horse races were not betting with the club, as the club could neither win nor lose: Lord Buckmaster (at 405); Viscount Dunedin (at 406); Lord Blanesburgh doubted whether there was any contract between the entrants and the club (at 407). In Zeidman v Owen (1951) KB 593 football pool entrants are not betting with the promoter: per Lord Goddard CJ at 598. See also Tote Investors Ltd v Smoker [1968] 1 QB 509 where a defendant who made bets by totalisator with the Horserace Totalisator Board was not wagering, as the Board could neither win nor lose: at 516 per Lord Denning; at 518–519 per Lord Wilberforce; at 520 per Lord Pearson. In Scotland there is some authority that a bet may exist without mutuality of risk, so that a participant in a totalisator pool may bet with the promoter. For differing views see Kelly v Murphy (1940) SLT 108 where entrants in a football pool did not bet with the promoter, per Lord Aitchison at 110, 113; or the entrants to a totalisator or pool do bet with the promoter, per Lord MacKay at 116 and per Lord Wark (apparently) at 116–117; Lord Jamieson appears to have left the point undecided.

Participants between themselves 2.107 There appears to be no satisfactory analysis of the nature of the relationship between the participants in a pool or totalisator bet as between themselves. Although they are clearly in competition with each other for the pooled stakes,1 and although they may be said to be betting against each other2 in the broad sense that each hazards a stake on the terms that it will be forfeit to the pool if he loses, and that he will share the pool if he wins, it is probably not possible to analyse the relationship between the participants in a pool bet in terms of strict bets or wagers.3 Rather, pool betting appears to be a form of betting which is sui generis.4 It has been observed that pool betting bears some resemblance to lotteries and sweepstakes, although, unlike these forms of gambling, pool betting as classically conducted by totalisator or in the form of football pools gives opportunities for the exercise of skill.5 1 Bretheton v United Kingdom Totalisator Co Ltd [1945] KB 555 at 559 per Lord Greene. 2 Zeidman v Owen [1951] KB 593 at 597 per Lord Goddard CJ.

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Some fundamental terminology 3 In A-G  v Luncheon & Sports Club Ltd [1929]  AC  400 Lord Buckmaster held that the club members betting by means of a totalisator provided and run by the club were entering into contracts (presumably of betting) with other members of the club (at 405); whilst Lord Blanesburgh held that there was a contract between the participants which was not a betting contract but was more in the nature of a ‘highly developed sweepstake offering results which, it is true, become practically possible only through the foolproof accuracy of the totalisator’ (at 407). Although it has been suggested that on a proper analysis a pool bet involves a wager by each participant with all the others through the promoter as agent (see Customs & Excise Commissioners v Dodd [1961] 1 WLR 144 obiter per Lloyd-Jacob J at 151) such an analysis has been strongly disputed, see Ellesmere v Wallace [1929] 2 Ch 1 at 50–54 per Russell LJ; Tote Investors Ltd v Smoker [1968] 1 QB 509 at 515 per Lord Denning; at 519 per Lord Wilberforce. See also Kelly v Murphy (1940) SLT 108, especially at 120–121 per Lord Jamieson. In Customs & Excise Commissioners v News International Newspapers Ltd [1996]  V  &  DR  434 (CO/112/96) Kay J  concluded that it is not necessary to find a contract, express or implied, between the contestants before it can be concluded that there was a bet by way of pool betting. This point was not considered on appeal by the Court of Appeal. 4 See the decision of the Court of Appeal in News International Newspapers Ltd v Customs & Excise Commissioners [1998] V & DR 267 (COF 96/1762/4). 5 See A-G v Luncheon & Sports Club Ltd (1929) AC 400 per Lord Blanesburgh at 407; Tote Investors Ltd v Smoker [1968] 1 QB 509 at 517; Kelly v Murphy (1940) SLT 108 per Lord Aitchison at 113; per Lord Jamieson at 121.

Pool betting and the exercise of skill 2.108 As the legislation stood prior to the enactment of the GA 2005, the law only permitted forms of pool betting which gave scope for the exercise of skill. Totalisator betting was permitted on horse races1 and on greyhound races,2 and both such forms of betting give undoubted scope for the exercise of skill in picking winners. So far as pool betting otherwise than on a track was concerned, this was governed by s 4 and Sch 2 of the Betting, Gaming and Lotteries Act 1963, which provided for pool promoters who were to run betting such as football pool betting to be registered with the local authority. Schedule 2, para  13(a) provided that pool betting business carried on by a registered pool promoter must: ‘(a) … take the form of the promotion of competitions for prizes for making forecasts as to sporting or other events …’. In Singette Ltd v Martin3 the House of Lords held that there is necessarily an element of skill in the making of ‘forecasts as to sporting or other events’ such as were contemplated by para 13(a). In their view football pools, for example, give scope for the exercise of skill, even though some participants may have no skill or knowledge and others who have such skill or knowledge may choose not to use it. However, the fact that the pools give scope for the exercise of skill was sufficient for the purpose of satisfying the requirements of the legislation as it then stood. One consequence was that under the legislation prior to the GA 2005 a clear distinction could be drawn between a lottery (where no skill would be involved) and pool betting (where the statutory provisions required scope for the exercise of skill). As is noted below, the definition of ‘pool betting’ in s 12 of the GA 2005 does not appear to treat skill as a necessary component of pool betting, and accordingly the Act contains provisions in s 18 to deal with the categorisation of activities which amount both to pool betting and a lottery under the definition contained in s 14 of the Act. 1 Betting, Gaming and Lotteries Act 1963, s 14. 2 BGLA 1963, s 16. 3 [1971] AC 407.

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Some fundamental terminology

Pool betting and winnings 2.109 One further aspect of the pre-GA 2005 legislation as it affected pool betting is worthy of comment. In the case of pool betting carried on offtrack (ie  by a registered pool promoter under BGLA  1963, s  4 and Sch  2) the legislation provided that the only amounts which could be paid out as winnings were the stakes paid by entrants in the competition. Schedule 2, para 13A1 provided that: ‘In any competition the total amount payable by way of winnings shall be the aggregate of— (a) the total amount of the stakes in respect of entries in the competition, less the relevant percentage of that total amount …’ although provision was made for money to be carried over from previous competitions in certain circumstances. The effect of these provisions was to prevent the injection into the prize fund of money from any other source. One consequence of this was that it made it difficult for new entrants to the pool betting market to achieve sufficient liquidity in their prize pools to attract competitors, and this represented a bar to entry. This aspect of the legislation does not appear to have been reproduced in the GA 2005 – see s 12 below. 1 Inserted by the National Lottery etc Act 1993, s 58(1) and (3).

2.110 Under the previous legislation, the expression ‘pool betting’ was the subject of an elaborate definition, which was contained in the Betting and Gaming Duties Act 1981, s 101 and carried over to Betting, Gaming and Lotteries Act 1963, s 55. Under the definition, any bet was deemed to be a pool bet unless it was a bet at fixed odds and, in particular, bets were pool bets (in summary) if stakes were shared amongst winners, if winnings were divisible among winners, if winners or their winnings were at the discretion of the promoter or some other person, or if winnings were not in money. Bets were made at fixed odds if (basically) each party to the bet could calculate what he would win when the bet was made. This produced a fairly clear distinction between a fixed odds bet and a pool bet where the winnings cannot be calculated when the bet is made. 1 Betting and Gaming Duties Act 1981, s 10 provided as follows: ‘(1) For the purposes of this Part of this Act, a bet shall be deemed to be made by way of pool betting unless it is a bet at fixed odds, and, in particular, bets shall be held to be made by way of pool betting wherever a number of persons make bets— (a) on terms that the winnings of such of those persons as are winners shall be, or be a share of, or be determined by reference to, the stake money paid or agreed to be paid by those persons, whether the bets are made by means of a totalisator, or by filling up and returning coupons or other printed or written forms, or in any other way, or (b) on terms that the winnings of such of those persons as are winners shall be, or shall include, an amount (not determined by reference to the stake money paid or agreed to be paid by those persons) which is divisible in any proportions among such of those persons are as winners, or

175

Some fundamental terminology (c) on the basis that the winners or their winnings shall, to any extent, be at the discretion of the promoter or some other person. (2) A bet is a bet at fixed odds within the meaning of this section only if each of the persons making it knows or can know, at the time he makes it, the amount he will win, except in so far as that amount is to depend on the result of the event or events betted on, or on any such event taking place or producing a result, or on the numbers taking part in any such event, or on the starting prices or totalisator odds for any such event, or on there being totalisator odds on any such event, or on the time when his bet is received by any person with or through whom it is made. In this subsection— “starting prices” means, in relation to any event, the odds ruling at the scene of the event immediately before the start, and “totalisator odds” means— (a) in relation to a race which is a recognised horse race within the meaning of section 55(1) of the Betting, Gaming and Lotteries Act 1963, the odds paid on bets on that race made by way of sponsored pool betting, and (b) in relation to any other event, the odds paid on bets made by means of a totalisator at the scene of the event. (3) A  bet made with or through a person carrying on a business of receiving or negotiating bets, being a bet made in the course of that business, shall be deemed not to be a bet at fixed odds within the meaning of this section if the winnings of the person by whom it is so made consist or may consist wholly or in part of something other than money. (4) Where a person carries on a business of receiving or negotiating bets and there is or has been issued in connection with that business any advertisement or other publication calculated to encourage persons making bets of any description with or through him a belief that the bets are made on the basis mentioned in subsection (1)(c) above, then any bets of that description subsequently made with or through him in the course of that business shall be deemed for the purposes of this section to be made on that basis.’

‘Pool betting’ under the Gambling Act 2005 2.111

The expression ‘pool betting’ is defined by GA 2005, s 12 as follows:

‘(1) For the purposes of this Act betting is pool betting if made on terms that all or part of the winnings— (a) shall be determined by reference to the aggregate of stakes paid or agreed to be paid by the persons betting, (b) shall be divided among the winners, or (c) (2)

shall or may be something other than money.

For the purposes of this Act pool betting is horse-race pool betting if it relates to horse-racing in Great Britain’.

It will be noted that the definition of ‘pool betting’ applies to ‘betting’ without qualification, so that both ‘betting’ in the general sense as defined by s 9 and ‘betting’ in the form of prize competitions as defined by s 11 may both amount to ‘pool betting’. However, this is only the starting point and, as we shall see, s 11 betting in the form of prize competitions may only amount to ‘pool betting’ in particular circumstances. 176

Some fundamental terminology 2.112 It should be noted that the s 12 definition focuses attention principally on the way in which the ‘winnings’ of the betting are dealt with. The expression ‘winnings’ is defined generally for the purposes of the Act by s 353(1), which provides: ‘“winnings”, in relation to a bet, means anything won, whether in money or money’s worth’. So ‘winnings’ may be in money or in something which is not money but which has a money value. The s 12 definition makes clear that where betting takes place in circumstances where the winnings are something other than money, the betting is ‘pool betting’ (see s 12(1)(c)). In other cases, where the winnings do consist of money, one has to look to see how the winnings are dealt with. Section 12 provides for two cases. 2.113

The first case is where all or part of the winnings—

‘(a) shall be determined by reference to the aggregate of stakes paid or agreed to be paid by the persons betting’. This limb of the definition applies to the classic pool bet where stakes paid by bettors are pooled and then divided up among the winners. It should be noted that this limb of the definition could only apply to bets falling within the general definition of ‘betting’ within s 9 and could not apply to ‘betting’ in the form of prize competitions as provided for by s 11, because this limb of the definition presupposes that there will be ‘stakes’ paid or agreed to be paid by the bettors. Section 11, however, as we have noted, only applies to cases where no stake is deposited (albeit some other payment to participate is required).1 The expression ‘stake’ is defined by s 353 as follows: ‘“Stake” means an amount paid or risked in connection with gambling and which either— (a) is used in calculating the amount of the winnings or the value of the prize that the person making the stake receives if successful, or (b) is used in calculating the total amount of winnings or value of prizes in respect of the gambling in which the person making the stake participates’. It is clear that the interaction of s  12(1)(a) and the definition of ‘stake’ will catch pool betting in its classic form. Take, for example, the case of a totalisator offering bets on a seven horse race. The totalisator offers tickets at a unit price of £1 per ticket. Ten thousand tickets are sold, producing a total pool of £10,000. £2,000, representing two thousand £1 bets, is staked on horse 4. Horse 4 wins. 10% of the pool is deduction on account of expenses, commission etc, so that the dividend is £9,000 ÷ 2,000 = £4.50 per winning unit. It is clear that the winnings are determined by reference to the aggregate of stakes paid, so that the arrangements fall within the s 12(1)(a) definition. The larger the number of stakes in the winning pool, the bigger the winnings from that pool. 1 See GA 2005, s 11(1)(b).

2.114 It should be noted that the definition in s 12(1)(a) applies both to the case where the stakes have been ‘paid’ by the persons betting and to the 177

Some fundamental terminology case where the stakes are ‘agreed to be paid’ by the persons betting, thus accommodating the case where pool betting is pursued on credit. Although pool betting on credit is probably not now common,1 there have been periods when football pools were regularly conducted on a credit basis, customers submitting stakes for the previous week with their coupons for the current week.2 1 In practice, pool betting on credit was difficult to organise in cases where BGLA 1963, Sch 2, para 13A prohibited the injection of funds other than stakes into the prize pool. This meant that if there was a shortfall in the pool due to defaulting customers, the promoter would be unable to make up the deficit from alternative funds. 2 See, for example, the facts in Stovell v Jameson (1940) 1  KB  92. The reason for conducting football pools in this way was that cash betting on football pools was forbidden by the Ready Money Football Betting Act 1920. See also A-G v Luncheon & Sports Club Ltd (1929) AC 400, HL for a case where totalisator betting on horse races was conducted by a club on credit terms.

2.115 The second limb of s 12 provides that betting is pool betting if made on terms that all or part of the winnings— ‘(b) shall be divided among the winners’. This limb of the definition could accommodate both ‘betting’ within the general definition in s  9 and ‘betting’ in the form of prize competitions within s 11. In the first case, however, it is unlikely that the limb will add anything to the s 12 (1)(a) definition in the case of a classic pool bet where stakes are paid. In such a case, the stakes are the winnings and, to the extent that they are divided among the winners, they bring the bet within s 12(1) (b). However, such a bet is, for the reasons noted above, likely to fall within s 12(1)(a) in any case. 2.116 Much more significantly, however, s  12(1)(b) may apply to a case where there are no ‘stakes’ which are paid or agreed to be paid by the persons betting. This means that the definition can apply to betting as defined by s 11, which can apply only where there are no stakes but always provided a payment to participate is required. For a discussion of the application of s 11 to certain forms of competition and fantasy schemes see 2.45 above. Where a competition ranks as ‘betting’ within the s  11 definition, the question whether it is general betting (within s 9) or ‘pool betting’ (within s 12) will, under this second limb, depend upon whether all or part of the winnings1 are to be ‘divided among the winners’. This will depend upon the rules of the competition. Take the case of a fantasy competition which provides a fixed first prize of £100,000, a fixed second prize of £50,000 and a fixed third prize of £25,000. These arrangements do not amount to arrangements in which all or part of the winnings are divided among the winners. There are fixed and discrete winnings for each of the winners which are known when each competitor enters. Suppose, however, the rules provided that if two or more persons got equal points in first place (or second or third place) then the relevant prize would be shared. This would seem to convert the arrangements into ‘pool betting’ within s  12(1)(b). A  promoter wishing to avoid this result would need to arrange for a tie-break to produce a clear cut winner of each relevant prize. It seems, therefore, to follow that fantasy competitions and other competitions falling within the s 11 definition may 178

Some fundamental terminology amount either to general betting or to pool betting, depending upon the arrangements made for distribution of winnings. 1 ‘Winnings’ in relation to a bet ‘means anything won, whether in money or money’s worth’: GA 2005, s 353.

2.117 The third limb of the definition of ‘pool betting’ is contained in s 12(1)(c) which provides that betting is pool betting if made on terms that all or part of the winnings— ‘(c) shall or may be something other than money’. Accordingly, any betting (including s  11 betting) involving non-money winnings will automatically qualify as ‘pool betting’. This provision reproduces the position which applied under the pre-GA  2005 legislation, where betting with non-money winnings automatically qualified as pool betting.1 1 See Betting and Gaming Duties Act 1981, s 10(3).

2.118 It seems clear that the s 12 definition of ‘pool betting’ was designed to be simpler than that contained in s 10 of the Betting and Gaming Duties Act 1981. The Explanatory Notes comment that the definition ‘… has been amended to remove those various elements which are no longer relevant to the definition for the purposes of the Act’.1 Although simplification is always to be welcomed, it may perhaps be questioned whether s  12, and in particular the first limb of the definition, produces a clear distinction between pool betting and other forms of betting such as fixed odds betting and wagering, which are to fall within the definition of ‘general’ betting within s  9. Suppose ‘B’ lays odds of 10/1 against horse X  to win a race (ie he bets that X will lose). ‘A’ backs the horse to win with a stake of £10. ‘A’ pays £10 and ‘B’ pays £100 to a stakeholder ‘C’. Whichever of ‘A’ and ‘B’ wins the bet will be paid £110 by ‘C’. In those circumstances, are not his ‘winnings … determined by reference to the aggregate of stakes paid … by the persons betting’? If so, they would seem to fall within the first limb of the s 12 definition; yet there can be no serious doubt that the bet between ‘A’ and ‘B’ is a fixed odds wager and not a pool bet. Perhaps the difficulty can be resolved by saying that ‘A’s’ (or ‘B’s’) winnings are not ‘determined by reference to the aggregate of stakes paid’ but are the aggregate of stakes paid, though the distinction may be thought a fine one. It is to be hoped, however, that the underlying distinction between a pool bet and a wager or fixed odds bet is reasonably clear and that the s 12 definition will prove adequate to reflecting the distinction. 1 Explanatory Notes to Gambling Act 2005, para 65.

2.119 It should be noted that the s 12 definition of ‘pool betting’ does not appear to contain any provision which expressly or impliedly requires that pool betting shall involve the exercise of skill. In this respect s 12 may have changed the law from that laid down by the legislation now repealed which laid it down as a requirement of pool betting, at least as carried on by a registered pool promoter under s 4 and Sch 2 of the Betting, Gaming and Lotteries Act 1963, that it should give scope for the exercise of skill.1 The conclusion that pool betting need not necessarily involve skill is supported 179

Some fundamental terminology by GA 2005, s 18 which provides for cases where a transaction amounts both to a lottery under s 14 and pool betting under s 12. 1 See Singette Ltd v Martin [1971] AC 407, HL.

2.120 If, as seems probable, the requirement that pool betting shall give scope for the exercise of skill has been dispensed with, this will remove certain restrictions which existed under the former law. For example, it was not previously possible to run pool betting schemes where bettors were required to back the outcome of virtual events, since the results of these events were digitally generated by random number generators, so that bettors could use no skill in forecasting what the results would be. On the basis that s 12 removes the need for skill to be exercised, this would seem to open the way to pool betting on such virtual events. 2.121 It should be noted too that there appears to be nothing in s  12 which reproduces the prohibition contained in the former legislation of the injection of money into the prize pool. Where betting qualifies as pool betting under s 12(1)(a) (where there will be the payment of stakes by bettors), it is sufficient if either all or part of the winnings are determined by reference to the aggregate of stakes paid or agreed to be paid. So the betting would qualify as pool betting within this limb of the definition even though money other than stake money was injected into the prize pool, provided part of the winnings were determined by reference to the aggregate of stakes paid. In the case of the other kinds of pool betting provided for in s 12(1)(b) and (c) there is no need for stakes at all, and it is common, for example in the case of fantasy competitions, for the prize or prizes to be derived from a pre-existing fund provided by the promoter. This would qualify as pool betting under s  12, and there is clearly no provision requiring that in these cases prizes shall come from a stake in the betting sense. 2.122 Section 21(2) provides that for the purposes of the GA  2005 ‘pool betting’ is ‘horse-race pool betting’ if it relates to horse-racing in Great Britain. Pool betting on horse-racing may only be carried on under the authority of a pool betting operating licence and ss 93 and 94 make provision about the conditions to be attached to such licences and to the acts which the holder of such a licence is authorised to perform.

LOTTERIES AND BETTING 2.123 Section 18 of the GA  2005 is headed ‘Lotteries and betting’. It is designed to deal with cases where a transaction satisfies the definition of participating in a lottery contained in s  14 and also either satisfies the definition of pool betting in s 12, or satisfies the definition of betting in s 9 by virtue of s 11. The section therefore proceeds on the assumption that a ‘lottery’ within s 14 could amount either to pool betting (as defined in s 12) or betting in the form of a prize competition (as defined in s 11). Where that state of affairs arises, s 18 provides that the usual consequence will be that the transaction will be treated as a bet and not a lottery, though there are a number of exceptions to this. Section 18 does not, however, provide for the possibility that a transaction or transactions might amount both to a lottery 180

Some fundamental terminology within s  14 and general betting as defined by s  9. In order to understand why this is so, and in order to understand the scope and effect of s 18, it is necessary to examine the legal position under the previous legislation. 2.124 Before the enactment of the GA 2005 the question could, from time to time, be raised whether a particular form of gambling was properly to be characterised as betting (either wagering or pool betting) or whether it should be characterised as a lottery in accordance with the then accepted non-statutory idea of what a ‘lottery’ was. As the law then stood there was little likelihood that a scheme would rank both as pool betting and as a lottery. A lottery was understood to be a scheme for the distribution of prizes by pure chance. In the case of pool betting, however, it was necessary that there should be scope for the exercise of skill. As noted at 2.108 above, pool betting could be carried on by totalisator on approved horse race courses or licensed greyhound tracks and such betting necessarily gave scope for the exercise of skill. Alternatively, pool betting could be carried on off-track by a registered pool promoter under legislation which, as interpreted in Singette Ltd v Martin,1 required that pool betting should give scope for the exercise of skill, and this requirement meant that pool betting (at least where it was lawfully conducted) would not be likely also to qualify as a lottery. The case of wagering or fixed odds betting, however, was not so clear cut. As has been noted at 2.18 above, there is nothing in principle to stop a wager or fixed odds bet being made upon a purely random event in circumstances where no skill can be employed to improve a bettor’s chances of winning the bet. This could and did lead to disputes over whether particular sets of arrangements in which money was distributed by chance amounted to lottery schemes or were merely arrangements for the making of wagers on random events. The question became one of great importance during the latter half of the 1990s and onwards with the growth of ‘numbers betting’ in licensed betting offices in the form of offerings such as 49’s, Rapido, fixed odds betting terminals and virtual racing. For a description of these developments see 0.115 and 0.121–0.124 above. 1 [1971] 1 AC 407.

2.125 These developments proceeded upon the assumption that a reasonably clear line could be drawn between wagering on the one hand and a lottery on the other. The writer would submit that this assumption was justified, although there could be difficult borderline cases. An important question that arises in approaching the GA 2005 is whether the distinction can be drawn in the same way, having regard to the new statutory definitions of ‘betting’ in ss  9–11, of ‘pool betting’ in s  12 and of ‘lottery’ in s  14. It is submitted that the distinction between wagering or fixed odds betting and lotteries survives intact under the new Act, but that the distinction drawn under the previous legislation between ‘pool betting’ (involving skill) and a ‘lottery’ (involving no skill) can no longer be relied on, owing to the definition of ‘pool betting’ in GA  2005, s  12. In addition, the extension of the concept of ‘betting’ to ‘prize competitions’ by s 11 creates the possibility of overlap between such competitions and lotteries. This explains why s 18 specifically caters for cases where there is an overlap between lotteries and pool betting or ‘prize competitions’, but does not cater for a possible overlap between lotteries and general betting within s 9. 181

Some fundamental terminology 2.126 Accordingly, the ensuing analysis falls into three sections. First there is a discussion of the distinction between wagering or fixed odds betting and lotteries as that distinction was understood under the legislation preceding the GA  2005. Next the question is posed whether the distinction between these two forms of activity has been affected by the Act of 2005 and, in particular, the new statutory definitions. Third, consideration will be given to the scope of GA 2005, s 18 in the case of transactions which do amount both to lotteries and to pool betting or s 11 betting.

Wagering and lotteries prior to the Gambling Act 2005 2.127 As discussed at 2.10 above, the pre-GA  2005 understanding of a ‘bet’ in the form of a wager was that it was a bilateral contract between two parties in which each staked something of value (usually money) on the outcome of some issue on which they had taken up opposing positions. The pre-GA  2005 conception of a lottery was that it was a scheme for the distribution of prizes by chance where the persons taking part had made a payment or consideration in return for their obtaining their chance of a prize.1 1 See Reader’s Digest Ltd Association v Williams [1976] 1 WLR 1109 at 1113; Imperial Tobacco Ltd v A-G [1982] WLR 466.

2.128 The question whether any particular arrangement amounted to a lottery was one which had to be answered by applying the above description of the essential elements of a lottery reasonably flexibly to the facts.1 In approaching the question it was considered helpful to take account of certain features which were typically found in lotteries as they had developed over the years.2 One feature of lotteries relevant to the present question is the fact that, typically, whilst they create a conflict of interest between the lottery entrants, there is no conflict of interest between any entrant and the promoter. Take first a classic lottery. There is a Promoter, ‘P’, who sells lottery tickets and pools the payments. P  takes his expenses from the pool and, having identified the winner(s) by a draw, distributes the pool as a prize or prizes to the winner or winners. In such an arrangement there is necessarily a conflict of interest between each of the participants. Each participant is in conflict with all the others to win some or all of the pool, and although in one sense it is to the advantage of any participant that a large number of other participants should take part, since this will increase the pool, it is also to his disadvantage, since it will reduce the chances of his ticket being drawn. Second, and by way of contrast, there is no conflict of interest involving the promoter ‘P’. Provided he has not guaranteed a minimum return in prizes, he cannot lose. In gambling terms he has no interest in the outcome; he merely collects the pool, deducts his expenses and distributes the pool to the winners. Thirdly, it is also relevant to note that the arrangement is designed to be a multi-partite arrangement in which a large number of different persons will take part. The whole purpose of such a lottery is to attract a large number of participants who will pay to enter on the understanding that this will generate a substantial prize pool to be paid out to one, or a few, lucky winners. By definition the arrangement involves a scheme to attract a large number of entries. Fourthly, it is easy to see that the scheme involves 182

Some fundamental terminology the ‘distribution’ of ‘prizes’, for a prize is by definition something given to one who wins as against others who are striving for the same prize. The OED defines ‘prize’ as: ‘a reward, trophy or symbol of victory or superiority in any contest or competition; a sum of money or thing of value, offered for competition by chance or hazard as by trying who will throw the highest or other specified number at dice, or draw a particular ticket from among a large number to which no advantage attaches, called blanks’. 1 See Smith & Monkcom Law of Betting, Gaming and Lotteries (2nd edn), ch  14, para  C14.1, citing Re: Senator Hanseatische Verwaltungsgesellchaft mbH  [1997] 1 WLR 515 at 523G: ‘So Parliament has left it to the Courts to decide what constitutes a lottery by reference to the general underlying idea. They have consistently held that what lies at the heart of the concept is “the distribution of prizes by lot or chance”, see Taylor v Smetten (1883) 11 QBD 207; Atkinson v Murrell [1972] QB 274; Whitbread & Co Ltd v Bell [1972] 2 QBD 547; Reader’s Digest Association Ltd v Williams [1976] 1 WLR 1109; Imperial Tobacco Ltd v A-G [1981] 1 AC 718. This is a description not a definition.’ per Millett LJ. 2 For a detailed discussion of these issues see Smith & Monkcom Law of Betting, Gaming and Lotteries (2nd edn), paras C14.4–C14.7.

2.129 A similar analysis applies to a second type of lottery where there is a prize or prizes put by the promoter, or by some third party, before the lottery is launched. In other respects the scheme remains the same. The promoter ‘P’ sells tickets for a money price, organises a draw or determining event and awards the prize or prizes to the winner(s). The money paid over by the participants may be used to defray the cost of the prizes or it may be that the prize is simply donated for the purpose of the lottery. Such an arrangement also produces a conflict of interest between the entrants, all of whom are in competition for the prizes. Again, the promoter ‘P’ has no interest in the outcome of the lottery. It is true that if he pays the cost of the prizes he runs the risk that he may not sell enough tickets to cover his expenditure. That, however, is a commercial, and not a gambling risk. What is certain is that if the lottery is drawn, he will have to pay the prize or prizes to somebody and it is a matter of indifference to him which of the entrants wins the lottery. Thirdly, the arrangement is designed to attract multi-partite participation by a large number of people, each of whom enters into a competitive relationship with all the others. Fourthly, it is easy to see how it can be said that ‘prizes’ are ‘distributed’ among the participants. 2.130 Applying the above analysis, it was possible to conclude that the following were typical, if not defining, characteristics of a lottery as the term was understood prior to the GA 2005: (1) However it might be expressed, the setting up of a lottery almost invariably involved some form of ‘scheme’ which was designed to attract a large number of participants who would make payments in order to participate and who would be, in some sense, in competition with the others for the prize or prizes. This characteristic could be observed in lotteries as they were in fact promoted, and in one way or another virtually all the leading lottery cases prior to GA 2005 did refer to lotteries as involving ‘schemes’ of one sort or another.1 183

Some fundamental terminology (2) The promoter typically had no competitive interest as against the entrants. Though there was the possibility of a commercial failure, he could not ‘lose’ in the gambling sense on the outcome of the draw or other determining event. (3) The payment which each participant made in order to take part was consideration for his chance to participate in a scheme from which he might derive winnings. It was thus a real consideration given for value and could be contrasted with a stake on a bet which is put at hazard, but which will be returned to the bettor in the case of a winning bet. 1 Barnes v Strathern 1929 SLT 37 at 40 per the Lord Justice-General: ‘There is no limit to the ingenuity of the devisers of projects such as this, and there is, accordingly, no end to the variety of schemes which may constitute a lottery. But the particular scheme with which we are here concerned presents characteristics which prevent it from falling … into any of the classes of lottery which have hitherto been the subject of judicial determination. A lottery has been compendiously defined as a scheme for the distribution of money by chance.’ At 42 per Lord Blackburn: ‘the word “lottery” has been so construed as to include many schemes which cannot have been originally within the purview of the Act. It is often difficult to say whether any individual scheme falls within the definition or not. But it is settled law, that if the winning of a prize in a scheme in which a number of persons take tickets depends entirely upon chance, the scheme is a “lottery”.’ DPP v Phillips [1935] 1 KB 391 at 400–401 per Lord Hewart: ‘… but wherever one looks in this undoubtedly ingenious scheme one finds it impossible to discover anything of a really commercial nature. What is it that is being done? There is here the publication of a scheme. What is the nature of that scheme? Is it not a scheme for the “distribution of prizes by lot or chance”?’ At 401 per Branson J: ‘The scheme is dressed in the guise of a commercial transaction.’ Atkinson v Murrell [1973] AC 289 at 295 per Viscount Dilhorne: ‘My Lords, in my opinion a scheme which is a lottery if the prizes are in the hands of the promoters for them to give to the winners does not cease to be a lottery if the scheme provides that each participant shall send a contribution direct to the winner, a contribution to his prize’, citing the conclusion of Griffiths J in [1972] 2 QB 274, DC at 282, 283: ‘Whereas it is true that most lotteries involve a scheme which creates an identifiable prize fund, I  can find no reason to conclude that this is an essential feature of a lottery provided the scheme achieves the overall object of the distribution of money by chance.’ Reader’s Digest Association Ltd v Williams [1976] 1  WLR  1109 at 1115 per Lord Widgery CJ, referring to Whitbread & Co Ltd v Bell: ‘The brewers, Whitbread, set up a scheme whereby people patronising their public houses might be given an envelope … it was contended by Whitbread that, there being no consideration for obtaining the individual chance, the whole scheme was not a lottery … I do not think it is sufficient to say that the prize is paid out of funds which are themselves derived from the scheme …’ Imperial Tobacco Ltd v A-G  [1981]  AC  718 at 735 Viscount Dilhorne posed the question:

184

Some fundamental terminology ‘Was the Spot Cash scheme an unlawful competition?’ At 744 per Lord Fraser: ‘In my opinion a scheme will be a lottery if the prizes are distributed by chance and if persons are induced to make a money payment …’ At 746 per Lord Fraser: ‘Thus in Bartlett v Parker [1912] 2 KB 497 where the prize was a bicycle presented by an outside firm as an advertisement, and the participants’ payment made no contribution to the cost of the bicycle or to the profits of the firm that had presented it, the scheme was held to be a lottery … For these reasons I am of the opinion that this scheme was a lottery.’ At 747 per Lord Lane: ‘The object of the respondents’ scheme … was to encourage sales of their … cigarettes … The whole object of the scheme was to induce them to ask for a special packet of the respondents’ kingsize cigarettes …’ Re Hanseatische [1997] 1 WLR 515 at 518 per Saville LJ: ‘The case made by the Secretary of State is … that the … business of the appellants … is the operation of the Titan scheme; and that since this scheme is either an unlawful lottery or has … undesirable characteristics … the promoters of the scheme should be stopped from operating it.’ At 520 per Saville LJ: ‘In the present case, the reality of the matter is undoubtedly that those persuaded to join the scheme did so .. in the hope of the rewards that would result … It seems to me that a scheme can be a lottery even if some of the rewards could be said to be gained by the application of an element of skill …’ At 522 per Saville LJ: ‘It follows as a matter of ordinary language and commonsense that … the participant is taking part in a scheme properly described as the distribution of prizes or rewards entirely by chance.’ At 524 per Millett LJ: ‘The Titan scheme is a multi-level snowball … scheme … In the Titan scheme they pay substantial sums to take part … But people do not join such schemes without the hope of reward … It was the presence of this feature which was held in DPP v Phillips … to make the scheme there under consideration an unlawful lottery. Mr Bannister rightly conceded the Titan scheme is not distinguishable in any material respect from the scheme in that case … Both schemes are well within the mischief which the Lottery Acts have been enacted to prevent’. Re: Titan International Inc [1998] 1 BCLC 102, CA at p 1 per Peter Gibson LJ: ‘Parliament and the Courts have viewed with considerable disfavour a scheme not constituting gaming but amounting to a lottery.’ One Life Ltd v Roy Carnwath J [1996] 2 BCLC 608 at p 2 per Carnwath J: ‘The company was incorporated … as a vehicle for a scheme called “The Businessman Game”. The First Defendant had been a participant in a similar scheme in Germany …’

2.131 The above elements were to become central in attempts to identify the defining distinctions between a ‘lottery’ and a ‘bet’ as the terms were understood prior to the GA  2005. The need to identify the differences 185

Some fundamental terminology was created largely by the arrival of the National Lottery in 1994, which demonstrated the existence of public demand for gambling on numbers. In response, the bookmaking industry began to search for rival forms of gambling on numbers which it could lawfully offer in licensed betting offices. At about this time a game known as ‘Keno’ which was being promoted in the USA and Australia, made its way to the United Kingdom. Keno was based on an ancient Chinese game, but as developed in the mid-1990s it involved elements both of fixed odds wagering and of a draw. Typically it involved the following format. There were 80 numbers and at least 20 were drawn at fixed intervals (often of no more than a few minutes). Each player was entitled to choose between one and ten numbers for each draw and he paid a fixed stake of (say) £1 to enter. The payment remained the same whether he selected one number or ten numbers. The promoter offered a fixed cash sum for those players whose chosen numbers came up. The cash returns were known before the draw and they were calculated by reference to the arithmetical chances of the relevant numbers coming up in the draw. The cash prizes were less than the arithmetical odds and they reduced as a percentage of the odds as the odds got longer. Thus, for example, the promoter might offer odds as follows: (a) The player selected one number. The odds were 80/20 (=  4/1). The promoter offered £3 or 75% of the arithmetical odds. (b) The player selected two numbers. The odds were 80/20 (=  4/1) × 79/19 (=  4.15/1) = 16.6/1. The promoter offered £12 or 72% of the arithmetical odds. (c) The player selected five numbers. The odds were 80/20 (=  4/1) × 79/19 (=  4.15/1) × 78/18 (=  4.33/1) × 77/17 (=  4.52/1) × 76/16 (= 4.75/1) = 1,543.22/1. The promoter offered £640 or about 41% of the arithmetical odds. The point to note about Keno is that although the payments are determined by a random draw of numbers (as typically in a lottery), the promoter is offering a fixed rate of return for certain numbers or combinations of numbers. He would be obliged to pay the agreed sums to the winning participants even if the money received by him from the other participants was wholly inadequate to cover his expenditure. The promoter can, therefore, win against each individual participant or lose against each individual participant. The arrangements are, therefore, different from those of a typical lottery where the promoter can neither win nor lose. Moreover, and again in distinction from the typical lottery, players who stake money on Keno are not in competition with each other. Each of them is entitled to be paid in full if his chosen numbers come up, regardless of how many other players win or lose. Players in Keno can also increase their potential winnings by increasing their stake. Hence, there is nothing to stop players buying five £1 tickets on the same numbers. If they do, they will win five times as much if their numbers come up. This again is a typical feature of betting rather than a lottery, and is illustrated in the Western Telcon case discussed below. 2.132 Following some initial debate about the true nature of this form of gambling a bookmaker launched a promotion known as ‘Lucky Choice’ in which it offered to take bets on the numbers drawn in the Irish National 186

Some fundamental terminology Lottery. Fixed odds were offered for various choices in numbers and the betting was conducted in licensed betting offices. 2.133 Having identified a market for numbers betting of this kind, the big three bookmakers, Ladbrokes, Corals and William Hill, developed the 49’s promotion. A  company, 49’s Limited, was set up to promote and develop numbers betting. 49’s Limited arranged for a daily draw of numbers to take place. The draw (which continues to take place) takes the form of a draw of six from forty-nine numbers. The draw is broadcast daily by Satellite Information Services Limited and is available to any licensed betting office that wishes to participate. The purpose of the draw is to enable bookmakers in their licensed betting offices to take bets on the numbers to be drawn. Bookmakers are free to offer bets in any form they choose, but a standard customised form of betting slip exists and this contains the standard 49’s bet. A customer is entitled to choose between one and five numbers which he predicts will be drawn in the draw. The odds offered vary but might typically be 11/2 for one number, 48/1 for two numbers, 511/1 for three numbers, 6,560/1 for four numbers and 99,999/1 for five numbers. Subject to individual bookmakers’ rules a customer may pay a stake of any value on the bets. 2.134 Camelot plc, the promoters of the National Lottery, objected that 49’s was a lottery and therefore illegal. Camelot brought a private prosecution which was heard by a stipendiary magistrate. Camelot’s case was simple. Applying the approach advocated in Seay v Eastwood,1 it contended that the court should take a broad and not overly analytical view of what was going on. Cases such as DPP v Phillips2 and Re: Hanseatische3 illustrated that a lottery, as understood prior to GA 2005, existed if money was being redistributed by chance among people who paid to take part. That, Camelot contended, was exactly what was happening in 49’s. It was not conceded that individual customers were in fact entering into betting contracts properly so-called with the bookmakers, but even if they were, this was not decisive for two reasons. First, it was a mistake to focus on the individual contracts between customers and bookmakers. Rather, one should take a global view and such a view demonstrated that 49’s achieved the object of distributing money by chance. Second, there was no principle which established that an activity was not a lottery simply because it involved betting. Even if the individual transactions were bets, the scheme overall could be and was a lottery. 1 [1976] 3 All ER 153, HL. 2 [1935] 1 KB 391. 3 [1997] 1 WLR 515.

2.135

The bookmakers’ contentions can be summarised as follows:

(1) The essential starting point was to establish the true contractual nature of the arrangements between the customers and the bookmakers. As to that, it was clear that each transaction was a bet or wager as the term is ordinarily understood. In 49’s there was a bilateral contract under which if the customer’s numbers came up he won the advertised winnings; if they did not he lost his stake and the bookmaker won it. This was a wager or fixed odds bet and produced a direct conflict of interest between a bookmaker and any customer who entered into a 49’s 187

Some fundamental terminology transaction with him. This was a defining characteristic of a bet, but was not a characteristic of a lottery where (for the reasons analysed above) such a conflict of interest is not found. On the other hand, because the bookmaker was liable to pay out to all customers whose numbers came up, there was no conflict of interest between the customers as between themselves. Each could win his full winnings regardless of the fate of the other customers. (2)

The 49’s promotion was one which offered facilities to enable customers to make bets. However, each bet was a perfectly valid arrangement between customer and bookmaker without regard to any other bets which the bookmaker might take. A lottery typically involves a scheme designed to ensure multi-participation by a number of entrants, all of whom are in competition with each other. In the decision of the Court of Appeal in Ellesmere v Wallace1 Russell  LJ had drawn an important distinction between the classic bet and a lottery. He said: ‘The truth is that you cannot have more than two parties or two sides to a bet. You may have a multi-partite agreement to contribute to a sweepstake (which may be illegal as a lottery if the winner is determined by chance, but not if the winner is determined by skill), but you cannot have a multi-partite agreement for a bet unless the numerous parties are divided into two sides, of which one wins or the other wins, according to whether an uncertain event does or does not happen’. The whole purpose of a lottery is to secure that a large number of people will enter into a competitive relationship to secure prizes or money that will be distributed between them. In the case of a bet by contrast two opposing parties put up stakes which will be won or forfeited depending upon the determining event. This could not be described in lottery terms as a ‘distribution of prizes’. It would be an abuse of language to describe a bookmaker as ‘distributing prizes’ when he pays out winnings on a bet which he has lost, and an even worse abuse of language to describe a customer as ‘distributing prizes’ to the bookmaker when the bookmaker forfeits the customer’s stake on a lost bet. 49’s admittedly provided facilities to enable customers to bet with bookmakers, but it did not constitute a ‘scheme’ for the distribution of prizes.

(3) The money which the customers staked against the bookmakers and the bookmakers staked against the customers could not be described as a ‘contribution’ or ‘payment’ in the sense in which this is to be understood in the lottery context. Where a person pays to enter a lottery, the payment is a consideration which passes to and becomes the property of the lottery promoter, in exchange for which he provides the scheme and a chance for the participant to win. A betting stake is different. Such a stake is merely put up to abide the outcome of the event. Until the result of the event is known it remains a stake and does not become the property of the bookmaker. It is only if the customer loses the bet that the stake is forfeited to the bookmaker. Conversely, the bookmaker gives the customer no consideration other than his own stake, which consists of the quoted odds. Such arrangements cannot be characterised as a ‘contribution’ or ‘payment’ for lottery purposes. 188

Some fundamental terminology (4) Parliament had over the years frequently legislated in a way which recognised that it was possible to bet or wager on a lottery draw, and this was inconsistent with the contention that betting on a draw of numbers was itself necessarily a lottery. As long ago as 1737, Parliament, in order to legislate against illegal insurances on the State Lotteries, had enacted that: ‘… no person or persons … shall lay any wager relating to the drawing of any ticket or tickets in the said lottery, either as to the time of such tickets being drawn, or whether such ticket or tickets shall be drawn fortunate or unfortunate …’ More recently the National Lottery Act 1993 had introduced amendments into the Betting, Gaming and Lotteries Act 1963 in order to prevent betting by bookmakers on the National Lottery. Such legislation presupposed that it was possible to bet on the result of a lottery or draw without this activity becoming an illegal lottery in itself. (5) Finally, the bookmakers relied upon the analyses contained in two Californian cases which make a clear distinction between lotteries and betting. The first, People v Postma 160 P2d 221 [1945] was a decision of the Superior Court of Los Angeles County, California. The facts were that the defendants were engaged in bookmaking on horse races at various tracks in the United States. It is clear from the case that their operations amounted to bookmaking in the form of making fixed odds wagers on horse races at various tracks in the United States. The court found that in the case of winning bets, ‘… [the] defendants paid the winning bettors the amounts determined at the tracks, regardless of the total amount of the bets placed with them, and even though on any particular race such amount was not sufficient to pay the winners.’ The question for determination by the court was whether the defendant’s activity amounted to betting or a lottery. It is clear from the report that the relevant definition of ‘lottery’ was in all significant respects identical to that in English law. The court said as follows: ‘Under our statute, three elements are necessary to constitute a lottery: (i)

The distribution of property, – the prize,

(ii) upon a contingency determined by chance, (iii) to a person who has paid or promised to pay valuable consideration for the chance of winning the prize, and upon the understanding that it will be disposed of by chance.’ Adopting that definition, the court concluded that the defendants’ activities could not be a lottery because there was no distribution of anything that could be described as a prize. It concluded: ‘There was nothing put up as a prize. According to the complaint, the various “bettors” selected horses and upon them would lay, make and place bets in money and the defendants would “accept such bets”. This shows simply betting or wagering, each bettor for himself dealing with the defendants as the other bettor … When, two persons bet with each other, it cannot be said that either of them, or the 189

Some fundamental terminology stakeholder, if there is one, has offered any property for disposal or distribution to persons who have paid a consideration for the chance of obtaining it. Each bettor puts up his own property on a venture and is at risk of losing it, but has not paid for the chance of winning that of the other bettor. This is true at least where but two persons or two opposing sets of persons are concerned in a bet, as here.’ There was, the court concluded, nothing which could be identified as a pooling arrangement but: ‘… only individual bets which defendants must pay to the winners regardless of the amount of money the defendants may have received from other bettors or even though they have received none at all, all bets being on the winning horse.’ The bookmakers contended that this authority made explicit what was implicit in the English cases. Second, they relied on the decision of the Supreme Court of California in Western Telcon Inc v California State Lottery [1917] P 2d [1996]. The case concerned the activities of the California State Lottery (‘CSL’) and in particular the question whether CSL could run Keno. CSL was permitted to run lotteries under the California State Lottery Act 1984, which authorised the State Lottery to run ‘lottery games’. The expression ‘lottery game’ was defined as ‘any procedure authorised by the Commission whereby prizes are distributed among persons who have paid, or unconditionally agreed to pay for tickets or shares which provide the opportunity to win such prize’. The court concluded that this latter definition implied a distribution by chance. On that basis it will be apparent that the relevant definition is in all essential respects identical to the English concept of a lottery prior to the GA 2005. 1 [1929] 2 Ch 1.

2.136 The court’s description of the conduct of Keno shows that it was being conducted as a form of fixed odds gambling in the way described at 2.131 above. In particular the court noted that: ‘Payoffs in CSL  Keno are pre-set according to a Schedule in the Regulations … In CSL Keno a winner’s payoff does not depend on the number of players participating in a particular draw, on the aggregate amount wagered on the draw by all the players, or on how many other players made the same winning selection or other winning selections. The “prizes” established for each winning category are not shared among all winners; instead, CSL pays a fixed pay off to each winner no matter how many winners are in a given draw.’ The question which the court had to determine was whether Keno was a lottery which could lawfully be promoted by the California State Lottery, or whether it was, as the opposition maintained, a ‘banking game’ which could not lawfully be run. As the judgment makes clear, a ‘banking game’ connotes an arrangement in which a central ‘bank’ bets against all comers, retaining winnings and paying out losses. ‘This court first defined the term “banking game” in People v Carroll 18 Cal 153, 157–158, 22 P129 (1889), accepting as “sufficiently accurate” 190

Some fundamental terminology the definition given by a witness at trial: “A game conducted by one or more persons where there is a fund against which everybody has a right to bet, the bank being responsible for the payment of all the funds, taking all that is won, and paying out all that is lost. The fund which is provided for that purpose is generally called the bank, and the person who conducts it the banker.”’ It follows that a banking game involves betting against the bank. 2.137 The court concluded that Keno played in the way described was a ‘banking game’ involving betting and not a lottery. As to the distinction between the two forms of activity the court held as follows: ‘In a lottery the operator does not bet against any of the participants, but merely offers up a prize for distribution to one or more of them. The operator, in other words, has no interest in the outcome of the chance event that determines the winner or winners – the “game” or “draw” – because neither the fact the prize will be disposed of, nor the value of the prize to be distributed, depends upon which, or how many, of the lottery entrants might win it. In a banking game, in contrast, the operator does compete with the other participants: “he is the one against the many.” (People v Ambrose [1953] 122 Cal App 2d Supp at 970, 265 P 2d 191). The operator thus has a direct interest in the outcome of the game, because the amount of money the operator will have to pay out depends upon whether each of the individual bets is won or lost.’ One consequence which the court noted is that in the case of a banking game the operator may be obliged to pay out more than he gets in wagers and, indeed, following a run of bad luck the bank can be ‘broken’. A lottery by contrast can never be broken in that sense. The court continued: ‘True, if a lottery operator offers a fixed prize – a particular automobile or piece of real property, for example – the ticket receipts may be insufficient to cover the cost. But the operator’s success or failure in such a lottery depends only on how many entries are attracted, not on which participant, or how many participants, win the prize. The outcome of the game or draw, in other words, does not determine whether the lottery operator makes or loses money on that game or draw.’ Applying the above distinction between a lottery and betting in the form of a banking game, it was clear that CSL Keno was a banking game, with CSL acting as the bank, rather than a lottery. 2.138 The court noted that, whilst most California decisions on lotteries have concerned the element of chance, the case before it required an examination of the nature of a ‘prize’. It noted: ‘A lottery must involve distribution of one or more prizes, rather than mere bilateral wagering. “A  prize must be distinguished from a bet between two persons upon an uncertain future event.” (71 Opinions California Attorney-General 139, 146 (1988). When two parties wager 191

Some fundamental terminology against one another on the outcome of a game they engage only in gaming … The bettors do not thereby conduct a lottery, for neither of them have offered up any property as a prize to be distributed to others. A  wager between two parties may be won by either of them. Each of the two has a chance to win the stake of the other and retain his or her own stake; neither puts up any property to be disposed of or shared by others according to chance. In contrast to a wager, a “purse”, prize, or premium is ordinarily some valuable thing offered by a person for the doing of something by others, into the strife for which he does not enter. He has not a chance of gaining the thing offered; and if he abides by his offer, that he must lose it, and give it over to some of those contending for it, is reasonably certain’ (Hankins v Ottinger 115 Cal 454, 458, 47 P 254, (1896)). In other words, as CSL explained in its brief: ‘[a] lottery operator does not “wager” or hazard its property against that of others. Whether the property offered by the lottery operator will be distributed is not the issue, as it is in gaming; in a lottery, the only issue is to whom will the property be distributed – and the lottery operator, earning his revenue as a proportion of the ticket sales, is not himself a contender for the prize.’ 2.139 The bookmakers in the 49’s case contended that the Western Telcon case merely made explicit what was already implicit in the English concepts of a ‘lottery’ and of a ‘bet’, and in the English and Scottish cases dealing with these forms of gambling. The metropolitan stipendiary magistrate summarised the defence arguments as follows: ‘They say it cannot be a lottery because, first of all, there is a bi-lateral contract between the bookmaker and the punter, citing Buckmaster LJ in the A-G  v Luncheon & Sports Clubs; secondly, the bets are fixed odds; thirdly, there is no distribution of anything that could properly be termed prizes; fourthly, there is no scheme, as such; fifthly, the punter’s bet is not affected by how many other persons are involved in the same activity; and, sixthly, there is a stake which is only forfeit if the punter loses his bet.’ He concluded that he found the defence arguments, ‘wholly persuasive’ and that: ‘… the predominant features of 49’s are those of betting and not of a lottery  …’ He therefore dismissed the charges against the bookmakers of running an unlawful lottery. 2.140 In the light of this decision, the distinction between betting in the form of wagering and lotteries prior to the GA 2005 could be summarised as follows: (1) A lottery, by definition, involved distribution of prizes by reference to purely random events; a wager could be made either upon a purely random event (in which case no skill could be involved in making the wager) or upon an event about which a skilled forecast could be made. 192

Some fundamental terminology In the latter case, the presence of skill meant that the wager could not be a lottery. (2)

A wager is a bilateral transaction in which opposing parties stake sums and each can win the stake of the opposing party and lose his own. By contrast, a lottery involved a scheme in which participants pay to enter, receiving in consideration of their payments the chance to win a prize.

(3) In the case of a wager there is inevitably a conflict of interest between each opposing party and this remains the case under arrangements such as ‘49’s’, where the bookmaker taking the bets has an interest in each of the bets so taken. By contrast, in a lottery, the promoter typically has no interest as such in the outcome of the random event which will determine the destination of the prize or prizes because it is certain that they will be distributed to someone. (4) Where a number of individuals make bets with a particular individual on one event, each bettor enters into an individual transaction and is entitled to be paid in full if he wins. He is unaffected by whether the other bettors win or lose their bets and so in an arrangement such as 49’s there is no conflict of interest between the participating bettors. In the case of a lottery, by contrast, each of the persons participating is in conflict with all the others to win one or some of the prize or prizes and there is therefore typically a conflict of interest between them. (5)

In the case of a bet the winning bettor receives the stake of the opposing party. There is nothing which can be identified as a ‘prize’, nor is there a ‘distribution’ of ‘prizes’. A lottery by contrast involves the distribution of prizes.

(6) A  betting arrangement such as ‘49’s’ cannot be characterised as a ‘scheme’ for the distribution of prizes. Under such an arrangement each bettor enters into an individual transaction with the bookmaker and is entitled to win regardless of any other participant. A lottery typically involves a ‘scheme’ which is designed to result in a large number of participants who, for the reasons noted, typically have competing interests. 2.141 The question whether arrangements amounted to a lottery or to fixed odds betting under the law prior to the GA 2005 arose for consideration by a VAT & Duties Tribunal in the case of Prize Provision Services Ltd v HM Revenue and Customs.1 Prize Provision Services Limited (‘PPS’) together with a company in common ownership, Lottery Service Providers Limited (‘LSP’), ran an offering known as the ‘Great Weather Lottery’ (‘the GWL’). The arrangements were run as a society lottery to raise funds for hundreds of charitable societies. The promotional material was designed to be customised so that it appeared to relate to each individual lottery, but the arrangements were run as essentially a unitary scheme with one determining event and one prize fund. The cost of entry was 20p per ‘line’ per day. An entrant would select six numbers from zero to nine and enter them in six boxes on the entry form. The boxes corresponded to six places – Corfu, Istanbul, Tenerife, Innsbruck, Edinburgh and Stockholm (whose initial letters spelt ‘CITIES’). Each day from Monday to Friday the Daily Telegraph printed the maximum Fahrenheit temperatures recorded at those six places on the preceding day. 193

Some fundamental terminology If three or more of the numbers chosen by a participant matched the final digits of the printed temperatures in the correct sequence, he won a prize of £2 for three correct numbers, £20 for four, £200 for five and £10,000 for all six. The value of each prize was fixed; no matter how many winners there were on any day each received the appropriate advertised sum. 1 Manchester Tribunal Centre No EO00902; decision released 18 August 2005.

2.142 PPS maintained that the arrangements amounted to a series of society’s lotteries. HM Revenue & Customs maintained that the arrangements amounted to fixed odds betting, so that betting duty was payable. 2.143 In approaching the issue the Tribunal made a number of relevant findings: (1) Although it was possible for any individual to enter for one day, paying 20p for a line, in practice most participants gave standing orders for one or more lines (the monthly cost of a single line being £4.34) and continued to participate in the arrangements for some time. A competitor would not be entered unless he had paid the entry fee in advance. (2) PPS acted as the banker and LSP acted as the administrator of the arrangements. From the overall receipts 20% were attributed to administration costs, 35% were distributed to the charities and 45% was devoted to prizes.1 (3)

The figure of 45% for prizes was a percentage which could be predicted, because it was, statistically, the amount which participants would win in the long run. PPS had, however, taken out prize insurance to cover the payment of £200 and £10,000 prizes. There was a single insurance policy in the name of PPS. The tribunal inferred that, since the frequency with which participants would win prizes was predictable in the longer term, the insurance cover was obtained as a means of smoothing the cost of paying prizes over time. In order to limit possible liability, the insurer had imposed a condition that no more than seven participants could select the same numbers. A  new participant who had selected numbers already selected by seven other participants was asked to make a different selection. The limit related to the aggregate number of participants, and not to the participants introduced by any single charity.

(4) There were occasions when, contrary to statistical forecasts, more smaller prizes were won than were allowed for by the prize fund. In such a case PPS made up the deficiencies. Conversely, where there was a surplus of prize fund over prizes, PPS enjoyed the benefit. No attempt was made to apportion gains and losses between the charities. 1 The actual figure attributed to prizes was 42.95%. The Tribunal assumed that the figure of 45% incorporated a safety margin.

2.144 PPS contended that it was managing a series of lotteries on behalf of the societies. It contended that the entry fees were paid to enter the lottery and that the fees (unlike stakes on a bet) could never be returned. 194

Some fundamental terminology The advertised prizes were of specified sums and that is what a winner received – he did not receive 20p in addition. Moreover, unlike the case of a bet, the participant had no opportunity to negotiate his own terms such as the amount to be staked or the nature of the event which determined the outcome (eg whether a horse wins a race or is placed in the first three). The arrangements did, so PPS contended, have the characteristics of a lottery, which was a concept to be broadly interpreted. It did not matter that winners received a pre-determined amount of money; the £10 prizes awarded in the National Lottery were fixed, yet this did not prevent it being a lottery. Finally, PPS contended that the Gaming Board had treated the arrangement as a society lottery when it had insisted that either PPS or LSP should be certified as an External Lottery Manager.1 1 In order to comply with LAA 1976, s 9A(1).

2.145 HM  Revenue & Customs maintained that the arrangements amounted to fixed odds betting for the following reasons: (1)

Winning participants were awarded fixed winnings which were known in advance according to odds that were calculable in advance.

(2) The promoter (ie either PPS or LSP) had a conflict of interest with the participants in that if a participant got the correct numbers he won the advertised prize and the promoter lost it; if not, the participant lost his 20p and the promoter won it. Moreover, the promoter suffered loss if the allocated prize fund was insufficient but gained if it exceeded the prizes won. (3) There was no element of competition between the participants: each received the full advertised prize regardless of how many other winners there might be. (4) It could not be said that there were ‘prizes’ which were ‘distributed’, since this implied sharing or apportionment and not the payment of a pre-determined sum. 2.146 The Tribunal concluded that the arrangements amounted to a lottery and not to betting. They reasoned as follows: (1) The question whether a scheme amounted to a lottery or fixed odds betting could not be solved by simply applying a ‘formulaic test’. A lottery may have some of the characteristics of betting; and betting may have some of the characteristics of a lottery. The matter had to be decided as one of common sense. (2) The societies on whose behalf the arrangements were run had no pecuniary interest in the outcome. They would receive 35% of the proceeds as profit. It was true that GWL/LSP did potentially have an interest in whether a competitor won or lost if the matter were looked at on a short term basis. However, on the basis that it was statistically predictable that over the longer term the participants would win 45% of the amount paid in, the Tribunal concluded that over time PPS/LSP would neither win nor lose. (3) The Tribunal did not accept that participants in a lottery must (rather than may) be in some form of competition with each other, so that 195

Some fundamental terminology the fact that there was no competition between participants was not decisive. (4) Finally, the Tribunal did not accept that the ‘distribution’ of prizes necessarily imported an element of sharing. In its view ‘distribute’ meant no more than ‘hand out’ and that element was satisfied under the arrangements. It is suggested that the Tribunal’s conclusion may be justified on the very particular facts of the case before it. Three points in particular may be significant. First, there was the finding of fact that over time the amount won by participants would amount to 45% of the total receipts. On the basis of that finding it may be possible to regard the 45% as essentially a fixed prize fund. Second, there was the fact that the losses where winnings exceeded income were borne not by the individual societies for whom the lotteries were run but by PPS/LSP. PPS and LSP, though effectively acting as agents for the societies, absorbed the losses themselves and it may be that this justified the view which the Tribunal took. Thirdly, there was the fact that the Tribunal concluded that the prize insurance policy had been obtained ‘rather less for conventional insurance reasons than as a means of smoothing the cost of paying prizes over time’. This finding of fact effectively discounted the significance of the insurance policy as being a means of protecting PPS/ LSP from significant gambling losses. If the view had been taken that the purpose of the insurance was to protect the assured from such losses, this factor might well have pointed towards the conclusion that the relevant transactions were bets. The writer would suggest that the ‘GWL’ decision is understandable provided it is seen as turning on a very particular view of the facts but that the case was a borderline one and the arrangements might well have been held to amount to betting.

BETTING AND LOTTERIES UNDER THE GAMBLING ACT 2005 2.147 As has been noted at 2.113 above, s  18 of the GA  2005, which is designed to deal with certain cases where an activity amounts to both a lottery and betting, does not apply where the relevant bet takes the form of a wager or fixed odds bet. The question arises, therefore, whether the distinction between wagering and lotteries which had been worked out prior to the 2005 Act still applies, having regard to the definitions of ‘betting’ in s 9 and of ‘lottery’ in s 14. It is submitted that the distinction between the two activities has not been affected by these definitions and that the position remains the same under the GA  2005. As has been suggested above, the definition of ‘betting’ in s 9 appears designed to put into statutory form the fundamental concept of a ‘bet’ as it existed before the GA 2005. In particular, as noted at 2.18 above, a bet in the form of a wager can be made on a purely random event such as a numbers draw. So far as lotteries are concerned, reference is made to the detailed discussion of s  14 in Chapter 15, but in general terms it appears that the intention of s 14 is to give statutory effect to the concept of a ‘lottery’ as it had been developed before the enactment of the 2005 Act.1 It would be strange in the circumstances if the interaction of the 196

Some fundamental terminology two sections produced a change in the accepted distinction between betting in the form of wagering and lotteries. 1 See Explanatory Notes to Gambling Act 2005, para 67, which states that GA 2005, s 14: ‘is intended to give statutory effect to the broad definition which the courts have evolved over recent years, while making specific additional provision in relation to arrangements whose status under the current law has proved problematic or uncertain.’

2.148 In fact it is submitted that the s 14 definition of ‘lottery’ contains a number of features which distinguish a ‘lottery’ under the GA 2005 from a bet in the form of a wager. Thus, s 14 provides as follows: ‘(1) For the purposes of this Act an arrangement is a lottery, irrespective of how it is described, if it satisfies one of the descriptions of lottery in sub-sections (2) and (3). (2) An arrangement is a simple lottery if— (a) persons are required to pay in order to participate in the arrangement, (b) in the course of the arrangement one or more prizes are allocated to one or more members of a class, and (c)

the prizes are allocated by a process which relies wholly on chance.’

The starting point is that a lottery is ‘an arrangement’ in which ‘persons are required to pay’ in order to participate. It is suggested that this statutory language reflects the aspect of a lottery noted at 2.130 above, namely that it is designed to be a scheme in which a number of persons are to take part, unlike a bet, which is in essence no more than a transaction between two opposing parties. Furthermore, the definition requires that payment be made ‘in order to participate in the arrangement’. In other words, the consideration given in exchange for the payment is the chance to participate in the arrangement in which prizes are allocated, and this is different from betting, in which two opposing parties hazard stakes against each other. Where a bettor makes a bet with a bookmaker, it would be artificial to regard him as paying to participate in an arrangement with the bookmaker. 2.149 Second, the definition refers to an arrangement in the course of which ‘one or more prizes are allocated to one or more members of a class’. So the assumption is that a lottery will involve a class of participants amongst whom prizes are allocated. This too seems to presuppose multipartite participation and may be distinguished from the making of a bet in which there is a simple staking of money between two parties which is effected quite regardless of anybody else. If a bettor placed a bet on 49’s and no other bets were placed for the particular draw concerned, there would still be a perfectly valid bet (which he could win) even though there was no ‘class’ of other bettors who had wagered on the relevant draw, and therefore no class of participants amongst whom prizes could be allocated. 197

Some fundamental terminology 2.150 It is also relevant to note that s  14(2)(a) defines ‘simple lottery’ by reference to a requirement to pay in order to participate. The draftsman has eschewed any reference to ‘stake’ (the general definition of which is given in s 353), which is the term most commonly used in connection with payments made in connection with wagers. In addition, the definition of ‘prize’ in s 14(4) to mean: ‘… any money, article or services— (a) whether or not described as a prize, and (b) whether or not consisting wholly or partly of money paid, or articles or services provided, by the members of the class among whom the prize is allocated’ excludes any reference to ‘winnings’, which is the term usually used to describe the money which a winning wager produces. The definition of ‘prize’ in s 14(4) may be contrasted with that in s 6(5) which provides that in relation to gaming ‘prize’ means, inter alia: ‘… both a prize provided by a person organising gaming and winnings of money staked’ (italics supplied). 2.151 Section 14(3) defines the expression ‘complex lottery’ in terms which, so far as relevant to this question, resemble the definition of ‘simple lottery’ in section 14(2), providing that in a complex lottery persons are required to pay in order to participate in an arrangement in the course of which one or more prizes are allocated to one or more members of a class. The same grounds for distinguishing such arrangements from an ordinary bet apply as in the case of a simple lottery. In conclusion, it is suggested that the s 14 definition of ‘lottery’ retains the distinction between bets in the form of wagers and lotteries as it had been worked out prior to 2005.

Gambling Act 2005: section 18 2.152

Section 18 of the GA 2005 applies to:

‘A transaction which satisfies the definition of participating in a lottery in s 14 and also— (a) satisfies the definition of pool betting in s 12, or (b) satisfies the definition of betting in s 9 by virtue of s 11’ (s 18(1)). The section therefore acknowledges the possibility that there may be an overlap between a lottery and pool betting (s 12) or betting in the form of prize competitions (s 11), as it is not an essential element of these forms of betting that any skill be involved and the distinctions between lotteries and wagering do not apply to such forms of betting. 2.153 Where a transaction does qualify as a lottery and also pool betting or betting in the form of a prize competition, then the normal position, provided for by s 18(3), is that the transaction will be treated for the purposes of the Act 198

Some fundamental terminology as betting and not as participating in a lottery. However, this categorisation can be changed in one of two different ways. First, s 18(4) provides that s 18 is ‘subject to regulations under s 14(7)’. Section 14(7) provides that the Secretary of State ‘… may by regulations provide that an arrangement of a specified kind is to be or not to be treated as a lottery for the purposes of this Act …’. So the default position created by s  18(3), namely that transactions which may be both lotteries and betting will normally be treated as betting, may be overridden by regulations made under s 14(7). Secondly, s 18(2) provides a list of cases where a transaction which is both a lottery and betting will, contrary to the normal default position, be treated for the purposes of the Act as participating in a lottery and not as betting. The cases where this result follows are for the most part those of relatively small promotions, often put on for charitable or quasi-charitable purposes, or for the purposes of a local authority. The cases are as follows: (a) incidental non-commercial lotteries: Sch 11, para 1(a) and (b); (b) private society lotteries: Sch 11, para 10(1)(a) and (b); (c)

work lotteries: Sch 11, para 11(1)(a) and (b);

(d) residents’ lotteries: Sch 11, para 12(1)(a) and (b); (e)

customer lotteries: Sch 11, para 20(1)(a) and (b);

(f)

small society lotteries: Sch 11, para 30(1)(a) and (b); or

(g) the transaction is promoted in reliance on a lottery operating licence (ie an operating licence authorising the running of lotteries issued to a non-commercial society, a local authority or a person proposing to act as an external lottery manager on behalf of such a society or authority).1 1 GA 2005, s 98(1).

Betting intermediary 2.154 The expression ‘betting intermediary’ is defined by GA 2005, s 13 as follows: ‘(1) In this Act “betting intermediary” means a person who provides a service designed to facilitate the making or acceptance of bets between others. (2) For the purposes of this Act acting as a betting intermediary is providing facilities for betting.’ The definition is designed to apply principally to the activities of betting exchanges and bet brokers. The development of these forms of betting service is described at 0.125 above. The effect of s 13(2), which provides that a betting intermediary is ‘providing facilities for betting’ is to ensure that betting intermediaries fall within the controls of the Act of 2005. A betting intermediary will commit the offence of providing facilities for gambling (s 33(1)) unless he holds an operating licence authorising the activity (s 33(2) (a)). A  specific form of operating licence, namely a ‘betting intermediary operating licence’ is provided for by s 65(2)(e). Such a licence may be issued either as a non-remote or a remote operating licence (see s 67). Most betting 199

Some fundamental terminology exchanges and bet broking businesses are conducted on the internet (or in some cases by telephone) so that the relevant form of licence will be remote. Where a person uses premises to provide facilities for betting by acting as a betting intermediary, he will commit an offence under s 37(1)(e) unless he holds a premises licence authorising the activity (s 37(2)), though, since most betting exchange and bet broking businesses are conducted remotely, use of premises to conduct the business will usually escape the need for a premises licence under the provisions of s  37(6).1 There are cases where terminals permitting access to a betting exchange are made available in a betting office for use by customers there, and in such a case a betting premises licence will be required. 1 Section 37(6) provides that no premises licence is required where premises are used to provide facilities which are to be used only by persons who (a) are acting in the course of a business, or (b) are not on the premises. For a discussion of the effect of this provision see Chapter 17.

2.155 In addition, so-called ‘Tic-tacs’, which carry out bet broking on the racecourse, will require a non-remote betting intermediary operating licence. The requirement for a premises licence will normally be covered by the licence held by the track occupier – see s 37(4). 2.156 The Gambling Commission has published Betting: advice for remote, non-remote and betting intermediaries Advice Note1 giving useful guidance as to its views on the interpretation of section 13 and its application to various commercial arrangements. 1 (October 2013, updated October 2014).

2.157 The definition of ‘betting intermediary’ is best understood by considering the way in which a betting exchange typically functions. The exchange promoter will set up a betting exchange website and invite customers to register with the site to use its services. Customers registering will be required to transfer funds by credit or debit card to be held by the promoter on account of stakes. Customers will then be free to post on the website offers to enter into bets which other customers are able to accept. Where one customer accepts another’s offer, a betting contract between them comes into existence. The exchange promoter will be authorised to deduct from the account of each of the customers his stake on the bet and to transfer it to a holding account pending the outcome of the bet. Once the outcome of the bet is known, the exchange promoter will then transfer the winnings to the account of the winning customer, deducting its own commission for the service provided. There are many variations on this basic business model. In some cases a bet posted by a customer may be accepted by more than one counterparty. Moreover, a bet posted on the site may be matched not by a succeeding bet but by a bet (or bets) already posted on the site. However, the fundamental principle remains the same; the exchange operator is acting as an agent to effect a betting contract between the customers.1 1 For a description of the functioning of a betting exchange see the judgment of Stanley Burnton LJ in The Queen (on the application of William Hill Organisation Ltd) v The Horse Race Betting Levy Board Case No: CO/8525/2011 approved by the Court of Appeal at C1/2012/1999. ‘An internet betting exchange is an online market

200

Some fundamental terminology place. Users of the exchange indicate the bets they wish to make and identify the odds they are willing to offer or accept and the sums they are willing to bet. The exchange then matches up one or more “backers” (ie  those who want to bet at particular odds that a particular event will occur. “I  bet that Camelot will win the Derby”) with one or more “layers” making an opposing bet (ie those who are prepared to bet at the same odds that the particular event will not occur: “I bet that Camelot will not win the Derby”). The exchange charges commission on the winnings of the interested party. The exchange itself takes no risk.’ (para 14). A betting exchange was described as follows in Betfair’s prospectus for the initial public offer of its shares: ‘The Betting Exchange is an order-driven system which allows customers to bet at odds sought by themselves or offered by other customers. A bet is only confirmed on the Betting Exchange once its risk is exactly matched by Betfair with another customer or group of customers with an equal and opposite view. When betting on the Betting Exchange, customers can either place a “back” bet or a “lay” bet. A “back” bet is a bet on something to happen (for example a football team to win a match) and a “lay” bet is a bet on something not to happen (for example a football match not to end in a draw). Betting on the Betting Exchange allows a customer not only to “back” or “lay” a selection, but also to choose a price at which that customer wishes to “back” or “lay” and how much he or she is prepared to risk. If the price at which the customers wishes to bet improves while a customer is in the process of placing his bet, that customer will be automatically matched at the best available price – higher for “backing”, lower for “laying” – in other words, in accordance with the “best execution principle”.’

2.158 When betting exchanges first began to appear, there was some debate about whether or not promoters were required to hold a bookmaker’s permit under the then governing legislation,1 though most exchange operators ( it is believed) did apply for and hold bookmaker’s permits. More significantly, perhaps, bets made on exchanges originally escaped any charge to general betting duty under the excise legislation then in force.2 Subsequent amendments to the duty legislation, beginning with the Finance Act 2001, s 6 and Sch 1, brought betting exchanges and bet brokers into charge to general betting duty. The current charge to betting duty on betting intermediaries is dealt with in Chapter 19. 1 Under Betting, Gaming and Lotteries Act 1963, s 2. The question depended upon whether an exchange promoter was a ‘bookmaker’ within the definition in s 55 of the Act of 1963 and that depended, essentially, upon whether the promoter was carrying on ‘the business of receiving or negotiating bets’ or was holding himself out as doing so. 2 This was because general betting duty was chargeable on a bet which was ‘made with a bookmaker’ under s  1(1)(a) of the Betting and Gaming Duties Act 1981. Even assuming that a betting exchange operator was a ‘bookmaker’, HM Customs & Excise accepted that bets on exchanges were made between the individual customers and not with the exchange operator, so that no charge to duty arose.

2.159 It is questionable whether, given the extremely wide terms in which s 5 defines ‘providing facilities for gambling’, the specific definition of ‘betting intermediary’ is really necessary. This matter is considered in more detail below. The definition of ‘betting intermediary’ which s  13 does provide is itself widely drawn to catch any provision of a service which is ‘designed to facilitate the making or accepting of bets between others’. It is clear that a ‘service’ might take the form of the provision of a technological service (eg a 201

Some fundamental terminology telephone service, an internet service), but the word ‘service’ is clearly not limited to such a case and could apply to a service of any kind. The ‘service’ must be one which is ‘designed to facilitate’ the making or acceptance of bets between others. The OED defines ‘facilitate’ as: ‘To render easier the performance of (an action), the attainment of (a result); to afford facilities for, promote, help forward (an action or process)’. It should be noted that a service will fall within the s  13 definition if it is ‘designed to facilitate’ the making of relevant bets, so that the question whether a service falls within s 13 depends upon the intention with which it is provided and not just upon its effect. A  website designed to facilitate person to person betting would require a licence even if it was a complete failure and no bets were ever struck on it.1 1 Contrast, for example, R v Naillie; R v Kanesarajah [1992] 2 WLR 927; no offence of ‘Facilitating the entry into the United Kingdom of … [an] … illegal entrant’ under the Immigration Act 1971, s  25(1) was committed where false documents were provided to those wishing to travel to the United Kingdom, but the documents were not used, as the recipients sought political asylum instead.

2.160 The service will fall within s 13 if it is designed to facilitate either ‘the making’ or ‘the acceptance’ of relevant bets. It is not entirely clear what the distinction between the two forms of activity may be; the making of a bet will almost inevitably involve the acceptance by one party of the terms offered by the opposing party. It may, perhaps, be that the reference to ‘making’ of bets is designed to apply to cases where the two betting parties actively negotiate the terms of the bet, whereas the ‘acceptance’ of bets is designed to apply to cases where a party simply accepts any and all bets which are tendered in response to an invitation made by him to bet on particular terms.1 1 Compare the definition of ‘bookmaker’ in the Betting, Gaming and Lotteries Act 1963, s  55 as a ‘person … who … carries on …the business of receiving or negotiating bets …’. In United Utilities plc and Commissioners of Customs & Excise (26 February 2001, unreported) a VAT Tribunal held that the ‘negotiation’ of a bet implied that each party should be in a position to change its position in reaching agreement on the subject of negotiation, cited in United Utilities plc v Commissioners of Customs & Excise [2002] EWHC 2811 (Ch).

2.161 It is, of course, central to the definition that the service should be designed to facilitate the making or acceptance of bets ‘between others’ (ie between persons other than the person who provides the service). This is central to the idea of a betting ‘intermediary’. As the Explanatory Notes observe: ‘A  person who provides a service for others to make or accept bets is called a “betting intermediary” in the Act. Such a person does not, himself, partake in the bet’.1 So, in the case of the classic betting exchange, the promoter provides a website on which other parties may bet but the provider of the website does not itself enter into bets.2 In addition, where a person acts as a bet broker in the sense 202

Some fundamental terminology that he acts as agent on behalf of a party to effect a bet with another party, the bet will be made between the two principal parties and the broker/agent will not be a party to it. This arrangement too would therefore fall within s 13.3 Although the classic betting exchange involves that the customers bet between themselves but that the provider of the service does not enter into bets there are cases where the provider may itself from time to time enter into bets (for example to ‘seed’ the market). In such a case the promoter will require to hold a general betting operating licence. 1 Explanatory Notes to Gambling Act 2005, para 66. 2 See the definition of ‘betting exchange’ in the Finance Act 2014, s 141: ‘General betting duty charge on betting exchanges (1) this section applies where— (a) one person makes a bet with another person using facilities provided by a third person in the course of a business, and (b) that business is one that does not involve the provision of premises for use by persons making or taking bets’. 3 For the usual principle that an agent making a contract on behalf of a principal binds his principal but is not personally liable on the contract, see Chitty on Contracts ( 31st edn), Vol 2, para 31.084. See also the definition of ‘bet-broker’ in the Finance Act 2014, s 133: ‘Bet-brokers (1) This section applies where – … (b) one person (the “bet-broker”) in the course of a business makes a bet with another person (the “bet-taker”) as the agent of a third person (the “bettor”) (whether the bettor is a disclosed principal or an undisclosed principal)’.

2.162 By contrast, arrangements in which a person receives money from other persons on terms that he will use the money to enter into bets as principal with third parties such as bookmakers and will account to them for any winnings received (typically charging a fee or commission for his services) should not fall within s 13, since the person providing the service will himself be the person making or accepting the bets. As to the case of a person who provides a ‘tipster’ service which provides information to bettors as to potentially profitable bets to make, this too, the writer would suggest, should not fall within s 13. It is true that the tipster provides a service and that the service may have the effect of encouraging people to bet. However, the service does not, it is suggested, really ‘facilitate’ (in the sense of ‘make easier’) the making of bets between the tipster’s customers and other people. Rather, it is designed to ensure that the betting will be more profitable from the point of view of the tipster’s customers. And even if it could be argued that the tipster’s services do ‘facilitate’ the making of bets by his customers, they do not facilitate the making of bets by the counter-parties to those customers’ bets, so that for this additional reason, it is suggested, the tipster’s activity should not normally fall within s 13. 2.163 In its Advice note of October 2014 the Gambling Commission has expressed certain views about the application of s 13. It has stated (para 3.9) that it: 203

Some fundamental terminology ‘… does not consider that merely placing advertisements about where to place bets or providing tips in the newspaper is sufficient to fall within the definition. In contrast, the offer of tipster services, whereby the tipster places bets on behalf of third parties in return for payment or commission would, in the Commission’s view, fall within the definition in s 13 of the Act.’ It has also stated (para 3.10): ‘Likewise, making dedicated rooms available at race tracks, for example by equipping them with computer terminals and live racing feeds and marketing them as being available for people to use for betting would be likely, in the Commission’s view, to amount to facilitating the making or accepting of bets between others.’ Whilst the broad thrust of this advice may be acceptable the writer would respectfully question the view that the ‘offer of tipster services’ will necessarily fall within s 13 thus creating the need for a betting intermediary operating licence. The reference in para 3.9 to ‘tipster services’ perhaps gives insufficient acknowledgement to the variety of activities that may be carried on under the description of ‘tipster services’. Some tipster services amount to no more than the giving (or selling) of advice about how to bet successfully and, as the Commission seem to accept, this in itself should not fall within s 13. As to the case where a ‘tipster’ places bets on behalf of third parties in return for payment or commission the question whether this falls within s 13 must, the writer would submit, depend upon whether the bets which the tipster makes are made by him as agent or as principal. If the tipster acts as agent of a customer in making a bet with a bookmaker then the bet will be made between the customer and the bookmaker so that it can be said that the activity falls within s 13 as the tipster is providing a service ‘designed to facilitate the making or acceptance of bets between others’. If, however, the ‘tipster’ accepts funds from a customer and then uses them to make bets with bookmakers in which, the tipster, is principal, accounting to the customer for winnings made then it does not seem to be the case that the tipster’s service is designed to facilitate the making or accepting of bets ‘between others’ so it should not fall within s 13. This conclusion is consistent with the Commission’s own guidance at para 3.7 which states: ‘A betting intermediary is a person who provides a service to enable others to make or accepts bets. Such a person does not himself partake in the bet. The definition includes betting exchanges.’ 2.164 It is suggested that the reference in s 13 to ‘the making or acceptance of bets’ must be taken to be a reference to ‘bets’ in the general sense provided by s 9 as extended by s 11. The effect of reading the section subject to this restriction is that s  13 will not apply to pool betting as defined by s  12. If s 13 were not limited in this way, then the conduct by a pools promoter of pool betting could well fall within the s  13 definition, since on one view it is possible to regard persons engaged in pool betting as making bets as between themselves (see 2.107 above). 2.165 Finally, a word must be said about the relationship between the s 13 definition of ‘betting intermediary’ and the general definition of ‘providing 204

Some fundamental terminology facilities for gambling’ in s 5. Given the width of the latter definition, it would seem to apply to the activities of a betting intermediary. The first limb of s 5(1) provides that a person ‘provides facilities for gambling’ if he ‘(a) invites others to gamble in accordance with arrangements made by him’. This limb of the s 5 definition does not provide that the gambling must be carried on with the person giving the invitation and would seem wide enough in its terms to apply to a betting exchange or bet broker. Alternatively, the second limb of the definition provides that a person ‘provides facilities for gambling’ if he ‘(b) provides, operates or administers arrangements for gambling by others’. The activities of a betting exchange or bet broker would certainly seem to fall within this limb of the definition. Given the overlap between ss 5 and 13 the probable explanation for the specific definition of ‘betting intermediary’ is to provide a peg on which to hang the betting intermediary operating licence under s 65(2)(e).

GAMING 2.166 For the purposes of the GA  2005, ‘gambling’ means ‘gaming’, ‘betting’ and ‘participating in a lottery’, the expressions ‘gaming’, ‘betting’ and ‘lottery’ being defined by the provisions of the Act.1 The basic definition of ‘gaming’ is contained in s 6 and there are definitions of closely connected concepts, namely ‘casino’ and ‘equal chance gaming’ in s 7 and 8. 1 GA 2005, s 3.

2.167 Of the three fundamental concepts ‘gaming’, ‘betting’ and ‘lottery’ the expression ‘gaming’ is perhaps the most difficult to define. Although the basic features of the playing of a game are easily recognisable, the formulation of a definition which will apply to all cases is elusive and perhaps impossible to achieve. In recent years the difficulty has been made worse by the development of on-line gambling (for example, on the internet and via interactive TV) since in the case of such gambling there is usually absent the collective participation by a number of players (traditionally together on the  same premises) in a common activity which has traditionally been regarded as one of the hallmarks of gaming and of playing of a game. Moreover recent decisions relating to VAT in the Firsttier Tribunal (Tax Chamber) and the Court of Appeal (discussed at 2.197– 2.211 below) have undermined the proposition that the playing of a game involves collective participation by players and have established that there is no hard and fast rule that in order for there to be a game players must interact with each other. 2.168 Section 6 of GA  2005 provides an elaborate definition of ‘gaming’ and ‘game of chance’, which will be examined in detail below. The definition is based upon the definitions of ‘gaming’ and ‘game of chance’ contained in s  52 of the Gaming Act 1968,1 although the wording has been updated, in part to accommodate the modern realities of computer gaming and internet gaming, and in part to make the meaning clearer. Importantly, the s  6 definition empowers the Secretary of State to make regulations providing that a specified activity is, or is not, to be treated as a game, a game of chance 205

Some fundamental terminology or a sport, thus enabling the definition to be expanded to apply to new technological developments if and when they occur. 1 Gaming Act 1968, s 52(1) provided as follows: ‘“gaming” (subject to subsections (3) to (5) of this section) means the playing of a game of chance for winnings in money or money’s worth, whether any person playing the game is at risk of losing any money or money’s worth or not;’ ‘“game of chance” does not include any athletic game or sport, but, with that exception, and subject to sub-section (6) of this section, includes a game of chance and skill combined and a pretended game of chance or of chance and skill combined’. For a consideration of the expression ‘a game of chance and skill combined’ see R v Derek Kelly [2008] EWCA Crim 137, CA.

2.169 The definition in s 6 (like the previous definition in the Act of 1968) builds upon certain concepts such as ‘game’, ‘game of chance’ and ‘playing a game of chance’ which are either not defined, or not fully defined. The ensuing discussion proceeds as follows. First the s 6 definition is set out in its entirety, but without comment. There is then a discussion of the fundamental concept of ‘playing a game’. This is discussed first as a matter of principle and an attempt is made to illustrate the essential features of ‘playing a game’ by reference to a number of games that are in fact played. There is then a discussion of the concept of ‘playing a game’ as it applies to one-person games as these have developed using traditional instruments such as cards as well as gaming machines, computers and the internet. Discussion then turns to such guidance as to the meaning of ‘playing a game’ of chance as can be obtained from cases decided under the Gaming Act 1968 or under the legislation which preceded it. In addition attention is paid to recent cases in the Firsttier Tribunal and the Court of Appeal where the meaning of that expression has been discussed in the context of VAT legislation. Finally, the provisions of GA 2005, s 6 are considered and analysed against this background. 2.170

Section 6 of the GA 2005 provides as follows:

‘Gaming and game of chance (1) In this Act “gaming” means playing a game of chance for a prize. (2) In this Act “game of chance”— (a) includes— (i)

a game that involves both an element of chance and an element of skill,

(ii) a game that involves an element of chance that can be eliminated by superlative skill, and (iii) a game that is presented as involving an element of chance, but (b) does not include a sport. (3) For the purposes of this Act a person plays a game of chance if he participates in a game of chance— 206

Some fundamental terminology (a) whether or not there are other participants in the game, and (b) whether or not a computer generates images or data taken to represent the actions of other participants in the game. (4) For the purposes of this Act a person plays a game of chance for a prize— (a) if he plays a game of chance and thereby acquires a chance of winning a prize, and (b) whether or not he risks losing anything at the game. (5)

In this Act “prize” in relation to gaming (except in the context of a gaming machine)— (a) means money or money’s worth, and (b) includes both a prize provided by a person organising gaming and winnings of money staked.

(6) The Secretary of State may by regulations provide that a specified activity, or an activity carried on in specified circumstances, is or is not to be treated for the purposes of this Act as— (a) a game; (b) a game of chance; (c)

a sport.’

It will be noted that s 6(3)(a) provides that there may be a game of chance played, even though there is only one human participant. In this respect the 2005 Act reproduces the position as it was under the Gaming Act 1968 and indeed under preceding legislation (see below).

Playing a game of chance – general principles 2.171 To start with dictionary definitions, the New Shorter OED defines ‘game’ as: ‘A  (form of) contest played according to rules and decided by skill, strength, or luck (as opp “sport”) esp. one in which opponents actively engage to defeat each other’.1 This will do as a starting point, though since s 6(2)(b) provides that ‘game of chance’ does not include a sport, the reference to the contest being decided by ‘strength’ must be discounted in this context. Subject to that, however, the underlying concept of a game involves a ‘contest’ carried out in accordance with ‘rules’. This clearly suggests that a ‘game’ will normally involve a contest between two or more ‘players’ and this remains, no doubt, the normal expectation, though, as we shall see, well before the GA 2005 it was possible to contemplate a ‘game’ played by only one player. The definition, however, needs to be supplemented in at least two ways. First, in the normal case of a game involving more than one player there is an expectation that the players will be able to communicate with each other (either by being together in 207

Some fundamental terminology the same place or by using some means of communication at a distance) in order that the contest can take place though recent Court of Appeal authority establishes that there is no hard and fast rule that in order for something to be a game there must be interaction between the players.2 Second, the purpose of playing a game is normally understood to be entertainment or recreation.3 Of course, not all players will necessarily derive entertainment or recreation from the games they play. Professional sports people play athletic games as a livelihood, and in the world of non-athletic games some people play games such as chess, poker and blackjack as a livelihood and may derive little or no amusement from playing them. Perhaps it would be better to say that the playing of a game is an activity which is carried out as an end in itself and that players have no purpose other than playing the game and achieving success in it. This fact is not affected by the fact (if it be the case) that the winning player receives a prize or wins a bet or plays the game for the purpose of earning a living. 1 To a similar effect see The Chambers Dictionary 1998: ‘A  contest for recreation; a competitive amusement played according to a system of rules;’ and see Websters Third New International Dictionary 1986: ‘A  physical or mental competition conducted according to rules in which the participants play in direct opposition to each other, each side striving to win and keep the other side from doing so’. 2 IFX  Investment Company Ltd v The Commissioners for Her Majesty’s Revenue and Customs [2016] EWCA Civ 436. The case is commonly referred to as the Sportec case. 3 See, for example, Adcock v Wilson [1967] 2 QB 683 at 703 per Widgery J: ‘I  think that an ordinary man, when talking of playing a game, is talking of something which involves entertainment, he is talking of something which involves excitement and fun in the common pursuit by a number of competitors of a similar and known object …’

2.172 The dictionary definition recognises that the result of the game may be determined by skill (eg  chess) or by luck (eg  roulette) and it is no doubt capable of encompassing a game that depends on both skill and luck (eg  any card game in which, albeit skill can be used, the random dealing of the cards necessarily introduces an element of chance). The GA  2005, as noted, specifically provides that ‘game of chance’ includes a game that involves both chance and skill.1 However, a distinction can usefully be made between games where the skill element is high and games where the chance element is high. Where a game involves a high degree of skill, that skill is liable to enable the skilled player to defeat the less skilled player by manipulation of the rules and procedures of the game. The game of chess provides an obvious example. Where, however, the element of chance is substantial, there is less opportunity for this to occur and the element of skill in the game tends to take the form of assessing the changing odds of success and either staking heavily when the odds offer good value or slightly, or not at all, when they offer bad value. The more a game approximates towards one of chance the less role there is for skill to be used to defeat the opponent until, when one gets to a game such as roulette, there is (probably) no skill which a player (unaided by technology) can use to beat the bank, although players’ perceptions of opportunities for the use of skill may differ from reality. 1 GA  2005, s  6(2)(a)(i) – see on the equivalent wording under the Gaming Act 1968 R v Derek Kelly [2008] EWCA Crim 137.

208

Some fundamental terminology 2.173 There follows a brief description of the essential elements of a number of games, starting with games of a high skill level such as chess and bridge and moving via poker, blackjack and craps to the game of roulette, where there is no meaningful skill at all. There then follows a brief description of the game of ‘bingo’. It is hoped that these descriptions may help to illustrate the essential features of ‘playing a game’ and may form a template against which the question whether any particular form of activity amounts to playing a game may be considered. It is a feature of the games described that they typically involve communication and interaction between players and a caveat needs to be entered to the extent that recent Court of Appeal authority establishes that there is no hard and fast rule that in order for something to be a game there necessarily has to be interaction between players (see 2.209 below).

Chess 2.174 Starting with a game of pure skill such as chess, opponents move pieces on a board in accordance with strict rules and may use skill to capture their opponent’s pieces, the ultimate purpose being to ‘checkmate’ the opponent’s King (ie to create a position in which the King will necessarily be captured on the next move). Here the essential elements of a ‘game’, namely an activity involving a contest between opponents in accordance with rules, are clear. The outcome depends upon skill, and chess normally involves the physical presence in one place of the players over the chess board. However, it is possible for a game of chess between two human players to be played at a distance (eg players in different places using terminals linked to a server on which they can move the chess pieces). Indeed, players at a distance may also conduct games of chess by post. Games of chess can, further, be played by one human player against a computer, the computer being programmed to operate in accordance with the rules of chess and the contest taking place between the human player and the computer playing in accordance with the rules.

Bridge 2.175 As noted, card games usually offer more scope for the role of chance by virtue of the random deal of cards, but the skill element may still be very high. In contract bridge four players divided into two opposing teams of two partners are each dealt 13 cards randomly from a 52-card pack. The partnerships compete to obtain a contract to make a given number of ‘tricks’, by means of ‘bidding’ to make those tricks with a specified suit as trumps. Each player is entitled to bid. The bids, often conventional, may enable deduction of the cards held by the other players and the adaptation of the next bid accordingly. The highest bid entitles the bidder to try and achieve the contract, and the other partnership opposes it. A ‘trick’ consists of four cards, one from each hand. Once an opposing player has exposed the first card for the first trick, the cards of the next (contracting) player are also exposed to the three remaining players, and he retires from the game, his partner playing both hands. All players must follow the suit of the first card in a trick if they can, or must discard another card of their choice if they cannot. The card with the highest value wins the trick for the player’s partnership, 209

Some fundamental terminology with the important exception that trumps (specified in the bid) are superior to cards of the other three suits. Skill lies in the bidding and the play, but in contract bridge much also depends on the cards dealt.1 This element of luck is greatly reduced in duplicate bridge, when a partnership competes not only with the opposing partnership, but also, over the course of multiple deals, with other partnerships at other tables who have been deliberately dealt identical cards. Here again, the element of competition by the skilled players in accordance with the rules is clear and the need for communication between the players is obvious. Typically they will sit around the same table in one place. In addition, live games of bridge may be played between human players over the internet in real time. It is also possible for games of bridge to be played by human players against computers programmed to operate in accordance with the rules of bridge. 1 In Ross, Banks and Dyson v The Queen [1968] 70 DLR (2d) 606 the Supreme Court of Canada held that contract bridge was a game of chance within a definition which provided that: ‘“game” means a game of chance or mixed chance and skill’. ‘Taken by themselves the words used in the definition of “game” are not ambiguous. They apply to any game of chance only or of mixed chance and skill. The word “mixed” implies no indication of the respective proportions of the two elements. Nothing shows that they must be equal or nearly so. Nothing indicates which is to be preponderant’, per Pidgeon J.

Poker 2.176 Poker is one of a number of ‘vying’ games.1 Such games have been described as follows: ‘Basically, the players are dealt a hand of cards and then “vie” with one another, by progressively raising the stakes, as to which of them is holding the best card-combination according to an agreed scale of values. At each turn a player may match the previous stake (see or call in the language of Poker) or increase it (raise), or else drop out (fold), thereby relinquishing whatever he has so far paid to stay in. There is no card-play as such, though there may be some exchange of cards with a view to improving the hand at some stage in the proceedings. There are two possible outcomes. Either a showdown is reached, in which case those left in reveal their cards and the player with the best hand wins the pot (or the stakes); or players may keep folding until only one is left in play, whereupon he wins without having to reveal his hand. In this case he will have done so by a process of vying, or psychological warfare, or bluff, since he might not hold the best hand and would therefore have lost if the game had reached a showdown instead’.2 Here the element of competition is very clear and there is an element of chance introduced by the deal of the cards that gives superior odds to some players. The element of skill has two aspects. The first involves weighing the probability that one has the best hand against the odds currently offered by the pot, and betting boldly if these odds are greater, otherwise cautiously or not at all. The second element lies in the exercise of competitive psychology in order to persuade the other players that one’s hand is stronger than it is.3 Typically, of course, poker is played by players who are physically located 210

Some fundamental terminology together sitting round a table. Poker may, however, also be played between live players over the internet and it is possible for poker to be played by a human player against a computer programmed to play the cards in accordance with the game rules. 1 For ‘vying’ games see Parlett A History of Card Games (OUP, 1991), p 85. 2 Parlett, pp 85–6. 3 See the discussion in R v Derek Kelly [2008] EWCA Crim 137 and see 2.221 below.

Blackjack 2.177 In blackjack, one player (the banker) plays against one or more other players (the opposing players), dealing cards to each of the players from a shuffled stack of cards. The dealer deals two cards to each player face up and one card face up to himself. The players then have certain options on how play will proceed. The essence of the game is that the players bet on the sum of the value of their cards being closer than those of the dealer to 21. If a player’s two cards total 21, then he wins straight away. If they total less than 21, he can choose whether to ‘stand’ (keep his hand at just those two cards) or draw an extra card. Extra cards are dealt face up and a player can carry on drawing them until he decides to stand or the total goes over 21, in which case he is ‘bust’ and loses. Each player makes his choices and the dealer then adds a second card to his original one. If his cards come to 17 or more the dealer must stand. If they come to 16 or less, the dealer must add extra cards until the total reaches 17 or more but, if the total goes over 21, the dealer is bust and the winning players are paid. Players whose cards total more than the dealer’s are paid their winnings. Players whose cards come to less than the dealer’s lose their stake. The chance element in the game comes, very obviously, from the random dealing of the cards. As to skill, it may in principle be possible for players to use skill by ‘cardcounting’ (ie  observing and memorising the cards which have been dealt and calculating the probability of a card of a particular value being drawn).1 Accordingly, there is a competition played in accordance with rules, but the gambling element is more fundamental to blackjack than to the preceding games because the essence of the skill in the game lies in calculating the chances that a card or cards of a particular value will enable the player to get closer to 21 than the banker. In a casino the bank and players will play the game at a blackjack table, but it is possible for blackjack to be played between live players over the internet and for versions of blackjack to be played by human players against computers programmed to ‘draw cards’ at random and to play in accordance with the rules of blackjack. 1 In practice, the introduction of shuffle machines which constantly recycle cards each hand has made the practice of card counting almost impossible – see Gambling Commission ‘Types and rules of Casino Games Consultation Document’, September 2006, para 22.

Craps 2.178 Craps is again a game played by players against the bank. The players in turn throw two dice and gamble either on the outcome of the 211

Some fundamental terminology next roll of the dice or on particular scores coming up before or after the score of seven. Again, there is a competitive element, but this is limited in effect to players calculating the probability of numbers being thrown and betting accordingly. There is no skill which can affect the probability of the two thrown dice producing a particular number; there is skill, however, in calculating the probability that a number will be thrown. The game takes place in the presence of all the players and there is communication between them. However, in essence the game really consists of betting on randomly generated numbers. It would be possible in principle for human players to play craps at a distance over the internet and there are versions of craps in which human players play craps against a computer programmed to ‘throw dice’ at random and to compete in accordance with the rules of the game.

Roulette 2.179 Roulette is a game played by a bank against one or more individual players. It involves betting on numbers. The numbers are generated by inserting a ball into a wheel which has 37 compartments numbered from 0 to 36 and spinning the wheel so that the ball falls randomly into one of the compartments. Players may bet that one specific number will be spun, or that the number spun will lie within a specific range (ie  one of the red numbers, one of the odd numbers, one of the even numbers etc). The bank quotes odds for each possible bet, the odds being less than the arithmetical odds so as to secure to the bank an advantage or ‘edge’ (for example 2.7% on a single number bet).1 1 The version of roulette described in the text is one in which the wheel contains one 0. There are versions of roulette where the wheel contains two zeros, where the odds differ. The version of roulette described in the text also assumes that the game is being played as one of unequal chance, where the bank has an advantage. It is possible, however, (see 2.239 below) for roulette to be played as a game of equal chance, where the payouts match the arithmetical chances of a number being spun.

2.180 It is much less easy to detect any true ‘contest’ played according to ‘rules’ in the case of roulette. There will of course be table ‘rules’ governing staking levels, and the odds quoted by the bank are part of the ‘rules’. But these are really the rules of the betting and not the rules of a game in the traditional sense. There is no true room for the exercise of skill (though, as noted below, roulette players often believe that skill may be exercised) so that the ‘game’ of roulette lacks the competitive element to be found in some of the games described above. The only true ‘competition’ is a bet on the number to be spun. 2.181 It is true that a number of betting sequences have been proposed which are supposed to enable roulette players to beat the casino. For example, the ‘Martingale’ (also known as ‘doubling up’) works on the principle that every time a player loses he should double his stake until he has won back enough to recoup his losses. The ‘d’Alembert’ system works on the premise that if a player’s starting stake is taken to be one unit he should add one further unit every time he loses, but deduct one unit every time he wins. The best that can be said for these systems is that they may help a player to lose 212

Some fundamental terminology his money to the casino’s ‘edge’ more slowly than he otherwise would, but they cannot guarantee a win. More fundamentally, they are really betting systems. They are designed to help the player to beat the betting ‘edge’ which the bank enjoys. They are not intended to affect the actual outcome of the spin of the wheel. 2.182 In the absence of any true contest (apart from a betting contest) between the players and the bank, it may legitimately be asked why is roulette treated as a game, indeed as the paradigm casino game? The following characteristics of roulette may be relevant: (1) There is the fact that the players do physically gather together in one place in order to play roulette. Though this may not be a necessary condition of the playing of a game, the cases of DPP  v Regional Pool Promotions Ltd,1 Armstrong v DPP2 and Adcock v Wilson3 all suggest that the gathering together of players in one place to take part in a joint activity may be indicative that a game is being played. So the collective feature of casino roulette is not unimportant. (2) The players play against a bank, which is also physically present (through its agent, the croupier). So players and bank play together on the same premises. (3) The players bet on numbers that are generated by the bank itself. The numbers are generated as a result of the physical activation of the wheel and the introduction of the ball by the croupier. This means that the result will depend upon factors such as the speed with which the wheel is spun, the instant when the ball is discharged into the wheel and so on. (4)

In casino roulette, bets may be placed both before the wheel is spun and whilst it is spinning and the ball is running round the rim up until the moment when the croupier announces, ‘No more bets’.

1 [1964] 2 QB 244. 2 [1965] AC 1262. 3 [1969] 2 AC 326.

2.183 The above factors create the perception that it is possible for players to predict which number will be spun (or, at least, the segment of the wheel where the ball will end up). It is also believed that the croupier can affect this. The following beliefs are held: (1) Gambler’s fallacy. There is the belief that a number which has not come up for some time has an enhanced chance of coming up. Casinos cultivate this belief by recording the numbers which have been spun. (2) Biased roulette wheel. The fact that numbers in roulette are generated by a physically manipulated wheel presents the possibility that tiny flaws in the wheel, or imbalances in it, may introduce a bias which will impact on the numbers drawn. Historically there may have been cases where observation of bias in a roulette wheel has enabled players to beat the casino.1 Modern casinos, however, frequently replace and rebalance their roulette wheels, and the chances of significant bias are virtually non-existent. 213

Some fundamental terminology (3) Croupier’s signature. Some roulette players believe that croupiers unconsciously exhibit a ‘bias’ or ‘signature’ by habitually spinning the wheel at a particular speed and introducing the ball at a particular point so that it shows a predisposition to land in a particular arc of the wheel. They believe that by studying ‘croupier signature’ it is possible to predict the arc. (4) Croupier manipulation. Yet other players believe that some croupiers can deliberately spin the wheel so as to ensure that the ball falls within a particular arc. They maintain that such croupiers will in particular use this skill to ensure that numbers which have been heavily staked on are not spun and such players will therefore tend to delay placing their bets until after the wheel is spun in order to frustrate the croupier.2 (5) Wheel watching. The ability to place bets after the ball has begun to be spun also gives to players the chance to try to predict the path and destination of the ball before they place their bets. A number of roulette players do maintain that it is possible by ‘wheel watching’ to predict at least the arc where the ball will land. It is doubtful whether this can be done by use of the naked eye, though it is possible that computerised methods of observation and prediction may be able to swing the odds in the player’s favour.3 1 See, for example, the case of William Jaggers who, during the latter part of the nineteenth century, won substantial sums from the Grand Casino in Monte Carlo. Jaggers had employed six clerks to record the winning numbers at the Monte Carlo casino over a period of one month. He then applied statistical analysis to the data, comparing the number of times particular numbers had come up with what might reasonably be expected according to the laws of probabilities. The results appeared to demonstrate a bias in some of the wheels. By betting in accordance with the bias, Jaggers was able to win the sum of 1.5 million French francs: see Lowe & Clark The ‘Which?’ Guide to Gambling (1st edn) March 1999. 2 For a detailed study of this belief among roulette players see: David Oldman ‘Chance and Skill: A Study of Roulette’ Sociology, Vol 8 (Oxford 1974). 3 Research in the 1960s into the theoretical path of the roulette ball carried out by Dr Edward O Thorpe led to the conclusion that there were so many variables in the croupier’s actions, and so many other factors such as whether the ball would be deflected by the separators or would bounce from one pocket to another, that the final resting place of the ball was not predictable with enough certainty to swing the odds away from the casino. See Thorpe ‘The Mathematics of Gambling’. More recently, the use of concealed tracking devices linked to a microcomputer was apparently successful in enabling a group of players to beat the bank’s advantage at roulette in the Ritz casino in London: see ‘Ritz phone gang can keep £1.3m roulette winnings’, The Times, 6 December 2004.

2.184 The conclusion appears to be that, although roulette as played in a casino is essentially a numbers bet and has no greater competitive element than that, the players’ perceptions of a skilled competition between themselves and the bank or casino coupled with their physical presence together on the same premises override that factor and justify the conclusion that roulette is a game. In principle, it would be possible for players to play roulette over the internet or over interactive TV against a physically spun roulette wheel and in such a case the activity would seem to amount to the playing of a game, on the basis that although the players would not be together in one set of premises, they would be in physical communication 214

Some fundamental terminology with each other and the constituents of the game noted at 2.182(1)–(4) and 2.183 would mutatis mutandis remain the same. There are also, of course, versions of internet roulette where players stake money on the outcome of a ‘spin’ of a virtual roulette wheel, the actual winning number being in fact generated by a random number generator, the ‘roulette wheel’ being no more than a virtual representation of the number drawn. In such a case the constituents noted at 2.182(2)–(4) and 2.183 do not apply and it is strongly arguable that in those circumstances there is no true game played but the mere making of a bet on a numbers draw.

Bingo 2.185 Bingo is defined in GA  2005 to mean ‘any version of that game, irrespective of by what name it is described’ (s  353(1)). This rather cryptic definition suggests not only that bingo may have more than one name (eg  ‘housey-housey’ and ‘tombola’) but that there may be more than one ‘version’ of it. Indeed, it is possible to regard bingo, like poker, as constituting a family of games having certain broad features in common. There is a description of bingo in the Final Report of the Royal Commission on Gambling 1978 (Cmnd 7002), Vol 2, which was cited in a decision of the VAT Tribunal WMT Entertainments Ltd v The Commissioners of Customs & Excise (20 November 1992, unreported). This describes bingo as: ‘A lottery played as a game of equal chance between players, in which each receives a set or sets of numbers. Each set differs as a whole from that of any other player. Numbers are then selected by chance and players eliminate from their sets the numbers selected. The winning player is the one who, having eliminated all the numbers received, is the first to claim to have done so by shouting “Bingo” or by other adopted means’.1 Although this definition has been influential in guiding thinking as to the constituents of a game of bingo, it is not, of course, a statutory definition and is now some 30 years old, and it may no longer adequately reflect more recent developments which have taken place in the game of bingo. 1 See also Royal Commission on Gambling Final Report (1978) Cmnd 7200, Vol  2, para 20.1: ‘Bingo is a lottery played as a game. Each player receives for his stake a set of numbers which he has not chosen. These are marked off against numbers selected at random and announced by a caller, and the winner is the person who can first substantiate a claim to have marked off all those, or a particular section of those, in the set he has been given.’ See also Gambling Review Report 2001, CM 5206, para 8.1: ‘Bingo is a game of chance. In return for a stake, each player receives a set of numbers that he has not chosen. The player marks off the numbers in his set against numbers which are selected at random and announced by a caller. A player wins by completing a line, multiple lines, or a full house (all the numbers in their set) more quickly than other players. A winning set must include the number which was called last. A player invalidates his win if he does not call out quickly enough; the pace of the game is determined by the speed of the caller. The length of the

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Some fundamental terminology game is determined, not only by the speed of the caller, but also by the number of players, the proportion of numbers that constitute a win, and the range of numbers in the selection.’

2.186 The above description brings out the elements of ‘bingo’ as it has traditionally been played in cash bingo halls and prize bingo arcades. It also makes it possible to suggest reasons why bingo so played is both a lottery and a game. The position can be analysed as follows: (1) Each player receives a given set of numbers (on a bingo ticket or bingo fascia). His success or failure will depend upon whether the numbers drawn match the numbers on his ticket (or a particular pattern of those numbers – single line, four corners, cross etc). To that extent bingo is like any passive lottery where participants are given numbers which may or may not be drawn to win prizes. (2)

Numbers are selected by chance and these numbers determine whether a card will qualify to win. The card will qualify to win when the numbers called match specified sets on the card. There are, however, two important differences from an ordinary lottery. In an ordinary lottery, once there is a match between the numbers drawn and a lottery ticket, then the ticket is a winning ticket and nothing can be done to defeat its status as such. In the case of bingo played in the traditional way, a ticket only becomes a winning ticket when, the numbers on it having been drawn in the draw, the owner of the ticket claims to be the holder of a winning ticket, classically by shouting ‘Bingo’. If, before he does so, another number is called the ‘winning’ ticket loses its status as such. Thus, each bingo player is in competition with all the others both to match their numbers in the draw and also to do so before any other player can do so. This is the central competitive element of bingo as it has traditionally been played in the past. Certain consequences follow. First, each cardholder must necessarily follow the draw and match the numbers drawn against those on his card. This is an important part of the competitive activity and can engage qualities such as speed of hand, eye and perception. Secondly, once he has identified that he has a winning card, he must make his claim to be the winner before any more numbers are drawn. Thirdly, implicit in these factors, in a traditional game of bingo players need to be in communication both with the promoter (so that they can follow the draw, match their numbers and so make a competitive claim to have won) and with the other players (so that they can know whether a competitive claim has been made by someone else). It may be these qualities, namely the need to follow the draw and match the numbers, to make a claim to be the winner and to be in communication with the promoter and other players that convert bingo as traditionally conducted into an activity involving the playing of a game.1

1 Although there is no decided case which, as such, supports the analysis suggested in the text, it is consistent with the Royal Commission Final Report’s description of bingo and can be supported to some extent by descriptions of bingo contained in Rogers v Cowley [1962] 2 All ER 683 and R v Herrod [1976] QB 540 at 558, where Lord Denning gave a description of ‘prize bingo’ as follows: ‘Now prize bingo is like ordinary bingo, played with sophisticated apparatus. Instead of cards with numbers on them, there are dials facing the players. A player

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Some fundamental terminology puts in a coin (5p for two cards). Thereupon two dials light up showing numbers corresponding to two cards. When the game starts, instead of someone throwing a number out of a hat, a machine throws a ball into the air. A gaily dressed lady plucks one of them and calls out the number. If it is one of the numbers on the dial, the player crosses it out by pulling a cover over it. If he gets all his numbers crossed out correctly before the other players, he gets a prize. This is obviously a lottery or a game of chance …’

2.187 Although cash bingo played in bingo clubs and prize bingo played in arcades has typically involved the elements described above, it remains the case that there is no definitive version of bingo and it may be possible for a game to omit one or more of the above described characteristics (or to include others not described) without forfeiting the right to be described as ‘bingo’. There are, for example, definitions of ‘bingo’ from other jurisdictions which do not include any requirement that the winning player should actually call or make an active claim to have a winning combination.1 The Queensland Charitable and Non-Profit Gaming Act 1999 defines ‘bingo’ in terms which omit any reference to a claim and in which there is no reference to the winner necessarily being the person who first achieves a pre-determined pattern. Section 8 provides that: ‘“Bingo” is a game known as bingo, housie or housie-housie, or a similar game, whatever called, in which: (1) each player is given a ticket with numbers, letters, or symbols printed on it; and (2) the winner is decided by the player matching the randomly selected numbers, letters or symbols to the numbers, letters or symbols on the player’s ticket.’ In addition, it should be borne in mind that the National Game of bingo originally introduced by the Gaming (Bingo) Act 1985 (repealed) provided for ‘a game of multiple bingo’ to be played jointly on different bingo club premises. The effect was that a single set of numbers was transmitted to a number of participating clubs which played games of bingo by reference to those numbers within a specified period beginning and ending the same for all of them. Various prizes were awarded, depending upon how many calls it took to achieve a full house in the different clubs. The arrangements were treated by the Act as ‘a game of multiple bingo’, even though a number of traditional features (eg  competitive claiming between all the participants) was missing. The very broad definition of ‘bingo’ contained in the GA 2005 may enable the development of games of bingo which will depart some way from bingo in its traditional form as described in 2.185–2.186 above. 1 See, for example, the Indian Gaming Regulatory Act which defines bingo as follows: ‘… the game of chance commonly known as bingo (whether or not electronic, computer, or other technologic aids are used in connection therewith): (i) which is played for prizes, including monetary prizes, with cards bearing numbers or other designations, (ii) in which the holder of a card covers such numbers or designations when objects, similarly numbered or designated, are drawn or electronically determined, and

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Some fundamental terminology (iii) in which the game is won by the first person covering a previously designated arrangement of numbers or designations on such cards, including (if played in the same location) pool-taps, lotto, punch boards, tip jars, instant bingo, and other games similar to bingo.’ In South Africa s  1 of the National Gambling Act 2004 defines bingo in the following terms: ‘“Bingo” means a game, including a game played in whole or in part by electronic means— (a) that is played for consideration, using cards or other devices— (i) that are divided into spaces each of which bears a different number, picture or symbol; and (ii) with numbers, pictures or symbols arranged randomly such that each card or similar device contains a unique set of numbers, pictures or symbols; (b) in which an operator or announcer calls or displays a series of numbers, pictures or symbols in a random order and the players match each such number, picture or symbol on the card or device as it is called or displayed; and (c) in which the player who is first to match all the spaces on the card or device, or who matches a specified set of numbers, pictures or symbols on the card or device, wins a prize, or any other substantially similar game declared to be bingo in terms of section 6(4)’.

Some special cases One-person games 2.188 Despite the fact that a game classically involves a competition between two or more players, there are a number of games which may be played by one human player only. Such games existed even before the development of computer games. For example, in the family of card games known as ‘Patience’, where the object is to arrange the cards of a shuffled pack in a definite order according to the rules of the particular version of the game being played, there is only one human player, yet Patience is commonly regarded as a game. Parlett has questioned whether the absence of competition between players prevents Patience from being regarded as a ‘game’ properly so called,1 but concludes that the possibility of solving the puzzle by strategic skill justifies treating Patience as a game. He concludes: ‘We therefore have to admit Patience as a category of game, and must accordingly revise our understanding of “competition”. Perhaps we may expand it to include a contest between, on one hand, the lone player, and, on the other, the shuffled pack, or the same player on different occasions, or Fate, according to taste.’2 1 David Parlett A History of Card Games (OUP, 1991). 2 Parlett, pp 153–4. For a discussion of Patience as a solo game involving move and response or a succession of related moves see the judgment of the Upper Tribunal in The Commissioners for Her Majesty’s Revenue and Customs v IFX  Investment Company Ltd [2014] UKUT 0398 (TCC). The judgment of the Upper Tribunal was overturned by the Court of Appeal which did not adopt the Upper Tribunal’s analysis of Patience played as a game.

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Some fundamental terminology

The playing of a game on a gaming machine 2.189 The rise of the gaming machine as a significant form of entertainment is described at 0.40 above. Early non-electronic machines took many forms, but typically they involved the user of the machine manipulating the mechanism in some way to try to achieve a winning result. For example, he might be required to manipulate a spring to project a coin or ball into an aperture, or he might be required to manipulate a cup to catch a ball or coin projected down through the machine. In such circumstances it is fairly easy to see why the user could be regarded as playing a game against the machine, since he was required to use skill in manipulating its mechanism to achieve a particular result. A  series of cases during the early twentieth century proceeded on the basis that the use of such machines could amount to the playing of a game.1 1 See Fielding v Turner [1903] 1 KB 867: a machine into which player could insert a penny which he could then project by a knob into one of seven compartments, one of which awarded a prize, two of which returned the penny and four of which kept it was held to be ‘unlawful gaming’ within Gaming Houses Act 1854, s 4. Thompson v Mason [1904] 90 LT 649 concerned a similar machine to that in Fielding v Turner: held ‘unlawful gaming’ within GHA 1854, s 4. Pessers v Catt LXXVII JP 429: a ‘Clown’ machine in which players inserted a penny which released a ball which they could then try to catch in a cup was held to be a game but not ‘unlawful gaming’ within GHA 1854, s 4, as it was a ‘game of skill’, not a ‘game of chance’. Peers v Caldwell [1916] 1 KB 371: a ‘Clown’ machine in which players inserted a halfpenny which released a ball which they could then try to catch in a cup to win prizes was held to be a ‘game’ within Betting Act 1853, s 1. See also R  v Peers & Brown [1917] 12 Cr App Rep 210; and Gordon v Dunlevy [1928] IR 595 where a fruit machine with three reels fitted with a control allowing players to stop reels (one at a time) and thus improve their chances of winning was held to be a game and ‘unlawful gaming’ within GHA 1854, s 4.

2.190 As the early forms of amusement machines described above gave way to the modern ‘one armed bandit’ or ‘fruit machine’ there might have been a question whether the activation of such machines could realistically be regarded as the ‘playing of a game’ by the single human customer involved. In some cases machines of this variety may possess ‘nudge’ and ‘hold’ buttons which allow the user to hold or manipulate the reels with a view to securing a favourable combination, and it could be argued that it was the existence of this potential for interactivity with the machine’s mechanism that justified treating the use of such machines as ‘playing a game’ with or against the machine. However, in Rosenbaum v Burgoyne1 the House of Lords was concerned with a fruit machine which could be activated merely by pulling a lever setting the revolving drums in motion. The case turned upon the meaning of the expression ‘… the stake required to be hazarded in order to play the game once …’ within the Betting and Gaming Act 1960, s 17(2). It was held that the ‘game’ played on the machine consisted solely in pulling the lever, and that playing the game once meant pulling the lever once. There was no suggestion that players could manipulate the machine or exercise any skill; rather, mere activation of the machine to enable its mechanism to 219

Some fundamental terminology determine whether a winning combination would come up was enough to be regarded as playing a game on the machine. So the concept of ‘playing a game’ was extended so as to apply to a single player who was doing no more than activating a fruit machine. Subsequently, in Seay v Eastwood2 the House of Lords returned to the question of the proper characterisation of the kind of gambling carried out on fruit machines. The case was concerned with the question whether the use of fruit machines could amount to ‘betting’; their Lordships unanimously concluded that it could not. However, Lord Wilberforce concluded that it was proper to regard the player of such machines as playing against or with the machine, ie the stakes provided by other players.3 1 [1965] AC 430. 2 [1976] 3 All ER 153. 3 Seay v Eastwood [1976] 3 All ER 153 at 155h.

2.191 The idea that it was possible to play a game on a fruit machine or slot machine was likewise reflected in the Gaming Act 1968, and in particular by the terms of s 26, which defined the types of machine to which Part III of the Act applied. These were: ‘… any machine which— (a) is constructed or adapted for playing a game of chance by means of the machine, and (b) has a slot or other aperture for the insertion of money or money’s worth …’ 2.192 It seems clear, therefore, that well before the enactment of the GA 2005 it was possible to regard a solitary player as playing a game, both in cases where he manipulated the mechanism of a machine (or competed with a computer program to play the relevant game) and also (at least so far as gaming machines were concerned) in cases where there was no true interactivity, but the supposed player merely activated the relevant machine. This rather loose use of the concept of ‘playing a game’ led to difficulty in the proper characterisation of activities carried out on the internet under the legislation in force prior to the GA  2005. Where such activities amounted to the playing of a game between a human players in real time, there was little difficulty in accepting this to be a form of gaming. More difficulties, however, arose where human players played against a computer. On the whole the accepted view seemed to be that where the ‘player’ did no more than place a bet the activity should not normally be regarded as ‘gaming’, whereas if there was any degree of interactivity between the ‘player’ and the software this would point towards the playing of a game and therefore ‘gaming’. In the second edition of this book1 the position, it was suggested, was as follows: ‘… it may be possible to structure “games” played on the Internet in such a way that they do not involve “gaming” as defined by section 52 of the Gaming Act 1968. It may, for example, be possible to structure “games” of roulette and craps to be played on the Internet in such a way that they are more akin to fixed odds betting than to 220

Some fundamental terminology gaming so that they may be provided by the holder of a bookmaker’s permit. In a casino, of course, roulette and craps are considered to be games, the element of “playing a game” deriving from the fact that all the players gather together physically in one place at one time so that they may carry on a group activity even though each player has his own individual contract with the bank. As “played” on the Internet, however, there is no physical gathering together of players and no necessary contemporaneous activity involving a number of players competing contemporaneously against a bank. Thus, roulette can be presented as an activity in which there are two parties to the transaction either of whom might win or lose, ie the person placing the bet and the content provider. The latter may enter into an individual betting contract with the former under which he will be obliged to pay each winning bet irrespective of how much is received in total by way of stake money from other participants. Each “player” will make a positive choice in the covering of his numbers or colours. He may, therefore, be said to be expressing a view as to the outcome of an event, ie the electronic spinning of a “wheel” which is being controlled by a random number generator in the content provider’s server which is remote from, and outside, his own computer. He is not playing a game with or against other persons accessing the server. Since each bettor is in a self contained one-to-one relationship with the content provider, there would be no element of striving or competition as between the bettors. The content provider’s remuneration does not depend, as with that of a lottery promoter, simply on the number of persons who take part in the lottery. The former’s remuneration is fairly and squarely dependent upon whether he wins or loses on the bets made by the participants. Thus the activity may be distinguished from “gaming” within the Gaming Act 1968 and from the promotion of a lottery. … It is possible that craps could be structured similarly to roulette so as to provide a simple bet between player and promoter. The bet would be a bet upon the number which will come up on the next throw. Different considerations may arise in the case of games such as Internet poker and Internet blackjack. If, in the case of Internet poker, a hand is “dealt” to the player and to the computer, and the player picks up and discards cards as he would with normal poker he will be actively participating in a competition with the computer in which he changes his tactics according to what happens in the game. Although in one sense he “backs” himself when he stakes money, it is on the basis that he will win, but he may win on any relevant combination rather than any combination that he has specified before the game begins. A similar analysis may well be applied in the case of Internet blackjack. Such activities may well qualify as “gaming” within the Gaming Act 1968 and are less likely to be analysable as betting.’ 1 Smith & Monkcom Law of Betting, Gaming and Lotteries (2nd edn) p  869, para D22.14.

Playing a game – the case law 2.193 We will now turn to consider guidance given as to the meaning of ‘playing a game of chance’ to be found in cases decided under the previous 221

Some fundamental terminology legislation. To the extent that the relevant cases were decided in the 1960s, long before the development of computerised gaming and gaming on the internet, the guidance is of limited value. Broadly the principles to be extracted from the cases are as follows: (1)

The question whether any particular activity involves playing a game is one of fact (Armstrong v DPP).1 In reaching a conclusion the court must look at the whole circumstances of the case, and there is no conclusive test of the matter (see the judgment of Lord Parker in Armstrong v DPP at 1272G).

(2) It has been said that ‘playing a game of chance’ involves some participation by the players, either by way of some degree of skill or by some physical act or by exercising some choice (DPP v Regional Pool Promotions,2 per Lord Parker at 253). (3)

There are in addition a number of dicta in various cases suggesting that the playing of a game normally involves the physical presence in one place of the players, or at least, of communication between players or groups of players if they are in different places. The relevant passages are footnoted below.3 The author would suggest, however, for the reasons discussed above, that even in cases where a game is played by more than one human player, the fact that people do not gather together physically at one place is nowadays not a strong contra-indication of ‘gaming’ and that this position had been reached well before the enactment of the GA 2005.4 Moreover, whilst it is still relevant to consider whether there is communication and interaction between ‘players’ in deciding whether an activity amounts to the playing of a game, recent Court of Appeal authority (discussed at 2.209–2.211 below) establishes that there is no hard and fast rule of law that in order for something to be a game there must be interaction between the putative players.5

(4) However, even the communication test becomes of no relevance where the ‘playing of a game’ is carried out by one individual who plays against a non-human adversary (such as a shuffled pack of cards, a machine’s mechanism, an electronic gaming machine or software on a server accessed via the internet). For the reasons discussed at 2.188– 2.192 above, all these activities may, at least in certain circumstances, be capable of leading to the conclusion that the single individual is ‘playing a game’, so that gaming may be taking place. 1 [1965] AC 1262. 2 [1964] 2 QB 244. 3 For example, in DPP  v Regional Pool Promoters [1964] 2  QB  244 at 253 Lord Parker said: ‘[The Prosecutor] has taken a number of points; in particular; that it is of the essence of the playing of a game that players should come together at a particular place at a particular time … For my part, I  do not propose to decide this case on that ground. I can envisage that it is possible physically for players to play a game without being physically together in one room or at one place, provided, of course, that there are means of communication.’ See also Armstrong v DPP [1965] AC 1262 where Lord Parker, referring to his own observations in Regional Pools Promotions said (at 1272) that the question whether the players were all together in the same premises:

222

Some fundamental terminology ‘… could not be the decisive test in every case … there may be many cases where people in different places can be said to be playing the same game at the same time. One can envisage Bingo in different rooms, communication being by closedcircuit television. There are games of Chess which are played between people miles away, and matters of that sort. But at the same time I am quite satisfied that in deciding whether some activity constitutes the playing of a game, the fact that the participants do not meet at all must have some relevance. Indeed, in some cases it may be the determining factor in the decision.’ When the case went to the House of Lords, Lord Pearson dealing with this contention said (at 1284): ‘I should mention that on behalf of the Respondent a further argument has been put forward to the effect that there cannot be “gaming” – the playing of a game – within the meaning of Part II of the Act of 1960 unless there is an assembly of players playing a game in each other’s presence. Undoubtedly, that is the normal way of playing a game, and there are provisions in this Part of this Act … which contemplate that a game will be so played. But as … it would seem to be possible to arrange the playing of a game of chance between players at a distance, the argument must rest on implication from the language and content of Part II of the Act of 1960. I think it is doubtful whether this argument can succeed, and I am not basing my opinion on it. On the other hand, the fact that there is no assembly of players, and that the alleged players are not in communication with each other, may well have considerable weight in any case as evidence in favour of a more general argument that there is no playing of a game.’ See also Adcock v Wilson [1967] 2 QB 683; [1969] 2 AC 326. There the question was whether persons who were playing bingo in a large number of different clubs (and were undoubtedly ‘gaming’ in that sense) were also playing a so-called ‘National Game’, in which prizes based upon calls in the club games were awarded by prior arrangement between the club owners and the National Game organiser. There was no communication between the various clubs while the individual games were being played in them. The magistrate held that there was no ‘National Game’ and this decision was upheld in the Divisional Court and the House of Lords. In the Divisional Court Winn J referred to Lord Pearson’s judgment in Armstrong v DPP. Referring to the argument that there had been no communication between the bingo clubs involved in the ‘National Game’ he said (at 699): ‘… I do not attach so much importance to that, since I think that communication is relevant only where the game is of a kind which, in order that it may proceed regularly and in accordance with the rules, requires one player or one group of players to know what has happened, what success has been achieved, or what choice has been made by the opposed player or group of players.’ Ashworth J said (at 701): ‘… in order to take part in a game it seems to me that one of the features is that there should be some means, so to speak, of identifying a competitor and knowing who is taking part.’ He went on to cite Armstrong’s case as authority that although it would not be right to say that there must be an assembly of all the players in any one place, it was nonetheless true that an absence of such an assembly pointed against there being the playing of a game. Widgery J said (at 703): ‘… in deciding whether persons are “playing a game” one should have regard to the ordinary meaning which an ordinary man would give to those words. I think that an ordinary man when talking of playing a game, is talking of something which involves entertainment, he is talking of something which involves excitement and fun in the common pursuit by a number of competitors of a similar and known object and it seems to me exceedingly difficult to produce those elements which

223

Some fundamental terminology the common man would ascribe to a game if you have the participants in separate places and with no communication between them whilst the activity is going on, and thus no sort of opportunity of seeing how their competitors are progressing, and I would have thought none of the excitement and entertainment that any true game can provide.’ The court held that there was on the facts no playing of a national game of bingo. The decision was upheld by the House of Lords. Lord Morris said ([1969] 2 AC 326 at 335): ‘In my view, this involves the question whether in fact there was any such thing as a national “game”. I do not think there was. In 500 separate clubs a large number of people … were variously taking part in separate games of Bingo. Each person was playing a game but in no sense were they all playing the same game. It could not rationally be said that they were all playing a game of Bingo with each other. In some circumstances arrangements can be made so that people who are geographically separated from each other can play a game with each other. But nothing of that sort was arranged or was happening on the night in question.’ 4 Consider, for example, the provisions of the Gaming Act 1968, s 20(2) providing for a game of ‘linked bingo’ to be played simultaneously on different bingo club premises and the Gaming (Bingo) Act 1985, s 1 providing for games of ‘multiple bingo’ to be played jointly on different bingo club premises. 5 IFX  Investment Company Ltd v The Commissioners for Her Majesty’s Revenue and Customs [2016] EWCA Civ 436.

2.194 The concept of ‘playing a game’ between human players was considered in a triad of cases decided in the 1960s. The three cases all involved ‘bingo’. For the reasons suggested above, bingo may be seen as a lottery played as a game in which (at least as it has traditionally been played) players must actively participate by following the draw and ticking off their numbers, identifying when they have achieved a winning line or card and making a claim before another number is drawn. Implicit in all this is that in order to play bingo in the traditional way it is necessary for players to be in communication with the caller of the numbers and with each other. In two early cases the courts were concerned with whether versions of ‘bingo’ involved ‘gaming’ within the Betting and Gaming Act 1960. In DPP v Regional Pool Promotions Ltd1 the ‘bingo’ took the form of competitions involving members of a club. The competitions were undoubtedly lotteries and therefore unlawful under the legislation then in force namely the Betting and Lotteries Act 1934 unless they also amounted to ‘gaming’ which was conducted in accordance with the provisions of the Betting and Gaming Act 1960 (see s 21 of that Act). ‘Gaming’ was defined by s 28 to mean ‘the playing of a game of chance for winnings in money or money’s worth’. There were clearly winnings so the central question was whether the ‘bingo’ involved the playing of a game of chance. The arrangements worked as follows. Club members had membership cards upon which digits appeared. If they paid their weekly subscriptions their membership numbers went into draws of numbers, which took place at the club’s headquarters. None of the members attended the draws or had any knowledge of what was going on. If their numbers came up in the draws they won prizes. None of the members selected their membership numbers. The Divisional Court held that the arrangements involved a simple lottery and there was no playing of a game. This conclusion was perhaps inevitable, given that no one followed the draw, marked their cards or made any claim to have won. The court concluded 224

Some fundamental terminology that the so-called ‘players’ simply did not do anything sufficient to amount to the playing of a game. Therefore there was no ‘gaming’. Giving the leading judgment Lord Parker CJ said: ‘… the point that I  feel this court must give effect to, is that it is impossible for a player to play a game without doing something, either something by way of some degree of skill or by some physical act or by exercising some choice. Here there is no suggestion of the member doing anything; there is here no question of choice, he cannot choose a number or buy a number. The moment when he becomes a member of the Club he is fixed for all times by the number indicated by the digits on his membership card. Nor, indeed, is he required to do any physical act at all; he can go to sleep, he can do absolutely nothing. On this basis he would be playing even if he did not want to play; he has to play in a sense from the moment that he becomes a member of the Club. In my judgment, as a matter of common sense, it is quite impossible to say that here there is any playing by players of a game’.2 The court considered but did not adopt a second reason advanced by the prosecutor for concluding that there had been no playing of a game. The prosecutor argued that it is of the essence of the playing of a game that players should come together at a particular place at a particular time. This did not happen in the case of the Club bingo. The court did not adopt this reasoning noting that it would be possible for players to play a game without being physically present together in one room or at one time provided that there were means of communication between the players. 1 [1964] 2 QB 244. 2 [1964] 2 QB 244 at 253.

2.195 A similar analysis was applied in Armstrong v DPP1 where the House of Lords considered a similar postal bingo scheme. The legal question was the same as that that arose in DPP  v Regional Pool Promotions Ltd namely whether an activity which was a lottery and therefore prima facie unlawful was rendered lawful because it involved lawful gaming under the Betting and Gaming Act 1960. The ‘postal bingo’ was made available as part of the activities of a club which could be joined on written application on payment of a membership fee. On joining a member was given a form containing his membership number and 15 different numbers between one and 90. Members could, and sometimes did, ask for their numbers to be changed. A member could obtain any number of forms incorporating different numbers without further charge. A member wishing to participate in the weekly draw would enter one or more forms, the numbers on the form or forms being his entry or entries and would pay a stake for each form entered. Prizes were awarded by means of a draw which took place in a private room, none of the club members being present. The results of the draw were communicated to a radio station which subsequently broadcast a ‘game of bingo’ based on the draw which had taken place as though it was a contemporaneous event. The sequence of numbers was also published in the club magazine weekly. Winning members did not need to claim since they were informed by letter if they had won. The Justices on a prosecution held that there was no playing of a game of chance. The Divisional Court, and subsequently the 225

Some fundamental terminology House of Lords, upheld this decision. Giving the leading judgment in the Divisional Court Lord Parker referred to his decision in Director of Public Prosecutions v Regional Pool Promotions Ltd and his observation there that it was not a necessary feature of the playing of a game that the players should be physically together in one room or at one time. He went on to state that although he did not consider this to be the decisive test in every case it was still a relevant consideration observing that: ‘… in deciding whether some activity constitutes the playing of a game, the fact that the participants do not meet at all must have some relevance. Indeed, in some cases it may be the determining factor in the decision’.2 Overall, however, he concluded that it was necessary to look at the whole circumstances in any particular case to say whether some activity is not only a lottery but also a game of chance. There was no conclusive test. However, he was certain that the postal bingo under consideration did not involve the playing of a game. He said: ‘I do not propose to go over all the matters which have been canvassed in argument, but if it is a game it is certainly a very curious game. When does it begin? Where is it played? When does it end? And the participants are not there.’.3 Moreover, even if it could be said that there was some active participation by club members for example in choosing numbers, deciding whether to enter numbers in the draw and listening to the radio programme, the participation was not sufficient to make the activity the playing of a game. On appeal to the House of Lords Lord Pearson giving the judgment of the House concluded that on the facts there was: ‘… no such participation in the operation of the weekly lottery as could reasonably be held to constitute the playing of a game by the members’.4 This was the basis of his decision that there was no playing of a game. He discussed briefly a secondary argument that there cannot be the playing of a game unless there is an assembly of players playing a game in each other’s presence. He commented: ‘Undoubtedly that is the normal way of playing a game, and there are provisions in this Part of the Act, especially section 16, which contemplate that a game will be so played.’ However, he did not base his opinion on the argument since he thought it would be possible to arrange the playing of a game of chance between players at a distance. But he went on to add the following: ‘On the other hand, the fact that there is no assembly of players, and that the alleged players are not in each other’s presence nor in communication with each other, may well have considerable weight in any case as evidence in favour of a more general argument that there is no playing of a game.’.5 1 [1965] AC 1262. 2 [1965] AC 1262 at 1272. 3 [1965] AC 1272 at 1273. 4 [1965] AC 1262 at 1283–1284. 5 [1965] AC 1262 at 1284C–E.

2.196 The case of Adcock v Wilson1 concerned the playing of true bingo in a bingo club under the provisions of the Betting, Gaming and Lotteries Act 226

Some fundamental terminology 1963. That Act provided that bingo so played should only be lawful if the money which the players in the game staked was paid out as winnings to players in that particular game (s 32(1)(b)). The effect was to limit the prize pool to the stakes paid by players in individual bingo club premises. About 500 bingo clubs got together to organise the ‘National Golden Scoop Club Game’. In every participating club, players bought bingo tickets for the price of one shilling. Of that sum, sixpence represented a stake in the house bingo game and sixpence represented the stake in the Golden Scoop game. Bingo was played in the individual clubs in the usual way. The winner of the house game received a prize consisting of the sixpences in the house game. However, details of his performance (ie the number of calls it took to win the house game etc) were transferred to Golden Scoop’s headquarters. In the course of the evening the performance of the participating clubs was monitored and players in those clubs received prizes from the pool of Golden Scoop sixpences depending upon various criteria (eg  whether they had achieved a win on the least call of numbers). The Golden Scoop arrangements were only lawful if the Golden Scoop could be regarded as a game in which all of the persons who took part in the individual clubs’ bingo games could be held to be players. This was the issue before the court. The stipendiary magistrate concluded that there was no such single Golden Scoop game and he convicted the defendants. The convictions were upheld by the Divisional Court and the House of Lords. The judgments concluded that it could not be said that a player in Club A was playing a single Golden Scoop game with players in Clubs B, C, D, E  etc. Various reasons were given, in particular the fact that the players were not following the same draw of numbers but were winning by reference to the draws in their individual clubs. Giving the leading Judgment in the Divisional Court Winn LJ summarised the reasons given by the stipendiary magistrate for concluding that there was no Golden Scoop Game being played by the players in the clubs in the following terms which he approved: ‘The magistrate himself stressed certain matters of fact which he thought pointed to the conclusion that the players in the bingo club in Hull were not playing in any national game. He said: “The ‘National Golden Scoop Club Game’ … involved the playing of numerous bingo games, each played under separate management on separate premises by separate groups of players with no communication between the groups.” I fully appreciate that it is not as a matter of law in any sense conclusive that individuals with regard to whom the question arises whether they were playing the same game were doing that which they did by way of intended participation in premises separate the one from the other. I have in mind Lord Pearson’s judgment in the latter part of his speech in Director of Public Prosecutions v Armstrong, as he there said – I do not stop to quote precisely – the fact that the supposed players are found to be carrying on their activities in separate places is something which has impact upon and tends to strengthen a general argument that they were not participating in the same game.’.2 Later in his judgment he went on consider the significance of the fact that there was no communication between the groups of players in the separate clubs and concluded that: 227

Some fundamental terminology ‘… I  do not attach so much importance to that, since I  think that communication is relevant only where the game is of a kind which, in order that it may proceed regularly and in accordance with the rules, requires one player or one group of players to know what has happened, what success has been achieved, or what choice has been made by the opposing player or group of players.’.3 Overall however Winn LJ concluded that the magistrate’s conclusions were justified in fact and law. Ashworth J  and Widgery J  delivered judgments concurring in the result with Winn LJ. Ashworth J considered that the notion that a person taking part in bingo in one club was playing a game at the same time with any of the 500 other clubs was ‘a concept that is quite divorced from reality.’ Widgery J reached the same conclusion but gave more weight than had Winn LJ to the consideration that there was no communication between the alleged players. He said: ‘The only other matter upon which I would wish to add a word is in relation to the observation of Winn LJ that in deciding whether persons are “playing a game” one should have regard to the ordinary meaning which an ordinary man would give to those words. I  think that an ordinary man, when talking of playing a game, is talking of something which involves entertainment, he is talking of something which involves excitement and fun in the common pursuit by a number of competitors of a similar and known object, and it seems to me exceedingly difficult to produce those elements which the common man would ascribe to a game if you have the participants in separate places with no communication between them whilst the activity is going on, and thus no sort of opportunity of seeing how their competitors are progressing, and I would have thought none of the excitement and entertainment which any true game can provide.’.4 The House of Lords likewise upheld the decision of the stipendiary magistrate concluding that overall the facts did not show that a national ‘game’ was being played. In giving the judgment of the House Lord Morris of Borth-y-Gest said: ‘In my view, this involves the question whether in fact there was any such thing as a national “game”. I do not think that there was. In 500 separate clubs a large number of people … were variously taking part in separate games of bingo. Each person was playing a game but in no sense were they all playing the same game. It could not rationally be said that they were all playing a game of bingo with each other. In some circumstances arrangements can be made so that people who are geographically separated from each other can play a game with each other. But nothing of that sort was arranged or was happening on the night in question. There were 500 different games which may well have started at different times and which may well have finished at different times. Once those games were concluded and the various winners were ascertained the distribution of the “National Scoop” money followed by a mere application of the rules. Nothing more remained to be done by those who had been playing the various bingo games. There was 228

Some fundamental terminology nothing more that they could do. As there was nothing further to be done there was nothing further that could be called a game.’.5 1 2 3 4 5

[1967] 2 QB 683; [1969] 2 AC 326, HL. [1967] 2 QB 683 at 699. [1967] 2 QB 683 at 699F. [1967] 2 QB 683 at 702F–703A. [1969] 2 AC 326 at 335C–F.

2.197 Two recent VAT cases, one in the First-tier Tribunal, and one that went from the First-tier Tribunal to the Court of Appeal via the Upper Tribunal have considered the concept of ‘playing a game’ in the context of the relevant VAT legislation. In the first of them, Oasis Technologies Ltd (UK) Ltd v The Commissioners for Her Majesty’s Revenue & Customs (VAT)1 the Firsttier Tribunal was concerned with electronic lottery ticket vending machines (‘ELTVM’). The issue was whether an ELTVM was a ‘gaming machine’ within the VAT legislation. The question arose in respect of two separate periods namely 1  April 2006 to 31  October 2006 and 1  November 2006 to the date of hearing. As to the first period the definition of ‘gaming machine’ was provided by VATA 1994, Sch 9, Group 4, Notes (3)–(6). Note (3) provided: ‘“Gaming machine” means a machine which is designed or adapted for use by individuals to gamble (whether or not it can be used for other purposes)’. Note (6) provided that: ‘“To gamble” means to participate in – (a) gaming within the meaning of section 6 of the Gambling Act 2005, …’. So the s  6 definition of ‘gaming’ in the GA 2005 with its reference to ‘playing a game of chance’ was directly engaged. During the period 1 November 2006 onwards VATA 1994, Sch 9 was amended so as to remove the reference to the GA 2005, s 6. Note (4) provided: ‘In this section “gaming machine” means a machine which is designed or adapted for use by individuals to gamble (whether or not it can also be used for other purposes)’ and Note (6) provided: ‘For the purposes of this section – (a) a reference to gambling is a reference to – (i) playing a game of chance for a prize, and (ii) betting.’ So again the concept of ‘playing a game of chance’ was in play. There were further provisions in that legislation mirroring the effects of the GA 2005, s 6(2)(a)(i)–(iii). 1 [2010] UKFTT292(TC).

2.198 An ELTVM is essentially a machine for the sale of virtual lottery tickets. The machine would be installed on a customer’s site and Oasis would then sell packs of tickets to the operator of the ELTVM, the packs being downloaded to the hard drive of the machine. Essentially the packs of tickets were packs of virtual scratch cards most of which would be losing cards but some of which would be winning cards. The winning cards were spread randomly throughout the packs. A user would insert money into the terminal via a coin slot and then press a button, which would ‘dispense’ him a ticket on the screen and display the result. The result depended upon whether or not he happened to get one of the randomly distributed winning tickets. His win or loss was pre-ordained and there was nothing whatever that he could do to affect the result. Some of the virtual lottery tickets were described as ‘games’, which added a play element to the announcement of the results. At its simplest the screen might show a virtual lottery ticket with a player rubbing part of the screen away with his fingers revealing the 229

Some fundamental terminology symbols underneath. Another version (called ‘Jungo Bingo’) involved the presentation of the ticket in terms of a bingo game with numbers being drawn and placed on a virtual bingo ticket. Another version (‘Treasure Island’) involved the ability for users to press a button or icon in order to roll an imaginary dice. This would happen on a number of occasions before either reaching a piece of gold (where the ticket was a winning one) or falling into a hole (where the ticket was a losing one). It should be noted that these were simply entertaining ways of presenting whether the ticket was a winning or losing one, this being something that was determined entirely by how the virtual winning tickets were distributed throughout the pack. The Tribunal held that the activity was ‘gaming’ within the s 6 definition. It noted that there was no definition of ‘game’ in s 6 so that the word had to be construed according to its ordinary meaning. It noted that the Shorter Oxford English Dictionary said that the word can ‘… variously be regarded as meaning an amusement, fun or sport, or as meaning a diversion, whether or not one in the nature of a contest played according to rules and decided by superior skill, strength or good fortune’ (para 65). It concluded that: ‘… everything that was provided by the ELTVM for an individual participant can fairly be described as a diversion or game. We find that all the effects, from the scratch cards and pull tabs, through the graphic displays such as Jungo Bingo, to the interactive effects such as Treasure Island and Spider’s Web, are “games” within the meaning of section 6.’ (para 65) Moreover, users of the terminals could be said to ‘play’ the game. The test was whether the user ‘participates’ in a game. In the tribunal’s view there were a number of occasions when a player could be said to participate in the ELTVM games, including ‘the introduction of money into the slot, the selection of a game from one of the icons presented on screen, and the pressing of a button to play the game or reveal the result.’ (para 71). It followed that the ELTVM was ‘a gaming machine’ within the relevant legislation. 2.199 The writer would respectfully contend that this decision appears to give an extraordinarily wide meaning to the idea of participating in or playing a game of chance. The purpose of the ELTVM was to provide a means of purchasing virtual instant lottery tickets. The ticket was a winning or losing ticket upon purchase and there was nothing that the purchaser could do to improve his chances of winning. If the mere buying of a virtual instant lottery ticket on a machine could amount to the playing of a game it is not easy to see why the purchase of such a lottery ticket in physical form over the counter in a newsagents should not also amount to the playing of a game. Yet this seems a wholly unacceptable conclusion. Moreover, the use of the definition from the Shorter Oxford English Dictionary with its reference to ‘an amusement, fun or sport’ almost seems to imply that anything that is ‘an amusement’ or ‘fun’ is, or may also be, a game without more. This seems too wide a conclusion. However, it must be noted that in the Sportech1 case discussed below a First-tier Tribunal cited and applied Oasis Technologies in concluding that Spot the Ball involves the playing of a game of chance. The decision of the First-tier Tribunal was upheld by the Court of Appeal which noted the Tribunal’s reference to the Oasis Technologies case (though stating that it did not add anything to the debate) and which itself concluded2 that 230

Some fundamental terminology the case establishes that what is a game is a question of fact to be determined in the context of the case. Subject to that qualification Oasis Technologies appears to have the approval of the Court of Appeal. 1 The ‘Spotting the Ball’ Partnership v The Commissioners for Her Majesty’s Revenue and Customs [2013] UKFTT 210 (TC). 2 IFX  Investment Company Ltd v The Commissioners for Her Majesty’s Revenue and Customs [2016] EWCA Civ 436, para 47.

2.200 In 2013 a First-tier Tribunal (Tax Chamber) in the case of The ‘Spotting the Ball’ Partnership v Commissioners for Her Majesty’s Revenue and Customs1 had to consider whether a Spot the Ball competition was a ‘game’ and, if so, whether it was a game of chance or a game of skill under the VAT legislation. Again this question arose in relation to two separate periods.2 The first period ended on 31 October 2006 during which period the VAT legislation defined ‘game of chance’ as having the same meaning as in the Gaming Act 1968, s 52 which at all relevant times provided: ‘(1)  … “game of chance” does not include any athletic game or sport, but, with that exception, and subject to sub-section (6) of this section, includes a game of chance and skill combined and a pretended game of chance or of chance and skill combined; … (6)  In determining for the purposes of this Act whether a game, which is played otherwise than against one or more other players, is a game of chance and skill combined, the possibility of superlative skill eliminating the element of chance shall be disregarded.’ From 1 November 2006 the relevant definition of ‘game of chance’ was moved into the Notes to Group 4, of Sch 9 to the Value Added Tax Act 1994, which reads as follows: “(2) “Game of chance” – (a) includes – (i) a game that involves both an element of chance and an element of skill, (ii) a game that involves an element of chance that can be eliminated by superlative skill, and (iii) a game that is presented as involving an element of chance, but (b) does not include a sport. (3) A person plays a game of chance if he participates in a game of chance – (a) whether or not there are other participants in the game, and (b) whether or not a computer generates images or data taken to represent the actions of other participants in the game. (4) “Prize” does not include the opportunity to play the game again.’ 231

Some fundamental terminology The parties were agreed that the sole question for decision by the tribunal was whether Spot the Ball was a ‘game of chance’ within the successive meanings of that phrase. HMRC’s position was that: (a) Spot the Ball was not a ‘game’ at all, but if it was, then it was a game of skill. The appellants’ position was that Spot the Ball was a ‘game’ and that it was a ‘game of chance and skill combined’ or, after 31  October 2006, it was a ‘game that involves both an element of chance and an element of skill’. 1 [2013] UKFTT2010 (TC). 2 To be strictly accurate the dispute before the First-tier Tribunal related to five separate periods but the main change to the legislation took effect from 1 November 2006.

2.201 The form of Spot of Ball before the tribunal was one involving the making of a decision by a panel. The promoters provided a photograph from a football match from which the ball had been deleted. Competitors were invited to enter the competition by marking a cross (or crosses) on the photograph to represent the point where they believed (exercising their footballing skill and knowledge) the ball was most likely to be. They made a money payment to enter. When all the entries were in, the photograph was considered by a panel of experts (who were mainly former professional footballers) who themselves decided where the most logical position of the ball was and marked it with a cross. The winner of the competition was the competitor whose cross marked a point which most nearly coincided with the point selected by the panel of experts. Highly sophisticated means were used to identify which of the competitors’ crosses was nearest to that of the panel of experts. The tribunal had cited to it the cases of DPP v Regional Pool Promotions Ltd, Armstrong v DPP and Adcock v Wilson. However, the tribunal concluded that the case law did not provide a great deal of assistance in answering the question whether Spot the Ball amounted to a game (para 110). It considered that Regional Pool Promotions and Armstrong case established little more than that some degree of active participation is inherent in the concept of a ‘game’ (a proposition that both parties to the appeal agreed on and a feature which they both agreed was present in the arrangements under consideration). Beyond that the only principles to be extracted were: (a) that the question whether an activity amounts to a ‘game’ or not is primarily a question of fact; and (b) that there is no rule of law that requires an assembly of players in order to constitute a ‘game’ (para 79). As to Adcock the tribunal found it ‘unpersuasive in the present case.’ It considered that the general observations made in the High Court and the House of Lords about the nature of a ‘game’ were made in the context of a discussion about bingo. In a game of bingo a crucial part of the game is the interaction with the caller and the other players so it was not hard to understand why the view was taken that the absence of interaction together with the lack of any requirement to do anything more than participate in the normal way in the local game should mean that there was no national game (para 80). Having concluded that the case law did not provide a great deal of assistance the tribunal referred to the same dictionary definition as had been referred to in the Oasis Technologies case and agreed with the Oasis Technologies’ conclusion that that definition ‘demonstrates that “game” has a wide meaning, to be construed according to its context.’ (para 116). It concluded that overall, and adopting the approach of the First-tier Tribunal in Oasis Technologies it was perfectly apt to refer to 232

Some fundamental terminology the activity of Spot the Ball as a ‘game’ for the purposes of the definitions in the two relevant periods. One particular matter which, the tribunal concluded, supported that view was the fact that the definition of ‘game of chance’ in s 52(6) of the Gaming Act 1968 and in the succeeding definition in the VATA  1994 contemplated the possibility of a game being played ‘otherwise than against one or more other players’ or ‘whether or not there are one or more other participants.’ It noted that no equivalent provisions were contained in the legislation which was in issue in DPP v Regional Pool Promotions, Armstrong v DPP and Adcock v Wilson (the implication appearing to be that the 1968 Act had introduced a ‘fundamental revision in the concept of “game”’ (as the Upper Tribunal put it – see para 41 of its decision) which undermined the status of any guidance as to the meaning of ‘playing a game’ which might be derived from these cases. Overall it concluded that the terms of s 52(6) and the equivalent provision of the VATA 1994 made it unsustainable to argue that an activity cannot be a game within the relevant definitions unless it includes the features of identifying, interacting with and/or monitoring the progress of other participants (para 111). It therefore concluded that Spot the Ball involved the playing of a game. As to the question whether the game was a game of skill or a game of skill and chance (and therefore a game of chance) the tribunal rejected the Commissioners’ argument that the game (if that is what it was) was a game of skill. The Commissioners argued that in considering whether the game was one of skill the tribunal should consider the rules of the competition (which made it clear that Spot the Ball was a game of skill in which the skill, judgment and logic of the competitors is judged ex post facto by the judges (who are also required to exercise their own skill and judgment) and that the tribunal should not concern itself with the internal procedures that were actually followed to decide the winners. The appellants, in contrast, argued that the tribunal had to consider the true nature of the activity and that it was completely obvious that skill, even superlative skill, would only take a competitor so far in the competition. The tribunal considered two 1970s cases on Spot the Ball namely Ladbrokes (Football) Ltd v Perrett1 and News of the World Ltd v Friend2 though it noted that it did not find much assistance in those cases (para 95). It concluded that as a matter of objective fact Spot the Ball involves a significant element of chance (para 121). Skill could only take a competitor so far in the competition; whether a person’s cross ultimately coincided with the position selected by the judges involved an element of chance so that the game was one of chance. Accordingly Spot the Ball involved the playing of a game of chance for a prize. The writer would suggest that this conclusion is highly counterintuitive. Spot the Ball competitions of the type considered in the Sportech case have existed for many years. In News of the World Ltd v Friend the House of Lords appears to have assumed that such competitions dated from 1935.3 As the tribunal noted they were well established by the 1970s (para 16). During their lifetime questions have been raised whether Spot the Ball might infringe the law relating to competitions to forecast the result of a future event or competitions which do not depend to a substantial degree on the exercise of skill (see s  47(1)(a)(i) and s  47(1)(b) of the Betting, Gaming and Lotteries Act 1963 later reproduced as s  14 of the Lotteries and Amusements Act 1976 discussed in Ladbrokes (Football) Ltd v Perrett and News of the World Ltd v Friend). In addition the possibility that Spot the Ball might amount to a lottery has been raised.4 However, to the best of the writer’s knowledge, it has 233

Some fundamental terminology never been suggested that Spot the Ball might involve the playing of a game such possibility having, it seems, eluded the Gaming Board, the Gambling Commission, the Crown Prosecution Service and HM Customs & Excise. It also seems not to have occurred to the Royal Commission on Gambling of 1978 (‘the Rothschild Committee’) which provided a detailed description and discussion of Spot the Ball competitions without suggesting that they amounted to gaming with all the regulatory consequences that would follow under the then existing social legislation.5 1 [1971] 1 WLR 110. 2 [1973] WLR 248. 3 [1973] 1 WLR 252G per Lord Hailsham. See also Church Vice Horseman v News Ltd (1933) SASR 70 (South Australian State Reports) where a ‘Find the Ball’ competition where the ball was erased from a photograph of a football match a prize was given to the competitor whose cross coincided with the spot where the deleted ball had been was held to be a lottery under the relevant Australian legislation. Although skill could enable a competitor to narrow down the area in which the ball would be found the final spot chosen was determined by pure chance. There was no panel involved. 4 News of the World Ltd v Friend [1973] 1 WLR 248 at 256A–256C, per Lord Hailsham. 5 Royal Commission on Gambling, Final Report 1978 CMND 7200, see especially Vol 1, Chapter 14.

2.202 The regulatory implications of treating Spot the Ball as involving ‘gaming’ are not easy to fathom. Two periods have to be considered namely, first, the period since the enactment of the GA  2005 and, second, the period before that when the position was governed by the GA 1968. It is relevant to have regard to the position under the 1968 Act because if, as the writer contends, it is virtually impossible to accommodate Spot the Ball characterised as gaming within the gaming provisions in the 1968 Act this may colour one’s view whether Spot the Ball is properly so characterised. 2.203 Taking the period under the GA 2005 it seems clear that if providing facilities for Spot the Ball amounts to providing facilities for gaming then promoters will be required to hold a casino operating licence (see GA 2005, ss 5, 6, 33(1) and (2), and 65(a)). Whether the licence would be a remote casino operating licence or a non-remote casino operating licence would depend upon whether any part of the arrangements involved ‘remote gambling’ within s 4. It is probably not necessary to investigate the question whether Spot the Ball would amount to a casino game (ie a banker’s game or a game of unequal chance) or a game of equal chance for the purposes of ss 7 and 8 because if Spot the Ball is a casino game it will be authorised by a casino operating licence and if it is equal chance gaming then the holder of a casino operating licence will be able to offer it under the licence pursuant to the GA 2005, s 68(3)(b). So it seems that Spot the Ball could in principle be licensed as gaming under the GA 2005. However, even a brief perusal of the detailed and exacting requirements for casino licences set out in the relevant Licence Conditions and Codes of Practice (‘LCCP’) provokes the question why a form of competition that has existed harmlessly for decades should be subjected to this degree of regulatory intrusion and control. 2.204 As to the period before the GA 2005 it is very difficult to accommodate Spot the Ball as a form of gaming under the regulatory provisions of the 234

Some fundamental terminology Gaming Act 1968. It becomes necessary to decide whether Spot the Ball is a game of equal chance (in which case it would be governed by the provisions of the Gaming Act 1968, ss  1–8) or whether it is a banker’s game or game of unequal chance (in which case it would be governed by the provisions of Part II of the Gaming Act 1968 and would require a licence under s 11). ‘Banker’s game’ is not defined in the 1968 Act but its essential characteristic is that the banker enters into individual betting contracts (under which he may either win or lose) with all the players of the game. Spot the Ball does not seem to fit this model. As to whether the game is one of equal or unequal chance the writer would suggest that it should probably be treated as a game of equal chance. Each cross marked by a competitor has an equal chance with all the other crosses of being the winning cross. It is true that some competitors may improve their chances by entering more than one cross but applying the approach set out in Rogers v Cowley1 this fact need not lead to the conclusion that Spot the Ball is a game where the chances are not equal (see discussion at 2.241). Assuming that Spot the Ball would amount to a game of equal chance and would thus be regulated by ss 1–8 of the Act it would be likely to run into problems under ss 3 and 4. Section 3 makes gaming illegal if, apart from any stakes hazarded, a charge in money or money’s worth is made in respect of the gaming. So entry fees would be illegal unless they amounted to ‘stakes’. ‘Stake’ is not defined in the 1968 Act but applying its usual meaning as representing a sum of money which is hazarded in a bet being lost if the bet is a losing bet and returned (together with the winnings) if the bet is a winning bet, entry charges for Spot the Ball would not appear to be stakes. So s 3 would be infringed. If, however, the entry charges amounted to stakes this would be likely to raise questions under s 4 which provides that no gaming may lawfully take place where a levy is charged on any of the stakes or on the winnings of the players. If and to the extent that a promoter of Spot the Ball appropriated any of the stakes this would amount to an infringement of s  4. It seems almost certain that some Spot the Ball promoters have over the years made deductions from the entry fees for commercial or charitable purposes and this would seem to amount to an unlawful levy on stakes (if the payments were stakes). On the assumption therefore that Spot the Ball is equal chance gaming it is hard to see how it could have lived comfortably under the provisions of the 1968 Act. 1 [1962] 1 WLR 770.

2.205 On the assumption that Spot the Ball was a game of unequal chance then it would have to be conducted under a gaming licence and would have to comply with the provisions of Part II of the 1968 Act. Part II applied ‘to all gaming which takes place on premises in respect of which … (a) a licence under this Act is for the time being in force, …’ (s 9). So the gaming had to take place on licensed premises in order to be lawful and under the provisions of s 12 all persons participating had to be present on the licensed premises at the time when the gaming took place. It is hard to see how any licensing arrangements complying with these requirements could possibly have been devised for Spot the Ball. 2.206 HMRC appealed against the First-tier Tribunal decision to the Upper Tribunal and the appeal was allowed. The Upper Tribunal’s decision was given in a judgment of Norris J.1 The Upper Tribunal overturned the decision 235

Some fundamental terminology of the First-tier Tribunal and gave detailed consideration to what is involved in the playing of a game of chance. Although the judge, Norris J, noted that it is impossible to provide an all embracing definition of ‘game’ he concluded that it is possible to identify some essential elements. These elements can be summarised as follows: (i)

a ‘game’ will typically involve an activity in the form of a contest in which it can be said that a player has won or lost (or, where there is more than one player, drawn);

(ii) ‘playing’ a game involves: (a) the player doing something which causes a change in existing circumstances; and (b) the player thereafter interacting with the changed circumstances or responding to another player’s interaction with the changed circumstances. Classically where a game involves more than one player (whether the other player is an individual competitor or an ‘institutional’ participant, like a ‘bank’ or ‘the house’, or is a machine) it will involve move and counter-move such as happens in chess. Where the game is a solo one it involves move and response, or a succession of related moves such as happens in Patience where the act of turning over a card from the pack requires an assessment by the player of the displayed cards, possibly ‘playing’ the exposed card, possibly re-arranging others in consequence of that ‘play’ and displaying new cards; (iii) in the case of a ‘game of chance’ it will either be the case that: (a) the rules provide for some event occurring after the start of the game randomly to influence its outcome to a significant degree; and (b) the effect produced by the uncertain outcome of the random element is one of the purposes of the game. In a game involving more than one ‘move’ or ‘round’ the effect produced will be the deployment of skill in an attempt to overcome or limit the random element (as the poker player assesses the odds and responds, perhaps in the light of the responses or anticipated responses of other players, or as the fruit machine player uses the ‘nudge’ button). In a game which might be thought to consist of only one ‘move’ or ‘round’ the point of the game will be the effect produced by the action such as excitement or suspense awaiting the outcome (as the drums on a fruit machine spin, or a roulette wheel turns after bets are placed, or as each player in turn throws the dice); (iv) ‘playing’ involves some sort of engagement with other ‘players’ (individual or institutional) or (if there are no other participants) with a machine or pack of cards (or whatever other means are used to ‘play’ the game). 1 [2014] UKUT 0398 (TCC).

2.207 The judge cited and relied upon previous case law including DPP v Regional Pools Promotions1 and Armstrong v DPP2 finding them valuable in contrast to the First-tier Tribunal which had concluded that authorities on the meaning of previous legislation were not helpful. 1 [1964] 2 QB 244. 2 [1965] AC 1262.

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Some fundamental terminology 2.208 Adopting this analysis of concepts of ‘gaming’ and ‘playing a game’ the Upper Tribunal concluded that Spot the Ball was not a game. Each entrant could not be regarded as in a contractual relationship with any of the other entrants. The rules did not provide for any relevant relationship with them. Indeed other entrants were not essential. If only one coupon was submitted the rules of Spot the Ball would still provide for a winner – the only entrant would inevitably be the closest. Nor was a ‘player’ of Spot the Ball ‘playing’ against the panel or against the promoters. As the judge put it: ‘the person who submits a coupon operates in one silo and the panel of experts in another. When the “player” makes his “move” the panel has not even met and there is no “answer” in existence. When the panel does meet it does not know about the coupons that have been submitted and obviously it does not take them into account’ (para 34). The judge also concluded that merely marking a cross on a photograph could not properly be regarded as ‘playing’ a game and that posting the coupon was merely entering upon the enterprise (p 37). The judge allowed the appeal on the basis that: ‘Operators of “Spot the Ball” competitions are not providing facilities for the playing of games of chance so as to fall within the [relevant legislation]. There is no “game” and completing and posting a coupon is not “playing”’. Having concluded that the activity did not involve the playing of a game the judge did not need to consider the question whether the arrangements amounted to a game of skill or a game of skill and chance. As to the arguments based on s  52(6) of the Gaming Act 1968 and the equivalent provision of the VATA 1994 the judge held that these provisions had not effected a fundamental revision to the concept of ‘game’ such that any solo activity could be a ‘game’ whatever other elements of ‘a game of chance’ had been identified in the authorities, and rendered the authorities of little assistance. He noted that statutory recognition of the fact that a game did not necessarily require more than one player was contained in s 17 of the Gaming Act 1960 which defined ‘gaming machine’ in terms as: ‘a machine for playing a game of chance, being a game which requires no action by any player other than the actuation or manipulation of the machine.’ This was the law as it stood when the three bingo cases were decided so it could not be said that s 52(6) of the Gaming Act 1968 had introduced a revolutionary concept of a ‘game’ with one player. The judge accepted arguments that the object of s  52(6) had been identified correctly by the Court of Appeal in the case of R v Kelly1 as being to bring within the scope of the terms ‘game of chance and skill combined’ games played against the bank or otherwise than against one or more players (as where gaming machines are used). He concluded therefore that operators of Spot the Ball were not providing facilities for the playing of games of chance so as to fall within the VATA exemption. 1 [2009] 1 WLR 701 at 711H–712B.

2.209 An appeal by the promoters against the decision of the Upper Tribunal was allowed by the Court of Appeal which reinstated the decision of the First-tier Tribunal.1 The Court of Appeal formulated the question which it had to determine as whether the First-tier Tribunal was correct to reject the Commissioners’ argument that in order for there to be the playing of a game 237

Some fundamental terminology there had to be a characteristic which the Court of Appeal described as an ‘inter-player interaction rule’ ie a rule that a competitor has both to make a move and also to respond to another competitor’s move or to a change of circumstances resulting from his move. If it was justified in rejecting that argument then there was no error of law entitling the Upper Tribunal to set aside its decision. There was a secondary question whether, if Spot the Ball was a game, it was a game of skill or was a game of skill and chance (and therefore a game of chance). The Upper Tribunal had not needed to decide this point but it was raised at Court of Appeal level by a respondents’ notice. As to the first question the Court of Appeal concluded that the three bingo cases, Regional Pools, Adcock and Armstrong did not establish that there cannot be a game unless there is an inter-player interaction or that inter-player interaction must ordinarily exist. It all depends on the facts (para  29). The court considered the three cases and concluded that: ‘… the FTT were correct to hold that there is no inter-player interaction rule. Adcock and Armstrong clearly contemplate that there can be a game without the contestants being in communication with each other. The words “it is necessary to show interaction between the competitors” are conspicuously absent from the judgements in both cases.’ per Arden LJ, para 39. The authorities, it was held, show no more than that the relationship between competitors is a relevant factor (para 41). The Court of Appeal concluded that the FTT’s decision had been drawn from the totality of their findings and that there was material which entitled them to reach the conclusion they did (para  42). As to the s  52(6) question the Court of Appeal concluded that the First-tier Tribunal had been entitled to take account of the fact that s 52(6) contemplates a game with only one player. They were, so the Court of Appeal held, ‘entitled to rely on what they saw as a characteristic of a single-player game which also threw light on the meaning of game in the context of the multi-player game such Spot the Ball’ (para 56). Lord Justice Tomlinson agreed with the judgment of Arden LJ and Morgan J concurred in the result and added a brief judgment summarising his views as follows: ‘It follows that in so far as the UT held that there was a legal requirement in this context that there had to be interaction between players or interaction by a player with changed circumstances, the UT was itself wrong in law. Alternatively, in so far as the UT held that interaction between players or interaction by a player with changed circumstances was a matter to be given weight, the FtT did not commit any error of law in that respect. The weight to be given to that factor was a matter for them and it was not right for the UT to substitute its own view for that of the FtT.’ (para 78). On the question whether the game was one of skill or mixed skill and chance the Court of Appeal concluded that the First-tier Tribunal were entitled to go beyond the contractual documentation and were entitled to adopt the dictum of Lord Hailsham in another Spot the Ball case News of the World Ltd v Friend2 that ‘the most that skill and judgment can do is to estimate its [ie the ball’s] approximate position.’ There was a mix of skill and chance which made the game a game of chance (see para 65). 1 IFX  Investments Company Ltd v The Commissioners for Her Majesty’s Revenue and Customs [2016] EWCA Civ 436. 2 [1973] 1 WLR 248 at 256A.

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Some fundamental terminology 2.210 It must now be taken as clearly established (permission to appeal to the Supreme Court having been refused) that it is not an essential characteristic of the playing of a game that there is ‘inter-player interaction’ ie a rule that a competitor has both to make a move and also to respond to another competitor’s move or to a change of circumstances resulting from his move. The presence or absence of inter-player interaction is one factor among others that will be relevant to the question whether an activity involves the playing of a game. It follows from this that, however counterintuitive it may be, a decision maker is entitled to find as a fact that Spot the Ball involves the playing of a game. The writer would respectfully suggest, however, that the judgments of the Court of Appeal do not do justice to the carefully focussed decision of the Upper Tribunal. It seems clear from paras 18 and 19 of the Upper Tribunal decision that the judge, Norris J, considered that the Firsttier Tribunal had failed to have regard to the context in which words such as ‘play’ and ‘game’ were used. He noted that once the tribunal had decided that the cases did not help ‘they were simply left to apply words with a broad dictionary meaning to the facts as they found them’ and that this had led them to misapply the law (para 18). He went on to state: ‘As I have said, the true task is to construe the composite phrase “the playing of any games of chance”; and it must be remembered both that the phrase occurs in a provision that exempts from tax “betting, lotteries and other forms of gambling” and that the Notes refer to the use of the expression in an Act to do with “gaming”. The composite phrase is important because the concepts of “play”, “game” and “chance” interact with one another. The setting is important because of the vagueness of some of the concepts and the wide variety of circumstances in which the terms can be used. Whatever other meanings may attach to the phrase “the playing of any game” (on which for the purposes of this judgment I  will concentrate) the activity in view for the purposes of the Exemption is the sort of thing one would encounter in “gaming”’ (italics supplied). What Norris J  is emphasising is the need to have regard to concepts such as ‘play’ and ‘game’ in the context of legislation which is concerned with gambling. In other words the words are coloured by their context and by the meaning they would ordinarily be understood to have in that context. Although he does not refer to it there is an established canon of statutory construction discussed in Bennion on Statutory Interpretation (6th edn), p 518 and recently noted in the gambling context by the Court of Appeal in the case of The Queen on the Application of William Hill Organisation Ltd v The Horserace Betting Levy Board1 which involves taking account of the ‘potency of the term defined’.2 Applying this principle to Norris J’s decision the writer would suggest that he is, without specifically acknowledging the principle, applying it to conclude that the ‘playing’ of a ‘game’ in the context of gambling legislation calls to mind activities such as those carried on in a casino or a bingo hall or some other gambling context and that they are coloured by that association. His decision was an attempt to draw out those characteristics of ‘gaming’ in the sense ordinarily understood in the ‘gaming’ context. The writer would contend that he was entitled to do so. It is suggested that the Court of Appeal paid inadequate attention to the responsibilities placed upon an Upper Tribunal judge considering an appeal from a First239

Some fundamental terminology tier Tribunal. The Court of Appeal approached the appeal on the basis that in order to succeed the Commissioners had either to show that interplayer interaction is a rule of law (so that the First-tier Tribunal had erred in concluding that Spot the Ball was a game) or that the tribunal’s conclusion was perverse (which was not alleged) (para  25). Morgan J  referred to s  11 of the Tribunals, Courts and Enforcement Act 2007 stating that the Upper Tribunal was only able to reverse the decision of the First-tier Tribunal if that decision involved an error of law. However this may have been too narrow a basis on which to approach the task of the Upper Tribunal. The Upper Tribunal’s responsibilities have been considered by the Supreme Court in a judgment in the case of Commissioners for Her Majesty’s Revenue and Customs v Pendragon plc3 which was cited to the Court of Appeal but not referred to by them. In his speech Lord Carnwath dealt with the question of the scope of the Upper Tribunal’s jurisdiction under the Tribunals, Court and Enforcement Act 2007. Although established authority such as Proctor & Gamble v HMRC4 stressed the role of the First-tier Tribunal as the primary fact finder and the primary maker of value judgments whose decision should not be overturned unless it had made a legal error (by, for example, reaching a perverse finding or failing to make a relevant finding or misconstruing the statutory test) the Upper Tribunal was entitled, if it found an error of law, to provide structured guidance on the use of expressions which are central to the statutory scheme. Lord Carnwath referred to his own speech in R (Jones) v First Tier Tribunal (Social Entitlement Chamber)5 where he said: ‘Where, as here, the interpretation and application of a specialised statutory scheme has been entrusted by Parliament to the new Tribunal system, an important function of the Upper Tribunal is to develop structured guidance on the use of expressions which are central to the scheme and so as to reduce the risk of inconsistent results by different panels at the First Tier level’ (para 41). Lord Carnwath went on to state (para  49): ‘This was consistent with the approach of the preceding White Paper (paras 7.14–7.21) which had spoken of the intended role of the new appellate Tier in achieving consistency in the application of the law, “law” for this purpose being widely interpreted to include issues of general principle affecting the jurisdiction in question.’ Such a flexible approach was supported also by recent statements in the House of Lords in cases such as Moyna v Secretary of State for Work and Pensions6 and Lawson v Cerco7. In the latter case (para  34) Lord Hoffmann had contrasted findings of primary facts with ‘an evaluation of those facts’ to decide a question posed by the interpretation of the legislation in question: ‘Whether one characterises this as a question of fact depends … upon whether as a matter of policy one thinks that it is a decision which an appellate body with jurisdiction limited to errors of law should be able to review.’ Pendragon post-dates the judgment of the Upper Tribunal in Sportech (though of course the authorities cited in Pendragon pre-date it) but it seems reasonable to read Norris J’s decision as one in which, having concluded that the First-tier Tribunal’s decision involved an error of law (for the 240

Some fundamental terminology reasons discussed at 2.206–2.208 above) he was justified in providing ‘structured guidance’ on the use of expressions such as ‘game’ and ‘play’ in the context of the VAT legislation so far as it related to gambling. It is also suggested that the Norris J’s treatment of the s  52(6) point is to be preferred to that adopted by the Court of Appeal. As he made clear the Gaming Act 1968 did not introduce the concept of a one-player game and the purpose of s 52(6) (as explained in Kelly) was to bring within the scope of the terms ‘game of chance and skill combined’ games played against the bank or where gaming machines are used. The Court of Appeal ignored this point. Moreover in deciding that the tribunal were entitled to take into account the characteristics of a single-player game in deciding the meaning of ‘game’ in the context of a multi-player game they failed to identify what relevance they could have to a case where that no-one was suggesting that Spot the Ball was or could be a putative single-player game. It was clearly a multi-person activity in which entrants were in competition with each other to produce an entry which was closest to the most logical position of the ball as judged by the panel. This arrangement is readily characterised as a competition; what it lacks is any obvious characteristics of a game. It was those characteristics which the Upper Tribunal was seeking to describe in order to demonstrate why Spot the Ball was not properly so characterised. In that context reference to single-player games does not seem to carry the matter further. 1 [2013] EWCA Civ 487 at para 12. 2 For an application of the principle as set out in Bennion see the speech of Lord Scott of Foscot in Oxfordshire CC v Oxford City Council [2006] 2 AC 708 at paras 82–83 where he concluded that it would not be correct to insist on a literal application of the definition of ‘town or village green’ in s 22 of the Commons Registration Act 1965 so as to apply it to land that no-one would recognise as a town or village green. 3 [2015] UKSC 37. 4 [2009] EWCA Civ 407. 5 [2013] UKSC 19. 6 [2003] 1 WLR 1929. 7 [2006] ICR 250.

2.211 It may therefore be that the issues canvassed in the Spot the Ball case will require further consideration. For the time being it must be accepted that there is no hard and fast rule of law that holds that an activity may only involve the playing of a game of chance if there is ‘inter-player interaction’. The question whether an activity involves the playing of a game of chance is one of fact in which all relevant considerations have to be taken into account. This does not, of course, mean that the question of ‘inter-player interaction’ is not relevant. It is a matter to be taken into account and to be given such weight as the decision maker considers appropriate (see Morgan J’s judgment at para 78). In many cases, the writer would contend, the presence of ‘inter-player interaction’ will point to the conclusion that the activity concerned involves the playing of a game. Moreover the absence of ‘inter-player interaction’ may still, the writer would contend, on suitable facts point to the conclusion that there is no playing of a game. However such a finding would need to be made having regard to all the relevant facts and not by treating the presence or absence of ‘inter-player interaction’ as decisive. 241

Some fundamental terminology

Section 6 definition 2.212 We may now turn to consider the definition of ‘gaming’ and ‘game of chance’ contained in GA 2005, s 6. As noted above, s 6(1) provides that ‘In this Act “gaming” means playing a game of chance for a prize.’ The definition, therefore, uses the expression ‘game’ and ‘playing a game’ without further definition, on the assumption that it will be possible to recognise these activities. Some of the matters which may be relevant in considering whether an activity amounts to ‘playing a game’ have been discussed at 2.171–2.211 above. Importantly, however, the concept of ‘playing a game’ must now be considered against the background of GA  2005, ss  4 and 353(3). Section 4 provides that gambling will be ‘remote gambling’ for the purposes of the Act where persons participate by the use of ‘remote communication’ (ie the internet, telephone, television, radio or any other kind of electronic or other technology for facilitating communication). So it is clear that a game may be played by human players against each other at a distance over such channels of ‘remote communication’. Section 353(3) provides: ‘(3) For the purposes of this Act a reference to a virtual game, race or other event or process is a reference to— (a)

images generated by a computer so as to resemble all or part of a game, race or other event or process of a kind that is played by or involves actual people, animals or things,

(b) images generated by a computer so as to represent an imaginary game, race or other event or process, or (c)

any game, race or other event or process the result of which is determined by computer.’

This provision makes clear that a game may be a virtual game and will clearly apply to the case where an individual player plays a game against a computer program. The s  6 definition therefore needs to be read subject to the extensions contained in ss 4 and 353(3). We will now consider other elements of the definition.

Prize 2.213 The definition in s  6(1) makes clear that the playing of a game of chance will only amount to ‘gaming’ for the purposes of the Act if the game is played for a prize. As was the case under the GA 1968, the playing of a game of chance in circumstances where no prize of any kind can be won will not amount to ‘gaming’, so that none of the regulatory provisions of the Act will apply. The word ‘prize’ is specifically defined for the purposes of s 6 by s 6(5) which provides: ‘(5) In this Act “prize” in relation to gaming (except in the context of a gaming machine)— (a) means money or money’s worth, and (b) includes both a prize provided by a person organising gaming and winnings of money staked.’ 242

Some fundamental terminology The first limb of the definition makes clear that a ‘prize’ may be money or it may be anything (such as an article, or a facility or service, or a voucher exchangeable for an article or facility or service) which has a monetary value.1 The second limb of the definition makes clear that a ‘prize’ may be provided by a person organising gaming (eg  the goods and shopping vouchers provided by the promoters of prize bingo), or may take the form of the winnings of money staked (as applies for example in the case of roulette, where the bank wins players’ stakes on losing bets and pays out on winning bets in accordance with the published odds). 1 The Concise Oxford Dictionary defines ‘money’s worth’ as ‘anything regarded as equivalent to money’. It has been held in the context of the Trade Marks Act 1938 (as amended) that ‘money`s worth’ means ‘equivalent to money’ in the sense of being something essentially material and not emotional or spiritual: Gideons International Service Mark [1991] RPC 141.

Game of chance 2.214 Section 6(2) provides for three specific cases which will fall within the definition of ‘game of chance’ and for one case which will not. Taking the last case first, s 6(2)(b) provides that in the Act ‘game of chance’ does not include a sport. The word ‘sport’ is not defined. Dictionary definitions of the word tend to stress the presence of physical exertion and/or skill.1 It is clear that athletic sports such as football, cricket and rugby would amount to sports for this purpose. The status of activities such as snooker, billiards and darts may be more debatable, but it seems likely that even if such activities were held not to amount to sports they would escape the provisions of s 6 by virtue of being games of skill and not of chance.2 1 See eg Shorter OED (5th edn): ‘“sport” … 3a An activity involving physical exertion and skill, esp. one in which an individual competes against another or others to achieve the best performance. Later also, participation in such activity; such activities collectively.’ The word ‘sport’ is defined in the Licensing Act 2003, Sch 1, para 16 as follows: ‘“sport” includes— (a) any game in which physical skill is the predominant factor, and (b) any form of physical recreation which is also engaged in for purposes of competition or display.’ 2 The meaning of the expression ‘sport’ was discussed during the Committee stage of the Bill, though little guidance is to be derived from the debate: see HC Official Report SC B, 2nd Sitting, Thursday 11 November 2004, col 81.

2.215 Although the traditional view has been that ‘sport’ involves physical exertion as a predominant element this view has come under challenge in the last few years. During that period the expression ‘mind sport’ has been used to refer to games of skill where the mental element is more significant than the physical. Games to which this name has been applied have included Backgammon and Contract Bridge. In 1997 the first ‘Mind Sports Olympiad’ was held in London. In some contexts Contract Bridge has been recognised as a sport. For example, the Charity Commission have 243

Some fundamental terminology accepted that Bridge fell within the definition of ‘sport’ in s  2(3)(d) of the Charities Act 2006: ‘Sports or games which promote health by involving physical or mental skill or exertion’. In addition the Olympic Committee and SportAccord (the umbrella organisation for Olympic and non-Olympic Sports Federations) have recognised Bridge as a sport. The basis of the claim as put forward by those who seek to extend the concept of sport to games such as Bridge and Backgammon is that ‘sport’ is not limited to cases where games involving a physical element provide benefits to physical and mental health but also applies to games which involve mental rather than physical effort which benefit physical and/or mental health. The relevance to s 6(2)(b) of the GA 2005 lies in the fact that there are a number of card games (such as Poker) which are governed by the gambling legislation but which might qualify as ‘sport’ if the extended definition is accepted. Of course it does not follow that a finding that (say) Bridge was a sport for the purposes of other legislative provisions would lead to the conclusion that it (or (say) Poker) involved a ‘sport’ for the purposes of s 6(2)(b). Moreover, in the two recent cases where the matter has been considered the courts have proved resistant to the idea that there can be a ‘sport’ where physical exertion is not the major characteristic. 2.216 The first case arose in the context of VAT. The English Bridge Union Limited exists to regulate and develop duplicate Bridge in England. As part of its activities it runs duplicate Bridge competitions in which members can participate on payment of an entry fee. For some years the Union charged VAT on the entry fees. Subsequently the Union claimed that VAT was wrongly paid on the basis that the fees should have been exempted from VAT because Contract Bridge fell within an exemption accorded to ‘sport’ in the VAT legislation. HMRC refused the claim to repayment on the basis that Contract Bridge was not a ‘sport’ for the purposes of the Directive or the domestic legislation based upon it. The relevant part of the VAT Directive is Art 132(1)(m) which exempts: ‘The supply of certain services closely linked to sport or physical education by non profit making organisations to persons taking part in sport or physical education.’ The relevant part of the domestic legislation was the VATA  1994, Sch  9, Group 10, Item 2: ‘The grant by an eligible body, established with the purpose of sport or physical recreation, of a right to enter a competition in such an activity.’ Was ‘Contract Bridge’ a ‘sport’ within the meaning of these provisions? The case came before a First-tier Tribunal in the English Bridge Union Ltd v The Commissioners for Her Majesty’s Revenue and Customs.1 It was common ground that playing Bridge involves the use of high level mental skills, logic, lateral thinking, planning, memory, sequencing and others. It was also common ground that playing Bridge regularly promotes both mental and physical health and may be beneficial to the immune system and reduce the chance of developing Alzheimer’s disease and of mental deterioration. On that basis the Union argued that it was a mistake to restrict the meaning of ‘sport’ to something which involves physical activity or physical fitness. The Tribunal rejected this submission. It acknowledged that the meaning of ‘sport’ in the Directive is a matter of EU law but observed that a search for the meaning of the word starts with a consideration of the Directive in each of its languages. It thus required an understanding of the English word. As to that the Tribunal concluded: 244

Some fundamental terminology ‘It seems to us that the normal English meaning of “sport” requires: (1) the application of some significant element of physical activity; (2) that such physical activity is itself an aim, or that it will have a direct effect on the outcome of the activity; and (3)

that physical skill – of which mental skill may be a part, and which includes physical endurance – is important to the outcome.

To our mind sport normally connotes a game with an athletic element rather than simply a game.’.2 The Tribunal therefore concluded that, applying the English version of the Directive, Contract Bridge was not a ‘sport’. Although there was some evidence before the Tribunal that in some Member States of the EU no VAT was charged on entry fees to Bridge competitions the Tribunal did not give much weight to this. More significantly it considered that there was no evidence that other language versions of the Directive indicated that the word ‘sport’ had a wider or different meaning. Having regard to these facts the Tribunal considered there was no basis for referring the matter to the Court of Justice of the EU and it dismissed the appeal on the basis that Contract Bridge was not a ‘sport’ within the meaning of the relevant legislation. 1 TC/2012/9526. 2 Paragraph 37.

2.217 On appeal the Upper Tribunal1 decided to make a reference to the Court of Justice to seek a preliminary ruling on the meaning of ‘sport’ in Art 132(1)(m). In reaching this decision the Upper Tribunal noted that enquiries made by HMRC after the hearing before the First-tier Tribunal had disclosed that in certain Member States Bridge is treated as a sport for the purpose of the VAT exemption. The Upper Tribunal considered that it could not with complete confidence resolve the issue of the Community law meaning of ‘sport’. That meaning was an autonomous meaning, and one that should be of general application amongst all Member States. It remains to see what the Court of Justice decides on the preliminary ruling. However, it is significant to note that any decision given will be on the basis that ‘sport’ has an autonomous meaning for the purposes of the VAT legislation and that meaning may not be a reliable guide to the meaning of the term in the GA 2005, s 6(2)(b). 1 Appeal No: FTC/68/2014; New Appeal No: UT/2014/0017.

2.218 In the second case the English Bridge Union sought judicial review of a decision of the English Sports Council to adopt a particular definition of the word ‘sport’ which involved that sport involves physical activity. The consequence was that Contract Bridge did not benefit from certain advantages (including National Lottery funding) which it might have enjoyed had the English Sports Council recognised Contract Bridge as a ‘sport’. The case is reported as The Queen (on the application of English Bridge Union Ltd) v The English Sports Council, The Secretary of State for Culture Media and Sport Intervening.1 The English Sports Council carries out various functions in connection with 245

Some fundamental terminology advancing the interests of sport in England. Its powers are conferred on it partly by a statute, the Physical Training and Recreation Act 1937 and partly by a Royal Charter. For the purposes of carrying out its activities the Council adopted a policy containing a definition of ‘sport’ derived from the European Sports Charter Art 2(1) which provided as follows: ‘1.

‘Sport’ means all forms of physical activity which, through casual or organised participation, aim at expressing or improving physical fitness and mental well-being, forming social relationships or obtaining results in competition at all levels’.

In challenging the adoption of that definition the English Bridge Union did not seek to raise the question whether or not Bridge is a sport. Rather it argued that in adopting that definition of sport (with its clear emphasis on the element of physical activity) the Council erred in law, the legal errors relating to its interpretation of the Physical Training and Recreation Act 1937 and the Royal Charter under which it operated. 1 [2015] EWHC 2875 (Admin).

2.219 As to the misinterpretation of the Physical Training and Recreation Act 1937 the issue turned on s 3 and in particular the words ‘physical training and recreation’. The English Bridge Union contended that this phrase did not involve a requirement to include physical activity. The judge rejected this argument in the light of an examination of the circumstances in which the 1937 Act was passed and having regard in particular to a contemporaneous memorandum published in the same year as the Act was passed. All the relevant material, the judge concluded, presented a compelling case that the phrase ‘physical training and recreation’ within s  3 was to be interpreted as meaning physical training and physical recreation. The judge went on to reject a secondary argument by the English Bridge Union to the effect that even if ‘physical training and recreation’ meant physical training and physical recreation in 1937 the phrase should be subjected to an updated interpretation in 2015 to include activities in which there was no, or very little, physical effort expended. The judge could see no basis for concluding that the phrase ‘physical training and recreation’ was a phrase whose general understanding had moved on since the 1937 Act was passed. On that basis there was nothing in the 1937 Act which called into question the Council’s decision to adopt the European Sports Charter definition of ‘sport’ as involving physical activity. 2.220 Second the English Bridge Union contended that the Council had misinterpreted the Royal Charter under which it operated. The objects contained in the Charter referred to ‘sport and physical recreation’. It was common ground that this should be read as meaning ‘sport and/or physical recreation’. The English Bridge Union argued that the word ‘sport’ in the context of the Royal Charter should, having regard to the surrounding material, not be interpreted as involving physical activity. The judge disagreed. He said: ‘I am satisfied that the proper interpretation of the 1937 Act and the surrounding factual context of the 1996 Royal Charter are of far greater significance than any help which is to be derived from dictionary definitions of the individual words comprising the phrase in question. Read in context therefore, the word “sport” as it appears in the 1996 Royal Charter 246

Some fundamental terminology phrase “sport and physical recreation” connotes and requires an essential element of physical activity.’ (para 48). Accordingly the defendant’s decision to adopt the European Sport Charter definition of ‘sport’ which requires an element of physical activity was entirely consistent with the proper understanding of the Royal Charter. Although the discussion of the width of the word ‘sport’ arose in the specific context of an interpretation of the legal scope of the English Sports Council’s powers under the 1937 Act and the Royal Charter the judge’s judgment does not provide support for an interpretation of the word ‘sport’ which would exclude or qualify the element of physical exertion and skill which have traditionally been taken as the important elements in any conception of ‘sport’. 2.221 Section 6(2)(a)(i) provides that ‘game of chance’ includes ‘a game that involves both an element of chance and an element of skill’. It should be noted that this definition is not designed to be a comprehensive definition of the expression ‘game of chance’; it merely provides that the expression includes a game involving both chance and skill. So games of chance may be of two kinds: first, games of pure chance such as roulette where (in the absence of technical assistance) there is no meaningful room for the exercise of skill, and games such as bridge1 and poker where, albeit there is room for a very considerable amount of skill, the random dealing of the cards introduces an inevitable element of chance. The terms of s  6(2)(a)(i) providing that ‘game of chance’ includes ‘a game that involves both an element of chance and an element of skill’ match the equivalent provisions of the Gaming Act 1968, s  52 (repealed), which provided that ‘game of chance’ includes ‘a game of chance and skill combined’. The meaning of this definition was considered by the Court of Appeal in R v Derek Kelly,2 where the question was whether the version of poker known as ‘Texas Hold’Em Poker’ was a game of skill or a game of skill and chance combined within that definition. The prosecution’s case was that poker is a game of skill and chance combined, in that: (i)

the pack is shuffled and the cards are dealt at random introducing a chance element;

(ii) there are five community cards placed in the middle of the table which are also produced by chance; (iii) the players assess the skill, facial movements, reputation etc of the other players and bet accordingly – this involves skill; (iv) the bets are a form of educated guess based upon the chances of the other players having better cards. 1 In Ross, Banks and Dyson v The Queen [1968] 70 DLR (2d) 606 the Supreme Court of Canada held that contract bridge was a game of chance within a definition which provided that ‘“game” means a game of chance or mixed chance and skill’. ‘Taken by themselves the words used in the definition of “game” are not ambiguous. They apply to any game of chance only or of mixed chance and skill. The word “mixed” implies no indication of the respective proportions of the two elements. Nothing shows that they must be equal or nearly so. Nothing indicates which is to be preponderant’ (per Pigeon J). 2 [2008] EWCA Crim 137, CA.

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Some fundamental terminology 2.222 The defendant contended that poker is, on any realistic assessment, a game of skill. Poker players use a wide range of separate skills, including the ability to understand the psychology of other players, calculate accurate odds quickly and play strategically. Poker involves definite fixed probabilities and chance does not have an equal influence from the start of the hand to the finish. Moreover, the defence contended that virtually all games involve some element of chance (eg who is to make the first move in chess, the random distribution of letters in Scrabble), yet some, so affected by chance, count as games of skill. The judge directed the jury that for the purposes of the definition in s 52 it was irrelevant whether chance predominated over skill or whether skill predominated over chance. Provided there was a significant or meaningful element of chance, as opposed to a mere notional element of chance, the s  52 test was satisfied. On that basis the jury convicted the defendant. On appeal the defendant submitted that the game of Texas Hold’Em was one in which skill predominated over chance and that the s 52 definition only applied to convert games where both skill and chance existed to games of chance if the element of chance was preponderant over the element of skill. In making this submission the appellant relied upon a line of US cases which established this proposition in US law.1 The reasoning in these cases can be summarised as follows: ‘Most courts have reasoned that there are few games (if any) which consist purely of chance or skill, and that therefore a game of chance is one in which the element of chance predominates over skill and a game of skill is one where the element of skill predominates over chance.’ The Court of Appeal rejected this submission holding: (i)

that previous UK case law on the meaning of ‘game of chance’ to be found in authorities pre-dating the definition in s 52 of the Gaming Act 1968 was irrelevant to the proper construction of that section;

(ii) the s 52 definition was in simple terms and needed little elaboration. It was a question of fact for the jury to determine whether on the statutory definition Texas Hold’Em Poker was a game of chance; (iii) the definition did not require that chance should preponderate over skill before a game could be held to be one of chance. ‘It is clear that Parliament could have adopted a test of preponderance; it did not and we see no reason to write into the Act a further restriction or qualification which Parliament could easily have included but which it did not’ (per Thomas LJ at [11(1)]); (iv) there could be cases where an element of chance was insignificant or de minimis and in such a case it would be necessary to spell out to the jury that the element of chance should be ignored. The court gave as an example of chance which was insignificant or de minimis as the use of chance to determine which player had the right to start a game.2 Given the similarities between GA  2005, s  6(2)(a)(i) and the definition in GA 1968, s 52 it seems likely that R v Derek Kelly will provide guidance as to the proper interpretation of the new provision. 1 The cases were Stubbs v Dick (1949 89  NE  2d 480) (Court of Common Pleas of Mercer County Ohio); State v Stroupe [1953] 76 SE 2d 313 (Supreme Court of North Carolina) and Re Allen [1962] 377 P 2d 280 (Supreme Court of California). 2 See also Joker Club LLC v Hardin [2007] 643 SE 2d 626 where the North Carolina Court of Appeals held that poker was a game of chance.

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Some fundamental terminology 2.223 In the context of skill with prizes machines the Gambling Commission has given guidance on whether certain features of machines on which skill games are played may have the result that a sufficient element of chance is introduced to cause the game played on the machine to amount to ‘gaming’. In Gambling Commission, Is a prize machine a gaming machine? (June 2010) at para 4.2 the Commission states: ‘However, in relation to games which purport to test a player’s skill in order for them to win a prize, if any of the factors set out below are present at any time, whether or not the machine would otherwise be considered a gaming machine, the Commission considers it likely that the game in question will contain an appreciable element of chance and the prize machine would therefore be a gaming machine. For this purpose it does not matter whether the factors, or any of them, are present at all times, or whether they are introduced by means of a compensation mechanism. The factors are: •

A prize game does not allow a suitably skilful player a sufficient minimum time to exercise their skill.

•

An outcome based on a player’s reactions is not genuinely achievable.

•

A  prize game based on memory does not give the player the opportunity for all the necessary information to be retained and recalled.

•

A prize game where the player controls operate in an inconsistent manner, for example where a pressure sensitive button does not give the same output for the same applied pressure in each go on that machine.’

2.224 Section 6(2)(a)(ii) provides that a game will count as a ‘game of chance’ if it involves an element of chance that can be eliminated by superlative skill. This appears designed to ensure that a game containing an element of chance will not be converted into one of pure skill merely because there may be exceptionally gifted players who can defeat the element of chance. A  similar provision appeared in the definition of ‘gaming’ under the GA  1968 (see s  52(6), though in the case of the 1968 Act this provision only applied to games which were played otherwise than against one or more other players). There does not appear to be any authority illustrating the meaning and application of this provision under the Gaming Act 1968. It might possibly be applicable in the case of games played on pinball, pusher, and crane and grab machines, which qualified as gaming machines under the definition in s 52 and have the potential to qualify as gaming under the GA 2005. Authorities decided under earlier legislation such as the Gaming Act 1854 established that a game which is one of chance, and therefore illegal when played by players of ordinary skill, would not be rendered a game of skill merely because, in the case of exceptionally skilled players, skill will predominate over chance. In an early Irish case on fruit machines, Gordon v Dunlevy,1 it was held that a ‘Diddler’ fruit machine which had a control by which players were able to stop reels and win games was an unlawful game within s 4 of the Gaming Houses Act 1854 as being one whose predominant character was one of chance, even though there was evidence that in the 249

Some fundamental terminology case of players of more than average skill the skill exercised could and did predominate over chance. It is suggested that s 6(2)(a)(ii) provides a statutory version of this principle. 1 [1928] IR 595.

2.225 Section 6(2)(a)(iii) provides that a ‘game of chance’ includes a ‘game that is presented as involving an element of chance’. This provision appears designed to apply to a case where a game is presented as one which involves an element of chance but where in fact (usually because of cheating) there is no true element of chance at all. Take the case, for example, of a game of pure chance such as roulette. Where roulette is honestly played, a player who bets on one number has a 1 in 37 chance that his number will be spun. Suppose, however, the bank secretly employs an electronic device to deflect the ball to ensure that it will never land on any number which he has backed. The game is presented as one of chance, but the electronic device overrides the chance element and ensures that the player can never win. Or take a case of mixed skill and chance like a card game where the chance element derives from the random dealing of the cards. Suppose one player cheats by using a pack of marked cards so that he can know what cards his opponent possesses. Here again, the game will be presented as involving an element of chance, but the chance element will in fact have been defeated by the cheat. The effect of s 6(2)(a)(iii) is to ensure that in both cases the activity would remain a ‘game of chance’ within the definition, even though the element of chance had in fact been overridden. The definition would also catch activities such as the ‘three card trick’ or ‘find the lady’, which are presented to the player as a game of chance but which are often in fact simply a form of cheating.1 The Commission has given guidance on its approach to the question whether a game is presented as involving an element of chance in the context of gaming machines – see Gambling Commission, Is a prize machine a gaming machine? (June 2010) in the following terms: ‘Question 5: Is the game presented as involving an element of chance? … A game may be considered to be presented as involving an element of chance when it is fraudulently presented as a game of chance (for example “Chase the Lady” or the “Three Card Trick”) but the question of presentation applies more widely. In considering whether a game is presented as involving an element of chance the Commission will take into account the following matters:

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•

How the game appears to the player.

•

What the game is called and whether it contains language associated with gambling games.

•

The livery of the machine and whether it contains symbols or graphics associated with gambling games.

•

The appearance of the game itself and whether it contains symbols or graphics associated with gambling games, including (but not limited to) the turn of a wheel, the spin of a coin, the roll of a dice, reel bands, or the random selection of numbers.

Some fundamental terminology •

Whether the game involves the player in actions associated with gambling games including (but not limited to) placing chips or markers on numbers, or engaging in prediction.

•

Any contextual indication such as advertising signage or marketing material.

It is important to note that any one of these factors by itself may not be sufficient to classify a particular machine as a gaming machine. For example, the depiction of dice in a game may not by itself necessarily indicate that a game is a gaming machine.’ 1 For a discussion of the application of the provision in s  6(2)(a)(iii) to the ‘three card trick’ see HC Official Report, SC B, 11 November 2004, morning col 81–82. The three card trick may be played honestly as a game of chance and skill, or it may be played fraudulently. For cases on the three card trick see R v Governor of Brixton Prison, ex p Sjoland [1912] 3 KB 568; Justice of Peace, Vol LXXI [1917], p 51; R v Moore [1914] 10 CAR 54. The provision in GA 2005, s 6(2)(a)(iii) was mirrored in GA 1968, s 52(1), which provided that ‘game of chance’ included ‘… a pretended game of chance or of chance and skill combined’. The writer would contend that the word ‘pretended’ in that context meant ‘falsely claiming to be such, spurious, counterfeit’ (see OED) and was derived from the Vagrancy Acts 1824, 1868 and 1873. That the word ‘pretended’ in that context referred to cheating and trickery is confirmed by the commentary on the Vagrancy Act in, for example, Stone’s Justices’ Manual (19th edn, 1878), which comments: ‘It is sometimes difficult to determine whether a particular game will come within the words “game” or “pretended game of chance”. Some games depend entirely on chance, some on skill, and others on chance and skill combined. It may, we think, be fairly assumed that any game, the result of which depends on the drawing or colour of a card, the throw of dice or coin, the revolution of a ball or a teetotum, or on other purely accidental circumstance, or on the art of trickery on the part of the person charged, or a confederate will be within the meaning of these words, and the mischief intended to be remedied.’

2.226 Section 6(3) deals principally with the position where there is only one human player. Section 6(3)(a) confirms that a person may be said to be playing a game of chance he participates in ‘whether or not there are other participants in the game’. This, it is suggested, does no more than confirm the position as described at 2.188–2.192 above, namely that there may be a game of chance played even though there is only one human participant in the game. Section 6(3)(b) is designed to cover the position where a computer is interposed as part of the process by which a game is played. It provides that for the purposes of the Act a person can be said to ‘play a game of chance’ if he participates in a game of chance ‘ … whether or not a computer generates images or data taken to represent the actions of other participants in the game.’ Thus, for example, a person who participates in a game of poker in which the part of the other ‘players’ is taken by a computer which deals the cards and plays them will be ‘playing a game of chance’ in that, first, it is irrelevant that there are no other human participants (see s  6(3)(a)) and second, the generation by the computer of images or data taken to represent the actions of other players falls within s 6(3)(b). It should be noted that s 6(3) (b) has the effect that a solitary human participant may be said to be ‘playing a game of chance’ even though there are not computer generated images or data representing other players. This is consistent with the discussion 251

Some fundamental terminology contained at 2.188–2.192 above, in which it was suggested that games of Patience or games played on machines (where there is no question of the participation of other human players) may amount to the playing of a game. Section 6(3)(b) will apply in three cases: first, to the case where there are no computer generated images or data at all; second, to the case where there are such images or data but they do not purport to represent the actions of other participants in the game because the game is one in which there are no other participants; and third, to the case where there are such images or data and they are taken to represent the actions of other participants in the game. 2.227 Section 6(4) helps to define the notion of playing a game of chance for a prize. Section 6(4)(a) provides that for the purposes of the Act a person plays a game of chance for a prize ‘if he plays a game of chance and thereby acquires a chance of winning a prize’. This provision appears designed to make clear that a person may ‘play a game of chance for a prize’, even though he does not in fact win a prize; it is enough that by playing the game he acquires a chance of winning a prize. 2.228 Section 6(4)(b) provides that for the purposes of the Act a person plays a game of chance for a prize ‘whether or not he risks losing anything at the game’. This important provision makes clear that a person may be ‘gaming’ within s 6, even though entry to the game is free and there is no risk of losing anything (in particular, no risk of losing a stake). The provision mirrors that contained in the definition of ‘gaming’ in s 52 of the Gaming Act 1968, which provided that there would be ‘gaming’ within the meaning of the section ‘whether any person playing the game is at risk of losing any money or money’s worth or not’. This provision in the 1968 Act was introduced to reverse the decision of the House of Lords in McCollom v Wrightson,1 where it was held that the word ‘gaming’ under previous legislation implied not only the chance of winning but also the chance of losing (ie the hazarding of a stake), so that games of bingo for prizes in a public house where no charge was made for cards did not amount to ‘gaming’ under that legislation. The effect of s 6(4)(b) is that such free gaming would now fall within s 6. 1 [1968] AC 522.

2.229 In recognition that difficult borderline cases may arise in the interpretation of s 6, under s 6(6) the Secretary of State may make regulations providing that a specified activity, or an activity carried on in specified circumstances, is or is not to be treated as a ‘game’ a ‘game of chance’ or a ‘sport’. Any such regulations would have to be laid before and approved by resolution by both houses of parliament before they could come into force.1 1 See GA 2005, s 355(4).

‘Casino games’ and ‘equal chance gaming’ – sections 7 and 8 2.230 The GA  2005 retains the distinction (already developed under the Gaming Act 1968) between certain types of gaming classically associated with casinos (eg  roulette, blackjack, baccarat, craps etc) and other types of games (eg  bingo) not so associated. Games in the first class have two characteristics which make it highly desirable that they should be limited to 252

Some fundamental terminology the strictly controlled environment of a casino: first, they are usually played in such a way as to be games of unequal chance, in that one player will have better chances of winning than will the other player or players; second, the player so benefiting will usually be the promoter of the gaming (ie the casino proprietor or ‘House’). As a result of these characteristics the player enjoying the advantage can expect over time to win money from the players who do not, and those players can easily incur substantial losses. Moreover, the benefits enjoyed by the house in games of this type make it desirable that strict control be maintained over operators who are authorised to offer such gaming to the public. Gaming of the other type (eg bingo or poker), where the chances between all players are equal, do not create such a high degree of risk for players.1 1 Though, of course, in an equal chance game like poker a skilled player may win substantial sums from a less skilled player, but that is a risk which the losing player takes by playing with the more skilful one – it is not intrinsic to the game itself.

2.231 The Gaming Act 2005 sets out the distinction between the two types of gaming in ss 7 and 8. It uses a number of expressions, such as ‘casino’, ‘casino game’, ‘equal chance gaming’ and ‘bank’, in order to provide definitions of the two different types of gaming. It should be noted, however, that these concepts, as used for the purposes of the definition, do not necessarily have in all respects the same meaning as they are generally understood to have in ordinary speech. 2.232 Section 7 begins by defining for the purposes of the Act the meaning of the expression ‘casino’. Section 7(1) provides that: ‘For the purposes of this Act a casino is an arrangement whereby people are given an opportunity to participate in one or more casino games.’ Section 7(2) provides that: ‘In this Act “casino game” means a game of chance which is not equal chance gaming.’ 2.233 These provisions provide the general definition of ‘casino’ for the purposes of the Act. It should be noted that a casino may be either a physical casino or a virtual casino in which players play games on-line. This latter fact is made clear by s 7(4), which provides as follows: ‘(4) For the purposes of this section it is immaterial— (a) whether an arrangement is provided on one set of premises or on more than one; (b) whether an arrangement is provided wholly or partly by means of remote communication’. 2.234 It should be noted too that the Secretary of State may make regulations providing that a specific activity, or an activity carried on in specified circumstances, is to be or not to be treated as a casino game for the purposes of the Act (see s 7(3)). 253

Some fundamental terminology 2.235 The balance of s  7 deals with the creation of different classes of physical casino and their regulation. These provisions are discussed at Chapter 14. Virtual gambling is discussed at Chapter 17. 2.236 The starting point of the s  7(2) definition is that a ‘casino game’ is not ‘equal chance gaming’. ‘Equal chance gaming’ is defined by s 8, which provides as follows: ‘(1) For the purposes of this Act gaming is equal chance gaming if— (a) it does not involve playing or staking against a bank, and (b) the chances are equally favourable to all the participants. (2) For the purposes of subsection (1) it is immaterial— (a) how a bank is described, and (b) whether or not a bank is controlled or administered by a player.’ Section 8 therefore defines ‘equal chance gaming’ in both negative and positive terms. Gaming will only be ‘equal chance gaming’ if it does not involve playing or staking against a bank and the chances are equally favourable to participants. So if a bank is involved in the game it will not be ‘equal chance gaming’ and therefore will be a ‘casino game’ within s 7(2). Section 8(2) makes clear that it makes no difference how the bank is described, nor whether the bank is controlled or administered by a player. 2.237 The expression ‘bank’ is not defined. In essence, a game involves a ‘bank’ where one player plays against all the others, winning from them the stakes that they lose and paying out to them the stakes that they win. The classic banker’s game is roulette, where the bank wins all losing bets and pays out on all winning bets. The essence of a banking game has been described (in the context of card games) as follows:1 ‘Banking games are … by definition, distinctly unequal in format. On one hand stands the banker, who deals the cards, operates the knobs and levers of play, and acts as a centre of redistribution of wealth. On the other are the punters, who exercise no player interaction amongst themselves but oppose the banker on an individual basis. In effect, the banker plays a series of two-player games simultaneously.’ The idea of a ‘banking game’ is also helpfully described in a judgment of the Supreme Court of California:2 ‘When one party wagers simultaneously against a number of others on the outcome of a game, the scheme is called a banked game or, in the words of our statute, a “banking game”. This court first defined the term “banking game” in People v Carroll (1889) 80 Cal 153, 157–158, 22 P129, accepting as “sufficiently accurate” the definition given by a witness at trial: “A game conducted by one or more persons where there is a fund against which everybody has a right to bet, the bank being responsible for the payment of all the funds, taking all that is won, and paying out all that is lost. The fund which is provided for 254

Some fundamental terminology that purpose is generally called the bank, and the person who conducts it the banker.” With variations in phrasing, this definition has been accepted and applied by California courts in many cases since … as succinctly stated in People v Ambrose (1953) 122 Cal App. 2d Supp 966, 970, 265P 2d 191, “In a banking game the banker or exhibitor pays all the winnings and suffers all the losses; he is the one against the many, which is the supreme test of a banking game.”’ 1 Parlett A History of Card Games (OUP, 1991), p 75. 2 Western Telcon v California State Lottery 917 P 2d 651 (Cal 1996).

2.238 It is an important feature of banker games that they are usually played as a game of unequal chance, the rules of the game and the odds being designed to give an advantage or ‘edge’ to the bank. It has been said that:1 ‘Inequality consists in the fact that ties and special cases are invariably designed to favour the banker, who is thereby assured of a small but cumulative profit or rake-off. This makes banking games ideal activities for casinos, in which the bank is held by the management and the game is dealt and controlled by its agents.’ The question whether a game confers an ‘edge’ upon the bank can only be determined on a case by case basis by examining the rules of play and the odds offered. A classic case of a bank ‘edge’ is supplied by roulette in cases where that game is played with a wheel containing the numbers 1–36 and a single zero. This produces 37 pockets where the ball may land, so that the arithmetical chances of a bet on a single number being spun are 1 in 37 or odds of 36/1. If the bank paid out at those odds, then it would enjoy no ‘edge’. In fact it pays out at odds of 35/1 and this creates an ‘edge’ as follows: if a player, ‘P’, bets £1 on one number on 37 spins, he will, on average, lose 36 times (so losing £36) and will win once (so winning £35). He therefore loses, on average, £1 for each 37 spins, so the bank’s ‘edge’ is: 1/37 × 100 = 2.72 1 Parlett A History of Card Games (OUP, 1991), p 75. 2 The table below reproduced from Vol 2 of the Final Report of the Royal Commission on Gambling 1978, p 452 sets out the odds commonly paid on a number of roulette wagers together with the arithmetically correct odds and the percentage edge in favour of the bank. Odds paid

Correct odds

Banker’s edge, %

One specific number

35:1

36:1

2.7

One of two specific numbers

17:1

17.5:1

2.7

One of three specific numbers

11:1

11.3:1

2.7

One of four specific numbers

8:1

8.25:1

2.7

One of six specific numbers

5:1

5.2:1

2.7

One of 12 specific numbers

2:1

2.1:1

2.7

One of 18 specific numbers excluding zero

1:1

1.06:1

1.35

One of 24 specific numbers

0.5:1

0.54:1

2.7

255

Some fundamental terminology 2.239 However, not all banker’s games are games of unequal chance.1 This may be for one of two reasons: (1) The game may be played so that the pay-outs on winning bets match the true arithmetical odds of winning. This is the case with the Chinese banker game of ‘Fan Tan’.2 It is possible also to play a game such as roulette as a game of equal chance. This will be the case where the roulette wheel contains no 0, but only numbers 1–36. With such roulette the chances of a bet on a single number winning are 1 in 36 or odds of 35/1. If the bank pays out at odds of 35/1, there will be no ‘edge’ for the bank and the game will be one of equal chance.3 (2) It is possible, even in a case where a game involves a bank which does enjoy an ‘edge’, for the game to be played as one of equal chance if the rules of the game permit the bank (with its advantage) to circulate among the players. In those circumstances each of the players in turn may enjoy the advantage of the bank and in such a case the game may be regarded as one of equal chance. Chemin-de-fer is an example of a game in which the bank circulates among the players and which may therefore be regarded as an equal chance game. Prior to the Gaming Act 1968 casinos were permitted to offer games of this type,4 but this led to wholesale abuse by casinos, which is described at 0.47 above. Under the Gaming Act 1968 chemin-de-fer with a circulating bank could be played in licensed casinos under the rules laid down by regulation.5 1 See the definition of ‘Banker game/non-banker game’ in Royal Commission on Gambling Final Report, Vol 2, 1978 Cmnd 7200, p 544: ‘Banker game/non-banker game: A banker game involves staking against a bank held either by the house or by one of the other players. A  non-banker game is one which does not. Many banker games provide the bank with an edge over the other players; not all do so, Fan Tan being an example of one which does not. Where the bank circulates among the players a game providing an advantage to the banker may still be considered one of equal chance, eg pontoon. Where there is an advantage to the banker, and the bank does not circulate, the game is not one of equal chance, eg Roulette. All non-bankers games are games of equal chance.’ 2 Fan Tan has much in common with roulette, though there is no wheel. ‘Any number of objects, which could be beans, buttons, beads or some similar article, are concealed under an upturned bowl. Stakes are placed against the bank on the numbers 1, 2, 3 or 4, or on any two or three of these numbers. The bowl is then removed and the dealer, usually an employee of the house, removes the beans four at a time until the pile is reduced to 1, 2, 3 or 4. The croupier, who supervises the game at all stages, then settles the wagers according to the result. There is thus the bank, which is taken by the house, but as it is an equal chance game in which wagers are settled at true odds, no profit is made by the bank from the games’ (Royal Commission on Gambling Final Report, 1978, Cmnd 7200, Vol 2, p 376). 3 For examples of roulette without a zero played as a game of equal chance see: Quinn v Mackinnon [1963] 1  QB  974; JM  Allan (Merchandising) Ltd v Cloke [1963] 2 QB 340; Kelland v Raymond [1964] 2 QB 108. 4 This was because the Betting and Gaming Act 1960, s 16(1) provided that gaming should be lawful if either ‘the chances in the game are equally favourable to all the players’ or ‘the gaming is so conducted that the chances therein are equally favourable to all the players’. 5 That is, the Gaming Clubs (Bankers’ Games) Regulations 1994 (SI  1994/2899), reg 6.

256

Some fundamental terminology 2.240 However, for the purposes of defining ‘equal chance gaming’ under the GA 2005 the above considerations are all irrelevant. Section 8 provides that gaming will only be ‘equal chance gaming’ if it does not involve playing or staking against a bank. It makes no difference that the bank may not enjoy an ‘edge’ and it makes no difference that the bank may circulate among players so that the effect of any ‘edge’ is removed. If there is a bank, the gaming is not ‘equal chance gaming’ and it therefore is ‘casino gaming’ within s 7. 2.241 Where gaming does not involve playing or staking against a bank, it will be ‘equal chance gaming’ if the chances are equally favourable to all participants – see s 8(1)(a) and (b). So in principle it would be possible for a non-banker game to be a game of unequal chance. In fact most, if not all, nonbanker games are games of equal chance. In the context of bingo the question has arisen whether bingo (which is normally a game of equal chance) may be converted to a game of unequal chance where some players play with more bingo cards than others. In Rogers v Cowley1 it was held that this fact did not result in bingo being a game of unequal chance. The legislation then in force2 required the chances in gaming to be equally favourable to all the players, and it was held that this requirement was satisfied, even though some bingo players had more cards than others in play. The court concluded that: ‘… it is the opportunities afforded to players by the rules or conduct of the game which it is required shall be equally favourable on a comparison of one of those opportunities with another, [and] it follows that there is no prohibition against one player holding more of such opportunities or chances than another, whether or not he has paid for those chances or for participation in the particular game.’3 1 [1962] 1 WLR 770. 2 That is, the Betting and Gaming Act 1960, s 16. 3 [1962] 1 WLR 770 at 779 per Winn J.

Betting and gaming – section 16 2.242 Betting and gaming are often closely associated. Gaming frequently takes the form of the playing of a game upon which participants make bets. The classic example is roulette, where players enter into individual bets with the bank that a particular number, or a number falling within a particular group of numbers, will be spun and the bank takes the contrary position, all bets being placed at stated odds. It is clear that the bets so made fall within the definition of ‘betting’ in s 9 in that they involve the making of bets on the outcome of an event (namely the spin of the wheel). But roulette, for reasons which are discussed at 2.179–2.184, also amounts to the playing of a game of chance and therefore falls within the definition of ‘gaming’ in s 6. 2.243 Section 16 is designed to provide for such hybrid cases where a transaction amounts both to ‘betting’ and ‘gaming’, so as to make clear whether or not the transaction is to be treated as a ‘bet’ needing to satisfy the regulatory framework for betting, or to be treated as gaming needing to satisfy the regulatory framework for gaming. The solution provided by the 257

Some fundamental terminology section is that where a transaction amounts to both ‘betting’ and ‘gaming’, it will be treated for the purposes of GA 2005 as ‘gaming’ unless the betting is ‘pool betting’, in which case it will be treated as ‘betting’. Section 16 provides as follows: ‘(1) This section applies to a transaction which satisfies— (a) the definition of betting in section 9, and (b) the definition of gaming in section 6. (2) A transaction to which this section applies which is pool betting (within the meaning of section 12) shall be treated for the purposes of this Act as betting (and not as gaming). (3)

Any other transaction to which this section applies shall be treated for the purposes of this Act as gaming (and not as betting).

(4) This section is subject to regulations under section 6(6).’ 2.244 So the default position is that hybrid betting/gaming will be treated as gaming unless it is pool betting within s 12. Betting as defined by s 9 is betting in the generally understood sense of a bilateral wager between two parties on the outcome of some event or process. For a discussion of the s 9 definition see 2.31. It is clear that the bets made between players and the bank in a game such as roulette or black jack amount to betting within the s 9 definition,1 so pursuant to s 16(3) roulette and blackjack will amount to gaming and not betting. 1 The writer would contend that bets made on roulette or blackjack amount to classic wagers which would fall within the s  9 definition. However, as is noted at 2.118, the s 12 definition of ‘pool betting’ may perhaps not have created such a clear distinction between wagering and pool betting as existed under the former legislation.

2.245 It should be noted that the s 16 provisions will apply both to hybrid transactions which are betting under s 9 and gaming under s 6, and to hybrid transactions which are betting under s 11 and gaming under s 6. As has been noted above (see 2.45, fn 5), prize competitions which become betting by virtue of the provisions of s 11 are s 9 betting for all purposes.1 It would seem to follow that hybrid transactions which were both prize competitions within s 11 and gaming within s 6 would fall within s 16(3) and would amount to gaming, not betting. 1 Referring to clause 11 (which became s 11) the Minister stated: ‘That clause makes it abundantly clear that prize competitions that satisfy the conditions set out in it thereby constitute betting for the purposes of s 9. Betting of the kind defined in clause 11 is not a different and separate kind of betting from that described in clause 9; it is clause 9 betting’ (Mr Caborn, Standing Committee B, 9 November 2004, AM, col 53).

2.246 Section 16(2) provides, however, that where a transaction is both pool betting and gaming it is to be treated as betting and not as gaming. For a discussion of the meaning of ‘pool betting’ as defined by s 12 see 2.91. It is not easy to think of a case in which pool betting would be likely to amount also to gaming. Pool betting as conducted, for example, in football 258

Some fundamental terminology pools or by means of a totalisator is far removed from ‘gaming’ as generally understood and as defined in s 6. However, s 16(2) caters for such a hybrid should it arise and provides that the transaction should amount to betting. 2.247 It is open to the Secretary of State to make regulations providing that a specified activity is or is not to be treated as ‘gaming’ within s 6.1 The distinction between ‘betting’ and ‘gaming’ in s 16 is subject to that regulationmaking power, so that any particular transaction could be categorised as ‘betting’ or ‘gaming’ by appropriate regulation.2 1 GA 2005, s 6(6). 2 GA 2005, s 16(4).

Lotteries and gaming – section 17 2.248 In some cases an arrangement may amount to ‘gaming’ within s 6 and also to a lottery as defined by s 14. Section 17 of GA 2005 deals with such a hybrid case and provides a test to determine whether such a transaction is to be treated as gaming or a lottery. It provides as follows: ‘(1) This section applies to an arrangement which satisfies— (a) the definition of a game of chance in section 6, and (b) the definition of a lottery in section 14. (2) An arrangement to which this section applies shall be treated for the purposes of this Act as a game of chance (and not as a lottery) if a person who pays in order to join the class amongst whose members prizes are allocated is required to participate in, or to be successful in, more than three processes before becoming entitled to a prize. (3) An arrangement to which this section applies shall, subject to subsection (2), be treated for the purposes of this Act as a lottery (and not as a game of chance) if— (a) it satisfies paragraph 1(1)(a) and (b) of Schedule 11, (b) it satisfies paragraph 10(1)(a) and (b) of Schedule 11, (c)

it satisfies paragraph 11(1)(a) and (b) of Schedule 11,

(d) it satisfies paragraph 12(1)(a) and (b) of Schedule 11, (e)

it satisfies paragraph 20(1)(a) and (b) of Schedule 11,

(f)

it satisfies paragraph 30(1)(a) and (b) of Schedule 11, or

(g) it is promoted in reliance on a lottery operating licence. (4) Any other arrangement to which this section applies shall be treated for the purposes of this Act as a game of chance (and not as a lottery). (5) This section is subject to regulations under sections 6(6) or 14(7).’ 2.249 An obvious example of an arrangement which amounts both to gaming within s  6 and a lottery within s  14 is bingo. For the reasons 259

Some fundamental terminology discussed at 2.185, the playing of bingo (at least as classically played) will amount to ‘gaming’ within s  6. But, as bingo involves an arrangement in which persons are required to pay to participate and in the course of which prizes are allocated by a process relying wholly on chance, the activity also falls within the definition of lottery within s  14. The scheme which s  17 applies to such a hybrid activity to determine whether it is to be gaming or a lottery is essentially as follows: (1)

The default position is that such an activity is gaming and not a lottery: see s 17(4).

(2) Where an arrangement involves that participants must participate in, or be successful in, more than three processes before winning a prize (‘the three process test’), then the arrangements will amount to gaming in all circumstances, even though they may fall within a class of arrangements which would otherwise be treated as a lottery under s 17(3): s 17(2). (3) Except in cases where an application of the ‘three processes test’ leads to the conclusion that the arrangement is ‘gaming’, an arrangement will be treated as a lottery (and not a game of chance) if it is an ‘exempt lottery’ within Schedule 11 or is promoted in reliance on a lottery operating licence: s 17(3). 2.250 To consider the scheme in slightly more detail, the starting point, as noted, is that a hybrid arrangement will normally be treated as gaming within s  6 and not as a lottery within s  14: s  17(4). This conclusion will definitely follow if, in order to win, participants must ‘participate in, or be successful in, more than three processes before becoming entitled to a prize’ (s 17(2)). This condition appears designed to ensure that a hybrid arrangement will only be a lottery (and not gaming) if it is simple in execution, and if winning does not depend upon achieving success in a number of determining events (eg  a series of draws) extending beyond three. The point is that the more complicated a scheme becomes, the more likely it is to involve active and continuous participation by players and therefore to approximate towards gaming.1 Some light is thrown on the application of the provision by reference to the old cases of Morris v Baguley2 and Smith v Wyles,3 although the effect of the provision would be to reverse the decisions in these cases, provided the lotteries were of a type specified in GA 2005, s 17(3) (see below). In the former case it was held that the drawing of a lottery or sweepstake was gaming. Clearly this would now be likely to amount to a lottery and not gaming under the ‘three process test’, since winners would be required to participate in only one process (rather than three). Accordingly, provided the arrangements fell within one of the specified types of lottery, they would amount to a lottery and not to gaming under s 17. 1 It has been suggested that the comparable ‘three process test’ contained in Gaming Act 1968, s 52(3) was designed to ensure that an activity such as a classic horse race sweepstake would not amount to gaming but would be a lottery. In such a sweepstake there are three processes, namely the random draw of participants’ names, the random draw of matching horses and the result of the race which determines who will win the sweepstake. This suggestion may be valid, though the writer would question whether a sweepstake normally involves a sufficient element of gaming to amount to a hybrid arrangement, in any case.

260

Some fundamental terminology 2 [1937] BTRLR 73. 3 [1958] 3 All ER 279.

2.251 In Smith v Wyles the lottery was a primitive form of bingo. Tickets were sold and, on purchase, players selected any two numbers between 1 and 20. On a subsequent occasion table tennis balls bearing numbers from 1 to 20 were placed in a canister and were released in pairs at random. The holder of the ticket who had selected the combination of numbers corresponding to those on the two balls released was entitled to a prize. This was held to be gaming. ‘Counsel for the appellants contended that gaming involves something in the nature of a game in which players not only participate but participate continuously; … In my judgment this contention places too restrictive a meaning on the word “gaming”. Undoubtedly some games involve gaming, but it does not follow that gaming involves a game … It was conceded that persons who play roulette are gaming: they are staking their money in a proceeding the outcome of which is dependent merely on chance … I  take the view that there is no difference in principle between that form of proceeding and the one involved in the present case, where the stake is represented by a ticket and the outcome is dependent on two numbered balls released from a canister and not one ball spun on a roulette board.’1 Such a scheme would now, however, seem to be excluded from the definition of ‘gaming’ under the 2005 Act, since winners were selected by only two determining factors and it would therefore amount to a lottery, provided the arrangements fell within one of the specified classes. 1 [1958] 3 All ER 279 at 281c per Ashworth J.

The specified classes 2.252 A  hybrid arrangement which is not rendered gaming by an application of the ‘three process test’ will amount to a lottery and not gaming if it is one of the following types: (i)

an incidental non-commercial lottery (Sch 11, para 1(1)(a) and (b));

(ii) a private society lottery (Sch 11, para 10(1)(a) and (b)); (iii) a work lottery (Sch 11, para 11(1)(a) and (b)); (iv) a residents’ lottery (Sch 11, para 12(1)(a) and (b)); (v) a customer lottery (Sch 11, para 20(1)(a) and (b)); (vi) a small society lottery (Sch 11, para 30(1)(a) and (b)). It will also be a specified lottery if it is a lottery promoted in reliance on a lottery operating licence, as provided for by s 65(2)(j). Such a licence can only be granted to authorise the promotion of a ‘non-commercial society lottery’ or a ‘local authority lottery’. 261

Some fundamental terminology 2.253 The provisions of s 17 are subject to any regulations that might be made under s 6(6) (definition of ‘gaming’) or s 14(7) (definition of ‘lottery’).1 Should a new form of hybrid transaction which amounted to both gaming and a lottery emerge, it would therefore be possible to categorise it as either gaming or a lottery by regulation. Specific provision is made for the National Lottery which for most purposes (see s  15) does not fall within the GA’s definition of ‘gambling’. However s 15(3) provides that where participating in a lottery which forms part of the National Lottery would also constitute gaming within s 6 it will be treated as gaming only if a person participating in the lottery is required to participate in or be successful in more than three processes before becoming entitled to a prize. 1 GA 2005, s 17(5).

REMOTE GAMBLING – SECTION 4 2.254 One of the principal purposes of the GA 2005 is to provide a proper regulatory framework for remote gambling. The development of remote forms of gambling, in particular on the internet, and the difficulties which these developments posed for the previous regulatory framework are described at 0.116–0.120 above. Accordingly, one of the terms of reference of the Gambling Review Body was to ‘consider the current state of the gambling industry and the ways in which it may change over the next ten years in the light of economic pressures and the growth of e-commerce, technological developments and wider leisure industry and international trends’. 2.255 The Act accordingly provides a definition of ‘remote gambling’ which is then fitted into the Act’s regulatory framework, principally by providing that the provision of facilities for remote gambling will amount to an offence under s 33 unless authorised by a remote gambling operating licence of a type specified by s 65. The definition of ‘remote gambling’ is contained in s 4. Section 4(1) and (2) provide as follows: ‘(1) In this Act “remote gambling” means gambling in which persons participate by the use of remote communication. (2) In this Act “remote communication” means communication using— (a) the internet, (b) telephone, (c) television, (d) radio, or (e) any other kind of electronic or other technology for facilitating communication’. In addition to the specific forms of ‘remote communication’ set out in s 4(2), the Secretary of State may make regulations providing that a specific system 262

Some fundamental terminology or method of communication is or is not to be treated as a form of remote communication for the purposes of the Act – see s 4(3). 2.256 The expressions ‘internet’, ‘telephone’, ‘television’ and ‘radio’ are not defined in the Act, no doubt because any attempted definition would need to be enormously complex and would be at constant risk of being rendered obsolete by technological advance.1 In any case, any dispute whether a particular means of communication falls within one of the specific definitions will almost certainly be resolvable on the basis that even if it does not, it will fall within s 4(2)(e) as being some other kind of electronic or other technology for facilitating communication. Fax machines and intranets, for example, would seem to fall within this definition. 1 The Internet is defined by The Shorter OED (5th edn) as: ‘a global computer network providing a variety of information and communication facilities to its users, and consisting of a loose confederation of interconnected networks which use standardised communication protocols’. See also the description of the Internet given by the United States Federal Court of Appeals for the Third Circuit in a case concerning an attempt by the Federal Government to regulate the communication of indecent material via the Internet: ‘It exists and functions as a result of the fact that hundreds of thousands of separate operators of computers and computer networks independently decided to use the common data transfer protocols to exchange communications and information with other computers (which in turn exchange communications and information with still other computers). There is no centralised storage location, control point, or communications channel for the Internet, and it would not be technically feasible for a single entity to control all of the information conveyed on the Internet.’ See also Godfrey v Demon Internet Ltd [2003] WLR 1020, QBD for a description of email, the World Wide Web and Usenet in the context of the law of defamation.

2.257 Section 4 does not in terms deal with the status of traditional postal services, though it is likely that these would be caught to the extent that such services employ ‘electronic or other technology for facilitating communication’ falling within s  4(1)(e). However, the effect of this is substantially negatived by provisions that non-remote general betting operating licences,1 pool betting operating licences,2 horse-race pool betting operating licences3 and lottery operating licences4 shall be subject to terms permitting the use of postal services for the transactions authorised by such licences. 1 2 3 4

GA 2005, s 92(2). GA 2005, s 93(7). GA 2005, s 94(6). GA 2005, s 98(4).

2.258 ‘Remote gambling’ as defined by s 4 must of course involve ‘gambling’ as defined by s 3, namely gaming, betting or participating in a lottery. There are two broad types of remote gambling, both of which will be caught by the definition, ie  ‘peer-to-peer’ gambling, where the gambling takes place between individuals who communicate with each other via a means of remote communication, and ‘virtual event gambling’, where the gambling takes 263

Some fundamental terminology place between an individual and a computer or server. Remote gambling of the first type would range from telephone betting between a bookmaker and a customer to internet poker played between live players who communicate through a poker site, or an internet betting exchange where customers bet via the exchange with each other. An example of the second type of remote gambling would be a cyber-casino where individual players play games such as roulette or blackjack against the computer’s server.1 The provision of facilities for remote gambling will amount to an offence under s 33 unless one of the exemptions specified in that section applies. The most common exemption applicable will be that provided for in s 33(2) which states that no offence is committed if the person providing the facilities holds an operating licence authorising the activity and the activity is carried on in accordance with the terms and conditions of the licence. Section 65 provides for the issue of various specified kinds of operating licence, and s  67 provides that an operating licence will be ‘a remote operating licence’ if it authorises activity to be carried on (a) in respect of remote gambling, or (b) by means of remote communication.2 An operating licence must either be a non-remote operating licence or a remote operating licence3 and must state whether it is a remote operating licence or not.4 For a discussion of these provisions see Chapter 6. The consequences of the structural divide between non-remote operating licences and remote operating licences may sometimes be inconvenient. For example, a bookmaker wishing to take bets over the counter in a betting office who also wishes to take telephone bets will need licences of both types, and bingo operators holding a general bingo operating licence (and a premises licence) will need a remote bingo operating licence in order to offer linked or multiple bingo.5 However these inconveniences have, to some extent, been mitigated by the Gambling Commission by the development of ancillary remote betting operating licences and ancillary remote bingo operating licences – see Chapter 6. For a discussion of remote gambling generally see Chapter 17. 1 These two fundamental types of gambling were discussed in Gambling Commission ‘Remote Technical Standards Consultation Paper’ (February 2007), p 8: ‘The term “virtual event gambling” is used to refer to any form of remote gambling where the result of a gamble is determined in whole or in part by reference to a virtual event that is based on the output of a random number generator. The term is intended to capture virtual casino games, virtual horse racing, fixed odds betting style games, virtual arcades, virtual bingo, virtual card games and the like … The phrase “peer-to-peer” refers to a specific sub-type of gambling where people gamble against each other (eg betting exchanges, or equal change gaming such as on-line poker) rather than against the house/operator (eg roulette).’ See also Gambling Commission, Remote gambling and software technical standards (June 2015), para 2 definition of terms: ‘Peer-to-peer gambling: ‘A type of gambling where customers gamble against each other rather than against the house. For example, equal chance gaming such as poker or peer-to-peer betting through betting exchanges.”’ and see Gambling Commission, Remote gambling equipment Guidance note (March 2008, updated October 2014), para 10.3 ‘Virtual event systems requiring random input in order to determine the outcome of games, which are normally provided by internal or external Random Number Generators. Virtual event systems may also support multi-player games where multiple players “sit” at the same table (whether they play against each other or against the house) and require systems to support multi-player tables.’

264

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GA 2005, s 67(1)(a) and (b). GA 2005, s 67(2). GA 2005, s 67(3). For a debate on the bingo requirements see Standing Committee B, Second Sitting, Tuesday 9 November 2004, cols 58–64.

PROVIDING FACILITIES FOR GAMBLING – SECTION 5 2.259 Section 5  GA  2005 sets out in detail the circumstances in which a person ‘provides facilities for gambling’ for the purposes of the Act. This is a concept of fundamental importance. A person who ‘provides facilities for gambling’ will commit an offence under s  33 unless his activities fall within one of a number of specified exemptions. The single most important exemption is that he holds an operating licence authorising the activity (s 33(2)) and it is in this way that the legislation, and most particularly the power of the Gambling Commission to grant operating licences as provided for by s 65 and personal licences as provided for by s 127 is engaged. 2.260 Section 5 is carefully structured. Section 5(1)(a), (b) and (c) set out three sets of circumstances in which a person will be held to be providing facilities for gambling. These are then qualified by s 5(2)(a), (b) and (c), which provide that certain sets of circumstances that would or might fall within the s 5(1) provisions will not do so and will not amount to providing facilities for gambling. The third of these provisions, s  5(2)(c), establishes that the mere provision of facilities for remote communication (eg the provision of services by an ISP or mobile phone network provider) which may be used for remote gambling shall not merely by virtue of that fact amount to providing facilities for gambling on the part of the person making the facilities available. However, s 5(3) then goes on to qualify that qualification to provide that in certain specified circumstances the provision of remote communication facilities which are used for gambling will amount to provision of facilities for gambling. Finally, s 5(4) provides that the Secretary of State may by order provide that certain uses made of remote communication shall or shall not amount to provision of facilities for gambling. 2.261 Despite the careful design of the section, it gives rise to a number of questions. One preliminary question is whether, and how, the section relates to gaming machines and lotteries. Gaming machines will be considered first. Section 5 is concerned with providing facilities ‘for gambling’ (ie  ‘gaming, betting and lotteries’ within s  3). Its principal purpose is to ensure that the provision of facilities for gambling is brought under control of the Act by the interaction of ss  33 and  65. For most purposes ‘gaming machines’ are dealt with quite separately in Part 10 of the Act, which provides a definition of ‘gaming machine’ (s  235) and which contains a specific provision rendering it an offence to make a gaming machine available for use unless one of a number of specific exemptions (including the holding of an operating licence under s  65) applies – see s  242. It might, in those circumstances, be thought that gaming machines would be excluded entirely from s 5 and that providing 265

Some fundamental terminology them would not amount to providing facilities for gambling within the section. However, it appears that providing a gaming machine will qualify as providing facilities for gambling within s  5, but that it does not follow as a consequence that the provision of such a machine will amount to an offence under s  33. The reasoning which leads to this conclusion is as follows: (i)

The definition of ‘gaming machine’ in s 235 provides that: ‘(1) In this Act “gaming machine” means a machine which is designed or adapted for use by individuals to gamble (whether or not it can also be used for other purposes).’ The verb ‘to gamble’ in this context must surely be read subject to the definition of ‘gambling’ in s  3, so that a person gambles if he uses a machine to take part in gaming or betting or to participate in a lottery. Accordingly, where a person provides a gaming machine he must be providing facilities for gambling and therefore fall within s 5.

(ii) Section  5(2)(a), which exempts the provision of certain articles from amounting to providing facilities for gambling, specifically excludes a gaming machine, a fact which clearly presupposes that provision of a gaming machine will fall within the terms of s 5. (iii) Section  35 provides that s  33 (ie  the section creating the offence of providing facilities for gambling) shall not apply to making a gaming machine available for use. This provision clearly presupposes that the provision of such a machine would otherwise amount to providing facilities for gambling within s 5. (iv) However, the effect of s  35 is that although provision of a gaming machine falls within s  5 and would in principle fall within s  33, it is in fact removed from s 33 by the effect of s 35, so that the legality or otherwise of providing a gaming machine is dealt with by the Part 10 provisions and specifically by s 242.1 1 This conclusion would have been put beyond argument if the definition of ‘gambling’ in s 3 had included the common formula ‘and other cognate expressions shall be construed accordingly’. However, even without this formula it is suggested that the word ‘gamble’ should be so interpreted, and this is supported by the fact that subsections in s 235 (eg (2)(a) and (b)) use the word ‘gambling’, which must be understood in its s 3 sense.

2.262 With lotteries, as with gaming machines, it appears that provision of them will amount to providing facilities for gambling within s  5, but that this will not amount to an offence under s 33. Although the expression ‘lottery’ is defined in Part  1 of the Act, the regulation of lotteries is dealt with in Part  11. This provides a definition of promoting a lottery (s  252) and contains a specific provision making it an offence to promote a lottery unless one of a number of exemptions applies, one exemption being the holding of a lottery operating licence (s  258). So again, there appears to be no necessity for the operating of lotteries to fall within s  5. However, participating in a lottery clearly falls within the s 3 definition of gambling and so falls within s 5. Nevertheless, s 34 specifically provides that the s 33 offence of providing facilities for gambling shall not apply to the provision of facilities for a lottery. 266

Some fundamental terminology

Section 5(1) 2.263 We shall now turn to consider the provisions of the section. Section 5(1) provides as follows: ‘Facilities for gambling (1) For the purposes of this Act a person provides facilities for gambling if he— (a) invites others to gamble in accordance with arrangements made by him, (b) provides, operates or administers arrangements for gambling by others, or (c) participates in the operation or administration of gambling by others.’ As the Explanatory Notes make clear, the provisions in paragraphs (a) to (c) are aimed at different levels and aspects of the operation of gambling.1 They provide three separate sets of circumstances in which a person will be held to be providing facilities for gambling, although, as will be seen, there may well be some overlap between them. As the purpose of the section is to define what amounts to ‘providing facilities’ for gambling, it is relevant to have in mind the idea of a ‘facility’, which has been defined as: ‘An amenity or service which enables something to be done’2 and of ‘facilities’, which has been defined as: ‘Favourable conditions for the easy or easier performance of something, esp. the physical means or equipment required in order to do something’.3  A  similar meaning is to be found, it is submitted, in the reference to ‘arrangements’ to gamble and ‘arrangements’ for gambling to be found in paragraphs (a) and (b). The word ‘arrangement’ has been defined as: ‘A disposition or preparation for a future event (frequently in the plural).’4 Section 5(1)(a) and (b), it is submitted, are concerned, not with the making or execution of a gambling transaction, but with the provision of facilities or arrangements for gambling, and it is likely that a very slight degree of organisation or the provision of very modest physical means or equipment to gamble would be sufficient to fall within these provisions. Section 5(1) (c), by contrast, is concerned with actual participation in the operation or administration of gambling. 1 2 3 4

Explanatory Notes to Gambling Act 2005, para 40. Shorter OED (5th edn). Shorter OED (5th edn) Shorter OED (5th edn)

‘(a)  Invites others to gamble in accordance with arrangements made by him’ 2.264 The first case where a person ‘provides facilities for gambling’ is where he invites others to gamble in accordance with arrangements made by him. The Explanatory Notes comment: 267

Some fundamental terminology ‘Paragraph (a) is aimed at people and companies who are in the business of providing gambling. Any person who offers the opportunity for people to gamble, whether at a casino or licensed betting premises or through a website, will expressly or by implication be inviting people to gamble in accordance with arrangements made by them.’1 It will be noted that this provision will apply both where the invitation to gamble is an invitation to gamble with the person making the invitation and where the invitation is an invitation to gamble with third parties under arrangements made by the person making the invitation. In cases of the second type there may be room for overlap with the provisions contained in s 5(1) (b). Examples of cases where an invitation is made by a land-based operator to gamble with him would include a bookmaker established on-course to offer betting there, an off-course bookmaker taking bets through a licensed betting office, a casino based in premises inviting customers to play against the house, and a lottery promoter offering to sell tickets in a lottery arranged by him.2 Examples drawn from the world of remote gambling would include a bookmaker offering to accept bets by telephone or over the internet, a cyber casino where players game against the casino’s server, and the online sale of lottery tickets by a promoter in his own lottery. 1 Explanatory Notes to Gambling Act 2005, para 40. 2 For the status of lotteries see 2.262 above.

2.265 Cases of a promoter inviting others to use physical arrangements to gamble with third parties would be, for example, land-based betting exchanges (where customers are invited to attend to bet, not with the owner, but with each other), licensed betting offices where the proprietor takes bets from customers as agent for another bookmaker or accepts fixed odds betting coupons as agent for the coupon betting company, casinos providing a card room where players can play games of chance against each other, and a lottery in which tickets are sold by an agent of the promoter.1 Examples of invitations made by a promoter to enable people to carry on remote gambling with third parties would be an internet betting exchange, where customers bet with each other on the internet, a gaming site where a game such as poker is carried on between live players, and a lottery in which tickets are sold online via a website hosted by an operator acting as agent for the lottery promoter.2 1 For the status of a lottery see 2.262 above. 2 For the status of a lottery see 2.262 above.

‘(b)  Provides, operates or administers arrangements for gambling by others’ 2.266 This provision is concerned with the case where a person provides etc arrangements for other people to gamble between themselves, not with him. The Explanatory Notes comment: ‘In paragraph (b), the reference to providing arrangements for gambling carries a general flavour of causing facilities to be available. The 268

Some fundamental terminology reference to operating arrangements for gambling is apt for mechanical arrangements such as a roulette wheel. Administering arrangements for gambling is a wide concept carrying a general flavour of control.’1 Paragraph (b), like paragraph (a), is concerned with the provision etc of ‘arrangements for gambling’ and the reader is referred to the discussion of this concept above. Three kinds of activity are caught, namely providing arrangements, operating arrangements or administering arrangements for gambling. A  person may, it is suggested, ‘provide arrangements’ if he in some way makes them available, even though he may play no part in the operation or administration of the arrangements. It is suggested that ‘operating arrangements’ applies to a higher level in the chain of command than ‘administering arrangements’. The word ‘operates’ has been defined as: ‘Manage, direct the operation of (a business, enterprise, etc)’,2 whilst the word ‘administer’ has been defined as: ‘Manage as a steward; carry on or execute (an office, affairs, etc)’.3 It is suggested that the senior and middle management of a business would be likely to be ‘operating arrangements’, whilst the more junior levels would be likely to be ‘administering arrangements’, but there is no hard and fast dividing line and, as the Explanatory Notes comment, the reference to ‘operating arrangements for gambling’ would cover operating a roulette wheel.4 1 2 3 4

Explanatory Notes to Gambling Act 2005, para 41. Shorter OED (5th edn). Shorter OED (5th edn) Explanatory Notes to Gambling Act 2005, para 41.

2.267 As has been noted above, there is room for overlap between s 5(1)(b) and (a) where, in the latter case, a person provides facilities for gambling by inviting other people to gamble with each other. Accordingly, all the examples given at 2.265 above are, it is suggested, cases which would also fall within s  5(1)(b). In addition, the services provided by an FOBT service provider which enable bets to be made between a bookmaker and his customers would, it is suggested, fall within s 5(1)(b). It seems clear also that the services of internet service providers, online systems providers and mobile phone networks could, if used for gambling, fall within para (b), although, as noted, where the services amount to no more than the provision of communications facilities, they will be excluded from the definition of ‘providing facilities for gambling’ by the effect of s 5(2)(c).

‘(c)  Participates in the operation or administration of gambling by others’ 2.268 This provision appears designed to apply to people who have the most direct ‘hands on’ involvement in the operation or administration of gambling by other people. The Explanatory Notes state:1 ‘Paragraph (c) is concerned with those people who are directly involved in the gambling operation itself. People who participate in the operating of gambling by others will include those who actually play a part in the gambling transaction. An example might be a croupier at a gaming 269

Some fundamental terminology table. People who participate in the administration of gambling would include those who, whilst they do not actually operate the gambling, nevertheless provide direct administrative back-up to the gambling transaction. An example would be a person who hands out betting slips for the completion of a betting transaction.’ A  person participating in the operation etc of gambling within (c) might have the status of an employee of a gambling business or of an independent contractor providing services to such a business. That such persons will be ‘providing facilities for gambling’ within s 5 is confirmed by the provisions of s  33(3), which proceeds on the assumption that such persons will be providing facilities for gambling within s  33 but exempts them from the requirement to hold an operating licence, provided they act in the course of a business carried on by a person who does hold a licence. Paragraph (c) would therefore apply to the employee of a bookmaker (who participates in the operation of gambling between the bookmaker and his customers), to a casino employee (participating in the operating of gambling between the casino and its customers) and a lottery promoter’s employee (participating in the operation of gambling between the operator and its customers).2 1 Explanatory Notes to Gambling Act 2005, para 42. 2 For the status of a lottery see 2.262 above.

2.269 The provisions of paragraphs (a), (b) and (c) give rise to a number of questions, and these will be discussed at 2.274 below following a discussion of the exemptions provided for in s 5(2) and (3).

Exemptions – section 5(2) 2.270 Section 5(2) provides for a number of exemptions in the following terms: ‘(2) But a person does not provide facilities for gambling for the purposes of this Act by virtue only of— (a) providing an article other than a gaming machine to a person who intends to use it, or may use it, in the course of any of the activities mentioned in subsection (1)(a) to (c), (b) providing, otherwise than in the course of providing, operating or administering arrangements for gambling or participating in the operation or administration of gambling, an article to a person who intends to use it, or may use it, for gambling, or (c) making facilities for remote communication available for use by— (i) persons carrying on any of those activities, or (ii) persons gambling in response to or in accordance with any of those activities.’ The exemption in para (a) permits the provision of articles for use by persons who will be providing facilities for gambling within the terms of s 5(1). This 270

Some fundamental terminology exemption does not apply to gaming machines, so that, for reasons analysed at 2.261 above, it appears that the provision of a gaming machine will amount to providing facilities for gambling within s 5, albeit the provision of such a machine will not fall within the terms of s  33. The Explanatory Notes state that1 the exemption would cover ‘the supply of goods (other than a gaming machine) to a person who intends to use them to provide facilities for gambling (paragraph (a)), eg the supplier of gaming chips to a casino’. 1 Explanatory Notes to Gambling Act 2005, para 43.

2.271 The exemption contained in s 5(2)(b) covers the supply of an article to a person who intends to use it, or may use it, for gambling but who is not himself ‘providing facilities for gambling’, as that expression is defined in s  5(1)(b) or  (c). Essentially, it covers the providing of articles to persons who may use them for non-business gambling. The Explanatory Notes state1 that the exemption applies to ‘the supply of goods to a person who may use them for gambling (but not where the supply is in the course of any of the activities referred to in subsection (1)(b) or (c) (paragraph  (b)), eg  a retailer supplying a pack of playing cards to a person for domestic use’. Note that this provision does not exclude gaming machines from the exemption, so that it would appear that the supply of such a machine to a private individual for his private entertainment would not amount to the provision of facilities for gambling within s 5. The control of the use of such a machine is imposed by s  242, which provides that a person commits an offence ‘if he makes a gaming machine available for use by another’ (italics added), unless he holds a operating licence or one of a number of other exceptions apply. 1 Explanatory Notes to Gambling Act 2005, para 43.

2.272 The third exemption contained in s 5(2)(c) is the most far-reaching. Its effect is that those persons making facilities for ‘remote communication’, as defined in s  4(2), will not be ‘providing facilities for gambling’ within s 5 merely because those remote communication facilities are available for use by persons who are themselves ‘providing facilities for gambling’, or for use by persons who are using the facilities so provided for gambling. The Explanatory Notes state1 that the exemption applies to ‘electronic communications providers who do nothing more than act as a carrier of information for people providing facilities for gambling or consumers partaking in gambling (paragraph  (c)), eg  an internet service provider or mobile telephone operator’. The exemption is designed to reflect the fact that electronic communications providers such as internet service providers and mobile phone network providers cannot in a practical sense monitor or take responsibility for all of the traffic which may pass through their systems. 1 Explanatory Notes to Gambling Act 2005, para 43.

2.273 However, this exemption for electronic communications providers will not apply, and the provision by them of facilities for remote communications will amount to the provision of facilities for gambling, if their activities fall within the terms of s 5(3). This provides that: ‘(3) A person provides facilities for gambling (despite subsection (2) (c)) if— 271

Some fundamental terminology (a) he makes facilities for remote communication available for use, (b) the facilities are adapted or presented in such a way as to facilitate, or to draw attention to the possibility of, their use for gambling, and (c) the nature, adaptation or presentation of the facilities is such that— (i) they cannot reasonably be expected to be used for purposes other than gambling, or (ii) they are intended to be used wholly or mainly for gambling.’ An example of a case where facilities are ‘adapted or presented in such a way as to facilitate, or to draw attention to the possibility of, their use for gambling’ would be where a portal is created on an internet site containing a number of icons giving ‘click-through’ access to various gambling sites. This would satisfy the terms of s  5(3)(a) and (b). The question would then be whether the facilities, in that form, could ‘reasonably be expected to be used for purposes other than gambling’ or whether they were intended to be used wholly or mainly for gambling under s 5(3)(c). If, under the first limb, the portal gave access to non-gambling sites as well as gambling sites, the conclusion might well be that it could reasonably be expected to be used for purposes other than gambling, so that provision of the portal would not amount to ‘providing facilities for gambling’ within s  5(3). Under the second limb the question whether the portal was intended to be used wholly or mainly for gambling would depend upon all the circumstances, and it would no doubt be relevant to consider how many non-gambling sites could be accessed through the portal. The Explanatory Notes comment as follows:1 ‘Subsection (3) sets out the circumstances in which, despite the exception in subsection (2)(c), making available a means of remote communication will be providing facilities for gambling under the Act. This will be so where, because of the way in which the facilities have been adapted or presented, either they cannot reasonably be expected to be used for purposes other than gambling, or they are intended to be used wholly or mainly for gambling. This might include, for example, where an internet connected personal computer is adapted so that it has a home page mainly dedicated to providing links to gambling websites. It would also cover the situation where an internet connected personal computer was surrounded by signs indicating that it was available for use for gambling, and giving details of specific web pages where gambling was available.’ Helpful though these examples are they may suggest that a remote communication provider could lose his s 5(2) exemption by changes made to the facilities he provides by third parties which adapt them or present them in a particular way. The writer would question this, and would suggest that s 5(3) will normally only have effect where the facilities as made available for use by the provider are adapted or presented in the relevant sense. 1 Explanatory Notes to Gambling Act 2005, para 44.

272

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Section 5 – some questions 2.274 We will now return to s 5(1)(a)–(c) to consider certain questions. It is clear that the definition of the circumstances in which a person ‘provides facilities for gambling’ within s  5(1) is extremely wide, and difficulties may be encountered in deciding whether particular sets of arrangements fall within the definition or not. One such question has been thrown up by a passage in the Explanatory Notes which suggests that (in certain circumstances at least) the mere making of a bet may amount to the provision of facilities for gambling within s 5. This suggestion is contained in passages dealing with Part 14 of the Act, which deals with ‘Private and Non-Commercial Gaming and Betting’. Among the provisions contained in this Part is s  296(3), which provides that a person does not commit an offence of providing facilities for gambling under s 33 if he bets otherwise than in the course of a business. So, as might be expected, persons conducting private betting do not require an operating licence. However, in this connection the Notes provide as follows:1 ‘In addition, these sections [ie  295–296] contain protection for people who bet, but who are not doing so in the course of a business. The definitions set out in Part 1 of the Act mean that both parties to a bet (sometimes known as the “backer” and the “layer”) are capable of providing facilities for betting. This means that, ordinarily, anyone who offers a bet, or accepts a bet will be committing an offence under Part 3, unless he has authorisation under the Act.’ The relevant offence under Part 3 must, presumably, be the offence under s  33 of providing facilities for gambling without a licence. The passage in the Notes set out above appears to suggest that a person who merely makes a bet (eg accepting the odds offered by a bookmaker) is, or may be, providing facilities for betting within s 5.2 The writer would maintain that this is difficult to accept. The terms of s 5(1)(a)–(c) are designed to define the circumstances where a person is providing facilities for gambling, but an ordinary betting customer does not ‘provide facilities’ (within the ordinary meaning of the words), nor does he make ‘arrangements’ within the terms of paras (a) and (b), nor does he participate in the operation or administration of gambling by others within para (c). So an ordinary ‘backer’ is unlikely to fall within the s 5 definition. So far as the ‘layer’ is concerned, the question whether he falls within s  5 is likely to depend upon how the term ‘layer’ is understood. In one sense a person ‘lays’ a bet if he offers to bet that something will not occur (eg that the favourite will not win a race). In this sense, an ordinary private gambler may be a ‘layer’ and such a person will not normally be providing facilities for gambling within s 5. On the other hand, reference to ‘laying odds’ can also be understood as describing the activity of a bookmaker (who makes a book by laying odds against each runner in a race),3 and a bookmaker’s activities are of course likely to amount to ‘providing facilities for gambling’ within s 5. The question could be posed why s 296(3) was considered necessary if a private bettor is not ‘providing facilities for gambling’. A  possible explanation is that it was inserted ‘ex abundante cautela’. The Explanatory Notes to the Act also state as follows at paragraph 752: 273

Some fundamental terminology ‘Where a person is offering or negotiating bets in the course of a business (commonly known as “bookmaking”), he will require a betting operating licence under Part 5. Similarly, if someone is using betting as a way of earning a living, so that it renders it a business activity, that too may require a licence. However, there is no regulatory requirement for people who use the services of a betting operator on a non-commercial basis to obtain a licence. Nor should private bets, ie between friends, require any form of express authorisation. These sections (sc 295–296) make it clear that a person does not commit any offence under the Act if he makes or accepts a bet, or offers to do so, provided he is acting in a personal capacity, and not in the course of a business.’ The writer would accept the accuracy of the above analysis, but would suggest that the justification for it will normally derive from the fact that parties acting in the manner described will not normally be providing facilities for gambling within s 5. 1 Explanatory Notes to Gambling Act 2005, para 751. 2 It should be noted that the Explanatory Notes to the Gambling Bill expressed this view more unequivocally (at para 631), stating: ‘The definitions set out in Part 1 of the Bill mean that both parties to a bet (sometimes known as the “backer” and the “layer”) are providing facilities for betting. This means that, ordinarily, anyone who offers a bet, or accepts a bet will be committing an offence under Part 3, unless he has authorisation under the Bill.’ 3 See 2.54–2.58.

2.275 Additional questions arise under s 5(1)(b)–(c). Businesses involved in the provision of gambling frequently use contractors to provide services to them, and difficult questions may arise whether such service providers are merely providing services incidental to gambling (in which case the writer would suggest that they should fall outside s 5(1)), or whether there is a sufficiently direct connection between the services they provide and the gambling to bring them within the terms of para (b) or (c).1 Obviously, some services provided to gambling operators will be too far removed from the gambling to fall within s 5. When the clause which was to become s 5 was originally published in the Gambling Bill,2 the government gave as an example of a service provider who would not fall within s 5 an accountant providing professional services to a betting business (DCMS draft Gambling Bill Explanatory Note, November 2003, para 29). It is suggested that this provides a good example of a service provider whose services would (at least ordinarily) fall outside s 5. The scope of the provision was considered in the course of Committee debate when an attempt was made to introduce a provision enabling the Secretary of State to provide by regulation whether a specified activity or an activity carried on in specified circumstances should or should not be treated as ‘providing facilities for gambling’. It was suggested that this could be helpful in clarifying, for example, whether providing facilities for gambling includes a bank holding stake money, or a gambling operator, accountant or credit card company providing finance directly or indirectly for gambling.3 In rejecting the proposed amendment, the Minister, Mr Caborn, said: ‘The clause strikes the right balance. In particular, it catches commercial gambling operators, and those who provide services to the operator 274

Some fundamental terminology and are themselves directly involved in the arrangements for gambling. It does not catch services that are provided equally and equivalently to companies irrespective of whether their business involves gambling or gardening’.4 1 Comparable questions may arise in other contexts, eg VAT legislation. See the case of United Utilities plc v Commissioners of Customs & Excise [2004] EWCA Civ 245, 2004 LLR 376. The question was whether UUG, a provider of call centre services, was entitled to the VAT exemption on betting services provided by the EC Sixth Council Directive on VAT 77/388/EEC where it provided call centre services to the bookmaker Littlewoods. Vertex, part of UUG, acted as agent for Littlewoods in respect of a telephone betting service called Bet Direct. Vertex provided the premises, office and computer equipment and personnel to run a computer service on which the game software called Telebet was run. Vertex received phone calls made by customers of Littlewoods and accepted their bets if the odds were within parameters set on the Telebet software. If bets were not within those parameters it only accepted them with the express permission of Littlewoods. Both the High Court judge on appeal from the Tribunal and (by a majority) the Court of Appeal held that UUG was not providing facilities for placing bets within the meaning of the Sixth Directive. At first instance the judge concluded (at [46]): ‘… I arrive at the conclusion that the services provided by Vertex to Littlewoods are more accurately categorised as services which involve the provision of communications and information technology in the form of a call centre than services which involve the provision of facilities for the placing of bets’. In the Court of Appeal Jacob J said (at [32]–[33]): ‘Vertex provides essentially administrative services for Littlewoods’ betting business. The provision of purely administrative services is simply not a betting service. Vertex are not a gambling business. This conclusion is not undermined by the fact that Vertex actually “accept” the bet from the customer. Such an act is merely mechanistic – the operator “accepts” only according to criteria set by Littlewoods. Vertex have no decision or discretion in the matter.’ 2 The wording of the clause in the Bill differed in some respects from that contained in s 5, but not in a way relevant to this issue. 3 See HC Official Report SC B, 9 November 2004, PM col 072. 4 HC Official Report SC B, 11 November 2004, AM col 077.

2.276 This appears to draw a distinction between those persons ‘directly involved in the arrangements for gambling’ and those (like the accountant) who are involved indirectly simply because the business to which they are providing services happens to be a gambling business. But difficult cases may arise. Consider the following circumstances: (i)

A  digital racing provider generates digital races and transmits them to a betting establishment. The bets which customers make with the bookmaker on the digital horses or greyhounds are not made via a terminal, but are simply made over the counter, the bookmaker himself checking the results of the ‘races’ and calculating and paying winnings on winning bets. Is the digital racing provider ‘providing, operating or administering arrangements for gambling by others’ within s 5(1)(b)? That depends upon how widely the phrase ‘providing etc arrangements for gambling’ is to be interpreted. In one sense the digital racing provider is providing arrangements for gambling, because the only purpose of providing the digital races is to provide 275

Some fundamental terminology an event on which bets can be placed. On that view, the provider would be providing arrangements for gambling. But a second way of interpreting the phrase would be to say that it is the bookmaker who provides arrangements for gambling, because it is he who offers to take the bets and accepts the stakes over the counter and calculates and pays winnings. The position can be compared with the case where a race course proprietor provides a race course and arranges for races to take place there in the knowledge that bookmakers will attend the course and bet with visitors. It would, it is suggested, be artificial to regard the race course proprietor as ‘providing facilities for gambling’; it is the bookmakers who do that. If that interpretation is accepted, then the digital racing provider would not fall within section 5. On balance, the writer would suggest that the second approach is the better one, while accepting that the first is credibly arguable. (ii) It may, of course, be said that a digital racing provider is so closely connected with the betting business that it would be unsurprising if, contrary to the conclusion at (i) above, its activities fell within s 5. But take the case of businesses which do not specifically provide services for gambling. Where a bookmaker provides betting facilities on the internet he will usually require customers to transfer funds into an account (using credit or debit cards) to be held on account of stakes. Suppose the bookmaker arranges for a bank or financial institution to deal with his cash handling requirements. Where a customer transfers funds to the bookmaker, the funds are in fact transferred to the bank, which holds the money to the customer’s credit in an account, debits the account with stakes paid out on bets by the customer, and credits the account with winnings, as appropriate. In those circumstances, is the bank ‘providing, operating or administering arrangements for gambling by others’ (within s 5(1)(b)) or ‘participating in the operation or administration of gambling by others’ (s 5(1)(c))? It could be argued that it is. The payment of stakes and winnings is a fundamental aspect of any betting transaction and the bank is acting as stakeholder for the parties. This would suggest that its activities fall within s  5. On the other hand, it could be argued that it is merely providing cash handling services such as it would provide to many kinds of non-gambling businesses (like the accountant who does the accounts of a betting business but does accounts for many other kinds of businesses as well). The writer would, on balance, suggest that the bank’s activities should not be regarded as falling within s 5, but would again concede that the reverse is credibly arguable. (iii) Take, finally, the case where an internet bookmaker requires customers to pay money on account of stakes by means of credit cards. The bookmaker accepts credit card payments from companies issuing cards such as Visa and MasterCard. So there will be a contract between the bookmaker and the credit card company. The bookmaker will accept payments from the credit card company when these are authorised by the customer and, where the customer wins money from the bookmaker, the bookmaker will pay money so that it is credited to the customer’s account. Does this bring the credit card company within clause 5(1)? On one view, it could be argued that it was providing, operating or administering arrangements for gambling by the bookmaker and the 276

Some fundamental terminology customer in that it arranges for payment of stakes by customer to bookmaker and of winnings by bookmaker to customer. On the other hand, the use of the credit card in this way is exactly comparable with its use in a huge range of payment transactions which have nothing whatever to do with gambling. The writer would suggest that for this reason the credit card company’s activities should not fall within the terms of s 5.

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Chapter 3 The Gambling Commission

INTRODUCTION 3.1 A  body corporate known as the Gambling Commission was established in October 2005 in accordance with the provisions of Part  2 (ss 20–32) and Sch 4 of the Gambling Act 2005.1 The extensive Explanatory Notes to the 2005 Act described the Commission as ‘a unified regulator for gambling in Great Britain’2 and explained that, aside from spread betting (currently regulated by the Financial Services Authority) and the National Lottery (regulated at that time by the National Lottery Commission) the Commission would regulate all commercial gambling in Great Britain.3 The implementation of the 2005 Act was scheduled in stages – with the majority of the legislation coming fully into force on 1 September 20074 – and thus the Commission was in existence for some time prior to the coming into force of all provisions of the Act. The Commission took over the role and duties of the Gaming Board for Great Britain (‘the Gaming Board’) with effect from 1 October 2005 and moved to its present offices in Birmingham in June 2006. With effect from 1 October 2013 the functions of the National Lottery Commission were transferred to the Commission5 and all the property, rights and liabilities to which the National Lottery Commission was entitled or subject immediately before that date became, on that date, property rights and liabilities of the Commission. Accordingly, the Gambling Commission now regulates the National Lottery under the terms of the National Lottery Etc Act 1993.6 1 The Gambling Commission was established under the Gambling Act 2005, s  20, brought into force by the Gambling Act 2005 (Commencement No  2 and Transitional Provisions) Order 2005 (SI  2005/2455), art  2 and Schedule as from 1 October 2005. 2 Explanatory Notes to the Gambling Act 2005, para 7. 3 Explanatory Notes to the Gambling Act 2005, para 8, reflecting the Gambling Act 2005, ss 10 and 15 which exclude, respectively, spread betting and the National Lottery from the scope of the Act. 4 Article 2, para 4 of the Gambling Act 2005 (Commencement No 6 and Transitional Provisions) Order 2006 (SI  2006/3272) (as amended by the Gambling Act 2005 (Commencement and Transitional Provisions) (Amendment) (No  2) Order 2007 (SI 2007/2169) states that:

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The Gambling Commission ‘Save as provided by articles 2 to 3, the 2005 Act apart from the provisions listed in column 1 of schedule 3B shall come into force for all remaining purposes on 1 September 2007.’ Of the provisions not brought into force on that date, s 89(2) and (3), s 117(1)(d) and s 245 were repealed by the Gambling Act 2005 (Repeal) (Remote Operating Licences and Credit)Regulations 2007 (SI 2007/2321); ss 214–234 (Temporary Use Notices) were brought into force by the Gambling Act 2005 (Commencement No 7) Order 2007 (SI 2007/3155) as from 1 December 2007 and ss 7(5)–(7) and 175 and Sch 9 (in so far as they relate to large and small casinos) by the Gambling Act 2005 (Commencement No 8) Order 2008 (SI 2008/1326) as from 20 May 2008; the latter provisions, in so far as they relate to a regional casino, have not been commenced, nor has the repeal in para 17 of Sch 16 to the Act. 5 By the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013 (SI 2013/2329). 6 The Commission’s functions in relation to the National Lottery are discussed in detail in Chapter 16 and not touched on further in this chapter. Further information on this topic may also be found on the Commission’s website.

3.2 As noted on its website – http://www.gamblingcommission. gov.uk – the Gambling Commission is a ‘Non-Departmental Public Body, sponsored by the Department of Culture, Media and Sport (“DCMS”)’ whose work is funded by fees set by DCMS and paid by the organisations and individuals it licenses and, in relation to National Lottery functions, by grant from the National Lottery Distribution Fund. The Commission is comprised of (at the time of writing) eleven Commissioners appointed by the Secretary of State for Culture, Media and Sport, and has a staff of approximately 250 headed by a Chief Executive. The current Chief Executive, as her predecessor, is also a Commissioner.

OVERVIEW OF THE GAMBLING COMMISSION’S FUNCTIONS 3.3 In its role as unified regulator for gambling, the Gambling Act 2005 provides for the Gambling Commission: to issue codes of practice about the manner in which facilities for gambling are provided;1 to issue guidance to ‘licensing authorities’;2 to advise the Secretary of State for the Department of Culture, Media and Sport about the incidence of gambling, the manner in which it is carried on, its effects and its regulation;3 and to investigate and prosecute offences committed under the Act.4 In addition, and crucially, the Commission is responsible for the issue and, as necessary, review of two of the three types of licence created under the Act: operating licences5 and personal licences6 (the third being premises licences).7 1 GA 2005, s 24; and see s 5 and Chapter 2 as to the meaning of ‘the provision of facilities for gambling’. 2 GA 2005, s 25. 3 GA 2005, s 26. 4 GA 2005, s 28. 5 For operating licences, see GA 2005, Pt 5 (ss 65–126) and Chapter 6. 6 For personal licences, see GA 2005, Pt 6 (ss 127–139) and Chapter 7. 7 For premises licences, see GA 2005, Pt 8 (ss 150–213) and Chapter 10.

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The Gambling Commission

THE GAMBLING COMMISSION AND LICENSING AUTHORITIES 3.4 In order to gain an understanding of the scope of the Gambling Commission’s role, it is useful to look first at the division of responsibilities under the provisions of the Gambling Act 2005. In terms of the power to grant applications for licences under the Act there are, in broad terms, two types of authority established under the Act, the Gambling Commission itself and ‘licensing authorities’,1 each with its own set of responsibilities. There are three types of licence created under the Act: operating licences;2 personal licences;3 and, premises licences.4 The Act makes provision for the Commission to issue operating and personal licences and for the licensing authorities to issue premises licences. 1 ‘Licensing authorities’ are certain local authorities in England and Wales (and, in Scotland, a licensing board constituted under Licensing (Scotland) Act 1976, s 1): GA 2005, s 2; and see Chapters 1, 9 and 24. 2 For operating licences, see GA 2005, Pt 5 (ss 65–126) and Chapter 6. 3 For personal licences, see GA 2005, Pt 6 (ss 127–139) and Chapter 7. 4 For premises licences, see GA 2005, Pt 8 (ss 150–213) and Chapter 10.

3.5 The division of functions between the Gambling Commission and the licensing authorities is in keeping with the recommendations made in the ‘Independent Gambling Review Report’ – more commonly referred to as the ‘Budd Report’ – which was published in July 2005.The Budd Report recommended that a new single regulatory authority license all gambling operators and key workers (18.13), save that the licensing of premises should remain a local decision (albeit that it was also recommended that the decision be vested in the local authority rather than in the magistrates’ court). 3.6 This division of functions between the Commission and licensing authorities was in issue in the first case under the Act to come before the Upper Tribunal.1 In that case the Commission had refused to grant an application for a bingo operating licence to enable commercial bingo (and consequently the higher categories of gaming machine which a bingo operating licence authorises to be made available) to be offered in certain pubs. It did not consider that to do so would be consistent with the licensing objectives. The refusal was challenged on appeal and the First-tier Tribunal quashed the decision accepting the appellant’s argument that the Commission had taken into account matters which were exclusively for the licensing authorities on a premises licence application. The Commission appealed on a point of law to the Upper Tribunal where Judge Levenson essentially agreed with the Commission’s arguments, including that it had an integral role as the national body with oversight over gambling policy and regulation and acted as ‘gatekeeper’ by issuing operating and personal licences, providing guidance to local authorities and advising government; its first duty was to have regard to the licensing objectives. As such, the Commission had argued, whilst local licensing authorities were empowered to consider matters relating to individual premises, that did not mean that the Commission had no power to consider matters relating to the operating environment. The Commission urged a need for consistency in gambling policy nationally and that it should not be compelled to grant a licence if it was of the view that a particular 281

The Gambling Commission operational model could not be delivered consistently with the licensing objectives. In giving judgment, Judge Levenson held that relevant provisions of the Act placed on the Commission the main responsibility for ensuring compliance with the licensing objectives and, in particular, the protection of vulnerable persons, and that ss 159(3)2 and 169(4)3 made it clear that primacy was to be given to the decisions of the Commission on whether to grant an operating licence. The learned judge said that in the light of these provisions ‘it cannot really be the case that when such matters are at issue the legislation, having established the Commission and detailed its responsibilities, then requires the Commission to step back in individual applications and let the multitude of local licensing authorities deal with these national policy issues on a case by case basis.’ He concluded that the reasoning of the decision of the Commission’s Regulatory Panel was consistent with its powers under the Act; on that basis the appeal succeeded, although as the judge made clear, whether the decision was correct on its merits was an issue for the First-tier Tribunal to whom the case was remitted to decide in accordance with the legal basis set out in his judgment. Recognising that the issue was not beyond argument and that the case raised issues of national importance Judge Levenson also granted permission for Greene King to appeal to the Court of Appeal. The case is likely to be heard in Spring 2017. 1 Gambling Commission v Greene King Brewery and Retailing Ltd [2016]  UKUT  0050 (AAC). It should be noted that, at the time of writing, permission to appeal the Upper Tribunal’s decision to the Court of Appeal has been granted and the appeal hearing listed for 5 April 2017. 2 Which provides that a premises licence may only be applied for by someone who holds, or has applied for, an appropriate operating licence. 3 Which provides that a licensing authority may not attach a condition to a premises licence which prevents compliance with a condition of an operating licence.

THE GAMBLING COMMISSION’S STATUTORY POWERS AND DUTIES 3.7 In this chapter it is proposed to review the relevant statutory provisions of the Gambling Act 2005 which pertain to the Gambling Commission and, where relevant, briefly compare and contrast the role and function of the Commission with those of its regulatory predecessor, the Gaming Board. Although the establishment of the Gambling Commission is to be found in Part 2 of the Gambling Act 2005,1 the Commission’s functions are not found only within the sections of that Part. Although fuller treatment of their provisions is to be found elsewhere in this title, it is also necessary to consider: Part 5, which deals with operating licences;2 Part 6 with personal licences;3 Part 15 with inspection;4 and Schedules 4, 5 and 6 to the Act. As already noted,5 the Commission regulates all commercial gambling, except spread betting which is currently regulated by the Financial Conduct Authority.6 It also, since October 2013, regulates the National Lottery under its separate governing legislation.7 However, subject to certain exceptions, participating in a lottery which forms part of the National Lottery is not gambling for the purposes of the GA  2005.8 Accordingly, in addition to casinos, bingo, gaming machines and the larger society lotteries (all of which fell within the Gaming Board’s purview) the Commission has responsibility 282

The Gambling Commission for betting, including pool betting, and the two related activities newly brought into regulation by the 2005 Act, namely ‘remote’ gambling’9 and the manufacture and supply of ‘gambling software’.10   1 GA 2005, Pt 2 (ss 20–32); see 3.7.   2 GA 2005, Pt 5 (ss 65–126); and see Chapter 6.   3 GA 2005, Pt 6 (ss 127–139); and see Chapter 7.   4 GA 2005, Pt 15 (ss 303–326); and see Chapter 26.   5 See 3.1.   6 See GA 2005, s 10 which states that for the purposes of the definition of betting in s 9(1) ‘bet’ does not include a bet the making or accepting of which is a regulated activity within the meaning of s 22 of the Financial Services and Markets Act 2000. Regulated activities within that section are those set out in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544) (‘the RAO’). In March 2015 HM Treasury consulted on proposals to amend the RAO to include derivative contracts of a binary nature which are settled in cash and financial instruments within paras 4–7 and 10 of Section C  to Annex I  to the Markets in Financial Instruments Directive. This would have the effect of transferring regulation of such ‘binary options’ (which currently fall within the definition of betting) from the Commission to the FCA. The Government’s response to the consultation was expected to be published in early 2016, but as at the date of publication is still awaited.   7 The National Lottery, etc Act 1993.   8 See GA 2005, s 15. The exceptions are the offence of cheating under the GA 2005, s 42 and s 335 in relation to the enforceability of gambling contracts. But if a ‘game’ offered as part of the National Lottery were also to meet the GA 2005 definition of gaming (in s 6), and require persons taking part to participate in, or be successful in, more than three processes before becoming entitled to a prize then it falls to be treated as gaming for the purposes of the 2005 Act.   9 For a discussion of remote gambling see Chapter 17. 10 Gambling software is computer software for use in connection with remote gambling: GA 2005, s 41(2).

PART 2 OF THE 2005 ACT The Commission’s constitution 3.8 Part 2 of the Gambling Act 2005, which is entitled ‘the Gambling Commission’, is of obvious significance. It begins by creating the Commission1 and provides that the Act’s provisions about its constitution and proceedings, which are to be found in Sch 4 to the Act, shall have effect.2 On the commencement of s 21 of the Act, the previous legislation relating to the Gaming Board3 ceased to have effect4 and the functions, rights and liabilities of the Gaming Board transferred to the Commission.5 1 GA 2005, s 20(1), brought into force by the Gambling Act 2005 (Commencement No 2 and Transitional Provisions) Order 2005 (SI 2005/2455), art 2 and Schedule as from 1 October 2005. 2 GA 2005, s 20(2), brought into force by the Gambling Act 2005 (Commencement No 2 and Transitional Provisions) Order 2005 (SI 2005/2455), art 2 and Schedule as from 1 October 2005, and see 3.9. 3 Gaming Act 1968, s 10 and Sch 1. 4 GA 2005, s 21(1), brought into force by the Gambling Act 2005 (Commencement No 2 and Transitional Provisions) Order 2005 (SI 2005/2455), art 2 and Schedule as from 1 October 2005.

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The Gambling Commission 5 GA 2005, s 21(2), brought into force by the Gambling Act 2005 (Commencement No 2 and Transitional Provisions) Order 2005 (SI 2005/2455), art 2 and Schedule as from 1 October 2005. GA 2005, s 21(3)–(6) and Sch 5 contain further provisions designed to facilitate the smooth transfer of the functions etc from the Gaming Board to the Gambling Commission.

3.9 Schedule 4 to the Gambling Act 2005 deals with the constitution of the Commission in first providing that it shall consist of a chairman and other commissioners appointed by the Secretary of State,1 and setting out their tenure. Both the commissioners and the chairman must hold and vacate office in accordance with the terms of their individual appointments, subject to the provisions of Sch 4.2 A commissioner cannot be appointed for a period of more than five years or for periods (whether or not they are consecutive) exceeding 10 years in aggregate.3 The Schedule also contains provisions relating to: the staff of the Gambling Commission;4 the proceedings of the Commission;5 money;6 and, the status of the Commission.7 The Commission is required to send to the Secretary of State a report at the end of each financial year about the activities of the Commission during that year.8 1 GA 2005, Sch 4, para 1; Sch 4 was brought into force by the Gambling Act 2005 (Commencement No  2 and Transitional Provisions) Order 2005 (SI  2005/2455), art 2 and Schedule as from 1 October 2005. 2 GA 2005, Sch 4, paras 2–3. 3 GA 2005, Sch 4, para 4. 4 GA 2005, Sch 4, paras 5–6. 5 GA 2005, Sch 4, paras 7–8. 6 GA 2005, Sch 4, paras 9–15. 7 GA 2005, Sch 4, para 17. 8 GA 2005, Sch 4, para 16.

3.10 The Commission is empowered (with the Secretary of State’s consent as to terms and conditions of employment) to appoint a chief executive who may hold appointment both as the chief executive and as a commissioner (but not as chairman).1 The Commission’s first appointed a chief executive,2 who held office until 30 September 2015 was also appointed a commissioner as is her successor.3 Schedule 4 also contains express provision for delegated decision-making. It states4 that the Commission may delegate a function (including in particular a discretionary function, the function of conducting a licence review and the function of determining whether to revoke a licence or whether to impose a requirement to pay a penalty) to a commissioner, a committee consisting of commissioners or of one or more commissioners and one or more employees of the Commission, or an employee of the Commission. In exercise of these powers the Commission has established a Remuneration Committee, an Audit Committee and a National Lottery Committee. It has also made arrangements for ‘regulatory panels’ with a quorum of two commissioners to which certain licensing and review decisions are reserved, and has set up and published on its website, and keeps under review, its scheme of delegation setting out what those reserved matters are and delegating other licensing and review functions to various levels of staff.5 1 GA 2005, Sch 4, para 5. 2 Mrs Jenny Williams, who prior to her appointment was Chief Executive of the Gaming Board.

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The Gambling Commission 3 Ms Sarah Harrison, who prior to her appointment on 1 October 2015 was a senior Partner at Ofgem. 4 GA  2005, Sch  4, para  8 as amended with effect from 1  October 2013 by the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013 (SI 2013/2329). 5 See Appendix 8 to the Commission’s Corporate Governance Framework most recently revised (at the time of writing) in September 2015. As to the grant and review of operating and personal licences, see respectively Chapters 6 and 7.

3.11 Schedule 5 to the Gambling Act 2005 contains provisions relating to the transfer of the functions, rights and liabilities of the Gaming Board to the Gambling Commission.1 1 GA  2005, Sch  5, brought into force by the Gambling Act 2005 (Commencement No 2 and Transitional Provisions) Order 2005 (SI 2005/2455), art 2 and Schedule as from 1 October 2005.

Promotion of the licensing objectives 3.12 Of central importance to the operation of the 2005 Act is the Commission’s duty to promote the ‘licensing objectives’,1 that is to say the objectives of: preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime; ensuring that gambling is conducted in a fair and open way; and protecting children and other vulnerable persons from being harmed or exploited by gambling. The duty is expressed in this way:2 ‘In exercising its functions under the Act the Commission shall aim— (a) to pursue, and wherever appropriate to have regard to, the licensing objectives, and (b) to permit gambling, in so far as the Commission thinks it reasonably consistent with pursuit of the licensing objectives.’ It will be noted from the second limb of this formulation that, subject to the overarching requirement to have appropriate regard to the licensing objectives, the regime established by the 2005 Act is, in contrast to that which preceded it, essentially permissive. 1 The duty is to be found in GA 2005, s 22, brought into force by the Gambling Act 2005 (Commencement No  2 and Transitional Provisions) Order 2005 (SI  2005/2455), art 2 and Schedule as from 1 October 2005; the ‘licensing objectives’ are set out in GA 2005, s 1, for which see Chapter 1. 2 In GA 2005, s 22.

3.13 The Commission is under a duty to prepare a statement setting out the principles to be applied by it in exercising its functions under the Gambling Act 2005,1 such statement to include an explanation of how those principles are expected to assist the Commission in its pursuit of the licensing objectives.2 The statement is also required to specify the principles to be applied by the Commission in considering applications for licences.3 The first such statement – entitled ‘Statement of Principles for Licensing and Regulation’ – was published by the Commission in December 2006, and, pursuant to the 285

The Gambling Commission Commission’s duty to review the statement from time to time and to revise it when it thinks it is appropriate4 has undergone periodic revision. The current version was published in March 2015 and is available on the Commission’s website. It incorporates by reference a further document also most recently revised in March 2015 and available on the Commission’s website, namely the Commission’s publication ‘Licensing, compliance and enforcement under the Gambling Act 2015: policy statement’. The Commission is under a duty to consult before issuing or revising its statement of principles,5 and the statement or, as the case may be, any revision must be published as soon as is reasonably practicable.6 1 GA 2005, s 23(1), brought into force by the Gambling Act 2005 (Commencement No 2 and Transitional Provisions) Order 2005 (SI 2005/2455), art 2 and Schedule as from 1 October 2005. 2 GA 2005, s 23(2). 3 GA 2005, s 69(4), brought into force by The Gambling Act 2005 (Commencement No  6 and Transitional Provisions) Order 2006 (SI  2006/3272) as from 1  January 2007; and see 3.29. 4 GA 2005, s 23(3)–(4). 5 GA 2005, s 23(5). The consultees, which include the Secretary of State, are listed in the Act. 6 GA 2005, s 23(4).

Codes of practice 3.14 Under s 24 of the Gambling Act 2005, the Gambling Commission is under a duty to issue at least one code of practice about the manner in which facilities for gambling are provided (whether the provision is by a licence holder under the Act or by another person).1 This duty is coupled with a power to revise or revoke the code.2 1 GA 2005, s 24(1) and (7); s 24 was brought into force by the Gambling Act 2005 (Commencement No  2 and Transitional Provisions) Order 2005 (SI  2005/2455), art 2 and Schedule as from 1 October 2005, save s 24(9), which was brought into force by the Gambling Act 2005 (Commencement No 6 and Transitional Provisions) Order 2006 (SI 2006/3272), art 2(4) as from 1 September 2007. 2 GA 2005, s 24(4). The code and any revision must be published by the Gambling Commission in a manner which the Commission thinks likely to bring it to the attention of those whose activities it concerns: GA 2005, s 24(6).

3.15 That code (or if more than one code is issued under s 24 of the Act, one of them) must describe arrangements that should be made by a person providing facilities for gambling: to ensure that gambling is conducted in a fair and open way; to protect children and other vulnerable persons from being harmed or exploited by gambling; and to make assistance available to persons who are or may be affected by gambling-related problems.1 The Act describes provisions which a code includes pursuant to this obligation as ‘social responsibility provisions’.2 In addition, the Commission has a power to include in a code provisions about how facilities for gambling are advertised or described.3 Before issuing or revising a code, the Commission is under a duty to consult those persons listed in s 24(10) and it has a discretion to consult those persons listed in s 24(11).4 1 GA 2005, s 24(2).

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The Gambling Commission 2 GA 2005, s 82(1), brought into force by the Gambling Act 2005 (Commencement No  6 and Transitional Provisions) Order 2006 (SI  2006/3272), art  2(4) as from 1 September 2007. 3 GA 2005, s 24(3). In its principal code the Commission has provided that licensees should comply with the advertising codes of practice which apply to the form and media in which they advertise their gambling. This includes, for example, the CAP and BCAP codes issued under the auspices of the Advertising Standards Authority. 4 GA 2005, s 24(10) and (11).

3.16 The Act provides for the consequences of failing to comply with a provision of a code and its admissibility in criminal or civil proceedings, as well as the weight it is to be given by courts or tribunals and by the Commission in exercising its functions under the Act.1 Whilst failure to comply with a code does not of itself make a person liable to criminal or civil proceedings, this is subject to any provision which makes an exception to an offence dependent on compliance with a code. Such a provision is to be found, for example, in s 33(2) and (3) of the Act which provide that s 33(1) (which creates the principal offence of providing facilities for gambling)2 does not apply to any activity carried on by a person who holds an operating licence, or who acts in the course of a business carried on by such a licence holder, provided the activity is carried on in accordance with the terms and conditions of the licence. Non-compliance with a social responsibility provision of a code is a breach of a statutory condition3 attached to an operating licence and can therefore give rise to criminal liability in the same way as breach of any other licence condition.4 1 2 3 4

GA 2005, s 24(8) and (9). For offences under the Act see Chapter 4. GA 2005, s 82(1). For licence conditions generally see Chapter 6.

3.17 On 1  June 2007 the Commission published its principal code under s  24 of the Act together with its general conditions for operating licences under s 75.1 This code, as the general operating licence conditions, has undergone a number of revisions over the years, following statutory consultation, and at the time of writing the current edition is that published in February 2015 as updated in April 2015. As with other such publications it is available on the Commission’s website. The code covers many areas, as illustrated by its section headings: Cooperation and responsibility for third parties; Financial requirements – Anti-money laundering; Protection of children and other vulnerable persons; ‘Fair and open’ provisions; Marketing; Complaints and disputes2; Gambling licensees’ staff; Information requirements; Primary gambling activity; and Local risk assessments. At the same time the Commission published the code of practice which it is required to issue on access to casino premises for children and young persons. Ensuring compliance with this code is a statutory condition of casino premises licences.3 Other codes which the Commission has issued include: its Gaming Machine Permits Code of Practice4 (which contains provisions relating to the location and operation of gaming machines, compliance with which is a condition of club gaming, club machine and licensed premises gaming machine permits) and its 287

The Gambling Commission Code of Practice for Equal Chance Gaming in Clubs and Premises with an Alcohol Licence.5 1 These were published together in a single document entitled ‘Licence Conditions and Codes of Practice’ and referred to by the Commission and gambling industry by the acronym ‘LCCP’. An updated LCCP was issued in July 2016, coming into force on 31 October 2016. Reflecting its broad compass the LCCP has followed a colour coding scheme: Part I: (in orange) the suite of general conditions attached to operating licences; Part II: (in blue) the principal code of practice, distinguishing between ‘social responsibility’ provisions and ‘ordinary’ provisions (the social responsibility provisions are in shaded boxes within the text); and Part III: (in purple) the suite of general conditions attached to personal licences. 2 It is worth noting that, in relation to disputes with their customers about the outcome of gambling transactions, the code requires licensed operators to ensure access to alternative dispute resolution (‘ADR’) and that, in the gambling sector, the Commission is the ‘competent authority’ responsible for the approval of ADR entities pursuant to the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 (SI  2014/542) as amended. 3 GA 2005, s 176; and for conditions on casino premises licences see Chapter 10. 4 For a more detailed discussion of this code see Chapter 25. 5 For a more detailed discussion of this code see Chapter 12.

Guidance to licensing authorities 3.18 Section 25 of the Gambling Act 2005, imposes a duty on the Gambling Commission to issue guidance to local authorities about the manner in which they exercise their functions under the Act and, in particular, the principles to be applied in exercising those functions.1 Local authorities must have regard to this guidance,2 which the Commission is under a duty to publish.3 Before issuing such guidance, the Commission is under a duty to consult those persons listed in s 25(4) and it has a discretion to consult those persons listed in s 25(5).4 1 GA  2005, s  25(1); s  25 was brought into force by the Gambling Act 2005 (Commencement No  2 and Transitional Provisions) Order 2005 (SI  2005/2455), art 2 and Schedule as from 1 October 2005. The meaning of ‘local authorities’ for the purpose of the GA 2005, s 25 is set out in s 25(6). 2 GA 2005, s 25(2). 3 GA 2005, s 25(3). 4 GA 2005, s 24(10) and (11).

3.19 The Commission first issued its Guidance to Licensing Authorities (‘the GLA’) in April 2006. The GLA is now in its fifth edition, published in September 2015 Whilst, as already mentioned, local authorities have a general duty to have regard to the GLA, it has a particular role to play in respect of applications for premises licences and certain permits. In exercising their functions in respect of premises licences under Part 8 of the Act, licensing authorities are required to aim to permit premises to be used for gambling in so far as they think it (among other things) ‘in accordance with any relevant guidance issued by the Commission under s 25’.1 1 GA 2005, s 153(1).

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The Gambling Commission 3.20 In this context, one aspect of the GLA came before the courts in January 2008. The case1 related to the circumstances in which a licensing authority was permitted to grant a premises licence. The Commission had expressed the view in the GLA current at the time that an applicant could not obtain a premises licence until the premises in which it was proposed to offer gambling had been constructed and were ready to be used for gambling and that, whilst this was a question of fact and degree, where premises were not ready for use, the appropriate application for the gambling operator to make was for a provisional statement.2 In reliance on this guidance, the licensing authority declined to determine a particular licence application for premises to which alterations had still to be made. That decision was challenged by way of judicial review. The licensing authority conceded that it had a duty to determine the application, ie  to grant or refuse it. However, in order to avoid the possibility (if the matter were simply referred back with a direction to determine the application) of a refusal in reliance on the GLA leading to a fresh challenge, the court accepted the claimant’s invitation to make a declaration. The court declared that, despite the relevant paragraphs of the GLA, a premises licence may lawfully be granted in respect of premises that are not ready to be used for gambling, the premises being about to be or in the course of construction or alteration, and they being premises which the applicant has a right to occupy and in respect of which he holds an operating licence. In its judgment the court went on to stress that there was, however, no obligation on the authority to grant and that it would be for it ‘to consider whether appropriate conditions can be crafted to cater for the situation that the premises are not yet in the state in which they ought to be before gambling takes place’, and that the authority is ‘entitled to decide that it is appropriate to grant a licence subject to conditions’. Following that judgment, the Commission, after consultation as required by the Act, revised the GLA in its 3rd edition. Its current guidance on this aspect is to be found at paras 7.59–7.64 of the 5th edition of the GLA. 1 R  (on the application of Betting Shop Services Limited) v Southend-on-Sea Borough Council [2008] EWHC 105 (Admin); for a more detailed discussion of the case, and its relevance to construction of s 159 of the Act, see Chapter 10. 2 For a discussion of applications for provisional statements, see Chapter 10.

Advice to Secretary of State 3.21 Section 26 of the Gambling Act places the Commission under a duty to advise the Secretary of State about the incidence of gambling, the manner in which gambling is carried on, the effect of gambling, and the regulation of gambling.1 Such advice must be given in response to a request from the Secretary of State or on such other occasions as the Commission thinks appropriate,2 and must be copied to the Scottish Ministers.3 The Commission has provided formal advice to the Secretary of State under s 26 on a number of occasions for example by publication in 2007 and again in 2010 of a British Gambling Prevalence Study, which it had commissioned from the independent National Centre for Social Research, publication of a review also commissioned from the National Centre for Social Research on findings from the Health Survey for England 2012 and the Scottish Health Survey 2012, in relation to the Triennial Review of Stake and Prize Limits on Gaming Machines 289

The Gambling Commission and data relating to the use of category B2 and B3 gaming machines in 2013 and more recently, in March 2015, in relation to gaming machines research carried out by the Responsible Gambling Trust. 1 GA 2005, s 26(1), brought into force by the Gambling Act 2005 (Commencement No 2 and Transitional Provisions) Order 2005 (SI 2005/2455), art 2 and Schedule as from 1 October 2005. 2 GA 2005, s 26(2). 3 GA 2005, s 26(3).

Compliance and investigation and prosecution of offences 3.22 Section 27 of the Gambling Act 2005 provides that the Commission may undertake activities for the purpose of assessing compliance with provision made by or by virtue of the Act and whether an offence is being committed under or by virtue of the Act; s  28 of the Act empowers the Commission to investigate whether an offence has been committed under the Act and (in England and Wales, but not in Scotland) to institute criminal proceedings in respect of an offence under the Act.1 The power to investigate offences may be exercised either in response to information received or on the Commission’s own initiative.2 The procedure to be adopted by the Commission in order to institute criminal proceedings is the laying of information before a magistrates’ court seeking the issue of a summons.3 The Commission’s approach to the investigation of offences, and the relationship between regulatory and criminal investigations, is set out in its ‘Statement of principles for licensing and regulation’ and accompanying ‘Licensing, compliance and enforcement under the Gambling Act 2005: policy statement’ referred to at 3.13. The Commission focuses on the investigation of illegal gambling and crimes which affect the outcome of gambling, such as cheating where that affects other players, together with other bodies or regulators as necessary, and on other offences related to gambling such as money laundering offences under the Proceeds of Crime Act 20024 and illegal money lending. As a general rule the Commission does not pursue criminal investigations into licensed operators because, in most cases, the matters under investigation can be dealt with satisfactorily by exercise of the Commission’s regulatory powers, as to which see later in this chapter. If investigations reveal evidence that a serious criminal offence may have been committed falling outside the Commission’s jurisdiction to investigate it may pass the information it possesses to the police or other appropriate body. 1 GA  2005, ss  27 and 28(1), brought into force by the Gambling Act 2005 (Commencement No  2 and Transitional Provisions) Order 2005 (SI  2005/2455), art 2 and Schedule as from 1 October 2005. 2 GA 2005, s 28(2). 3 Under s 1 of the Magistrates’ Courts Act 1980. 4 By virtue of the Proceeds of Crime Act 2002 (References to Financial Investigators) Order 2009 (SI 2009/975) the Commission has certain powers under the Proceeds of Crime Act as set out in Sch 1 to the Order.

3.23 These sections, coupled with the sections in Part 5 of the Act dealing with licence reviews,1 provide the statutory basis for the Commission’s compliance and enforcement function. Reference has already been made to 290

The Gambling Commission the Commission’s published policy statement ‘Licensing, compliance, and enforcement under the Gambling Act 2005’ which sets out the principles it intends to apply in exercising these functions. Among the tools which the Commission has available to it in carrying out its compliance and enforcement role are the information exchange powers referred to later in this chapter, the power to require the holder of an operating (or personal) licence to produce a written or electronic record relating to the licensed activities, provide a copy of such a record, or provide information about such activities,2 and the power to designate employees of the Commission (and to appoint persons other than Commission employees as) enforcement officers for the purposes of the Act.3 Enforcement officers are empowered to undertake activities for the purpose of assessing compliance with provision made by or by virtue of the Act and whether an offence is being committed under or by virtue of the Act,4 and are given certain specific rights of entry to premises and powers of inspection.5 The Commission has designated all staff in its compliance and enforcement directorate, certain staff in its intelligence department and an in-house forensic financial investigator as enforcement officers, but has not appointed any persons other than employees. It might wish to do so if technical expertise were required, in respect of any investigation, in areas not covered ‘in house’ (eg  forensic accounting or computer software). 1 For a detailed discussion of review of operating and personal licences see Chapters 6 and 7 respectively. 2 GA 2005, s 122(1), brought into force by the Gambling Act 2005 (Commencement No 6 and Transitional Provisions) Order 2006 (SI 2006/3272), art 2(1) and Sch 1 as from 1 January 2007, and see for licence review powers generally, Chapter 6. 3 GA 2005, s 303(1), brought into force by the Gambling Act 2005 (Commencement No 6 and Transitional Provisions) Order 2006 (SI 2006/3272), art 2(2) and Sch 2 as from 21 May 2007. 4 GA  2005, s  305, brought into force by the Gambling Act 2005 (Commencement No  6 and Transitional Provisions) Order 2006 (SI  2006/3272), art  2(4) as from 1 September 2007. 5 GA 2005, ss 306–326 brought into force by the Gambling Act 2005 (Commencement No  6 and Transitional Provisions) Order 2006 (SI  2006/3272), art  2 as from, variously, 21 May, 1 August and 1 September 2007; for exercise of powers of entry and inspection generally see 3.30 and Chapter 26.

Information powers 3.24 Section 29 of the Gambling Act 2005 empowers the Commission to require a licensing authority to provide information that forms part of a register maintained by the authority under the Act or that is in the authority’s possession in connection with a provision of the Act.1 Such a requirement may include a requirement for information to be compiled or collated in a specified manner and/or provided in a specified form.2 A licensing authority must comply with a requirement under s 29.3 1 GA 2005, s 29(1), brought into force by the Gambling Act 2005 (Commencement No  6 and Transitional Provisions) Order 2006 (SI  2006/3272), art  2(4) as from 1 September 2007. 2 GA 2005, s 29(2). 3 GA 2005, s 29(3).

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The Gambling Commission 3.25 Section 30 of the Gambling Act 2005 provides for the exchange of information between the Gambling Commission and certain specified persons and bodies, and should be considered along side s 350 (in Part 18 of the Act) which relates to the mutual exchange of information between some of those specified persons and bodies. The Commission is expressly empowered to provide information received by it in the exercise of its functions to any of the persons or bodies listed in Sch 6 to the Act for use in the exercise of such person’s or body’s functions or for the purpose of a function of the Commission.1 Where it provides information to a person or body listed in the Schedule for use in the exercise of that person’s or body’s functions, the Commission is entitled to charge a fee.2 Any of the persons or bodies listed in Parts 1 or 2 of Sch 6 may provide to the Commission, for use in the exercise of its functions, information received by the person or body in the exercise of his or its functions.3 A person or body listed in Sch 6, Pt 1 may provide information to any other person or body so listed for use in the exercise of a function under the Gambling Act4 and may provide information obtained in the course of the exercise of a function under the Act to the Commissioners for Revenue and Customs (‘HM Revenue and Customs’) for use in the exercise of any function.5 The Commission may also provide information received by it in the exercise of its functions to the Comptroller and Auditor General for use in the exercise of his functions under Part 2 of the National Audit Act 1983,6 and to any person if the provision of such information is for the purpose of a criminal investigation or criminal proceedings, in either case whether in the United Kingdom or elsewhere.7 The provision of information under any of these powers may be made subject to conditions, whether as to use, storage, disposal or otherwise,8 but it is expressly provided that none of them authorises a disclosure which would contravene the Data Protection Act 1998.9 1 GA 2005, s 30(1), brought into force by the Gambling Act 2005 (Commencement No 2 and Transitional Provisions) Order 2005 (SI 2005/2455), art 2 and Schedule as from 1 October 2005. 2 GA 2005, s 30(7). 3 GA 2005, s 30(2). 4 GA 2005, s 350(1), brought into force by the Gambling Act 2005 (Commencement No 6 and Transitional Provisions) Order 2006 (SI 2006/3272), art 2(1) and Sch 1 as from 1 January 2007. 5 GA 2005, s 350(2); that section refers to her Majesty’s Commissioners of Customs and Excise but by virtue of s 50(1) of the Commissioners for Revenue and Customs Act 2005 is, so far as is appropriate, to be read as a reference to HMRC. 6 GA 2005, s 30(3). 7 GA 2005, s 30(4). 8 GA 2005, s 30(6) and s 350(3). 9 GA  2005, s  352, brought into force by the Gambling Act 2005 (Commencement No 2 and Transitional Provisions) Order 2005 (SI 2005/2455), art 2 and Schedule as from 1 October 2005.

3.26 Schedule 6 to the Act is divided into three parts listing, respectively, persons with functions under the Act (Pt  1),1 enforcement and regulatory bodies (Pt  2),2 and sport governing bodies (Pt  3),3 and contains Notes, to which reference is made below. The schedule has undergone amendment over the years as the regulatory landscape and identity of certain regulators has changed. In particular a number of sports governing bodies, including 292

The Gambling Commission international bodies, have been added to Pt 3 under the Secretary of State’s power to add an entry to any of the three lists, remove an entry from a list, move an entry from one list to another or add, remove or vary a Note,4 either generally or in relation to a specified person or body, or class or description of persons or bodies.5 An entry added to the list may specify a person or body or a class or description of persons or bodies.6 A Note relating to an entry for a person or body situated outside the United Kingdom may provide for the entry to have effect only in relation to the law of a part of the United Kingdom.7 At the time of writing, there are three Notes to Sch 6. The first provides that where any listed person or body is by virtue of an enactment restricted in the use that may be made of information provided to them by another, nothing in s  30 or s  350 overrides that restriction, either in relation to information provided to them by the Commission or so as to permit the disclosure of information to the Commission which was provided to the person or body by another. The second Note (which does not apply in the case of information provided by the Commission to the Comptroller and Auditor General for use in the exercise of his functions under Part 2 of the National Audit Act 1983)8 provides that where by virtue of an enactment the use that may be made of information supplied by a person or body listed in the Schedule is restricted, or where that information may be further disclosed only with the consent of the person or body which provided it, then the prohibition or restriction on further disclosure applies to the supply of information to anyone by virtue of the Act and to the supply of information to the Commission, whether or not by virtue of the Act. The third Note provides that information provided to a person or body in reliance on the Act by HM Revenue and Customs may not be further disclosed without the latter’s consent. 1 At the time of writing, Pt 1 of Sch 6 lists: a constable or police force, an enforcement officer, a licensing authority, HM  Revenue and Customs, the First-tier Tribunal, the Secretary of State and the Scottish Ministers. 2 At the time of writing, Pt 2 of Sch 6 lists: the Charity Commission, the Financial Conduct Authority, the Horserace Betting Levy Board, the National Crime Agency, the Competition and Markets Authority, the Pensions Regulator, the Prudential Regulation Authority and the Serious Fraud Office. 3 At the time of writing, Pt 3 of Sch 6 lists: the Association of European Professional Football Leagues (established in Switzerland), Bowls England, the British Boxing Board of Control Limited, the British Darts Organisation Limited, the British Horseracing Authority Limited, British Lions Limited (incorporated in Ireland), Celtic Rugby Limited (incorporated in Ireland), the Commonwealth Games Federation, England Hockey, English Squash and Racketball Limited, the England and Wales Cricket Board Limited, the European Rugby Cup Limited (incorporated in Ireland), Fédération International de Football Association (FIFA), the Football Association Limited, the Football Association of Wales Limited, the Greyhound Board of Great Britain Limited, the International Association of Athletics Federations, the International Cricket Council, the International Hockey Federation, the International Olympic Committee, the International Rugby Board, the International Tennis Federation (incorporated in the Bahamas as ITF Limited, the Lawn Tennis Association, the Irish Football Association, the Jockey Club, the London Marathon Limited, the Motor Sports Association Limited, the Professional Golfers’ Association, the Rugby Football League Limited, the Rugby Football Union, the Rugby League International Federation, the Scottish Football Association Limited, the Scottish Rugby Union PLC, Six Nations Rugby Limited, UK  Athletics Limited, the Union of European Football Associations, the Welsh Rugby Union Limited, the World Darts Federation, and the World Professional Billiards and Snooker Association Limited.

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The Gambling Commission 4 GA 2005, s 351(1), brought into force by the Gambling Act 2005 (Commencement No 6 and Transitional Provisions) Order 2006 (SI 2006/3272), art 2(1) and Sch 1 as from 1 January 2007. 5 GA 2005, s 351(4). 6 GA 2005, s 351(3). 7 GA 2005, s 351(2). 8 GA 2005, s 30(5).

3.27 Pursuant to these provisions, and more generally, the Commission has entered into Memoranda of Understanding with certain Sch 6 bodies,1 overseas gambling regulators2 and others3, covering the circumstances in which it is expected that the Commission and those bodies would exchange information and the procedures to be followed as to such matters as the classification and handling of material disclosed. Contrary to arguments advanced in some quarters, the Commission considers that its power to share information with third parties is not circumscribed by s 30; that the power is not in all circumstances restricted to bodies included in Sch 6. Unlike some regulatory regimes, that set by the GA 2005 contains no general prohibition on the provision of information by the Commission to others. This means that it is not unlawful for the Commission to provide information to others (for example other gambling regulators) if it considers it appropriate to do so provided it complies with any generally applicable legal requirements, such as those that arise under data protection law where personal data is concerned.4 1 Including the National Crime Agency, HMRC, the Horserace Betting Levy Board, the Charity Commission, the International Olympic Committee, and FIFA. 2 Including Alderney Gambling Control Commission, Autorité de régulation des jeux en ligne (Authority for regulation of online gambling – France) (ARJEL), Casino Regulatory Authority of Singapore, Danish Gambling Authority, Isle of Man Gambling Supervision Commission and Registrar of alcohol and gaming – Ontario. 3 Including the ASA, Association of Chief of Police Officers, ACRO (Criminal Records Office), Better Regulation Delivery Office, European Sports Security Association (ESSA), Federation Against Copyright Theft (UK) – (FACT), IBAS, The Information Commissioner, International Paralympic Committee, International Sports Monitoring, Phonepay Plus, UK  Anti-Doping and World Rugby. 4 Unlike, for example, the Local Government Act 1972, s  111(1) which provides that local authorities have power to do anything which ‘is calculated to facilitate or is conducive or incidental to the discharge of any of their functions’, the Gambling Act 2005, s  20, which establishes the Commission as a body corporate, does not set out an express power for it to do anything necessary to discharge its functions. However, it is settled law that even where no statutory provision is made for an ‘incidental’ power a public body will usually have an implicit power to do those things that may reasonably and fairly be consequential upon, or incidental to, its express statutory functions: see for example McCarthy & Stone (Developments) Ltd v Richmond-upon-Thames London Borough Council [1992] 2 AC 48 at 68 per Lord Lowry; and note the wellknown case of Attorney General v Great Eastern Railway Company 5 Appeal Cases 473 for the proposition that ‘whatever may fairly be regarded as incidental to, or consequential upon, those things which the legislature has authorised, ought not (unless expressly prohibited) to be held, by judicial construction, to be ultra vires.’

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The Gambling Commission

Consultation 3.28 As originally enacted the GA  2005 imposed a duty on the Gambling Commission to consult the National Lottery Commission whenever, in the course of the exercise of its functions, it became aware of a matter about which the National Lottery Commission was likely to have an opinion,1 or when directed so to do by the Secretary of State.2 The need for such consultation might have arisen, for example, if there were to come to the Commission’s attention a proposed lottery scheme being marketed both to the operators of the National Lottery and to non-commercial societies holding lottery operating licences and which the Commission considered to be unlawful. However, as explained earlier in this chapter, the two bodies have since merged, and with effect from 1  October 2013 the functions of the National Lottery Commission were transferred to the Commission. The Commission still has a parallel statutory duty to consult with HM Revenue and Customs.3 1 GA 2005, s 31(1), brought into force by the Gambling Act 2005 (Commencement No 2 and Transitional Provisions) Order 2005 (SI 2005/2455), art 2 and Schedule as from 1 October 2005 but repealed by the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013 (SI 2013/2329). 2 GA 2005, s 31(2). 3 GA 2005, s 32, brought into force the Gambling Act 2005 (Commencement No 2 and Transitional Provisions) Order 2005 (SI 2005/2455), art 2 and Schedule as from 1 October 2005.

PARTS 5 AND 6 OF THE 2005 ACT 3.29 Parts 5 and 6 of the Gambling Act 2005 contain the provisions (ss  65–126 and ss  127–139 respectively) which set up and govern the Act’s regime for the licensing by the Gambling Commission of those who provide facilities for gambling1 and those who perform the functions of certain management offices or operational functions2 in connection with the provision of those facilities or those who provide them. These provisions are dealt with in detail in Chapters 6 and 7 respectively, but it may be helpful to draw attention in this chapter, albeit in brief outline only, to certain aspects of the Commission’s role in the Act’s licensing regime. 1 As to the meaning of ‘the provision of facilities for gambling’ see GA 2005, s 5 and Chapter 2. 2 For the definition of ‘management office’ and ‘operational function’ see GA 2005, s 80 and Chapter 6 and Chapter 7.

3.30 The first point to note is that when considering applications for licences the Commission is required to have regard to the licensing objectives and to ‘form and have regard to an opinion of the applicant’s suitability to carry on the licensed activities’.1 For the purpose of considering suitability the Commission may, in particular, have regard to the integrity, competence and financial and other circumstances of the applicant or of a person relevant to the application.2 This test of ‘suitability’ replaces but has similarities to the different tests which the Gaming Board 295

The Gambling Commission had to apply when considering applications for certificates of consent from potential casino or bingo licence applicants (whether the applicant would be ‘capable of and diligent in’ securing compliance with the legislation and conducting gaming fairly and properly) and certificates of approval for gaming staff or machine suppliers (whether the applicant was a ‘fit and proper’ person to carry out the relevant functions). The statement which the Commission is required to maintain by s  23 must specify the principles to be applied by it in considering licence applications.3 In its publication Licensing, compliance and enforcement under the Gambling Act 2005: policy statement, which is incorporated into its s  23 Statement of principles for licensing and regulation, and is available on its website, the Commission sets out in some detail at paras 3.11 and following, its approach to the assessment of an applicant’s suitability to hold a licence. 1 GA 2005, s 70(1). 2 GA 2005, s 70(2). 3 See 3.12 above.

3.31 The second matter worth mentioning here is that the Commission is empowered to attach conditions to operating and personal licences. These can be general conditions1 attaching to all such licences, or all in a specified class, or individual conditions2 specific to a particular licence. As already mentioned,3 the Commission published its first suite of general licence conditions alongside its principal Code of Practice in June 2007. A  number of revised specifications have been published subsequently the most recent at the time of writing being that which was published in July 2016 and due to come into effect on 31  October 2016. The power to set conditions has received judicial consideration, as is considered in more detail in Chapter 6. Additionally, the Commission has powers to review4 operating and personal licences on a number of grounds, including suspected breach of a licence condition, the acquisition of a conviction for a relevant offence,5 and that ‘for any reason’ the Commission either suspects the licensee may be unsuitable to carry on the licensed activities or ‘thinks that a review would be appropriate’.6 The regulatory sanctions open to the Commission following a review are extensive, ranging from a warning, to the imposition of additional conditions, the imposition of a financial penalty or suspension or revocation of a licence. This flexibility of response contrasts favourably with the position enjoyed by its predecessor as gambling regulator, the Gaming Board for Great Britain, which, in the case of ‘certificates of consent’ for casino applications, certificates of approval for gaming personnel and machine suppliers, and registrations of societies to promote lotteries had available to it only the final sanction of revocation. 1 GA 2005, ss 75 and 76. 2 GA 2005, s 77. 3 See 3.16 above. 4 See eg  First-tier Tribunal in Luxury Leisure Ltd v The Gambling Commission (GA/2013/0001) (13  May 2014), Judge Warren; and Greene King Brewing and Retailing Ltd v The Gambling Commission (GA/2014/0002) (2  December 2014), Judge Warren. 5 That is to say, one of the offences listed in GA 2005, Sch 7. 6 GA 2005, s 116(2).

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The Gambling Commission

PART 15 OF THE 2005 ACT 3.32 As mentioned earlier in this chapter,1 this Part of the Gambling Act 2005 provides for the appointment by the Commission of ‘enforcement officers’ who are empowered to undertake activities for the purpose of assessing compliance with provision made by or by virtue of the Act, and whether an offence is being committed under or by virtue of the Act.2 Part  15 is dealt with in detail in Chapter  25. Briefly, enforcement officers are given powers of entry without a warrant to various types of premises (other than dwellings) for various specific purposes set out in the Act,3 and to any premises (other than a dwelling) when they suspect that an offence under the Act is being or is about to be committed on the premises.4 Entry to premises to secure evidence of an offence under the Act which there are reasonable grounds to suspect has been committed on the premises, or to a dwelling, requires a warrant and the Act sets out the conditions which must be satisfied before a warrant may be granted.5 1 See 3.22 above. 2 GA  2005, s  305, brought into force by the Gambling Act 2005 (Commencement No  6 and Transitional Provisions) Order 2006 (SI  2006/3272), art  2(4) as from 1 September 2007. 3 GA 2005, ss 307–315. 4 GA 2005, s 306(1). 5 GA 2005, ss 306(2) and 318.

3.33 Section 317 of the Act sets out enforcement officers’ powers of inspection (including powers to question persons on the premises and remove and retain evidence of the commission of offences under the Act, or breach of licence condition) exercisable following lawful entry to premises. Section 319 provides that enforcement officers may only exercise their powers of inspection, copying of documents and removal of evidence in relation to records where those records relate entirely to the matters to which the power of entry which they are exercising relates. However,1 a justice of the peace may disapply that provision by warrant if satisfied notice of intention to apply for such a warrant has been given, or the purpose of exercising the power of entry may be frustrated or seriously prejudiced by the giving of such notice. Regulations under s 3222 set down procedures to be followed, including the giving of notices of inspection, and a person exercising a power of entry is required to have regard to relevant provisions of the codes of practice under the Police and Criminal Evidence Act 1984. 1 GA 2005, s 319(2) and (3). 2 Gambling Act 2005 (Inspection) (Provision of Information) Regulations 2007 (SI 2007/319).

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Chapter 4 General offences

INTRODUCTION 4.1 Offence-creating sections appear within various Parts of the Gambling Act 2005. However, two Parts of the Act, Parts 3 and 4, are concerned exclusively with offences. The provisions of Part 4 of the Act – which create offences relating to children and young persons – are considered later in this title.1 Under Part 3 of the Act, which is considered in this chapter, a number of ‘general’ offences are created.2 Whilst this chapter is primarily concerned with the way in which these general offences are framed within Part 3 of the Act, since the Gambling Commission is the principal regulator of commercial gambling in Great Britain it should also be noted that the Commission provides helpful guidance as to its policies in relation to matters such as the carrying out of compliance activities, enforcement and prosecutions and the principles to be applied in determining financial penalties. At the time of publication of this title, chief amongst the Commission’s published guidance in relation to offences under the Gambling Act 2005 are: its ‘Licensing, compliance and enforcement policy statement’ (March 2015), its ‘Statement of principles for determining financial penalties’ (September 2009) and, together with Local Authorities Coordinators of Regulatory Services (LACORS) and the Association of Chief Police Officers (ACPO), the ‘Gambling Act 2005 – Joint Compliance and Enforcement Statement’ (2007). Further, and as required under s 25 of the Act, the Commission also gives guidance to licensing authorities as to the discharge of their functions, this guidance currently to be found in ‘Guidance to licensing authorities’ (5th edn) September 2015 (Parts 17, 18 and 19 updated September 2016). 1 See GA 2005, Pt 4 (ss 45–64) and Chapter 5. See s 3 and Chapter 2 for the meaning of ‘gambling’. 2 GA 2005, Pt 3 (ss 33–44).

4.2 Before turning to the detail of the general offences created under Part 3 of the 2005 Act, it is instructive to consider the purpose underlying their creation and, in fact, underlying the creation of other offences elsewhere within the Act. It is submitted that the intention behind all the offences 299

General offences created under the Act is essentially twofold: to give efficacy to the Act’s regulatory system, and to further the Act’s ‘licensing objectives’.

EFFICACY OF THE REGULATORY SYSTEM 4.3 The express intention underlying the GA  2005 was that it should contain a regulatory system ‘…  to govern the provision of all gambling in Great Britain, other than the National Lottery and spread betting’.1 Although the Act contains provisions which, in certain circumstances, allow for the lawful carrying on of gambling on an occasional2 or temporary basis,3 the main instruments of regulation are licences and permits. Clearly a regulatory system based on licences and permits needs sanctions to ensure compliance. With the exceptions of the National Lottery and spread betting (which are regulated by, respectively, the National Lottery etc Act 1993 and the Financial Services and Markets Act 2000), the regulatory system is given efficacy in that the Gambling Act 2005 renders all gambling in Great Britain unlawful unless it is permitted by the 2005 Act itself.4 If, therefore, an activity in Great Britain constitutes ‘gambling’ within the meaning of s 3 of the 2005 Act,5 it will generally be the case that such permission will be derived from holding the requisite licence or permit. Although more detailed discussion of the Act’s provisions relating to licences and permits is to be found elsewhere in this title, the types of licences and permits created under the Act and the authority which they provide should be borne in mind when considering the provisions of Part 3. 1 2 3 4 5

Explanatory Notes to the Gambling Act 2005, para 3. See GA 2005, s 39 and 4.47. See GA 2005, Pt 9 (ss 214–234) and Chapter 11 for ‘temporary use notices’. See Explanatory Notes to the Gambling Act 2005, para 6. For GA 2005, s 3, see Chapter 2.

4.4 Three licences are created under the GA  2005: operating licences, personal licences, and premises licences.1 Personal licences, which are issued by the Gambling Commission,2 are licences which authorise an individual to perform the functions of a specified ‘management office’, or to perform a specified ‘operational function’, in connection with either the provision of facilities for gambling or a person who provides facilities for gambling.3 Although offences relating to personal licences are created under the 2005 Act, they do not feature within the provisions of Pt 3 of the Act.4 1 See GA 2005, Pt 5 (ss 65–126) and Chapter 6 for ‘operating licences’; GA 2005, Pt 6 (ss 127–139) and Pt 5 as applied by GA 2005, s 128 and Chapter 7 for ‘personal licences’; and GA 2005, Pt 8 (ss 150–213) and Chapter 10 for ‘premises licences’. 2 See GA 2005, Pt 2 (ss 20–32) and Chapter 3 for ‘the Gambling Commission’. 3 GA  2005, s  127; see Chapter  7. For the meaning of ‘management office’ and of ‘operational function’, see GA 2005, s 80 and Chapter 7. 4 For offences relating to personal licences, see GA 2005, Pt 6 (ss 127–139) and Pt 5 (ss 65–126), the latter Part as applied by s 128.

4.5 Operating licences, which may be either ‘non-remote operating licences’ or ‘remote operating licences’,1 are issued by the Gambling 300

General offences Commission.2 The term ‘operating licence’ is, however, a rather general description. Aside from the distinction the Act makes between non-remote operating licences and remote operating licences, different kinds of operating licence are required to authorise the provision of facilities for gambling of different kinds. Although the Secretary of State is given the power to make additions to, to remove or to vary those listed,3 ten kinds of operating licence are listed in the GA 2005.4 These are operating licences which authorise the licensee: (1) to operate a casino – termed a ‘casino operating licence’;5 (2) to provide facilities for playing bingo – a ‘bingo operating licence’;6 (3) to provide facilities for betting other than pool betting – a ‘general betting operating licence’;7 (4)

to provide facilities for pool betting – a ‘pool betting operating licence’;8

(5) to act as a betting intermediary – a ‘betting intermediary operating licence’;9 (6) to make gaming machines available for use in an adult gaming centre – a ‘gaming machine general operating licence for an adult gaming centre’;10 (7) to make gaming machines available for use in a family entertainment centre – a ‘gaming machine general operating licence for a family entertainment centre’;11 (8) to manufacture, supply, install, adapt, maintain or repair a gaming machine – a ‘gaming machine technical operating licence’;12 (9)

to manufacture, supply, install or adapt gambling software – a ‘gambling software operating licence’;13 and

(10) to promote a lottery – a ‘lottery operating licence’.14   1 See GA 2005, s 67 and Chapter 6.   2 GA 2005, s 65(1).   3 GA 2005, s 65(4) and (5).   4 GA  2005, s  65(2)(a)–(j). See GA  2005, s  65(4) and (5) for the Secretary of State’s power to amend s 65(2) to add, remove or vary a kind of operating licence.   5 GA 2005, s 65(2)(a). See GA 2005, s 7 and Chapter 14 for the meaning of ‘casino’.  6 GA  2005, s  65(2)(b). See GA  2005, s  353(1) and Chapter  14 for the meaning of ‘bingo’.   7 GA 2005, s 65(2)(c). See GA 2005, ss 9–11 and Chapter 2 for the meaning of ‘betting’; and GA 2005, s 12 and Chapter 2 for the meaning of ‘pool betting’.   8 GA 2005, s 65(2)(d).   9 GA 2005, s 65(2)(e). See GA 2005, s 13(1) and Chapter 2 for the meaning of ‘betting intermediary’. 10 GA 2005, s 65(2)(f). See GA 2005, s 235 and Chapter 25 for the meaning of ‘gaming machine’; and s 237 and Chapter 25 for ‘adult gaming centre’. 11 GA 2005, s 65(2)(g). See GA 2005, s 238 and Chapter 25 for the meaning of ‘family entertainment centre’. 12 GA 2005, s 65(2)(h). 13 GA 2005, s 65(2)(i). See GA 2005, s 41(2) and 4.74 for the meaning of ‘gambling software’. 14 GA 2005, s 65(2)(j). See GA 2005, s 14 and Chapter 15 for the meaning of ‘lottery’.

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General offences 4.6 Premises licences are issued by licensing authorities.1  A  premises licence authorises premises to be used for certain types of gambling. As is the case with ‘operating licence’, ‘premises licence’ should be viewed as a general description, in that the Act provides for different kinds of premises licence, authorising premises to be used for different kinds of gambling. The Act describes five different kinds of premises licences which authorise premises to be used for: (1) the operation of a casino – termed a ‘casino premises licence’;2 (2) the provision of facilities for the playing of bingo – a ‘bingo premises licence’;3 (3) making category B  gaming machines available for use – an ‘adult gaming centre premises licence’;4 (4) making category C  gaming machines available for use – a ‘family entertainment centre premises licence’;5 and (5) the provision of facilities for betting, whether by making or accepting bets, by acting as a betting intermediary or by providing other facilities for the making or accepting of bets – a ‘betting premises licence’.6 1 See GA 2005, s 2 and Chapters 9 and 24 for ‘licensing authorities’. Premises licences are discussed in Chapter 10. 2 GA 2005, s 150(1)(a). See GA 2005, s 7 and Chapter 14 for the meaning of ‘casino’. 3 GA  2005, s  150(1)(b). See GA  2005, s  353(1) and Chapter  14 for the meaning of ‘bingo’. 4 GA 2005, s 150(1)(c). In relation to gaming machines, see: GA 2005, Pt 10 (ss 235– 251); s 235 (which defines ‘gaming machine’); s 236 (which empowers the Secretary of State to make regulations defining four classes of gaming machine, Categories A, B, C and D); and Chapter 25. 5 GA 2005, s 150(1)(d). 6 GA 2005, s 150(1)(e). See: GA 2005, ss 9–11 and Chapter 2 for the meaning of ‘betting’ See GA 2005, s 13(1) and Chapter 2 for the meaning of ‘betting intermediary’.

4.7 Provisions relating to the various permits created under the GA 2005 are to be found in a number of its Parts. Detailed discussion of the permits under the Act is beyond the scope of this chapter but, in general, permits can be viewed as providing the requisite authority for the provision of facilities for gambling where the gambling is ancillary to other activities and/or where the kind of gambling is perceived as ‘softer’ than the types requiring the authority of an operating licence.

FURTHERANCE OF THE LICENSING OBJECTIVES 4.8 Section 1 of the GA  2005 provides for three ‘licensing objectives’. These are: (1) preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime;1 (2) ensuring that gambling is conducted in a fair and open way;2 and 302

General offences (3)

protecting children and other vulnerable persons from being harmed or exploited by gambling.3

1 GA 2005, s 1(a). 2 GA 2005, s 1(b). 3 GA 2005, s 1(c).

4.9 Whilst offences clearly which support the regulatory system of licences and permits may have the ultimate effect of furthering the licensing objectives (assuming, that is, that the system of regulation as whole has that consequence), it is clear that some of the offences created under Part 3 and other Parts of the GA  2005 relate to activities that fall outside the specific parameters of the regulatory system. The offences created under Part 3 of the Act which come within that latter category are discussed further below1 but for immediate purposes it seems sufficient to note that they appear to have been directly aimed at furthering the Act’s licensing objectives. 1 See 4.11.

THE OFFENCES UNDER PART 3 OF THE GAMBLING ACT 2005 4.10 By way of summary, the offences created under Part 3 of the GA 2005 are as follows: (1) an offence of providing facilities for gambling under s 33; (2)

an offence relating to the use of premises for various specified gambling activities under s 37;

(3)

an offence relating to the manufacture, supply, installation or adaptation of ‘gambling software’ under s 41;

(4) an offence of cheating or enabling or assisting another person to cheat at gambling under s 42; (5) provisions which render illegal all ‘chain-gift schemes’ under s 43; and (6) an offence of providing unlawful facilities abroad under s 44. 4.11 The offence relating to the provision of facilities for gambling under s 33 of the GA 2005, the offence of using premises for certain types of gambling under s 37, and the ‘gambling software’ offence under s 41, give efficacy to the regulatory system in that the illegality arises as a result of a potentially lawful activity being carried out in the absence of the authority of relevant licence. The other offences under Part 3 of the GA 2005 – that of ‘cheating’ under s 42, the provisions prohibiting ‘chain-gift’ schemes under s 43 and that of providing unlawful facilities abroad under s 44 – relate to activities for which no licence can provide the relevant authority and thus cannot be lawfully conducted. It is convenient, therefore, to view this latter category of offences as ones created in direct furtherance of the licensing objectives. 303

General offences

Offenders and prosecutors 4.12 All of the offences created under Part 3 of the GA  2005 may be committed by a ‘person’. Whilst ‘person’ includes an individual, it also includes bodies of persons. Section 341 contains important provisions relating to the prosecution of bodies of persons for offences under the Act.1 Where an offence under the Act is committed by a body of persons corporate or by an unincorporated body of persons (other than a partnership) and it is proved that the offence was committed with the consent or connivance of an officer of the body or as a result of the negligence of an officer of the body, the officer as well as the body is guilty of an offence.2 Where the offence is committed by a limited partnership, the foregoing provisions apply, save that it is a partner, rather than an officer, who is guilty of the offence as well as the limited partnership.3 In the case of an offence committed by a partnership, other than a limited partnership, each partner is guilty of the offence.4 Unincorporated associations are to be treated as if they were incorporated bodies for all procedural purposes when prosecuted for an offence under the Act. 1 GA  2005, s  341. The Secretary of State is given the power to make regulations providing for the modification of a provision of s 341 in its application to a body of persons formed under or, in so far as the body is recognised by it, by law having effect outside the United Kingdom: s 341(7). 2 GA 2005, s 341(1) and (2). An ‘officer of a body’ includes: a director, manager or secretary; a person purporting to act as a director, manager or secretary and, if the affairs of the body are arranged by its members, a member: s 341(3). 3 GA 2005, s 341(5). 4 GA 2005, s 341(4).

4.13 The Gambling Commission may institute criminal proceedings in respect of any offence under the GA  2005.1 The power of licensing authorities to institute criminal proceedings in respect of an offence under the Act is limited to those offences listed under s  346 of the Act.2 The list includes the offence of using premises for certain types of gambling created by s 37, but not any of the other offences to be found in Part 3 of the GA 2005.3 1 GA 2005, s 28, see Chapter 3. 2 GA 2005, s 346(1). However, s 346 is without prejudice to the Local Government Act 1972, s  222 (the power of local authorities to prosecute or defend legal proceedings): GA 2005, s 346(2). 3 GA 2005, s 346(1)(a).

The time limit for prosecutions under the Gambling Act 2005 4.14 A magistrates’ court may try an information for an offence under the GA 2005 if the information was laid within 12 months of the date (or the last date) on which the offence is alleged to have been committed.1 1 GA  2005, s  347(1). Magistrates’ Courts Act 1980, s  127(1) – which provides that a magistrates’ court shall not try an information or hear a complaint unless the information was laid or the complaint was made within six months of the

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General offences commission of the offence or the complaint arose – does not apply to an offence under the GA 2005: GA 2005, s 347(2).

SECTION 33 – PROVIDING FACILITIES FOR GAMBLING The offence 4.15 Section 33 of the GA 2005 creates an offence which is clearly designed as the main tool for ensuring compliance with the Act’s requirements as to most kinds of operating licences. Although it is subject to a number of exceptions, s  33 provides that a person commits an offence if he provides facilities for gambling.1 1 GA 2005, s 33(1).

4.16 The expression ‘the provision of facilities for gambling’ appears throughout the GA 2005, but here it is clearly key to an understanding of the offence under s 33. Although subject to a number of important qualifications,1 its basic meaning is to be found in s 5, which provides that a person provides facilities for gambling if he: (1) invites others to gamble in accordance with arrangements made by him;2 (2) provides, operates or administers arrangements for gambling by others;3 or (3) participates in the operation or administration of gambling by others.4 1 See GA 2005, s 5(2)–(4) and Chapter 2 for the qualifications to the basic meaning of the expression. 2 GA 2005, s 5(1)(a). 3 GA 2005, s 5(1)(b). 4 GA 2005, s 5(1)(c).

4.17 The GA 2005 further provides that, for the purposes of the offence of providing facilities for gambling, it is immaterial whether facilities are provided wholly or partly by means of remote communication.1 The expression ‘remote communication’ is also given meaning within the Act – it is defined as communication using the internet, telephone, television, radio or any other kind of electronic or other technology for facilitating communication.2 It is also immaterial whether the facilities for gambling are provided inside the United Kingdom, outside the United Kingdom, or partly inside and partly outside.3 This, however, is subject to qualification in both the case of non-remote gambling and the case of ‘remote gambling’, the latter being gambling in which persons participate by the use of remote communication.4 Where the provision of facilities is for non-remote gambling, s 33 applies only if anything done in the course of providing the facilities for gambling is done in Great Britain. As far as remote gambling is concerned the combined effect of s 33(1), (2) and s 36(3) (as amended by the Gambling (Licensing and Advertising) Act 2014) is that an operating licence will be 305

General offences required to provide remote gambling if at least one piece of remote gambling equipment (as defined) used in the provision of the facilities is situated in Great Britain or if, even though no remote gambling equipment is situated in Great Britain, the facilities are used in Great Britain.5 The Act draws a distinction between remote gambling equipment used by the provider of the facilities for gambling and the remote gambling equipment used by persons accessing the facilities for gambling. Although ‘remote gambling equipment’ does not include equipment which is used by a person to take advantage of remote gambling facilities provided by another person if the equipment is not provided by that other person,6 the expression does mean electronic or other equipment used by or on behalf of a person providing facilities for remote gambling: (1)

to store information relating to a person’s participation in the gambling;7

(2) to present to persons who are participating or may participate in the gambling a virtual game, virtual race or other virtual event or process by reference to which the gambling is conducted;8 (3) to determine all or part of a result or of the effect of a result;9 or (4) to store information relating to a result.10   1 GA 2005, s 36(1)(a).   2 GA 2005, s 4(2); see Chapter 17.   3 GA 2005, s 36(1)(b).   4 GA 2005, s 4(1); see Chapter 17.   5 GA 2005, s 33(1), (2) and s 36(3) (as amended).   6 GA 2005, s 36(5).   7 GA 2005, s 36(4)(a).  8 GA  2005, s  36(4)(b). A  ‘virtual game, race or other event or process’ means: computer-generated images resembling all or part of a game, race or other event or process of a kind that is played by or involves actual people, animals or things; computer-generated images representing an imaginary game, race or other event or process; or any game, race or other event or process the result of which is determined by computer: s 353(3).   9 GA 2005, s 36(4)(c). 10 GA 2005, s 36(4)(d).

The exceptions 4.18 Since it is not the purpose of the GA  2005 to render all gambling activity unlawful, the basic offence of providing facilities for gambling under s 33 of the Act is subject to a number of exceptions. Before addressing those exceptions, it should be noted that many of them will only apply if the form of gambling in question complies with conditions specified in various sections of the Act, all such sections falling outside the provisions of Part 3. Here it is endeavoured to present as complete a picture as is possible of the exceptions to the offence and, therefore, to include commentary on the conditions relevant to each exception. However, since some of the conditions specified within the Act are dependent on secondary legislation (setting, for example, limits on participation fees and stakes and the amounts or values of prizes), recourse should be made to the relevant secondary legislation in force at the time that the facilities for gambling are provided. 306

General offences

The authority of an operating licence 4.19 The offence created under s 33 does not apply to any activity by a person if that person holds an operating licence authorising the activity,1 and the activity is carried on in accordance with the terms and conditions of the licence.2 As well as the direct protection afforded to the holder of an operating licence, an operating licence also protects employees and other agents of the licensee. The offence of providing facilities for gambling does not apply to any activity by a person if he acts in the course of a business carried on by a person who holds an operating licence authorising the activity3 (with, again, the caveat that the activity is carried on in accordance with the terms and conditions of the operating licence).4 1 2 3 4

GA 2005, s 33(1)(a) and (2)(a). GA 2005, s 33(1)(a) and (2)(b). GA 2005, s 33(1)(a) and (3)(a). GA 2005, s 33(1)(a) and (3)(b).

The provision of facilities for a lottery 4.20 The offence created under s  33 of the GA  2005 does not apply to the provision of facilities for a lottery.1 Part 11 of the Act is concerned only with lotteries.2 Within its provisions are a number of offences which relate specifically to lotteries, including provisions which, subject to exceptions, make it an offence to promote a lottery.3 One exception to the offence of promoting a lottery is that it does not apply to any activity by a person if that person holds an operating licence authorising the activity and he acts in accordance with the terms and conditions of the licence.4 1 GA 2005, ss 33(1)(b)(i) and 34. 2 GA 2005, Pt 11 (ss 252–265); see Chapter 15. 3 GA  2005, s  258. For lottery offences generally, see GA  2005, ss  258–265 and Chapter 15. 4 GA 2005, s 258(1) and (2). A further exception to the offence of promoting a lottery protects employees and other agents of a person holding an operating licence; see s 258(1) and (3) for this and other exceptions to the offence.

Making gaming machines available for use 4.21 The offence of providing facilities for gambling does not apply to making gaming machines available for use.1 As in the case of lotteries, the GA  2005 dedicates an entire Part – Part 10 – to gaming machines.2 In Part 10 there are offences specific to gaming machines, including an offence of making a gaming machine available for use, unless an exception applies.3 One of the exceptions is that the gaming machine is made available for use in accordance with an operating licence.4 Another offence under Part 10 relates to the manufacture, supply, installation, adaptation, maintenance and repair of gaming machines.5 This offence is also subject to exceptions, including the exception that a person manufacturing, supplying, installing, adapting, maintaining or repairing a gaming machine is acting in accordance with an operating licence.6 1 GA 2005, ss 33(1)(b)(i) and 35.

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GA 2005, Pt 10 (ss 235–251); see Chapter 25. GA 2005, s 242(1); see Chapter 25. GA 2005, s 242(1)(a); see Chapter 25. GA 2005, s 243(1); see Chapter 25. GA 2005, s 243(1)(a); see Chapter 25.

Exempt gaming – equal chance gaming in miners’ welfare institutes and in certain clubs 4.22 In the GA 2005 ‘miners’ welfare institutes’ are defined as associations established and conducted for social and recreational purposes, but which also satisfy various conditions.1 The Act also gives meaning to the terms ‘members’ clubs’2 and ‘commercial clubs’.3 Save that the disapplication of s 33 does not apply to ‘high turnover bingo’ played during a ‘high turnover period’,4 the offence of providing facilities for gambling under s 33 does not apply to the provision of facilities for ‘equal chance gaming’5 in miners’ welfare institutes, members’ clubs, commercial clubs and some other clubs (which meet most of the requirements of the Act’s definitions of either members’ clubs or commercial clubs)6 if the following conditions are satisfied:7 (1) that the arrangements for the gaming satisfy any prescribed requirements in relation to the amounts staked or the amount or value of a prize;8 (2) that no amount is deducted or levied from the sums staked or won;9 (3) that any participation fee does not exceed such maximum as may be prescribed;10 (4) that a game played on one set of premises is not linked with a game played on another set of premises;11 and (5)

in the cases of miners’ welfare institutes, members’ clubs and clubs that would be members’ clubs but for the Act’s requirement that members’ clubs are established and conducted wholly or mainly for purposes other than the provision of facilities for gambling,12 that each person who participates is: (a) a member of the club or institute who applied for membership, was nominated for membership or became a member at least 48 hours before he participates,13 or (b) is a guest of a member of the club or institute who would be entitled to participate by virtue of applying for membership, being nominated for membership or becoming a member at least 48 hours before participation.14

 1 GA  2005, s  268(1). The conditions are either: that the association’s affairs are managed by a group of individuals of whom at least two-thirds are miners’ representatives; or that the association operates on premises the use of which is regulated in accordance with a charitable trust which has received money from the Miners’ Welfare Fund, or the former body corporate known as the Coal Industry Social Welfare Organisation incorporated under the Companies Act 1948, or the charitable trust known as the Coal Industry Social Welfare Organisation: s 268(2)– (4). See Chapter 12 for further commentary.

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General offences   2 GA 2005, s 266; see Chapter 12. In general a ‘members’ club’ means a club which is: established and conducted wholly or mainly for purposes other than the provision of facilities for gaming; established and conducted for the benefit of its members (and which is not otherwise established or conducted as a commercial enterprise); not established with the purpose of functioning for only a limited period of time; and has at least 25 individual members: s 266(1). However, a club may still be a members’ club if it is established or conducted wholly or mainly for the purpose of the provision of facilities for gaming of a prescribed kind, and facilities are not provided for any other kind of gaming in the course of the club’s activities: s 266(2).  3 GA  2005, s  267; see Chapter  12. Under the Act ‘commercial clubs’ must meet similar requirements to those required of members’ clubs (see fn 2 above), save that there is no requirement that a commercial club is established and conducted for the benefit of its membership.   4 GA 2005, s 275(1); see Chapter 12.   5 Defined as gaming which does not involve playing or staking against a bank and where the chances are equally favourable to all participants: GA 2005, s 8(1); see Chapters 2 and 12.   6 GA 2005, s 269(1)(c) and (d). This applies to a club that would be a members’ club under s 266 save for the requirement that the club is established and conducted wholly or mainly for purposes other than the provision of facilities for gaming under s 266(1); and also to a club that would be a commercial club under s 267, save for the requirement that the club is established and conducted wholly or mainly for purposes other than the provision of facilities for gaming.   7 GA 2005, ss 33(1)(b)(ii) and 269(1). The reference to the provision of facilities by a club or institute in s 269(1) includes a reference to any provision of facilities made on behalf of or by arrangement with the club or institute and in the course of its activities: s 270(1).  8 GA  2005, s  269(2). Regulations prescribing requirements in relation to stakes or prizes for the purpose of this subsection may, in particular, make different provision for different classes of club or institute and make different provision for different classes or descriptions of game: s 270(2). See the Gambling Act 2005 (Exempt Gaming in Clubs) Regulations 2007 (SI 2007/1944).   9 GA  2005, s  269(3). The reference in s  269(3) to a deduction or levy in respect of gaming provided by, on behalf of or by arrangement with a club or institute is to a deduction or levy made by or on behalf of the club or institute or a person providing facilities for gaming on behalf of, or by arrangement with, the club or institute: s 270(3). 10 GA 2005, s 269(4); see also s 270(2) as to the provision that regulations may make in relation to the maximum charge. See SI 2007/1944. 11 GA 2005, s 269(5). Two games are linked if the result of one game is or may be wholly or partly determined by reference to the result of the other game or the amount of winning available in one game is or may be wholly or partly determined by reference to the amount of participation in the other game: s 270(5). 12 This requirement is to be found under GA 2005, s 266(1)(a). 13 GA 2005, s 269(6)(a). 14 GA 2005, s 269(6)(b). A person is not to be treated as a guest of a member if the member extends an invitation, having no previous acquaintance with the person, and for the purpose only of enabling the person to take advantage of facilities for gaming provided by or for the club or institute: s 270(6).

Gaming in accordance with a club gaming permit 4.23 The offence of providing facilities for gambling under s  33 of the GA 2005 does not apply to gaming in accordance with a club gaming permit.1 309

General offences Club gaming permits, which are issued by licensing authorities,2 authorise the provision of facilities for some forms of gaming as long as the gaming takes place on premises on which a members’ club or miners’ welfare institute operates and the gaming takes place in the course of the activities of the club or institute.3 However, as with exempt gaming in miners’ welfare institutes and certain clubs, the disapplication of s 33 does not apply to ‘high turnover bingo’ played during a ‘high turnover period’.4 1 GA 2005, ss 33(1)(b)(ii) and 271(1). 2 GA 2005, Sch 12; see Chapter 12. 3 GA  2005, s  271(2). See 4.22 above as to ‘members’ clubs’ and ‘miners’ welfare institutes’. 4 GA 2005, s 275(1); see Chapter 12.

4.24 In addition to conditions which are specific to the provision of facilities for gaming and to the provision of facilities for games of chance, considered below, club gaming permits are subject to some general conditions. The general conditions are: (1) That each person who participates in gaming in reliance on the club gaming permit is a member of the club or institute who applied for membership, was nominated for membership or became a member at least 48 hours before he participates,1 or is a guest of a member of the club or institute (such member being himself entitled to participate having applied for membership, been nominated for membership or becoming a member, at least 48 hours before the participation of his guest).2 (2) That no child or young person uses a Category B or C gaming machine on the premises of the club or institute3 and that the holder of the club gaming permit complies with any relevant code of practice issued by the Gambling Commission under s 24 of the 2005 Act.4 1 GA 2005, s 271(6)(a). 2 GA 2005, s 271(6)(b). A person is not to be treated as a guest of a member if the member extends an invitation, having no previous acquaintance with the person, and for the purpose only of enabling the person to take advantage of facilities for gaming provided by or for the club or institute: s 272(4). 3 GA 2005, s 271(7)(a). 4 GA  2005, s  271(7)(b). See Chapter  3 for the provisions of s  24 and for the Act’s provisions relating to the Gambling Commission. See s 235 and Chapter 25 as to the meaning of ‘gaming machine’. See Chapter 25 as to the categories of gaming machine.

4.25

The authority of a club gaming permit extends to:

(1) making up to three gaming machines (each of which must be of Category B, C or D) available for use;1 (2)

subject to the conditions set out in the Act (described under 4.26 below), the provision of facilities for gaming;2 and

(3) again subject to conditions specified in the Act (described under 4.27 below), the provision of facilities for games of chance, of such class or description as may be prescribed.3 1 GA  2005, s  271(3)(a). See s  235 and Chapter  25 as to the meaning of ‘gaming machine’. See Chapter 25 as to the categories of gaming machine.

310

General offences 2 GA 2005, s 271(3)(b). 3 GA 2005, s 271(3)(c).

4.26 If facilities for gaming are to be lawfully provided on premises operated by a club or institute and in the course of the activities of the club or institute under a club gaming permit, the gaming must also satisfy the following conditions: (1) that no amount is deducted or levied from the sums staked or won;1 (2) that any participation fee does not exceed such maximum as may be prescribed;2 (3) that a game played on one set of premises is not linked with a game played on another set of premises;3 and (4) that each person who participates is: (a) a member of the club or institute who applied for membership, was nominated for membership or became a member at least 48 hours before he participates,4 or (b) is a guest of a member of the club or institute who would be entitled to participate by virtue of applying for membership, being nominated for membership or becoming a member at least 48 hours before participation.5 1 GA 2005, s 269(3) as applied by s 271(3)(b). The reference in s 269(3) to a deduction or levy in respect of gaming provided by, on behalf of, or by arrangement with a club or institute is to a deduction or levy made by or on behalf of the club or institute or a person providing facilities for gaming on behalf of, or by arrangement with, the club or institute: s 270(3). 2 GA 2005, s 269(4) as applied by s 271(3)(b). See also s 270(2) as to the provision that regulations may make in relation to the maximum charge. See the Gambling Act 2005 (Club Gaming Permits) (Authorised Gaming) Regulations 2007 (SI 2007/1945). 3 GA 2005, s 269(5) as applied by s 271(3)(b). Two games are linked if the result of one game is or may be wholly or partly determined by reference to the result of the other game, or the amount of winnings available in one game is or may be wholly or partly determined by reference to the amount of participation in the other game: s 270(5). 4 GA 2005, s 269(6)(a) as applied by s 271(3)(b). 5 GA  2005, s  269(6)(b) as applied by s  271(3)(b). A  person is not to be treated as a guest of a member if the member extends an invitation, having no previous acquaintance with the person, and for the purpose only of enabling the person to take advantage of facilities for gaming provided by or for the club or institute: s 270(6).

4.27 If facilities for games of chance (which must conform with any regulations prescribing the class and description of the games of chance) are to be lawfully provided on premises operated by a club or institute and in the course of the activities of the club or institute under a club gaming permit, the games of chance must satisfy the following conditions:1 (1) that no participation fee is charged otherwise than in accordance with regulations;2 311

General offences (2) that no amount is deducted or levied from the sums staked or won otherwise than in accordance with regulations;3 (3) that the public is excluded from any area of the club’s or institute’s premises where gaming is taking place;4 and (4) that children and young persons are excluded from any area of the club’s or institute’s premises where gaming is taking place.5 1 GA 2005, ss 33(1)(b)(ii) and 269(1). The reference to the provision of facilities by a club or institute in s 269(1) includes a reference to any provision of facilities made on behalf of or by arrangement with the club or institute and in the course of its activities: s 270(1). 2 Such regulations may make provision about the circumstances in which a fee may be charged and about the amount of the fee: s 271(4)(a). Regulations under s 271(4) (a) may make different provision for different classes of club or institute, make different provision for different classes or descriptions of games, make different provision for different classes or descriptions of fee, deduction or levy: s 271(5). See the Gambling Act 2005 (Club Gaming Permits) (Authorised Gaming) Regulations 2007 (SI 2007/1945). 3 Such regulations may make provision about the circumstances in which a fee may be charged and about the amount of the fee: s 271(4)(b). Regulations under s 271(4) (b) may make different provision for different classes of club or institute, make different provision for different classes or descriptions of games, make different provision for different classes or descriptions of fee, deduction or levy: s 271(5). See SI 2007/1945. The reference in s 271(4)(b) to a deduction or levy in respect of gaming provided by, on behalf of or by arrangement with a club or institute is to a deduction or levy made by or on behalf of: the club or institute, or a person providing facilities for gaming on behalf of, or by arrangement with, the club or institute: s 272(1). 4 GA  2005, s  271(4)(c). ‘Public’ means persons other than members, guests of members and staff of the club or institute and persons providing services to or for the club or institute: s 272(2). A person is not to be treated as a guest of a member if the member extends an invitation, having no previous acquaintance with the person, and for the purpose only of enabling the person to take advantage of facilities for gaming provided by or for the club or institute: s  272(4). ‘An area where gaming is taking place’ is any place in which it is possible to participate in the gaming: s 272(3). 5 GA 2005, s 271(4)(d). A ‘child’ is an individual who is less than 16 years old: s 45(1); a ‘young person’ is an individual who is not a child but is less than 18 years old: s 45(2). ‘An area where gaming is taking place’ is any place in which it is possible to participate in the gaming: s 272(3).

Exempt gaming – equal chance gaming in some premises with an alcohol licence 4.28 In the GA 2005 an ‘alcohol licence’ means a premises licence under Part 3 of the Licensing Act 2003,1 and an ‘on-premises licence’ means a premises licence under Part 3 of the Licensing Act 2003 which authorises the supply of alcohol for consumption on the licensed premises.2 Under the Gambling Act 2005, ‘premises’ are defined to include any place and, specifically, a vessel and a vehicle.3 1 GA 2005, s 277(a). 2 GA 2005, s 277(b). 3 GA 2005, s 353(1).

312

General offences 4.29 Unless a licensing authority has used its powers to order that s 279 of the GA  2005 does not apply to specified premises,1 s  279 applies to all premises other than vehicles if there is an on-premises alcohol licence in effect in respect of the premises,2 the premises contain a bar at which alcohol is served for consumption on the premises (without a requirement that alcohol is served only with food),3 and at a time when alcohol may be supplied in reliance on the alcohol licence.4 Section 279 provides that the offence of providing facilities for gambling under s 33 does not apply to the provision of facilities for equal chance gaming5 on premises which meet these requirements6 if, in addition, the following conditions are satisfied:7 (1)

that the arrangements for the gaming satisfy the prescribed requirements in relation to limiting the amounts that may be staked or limiting the amount or value of a prize;8

(2) that no amount is deducted or levied from the sums staked or won;9 (3) that no participation fee is charged;10 (4) that a game played on one set of premises is not linked with a game played on another set of premises;11 and (5) that children and young persons are excluded from participation.12   1 See GA 2005, s 284 and Chapter 12.  2 Or a ‘relevant Scottish licence’: s  278(1)(a). A  ‘relevant Scottish licence’ is any licence granted under Licensing (Scotland) Act 1976, s 9(1), provided that it is not an off-sale licence: s 277(c).   3 GA 2005, s 278(1)(b).   4 GA 2005, s 278(1)(c).   5 Defined as gaming which does not involve playing or staking against a bank and where the chances are equally favourable to all participants: s 8(1); see Chapter 2.   6 GA 2005, s 279(1)(a).   7 GA 2005, ss 33(1)(b)(iii) and 279(1)(b).  8 GA  2005, s  279(2). ‘Prescribed’ means prescribed by regulations made by the Secretary of State; and regulations may, in particular, make different provision for different classes or descriptions of game: s 280(1).   9 GA 2005, s 279(3). 10 GA 2005, s 279(4). 11 GA 2005, s 279(5). Two games are linked if the result of one game is or may be wholly or partly determined by reference to the result of the other game, or the amount or value of a prize available in one game is or may be wholly or partly determined by reference to the extent of participation in the other game; and if a single game is played partly on one set of premises and partly on another it shall be treated as two linked games: s 280(2). 12 GA 2005, s 279(6). A ‘child’ is an individual who is less than 16 years old: s 45(1); a ‘young person’ is an individual who is not a child but is less than 18 years old: s 45(2).

Prize gaming 4.30 Under the GA  2005 ‘prize gaming’ is gaming where neither the nature nor the size of a prize played for is determined by reference to the number of players or the amount paid for or raised by the gaming.1 ‘Prize gaming permits’, which are issued by licensing authorities,2 authorise a person to provide facilities for gaming with prizes on specified premises.3 313

General offences If such gaming satisfies the conditions for prize gaming which are set out in the Act, and the facilities for that gaming are provided in accordance with a prize gaming permit, the person providing the facilities for the gaming does not commit the offence of providing facilities for gambling under s 33.4 1 2 3 4

GA 2005, s 288; see Chapter 22. GA 2005, s 289(2) and Sch 14. GA 2005, s 289(2). GA 2005, ss 33(1)(b)(iv) and 289(1).

4.31 (1)

The GA 2005’s prize gaming conditions are as follows: that there is compliance with such limits in respect of participation fees as may be prescribed;1

(2) that: (a) all the chances to participate in a particular game must be acquired or allocated on one day and in the place where the game is played,2 (b) the game must be played entirely on that day,3 (c)

(3)

the result of the game must be made public in the place where the game is played and as soon as is reasonably practicable after the game ends and, in any event, on the day on which the game is played;4

that the prize for which a game is played, or the aggregate of the prizes for which a game is played, must not exceed the prescribed amount where all the prizes are money and must not exceed the prescribed value in any other cases;5 and

(4) that participation in the game by a person does not entitle him or another person to participate in any other gambling (whether or not he or the other person would also have to pay to participate in other gambling).6 1 Such limits in respect of participation fees may, in particular, relate to players, games or a combination and different limits may be prescribed in respect of different classes or descriptions of fee: s 293(1) and (2). ‘Prescribed’ means prescribed by regulations made by the Secretary of State: s 293(6); see the Gambling Act 2005 (Limits on Prize Gaming) Regulations 2007 (SI 2007/1777). 2 GA 2005, s 293(3)(a). 3 GA 2005, s 293(3)(b). 4 GA 2005, s 293(3)(c). 5 GA 2005, s 293(4). 6 GA 2005, s 293(5).

4.32 In addition to the protection from the offence of providing facilities for gambling under s  33 of the 2005 which is afforded when facilities for prize gaming are provided in accordance with a prize gaming permit, there are a number of other situations where a person does not commit an offence under s 33 when he provides facilities for prize gaming, although compliance with the Act’s prize gaming conditions is generally required. No offence is committed under s 33 if: 314

General offences (1) subject to compliance with the Act’s prize gaming conditions, facilities for prize gaming are provided in an adult gaming centre and the gaming satisfies the Act’s prize gaming conditions;1 (2) subject to compliance with the Act’s prize gaming conditions, facilities for prize gaming are provided in a licensed family entertainment centre and the gaming satisfies the Act’s prize gaming conditions;2 (3) subject to compliance with the Act’s prize gaming conditions, facilities for equal chance prize gaming are provided on premises in respect of which a family entertainment centre gaming machine permit has effect and the gaming satisfies the Act’s prize gaming conditions;3 (4) facilities for prize gaming are provided in premises in respect of which a bingo premises licence has effect;4 (5) subject to compliance with the Act’s prize gaming conditions, facilities for equal chance prize gaming are provided at a travelling fair,5 the facilities for gambling (in whatever form) amount together to no more than an ancillary amusement at the fair and the gaming satisfies the Act’s prize gaming conditions.6 1 2 3 4

GA 2005, ss 33(1)(b)(iv) and 290(1). GA 2005, ss 33(1)(b)(iv) and 290(1). GA 2005, ss 33(1)(b)(iv) and 290(2). GA 2005, ss 33(1)(b)(iv) and 291. Unlike other exceptions to the offence under s 33 where facilities for prize gaming are provided, here there is no requirement that the prize gaming satisfies the Act’s prize gaming conditions. Conditions governing the prize gaming may, however, be imposed on the bingo operating licence which will be necessary to promote bingo see s 291(2). 5 For the purpose of the Gambling Act 2005 a ‘fair’ means a fair consisting wholly or principally of the provision of amusements, and a fair held on a day in a calendar year is a ‘travelling fair’ if provided wholly or principally by persons who travel from place to place for the purpose of providing fairs and at a place no part of which has been used for the provision of a fair on more than 27 days in that calendar year: s 286. 6 GA 2005, ss 33(1)(b)(iv) and 290(1).

Private gaming and betting 4.33 A  person does not commit the offence of providing facilities for gambling under GA 2005, s 33 by providing facilities for private gaming1 or private betting.2 Both ‘private gaming’ and ‘private betting’ are defined in Sch 15 to the Act.3 1 GA 2005, ss 33(1)(b)(v) and 296(1)(a). 2 GA 2005, ss 33(1)(b)(v) and 296(1)(b). 3 GA 2005, s 295.

4.34 Gaming is ‘private gaming’ if satisfies three conditions: that no charge is made for participation,1 that it is equal chance gaming,2 and that it does not occur in a place to which the public have access (whether or not on payment).3 However, the condition that the gaming is equal chance gaming does not apply in relation to ‘domestic gaming’ or ‘residential gaming’.4 315

General offences ‘Domestic gaming’ is gaming which takes place in a private dwelling and on a domestic occasion.5 ‘Residential gaming’ is gaming which takes place in hostels, halls of residence and similar establishments not administered in the course of a trade or business and where more than half the participants in the gaming are residents of the hostel, hall or establishment.6 1 GA 2005, Sch 15, para 3(1). For these purposes it is immaterial how a charge is described; it is immaterial whether a charge is in money or money’s worth; an amount deducted or levied by a person providing the facilities for gaming from sums staked or won in the course of the gaming is a charge for participation in the gaming; a charge for admission to premises where gaming takes place shall be treated as a charge for participation in the gaming; and a stake is not a charge for participation: Sch 15, para 3(2). 2 GA 2005, Sch 15, para 4(1). 3 GA 2005, Sch 15 para 5. 4 GA 2005, Sch 15, para 4(2). 5 GA 2005, Sch 15, para 2(1). 6 GA 2005, Sch 15, para 2(2).

4.35 ‘Private betting’ is betting which falls into one of two categories set out under the GA 2005: ‘domestic betting’ and ‘workers’ betting’.1 Domestic betting is betting on premises in which each party to the transaction lives.2 Workers’ betting is betting made between persons each of whom is employed under a contract of employment with the same employer.3 1 GA 2005, Sch 15, para 6. 2 GA 2005, Sch 15, para 7(1). A person lives in premises if he habitually resides in any part of the premises (whether or not there are other premises in which he also habitually resides): Sch 15, para 7(2). 3 GA 2005, Sch 15, para 8.

Non-commercial gaming 4.36 The final exceptions to commission of the offence of providing facilities for gambling under s 33 of the GA 2005 are where a person provides facilities for non-commercial prize gaming1 or provides facilities for noncommercial equal chance gaming.2 Part 14 of the Act specifies conditions with which gaming must comply if it is to be treated as either non-commercial prize gaming or non-commercial equal chance gaming. 1 GA 2005, ss 33(1)(b)(v) and 298(1)(a). 2 GA 2005, ss 33(1)(b)(v) and 298(1)(b).

4.37 The conditions to be satisfied in the case of non-commercial prize gaming are: (1) that the players are informed that the purpose of the gaming is to raise money for a specified purpose other than that of private gain;1 (2) that the arrangements for the gaming are such that the profits will be applied for a purpose other than that of private gain;2 (3) that the non-commercial event of which the gaming is part does not take place: 316

General offences (a) on premises, other than a track, in respect of which a premises licence has effect,3 (b) on a track at a time when activities are being carried on in reliance of a premises licence,4 or (c) on premises at a time when activities are being carried on in reliance on a temporary use notice;5 (4) that the gaming is not remote.6 1 GA 2005, s 299(1) and (2). 2 GA 2005, s 299(1) and (3). ‘Profits’ in relation to gaming means the aggregate of amounts paid by way of stakes or otherwise accruing to the person organising the gaming directly in connection with it, minus amounts deducted by the person organising the gaming in respect of the provision of prizes, or other costs reasonably incurred in organising or providing facilities for the gaming: s 299(6). 3 GA 2005, s 299(1) and (4)(a). 4 GA 2005, s 299(1) and (4)(b). 5 GA 2005, s 299(1) and (4)(c). 6 GA 2005, s 299(1) and (5).

4.38 The conditions to be satisfied in the case of non-commercial equalchance gaming are: (1) that the persons participating in the gaming are informed that the purpose of the gaming is to raise money for a specified purpose other than that of private gain;1 (2) that the arrangements for the gaming are such that the profits will be applied for a purpose other than that of private gain;2 (3) that the arrangements for the gaming ensure compliance with regulations of the Secretary of State: (a) limiting amounts staked,3 (b) limiting participation fees,4 (c) limiting other amounts paid by a person in connection with the gaming,5 (d) limiting a combination of matters in paras (a)–(c), (e)

limiting the amount or value of a prize,

(f)

limiting the aggregate amount or value of prizes;

(4) that the gaming is not remote.6 1 GA 2005, s 300(2). 2 GA 2005, s 300(3). ‘Profits’ in relation to gaming means the aggregate of amounts paid by way of stakes or otherwise accruing to the person organising the gaming directly in connection with it, minus amounts deducted by the person organising the gaming in respect of the provision of prizes or other costs reasonably incurred in organising or providing facilities for the gaming: s 300(8). 3 GA 2005, s 300(4)(a). 4 GA 2005, s 300(4)(b). 5 GA 2005, s 300(4)(c). 6 GA 2005, s 300(7).

317

General offences

Sentencing powers 4.39 In England and Wales a person guilty of an offence under s 33 of the GA  2005 is liable on summary conviction to imprisonment for a term not exceeding 51 weeks,1 a fine not exceeding level 5 on the standard scale,2 or, both.3 1 GA 2005, s 33(4)(a). 2 GA 2005, s 33(4)(b). 3 GA 2005, s 33(4)(c).

SECTION 37 – USING PREMISES, OR CAUSING OR PERMITTING PREMISES TO BE USED, TO PROVIDE FACILITIES FOR CERTAIN FORMS OF GAMBLING ACTIVITY The offence 4.40 Under the GA 2005 ‘premises’ include any place and, in particular, a vessel and a vehicle.1 A person commits an offence under s 37 of the GA 2005 if he uses premises, or causes or permits premises to be used, to: (1) operate a casino;2 (2) provide facilities for the playing of bingo;3 (3) make a gaming machine available for use;4 (4) provide other facilities for gaming;5 or (5) provide facilities for betting (whether by making or accepting bets, by acting as a betting intermediary or by providing other facilities for the making or accepting of bets).6 1 GA  2005, s  353(1). ‘Vessel’ includes anything other than a seaplane or an amphibious vehicle, designed or adapted for navigation or other use in, on or over water, a hovercraft (within the meaning of the Hovercraft Act 1968), and anything, or any part of a place, situated in or on water: s 353(1). ‘Vehicle’ includes a train, an aircraft, a seaplane, and an amphibious vehicle (other than a hovercraft within the meaning of the Hovercraft Act 1968): s 353(1). 2 GA 2005, s 37(1)(a). 3 GA 2005, s 37(1)(b). 4 GA 2005, s 37(1)(c). 5 GA 2005, s 37(1)(d). 6 GA 2005, s 37(1)(e).

4.41 The activities set out above are described as ‘gambling activities’ in the GA 2005 and a ‘gambling activity’ is defined as a kind of gambling or, the provision of facilities for a kind of gambling.1 It should be noted that Secretary of State is given the power to add a gambling activity to those listed under s 37, or to remove a gambling activity from the list or to vary an entry for a gambling activity.2 1 GA 2005, s 38(2). 2 GA 2005, s 38(1).

318

General offences 4.42 If the offence of providing facilities for gambling under s  33 is to be viewed as the principal offence for enforcing the Act’s requirements as to operating licences, s 37 can be seen as the principal offence for enforcing the Act’s requirements as to premises licences. Although licensing authorities, unlike the Gambling Commission, do not have a general power to prosecute offences created under the 2005 Act, since premises licences are issued by licensing authorities it is appropriate that licensing authorities are given to the power to institute criminal proceedings in respect of offences under s 37.1 1 GA 2005, s 346(1)(a).

The exceptions 4.43 There are a number of exceptions to the offence of using premises for certain forms of gambling under s 37 of the GA 2005. As with exceptions to the offence of providing facilities for gambling under s  33 of the Act, the intention here is to present as complete a picture as is possible of the exceptions to the offence under s  37, and to include commentary on any conditions which are relevant to the exceptions. However, since some of the detail of the conditions is contained within regulations, recourse should be made to the relevant secondary legislation in force at the time that the premises were used for gambling.

The authority of a premises licence 4.44 The offence of using premises for certain forms of gambling under s 37 of the GA 2005 does not apply in relation to the use of premises by a person if the use of the premises is authorised by a premises licence held by him,1 or to the use of premises by a person if he acts in the course of a business carried on by another person who holds a premises licence authorising the use.2 1 GA 2005, s 37(2). 2 GA 2005, s 37(3).

4.45 Further exceptions apply in relation to the use of a track by a person accepting bets if the use is authorised by a premises licence (whether or not held by him),1 and the use of a casino for the provision of facilities for betting or bingo.2 As far as the latter exception is concerned, it arises because, save in the case of small casinos and betting,3 a casino premises licence authorises the holder, and any person he authorises in writing, to use the premises to provide facilities for bingo, betting or both.4 1 GA 2005, s 37(4). ‘Track’ means a horse-race course, a dog track or other premises on any part of which a race or other sporting event takes place or is intended to take place; see s 353(1). 2 GA 2005, s 37(5). 3 GA 2005, s 174(4). 4 GA 2005, s 174(3).

319

General offences

Use of premises only by persons not on the premises 4.46 The offence of using premises for certain forms of gambling under s 37 of the GA 2005 does not apply to the use of premises to provide facilities which are to be used only by persons who are acting in the course of a business or are not on the premises.1 The Explanatory Notes to the Act give two examples where such an exception may be relevant: where premises house a server used for the purpose of remote gambling, and a telephone call centre set up by a betting operator to accept telephone bets.2 1 GA 2005, s 37(6). 2 Explanatory Notes to the Gambling Act 2005, para 149.

The authority of an occasional use notice 4.47 An ‘occasional use notice’ may be given by a person who is responsible for the administration of events on a track or who is an occupier of a track.1 Such a notice, which must be written, must be given to the licensing authority for any area in which the track is wholly or partly situated, and must be copied to the chief officer of police for any area in which the track is wholly or partly situated.2 It must specify a day on which it has effect,3 and cannot be given in respect of a track for a day in a calendar year if eight occasional use notices have been given in respect of that track for days in that year.4 A person who accepts bets on a track, or who causes or permits premises to be used for the acceptance of bets, does not commit the offence of using premises for certain forms of gambling under s 37 of the GA 2005.5 1 GA 2005, s 39(2). ‘Track’ means a horse-race course, a dog track or other premises on any part of which a race or other sporting event takes place or is intended to take place: s 353(1). 2 GA 2005, s 39(3). For ‘chief officer of police’, see s 39(6)(a). 3 GA 2005, s 39(4). 4 GA 2005, s 39(5). See s 39(6) and (7) as to the Secretary of State’s power to amend this subsection so as to substitute a different maximum number of occasional use notices for a calendar year. 5 GA 2005, ss 37(7)(a) and 39.

Football pools, authorisation under section 93(3) 4.48 Where a pool betting operating licence authorises (whether expressly or impliedly) the provision of facilities for football pools, under s 93(3) of the GA 2005 the holder of the licence may give written authorisation to an adult or young person1 to make documents or other facilities available in connection with the licensed activities, to receive entries on behalf of the licensee, to receive payments on behalf of the licensee, and to make payments of winnings on behalf of the licensee.2 A person does not commit any offence under s 37 if he uses premises to do anything in accordance with an authorisation under s 93(3).3 1 A ‘child’ is an individual who is less than 16 years old: GA 2005, s 45(1); a ‘young person’ is an individual who is not a child but is less than 18 years old: s 45(2). 2 GA 2005, s 93(3). See Chapter 6 for operating licences.

320

General offences 3 GA  2005, ss  37(7)(a) and 40(1). The Secretary of State may make regulations disapplying s 40(1) to specified classes of premises: s 40(2).

Temporary use notices 4.49 A  temporary use notice is a notice given in accordance with the provisions of Part 9 of the GA 2005.1 A person who uses premises to carry on any of the gambling activities listed under s 37(1),2 or who causes or permits premises to be used to carry on any such gambling activity, does not commit the offence under s 37 of the Act if a temporary use notice has effect in respect of the premises and the activity is carried on in accordance with the terms of the notice.3 1 GA 2005, s 215(1). Such a notice is given by the holder of an operating licence and states his intention to carry on one or more prescribed activities. See GA 2005, Pt 9 (ss 214–234) for temporary use notices. 2 See 4.40 for the gambling activities listed under GA 2005, s 37(1). 3 GA 2005, ss 37(7)(b) and 214.

Gaming machines 4.50 A person does not commit the offence of using premises for certain forms of gambling under s 37 of the GA 2005 if: (1)

he makes a Category D gaming machine available for use in accordance with a family entertainment gaming machine permit;1

(2) he makes a gaming machine available for use by an individual, but the individual does not acquire an opportunity to win a prize by using the machine;2 and (3) he makes a gaming machine available for use by an individual, but the individual does not acquire an opportunity to win a prize of a value in excess of the amount paid for or in connection with the use of the machine.3 1 GA 2005, ss 37(7)(c) and 247(1). ‘A family entertainment gaming machine permit’ is a permit issued by the a licensing authority which authorises a person to make Category D gaming machines available for use in a specified family entertainment centre: s 247(2). 2 GA 2005, s 248(1). 3 GA  2005, ss  37(7)(c) and 249(1). Paying includes: paying money by way of an entrance charge, using a coin to activate a gaming machine where the coin will not or may not be returned, transferring money’s worth, and paying for goods or services at a rate which reflects the opportunity to use a gaming machine: s 249(2). It is immaterial to whom payment is made and who receives benefit from the payment: s 249(2)(b).

Exempt gaming – equal chance gaming in miners’ welfare institutes and in certain clubs 4.51 In the GA 2005 ‘miners’ welfare institutes’ are defined as associations established and conducted for social and recreational purposes and which 321

General offences also satisfy various conditions.1 The Act also gives meaning to the terms: ‘members clubs’2 and ‘commercial clubs’.3 The offence of using premises for certain forms of gambling under s 37 of the GA 2005 does not apply to the use of premises for ‘equal chance gaming’4 in miners’ welfare institutes, members clubs, commercial clubs and some other clubs (which meet most of the requirements of the Act’s definitions of either members’ clubs or commercial clubs)5 if the following conditions are satisfied:6 (1) that the arrangements for the gaming satisfy any prescribed requirements in relation to the amounts staked or the amount or value of a prize;7 (2) that no amount is deducted or levied from the sums staked or won;8 (3) that any participation fee does not exceed such maximum as may be prescribed;9 (4) that a game played on one set of premises is not linked with a game played on another set of premises;10 and (5)

in the cases of miners’ welfare institutes, members’ clubs and clubs that would be members’ clubs but for the Act’s requirement that members’ clubs are established and conducted wholly or mainly for purposes other than the provision of facilities for gambling,11 that each person who participates is: (a) a member of the club or institute who applied for membership, was nominated for membership or became a member at least 48 hours before he participates,12 or (b) is a guest of a member of the club or institute who would be entitled to participate by virtue of applying for membership, being nominated for membership or becoming a member at least 48 hours before participation.13

  1 GA 2005, s 268(1). The conditions are: that the association’s affairs are managed by a group of individuals of whom at least two thirds are miners’ representatives; that the association operates on premises the use of which is regulated in accordance with a charitable trust which has received money from the Miners’ Welfare Fund or the Coal Industry Social Welfare Organisation: s 268(2)–(4).   2 GA 2005, s 266; see Chapter 12. In general a ‘members’ club’ means a club which is established and conducted wholly or mainly for purposes other than the provision of facilities for gaming, which is established and conducted for the benefit of its members (and which is not otherwise established or conducted as a commercial enterprise), which is not established with the purpose of functioning for only a limited period of time, and which has at least 25 individual members: s  266(1). However, a club may still be a members’ club if it is established or conducted wholly or mainly for the purpose of the provision of facilities for gaming of a prescribed kind and facilities are not provided for any other kind of gaming in the course of the club’s activities: s 266(2).  3 GA  2005, s  267; see Chapter  12. Under the Act ‘commercial clubs’ must meet similar requirements to those required of members’ clubs (see fn  2 above) save that there is no requirement that a commercial club is established and conducted for the benefit of its membership.   4 Defined as gaming which does not involve playing or staking against a bank and where the chances are equally favourable to all participants: s 8(1); see Chapter 2.

322

General offences   5 GA 2005, s 269(1)(c) and (d). This applies to a club that would be a members’ club under s 266 save for the requirement that the club is established and conducted wholly or mainly for purposes other than the provision of facilities for gaming under s 266(1) and also to a club that would be a commercial club under s 267 save for the requirement that the club is established and conducted wholly or mainly for purposes other than the provision of facilities for gaming.   6 GA 2005, ss 37(7)(b)(ii) and 269(1). The reference to the provision of facilities by a club or institute in s 269(1) includes a reference to any provision of facilities made on behalf of or by arrangement with the club or institute and in the course of its activities: s 270(1).  7 GA  2005, s  269(2). Regulations prescribing requirements in relation to stakes or prizes for the purpose of this subsection may, in particular, make different provision for different classes of club or institute, and make different provision for different classes or descriptions of game: s 270(2). See the Gambling Act 2005 (Exempt Gaming in Clubs) Regulations 2007 (SI 2007/1944).   8 GA  2005, s  269(3). The reference in s  269(3) to a deduction or levy in respect of gaming provided by, on behalf of or by arrangement with a club or institute is to a deduction or levy made by or on behalf of the club or institute or a person providing facilities for gaming on behalf of, or by arrangement with, the club or institute: s 270(3).   9 GA 2005, s 269(4); and see also s 270(2) as to the provision that regulations may make in relation to the maximum charge. See SI 2007/1944. 10 GA 2005, s 269(5). Two games are linked if the result of one game is or may be wholly or partly determined by reference to the result of the other game, or the amount of winning available in one game is or may be wholly or partly determined by reference to the amount of participation in the other game: s 270(5). 11 This requirement is to be found under GA 2005, s 266(1)(a). 12 GA 2005, s 269(6)(a). 13 GA 2005, s 269(6)(b). A person is not to be treated as a guest of a member if the member extends an invitation, having no previous acquaintance with the person, and for the purpose only of enabling the person to take advantage of facilities for gaming provided by or for the club or institute: s 270(6).

Gaming in accordance with a club gaming permit 4.52 Club gaming permits, which are issued by licensing authorities, authorise the provision of facilities for some forms of gaming as long as the gaming takes place on premises on which a members’ club or miners’ welfare institute operates, and the gaming takes place in the course of the activities of the club or institute.1 1 GA 2005, s 271(2). See 4.22 as to ‘members’ clubs’ and ‘miners’ welfare institutes’.

4.53 In addition to conditions which are specific to the provision of facilities for gaming and to the provision of facilities for games of chance (considered below), club gaming permits are subject to some general conditions. The general conditions are: (1) that each person who participates in gaming in reliance on the club gaming permit is a member of the club or institute who applied for membership, was nominated for membership or became a member at least 48 hours before he participates,1 or a guest of a member of the club or institute (such member being himself entitled to participate, having applied for membership, been nominated for membership or becoming a member at least 48 hours before the participation of his guest);2 323

General offences (2) that no child or young person uses a Category B or C gaming machine on the premises of the club or institute,3 and that the holder of the club gaming permit complies with any relevant code of practice issued by the Gambling Commission under s 24 of the 2005 Act;4 (3) the authority of a club gaming permit extends to: (a) making up to three gaming machines (each of which must be of Category B, C or D) available for use,5 (b) subject to the conditions set out in the Act (described under 4.54 below), the provision of facilities for gaming,6 and (c) again subject to conditions specified in the Act (described under 4.55 below), the provision of facilities for games of chance, of such class or description as may be prescribed.7 1 GA 2005, s 271(6)(a). 2 GA 2005, s 271(6)(b). A person is not to be treated as a guest of a member if the member extends an invitation, having no previous acquaintance with the person, and for the purpose only of enabling the person to take advantage of facilities for gaming provided by or for the club or institute: s 272(4). 3 GA 2005, s 271(7)(a). 4 GA  2005, s  271(7)(b). See Chapter  3 for the provisions of s  24 and for the Act’s provisions relating to the Gambling Commission. See s 235 as to the meaning of ‘gaming machine’. 5 GA 2005, s 271(3)(a). 6 GA 2005, s 271(3)(b). 7 GA 2005, s 271(3)(c).

4.54 If facilities for gaming are to be lawfully provided on premises operated by a club or institute and in the course of the activities of the club or institute under a club gaming permit, the gaming must also satisfy the following conditions: (1) that no amount is deducted or levied from the sums staked or won;1 (2) that any participation fee does not exceed such maximum as may be prescribed;2 (3) that a game played on one set of premises is not linked with a game played on another set of premises;3 and (4) that each person who participates is: (a) a member of the club or institute who applied for membership, was nominated for membership or became a member at least 48 hours before he participates,4 or (b) is a guest of a member of the club or institute who would be entitled to participate by virtue of applying for membership, being nominated for membership or becoming a member at least 48 hours before participation.5 1 GA 2005, s 269(3) as applied by s 271(3)(b). The reference in s 269(3) to a deduction or levy in respect of gaming provided by, on behalf of or by arrangement with a club or institute is to a deduction or levy made by or on behalf of the club or institute,

324

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2

3

4 5

or a person providing facilities for gaming on behalf of, or by arrangement with, the club or institute: s 270(3). GA 2005, s 269(4) as applied by s 271(3)(b). See also s 270(2) as to the provision that regulations may make in relation to the maximum charge. See the Gambling Act 2005 (Club Gaming Permits) (Authorised Gaming) Regulations 2007 (SI 2007/1945). GA 2005, s 269(5) as applied by s 271(3)(b). Two games are linked if the result of one game is or may be wholly or partly determined by reference to the result of the other game, or the amount of winnings available in one game is or may be wholly or partly determined by reference to the amount of participation in the other game: s 270(5). GA 2005, s 269(6)(a) as applied by s 271(3)(b). GA  2005, s  269(6)(b) as applied by s  271(3)(b). A  person is not to be treated as a guest of a member if the member extends an invitation, having no previous acquaintance with the person, and for the purpose only of enabling the person to take advantage of facilities for gaming provided by or for the club or institute: s 270(6).

4.55 If facilities for games of chance (which must conform with any regulations prescribing the class and description of the games of chance) are to be lawfully provided on premises operated by a club or institute and in the course of the activities of the club or institute under a club gaming permit, the games of chance must satisfy the following conditions:1 (1) that no participation fee is charged otherwise than in accordance with regulations;2 (2) that no amount is deducted or levied from the sums staked or won otherwise than in accordance with regulations;3 (3) that the public is excluded from any area of the club’s or institute’s premises where gaming is taking place;4 and (4) that children and young persons are excluded from any area of the club’s or institute’s premises where gaming is taking place.5 1 GA 2005, ss 37(7)(d) and 269(1). The reference to the provision of facilities by a club or institute in s 269(1) includes a reference to any provision of facilities made on behalf of or by arrangement with the club or institute and in the course of its activities: s 270(1). 2 Such regulations may make provision about the circumstances in which a fee may be charged and about the amount of the fee: s 271(4)(a). Regulations under s 271(4)(a) may make different provision for different classes of club or institute, make different provision for different classes or descriptions of games, and make different provision for different classes or descriptions of fee, deduction or levy: s 271(5). See the Gambling Act 2005 (Club Gaming Permits) (Authorised Gaming) Regulations 2007 (SI 2007/1945). 3 Such regulations may make provision about the circumstances in which a fee may be charged and about the amount of the fee: GA  2005, s  271(4)(b). Regulations under s  271(4)(b) may make different provision for different classes of club or institute, make different provision for different classes or descriptions of games, and make different provision for different classes or descriptions of fee, deduction or levy: s 271(5). See SI 2007/1945. The reference in s 271(4)(b) to a deduction or levy in respect of gaming provided by, on behalf of or by arrangement with a club or institute is to a deduction or levy made by or on behalf of the club or institute or a person providing facilities for gaming on behalf of, or by arrangement with, the club or institute: s 272(1).

325

General offences 4 GA  2005, s  271(4)(c). ‘Public’ means persons other than members, guests of members and staff of the club or institute, and persons providing services to or for the club or institute: s 272(2). A person is not to be treated as a guest of a member if the member extends an invitation, having no previous acquaintance with the person, and for the purpose only of enabling the person to take advantage of facilities for gaming provided by or for the club or institute: s  272(4). ‘An area where gaming is taking place’ is any place in which it is possible to participate in the gaming: s 272(3). 5 GA 2005, s 271(4)(d). A ‘child’ is an individual who is less than 16 years old: s 45(1); a ‘young person’ is an individual who is not a child but is less than 18 years old: s 45(2).

Making a gaming machine available for use in accordance with a club machine permit 4.56 As with club gaming permits (which are considered above), club machine permits are issued by licensing authorities.1 However, the Gambling Act’s provisions as to club machine permits differ from club gaming permits. Club machine permits can be held by commercial clubs (as well as by members’ clubs and miners’ welfare institutes), but the scope of the permission given is narrower in that they authorise only the making of up to three gaming machines (each of which must be of Category B, C or D)2 available for use on premises which the club or institute operates and in the course of the activities of the club or institute.3 1 GA 2005, ss 273(2), 274 and Sch 12; see Chapter 25. 2 GA  2005, s  271(3)(a). See GA  2005, s  235 and Chapter  25 as to the meaning of ‘gaming machine’. See Chapter 25 as to the categories of gaming machine. 3 GA 2005, s 273(2).

4.57

The authority of a club machine permit is subject to conditions:

(1) that each person to whom a machine is made available for use in reliance on the club machine permit is a member of the club or institute who applied for membership, was nominated for membership or became a member at least 48 hours before he uses the machine,1 or a guest of a member of the club or institute (such member being himself entitled to participate having applied for membership, been nominated for membership or becoming a member at least 48 hours before the use of the machine by his guest);2 (2) that no child or young person uses a Category B or C gaming machine on the premises of the club or institute,3 and that the holder of the club gaming permit complies with any relevant code of practice issued by the Gambling Commission under s 24 of the 2005 Act.4 1 GA 2005, s 273(3)(a). 2 GA 2005, s 273(3)(b). A person is not to be treated as a guest of a member if the member extends an invitation, having no previous acquaintance with the person, and for the purpose only of enabling the person to take advantage of facilities for gaming provided by or for the club or institute: s 273(5). 3 GA 2005, s 273(4)(a). 4 GA  2005, s  273(4)(b). See Chapter  3 for the provisions of s  24 and for the Act’s provisions relating to the Gambling Commission. See s 235 and Chapter 25 as to

326

General offences the meaning of ‘gaming machine’. See Chapter 25 as to the categories of gaming machine.

4.58 The offence of using premises for certain forms of gambling under s 37 of the GA 2005 do not apply to making a gaming machine available for use in accordance with a club machine permit.1 1 GA 2005, ss 37(7)(d) and 273(1).

Gaming machines – automatic entitlement for some premises with on-premises alcohol licence 4.59 The offence of using premises for certain forms of gambling under s 37 of the GA 2005 does not apply to making one or two gaming machines, each of which is of Category C or D,1 available for use on premises where an automatic entitlement arises by virtue of the fact that, amongst other things, a premises licence under Part 3 of the Licensing Act 2003 has effect in respect of the premises.2 This automatic entitlement applies to premises (other than vehicles), in respect of which an on-premises alcohol licence has effect,3 which contain a bar at which alcohol is served for consumption on the premises (without a requirement that alcohol is served only with food),4 and at a time when alcohol may be supplied in reliance on the alcohol licence.5 However, this is subject to the following conditions being satisfied: (1) that the person who holds the on-premises alcohol licence sends the licensing authority written notice of his intention to make gaming machines available for use in reliance on the automatic entitlement and the prescribed fee;6 (2) that any relevant code of practice issued by the Gambling Commission under s 24 of the 2005 Act about the location and operation of a gaming machine is complied with.7 Under the foregoing provisions, s 37 is not disapplied in respect of premises at a time when gaming machines are made available for use on the premises in reliance on a club gaming permit or a club machine permit.8 1 See GA  2005, s  235 and Chapter  25 for the meaning of ‘gaming machine’ and see s 236, regulations made thereunder, and Chapter 25 for the categorisation of gaming machines. 2 GA 2005, s 282(1). 3 GA 2005, s 278(1)(a). ‘Alcohol licence’ means a premises licence under Pt 3 of the Licensing Act 2003: GA 2005, s 277(a); and ‘on-premises alcohol licence’ means a premises licence under Pt 3 of the Licensing Act 2003 which authorises the supply of alcohol for consumption on the licensed premises: GA 2005, s 277(b). 4 GA 2005, s 278(1)(b). 5 GA 2005, s 278(1)(c). 6 GA  2005, s  282(2). In the case of premises in respect of which an on-premises alcohol licence has effect, ‘prescribed’ means prescribed by regulations made by the Secretary of State: s 282(5)(a). 7 GA  2005, s  273(4)(b). See Chapter  3 for the provisions of s  24 and for the Act’s provisions relating to the Gambling Commission. 8 GA 2005, s 282(4). See 4.52 for ‘club gaming permit’ and 4.56 for ‘club machine permit’.

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General offences

Making a gaming machine available for use in accordance with a licensed premises gaming machine permit 4.60 Licensed premises gaming machine permits, which are issued by licensing authorities, authorise a person to make Category C or D gaming machines (or both) available for use on premises,1 subject to the condition that the holder complies with any relevant provision of a code of practice issued by the Gambling Commission under s 24 of the 2005 Act about the location and operation of a gaming machine.2 1 GA 2005, s 283(2). 2 GA  2005, s  283(3). See Chapter  3 for the provisions of s  24 and for the Act’s provisions relating to the Gambling Commission. See s 235 and Chapter 25 as to the meaning of ‘gaming machine’. See Chapter 25 as to the categories of gaming machine.

4.61 A  person does not commit an offence under s  37 of the Act if he makes a gaming machine available for use in accordance with a licensed premises gaming machine permit,1 but it is to be noted that, under these provisions, s  37 is not disapplied in respect of premises at a time when gaming machines are made available for use on the premises in reliance on a club gaming permit or a club machine permit.2 1 GA 2005, ss 37(7)(e) and 283(1). 2 GA 2005, s 283(4). See 4.52 for ‘club gaming permit’ and 4.56 for ‘club machine permit’.

Travelling fairs 4.62 For the purpose of the GA  2005 a ‘fair’ means a fair consisting wholly or principally of the provision of amusements.1 A fair held on a day in a calendar year is a ‘travelling fair’ if provided wholly or principally by persons who travel from place to place for the purpose of providing fairs, and at a place no part of which has been used for the provision of a fair on more than 27 days in that calendar year.2 1 GA 2005, s 286(a). 2 GA 2005, s 288(b).

4.63 A person does not commit the offence of using premises for certain forms of gambling under s 37 of the GA 2005 if: (1)

he makes one or more Category D gaming machines available for use at a travelling fair;1 and

(2) facilities for gambling (whether by way of gaming machines or otherwise) amount together to no more than an ancillary amusement at the fair and the gaming satisfies the Act’s prize gaming conditions.2 1 GA  2005, s  293(4). ‘Prescribed’ means prescribed by regulations made by the Secretary of State: s 293(6); see the Gambling Act 2005 (Limits on Prize Gaming) Regulations 2007 (SI 2007/1777). 2 GA 2005, ss 37(7)(f) and 290(1).

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General offences

Prize gaming 4.64 Under the GA  2005 ‘prize gaming’ is gaming where neither the nature nor the size of a prize played for is determined by reference to the number of players or the amount paid for or raised by the gaming.1 ‘Prize gaming permits’, which are issued by licensing authorities, authorise a person to provide facilities for gaming with prizes on specified premises. If such gaming satisfies the conditions for prize gaming which are set out in the Act and the facilities for that gaming are provided in accordance with a prize gaming permit, the person using the premises for gambling does not commit an offence under s 37.2 1 GA 2005, s 288; see Chapter 22. 2 GA 2005, ss 37(7)(g) and 289(1).

4.65 (1)

The GA 2005’s prize gaming conditions are as follows: that there is compliance with such limits in respect of participation fees as may be prescribed;1

(2) that: (a) all the chances to participate in a particular game must be acquired or allocated on one day and in the place where the game is played,2 (b) the game must be played entirely on that day,3 (c)

(3)

the result of the game must be made public in the place where the game is played and as soon as is reasonably practicable after the game ends and, in any event, on the day on which the game is played;4

that the prize for which a game is played, or the aggregate of the prizes for which a game is played, must not exceed the prescribed amount where all the prizes are money, and must not exceed the prescribed value in any other cases;5 and

(4) that participation in the game by a person does not entitle him or another person to participate in any other gambling (whether or not he or the other person would also have to pay to participate in other gambling).6 1 Such limits in respect of participation fees may, in particular, relate to players, games or a combination, and different limits may be prescribed in respect of different classes or descriptions of fee: GA  2005, s  293(1) and (2). ‘Prescribed’ means prescribed by regulations made by the Secretary of State: s 293(6); see the Gambling Act 2005 (Limits on Prize Gaming) Regulations 2007 (SI 2007/1777). 2 GA 2005, s 293(3)(a). 3 GA 2005, s 293(3)(b). 4 GA 2005, s 293(3)(c). 5 GA 2005, s 293(4). 6 GA 2005, s 293(5).

4.66 In addition to the protection from the offence of using premises for gambling under s  37 of the GA  2005 which is afforded when facilities for 329

General offences prize gaming are provided in accordance with a prize gaming permit, there are a number of other situations where a person does not commit an offence under s 37 when he provides facilities for prize gaming. In general, however, compliance with the Act’s prize gaming conditions is required. No offence is committed under s 37 if: (1) subject to compliance with the Act’s prize gaming conditions, facilities for prize gaming are provided in an adult gaming centre and the gaming satisfies the Act’s prize gaming conditions;1 (2) subject to compliance with the Act’s prize gaming conditions, facilities for prize gaming are provided in a licensed family entertainment centre and the gaming satisfies the Act’s prize gaming conditions;2 (3) subject to compliance with the Act’s prize gaming conditions, facilities for equal chance prize gaming are provided on premises in respect of which a family entertainment centre gaming machine permit has effect and the gaming satisfies the Act’s prize gaming conditions;3 (4) facilities for prize gaming are provided in premises in respect of which a bingo premises licence has effect;4 (5) subject to compliance with the Act’s prize gaming conditions, facilities for equal chance prize gaming are provided at a travelling fair, the facilities for gambling (in whatever form) amount together to no more than an ancillary amusement at the fair and the gaming satisfies the Act’s prize gaming conditions.5 1 2 3 4

GA 2005, ss 37(7)(g) and 290(1). GA 2005, ss 37(7)(g) and 290(1). GA 2005, ss 37(7)(g) and 290(2). GA 2005, ss 37(7)(g) and 291. Unlike other exceptions to the offence under s 37 where premises are used for prize gaming, here there is no requirement that the prize gaming satisfies the Act’s prize gaming conditions. See, however, 4.34 fn 4 as to the imposition of conditions governing prize gaming on the bingo operating licence. 5 GA 2005, ss 37(7)(g) and 292(a).

Private gaming and betting 4.67 A person does not commit the offence of using premises for certain forms of gambling under s 37 of the GA 2005 by the use of premises for private gaming1 or private betting.2 Both ‘private gaming’ and ‘private betting’ are defined in Sch 15 to the Act.3 1 GA 2005, ss 37(7)(h) and 296(2)(a). 2 GA 2005, ss 37(7)(h) and 296(2)(b). 3 GA 2005, s 295.

4.68 As far as private gaming is concerned, it is gaming which satisfies three conditions: that no charge is made for participation;1 that it is equal chance gaming;2 and that it does not occur in a place to which the public have access (whether or not on payment).3 However, the condition that the gaming is equal chance gaming does not apply in relation to ‘domestic gaming’ or 330

General offences ‘residential gaming’.4 Domestic gaming is gaming which takes place in a private dwelling and on a domestic occasion.5 Residential gaming is gaming which takes place in hostels, halls of residence and similar establishments, not administered in the course of a trade or business, and where more than half the participants in the gaming are residents of the hostel, hall or establishment.6 1 GA 2005, Sch 15, para 3(1). For these purposes: it is immaterial how a charge is described; it is immaterial whether a charge is in money or money’s worth; an amount deducted or levied by a person providing the facilities for gaming from sums staked or won in the course of the gaming is a charge for participation in the gaming; a charge for admission to premises where gaming takes place shall be treated as a charge for participation in the gaming; and a stake is not a charge for participation: Sch 15, para 3(2). 2 GA 2005, Sch 15, para 4(1). 3 GA 2005, Sch 15, para 5. 4 GA 2005, Sch 15, para 4(2). 5 GA 2005, Sch 15, para 2(1). 6 GA 2005, Sch 15, para 2(2).

4.69 Private betting is betting which falls into one of two categories set out under the GA 2005: ‘domestic betting’ and ‘workers’ betting’.1 Domestic betting is betting on premises in which each party to the transaction lives.2 Workers’ betting is betting made between persons each of whom is employed under a contract of employment with the same employer.3 1 GA 2005, Sch 15, para 6. 2 GA 2005, Sch 15, para 7(1). A person lives in premises if he habitually resides in any part of the premises (whether or not there are other premises in which he also habitually resides): Sch 15, para 7(2). 3 GA 2005, Sch 15, para 8.

Non-commercial gaming 4.70 The final exceptions to commission of the offence of using premises for certain forms of gambling under s 37 of the GA 2005 are where a person provides facilities for non-commercial prize gaming,1 or provides facilities for non-commercial equal chance gaming.2 Part  14 of the Act specifies conditions with which gaming must comply if it is to be treated as either non-commercial prize gaming or non-commercial equal chance gaming. 1 GA 2005, ss 37(7)(h) and 298(2)(a). 2 GA 2005, ss 37(7)(h) and 298(2)(b).

4.71 The conditions to be satisfied in the case of non-commercial prize gaming are: (1) that the players are informed that the purpose of the gaming is to raise money for a specified purpose other than that of private gain;1 (2) that the arrangements for the gaming are such that the profits will be applied for a purpose other than that of private gain;2 331

General offences (3) that the non-commercial event of which the gaming is part does not take place: (a) on premises, other than a track, in respect of which a premises licence has effect,3 (b) on a track at a time when activities are being carried on in reliance of a premises licence,4 or (c) on premises at a time when activities are being carried on in reliance on a temporary use notice;5 (4) that the gaming is not remote.6 1 GA 2005, s 299(1) and (2). 2 GA 2005, s 299(1) and (3). ‘Profits’ in relation to gaming means: the aggregate of amounts paid by way of stakes or otherwise accruing to the person organising the gaming directly in connection with it, minus amounts deducted by the person organising the gaming in respect of the provision of prizes or other costs reasonably incurred in organising or providing facilities for the gaming: s 299(6). 3 GA 2005, s 299(1) and (4)(a). 4 GA 2005, s 299(1) and (4)(b). 5 GA 2005, s 299(1) and (4)(c). 6 GA 2005, s 299(1) and (5).

4.72 The conditions to be satisfied in the case of non-commercial equalchance gaming are: (1) that the persons participating in the gaming are informed that the purpose of the gaming is to raise money for a specified purpose other than that of private gain;1 (2) that the arrangements for the gaming are such that the profits will be applied for a purpose other than that of private gain;2 (3) that the arrangements for the gaming ensure compliance with regulations of the Secretary of State: (a) limiting amounts staked,3 (b) limiting participation fees,4 (c) limiting other amounts paid by a person in connection with the gaming,5 (d) limiting a combination of matters in paras (a)–(c), (e)

limiting the amount or value of a prize,

(f)

limiting the aggregate amount or value of prizes;

(4) that the gaming is not remote.6 1 GA 2005, s 300(2). 2 GA 2005, s 300(3). ‘Profits’ in relation to gaming means the aggregate of amounts paid by way of stakes or otherwise accruing to the person organising the gaming directly in connection with it, minus amounts deducted by the person organising the gaming in respect of the provision of prizes or other costs reasonably incurred in organising or providing facilities for the gaming: s 300(8). 3 GA 2005, s 300(4)(a).

332

General offences 4 GA 2005, s 300(4)(b). 5 GA 2005, s 300(4)(c). 6 GA 2005, s 300(7).

Sentencing powers 4.73 In England and Wales a person guilty of an offence under s  37 is liable on summary conviction to: imprisonment for a term not exceeding 51 weeks,1 a fine not exceeding level 5 on the standard scale,2 or both.3 1 GA 2005, s 37(8)(a) but, in its application to Scotland, imprisonment for a term not exceeding six months: s 37(9). 2 GA 2005, s 37(8)(b). 3 GA 2005, s 37(8)(c).

SECTION 41 – GAMBLING SOFTWARE The offence 4.74 ‘Gambling software’ is defined in the GA 2005 as computer software for use in connection with remote gambling, but it does not include anything for use solely in connection with a gaming machine.1 By virtue of s  41 of the Act, a person commits an offence if in the course of a business he manufactures, supplies, installs or adapts gambling software, unless he acts in accordance with an operating licence.2 1 GA 2005, s 41(2). 2 GA 2005, s 41(1).

4.75 However, the basic offence is qualified, in that it is further provided that a person does not supply or install gambling software by reason only of the facts that: (1) he makes facilities for remote communication or non-remote communication available to another person;1 and (2) the facilities are used by the other person to supply or install gambling software.2 1 GA 2005, s 41(3)(a). 2 GA 2005, s 41(3)(b).

Sentencing powers 4.76 In England and Wales a person guilty of an offence under s  41 is liable on summary conviction to: imprisonment for a term not exceeding 51 weeks,1 a fine not exceeding level 5 on the standard scale,2 or both.3 1 GA 2005, s 41(4)(a). 2 GA 2005, s 41(4)(b). 3 GA 2005, s 41(4)(c).

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General offences

SECTION 42 – CHEATING The offence 4.77 Unlike the offences under ss 33, 37 and 41, the offence of ‘cheating’ created under s  42 of the GA  2005 does not allow for the imposition of sanctions for failures in compliance with the Act’s regulatory system, but the intention behind the creation of the offence is clearly furtherance of the licensing objectives. It is the only offence created under the 2005 Act which may be tried on indictment. 4.78 A person commits the offence of cheating if he cheats at gambling, or does anything for the purpose of enabling or assisting another person to cheat at gambling.1 1 GA 2005, s 42(1).

4.79 Although ‘cheating’ is not defined in the GA 2005 (it is to be given its ‘… normal, everyday meaning’),1 s 42 further provides (without prejudice to the generality of the Act’s statement of the offence) that cheating at gambling may, in particular, consist of actual or attempted deception or interference in connection with either the process by which gambling is conducted,2 or a real or virtual game, race or other event or process to which gambling relates.3 It is also provided that it is immaterial if the person who cheats improves his chances of winning anything or, indeed, if the person who cheats wins anything.4 1 2 3 4

Explanatory Notes to the Gambling Act 2005, para 163. GA 2005, s 42(3)(a). GA 2005, s 42(3)(b). GA 2005, s 42(2).

4.80 The meaning of ‘cheating’ came before the courts when Crockfords refused to pay a professional gambler the £7.7 million he had won playing Punto Banco, alleging that his use of the technique known as ‘edge-sorting’ amounted to cheating.1 The gambler brought an action in the High Court to recover his winnings.2 Crockfords claimed (inter alia) that it was an implied term of his gaming contract that he would not cheat. The gambler failed before the High Court. A majority of the Court of Appeal dismissed his appeal,3 but the reasoning of the first-instance judge and the two Court of Appeal judges in agreement is by no means identical, and the dissenting judge in the Court of Appeal disagreed with all the other three. Thus we have four judges, each of whom has approached the issue of ‘cheating’ somewhat differently, and come to different conclusions about it. In summary: (1) Mitting J  held that the gambler’s actions, in (a) giving himself an advantage which the game precludes, (b) using the croupier as an innocent agent, (c) in circumstances in which he knew that the croupier and her superiors did not realise the consequences of what she had done at his instigation (turning the direction of the cards), amounted to cheating ‘for the purposes of the civil law’, and was in breach of an implied term of the gaming contract. The judge declined to rule as to whether or not there had been criminal cheating within GA 2005, s 42;

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General offences (2)

Arden LJ decided that on the agreed facts the gambler was guilty of the criminal offence of cheating. She held that the s 42 offence was made out because s 42(3) says that cheating may consist in an interference in connection with the process by which gambling is conducted. She said that dishonesty was not a necessary ingredient of the offence;

(3) Tomlinson LJ was inclined to doubt, because of the interference with the game instigated by the gambler made it no longer a game of pure chance, whether the game of Punto Banco had been played at all. (Mitting J ruled that the game had been played.) He found that the gambler and an accomplice had practised a deception on Crockfords (again, parting company with Mitting J). He said that the gambler’s conduct fell within the ordinary and natural meaning of the word ‘cheating’; (4) Sharp LJ (dissenting) thought that dishonesty was an essential ingredient of the criminal offence of cheating. She said that cheating for the purposes of the implied term in the gaming contract could not sensibly be looked at or defined differently from cheating contrary to the GA 2005, s 42. In light of Mitting J’s finding of that the gambler had not been dishonest, she concluded that he was bound to have found that the gambler had not cheated. At the time of writing it is understood that application for permission to appeal has been made to the Supreme Court. Having in mind the miscellany of judicial interpretations of s  42, and of ‘civil’ cheating, it is hoped that permission is given and some judicial consensus is reached. 1 A detailed analysis of ‘edge sorting’ is provided by paras 9–16 of the judgment of Mitting J in the Genting case (see n 2). 2 Phillip Ivey v Genting Casinos UK Ltd [2014] EWHC 3394 (QB). 3 [2016] EWCA Civ 1093.

Sentencing powers 4.81 (1)

In England and Wales a person guilty of an offence under s 42 is liable: on conviction on indictment, to imprisonment not exceeding two years, to a fine or to both;1 or

(2) on summary conviction, to imprisonment for a term not exceeding 51 weeks, to a fine not exceeding the statutory maximum or to both.2 1 GA 2005, s 42(4)(a). 2 GA 2005, s 42(4)(b).

SECTION 43 – ‘CHAIN-GIFT SCHEMES’ The offence 4.82 Section 43 of the GA  2005 contains a general prohibition against participation in ‘chain-gift schemes’. A ‘chain-gift scheme’ is defined in the Act as an arrangement where: 335

General offences (1) in order to participate a person must make a payment to one or more other participants (a ‘joining fee’);1 and (2) each person who participates in the arrangement is required or invited to invite others to participate, and is encouraged to believe that he will receive the joining fees, or part of the joining fees, of other participants, to an amount in excess of the joining fee paid by him.2 1 GA 2005, s 43(2)(a). ‘Payment’ means a payment of money or money’s worth, but does not include the provision of goods or services, and it is immaterial whether a payment is made directly or through a person responsible for administering the scheme: s 43(3). 2 GA 2005, s 43(2)(b).

4.83 It seems clear that a scheme falling within the definition of ‘chain gift scheme’ would have amounted to a lottery as the law stood prior to the implementation of the GA  2005 and in particular the implementation of the statutory definition of ‘lottery’ in s 14. It may, however, be arguable that chain gift schemes do not fall within the new statutory definition of lottery. For a discussion of this issue see Chapter 15. Howsoever that issue may be resolved it seems clear that Parliament took the view that chain gift schemes, even if they were not to be treated as lotteries under the Act, had many of the characteristics of gambling and the pursuit of the third of the licensing objectives, the protection of children and other vulnerable persons from harm, required the creation of a specific offence to deal with schemes of this type. The offence is committed when a person: (1) invites another to join a ‘chain-gift’ scheme;1 or (2)

knowingly participates in the promotion, administration or management of such a scheme.2

Reference should also be made to the provisions of the Consumer Protection from Unfair Trading Regulations 2008, SI 2008/1277 (implementing Directive 2005/29/EC of the European Parliament and of the Council concerning unfair business-to-consumer commercial practices) which, inter alia, provide that it is an unfair commercial practice which is subject to criminal sanctions to establish, operate or promote a ‘pyramid promotional scheme’ (ie a scheme where a consumer gives consideration for the opportunity to receive compensation that is derived primarily from the introduction of other consumers into the scheme rather than from the sale or consumption of ‘products’ (the latter being very widely defined by the regulations to include goods, services and immoveable property, rights and obligations)). 1 GA 2005, s 43(1)(a). 2 GA 2005, s 43(1)(b).

Sentencing powers 4.84 In England and Wales a person guilty of an offence under s  43 is liable on summary conviction to: imprisonment for a term not exceeding 51 weeks,1 a fine not exceeding level 5 on the standard scale,2 or both.3 1 GA 2005, s 43(4)(a).

336

General offences 2 GA 2005, s 43(4)(b). 3 GA 2005, s 43(4)(c).

SECTION 44 – THE PROVISION OF UNLAWFUL FACILITIES ABROAD The offence 4.85 A person commits an offence if he does anything in Great Britain, or uses remote gambling equipment situated in Great Britain, for the purpose of inviting or enabling a person in a prohibited territory to participate in remote gambling.1 ‘Prohibited territories’ are countries or places designated as such by the Secretary of State by order.2 1 GA 2005, s 44(1). See s 4 and Chapter 17 for the meaning of ‘remote gambling’, and s 36(5) and 4.17 for the meaning of ‘remote gambling equipment’. 2 GA 2005, s 44(2).

Sentencing powers 4.86 An order under GA 2005, s 44(2) (ie an order designating countries or places as ‘prohibited territories’) shall prescribe the mode of trial and the maximum penalty for an offence under s 44 of the Act.1 1 GA 2005, s 44(3).

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Chapter 5 Offences relating to children and young persons

INTRODUCTION 5.1 Part 4 is the second of the two Parts of the Gambling Act 2005 which are devoted entirely to offences.1 The provisions of Part 3 of the Act – which create a number of ‘general offences’ – have been considered in the preceding chapter.2 Part  4 of the Act creates offences relating to children and young persons. According to the Explanatory Notes to the Act, these offences: ‘…  establish the extent to which children and young people may become involved in gambling, whether in terms of participation in the gambling, entry into gambling premises, or employment in relation to the provision of such facilities’.3 1 Gambling Act 2005, Pt 4 (ss 45–64). 2 See Chapter 4 for commentary on the general offences created under GA 2005, Pt 3 (ss 33–44). 3 Explanatory Notes to the Gambling Act 2005, para 173.

5.2 Under the Act, a ‘child’ is defined as an individual who is less than 16 years old1 and a ‘young person’ is defined as an individual who is not a child but who is less than 18 years old.2 Whilst, as has been seen, the general offences created under Part 3 are, at least in part, designed to give efficacy to the Act’s regulatory system (ie  to impose criminal sanctions for failure to comply with its requirements as to the holding of licences, permits etc),3 it is clear that the primary purpose underlying the creation of the offences to be found in Part 4 is furtherance of the third of the licensing objectives set out under GA 2005, s 1, that is to say, the protection children and other vulnerable persons from being harmed or exploited by gambling.4 1 2 3 4

GA 2005, s 45(1). GA 2005, s 45(2). See Chapter 4. GA 2005, s 1(c).

339

Offences relating to children and young persons 5.3 Although the offences created by Part  4 of the Act are divided into three categories – ‘principal offences’,1 ‘employment offences’2 and ‘miscellaneous offences’3 – there are, nonetheless, some features which are common to all three categories. First, it is clearly not the aim of the legislation to prevent children and young persons having any contact, however slight, with gambling, but to prevent their exposure to certain kinds of gambling activity which is clearly believed, at least in the eyes of the draftsman, to be more harmful. This tacit distinction made in the Act between ‘hard’ gambling (eg gaming in casinos) and ‘soft’ gambling (eg the use of low-payout gaming machines at family entertainment centres and travelling fairs) has already been observed in relation to the general offences under Part 3.4 Second, since both hard and soft gambling come in a myriad of forms, and facilities for gambling can be lawfully provided in a variety of premises under the Act, the draftsman has clearly decided against the creation of numerous specific offences and has opted to create a few offences expressed in general and all-encompassing terms to which exceptions – these being the softer forms of gambling – apply. Whilst this method, which again has already been seen used in the creation of the general offences under Part 3, is understandable, for many offences the consequence is a long list of exceptions and, in addition, it does often mean that recourse must be had to various sections of the Act outside Part 4 in order to be confident that, in any particular case, an exception to an offence does indeed apply. As with the approach to the general offences under Part  3, here it is intended to present as complete a picture as is possible of the exceptions to each of the offences under Part 4 of the Act. 1 2 3 4

GA 2005, ss 46–50. GA 2005, ss 51–55. GA 2005, ss 56–59. See Chapter 4.

5.4 Turning to the specific categories of offence created by Part  4, the common theme of the principal offences is that they are aimed at the prevention of harm that might be caused to children and young persons by their exposure to the harder forms of gambling by limiting their participation in gambling (including their participation as a provider of facilities for gambling)1 and by preventing their entry onto certain premises. 1 For the meaning of ‘providing facilities for gambling’, see GA  2005, s  5 and Chapter 2.

5.5 It will be seen that the employment offences under Part 4 fall into two categories: offences that apply where a child and/or a young person is employed to provide facilities in connection with some forms of gambling; and offences that apply where a child and/or young person is employed to perform functions in connection with some forms of gambling on some premises. In Part 4 a reference to ‘employing’ a person includes a reference to employing or ‘engaging’ the person, whether or not under a contract of employment.1 Further, ‘employing a person’ also includes causing or permitting the person to be employed or engaged.2 It is clear that these provisions would apply in a situation where, for example, ‘A’, the provider of facilities for gambling, engages ‘B’, a 16 or 17-year-old, to provide facilities in connection with the gambling and B  is self-employed. It would also 340

Offences relating to children and young persons appear that these provisions encompass a situation where the 16 or 17-yearold B  is in fact employed by ‘C’ (eg  an employment business), but in fact provides facilities for gambling on A’s behalf (by virtue of a contract between A and C). Where a person commits an offence under Part 4 of the Act, he is to be treated as committing the offence on each day during any part of which the employment continues.3 1 GA 2005, s 61(1)(a). 2 GA 2005, s 61(1)(b). 3 GA 2005, s 61(2).

The offences under Part 4 of the Gambling Act 2005 5.6 Some of the offences created under Part  4 of the GA  2005 may committed by a ‘person’ and others may be committed by a ‘young person’. Under the Act, a ‘child’ is defined as an individual who is less than 16 years old and a ‘young person’ is defined as an individual who is not a child but who is less than 18 years old.1 1 GA 2005, s 45.

5.7 By way of summary, the offences created under Part  4 of the Gambling Act 2005 are as follows.

The principal offences 5.8 (1)

Under s 46, a person commits an offence if he invites, causes or permits, a child or young person to gamble (subject to exceptions).

(2)

Under s 47, five offences, each relating to a specific type of premises, are created, and in each case a person commits an offence if he invites or permits a child or young person to enter the specified type of premises.

(3) Under s 48, a young person commits an offence if he gambles (subject to exceptions). (4) Under s  49, five offences are also created, in that a young person commits an offence if he enters premises in circumstances in which a person would commit an offence under s 47 if he invited or permitted the young person to enter the premises. (5) Under s 50, a young person commits an offence if he provides facilities for gambling (subject to exceptions).

The employment offences 5.9 (1)

Under s 51, a person commits an offence if he employs a child or young person to provide facilities for gambling (subject to exceptions). 341

Offences relating to children and young persons (2) Under s  52, a person commits an offence if he employs a child to provide facilities for gambling in connection with a lottery (other than a lottery that forms part of the National Lottery) or football pools. Note, however, that the effect of the exemption of the National Lottery from this provision (which on its face would result in the lawful employment of a child to provide facilities in connection with the National Lottery) is qualified by the National Lottery Regulations 1994, SI 1994/189, reg 3 which provides that no National Lottery ticket may be sold by (or to) a person who has not attained the age of 16 years. Thus a young person may, but a child may not, sell National Lottery tickets or football pools coupons. (3) Under s  53, a person commits an offence if he employs a child to perform any function on premises where, and at a time when facilities are provided for the playing of bingo or facilities for gambling are provided in accordance with a club gaming permit or a club machine permit. (4) Under s 54, two offences are created: a person commits an offence if he employs a child or young person to perform any function on premises where a Category A, B, C or D gaming machine is situated and the child or young person is or may be required in the course of that employment to perform a function in connection with the gaming machine; and a young person commits an offence if he is employed in contravention of the foregoing provision. (5) Under s  55, two offences are created: subject to exceptions, a person commits an offence if he employs a child or young person to perform any function on premises in respect of which a casino premises licence has effect or a betting premises licence has effect or an adult gaming centre premises licence has effect; and a young person commits an offence if he is employed in contravention of the foregoing provisions.

The miscellaneous offences 5.10 (1)

Under s 56, a person commits an offence if he invites, causes or permits a child to participate in a lottery (subject to exceptions).

(2)

Under s 57, a person commits an offence if he invites, causes or permits a child to participate in football pools.

(3) Under s 58, a person commits an offence if, without reasonable excuse, he fails to comply with a condition attached to an operating licence by virtue of s 83. In addition to the above, s 59 gives the Secretary of State the power to create by order an offence of inviting, causing or permitting a child or young person below a specified age to use a Category D gaming machine.1 1 GA 2005, s 59. See s 235 and Chapter 25 as to the meaning of ‘gaming machine’. See s  236, regulations made thereunder and Chapter  25 as to the categories of gaming machine.

342

Offences relating to children and young persons

Offenders and prosecutors 5.11 As has been seen above, some of the offences created under Part 4 of the GA 2005 may be committed by a ‘person’ and others may be committed by a ‘young person’. Under the Act a ‘young person’ is an i­ ndividual who is at least 16 years old but less than 18 years old.1 Whilst ‘person’ includes an individual (and, it should be added, there would seem to be nothing in the 2005 Act or elsewhere2 to suggest that it does not encompass individuals who are children or young persons as well as adult individuals), it also includes bodies of persons. Section 341 contains important provisions relating to the prosecution of bodies of persons for offences under the Act.3 Where an offence under the Act is committed by a body of persons corporate or by an unincorporated body of persons (other than a partnership) and it is proved that the offence was committed with the consent or connivance of an officer of the body or as a result of the negligence of an officer of the body, the officer as well as the body is guilty of an offence.4 Where the offence is committed by a limited partnership, the foregoing provisions apply, save that it is a partner, rather than an officer, who is guilty of the offence as well as the limited partnership.5 In the case of an offence committed by a partnership, other than a limited partnership, each partner is guilty of the offence.6 Unincorporated associations are to be treated as if they were incorporated bodies for all procedural purposes when prosecuted for an offence under the Act. 1 A ‘child’ is an individual who is less than 16 years old: GA 2005, s 45(1); and a ‘young person’ is an individual who is not a child but is less than 16 years old: s 45(2). 2 For example, in the Interpretation Act 1978. 3 GA  2005, s  341. The Secretary of State is given the power to make regulations providing for the modification of a provision of s 341 in its application to a body of persons formed under, or in so far as the body is recognised by, law having effect outside the United Kingdom: s 341(7). 4 GA 2005, s 341(1) and (2). An ‘officer of a body’ includes: a director, manager or secretary; a person purporting to act as a director, manager or secretary; and, if the affairs of the body are arranged by its members, a member: s 341(3). 5 GA 2005, s 341(5). 6 GA 2005, s 341(4).

5.12 The Gambling Commission may institute criminal proceedings in respect of any offence under the Gambling Act 2005.1 The power of licensing authorities to institute criminal proceedings in respect of an offence under the Act is limited to those offences listed under s 346 of the Act.2 This list does not include any offence created under Part 4 of the Act. 1 GA 2005, s 28. 2 GA 2005, s 346(1). However, s 346 is without prejudice to the Local Government Act 1972, s  222 (the power of local authorities to prosecute or defend legal proceedings): s 346(2).

Statutory defences Children 5.13 A statutory defence is provided for a person charged with an offence under Part 4 of the Act of doing anything in relation to an individual who is a child.1 It is a defence for that person to prove that: 343

Offences relating to children and young persons (1) he took all reasonable steps to determine the individual’s age;2 and (2) he reasonably believed that the individual was not a child.3 1 A ‘child’ is an individual who is less than 16 years old: GA 2005, s 45(1). 2 GA 2005, s 63(1)(a). 3 GA 2005, s 63(1)(b).

Young persons 5.14 Similarly, a statutory defence is provided for a person charged with an offence under Part  4 of the Act of doing anything in relation to an individual who is a young person. It is a defence for that person to prove that: (1) he took all reasonable steps to determine the individual’s age;1 and (2) he reasonably believed that the individual was not a young person.2 1 GA 2005, s 63(1)(a). 2 GA 2005, s 63(1)(b).

Saving when children and young persons are used in enforcement operations 5.15 Under the GA  2005 the Gambling Commission is empowered to designate its employees and appoint persons other than its employees as ‘enforcement officers’ for the purposes of the Act.1 In certain circumstances, other persons, including officers of licensing authorities, fall within the Act’s definition of ‘authorised persons’.2 1 GA 2005, s 303(1). For ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3. 2 GA 2005, s 304.

5.16

Section 64(1) provides that nothing in GA 2005, Pt 4 renders unlawful:

(1) anything done, in the performance of his functions, by a constable, an enforcement officer or an authorised person;1 and (2) anything done by a child or young person at the request of a constable, enforcement officer or authorised person acting in the performance of his functions.2 1 GA 2005, s 64(1)(a). 2 GA 2005, s 64(1)(b).

5.17

The Explanatory Notes to the Act state that s 64: ‘… will enable children and young persons to be used in test purchasing operations for the purpose of assessing whether the provisions in [Part 4], prohibiting under-age gambling, are being complied with.’1

344

Offences relating to children and young persons Section 64(1) also applies to an order made under s  59 (which gives the Secretary of State the power to create by order an offence of inviting, causing or permitting a child or young person below a specified age to use a Category D gaming machine).2 However, at the time of writing no orders have been made under s 59. 1 Explanatory Notes to the GA 2005, para 201. 2 GA 2005, s 59. See s 235 and Chapter 25 as to the meaning of ‘gaming machine’. See s  236, regulations made thereunder and Chapter  25 as to the categories of gaming machine.

The time limit for prosecutions under the Gambling Act 2005 5.18 A magistrates’ court may try an information for an offence under the GA 2005 if the information was laid within 12 months of the date (or the last date) on which the offence is alleged to have been committed.1 1 GA  2005, s  347(1). Magistrates’ Courts Act 1980, s  127(1) – which provides that a magistrates’ court shall not try an information or hear a complaint unless the information was laid or the complaint was made within six  months of the commission of the offence or the complaint arose – does not apply to an offence under the 2005 Act: GA 2005, s 347(2).

Sentencing powers 5.19 As discussed above, some of the offences under GA 2005, Pt 4 may be committed by a ‘person’, whilst others may be committed by a ‘young person’. Section 62 contains general penalty provisions in respect of all the offences under Part 4 of the Act. In England and Wales a person guilty of an offence under Pt 4 is liable on summary conviction to imprisonment for a term not exceeding 51 weeks,1 a fine not exceeding level 5 on the standard scale,2 or both.3 However, a young person guilty of an offence under Pt 4 is liable on summary conviction to a fine not exceeding level 3 on the standard scale. 1 GA 2005, s 62(1)(a). 2 GA 2005, s 62(1)(b). 3 GA 2005, s 62(1)(c).

5.20 If, as alluded to earlier, ‘person’ includes not only adult individuals but also individuals who are children or young persons, these sentencing provisions may have some curious consequences. If any of the offences under Part 4 which can be committed by a person can, in fact, be committed by a person who also falls within the Act’s definitions of ‘child’ and ‘young person’,1 then a 15-year-old (ie a child) and a 17-year-old (ie a young person) can both commit the offence of, for example, inviting, causing or permitting a child or young person to gamble under s 46 of the Act. If that is the case, following conviction, and although the 15-year-old is not liable to imprisonment, he or she is nonetheless liable to a fine not exceeding level 5 on the standard scale, whereas the 17-year-old is only liable to a fine not exceeding level 3 on the standard scale. 345

Offences relating to children and young persons 1 A ‘child’ is an individual who is less than 16 years old: GA 2005, s 45(1); and a ‘young person’ is an individual who is not a child but is less than 18 years old: s 45(2).

SECTION 46 – INVITING, CAUSING OR ­PERMITTING A CHILD OR YOUNG PERSON TO GAMBLE The offence 5.21 Subject to the exceptions set out below, s 46 of the GA 2005 provides that a person commits an offence if he invites, causes or permits a child or young person to gamble. Intentionally sending a document advertising gambling to a child or young person is an invitation to the child or young person to gamble,1 as is intentionally bringing the child or young person’s attention to information about gambling with a view to encouraging the child or young person to gamble.2 1 GA 2005, s 46(3)(a). 2 GA 2005, s 46(3)(b).

5.22 If a document which advertises gambling is sent to a child or young person and the document gives the name or contact details of a person to whom payment may be made or from whom information may be obtained, that person is to be treated as having committed the offence under s 46, unless he proves that the document was sent without his consent1 and without his authority.2 A similar provision applies where information about gambling is brought (rather than sent) to the attention of a child or young person.3 Where such information includes the name or contact details of a person to whom payment may be made or from whom information may be obtained, that person (described in the Act as ‘the advertiser’) is to be treated as having committed the offence under s 46 unless he proves that the information was brought to the attention of the child or young person without the advertiser’s consent or authority4 and as an incident of the information being brought to the attention of adults and without a view to encouraging the child or young person to gamble.5 1 GA  2005, s  46(4)(a). ‘Contact details’ means an address or other location, a telephone number, an internet site, or an email address: s 46(6). 2 GA 2005, s 46(4)(b). 3 GA 2005, s 46(5). 4 GA 2005, s 46(5)(a). 5 GA 2005, s 46(5)(b).

The exceptions Participation in private or non-commercial gaming 5.23 The offence under s  46(1) does not apply to inviting, causing or permitting a child or young person to participate in private or noncommercial gaming.1 1 GA 2005, s 46(2)(a).

346

Offences relating to children and young persons 5.24 ‘Private gaming’ is gaming which satisfies three conditions specified in the Act: no charge is made for participation in the gaming;1 the gaming is equal chance gaming;2 and the gaming does not occur in a place to which the public have access (whether or not on payment).3 However, the condition that the gaming must be equal chance gaming does not apply in relation to ‘domestic gaming’ or ‘residential gaming’.4 Domestic gaming is gaming which takes place in a private dwelling and on a domestic occasion.5 Residential gaming is gaming which takes place in hostels, halls of residence and similar establishments not administered in the course of a trade or business and where more than half the participants in the gaming are residents of the hostel, hall or establishment.6 1 GA 2005, Sch 15, para 3(1). For these purposes: it is immaterial how a charge is described; it is immaterial whether a charge is in money or money’s worth; an amount deducted or levied, by a person providing the facilities for gaming, from sums staked or won in the course of the gaming is a charge for participation in the gaming; a charge for admission to premises where gaming takes place shall be treated as a charge for participation in the gaming; and a stake is not a charge for participation: para 3(2). 2 GA 2005, Sch 15, para 4(1). 3 GA 2005, Sch 15, para 5. 4 GA 2005, Sch 15, para 4(2). 5 GA 2005, Sch 15, para 2(1). 6 GA 2005, Sch 15, para 2(2).

5.25 ‘Non-commercial gaming’ is gaming which takes place at a noncommercial event, whether as an incidental activity or as the principal or only activity.1 An event is ‘non-commercial’ if the arrangements for the event are such that no part of the proceeds is to be appropriated for the purpose of private gain.2 1 GA 2005, s 297(1). 2 GA 2005, s 297(2). For the purpose of s 297(2), the proceeds of an event are: the sums raised by the organisers (whether by way of entrance or participation fees, by way of sponsorship, by way of commission from traders or otherwise) minus amounts deducted by the organisers in respect of costs reasonably incurred in organising the event: s 297(3).

Participation in private or non-commercial betting 5.26 The offence under GA  2005, s  46(1) does not apply to inviting, causing or permitting a child or young person to participate in private or non-commercial betting.1 1 GA 2005, s 46(2)(b).

5.27 ‘Private betting’ is betting which falls into one of two categories set out under GA  2005, Sch  15: ‘domestic betting’ and ‘workers’ betting’.1 Domestic betting is betting on premises in which each party to the transaction lives.2 Workers’ betting is betting made between persons, each of whom is employed under a contract of employment with the same employer.3 1 GA 2005, Sch 15, para 6.

347

Offences relating to children and young persons 2 GA 2005, Sch 15, para 7(1). A person lives in premises if he habitually resides in any part of the premises (whether or not there are other premises in which he also habitually resides): para 7(2). 3 GA 2005, Sch 15, para 8.

5.28 Under the GA  2005 the term ‘non-commercial betting’ describes a betting transaction where no party to the transaction enters it in the course of a business,1 or holds himself out as being in business in relation to the acceptance of bets.2 1 GA 2005, s 302(a). 2 GA 2005, s 302(b).

Participation in a lottery 5.29 The offence under GA  2005, s  46(1) does not apply to inviting, causing or permitting a child or young person to participate in a lottery.1 Note, however, the provisions of s  56 which make it an offence to invite, cause or permit a child to participate in a lottery other than: (a) an incidental non-commercial lottery that is exempt for the purposes of s 258 by Part 1 of Sch 11; (b) a private lottery (whether a private society lottery, a work lottery or a residents lottery) that is exempt for the purposes of s 258 by virtue of Part 2 of Sch 11; or, (c) a lottery which forms part of the National Lottery. The breadth of the exemption of the National Lottery is, however, cut down by the National Lottery Regulations 1994, SI 1994/189, reg 3 which provide that no National Lottery ticket shall be sold to a person who has not attained the age of 16 years. 1 GA 2005, s 46(2)(c). See s 14 and Chapter 15 for the meaning of ‘lottery’.

Participation in football pools 5.30 The offence under s  46(1) does not apply to inviting, causing or permitting a child or young person to participate in football pools.1 Note, however, s 57 which limits the effect of this provision in the case of children by providing that a person commits an offence if he invites, causes or permits a child to participate in football pools. Thus a young person may, but a child may not, participate in football pools. 1 GA  2005, s  46(2)(d). ‘Football pools’ means an arrangement whereby people compete for prizes by forecasting the results of association football games, and each entry to the competition must forecast the results of at least four games: s 353(1).

The use of a Category D gaming machine 5.31 The offence under s  46(1) does not apply to inviting, causing or permitting a child or young person to use a Category D gaming machine.1 1 GA  2005, s  46(2)(e). See s  235 and Chapter  25 as to the meaning of ‘gaming machine’. See Chapter 25 as to the categories of gaming machine.

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Offences relating to children and young persons

Participation in equal chance gaming in accordance with a prize gaming permit 5.32 The offence under s  46(1) does not apply to inviting, causing or permitting a child or young person to participate in equal chance gaming in accordance with a prize gaming permit.1 1 GA 2005, s 46(2)(f).

5.33 ‘Equal chance gaming’ is gaming which does not involve playing or staking against a ‘bank’,1 and in which the chances are equally favourable to all participants.2 A prize gaming permit is a permit issued by a licensing authority authorising a person to provide facilities for gaming with prizes on specified premises.3 1 GA 2005, s 8(1)(a). It is immaterial how a bank is described and it also immaterial whether or not a bank is controlled or administered by a player: s 8(2). 2 GA 2005, s 8(1)(b). 3 GA 2005, s 289(2). See Chapter 22 for commentary on prize gaming permits.

Participation in equal chance gaming at a licensed family entertainment centre 5.34 The offence under s  46(1) does not apply to inviting, causing or permitting a child or young person to participate in equal chance gaming at a licensed family entertainment centre.1 1 GA 2005, s 46(2)(g).

5.35 As has been seen in relation to the previous exception to the offence under s 46(1), ‘equal chance gaming’ is gaming which does not involve playing or staking against a bank, and in which the chances are equally favourable to all participants.1 A ‘licensed family entertainment centre’ describes premises in respect of which a family entertainment centre premises licence has effect.2 A family entertainment premises licence authorises premises to be used for making Category C gaming machines available for use.3 1 See 5.33 above. 2 GA 2005, s 238; see Chapter 25. 3 GA  2005, s  150(1)(d). See s  235 and Chapter  25 as to the meaning of ‘gaming machine’. See s  236, regulations made thereunder and Chapter  25 as to the categories of gaming machine.

Participation in prize gaming at a non-licensed family entertainment centre 5.36 The offence under s  46(1) does not apply to inviting, causing or permitting a child or young person to participate in prize gaming at a nonlicensed family entertainment centre.1 1 GA 2005, s 46(2)(h).

349

Offences relating to children and young persons 5.37 Under the GA  2005, ‘prize gaming’ is gaming where neither the nature nor the size of a prize played for is determined by reference to the number of players or the amount paid for or raised by the gaming.1 The Act defines a ‘family entertainment centre’ as premises – other than an adult gaming centre – wholly or mainly used for making gaming machines available for use.2 1 GA 2005, s 288; see Chapter 22. 2 GA 2005, s 238. See s 235 and Chapter 25 as to the meaning of ‘gaming machine’. An ‘adult gaming centre’ means premises in respect of which an adult gaming centre premises licence has effect,: s 237; see Chapter 25.

Participation in prize gaming at a travelling fair 5.38 The offence under s  46(1) does not apply to inviting, causing or permitting a child or young person to participate in prize gaming at a travelling fair in accordance with s 292.1 1 GA 2005, s 46(2)(i).

5.39 Under the GA  2005, ‘prize gaming’ is gaming where neither the nature nor the size of a prize played for is determined by reference to the number of players or the amount paid for or raised by the gaming.1 For the purposes of the GA 2005, a ‘fair’ means a fair consisting wholly or principally of the provision of amusements.2 A fair held on a day in a calendar year is a ‘travelling fair’ if provided wholly or principally by persons who travel from place to place for the purpose of providing fairs, and at a place no part of which has been used for the provision of a fair on more than 27 days in that calendar year.3 1 GA 2005, s 288; see Chapter 22. 2 GA 2005, s 286(a). 3 GA 2005, s 288(b).

5.40 At first blush, it is difficult to see how GA 2005, s 292 provides an exception to the offence under s 46(1), since it provides that a person does not commit an offence under s  33 (ie  the offence of providing facilities for gambling)1 or an offence under s  37 (ie  the offence of using premises, or causing or permitting premises to be used, to provide facilities for certain forms of gambling)2 if the gaming satisfies the Act’s prize gaming conditions in s  293,3 the facilities are provided at a travelling fair,4 and the facilities for gambling (in whatever form) amount to no more than an ancillary amusement at the fair.5 It would seem, however, that this exception to the offence under s 46(1) applies when a person invites, causes or permits a child or young person to participate in prize gaming at a travelling fair if the exceptions under s 292 to the offence under s 33 and to the offence under s 37 also apply. 1 2 3 4 5

See Chapter 4 for commentary on the provisions of GA 2005, s 33. See Chapter 4 for commentary on the provisions of GA 2005, s 37. GA 2005, s 292(a). GA 2005, s 292(b). GA 2005, s 292(c).

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Offences relating to children and young persons 5.41 The 2005 Act’s prize gaming conditions specified in s  293 are as follows: (1)

that there is compliance with such limits in respect of participation fees as may be prescribed;1

(2)  that: (a) all the chances to participate in a particular game must be acquired or allocated on one day and in the place where the game is played;2 (b) the game must be played entirely on that day;3 (c)

the result of the game must be made public in the place where the game is played and as soon as is reasonably practicable after the game ends and, in any event, on the day on which the game is played;4

(3) that the prize for which a game is played or the aggregate of the prizes for which a game is played, must not exceed the prescribed amount where all the prizes are money and must not exceed the prescribed value in any other cases;5 and (4) that participation in the game by a person does not entitle him or another person to participate in any other gambling (whether or not he or the other person would also have to pay to participate in other gambling).6 1 GA 2005, s 293(1). Such limits in respect of participation fees may, in particular, relate to players, games or a combination and different limits may be prescribed in respect of different classes or descriptions of fee: s 293(1) and (2). ‘Prescribed’ means prescribed by regulations made by the Secretary of State: s 293(6); see the Gambling Act 2005 (Limits on Prize Gaming) Regulations 2009 (SI  2009/1272). 2 GA 2005, s 293(3)(a). 3 GA 2005, s 293(3)(b). 4 GA 2005, s 293(3)(c). 5 GA 2005, s 293(4). 6 GA 2005, s 293(5).

SECTION 47 – INVITING OR PERMITTING A CHILD OR YOUNG PERSON TO ENTER CERTAIN PREMISES The offences 5.42 Under the GA 2005 ‘premises’ include any place and, in particular, a vessel and a vehicle.1 Five offences are created under s 47 of the Act.2 Each offence is committed by a person who invites or permits a child or young person to enter certain premises under the following circumstances: (1) Under s  47(1) a person commits an offence if he invites or permits a child or young person to enter premises if a casino premises licence has effect in respect of the premises and the premises are being used in reliance on that licence when the child or young person is invited or 351

Offences relating to children and young persons permitted to enter.3 However – and albeit that it is of academic interest only in the current absence of a regional casino – specific provision is made permitting a child or young person to enter a part of premises which are being used for a regional casino provided that part is not being used for the provision of facilities for gambling when they are permitted to enter. (2) Under s  47(4) a person commits an offence if he invites or permits a child or young person to enter premises other than a track if a betting premises licence has effect in respect of the premises and the premises are being used in reliance on the licence when the child or young person is invited or permitted to enter.4 (3) Under s  47(5) a person commits an offence if he invites or permits a child or young person to enter premises if an adult gaming centre premises licence has effect in respect of the premises and the premises are being used in reliance on the licence when the child or young person is invited or permitted to enter.5 (4) Under s  47(6) a person commits an offence if he invites or permits a child or young person to enter an area from which children and young persons are required to be excluded by virtue of s 182 (which provides that a premises licence in respect of a track is subject to the condition that the licensee must ensure that children and young persons are excluded from any area where facilities for betting are provided and any area in which a gaming machine, other than a Category D gaming machine, is situated).6 (5) Under s  47(7) a person commits an offence if he invites or permits a child or young person to enter part of premises if: (a) the premises are a licensed family entertainment centre;7 (b) a person entering that part of the premises has access to a Category C gaming machine;8 and (c)

at the time when the child or young person is permitted or invited to enter, a Category C gaming machine is being used or is available for use.9

1 GA  2005, s  353(1): ‘Vessel’ includes: anything, other than a seaplane or an amphibious vehicle, designed or adapted for navigation or other use in, on or over water; a hovercraft (within the meaning of the Hovercraft Act 1968); and anything, or any part of a place, situated in or on water. ‘Vehicle’ includes: a train; an aircraft; a seaplane; and an amphibious vehicle (other than a hovercraft within the meaning of the Hovercraft Act 1968). 2 For sentencing powers following conviction for an offence under s 47, see GA 2005, s 62 and 5.19 above. 3 GA  2005, s  47(1). For ‘casino premises licence’, see s  150(1)(a) and Chapter  14. Although the main form of authority in respect of the use of premises for gambling under the 2005 Act is the premises licence – see GA 2005, Pt 8 (ss 150– 213) and Chapter 10 – the Act also provides for circumstances in which premises may used for gambling on a temporary basis under the authority of a temporary use notice (see GA 2005, Pt 9 (ss 214–234) and Chapter 11) and on an occasional basis under the authority of an occasional use notice (see s 39). For the purposes of Part  4 of the Act, a temporary use notice in respect of the use of premises is to be treated as if it were a premises licence authorising that activity; and an

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Offences relating to children and young persons

4 5 6

7 8 9

occasional use notice in respect of premises is to be treated as if it were a betting premises licence: s 60(1). GA 2005, s 47(4). Track’ means a horse-race course, a dog track or other premises on any part of which a race or other sporting event takes place or is intended to take place; see s 353(1). For ‘betting premises licence’, see s 150(1)(e) and Chapter 10. GA 2005, s 47(5). For ‘adult gaming centre premises licence’, see s 150(1)(c) and Chapter 10. GA  2005, s  47(6). For the purposes of Part  4 of the Act, a temporary use notice in respect of the use of premises is to be treated as if it were a premises licence authorising that activity; and an occasional use notice in respect of premises is to be treated as if it were a betting premises licence: s  60(1). Sections 47(6) and 182 apply in relation to a notice treated as a premises licence by virtue of s 60(1): s 60(2). GA 2005, s 47(7)(a). A ‘licensed family entertainment centre’ means premises in respect of which a family entertainment centre premises licence has effect For ‘family entertainment centre premises licence’, see s 150(1)(d) and Chapter 10. GA 2005, s 47(7)(b). See s 235 and Chapter 25 as to the meaning of ‘gaming machine’. See s  236, regulations made thereunder and Chapter  25 as to the categories of gaming machine. GA 2005, s 47(7)(c).

SECTION 48 – GAMBLING BY A YOUNG PERSON The offence 5.43 Section 48 of the GA 2005 is directed at young persons who actually take part in gambling. They commit a criminal offence. By contrast children who gamble commit no offence themselves, it presumably being thought that they are victims rather than perpetrators of illegality. Section 48(1) simply provides that a young person commits an offence if he gambles.1 This is, however, subject to exceptions. 1 GA 2005, s 48(1). For sentencing powers following conviction for an offence under s 48, see s 62 and 5.19 above.

The exceptions 5.44 The exceptions to the offence under s 48 are identical to the exceptions to the offence under s 46 (which provides that a person commits an offence if he invites, causes or permits a child or young person to gamble).1 A young person does not commit the offence of gambling under s 48 if he: (1) participates in private or non-commercial gaming;2 (2) participates in private or non-commercial betting;3 (3) participates in a lottery;4 (4) participates in football pools;5 (5) uses a Category D gaming machine;6 (6) participates in equal chance gaming in accordance with a prize gaming permit;7 353

Offences relating to children and young persons (7) participates in equal chance gaming at a licensed family entertainment centre;8 (8) participates in prize gaming at a non-licensed family entertainment centre;9 (9) participates in prize gaming at a travelling fair in accordance with s 292.10  1 See 5.23–5.41 above.   2 GA 2005, s 48(2)(a), see 5.23–5.25 above as to the meanings of ‘private gaming’ and ‘non-commercial gaming’.   3 GA 2005, s 48(2)(b). See 5.26–5.28 above for the meanings of ‘private betting’ and ‘non-commercial betting’.   4 GA 2005, s 48(2)(c). See 5.29 above.   5 GA 2005, s 48(2)(d). See 5.30 above.   6 GA 2005, s 48(2)(e). See 5.31 above.   7 GA 2005, s 48(2)(f). See 5.32–5.33 for the meaning of ‘equal chance gaming’ and ‘prize gaming permit’.   8 GA 2005, s 48(2)(g). See 5.34–5.35 for the meaning of ‘equal chance gaming’ and ‘licensed family entertainment centre’.   9 GA 2005, s 48(2)(h). See 5.36–5.37 for the meaning of ‘prize gaming’ and ‘family entertainment centre’. 10 GA 2005, s 48(2)(i). See 5.38–5.41 for the meaning of ‘prize gaming’ and ‘travelling fair’.

SECTION 49 – ENTRY BY A YOUNG PERSON TO CERTAIN PREMISES The offences 5.45 A young person commits an offence under s 49 of the GA 2005 if he enters premises in circumstances where a person would commit an offence under s 47 if he invited or permitted the young person to enter.1 This being the case, five offences are created under s 49: (1) Under s 47(1), as applied by s 49, a young person commits an offence if he enters premises when a casino premises licence has effect in respect of the premises and the premises are being used in reliance on that licence when the young person enters the premises.2 (2) Under s 47(4), as applied by s 49, a young person commits an offence if he enters premises other than a track when a betting premises licence has effect in respect of the premises and the premises are being used in reliance on the licence when the young person enters the premises.3 (3) Under s 47(5), as applied by s 49, a young person commits an offence if he enters premises when an adult gaming centre premises licence has effect in respect of the premises and the premises are being used in reliance on the licence when the young person enters the premises.4 354

Offences relating to children and young persons (4) Under s 47(6), as applied by s 49, a young person commits an offence if he enters an area from which children and young persons are required to be excluded by virtue of s 182 (which provides that a premises licence in respect of a track is subject to the condition that the licensee must ensure that children and young persons are excluded from any area where facilities for betting are provided and any area in which a gaming machine, other than a Category D gaming machine, is situated).5 (5) Under s 47(7), as applied by s 49, a young a person commits an offence if he enters part of premises when: (a) the premises are a licensed family entertainment centre;6 (b) a person entering that part of the premises has access to a Category C gaming machine;7 and (c)

at the time when the young person enters that part of the premises, a Category  C  gaming machine is being used or is available for use.8

1 GA  2005, s  49. ‘Premises’ includes any place and, in particular, a vessel and a vehicle: s 353(1). For sentencing powers following conviction for an offence under s 49, see s 62 and 5.19 above. 2 GA 2005, s 47(1), as applied by s 49. For ‘casino premises licence’, see s 150(1)(a) and Chapter 14. Although the main form of authority in respect of the use of premises for gambling under the Gambling Act 2005 is the premises licence – see GA 2005, Pt  8 (ss  150–213) and Chapter  10 – the Act also provides for circumstances in which premises may used for gambling on a temporary basis under the authority of a temporary use notice (see GA 2005, Pt 9 (ss 214–234) and Chapter 11) and on an occasional basis under the authority of an occasional use notice (see s 39). For the purposes of Part 4 of the Act, a temporary use notice in respect of the use of premises is to be treated as if it were a premises licence authorising that activity, and an occasional use notice in respect of premises is to be treated as if it were a betting premises licence: s 60(1). 3 GA 2005, s 47(4), as applied by s 49. Track’ means a horse-race course, a dog track or other premises on any part of which a race or other sporting event takes place or is intended to take place; see s 353(1). For ‘betting premises licence’, see s 150(1) (e) and Chapter 10. 4 GA 2005, s 47(5), as applied by s 49. For ‘adult gaming centre premises licence’, see s 150(1)(c) and Chapter 10. 5 GA  2005, s  47(6), as applied by s  49. For premises licences, see GA  2005, Pt  8 (ss 150–213) and Chapter 10. For the purposes of Part 4 of the Act, a temporary use notice in respect of the use of premises is to be treated as if it were a premises licence authorising that activity, and an occasional use notice in respect of premises is to be treated as if it were a betting premises licence: s 60(1). Sections 47(6) and 182 apply in relation to a notice treated as a premises licence by virtue of s 60(1): s 60(2). 6 GA 2005, s 47(7)(a), as applied by s 49. A ‘licensed family entertainment centre’ means premises in respect of which a family entertainment centre premises licence has effect For ‘family entertainment centre premises licence’, s  150(1)(d) and Chapter 10. 7 GA 2005, s 47(7)(b), as applied by s 49. See s 235 and Chapter 25 as to the meaning of ‘gaming machine’. See s 236, regulations made thereunder and Chapter 25 as to the categories of gaming machine. 8 GA 2005, s 47(7)(c) as applied by s 49.

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Offences relating to children and young persons

SECTION 50 – THE PROVISION OF FACILITIES FOR GAMBLING BY A YOUNG PERSON The offence 5.46 Section 50(1) of the GA 2005 provides that a young person commits an offence if he provides facilities for gambling.1 1 GA 2005, s 50(1). For the meaning of ‘gambling’, see s 3 and Chapter 2; and for the meaning of ‘provides facilities for gambling’, see s 5 and Chapter 2. For sentencing powers following conviction for an offence under s 50, see s 62 and 5.19 above.

The exceptions 5.47 The offence under s 50(1) is subject to exceptions. A young person does not commit an offence if he provides facilities for gambling in connection with: (1) private or non-commercial gaming;1 (2) private or non-commercial betting;2 (3) a lottery;3 (4) football pools;4 or (5) prize gaming at a travelling fair in accordance with s 292 of the Act.5 1 GA 2005, s 50(2)(a). See: ss 6–8 for ‘gaming’; s 295, s 353(1) and Sch 15, Pt 1 and 5.24 above for ‘private gaming’; s 297, s 353(1) and 5.25 above for ‘non-commercial gaming’. 2 GA 2005, s 50(2)(b). See ss 9–13 for ‘betting’; s 295, s 353(1) and Sch 15, Pt 2 and 5.27 above for ‘private betting’; s 302, s 353(1) and 5.28 above for ‘non-commercial betting’. 3 GA  2005, s  50(2)(c). See s  14 and Chapter  15 for ‘lottery’; and GA  2005, Part  11 (ss 252–265) and Chapter 15 for lotteries generally. 4 GA  2005, s  50(2)(d). ‘Football pools’ means an arrangement whereby people compete for prizes by forecasting the results of association football games, and each entry to the competition must forecast the results of at least four games: s 353(1). 5 GA  2005, s  50(2)(e). For the meaning of ‘prize gaming’, see s  288, s  353(1) and Chapter 22 post. For the meaning of ‘travelling fair’, see GA  2005, s  292 and Chapter 22. For commentary on the provisions of s 292 in the context of exceptions to offences under GA 2005. Pt 4 (ss 45–64), see 5.40 above.

SECTION 51 – EMPLOYING A CHILD OR YOUNG PERSON TO PROVIDE FACILITIES FOR GAMBLING The offence 5.48 Section 51(1) of the GA 2005 provides that a person commits an offence if he employs a child or young person to provide facilities for gambling.1 1 GA 2005, s 51(1). See s 61 and 5.5 above for the meaning of ‘employment’ when used in GA  2005, Pt  4 (ss  45–64). For the meaning of ‘gambling’, see s  3 and Chapter 2; and for the meaning of ‘provides facilities for gambling’, see s 5 and

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Offences relating to children and young persons Chapter 2. For sentencing powers following conviction for an offence under s 51, see s 62 and 5.19 above.

The exceptions 5.49 The offence under s 51(1) is subject to exceptions. A person does not commit the offence if he employs a child or young person to provide facilities in connection with: (1) private or non-commercial gaming;1 (2) private or non-commercial betting;2 (3) a lottery;3 (4) football pools;4 or (5) prize gaming at a travelling fair in accordance with s 292 of the Act.5 1 GA 2005, s 51(2)(a). See: ss 6–8 for ‘gaming’; s 295, s 353(1) and Sch 15, Pt 1 and 5.24 above for ‘private gaming’; s 297, s 353(1) and 5.25 above for ‘non-commercial gaming’. 2 GA 2005, s 51(2)(b). See: ss 9–13 for ‘betting’; s 295, s 353(1) and Sch 15, Pt 2 and 5.27 above for ‘private betting’; s 302, s 353(1) and 5.28 above for ‘non-commercial betting’. 3 GA  2005, s  51(2)(c). See: s  14 and Chapter  15 for ‘lottery’; and GA  2005, Pt  11 (ss 252–265) and Chapter 15 for lotteries generally. See also s 52 and 5.50 below for the offence of employing a child to provide facilities in connection with a lottery (other than a lottery which forms part of the National Lottery). 4 GA  2005, s  51(2)(d). ‘Football pools’ means an arrangement whereby people compete for prizes by forecasting the results of association football games, and each entry to the competition must forecast the results of at least four games: s  353(1). See also s  52 and 5.50 below for the offence of employing a child to provide facilities in connection with football pools. 5 GA  2005, s  51(2)(e). For the meaning of ‘prize gaming’, see s  288, s  353(1) and Chapter  22. For the meaning of ‘travelling fair’, see s  292 and Chapter  22. For commentary on the provisions of s  292 in the context of exceptions to offences under GA 2005, Pt 4 (ss 45–64), see 5.40 above.

SECTION 52 – EMPLOYING A CHILD TO PROVIDE FACILITIES FOR GAMBLING IN CONNECTION WITH A LOTTERY OR FOOTBALL POOLS The offence 5.50 As has been seen, if a person employs a child to provide facilities for gambling in connection with a lottery or with football pools, no offence is committed under s 51 of the GA 2005. However, with the specific exception of a lottery which forms part of the National Lottery, a person who employs a child to provide facilities for gambling in connection with a lottery or football pools will commit an offence under s 52.1 1 GA 2005, s 52. For the meaning of ‘gambling’, see s 3 and Chapter 2; and for the meaning of ‘provides facilities for gambling’, see s 5 and Chapter 2.

357

Offences relating to children and young persons

SECTION 53 – EMPLOYING A CHILD TO PERFORM ANY FUNCTION ON BINGO AND CLUB PREMISES The offence 5.51 A person commits an offence if he employs a child to perform any function on premises where, and at a time when,1 facilities are provided for the playing of bingo,2 or facilities for gambling are provided in accordance with a club gaming permit or a club machine permit.3 1 ‘Premises’ includes any place and, in particular, a vessel and a vehicle: s 353(1). 2 GA 2005, s 53(a). ‘Bingo’ means any version of that game, irrespective of by what name it is described: s 353(1). 3 GA 2005, s 53(b).

5.52 Club gaming permits, which are issued by licensing authorities, authorise the provision of facilities for some forms of gaming subject to conditions, and as long as the gaming takes place on premises on which a members’ club or miners’ welfare institute operates and the gaming takes place in the course of the activities of the club or institute.1 Club machine permits are also issued by licensing authorities. However, the Gambling Act’s provisions as to club machine permits differ from those for club gaming permits. Club machine permits can be held by commercial clubs (as well as by members’ clubs and miners’ welfare institutes), but the scope of the permission given is narrower, in that (subject to compliance with conditions) they authorise only the making of up to three gaming machines (each of which must be of Category B, C or D) available for use on premises which the club or institute operates and in the course of the activities of the club or institute.2 1 GA  2005, s  271(2). See Chapter  12 as to ‘members’ clubs’ and ‘miners’ welfare institutes’. 2 GA 2005, s 273(2). See Chapter 12 as to ‘commercial clubs’.

SECTION 54 – EMPLOYMENT OF A CHILD OR YOUNG PERSON TO PERFORM ANY FUNCTION ON PREMISES WITH GAMING MACHINES The offences 5.53

Two offences are created under s 54 of the GA 2005:

(1) Section 54(1) provides that a person commits an offence if he employs a child or young person on premises where a Category A, B, C or D gaming machine is situated,1 and the child or young person is or may be required in the course of his employment to perform a function in connection with the gaming machine.2 (2) Section 54(2) provides that a young person commits an offence if he is employed in contravention of s 54(1).3 1 GA 2005, s 54(1)(a). ‘Premises’ includes any place and, in particular, a vessel and a vehicle: s 353(1). See s 235 and Chapter 25 as to the meaning of ‘gaming machine’. See

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Offences relating to children and young persons s 236, regulations made thereunder and Chapter 25 as to the categories of gaming machine. 2 GA 2005, s 54(1)(b). 3 GA 2005, s 54(2).

SECTION 55 – EMPLOYMENT OF A CHILD OR YOUNG PERSON IN CERTAIN PREMISES IN RESPECT OF WHICH A PREMISES LICENCE HAS EFFECT The offences 5.54 Two offences are created under s 55 of the GA 2005: (1) Subject to exceptions, s 55(1) provides that a person commits an offence if he employs a child or young person to perform any function on premises in respect of which:1 (a) a casino premises licences has effect;2 or (b) a betting premises licence has effect;3 or (c) an adult gaming centre premises licence has effect.4 (1) Section 54(2) provides that a young person commits an offence if he is employed in contravention of s 55(4).5 1 For the meaning of ‘employing a person’ in Part 4, see GA 2005, s 61 and 5.5 above. A ‘child’ is an individual who is less than 16 years old, and a ‘young person’ is an individual who is not a child but who is less than 18 years old: s 45. ‘Premises’ includes any place and, in particular, a vessel and a vehicle: s 353(1). 2 GA 2005, s 55(1)(a). For ‘casino premises licence’, see s 150(1)(a) and Chapter 14. Although the main form of authority in respect of the use of premises for gambling under the Gambling Act 2005 is the premises licence – see GA 2005, Pt 8 (ss 150–213) and Chapter 10 – the Act also provides for circumstances in which premises may used for gambling on a temporary basis under the authority of a temporary use notice (see GA 2005, Pt 9 (ss 214–234) and Chapter 11) and on an occasional basis under the authority of an occasional use notice (see s 39). For the purposes of Pt 4 of the Act, a temporary use notice in respect of the use of premises is to be treated as if it were a premises licence authorising that activity, and an occasional use notice in respect of premises is to be treated as if it were a betting premises licence: s 60(2). 3 GA 2005, s 55(1)(b). For ‘betting premises licence’, see s 150(1)(b). 4 GA 2005, s 55(1)(c). For ‘adult gaming centre premises licence’, see s 150(1)(c) and Chapter 10. 5 GA 2005, s 55(4).

The exceptions 5.55 A person does not commit an offence under s 55(1) – and accordingly a young person does not commit an offence under s 55(4) – if the employment is at a time when no activity is being carried on in reliance on the premises licence.1 1 GA 2005, s 55(2)(a). The Secretary of State may make regulations for the purposes of s 55(2) which make provision for distinguishing between one part of premises and another, and determining when use is being made of a part of premises: s 55(3).

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SECTION 56 – INVITING, CAUSING OR ­PERMITTING A CHILD TO PARTICIPATE IN A LOTTERY The offence 5.56 A person commits an offence under s 56 of the Gambling Act 2005 if he invites, causes or permits a child to participate in a lottery.1 However, certain kinds of lottery are excepted from the provisions creating the offence. 1 GA 2005, s 56(1). For the meaning of ‘lottery’, see s 14 and Chapter 15.

The exceptions 5.57 A person does not commit the offence under s 56 if he invites, causes or permits a child to participate in: (1)

an incidental non-commercial lottery that is exempt for the purposes of s 258 by virtue of GA 2005, Sch 11, Pt 1;1

(2) a private lottery (whether a private society lottery, a work lottery or a residents’ lottery) that is exempt for the purposes of s 258 by virtue of GA 2005, Sch 11, Pt 2;2 or (3) a lottery which forms part of the National Lottery.3 Note, however, the provisions of the National Lottery Regulations 1994, SI 1994/189, reg 3 providing that no National Lottery ticket shall be sold to a person who has not attained the age of 16 years. 1 GA 2005, s 56(1)(a). 2 GA 2005, s 56(1)(b). 3 GA 2005, s 56(1)(c). See: s 14 and Chapter 15 for ‘lottery’; and Chapter 16 for the National Lottery. See also s 52 and 5.50 above for the offence of employing a child to provide facilities in connection with a lottery (other than a lottery which forms part of the National Lottery).

5.58 Intentionally sending a document advertising participation in a lottery to a child is an invitation to the child to participate in a lottery,1 as is intentionally bringing the child’s attention to information about participation in a lottery with a view to encouraging the child to participate in a lottery.2 1 GA 2005, s 46(3)(a), as applied by s 56(2). 2 GA 2005, s 46(3)(b), as applied by s 56(2).

5.59 If a document which advertises participation in a lottery is sent to a child and the document gives the name or contact details of a person to whom payment may be made or from whom information may be obtained, that person is to be treated as having committed the offence under s  56 unless he proves that the document was sent without his consent1 and without his authority.2 A similar provision applies where information about participation is brought (rather than sent) to the attention of a child.3 Where such information includes the name or contact details of a person to whom 360

Offences relating to children and young persons payment may be made or from whom information may be obtained, that person (described in the Act as ‘the advertiser’) is to be treated as having committed the offence under s  56, unless he proves that the information was brought to the attention of the child without the advertiser’s consent or authority4 and as an incident of the information being brought to the attention of adults and without a view to encouraging the child to participate in a lottery.5 1 GA 2005, s 46(4)(a), as applied by s 56(2). ‘Contact details’ means an address or other location, a telephone number, an internet site, or an email address: s 46(6), as applied by s 57(2). 2 GA 2005, s 46(4)(b), as applied by s 56(2). 3 GA 2005, s 46(5), as applied by s 56(2). 4 GA 2005, s 46(5)(a), as applied by s 56(2). 5 GA 2005, s 46(5)(b), as applied by s 56(2).

SECTION 57 – INVITING, CAUSING OR ­PERMITTING A CHILD TO PARTICIPATE IN ­FOOTBALL POOLS The offence 5.60 A person commits an offence under s 57 of the GA 2005 if he invites, causes or permits a child to participate in football pools.1 1 GA 2005, s 57(1).

5.61 Intentionally sending a document advertising participation in football pools to a child is an invitation to the child to participate in football pools,1 as is intentionally bringing the child’s attention to information about participation in football pools with a view to encouraging the child to participate in football pools.2 1 GA 2005, s 46(3)(a), as applied by s 57(2). 2 GA 2005, s 46(3)(b), as applied by s 57(2).

5.62 If a document which advertises participation in football pools is sent to a child and the document gives the name or contact details of a person to whom payment may be made or from whom information may be obtained, that person is to be treated as having committed the offence under s 57, unless he proves that the document was sent without his consent1 and without his authority.2 A similar provision applies where information about participation is brought (rather than sent) to the attention of a child.3 Where such information includes the name or contact details of a person to whom payment may be made or from whom information may be obtained, that person (described in the Act as ‘the advertiser’) is to be treated as having committed the offence under s  57, unless he proves that the information was brought to the attention of the child without the advertiser’s consent or authority4 and as an incident of the information being brought to the 361

Offences relating to children and young persons attention of adults and without a view to encouraging the child to participate in football pools.5 1 GA 2005, s 46(4)(a), as applied by s 57(2). ‘Contact details’ means an address or other location, a telephone number, an internet site, or an email address: s 46(6), as applied by s 57(2). 2 GA 2005, s 46(4)(b), as applied by s 57(2). 3 GA 2005, s 46(5), as applied by s 57(2). 4 GA 2005, s 46(5)(a), as applied by s 57(2). 5 GA 2005, s 46(5)(b), as applied by s 57(2).

SECTION 58 – FAILING TO RETURN A STAKE TO A CHILD OR YOUNG PERSON, OR GIVING A PRIZE TO A CHILD OR YOUNG PERSON The offence 5.63 With very limited exceptions – where a child or young person uses a Category  D  gaming machine1 or participates in equal chance gaming at a licensed family entertainment centre – by virtue of s  83 of the GA  2005 it is automatically a condition of all operating licences that, if the licensee becomes aware that a child or young person is using or has used facilities for gambling which are provided in reliance on the licence, the licensee must return any money paid in respect of the use of the facilities for gambling by the child or young person as soon as is reasonably practicable, and he may not give a prize to the child or young person. Section 58 provides that a person commits an offence if, without reasonable excuse, he fails to comply with a condition attached to an operating licence by virtue of s 83.2 1 GA 2005, s 83(2)(a). See s 236, regulations made thereunder and Chapter 25 as to the categories of gaming machine. 2 GA 2005, s 58. See s 61 and 5.5 above for the meaning of ‘employment’ when used in Gambling Act 2005, Pt 4 (ss 45–64). For the meaning of ‘gambling’, see s 3 and Chapter 2; and for the meaning of ‘provides facilities for gambling’, see s 5 and Chapter 2. For sentencing powers following conviction for an offence under s 58, see s 62 and 5.19 above.

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Chapter 6 Operating licences

INTRODUCTION 6.1 The operating licence is one of the three elements that comprise the centrepiece of the Gambling Act’s regulatory structure. Aside from the many exceptional authorisations for which it provides, the GA 2005 is based on the understanding that commercial gambling is authorised only where the operator and the premises are licensed. The licensing structure is not dissimilar to that which governed gaming under the Gaming Act 1968. The Gambling Commission is responsible for the issue of operating and personal licences (certificates of consent and of approval), while premises licences are a local responsibility; here the local authority replaces the licensing justices. The GA 2005 is comprehensive of the commercial gambling market. In addition to existing casinos, bingo, lotteries and gaming machines, its operating licence regime covers, for the first time, betting, remote gambling and arcades. 6.2 In addition, the Act makes extensive provision for conditions to be attached to the operating licence. By this means the Gambling Commission can restrict the activities which may be carried on in reliance on the licence or otherwise provide for the manner of their exercise. A key element in the Commission’s regulatory armoury is the codes of practice that it is required or permitted to issue, of which by s 82 any social responsibility code attaches without more to any operating licence. Operators must comply with these codes (and any other of the Act’s requirements). The Commission has extensive enforcement powers that go well beyond those that were enjoyed, for example, by the Gaming Board. 6.3 These and other matters connected to the operating licence are explained in this chapter. In addition to the Act, the implementation in particular of Part 5 (operating licences) is governed by secondary legislation and by the Gambling Commission’s Licence Conditions and Codes of Practice (LCCP), the most recent revision to which was published in July 2016, coming into effect 31  October 2016. The LCCP are subject to frequent amendment and revision. The Commission’s website is a valuable and current point of reference.1 1 www.gamblingcommission.gov.uk.

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THE OPERATING LICENCE: PARTS 3 AND 5 OF GA 2005 6.4 Part 3 of the Act provides that it is an offence to provide ‘facilities for gambling’ as defined in s  5,1 unless the provision is authorised by an operating licence or is covered by a specific exception. These exceptions relate to activities that either depend on the issue of a permit or other authorisation, or fall within a category of gambling which may be carried on under the Act without the need for a specific authorisation or permission.2 Sections 33–35 establish as a general principle that these constitute alternative routes to the authorised provision of gambling facilities. 1 See Chapter 2. 2 See Chapter 23.

6.5 Part  5 is central to the regulatory regime administered by the Gambling Commission. Section 65(1) gives the Commission power to issue operating licences in accordance with its provisions, which establish in turn eight matters affecting their issue and effect. Without being exhaustive here, Part 5 specifies 10 basic kinds of operating licence, sets out the principles that the Commission must or may apply in considering applications, the conditions that may be attached to licences, and rules for particular kinds of licence. It also deals with the enforcement procedures open to the Commission once licences have been granted. The following sections deal first with the scope of Part 3 of the Act, followed by the matters concerning the operating licence set out in Part 5. Sections 89–99, which provide for rules for particular kinds of licence, are dealt with in their respective sector chapters.

PART 3: THE OPERATING LICENCE AS AUTHORISATION Operating licences: general application 6.6 Section 33(1) provides that a person commits an offence if he provides facilities for gambling unless an exception provided for in subsections (2) or (3) applies. These subsections provide that s 33(1) does not relate to activities that are undertaken either by a person who holds an operating licence or by a person acting in the course of a business carried on by the holder of an operating licence. In each case the activity must itself be carried on in accordance with the terms and conditions of the licence. These are powerful requirements, which mean that any breach of a licence term or condition gives rise to an offence under this section. By contrast, we may note that, subject to s 82, the breach of a provision in a code of practice issued by the Commission does not of itself make a person liable to civil or criminal proceedings (s 24(8)).1 Such breach is, however, clearly highly relevant to the Commission’s exercise of its regulatory oversight of the manner in which any operator is carrying on the licensed activities. 1 Social responsibility provisions, however, are licence conditions by virtue of GA 2005, s 82.

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Operating licences 6.7 By s  33(4) the unauthorised provision of gambling facilities is a summary offence, with a maximum penalty on conviction of imprisonment for 51 weeks for England and Wales (or six months in Scotland), a level 5 fine on the standard scale, or both.

Operating licences: lotteries and gaming machines 6.8 There are two further exceptions. Sections 34 and 35 provide that s 33(1) does not apply to the provision of facilities for a lottery or to making a gaming machine available for use. Authorisation for this provision is contained on Parts 11 and 10 of the Act respectively. 6.9 Part 11 creates the offences of promoting (s 258) and of facilitating (s 259) a lottery. In the case of the promotion of a lottery, the offence structure mirrors s  33, with one qualification. The promotion is not unlawful if the lottery is an exempt lottery within Sch 11 or the promoter holds an operating licence authorising the activity and acts in accordance with its terms and conditions (s 258(2)). Similarly, s 258(1) does not apply to a person who acts on behalf of a person who is so authorised, provided the person acting does so otherwise than as an external lottery manager. An external lottery manager (defined in s 257) must be separately licensed. The facilitation of a lottery is not unlawful if the lottery is an exempt lottery within Sch 11 or the facilitator acts in accordance with the terms and conditions of an operating licence (s 259(3)), which will be a ‘lottery operating licence’ held by the promoter. 6.10 Part 10 deals generally with gaming machines. Sections 242 and 243 create offences of making gaming machines available for use and concerning the manufacture and supply of machines. Again, reflecting the Act’s general principle, s 242(1) provides that it is an offence to make a gaming machine available for use by another unless one of a number of exceptions applies or it is available for use in accordance with an operating licence. Likewise, a person commits an offence if he manufactures, supplies, installs, adapts, maintains or repairs a gaming machine (s 243(1)).

Territorial extent: remote gambling equipment 6.11 The GA 2005 draws a distinction between ‘remote’ and ‘non-remote’ gambling. ‘Remote gambling’ is gambling by means of ‘remote communication’, as defined in s 4, ie by telephone, over the internet or by other technology which usually, though not always, means the gambler is not in the same place as the person offering the facilities. Facilities for gambling can be provided remotely or non-remotely (eg face to face in ‘bricks and mortar’ premises). 6.12 The territorial extent of s 33 is determined by whether the gambling in question is remote or non-remote. It is immaterial for the purposes of this section whether the gambling facilities are provided wholly or partly by remote communication or, subject to what follows, are inside or outside, or partly inside and partly outside the United Kingdom (s 36(1)). In the case of non-remote gambling, until amended by the Gambling (Licensing and Advertising) Act 2014 the provisions of the GA 2005 applied only if anything done in the course of their provision was done in Great Britain (s 36(2)). In the 365

Operating licences case of remote gambling, until amended by the Gambling (Licensing and Advertising) Act 2014 the provisions of the GA 2005 applied ‘only if at least one piece of remote gambling equipment used in the provision of the facilities [was] situated in Great Britain’ (s 36(3)(a)). Since 1 November 2014, however, gambling in the UK has been regulated at the point of consumption as well as the point of supply. A new s 33(3)(b) requires remote gambling operators to be licensed if their gambling facilities are used in Britain, even if no equipment is located here. Section 33(5) defines what is meant by ‘remote gambling equipment’.1 1 See 17.12–17.32.

PART 5: KINDS OF OPERATING LICENCE The ten basic kinds of operating licence 6.13 Section 65(2) provides for ten different kinds of operating licence for the various forms of gambling facilities. They are:1 (a) a casino operating licence; (b) a bingo operating licence; (c) a general betting operating licence; (d) a pool betting operating licence; (e) a betting intermediary operating licence; (f) a gaming machine general operating licence for an adult gaming centre; (g) a gaming machine general operating licence for a family entertainment centre; (h) a gaming machine technical operating licence; (i) a gambling software operating licence; and (j) a lottery operating licence. 1 The Secretary of State may by order amend this list so as to add, vary or delete a class of operating licence (s 65(4)).

6.14 As well as the ten ‘Gambling Act’ operating licences, the Gambling (Operating Licence and Single-Machine Permit Fees) (Amendment) Regulations 2008 (SI 2008/1803) have added a ‘betting intermediary (trading room only) operating licence’ and a ‘supplementary gambling software operating licence’ and a ‘supplementary gaming machine technical operating licence.’ A  trading room is characterised by the Commission as premises which provide access to live sporting pictures and remote communication such as an internet-enabled computer intended to be used for betting via a betting exchange. The operator’s involvement is limited to administering the arrangements for gambling by others. Whether the offer of trading room facilities amounts to the provision of a licensable gambling activity is a question of fact and degree: guidance is given by the Commission in an Advice Note issued in March 2011: ‘Is a trading room licence required?’.1 1 See http://www.gamblingcommission.gov.uk/pdf/is%20a%20trading%20room %20licence%20required%20-%20march%202011.pdf.

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Operating licences 6.15 The new and generic operating licences give the holder a general authorisation for the provision of the named facilities. In this respect operating licences resemble certificates of consent under the Gaming Act 1968. And, as under that Act, before any particular premises may be used for the provision of gambling, the holder will also need a premises specific authorisation under the GA 2005. Premises licences are dealt with in Part 8 of the Act, although there are other forms of permission, eg an occasional use notice (s 39) or a temporary use notice (Part 9).1 1 For temporary use notices, see Chapter 11.

6.16 When issued, the licence must specify1 the person to whom it is issued, its duration, and any condition that the Gambling Commission has attached under GA 2005, s 75 or s 77. The Secretary of State may also by regulations require the Commission to ensure that the form is issued in accordance with them and contain information about any conditions attached to the licence under s 78. 1 GA 2005, s 66.

Remote gambling 6.17 The distinction between ‘remote’ and ‘non-remote’ gambling is reflected in the operating licence structure set out in Part 5. In addition to the general authorisation for ‘non-remote’ provision in GA  2005, s  65(2), s  67 authorises the provision of any of those facilities by means of remote communication (‘remote provision’). The combined effect of ss 65 and 67 is that there are two basic types of operating licence for eight of the ten listed kinds. The first is a non-remote licence, which authorises the named facilities to be provided from premises or, in respect of those licences which do not relate to direct provision of gambling facilities to customers (for example gaming machine technical operating licences) by means which do not involve remote communication. The second is a remote operating licence, which authorises activity to be carried on either in respect of remote gambling or by means of remote communication (s 6). 6.18 It is important, however, to note that it is not possible to combine these two into a single licence authorising both the remote and the nonremote provision of the specified gambling facilities (s  67(2)). Section 67(3) requires a licence to state whether it is a remote operating licence or a nonremote operating licence: it cannot be both. Remote gambling raises issues concerning eg  access by children that do not apply so acutely to bricks and mortar venues. More obviously, they do not require premises licences, which precludes the imposition of conditions on the manner in which their activities are carried on that a licensing authority could otherwise apply. For these and associated reasons the government wished to be able to regulate remote gambling as a separate licensed activity. This is reflected later in Part  5, where further provisions on the conditions that can be attached to a remote licence allow the Commission to limit the particular forms of remote communication by which gambling is offered under a remote licence (s 89). 367

Operating licences 6.19 While one operating licence cannot authorise both remote and nonremote provision, one operator may hold both a remote licence and a non-remote licence. For example, a bookmaker that operated both on the high street and on the internet may (and would be required to) hold two separate ‘general betting operating licences’, each authorising one of these activities. Similarly, operators wishing to provide casino or bingo facilities both in bricks and mortar venues and on line would need to hold both of the corresponding non-remote and remote licences. The financial effect of this on operators has to some extent been mitigated by the development of the notion of the ‘ancillary remote operating licence’ provided for in regs 2 and 14 of the Gambling (Operating Licence and Single-Machine Permit Fees) Regulations 2006.1 Thus, an ‘ancillary remote general betting operating licence’ can be obtained by the holder of a non-remote general betting operating licence to authorise the taking of bets by telephone without incurring the level of fee payable for an ordinary remote licence which would also cover, for example, running an on-line betting business.2 An ‘ancillary remote bingo operating licence’ is for use where non-remote cash bingo has some ancillary remote aspect, such as use by players of personal electronic terminals.3 Similarly, an ‘ancillary remote casino operating licence’ covers the provision of automated roulette in a casino4. 1 2 3 4

SI 2006/3284 (amended in 2008, 2012). See Chapter 17. See Chapter 14. See Chapter 14.

6.20 Notwithstanding the combined effect of ss  65 and 67, it does not appear to be possible for an operator to hold both a non-remote and a remote operating licence for an adult gaming centre (s 65(2)(f)) or a family entertainment centre (s 65(2)(g)). By virtue of ss 237 and 238 an adult gaming centre and a family entertainment centre are ‘premises in respect of which a corresponding premises licence has effect’. They are by definition landbased operations. The Gambling (Operating Licence and Single-Machine Permit Fees) Regulations 20061 make provision for application and annual fees for both forms of non-remote licence, but none for a remote licence for either kind of centre. 1 SI 2006/3284 (amended in 2008, 2012).

Combined operating licence 6.21 While there is a distinction between remote and non-remote operating licences, s 68(1) provides that the Commission may issue a single operating licence that authorises ‘more than one of the kinds described in s  65(2)’. An operating licence might combine, for example, both a ‘gaming machine technical operating licence’ and a ‘gambling software operating licence’. Such a combined licence would be of value to a company that specialises in the supply both of gaming machine equipment and software. Similarly, a company that has operated amusement arcades for adults or for children could benefit from a single ‘gaming machine general operating licence’ for both an adult gaming centre and a family entertainment centre. Section 68(3)–(5) provides for certain combinations of authorised activity 368

Operating licences without the need for a combined licence, although in each case there are restrictions.

A casino operating licence 6.22 By virtue of GA 2005, s 68(3) a casino operating licence without more authorises the provision of facilities for betting on the outcome of a virtual game, race, competition or other event or process. In short, a casino operator who wishes to offer this form of betting does not need to make a separate application for a betting operating licence. The subsection also provides that by virtue of the casino operating licence the holder can automatically offer equal chance gaming. Each of these automatic combinations is qualified. The authorisation to provide betting is subject to any exclusion or restriction that the Commission has imposed under s  75 or s  77, and the authorisation to provide equal chance gaming does not include bingo. This does not preclude a casino operator from offering bingo, having first obtained a bingo operating licence combined with the casino operating licence under s 68(1); what s 68(3) precludes is the automatic inclusion of bingo in with the casino operating licence.1 1 By GA  2005, s  174(4) a small non-remote casino cannot offer bingo from its premises.

A betting operating licence 6.23 By s  68(4) a ‘general betting operating licence’ authorises the provision of facilities for betting on the outcome of a virtual game, race, competition or other event or process (other than a game of chance). Here again, this automatic authorisation is subject to any exclusion or restriction that the Commission has imposed under s 75 or s 77.

Making gaming machines available for use 6.24 It should be stressed that neither s  68(3) nor s  68(4) comprises an authorisation for virtual gambling by machine, which is generally regulated by GA 2005, Pts 8 and 10. There are two types of operating licence specifically designed for authorising the provision of gaming machines. These are provided by s 65(2)(f) and (g): the ‘gaming machine general operating licence for adult gaming centres’ and the ‘gaming machine general operating licence for family entertainment centres’. 6.25 In addition to these, s  68(5)(a)–(d) provides that four other types of non-remote operating licence bring with them a general authorisation to make gaming machines available for use. These are a casino operating licence, a bingo operating licence, a general betting operating licence and a pool betting operating licence. By virtue of s 68(5), each of these operating licences authorises the making of one or more machines within Categories A–D  available for use. This does not, however, entitle the holders of these six operating licences (s  65(2)(f) and  (g) and s  68(5)) to install any number or category of gaming machines on any particular premises. The purpose 369

Operating licences of s 68(5) is to provide a generic authority for the operator to make gaming machines available for use, in the same way as a casino operating licence gives authority to provide facilities to operate a casino (in the general sense). The number and location of any gaming machines are governed by Parts 8 (premises licences) and 10 (gaming machines) of the Act. An operator must comply with the requirements of these Parts to make a gaming machine available for lawful use on any particular premises. 6.26 Notwithstanding the broad permissive language of the GA  2005, s  68(5), the Gambling Commission has steadfastly sought to restrict the generic statutory authority to make gaming machines available that is expressly provided by the subsection. Until recently the Commission had expressed the view that the s 68(5) gaming machine entitlement is dependent upon an operator making available ‘sufficient facilities for the primary gambling activity for which an operating licence has been issued.’ That view was predicated on a narrow interpretation of the licensing regime under the GA 2005, that it was intended that the entitlements attaching to an operating licence were only available to the licence-holder if he made sufficient provision for the primary activity authorised by the licence – the clue being in the licence’s name. A  licensee could not enjoy what the Commission called the ancillary authorisations of an operating licence whilst making no provision at all for, or only paying lip-service to, the principle gambling activities authorised by the licence.1 The Commission gave that view some force by incorporating it into the LCCP 2015 by way of Licence Condition 16 and Ordinary Code Provision 9. Condition 16 required that gaming machines could only be made available for use in licensed gambling premises on those days when ‘sufficient facilities’ for betting, bingo, or playing casino games (as the case may be) were available for use. Ordinary Code Provision 9 gave guidance as to what might be regarded as sufficient facilities. Opinion was divided as to whether the Commission, in its interpretation of the Act (and also its own condition and code) was acting in excess of its statutory powers. In the case of Luxury Leisure Ltd v Gambling Commission2 Judge NJ Warren held that Licence Condition 16 was intra vires, but only if it was interpreted as requiring a sufficient provision of the facilities for which an operating licence has been issued, and was not interpreted (as the Commission submitted it should be) as requiring a contest between the use of those facilities and the use of permitted gaming machines as to which is or could be the primary activity. 1 See also, with regard to premises licensing, Guidance to Licensing Authorities (4th edn), at 7.6: ‘By distinguishing between premises types the Act makes it clear that the primary gambling activity of the premises should be that described. Thus, in a bingo premises, the primary activity should be that of bingo, with gaming machines as an ancillary offer on the premises.’ 2 First-tier Tribunal GA/2013/0001.

6.27 With the recent publication of LCCP 2016 (July), the Commission has abandoned its controversial ‘primary gambling activity’ concept (at least in name), and has replaced it with another – but one which may be thought to derive from the same thinking. There is no condition to correspond to the repealed condition 16; but there is a new ‘social responsibility code provision’ (#9) applying to all non-remote betting, bingo and casino operating licences.1 Consolidating the texts of 9.1, 9.2 and 9.3: 370

Operating licences ‘9.1 Gaming machines may be made available for use in licensed [betting, bingo and casino] premises only where there are also substantive facilities for non-remote [betting, bingo, the playing of casino games] provided in reliance on [the relevant operating licence] available in the premises. 9.2 [provides for adequate supervision by staff] 9.3 Licensees must ensure that the function along with the internal and/or external presentation of the premises are such that a customer can reasonably be expected to recognise that it is a premises licensed for the purposes of provided [betting, bingo, or casino] facilities.’ In formulating this new code the Commission has relied heavily on a proposition, expressed in a very few words by Judge NJ  Warren in the Luxury Leisure case: namely, that the Commission is allowed to regulate ‘the atmosphere in which gambling facilities are provided’. In the consultation preceding the LCCP  2016 the Commission expressed concern for, and the intention to protect, vulnerable people who might otherwise enter gambling premises unaware of what type of gambling premises they were, or whether they were gambling premises at all. It would be wrong to comment on the plausibility of that projection, or the extent to which it has been identified as a real, as opposed to theoretical, problem in the past, without a comprehensive analysis of the evidence before the Commission. What may be said with more confidence is that determining the meaning of ‘substantive facilities’ and (within the broad spectrum of differing but legitimate opinion) what a customer of gambling premises might ‘reasonably expect’, is something likely to tax the courts in the gap between the writing of this and any later edition of the work. 1 The code does not apply to GA 2005 casino operating licences.

6.28 Apart from these six, GA  2005, s  68(6) provides that no other operating licences may authorise the holder to make gaming machines available for use. The holders of the operating licences specified in s  65(2) – betting intermediaries,1 gaming machine technical,2 gambling software3 and lottery4 – have no authorisation for this purpose. And, since gaming machine general operating licences can only apply to non-remote provision, no remote operating licence can confer a right to make gaming machines available for use. 1 2 3 4

GA 2005, s 65(2)(e). GA 2005, s 65(2)(h). GA 2005, s 65(2)(i). GA 2005, s 65(2)(j).

APPLYING FOR AN OPERATING LICENCE General: the Commission’s approach to licensing 6.29 Sections 69–74 set out the procedures to be followed by applicants and by the Gambling Commission when it is exercising its power under 371

Operating licences s 65(1) to issue an operating licence. These procedures are informed by the Commission’s Statement of Principles for Licensing and Regulation dated March 2015, in compliance with its obligations under s 23.1 The Commission’s general principles are contained in ss 2 and 3 respectively of that Statement; ‘Principles for Regulation’ are set out in s 4; and ‘Promoting the Licensing Objectives’ is the subject of s 5. In this chapter, reference will primarily be made to those principles that are relevant to the issue of an operating licence. 1 See http://www.gamblingcommission.gov.uk/pdf/statement-of-principles-forlicensing-and-regulation.pdf. The Statement should be read in conjunction with two other Gambling Commission publications: ‘Regulatory decisions: Procedures and guidance for the Regulatory Panel November 2010’; and ‘Licensing, compliance and enforcement under the Gambling Act 2005: policy statements’, March 2005. The Gambling Commission would seem to regard its statutory obligations as to the content of the s 23 Statement as satisfied if the relevant material is placed in one or other of these three documents.

6.30 A  number of important general points may be made here as a preliminary to the detail of the application procedure.

Suitability and criminal convictions 6.31 When determining whether to grant or reject the application, two principal considerations arise. First, GA  2005, s  70 sets out a number of ‘general principles’ to which the Commission must or may have regard. Amongst other matters these require the Commission to form an opinion of the applicant’s suitability to carry on the licensed activities or to consider the suitability of any gaming machine or other equipment to be used in connection with them. The criteria that the Commission may take into account when considering an applicant’s suitability will resonate with licence holders under the old law, in particular of certificates of consent. They are the applicant’s integrity, competence and financial circumstances, dealt with in detail below. 6.32 The fact that the applicant has a criminal record does not expressly arise under s 70, but the Commission can clearly take it into account when determining the applicant’s suitability. But quite separately from that consideration, s 71 provides that the Commission may refuse the application if the applicant (or a person relevant to the application) has a conviction for a relevant offence.1 This discretion is without prejudice to the generality of s 70.2 The implications of these provisions and the detail of s 71 are considered at 6.80 below. 1 GA 2005, s 74(1). 2 GA 2005, s 71(2).

THE LICENSING OBJECTIVES 6.33 Part  5 includes new criteria that reflect the overarching principles of GA  2005 for the provision of commercial gambling, as set out in the licensing objectives in s  1. In considering an application for an operating 372

Operating licences licence the Commission’s first obligation under s  70(1)(a) is to have regard to them. The inclusion here of this obligation might be thought otiose, given the Commission’s statutory duty set out in s 22(a), that it shall aim ‘to pursue, and wherever appropriate, to have regard to, the licensing objectives’. Nevertheless, s  70(1)(a) reinforces the centrality of these objectives in the particular instance of applications for operating licences. Their centrality is reflected in the Commission’s Statement of Principles. 6.34 Section 4.1 of the Statement states that the Commission ‘expects licensed operators to conduct their gambling operations in a way that does not put the licensing objectives at risk’. This expectation implies that when it is considering an application the Commission will wish to see evidence that applicants who are granted operating licences will be able to: •

conduct their business with integrity;

•

act with due care, skill and diligence;

•

take care to organise and control their affairs responsibly and effectively, having adequate systems and controls to protect the three licensing objectives;

•

maintain adequate financial resources;

•

have due regard to the interests of customers and treat them fairly;

•

have due regard to the information needs of customers, and communicate with them in a way that is clear, not misleading, and allows them to make a properly informed judgment about whether to gamble;

•

manage conflicts of interest fairly.

6.35 A number of these matters have more particular focus in s 70. The Commission will also expect operators to work with it in an open and co-operative way. This includes access to their premises (LCCP 2016, Part I, condition 14) and a duty to report certain matters of which the Commission would reasonably expect notice (suspicion of offences under the Act – condition 15.1; key events having a significant impact on the nature or structure of a licensee’s business – condition 15.2; information about the use made of facilities and the manner in which they are provided – condition 15.3. See also Part II, provision 8 (information requirements)).

THE ACT’S ETHOS 6.36 A second major difference between the old and the new law is the underlying ethos of the Act. Whereas the repealed legislation’s approach to bookmaking, and more particularly casinos, was characterised by a policy of restraint, the 2005 Act treats commercial gambling as a predominantly harmless leisure activity for which operators may be licensed where they meet the criteria set out in Part  5. Subject to the Commission’s ‘overriding duty to pursue and have regard to these objectives, and to permit gambling in so far as we think it reasonably consistent with them in pursuit of the licensing objectives’ (Statement of Principles, section 3.3) the Commission’s 373

Operating licences duty is facilitative rather than restrictive. This shift in legislative policy is reflected in two particular ways that concern an operating licence. These are the exclusion of any consideration of the question of demand for the facilities to be licensed or of any requirement of club membership.

Demand 6.37 Under the old law the question whether there was an unmet demand for the facilities to be provided took effect in two ways. In the particular case of casinos, the Permitted Areas regulations restricted casinos to those areas named in the regulations’ areas of Great Britain in which casinos could be located.1  A  certificate of consent to apply for a gaming licence could not be granted in respect of any other area. That restriction has been removed. By s  72(a), in determining whether to grant an operating licence the Commission may not have regard to ‘the area in Great Britain where it is proposed to provide the facilities’. A  legacy remains, however, in the restrictions on the location of the three new forms of casino authorised by s 175. The combined effect of s 175(4) and the Gambling (Geographical Distribution of Large and Small Casino Premises Licences) Order 2008 (SI  2008/1327) is to limit the power to grant eight large casino premises licences to eight specified licensing authorities, and eight small casino premises licences to eight specified licensing authorities (see Chapter  14). These provisions will therefore have some impact on an application for a casino operating licence. 1 Smith & Monkcom The Law of Betting, Gaming and Lotteries (2nd edn), paras B9.114– B9.119.

6.38 The second effect was of wider scope, applying as a discretionary matter to proceedings concerning the grant or renewal of a betting office licence,1 and as a mandatory requirement for the grant of a gaming licence.2 The Gaming Board’s view was that the ‘demand test’ meant that where unmet demand for a new casino was not established not only did licensing justices have a discretion to refuse the application but, in the absence of evidence of other material factors which outweighed such lack of demand, a refusal was to be expected. In R  v Newcastle Licensing Justices (on the application of TC Projects Limited), the Court of Appeal stressed the priority of the statutory language when affirming the Gaming Board’s interpretation of the 1968 Act: the absence of unmet demand for a casino of the type that an applicant proposed was of itself sufficient reason for refusal.3 This ruling is largely of historic interest, as by GA 2005, s 72(b), in determining whether to grant an operating licence the Commission may not have regard to ‘the expected demand for facilities which it is proposed to provide’.4 1 Smith & Monkcom The Law of Betting, Gaming and Lotteries (2nd edn), paras A2.64– A2.78. 2 Smith & Monkcom, paras B9.122–B9.154. 3 [2008] EWCA Civ 428. 4 The repeals necessary for these changes are listed in GA 2005, Sch 17.

6.39 But here, too, the demand criterion may continue to have relevance in the context of casino licensing. Under GA 2005, s 166 a licensing authority 374

Operating licences may resolve not to issue casino premises licences, and in deciding whether to pass a resolution it may ‘have regard to any principle or matter’. There seems little doubt that the question whether there is demand for casino facilities in the licensing authority’s area would be a relevant consideration when it is reaching this resolution. Although s 166 relates to casino premises licences, the effect of a resolution not to issue casino premises licences would, obviously, have an impact on the need to apply for a casino operating licence. If, however, the licensing authority decides not to pass such a resolution, then when it does come to consider an application for a premises licence it may not have regard to the expected demand for the facilities to be provided (s 153(2)).

Club membership 6.40 Under the Gaming Act 1968 it was a requirement that gaming licences under Part  II of that Act could only be held by casinos or bingo halls that operated as clubs. That restriction has also been removed, in the case of the operating licence by GA  2005, s  87. This provides that neither the Commission nor the Secretary of State may make an operating licence subject to a condition ‘requiring facilities to be provided by, or used in the course of the activities of, a club or other body with membership’ (s 87(a)). Nor may a condition restrict ‘the provision or use of facilities wholly or partly by reference to membership of a club or other body’ (s 87(b)).1 1 GA  2005, s  170 makes identical provision where a local authority imposes conditions on a premises licence.

The application Initial requirements 6.41 GA 2005, s 69(1) provides that a person (who may be a natural person, partnership, unincorporated association, limited liability partnership or a company) may apply to the Commission for an operating licence authorising the provision of facilities for gambling. An application cannot be made by a child or young person or by a group that includes such persons (s 69(3)). In addition to the Commission, the Secretary of State may by regulations made under s 69(4) require the applicant to notify specified persons within a specified time. Failure to do so may result in the application being disregarded. 6.42 By s 69(2) the applicant is required, first, to specify the activities to be authorised, ie which one or more of the ten types of licence1 he wishes to obtain, and whether the licence is to be for remote or non-remote provision. The applicant must specify an address in the United Kingdom, and state whether he has been convicted of a ‘relevant’ or any other offence (s 69(2)(d) and (e)). This information must be made in such manner as the Commission may prescribe and must contain or be accompanied by such information as it may direct. 1 But see 6.14.

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Fees 6.44 The fees regime was introduced by the Gambling (Operating Licence and Single-Machine Permit Fees) Regulations 2006,1 which have since been amended six times.2 The Gambling Commission website publishes a useful list of ‘Gambling Related Legislation’, in the ‘fees’ section of which may be seen the latest amendments. The 2006 Regulations set out in three Parts rules for application3 and annual4 fees for non-remote operating licences (Part 2), remote operating licences (Part 3), and combined and multiple licences (Part 4). Regulation 4 lists 15 categories of non-remote operating licences.5 Regulations 5, 6 and 7 and Sch  1 establish the fee categories for these licences and Sch  2 lists the corresponding application fees for them. Regulation 8 and Sch 3 provide for the annual fees for nonremote operating licences. 1 SI 2006/3284. 2 Gambling (Operating Licence and Single-Machine Permit Fees) (Amendment) Regulations 2007 (SI  2007/269); Gambling (Operating Licence and SingleMachine Permit Fees) (Amendment) Regulations 2007 (SI 2007/1791); Gambling (Operating Licence and Single-Machine Permit Fees) (Amendment) Regulations 2008 (SI  2008/1803); Gambling (Operating Licence and Single-Machine Permit Fees) (Amendment) Regulations 2009 (SI  2009/1837); Gambling (Operating Licence and Single-Machine Permit Fees) (Amendment) Regulations 2012 (SI 2012/829); Gambling (Licence Fees) (Miscellaneous Amendments) Regulations 2012 (SI 2012/1851). 3 GA 2005, s 69(2)(g). 4 GA 2005, s 100. 5 For the imposition of conditions on certain classes of operating licences under ss 77–79 restricting the scope of activities authorised by such licences and thereby creating sub categories of licence see 6.96A

6.45 Regulations 9 and 10 and Sch 4 provide for 12 categories of remote gambling operating licences and regs 11–14 and Schs  5 and  6 provide for their application and annual fees respectively. Regulations 15–20 provide for application and annual fees payable for combined and multiple operating licences. Broadly speaking, the fee that is payable in these cases comprises a calculation based on the level of one of the fees applicable to one of the operating licences and a proportion of the others. 6.46 Part  5 of the Regulations applies to applications for a change in corporate control, to vary and for a copy of an operating licence.1 1 GA 2005, ss 102, 104 and 107.

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Consideration of applications: general principles 6.47 GA  2005, s  70 is a substantial section that addresses two kinds of general principles. Section 70(1)–(3) lists the substantive criteria to which the Commission must or may have regard when considering an application under s 69. Section 70(4) provides that the Commission must specify the principles to be applied in considering these applications in its s  23 Statement.1 By s 70(5)–(8) that Statement must also specify the kinds of evidence on which the Commission may rely. For the sake of exposition, these substantive and evidential criteria are dealt with under separate headings. 1 See Chapter 3.

6.48 There has been a change of emphasis in the Commission’s Statement of Principles since publication of the third edition of this work. Section 3.5 of the 2015 Statement makes it clear that ‘Whilst the commission will provide assistance to licence applicants, to help them through the application process, the responsibility for providing information rests with applicants. The Commission will treat delays in providing information as a strong contraindicator of suitability to hold a licence.’ A  duty not far, if at all, short of uberrimae fidei rests with an applicant. At section 3.6 the Statement reads: ‘The Commission expects applicants to work with the Commission in an open and cooperative way and to disclose anything which the Commission would reasonably expect to know. The Commission will attach significant weight to an applicant’s failure to work in an open and cooperative way.’ Withholding information from the Commission will be treated as a strong contra-indicator of an applicant’s suitability to hold a licence: section 3.7. Failure to declare a conviction for a ‘relevant offence’1 committed by the applicant or by a person relevant to the application is, again, something to which ‘significant weight’ will be attached: section 3.11. 1 GA 2005, s 126, Sch 7.

SUBSTANTIVE PRINCIPLES The licensing objectives 6.49 Section 70(1) specifies three matters to which the Commission must have regard when considering an application, and a fourth to which it may have regard. First, the Commission must have regard to the licensing objectives (s 70(1)(a)). They are, as the lexical order indicates, paramount. Subject to the Commission’s direction on their contents (s 69(2)(g)), applications will need to show how they will meet these objectives. An applicant who fails to satisfy the Commission that they will be met will fail. 6.50 The following sections draw from the Commission’s Statement of Principles (March 2015) and on the licensing objectives that have a particular relevance to an application for an operating licence. The text also refers to the Commission’s Licence Conditions and Code of Practice (LCCP 2016), where these have relevance to an application. Applicants may regard the Statement of Principles, the licensing objectives, the licence conditions and the code of 377

Operating licences practice as constituting a cumulative checklist against which applications will be judged. The Statement contains other principles relevant, for example, to premises licences or the Commission’s guidance to local authorities: these are not mentioned here.

Objective 1: to prevent gambling from being a source of crime or disorder, being associated with crime or disorder, or being used to support crime 6.51 ‘The Commission’s licensing, compliance and enforcement processes are designed to prevent gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime, and will ensure that: •

only suitable applicants will be granted operating licences or personal licences

•

the suitability of licence holders will be assessed on an ongoing basis as part of the Commission’s compliance activities

•

compliance activity is targeted where the risks to the licensing objectives are greatest

•

the suitability of licence holders will be reconsidered in the light of any subsequent criminal activity or connection with such activity.’1

‘The Commission will take a serious view of applicants and licensees who have convictions for relevant offences. Each case will be considered on its merits, but there will be a presumption in favour of refusing an application or reviewing a licence in such cases.’2 1 Statement section 5.2. 2 Statement section 5.3.

6.52 ‘In relation to the prevention, investigation and prosecution of offences under the Act, and other offences related to gambling, the Commission will give priority, based on the level of risk posed to the licensing objectives, to: •

crimes in which gambling is an intrinsic element, for example illegal gambling

•

financial crimes which operators should seek to prevent, such as money laundering offences under the Proceeds of Crime Act

• crimes which affect the outcome of gambling for other participants.’1 1 Statement section 5.9. See LCCP 2016, Part I, conditions 4 (protection of customer funds), 5 (Payment, cash and cash equivalent), and Part II provision 2 (financial requirements).

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Objective 2: to ensure that gambling is conducted in a fair and open way 6.53 ‘The Commission expects that not only is gambling fair in the way it is played, but that the rules are transparent to players and they know what to expect.’1 This will be achieved by ensuring:2 •

operating and personal licences are issued only to those who are suitable to offer gambling facilities or work in the industry;3

•

easily understandable information is made available by operators to players about, for example: the rules of the game, the probability of losing or winning, and the terms and conditions on which business is conducted;4

•

the rules are fair;5

•

advertising codes are put in place that prevent consumers from being misled;

•

the results of events and competitions on which commercial gambling takes place are made public;

•

machines, equipment and software used to produce the outcome of games comply with relevant regulations made under the Act (eg under s 240), meet standards set by the Commission and operate as advertised.6

1 The listed bullet points are taken from different documents, and in some instances are summaries. 2 Statement section 5.13. 3 Statement section 5.15; LCCP  2016, Part  I, condition 1 (qualified persons and personal licences). 4 Statement section 5.13; LCCP 2016, Part I, conditions 9 (types of rules of casino and other games) and 10 (tipping of casino employees), and Part II, provisions 6 (complaints and disputes) and 7 (gambling licensees’ staff). 5 LCCP  2016, Part  I, condition 7 (general ‘fair and open’ provisions) and Part  II, provision 4 (‘fair and open’ provisions). 6 LCCP 2016, Part I, condition 2 (technical standards and equipment specifications).

Objective 3: to protect children and other vulnerable persons from being harmed or exploited by gambling 6.54 The first strand of the third licensing objective relates to protecting children from being harmed or exploited by gambling. In approaching this objective the Commission will, for example:1 •

require persons operating premises in which gambling takes place to take measures, such as supervision of entrances and training of staff, to prevent access by children and young persons;

•

require persons operating remote gambling to ensure that there are adequate age verification measures in place to prevent children and young persons gambling on their sites.

1 Statement sections 5.22 and 5.23.

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Operating licences 6.55 The second strand of the third licensing objective relates to protecting vulnerable persons from being harmed or exploited by gambling. The Commission’s role does not extend to treatment or care of those who have gambling problems. However: ‘… the Commission does have an interest in keeping up to date with developments and trends in work of that kind.’1 1 Statement section 5.26.

6.56 ‘The Commission’s focus will be on identifying best practice in protecting vulnerable people from being harmed or exploited by gambling, and where appropriate placing requirements on operators to put particular measures in place and to monitor their compliance.’1 1 Statement section 5.31.

6.57 This third objective is an innovation: it applies to all sectors and is a matter of considerable significance. Applicants are strongly advised to study carefully the Commission’s Licence Conditions and Code of Practice so far as they concern children, vulnerable players and problem gambling. These are social responsibility code provisions and are, by virtue of GA 2005, s 82, licence conditions.1 Applications will need to show very clearly how the operator will meet this objective. 1 See LCCP 2016, Part II, provision 3 (protection of children and other vulnerable persons).

The applicant’s suitability: criteria 6.58 Secondly, the Commission must ‘form and have regard to an opinion of the applicant’s suitability to carry on the licensed activities’ (s  70(1)(b)). Under the repealed legislation on certificates of consent, the Gaming Board was required to have regard to the question whether the applicant would be ‘capable and diligent’ in meeting the requirements of Gaming Act 1968, Sch 2, para 4(5). Paragraph 4(6) went on to provide that, in considering that question, the Board was in particular to take into account the ‘character, reputation and financial standing’ of the applicant or any other person who might be involved in the premises’ management. The GA 2005 equivalents to these three criteria are to be found in s 70(2), and the relationship between ‘suitability’ and the three new criteria of ‘integrity, competence and financial and other circumstances’ is much the same as under the 1968 Act: they are indicative of suitability. 6.59 These non-exhaustive criteria of suitability (which do not specifically mention an applicant’s criminal record, discussed below) now apply to all commercial gambling sectors in respect of which an operating licence is required. They also apply to any relevant person associated with the application. A  person is relevant to an application if ‘in particular, he is likely to exercise a function in connection with, or have an interest in, the 380

Operating licences licensed activities’ (s 70(9)(b)). There will be some persons whose functional relevance to the application will be obvious; for example, where the applicant is a company a relevant person will include its directors and where it is an unincorporated association any office in the association. Otherwise, or in addition, a relevant person could include any position the occupier of which is required to have some responsibility either for ensuring compliance with the terms and conditions of the licence or for the conduct of those who perform an operational role in connection with the licensed activity. These persons would include those senior managers responsible for compliance, marketing and finance. Under s  80 the Commission shall use its powers under ss 75 and 77 to ensure that in respect of each operating licence at least one person ‘occupies a specified management office’ in respect of the licence. This requirement is dealt with in detail below. 6.60 A person is ‘relevant’ to an application who has an ‘interest’ in the licensed activities, which may readily include a financial interest, or who performs a function in connection with the activities (s 70(9)(b)). It is for the Gambling Commission to determine who might be a relevant person in respect of any application. This will, of course, depend on the kind of licence that is sought (s  70(9)(a)). The Commission’s determination of relevance must be a matter of Wednesbury reasonableness. In a policy statement1 accompanying the Commission’s Statement of Principles, and which must be read alongside it, the Commission states (at 3.10): ‘The persons considered relevant may vary depending on the information provided in the operating licence application and on company structure, but are likely to exercise a function in connection with, or to have an interest in, the licensed activities.’ 1 Licensing, compliance and enforcement under the Gambling Act 2005: policy statement: (‘the 2015 Policy Statement’).

Integrity 6.61 In the case of the first of these three new criteria, GA  2005, s  70(2)(a) simply provides that the Commission may have regard to ‘the integrity of the applicant or of a person relevant to the application’. Integrity means honesty and probity, which may be evidenced positively by the fact that the applicant has held licences under the repealed legislation or in other regulated commercial sectors over a long period of time, and in the absence of any issue as to their continuation. Lack of integrity may be evidenced in particular by conviction for a relevant offence; but ‘information’ that the Commission has sought from other agencies (the police, HMRC) may equally reveal dishonesty or a lack of probity, even if they did not lead to criminal or other proceedings. The matter of the evidence on which the Commission may rely is considered below. 6.62

At 3.26 and 3.27 of the 2015 Policy Statement the Commission states: ‘The Commission will consider whether the information it collects raises any concerns about integrity. This involves an assessment of an 381

Operating licences applicant’s [or, presumably, a relevant person’s] criminal record… or past involvement in civil or regulatory investigations or proceedings.’ ‘The Commission will consider the evidence and findings of complaints about the applicant and investigations by other regulators. The Commission will look into the applicant and other relevant persons to see if there has been a history of problems or business failure and will use open source checks to assist with that.’ 6.63 It may be noted here that s  70(7) provides that the s  23 statement of principles may ‘specify a class of applicant or other person in relation to whom the Commission will or may assume integrity’ for the purpose of s  70(2)(a). Section 3.17 of the Statement of Principles provides that the Commission: ‘will assume integrity when assessing the suitability of any local authority to run a lottery.’

Competence 6.64 In the terms of s  70(2)(b) the Commission will have regard to the applicant’s or the relevant person’s competence to carry on the licensed activities in a manner consistent with the pursuit of the licensing objectives. ‘Competence’ is explained in the 2015 Policy Statement at 3.28 and 3.29: ‘The Commission will take up references and may review the CVs of the applicant or other relevant persons to assess their work experience and the training they have received which demonstrates their competence to carry out the role required of them.’ ‘For individuals who are likely to fulfil key senior roles, the Commission will look for evidence that the individual has some demonstrable experience, which is appropriate, of working in a regulated industry and, if an individual has had no gambling experience, that suitable training of briefing in gambling regulation is planned.’ 6.65 In particular, operators are be required to demonstrate how they propose to meet the requirement to be socially responsible in the manner in which they offer gambling’.1 It is not just a matter of achieving compliance, but of demonstrating to the Commission that the applicant has understood the implications of the social responsibility code and has or will have in place strong systems for meeting it. The Commission will consider the robustness of operators’ policies and procedures for socially responsible gambling which, to comply with licence conditions and relevant code conditions, must include but need not be confined to: •

policies and procedures designed to prevent underage gambling;2

•

making information readily available to their customers on how to gamble responsibly;3

•

policies and procedures for customer interaction where there are concerns that a customer’s behaviour may indicate problem gambling;4

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procedures for self-exclusion;5

•

a commitment to, and how they will contribute to, research into the prevention and treatment of problem gambling;

•

a commitment to, and how they will contribute to, public education on the risks of gambling and how to gamble safely;

•

a commitment to, and how they will contribute to, the identification and treatment of problem gamblers where relevant.

These last three commitments may be evidenced by financial contributions to the Responsibility in Gambling Trust. 1 LCCP 2016, Part II, provision 3.1 (promotion of socially responsible gambling). 2 LCCP  2016, Part  II, provision 3.2 (access to gambling by children and young persons). 3 LCCP  2016, Part  II, provision 3.3.2 (information on how to gamble responsibly and help for problem gamblers). 4 LCCP 2016, Part II, provision 3.4 (customer interaction). 5 LCCP 2016, Part II, provision 3.5 (self-exclusion). See Calvert v William Hill Credit Ltd [2008] EWHC 454 (Ch).

Financial and other circumstances 6.66 In the terms of GA  2005, s  70(2)(c) the Commission may have regard to: ‘financial and other circumstances of the applicant or of a person relevant to the application (and, in particular, the resources likely to be available for the purpose of carrying on the licensed activities).’ 6.67 By section 3.24 and 3.25 of its 2015 Policy Statement the Commission states: ‘For operating licence applications, the Commission will ask for accounts from existing businesses or financial projections where the applicant is a new business. Our main focus is on assessing the resources likely to be available to enable a licensee to carry on the licensed activities. The Commission does not purport to assess, on an ongoing basis, an operator’s solvency; the Commission is principally interested in financial stresses that might lead to an increased likelihood of compliance failures.’ ‘The Commission’s approach is slightly different depending on whether an applicant is a new start up or an existing business. With new businesses we consider the overall viability of the business and may wish to make further enquiries if it appears that the resources available are inadequate or not properly secured. With existing businesses the Commission will consider the resources devoted to the gambling operation and the degree to which they could deliver the necessary arrangements for the provision to be compliant with the Act.’ 6.68 Section 70(2)(c) enables the Commission to have regard in particular to ‘the financial and other’ circumstances’ of the applicant or relevant 383

Operating licences person. The question of interpretation that arises here is whether the ‘other’ circumstances to which it may have regard are qualified by the preceding reference to ‘financial’ circumstances. Under the rules of statutory interpretation the use of the word ‘other’ may arguably be coloured by the specific word(s) that precede it in the provision. In this instance the word ‘other’ is also followed by the parenthetic reference to a consideration of the resources likely to be available to carry on the licensed activities. Together these may suggest that this paragraph is limited to ‘other circumstances’ that have to do with the applicant’s or relevant person’s financial standing. This interpretation gains some strength from the fact that the three criteria of suitability particularised in s 70(2) are separately provided for. It may also be noted that sections 4.30–4.36 of the Statement of Principles for Licensing and Regulation (Discussion following Consultation), which deal with this criterion, make no comment beyond reference to the financial position of those who would be the operator or holders of personal licences. 6.69 The obligation on the Commission is to form and have regard to an opinion as to the applicant’s suitability (s 70(1)(b)). For this purpose s 70(2) identifies integrity, competence and (adopting the interpretation suggested at 6.72) financial circumstances as three particular criteria to which the Commission may have regard when forming that opinion. Notwithstanding these three particular considerations, however, and assuming the interpretation of s 70(2)(c) offered above (para 6.68), to be correct, it is clear that s  70(2) does not preclude the Commission from having regard to any other factors that it considers (Wednesbury) relevant to the formation of its opinion of the applicant’s suitability and these would include the applicant’s non-financial circumstances.

The applicant’s suitability: forming an opinion 6.70 GA 2005, s 70(1)(b) imposes two duties on the Gambling Commission when considering an application. It must ‘form and have regard to an opinion of the applicant’s suitability to carry on the licensed activities’. This requires the Commission, first, to form ‘an opinion’ of the applicant’s suitability. Secondly, having formed that opinion the Commission must have regard to it when determining the application under s 69. It cannot ignore the opinion it has formed as to suitability. That opinion may in particular take into account the applicant’s or a relevant person’s integrity, competence and financial circumstances (s 70(2)), but it is not so limited. The ultimate question is the applicant’s suitability to carry on the licensed activities, and for this purpose the Commission may take into account any other factor that reasonably bears upon this question. If its own opinion is that the applicant is not suitable, the application will be rejected in whole or in part. An existing bingo operator might, for example, apply for a combined licence for both a bingo and a betting intermediary operating licence. Depending on the information that the applicant supplies, the Commission might take the view that the applicant is suitable for the former but not the latter. A  reference in s  70 to ‘the licensed activities is a reference to the activities which will be the licensed activities if the application is granted’ (s 70(9)(a)). The procedures that the Commission must adopt in relation to the obtaining of ‘an opinion’ are set out below. 384

Operating licences

The suitability of equipment to be used in connection with the proposed activities 6.71 In addition to the suitability of the applicant, s  70 requires the Commission to consider the suitability of equipment to be used in connection with the licensed activities. Section 4.39 of the Statement provides that the Commission will, in particular: ‘seek to ensure that gambling is fair and open by requiring all categories of machines and gambling equipment to comply with the Commission’s technical standards for gaming machines or remote gambling equipment, or our specifications for casino and bingo equipment as appropriate, before they are used by the public’. 6.72 Section 70(1)(c) provides for the specific case of gaming machines and s 70(1)(d) extends to ‘any other equipment’ to be used in connection with the licensed activities. This is clearly intended to be taken literally and to be interpreted as widely as is necessary to capture every item of equipment that the operator will use. Section 70(10) provides that ‘equipment’ includes a computer, a device for the playing of a casino game, and ‘any other piece of equipment’. This therefore includes the computers used in connection with the activities specified in any of the remote or non-remote operating licences, a roulette wheel or an automatic card shuffler, and an electronic bingo ticket. In order that the section does not become circular in its separate requirements for gaming machines and other equipment, s  70(10) also provides that a gaming machine is not equipment for the purpose of the section. 6.73 For either purpose, and like the specification that it may make in its statement of principles concerning the integrity of any applicant or relevant person (s 70(7)), the Commission may specify any class of gaming machine or other equipment it will or may assume to be suitable (s 70(8)). By s 70(8) (a) a class of gaming machine may be defined by reference to standards established under s  89 (remote operating licences), s  96 (gaming machine operating licences), or Part 10 (gaming machines). Section 70(1)(c) and (d) shall not apply where an application specifies that a gaming machine or other equipment which the Commission has specified under s70(8) is to be used in connection with the licensed activities. The Commission would therefore not be required to consider the suitability of a gaming machine or other equipment where those items fall within classes it has already specified as meeting that requirement. In a footnote to section 3.17 of the statement of principles the Commission says it ‘has not identified a class of gaming machine or other equipment in relation to which it will or may assume suitability under section 70(8) of the Act, and therefore makes no specification in that regard.’

Applications for a non-remote casino operating licence 6.74 In the case of an application for a non-remote casino operating licence the Commission is to have particular regard to the applicant’s commitment to the third licensing objective, ie  to ‘protecting vulnerable persons from being harmed or exploited by gambling’ (s 70(3(a)). The commitment in fact goes further than this. It extends to ‘making assistance available to persons 385

Operating licences who are or may be affected by problems related to gambling’ (s 70(3)(b). This commitment may be evidenced in many ways, including the provision of leaflets advising players of GamCare’s contact details, a clear, effective and well publicised self-exclusion policy, and employees who are alert via the operator’s training programmes to speak to players who demonstrate that they are in difficulty.

Evidential criteria 6.75 As has been noted, GA  2005, s  70(7) and (8) provide that the Commission may specify evidential assumptions as to the integrity of an applicant or the suitability of gaming machines and other equipment. If made, those specifications must be stated in the Commission’s Statement of Principles. That statement must also specify ‘the kind of evidence to which the Commission will have regard when assessing integrity, competence and financial or other circumstances’ (s  70(5)). That evidence may include interviews conducted by or on behalf of the Commission (s 70(5)(a)), references provided by the applicant (s 70(5)(b)) or information or opinions provided to the Commission (whether or not requested) (s 70(5)(c)). 6.76 By s  69(2)(f) the application must ‘contain or be accompanied by such other information or documents as the Commission may direct’. By s  73(1) the Commission may require the applicant to provide information, and may ‘consult, and have regard to information provided by or an opinion stated by, any person’. Section 73(2) provides that ‘information’ and ‘opinion’ mean information and an opinion about the applicant, a person relevant to the application or the licensed activities. Thus, when the Commission is required by s 70(1)(a) to ‘form and have regard to an opinion of the applicant’s suitability to carry on the licensed activities’, that ‘opinion’ includes opinions as to any of these three matters. 6.77 There is no express limit on the sources of that information on which the Commission may rely. The 2015 Policy Statement states (section 3.7): ‘The Commission may also seek evidence or opinions from other sources where that is appropriate or where its initial review has highlighted areas of concern. The sources the Commission may access include, but are not restricted to: •

Disclosure and Barring Service (DBS) and Disclosure Scotland

•

Court records

•

Company Watch

•

Companies House

•

Dun & Bradstreet

• Equifax •

Financial Conduct Authority

• HMRC • 386

The Insolvency Service

Operating licences •

The Solicitors Regulation Authority

•

The Law Society of Scotland

•

National Crime Agency sports governing bodies

•

open source internet searches

•

other regulators in the UK and abroad

•

police forces in UK and abroad

•

references provided to the Commission.’

6.78 The more particular evidence to which the Commission may have regard includes information it has sought as to the applicant’s solvency and financial reserves and the completion of training or the possession of qualifications (s  70(5)(e) and  (f)). These last contemplate training or qualifications completed or held by the applicant’s employees, whether or not they were provided or awarded in accordance with arrangements made by the Commission. Possession of a grey certificate of approval would be an example of a s 70(5)(f) qualification. 6.79 These six kinds of evidence relate to the suitability of the applicant and, by virtue of s  70(2), any ‘relevant person’. Section 70(6) provides that the Commission must also specify the kind of evidence to which it will have regard in considering the suitability of any gaming machine or of other equipment.1 This evidence may include the results of any tests that the Commission has established or asked others to establish for it, eg as to machine standards. It may also include ‘the opinion of any person’. 1 LCCP 2016, Part I, condition 2 (technical standards and equipment specifications).

Consideration of applications: criminal convictions 6.80 As noted at 6.32 above, GA 2005, s 71(1) provides that the Commission may refuse an application under s  69 if the applicant or a person relevant to the application has a conviction for a relevant offence.1 The exercise of this discretion is without prejudice to the generality of s  70.2  A  person is relevant to an application if ‘in particular, he is likely to exercise a function in connection with, or have an interest in, the licensed activities’. This is the same definition as is used for the purpose of s 70(1)(b).3 Thus, even though it might consider the applicant suitable, the Commission could still reject the application because the applicant has a conviction for a relevant offence, or because a ‘relevant person’ has such a conviction. A suitable candidate who included in the application a relevant person with a conviction for a relevant offence would, therefore, have been badly advised. 1 GA 2005, s 71(1)(a) and (b). 2 GA 2005, s 71(2). 3 GA 2005, s 70(9)(b).

6.81 The simple purpose of GA 2005, s 70 is to keep gambling crime free, as is expressed in the first licensing objective. For this purpose, the scope of a ‘relevant offence’ is wide, covering both domestic and foreign offences. 387

Operating licences A ‘domestic offence’ is one that is listed in Sch 7,1 to which the Secretary of State may add, vary or remove an entry (Part 2).2 Part 1 includes any offence under the repealed legislation. It also lists offences under the Theft Acts 1968 and 1978, the Fraud Act 2006,3 evasion of duty under the Customs and Excise Management Act 1979, the common law offence of conspiracy to defraud, and their Scottish equivalents.4 It also includes a range of ‘miscellaneous’ offences concerning firearms, drugs and sexual offences, offences against the person (including homicide) and their equivalents in the legislation governing the three branches of the armed forces. A ‘foreign offence’ is an offence under the law of a country or territory outside the United Kingdom which prohibits a kind of activity that is prohibited under a ‘domestic offence’; ie under Sch 7. It is immaterial whether or not the foreign offence prohibits all the kinds of activity prohibited by the domestic offence or includes activities not prohibited by it.5 1 GA 2005, s 126(2)(a). 2 The Gambling Act 2005 (Relevant Offences) (Amendment) Order 2006 (SI 2006/3391). 3 Fraud Act 2006, s 14 and Sch 3 (entry 38). 4 An offence under s 58(1) of the Civic Government (Scotland) Act 1982 and common law offences of theft etc in Scotland. 5 GA 2005, s 126(3).

6.82 GA  2005, s  73(3) gives the Commission power to request the production of an enhanced criminal record certificate under s 115 of the Police Act 1997 relating to the applicant or a person relevant to the application. 6.83 GA 2005, s 125(a) disapplies s 4 of the Rehabilitation of Offenders Act 1974 for the purposes of, or in connection with, consideration under s 71(1). In that section and in Part  5 generally ‘conviction’ has the meaning given to it by s 1(4) of the 1974 Act, and includes a spent conviction to the extent required by s 125.

Consideration of applications: procedure 6.84 GA  2005, Sch  4 provides that the Commission shall determine arrangements for the conduct of its proceedings. Paragraph 8 provides that it may delegate functions to a commissioner, a committee consisting of commissioners, or a Commission employee. In accordance with those powers the ‘Regulatory decisions: Procedures and guidance for the Regulatory Panel (November 2010)’ guidance note1 states at 1.3: ‘The Commission has approved a scheme of delegations setting out who has the delegated authority to make regulatory decisions. As part of that scheme the Commission has established a Committee of Commissioners, on which any Commissioner may sit, known as the Regulatory Panel (“the Panel”).’ 1 ‘The Regulatory Decisions Guidance Note’.

6.85 The Commission is required to specify its practice in relation to oral hearings in its Statement (s  73(4)(b)). This it has done in Parts 1–3 of ‘The Regulatory Decisions Guidance Note’. Paragraph 1.6 states: 388

Operating licences ‘The determination of whether to impose a regulatory sanction is likely to amount to a determination of the licensee’s civil rights or obligations within the meaning of Article 6(1) of the Convention. The Commission’s procedures have therefore been designed to ensure, so far as possible, that the requirements of the Human Rights Act 1998 and the Convention are met. The right of appeal to the First-tier Tribunal (Gambling) is also an important element in ensuring that an individual’s Convention rights are protected.’ 6.86 The GA 2005 does not require the Commission to hold oral hearings of applications. If the licensee is content for matters to be dealt with on the papers alone, then the Panel may meet and carry out its work in the absence of the licensee. ‘Where officials [acting under delegated authority] consider that the Commission should exercise its regulatory powers under section 117 of the Gambling Act 2005, a “minded to” letter is sent to the licensee offering them a hearing before the Regulatory Panel at which they will have an opportunity to appear or make further written representations before a final decision is made.’ (Paragraph 1.5) 6.87 The decision making process to be observed by the panel is spelled out with unusual specificity in Part 4 of the Regulatory Decisions Guidance Note.

Determination of the application 6.88 The GA  2005, s  74 provides the range of determinations the Commission may make having considered an application and the actions consequent upon a determination. It may grant or reject the application, or grant it in respect of one or more of the activities that the applicant specified1 and reject it in respect of the others (s 74(1)(a)). Where it grants an application in whole or part, the Commission shall notify the applicant and issue an operating licence as soon as is reasonably practicable (s 74(2)). Where it rejects an application, the Commission shall notify the applicant of the rejection and the reasons for it as soon as is reasonably practicable (s 74(3)). Appeals against the rejection of an application are made to the Gambling Appeals Tribunal.2 1 GA 2005, s 69(2)(a). 2 See Chapter 8.

LICENCE CONDITIONS Introduction 6.89 The GA 2005, ss 75–88 deal with the conditions that may, may not, or must attach to an operating licence. Sections 75–79 deal with three types of licence condition that may be attached to operating licences: general conditions and individual conditions, both of which are attached by the Commission, and conditions imposed by the Secretary of State. Sections 80–88 deal with 389

Operating licences particular conditions that may affect all operating licences. By contrast, ss  89–99 set out rules for particular operating licences. These rules are not dealt with here but in the sector-specific chapters.

General conditions imposed by the Commission Specification 6.90 Section 75(1) provides that the Commission may specify conditions to be attached to each operating licence or each operating licence falling within a specified class. Both have general application. In the former case the condition applies without qualification to each operating licence that it grants (s  75(1)(a)). Within the suite of 16 general conditions specified in LCCP 2016, Part I, one condition applies without exception to all operating licences (condition 14 (access to premises)). In their application, some apply differently to different operating licences, although the substance of the condition is common. Examples are conditions 8 (display of licensed status) and condition 15 (information requirements). Others apply only to specified classes of operating licence (s 75(1)(b)). As is provided by s 75(2), a class may be defined wholly or partly by reference to: (a) the nature of the licensed activities; (b) the circumstances in which the licensed activities are carried on; (c)

the nature or circumstances of the licensee or of another person involved or likely to be involved in the conduct of the licensed activities.

6.91 A  number of the conditions that are qualified in these ways are phrased in terms of ‘all operating licences except for’ a named class of licence. For example, condition 7 (general ‘fair and open’ provisions) applies to all operating licences except gaming machine technical and gambling software licences. Likewise, condition 5 (cash handling) does not apply either to these two licences or to remote operating licences. Others apply only to one class of operating licence, eg condition 13 (pool betting). Condition 11 (lotteries) applies only to the range of lottery operating licences. 6.92 However a condition is qualified by reference to the matters set out in s 75(2), the Commission must attach to any operating licence that it issues those general conditions that apply to each operating licence or to a class of licence (s 75(3)). Condition 6 (provision of credit by licensees and the use of credit cards) applies to gaming machine general operating licences for adult gaming centres and family entertainment centres. The Commission shall attach this condition to any such operating licences that it issues. A condition that all non-remote casino operating licences should maintain a casino gaming reserve was removed in LCCP Supplement 9, September 2011.

Primary Gambling Activity1 6.93 In May 2009 the Commission added a licence condition to the LCCP, to be placed on non-remote bingo, casino, and general betting standard 390

Operating licences operating licences: ‘licence condition 16’. The wording of the condition, under the heading ‘Primary gambling activity’, may be consolidated: ‘Gaming machines may be made available for use in [licensed bingo, casino or betting] premises only at times when sufficient facilities for [playing bingo; or for playing casino games; or for betting] are also available.’ 1 Immediately before we submitted the draft of this book for publication, the Commission published LCCP 2016, from which the concept of ‘primary gambling activity’ has been removed. See 6.27 above, and footnotes.

6.94 The sufficiency of facilities in bingo and casino premises has not given rise to any significant controversy; but the issue was, and is, very much alive insofar as it affects betting premises. In its original formulation two paragraphs followed the condition as it applied to betting, giving prescriptive examples of what (in the Commission’s view) amounted to ‘sufficient facilities’. The second of those paragraphs was removed when it became apparent that it was inconsistent with the Commission’s interpretation (at that date) of its own condition. The condition was further amended, consistently with the removal of that paragraph, so as to require sufficient facilities for non-remote betting to be provided: it had previously required, simply, the provision of ‘facilities for betting’. For a detailed commentary on the condition as originally worded, see Appendix One to Luxury Leisure Ltd v gambling Commission (FTT) 129, per NJ Warren. 6.95 Licence condition 16 was controversial from the moment of its introduction when out to consultation, and it has remained so ever since, with as much doubt being cast as to its meaning as to its legality. Part of the problem is the use of the word ‘activity’ in the condition. The Commission’s interpretation of that word has not been consistent. The root of the confusion may be that the word ‘activities’ is used in the machine-enabling section 68(5), which authorises the holder of a non-remote general betting operating licence to make one or more gaming machines available ‘in addition to authorising the activities specified in accordance with section 65(2)’. Those so-called ‘activities’ are nothing other than the provision of betting facilities: see section 65(2)(c). Whether or not it is because of the infelicitous statutory language, where ‘activities’ means ‘provision’, the Commission has vacillated between an interpretation of the word ‘activity’ in condition 16 that relates to the activity of customers, and an interpretation that relates to the provision of facilities. In its current Guidance to Licensing Authorities (5th edition) the Commission has softened its previous approach (‘… the primary gambling activity of the premises should be that described in the operating licence’), and has substituted (at 7.4) ‘… the gambling activity of the premises should be linked to the premises described” – [in the operating licence]. It is by no means clear what is meant by ‘the activity of the premises’; but from the language of the paragraph it would seem that what is meant is ‘the activity in the premises’. The language of paragraph 19.21 in the same Guidance, however, points unequivocally to the requirement’s being the offer of ‘sufficient facilities’ for the gambling activity described in the operating licence. It is by no means easy to reconcile these two paragraphs. 6.96 As noted earlier in this commentary, in the case of Luxury Leisure Ltd v Gambling Commission1 Judge NJ Warren held that Licence Condition 16 391

Operating licences was intra vires, but only if it is interpreted as requiring a sufficient provision of the [betting] facilities for which an operating licence has been issued, and is not interpreted (as the Commission submitted it should be) as requiring a contest between the use of those betting facilities and the use of the permitted gaming machines as to which is or could be the primary activity of the customers. 1 (FTT) 129.

6.97 For a critical analysis of the Commission’s changing stance, and of the unfortunate adoption of the word ‘activity’ in condition 16, see the Appendix One to Judge Warren’s decision in the Luxury Leisure case.

Local Risk Assessment 6.98 In the revised LCCP of February 2015/April 2015 (replicated in the 2016 edition) the Gambling Commission introduced a new ‘Social responsibility code provision’ and related ‘ordinary code provision’. They are set out below: ‘Social responsibility code provision 10.1.1 Assessing local risk All non-remote casino, adult gaming centre, bingo, family entertainment centre, betting and remote betting intermediary (trading room only) licences, except non-remote general betting (limited) and betting intermediary licences. 1

Licensees must assess the local risks to the licensing objectives posed by the provision of gambling facilities at each of their premises, and have policies, procedures and control measures to mitigate those risks. In making risk assessments, licensees must take into account relevant matters identified in the licensing authority’s statement of licensing policy.

2

Licensees must review (and update as necessary) their local risk assessments: a to take account of significant changes in local circumstances, including those identified in a licensing authority’s statement of licensing policy; b when there are significant changes at a licensee’s premises that may affect their mitigation of local risks; c when applying for a variation of a premises licence; and d In any case, undertake a local risk assessment when applying for a new premises licence.

Ordinary code provision 10.1.2 Sharing local risk assessments All non-remote casino, adult gaming centre, bingo, family entertainment centre, betting and remote betting intermediary 392

Operating licences (trading room only) licences, except non-remote general betting (limited) and betting intermediary licences 1

Licensees should share their risk assessment with licensing authorities when applying for a premises licence or applying for a variation to existing licensed premises, or otherwise on request.’

6.99 It remains to be seen how onerous these new provisions will prove. Whilst on their face they do not seem to impose any duty on operators that is not already undertaken by them (or should be undertaken), the interpretation of the codes by licensing authorities is capable of creating responsibilities that go further than might have been expected when the codes were drafted. For example, Guidance on Undertaking Local Risk Assessments published by Westminster City Council (26 pages) suggests that operators should undertake a review of their local risk assessments for as little reason as that premises in the area are converted to a local supermarket, or a bus stop used by school children is moved. It is the view of this author that if a casino or betting office has adequate measures in place for the prevention of children entering or gambling, then those measures are unlikely to require review or reinforcement because a bus stop is moved.

Procedure 6.100 Before it specifies a condition under s  75, the Commission must consult one or more persons who in its opinion represent the interests of operating licensees who may be affected by the condition (s 76(2)(a)). These will typically include representatives of the relevant trade associations. In addition to these mandatory consultees the Commission may consult such of those persons specified in s 23(5) as it thinks appropriate. This includes persons representing local authorities, chief constables of police, persons who appear to have knowledge about social problems relating to gambling, and members of the public. These may include, for example, representatives of GamCare or academics who have conducted research on the matter to be addressed by the condition. Trade representatives will be consulted typically as to the desirability, scope and implementation of a proposed condition. They may welcome it or think it disproportionate. Those with knowledge of the social problems affecting dysfunctional gambling may wish to argue against the amendment or revocation of a condition that they consider an important safeguard for players. The choice of consultees will be governed by the law on sufficient interest for the purpose of judicial review. In practice, the Commission consulted widely on the drafts of both the 2007, 2008 LCCP. Consultation must also be conducted where the Commission proposes to amend or revoke a condition (s 76(1)), and it was so conducted prior to the 2015 amendments. For a recent analysis by Holgate J of the cases on defective consultation, see West Berkshire District Council v Department for Communities and Local Government.1 1 [2015] EWHC 2222.

6.101 Having consulted, where it proposes to specify, amend or revoke a s  75 condition, the Commission is obliged to give at least three months’ 393

Operating licences notice to any person who is at that time the holder of an operating licence that will be affected by the specification, amendment or revocation (s 76(4) (a)). If the Commission issues an operating licence within this notice period, it shall notify the licensee of the proposed specification etc (s 76(4)(b)). The purpose of these provisions is to ensure that licensees have adequate notice of general conditions and changes that may be made to them over time. 6.102 Section 76(5) provides that where the specification is ‘necessary by reason of urgency’, the Commission may proceed under s  76(4) by giving ‘as much notice as it thinks possible in the circumstances’ to the affected persons. 6.103 The Commission shall publish any specification, amendment or revocation as soon as is reasonably practicable (s 76(3)) and, once made, all affected operating licences are subject to it (s 76(4)(c), (5)(c) and (6)).

Individual conditions imposed by the Commission 6.104 The GA 2005, s 77 gives the Commission power to impose specific conditions on individual operating licences. In contrast with s  75, these conditions are not subject to any publication or general consultation requirements. They may be commercially sensitive, but every operating licence issued must specify any individual conditions attached to it under this section. They will address particular matters concerning an individual operator and its activities, where the Commission considers it appropriate. The Explanatory Notes give the following example (para 228): ‘The Commission could attach an individual condition on a particular casino operating licence that not more than five casino premises can be operated under it, due to the financial strength of the operator.’ An individual licence might also specify a condition that the operator must meet within a given time frame. 6.105 It is by use of conditions under s  77, restricting the scope of the activities which a licence authorises, that the Commission has created the various sub-categories of licence within the ten basic kinds set out at 6.13 above. These are defined in the Gambling Act (Operating Licence and Single-machine Permit Fees) Regulations 2006, as amended, and include, for example, ancillary remote licences. 6.106 Section 141(2) provides that a licensee may appeal to the First-tier Tribunal against the Commission’s decision to attach an individual condition to the operating licence, which includes any conditions requiring a personal licence.

Conditions imposed by the Secretary of State 6.107 Section 78 provides that the Secretary of State may make regulations to provide for a specified condition to be attached to operating licences falling 394

Operating licences within a specified description. The use of the word ‘description’ indicates that this power is not limited by the reference in s 75(2) to a specified ‘class’ of licence. An example of regulations made under this section are the Gambling Act 2005 (Operating Licence Conditions) Regulations 2007.1 They relate to casinos, and to bingo operating licences in respect of prize gaming.2 1 SI 2007/2257 (as amended in 2010). 2 See Chapter 14.

Scope of powers to attach conditions 6.108 Without prejudice to the generality of ss 75, 77 and 78 of GA 2005, s 79 provides specific examples of the matters to which general, individual or Secretary of State conditions may relate. The section does not limit the breadth of the matters with which these three types of condition can deal, but indicates the (very extensive) range of matters in respect of which a condition may be made. For the most part s 79(2)–(9) specifies the particular effects that the condition will have. Section 79(3) is of a more generic nature, repeating the criteria set out in s 75(2), ie a condition may make provision wholly or partly by reference to the nature of the licensed activities, the circumstances in which the licensed activities are carried on, or the nature or circumstances of the licensee or of another person involved or likely to be involved in the conduct of the licensed activities. 6.109 The Explanatory Notes provide a paraphrase of ‘the things’ that the s 75, s 77 and s 78 conditions may specify. Adapting that summary (para 241), and incorporating the terms of ss 84 and 85, a condition may: •

restrict the nature or extent of the gambling facilities or the circumstances in which they are carried on (s 79(2));

•

in regulating the licensed activities, make provision about the facilities that may or must be provided, the manner in which they are provided and the number of people employed in, and the financial resources available for, their provision (s 79(4));

•

make provision about the financial resources available to the licensee, including the maintenance of reserves in respect of potential liabilities (s 79(5));

•

where it is a remote operating licence, may restrict the methods of remote communication that may be used (s 79(6));

•

make provision about the advertising or description of facilities for gambling (which could include the name given to a gambling product) (s 79(7));

•

make provision about assistance to people who are or may be affected by problem gambling (s 79(8));

•

require the operator to identify or record the identity of users of his facilities and to restrict access to persons registered in advance (s 79(9));

•

restrict (or otherwise be about) the number of sets of premises on which the licensed activities may be carried out, or the number of persons for 395

Operating licences whom facilities may be provided on any premises where the licensed activities are carried on (s 84(1)(b)); •

authorise activities to be carried on in more than one place.

Conditions applying to all operating licences 6.110 Sections 80–88 deal with a disparate range of conditions that may, may not, or must apply to all operating licences. They are dealt with seriatim, drawing on the extensive and helpful Explanatory Notes.

Requirement for personal licence 6.111 The third element in the regulatory triumvirate (with operating and premises licences) is the personal licence. Personal licences are governed by Part 6. The Commission grants or rejects applications for personal licences on the basis of the provisions of Part 5 with the modifications and exclusions set out in Part 6. Like operating licences, they can be made subject to general and individual conditions.1 Personal licences are dealt with in Chapter 7. 1 LCCP 2016, Part 1.1, Qualified persons and personal licences.

6.112 There is a necessary relationship between an operating licence and a personal licence, which is provided for in GA  2005, s  80. Depending on the activities that the applicant specifies,1 the Commission will consider what offices or functions in the organisation will need to be performed so that the licensed activities may be carried on in accordance with the Act’s requirements. These functions are of two kinds: managerial and operational. A ‘management office’ is defined in s 80(5); to paraphrase, it means: •

a director of a company;

•

a partner, which includes a limited liability partnership;

•

an officer in an unincorporated association; and

•

any position which (by reason of the terms of the appointment) carries responsibility for: –

the conduct of a person who performs an operational function, or

–

facilitating or ensuring compliance with the terms of the operating licence.

An ‘operational function’ means (s 80(6)): (a) any function that enables the person exercising it to influence the outcome of gambling; (b) receiving or paying money in connection with the gambling; or (c) manufacturing, supplying, installing, maintaining or repairing a gaming machine. The Secretary of State has the power to amend these definitions through secondary legislation (s 80(8)). 1 GA 2005, s 69(2)(a).

396

Operating licences 6.113 The more extensive the proposed provision of gambling facilities, the more demanding the need for persons to perform these functions. But however extensive they are, and subject to two exceptions referred to at 6.117 and 6.118 below, s 80(1) requires that the Commission ensure that in respect of each operating licence at least one person must occupy a specified ‘management office’ and that that person holds a personal licence authorising the functions of the office. This is a necessary condition of an operating licence. It will be either a general or an individual condition imposed under s 75 or s 77, but not by the Secretary of State under s 78. 6.114 The requirement that there be at least one such person occupying a management office will in practice never be sufficient for the licensed activities to be carried on in accordance with the other terms and conditions of the licence. Beyond the one mandatory personal licence, the Commission may require as conditions any number of additional persons occupying a management office or performing an operational function as defined in s 80(6). These conditions are authorised by s 80(3) and (4). A condition attached to an operating licence under s 75, s 77 or s 78 may provide that if a specified management office is held in respect of the licensee or in connection with the licensed activity, it must be performed by a person holding a corresponding personal licence. Similar provision is made where the s  75, s  77 or s  78 conditions relate to a specified operational function. In both cases the holder of the personal licence is also required to act in accordance with its terms and conditions. It may be noted that the requirements that take effect under s 80(3) and (4) may flow from conditions imposed by the Commission (both general and individual) and, unlike the mandatory s 80(1) personal licence, by generic regulations made by the Secretary of State. 6.115 It should be stressed that s 80 does not require everyone performing any management office or operational function to hold a personal licence. Section 80(3) and (4) says only that a condition under s 75, s 77 or s 78 may require that in respect of specified management offices or operational functions the person performing them shall require a personal licence. ‘The broad definitions contained in particular in section 80(6) will enable the Commission to consider the particular circumstances of each operator, irrespective of the job titles the operator may use. Its task is to identify those functions and offices within an organisation that will require a person to hold a personal licence when carrying them out. The Commission will decide what the appropriate licensing requirements are to be, either on an individual basis, or, where it is able to do so, according to classes of operating licence.’1 As these s  80 requirements constitute licence conditions, an operator who does not use a person holding an appropriate personal licence to perform an office or function that the Commission has so identified will breach a condition of its operating licence. 1 Explanatory Notes to Gambling Act 2005, para 248.

6.116 The LCCP 2016 condition 1.2.1 makes provision for personal licence conditions to attach to all casino, bingo, general and pool betting, betting 397

Operating licences intermediary, gaming machine general, gaming machine technical, gambling software and lottery managers licences except ancillary remote licences. The conditions are extensive and must be examined in detail by the affected sector operators. In broad terms, and subject to specific sector variations, licensees must ensure that at least one of the persons who occupies one of the specified management offices holds the appropriate personal licence. The list includes any function regarding the overall management and direction of the licensee’s business or affairs, the head of any finance, regulatory compliance, marketing, and information technology function. In the case of casino and bingo licences only, this list includes oversight of the day to day management of a single set of premises licensed under Part 8 of the Act. In all cases licensees must take all reasonable steps to ensure that anything done in the performance of the functions of a specified management office is done in accordance with the terms and conditions of the holder’s personal management licence. Condition 1.2.2 also makes provision for personal licences to be held in respect of operational functions performed in respect of a casino operating licence: a dealer in respect of casino games, cashier, inspector, security staff employed to watch gaming, and a supervisor of gaming activities. 6.117 Section 80(9) contains an exemption from the requirements of s 80 for clubs or miners’ welfare institutes holding a bingo operating licence. Provided that the games do not qualify as ‘high turnover bingo played during a high turnover period’,1 the officers of these associations are not required to hold personal licences in relation to their additional bingo operating licence. Section 80(1) does not apply to this operating licence, nor may a condition attached by virtue of s 75, s 77 or s 78 so require or operate by reference to whether a person holds a personal licence. 1 GA 2005, s 275.

6.118 Neither may personal licences be attached as a condition where the holder is a ‘small-scale operator’ as defined in regulations made under s 129.1 These regulations define a small scale operator as one in which there are no more than three ‘qualifying positions’ and each such position is occupied by a ‘qualified person’. The qualifying positions are defined in the regulations in such a way as to broadly correspond to the management offices which the Commission would normally require to be filled by personal licence holders, and qualified persons are those named on the operating licence or in an application to amend a detail of that licence. The Commission has attached general licence conditions2 to the operating licences of small-scale operators requiring applications for amendment of the licence when there are changes in those holding qualifying positions so as to know (and as necessary make enquiries into) of all those who are ‘qualified persons’, track when an operator ceases to be a small-scale operator and then apply the standard personal licence condition to such operators. On a small-scale operator ceasing to be such the statutory condition requiring at least one personal licence to be held will apply immediately. However, so far as the Commission’s general condition as to the range of persons who require personal licences is concerned those who were ‘qualified persons’ immediately prior to the change of status may remain in position for three years before the need a personal licence. 398

Operating licences 1 The Gambling Act 2005 (Definition of Small-scale Operators) Regulations 2006 (SI 2006/3266), 2 LCCP 2016, Part I, conditions 1.1.1 and 1.1.2.

Credit and inducements 6.119 Throughout the consultation on the Gambling Bill (the Budd Report, ‘A Safe Bet for Success’) there was concern about the role of credit in facilitating or encouraging excessive and problem gambling. Section 16 of the Gaming Act 1968 famously sought to prohibit the provision of credit for gaming. Its application in particular to dishonoured cheques and the practice of not pressing for the settlement of the underlying debt gave rise to judicial interpretation that had major financial and regulatory significance for some London casinos.1 By contrast, betting on credit is a major element in bookmaking. An associated matter concerns inducements to gamble, such as providing complimentary accommodation, drinks or meals to players in a casino, introductory ‘free bets’, loyalty cards and other devices that reward the player. Here, too, the tenor of the consultation and debates on the Bill urged caution. 1 Smith & Monkcom The Law of Betting, Gaming and Lotteries (2nd edn), paras B9.317– B9.345.

6.120 GA  2005, s  81 has two principal effects. First, s  81(1) applies this cautionary approach to every sector of the commercial gambling market, providing that conditions may be attached to any operating licences restricting or otherwise making provision about the giving of credit or the making of inducements to gamble. Secondly, echoing s  16 of the 1968 Act, GA 2005, s 81(2) provides that holders of casino and bingo operating licences shall themselves not give credit for gambling.

Definitions Inducement 6.121 The Act does not define ‘inducement’, which may therefore be given its ordinary meaning, ‘to lead a person by persuasion or influence to some action, condition or belief’ (Shorter OED). Neither has the Commission provided a definition, but its social responsibility provisions concerning marketing are explicitly directed towards the prohibition of incentives or rewards to players that depend on the level of their participation.1 This applies to all licensees (including ancillary remote licensees), except gaming machine technical and gambling software licensees. This code prohibits licensees from making available to any customer or potential customer— ‘any incentive or reward scheme or other arrangement under which the customer may receive money, goods, services or any other advantage (including the discharge in whole or in part of any liability of his) (“the benefit”).’ The code provision needs to be read in detail, but in broad terms, apart from a requirement of clear publicity, the scheme must not operate by reference 399

Operating licences to a customer’s duration or frequency of play or provide benefits that are disproportionately greater than the customer’s gambling expenditure. Offering a free bet valued at, say, £20 for every £10 the customer bets would be unlawful. Neither may free or subsidised travel or accommodation be related to the level of a customer’s prospective gambling. 1 LCCP 2016, Part II, provision 5 (marketing).

6.122 The code also makes specific provision in respect of offers by nonremote casino and bingo licensees of free or discounted alcoholic drinks for consumption on their premises. Such offers must not in any way be related to the customer’s gambling, nor may licensees make unsolicited offers of free alcoholic drinks for immediate consumption by customers at a time when they are gambling.

Credit 6.123 ‘Credit’ is defined as including any form of financial accommodation (an IOU, an understanding about postponed payment).1 In particular, it includes the acceptance by way of payment of a ‘fee, charge or stake’ of anything other than cash or a cheque or a debit card payment which is not postdated and for which full value is given.2 A ‘debit card payment’ means a payment debited against a person’s banking account and made by means of a card which is not a ‘credit token’ within the meaning of the Consumer Credit Act 1974.3 1 GA 2005, s 81(4)(a). 2 GA 2005, s 81(4). 3 GA 2005, s 81(5).

Controls General 6.124 Section 81(1) provides that the Commission acting under s 75 or s 77, or the Secretary of State under s  78 may attach to any operating licence a condition that restricts or otherwise makes provision about: (a) the giving of credit in relation to the licensed gambling activities; (b) the making of offers designed to induce persons to participate or to increase their participation in the licensed activities; (c) participation in arrangements for inducing, permitting or assisting persons to gamble. 6.125 For the purposes of GA 2005, s 81(1)(a), LCCP 2016, Part II specifies both a social responsibility and an ordinary code provision governing the provision of credit by licensees and the use of credit cards (provision 3.7). These apply to all general and pool betting, betting intermediary and lottery and all remote licensees. They do not apply to gaming machine technical, gambling software, or ancillary remote casino, bingo and betting intermediary (trading rooms only) licensees. Casino and bingo operating 400

Operating licences licences are dealt with in s 81(2). The social responsibility code provision is a licence condition;1 the ordinary code provision is not.2 1 GA 2005, s 82, discussed at 6.132–6.133 below. 2 GA 2005, s 24(8).

6.126 For the purpose of s 81(1)(b), the question may arise whether ‘offer’ within the section is to be interpreted as a matter of the law of contract or, as is the case in criminal statutes, in a non-technical sense.1 It is suggested that a technical interpretation would compromise the intention of the section, whose object is to make provision for controls over steps (offers) that a licence holder might take to encourage (new) players to gamble, not to provide for such players to enter into binding contracts with the operator on what is the subject of the ‘offer’. 1 Fisher v Bell [1961] 1 QB 394.

Casino and bingo operating licences 6.127 Section 81(2) provides that casino and bingo operating licences shall be subject to a condition that the licensee ‘may not give credit in connection with gambling or participate in, arrange, permit or knowingly facilitate the giving of credit in connection with gambling.’ In this connection, Part  8 provides that a premises licence shall be subject to a condition that is in exactly the same terms as s  80(2).1 It will be noted that the prohibition in s 81(2) is simply on the giving of credit for gambling and not, as was the case under s 16 of the Gaming Act 1968, credit in respect of gaming taking place on the premises to which a current gaming licence applied. GA 2005, s 81(2) is not restricted to the giving of credit for gambling to any particular person or in respect of a person gambling on any particular premises licensed under Part  8. It may be, therefore, that the holder of a casino or bingo operating licence who gives credit in respect of gambling on premises in which he has no interest is nevertheless in breach of this condition. Section 81(2) applies only to the giving of credit. The holder of a casino or bingo operating licence may lawfully offer inducements to gamble so far as they are permitted by any s 75, s 77 or s 78 conditions attaching to those licences.2 1 GA 2005, s 177. 2 GA 2005, s 81(1)(b) and (c).

6.128 Payment by means of a debit card to the holder of a casino or bingo operating licence to participate in gambling does not involve the giving of credit. Payment by means of a credit card does, but s 81(3) does not prevent the licensee ‘from permitting the installation and use on his premises of a machine enabling cash to be obtained on credit from a person (the “credit provider”)’, subject to three provisos. As will always be the case with such permissions, the operator must comply with any s 75, s 77 or s 78 conditions concerning the nature and location of the machine (s  81(3)(c)). The two other provisos prohibit any commercial connection or financial benefits as between the operator and the credit provider (s 81(3)(a) and (b)). The licensee must have no commercial connection with the credit provider in relation to gambling and must neither make nor receive any payment or reward 401

Operating licences (whether by commission, rent or otherwise) in connection with the machine. It may be noted that exactly the same permission applies as an exception to the general prohibition on holders of casino or bingo premises licences from giving credit, and subject to the same provisos (s 177). 6.129 Condition 6 of the Commission’s LCCP 2016 extends the prohibition contained in GA  2005, s  81(2) on the granting of credit by the holders of non-remote casino and bingo operating licences to licensees holding gaming machine general operating licences for adult gaming and family entertainment centres. Licensees must neither provide credit themselves in connection with gambling, nor participate in, arrange, permit or knowingly facilitate the giving of credit in connection with gambling. 6.130 It should also be noted that LCCP 2016, Part II establishes an ordinary code provision requiring licensees to take steps to prevent systematic or organised money lending between customers on their premises (provision 3.8). The provision applies to all non-remote casino licensees and to nonremote bingo, general betting, adult gaming and family entertainment centres, and remote betting intermediary (trading rooms only) licences, save that in the case of non-remote casinos the steps the licensee should take are more demanding.

Compliance with code of practice 6.131 There have been a number of references to s 82 in this chapter and elsewhere in this book. At the risk of repetition, it is a key component in the Commission’s regulatory regime. Two points may be made here. 6.132 First, by GA  2005, s  24(1) the Commission is both required and has discretion to issue one or more codes of practice. One such code shall describe arrangements for ensuring that the provision of gambling facilities complies with the second and third licensing objectives, and to making assistance available to persons who are or may be affected by problems related to gambling (s 24(2)). This is primarily a social responsibility code, but it should be noted that any code of practice may contain social responsibility provisions, where they are so identified as being made in pursuance of s 24(2).1 In short, any code issued by the Commission may contain social responsibility provisions. The significance of this should not be lost on operators or their advisers. By s 82(1), compliance with any relevant social responsibility provision is a licence condition. Compliance is required not just of the licensee but also of anyone employed or engaged by him to perform an operational function as defined in s 80.2 1 GA 2005, s 82(2)(b). 2 GA 2005, s 82(2)(a).

6.133 Part  II of the LCCP  2016 contains the Commission’s principal code of practice issued under s  24. The code of practice for gambling operators comprises ten code provisions. Of these, some are ‘ordinary’ code provisions, to which s 24(8) and (9) applies (breach does not of itself give rise to civil or criminal proceedings, but is admissible as evidence in them). By contrast, breach of a social responsibility provision is a breach of a licence condition, which, apart from the regulatory implications, gives rise to an offence (s 33). So that they can 402

Operating licences be clearly contrasted with the ordinary code provisions, the social responsibility provisions in the LCCP 2015 print version were shaded in salmon pink. One of the amendments made by LCCP 2016 is the change of this colour to turquoise. 6.134 Second, s  82(3) provides that compliance with any other code provision may also be made the subject of a licence condition under s 75, s 77 or s 78.

Return of stakes to children and young persons 6.135 GA  2005, Pt  4 establishes for the first time (and instead of the unhappy mix of statutory and self-regulation that existed previously) a regime for the protection of children and young persons. Section 83 is a novel provision that supplements the prohibitions to be found in ss 45–64. Once an operator becomes aware that a child or young person1 is or has been using the gambling facilities authorised by his operating licence, he is required to return any money paid in respect of their use as soon as is reasonably practicable (s 83(1)(a)). 1 ‘Child’ and ‘young person’ have the same meaning as s 45 provides. A child is a person under 16 and a young person a person under 18 years of age.

6.136 Once he becomes so aware, neither may the licensee pay out any winnings or give any prize to the child or young person (s 83(1)(b)). A ‘prize’ includes both a prize provided by the organiser of the gambling and winnings of money staked (s 83(5)). But the condition does not permit him to demand repayment of or require the child or young person to return a prize that he won before the licensee became aware of his age (s 83(3)(b)). For these purposes s 83(3)(a) suspends the application of the law of contract or any other rule of law that might apply to such facts. The child or young person may therefore keep any prizes won prior to the operator’s discovery – a matter that provoked some controversy. Its opponents argued that the section creates risk-free gambling opportunities for underage players who, so long as they can escape discovery (eg by some deception or other subterfuge), will be able to keep their winnings. The DCMS response was that the prospect of the non-recovery of stakes and prizes would encourage licensees to ensure that they and any of their employees who perform an operational function (s 83(4)) are alert to the age of those using the gambling facilities. This is a central element in the government’s approach to the new regime under the 2005 Act, and this commercial incentive may be as potent a spur to action as the possibility of unlimited fines or more serious administrative sanctions for breach of the condition. 6.137 There are some limitations on the application of s  83. It is not an offence under GA 2005, Pt 4 to invite, cause or permit a child to gamble where this consists in the use of a Category D gaming machine or participation in equal chance gaming in a family entertainment centre.1 Section 83(1) does not apply in these cases (s 83(2)). In the case of a young person the section applies to the provision of any gambling facilities that are only available to persons over 18 years of age. It does not, therefore, apply where the young person participates in a lottery or the football pools, where the minimum age limit is 16 (s 83(4)(b)). 1 See GA 2005, Pt 13.

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Operating licences 6.138 The obligations imposed on the licence holder arise by virtue of their being a licence condition (s 83(1)). The terms of s 33(2) and (3) mean that a person who provides unauthorised gambling facilities commits an offence, such provision being unlawful if the terms and conditions of a licence are not met. But s 58, contained in Part 4 of the Act (protection of children and young persons), creates a specific offence of failing, without reasonable excuse, to comply with a s 83 condition. Section 58 comes into play once the licensee, in the terms of s 83(1), ‘becomes aware’ that the player is a child or young person, and then fails to return a stake, gives a prize or demands the return of a prize. Suppose the holder of a general betting operating licence becomes aware that one of his customers is 17. At that point he must return any stakes the young person has bet on the outcome of a race, not pay out on any winning bet and not demand the return of any earlier winning bets. If the licensee holds a combined licence under s 68 also authorising him to provide facilities for pool betting, his relationship with the young person is unaffected by s 83 so far as that relates to the football pools (s 83(4)(b)). 6.139 So far as the licensee may have committed an offence in permitting the young person to bet on the outcome of, say, a horserace, s 63 provides a defence of reasonable belief that the individual in question was of sufficient age in respect of all Part  4 offences. The licensee must prove that he took all reasonable steps to ascertain the individual’s age and that he reasonably believed that he was not a child or young person, as the case may be. It will be noted that s 63 expressly requires the licensee ‘to prove’ the defence. This phrase is normally taken to imply a legal burden of proof, to prove the defence on a balance of probabilities. The 2005 Act was enacted at a time when the House of Lords has given guidance on the effect of s 3 of the Human Rights Act 1998 to ‘read down’ such a burden to an evidential burden only, in order to be compatible with Art 6 of the ECHR.1 1 FAR Bennion Statutory Interpretation: A Code (4th edn, 2002), 937–9; Supplement to the Fourth Edition (2005), S64 (Butterworths, London).

6.140 So far as the requirements of s  83 are concerned, the ‘reasonable excuse’ provided by s  58 cannot engage s  63, as they arise only once the licensee becomes aware of the individual’s age. Section 83(1)(a) provides that the return of any money paid by way of stakes etc must be ‘as soon as is reasonably practicable’. This will provide an excuse where, for example, the licensee becomes aware that the individual was a child or young person only after he had left the premises. It may be impossible for the licensee to trace the individual. A reasonable excuse might arise where, for example, the child or young person refused to accept the return of the money because he thinks he is in trouble and runs out of the premises.

Restrictions on conditions relating to premises 6.141 The provisions considered so far authorise the imposition of conditions on all or some specific operating licences. Section 84, by contrast, prohibits the Commission and the Secretary of State from imposing conditions on the premises on which the activities authorised by the operating licence may be carried on. That is the function of the licensing authorities. The 404

Operating licences operating licence is a generic authorisation to provide the licensed activities; it is for the licensing authorities acting under GA  2005, Pt  8 to license the specific premises on which facilities for gambling may be provided. 6.142 Section 84(1)(a) provides that an operating licence cannot be subject to any s 75, s 77 or s 78 condition: (1) requiring that the licensed activities be carried on at a specific place or class of place; (2) preventing the licensed activities from being carried on at a specific place or class of place; or (3) specifying premises on which the licensed activities may be carried on. 6.143 In Greene King Brewing and Retailing Ltd v The Gambling Commission1 the First-tier Tribunal held that s  84(1)(a) supported its ruling that the Commission was not entitled to refuse an operating licence to an otherwise suitable applicant on the ground that it proposed to develop bingo in public houses. The Upper Tribunal allowed the Commission’s appeal against that decision and remitted the matter to the FtT for reconsideration. Greene King appealed to the Court of Appeal which gave permission, and the case is due to be heard in 2017. The decision of the Court of Appeal is awaited with interest: academic opinion is by no means unanimously supportive of the UT’s decision or the reasons given for it. Greene King had sought to offer higher stake bingo and higher category gaming machines in some of their pubs. The Regulatory Panel of the Gambling Commission refused to grant them an operating licence on the grounds that such provision in a busy pub environment had the potential to undermine the second and third licensing objectives and it would create a precedent. An operator, said the Panel, had to decide whether the primary purpose was that of a pub or bingo premises. The FtT allowed Greene King’s appeal on the simple, but elegantly persuasive ground that whether bingo should be played in public houses was a matter for premises licensing: to refuse an operating licence to a suitable applicant because he would or might obtain a premises licence under the authority of it, and the conduct of those licensed premises would or might undermine the licensing objectives, is to trespass on the jurisdiction (premises licensing) assigned to local licensing authorities. Furthermore, it would be inconsistent with GA 2015, s 84(1) so to refuse. The Upper Tribunal allowed an appeal against the decision of the FtT, holding that the Commission is primarily responsible for ensuring compliance with the licensing objectives, and it should not be left to local licensing authorities to deal with matters of national licensing policy on a case-by-case basis. The UT dismissed the ‘inconsistency’ argument based on s 84(1), saying that that subsection only dealt with conditions to be attached to an operating licence once it had been granted. It is difficult, with respect, to follow that reasoning: the point being made, and which the UT does not seem fully to have addressed, is that it cannot be right for the Gambling Commission to use the refusal of an operating licence as a tool for obtaining a consequence (preventing licensed activities from being carried out at a class of place) that is expressly denied to it in the imposition of a condition. 1 (FTT) 2014.

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Operating licences 6.144 But s 84(1)(b) does permit a condition to be attached to an operating licence that deals with the number of sets of premises on which the licensed activities may be carried on, or the number of persons for whom facilities may be provided on any licensed premises. Paragraph 260 of the Explanatory Notes gives the example of a condition attached to a general betting operating licence that restricts the licensed activities to 100 betting shops.1 Regulation 2 of the Gambling Act 2005 (Operating Licence Conditions) Regulations 20072 adds a s 78 condition to each casino operating licence relating to s 84(1)(b)(ii). If a game is played wholly on an automated gaming table,3 the game ‘must be capable of being played by four persons at the same time using four separate player positions’. 1 GA 2005, s 84(1)(b(i). 2 SI 2007/2257. 3 GA 2005, s 235.

6.145 In recognition of its generic character, s  84(2) provides that ‘an operating licence of any kind may authorise activities carried on in more than one place.’ As para 261 of the Explanatory Notes says: ‘The fact that an operating licence is a “casino” operating licence or an operating licence for an “adult gaming centre” does not mean this only authorises the provision of one such facility. An operating licence gives a generic entitlement, to be used alongside any number of premises licences, subject to any conditions imposed under subsection (1) of this section.’

Equipment other than gaming machines 6.146 When considering an application for an operating licence under GA  2005, s  69, the Commission shall consider the suitability of any ‘other equipment’ to be used in connection with the licensed activities (s 70(1)(d)). Having granted the application, by virtue of s 85, a s 75, s 77 or s 78 condition may attach to that equipment, which has the same meaning as it does in s  70(10).1 Such equipment may include computers or devices for playing casino games, but does not include a gaming machine.2 1 GA 2005, s 85(3). 2 GA 2005, s 85(4).

6.147 The condition may make provision about the number or specification of the pieces of equipment that are used (s  85(2)). But s  85(2)(a) does not apply to equipment used for playing bingo. A  s  75, s  77 or s  78 condition cannot be attached to a licence about the number of pieces of equipment used for playing bingo. The Explanatory Notes comment that this means that equipment such as ‘mechanised cash bingo equipment’, used under the Gaming Act 1968 regime, cannot be subject to control about its numbers (paras 263–264). But it can be subject to a licence condition, as GA  2005, s  85(2)(b) provides, without any exception, that it ‘may make provision about the specification of equipment used to provide facilities for gambling’. Such specification will enable this equipment to fall outside the definition 406

Operating licences of gaming machine in Part  10. Similarly, a condition under s  85(2)(b) may relate to the specification of equipment for playing bingo in adult gaming centres or licensed family entertainment centres (bingo played pursuant to the prize gaming entitlements in Part 13). Where it does so, such equipment will not constitute a gaming machine. The Commission has specified a condition on non-remote casino and bingo licences requiring compliance with specifications it has set for casino and bingo equipment.1 1 See LCCP 2016, Part I, condition 2.3.1.

Gaming machines 6.148 Section 86 makes two provisions in respect of gaming machines, the first being prohibitive of certain conditions attaching to operating licences (see 6.149), and the second being permissive (see 6.150). Operating licences to make gaming machines available for use may be granted in respect of adult gaming and family entertainment centres (s 67(2)(f) and (g)) and, by virtue of s 68(5), the ability to make machines available for use is an incident of a nonremote casino, bingo, general or pool betting operating licence. These confer general permissions to use gaming machines; the permission to use gaming machines on particular premises is contained in Parts 8 and 10 of the Act. 6.149 In order that there are no contradictory provisions as between conditions attached to an operating licence and any provisions under Parts 8 or 10 or regulations made under Part 10, s 86(1) limits the conditions affecting gaming machines that may be attached to the licence.1 An operating licence may not include a condition (whether attached by virtue of ss 75, 77 or 78) – about the number or categories of gaming machine that may be made available in accordance with the licence. In the Luxury Leisure case, however, Judge NJ Warren, whilst agreeing that an operating licence condition could not control the number of Fixed Odds Betting Machines in licensed betting premises, commented: ‘… but [section 86(1)(a)] does not in my judgment exclude regulation by the Commission of any activity relating to FOBTs. Reading the statute as a whole it seems to me that it is open to the Commission to attach conditions concerning what I might call the atmosphere in which various facilities, including gaming machines, are made available.’ Neither may a condition contradict a provision in regulations made by the Secretary of State under s 236 (gaming machine categories A to D) or ss 240 and 241 (the use of and supply etc of machines).2 Nor may s 75, s 77 or s 78 attach a condition of a kind that is prohibited by regulations made under ss  236, 240 and 241.3 These limitations do not mean that the Commission cannot regulate the manufacture and supply of machines. Section 96 makes express provision for the Commission to set standards for the gaming machine technical operating licence.4 1 2 3 4

GA 2005, s 86(1)(a). GA 2005, s 86(2)(b). GA 2005, s 86(1)(c). See LCCP 2016, Part I, condition 2.3.1.

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Operating licences 6.150 The second provision in s 86 provides a mechanism whereby operators may be required to stop using machines that have been illegally manufactured, supplied, installed, adapted, maintained or repaired. A  gaming machine may not be made available for use where the Commission has notified the licensee that it is not covered by an appropriate gaming machine technical operating licence, or does not comply with Commission standards. After such notification, the Commission may place a s 77 condition on the relevant operating licence requiring the operator to stop making the machine available for use. Such a condition may also be attached under s 75 or s 78.

Membership 6.151 Section 87 provides that neither the Commission nor the Secretary of State can impose a condition on an operating licence requiring facilities to be provided on the basis of a club or on any other membership basis.1 But this does not prevent organisations from operating as members’ clubs if they wish. 1 See 6.40 above.

Information 6.152 Section 88 permits the Commission or the Secretary of State to impose licence conditions requiring operators to pass information to the Commission or to such other people as may be specified. In the case of the Commission, this may only be imposed as a general (s  75) and not an individual condition (s  77). The purpose of this power is to promote information exchange between the Commission and the holders of operating licences, and does so in two main ways. 6.153 First, s 88(1) requires operators to provide information ‘of a specified kind’. The specification is contained in condition 15 of LCCP  2016, Part  I, which applies to all operating licences except ancillary remote licences. This condition is headed Reporting ‘Key Events’ (condition 15.2). This is an event ‘that could have a significant impact on the nature or structure of a licensee’s business. Licensees must notify the Commission of the occurrence of any of the following key events as soon as reasonably practicable and in any event within five working days of the licensee becoming aware of the event’s occurrence’. There then follows a list of 14 such events, all of which, therefore, require the provision of information. Examples (abbreviated) include: •

in the case of licensees which are companies, a petition being presented for their winding up or the winding up of any group company of theirs, or they or any group company being placed in administration or receivership;

•

the departure from the licensee’s business of any person occupying a ‘qualifying position’ as defined by reg 2(2) of the Gambling Act 2005 (Definition of Small-scale Operator) Regulations 2006;1

•

any breach of a covenant given to a bank or other lender, default in making repayment of the whole or any part of a loan on its due date,

408

Operating licences or any court judgments remaining unpaid 14 days after the date of judgment; •

the commencement of any material litigation against the licensee or the imposition of a disciplinary sanction, including dismissal, against the holder of a personal licence or a person occupying a qualifying position for gross misconduct; or

•

the resignation of a personal licence holder or person occupying a qualifying position following commencement of disciplinary proceedings in respect of gross misconduct against that person.

This condition relating to key events is supplemented by provision 8 of the Code of Practice. 1 SI 2006/3266.

6.154 Second, s 88(2) provides for a condition to be attached to the licence in four particular cases. The first relates to information about the use made of the authorised facilities (s  88(2)(a)). A  condition to this effect has been attached by the Commission to all licences (condition 15.3 in LCCP October 2016) and also provides for periodic ‘regulatory returns’ to be made to the Commission on a sector by sector basis. The second requires a person to provide information that he suspects relates to the commission of an offence under the Act (s 88(2)(b)(i)). 6.155 By contrast with this wide requirement, the third and fourth requirements are specific to sporting regulators. Here the information relates to a breach of a rule applied by a sporting or other body or that may lead to the Commission voiding a bet under s 336.1 That section applies to bets accepted by the holder of a general or pool betting, or a betting intermediary operating licence. LCCP  2016, condition 15.1, which applies to all betting operating licences, including betting intermediary, ancillary remote betting and remote betting intermediary (trading rooms only) licences, amplifies this. Licensees must provide the Commission with any information that they know relates to or suspect may relate to the commission of an offence under the Act, including an offence resulting from a breach of a licence condition or a code provision having the effect of a licence condition. Section 88 provides a statutory basis for the voluntary codes that are already in place in parts of the gambling industry to allow such information exchange. 1 GA 2005, s 88(2)(b)(ii) and (iii).

RULES FOR PARTICULAR KINDS OF LICENCE 6.156 GA  2005, ss  89–99 make specific provision for particular kinds of licence. These provisions are considered in the relevant sector-specific chapter: •

Section 89  Remote operating licence – see Chapter 17.

•

Section 90  Casino operating licence – see Chapter 14.

•

Section 91  Bingo operating licence – see Chapter 14. 409

Operating licences •

Section 92  General betting operating licence – see Chapter 13.

•

Section 93  Pool betting operating licence – see Chapter 13.

•

Section 94  Horse-race pool betting operating licence – see Chapter 13.

•

Section 95  Betting on the National Lottery – see Chapter 13.

•

Section 96  Gaming machine technical operating licence: standards – see Chapter 24.

•

Section 97  Gambling software operating licence: standards – see Chapter 17

•

Section 98  Lottery operating licence – see Chapter 15.

•

Section 99  Mandatory conditions of lottery operating licence – see Chapter 15.

MAINTENANCE OF THE OPERATING LICENCE Annual fee 6.157 The holder of an operating licence must pay a fee to the Commission for the licence to have effect (‘the first annual fee’) and, thereafter, must pay an annual fee before each anniversary of the issue of the licence (GA 2005, s 100(1)(a) and (b)). These annual fees act as renewal fees in the sense that failure to pay them can lead to revocation of the licence (s 119(3)). These fees are different from the application fee required when making an application for a licence and will have effect only if a licence is issued and is then payable within the prescribed period. 6.158 In R  (on the application of Hemming (t/a Simply Pleasure Ltd)) v Westminster City Council1 the Supreme Court drew a distinction between a fee levied in respect of access to an authorisation (licensing) scheme, and a fee levied in respect of possession or retention of a licence. The former is subject to reg 18 of the Provision of Services Regulations 2009 (SI 2009/2999) (adopting Article  13 of Directive 2006/123/EC on services in the internal market): the costs of the running and enforcement of the licensing scheme are not recoverable by way of an ‘access’ licensing fee, only the costs of dealing with an application (including investigating their suitability) are recoverable. The fee for retention or possession of a licence, however, is not subject to the Regulations and Directive. Lord Mance said: ‘… there is no reason why [such a licence fee] should not be set at a level enabling the authority to recover from licensed operators the full cost of running and enforcing the licensing scheme, including the costs of enforcement and proceedings against those operating … without licences.’ 1 [2015] UKSC 25.

6.159 Section 100(2) gives the Secretary of State power to prescribe by regulation the amount of the annual fee and the timing of its payment, and different fees may be set for different kinds of operating licences and 410

Operating licences different circumstances (s  100(3)). The fees regime was introduced by the Gambling (Operating Licence and Single-Machine Permit Fees) Regulations 2006,1 which have since been amended three times.2 1 SI 2006/3284. 2 Gambling (Operating Licence and Single-Machine Permit Fees) (Amendment) Regulations 2007 (SI  2007/269); Gambling (Operating Licence and SingleMachine Permit Fees) (Amendment) Regulations 2007 (SI 2007/1791); Gambling (Operating Licence and Single-Machine Permit Fees) (Amendment) Regulations 2008 (SI 2008/1803).

Change of circumstance 6.160 Section 101(1)(a) and (5) provides that the Secretary of State may make regulations requiring an operator to notify the Commission of ‘any change of circumstance of a prescribed kind’ and to provide details of the change. This is without prejudice to the power the Commission has, when issuing an operating licence, to attach a condition requiring the licensee to notify it of any ‘specified change of circumstance’ (s 101(8)). At the time of writing, no regulations have been made under s  101, and it is understood that none are currently proposed, it being left to the Commission to specify by condition what information it requires1. 1 For example in LCCP July 2016, Part I, conditions 1.1.1.3 @3.

6.161 It may be that that change will also falsify any matter that is contained in the operating licence by virtue of the requirements of s  66. These matters specify the person to whom the licence is issued, the period for which it has effect, any s 75 or s 77 conditions, and any other matter that the Secretary of State may have specified. In this event, the licensee must pay the prescribed fee and provide the Commission with the licence or apply for a copy of it under s 107, which will also require a fee (s 101(2)). Where the licence accompanies the notification, the Commission shall alter it as appears to be required and return it to the licensee (s 101(3)). If the licensee applied for a copy, the Commission shall, if it grants that application, issue the copy in such altered form as appears to reflect the change in circumstance (s 101(4)). 6.162 Section 101(6) and (7) provides that a licence holder commits an offence if he fails, without reasonable excuse, to comply with a requirement to inform the Commission of a change of circumstance. The maximum penalty for the offence is a fine not exceeding level 2 on the standard scale. Of much greater commercial impact, the Commission may also suspend or revoke an operating licence if the holder fails to comply with requirements of this section.1 1 GA 2005, ss 118(3), 119(2) and 120(2).

Change of corporate control 6.163 Sections 102 and 103 apply where the holder of an operating licence is a company limited by shares. They provide the mechanism by which the 411

Operating licences Commission may approve a change of control of that company, for example following sale, transfer, allotment or issue of shares. They replace the procedure for certificates of continuance that applied to casinos under the Gaming Act 19681 and, subject to any exclusion, apply to the entire commercial gambling sector where the facilities are authorised by an operating licence. Section 103(1) provides that the Secretary of State may make regulations exempting specified kinds of operating licence from these requirements. 1 Smith & Monkcom The Law of Betting, Gaming and Lotteries (2nd edn), paras B9.59– B9.67.

6.164 If a person (the ‘new controller’) becomes a controller of the company (as defined by s 422 of the Financial Services and Markets Act 2000) then the company is required to inform the Commission. It must either surrender the operating licence under GA 2005, s 113 or apply for a determination that the licence shall continue to have effect (s 102(2)(a) and (b)). The company has five weeks from the date when someone becomes a controller, being the day on which its duty under s 102(2) begins, in which to inform the Commission and state which course of action it wishes to take. Where it is contemplating an application under s 102(2)(b) to continue the licence, a company may wish to avail itself of s 103(3), which permits it to make this application in respect of ‘a person who is expected to become a controller of a company’. 6.165 Otherwise, if the company fails to inform the Commission in accordance with s 102(2), the Commission shall revoke the licence (s 102(5)). But by s 102(6) the Commission may extend the five-week period, and may do so even after that period has expired, provided that the licence has not already been revoked – whether pursuant to s 102(5) or for some other reason (eg s 119(2)). 6.166 A  company that wishes to apply for a determination that the licence continue must supply with the application such information as the Commission may direct about the new controller, his interest in the company and in any company of which the holder is a subsidiary (s 102(3)).1 In giving a direction under this section the Commission is required to have regard to normal practices concerning commercial confidentiality (s  103(5)). The application under s 102(2)(b) must be accompanied by the prescribed fee, and in making regulations about the fee the Secretary of State may set reduced fees for applications where the cause of a change of controller arises from the merger or division of companies (s 103(6)). The change in corporate control application fee is provided for in regs  23, 23A and 23B of the Gambling (Operating Licence and Single-Machine Permit Fees) Regulations 2006,2 as amended by the Gambling (Operating Licence and Single-Machine Permit Fees) (Amendment) Regulations 2008.3 1 Companies Act 2006, s 1159. 2 SI 2006/3284. 3 SI 2008/1803.

6.167 The Commission may give approval if it is satisfied that it would have granted the operating licence at the time of the original application, had the new controller been a controller of the company at the time (s 102(4)(a)). 412

Operating licences This determination will therefore engage all of the considerations in ss 70–73 as to the suitability etc of the new controller.1 If it is not so satisfied, then the Commission must revoke the operating licence (s 102(4)(b)). 1 See 6.59–6.70 above.

6.168 Revocations under s 102(4) and (5) are to be treated for all purposes as revocations under s 119. The Commission’s determination under s 102(2) (b) may be appealed to the Gambling Appeals Tribunal (s 114(3)).

Variation of an operating licence 6.169 Section 104 provides for a licence holder to make an application to vary the terms of his operating licence. An application for the variation of a licence cannot be used to transfer an operating licence to another person (s  104(2)). Subject to that, for their own commercial reasons holders of an operating licence may wish to add, amend or remove a licensed activity or a s 77 condition, or amend ‘another detail’ of the licence (s 104(1)). There are also some situations in which a general condition imposed by the Commission requires an application to be made.1 In these cases the licensee must apply to the Commission for its approval. The brevity of s  104 is deceptive. An application to vary the terms of the licence engages the entire range of matters provided for by Part 5 as they apply in relation to an application for an operating licence: an application under s  104 is not to be taken lightly. Part  5 applies subject to any necessary modifications and subject to the provisions of s  104.2 By s  104(4) Regulations made under Part  5 in respect of an application for an operating licence may make different provision for applications for variation and for different kinds of such applications. 1 For example LCCP July 2016, Part I, condition 1.1.2.2. 2 GA 2005, s 104(3).

6.170 The application must, in addition to the requirements of s  69, be accompanied by a statement of the variation sought and the licence (s 104(5)). A  licensee who cannot produce the licence must explain why it is not reasonably practicable to do so (s 104(5)(b)(ii)). In this case the licensee may request a copy (s 107). The application must be accompanied by the prescribed fee (reg 24 of the Gambling (Operating Licence and Single-Machine Permit Fees) Regulations 2006,1 as amended by the Gambling (Operating Licence and Single-Machine Permit Fees) (Amendment) Regulations 2008,2 20093 and 2012,4 and the Gambling (Licence Fees) (Miscellaneous Amendments) Regulations 2012.5 1 SI 2006/3284. 2 SI 2008/1803. 3 SI 2009/1837. 4 SI 2012/829. 5 SI 2012/1851.

6.171 Section 74 permits the Commission to grant or reject an application for an operating licence in whole or in part. This applies to an application for variation. Where it rejects the application, the Commission’s determination 413

Operating licences may be appealed to the Gambling Appeals Tribunal (s 114(3)). Where it grants the application, the Commission shall specify the time when it shall begin to have effect and may make transitional provision (s 104(6)).

Amendment of licence 6.172 Section 105(1) provides that the Commission may require the holder of an operating licence to submit the licence to the Commission for amendment in a number of circumstances where it requires changes to be made to it. These are: (a) a general variation of conditions under s  75 (without prejudice to a specified condition attaching to the licence by virtue of s 76(4)(c));1 (b) a change of circumstance notified under s 101; (c)

the grant of an application for variation under s 104;

(d) the attachment of an additional condition or the amendment of a condition under s 117; (e)

the grant of an application for renewal under s 112; 2

(f)

anything done in relation to a personal licence under Part 6.

1 GA 2005, s 105(5). 2 But see 6.182–6.184 below

6.173 A licence holder has 14 days to comply with a requirement to send his licence to the Commission in response to a request, and commits an offence if he fails to do so without reasonable excuse (s 105(2) and (3)). The maximum penalty is a fine not exceeding level  2 on the standard scale (s  105(4)). Of much greater commercial impact, the Commission may also suspend or revoke an operating licence if the holder fails to comply with requirements of this section (ss 118(3), 119(2) and 120(2)).

Register of operating licences 6.174 Paragraph 322 of the Explanatory Notes to Gambling Act 2005 states a general policy that: ‘to allow the public to find out whether a person providing gambling facilities holds the necessary permission, licence or permit, the Act contains a series of requirements for various registers to be maintained.’ Section 106(1) requires the Commission to maintain a register of operating licences, to make it available for inspection by members of the public, and to make arrangements for provision of a copy to a member of the public on request. 6.175 The Commission may refuse access or a request for a copy of an entry unless the fee that it has specified has been paid. This fee must not exceed the reasonable cost of providing the service (s 106(2) and (3)). 414

Operating licences

Copy of an operating licence 6.176 Section 107(1) enables the Commission to issue to the licensee a copy of an operating licence that has been lost, stolen or damaged. In the case of lost or stolen licences, Regulations made under s 107(2)(b) may require the licensee to comply with specified arrangements for reporting the loss or theft to the police. Regulations made under s 107(2)(a) may prescribe a fee payable for the copy. Regulation 25 of the Gambling (Operating Licence and SingleMachine Permit Fees) Regulations 20061 provides a maximum fee, currently £25. The Gambling Commission state on their website that no charge will be made for an electronic copy. 1 SI 2006/3284, as amended.

6.177

A copy of the licence is to be treated as if it were the licence (s 107(3)).

Production of an operating licence 6.178 Section 108(1) provides that a constable or an enforcement officer may require the licensee to produce the licence within a specified period. ‘Enforcement officer’ is defined by s 303. The section means that it may be required by and produced to those of the Commission’s employees designated under s 303 and any other person it has appointed as an enforcement officer. The licensee will be committing an offence if he fails without reasonable excuse to comply with this requirement. The maximum penalty is a fine not exceeding level 2 on the standard scale (s 108(2) and (3)).

Conviction 6.179 The first licensing objective is to prevent gambling from being a source of crime or disorder, being associated with crime or disorder, or being used to support crime. The application process requires the applicant to disclose any ‘relevant offence’ or any other offence (s  69(2)(d) and  (e)). The purpose of s 109 is to require the person who is now the holder of an operating licence to disclose any subsequent convictions. The section draws a distinction between convictions returned by courts in or outside Great Britain, and imposes different requirements on the holder. 6.180 If the holder is convicted of an offence by or before a court in Great Britain, he must inform the Commission as soon as is reasonably practicable of the conviction and any sentence (s  109(1)). This will necessarily include a ‘relevant offence’, defined in s 126.1 The section is intended to ensure that the Commission has the necessary information it needs to regulate licence holders and, if it wishes, to commence a review of the licence (s  116(2)(b)). Following that review, the Commission may conclude that the relevant offence makes the holder ‘unsuitable’ to carry on the licensed activities, in which case it may suspend or revoke the licence (ss 118(1), 119(1) and 120(1) (d)). If it is a ‘relevant offence’, the holder must in any event immediately inform the court that he is the holder of an operating licence. The purpose of this is so that the court can consider whether it should exercise its powers to 415

Operating licences order forfeiture of the operating licence as part of the sentence it imposes for the offence (s 115). 1 See 6.81 above.

6.181 In the case of a conviction by or before a court outside Great Britain, the obligation on the holder is to inform the Commission only where the offence is a ‘relevant offence’ (s 109(3)). 6.182 The licensee will be committing an offence if he fails without reasonable excuse to comply with s 109. The maximum penalty is a fine not exceeding level  2 on the standard scale (s  109(4) and  (5)). But if he should not comply and the Commission nevertheless ‘believes’ that the holder has acquired a conviction of the kind mentioned in s 71(1) (a ‘relevant offence’), the Commission may initiate a review (s  116(2)(b)), with the commercially serious (or even fatal) consequences to which a review may lead.1 1 See 6.200–6.203 below.

DURATION OF AN OPERATING LICENCE 6.183 By GA  2005, s  110 an operating licence is of indefinite duration unless it ceases to have effect in accordance with s  111 (the Commission’s power to limit duration),1 s 113 (surrender by the licensee), s 114 (lapse), s 115 (forfeiture) or s 119 (revocation).2 1 GA 2005, s 110(a). 2 GA 2005, s 110(b).

Power to limit duration 6.184 By virtue of s 110, the general position is that licences do not need to be renewed at any point. However, the Commission has power to introduce time limits for licences if it believes there is a regulatory need to do so. This power exists in s 111, which gives the Commission power to determine that operating licences, or a particular class of operating licence, should be given a particular duration (unless they are terminated earlier under any of the other alternatives specified in s 110(b)). Where made, the determination shall apply to existing and future licences; in the case of existing licences the duration will begin from the date of publication of the determination rather than the date the licence was granted (s 111(2)). 6.185 The determination must be published as part of the Commission’s s  23 Statement of Principles for Licensing and Regulation.1 At the time of writing, ‘the Commission does not intend to exercise this power at the present time, but will keep this matter under review’ (section 4.58). 1 GA 2005, s 111(4).

6.186 Where an operating licence is subject to a determination under GA 2005, s 111, s 112 provides that its holder may apply for its renewal. Like an 416

Operating licences application for variation, this application engages Part 5 in its entirety, subject to the provisions of s 112 and any necessary modifications. However, s 112 will only become relevant if and when a determination under s 111 is made. ‘As the Commission does not intend to exercise its powers under section 111 of the Act, it is not necessary for the Commission to include any provisions relating to this section of the Act in the Statement of Principles at this time’ (section 4.64).

Surrender and lapse of an operating licence 6.187 Section 113 enables the licensee voluntarily to surrender an operating licence by giving notice to the Commission and by giving it the licence or a written statement explaining why it is not reasonably practicable to produce it at that time. 6.188 Section 114 provides for an operating licence to lapse. Where the licensee is an individual, it lapses if he dies, becomes bankrupt or, in Scotland, his estate is sequestrated, or in the opinion of the Commission he becomes physically or mentally incapable of carrying on the licensed activities (s 114(1)). In this last case, which requires the Commission to notify the licensee of is opinion that he is incapable (s 114(1)(b)), there is a right of appeal to the Gambling Appeal Tribunal (s 141(5)). 6.189 In any other case, the licence will lapse if the licensee ceases to exist or goes into liquidation (s 114(2)).

Forfeiture of an operating licence 6.190 Section 115(1) provides that a court before which the holder of an operating licence is convicted of a relevant offence (s 126) has power to order its forfeiture. The purpose of this section is to obviate the need in such cases for a regulatory response from the Commission; although, if the court does not exercise its power, the terms of s 109 mean that the Commission will be informed and be in a position to take action. 6.191 The forfeiture order may be in such terms as are specified by the court making it, an appeal court, or the High Court if hearing proceedings relating to the conviction (s  115(2)). Forfeiture may include terms as to the suspension of the licence (s  115(1)), and shall include a requirement that the licensee deliver it to the Commission or provide a written statement explaining why it is not reasonably practicable to produce it (s 115(4)). The court shall, as soon as is reasonably practicable, notify the Commission of the order for forfeiture (s 115(5)).

REGULATION 6.192 The Act gives the Commission a wide range of powers to ensure that licensees are compliant with the requirements imposed on them by virtue of 417

Operating licences their operating licence, and, where they are non-compliant, to take action. In many instances this action will be the consequence of a review conducted by the Commission, but it is not limited in this way; there are occasions where it may act following the licensee’s failure to comply with other provisions in Part  5. Its action may comprise a warning or, in extreme cases, the suspension or revocation of the licence. Between these the Commission may use its powers to adjust the individual conditions that attach to the licence. In addition, it has the power to impose an unlimited penalty. The exercise of a number of these powers is subject to appeal to the Gambling Appeal Tribunal. 6.193 The Commission has published a Compliance and Enforcement Policy Statement (June 2007) that should be read in conjunction with its Statement of Principles for Licensing and Regulation 2015.1 By GA  2005, s  121(6) the Commission must publish a statement of the principles that it will adopt when imposing a financial penalty. This has been published separately as the Statement of Principles for Determining Financial Penalties (June 2007). The paragraphs that follow refer, as appropriate, to these two Statements, but do not deal with them in their full detail. 1 See http://www.gamblingcommission.gov.uk/pdf/statement-of-principles-forlicensing-and-regulation.pdf.

Review 6.194 As noted, GA 2005, s 110 provides that, subject to a determination under s  111 (or the application of the provisions in s  110(b)), an operating licence is of indefinite duration. In the absence of a s 111 determination, which would trigger the renewal procedures provided for in s 112, a licensee does not need to take any steps to renew the operating licence at any time. One of the main purposes of s 116 is to enable the Commission to review, over time, the operation of licence conditions in any one sector and the performance of individual licensees, and to take action. Its regulatory grip on licensees therefore has both a class and an individual dimension. 6.195 Section 116 provides for two types of review. Section 116(1) provides that the Commission may conduct a review relating to a class or type of licence. The purpose will be to review the manner in which all licensees holding nonremote bingo operating licences or betting intermediary operating licences are carrying on their authorised activities. Paragraph 335 of the Explanatory Notes to Gambling Act 2005 gives an example: the Commission could review the operation of all gaming machine general operating licences. As any social responsibility provision in a code of practice is a licence condition (s 82), the Commission could conduct a review of the steps licensees have taken to meet any aspect of LCCP  2016, Part  II, provision  3 (protection of children and other vulnerable persons). It could also conduct a similar review of the ways in which licensees are complying with any one or more of its general conditions set out in LCCP 2016. 6.196 The purpose of this audit of the manner in which licensees, as a whole, carry on licensed activities, and particularly, how licensees comply 418

Operating licences with the conditions attached to the class of operating licence is principally regulatory. It may lead the Commission to consider (and consult where required) whether any changes to the general conditions on licences are required or would require the Secretary of State to make regulations. Such audit may well also reveal individual non-compliance (which is the subject of s  116(2)), although the Commission’s exercise of its power of individual review does not depend on such s 116(1) revelation. And where the audit does reveal non-compliance, the Commission may in certain cases suspend the operating licence (s 118). 6.197 Section 116(2) provides that the Commission may review any matter connected with the provision of gambling facilities authorised by a particular operating licence.1 It may do this where (to paraphrase): •

it has reason to suspect that activities may have been carried on in breach of a licence condition;2

•

it believes that the licensee, a person exercising a function in connection with or with an interest in the activities has been convicted of a relevant offence;3

•

it for any reason suspects that the licensee may be unsuitable to carry on the licensed activities.4

1 2 3 4

Compliance and Enforcement Policy Statement 2015, para 5.13 ff. GA 2005, s 116(2)(a). GA 2005, s 116(2)(b). GA 2005, s 116(2)(c)(i).

6.198 These criteria, and in particular the last, clearly give the Commission wide power to conduct a specific review of an individual licensee. ‘Unsuitable’ is to be read in the context of s 70(1)(b), which engages the licensee’s integrity, competence and financial or other circumstances.1 The Commission’s suspicion may arise because it has evidence that raises that  suspicion, in particular because it has received a complaint about the licensee’s activities (s 116(3)(a)). But s 116(3)(b) makes it clear that the s 116(2)(c) reason ‘need not relate to any suspicion or belief about the licensee’s activities’. Moreover, the fourth criterion in s 116(2) provides that the Commission may conduct a review if for any reason it ‘thinks that a review would be appropriate’ (s 116(2) (c)(i)). Here again, s 116(3)(b) applies. Paragraph 337 of the Explanatory Notes to Gambling Act 2005 suggests that a review could be conducted solely on the grounds that the licence had been held for a long period of time, and that the Commission considered a review ‘prudent’. 1 GA  2005, s  70(2); and see Compliance and Enforcement Policy Statement 2015, paras 5.38–5.41.

6.199 Where the Commission conducts a review under s  116(2), it must notify the licensee and inform him of the procedure to be followed (s 116(4)). In conducting the review, the Commission must give the licensee an opportunity to make representations and may give others that opportunity (s 116(5)). The proposed procedure for a specific review is described in paras 5.16–5.28 of the Compliance and Enforcement Policy Statement. At any stage in the review the Commission may decide to take no further action or to 419

Operating licences resolve an issue by the licensee’s voluntary remedial action that has arisen. More serious cases will proceed to the Commission considering one of the s 117 options; and where urgent action is needed to put a temporary stop on the licensed activities, it may suspend the licence.

Regulatory powers Note: In November 2009 the Commission published Guidance on regulatory decision making after a review. In June of 2015 the following announcement was made on the Commission’s website: ‘This document will shortly be updated to take account of the recent publication of “Statement of Principles for licensing and regulation March 2015” and the “Licensing, compliance and enforcement statement March 2015”’. At the time of writing no update has been published.

General 6.200 Following a review under s  116(1) or (2) the Commission may take any of seven actions with regard to the holder of an operating licence (s  117). Paragraph  114 of the Compliance and Enforcement Policy Statement provides that in determining whether or not to impose a regulatory sanction, the Commission will take into account, first, the six ‘penalty principles’ recommended by the Better Regulatory Executive. These are listed in para  9 of the Commission’s Statement of Principles for Determining Financial Penalties (September 2009).1 It will, secondly, take into account a range of 19 factors set out in para  114 of the Compliance Statement. These include such matters as the seriousness, extent (systemic failure), duration and repetition of the breach, whether committed deliberately or recklessly and whether the licensee knew or ought to have known or had received earlier advice. The involvement of senior management, the level of financial gain, any attempt to conceal the failure or breach, and impact on customers are also included. 1 See http://www.gamblingcommission.gov.uk/pdf/Statement%20of%20principles %20for%20determining%20financial%20penalties%20-%20September%202009. pdf.

6.201 The Commission may, first, give the holder a warning.1 The procedure for formal warnings is set out in paras 105–107 of the Compliance and Enforcement Policy Statement. A  warning has no further immediate consequence, but may be relevant in the event of future non-compliance. Section 117(3) provides that, in determining what action to take under s 117(1), the Commission may have regard to an earlier warning, whether or not that related to the current licence. Secondly, it may remove or amend, or attach an additional condition to an individual licence.2 Finally, the Commission may suspend or revoke a licence, or impose a financial penalty.3 1 GA 2005, s 117(1)(a). 2 GA 2005, s 117(1)(b) and (c). 3 GA  2005, s  117(1)(e)–(g). Consequent on the repeal of sections 89(2) and 3, the  regulatory power in section 117(1)(d) has also been repealed; Gambling Act 2005 (Repeal) (Remote Operating Licence and Credit) Regulations 2007 (SI 2007/2321).

420

Operating licences 6.202 The Commission’s Regulatory Panel takes the decision. Section 4.10 of the Statement of Principles for Licensing and Regulation (Discussion following Consultation) provides that there will be the opportunity to make representations in all cases where, following a review, the Commission proposes to revoke a licence or impose another penalty under s 117 of the Act. The Panel’s procedure is set out in Part 5 of the Compliance and Enforcement Policy Statement 2015, which also encourages voluntary settlement (paras 5.3–5.8 and 5.43–5.49). Having determined to take action under s 117(1), the Commission must notify the licensee as soon as is reasonably practicable of that action and the reasons for it.1 1 Compliance and Enforcement Policy Statement 2015, paras 121–126.

6.203 An appeal lies to the First-tier Tribunal where the Commission takes action or proposes to take action under s 117, including action in respect of a personal licence (s 141(6)).

Suspension 6.204 Section 118 provides two routes by which the Commission may suspend an operating licence. The first route is occasioned by the s 116 review procedure. By s  118(1) the Commission may suspend a licence following a review under s 116(1) or (2) if it ‘thinks’ that any of the conditions specified in s 120(1) applies. In addition to this, by s 118(2) the Commission may suspend a licence at the outset of, or during, a review under s 116(1) or (2) if it ‘suspects’ that any of the s  120(1) conditions are met. The conditions in s  120(1) are considered below.1 1 See 6.214 below.

6.205 The deliberate choice of two distinct verbs must signify distinct mental processes preceding the Commission’s choice of action. The two sections also signify different evidential processes. To ‘suspect’ that any of the s 120(1) conditions applies implies that the Commission has some evidence that raises that suspicion. In terms of the sequence of events contained in ss 116 and 118, the review normally precedes the suspension. 6.206 Similar processes will apply to the interaction of ss  116(2) and 118(2). Assume the Commission has commenced a review of an individual operating licence for the reasons mentioned in s  116(2)(a)–(c). ‘At any time during the course’ of that review the Commission may suspect that the s  120(1) conditions apply, in which case it may suspend the licence. Or, the Commission might have evidence that the s  120(1) conditions apply with such gravity to an operating licence that even ‘at the time of deciding to conduct a review’ under s  116(2) it suspends that licence. Commenting on these powers, para 341 of the Explanatory Notes to Gambling Act 2005 says, ‘therefore, if the Commission considers a matter sufficiently serious, it can require the operator to suspend all or part of his activities pending the outcome of the review’. If the Commission decides to suspend a licence in such circumstances, the licensee will be informed that they may have that decision reviewed by the Commission’s Regulatory Panel. If such a review 421

Operating licences is requested, a meeting of the Regulatory Panel will be convened as soon as practical.1 1 Compliance and Enforcement Policy Statement 2015, para 5.35.

6.207 The reference in s  118(1) to a review conducted under s  116(2) permits the Commission to suspend an operating licence where it ‘thinks’ that any of the s  120(1) conditions apply. This thinking occurs ‘following a review’ and may be taken to mean that this is a conclusion that the Commission has reached following a (quasi) judicial enquiry about the licensee’s activities. 6.208 The second route does not depend on any decision to conduct or on the outcome of a s 116 review. By s 118(3) the Commission may suspend an operating licence ‘if it thinks’ that any of the conditions specified in s 120(2) applies. The conditions in s 120(2) are considered below.1 1 See 6.216 below.

6.209 Where it does propose to suspend a licence, the Commission must specify the time at which the suspension will take effect and its duration, which may depend on a specific event rather than a fixed time period (s 118(4)). The stipulation of a fixed time does not preclude the Commission from a re-exercise of its power under s 118(1). The Commission may make saving or transitional provision. For the period of its suspension an operating licence has no effect (s 118(5)). 6.210 An appeal lies to the First-tier Tribunal where the Commission takes action or proposes to take action under s 118, including action in respect of a personal licence (s 141(7)).

Revocation 6.211 By s 119 there are three routes to the revocation of a licence. The first route is occasioned by the s 116 review procedure. By s 119(1) the Commission may revoke a licence following a review under s 116(1) or (2) if it thinks that any of the conditions specified in s  120(1) applies. The second route does not depend on any decision to conduct or the outcome of a s 116 review. By s 119(2) the Commission may revoke an operating licence if it thinks that any of the conditions specified in s 120(2) applies. The conditions in s 120(1) and (2) are considered below.1 1 See 6.214–6.216 below.

6.212 Third, by s 119(3) the Commission must revoke a licence if the licensee fails to pay the annual fee in accordance with s 100. But the Commission may disapply this section if the failure was due to administrative error. 6.213 An appeal lies to the Gambling Appeal Tribunal where the Commission takes action or proposes to take action under s 119, including action in respect of a personal licence (s 141(8)). 422

Operating licences

Conditions for suspension or revocation 6.214 Section 120(1) provides that an operating licence may be suspended or revoked under s 118(1) and (2) or s 119(1) where (to paraphrase): (a) an operator or individual is carrying on or has carried on a licensed activity in a manner which is inconsistent with the licensing objectives; (b) a licence condition has been breached; (c)

a licensee has failed to co-operate with a specific or general regulatory review;

(d) the licensee is unsuitable to carry on licensed activities. 6.215 Section 120(3) provides that in considering a licensee’s suitability the Commission may have particular regard to the licensee’s integrity, competence or financial and other circumstances. These criteria extend to a person who exercises a function in connection with, or has an interest in, any of the licensed activities. In short, these are the same criteria as apply to the application for a licence and are a guide and not an exhaustive list of factors to be considered. In deciding whether or not a person has carried on a licensed activity in a manner which is inconsistent with the licensing objectives, the Commission will have regard to its own codes of practice and other public statements concerning compliance with the objectives (Compliance and Enforcement Policy Statement 2015, para 5.42). 6.216 Section 120(2) provides that an operating licence may be suspended or revoked under s 118(3) or s 119(2) if a licensee has failed to comply with the requirements of s 101 (change of circumstance) or s 105 (failure to submit the licence for amendment).

Financial penalty 6.217 By s 121(1) a financial penalty can be imposed where the Commission thinks that there has been a breach of a licence condition, but this is the only ground on which a financial penalty may be imposed. It will, by virtue of s 82, include breach of a provision in a social responsibility code of practice. 6.218 Under s  121(6) of the Act, the Commission is obliged to prepare a statement setting out the principles it will apply when exercising its powers to impose a financial penalty on a licensed operator or individual. By s 121(7) the statement must, in particular, require the Commission to have regard to the seriousness of the relevant breach of condition, whether the licensee should have known of it, and the nature of the licensee, including his financial circumstances. In addition to these mandatory criteria, the Commission’s Statement of Principles for Determining Financial Penalties (September 2009) sets out its general criteria for aggravating and mitigating factors (paras 2.2– 2.5) and more specific criteria for fixing the quantum of a penalty (para 2.6). 6.219 Before imposing a financial penalty on a licensee, the Commission is required, by GA 2005, s 121(3), to notify the licensee that it proposes to require him to pay a penalty, its amount and the Commission’s reasons. It must also 423

Operating licences notify the licensee of a period within which he may make representations to the Commission; para 2.8 of the Commission’s Statement of Principles for Determining Financial Penalties provides that it will give licensees at least 14 days for this purpose. 6.220 An appeal lies to the First-tier Tribunal where the Commission takes action or proposes to take action under s 121, including action in respect of a personal licence (s 141(9)).

Information 6.221 By s  122 licensees are required to assist the Commission to carry out its functions by meeting its requests for information. The Commission may request original, or copies of, written or electronic records relating to the licensed activities, or simply the provision of information about these activities, and in any form and within any period of time (s 122(1) and (2)). These requests cannot be ‘fishing exercises’ (Explanatory Notes to Gambling Act 2005, para 345), but must only be used for determining whether the licence holder has carried on his licensed activities otherwise than in accordance with his licence conditions, or is unsuitable to carry on gambling activities (s 122(3)). Non-compliance without reasonable excuse is an offence that will attract a fine not exceeding level 2 on the standard scale (s 122(5) and (6)).

LEVY 6.222 Section 123(1) provides the Secretary of State with reserve powers to impose by regulations an annual financial levy on the holders of all operating licences. The levy will apply to all holders. The regulations shall make provision for its amount and timing (s  123(2)). Section 123(3) lists a number of alternative methods for calculating the amount of the levy: according to a percentage of the licence holder’s receipts or profits, or by a specified formula, or in some other way. Before making these regulations the Secretary of State must consult the Commission. The levy is treated as if it were part of the annual fee (s 100). This means that a licence would be revocable if the levy was not paid. 6.223 This is a hypothecated tax. Its purpose is to provide assistance for projects related to gambling addiction, other forms of harm or exploitation associated with gambling, or any of the licensing objectives (s 123(5)). The Treasury and the Secretary of State must consent to the Commission’s expenditure of the levy. Such projects need not be undertaken by the Commission itself, but the Commission could fund others (including other public sector bodies) who are undertaking projects connected with the matters specified in s  123(5). These projects, to emphasise the point, need not only be related to problem gambling but to any aspect of the licensing objectives, eg fair and open gambling or keeping crime out of gambling. 6.224 GA 2005, Sch 3 amends the National Lottery etc Act 1993 to give the Secretary of State similar powers in respect of the National Lottery. But that levy cannot be imposed until the powers under s 123 have been exercised. 424

Operating licences 6.225 At the time of writing, s 123 remains unimplemented. The history, in essence, is that the Budd Report recommended that it would be desirable for the gambling industry to contribute (say) £3 million a year to fund research into problem gambling. This it has done, but the funding has been unpredictable, requiring extensive and last-minute negotiation. This inevitably creates problems for the Responsibility in Gambling Trust (to whom the voluntary payments are made) to plan effectively how funds can best be used. There are disagreements about the proportions of the whole that each operator should bear, and free-riding prompts resentment (although there is an argument that very small operators should be placed below what is in effect a tax threshold). In late 2008 the Commission published the Final report on its Review of Research, Education and Treatment, which, amongst other matters, addressed the funding and levy questions. 6.226 Reviewing the current voluntary arrangements, the Commission concluded that they— ‘are not working effectively and need to be improved. Although RIGT has achieved much since its creation six years ago, in particular in funding the provision of treatment, there are several areas where only limited progress has been made.’ The Commission’s— ‘strongly preferred option remains that stakeholders work together to ensure that improved voluntary arrangements are put in place. However, time is running out and, for a levy to remain a viable option for 2009/10, detailed preparations need to start very soon indeed.’ The Commission’s first recommendation is that: ‘Ministers now move immediately to prepare for the introduction of a statutory levy, as provided for in the Gambling Act 2005, with a view to implementation if necessary from April 2009; the transitional arrangements for any levy on individual operators would take into account the voluntary funding contributions made by them this financial year, providing operators with no incentive to continue to defer making such contributions.’ There the matter rests.1 1 Review of Research, Education and Treatment, Final report and recommendations, 17  October 2008; http://www.gamblingcommission.gov.uk/pdf/Review%20 of%20research%20education%20and%20treatment%20-%20Oct%202008.pdf, paras 1.4–1.5 and 1.9.

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Chapter 7 Personal licences

INTRODUCTION 7.1

Three kinds of licence are created under the Gambling Act 2005:

(1) operating licences, which authorise the licensee to provide facilities for certain kinds of gambling;1 (2) premises licences, which authorise premises to be used for the provision of facilities for specified kinds of gambling;2 and, (3) personal licences, under Part 6 of the Act.3 Personal licences, like operating licences, are issued by the Gambling Commission,4 whereas premises licences are issued by licensing authorities.5 1 2 3 4 5

For operating licences, see GA 2005, Pt 5 (ss 65–126) and Chapter 6. For premises licences, see GA 2005, Pt 8 (ss 150–213) and Chapter 10. GA 2005, Pt 6 (ss 127–139). For ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3. For ‘licensing authorities’ under the Gambling Act 2005, see s 2 and Chapter 9.

The relationship between operating licences and personal licences 7.2 Aside from the fact that both types of licence are issued by the Gambling Commission, the regulatory system under the Gambling Act 2005 creates a close relationship between personal licences and operating licences. However, before analysing some important features of this relationship, it is necessary to consider the meaning of two phrases employed in the 2005 Act – ‘management office’ and ‘operational function’ – both of which, subject to a power given to the Secretary of State to amend their definitions by order,1 are defined in Part 5 of the Act (which deals with operating licences) and, of course, the meaning given to ‘personal licence’ in Part 6. 1 GA 2005, s 80(8).

427

Personal licences

‘Management office’ 7.3 Under s  80 of the Gambling Act 2005 the meaning of the phrase ‘management office’ varies according to the legal personality of the licensee, which is (bearing in mind s 80 appears in Part 5 of the Act) the person to whom the operating licence is issued.1 If the licensee is a company, the office of director is a management office.2 If the licensee is a partnership – including a limited l­ iability partnership – the office of partner is a management office.3 If the licensee is an unincorporated association, any office in the association is a management office.4 Finally, in any case, ‘management office’ means a position where the occupier of that position is required, by the terms of his appointment, to take or share responsibility for the conduct of a person who performs an operational function in connection with gambling, and facilitating or ensuring compliance with the terms or conditions of the operating licence.5 1 For the meaning of ‘licensee’ when the term is used in Part 5 (ss 65–126) of the Gambling Act 2005 – ie in relation to operating licences – see s 126(1). 2 GA 2005, s 80(5)(a). 3 GA 2005, s 80(5)(b). 4 GA 2005, s 80(5)(c). 5 GA 2005, s 80(5)(d).

‘Operational function’ 7.4 Section 80(6) of the 2005 Act provides that an ‘operational function’ means: ‘(a) any function which enables the person exercising it to influence the outcome of gambling; (b) receiving or paying money in connection with gambling; and (c) manufacturing, supplying, installing, maintaining or repairing a gaming machine.’

‘Personal licence’ 7.5 In Part 6 of the Act, the definition of ‘personal licence’ (which adopts the meanings given to ‘management office’ and ‘operational function’ in s 80)1 is of a licence which authorises an individual to perform the functions of a specified management office, or to perform a specified operational function, in connection with: (1) the provision of facilities for gambling;2 or (2) a person who provides facilities for gambling.3 1 GA 2005, s 127(2). 2 GA 2005, s 127(1)(a). For ‘gambling’, see GA 2005, s 3 and Chapter 2; and for ‘the provision of facilities for gambling’, see GA 2005, s 5 and Chapter 2. 3 GA 2005, s 127(1)(b).

428

Personal licences 7.6 It should be noted that the Gambling Commission cannot issue a personal licence to an individual who already holds one.1 However, a personal licence may authorise the performance of more than one function.2 1 GA 2005, s 133(1). 2 GA 2005, s 133(2).

General requirement for a personal licence Operating licence conditions requiring possession of a personal licence 7.7 The first aspect of the close relationship between personal licences and operating licences to be examined is the requirement in the Gambling Act 2005 that, in general, an operating licence will provide insufficient authority for the lawful provision of facilities for gambling unless at least one personal licence is also held. Under the Act, the Gambling Commission is given powers to attach general conditions1 and individual conditions2 to operating licences. Although there are important exceptions in the case of some bingo operating licences3 and ‘small-scale operators’ – the latter considered below – the Commission is otherwise required to use its powers to attach conditions to operating licences to ensure that, in respect of each operating licence, at least one person occupies a specified management office in or in respect of the licensee or in connection with the licensed activities,4 and holds a personal licence authorising the performance of the functions of the office.5 1 The Gambling Commission’s power to attach general conditions to operating licences is provided for under GA 2005, s 75: see Chapter 3. Under these provisions the Commission may specify conditions to be attached to each operating licence or each operating licence falling within a specified class: s 75(1). 2 The Gambling Commission’s power to attach individual conditions to operating licences is provided for under GA 2005, s 77: see Chapter 3. Where the Commission issues an operating licence, it may attach a condition to the licence: s 77. 3 In the case of bingo operating licences issued to members’ clubs, commercial clubs or miners’ welfare institutes, the general requirement for a personal licence does not apply, and a condition may not be attached to an operating licence which requires a person to hold a personal licence or which operates by reference to whether a person holds a personal licence; see GA 2005, s 80(9). For the meaning of ‘members’ club’, see GA 2005, s 266 and Chapter 12; for ‘commercial club’, see s 267 and Chapter 12; and for ‘miners’ welfare institute’, see s 268 and Chapter 12. 4 GA 2005, s 80(1)(a). 5 GA 2005, s 80(1)(b).

7.8 It is important to note that further provisions permit (rather than require) the attachment of conditions which have the effect of requiring a personal licence to be held. These provisions, which again should be read subject to the exceptions for some bingo operating licences1 and small-scale operators, are as follows: (1) A  general condition or an individual condition attached by the Commission to an operating licence may impose a requirement which 429

Personal licences relates to a management office in addition to any general or individual condition imposed to satisfy the general requirement for a personal licence.2 (2) In addition to the Gambling Commission’s powers to attach general conditions and individual conditions to operating licences, the Secretary of State may, by means of regulations, provide for a specified condition to be attached to operating licences falling within a specified description.3  A  condition attached to an operating licence (whether a general condition or an individual condition attached to an operating licence by the Commission or a condition specified by the Secretary of State in regulations) may, in particular, provide that if a specified management office is held in or in respect of the licensee or in connection with a licensed activity (whether or not in pursuance of another condition): (a) it must be held by an individual who holds a personal licence authorising the performance of the functions of the office; and (b) anything done in performance of the functions of the office must be done in accordance with the terms and conditions of the personal licence. (3) Finally, a condition attached to an operating licence (whether a general condition or an individual condition attached to an operating licence by the Commission or a condition specified by the Secretary of State in regulations) may, in particular, provide that if a specified operational function is performed in connection with a licensed activity, it must be performed: (a) by an individual who holds a personal licence authorising the performance of the function;4 and (b) in accordance with the terms and conditions of the personal licence.5 1 In the case of bingo operating licences issued to members’ clubs, commercial clubs or miners’ welfare institutes, the general requirement for a personal licence does not apply, and a condition may not be attached to an operating licence which requires a person to hold a personal licence or which operates by reference to whether a person holds a personal licence; see GA 2005, s 80(9). For the meaning of ‘members’ club’, see GA 2005, s 266 and Chapter 12; for ‘commercial club’, see s 267 and Chapter 12; and for ‘miners’ welfare institute’, see s 268 and Chapter 12. 2 GA 2005, s 80(2). 3 The Secretary of State’s power, by means of regulations, to provide for a specified condition to be attached to operating licences falling within a specified description is provided for under GA 2005, s 78. 4 GA 2005, s 80(4)(a). 5 GA 2005, s 80(4)(b).

Breach of personal licence condition 7.9 Section 139 of GA  2005 applies where a condition attached to an operating licence includes provision for a personal licence,1 where an individual who holds a personal licence under Part 6 acts in the course of or 430

Personal licences in connection with any of the activities authorised by the operating licence,2 and where the individual’s action is not in accordance with the terms and conditions of the personal licence.3 1 GA 2005, s 139(1)(a). 2 GA 2005, s 139(1)(b). 3 GA 2005, s 139(1)(c).

Offence 7.10 If s 139 of GA 2005 applies, the individual who holds the personal licence commits an offence,1 and may be proceeded against for the offence under s  139 whether or not the holder of the operating licence is proceeded against for an offence under s  332 (the offence of providing facilities for gambling – one of the ‘general offences’ created under Part  3 of the Act).3 A person guilty of the offence under s 139 is liable on summary conviction to imprisonment for a term not exceeding 51 weeks, a fine not exceeding level 5 on the standard scale, or both.4 1 GA 2005, s 139(2). 2 GA 2005, s 139(3). 3 For the general offences created under Part 3 (ss 33–44) of the Gambling Act 2005, see Chapter 4. 4 GA 2005, s 139(4). In its application to Scotland the reference to 51 weeks has effect as a reference to six months: s 139(5).

Prosecutors 7.11 The Gambling Commission may institute criminal proceedings in respect of any offence under the Gambling Act 2005.1 The power of licensing authorities to institute criminal proceedings in respect of an offence under the Act is limited to those offences listed under s 3462 and does not extend to the offence under the provisions of s 139. 1 GA 2005, s 28; see Chapter 3. 2 GA 2005, s 346(1). However, s 346 is without prejudice to the Local Government Act 1972, s  222 (the power of local authorities to prosecute or defend legal proceedings): GA 2005, s 346(2).

The exception for ‘small-scale operators’ 7.12 As has been noted earlier, the general requirement for a personal licence is subject to exceptions for some bingo operating licences1 and for small-scale operators. As far as the latter exception is concerned, a condition may not be attached to an operating licence (whether it is a general condition or an individual condition of the Gambling Commission or if it is a condition specified by the Secretary of State in regulations) which requires possession of a personal licence if the licensee (ie  the person to whom the operating licence is issued) is a small-scale operator.2 ‘Small-scale operator’ is not defined in the Gambling Act 2005, but it is to be given such meaning as the Secretary of State may prescribe by regulations.3 Currently the definition is 431

Personal licences to be found in the Gambling Act 2005 (Definition of Small-scale Operator) Regulations 2006.4 Before turning to the statutory definition of ‘small-scale operator’, it is convenient to consider first two key phrases employed in these Regulations – ‘qualifying positions’ and ‘qualifying persons’. 1 In the case of bingo operating licences issued to members’ clubs, commercial clubs or miners’ welfare institutes, the general requirement for a personal licence does not apply, and a condition may not be attached to an operating licence which requires a person to hold a personal licence or which operates by reference to whether a person holds a personal licence; see GA 2005, s 80(9). For the meaning of ‘members’ club’, see GA 2005, s 266 and Chapter 12; for ‘commercial club’, see s 267 and Chapter 12; and for ‘miners’ welfare institute’, see s 268 and Chapter 12. 2 GA 2005, s 129(1). 3 GA 2005, s 129(2). Such regulations may, in particular, make provision by reference to the size or value of business carried on, or expected to be carried on, in reliance on an operating licence, and the number of persons employed, or expected to be employed, by the licensee: s 129(3). 4 SI 2006/3266.

7.13 A ‘qualifying position’ means a position held by a person who, by the terms of his appointment, has primary responsibility for: (1) the management of the licensed activity;1 (2) the management of the financial affairs of the licensee;2 (3) ensuring the licensee complies with the requirements of the Gambling Act 2005;3 (4) the marketing of the licensed activity;4 (5) the management of the information technology facilities used in the provision of the licensed activity;5 (6) the management of the licensed activity for a particular locality or area in Great Britain in which there are situated five or more sets of premises in respect of each of which the licensee holds a premises licence;6 or (7) the management of a single set of premises in respect of which a casino or bingo premises licence has effect.7 1 Gambling Act 2005 (Definition of Small-scale Operator) Regulations 2006 (SI 2006/3266), reg 2(2)(a). ‘Licensed activity’ means the activity authorised by the operating licence: reg 2(1). 2 Regulation 2(2)(b). 3 Regulation 2(2)(c). 4 Regulation 2(2)(d). 5 Regulation 2(2)(e). 6 Regulation 2(2)(f). For ‘premises licences’, see GA  2005, Pt  8 (ss  150–213) and Chapter 10. 7 Regulation 2(2)(g). For ‘casino premises licence’, see GA  2005, s  150(1)(a) and Chapter 10; and for ‘bingo premises licence’, see s 150(1)(b) and Chapter 10.

7.14

A qualified person means a person who is:

(1) named on the operating licence as a person who holds a qualifying position;1 or 432

Personal licences (2) the subject of an application to vary the operating licence to add his name as a person holding a qualifying position,2 and: (a)

the application complies with the Act’s requirements as to fee and accompanying statement (of the variation sought);3 and

(b) the application has not been withdrawn or finally determined.4 1 Gambling Act 2005 (Definition of Small-scale Operator) Regulations 2006 (SI 2006/3266), reg 2(3)(a). 2 Regulation 2(3)(b). For the provisions of the GA 2005 relating to an application to vary an operating licence, see GA 2005, s 104 and Chapter 6. Where the application is to vary the operating licence to add the name of a person holding a qualifying position, the application is made under s 104(1)(b). 3 Regulation 2(3)(b)(i). In relation to applications to vary operating licences, see GA 2005, s 69(2)(g) in respect of fees, and s 104(5) in respect of the statement to accompany the application. 4 Regulation 2(3)(b). For these purposes an application to vary an operating licence which has been rejected by the Gambling Commission is to be treated as having been finally determined (reg 2(4)(a)–(e)) (as amended by SI 2010/22, art 5(2), Sch 3, para 138): (a) where there is no appeal to the First-tier Tribunal, on the expiry of the period for appealing; (b) where an appeal is made, and the appeal is either withdrawn or allowed, (subject to sub-para (e)), when the appeal is withdrawn or, as the case may be, determined; (c) where the appeal to the First-tier Tribunal is refused and no appeal is made to the Upper Tribunal, on the expiry of the period for appealing against the decision of the First-tier Tribunal; (d) where an appeal is made to the Upper Tribunal, subject to sub-para (e), on the date on which the appeal is determined or withdrawn; (e) where the result of an appeal is that the matter be remitted to the body against whose decision the appeal is made, when any subsequent proceedings relating to the decision to reject the application are finally determined (as determined in accordance with sub-paras (a)–(d)). See GA 2005, Pt 7 (ss 140–149) and Chapter 8 for appeals against decisions relating to operating licences and personal licences.

7.15 The Gambling Act 2005 (Definition of Small-scale Operator) Regulations 20061 provide that the holder of an operating licence (the licensee) is a small-scale operator if, in relation to the activity authorised by that operating licence (the licensed activity): (1)

there are no more than three qualifying positions in, or in respect of, the licensee or in connection with the licensed activity;2 and

(2) each qualifying position is occupied by a qualified person.3 1 SI 2006/3266. 2 Regulation 2(1)(a). 3 Regulation 2(1)(b).

7.16 A licensee does not cease to be a small-scale operator if he no longer complies with these conditions unless he fails to comply with them for a 433

Personal licences period of more than 28 days,1 or for two periods, each of more than 14 days, where one period occurs within 28 days of the other.2 1 Gambling Act 2005 (Definition of Small-scale Operator) Regulations 2006 (SI 2006/3266), reg 3(a). 2 Regulation 3(b).

Application of Part 5 of the Gambling Act 2005 to Part 6 of the Act 7.17 A further aspect of the close relationship between personal licences and operating licences is the application of Part 5 of the Gambling Act 2005 (which deals with operating licences)1 to Part  6 of the Act (which deals with personal licences).2 After the lengthy provisions of Part  5, a glance at the much shorter Part 6 appears to hold out the prospect of much more concise provisions for personal licences. This appearance is, unfortunately, misleading. The Explanatory Notes to the 2005 Act provide as follows: ‘Part 6 operates on the basis that many of the provisions contained in Part 5 on operating licences are also relevant to personal licences. So, in relation to many of the procedural requirements which the Commission will need to undertake for the personal licensing regime, the sections in Part 5 are deemed to apply to personal licences under Part 6. Powers are taken for the Secretary of State to make necessary modifications to the Part  5 procedures. This approach has been adopted to avoid repetition of large amounts of material in both Parts 5 and 6. Where particular matters need a self-standing provision for personal licences, Part 6 provides accordingly.’3 1 GA 2005, Pt 5 (ss 65–126); see Chapter 6. 2 GA 2005, Pt 6 (ss 127–139). 3 Explanatory Notes to Gambling Act 2005, para 357.

Section 128 of the 2005 Act 7.18 The mechanism by which the provisions of GA  2005, Pt  5 (ie  in relation to operating licences) are applied to Part 6 (ie in relation to personal licences) is to be found in s 128. With the specific exclusion of the provisions of Part 5 of the Act which set out the nature of an operating licence,1 s 128 states that Part 5 applies to a personal licence as it applies to an operating licence, with: (1) the modifications and exclusions specified in Part 6;2 (2) such modifications and exclusions as the Secretary of State may specify by regulations;3 and (3) any other necessary modifications.4 1 See GA 2005, s 65(2), (4) and (5) and Chapter 6. 2 GA 2005, s 128(1)(a). 3 GA 2005, s 128(1)(b). Regulations under a provision of Part 5 may make different provision for purposes of Part  6 and for the purposes of Part  5 and, in making provision for purposes of Part  6, may make different provision in relation to

434

Personal licences personal licences authorising the performance of different kinds of function or the performance of functions in different circumstances: s 128(2). For the current regulations relating to the application of Part  5 to Part  6, see the Gambling (Personal Licences) (Modification of Part 5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267). 4 GA 2005, s 128(1)(c).

7.19 The manifestation of this desire to avoid repetition of large amounts of material (in fact, very few of Part  5’s provisions escape modification by secondary legislation in their application to Part  6) is, however, at the expense of an easy to read statement of the law relating to personal licences. To understand personal licences it is often necessary to consider more than one section of the Act simultaneously and with a third eye on subordinate legislation. Here, as far as possible, it is intended to take in the modifications and exclusions to Part 5 of the Act – whether those specified in Part 6 or those specified in regulations – as well as other necessary modifications, and apply them to personal licences.

APPLYING FOR A PERSONAL LICENCE Application requirements 7.20 An application for a personal licence under the Gambling Act 2005 – which cannot be made by a child or young person1 – is made to the Gambling Commission.2 The Act provides that an application for a personal licence must: (1)

specify any management office the performance of whose functions are to be authorised by the personal licence;3

(2) specify any operational function to be authorised by the licence;3 (3) specify an address in the United Kingdom at which a document issued under the Gambling Act 2005 may be served on the applicant;4 (4) be made in such form and manner as the Gambling Commission may direct5 (and such direction may, in particular, require that an application is to be signed by the applicant’s employer and contain or be accompanied by information provided by the applicant’s employer or relating to his employment;6 (5) state whether the applicant has been convicted of a relevant offence;7 (6) state whether the applicant has been convicted of any other offence;8 (7) contain or be accompanied by such other information or documents as the Gambling Commission may direct9 (and such direction may, in particular, require that an application is to be signed by the applicant’s employer and contain or be accompanied by information provided by the applicant’s employer or relating to his employment);6 and (8) be accompanied by the prescribed fee.10   1 GA 2005, s 69(3)(a) as applied by s 128. A ‘child’ is an individual who is less than 16 years old and a ‘young person’ is an individual who is not a child but who is less than 18 years old: s 45.

435

Personal licences   2 GA 2005, s 69(1) as applied by s128. For ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3.   3 GA 2005, s 69(2)(a) as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2.   4 GA 2005, s 69(2)(b) as applied by s 128.   5 GA 2005, s 69(2)(c) as applied by s 128.   6 GA 2005, s 130(1). Note, however, neither this nor any other provision of the 2005 Act is to be treated as preventing a person who is not employed from applying for a personal licence: s 130(4). The reference to an applicant’s employer is a reference to any person for whom the applicant, in the course of a business (but whether or not under a contract of employment): (a) provides services, (b) has provided services, or (c) intends to provide services: s 130(3).  7 GA  2005, s  69(2)(d) as applied by s  128. For the meaning of ‘relevant offence’ when used in the 2005 Act, see s 126(2) as applied by s 128 and 7.26–7.27 below. Rehabilitation of Offenders Act 1974, s 4 (effect of rehabilitation) does not apply for the purposes or in connection with the requirement that the application for a personal licence must specify whether the applicant has been convicted of a relevant offence: s 125(a) as applied by s 128. ‘Conviction’ has the meaning given by the Rehabilitation of Offenders Act 1974, s  1(4) and includes, to the extent required by GA  2005, s  125 (as applied by s  128), a spent conviction within the meaning of the 1974 Act: GA 2005, s 126(1) as applied by s 128.   8 GA 2005, s 69(2)(e) as applied by s 128.   9 GA 2005, s 69(2)(f) as applied by s 128. 10 GA 2005, s 69(2)(g) as applied by s 128. ‘Prescribed’ means prescribed by regulations made by the Secretary of State, and such regulations may, in particular, make different provision for applications for the authorisation of different classes of activity, or for different circumstances: s 69(5) as applied by s 128. The regulations so made are: the Gambling (Personal Licence Fees) Regulations 2006 (SI 2006/3285); Gambling (Personal Licence Fees) (Amendment) Regulations 2009 (SI 2009/1971); and the Gambling (Licence Fees) (Miscellaneous Amendments) Regulations 2012 (SI 2012/1851).

7.21 The 2005 Act provides that the Secretary of State may by regulations: require any applicant for a personal licence to notify specified persons within a specified period (which may be wholly or partly before the application is made),1 and provide for the consequences of failure to comply with such a requirement (which may, in particular, include provision for an application to be disregarded or for a licence to lapse).2 1 GA 2005, s 69(4)(a) as applied by s 128. 2 GA 2005, s 69(4)(b) as applied by s 128.

Consideration of the application – general principles The licensing objectives 7.22 As has been seen, three ‘licensing objectives’ are set out at the beginning of the Gambling Act 2005. These objectives are: (1) preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime; (2) ensuring that gambling is conducted in a fair and open way; and 436

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protecting children and other vulnerable persons from being harmed or exploited by gambling.1

When it considers an application for a personal licence the Gambling Commission must have regard to the licensing objectives.2 1 GA 2005, s 1; see Chapter 1. 2 GA 2005, s 70(1)(a) as applied by s 128.

The suitability of the applicant 7.23 In addition, the Commission must form an opinion of the applicant’s suitability to carry on the licensed activities and have regard to that opinion in considering an application for a personal licence.1 In relation to a personal licence, ‘licensed activities’ means the functions whose performance is authorised by the licence2 and, in relation to an application for a personal licence, a reference to the licensed activities is a reference to the activities which will be the licensed activities if the application is granted.3 1 GA 2005, s 70(1)(b) as applied by s 128. 2 GA 2005, s 126(1) as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2. 3 GA 2005, s 70(9)(a) as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2.

7.24 In forming and having regard to an opinion of the applicant’s suitability to carry on the licensed activities, the Commission may, in particular, have regard to: (1) the integrity of the applicant;1 (2) the competence of the applicant to carry on the licensed activities in a manner consistent with the pursuit of the licensing objectives;2 (3)

the financial and other circumstances of the applicant (and, in particular, the resources likely to be available for the purpose of carrying on the licensed activities).3

1 GA 2005, s 70(2)(a) as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2. 2 GA 2005, s 70(2)(b) as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2. 3 GA 2005, s 70(2)(c) as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2.

The Gambling Commission’s statement under section 23 7.25 By virtue of s  23 of the Gambling Act 2005, the Gambling Commission is required to prepare and maintain a statement setting out the 437

Personal licences principles to be applied by it in exercising its functions under the Act.1 It is specifically required that the statement specifies the principles to be applied by the Commission when considering applications for personal licences.2 In particular, the statement must specify the kind of evidence to which the Commission will have regard when assessing the integrity, competence and financial or other circumstances of the applicant for a personal licence. That evidence may include: (1) interviews conducted by or on behalf of the Commission;3 (2) references provided to the Commission at the request of the applicant;4 (3) information or opinions provided to the Commission (whether or not on request) by other persons;5 (4) the completion of training (whether provided in accordance with arrangements made by the Commission or otherwise);6 (5) the possession of qualifications (whether awarded in accordance with arrangements made by the Commission or otherwise).7 1 GA  2005, s  23; see Chapter  3. For ‘Gambling Commission’, see GA  2005, Pt  2 (ss 20–32) and Chapter 3. 2 GA 2005, s 70(4) as applied by s 128. 3 GA 2005, s 70(5)(a) as applied by s 128. 4 GA 2005, s 70(5)(b) as applied by s 128. 5 GA 2005, s 70(5)(c) as applied by s 128. 6 GA 2005, s 70(5)(d) as applied by s 128. 7 GA 2005, s 70(5)(e) as applied by s 128.

Consideration of the application – criminal record of the applicant Relevant offences 7.26 Schedule 7 to the Gambling Act 2005 lists a number of offences falling into three categories under the subheadings ‘gambling offences’,1 ‘theft etc’2 and ‘miscellaneous’.3 The gambling offences include offences under current gambling legislation – the 2005 Act itself,4 the National Lottery etc Act 19935 and the National Lottery Act 19986 – and also offences under legislation repealed under the provisions of the 2005 Act – the Betting, Gaming and Lotteries Act 1963,7 the Gaming Act 1968,8 and the Lotteries and Amusements Act 1976.9 A number of offences which involve an element of dishonesty are listed under the subheading ‘theft etc’. As is to be expected, the miscellaneous offences are various and include, by way of example, a number of sexual offences as well as offences under the Firearms Act 1968 and under the Misuse of Drugs Act 1971. 1 GA 2005, Sch 7, para 1. 2 GA  2005, Sch  7, paras 2–7 (para  3A: inserted by the  Fraud Act 2006, s  14(1): see SI 2006/3200, art 2). 3 GA 2005, Sch 7, paras 8–22 (paras 8, 8A, 8B, 9, 9A: substituted by SI 2006/3391, art  2; para  11A: inserted by the Psychoactive Substances Act 2016, s  60, Sch  5, para  6; para  14A: substituted by the Armed Forces Act 2006, s  378(1), Sch  16, para 246(a) – see SI 2009/812, art 3(a), (b) and SI 2009/1167, art 4; paras 18A–18C:

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4 5 6 7 8 9

inserted by SI  2006/3391, art  3(1); para  19: amended by SI  2006/3391, art  3(2) (a) and (b); para  22A: inserted by the Armed Forces Act 2006, s  378(1), Sch  16, para 246(b) – see SI 2009/812, art 3(a) and (b) and SI 2009/1167, art 4. In para 22A the words ‘encouragement and assistance’ in square brackets were substituted by the Serious Crime Act 2007, s 60, Sch 5, para 6 (see SI 2008/2504, art 2(a)). GA 2005, Sch 7, para 1(a). GA 2005, Sch 7, para 1(e). GA 2005, Sch 7, para 1(f). GA 2005, Sch 7, para 1(b); BGLA 1963 repealed by GA 2005, s 356(3)(f). GA 2005, Sch 7, para 1(c); GA 1968 repealed by GA 2005, s 356(3)(g). GA 2005, Sch 7, para 1(d); LAA 1976 repealed by GA 2005, s 356(3)(i).

7.27 Under the Gambling Act 2005 any offence listed under Sch  7 (ie  a ‘domestic offence’) is a ‘relevant offence’.1 However, the term ‘relevant offence’ also means a ‘foreign offence’ – an offence under the law of a country or territory outside the United Kingdom which prohibits the kind of activity prohibited by a domestic offence listed in Sch 7.2 For these purposes it is immaterial whether or not the foreign offence prohibits all the kinds of activity prohibited by the domestic offence,3 and whether or not the foreign offence prohibits kinds of activity not prohibited by the domestic offence.4 1 2 3 4

GA 2005, s 126(2)(a). GA 2005, s 126(2)(b). GA 2005, s 126(3)(a). GA 2005, s 126(3)(b).

Significance of a relevant offence 7.28 The Gambling Commission may refuse an application for a personal licence if the applicant has a conviction for a relevant offence.1 However, this does not prejudice the generality of the provisions of the Act which set out the general principles to be applied when the Commission considers an application for a personal licence.2 1 GA  2005, s  71(1) as applied by s  128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI  2006/3267), reg  2(2) and Schedule, Table  2. Rehabilitation of Offenders Act 1974, s 4 (effect of rehabilitation) does not apply for the purposes or in connection with the Gambling Commission’s power to refuse an application for a personal licence if the applicant has been convicted of a relevant offence: GA 2005, s 125(a) as applied by s 128. ‘Conviction’ has the meaning given by the Rehabilitation of Offenders Act 1974, s 1(4) and includes, to the extent required by GA 2005, s 125 (as applied by s  128), a spent conviction within the meaning of the 1974 Act: GA 2005, s 126(1) as applied by s 128. For ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3. 2 GA  2005, s  71(2) as applied by s  128. For the provisions setting out the general principles to be applied when the Gambling Commission considers an application for a personal licence, see s 70 as applied by s 128 and 7.22–7.25 above.

Consideration of the application – procedure 7.29 For the purpose of considering an application for a personal licence, the Gambling Commission may require the applicant to provide information,1 and consult, and have regard to information provided by, or 439

Personal licences an opinion stated by, any person.2 Here, ‘information’ and ‘opinion’ mean information or an opinion about the applicant or the licensed activities3 (in relation to a personal licence, ‘licensed activities’ means the functions whose performance is authorised by the licence4 and, in relation to an application for a personal licence, a reference to the licensed activities is a reference to the activities which will be the licensed activities if the application is granted).5 Under these provisions the Commission may require an applicant for a personal licence to obtain information from his employer.6 In particular, the Commission may require the production of an enhanced level Disclosure and Barring Service (previously known as a ‘criminal record’) certificate (under s 115 of the Police Act 1997) relating to the applicant.7 1 GA 2005, s 73(1)(a) as applied by s 128. For ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3. 2 GA 2005, s 73(1)(b) as applied by s 128. 3 GA  2005, s  73(2) as applied by s  128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2. 4 GA 2005, s 126(1) as applied by s 128 and modified by SI 2006/3267, reg 2(2) and Schedule, Table 2. 5 GA 2005, s 70(9)(a) as applied by s 128 and modified by SI 2006/3267, reg 2(2) and Schedule, Table 2. 6 GA  2005, s  130(2). Note, however, that neither this nor any other provision of the 2005 Act is to be treated as preventing a person who is not employed from applying for a personal licence: s 130(4). The reference to an applicant’s employer is a reference to any person for whom the applicant, in the course of a business (but whether or not under a contract of employment): (a) provides services, (b) has provided services, or (c) intends to provide services: s 130(3). 7 GA 2005, s 73(3)(a) as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2. Obtaining or holding a personal or operating licence under Part 5 or Part 6 of the Gambling Act 2005 appears as document reference number 60 in Annex A to the Disclosure and Barring Service’s Guide to eligibility for DBS checks.

7.30 By virtue of s 23 of the Gambling Act 2005, the Gambling Commission is required to prepare and maintain a statement setting out the principles to be applied by it in exercising its functions under the Act.1 It is specifically required that the statement must, in particular, specify the Commission’s practice in relation to: (1) the delegation of functions in relation to applications for personal licences;2 (2) the holding of oral hearings of personal licence applications;3 and (3) the evidence required or accepted in connection with personal licence applications.4 Regard should be had to the appropriate statement of the Gambling Commission, the Conditions and codes of practice applicable to personal management licences [and] personal functional licences (an Extract of the LCCP July 2016 (in force from 31 October 2016)) and the most recent ‘Statement of principles for licensing and regulation’.5 1 GA 2005, s 23; see Chapter 3.

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Personal licences 2 3 4 5

GA 2005, s 73(4)(a) as applied by s 128. GA 2005, s 73(4)(b) as applied by s 128. GA 2005, s 73(4)(c) as applied by s 128. Currently March 2015.

7.31 Other than a failure to pay the required fee, the Commission may disregard an irregularity or deficiency in or in relation to an application for a personal licence.1 1 GA 2005, s 73(5) as applied by s 128. See s 69(2)(g) as applied by s 128 and 7.20 above for the Act’s provisions as to the fee which must accompany an application for a personal licence.

Determination of the application Grant or rejection of the application 7.32 As has been seen,1 the Gambling Act 2005 provides that, amongst other application requirements, an application for a personal licence must: (1)

specify any management office the performance of whose functions are to be authorised by the personal licence;2

(2) specify any operational function to be authorised by the licence.3 1 See 7.20 above. 2 GA 2005, s 69(2)(a) as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI  2006/3267), reg  2(2) and Schedule, Table  2. For ‘management office’, see GA 2005, s 80(5) and 7.3 above. 3 GA 2005, s 69(2)(a) as applied by s 128 and modified by SI 2006/3267, reg 2(2) and Schedule, Table 2. For ‘operational function’, see GA 2005, s 80(6) and 7.4 above.

7.33 On considering an application for a personal licence, the Gambling Commission must: (1) grant it;1 (2) reject it;2 or (3) grant it in respect of one or more of the management offices and/or operational functions specified in the application and reject it in respect of others.3 1 GA 2005, s 74(1)(a) as applied by s 128. 2 GA 2005, s 74(1)(b) as applied by s 128. 3 GA 2005, s 74(1)(c) as applied by s 128. For ‘management office’, see s 80(5) and 7.3 above. For ‘operational function’, see s 80(6) and 7.4.

7.34 Where the Commission grants an application for a premises licence in whole or in part, it must, as soon as is reasonably practicable, notify the applicant and issue a personal licence to the applicant.1 Where the Commission rejects an application in whole or in part, it must, as soon as is reasonably practicable, notify the applicant of the rejection and the reasons for the rejection.2 It is clear that both these provisions apply in the case of a 441

Personal licences partial grant or, putting it another way, a partial rejection of an application for a personal licence. 1 GA 2005, s 74(2) as applied by s 128. 2 GA 2005, s 74(3) as applied by s 128.

Prohibition against the holding of multiple personal licences 7.35 The Commission may not issue a personal licence to an individual who already holds one.1 However, a personal licence may authorise the performance of more than one function.2 1 GA 2005, s 133(1). 2 GA 2005, s 133(2).

Form of personal licence 7.36 A personal licence must specify the individual to whom it is issued,1 and any condition attached by the Gambling Commission.2 The Secretary of State may, by means of regulations, require the Commission to ensure that a personal licence is issued in such form as the regulations may specify,3 and contains, in addition to the foregoing, such information as the regulations may specify (which may, in particular, include information about conditions attached to the personal licence by virtue of the Secretary of State’s power to provide, by means of regulations, for a specified condition to be attached to personal licences falling within a specified description).4 1 GA 2005, s 66(1)(a) as applied and modified by s 128. 2 GA  2005, s  66(1)(c) as applied by s  128. For the ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3. The Gambling Commission is given the power to attach general conditions and individual conditions to personal licences under, respectively, s  75 as applied by s  128 and modified by the Gambling (Personal Licences) (Modification of Part 5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2, and s 77 as applied by s 128. For the powers to attach general conditions, see 7.39–7.44. For the powers to attach individual conditions, see 7.45 below. 3 GA 2005, s 66(2)(a) as applied by s 128. 4 GA  2005, s  66(2)(b) as applied by s  128. For the Secretary of State’s power to provide, by means of regulations, for a specified condition to be attached to personal licences falling within a specified description, see s  79 as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part 5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2 and 7.46–7.54 below.

The offence under section 37 of the 2005 Act 7.37 Amongst the general offences created under Part 3 of the Gambling Act 20051 is the offence of using premises, or causing or permitting premises to be used to provide facilities for certain forms of gambling. It is to be noted that, as is the case with operating licences,2 the issue of a personal licence does not affect the application of s 37 of the Act.3 1 For the ‘general offences’ created under GA 2005, Pt 3 (ss 33–44), see Chapter 4. 2 See GA 2005, s 65(3) and Chapter 6. 3 GA 2005, s 65(3) as applied by s 128.

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THE ATTACHMENT OF CONDITIONS TO PERSONAL LICENCES 7.38 There is considerable scope under the Gambling Act 2005 for the Gambling Commission1 to attach conditions to personal licences. The Commission’s powers to attach conditions fall into two categories. Although the terms ‘general conditions’ and ‘individual conditions’ are used only in subheadings rather than in the body of the Act, it is convenient to adopt these terms here to distinguish one category from the other. In addition to the Commission’s powers to attach general conditions and individual conditions to personal licences, the Secretary of State may, by means of regulations, provide for a specified condition to be attached to personal licences which fall within a specified description. Further, by virtue of the provisions of the Act itself, personal licences are automatically subject to certain conditions. 1 For ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3.

General conditions attached by the Gambling Commission 7.39 The Gambling Commission may specify conditions to be attached to each personal licence,1 or each personal licence falling within a specified class.2 Although the term ‘general condition’ only appears in subheadings in the Gambling Act 2005, as indicated, it is convenient to refer to such conditions as ‘general conditions’. The Act provides that a class of personal licence may be defined wholly or partly by reference to: (1)

the nature of licensed activities3 (in relation to a personal licence, ‘licensed activities’ means the functions whose performance is a­ uthorised by the licence4 and, in relation to an application for a personal licence, a reference to the licensed activities is a reference to the activities which will be the licensed activities if the application is granted);5

(2) the circumstances in which the licensed activities are carried on;6 (3) the nature or circumstances of the personal licensee.7 1 2 3 4

GA 2005, s 75(1)(a) as applied by s 128. GA 2005, s 75(1)(b) as applied by s 128. GA 2005, s 75(2)(a) as applied by s 128. GA 2005, s 126(1) as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2. 5 GA 2005, s 70(9)(a) as applied by s 128 and modified by SI 2006/3267, reg 2(2) and Schedule, Table 2. 6 GA 2005, s 75(2)(b) as applied by s 128. 7 GA 2005, s 75(2)(c) as applied by s 128 and modified by SI 2006/3267, reg 2(2) and Schedule, Table 2.

Procedure for specifying a general condition 7.40 The Commission may amend or revoke a general condition specified under the foregoing provisions.1 When the Commission proposes to specify a new general condition or when it proposes to amend or revoke the 443

Personal licences specification for an existing general condition, it must follow the procedure set out in the 2005 Act. 1 GA 2005, s 76(1) as applied by s 128. See Gibraltar Betting and Gaming Association Ltd v Secretary of State for Culture, Media and Sport [2014]  EWHC  3236 (Admin), [2014] All ER (D) 122 (Oct) for a consideration of the scope of s 76(1).

7.41 Before specifying a general condition (or amending or revoking an existing specification of a general condition), the Commission must consult one or more persons who, in the Commission’s opinion, represent the interests of personal licensees who may be affected by the condition.1 The Commission must also consult such of the following persons as it thinks appropriate (if any): the Secretary of State; Her Majesty’s Commissioners for Her Majesty’s Revenue and Customs; one or more persons who appear to the Commission to represent local authorities (or licensing boards in Scotland); one or more persons who appear to the Commission to represent chief constables of police forces; one or more persons who appear to the Commission to represent the interests of persons carrying on gambling businesses; one or more persons who appear to the Commission to have knowledge about social problems relating to gambling; and, to such extent and in such manner as the Commission thinks appropriate, members of the public.2 The Commission must publish a specification of a general condition (or an amendment or a revocation of an existing specification of a general condition) as soon as is reasonably practicable.3 1 GA 2005, s 76(2)(a) as applied by s 128. 2 GA 2005, s 76(2)(b) as applied by s 128. These persons are also those whom the Gambling Commission must consult before issuing or revising a statement under s 23 (setting out the principles to be applied by it in exercising its functions under the 2005 Act). See Chapter 3 for commentary on the provisions of s 23. 3 GA 2005, s 76(3) as applied by s 128.

7.42 Where the Commission proposes to specify a general condition (or proposes to amend or revoke an existing specification of a general condition), it must, in general, give at least three months’ notice of it to the holder of each personal licence which has effect at that time and is within a class affected by the proposal.1 If, having given such notice of a proposal but before the specification of the general condition is made (or, as the case may be, the existing specification of a general condition is amended or revoked), the Commission issues a new personal licence of a class affected by the proposal, the Commission must give the new licensee notice of the proposal.2 1 GA 2005, s 76(4)(a) as applied by s 128. 2 GA 2005, s 76(4)(c) as applied by s 128.

7.43 Where the Commission thinks it necessary by reason of urgency to make, amend or revoke a specification of a general condition without giving existing personal licence holders three months’ notice of the proposal, it must give as much time as it thinks possible to the holders of each personal licence which has effect at that time and is within a class affected by the proposal.1 Again, the Commission is required to give notice of the proposal to new personal licensees (ie individuals who hold personal licences issued following notice of the proposal, but before the specification of the general condition is, as the case may be, made, amended or revoked).2 1 GA 2005, s 76(5)(c) as applied by s 128. 2 GA 2005, s 76(5)(b) as applied by s 128.

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Personal licences 7.44 On the making of a specification of a general condition – whether following three months’ notice of the proposal to existing licensees or a shorter period by reason of urgency – an existing personal licence is subject to the general condition specified.1 Where a general condition is amended, existing personal licences are subject to the general condition as amended.2 Where a general condition is revoked, existing licences are relieved from the general condition which has been revoked.3 1 GA 2005, s 76(4)(c) and (5)(c) as applied by s 128. 2 GA 2005, s 76(6)(a) as applied by s 128. 3 GA 2005, s 76(6)(b) as applied by s 128.

Individual conditions attached by the Gambling Commission 7.45 Where the Gambling Commission issues a personal licence, it may attach a condition to the licence.1 Although the term ‘individual condition’ is again only used in the subheading, it is convenient to refer to the conditions attached to personal licences in exercise of this power as individual conditions so as to distinguish them from the general conditions discussed in the preceding paragraphs. 1 GA 2005, s 77 as applied by s 128.

Secretary of State’s power to attach conditions to personal licences 7.46 The Secretary of State is given the power, by means of regulations, to provide for a specified condition to be attached to personal licences which fall within a specified description.1 At the time of writing, regulations have been made under the equivalent provisions in relation to the operating licences,2 but this power has not been exercised in respect of personal licences. 1 GA 2005, s 78 as applied by s 128. 2 See Gambling Act 2005 (Operating Licence Conditions) Regulations 2007 (SI 2007/2257) and Chapter 6.

Scope of powers to attach conditions General 7.47 The Gambling Act 2005 provides that, without prejudice to the generality of the powers of the Gambling Commission to attach general conditions and individual conditions to personal licences, or the power of the Secretary of State to provide, by means of regulations, for a specified condition to be attached to personal licences which fall within a specified description,1 a condition attached in exercise of any of these powers may, in particular, do any of the things set out in the paragraphs below.2 1 For general conditions, see GA 2005, s 75 as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part 5 of the Gambling Act 2005)

445

Personal licences Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2 and 7.39–7.44. For individual conditions, see GA 2005, s 77 as applied by s 128 and 7.45 above. For conditions specified by the Secretary of State in regulations, see s 78 as applied by s 128 and 7.46. 2 GA 2005, s 79 as applied by s 128.

7.48 A condition may have the effect of restricting the activities that may be carried on in reliance on the personal licence by reference to: (1) the nature of the activities;1 (2) the circumstances in which they are carried on;2 or (3) their extent.3 1 GA 2005, s 79(2)(a) as applied by s 128. 2 GA 2005, s 79(2)(b) as applied by s 128. 3 GA 2005, s 79(2)(c) as applied by s 128.

7.49

A condition may make provision wholly or partly by reference to:

(1) the nature of the licensed activities1 (in relation to a personal licence, ‘licensed activities’ means the functions whose performance is authorised by the licence2 and, in relation to an application for a personal licence, a reference to the licensed activities is a reference to the activities which will be the licensed activities if the application is granted);3 (2) the circumstances in which the licensed activities are carried on;4 (3) the nature or circumstances of the licensee.5 1 GA 2005, s 79(3)(a) as applied by s 128. 2 GA 2005, s 126(1) as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2. 3 GA 2005, s 70(9)(a) as applied by s 128 and modified by SI 2006/3267, reg 2(2) and Schedule, Table 2. 4 GA 2005, s 79(3)(b) as applied by s 128. 5 GA 2005, s 79(3)(c) as applied by s 128 and modified by SI 2006/3267, reg 2(2) and Schedule, Table 2.

7.50

A condition may relate to the financial circumstances of the licensee.1

1 GA  2005, s  79(5) as applied by s  128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2.

7.51 A condition may make provision about the provision of assistance to persons who are or may be affected by problems relating to gambling.1 1 GA 2005, s 79(8) as applied by s 128.

7.52

A condition may make provision about:

(1) establishing the identity of users of facilities;1 (2) recording the identity of users of facilities;2 446

Personal licences (3) restricting facilities to persons registered in respect of the facilities in advance.3 1 GA 2005, s 79(9)(a) as applied by s 128. 2 GA 2005, s 79(9)(b) as applied by s 128. 3 GA 2005, s 79(9)(c) as applied by s 128.

Information 7.53 A  general condition or an individual condition attached to a personal licence by the Gambling Commission1 may require the provision of information of a specified kind to the Commission or to another specified person or class of person.2 Such a condition may, in particular: (1) relate to information about the use made of facilities provided in accordance with a relevant operating licence3 (a ‘relevant operating licence’ is any operating licence in connection with which the personal licensee performs the functions authorised by his personal licence);4 (2)

require a person to provide any information that he suspects may relate to the commission of an offence under the Gambling Act 2005, relate to a breach of a rule applied by a sporting or other body, or lead to the making of an order under s  336 of the 2005 Act (which gives the Gambling Commission the power to void bets in certain circumstances).5

1 For general conditions, see GA 2005, s 75 as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part 5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2 and 7.39–7.44. For individual conditions, see GA 2005, s 77 as applied by s 128 and 7.45 above. 2 GA 2005, s 88(1) as applied by s 128. 3 GA 2005, s 88(2)(a) as applied by s 128 and modified by SI 2006/3267, reg 2(2) and Schedule, Table 2. 4 GA 2005, s 88(2A) as inserted (in respect of the application of Part 5 to Part 6 of the 2005 Act) by SI 2006/3267, reg 2(2) and Schedule, Table 2. 5 GA 2005, s 88(2)(b) as applied by s 128. Under s 336 the Gambling Commission may make an order in relation to a bet accepted by or through a general betting operating licence, a pool betting operating licence, or a betting intermediary operating licence. Where the Commission makes such an order, any contract or other arrangement in relation to the bet is void and any money paid in relation to the bet (whether by way of stake, winnings, commission or otherwise) shall be repaid to the person who paid it, and repayment may be enforced as a debt due to that person. See Chapter 13 for more detailed commentary on the provisions of GA 2005, s 336.

Premises 7.54 In relation to a personal licence, ‘licensed activities’ means the functions whose performance is authorised by the licence1 and, in relation to an application for a personal licence, a reference to the licensed activities is a reference to the activities which will be the licensed activities if the application is granted.2  A  personal licence may not include a condition (whether a general condition, or an individual condition attached by the Gambling Commission, or a condition specified by the Secretary of State in regulations):3 447

Personal licences (1)

requiring that the licensed activities be carried on at a specified place or class of place;4

(2) preventing the licensed activities from being carried on at a specified place or class of place;5 or (3) specifying the premises on which the licensed activities may be carried on.6 Barry Malizia and Paul Chohan v The Gambling Commission7 related to a review and revocation of a number of personal management licences (PMLs) initiated by the Commission following the failure of the company holding an operating licence for a group of adult amusement centres amid general suggestions of financial impropriety on the part of certain directors of that company. A  specific challenge was brought by one of the junior directors, who had initially applied for a PML in his capacity as the IT director. Dismissing the challenge upon a number of grounds, the President of the First-tier Tribunal (General Regulatory Chamber) said (at 72): ‘It appears from para 92 of the regulatory panel’s decision that they have taken the phrase “licensed activities” in general condition one to refer to the specified management office in the PLs contract of employment. I would have taken it to refer to activities licensed by the Act generally. As I have indicated, the actual PL is not restricted to a particular office. There may be a similar misunderstanding in respect of para  1.2(c) of the general conditions attached to operating licences. Those advising Mr Chohan have taken “Licensees” to refer to the PL holder whereas it may well be intended to apply to the operating licence holder. Perhaps the layout is unclear. At any rate, it may be that a little redrafting now would avoid confusion later.’ 1 GA 2005, s 126(1) as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2. 2 GA 2005, s 70(9)(a) as applied by s 128 and modified by SI 2006/3267, reg 2(2) and Schedule, Table 2. 3 For general conditions, see GA  2005, s  75 as applied by s  128 and modified by SI  2006/3267, reg  2(2) and Schedule, Table  2 and 7.39–7.44. For individual conditions, see GA 2005, s 77 as applied by s 128 and 7.45 above. For conditions specified by the Secretary of State in regulations, see s 78 as applied by s 128 and 7.46. For the scope of the powers to attach conditions to personal licences, see s 79 as applied by s 128 and 7.47–7.53. 4 GA 2005, s 84(1)(a)(i) as applied by s 128. 5 GA 2005, s 84(1)(a)(ii) as applied by s 128. 6 GA  2005, s  84(1)(a)(iii) as applied by s  128. For the meaning of ‘premises’, see s 353(1) and Chapter 10. 7 GA/2012/0001, GA/2012/0002.

Automatic condition – compliance with code of practice 7.55 By virtue of s 24 of the Gambling Act 2005, the Gambling Commission is required to issue one or more codes of practice about the manner in which facilities for gambling are provided, whether by the holder of a licence under the Act or by another person.1 Two types of code of practice are authorised. 448

Personal licences The first is a social responsibility code. Such a code must be followed and has the force of a licence condition. The Commission may also issue ordinary codes, which are intended to set out ‘best practice’ in the particular sector. The latter are not mandatory but operators are expected to follow them unless they have alternative arrangements in place that can be demonstrated to be equally effective. Both current codes are set out in the Commission’s online2 ‘Licence Conditions and Codes of Practice (LCCP)’ or as ‘Gambling codes of practice – consolidated for all forms of gambling’. A  personal licence is automatically subject to the condition that the licensee complies with any relevant social responsibility provision of such a code of practice.3 Where the personal licence authorises the performance of the functions of a management office, ‘licensee’ includes a person for whom the licensee is responsible.4 The personal licensee is responsible for a person if the licensee is required by the terms of his appointment to take or share responsibility for the conduct of that person,5 and that person performs an operational function in connection with an activity performed in reliance on a relevant operating licence.6 A ‘relevant operating licence’ is any operating licence in connection with which the licensee performs the functions authorised by his personal licence.7 1 GA 2005, s 24; see Chapter 3. 2 Go to http://www.gamblingcommission.gov.uk/. 3 GA 2005, s 82(1) as applied by s 128. Here the reference to a social responsibility provision of a code is a reference to a provision identified by a code as being included in pursuance of the requirement (under s 24(2)) that a code of practice describes arrangements that should be made by a person providing facilities for gambling for the purposes of ensuring that gambling is conducted in a fair and open way, protecting children and other vulnerable persons from being harmed or exploited by gambling, and making assistance available to persons who are or may be affected by problems related to gambling: s 82(2)(b) as applied by s 128. 4 GA 2005, s 82(2)(a) as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI  2006/3267), reg  2(2) and Schedule, Table  2. For ‘management office’, see GA 2005, s 80(5) and 7.3 above. 5 GA 2005, s 82(4)(a) as applied by s 128 and modified by SI 2006/3267, reg 2(2) and Schedule, Table 2. 6 GA 2005, s 82(5) as applied by s 128 and modified by SI 2006/3267, reg 2(2) and Schedule, Table 2. For ‘operational function’, see GA 2005, s 80(6) and 7.4 above. 7 GA  2005, s  82 as applied by s  128 and modified by SI  2006/3267, reg  2(2) and Schedule, Table 2.

7.56 It should be noted that these provisions do not prevent a condition being attached to a personal licence (whether a general condition, or an individual condition attached to the licence by the Gambling Commission, or a condition specified by the Secretary of State in regulations)1 which has the object of ensuring compliance with a provision of a code other than a social responsibility provision.2 1 For general conditions, see GA 2005, s 75 as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part 5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2 and 7.39–7.44. For individual conditions, see GA 2005, s 77 as applied by s 128 and 7.45 above. For conditions specified by the Secretary of State in regulations, see s 78 as applied by s  128 and 7.46. For the scope of the powers to attach conditions to personal licences, see s 79 as applied by s 128 and 7.47–7.53. 2 GA 2005, s 82(3) as applied by s 128.

449

Personal licences

Automatic condition – return of stakes to children 7.57 The third of the three licensing objectives under the Gambling Act 2005 is the protection of children and other vulnerable persons from being harmed or exploited by gambling.1 With, no doubt, the aim of furthering this objective, the Act imposes a condition where a personal licence authorises the licensee to perform a specified operational function in connection with the provision of facilities for gambling under an operating licence.2 In such circumstances the personal licence is subject to a condition that, if the personal licensee becomes aware that a child or young person is using or has used facilities for gambling provided in reliance on the operating licence, the personal licensee: (1) must return any money paid in respect of the use of those facilities (whether by way of stake, fee or otherwise) by the child or young person as soon as is reasonably practicable;3 and (2) may not give a prize to the child or young person.4 1 GA 2005, s 1(c); see Chapter 1. 2 GA 2005, s 83(1) as substituted by the Gambling (Personal Licences) (Modification of Part 5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2 and applied by GA 2005, s 128. See s 80(6) and 7.4 above for the meaning of ‘operational function’. 3 GA  2005, s  83(1A)(a) as inserted (for the purposes of Part  6 of the Act) by SI 2006/3267, reg 2(2) and Schedule, Table 2 and applied by GA 2005, s 128. In the GA 2005 a ‘child’ means an individual who is less than 16 years old and a ‘young person’ means an individual who is not a child but who is less than 18 years old: s 45. 4 GA  2005, s  83(1A)(b) as inserted (for the purposes of Part  6 of the Act) by SI 2006/3267, reg 2(2) and Schedule, Table 2 and applied by GA 2005, s 128. In the context of these provisions, ‘prize’ includes both a prize provided by a person organising gambling and also winnings of money staked: s 83(5) as applied by s 128.

7.58 However, in cases of participation in a lottery or football pools, the above provisions only apply to the participation of children,1 and they do not apply at all if the personal licensee does not have authority under the terms or conditions of his appointment to act in the way the condition requires. In such circumstances, the personal licensee must take all reasonable steps to inform a person who does have the appropriate authority of the relevant matters relating to the child or young person.2 Further, this condition does not apply to the use of a Category  D  gaming machine3 or participation in equal chance gaming at a licensed family entertainment centre.4 Subject to these exceptions, the condition: (1) has effect despite any contract or other agreement and despite any rule of law;5 (2)

does not enable a personal licensee to demand repayment of, and does not require a child or young person to return, a prize paid before the personal licensee becomes aware that the participant is a child or young person.6

1 GA 2005, s 83(4)(b) as applied by s 128. In the GA 2005 a ‘child’ means an individual who is less than 16 years old and a ‘young person’ means an individual who is not a child but who is less than 18 years old: s 45.

450

Personal licences 2 GA 2005, s 83(1B) as inserted (for the purposes of Part 6 of the Act) by the Gambling (Personal Licences) (Modification of Part 5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2 and applied by s 128. 3 GA 2005, s 83(2)(a) as applied by s 128. See s 235 and Chapter 25 for the meaning of ‘gaming machine’ and s 236, regulations made thereunder, and Chapter 25 for the categories of gaming machine. 4 GA 2005, s 83(2)(b) as applied by s 128. See s 8 and Chapter 2 for the meaning of ‘equal chance gaming’ and s 238 and Chapter 25 for ‘licensed family entertainment centre’. 5 GA 2005, s 83(3)(a) as applied by s 128 and modified by SI 2006/3267, reg 2(2) and Schedule, Table 2. 6 GA 2005, s 83(3)(b) as applied by s 128 and modified by SI 2006/3267, reg 2(2) and Schedule, Table 2. In the context of these provisions, ‘prize’ includes both a prize provided by a person organising gambling and also winnings of money staked: s 83(5) as applied by s 128.

MAINTENANCE OF PERSONAL LICENCES Fees 7.59 The Secretary of State may make regulations requiring the holder of a personal licence to pay to the Gambling Commission specified fees in respect of specified periods during which the personal licence is held.1 Such regulations may, in particular, make different provision for different kinds of personal licence or for different circumstances.2 1 GA 2005, s 132(2). For the regulations relating to operating licences and personal licences current at the time of writing, see the Gambling (Operating Licence and Single-Machine Permit Fees) Regulations 2006 (SI  2006/3284), as amended by SI  2007/269, SI  2007/1791, SI  2008/1803, SI  2008/3105, SI  2009/1837 and SI 2012/829, the Gambling (Personal Licence Fees) Regulations 2006 (SI 2006/3285, as amended by SI  2009/1971) and the Gambling (Licence Fees) (Miscellaneous Amendments) Regulations 2012 (SI 2012/1851).. For ‘Gambling Commission’, see GA  2005, Pt  2 (ss  20–32) and Chapter  3. Note that s  100 – which provides for the payment of annual fees by the holders of operating licences to the Gambling Commission – does not apply, even with modification, to personal licences: s 132(1). 2 GA 2005, s 132(3).

Change of circumstance 7.60 Under the Gambling Act 2005, the Secretary of State is given the power to make regulations requiring the holder of a personal licence to notify the Gambling Commission of any change of circumstance of a prescribed kind in relation to him or to a licensed activity,1 and to give the Commission prescribed details of the change.2 If the change of circumstances notified to the Commission has the effect of falsifying the information contained in the personal licence,3 the notification must be accompanied by the prescribed fee4 and either the personal licence or an application to the Commission for the issue of a copy of the licence.5 Where the notification of a change of circumstance is accompanied by the personal licence, the Commission must make such alteration to the information contained in the licence as appears 451

Personal licences to it to be required by the change of circumstance,6 and return the licence to the licensee.7 Where, however, the notification of the change of circumstance is accompanied by an application for a copy of the personal licence, the Commission must, if it grants the application, issue the copy of the personal licence in a form which appears to the Commission to reflect the change in circumstance.8 1 In relation to a personal licence, ‘licensed activities’ means the functions whose performance is authorised by the licence: GA 2005, s 126(1) as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2. 2 GA 2005, s 101(1) as applied by s 128. 3 See GA 2005, s 66 as applied by s 128 and modified by SI 2006/3267, reg 2(2) and Schedule, Table 2; and see 7.36 above as to the form of personal licences. 4 GA  2005, s  101(2)(a) as applied by s  128. ‘Prescribed’ means prescribed by regulations made under these provisions: s 101(5) as applied by s 128. 5 GA  2005, s  101(2)(b) as applied by s  128. For an application for a copy of the personal licence, see s 107 as applied by s 128 and 7.71 below. 6 GA 2005, s 101(3)(a) as applied by s 128. 7 GA 2005, s 101(3)(b) as applied by s 128. 8 GA 2005, s 101(4) as applied by s 128.

Offence 7.61 The holder of a personal licence commits an offence if he fails without reasonable excuse to comply with regulations made under the Act’s provisions as to notification of the Gambling Commission of a change of circumstance.1  A  person guilty of such an offence is liable on summary conviction to a fine not exceeding level 2 on the standard scale.2 1 GA 2005, s 101(6) as applied by s 128. 2 GA 2005, s 101(7) as applied by s 128.

Prosecutors 7.62 The Gambling Commission may institute criminal proceedings in respect of any offence under the Gambling Act 2005.1 The power of licensing authorities to institute criminal proceedings in respect of an offence under the Act is limited to those offences listed under s 346 of the Act,2 and does not extend to the offence under these provisions. 1 GA 2005, s 28; see Chapter 3. 2 GA 2005, s 346(1). However, s 346 is without prejudice to the Local Government Act 1972, s  222 (the power of local authorities to prosecute or defend legal proceedings): GA 2005, s 346(2).

Applying to vary a personal licence 7.63 Section 104 (as applied by s 128) of the Gambling Act 2005 provides for applications for variations of personal licences. The holder of a personal 452

Personal licences licence may apply to the Gambling Commission1 to vary the personal licence by: (1) adding, amending or removing a licensed activity;2 (2) amending another detail of the licence;3 or (3) adding, amending or removing an individual condition attached to the licence.4 1 For the ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3. 2 GA 2005, s 104(1)(a) as applied by s 128. In relation to a personal licence, ‘licensed activities’ means the functions whose performance is authorised by the licence: s  126(1) as applied by s  128 and modified by the Gambling (Personal Licences) (Modification of Part 5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2. 3 GA 2005, s 104(1)(b) as applied by s 128. 4 GA 2005, s 104(1)(c) as applied by s 128.

7.64 A  personal licence cannot, however, be varied so as to authorise anyone other than the person to whom it was issued to perform the functions of a specified management office, or to perform a specified operational function, in connection with the provision of facilities for gambling or a person who provides facilities for gambling.1 1 GA 2005, s 104(2) as applied by s 128.

7.65 Subject to the provisions of GA 2005, s 104 (as applied by s 128) and any other necessary modifications, the procedure for applying for a variation of a personal licence is the same as the procedure for applying for a personal licence.1 However, regulations under Part 5 of the Act (as applied by s 128 to Part  6)2 which relate to an application for a personal licence may make provision which applies only in the case of an application for variation,3 provision which does not apply in the case of an application for a variation,4 different provision in relation to an application for variation from that made in relation to an application for a personal licence,5 and different provision in relation to applications for variations of different kinds.6 An application for variation of a personal licence must be accompanied by a statement of the variation sought,7 and either the personal licence to be varied or a statement explaining why it is not reasonably practicable to produce the licence.8 In granting an application for variation of a personal licence, the Gambling Commission must specify a time when the variation shall begin to have effect,9 and may make transitional provision.10   1 GA 2005, s 104(3) as applied by s 128. See ss 69–74 (as applied by s 128) and 7.20– 7.37 for applications for personal licences.   2 Such regulations as have been made under these provisions at the time of writing relate to fees and are prone to periodic change as indicated above.   3 GA 2005, s 104(4)(a) as applied by s 128.   4 GA 2005, s 104(4)(b) as applied by s 128.   5 GA 2005, s 104(4)(c) as applied by s 128.   6 GA 2005, s 104(4)(d) as applied by s 128.   7 GA 2005, s 104(5)(a) as applied by s 128.   8 GA 2005, s 104(5)(b) as applied by s 128.   9 GA 2005, s 104(6)(a) as applied by s 128. 10 GA 2005, s 104(6)(b) as applied by s 128.

453

Personal licences

Amendment of a personal licence 7.66 There are a number of circumstances in which the Gambling Commission may require the holder of a personal licence to submit it to the Commission for amendment.1 The Commission may require submission of a personal licence for amendment to reflect: (1) a variation of the general conditions;2 (2) a change of circumstance notified to the Commission;3 (3) the grant of an application for variation of the personal licence;4 (4) the attachment of an additional condition to the personal licence or the amendment of an existing condition in exercise of the Commission’s regulatory powers;5 or (5) anything done in relation to a personal operating licence under Part 5.6 1 GA 2005, s 105 as applied by s 128. For ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3. 2 GA 2005, s 105(1)(a) as applied by s 128. This is without prejudice to s 76(4)(c), which provides that, on the Gambling Commission specifying a new general condition, an existing personal licence (which has effect at that time and is within a class affected by the new specification) is subject to the new general condition specified: s 105(5) as applied by s 128. For the attachment of ‘general conditions’ to a personal licence by the Gambling Commission, see ss 75–76 as applied by s 128 and 7.38–7.44. 3 GA 2005, s 105(1)(b) as applied by s 128. For the duty of the holder of a personal licence to notify the Gambling Commission of any change of circumstance of a prescribed kind in relation to him or to a licensed activity and to give prescribed details of the change, see s 101 as applied by s 128 and 7.60–7.61. 4 GA 2005, s 105(1)(c) as applied by s 128. For applications to vary a personal licence, see s 104 as applied by s 128 and 7.63–7.65. 5 GA  2005, s  105(1)(d) as applied by s  128. For the Gambling Commission’s regulatory powers, see ss 116–122 as applied by s 128 and 7.84–7.85. 6 GA  2005, s  105(1)(f) as applied by s  128. For commentary on the provisions of GA 2005, Pt 5 (ss 65–126) – which deals with operating licences – see Chapter 6.

7.67 A  licensee must comply with a requirement of the Gambling Commission to submit the personal licence to the Commission for amendment within 14 days beginning with the day on which he receives notice of the requirement.1 1 GA 2005, s 105(2) as applied by s 128.

Offence 7.68 The holder of a personal licence commits an offence if he fails without reasonable excuse to comply with a requirement made under the Act’s provisions as to submission of the personal licence to the Gambling Commission for amendment of the licence.1  A  person guilty of such an offence is liable on summary conviction to a fine not exceeding level 2 on the standard scale.2 1 GA 2005, s 101(6) as applied by s 128. 2 GA 2005, s 101(7) as applied by s 128.

454

Personal licences

Prosecutors 7.69 The Gambling Commission may institute criminal proceedings in respect of any offence under the Gambling Act 2005.1 The power of licensing authorities in England and Wales (Scotland is excluded2) to institute criminal proceedings in respect of an offence under the Act is limited to those offences listed under s 3463 and does not extend to an offence under these provisions. 1 GA 2005, s 28; see Chapter 3. 2 GA 2005, s 346(3). 3 GA  2005, s  346(1) – ie: s  37 (use of premises); s  185 (availability of premises licence); s  186 (change of circumstance of holder of a premises licence); s  229 (availability of temporary use notice); s  242 (making gaming machine available for use); s 258 (promotion of lottery); s 259 (facilitating a lottery); s 260 (misusing profits of lottery); s 261 (misusing profits of exempt lottery); s 262 (small society lottery: breach of condition); s 326 (obstructing etc a constable, enforcement officer or authorised person); s 342 (false information); para 20 Sch 10 (Failure to produce Family Entertainment Centre Gaming Machine Permit); para 10 Sch 13 (Failure to produce Licensed Premises Gaming Machine Permits) and para 20 Sch 14 (Failure to produce Prize Gaming Permits). However, s  346 is without prejudice to the Local Government Act 1972, s 222 (the power of local authorities to prosecute or defend legal proceedings): s 346(2).

Maintenance of a register 7.70 The Gambling Commission must maintain a register of personal licences containing such details of, and relating to, each licence as the Commission thinks appropriate,1 make the register available for inspection by members of the public at all reasonable times,2 and make arrangements for the provision of a copy of an entry in the register to a member of the public on request.3 The Commission may refuse to provide access to the register or to provide a copy, unless the person seeking it pays a fee specified by the Commission.4 The Commission may not, however, specify a fee which exceeds the reasonable cost of providing the service sought (but in calculating the cost of providing a service to a person the Commission may include a reasonable share of expenditure which is referable only indirectly to the provision of that service).5 1 GA 2005, s 106(1)(a) as applied by s 128. For ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3. 2 GA 2005, s 106(1)(b) as applied by s 128. 3 GA 2005, s 106(1)(c) as applied by s 128. 4 GA 2005, s 106(2) as applied by s 128. 5 GA 2005, s 106(3) as applied by s 128.

Copy of personal licence 7.71 Under the Gambling Act 2005 the Gambling Commission is given the power to make arrangements to issue to the licensee on request a copy of a personal licence which has been lost, stolen or damaged.1 The Act further provides that such arrangements may, in particular, include a requirement for the payment of a fee2 and, in the case of a licence being lost or stolen, 455

Personal licences that the licensee has complied with specified arrangements for reporting the loss or theft to the police.3 A copy of a personal licence issued under these provisions is to be treated as if it were the licence.4 1 GA 2005, s 107(1) as applied by s 128. 2 GA 2005, s 107(2)(a). The fee cannot exceed such sum as may be prescribed for these purposes by the Secretary of State in regulations. Although regulations have been made under these provisions, it is not proposed to set them out here, as they are prone to periodic replacement. 3 GA 2005, s 107(2)(b) as applied by s 128. 4 GA 2005, s 107(3) as applied by s 128.

Production of personal licence Duty to produce licence 7.72 A constable or enforcement officer1 may require the individual who holds a personal licence to produce the licence: (1) within a specified period;2 (2)

while the individual is carrying on a licensed activity,3 immediately;4 or

(3) while the individual is on premises in respect of which a premises licence has effect, immediately.5 1 For the meaning of ‘enforcement officer’, see GA 2005, s 303 and Chapter 26. 2 GA 2005, s 108 as applied by s 128 and modified by s 134(1)(a). 3 In relation to a personal licence, ‘licensed activities’ means the functions whose performance is authorised by the licence: GA 2005, s 126(1) as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2. 4 GA 2005, s 108 as applied by s 128 and modified by s 134(1)(b). 5 GA  2005, s  108 as applied by s  128 and modified by s  134(1)(c). For ‘premises licences’, see GA 2005, Pt 8 (ss 150–213) and Chapter 10.

Offence 7.73 The holder of a personal licence commits an offence if he fails without reasonable excuse to comply with the Act’s requirements as to the production of the personal licence.1  A  person guilty of such an offence is liable on summary conviction to a fine not exceeding level 2 on the standard scale.2 1 GA 2005, s 108 as applied by s 128 and modified by s 134(2). 2 GA 2005, s 108 as applied by s 128 and modified by s 134(3).

Prosecutors 7.74 The Gambling Commission may institute criminal proceedings in respect of any offence under the Gambling Act 2005.1 The power of licensing authorities to institute criminal proceedings in respect of an offence under 456

Personal licences the Act is limited to those offences listed under s 346 of the Act,2 and does not extend to the offence of failing to produce a personal licence. 1 GA 2005, s 28; see Chapter 3. 2 GA 2005, s 346(1). However, s 346 is without prejudice to the Local Government Act 1972, s  222 (the power of local authorities to prosecute or defend legal proceedings): GA 2005, s 346(2).

Criminal conviction of holder of personal licence Personal licensee’s duties to inform Gambling Commission 7.75

If the holder of a personal licence is convicted of:

(1) any offence by or before a court in Great Britain, he must as soon as is reasonably practicable notify the Gambling Commission of his conviction and any sentence passed in respect of it;1 (2) a relevant offence by or before a court outside Great Britain, he must as soon as is reasonably practicable notify the Commission of his conviction and any sentence passed in respect of it.2 1 GA 2005, s 109(1) as applied by s 128. For the meaning of ‘conviction’, see 7.20 above. For ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3. 2 GA 2005, s 109(2) as applied by s 128. For the meaning of ‘relevant offence’, see s 126(2) and (3) and 7.26–7.27.

Personal licensee’s duty to inform court 7.76 If the holder of a personal licence is convicted of a relevant offence by or before a court in Great Britain, he must immediately inform the court that he is the holder of a personal licence.1 The significance of this is that where the holder of a personal licence is convicted of a relevant offence before a court in Great Britain, the court may order forfeiture of the personal licence2 and/or may make an order disqualifying the individual from holding a personal licence for up to ten years.3 1 GA 2005, s 109(3) as applied by s 128. 2 For forfeiture of a personal licence, see GA 2005, s 115 as applied by s 128 and 7.100 below. 3 For disqualification of an individual from holding a personal licence, see GA 2005, s 136 and 7.101 below.

Offence 7.77 The holder of a personal licence commits an offence if he fails without reasonable excuse to comply with the requirements of the Gambling Act 2005 as to notifying the Gambling Commission and/or the court.1 A person guilty of such an offence is liable on summary conviction to a fine not exceeding level 2 on the standard scale.2 1 GA 2005, s 109(4) as applied by s 128. 2 GA 2005, s 109(5) as applied by s 128.

457

Personal licences

Prosecutors 7.78 The Gambling Commission may institute criminal proceedings in respect of any offence under the Gambling Act 2005.1 The power of licensing authorities to institute criminal proceedings in respect of an offence under the Act is limited to those offences listed under s 346 of the Act and does not extend to these offences.2 1 GA 2005, s 28; see Chapter 3. 2 GA  2005, s  346(1). For a comprehensive list of those gambling offences which local authorities in England and Wales may prosecute, see n 2 to para 7.69 above. However, s 346 is without prejudice to the Local Government Act 1972, s 222 (the power of local authorities to prosecute or defend legal proceedings): GA  2005, s 346(2).

Operating licensee’s duty to inform Gambling Commission 7.79 The 2005 Act also imposes a duty on the holder of any ‘relevant operating licence’, if the holder of a personal licence is convicted of a relevant offence by or before a court, whether the court is inside or outside Great Britain.1 This duty is in addition to the duties of the holder of a personal licence to notify the Gambling Commission and the court, discussed above.2 An operating licence is ‘relevant’ if the holder of the personal licence acts in connection with a­ ctivities authorised by the operating licence.3 Where the holder of a personal licence is convicted of a relevant offence by or before a court (whether inside or outside Great Britain), the holder of any relevant operating licence must notify the Commission of the conviction and any sentence passed in respect of it as soon as is reasonably practicable after he becomes aware of it.4 1 GA  2005, s  138. For ‘relevant offence’, see s  126(2) and (3) and 7.26–7.27. For ‘operating licence’, see GA 2005, Pt 5 (ss 65–126) and Chapter 6. 2 GA 2005, s 138(6). 3 GA 2005, s 138(5). 4 GA 2005, s 138(1) and (2).

Offence 7.80 The holder of a relevant operating licence commits an offence if he fails without reasonable excuse to comply with the Act’s requirements as to notifying the Gambling Commission.1 A person guilty of such an offence is liable on summary conviction to a fine not exceeding level 2 on the standard scale.2 1 GA 2005, s 138(3). 2 GA 2005, s 138(4).

Prosecutors 7.81 The Gambling Commission may institute criminal proceedings in respect of any offence under the Gambling Act 2005.1 The power of licensing 458

Personal licences authorities to institute criminal proceedings in respect of an offence under the Act is limited to those offences listed under s 346 of the Act and does not extend to this offence.2 1 GA 2005, s 28; see Chapter 3. 2 GA 2005, s 346(1). However, s 346 is without prejudice to the Local Government Act 1972, s  222 (the power of local authorities to prosecute or defend legal proceedings): GA 2005, s 346(2).

REGULATION Review 7.82 The Act confers a number of regulatory powers in connection with personal licences upon the Gambling Commission. For the Commission’s policy approach to the exercise of these powers see its publication ‘ Licensing, compliance and enforcement under the Gambling Act 2005: policy statement March 2015’ and its ‘Statement of principles for determining financial penalties September 2009’. The Gambling Commission may review any matter connected with the performance of the functions authorised by a personal licence if the Commission: (1) has reason to suspect that the functions have not been performed in accordance with a condition of the licence;1 (2) believes that the licensee has been convicted of a relevant offence;2 (3) for any reason suspects that the licensee may be unsuitable to carry on the licensed activities, or thinks that a review would be appropriate.3 1 GA 2005, s 116(2)(a) as modified by the Gambling (Personal Licences) (Modification of Part 5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule. 2 GA  2005, s  116(2)(b) as modified by SI  2006/3267, reg  2(2) and Schedule. For ‘relevant offence’, see GA 2005, s 126(2) and (3) and 7.26–7.27. 3 GA 2005, s 116(2)(c) as modified by SI 2006/3267, reg 2(2) and Schedule. A reason may, in particular, relate to the receipt of a complaint about the performance of the functions authorised by the personal licence, but need not relate to any suspicion or belief about the performance of those functions: GA 2005, s 116(3) as modified by SI 2006/3267, reg 2(2) and Schedule.

7.83 Before commencing a review of a personal licence, the Commission must notify the licensee and inform him of the procedure to be followed in the conduct of the review.1 In conducting a review, the Commission must give the licensee an opportunity to make representations, and it may give other persons an opportunity to make representations.2 In practice, following written representations the Commission may agree to hold a hearing before its regulatory panel if the licensee so requests. 1 GA 2005, s 116(4) as applied by s 128. 2 GA 2005, s 116(5) as applied by s 128.

459

Personal licences

Regulatory powers 7.84 may:1

Following a review of a personal licence, the Gambling Commission

(1) give the holder a warning; (2) attach an additional individual condition; (3) remove or amend an existing individual condition; (4) exercise the power to suspend the licence; (5) exercise the power to revoke the personal licence; (6) exercise the power to impose a financial penalty. 1 GA 2005, s 117(1)(a) as applied by s 128.

7.85 In determining what action to take following a review of a personal licence, the Commission may have regard to a warning given to the personal licensee following an earlier review (whether or not the warning was in respect of the same personal licence).1 Where the Commission determines to take action, it must, as soon as is reasonably practicable, notify the licensee of the action and its reasons.2 1 GA 2005, s 117(3) as applied by s 128. 2 GA 2005, s 117(2) as applied by s 128.

Suspension Suspension in connection with a review of a personal licence 7.86 The Gambling Commission1 may suspend a personal licence if, following a review, it thinks any of the following conditions applies: (1) that a licensed activity is being carried on in a manner which is inconsistent with the licensing objectives;2 (2) that a condition of the licence has been breached;3 (3) that the licensee has failed to co-operate with a review;4 or (4) that the licensee is unsuitable to carry on the licensed activities.5 1 For the ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3. 2 GA  2005, ss  118(1) and 120(1)(a) as applied by s  128. In relation to a personal licence, ‘licensed activities’ means the functions whose performance is authorised by the licence: s  126(1) as applied by s  128 and modified by the Gambling (Personal Licences) (Modification of Part 5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2. Note, however, the decision in Barry Malizia and Paul Chohan v The Gambling Commission (GA/2012/0001, GA/2012/0002) (see para 7.54 above). The licensing objectives are: (a) preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime; (b) ensuring that gambling is conducted in a fair and open way; and (c) protecting children and other vulnerable persons from being harmed or exploited by gambling: GA 2005, s 1; and see Chapter 1.

460

Personal licences 3 GA 2005, ss 118(1) and 120(1)(b) as applied by s 128. For conditions, see 7.38–7.58. 4 GA 2005, ss 118(1) and 120(1)(c) as applied by s 128. 5 GA 2005, ss 118(1) and 120(1)(d) as applied by s 128. In considering the licensee’s suitability, the Commission may have regard to the integrity of the licensee, the competence of the licensee to carry on the licensed activities in a manner consistent with pursuit of the licensing objectives and the financial and other circumstances of the licensee (and, in particular, the resources available for the purpose of carrying on the licensed activities): s 120(3) as applied by s 128.

7.87 The power to suspend a personal licence on the basis that one or more of these conditions applies is not restricted to the conclusion of a review of a personal licence. The Commission may suspend a personal licence if at the time of deciding to conduct a review of a personal licence, or at any time during the course of a review, it suspects that any of the above conditions applies.1 1 GA 2005, ss 118(2) and 120(1) as applied by s 128.

Suspension otherwise than in connection with a review 7.88 The Gambling Commission may suspend a personal licence if it thinks that either of the following conditions applies: (1) that the licensee has failed to comply with a requirement of regulations made under the Act’s provisions as to notification of the Commission of a change of circumstance;1 (2) that the licensee has failed to submit the personal licence to the Commission for amendment.2 1 GA 2005, ss 118(3) and 120(2)(a) as applied by s 128. See s 101 as applied by s 128 and 7.60–7.62 for the Act’s provisions as to notification of a change of circumstance. 2 GA 2005, ss 118(3) and 120(2)(b) as applied by s 128. See s 105 as applied by s 128 as to the Act’s provisions as to amendment of a personal licence.

General 7.89 Where the Gambling Commission suspends a personal licence, it must specify the time when the suspension takes effect.1 It must also specify either a period for which the suspension is to last (which is without prejudice to the re-exercise of the power to suspend on or after the expiry of that period),2 or that the suspension is to last until some specified event occurs (which may be the giving of a notice by the Commission).3 Further, where it suspends a personal licence, the Commission may make a saving or transitional provision.4 A personal licence has no effect in respect of anything done while it is suspended.5 Where the Commission suspends a personal licence under these provisions, it must – if it believes that the holder of the personal licence is providing services to the holder of an operating licence in connection with the licensed activities – notify the holder of the operating licence of the suspension as soon as is reasonably practicable.6 1 GA 2005, s 118(4)(a) as applied by s 128. 2 GA 2005, s 118(4)(b)(i) as applied by s 128.

461

Personal licences 3 4 5 6

GA 2005, s 118(4)(b)(ii) as applied by s 128. GA 2005, s 118(4)(c) as applied by s 128. GA 2005, s 118(5) as applied by s 128. GA 2005, s 137(1)(a) and (2).

Revocation Revocation in connection with a review of a personal licence 7.90 The Gambling Commission1 may revoke a personal licence if, following a review, it thinks any of the following conditions applies: (1) that a licensed activity is being carried on in a manner which is inconsistent with the licensing objectives;2 (2) that a condition of the licence has been breached;3 (3) that the licensee has failed to co-operate with a review;4 or (4) that the licensee is unsuitable to carry on the licensed activities.5 1 For the ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3. 2 GA 2005, ss 119(1) and 120(1)(a) as applied by s 128. In relation to a personal licence, ‘licensed activities’ means the functions whose performance is authorised by the licence: s 126(1) as applied by s 128 and modified by the Gambling (Personal Licences) (Modification of Part 5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2. The licensing objectives are: (a) preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime; (b) ensuring that gambling is conducted in a fair and open way; and (c) protecting children and other vulnerable persons from being harmed or exploited by gambling: s 1; and see Chapter 1. 3 GA 2005, ss 119(1) and 120(1)(b) as applied by s 128. For conditions, see 7.38–7.58. 4 GA 2005, ss 119(1) and 120(1)(c) as applied by s 128. 5 GA 2005, ss 119(1) and 120(1)(d) as applied by s 128. In considering the licensee’s suitability, the Commission may have regard to the integrity of the licensee, the competence of the licensee to carry on the licensed activities in a manner ­consistent with pursuit of the licensing objectives and the financial and other circumstances of the licensee (and, in particular, the resources available for the purpose of carrying on the licensed activities): ss 119(2) and 120(3) as applied by s 128.

Revocation otherwise than in connection with a review 7.91 The Gambling Commission may revoke a personal licence if it thinks that either of the following conditions applies: (1) that the licensee has failed to comply with a requirement of regulations made under the Act’s provisions as to notification of the Commission of a change of circumstance;1 (2) that the licensee has failed to submit the personal licence to the Commission for amendment.2 1 GA 2005, ss 119(2) and 120(2)(a) as applied by s 128. See s 101 as applied by s 128 and 7.60–7.62 for the Act’s provisions as to notification of a change of circumstance. 2 GA 2005, ss 119(2) and 120(2)(b) as applied by s 128. See s 105 as applied by s 128 as to the Act’s provisions as to amendment of a personal licence.

462

Personal licences 7.92 The Commission must revoke a personal licence if the licensee fails to pay any fee payable in accordance with the provisions of s 132, but it can disapply this provision if it thinks the failure to pay is attributable to an administrative error.1 1 GA  2005, s  119(3) as applied by s  128 and modified by the Gambling (Personal Licences) (Modification of Part  5 of the Gambling Act 2005) Regulations 2006 (SI 2006/3267), reg 2(2) and Schedule, Table 2.

General 7.93 Where the Gambling Commission revokes a personal licence, it must specify the time when the revocation takes effect and may make saving or transitional provision.1 Where the Commission revokes a personal licence under these provisions, it must – if it believes that the holder of the personal licence is providing services to the holder of an operating licence in connection with the licensed activities – notify the holder of the operating licence of the suspension as soon as is reasonably practicable.2 1 GA 2005, s 119(4) as applied by s 128. 2 GA 2005, s 137(1)(b) and (2).

Financial penalty 7.94 The Gambling Commission may require the holder of a personal licence to pay a penalty if it thinks that a condition of the licence has been breached.1 However, before imposing a requirement on a licensee to pay a penalty, the Commission must notify him that it proposes to require him to pay a penalty,2 the amount of the proposed penalty,3 the Commission’s reasons,4 and of a period within which the licensee may make representations to the Commission.5 After the end of the period for making representations, the Commission may give the licensee a notice requiring him to pay a financial penalty.6 The Commission cannot, however, give such a notice after the end of the period of two years beginning with the day on which the breach occurred or began to occur or, if later, the day on which the breach came to the knowledge of the Commission.7 1 2 3 4 5 6 7

GA 2005, s 121(1) as applied by s 128. GA 2005, s 121(2)(a) as applied by s 128. GA 2005, s 121(2)(b) as applied by s 128. GA 2005, s 121(2)(c) as applied by s 128. GA 2005, s 121(2)(d) as applied by s 128. GA 2005, s 121(4) as applied by s 128. GA 2005, s 121(3) as applied by s 128.

7.95 A  financial penalty imposed by notice under these provisions is payable by the personal licensee to the Commission,1 and may be enforced as if it were a debt owed by the personal licensee to the Commission.2 1 GA 2005, s 121(5)(a). 2 GA 2005, s 121(5)(b) as applied by s 128. On receipt of the financial penalty by the Commission, it is to be paid into the Consolidated Fund after a deduction of a sum which represents the direct costs to the Commission of, and a reasonable share of

463

Personal licences expenditure by, the Commission which is directly referable to the investigation by the Commission of the matter in respect of which the financial penalty is imposed, or the imposition and enforcement of the penalty: s 121(5)(c) as applied by s 128.

7.96 The Commission is required to prepare a statement setting out the principles to be applied by it in exercising the powers under these provisions.1 The Commission is required to review the statement from time to time,2 and revise the statement when it thinks it is necessary.3 Before preparing or revising the statement, the Commission must consult the Secretary of State, the Lord Chancellor and such other persons as it thinks appropriate.4 As soon as is reasonably practicable, the Commission must send the statement and any revision to the Secretary of State, and publish the statement and any revision.5 The Commission must have regard to the statement when exercising a power under these provisions.6 The statement must, in particular, require the Commission to have regard to the seriousness of the breach of condition in respect of which the penalty is proposed, whether or not the licensee knew or ought to have known of the breach, and the nature of the licensee (including, especially, his financial resources) when ­considering the imposition of a financial penalty.7 1 2 3 4 5 6 7

GA 2005, s 121(6)(a) as applied by s 128. GA 2005, s 121(6)(b) as applied by s 128. GA 2005, s 121(6)(c) as applied by s 128. GA 2005, s 121(9) as applied by s 128. GA 2005, s 121(6)(d) as applied by s 128. GA 2005, s 121(6)(e) as applied by s 128. GA 2005, s 121(7) as applied by s 128.

DURATION OF PERSONAL LICENCES 7.97 Under the Gambling Act 2005 a personal licence continues to have effect unless and until it ceases to have effect in accordance with the Act’s provisions as to surrender, lapse, forfeiture or revocation of personal licences.1 1 GA 2005, s 131.

Surrender 7.98 A  personal licence ceases to have effect if the licensee notifies the Gambling Commission of his intention to surrender the licence,1 and gives the Commission either the licence or a written statement explaining why it is not reasonably practicable to produce the licence.2 1 GA 2005, s 113(a) as applied by s 128. For ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3. 2 GA 2005, s 113(b) as applied by s 128.

Lapse 7.99 A  personal licence lapses if the licensee dies.1 It also lapses if the licensee becomes, in the opinion of the Gambling Commission as notified 464

Personal licences to the licensee, incapable of carrying on the licensed activities by reason of mental or physical incapacity.2 Further, the personal licence lapses on the licensee’s bankruptcy.3 1 GA 2005, s 114(1)(a) as applied by s 128. 2 GA 2005, s 114(1)(b) as applied by s 128. A requirement under the 2005 Act to give a notice (or notify) is a requirement to give notice in writing, and for that purpose: (a) a message sent by facsimile transmission or electronic mail is to be treated as notice given in writing, and (b) a notice sent to a licensee at the address specified for that purpose in the licence shall, unless the contrary is proved, be treated as reaching him within a period within which it could reasonably be expected to reach him in the ordinary course of events: s 353(4). 3 GA 2005, s 114(1)(c); ie bankrupt within the meaning of the Insolvency Act 1986, s 381.

Forfeiture 7.100 Where the holder of a personal licence is convicted of a relevant offence by or before a court in Great Britain, the court may order forfeiture of the licence.1 Forfeiture is to be on such terms (which may include terms as to suspension) as may be specified by the court which orders forfeiture, a court to which an appeal against the conviction, or against any order made on the conviction, has been or could be made, or the High Court, if hearing proceedings relating to conviction.2 Subject to any express terms on which the forfeiture order is made, a personal licence ceases to have effect on the making of a forfeiture order under these provisions.3 The terms on which a forfeiture order is made must, in particular, include a requirement that the licensee delivers the personal licence, or a statement explaining why it is not reasonably practicable to produce the licence, to the Commission within such time as is specified in the order.4 As soon as is reasonably practicable after making a forfeiture order, the court must notify the Commission.5 Where the Commission is informed by the court of the making of a forfeiture order in respect of a personal licence under these provisions, it must – if it believes that the holder of the personal licence is providing services to the holder of an operating licence in connection with the licensed activities – notify the holder of the operating licence of the forfeiture order as soon as is reasonably practicable.6 1 2 3 4 5 6

GA 2005, s 115(1) as applied by s 128. GA 2005, s 115(2) as applied by s 128. GA 2005, s 115(3) as applied by s 128. GA 2005, s 115(4) as applied by s 128. GA 2005, s 115(5) as applied by s 128. GA 2005, s 137(1)(c) and (2).

Disqualification 7.101 A court which may order the forfeiture of an individual’s personal licence may, whether or not it makes a forfeiture order, make an order disqualifying the individual from holding a personal licence for a specified period (not exceeding ten years), beginning with the date of the order.1 The Commission must not issue a personal licence to a person while he is 465

Personal licences disqualified under these provisions.2 Disqualification is to be on such terms (which may include terms as to suspension) as may be specified by the court which makes the disqualification order, a court to which an appeal against the conviction, or against any order made on the conviction, has been or could be made, or the High Court, if hearing proceedings relating to conviction.3 Subject to any express terms on which the disqualification order is made, a personal licence ceases to have effect on the making of a disqualification order under these provisions.4 The terms on which a disqualification order is made must, in particular, include a requirement that the licensee delivers the personal licence, or a statement explaining why it is not reasonably practicable to produce the licence, to the Commission within such time as is specified in the order.5 As soon as is reasonably practicable after making a disqualification order, the court must notify the Commission.6 Where the Commission is informed by the court of the making of a disqualification order in respect of a personal licence under these provisions, it must – if it believes that the holder of the personal licence is providing services to the holder of an operating licence in connection with the licensed activities – notify the holder of the operating licence of the disqualification order as soon as is reasonably practicable.7 1 2 3 4 5 6 7

GA 2005, s 136(1). GA 2005, s 136(2). GA 2005, s 115(2) as applied by s 136(3). GA 2005, s 115(3) as applied by s 136(3). GA 2005, s 115(4) as applied by s 136(3). GA 2005, s 115(5) as applied by s 136(3). GA 2005, s 137(1)(d) and (2).

Revocation 7.102 The Gambling Commission’s powers to revoke a personal licence have been considered at 7.90–7.92.

466

Chapter 8 Appeals

APPEALS AGAINST DECISIONS OF THE GAMBLING COMMISSION 8.1 The division of licensing functions between the Gambling Commission and local authorities brought about by the GA 2005 led initially to the creation of an entirely new, specialist appellate body, the Gambling Appeals Tribunal (GAT), to hear appeals from the Commission. 8.2 The tribunals system, long seen as an unsatisfactory, an ad hoc patchwork quilt governed by numerous pieces of individual legislation and lacking in any cohesive framework or administration, was already undergoing fundamental reform when the GA 2005 came into force during the latter part of 2007. In his review of tribunals, Tribunals for Users – One System, One Service (August 2001), Sir Andrew Leggatt recommended root and branch reform of the system. He recommended primarily that tribunals should be unified in a single system entirely separate from their sponsoring government departments, administered by a single Tribunals Service under the aegis of the department responsible for the administration of justice. The Government’s response was the promotion of the Tribunals, Courts and Enforcement Act 2007 which created two new, generic tribunals, the Firsttier Tribunal and the Upper Tribunal into which many (but not all) of the existing tribunal jurisdictions would eventually be transferred. The Act also provided for the setting up of different chambers headed by a presiding judge (President) within the two tribunals so that the various jurisdictions to be transferred into the tribunals could be allocated to the most appropriate chamber. 8.3 The process of reform has taken some time to complete. As far as the GAT is concerned, it was abolished and its jurisdiction transferred to the General Regulatory Chamber (GRC) of the First-tier Tribunal with effect from 18 January 2010 by virtue of art 2(1)(c) of the Transfer of Tribunal Functions Order 2010 (TTFO).1 The effect is to bring the GAT into the unified structure for tribunals created by the Tribunal’s Courts and Enforcement Act 467

Appeals 2007. Thus after a short life, the GAT, like many of its counterparts in other fields, was consigned to history. The GAT judges were, however, transferred across to the GRC so that their expertise and experience could continue to be deployed there. 1 SI 2010/22.

8.4 A detailed exegesis of the structure, and procedural rules relating to tribunal appeals is beyond the scope of this work.1 What follows is a summary of the main procedural etc provisions with particular reference to appeals from decisions and orders of the Gambling Commission. 1 For a detailed account see Gordon et al, The New Tribunals Handbook (December 2010, Bloomsbury Professional).

Jurisdiction 8.5 Appeals to the tribunal lie against the following decisions of the Gambling Commission: •

a decision not to issue or renew an operating or personal licence;

•

a decision attaching a condition to a personal or operating licence;

•

a decision refusing to continue the effect of an operating licence when a new controller takes over;

•

a decision to refuse to vary the terms of an operating or personal licence;

•

a notification to lapse an operating or personal licence due to mental or physical incapacity;

•

a decision following a review to: (i)

attach a warning,

(ii) attach an additional condition to a licence, (iii) remove or amend a condition attached to a licence, (iv) (in the case of remote licences) make, amend or remove an exclusion; •

a decision following a review to suspend a licence;

•

a decision following a review to revoke a licence;

•

a decision following a review to impose a financial penalty on the holder of an operating or personal licence;

•

a decision to void a bet.

Procedure 8.6 Procedure is governed by the Tribunal Procedure (First-tier Tribunal) (General Regulatory Chamber) Rules 2009 (GRC Rules).1 1 SI 2009/1976 (L 20).

468

Appeals

Time limits, formalities etc 8.7 Pursuant to r 22(1)(b) of the GRC Rules the notice of appeal must be sent or delivered to the Tribunal so as to be received within 28 days of the notice of the decision of the Gambling Commission being sent to the appellant. That time limit is not, however, immutable. The extensive case management powers given to the GRC by r 5 include a power to extend the time limit for appealing.1 If the appellant provides the notice of appeal to the tribunal later than the time prescribed by r 22(1)(b) or by any extension of time granted under r 5(3)(a) the notice of appeal must include a request for an extension of time and the reason why the notice of appeal was not provided in time. 1 Rule 5(3)(a).

8.8

The notice of appeal must include:

(a) the name and address of the appellant; (b) the name and address of the appellant’s representative (if any); (c) an address where documents for the appellant may be sent or delivered; (d) the name and address of any respondent; (e) details of the decision or act, or failure to decide or act, to which the proceedings relate; (f)

the result the appellant is seeking;

(g) the grounds on which the appellant relies; (h) any further information or documents required by a practice direction.1 A copy of the GC’s decision or order must accompany the notice of appeal together with any statement of reasons for the decision or order that the appellant has or can reasonably obtain.2 1 GRC Rules, r 22(2). 2 Ibid, r 22(3).

8.9 Rules 23 and 24 provide respectively for the filing of responses to the notice of appeal by the respondent and replies thereto by the appellant.

Fees 8.10 Fees are currently at levels set by the First-tier Tribunal (Gambling) Fees Order 2010, as amended.1 The amount of the fee will depend on the nature and type of licence to which the decision relates. A fee is also payable in respect of an appeal against an order to void a bet. The prescribed fees are set out in a table in the Schedule to the Order. The fee must accompany the notice of appeal.2 Article  4 gives the Lord Chancellor discretion to reduce or even waive any fee prescribed by the Order where payment of that fee would, owing to the exceptional circumstances of the particular case, involve undue financial hardship to the appellant. Article 3 provides that no fee at 469

Appeals all is payable by persons in receipt of specified benefits known as ‘qualifying benefits’. 1 SI 2010/42. 2 GRC Rules, r 22(3A).

Effect of appeal 8.11 The general rule under GA 2005, s 145(1) is that a decision or other action of the Commission under Parts 5 or 6 of the Act is of no effect until: (a) the time limit for bringing an appeal has expired; or (b) where an appeal has been lodged, it has been finally determined or abandoned. However, when making a decision or taking other action under Parts 5 or 6 of the Act, the Gambling Commission may, by virtue of s 145(2), direct that the stay of execution prescribed by s  145(1) shall not apply to the case in question. 8.12 Rule 19A of the GRC Rules, gives the Tribunal a power to suspend the effect of a decision of the Gambling Commission on application being made in writing,1 whether or not the decision has already taken effect while an appeal against that decision: (a) could be brought within the time required by the Rules; or (b)

has been brought and has not yet been finally determined or withdrawn.

1 GRC Rules, r 20(2).

The hearing 8.13 Pursuant to r 32 the Tribunal must hold a hearing unless each party has consented to the matter being determined without a hearing and the Tribunal is satisfied that it can properly determine the issues without a hearing. 8.14 The appeal is by way of a rehearing. Thus, by virtue of GA  2005, s 144(4), the Tribunal may take account of evidence which was not available to the Commission when determining an appeal. Section 144(3) requires the Tribunal to have regard to any relevant provision of a code of practice issued by the Commission under s 24. 8.15 Part 2 of the GRC  Rules gives the Tribunal extensive powers to regulate its own proceedings. These include power to: •

decide the form of any hearing;1

•

decide preliminary issues;2

•

give directions relating to the conduct or disposal of proceedings3 – these may include directions as to:

470

Appeals (i)

exchange and inspection of documents;4

(ii) the issues on which it requires evidence and/or submissions;5 (iii) the nature of the evidence and/or submissions it requires;6 (iv) expert evidence;7 (v) the number of witnesses a party may call whether in relation to a particular issue or generally;8 (vi) the manner in which evidence or submissions are to be provided ie  whether orally at the hearing or in the form of written submissions or witness statements;9 •

summon witnesses;10

•

stay proceedings;11

•

strike out a party’s case.12

  1 GRC Rules, r 5(3)(g).   2 GRC Rules, r 5(3)(e).   3 GRC Rules, r 5(2).   4 GRC Rules, r 15(1)(a).   5 GRC Rules, r 15(1)(c).   6 GRC Rules, r 15(1)(d).   7 GRC Rules, r 15(1)(e).   8 GRC Rules, r 15(1)(f).   9 GRC Rules, r 15(1)(g). 10 GRC Rules, r 16. 11 GRC Rules, r 5(3)(j). 12 GRC Rules, r 8.

8.16 The Tribunal is not bound by the strict rules of evidence. It may also admit evidence that was not available to the original decision maker.1 There is, however, discretion to refuse to admit evidence if, for example, it was provided in a manner that did not comply with a direction or where it would be otherwise unfair to admit the evidence.2 1 GRC Rules, r 15(2)(a). 2 GRC Rules, r 15(2)(b).

8.17 The GA  2005, s  144(1) governs the powers of the Tribunal. Thus, where the Tribunal determines an appeal against a decision of, or action taken by, the Commission it may: (a) affirm the Commission’s decision or action; (b) quash the Commission’s decision or action in whole or in part; (c)

substitute for all or part of the Commission’s decision or action another decision or action of a kind that the Commission could have taken;

(d) add to the Commission’s decision or action a decision or action of a kind that the Commission could have taken; (e) remit a matter to the Commission (generally, or for determination in accordance with a finding made or direction given by the Tribunal); (f)

reinstate a lapsed or revoked licence. 471

Appeals 8.18 Section 144(2) provides that in determining an appeal instituted out of time or following a direction under its rules, the Tribunal may, in addition to the matters specified in s  144(1) above, make any order that it thinks appropriate.

Costs 8.19 Orders for costs are governed by r 10 of the GRC Rules. The Tribunal may make an award of costs only: (a) in respect of wasted costs; (b)

if it considers that a party has acted unreasonably in bringing, defending or conducting the proceedings; or

(c) as against the Gambling Commission if it considers that the decision, direction or order appealed against was unreasonable.1 1 GRC Rules, r 10(1).

8.20 If the Tribunal allows an appeal against a decision of the Gambling Commission, the Tribunal must, unless it considers that there is a good reason not to do so, order the Commission to pay to the appellant an amount equal to any fee paid by the appellant under the First-tier Tribunal (Gambling) Fees Order 2010 that has neither been included in an order for costs nor refunded.1 1 GRC Rules, r 10(1)(A).

8.21 An order for costs may be made by the Tribunal on application or on its own initiative. Applications must be made in writing to the Tribunal and copied to the party against whom the order is sought.1 1 GRC Rules, r 10(3).

Appeals from the First-tier Tribunal 8.22 Appeals from the First-tier Tribunal lie to the Upper Tribunal on a point of law only. Appeals from the Upper tribunal lie to the Court of Appeal, again in respect of matters of law only.

APPEALS AGAINST DECISIONS OF A LICENSING AUTHORITY Introduction 8.23 It has been seen that appeals against decisions and orders of the Gambling Commission are dealt with by professional judges having particular expertise and experience in the subject matter, pursuant to a sophisticated procedural regime. This properly befits appeals in matters which may be highly complex and where very large sums of money may be 472

Appeals at stake. Under the regime in force prior to the coming into force of GA 2005, appeals from the decisions of betting and gaming licensing justices lay to the Crown Court. Those appeals were decided by professional judges assisted by experienced betting and gaming licensing justices usually from divisions close to that of the betting and gaming licensing committee whose decision was subject to appeal. 8.24 The GA  2005 purposefully removed the right of appeal from the Crown Court and gave the magistrates’ court jurisdiction to hear appeals against the decisions of licensing authorities. Although magistrates’ courts may be presided over by professional district judges, that is not invariably the case. Further, district judges may not hear a sufficient number of appeals to develop expertise in the subject-matter, the vast majority of their time being taken up hearing criminal cases. The loss of their betting and gaming licensing jurisdiction also means that lay magistrates are even less likely to develop expertise in, or even a ‘feel’ for adjudicating on gambling licensing appeals. 8.25 It may be that following the extensive review of our gambling laws during the early part of this millennium, a golden opportunity to create a specialist body to determine appeals against the decisions of local licensing authorities was lost. Similar issues to those decided by specialist planning inspectors frequently arise in relation to premises licensing under the GA  2005. Although not necessarily coterminous, it perhaps seems strange that in the 21st Century such a two-tier system of appeals should have been created. Appeals in relation to operating and personal licences are determined by professional judges with specific expertise and experience, whereas appeals in relation to decisions concerning the premises that may be required to give those licences any commercial viability are decided at the lowest level in the court system, potentially by lay persons with no expertise whatsoever in the subject-matter. 8.26 Another significant change brought about by the GA 2005 relates to the persons who may appeal decisions of the local licensing authority. Under the old regime it was not possible for an unsuccessful objector to appeal to the Crown Court against the grant of a licence. Now, any person who made representations in relation to an application may appeal. 8.27 In the case of a review of a licence, in addition to the licensee, the person requesting the review (even where the licensing authority throws out the request because it is regarded as frivolous), any person who made representations in respect of the review may appeal.

Jurisdiction 8.28 Appeals lie to the magistrates’ court against decisions of a licensing authority in respect of applications for the grant of a premises licence or a provisional statement, applications to vary or transfer a premises licence, applications for a copy of a premises licence and decisions on an application to review a premises licence. 473

Appeals 8.29 (i)

Appeals will also lie against decisions in respect of: gaming machine permits for a family entertainment centre;

(ii) the registration of a society promoting a small society lottery; (iii) club gaming and club machine permits; (iv) licensed premises gaming machine permits; (v) prize gaming permits; (vi) temporary use notices; (vii) removal of exemptions from licensed premises.

Time limits 8.30 In cases other than those relating to Temporary Use Notices, where appeals must be brought within 14 days beginning with the day on which the appellant receives notice of the action against which the appeal is brought, the appeal must be brought within 21 days beginning with the day on which the appellant receives notice of the decision against which the appeal is brought. These time limits are, on the face of it, immutable in the sense that there is no power vested in either the licensing authority or the magistrates’ court to extend them. This again accords with the procedure in respect of other local authority decisions where an appeal lies to the magistrates’ court (eg in respect of statutory nuisance abatement notices). 8.31 By virtue of GA  2005, s  207(1) the appeal must be made to the magistrates’ court for the local justice area in which the relevant premises are situated. Rule 34 of the Magistrates’ Courts Rules 19811 provides that where under any enactment an appeal lies to a magistrates’ court against the decision or order of a local authority or other authority, or other body or person, the appeal shall be by way of complaint for an order. Complaint for an order is therefore the prescribed procedure in respect of appeals against the decisions of licensing authorities. 1 SI 1981/552.

Effect of appeal 8.32 By GA  2005, s  208(1) the effect of any decision of the licensing authority under Part 8 of the Act is stayed while an appeal under s 206: (a) could be brought; or (b) has been brought and has not yet been either finally determined or abandoned; unless the licensing authority making a determination or taking other action under that Part gives a direction to the contrary effect under s 208(2). However, in that event, it is open to the magistrates’ court to which any appeal is made to give any order in respect of the direction that it considers appropriate. Clearly the power under s 208(2) is a draconian power that could destroy a 474

Appeals business in the time between the giving of a decision and the determination of an appeal, thereby rendering the latter academic. It is therefore right that there should be an appropriate check on its use by the licensing authority. It is submitted that a direction under s 208(2) should only be made as a last resort, where it is manifestly in the public interest.

Procedure at the hearing 8.33 Rule 14 of the Magistrates’ Courts Rules 1981 in large measure prescribes the procedure to be adopted at the hearing of complaints. Thus, on the hearing of a complaint: (i)

except where the court determines under s  53(3) of the Magistrates’ Courts Act 1980 to make the order with the consent of the defendant without hearing evidence, the complainant shall call his evidence and, before doing so, may address the court;

(ii) at the conclusion of the evidence for the complainant the defendant may address the court, whether or not he afterwards calls evidence; (iii) at the conclusion of the evidence, if any, for the defence, the complainant may call evidence to rebut that evidence; (iv) at the conclusion of the evidence for the defence and the evidence, if any, in rebuttal, the defendant may address the court, if he has not already done so; (v) either party may, with the leave of the court, address the court a second time, but where the court grants leave to one party, it shall not refuse leave to the other; (vi) where the defendant obtains leave to address the court for a second time, his second address shall be made before the second address, if any, of the complainant. 8.34 The procedure is formal and evidence is taken on oath. Witnesses may be cross-examined by either party. The rules of evidence are, however, relaxed. They are quite different from the rules applicable in criminal and civil cases. Licensing is a quasi-administrative jurisdiction akin to planning. Thus, a magistrates’ court exercising its appellate jurisdiction in a licensing matter may properly receive hearsay evidence and unproven documents. Clearly, of course, the court must act fairly. Generally speaking, therefore, admissibility is determined by relevance rather than by reference to formal exclusionary rules. Once admitted, however, the weight to be attached to any particular piece of evidence is entirely a matter for the court. For a detailed discussion of the principles applicable see R  v Westminster City Council v Zesfair Ltd.1 1 (1989) LGR 288.

The nature of the appeal and relevance of the decision below 8.35 It has long been established that appeals against decisions of licensing authorities are, by convention, by way of a complete rehearing.1 475

Appeals Difficult issues, have, however, arisen over the years over precisely what is meant by the expressions ‘complete’ or ‘total’ rehearing. There appears to be an absence of any comprehensive judicial analysis in English or Scots law on the question. As a result the expressions ‘total rehearing’, ‘hearing de novo’ etc have been bandied about quite loosely over the years by both advocates and judges alike. 1 See eg Sagnata Investments v Norwich Corporation [1971] 2 QB 614; R (Chief Constable of Lancashire) v Preston Crown Court [2001] EWHC Admin 928.

8.36 An interesting analysis of the nature of statutory appeals can, however, be found in the Australian case of Wigg v Architects Board1 where Cox J  analysed the various types of appeal from decisions of judicial and administrative bodies that may be created by statute, identifying three broad categories namely: (a) appeals ‘strictly so called’ where the question is whether the decision complained of was right when given and there is no question of introducing fresh evidence in the appeal court. All that is decided is whether the court below came to the right decision on the material that was before it; (b) appeals by way of rehearing where new evidence could be introduced. Here the question is whether the decision below ought to be affirmed or reversed in the light of the material before the appeal court at the time it hears the appeal; (c)

appeals de novo where the appeal is conducted as an original cause and all the evidence is given afresh unless the parties agree to the material used before the original body being used on the appeal. The appeal court will determine the matter on the basis the material presented at the appeal hearing untrammelled in any way by the decision made below.

1 (1984) 36 SASR 111 at 112–113.

8.37 As Cox J observed, the mere fact that a statute provides that an appeal is ‘by way of rehearing’ is not in itself definitive as to the precise nature of the appeal. That can only be determined as a matter of statutory interpretation following a detailed examination of the instrument as a whole.1 1 (1984) 36 SASR 111 at 113; see also Westmite Pty Ltd v Law Society of South Australia (1999) 73 SASR 454 at 455.

8.38 A similar approach has been taken by courts in England and Wales. For example in R v Secretary of State for Communities and Local Government, ex p Martin Perrett Richards LJ said: ‘Thus it does not follow from the use of the word “rehearing” that the Secretary of State is required to hear the enforcement notice appeal de novo and reach an entirely fresh decision. What a rehearing requires depends on the context.’1 1 [2009] EWCA Civ 1365, para 24.

476

Appeals 8.39 The juridical nature of appeals from decisions of local authorities exercising a licensing jurisdiction was explored in Hope and Glory Public House Ltd v City of Westminster Magistrates’ Court.1 The case concerned an appeal to the magistrates’ court pursuant to s  181 of the Licensing Act 2003, from a decision of Westminster City Council to impose conditions on a licence for a public house. The key issue on the merits was whether noise caused by customers congregating outside the premises was a public nuisance. 1 [2010] EWCA (Civ) 707.

8.40 A preliminary issue was raised in the Hope and Glory case as to how the district judge should treat the decision below. He ruled that he would: (i)

note the decision;

(ii) not lightly reverse it; (iii) only reverse it if satisfied that it was wrong; (iv) hear evidence on the appeal; (v) consider the licensing objectives, the statutory guidance, the council’s policy and relevant legal authorities. 8.41 The district judge in the Hope and Glory case went on to say that he was not concerned with the manner in which the council approached its decision or the process by which it was made; that was a matter for judicial review. After a lengthy hearing he dismissed the appeal stating that he was satisfied that the council’s decision was right. 8.42 The Court of Appeal in upholding the decision of Burton J noted that the Licensing Act 2003 was designed to effect major changes to the licensing system, integrating the licensing of a number of activities that had previously been the subject of a patchwork system of regulation. Overall responsibility for the new regime had been devolved on local authorities on the basis that they were more accountable and accessible than the magistrates and had developed a leading statutory role in preventing local crime and disorder. 8.43 The court accepted, as did the parties, that an appeal against a licensing decision was a rehearing in the sense that the parties were all entitled to call evidence and the court was obliged to make its decision on the basis of the full material before it. The appellant had argued that the requirement for the court to have regard to the original decision did not impose a legal burden on the appellant. The burden of proving a public nuisance should remain on the council’s officers as it had been when the matter was before the licensing authority. 8.44 The court eventually narrowed the issues down to three, namely: (i) how much weight was the district judge entitled to attach to the decision of the licensing authority; (ii) was he right in holding that the appeal should be allowed only if he was satisfied that the decision of the licensing authority was wrong; (iii) was his ruling compliant with art  6 of the European Convention on Human Rights? 477

Appeals 8.45 As regards the first question, the court held that it was impossible to give a formulaic answer because it might depend on a variety of factors such as the nature of the issue, the nature and quality of the reasons given by the licensing authority and the nature and quality of the evidence on the appeal. Licensing authorities often had to resolve a number of difficult and competing questions none of which was susceptible to black-and-white answers. Although in one sense they were questions of fact, in another they were value judgments regarding what might be considered reasonably acceptable in a particular location. Deciding what conditions, if any, should be attached to a licence as a matter of necessity and proportionality was, par excellence, a matter of judgment rather than a matter of pure fact. It was therefore difficult to separate out the matters of pure fact from matters of judgment. The evidence called on appeal might place an entirely different complexion on the decision of the licensing authority. For example a person whose representations were accepted by the licensing authority might be totally discredited when subjected to cross-examination at the appeal. On the other hand the evidence might have no impact on the correctness of the decision below. 8.46

At para 45 Toulson LJ said: ‘Given all the variables, the proper conclusion to the first question can only be stated in very general terms. It is right in all cases that the magistrates’ court should pay careful attention to the reasons given by the licensing authority for arriving at the decision under appeal, bearing in mind that Parliament has chosen to place responsibility for making such decisions on local authorities. The weight which the magistrates should ultimately attach to those reasons must be a matter for their judgment in all the circumstances, taking into account the fullness and clarity of the reasons, the nature of the issues and the evidence given on the appeal.’

8.47 On the second issue the court rejected the argument that Lord Goddard’s dictum in Stepney Borough Counsel v Joffe1 was confined to cases where the original decision was based on ‘policy’ as opposed to factual or other considerations. Toulson LJ doubted the practicability of such an approach as it was ‘unreal’ to assume that all decisions could be compartmentalised in the way suggested. Indeed the issue in Joffe was not a ‘policy’ issue at all; it was simply whether street traders convicted of relatively minor offences should be deprived of their livelihoods by having their trading licences revoked. 1 [1949] 1 KB 599 ie to the effect that it is the function of an appeal court to overturn a decision only if it was satisfied that the decision below is wrong, not merely because it is not satisfied that it was right.

8.48 Placing the burden of persuading an appellate court that it should reverse the decision taken below on the appellant was the norm. In the case of statutory appeals to magistrates’ courts from the decisions of local authorities this was specifically envisaged in the Magistrates Courts Rules. There was no indication in the 2003 Act that Parliament intended to create an exception to the general rule, particularly in cases where the exercise of 478

Appeals the licensing authority’s discretion to impose conditions on a licence was the issue. 8.49 On the third issue the court ruled that the approach taken by the district judge was compliant with art  6 of the European Convention on Human Rights. 8.50 The court did, however, go on to doubt the correctness of district judge’s ruling that he was not concerned with the way in which the licensing authority approached its decision or the process by which it was made. The magistrates’ court’s ability to remit the case to the authority for disposal in accordance with the direction of the court was the natural remedy in the case of an error of law by the authority. 8.51 Further guidance to the correct approach to be taken was given in R  on the application of Townlink Ltd v Thames Magistrates Court1 where in giving an ex tempore judgment following an appeal pursuant to s  181 of the Licensing Act 2003, the district judge had said: ‘I  start with having to consider if the decision of the committee was wrong.’ 1 [2011] EWCH 898.

8.52 On an application for judicial review, the Administrative Court held that this was the wrong approach. Lindblom J  said that the correct approach was for the district judge to arrive at his own conclusions on the merits of the appeal applying the principles prescribed by the legislation and proportionality. Although he was obliged to bear in mind the decision of the democratically elected authority, he had to do this by considering whether because he disagreed with the decision below in the light of the evidence called on the appeal, that decision was therefore wrong. 8.53 A very similar approach was taken by the Court in R on the application of Developing Retail Ltd v East Hampshire Magistrates’ Court1 decided some two weeks after Townlink. Clare Mongomery QC sitting as a Deputy High Court Judge said: ‘The correct approach to be taken by a magistrates’ court on appeal when it is being asked to consider a licensing decision made by a local authority has been considered recently in Hope and Glory Public House Limited v City of Westminster Magistrates’ Court and Others [2010]  EWCA (Civ) 707, where the court held that the magistrates’ court must pay careful attention to any reasons given by the licensing authority for arriving at any decision under appeal, bearing in mind that Parliament has chosen to place primary responsibility for making such decisions on local authorities. The weight which magistrates should ultimately attach to those reasons is a matter for their judgment in all the circumstances, taking into account the fullness and clarity of any reasons provided, the nature of the issues and the evidence given on appeal. What the magistrates’ court must do is consider whether, having taken the decision of the licensing authority into account, it is “wrong on the basis of the evidence put before the magistrates’ court.” In deciding whether the decision of the licensing committee is wrong the magistrates’ court is not considering any question of Wednesbury 479

Appeals unreasonableness since it is not a process of judicial review, it is instead a fresh evidential hearing. This means that the task of the magistrates’ court, having heard the evidence and specifically addressed the decision of the authority below, is to give a decision whether, because they disagree with the decision below in the light of the evidence, it is wrong. The magistrates therefore have power not merely to review the decision on the grounds of an error of law but also on its merits. It is however for the appellant before the magistrates court to persuade the court that it should reverse the order under appeal, and in cases where a statutory discretion to attach conditions has been exercised, the magistrates’ court should normally consider whether the exercise of discretion was wrong in the light of the reasons given for that exercise and the form of the conditions, rather than considering the discretion afresh in the hearing of the appeal.’2 1 [2011] EWCH 618 (Admin). 2 [2011] EWCH 618 (Admin), paras 29 and 30.

8.54 If the magistrates’ court does decide to allow an appeal from the decision of a licensing authority it is absolutely crucial that it should make a specific finding that the authority’s decision is wrong and to articulate its reasons for that finding. 8.55 In Gateshead Council v Graham Crozier1 a magistrates’ court had allowed a taxi-driver’s appeal against a council’s decision to revoke his Hackney Carriage licence. The council had determined that he was not a fit and proper person to hold a licence on the basis of a long-standing history of directing aggression and abuse at its officers. The respondent’s appeal to the magistrates’ court was allowed. Their reasons stated that although having evaluated all the evidence they understood the licensing authority’s concerns, they noted that the only matter involving a complaint from a member of the public was in 2006. Accordingly they stated that: ‘In considering whether Mr Crozier is a fit and proper person to hold a Hackney Carriage licence, we have given careful consideration to all the circumstances and on the balance of probabilities have concluded that he is. This appeal is therefore granted. We reiterate that the Council’s approach to their decision was not flawed, it is simply that we have reached a different conclusion.’ 1 [2014] EWHC 2097 (Admin).

8.56 The case as conducted on appeal to the magistrates appears to have proceeded very much on the same basis as it did before the council. There appears to have been very little by way of new material or evidence presented at the appeal hearing. There also appears to have been little or no dispute as to the facts. 8.57 The council appealed to the High Court by way of case stated. The court allowed the appeal on the basis that the magistrates had not expressed any conclusion that the decision of the council was wrong and had indeed made a specific finding that it was ‘not flawed’. To that extent they had 480

Appeals misdirected themselves in law. The matter was therefore remitted for them to reconsider in the light of the High Court’s ruling. The nature of the error did not require reconsideration by a differently constituted bench. 8.58 It seems clear that the High Court would not have sent the matter back had the magistrates stated that they found the council’s decision to be wrong and articulated sensible reasons for so finding. The court specifically held that it would have been open to the magistrates to come the view that Mr Crozier’s good driving record was more significant in assessing whether he was a fit and proper person to hold a licence than his behaviour towards council officers. 8.59 It can be seen that in Crozier the primary issue was neither ‘policy’ nor ‘factual’ but rather took the form of a value judgment made on the basis of facts that were essentially agreed. It therefore follows that it would have been open to the magistrates to arrive at a different value judgment as to the appellant’s fitness to hold a licence if they concluded that the council had been wrong because it attached too much weight to his conduct vis-à-vis council officers and not enough to his overall good driving record, despite the fact that no new evidence was called on the appeal. 8.60 Although Hope and Glory and the decisions that follow were not appeals brought under the GA  2005, their subject matter is in pari materia with such appeals. Accordingly they are clearly authoritative in the context of appeals from the decisions of licensing authorities brought under that Act. Such appeals are, therefore, appeals by way of rehearing in the second sense enunciated by Cox J in Wigg v Architects Board as opposed to true appeals de novo in the third sense. 8.61 The principles to be derived from those decisions may therefore be summarised as follows: (a) the burden of proof is on the appellant to show that the decision below was wrong; (b) although the magistrates’ court must have regard to the decision of the licensing authority, the weight to be attached to it will vary according to the circumstances of the case; (c)

there is no rule that ‘great weight’ should automatically be attached to that decision or that the magistrates’ court should be ‘slow’ to depart from it; the weight to be given to the decision below will depend on all the circumstances;

(d) there may be cases where no weight at all can be attached to it, for example because on an examination of what occurred before the licensing authority and/or of the reasons given for its decision, errors of law have been made or procedural irregularities have occurred making it clearly ‘wrong’; (e) in other cases, although no new evidence has been called, the magistrates’ court may conclude that the decision was wrong because the licensing authority has attached too much weight to a particular factor or factors and not enough to others; 481

Appeals (f)

where new evidence is led on appeal, this may put such a different complexion on the matter, as to lead the magistrates’ court to conclude that even though the decision was not wrong at the time it was made, it is wrong in the light of that new evidence;

(g) in some cases, even though extensive new evidence is led on appeal, the magistrates reach the same conclusion as the licensing authority, leading them to conclude that the decision was clearly right; (h) these principles apply whatever the nature of the issues in the appeal; it makes no difference whether they concern policy, findings of fact or value judgments; (i)

if the magistrates’ court allows the appeal it should make a specific finding that the decision of the licensing authority was wrong and articulate its reasons for so finding.

Powers on determination 8.62 On the determination of an appeal from the licensing authority the magistrates’ court may: (a) dismiss the appeal; (b) substitute for the decision appealed against any decision that the licensing authority could have made; (c)

remit the case to the licensing authority to decide in accordance with a direction of the court;

(d) make an order about costs.1 1 GA 2005, s 207(3).

Costs 8.63 There has been a good deal of case law concerning the award of costs in licensing cases where similarly worded powers are conferred on magistrates and on Crown Courts. Basically there is no principle in licensing that costs follow the event, and special considerations apply when considering awards of costs against local authorities. 8.64 In R v Crown Court at Stafford, ex p Wilf Gilbert (Staffs) Ltd1 the court was concerned with a refusal by a Crown Court to award costs against trade objectors who had unsuccessfully opposed an appeal against the refusal to grant a betting office licence. The successful appellant sought a judicial review of the Crown Court’s refusal to award costs, contending that costs should follow the event, as was the normal rule in civil and criminal proceedings. Rule 12 of the Crown Court Costs Rules 1982 was worded similarly to s 207(3) of the Gambling Act 2005 in that it provided that ‘… the Crown Court may make such order for the costs as it thinks just’. Scott Baker J held that the rules relating to costs in civil and criminal proceedings did not apply in relation to applications for betting office licences made under the Betting Gaming and Lotteries Act 1963. He went on to say, obiter, that such proceedings were 482

Appeals administrative in nature, being more akin to proceedings before inspectors in planning appeals under the Town and Country Planning Acts, where costs were awarded only if a party could be said to have acted unreasonably. Amongst other things, the court will wish to consider the nature of the proceedings and the status and behaviour of the parties. 1 [1999] 2 All ER 955.

8.65 In Bradford City Metropolitan District Council v Booth1 the court was considering the exercise of the power by the magistrates under s 64(1) of the Magistrates’ Courts Act 1980 to make such order as to costs as it thinks just and reasonable, a power which is comparable with the power to award costs under s 207(3) of the Gambling Act 2005. Lord Bingham said: ‘1. Section 64(1) conferred a discretion on a magistrates’ court to make such order as to costs as it thought just and reasonable; that provision applied both to the quantum of the costs, if any, to be paid, but also as to the party, if any, which should pay them. 2.

What the court would think just and reasonable would depend on all the relevant facts and circumstances of the case before it. It might think it just and reasonable that costs should follow the event, but need not think so in all the cases covered by the subsection.

3.

Where a complainant had successfully challenged before justices an administrative decision made by a police or regulatory authority acting honestly, reasonably, properly and on grounds that reasonably appeared to be sound, in exercise of its public duty, the court should consider, in addition to any other relevant fact or circumstances, both (i)

the financial prejudice to the particular complainant in the particular circumstances if an order for costs was not made in his favour; and

(ii) the need to encourage public authorities to make and stand by honest, reasonable and apparently sound administrative decisions made in the public interest without fear of exposure to undue financial prejudice if the decision was successfully challenged.’ Although this decision was concerned with awards of costs against a regulatory body acting as a licensing authority, similar principles might be applied in the case of a public body such as a town or parish council, or indeed a police force intervening in licensing proceedings in the public interest, either in its role as a statutory consultee or as a responsible authority or interested party. 1 (2000) COD 338; (2000) 164 JP 485.

8.66 The principles governing awards of costs against local authorities in licensing matters were further discussed in Crawley Borough Council v Attenborough.1 Here the court was concerned with a successful appeal to the magistrates’ court against a decision made by a local licensing authority 483

Appeals under the Licensing Act 2003. In that case the magistrates did make an award of costs in favour of the successful appellants against the local licensing authority, who then appealed against the award by way of case stated. In awarding costs the magistrates gave the following reason for their decision: ‘We were entitled to make an order as to costs in accordance with our discretion as we had considered all the circumstances concerning the facts and the history of the case and awarded costs against Crawley Borough Council as were just and reasonable given the variation made.’ And a little earlier in the main paragraph of the case, setting out the basis for their decision, they said: ‘There is no real problem relating to noise nuisance from the interior of the Royal Oak Public House having heard the evidence of Mr Petrou and Mr Burns and visiting the premises itself.’ 1 [2006] EWHC 1278 (Admin).

8.67 In declining to interfere with the justices’ decision, Scott Baker  LJ (who it will be observed also delivered the judgement in the Wilf Gilbert case) said: ‘Be that as it may, the justices did give reasons for their decision in the present case, the reasons to which I have referred. For my part I think, first of all, there is no obligation on justices in cases of this kind to go in detail into the reasons for their decision, and it is sufficient that they have made it clear that they appreciated the principle under which they were operating. Secondly, I make the general observation that it seems to me highly undesirable that the courts should do anything to encourage satellite litigation on questions such as costs. It is plain from section 181 and also, so far as material, section 64(1) of the Magistrates’ Court Act 1980 that in a case of this kind the justices have a very wide discretion in what costs order they see fit to make. They will, after all, have heard the appeal, which in this case took something in the region of two days. Mr Miller submits that they went wrong because they ordered the local authority to pay all of the appellant’s costs without making a finding that the local authority had behaved unreasonably. In my judgment, he is seeking to import into the magistrates’ discretion something that the statute does not specifically say. Further, Mr Miller refers to the reasons for the court’s decision as originally provided, but it seems to me that the critical matter in this case is what was said in the stated case after no doubt more careful consideration.’ (italics supplied) The Administrative Court has, therefore, clearly set its face against giving any encouragement to ‘satellite litigation’ on costs by reasserting the very wide discretion given to magistrates in this area and its reluctance to interfere. 484

Appeals The decisions make it plain that any party seeking to overturn a decision as to costs, whichever way that decision went, will have a very considerable threshold to cross. It is always a tall order for a court to make a finding that a public authority has acted in bad faith. 8.68 In Uttlesford District Council v English Heritage1 the licensing authority had imposed a noise condition on the grant of a premises licence under LA  2003 that was so vague and subjective as to be probably unworkable. Following a noise survey, English Heritage sought a variation of the condition to bring it in line with the specific recommendations of the survey. The licensing authority rejected the variation and refused to engage in any meaningful negotiation on the matter. English Heritage appealed and following a fully contested hearing, the magistrates’ court varied the condition as requested and awarded costs against the licensing authority. The justices were concerned that the failure of the authority to engage with English Heritage had led to an unnecessary contested hearing before them. Further, there was a precedent for the type of condition proposed by English Heritage in respect of another historic house in the area. The authority appealed to the High Court by way of case stated against the award of costs. Pitchford J  held that it was open to the justices to award costs against the authority and that in the particular circumstances of the case they had made no error of law. 1 [2007] EWHC 816 (Admin).

485

Chapter 9 The licensing authority: constitution and procedure

9.1

The following are licensing authorities under the GA 2005:

(a) In England: (i)

a district council;

(ii) a county council for a county in which there are no district councils; (iii) a London borough council; (iv) the Common Council of the City of London; and (v) the Council of the Isles of Scilly.1 (b) In Wales: (i)

a county council; and

(ii) a county borough council.2 (c) In Scotland, a licensing board constituted under s  1 of the Licensing (Scotland) Act 1976.3 In addition the Sub-Treasurer of the Inner Temple and the Under-Treasurer of the Middle Temple are licensing authorities for the purpose of granting licensed premises gaming machine permits under s 283 and Sch 13 of the GA 2005.4 1 2 3 4

GA 2005, s 2(1)(a). GA 2005, s 2(1)(b). GA 2005, s 2(1)(c). GA 2005, s 2(2).

LICENSING AUTHORITY FUNCTIONS Premises licences 9.2 The licensing authority is the authority responsible for the grant,1 variation,2 transfer,3 acceptance of surrender,4 revocation,5 reinstatement 487

The licensing authority: constitution and procedure following lapse,6 and review7 of premises licences. In addition, it is the authority responsible for the grant of applications for provisional statements.8 These functions are all to be found in Part 8 of the GA 2005. They must also prepare, consult on and publish a three-year statement of principles they will apply in exercising their functions under the Act.9 In England and Wales the licensing authority’s functions in relation to premises licences are delegated to the authority’s licensing committee established under s 6 of the Licensing Act 2003.10 In Scotland a licensing authority may arrange for the discharge of any of their functions in connection with premises licences by a committee of the authority, a member or members of the authority, the clerk of the authority, or any person appointed to assist the clerk.11 The statutory scheme of delegation is considered in more detail at 9.11–9.20 below.   1 GA 2005, ss 159 and 164.   2 GA 2005, s 187.   3 GA 2005, s 188.   4 GA 2005, s 192.   5 GA 2005, s 193.   6 GA 2005, s 195.   7 GA 2005, s 201.   8 GA 2005, s 204.   9 GA 2005, s 349. 10 GA 2005, s 154(1). 11 GA 2005, s 155(1).

Temporary use notices 9.3 The licensing authority has a number of functions under Part 9 of the GA 2005 in connection with temporary use notices, in particular the receipt and acknowledgement of such notices, the giving of notice of objection (where appropriate), the hearing of objections, the giving of counter-notice (where appropriate) and the endorsement of temporary use notices. In England and Wales the licensing authority’s functions under Part 9 are delegated to the authority’s licensing committee established under s  6 of the Licensing Act 2003.1 In Scotland a licensing authority may arrange for the discharge of any of their functions under Part 9 by a committee of the authority, a member or members of the authority, the clerk of the authority, or any person appointed to assist the clerk.2 However, in both cases the power to issue a counter-notice may not be delegated to an officer.3 1 GA 2005, s 232(1). 2 GA 2005, s 233(1). 3 GA 2005, s 232(3) (England and Wales); s 233(2) (Scotland).

Miscellaneous functions 9.4 Licensing authorities have a number of miscellaneous functions, principally in granting permits to premises for particular kinds of gambling, and thereafter monitoring gambling on those premises. These can be summarised as follows: (1) Determination of applications for family entertainment centre gaming machine permits to permit use of Category D machines.1 In England and 488

The licensing authority: constitution and procedure Wales the power is automatically delegated to the licensing committee, and in Scotland the licensing authority may itself delegate the power.2 (2) Determining applications for club gaming permits,3 and club machine permits4 under Sch 12. In England and Wales the power is automatically delegated to the licensing committee, and in Scotland the licensing authority may itself delegate the power.5 (3) Receipt of written notice from an on-premises alcohol licence holder of their intention to make up to two Category C or D gaming machines available for use on their premises.6 (4) Determination of applications for licensed premises gaming machine permits under the GA 2005, s 283 and Sch 13. The application is made to the licensing authority which is the licensing authority under the Licensing Act 2003 in its capacity as a licensing authority under the GA  2005.7 The determination of the application will, in England and Wales, automatically be delegated to the licensing committee,8 and in Scotland the licensing authority may itself delegate the hearing of the application. (5) The making of orders disapplying s  279 (provision of equal chance gaming on premises holding an on-premises alcohol licence) and s  282(1) (automatic entitlement to up to two gaming machines of Categories C or D for premises with on-premises alcohol licence): s 284. (6) Determination of applications for prize gaming permits.9 In England and Wales the power is delegated to the licensing committee and in Scotland the licensing authority may itself delegate the function.10 (7) Registration of small society lotteries under Sch 11.   1 GA 2005, s 247 and Sch 10.   2 GA 2005, Sch 10, para 6, applying s 154 (England and Wales) and s 155 (Scotland).   3 GA 2005, s 271.   4 GA 2005, s 273.   5 GA 2005, Sch 12, para 28, applying s 154 (England and Wales) and s 155 (Scotland). In England and Wales the power to grant a permit may not be delegated to an officer where an objection has been made, nor may an officer cancel a permit: GA 2005, Sch 12, para 28(2).   6 GA 2005, s 282.   7 GA 2005, Sch 13, para 1.   8 GA 2005, Sch 13, para 3, applying s 154 (England and Wales) and s 155 (Scotland).   9 GA 2005, s 189 and Sch 14. 10 GA 2005, Sch 14, para 7, applying s 154 (England and Wales) and s 155 (Scotland).

The local authority context 9.5 Most of the licensing authorities are ‘local authorities’ for the purposes of the relevant local government legislation.1 The law governing local authorities is extensive,2 but certain features will be briefly noted. First, local authorities have corporate status provided for in various enactments.3  A  corporation is a collection of many individuals which becomes by incorporation one individual, an artificial person, having rights and duties, capable of suing and being sued, of holding property and making 489

The licensing authority: constitution and procedure contracts. A corporation is a wholly different and separate entity from the individuals who compose it. It must have a name and it will have perpetual succession (ie the corporation outlives the individuals who compose it from time to time). A corporation is also required to have a seal. 1 See Local Government Act 1972, s 270; ‘local authority’ means, for the purposes of that Act, a county council, a district council, a London borough council or a parish council but, in relation to Wales, means a county council, county borough or community council. 2 For further information see Cross on Local Government Law: Sweet & Maxwell (9th edn, 1996, as updated); Cross on Principles of Local Government Law: Sweet & Maxwell (3rd edn, 2004); Local Government Law (Tottel, looseleaf). 3 See eg the Local Government Act 1972, s 2(3) (county councils and district c­ ouncils in England); s 14(2) (parish councils); s 21(2) and (3) (principal councils in Wales); s 33(1) and (2) (community councils).

9.6 One important consequence of the corporate status of local authorities is that they may only perform acts in accordance with powers conferred upon them by legislation. If a statutory corporation were to perform an act outside the powers so conferred, that act would be ultra vires (ie  ‘beyond the powers’) of the corporation and would therefore be void and of no effect. The rigidity of this rule is, to some extent, mitigated by the courts being willing to acknowledge that a corporation may do not only those things for which there is express authority, but also things for which there is implied authority or which are reasonably incidental to the doing of those things.1 The common law principle that a corporation may do things that are reasonably incidental to the exercise of powers conferred upon it is given additional statutory expression in the case of local authorities2 by s 111 of the Local Government Act 1972, which provides that: ‘…  a local authority shall have power to do any thing (whether or not involving the expenditure, borrowing or lending of money or the acquisition or disposal of any property or rights) which is calculated to facilitate, or is conducive or incidental to, the discharge of any of their functions.’ The scope of the authority conferred by s 111 is a matter of some debate, but it is clear that in order to fall within s 111 the acts in question must be ancillary to a function of the local authority that is conferred upon it by some other provision.3 1 Attorney-General v Great Eastern Railway Company (1885) App Cas 473. 2 Including the Common Council of the City of London: Local Government Act 1972, s 111(4). 3 Examples of cases where local authorities’ actions were held to be authorised by LGA 1972, s 111 are: R v Greater London Council and Another, ex p Westminster City Council (1984) Times, 27 December (held: maintenance of good staff relations was a proper function of a local authority and a decision to release staff to a joint committee of trade unions made in the interests of good industrial relations was valid); R v Westminster City Council, ex p Legg [2000] 2 LGLR 961 (held: s 111 authorised the grant of an indemnity to members or officers in respect of their legal costs incurred in responding to an objection made by the auditor); R  (on the ­application of Comninos) v Bedford BC  [2003]  EWHC  121 (Admin) (held: s  111 authorised the council to provide an indemnity for the costs of libel proceedings brought by council officers in respect of statements in a local newspaper

490

The licensing authority: constitution and procedure alleging incompetence in the performance of their duties in connection with a local election). Contrast the ‘swaps’ litigation Hazell v Hammersmith & Fulham LBC [1990] 2 QB 697; [1992] 2 AC 1, HL: speculative financial transactions by the local authority were not authorised by s 111 as being incidental to the function of borrowing, as they involved speculation in future interest trends with the object of making a profit.

9.7 The principle that a corporate body set up under statute may only exercise powers conferred expressly or impliedly on it by statute will apply to licensing authorities as to local authorities generally. If a licensing authority were to do an act or make a decision outside the scope of the authority which legislation confers upon it, the act or decision could be struck down as being void by reason of its being ultra vires in an application for judicial review. In some cases the presence of an unlawful or ultra vires act may be used by a person as a defence to criminal proceedings,1 or as a defence to a civil claim2 based upon the unlawful act or decision. 1 Boddington v British Transport Police [1999] 2 AC 143. 2 Wandsworth London Borough Council v Winder [1985] AC 461.

Local authorities’ general powers of delegation and ‘executive arrangements’ 9.8 Practical necessity requires that the performance of many of the functions of local authorities is delegated to committees or officers. The Local Government Act 1972 provides that subject to express statutory provisions a local authority may arrange for the discharge of any of their functions by a committee, a sub-committee, an officer or by another local authority.1 Local authorities usually have a scheme of delegation setting out which powers are delegated, to whom and subject to what conditions. The GA 2005 provides its own scheme of delegation discussed at 9.11–9.20 below. 1 LGA 1972, s 101.

9.9 There has been grafted onto the ordinary powers of local authority delegation a requirement set out in Part 2 of the Local Government Act 2000 requiring each local authority to adopt ‘executive arrangements’. These provisions have been summarised in a leading textbook as follows:1 ‘“Executive arrangements” are arrangements made by the authority for and in connection with the creation and operation of an executive of the authority under which certain of the authority’s functions are the responsibility of the executive. This involves a framework whereby there is a division between the making of decisions and the scrutiny of these decisions. The purpose of the new requirement is “to deliver greater efficiency, transparency and accountability of local authorities”, ensuring that decisions are taken more quickly and efficiently than under the previous committee system, and that the individuals and bodies responsible for decisions can be more readily identified by the public and held to account in public by overview and scrutiny committees. The intention is that the full council will determine its policy framework (through approval or adoption of a series of plans 491

The licensing authority: constitution and procedure or s­ trategies) and its budget, following proposals from the executive; the executive is then responsible for implementation of the policy framework. Overview and scrutiny committees scrutinise decisions before and after implementation, receive advice from other committees and in turn advise the executive and the full council.’ 1 Cross on Principles of Local Government Law (3rd edn), p 102.

9.10 Provision is made for four different types of ‘executive arrangements’, namely a ‘mayor and cabinet executive’, a ‘leader and cabinet executive’, a ‘mayor and council manager executive’ and an executive in a form prescribed in regulations made by the Secretary of State.1 Statutory provisions have been enacted governing local authorities which are operating executive arrangements to enable it to be determined whether their functions are to be the responsibility of the executive or the responsibility of the full council (either acting as the full council or acting in accordance with some other arrangements for delegation).2 The default position (subject to any provision contained in the Local Government Act 2000 or any enactment passed after that Act) is that any function of a local authority is to be the responsibility of the executive unless it is a function specified in regulations made under the LGA 2000.3 These provisions become of some significance in considering the scheme of delegation laid down by the GA 2005. 1 LGA 2000, s 11. 2 LGA 2000, s 13. 3 LGA 2000, s 13(2) and (3).

Delegation under the GA 2005 9.11 The Gambling Act 2005 makes specific provision for the delegation of licensing authority functions. In England and Wales1 the licensing authority’s functions under Part 8 are delegated to the licensing committee of the authority established under s  6 of the Licensing Act 2003.2 That section requires a licensing authority (except for the Sub-Treasurer of the Inner Temple and the Under-Treasurer of the Middle Temple) to establish a licensing committee consisting of at least 10, but not more than 15, members of the authority. The constitution of the committee is considered at 9.13 below. 1 For Scotland, see GA  2005, s  155, which provides that a licensing authority in Scotland may arrange for the discharge of any of their functions under Part 8 by a committee of the authority, a member or members of the authority, the clerk of the authority or any person appointed to assist the clerk (s 155(1)). However, the authority’s power under s  166 (to resolve not to issue casino licences) and s 349 (preparation of three-year licensing policy) may not be delegated (s 155(2) (a)), and neither the clerk nor any person appointed to assist him may discharge the authority’s functions under s 154(4) (discussed in the text above). 2 GA 2005, s 154(1).

9.12 There are three exceptions to the above provision for the automatic delegation of licensing authority functions to the licensing committee: (1) The licensing authority’s function under s  166 to resolve not to issue casino licences is not automatically delegated to the licensing 492

The licensing authority: constitution and procedure committee, and may not be delegated by the authority.1 The power therefore remains vested in the licensing authority, and in England it must be exercised by the licensing authority (ie by the relevant body as specified in GA 2005, s 2) and not by the executive under ‘executive arrangements’.2 In Wales the function may be, but need not be, a responsibility of the executive of the authority.3 (2) The licensing authority’s functions under s 212 to determine premises licensing fees are not automatically delegated, but may be delegated by the authority.4 So far as the position in England is concerned, amendments have been made to Sch  1 to The Local Authorities (Functions and Responsibilities) (England) Regulations 20005 to the effect that ‘Functions relating to the determination of fees for premises licences’ under the GA  2005 are to remain functions of the relevant local authority and not of the executive under ‘executive arrangements’.6 This presumably means that the decision whether to delegate the determination of fees to the licensing committee is to be made by the licensing authority (and not by the executive). If the function is delegated to committee, then the committee will discharge it. If, however, the function is not so delegated, then the effect of the amendment to Sch 1 appears to be that the licensing authority (and not the executive) are to discharge the function of fixing fees. In Wales the functions may be, but need not be, a responsibility of the executive of the authority.7 (3) The licensing authority’s function under s  349 to prepare a threeyear licensing policy is not automatically delegated to the licensing committee and may not be delegated by the authority.8 In England the function is to be the shared responsibility of the authority and the executive, in that the executive is to put proposals for a policy before the authority, but it is the duty of the authority to adopt the policy with such modifications as it may decide.9 In Wales the function may be, but need not be, a responsibility of the executive of the authority.10 At the time of writing the Department for Communities and Local Government is considering responses to a consultation on a draft amendment to these regulations, which would consolidate the extant regulations and amendments into one document, and make further minor amendments to the list of functions which must or may not be the responsibility of the executive.   1 GA 2005, s 154(2)(a).  2 This is the effect of The Local Authorities (Functions and Responsibilities) (Amendment) (England) Regulations 2006 (SI 2006/886) amending Sch 1 to The Local Autho­rities (Functions and Responsibilities) (England) Regulations 2000 (SI 2000/2853).   3 The Local Authorities (Executive Arrangements) (Functions and Responsibilities) (Wales) Regulations 2007 (SI 2007/399), reg 4 and Sch 2, para 24.   4 GA 2005, s 154(2)(b).   5 SI 2000/2853.   6 See The Local Authorities (Functions and Responsibilities) (England) (Amendment) Regulations 2007 (SI 2007/1284).   7 The Local Authorities (Executive Arrangements) (Functions and Responsibilities) (Wales) Regulations 2007 (SI 2007/399), reg 4 and Sch 2, para 24.

493

The licensing authority: constitution and procedure   8 GA 2005, s 154(2)(c).  9 The Local Authorities (Functions and Responsibilities) (England) Regulations 2000 (SI 2000/2853), Sch 3 as amended by The Local Authorities (Functions and Responsibilities) (Amendment) (England) Regulations 2006 (SI 2006/886), reg 2. 10 The Local Authorities (Executive Arrangements) (Functions and Responsibilities) (Wales) Regulations 2007 (SI 2007/399), reg 4 and Sch 2, para 24.

9.13 As has been noted, the authority’s licensing committee is set up under s 6 of the Licensing Act 2003. The 2003 Act itself contains provisions governing the licensing committee, namely s 7 which deals with the exercise and delegation of functions by the committee, s  9 which authorises the committee to establish one or more sub-committees consisting of three members of the committee, and which also makes provision for regulations to govern the proceedings of the licensing committee, and s 10 which deals with the sub-delegation of functions by the licensing committee. Having automatically delegated in England and Wales the licensing authority’s Part 8 functions to the licensing committee, GA 2005, s 154 proceeds to state how ss 7 and 10 of the Licensing Act 2003 will apply. Where a Part 8 function is delegated to the licensing committee, then, as a general rule, the provisions of LA  2003, s  7 do not apply to that delegation,1 although an exception is made in the case of s 7(9), which provides as follows: ‘(9) Where a licensing committee is unable to discharge any function delegated to it in accordance with this section because of the number of its members who are unable to take part in the consideration or discussion on any matter or vote on any question with respect to it, the committee must refer the matter back to the licensing authority and the authority must discharge that function.’ This provision might apply, for example, where a sufficient number of the members of the committee had a disqualifying interest in the matter to be decided to render the committee inquorate. For a discussion of disqualifying interests see 9.26–9.34 and for a discussion of the committee quorum see 9.19–9.20 below. 1 GA 2005, s 154(3).

9.14 The provisions of LA  2003, s  10 are applied generally to licensing committees as they function under the GA  2005, although important modifications are introduced into the section.1 The effect is as follows: (i)

The licensing committee may arrange for the discharge of any functions exercisable by it— (a) by a sub-committee established by it, or (b) by an officer of the licensing authority.

(ii) Where a function of the licensing committee is delegated to a subcommittee, the sub-committee may in turn arrange for the function to be discharged by an officer of the licensing authority.2 This power is, however, subject to any direction given by the licensing committee to the sub-committee.3 494

The licensing authority: constitution and procedure (iii) Arrangements for the delegation of functions to a sub-committee or an officer may provide for more than one sub-committee or officer to discharge the same function concurrently.4 (iv) Certain matters may not, however, be delegated to an officer. These are as follows: (a) determination of an application for a premises licence in respect of which representations have been made by an interested party or responsible authority and not withdrawn; (b) determination of an application for the variation of a premises licence in respect of which representations have been made by an interested party or responsible authority and not withdrawn; (c)

determination of an application for transfer of a premises licence following representations by the Commission;

(d) determination of an application for a provisional statement under s 204 in respect of which representations have been made by an interested party or responsible authority and not withdrawn; and (e) 1 2 3 4 5

a review of a premises licence under s 201.5

GA 2005, s 154(3)(b) and (4). LA 2003, s 10(2). LA 2003, s 10(5). LA 2003, s 10(3). LA 2003, s 10(4) substituted by GA 2005, s 154(4).

9.15 The effect of the above scheme of delegation and sub-delegation is set out below in tabular form.1 Summary of licensing authority delegations permitted under the Gambling Act Matter to be dealt with

Full Sub-committee council of licensing committee

Final approval of three-year licensing policy

X

Policy not to permit casinos

X

Fee setting (when appropriate)

X (if delegated by full council)

Application for premises licences

X Where representations have been received and not withdrawn

Officers

X Where no representations received/ representations have been withdrawn

495

The licensing authority: constitution and procedure Matter to be dealt with

Full Sub-committee council of licensing committee

Officers

Application for a variation to a licence

X Where representations have been received and not withdrawn

X Where no representations received/ representations have been withdrawn

Application for a transfer of a licence

X Where representations have been received from the Commission or responsible authority

X Where no representations received from the Commission or responsible authority

Application for a provisional statement

X Where representations have been received and not withdrawn

X Where no representations received/ representations have been withdrawn

Review of a premises licence

X

Application for club gaming/club machine permits

X Where objections have been made (and not withdrawn)

Cancellation of club gaming/club machine permits

X

X Where no objections made/ objections have been withdrawn

Applications for other permits

X

Cancellation of licensed premises gaming machine permits

X

Consideration of temporary use notice

X

Decision to give a counter-notice to a temporary use notice

X

1 The table is taken from Gambling Commission Guidance to Licensing Authorities, (5th edn, September 2015), Appendix G. ‘X’ indicates the lowest level to which decisions can be delegated.

496

The licensing authority: constitution and procedure 9.16 As has been noted above, a licensing committee established under the LA 2003 may itself establish one or more sub-committees consisting of three members of the committee.1 Provision is made for regulations to be made governing the proceedings of licensing committees and their subcommittees under LA 2003.2 Section 154(5) of GA 2005 applies the relevant provisions of LA  2003 to licensing committees’ functions under GA  2005, Pt 8, with the result that licensing committees may establish sub-committees consisting of three members of the committee, and regulations may be made governing the proceedings of licensing committees and sub-committees. Two aspects of this committee structure require consideration namely, first, ‘political balance’ and, second, the necessary quorum. 1 LA 2003, s 9(1). 2 LA 2003, s 9(2). For a case in which a licensing sub-committee was held to have unlawfully referred an application back to the full licensing committee for decision by them, see Bridgerow Ltd v Cheshire Council [2014] EWHC 1187 (Admin).

Political balance 9.17 In certain circumstances, provisions contained in the Local Government and Housing Act 1989 require local authority committees to be politically balanced so that membership reflects the balance of different political groups having seats on the authority. However, it appears that these provisions do not apply to a local authority’s licensing committee as regards its functions under the Licensing Act 2003 or the Gambling Act 2005. The provisions in the 1989 Act are not of general application to local authority committees. Section 15(7) provides that Sch 1 to the 1989 Act shall have effect for determining the bodies to which the provisions on political balance are to have application. Schedule  1, para  1 provides for three classes: (a)

any ordinary committee or ordinary sub-committee of the authority; an ‘ordinary committee’ means a committee appointed under LGA 1972, s  102(1)(a); an ‘ordinary sub-committee’ means a sub-committee appointed under LGA 1972, s 102(1)(c) by an ordinary committee of the authority;

(b) any advisory committee of the authority and any sub-committee appointed by such an advisory committee; and (c)

certain additional specified bodies set out in Sch 1, para 2.

9.18 Licensing committees are established under s  6 of the LA  2003 (and sub-committees, to which the discharge of licensing functions can be delegated under that Act, are established under s 9). Delegation of functions under GA 2005, Pt 8 to the licensing committee is effected in England and Wales by s 154. Committees and sub-committees so constituted do not fall within Sch 1 of the LGHA 1989. Although most local authorities arrange for the discharge of their functions under s 101 of the LGA 1972 by committees and sub-committees appointed under s 102 of that Act, para 58 of Sch 6 to LA  2003 specifically provides that such committees are to be excluded in relation to the discharge of licensing functions under the 2003 Act by adding to s 101 a new subsection (15), which provides: 497

The licensing authority: constitution and procedure ‘Nothing in this section applies in relation to any function under the Licensing Act 2003 of a licensing authority (within the meaning of that Act).’ It appears accordingly that there is no requirement for political balance on licensing committees and sub-committees under the Licensing Act 2003 or the GA 2005. Of course, local authorities may decide that licensing committees should be politically balanced.

Quorum 9.19 The GA  2005 (like the LA  2003) makes no express provision for when the licensing committee, or a licensing sub-committee, is to be regarded as quorate. As noted at 9.13 above, GA 2005, s 7(9) provides for the licensing committee to refer matters back to the licensing authority where an insufficient number of its members are able to take part in consideration of a matter or to vote. However, this gives no guidance as to the required quorum. It has been suggested in the context of the Licensing Act 2003 that there are three possibilities:1 first, all members of the licensing committee have to be present for the committee to be quorate, so that the absence of any member renders the committee inquorate and the matter must be referred back to the licensing authority; second, whatever number at which the composition of the committee is fixed between 10 and 15, the number present must never fall below 10 for the committee to be quorate; third, whilst the committee must have between 10 and 15 members appointed to it, it can still meet and discharge licensing functions delegated to it when fewer than 10 members are present, provided some specified quorum for meetings is complied with.2 It has been suggested that this is the most sensible and practical answer for the purposes of the LA  2003 and it is suggested that similar reasoning applies where the licensing committee is dealing with matters under the GA 2005. 1 See the illuminating discussion in Manchester, Poppleston & Allen Alcohol and Entertainment Licensing Law (2nd edn, Cavendish Publishing Limited, 2008), pp 32–33. 2 The local authority can make general provision as to the quorum in its standing orders and, subject to the standing orders, this is a matter for the committee or sub-committee.

9.20 So far as sub-committees are concerned, no quorum is specified in the LA 2003, nor in regulations made under that Act, nor in the GA 2005 or in regulations made under that Act. However, it appears to have been the government’s intention that the quorum should be three members, though in the absence of a specified quorum, local authorities appear free to set their own.1 1 See Manchester Poppleston & Allen Alcohol and Entertainment Licensing Law (2nd edn, Cavendish Publishing Limited, 2008), p  36 referring to a statement during the committee stage of the Bill in the House of Commons: ‘The sub-committee must have three members to be quorate’ (HC, SC D, col 179, 8 April 2003 (Dr Kim Howells)).

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The licensing authority: constitution and procedure

Conduct of committee members Bias 9.21 The law relating to ‘bias’ evolved originally to regulate the conduct of judges in deciding cases, and its application to decisions by persons such as local authority committee members sitting in a non-judicial capacity has been a matter of some debate.1 The duty to avoid bias derives from the principle ‘nemo judex in causa sua’ (no one may be a judge in his own cause). Where the rule against bias is infringed, its effect is to render the relevant decision void. The rule as applied classically to judges may be considered under three heads. First, it is a fundamental principle that a judge may not try an action to which he is a party,2 nor where he has a financial or proprietary interest in its outcome. The same principle applies to bar a judge from hearing a case where he has some other interest of a kind which the law recognises as sufficiently analogous to a financial or proprietary interest to bar him from adjudicating.3 The bar from adjudicating is automatic (though it may be waived by the affected party)4 and does not depend on any implication of bias.5 To that extent, inclusion of this principle under the title of ‘bias’ is a misnomer. 1 For a summary of the cases relating to this issue see Cross on Local Government Law (Sweet & Maxwell), paras 10-80 to 10-83. 2 R v Bow Street Metropolitan Stipendiary Magistrate, ex p Pinochet Ugarte (No 2) [2000] 1 AC 119 at 132H per Lord Browne-Wilkinson, citing Dimes v Proprietors of Grand Junction Canal (1852) 3 HL Cas 759. 3 R v Bow Street Metropolitan Stipendiary Magistrate, ex p Pinochet Ugarte (No 2) [2000] 1 AC 119, where it was held that the principle applies where a judge is involved, whether personally or as the director of a company, in promoting the same causes in the same organisation as is a party to the suit. 4 Locabail (UK) Ltd v Bayfield Properties Limited [2000] 2 WLR 870 at para 15. Any such waiver must be clear and unequivocal, and made with full knowledge of all the facts relevant to the decision whether to waive or not. 5 R v Bow Street Metropolitan Stipendiary Magistrate, ex p Pinochet Ugarte (No 2) [2000] 1 AC 119 at 135 G–H per Lord Browne-Wilkinson.

9.22 The second class of ‘bias’ is ‘actual bias’ and arises where it can be shown that a judge has made his decision on the basis of partiality for or prejudice against one of the parties. Where such actual bias can be shown, the litigant has irresistible grounds for applying to set aside the judgment (or for objecting to the trial of the case by that judge if the objection is made before the hearing).1 Allegations of actual bias are very rare. Perhaps surprisingly, the High Court dismissed a complaint of bias in the chairman of a licensing committee who refused an application for an SEV (lap dancing club) in Oxford, notwithstanding that he had been in acrimonious litigation with one of the owners of the club, and had been reported as saying that as chairman of the licensing committee he would not allow premises of an analogous kind in Oxford. The ostensible basis on which the claim of bias was dismissed was that the compliant should have been made at the hearing at which the licence was refused: it is not difficult, however, to discern from the judgment of Haddon-Cave J  a lack of enthusiasm for the merits of the complaint itself: see Thompson v Oxford City Council.2 1 Locabail (UK) Ltd v Bayfield Properties Ltd [2000] 2 WLR 870 at para 3. 2 [2013] EWHC 1819 (Admin).

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The licensing authority: constitution and procedure 9.23 The third head of ‘bias’ is ‘apparent bias’. This arises where a judge is not a party to the suit and does not have a financial interest (or any other interest) in its outcome, but in some other way his conduct or behaviour may give rise to a suspicion that he is not impartial, eg because of his friendship with a party.1 There is obviously a whole range of considerations which might lead to an allegation of apparent bias and every application must be decided on the facts and circumstances of the individual case. In a leading case2 the Court of Appeal enumerated some of the factors which might be relevant to allegations of ‘apparent bias’ and indicated the weight that might be attached to them: ‘Everything will depend on the facts, which may include the nature of the issue to be decided. We cannot, however, conceive of circumstances in which an objection could be soundly based on the religion, ethnic or national origin, gender, age, class, means or sexual orientation of the judge. Nor, at any rate ordinarily, could an objection be soundly based on the judge’s social or educational or service or employment background or history, nor that of any member of the judge’s family; or previous political associations; or membership of social or sporting or charitable bodies; or Masonic associations; or previous judicial decisions; or extra-curricular utterances (whether in textbooks, lectures, speeches, articles, interviews, reports or responses to consultation papers); or previous receipt of instructions to act for or against any party, solicitor or advocate engaged in a case before him; or membership of the same Inn, circuit, local Law Society or chambers (see KFTCI  v Icori Estero SpA Court of Appeal of Paris, 28 June 1991, International Arbitration Report, Vol 6, 8/91). By contrast, a real danger of bias might well be thought to arise if there were personal friendships or animosity between the judge and any member of the public involved in the case; or if a judge were closely acquainted with any member of the public involved in the case, particularly if the credibility of that individual could be significant in the decision of the case; or if, in a case where the credibility of any individual were an issue to be decided by the judge, he had in a previous case rejected the evidence of that person in such outspoken terms as to throw doubt on his ability to approach such person’s evidence with an open mind on any later occasion; or if on any question at issue in the proceedings before him the judge had expressed views, particularly in the course of the hearing, in such extreme and unbalanced terms as to throw doubt on his ability to try the issue with an objective judicial mind (see Vakuta v Kelly [1989] 167 CLR 568); or if, for any other reason, there were real grounds for doubting the ability of a judge to ignore extraneous c­ onsiderations, prejudices and predelictions and bring an objective judgment to bear on the issues before him.’ 1 R v Bow Street Metropolitan Stipendiary Magistrate, ex p Pinochet Ugarte (No 2) [2000] 1 AC 119 at 132H–133A per Lord Browne-Wilkinson. 2 Locabail (UK) Ltd v Bayfield Properties Limited [2000] 2 WLR 870 at para 25.

9.24 The test for determining whether an allegation of apparent bias has been made out has now been authoritatively stated by the House of Lords in Porter v Magill,1 where the test proposed in In re Medicaments and Related Classes of Goods (No 2)2 was adopted, with one modification. The House of 500

The licensing authority: constitution and procedure Lords concluded that the test of ‘apparent bias’ is ‘whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased’.3 1 [2002] 2 AC 357. 2 [2001] 1 WLR 700. 3 Porter v Magill [2002] 2 AC 357 at [103] per Lord Hope of Craighead.

9.25 A  party entitled to complain of ‘apparent bias’ in the judge may waive the objection, and indeed will be held to have done so if, appropriate disclosure having been made by the judge, he raises no objection to the judge hearing or continuing to hear the case.1 1 Locabail (UK) Ltd v Bayfield Properties Ltd [2000] 2 WLR 870 at para 26.

Local authority committees and the rule against bias 9.26 There are obvious potential difficulties in applying the rule against bias in all its aspects to decision-making by local authority committees. Council members are elected on the basis of political platforms and it is expected that they will from time to time have strong policy-driven views in favour of or against various proposals. This has led to some debate as to whether, and how far, the rule against bias should be applied to them. However, in R  v Secretary of State for the Environment, ex  p Kirkstall Valley Campaign Ltd1 Sedley J, having considered the authorities, concluded that the principle that a person is disqualified from participating in a decision if there is a real danger that he or she will be influenced by a pecuniary or personal interest in the outcome is of general application in public law and is not limited to judicial or quasi-judicial bodies or proceedings.2 He therefore held that the principle applied to an Urban Development Corporation exercising town and country planning powers, and it is clear that he regarded the same principle as applying to a planning committee consisting of elected members. He acknowledged, however, that in the case of an elected body the law recognises that members would take up office with publicly stated views on a variety of policy issues. He concluded that questions relating to the effect of such publicly stated views should be governed by the separate line of authority on predetermination rather than under rules relating to ‘bias’. After a close examination of the facts, however, he held that the allegations of bias were not made out. 1 [1996] 3 All ER 304. 2 [1996] 3 All ER 304 at 325b. In referring to a ‘real danger’ of bias, the judge was applying the test as understood before its restatement in Porter v Magill [2002] 2 AC 357.

9.27 Where a decision is challenged by way of judicial review on the grounds that one of the decision-makers (eg a committee member) exhibited ‘apparent bias’, the court has a discretion, assuming bias is found, whether or not to quash the decision as being unlawful. It appears, however, that the presence of one committee member who is apparently biased will normally be enough to cause the court to quash the decision.1 1 Bovis Homes v New Forest DC [2002] EWHC 483 (Admin).

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The licensing authority: constitution and procedure Members’ interests: the statutory framework 9.28 The common law framework governing possible bias by local authority committee members is, in many important respects, now overlaid by statutory provisions regulating members’ conduct and, in particular, dealing with cases where there may be conflicts of interest. The statutory framework is grounded in Part III of the Local Government Act 2000. Section 49(1) provides that the Secretary of State may by order specify the principles which are to govern the conduct of members of relevant authorities in England and police authorities in Wales.1 Section 49(2) provides that the National Assembly for Wales may by order specify the principles which are to govern the conduct of members of relevant authorities in Wales (other than police authorities).2 The principles stated in the regulations are in general terms; the regulations governing England state that the conduct of members must be governed by: ‘selflessness’, ‘honesty and integrity’, ‘objectivity’, ‘accountability’, ‘openness’, ‘personal judgment’, ‘respect for others’, ‘duty to uphold the law’, ‘stewardship’ and ‘leadership’. 1 See the Relevant Authorities (General Principles) Order 2001 (SI 2001/1401). 2 See the Conduct of Members (Principles) (Wales) Order 2001 (SI  2001/2276 (W166)).

9.29 Section 50(1) provides that the Secretary of State may by order issue a model code of conduct for members of relevant authorities in England and police authorities in Wales. Section 50(2) provides that the National Assembly for Wales may by order issue a model code of conduct for members of relevant authorities in Wales. A brief discussion of the Code applicable to England follows.1 It applies where members are conducting the business of their authority or acting so as to give the impression that they are acting as representatives of their authority.2 The Code: (i)

sets out general obligations to be observed by all members, such as treating others with respect, not disclosing confidential information etc; and

(ii) defines the nature of a ‘personal interest’ and a ‘prejudicial interest’ in any business of the authority and lays down the duties of a member having such a personal interest or prejudicial interest. 1 For England, see The Local Authorities (Model Code of Conduct) Order (SI 2007/1159); for Wales see the Conduct of Members (Model Code of Conduct) (Wales) Order 2001 (SI 2001/2289 (W177)). 2 The Local Authorities (Model Code of Conduct) Order 2007, Sch 1, para 2.

9.30 The expression ‘personal interests’ is given a detailed definition. In summary, a member will have a ‘personal interest’ in any business of their authority where the business relates to or is likely to affect one of eleven basic categories of persons or bodies with whom the member is associated (eg  a business carried on by him, his employer, a company in which he has a beneficial interest exceeding prescribed limits), or where a decision in relation to the business might reasonably be regarded as affecting the member’s well-being or financial position, or the well-being or financial position of a member of the member’s family, or of someone with whom they have a close association, to a greater extent than the majority of other council 502

The licensing authority: constitution and procedure tax payers affected by the decision.1 Where a member attends a meeting of their authority at which business in which they have a personal interest is considered, they must disclose to that meeting the existence and nature of their interest at the commencement of that consideration, or when the interest becomes apparent.2 1 The Local Authorities (Model Code of Conduct) Order 2007, Sch 1, para 8. 2 The Local Authorities (Model Code of Conduct) Order 2007, Sch 1, para 9.

9.31 A  ‘prejudicial interest’ is a form of ‘personal interest’. A  ‘personal interest’ is a ‘prejudicial interest’ if the interest is: ‘one which a member of the public with knowledge of the relevant facts would reasonably regard as so significant that it is likely to prejudice [the member’s] judgment of the public interest’.1 Where a member has a ‘prejudicial interest’ in any business of their authority, they must withdraw from the room or chamber where the meeting considering the business is being held, subject to a right to attend the meeting for the purpose of making representations, answering questions or giving evidence relating to the business. Alternatively, they can apply for a dispensation from the authority’s standards committee.2 1 The Local Authorities (Model Code of Conduct) Order 2007, Sch 1, para 10. 2 The Local Authorities (Model Code of Conduct) Order 2007, Sch 1, para 12.

9.32

A local authority is under a duty to adopt a code of conduct which:

•

must incorporate any mandatory provisions of the model code;

•

may incorporate optional provisions of the model code; and

•

may include other provisions which are consistent with the model code.1

1 Local Government Act 2000, s 51.

9.33 The question whether a council member has a personal or prejudicial interest is to be determined objectively and not subjectively, so that his mistaken but reasonable view that he has no such interest is irrelevant.1 Where a member has a prejudicial interest, he must withdraw from the meeting; he cannot stay in his personal capacity save and except for the purpose of making representations, answering questions or giving evidence, following which he must withdraw.2 The Localism Act 2011 also contains provisions concerning predetermination and standards of conduct of councillors. Where, as a result of an allegation of bias or predetermination there is an issue about the validity of a decision of a relevant authority and it is relevant to that issue whether any of the decision-makers appeared (to any extent) to have had a closed mind when making the decision, then the Act provides that they are not to be taken to have had a closed mind when making the decision just because: (a) the decision-maker had previously done anything that directly or indirectly indicated what view the decision-maker took, or would or might take, in relation to a matter; and 503

The licensing authority: constitution and procedure (b) the matter was relevant to the decision.3 1 Scrivens v Ethical Standards Officer [2005]  LGR  641; [2005]  EWHC  529 (Admin), Stanley Burnton J. 2 See R  (Richardson) v North Yorkshire County Council [2004] 2  All ER  31. CA. The court was concerned with the code under the Local Authorities (Model Code of Conduct) (England) Order 2001 (now replaced by SI 2007/1159). The 2001 Code did not provide for a member who had a ‘prejudicial interest’ to attend a meeting to make representations, answer questions or give evidence, and the Court of Appeal’s conclusion must now be read subject to the greater latitude given in the 2007 Code. The North Yorkshire case would still seem, in principle, however, to apply to the position in Wales, although the Welsh Model Code does not use the expression ‘prejudicial interest’. 3 Localism Act 2011, s 25. See also Pt 1, Ch 7 (ss 25–37) for pre-determination and standards of conduct of councillors generally.

9.34 A  local authority is obliged to establish a ‘standards committee’,1 which has the functions of promoting and maintaining high standards of conduct by the members of the authority and assisting members of the authority to observe the authority’s Code of Conduct.2 1 LGA 2000, s 52. 2 LGA 2000, s 54.

Proceedings of licensing committees and sub-committees 9.35 As has been noted at 9.14 above, applications relating to premises licences under Part 8 are delegated to the licensing committee of the licensing authority and may be sub-delegated to sub-committees. The proceedings of committees and sub-committees are laid down in England and Wales by The Gambling Act 2005 (Proceedings of Licensing Committees and Subcommittees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007.1 For the position in Scotland see Chapter  24. The proceedings governed by these regulations are applications for premises licences,2 applications to vary premises licences,3 applications to transfer premises licences,4 applications to reinstate a premises licence,5 applications to review a premises licence,6 and an application for a provisional statement.7 The proceedings laid down by the regulations apply wherever a hearing is required to be held in relation to an application relating to a licence, or wherever a hearing is required to be held in relation to a review of a licence.8 It should be noted that the 2007 Regulations apply to proceedings under the GA 2005 in place of the regulations governing licensing committee procedure under the Licensing Act 2003, ie the Licensing Act 2003 (Hearings) Regulations 2005.9 1 SI 2007/173. 2 GA 2005, s 159. 3 GA 2005, s 187. 4 GA 2005, s 188. 5 GA 2005, s 195. 6 GA 2005, s 197. 7 GA 2005, s 204. 8 Under GA 2005, s 162(1) and (2) or GA 2005, s 201(4): see the Gambling Act 2005 (Proceedings of Licensing Committees and Sub-committees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007, reg 3.

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The licensing authority: constitution and procedure 9 See the Gambling Act 2005 (Proceedings of Licensing Committees and Subcommittees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007, reg 3(3).

Notices 9.36 Notices under the regulations must be given in writing; a message sent by fax or e-mail is to be treated as a notice given in writing.1 Where a hearing is required to decide an application to grant, vary, transfer, reinstate or review a premises licence, or where such a hearing is necessary to consider an application for a provisional statement, the committee must arrange for the hearing to be commenced as soon as reasonably practicable after the expiry of any period for representations.2 For the procedure on reviews which may result in a hearing being necessary see 10.180–10.188; 10.189–10.196. Where the hearing is to be held on more than one day, arrangements must be made for it to take place on consecutive working days.3 Notice of the hearing must be given to the applicant and to any person who has made (and not withdrawn) representations about the application, and, in addition, where the application is for transfer of a licence or review of a licence, the licensee.4 The notice must specify the date on which, the place at which, and the time when the hearing is to take place.5 The notice must state that the committee, if requested, will make available copies of documents containing representations made in ­relation to the application (unless the committee considers that the representations are vexatious, frivolous or will certainly not influence the determination of the application) to any person who has made representations (unless the committee considers that the representations made by that person are vexatious, frivolous or will certainly not influence the determination of the application) and, in the case of an application for transfer of a premises licence, the licensee.6 As will be noted below, this duty is supplemented by a duty on the committee to actually send the documents containing representations to specified persons, including the applicant and, in the case of a review, the licensee. The notice must be sent so that in the ordinary course of events it is received no later than 10 working days before the first day on which the hearing is to be held, as specified in the notice.7 1 Gambling Act 2005 (Proceedings of Licensing Committees and Sub-committees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007, reg  18. Note that the Provision of Services Regulations 2009 require local authorities to ensure that all procedures relating to access to, or the exercise of, a service activity may be easily completed at a distance and by electronic means. Electronic application facilities for premises licences may be found either on GOV. UK or generally on the website of each licensing authority. Applications may, of course, still be made in writing. 2 Regulation 4(1). 3 Regulation 4(2). ‘Working day’ means a day which is not a Saturday or a Sunday, Christmas Day, Good Friday or a bank holiday in England and Wales under the Banking and Financial Dealings Act 1971: reg 2(1). 4 Regulation 5. 5 Regulation 5(2)(a). 6 Regulation 5(2). 7 For the definition of ‘working day’ see footnote 3 above.

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The licensing authority: constitution and procedure 9.37 The notice of hearing must be accompanied by information in writing explaining the following: (a) the consequences where a party informs the relevant committee that he does not wish to attend or be represented at the hearing, or fails to inform the relevant committee whether he wishes to attend or be represented; (b) the requirements imposed on the relevant committee in conducting a hearing set out in regs 8 and 9; (c)

the consequences provided for in reg 10(2) where a party has indicated that he wishes to attend or be represented at the hearing, but fails to attend or be represented;

(d) the procedure to be followed at a hearing; (e) the time limit and method, if any, by which a party should inform the relevant committee that he wishes to attend or address the hearing; (f)

the time limit and method, if any, by which a party should inform the relevant committee that he wishes to be assisted or represented by another person;

(g) the time limit and method, if any, by which a party should inform the licensing authority that he will want to call a witness to give evidence at the hearing, and the matters in relation to which he wishes that witness to give evidence; (h) the time limit and method, if any, by which a party should inform the relevant committee that he wishes to withdraw any representations; (i)

the time limit and method, if any, by which a party should inform the relevant committee that he is willing to consent to the application being determined without a hearing;

(j)

the matters, if any, on which the relevant committee considers at the time that it will want clarification at the hearing from a party.

Information and documents 9.38 In the case of all applications, the committee must send to the applicant copies of the documents containing representations (unless the committee considers that the representations are vexatious, frivolous or will certainly not influence the determination of the application).1 In the case of a review, the documents, subject to the same qualification, must also be sent to the licensee.2 In addition, the committee must, if requested, send the documents, subject to the same qualification, to any person who has made representations in relation to the application or review (unless the committee considers that that person’s representations are vexatious, frivolous or will certainly not influence the determination of the application).3 In the case of an application for transfer of a premises licence, the committee must, if requested, send the documents, subject to the same qualification, to the licensee.4 1 The Gambling Act 2005 (Proceedings of Licensing Committees and Subcommittees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007, reg 6(2).

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The licensing authority: constitution and procedure 2 Regulation 6(2). 3 Regulation 6(2). 4 Regulation 6(2).

Postponement of hearing 9.39 A  committee may at any time postpone a hearing to a specified date or arrange for a hearing to be held on a date specified if it considers it necessary: (a) to enable it to consider any information or documents provided by any party in response to a notice under reg 6, or at the hearing; or (b) having regard to the ability of any party, or person representing a party or witness to attend the hearing.1 It would appear that the committee’s power to postpone or adjourn a hearing is limited to these two situations, and there is room for doubt whether it could postpone a hearing in other circumstances that might easily arise, eg  to allow a party or a licensee to consider information or documents produced at a hearing. It would certainly seem desirable that the committee should have power to postpone a hearing in such circumstances and it may be possible to read reg 7 as conferring such a power, since reg 7(1) confers a general power to postpone a hearing, whilst reg 7(2) appears to limit that power to the two situations set out in (a) and (b) above. It may perhaps be possible to read reg  7(2) as meaning that the committee may in particular exercise the power to postpone a hearing in situations (a) and (b), leaving it with a discretion to do so in other cases. Where a committee has adjourned a hearing to a specified date, it must notify the parties of the new date, time and place for the hearing.2 Where arrangements are made for a hearing to be held on a specified additional date, the parties must be notified of the additional date, time and place for the hearing.3 The basic rule is that the hearing must take place in public, although the committee may direct that all or part of a hearing should be in private if it is satisfied that it is necessary to prevent unfairness to a party that would result from a public hearing, or in order to protect the commercial or other legitimate interests of a party.4 1 The Gambling Act 2005 (Proceedings of Licensing Committees and Subcommittees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007, reg 7(1)(2). 2 Regulation 7(3). 3 Regulation 7(4). 4 Regulation 8.

Proceedings at hearing 9.40 The committee must permit a party to attend the hearing and to be assisted or represented by any person, whether or not that person is legally qualified.1 The duty to permit a party and representative to attend is expressed to be ‘subject to regulations  8 (which permits a committee to hold a hearing in private) and 11 (which permits the exclusion of disruptive persons)’.2 This appears to envisage that a committee could exclude a party from a hearing which it has decided to hold in private in order to protect, for 507

The licensing authority: constitution and procedure example, the commercial interests of another party. It is difficult to see how such an arrangement could satisfy the public law right of the excluded party to a fair hearing, particularly since the excluded party might have important commercial interests itself (eg as licensee). 1 The Gambling Act 2005 (Proceedings of Licensing Committees and Subcommittees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007, reg 9(1). 2 Regulation 9(1).

9.41 At the beginning of a hearing the committee must explain the procedure that it proposes to follow in conducting the hearing.1 Subject to the provisions of the regulations, it is for the committee to determine the procedure to be followed in relation to the hearing,2 a provision which clearly gives a broad discretion to the committee to determine the most effective way of considering the issues before it. The committee must ensure that each party is given the opportunity to address the committee on any matter that is relevant to the application or review, or any representations made; to call witnesses to give evidence on any such matter or representation; and to provide further information on or explanation of any matter the committee has indicated that it will want clarified when giving notice of a hearing.3 In conducting a hearing the committee must also permit any party to question any other party or person representing a party on any matter that is relevant to the application or review or any representations made, where the committee considers that it is appropriate to do so.4 This regulation is curiously phrased, the word ‘must’ creating a species of obligation that arises only at the discretion of the committee. It is the editors’ experience that unsubstantiated or exaggerated claims by parties are frequently accepted at face value without any critical examination because the licensing committee decides not to permit questioning by other parties. The expenditure of public and private money involved in putting matters right on appeal is to be regretted. The committee must also take into consideration documentary or other information produced by a party before the hearing, or at the hearing, with the consent of all the other parties attending the hearing.5 The regulations provide that a hearing must be conducted so that it takes the form of a discussion led6 by the relevant committee, and the committee is not to permit cross-examination unless it considers that this is required for it properly to consider the application or representations.7 1 The Gambling Act 2005 (Proceedings of Licensing Committees and Sub-­ committees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007, reg 9(2). 2 Regulation 3(2). 3 Regulation 9(3). 4 Regulation 9(4)(a). 5 Regulation 9(4)(b). 6 In Dyason v Secretary of State for the Environment and Chiltern District Council (1998) 75  P  & CR  506, [1998]  JPL  778, CA, (which related to a planning hearing, but nonetheless is apposite) Pill LJ observed ‘The danger is that the “more relaxed” atmosphere could lead not to a “full and fair” hearing but to a less than thorough examination of the issues. A relaxed hearing is not necessarily a fair hearing. The hearing must not become so relaxed that the rigorous examination essential to the determination of difficult questions may be diluted. The absence of an accusatorial procedure places an inquisitorial burden upon an Inspector’. 7 Regulation 9(5).

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The licensing authority: constitution and procedure

Failure of parties to attend the hearing 9.42 A committee may proceed with a hearing in the absence of a party or a party’s representative if the party has: (a) informed the committee that he does not intend to attend or be represented at the hearing (and has not subsequently advised the committee otherwise); (b) failed to inform the committee whether he intends to attend or be represented at the hearing; or (c)

left the hearing in circumstances enabling the committee reasonably to conclude that he does not intend to participate further.1

If a party has indicated that he does intend to attend or be represented, but fails to attend or be represented, the committee may adjourn the hearing to a specified date if it considers this to be in the public interest, or proceed with the hearing in the party’s absence.2 Where the committee adopts the latter course, it must consider the absent party’s application or representations at the hearing.3 Where the committee adjourns the hearing to a specified date, it must notify the parties of the date, time and place to which the hearing has been adjourned.4 1 The Gambling Act 2005 (Proceedings of Licensing Committees and Subcommittees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007, reg 10(1). 2 Regulation 10(2). 3 Regulation 10(3). 4 Regulation 10(4).

Exclusion of disruptive persons 9.43 The committee may exclude from the hearing any person who is behaving in a disruptive manner, or may permit him to remain subject to conditions, and exclude him if he breaches those conditions.1 Where a person is excluded, the committee must permit him to submit in writing, before the end of the hearing, any information which he could have given orally, and take that information into account.2 1 The Gambling Act 2005 (Proceedings of Licensing Committees and Subcommittees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007, reg 11(1) and (2). 2 Regulation 11(3).

Determination of application or review 9.44 Where the parties have notified the committee that they consent to the application or review being determined without a hearing,1 the relevant committee must, as soon as reasonably practicable, (a) notify all the parties that the hearing has been dispensed with, and (b) determine the application or review.2 Where a hearing has taken place, the committee must determine the application or review before the end of five working days, starting with 509

The licensing authority: constitution and procedure the day after the last day of the hearing.3 There is power to extend this time limit for a specified period where it is in the public interest to do so; notice of the extension must be given to the parties.4 A record of the hearing must be taken in a permanent and intelligible form and must be kept for a period of six years from the date that the application or review is finally determined (including, in either case, any appeal or judicial review).5 1 Under GA 2005, s 162(2) or s 201(4)(a). 2 The Gambling Act 2005 (Proceedings of Licensing Committees and Subcommittees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007, reg 12. 3 Regulation 13. 4 Regulation 14. 5 Regulation 15.

Irregularities 9.45 Where an irregularity resulting from a failure to comply with the regulations, or resulting from a failure to comply with the procedure laid down by the committee for the conduct of the hearing, comes to the attention of the committee before it makes its determination, it may disregard the irregularity.1 However, if the committee considers that any person may have been prejudiced by the irregularity, it must take such steps as it considers necessary to remedy the consequences of the irregularity before reaching its determination.2 It would appear that if an irregularity comes to the committee’s attention after it has made its determination, there is no means by which it can remedy the position, although it is unlikely that its decision could be successfully challenged unless the procedural irregularity was relatively serious and had caused prejudice.3 1 The Gambling Act 2005 (Proceedings of Licensing Committees and Subcommittees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007, reg 16(1). 2 Regulation 16(2). 3 See R (TC Projects) v Newcastle Justices [2006] EWHC 1018 (Admin), [2006] LLR 499.

9.46 The committee may correct clerical mistakes in any document recording a determination of the committee, or errors arising in such a document from an accidental slip or omission.1 1 The Gambling Act 2005 (Proceedings of Licensing Committees and Subcommittees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007, reg 17.

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Chapter 10 Premises licences

10.1 Part 8 of GA 2005 confers power upon licensing authorities to grant premises licences authorising the use of premises in their area for specified forms of gambling. The premises licence replaces the betting office licence which was granted under the Betting, Gaming and Lotteries Act 1963 and the gaming licence which was granted under the Gaming Act 1968 and which authorised the use of premises as a casino or for a licensed bingo club. The premises licence also replaces permits for amusement centres and amusement arcades granted under the Gaming Act 1968, Sch 9 and the Lotteries and Amusements Act 1976, Sch 3. However, the GA 2005 is a good deal less informative about the underlying purpose of premises licensing than the Acts of 1963, 1968 and 1976 were about the purposes of the licensing and permit granting regimes which they contained.

THE FUNCTIONS OF PREMISES LICENSING 10.2 The contrast between the GA  2005 and the previous legislation appears clearly in the case of betting office licences. The Betting, Gaming and Lotteries Act 1963 set out both mandatory and discretionary grounds for refusing a betting office licence. The committee was required to refuse the application where the applicant was not the holder of a bookmaker’s permit, where the premises were not enclosed or where the only access to the proposed betting office from the street was through premises which could be used for non-betting transactions.1 The committee had discretion to refuse the application if the premises were not suitable to be a licensed betting office having regard to their layout, character, condition or location; or if the grant would be ‘inexpedient’ having regard to the demand for betting facilities in the locality of the proposed betting office.2 In the case of a renewal application the licence could be refused on the grounds that the premises had not been properly conducted.2 It is possible to see, therefore, that the purpose of betting office licensing was to prevent over-provision, to ensure that the premises and their location would be suitable, and to ensure that the applicant was a fit and proper person to run a betting business. The discretionary grounds for refusing a casino licence or a bingo club licence were broadly similar.3 In practice, although the legislation was less prescriptive, applications for 511

Premises licences amusement centres and amusement arcades tended to raise similar questions of demand and the suitability of the premises and location. 1 BGLA 1963, Sch 1, para 19(a). 2 BGLA 1963, Sch 1, para 19(b). 3 GA 1968, Sch 2, paras 18 and 20(1).

10.3 The Gambling Review Body recommended the abolition of the demand test for casinos, bingo premises and licensed betting offices.1 The government accepted this recommendation and it is carried into effect by GA  2005, s  153(2), which states that in determining whether to grant a premises licence a licensing authority may not have regard to the expected demand for the proposed gambling facilities. The GRB gave some consideration to the role of premises licensing in the absence of a demand test. They concluded that premises licensing was not a suitable regime for dealing with the suitability of the location or of the premises. These matters, they concluded, were matters for planning control.2 The purpose of premises licensing, in their view, was to prevent the proliferation of gambling venues and to provide a means of enabling local residents to help to shape their communities.3 The GRB, deriving inspiration from the Local Government (Miscellaneous Provisions) Act 1982 relating to the licensing of sex establishments, recommended that local authorities should be enabled to impose a blanket ban on all, or particular types of, gambling premises in a specified area.4 The purpose of such a ban would be to prevent the overconcentration of gambling premises in ways which might affect the character of an area.5 In addition, the GRB recommended that the licensing authority should have regard to the general character of the locality and the use to which buildings nearby were put in deciding whether a licence for gambling premises in that locality should be granted.6 They also recommended that the Gambling Commission should give advice to local authorities about the criteria which they should adopt in determining licence applications.7 1 2 3 4 5 6 7

Gambling Review Report 2001, Cm 5206, paras 20.28 and 20.31. Gambling Review Report, para 21.1. Gambling Review Report, para 18.19. Gambling Review Report, para 21.9. Gambling Review Report, para 21.10. Gambling Review Report, para 21.13. Gambling Review Report, para 21.13.

10.4 The broad thrust of the Committee’s recommendations was accepted by the government, though the power to impose blanket bans on gambling premises was limited so as to apply only in the case of casino premises.1 The government’s approach was to require licensing authorities to consider licensing applications on their merits, subject to national guidance from the Gambling Commission and subject also to the principles laid down in licensing policies which each licensing authority was obliged to formulate.2 An attempt was made at the Committee stage of the Bill to reintroduce the demand criterion,3 but the attempt failed. Accordingly, the criteria governing premises licensing under the GA 2005 must be deduced from the Act itself, from the guidance given by the Gambling Commission and from the policies of the individual licensing authorities. 1 DCMS: ‘A Safe Bet for Success – Modernising Britain’s Gambling Laws’ 2002, Cm 5397, para 3.10.

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Premises licences 2 ‘A Safe Bet for Success’, Appendix B, Recommendation 44. 3 H C SC B, Thursday 2 December 2004, cols 353–5.

Requirement for a premises licence 10.5 The GA 2005 provides a number of different ways in which the use of premises for gambling may be authorised, but the premises licence is the most important. It is an offence to use premises, or to cause or permit premises to be used, to operate a casino, to provide facilities for bingo, to make a gaming machine available for use, to provide other facilities for gaming, or to provide facilities for betting unless that use is authorised by a premises licence, or unless the use is covered by one of a number of other forms of authorisation which the Act provides.1 These forms of authorisation are set out at 10.8 below. Five different types of premises licence are provided for, namely: (i) a casino premises licence authorising premises to be used for the operation of a casino; (ii) a bingo premises licence authorising premises to be used for the provision of facilities for the playing of bingo; (iii) an adult gaming centre premises licence authorising premises to be used for making Category B, C or D gaming machines available for use; (iv) a family entertainment centre premises licence authorising premises to be used for making Category C or D gaming machines available for use; (v) a betting premises licence authorising premises to be used for the provision of facilities for betting, whether by making or accepting bets, by acting as a betting intermediary or by providing other facilities for the making or accepting of bets.2 1 GA 2005, s 37(1)(a)–(e), (2) and (3). 2 GA 2005, s 150(1)(a)–(e).

10.6 A premises licence is not required in order to provide facilities for gambling on premises if the facilities are to be used only by persons who: (i)

are acting in the course of a business; or

(ii) are not on the premises.1 The Explanatory Notes give as an example of the first case a telephone call centre set up by a betting operator to accept telephone bets.2 In such a case, all the people using the premises would be acting in the course of the betting operator’s business and no customers would be visiting the premises. The Explanatory Notes give as an example of the second case, the use of premises to house a server which is used for the purposes of remote gambling.3 Here the facilities, namely the server, will be used by people for the purpose of remote gambling, but those people will not visit the premises or be on the premises. Any persons who might visit the premises (such as technical support staff) would fall within the first exemption, since they would be acting in the course of the gambling business. 1 GA 2005, s 37(6).

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Premises licences 2 Explanatory Notes to GA 2005, para 149. 3 Explanatory Notes to GA 2005, para 149.

10.7 Premises may only be subject to one premises licence at a time,1 and, with the exceptions noted below, each licence may only authorise the use of the premises for gambling of one of the specified kinds.2 That rule is subject to the following exceptions: (i)

Tracks: a betting track may be subject to more than one premises licence at a time, provided each licence relates to a different area of the track. Where a track, or part of a track, is subject to a premises licence, any application for a premises licence to authorise another type of gambling there must be accompanied by an application to vary the existing licence, so that it will no longer have effect if and when the new licence is granted.3

(ii) Licensed adult gaming centres: these may provide any number of Category C  and D  gaming machines as well as up to four Category B gaming machines.4 In addition, prize gaming (such as prize bingo) may be provided in the premises, subject to certain conditions.5 (iii) Licensed family entertainment centres: these may provide any number of Category D  gaming machines as well as any number of Category C gaming machines.6 In addition, prize gaming (such as prize bingo) may be provided, subject to certain conditions.7 (iv) Licensed casinos: small, large and regional casinos (as to which see Chapter 14) may provide Category B, C or D gaming machines, subject to limits on numbers specified in the Act. A  regional casino using at least 40 gaming tables may also use Category A  machines, subject to limits on numbers set out in the Act.8 (v) Licensed bingo premises: these may make available for use on the premises a number of Category B gaming machines not exceeding 20 per cent of the total number of gaming machines which are available for use on the premises together with an unlimited number of Category C  and D  machines.9 In addition, prize gaming may be provided in premises for which a bingo premises licence is in force, subject to conditions which may be attached to the operating licence which authorises the provision of bingo there.10 (vi) Licensed betting premises may use up to a total of four gaming machines of Category B, C or D,11 except where the licence is granted in respect of a track.12 In such a case, the licence will only authorise use of gaming machines if the holder also holds a pool betting operating licence.   1 As to which, see Clockfair Ltd v Sandwell Metropolitan Borough Council and Grosvenor Casinos Ltd [2012]  EWHC  1857 (Admin), [2012]  LLR  845, which was a special case concerning a bingo licence and a casino licence converted pursuant to the transitional provisions of the Gambling Act and a subsequent application to review the latter.   2 GA 2005, s 152.   3 GA 2005, s 152.   4 GA 2005, s 172(1).   5 GA 2005, s 290(1).   6 GA 2005, s 172(2).

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Premises licences   7 GA 2005, s 290(1).   8 GA 2005, s 172(3), (4) and (5).   9 GA 2005, s 172(7). 10 GA 2005, s 291. 11 GA 2005, s 172(8). 12 GA 2005, s 172(8) and (9).

Exceptions to the requirement for a premises licence 10.8 Gambling may be provided on premises without a premises licence in the following cases: (i)

Bets may be accepted on a track under an ‘occasional use notice’: s 39.

(ii) Written authority may be given which has the effect of authorising premises to be used for the collection of pool bets and stakes etc: s 40. (iii) Premises may be used for gambling under a temporary use notice having effect under Part 9 of the GA 2005. (iv) Certain gaming machines may be used in premises if a family entertainment centre gaming machine permit exists for the premises, or if either no prize, or a limited prize only, may be won. (v)

Equal chance gaming may be provided in a members’ club, a commercial club or a miners’ welfare institute (s 269); gaming may be provided in accordance with a club gaming permit (s 271); and gaming machines may be provided in accordance with a club machine permit (s 273).

(vi) Facilities for equal chance gaming may be provided, and no more than two Category C or D gaming machines may be provided, on premises for which an on-premises alcohol licence has effect: ss  278, 279 and 282. A  Category C  or D  gaming machine may also be provided on such premises in accordance with a licensed premises gaming machine permit: s 283. (vii) One or more Category D gaming machines may be made available for use at a travelling fair: s 287. (viii) ‘Prize gaming’ may be provided, subject to specified conditions, on premises for which a prize gaming permit exists (s  289), in an adult gaming centre or a licensed family entertainment centre (s  290), in premises for which a bingo premises licence has effect (s 291), and at a travelling fair (s 292). In addition, no premises licence is required where the gaming or betting provided is private gaming or betting (s 296), nor where facilities are provided for non-commercial prize gaming or non-commercial equal chance gaming (s 298).

THE LICENSING AUTHORITY 10.9 In England, the licensing authority is the district council, the county council (in the case of a county where there are no district councils), the London borough council, the Common Council of the City of London or the 515

Premises licences Council of the Isles of Scilly.1 In Wales, the licensing authority is the county council or the county borough council. In Scotland, the licensing authority is a licensing board constituted under s 1 of the Licensing (Scotland) Act 1976 – see Chapter 24. For a discussion of the constitution, status and proceedings of the licensing authority see Chapter 9. Application for a licence is made to the licensing authority in whose area the premises are wholly or partly situated.2 The licensing authority have a number of duties and powers in addition to their function of granting or rejecting applications for premises licences. First, they must prepare, consult on and publish a three-year statement of the principles they will apply in exercising their functions under the Act.3 Second, the licensing authority may resolve not to issue casino premises licences in their area.4 Third, they must determine the amounts of the licence fees they will charge.5 In addition, the licensing authority are responsible for administering the ‘temporary use notice’ procedures under Part 9 of the GA 2005. The Act delegates the authority’s functions to the licensing committee of the authority established under the Licensing Act 2003,6 with a number of exceptions – which are discussed in Chapter 9. In addition, the Act provides its own scheme for delegation by the licensing committee to a sub-committee or to an officer. These powers of delegation are also discussed in Chapter 9. 1 GA 2005, s 2. In addition, the Sub-Treasurer of the Inner Temple and the UnderTreasurer of the Middle Temple are licensing authorities for the purpose of granting licensed premises gaming machine permits under GA  2005, s  283 and Sch 13: s 2(2). 2 GA  2005, s  159. ‘Premises’ includes any place and, in particular, a vessel and a vehicle: s  353(1). However, no premises licence may be issued for a vehicle as defined by s  353(1): s  211(1)(a). A  premises licence may be issued for certain vessels (ie basically a boat or hovercraft – see definition in s 353(1)): s 211(1)(b)–(d). Provision is made by s 211 about the place where a vessel is taken to be situated and also the parties who will be treated as responsible authorities in relation to the application. 3 GA 2005, s 349. 4 GA 2005, s 166. 5 GA 2005, s 212. 6 GA 2005, s 154.

Three-year licensing policy 10.10 A licensing authority is required to prepare and publish a statement of the principles that it proposes to apply in exercising its functions under the Act.1 The licensing policy statement will remain in force for three years, unless revised.2 By regulation, 31 January 2007 is the first day of the first period of three years during which policy statements are to run.3 A licensing authority must review its statement from time to time and, if it thinks it necessary in the light of a review, revise the statement and publish the revision.4 In preparing a statement or revision, an authority is required to consult certain parties – see below.5 Regulations have been made dealing with the form of statements and the procedure to be adopted in preparing, reviewing, revising and publishing them.6 In addition, the Gambling Commission’s Guidance to Licensing Authorities 5th edition September 2015, Part  6 contains guidance about statements of licensing policy. 1 GA 2005, s 349(1)(a)–(b). 2 GA 2005, s 349(1).

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Premises licences 3 See the Gambling Act 2005 (Licensing Authority Policy Statement) (First Appointed Day) Order 2006 (SI 2006/637), made under GA 2005, s 349(6). 4 GA 2005, s 349(2). 5 GA 2005, s 349(3). 6 See the Gambling Act 2005 (Licensing Authority Policy Statement) (England and Wales) Regulations 2006 (SI 2006/636), made under GA 2005, s 349(4).

10.11 Subject to the specific requirements of the regulations, the form of the statement or any revision is for the authority to determine.1 The regulations provide that: (i) the statement must include an introductory section at or near the beginning summarising the content;2 (ii) the statement must include a description of the geographical area over which the authority exercises functions under the Act3 (this requirement may be satisfied by including a plan of the area);4 (iii) the statement must list the persons whom the authority has consulted in preparing the statement.5 1 The Gambling Act 2005 (Licensing Authority Policy Statement) (England and Wales) Regulations 2006, reg 3. 2 Regulation 4(1). 3 Regulation 4(2)(a). 4 Regulation 4(3). 5 Regulation 4(2)(b).

10.12 In addition to the above requirements, the statement must set out each of the following in a separate section: (a)

The principles to be applied by the authority in exercising their powers to designate, in writing, a body competent to advise them about the protection of children from harm;1 the Commission’s s  25 Guidance notes that such a body may be, but will not necessarily be the Local Safeguarding Children Board in England and Wales, or the Child Protection Committee in Scotland, though the authority must consider which body best fulfils the function.2

(b) The principles to be applied by the authority in exercising the powers under s 158 of the Act to determine whether a person is an interested party in relation to a premises licence;3 the Commission’s s 25 Guidance states that authorities must consider whether a person is an interested party on a case by case basis but that they should set out in their policy statements the factors which they will take into account when making their decision. These factors may, for example, include the size of the premises and the nature of the activities taking place. The statement should also include guidance as to the persons whom the authority will consider come within the category of those who represent persons living close to premises, or having business interests that may be affected by premises.4 (c)

The principles to be applied by the authority in exercising the functions under ss 29 and 30 of the Act with respect to the exchange of information between the authority and the Gambling Commission, and the functions under s  350 of the Act with respect to the exchange of information 517

Premises licences between the authority and other persons listed in Sch 6 to the Act.5 The Commission’s s 25 Guidance requires the authority to set out whether they intend to establish any protocols on how they will approach data protection and freedom of information requirements; in particular, how information will be protected, whether the confidentiality of those making representations will be maintained, what information will be shared with other agencies or persons and how information can be accessed by data subjects.6 (d) The principles to be applied by the authority in exercising the functions under Part 15 of the Act with respect to the inspection of premises; and the powers under s 346 of the Act to institute criminal proceedings in respect of the offences specified there.7 The Commission’s s 25 Guidance pointedly reminds licensing authorities (whether drafting their policy or otherwise) that they are under a statutory duty to have regard to the principles in the Regulators’ Code (April 2014).8 1 Gambling Act 2005 (Licensing Authority Policy Statement) (England and Wales) Regulations 2006, reg  5(a); the power to designate such a body is contained in GA 2005, s 157(h). 2 Gambling Commission Guidance to Licensing Authorities (5th edn) September 2015, para 6.16. 3 Gambling Act 2005 (Licensing Authority Policy Statement) (England and Wales) Regulations 2006, reg 5(b). 4 2015 Guidance, para 6.18–6.21. 5 Gambling Act 2005 (Licensing Authority Policy Statement) (England and Wales) Regulations 2006, reg 5(c). 6 2015 Guidance, para 6.25. 7 Gambling Act 2005 (Licensing Authority Policy Statement) (England and Wales) Regulations 2006, reg 5(d). 8 2015 Guidance, paras 5.27–5.28.

10.13 In addition to the above requirements, the Commission’s s  25 Guidance requires that policy statements: (i)

should begin by stating the three licensing objectives which the licensing policy will promote; the statement should also state that the licensing authority will aim to permit the use of premises for gambling as set out in s 153;1

(ii) should include a firm commitment to avoid duplication with other regulatory regimes so far as possible;2 (iii) may not override the right of any person to make an application under the Act and to have the application considered on its merits, and may not undermine the right of any person to make representations on an application or to seek a review of a licence where provision has been made for them to do so;3 (iv) should reflect the fact that the ‘demand’ for gambling premises is not a relevant consideration on an application for a premises licence;4 the Guidance notes, however, that an authority may comment on the location of premises in so far as the location relates to licensing objectives (eg  might state that the authority will consider whether applications for premises licences for certain gambling activities 518

Premises licences should be located close to a school, or a centre for gambling addicts).5 1 Gambling Commission Guidance to Licensing Authorities (5th edn) September 2015, paras 6.7–6.8. 2 2015 Guidance, para 6.36. 3 2015 Guidance, para 6.10. 4 2015 Guidance, paras 6.10–6.11. 5 2015 Guidance, para 6.37–6.38.

10.14 The updated (2016)  LCCP have significant implications for the statement of principles. An LGA  Guidance Note (May 2015)1 advises: ‘The requirement for operators to prepare local risk assessments in relation to all their premises from April 2016 means that licensing authorities will need to set out their expectations of operators’ risk assessments, ideally in their statements. This provides a real opportunity for councils to reflect local needs and issues in their gambling policies, in a similar way to licensing policy statements prepared under the Licensing Act 2003.’ Note that the social responsibility code provision 10.1.1. in the Gambling Commission’s Gambling codes of practice – Consolidated for all forms of gambling (October 2016) makes the following specific arrangements (coming into force on 31 October 2016) for assessing local risk in all non-remote casino, adult gaming centre, bingo, family entertainment centre, betting and remote betting intermediary (trading room only) licences, except non-remote general betting (limited) and betting intermediary licences: ‘1

Licensees must assess the local risks to the licensing objectives posed by the provision of gambling facilities at each of their premises, and have policies, procedures and control measures to mitigate those risks. In making risk assessments, licensees must take into account relevant matters identified in the licensing authority’s statement of licensing policy.

2

Licensees must review (and update as necessary) their local risk assessments: a

to take account of significant changes in local circumstances, including those identified in a licensing authority’s statement of licensing policy;

b

when there are significant changes at a licensee’s premises that may affect their mitigation of local risks;

c

when applying for a variation of a premises licence; and

d

in any case, undertake a local risk assessment when applying for a new premises licence.’

In its February 2016 Bulletin to licensing authorities the Commission also advises: ‘When undertaking their local risk assessments operators must take into account relevant matters identified in the local LA’s statement of licensing policy and, where available, local area profiles. Whilst there is no statutory requirement for licensees to share their risk assessments with 519

Premises licences responsible authorities or interested parties, ordinary code 10.1.2 states that licensees should share their risk assessment with LAs on request as best practice. Some LAs have included in their statements of licensing policy that they expect to see the risk assessment when undertaking inspections. We therefore consider it appropriate for operators to hold premises’ risk assessments on the premises. Doing so can also save considerable time and expense, as well as increasing the confidence of those agencies as to the operator’s awareness of their obligations.’ The same Bulletin reminds authorities of their enforcement powers as regards risk assessments after 6 April 2016. 1 http://www.local.gov.uk/documents/10180/11309/GA+SoP+guidance+note++5+May+2015.pdf/2c5210c2-bbc3-46ec-977f-b34b20445609

Revisions 10.15 (i)

A revision of a licensing policy statement must:

include an introductory section at or near the beginning summarising the content;1

(ii) list in the introductory section the persons consulted in preparing the revision;2 (iii) where it deals with any of the matters set out in 10.13 above, comply with the requirements applying to those matters.3 1 Gambling Act 2005 (Licensing Authority Policy Statement) (England and Wales) Regulations 2006, reg 6(1), applying reg 4(1). 2 Regulation 6(2). 3 Regulation 6(3).

10.16 The Commission’s s 25 Guidance points out that licensing authorities will need to consider whether a review is required where policy changes in fields other than gambling premises licensing (eg in planning) may impact on premises licensing policy under the Act.1 Where a statement is revised, it is only the revision that needs to be published and consulted on; there is no need to review and reopen consultation on the main body of the statement.2 1 Gambling Commission Guidance to Licensing Authorities (5th edn) September 2015, para 6.62. 2 2015 Guidance, para 6.64.

Consultation on policy 10.17 In preparing a statement or revision of a policy document, the licensing authority must consult as follows: (a) (i) in England and Wales, the Chief Officer of Police for the authority’s area;

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(ii) in Scotland, the Chief Constable of the Police Force maintained for the police area comprising the authority’s area;

Premises licences (b) one or more persons who appear to the authority to represent the interests of persons carrying on gambling businesses in the authority’s area; and (c) one or more persons who appear to the authority to represent the interests of persons who are likely to be affected by the exercise of the authority’s functions under the Act.1 Except so far as consultation with the police is concerned, the above requirements leave the authority with a fairly wide discretion as to whom they will consult. Generally speaking, where statute gives a decision-maker some discretion as to whom he should consult, his decision as to whom to consult will not be interfered with by the courts, unless it was made in bad faith or was one which no reasonable decision-maker could have made.2 1 GA 2005, s 249(3). 2 Gallagher v Post Office [1973]  All ER  712; Agricultural, Horticultural and Forestry Industry Training Board v Aylesbury Mushrooms Limited [1972] 1  All ER  280; R  v Sheffield City Council, ex  p Mansfield [1978] 37  P  &  CR  1, DC; R  v Hammersmith & Fulham London Borough Council, ex p Beddowes [1987] QB 1050, CA at 1068 per Fox LJ; R (Wainwright) v Richmond upon Thames LBC [2001] EWCA Civ 2062, CA.

10.18 In R  (Wainwright) v Richmond upon Thames LBC,1 a case involving local authority consultation as to the siting of a toucan crossing under the Road Traffic Regulations Act 1984, Clarke LJ said: ‘Provided that the notification and consultation satisfy the principles set out above, it appears to me that the council must have a comparatively wide discretion as to how the process is carried out. The council cannot be in breach of duty unless the extent of the consultation process was such as to be outside the ordinary ambit of its discretion. In short, in order to be unlawful the nature and extent of the process must be so narrow that no reasonable council, complying with the principles set out above, would have adopted it.’ 1 [2001] EWCA Civ 2062, CA.

10.19 Whereas the Commission’s Guidance of 2012 recommended a number of bodies whom the licensing authority might wish to consult,1 the 2015 Guidance merely states ‘It is a matter for the licensing authorities to develop their own consultation practices, including the methods for consultation and who they consider it necessary to consult with, which might include consultation with relevant local groups, businesses and responsible authorities.’2 This subtle departure is in accordance with a less subtle and increasing trend in the Commission’s guidance and advice generally, to encourage licensing authorities to embrace a greater independence and freedom of discretion than has hitherto been the case. Whether or not the ambit of a licensing authority’s discretion has been over-stated by the Commission (as, for example, in the Commission’s interpretation of s 153) remains to be tested in the courts. 1 Gambling Commission Guidance to Licensing Authorities (4th edn, September 2012), para 6.15. 2 Gambling Commission Guidance to Licensing Authorities (5th edn, September 2015), para 6.60.

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Premises licences 10.20 The principles to be applied in conducting consultations upon a proposal such as this have been developed by the courts in a series of cases. In R v Gwent County Council and the Secretary of State for Wales, ex p Bryant1 the Divisional Court held, in the context of the Education Act 1980, that the elements of a ‘fair consultation’ mean: (a) consultation when the proposals are still at a formative stage; (b) adequate information on which to respond; (c)

adequate time in which to respond; and

(d) conscientious consideration by the authority of the response to the consultation.2 1 [1988] COD, p 19. 2 [1988] COD, pp 19–20; in formulating these principles the court was adopting the analysis proposed by Mr Stephen Sedley QC (as he then was) in R v Brent London Borough Council, ex p Gunning and Others (1985) 84 LGR 168. In R (Moseley) v Haringey [2014] 1 WLR 3947 the ‘Sedley criteria’ were approved by the Supreme Court (Lord Wilson at para 24). A similar analysis of the principles of fair consultation is to be found in other cases, including R v British Coal Corporation and Secretary of State for Trade and Industry, ex p Price [1994] IRLR 72; Rowell v Hubbard [1995] IRLR 195; King v Eaton Ltd [1996] IRLR 199; Mugford v Midland Bank plc [1997] ICR 399; R v North & East Devon Health Authority, ex p Coughlan [2000] 1 WLR 632, CA.

10.21 In R v North East Devon Health Authority, ex p Coughlan1 the Court of Appeal formulated the requirements as follows: ‘To be proper, consultation must be undertaken at a time when proposals are still at a formative stage; it must include sufficient reasons for particular proposals to allow those consulted to give intelligent consideration and an intelligent response; adequate time must be given for this purpose; and the product of consultation must be conscientiously taken into account when the ultimate decision is taken.’2 1 [2000] 2 WLR 622. 2 [2000] 2 WLR 622 at para 108.

10.22 In addition to the principles laid down by the courts, the Cabinet Office’s Better Regulations Executive has published a ‘Code of Practice on Consultation’1 setting out and elaborating on six consultation criteria.2 Each of the four elements of ‘fair consultation’ identified at 10.20 above will now be considered. 1 July 2012 (updating and amending the 2008 Code). 2 The Code of Practice is available at https://www.gov.uk/government/ publications/consultation-principles-guidance.

Consultation when the proposals are still at a formative stage 10.23 This simply means that the proposals must be at a stage of development where it is possible for changes to be made to them in the light of the consultation. In a leading case the judge referred to consultation by the Minister on ‘a plan which the Minister has tentatively evolved’.1 522

Premises licences However, this requirement may be satisfied even though the proposals are at an advanced stage of preparation. For example, it has been common for local planning authorities to consult on fully-formulated versions of a proposed development plan. Indeed, a duty to consult will not normally arise until there are in existence proposals sufficiently well-formulated for consultation to take place.2 In another leading case the judge noted that the proposals should be ‘of some specificity into which those consulted can get their teeth’.3 The requirement is satisfied provided the authority is willing to consider representations about the proposals, even though they may be fully formulated, and to make changes in the light of them. 1 Rollo v Minister of Town & Country Planning [1948] 1 All ER 13 at 17. 2 Short v Tower Hamlets London Borough Council [1985] 18 HLR 171, CA. Contrast R v Hammersmith & Fulham London Borough Council, ex p Beddowes [1987] QB 1050, CA at 1068 per Fox LJ. 3 R v Brent London Borough Council, ex p Gunning and Others (1985) 84 LGR 168.

Adequate information on which to respond 10.24 The information provided to consultees must be such as to let them know in clear terms what the proposal is and exactly why it is under positive consideration, telling them enough (which may be a good deal) to enable them to make an intelligent response.1 Clearly, the amount of detail to be given about the proposal, and the degree to which reasons should be given, will vary as between different parts of the policy statement and the issues that are raised there. In R v North & East Devon HA, ex p Coughlan2 the Court of Appeal stressed that consultation is not litigation and noted that: ‘the consulting authority is not required to publicise every submission it receives or (absent some statutory obligation) to disclose all its advice.’3 It has been said that a local authority conducting a consultation is not required to set out possible objections to its proposals or to articulate both sides of the argument.4 1 2 3 4

R v North & East Devon Health Authority, ex p Coughlan [2000] 2 WLR 622 at para 112. [2000] 2 WLR 622. [2000] 2 WLR 622 at para 112. R (Beale) v London Borough of Camden [2004] BLGR 291, para 19.

Adequate time in which to respond 10.25 The principle laid down in a line of cases is that the time to be given to allow consultees to respond will depend upon the circumstances of the individual case. However, in the context of consultation under s 349, the Commission’s s  25 Guidance provides that authorities should follow best practice as set out by the Cabinet Office and should allow 12 weeks for responses to consultation.1 This is therefore thought likely to be the minimum acceptable period.2 1 Gambling Commission Guidance to Licensing Authorities (5th edn, September 2015), para 6.61.

523

Premises licences 2 Cabinet Office Code of Practice on Consultation 2012, however, advises that ‘departments will follow a range of timescales rather than defaulting to a 12-week period, particularly where extensive engagement has occurred before’.

Conscientious consideration by the authority of the responses to the consultation 10.26 As is noted at 10.23 above, proposals may go out for consultation in an advanced stage of preparation. However, the fourth requirement of ‘fair consultation’ imposes an obligation on the authority to give proper consideration to the representations made to them with a view to making changes in the proposals in the light of those representations where appropriate. The requisite state of mind was laid down in an early case1 where it was said that the Minister: ‘… with receptive mind, must by such consultation seek and welcome the aid and advice which those with local knowledge may be in a position to proffer in regard to a plan which the Minister has tentatively evolved.’ It has also been said that an authority must listen ‘with mind ‘ajar’’.2 More recently, the requirement to consider representations has been described as one in which: ‘… the consulting party must consider responses with a receptive mind and in a conscientious manner when reaching its decision’.3 Provided the authority consider responses in accordance with these standards, it is a matter for the authority whether, and to what extent, they make changes in the proposals, subject always to the requirement to act in good faith and not to act in a way which could be described as Wednesbury unreasonable. It is good practice to provide a summary of the responses to the consultation, and these should be published on the authority’s website. A paper copy of the summary should also be made available. Good practice also involves setting out alongside the summarised responses the officer’s views and recommendations in the light of the responses. The Cabinet Office Code advice of 2008 was that: ‘The summary should give an analysis of the responses to questions asked: for each question there should be a summary of responses to that question and then an explanation of how it is proposed to change the proposal in the light of the responses received. There should also be information provided on themes that came out of the consultation which were not covered by the questions. Wherever possible the summary of responses should also include a summary of the next steps for the policy, including reasons for decisions taken.’4 1 Rollo v Minister of Town & Country Planning [1947] 2 All ER 488. 2 R  v Secretary of State for the Environment, ex  p Brent London Borough Council [1982] QB 593 at 643. 3 Cran v Camden London Borough Council [1995] RGR 346.

524

Premises licences 4 Cabinet Office Better Regulation Executive Code of Practice on Consultation, 2008, criteria 4.4–4.5. Cabinet Office Code of Practice on Consultation 2012, which replaced the 2008 Code, places emphasis on ‘understanding the effects of a proposal and focusing on real engagement with key groups rather than following a set process.’

Consequences of defective consultation 10.27 Where a decision-maker makes a decision in the public law realm without properly consulting those who were entitled to be consulted, his decision is liable to be attacked by way of application for judicial review. If a reviewing court concludes that the decision has been taken without proper consultation, it may decide to quash the decision. The decision whether to quash will itself be the subject of a discretion exercisable by the reviewing court. In approaching the exercise of that discretion courts have tended to follow the approach laid down in cases where a decision-maker has, in breach of the rules of natural justice, failed adequately to hear representations from an individual whose interests were being affected by a decision to be taken by the decision-maker. In R v Chief Constable of Thames Valley Police, ex p Cotton1 the court was concerned with the question whether a police officer was given sufficient opportunities to make representations as to whether or not his services should be dispensed with. Bingham LJ stated the principles as follows: ‘While cases may no doubt arise in which it can properly be held that denying the subject of a decision an adequate opportunity to put his case is not in all the circumstances unfair, I would expect these cases to be of great rarity. There are a number of reasons for this: 1.

unless the subject of the decision has had the opportunity to put his case it may not be easy to know what case he could or would have put if he had had the chance;

2.

as memorably pointed out by Megarry J  in John v Rees [1970] Ch 345 at page 402, experience shows that what is confidently expected is by no means always that which happens;

3.

it is generally desirable that decision-makers should be reasonably receptive to argument, and it would therefore be unfortunate if a complainant’s position became weaker as the decision-maker’s mind became more closed;

4. in considering whether the complainant’s representations would have made any difference to the outcome the court may unconsciously stray from its proper province of reviewing the propriety of the decision-making process into the forbidden territory of evaluating the substantial merits of a decision; 5.

this is a field in which appearances are generally thought to matter;

6.

though the decision-maker is under a duty to act fairly the subject of the decision may properly be said to have a right to be heard, and rights are not to be lightly denied.’2

1 [1990] IRLR 344.

525

Premises licences 2 These principles were subsequently applied by the Court of Appeal in R v Broxtow Borough Council, ex p Bradford [2000] IRLR 329.

10.28 The above passage was cited and applied in R  (Wainwright) v Richmond upon Thames London Borough Council,1 a case involving a failure by a local authority to consult adequately in connection with proposals for constructing a toucan road crossing. To the extent that it cited the passage, the Court of Appeal clearly accepted the weight which the passage attaches to proper consultation. This might be read to imply that a court will only rarely allow a decision to stand if the consultation process has been inadequate. The test which the Court of Appeal adopted was to ask whether, if there had been no breach of duty to consult, there was a real as opposed to a purely minimal possibility that the outcome would have been different. The court accepted that in trying to answer that question it should have in mind the principles identified by Bingham LJ in Ex parte Cotton.2 On the facts of the case before it, the court concluded that although the consultation was defective the decision to construct the toucan crossing should not be quashed because there was no real possibility that the council would have reached a different decision if proper notice of the proposals had been given and consulted on. The court concluded that: ‘It would not have led to a significant number of members of the public making representations who did not in fact do so. Moreover, no-one has been able to suggest any new point of substance which might have been made. There can I think be no doubt that the council would have exercised its discretion in the same way’.3 The Court of Appeal noted that there was a distinction to be made between cases such as Ex  parte Cotton and Ex parte Bradford (where the court was concerned with the failure by a decision-maker to hear representations from an individual who was to be directly affected by its decision) and cases such as the case before it where there was a general duty to consult a potentially wide class of consultees about proposals which were of public concern. The distinction is obviously one that has to be taken into account, although it should be borne in mind that individuals (for example, people running businesses in the locality and residents there) may be individually affected by the terms of the authority’s licensing policy, and in those circumstances the significant weight which Ex parte Cotton accords to proper consultation will remain, it is suggested, appropriate. 1 [2001] EWCA Civ 2062. 2 R (Wainwright) v Richmond upon Thames London Borough Council [2001] EWCA Civ 2062 at [51]. 3 [2001] EWCA Civ 2062 at [55].

Miscellaneous section 25 guidance 10.29 There are a number of miscellaneous matters which the Commission’s s 25 Guidance recommends should be included in licensing policy statements. It is recommended that the authority should set out in their statement what factors they may take into account when considering applications for premises licences, permits and other permissions and matters that they would consider 526

Premises licences relevant when determining whether to review a licence.1 They should also set out any resolution not to issue casino licences and should include details about how they have taken or will take a decision to pass (or not to pass) a casino resolution.2 The 2015 Guidance advises that the licensing authority ‘may’ wish to include a declaration that sets out that the authority have had regard to the licensing objectives of the GA 2005, the guidance issued by the Gambling Commission, and any responses from those consulted on the policy statement.3 Previous guidance has advised that the licensing authority ‘should’ include such a statement. Authorities should note that the regulations and s 25 Guidance do not prevent them from including any additional information that they consider necessary or helpful.4 1 Gambling Commission Guidance to Licensing Authorities (5th edn, September 2015), para 6.33. 2 Paragraph 6.35. 3 Paragraph 6.54. 4 Paragraph 6.55.

Publication and advertisement of the policy statement 10.30 Before a statement or revision comes into effect, the licensing authority must publish it and advertise the publication. The statement or revision must be published for a period of at least four weeks before it comes into effect (i)  on the authority’s internet website; and (ii)  in one or more public libraries in the area to which the policy relates and/or in other premises in the area.1 The publication of the statement or revision must be advertised no later than the first date of the publication by notice (i) on the authority’s internet website and in one or more of (ii) a local newspaper, a local newsletter, circular or similar document, a public noticeboard in or near the authority’s principal office and a public noticeboard on the premises of public libraries.2 The notice must state the date on which the statement or revision will be published, the date on which it will come into effect, the internet address where the statement or revision will be published and the address of the library or other premises at which the statement or revision may be inspected.3 1 Gambling Act 2005 (Licensing Authority Policy Statement) (England and Wales) Regulations 2006, reg 7(1)(a) and (2). 2 Regulation 7(1)(b) and (4). 3 Regulation 7(3).

Licensing Authority Fees 10.31 Fees are payable upon the making of various applications to the licensing authority. The relevant applications are an application for grant of a premises licence,1 an application for variation of a licence,2 an application for transfer of a licence,3 an application for a copy licence,4 an application for reinstatement of a licence,5 and an application for a provisional statement.6 In addition an annual fee is payable for a licence.7 1 GA 2005, s 159(6)(c). 2 GA 2005, s 187(3).

527

Premises licences 3 4 5 6 7

GA 2005, s 188(2). GA 2005, s 190(2). GA 2005, s 195(3). GA 2005, s 204(2). GA 2005, s 184(1)(b).

10.32 The Act makes provision for regulations prescribing fees to be paid, and it provides that the amount of those fees may be determined by the licensing authority, so that each licensing authority is given a discretion as to the level of fees it will set.1 For England and Wales the relevant regulations are the Gambling (Premises Licences Fees) (England and Wales) Regulations 2007;2 separate regulations have been made for Scotland.3 The following discussion relates to the position in England and Wales. The regulations proceed by defining nine separate classes of premises licence and prescribing the maximum fee which a local authority may charge in respect of different applications relating to each licence. The nine classes of licence are: (a) a regional casino premises licence; (b) a large casino premises licence; (c)

a small casino premises licence;

(d) a converted casino premises licence; (e)

a bingo premises licence;

(f)

an adult gaming centre premises licence;

(g) a betting premises (track) licence; (h) a family entertainment centre premises licence; and (i)

a betting premises (other) licence.4

The maximum fees which may be charged are set out in the following table:5 1 GA 2005, s 212(1). 2 SI 2007/479. 3 The Gambling Premises (Licence Fees) (Scotland) Regulations 2007 (SSI 2007/197). 4 The Gambling Premises (Licence Fees) (England and Wales) Regulations 2007, reg 3. 5 Table derived from the Gambling (Premises Licence Fees) (England and Wales) Regulations 2007 (SI 2007/479), Schedule.

528

£5,000

£3,000

Large casino premises licence

Small casino premises licence

Converted casino premises licence

£2,000

£8,000

£10,000

£15,000

£8,000

Regional casino premises licence

Column (2) Maximum conversion application fee for nonfast track application

Column (4) Maximum nonconversion application fee in respect of other premises

Column (1) Classes of premises licence

Column (3) Maximum nonconversion application fee in respect provisional statement premises

Table of minimum fees

SCHEDULE

£3,000

£5,000

£10,000

£15,000

Column (5) Maximum annual fee

£2,000

£4,000

£5,000

£7,500

Column (6) Maximum fee for application to vary

£1,350

£1,800

£2,150

£6,500

Column (7) Maximum fee for application to transfer

£1,350

£1,800

£2,150

£15,000

Column (8) Maximum fee for application for reinstatement of a licence

£8,000

£10,000

Column (9) Maximum fee for application for provisional statement

Premises licences

529

Column (2) Maximum conversion application fee for nonfast track application

£1,750

£1,000

£1,250

£1,000

£1,500

Column (1) Classes of premises licence

Bingo premises licence

530

Adult gaming centre premises licence

Betting premises (track) licence

Family entertainment centre premises licence

Betting premises (other) licence

£1,200

£950

£950

£1,200

£1,200

Column (3) Maximum nonconversion application fee in respect provisional statement premises

£3,000

£2,000

£2,500

£2,000

£3,500

Column (4) Maximum nonconversion application fee in respect of other premises

£600

£750

£1,000

£1,000

£1,000

Column (5) Maximum annual fee

£1,500

£1,000

£1,250

£1,000

£1,750

Column (6) Maximum fee for application to vary

£1,200

£950

£950

£1,200

£1,200

Column (7) Maximum fee for application to transfer

£1,200

£950

£950

£1,200

£1,200

Column (8) Maximum fee for application for reinstatement of a licence

£3,000

£2,000

£2,500

£2,000

£3,500

Column (9) Maximum fee for application for provisional statement

Premises licences

Premises licences 10.33 The fees prescribed by the regulations are maximum fees. In deciding what fees to charge, subject to those maxima, the licensing authority must aim to ensure that the income from fees of each particular kind equates as nearly as possible to the cost of providing the service to which the fee relates (including a reasonable share of the expenditure which is referable only partly or only indirectly to the provision of that service).1 Where a licence is subject to a ‘seasonal condition’ limiting use of the premises for part of a year only, the licensing authority may prescribe an annual fee lower than that which would be payable for a full licence.2 1 GA 2005, s 212(2)(d). 2 Gambling Premises (Licence Fees) (England and Wales) Regulations 2007, reg 9.

10.34 The maximum fees prescribed in the regulations are based upon a costing exercise carried out by DCMS which took account of data from 46 licensing authorities, including feedback on the processes they would have to undertake to fulfil their functions under the Act.1 There are concerns that, notwithstanding this exercise, authorities will tend to treat the prescribed maximum fees as standard and simply charge them without adopting the statutory requirement to aim for cost recovery only. Authorities are enjoined by the Regulatory Impact Assessment for the regulations to abide by internal audit and scrutiny procedures, to monitor their activities in line with best value legislation, to submit to best value scrutiny by the Audit Commission and to observe the Best Value Accounting Code of Practice. In addition, DCMS intends, with the help of LACORS, to collate and publish the fees set by each licensing authority for the first year and then to conduct case studies looking at each type of premises and each region.2 It will then consider whether it needs to adjust the maximum fees up or down from April 2008. Licensing authorities are clearly under notice that a failure to moderate fees so that they achieve cost recovery and no more creates the risk that maximum fees will be reduced, or that they will be subjected to more severe monitoring in the fixing of fees. 1 Explanatory Memorandum to the Gambling Premises (Licence Fees) (England and Wales) Regulations 2007, para 7.3. 2 Explanatory Memorandum, para 7.14.

10.34A In R  (on the application of Hemming (t/a Simply Pleasure Ltd)) v Westminster City Council,1 the issue for the court was whether it was legitimate under domestic and/or European Union Law for Westminster City Council to charge such licence fee as would make the licensing regime essentially self-financing – the legitimacy of which has been long established in UK domestic law. The claimant licensees argued that following the introduction of the Provision of Services Regulations 2009,2 Westminster City Council was no longer entitled to include within its fee the cost of running and enforcing the licensing regime. The Supreme Court rejected that argument, ruling that ‘Nothing in article  13(2) precludes a licensing Authority from charging a fee for the possession or retention of a licence and making [a] licence conditional upon payment of such a fee’. The court also ruled that (subject to proportionality) there was no reason why the licence fee should not be set at a level enabling the authorities to recover from licensed operators the full costs of running and enforcing the licensing scheme – which, in accordance with existing case 531

Premises licences law may include the costs of enforcement proceedings against unlicensed operators. On a reference to the CJEU concerning advance payment (at time of application) of ‘the enforcement element’ of the licence fee, to be refundable in the event of an application being refused, the court held: (a) that the Services Directive’s express wording did not support a payment in advance for such purposes, even if it was refundable in the event of an application being refused; and (b) in any event the aims of the Services Directive would not be served by ‘a requirement to pre-finance the costs of management and enforcement of the authorisation scheme concerned, including inter alia the costs of detecting and prosecuting unauthorised activities.’ Note that the fees for operating and personal licences are prescribed by regulations, so Hemming will not apply. 1 [2015] UKSC 25. 2 SI 2009/2999 to give effect to Directive 2006/123/EC.

APPLICATIONS FOR PREMISES LICENCES 10.35 An application for a premises licence is made to the licensing authority in whose area the premises are wholly or partly situated.1 In the perhaps comparatively rare case where premises lie within the area of more than one authority, there is nothing in the Act requiring the application to be made to the licensing authority in whose area the greater or greatest part of the premises is situated. In its previous Guidance the Commission expressed an expectation that in those circumstances the applicant would apply to the licensing authority in whose area the greater or greatest part of the premises is situated, and suggested that where an authority receives an application which straddles areas it should discuss with the applicant and the neighbouring authority which is the appropriate authority.2 That steer is omitted from the 2015 Guidance. In any case, the authority to which application is not made will nonetheless be a ‘responsible authority’ and able to make representations on the application.3 For ‘responsible authorities’ see 10.54 below. The applicant must either hold, or have applied for, an operating licence authorising him to carry on the type of gambling for which the licence is sought.4 In Greene King Brewing and Retailing Ltd v The Gambling Commission5 the First-tier Tribunal (Judge NJ Warren) held that the Gambling Commission could not refuse an operating licence for the purpose of preventing an otherwise suitable and competent applicant from applying for a premises licence. The judge said: ‘In my judgment, it is not open to the Commission to use s 159(3) of the Act to give them an effective right of veto on an application for a premises licence.’ This decision was however reversed on appeal to the Upper Tier Tribunal,1 where Judge H Levenson held (at 54): ‘The combined effect of sections 1(c) (paragraph  15 above), 22 (paragraph 14 above) and 70(1)(a) (paragraph 22 above) is really to place on the Commission the main responsibility for ensuring compliance with the licensing objectives and, in particular, the protection of vulnerable persons (as referred to in the section 23 statement – see paragraph 29 above). The provisions of sections 159(3) (paragraph 27 532

Premises licences above) and 169(4) (paragraph 28 above) make it clear that primacy is to be given to the decisions of the Commission on whether to grant an operating licence. In light of these provisions, it cannot really be the case that when such matters are at issue the legislation, having established the Commission and detailed its responsibilities, then requires the Commission to step back in individual applications and let the multitude of local licensing authorities deal with these national policy issues on a case by case basis. Neither can it be the case that in pursuit of such national policy objectives the Commission is required to conduct some kind of guerrilla warfare in each separate locality. That would run the risk of undermining the kind of approach approved in the Gibraltar case (paragraph 52 above) and of not controlling betting activities in a “consistent and systematic matter”.’ Given the significance of the decision, permission has been given to pursue an appeal before the Court of Appeal, which is due to be heard in 2017. The Greene King case is further discussed, in the context of operating licences, in Chapter 6 of this work, at 6.142. The requirement under s  159(3) does not apply in the case of a track to be used only for accepting bets,6 a provision enabling a track occupier to obtain a premises licence to allow betting and, in particular, bookmaking on his track without himself holding a betting operating licence. The applicant must have a right to occupy the premises to which the application relates.7 This requirement would clearly be satisfied by an applicant with a freehold interest, a leasehold interest or rights under a contractual licence.8 The requirement that an applicant should have a right to occupy does not, of course, mean that the applicant must be in actual occupation of the premises. The premises may simply be vacant. And even if he has let a licensee temporarily into occupation, he should still, it is submitted, be regarded as having a right to occupy, provided he can terminate the licence and obtain possession if he needs to do so. Where an applicant has taken an option to purchase premises, this too, it is submitted, should be regarded as giving him a right to occupy, since he can by exercising the option unilaterally obtain the freehold or leasehold interest the subject of the option and therewith the right to occupy the premises. It is perhaps relevant in this context to note that since an option connotes a specifically enforceable contractual right to call for a legal estate, the optionee holds, from the moment of grant of the option, an equitable interest in the land concerned.9 The Secretary of State in England and Wales and the Scottish Ministers in Scotland have prescribed regulations10 in relation to applications, and an application must be made in the prescribed form and manner, contain or be accompanied by the prescribed information or documents and be accompanied by the prescribed fee.11 For procedure on the application see 10.36. For fees see 10.31. For the proceedings of the licensing committee in determining the application see Chapter 9. The three requirements laid down by s 159 that an applicant must comply with (ie (i) he must be holder of or applicant for an operating licence, (ii) he must have a right to occupy the premises, and (iii) he must make the application in the prescribed form and manner) are the only requirements laid down by Parliament. In The Queen (on the application of Betting Shop Services Ltd) v Southend-on-Sea Borough Council12 (for the facts of which see 10.47 below) the Administrative Court held that where an applicant fulfilled those requirements, the licensing authority was obliged to consider and 533

Premises licences determine its application, and was not entitled to refuse to do so on the ground that the application premises were not in a state of development that would enable gambling to be carried on there.   1 GA  2005, s  159. ‘Premises’ includes any place and in particular a vessel and a vehicle: s  353(1). However, no premises licence may be issued for a vehicle as defined by s  353(1): s  211(1)(a). A  premises licence may be issued for certain vessels (ie basically a boat or hovercraft – see definition in s 353(1)): s 211(1)(b)–(d). Provision is made by s 211 about the place where a vessel is taken to be situated and also the parties who will be treated as responsible authorities in relation to the application.   2 Gambling Commission Guidance to Licensing Authorities (4th edn, September 2012), para 7.3.   3 2015 Guidance, para 7.10.   4 GA 2005, s 159(3).  5 GA/2014/0001 and [2016]  UKUT  50 (AAC) (29  January 2016), GG/0281 and 0282/2015.   6 GA 2005, s 159(4).   7 GA 2005, s 159(5).   8 Explanatory Notes to GA 2005, paras 427 and 734 acknowledge that an applicant having a freehold or leasehold interest or holding under a tenancy agreement will have a right to occupy. For rights to occupy under a contractual licence see Luganda v Service Hotels [1969] 2 WLR 1056, CA.   9 See Gray and Gray Elements of Land Law (5th edn) (Oxford, 2009), para 8.1.77. 10 For England and Wales see the Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI  2007/459) as amended by the Gambling Act 2005 (Premises Licences and Provisional Statements) (Amendment) (England and Wales) Regulations 2007; for Scotland see the Gambling Act 2005 (Premises Licences and Provisional Statements) (Scotland) Regulations 2007 (SI  2007/196), the Gambling Act 2005 (Premises Licences and Provisional Statements) (Amendment) (Scotland) Regulations 2007. 11 GA 2005, s 159(6). 12 [2008] EWHC 105 (Admin), [2007] LLLR 370.

Procedure on applications 10.36 The procedure on applications relating to premises licences is governed in England and Wales by the Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007.1 In addition, the form of premises licences and provisional statements granted by such authorities is set out by the regulations.2 The applications governed by the regulations are applications for the grant of a premises licence (s  159), the variation of a premises licence (s  187), the transfer of a premises licence (s  188), the reinstatement of a premises licence (s 195) and for the grant of a provisional statement (s 204).3 The procedure is set out below as it applies to an application for a premises licence. Note that in 2016 the DCMS asked the Commission to host all the statutory notices and application forms on the Commission’s website as they were no longer available on the DCMS website (even though the gambling pages on many local authority websites continued to signpost applicants to the DCMS website for more information.). 1 SI 2007/459, as amended by SI 2007/1775. In addition, the regulations governing plans on applications for a provisional statement under s 204 apply to Scotland as well as to England and Wales: reg 10(3).

534

Premises licences 2 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007, reg 1(2)(b). 3 Regulation 2(1)(a)–(e).

Form of service of application and notices 10.37 The regulations specify the form of application and the form of notice to be given to responsible authorities and to be published in a newspaper and by display on the relevant premises. Such applications and notices must be made or given in writing.1 An application or notice sent by fax or email is to be treated as made or given in writing provided: (a) the text of the application or notice— (i)

is capable of being accessed by the recipient,

(ii) is legible in all material respects,2 and (iii) is capable of being read and reproduced in written form and used for subsequent reference by the recipient;3 and (b) the person to whom the application or notice is to be made or given has agreed in advance that an application or notice may be made or given by the particular electronic means used.4 Subject to exceptions relating to applications, an application or notice sent by fax or email is to be treated as having been made or given when the conditions (a) (i), (ii) and (iii) are satisfied.5 The exceptions applying to applications are, first, that an application is not to be treated as having been made until the prescribed fee6 has been received by the authority.7 Second, in a case where any document required to accompany an application has not been sent by electronic means, or has been sent in a form which does not comply with the requirements necessary to enable it to be treated as having been made or given, the application will not be treated as having been made until the document has been received by the licensing authority in hard copy.8 It is a statutory requirement that applicants use the correct forms to give proper notice of applications, variations etc to all responsible authorities (Pt 3, regs 12 and 13 of the Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007). 1 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007, reg 16(1). 2 ‘Legible in all material respects’ means that the information contained in the application or notice sent by fax or email is available to the recipient to no lesser extent than it would be if given by means of a document in written form: reg 16(6) (a). 3 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007, reg 16(3)(a). 4 Regulation 16(3)(b). 5 Regulation 16(4). 6 For fees see 10.31 above. 7 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007, reg 16(5)(a), 8 Regulation 16(5)(b). A document in hard copy is a written document or a document in the form of a plan: reg 16(6)(c).

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Form and content of applications for premises licences 10.38 An application for a premises licence must be in the form prescribed by the regulations.1 There are four forms of application: a standard form of application in Sch  1, Pt  1; a form of application where the premises are a vessel in Sch 1, Pt 2; a standard form of application for a converted2 premises licence in Sch  1, Pt  3 and a form of application for a converted premises licence2 for a vessel in Sch 1, Pt 4.3 1 The Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007, reg 3. 2 A  converted premises licence is a premises licence issued under the GA  2005 (Commencement No  6 and Transitional Provisions) Order 2006 (SI  2006/3272) amended by SI  2006/3361, providing for the conversion of licences and other documents under repealed enactments into premises licences. 3 The Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007, reg 3.

Plans 10.39 The application must be accompanied by a scale plan (though no scale is prescribed) showing specific matters.1 Guidance2 given by the Commission to licensing authorities reminds them that: ‘The Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (as amended) states that a plan must show: •

the extent of the boundary or perimeter of the premises

•

where the premises include, or consist of, one or more buildings, the location of any external or internal walls of each such building

•

where the premises form part of a building, the location of any external or internal walls of the building which are included in the premises

•

where the premises are a vessel or a part of a vessel, the location of any part of the sides of the vessel, and of any internal walls of the vessel, which are included in the premises

•

the location of each point of entry to and exit from the premises, including in each case a description of the place from which entry is made or to which the exit leads.’.

In addition to showing the basic matters outlined above, there are specific individual matters required to be shown on plans accompanying an application for a casino premises licence (other than a converted casino premises licence),3 a regional casino premises licence,4 a converted casino premises licence with a gambling area of 200 square metres or more,5 a bingo premises licence,6 an adult gaming centre premises licence,7 a family entertainment centre premises licence,8 a non-track betting premises licence,9 and a betting premises licence in respect of a track.10   1 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007, reg 4(1).

536

Premises licences  2 Guidance to licensing authorities (5th edn, September 2015), para 7.45.   3 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007, reg 4(3), as amended by SI 2007/1775.   4 Regulation 4(4).   5 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007, reg 4(4A)–(4B), inserted by SI 2007/1775.   6 Regulation 4(5).   7 Regulation 4(6).   8 Regulation 4(7).   9 Regulation 4(8). 10 Regulation 4(9).

Documents to accompany applications 10.40 Specific additional documents are required in cases where the application is for a converted premises licence. The application must be accompanied by a copy of the licence or permit which it is sought to convert,1 or, where the licence or permit has been applied for but not yet been granted, by copies of the documents submitted on that application.2 Where a person applying for a casino premises licence is entitled to apply for a converted casino premises licence, but does not want the application to be treated as an application for a converted licence, the application must be accompanied by a written statement confirming this.3 1 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007, reg 5(1)(a). 2 Regulation 5(1)(b). 3 Regulation 6(1).

Giving and publishing notice of the application 10.41 Notice of the application must be given in the form prescribed at Sch  6, Pt  1 of the 2007 Regulations to each of the authorities which are ‘responsible authorities’ in relation to the application premises.1 The notice must be given within a period of seven days beginning on the date when the application is made.2 Notice of the application must also be published in a newspaper and displayed on the premises.3 Notice of the application in the form prescribed at Sch 6, Pt 24 must be published in a local newspaper or, if there is none, a local newsletter, circular or similar document circulating within the licensing authority’s area at least once during the period of ten working days5 starting with the day after the day on which the application is made to the authority.6 Notice in the same prescribed form7 must be displayed on the premises to which the application relates: (i)

in a place at which it can conveniently be read by members of the public from the exterior of the premises;

(ii) for a period of no less than 28 consecutive days starting on the day on which the application is made to the licensing authority.8 1 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007, reg  12(1) and  (3)(a). The requirement does not apply to a ‘fast track application’ for a converted premises licence: reg 12(1) and (12).

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Premises licences 2 Regulation 12(4). 3 Regulation 12(5)(a). The requirement does not apply to a ‘fast track application’ for a converted premises licence: reg 12(5)(a) and (12). 4 Regulation 12(9)(a). 5 ‘Working day’ means a day which is not a Saturday or a Sunday, Christmas Day, Good Friday or any Bank Holiday in England and Wales under the Banking and Financial Dealings Act 1971: reg 2(1). 6 Regulation 12(6)(a). 7 Regulation 12(9)(a). 8 Regulation 12(6)(b).

10.42 The notices of application to be given to the responsible authorities and to be published and displayed give notice of the right of responsible authorities and interested parties to make representations under s 161. The time prescribed for the making of such representations is a period of 28 days beginning on the date on which the application was made to the licensing authority,1 unless the period is varied under the ‘slip’ rule (see below). 1 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007, reg 15.

‘Slip’ rule 10.43 Regulations 13 and 14 provide for steps to be taken to cure defects in the giving and publication of notice under the procedure set out above.

Defective notice of application 10.44 Where a person gives notice of application to the responsible authorities under para 12(1) of the 2007 Regulations, but fails to give proper notice (ie a notice which complies with the requirements of the regulations as to the form or manner in which it is to be given)1 within the required sevenday period,2 then in order to cure the defect under the slip rule in reg 13 he must give notice to the responsible authority in a form and manner which does comply with the requirements of the regulations (other than as to the period for giving notice) as soon as practicable after the end of the seven-day period.3 The responsible authority to whom such notice is given then has a period of 28 days to make representations, the period beginning on the day on which it receives the notice.4 The licensing authority may not grant the application until notice under the slip rule has been given or until the 28-day period has elapsed,5 and any licence purportedly granted in breach of these requirements will be of no effect.5 Subject to these requirements of the slip rule, the licensing authority may disregard any irregularity in the giving of notice.6 1 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007, reg 13(2). 2 As required by reg 12(4). 3 Regulation 13(1), (3). 4 Regulation 13(4). 5 Regulation 13(5). 6 Regulation 13(6). Note that the reference in reg 13(6) to ‘any irregularity in relation to the giving of notice under regulation  12(2)’ is in error and should refer to regulation 12(1).

538

Premises licences

Defective publication 10.45 Where a person who publishes notice of his application in a newspaper or by display on the premises fails to publish a proper notice (ie a notice which complies with the requirements of the regulations as to the form or manner in which it is to be published)1 within the required period (ie  10 working days for the newspaper notice and 28 consecutive days for the premises notice), then in order to cure the defect under the slip rule in reg 14 he must publish notice of the application in a form and manner which complies with the regulations as soon as practicable after the end of the relevant period.2 Any interested party then has a period of 28 days to make representations under s  161, the period beginning with the day on which the notice is published.3 The licensing authority may not grant the application until the notice has been published and the 28-day period has elapsed,4 and any licence purportedly granted in breach of these requirements will be of no effect.4 Subject to the requirements of the slip rule, the licensing authority may disregard any irregularity in the publication of the notice.5 1 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007, reg 14(2). 2 Regulation 14(1) and (3). 3 Regulation 14(4). 4 Regulation 14(5). 5 Regulation 14(6).

Requirements as to the condition of the premises 10.46 The statutory provisions do not lay down any requirements as to the condition of the premises for which the application is made, or as to their state of preparedness for use for gambling. Despite this, the Gambling Commission’s original s 25 Guidance (June 2007 2nd edn) stated that premises must be fully constructed and in a high degree of readiness for use for gambling before a licence may be granted. The 2007 Guidance stated: ‘7.55 An applicant cannot obtain a full premises licence until the premises in which it is proposed to offer the gambling are constructed. The intention behind Part 8 of the Act is that the reference to “the premises” are to the premises in which gambling may now take place. Thus a licence to use premises for gambling should only be issued in relation to premises that are ready to be used for gambling. This is why the Act allows an operator to apply for a provisional statement if the building is not yet complete, needs alteration, or he does not yet have a right to occupy it. See Part 11 of this guidance for more about provisional statements. ‘7.56  It is a question of fact and degree whether premises are finished to a degree that they can be considered for a premises licence. For example, the fact that a wall needed painting would not stop a full assessment of the premises as gambling premises, and in such circumstances it would probably be wrong to insist that 539

Premises licences the applicant applied for a provisional statement rather than a premises licence.’1 1 Gambling Commission: Guidance to Licensing Authorities (2nd edn, June 2007). As noted in 10.47 the Guidance has now been updated as Guidance to Licensing Authorities (5th edn, September 2015), paras 7.58–7.65.

10.47 From the start there were those who questioned whether the Commission’s interpretation of the statutory requirements was correct, and in The Queen (on the application of Betting Shop Services Ltd) v Southend-on-Sea Borough Council1 the Administrative Court held that the interpretation was wrong. The applicant company applied for a premises licence for premises in Southend (for which it held a provisional statement). The applicant possessed the relevant operating licence, had a right to occupy the premises and made the application in the form and manner prescribed by s 159 and the Regulations. The premises were not, however, in a completed state and the licensing authority refused to hear the application, primarily because of the guidance given by the Commission in paras 7.55 and 7.57 in the Guidance as it then stood. The court quashed the decision and remitted the application to the licensing authority to hear and determine. The court concluded that the only requirements imposed on an applicant were those laid down by s 159 and the Regulations and that where an applicant fulfilled those requirements the authority was obliged to hear and determine the application. The judge said: ‘In my judgment, it is plain that if an application for a Premises Licence is made in a manner that complies with s 159, the local authority must consider the application. There must be a hearing if the requirements of s 162 of the 2005 Act are in play, and as s 163 provides, on considering an application for a Premises Licence, whether at a hearing or not, a licensing authority must grant it or reject it’.2 The judge went on to comment that where premises are not yet in a completed physical state, a licensing authority could satisfy itself about the state that the premises would be in before gambling took place there by attaching a suitable condition to the issue of the licence.3 In the light of the decision in the Southend case the Commission has amended the Guidance, the current version being Guidance to Licensing Authorities (5th edn, September 2015), at paras 7.58–7.65. 1 [2008] EWHC 105 (Admin). 2 See The Queen (on the application of Betting Shop Services Ltd) v Southend-on-Sea Borough Council [2008] EWHC 105 (Admin) at 17. 3 See The Queen (on the application of Betting Shop Services Limited) v Southend-on-Sea Borough Council [2008] EWHC 105 (Admin) at 20 and 21.

Split premises and use of premises for their ‘primary purpose’ 10.48 Paragraphs 7.3–7.18 of the Commission’s 2015 Guidance deal with the meaning of ‘premises’. It is noted that there is no reason in principle why a single building could not be subject to more than one premises licence, provided they are for different parts of the building, and the different parts of the building can reasonably be regarded as being different premises. However 540

Premises licences issues relating to the identity of the ‘premises’ for which a premises licence application is made have become a matter of controversy. The controversy arises because premises licences not only authorise particular forms of gambling (eg bingo, casino gambling, betting, etc) but they also authorise the provision of a stated number of gaming machines. A bingo premises licence authorises up to four Category B3 or B4 machines (and unlimited Category C and D machines); a betting premises licence authorises up to four Category B machines (ie B2, B3 or B4) or C or D machines. In addition, an adult gaming centre premises licence, being a premises licence for specialist gaming machine premises, authorises up to four Category B3 or B4 and unlimited Category C and D machines. Attempts have been made to obtain individual premises licences for two or more locations within premises (which may not necessarily be regarded as naturally separate areas) so as to gain an enhanced number of gaming machines. For example an AGC operator may attempt to apply for an AGC premises licence for an adult gaming centre and also to apply for a betting or bingo premises licences in a separated-out area in order to take advantage of the gaming machine entitlements which accrue from both licences. Or an applicant for a betting premises licence may seek to apply for two such licences in respect of a building which would naturally be regarded as one set of premises in order to obtain rights to twice the number of Category B  machines which would permitted if the premises were the subject of a single licence. These attempts can give rise to three sets of issues. First, there may be an issue whether the notionally two sets of premises for which the licences are sought are in reality one set of premises which should, so the Gambling Commission would contend, be the subject of one premises licence. In this context, see for example Woolway (Valuation Officer) v Mazars LLP1 in which the Supreme Court held that where a business’s offices were on two separate floors of an office block, the communication between the two being solely by way of the block’s communal lift, those two floors comprised two separate hereditaments for the purposes of non-domestic rating. Second, there may be issues relating to the extent to which access between the two sets of premises is permitted under the access provisions laid down in the mandatory premises licence conditions (see 10.129 below). Third, the question has arisen whether an applicant who is successful in obtaining a second licence for the purpose of taking advantage of the extra gaming machine entitlements attached to it is obliged in addition to provide the primary form of gambling (eg betting, bingo) which the licence authorises. Thus an applicant who successfully obtains separate betting premises licences for two adjoining premises may seek to contend that he is only obliged to provide facilities for betting in one of them and that he is entitled to use the second premises for machines only. Alternatively he may seek to satisfy any supposed obligation to provide betting in both premises by providing minimal betting facilities (eg one betting terminal for bets on real events) in one of the licensed premises. 1 [2015] UKSC 53, [2015] WLR (D) 353.

10.49 The Commission’s position1 is that ‘areas of a building that are artificially or temporarily separated, for example by ropes or movable partitions, [cannot] properly be regarded as different premises’. It has also taken the view that ‘the gambling activity of the premises should be linked to the premises described [in the relevant operating licence]’.2 As has been 541

Premises licences discussed in Chapter 6, there is an unhelpful ambiguity in the phrase ‘the gambling activity of the premises’. Does that mean the activity of the customers using the gambling facilities? Or does it mean the ‘activity’ (see s 68(5)) of the licence-holder in providing gambling facilities? The position taken by the Gambling Commission has not been constant, but would seem to be (at the time of writing) that where a premises licence has been granted the holder is obliged to provide the gambling activity that is authorised by the operating licence; and to provide it to such a degree as characterises the premises as ‘bingo premises’, or ‘casino premises’, or ‘betting premises’ in accordance with the description of the relevant premises licence. An operator is not permitted to use the premises only for the purpose of taking advantage of his gaming-machine entitlement: he cannot, for example, obtain a general betting operating licence, a betting premises licence, and then use the premises only for the provision of four gaming machines. For a discussion of the development (and abandonment) of the concept ‘Primary Gambling Activity’ see Chapter 6. 1 2015 Guidance, para 7.7. 2 2015 Guidance, para 7.4.

10.50 In determining whether two or more proposed premises are truly separate, the Commission lists four factors which it suggests should be taken into account by licensing authorities:1 •

Is a separate registration for business rates in place for the premises?

•

Is the premises’ neighbouring premises owned by the same person or someone else?

•

Can each of the premises be accessed from the street or public passageway?

•

Can the premises only be accessed from any other gambling premises?

1 2015 Guidance, para 7.33.

10.51 An issue that frequently arises when premises have been split into different licensed premises is the lawfulness of the proposed access from and to the various areas. The Gambling Act 2005 (Mandatory and Default Conditions) Regulations 2007 set out the access provisions for each type of premises, and the 2015 Guidance provides a table of the relevant access provisions at para 7.23: Type of premises

Access provisions

Casinos

•

the principal entrance to the premises must be from a ‘street’

•

no entrance to a casino must be from premises that are used wholly or mainly by children and/or young persons

•

no customer must be able to enter a casino directly from any other premises which holds a gambling premises licence.

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Type of premises

Access provisions

AGCs

•

no customer must be able to access the premises directly from any other licensed gambling premises.

Betting shops

•

access must be from a ‘street’ or from other premises with a betting premises licence

•

no direct access from a betting shop to another premises used for the retail sale of merchandise or services. In effect there cannot be an entrance to a betting shop from a shop of any kind unless that shop is itself a licensed betting premises.

Tracks

•

no customer must be able to access the premises directly from a casino or AGC

Bingo premises

•

no customer must be able to access the premises directly from a casino, an AGC or a betting premises, other than a track

FECs

•

no customer must be able to access the premises directly from a casino, an AGC or a betting premises, other than a track.

10.52 Paragraphs 7.24–7.30 provide revised and expanded versions of previous advice dealing with access to gambling by children, and the need (generally) to configure buildings so as to exclude children; and paras 7.31–7.33 address the need to provide separate identifiable entrances to and exits from gambling premises so that the separation of different premises is not compromised. A  recurring theme in the Commission’s Guidance is the enforcement of the statutory limitations on the provision of gaming machines: licensing authorities are reminded (para 7.34) that ‘where a building consists of a number of areas which hold separate premises licences, each individual licence must not exceed its permitted gaming machine entitlement.’ The position however is different for tracks: see Part 20 of the Guidance. 10.53 A  number of paragraphs in earlier guidance dealing with the practical and legal issues arising out of split premises have been omitted from the 2015 Guidance, but have found their way, abridged, into a ‘Quick Guide for licensing officers’ which expressly does not form part of the s 25 Guidance.1 1 ‘Multi Activity Sites’: http://www.gamblingcommission.gov.uk/pdf/multi%20 activity%20premises%20-%20a%20quick%20guide%20for%20licensing%20 officers.pdf.

Responsible authorities and interested parties 10.54 The right to make representations to a licensing authority about the exercise by them of functions in relation to a premises licence (eg the grant, transfer, review etc of such a licence) is limited to certain defined public 543

Premises licences authorities and bodies (‘responsible authorities’) and to any person who qualifies as an ‘interested party’ within the terms of the Act. Although these provisions of the GA 2005 mirror the provisions of the Licensing Act 2003 dealing with the persons (‘responsible authorities’ and ‘interested parties’) who may make ‘relevant representations’ on the making of an application for a premises licence under that Act,1 there are significant differences between the two statutes and there are a number of questions relating to the 2005 Act which do not arise under the 2003 Act. 1 See Licensing Act 2003 ss 13 and 18. A ‘responsible authority’ or ‘interested party’ may also apply for a review of a premises licence under the 2003 Act: see s 51.

10.55 A responsible authority may make representations on an application for the grant,1 variation,2 transfer3 and reinstatement4 of a premises licence. A responsible authority may also apply for a review of such a licence,5 and may make representations on a review initiated by a third party6 or by the licensing authority.7 An interested party may make representations on an application for the grant,8 and variation,9 but not the transfer10 nor the reinstatement11 of a premises licence. An interested party may also apply for a review of such a licence,12 and may make representations on a review initiated by a third party13 or by the licensing authority.14   1 GA 2005, s 161.   2 GA 2005, s 187(2).   3 GA 2005, s 188(2).   4 GA 2005, s 195(3).   5 GA 2005, s 197(1).   6 GA 2005, s 197(6).   7 GA 2005, s 200(5).   8 GA 2005, s 161.   9 GA 2005, s 187(2). 10 GA 2005, ss 188(2) and 189(5). 11 GA 2005, ss 195(3) and 196(4). 12 GA 2005, s 197(1). 13 GA 2005, s 197(6). 14 GA 2005, s 200(5).

10.56

The Commission advises:1

‘The factors that licensing authorities should take into account when determining what “sufficiently close to the premises” means (in each case) might include:

544

•

the size of the premises

•

the nature of the premises

•

the distance of the premises from the location of the person making the representation

•

the potential impact of the premises (number of customers, routes likely to be taken by those visiting the establishment)

•

the circumstances of the person who lives close to the premises. This is not their personal characteristics, but their interests which may be relevant to the distance from the premises.’

Premises licences For example, it could be reasonable for an authority to conclude that ‘sufficiently close to be likely to be affected’ could have a different meaning for: (a) a private resident; (b) a residential school for children with truanting problems; and (c) a residential hostel for vulnerable adults. 1 2015 Guidance, para 8.12.

10.57 In carrying out its functions in relation to premises licences, a licensing authority is required to apply the principles set out in s 153 of the Act (discussed at 10.106–10.114 below). Section 153 is highly prescriptive, requiring the authority to aim to permit the use of premises for gambling, but setting out four qualifying factors, namely: (i) any relevant code of practice issued by the Gambling Commission under s 24;1 (ii) Gambling Commission Guidance under s 25; (iii) consistency with the licensing objectives; and (iv) the authority’s own three-year licensing policy, which may point against permitting gambling, or which may make it appropriate to impose limiting conditions on a licence, in the case of the particular premises. As discussed at 10.106 below, the licensing objectives and their achievement are a common thread running through the four qualifying factors. Previous Guidance advised that representations made by responsible authorities or interested parties are only likely to be relevant to the licensing authority’s exercise of their functions in accordance with the s  153 principles if the representations relate to those principles and, in particular, relate to the licensing objectives.2 1 In the preamble to its Gambling codes of practice – Consolidated for all forms of gambling (October 2016) the Commission notes that s 24 requires the Commission to issue one or more codes of practice about the manner in which facilities for gambling are provided. The codes may be directed at the holders of operating or personal licences, or any other person involved in providing facilities for gambling. Section 153 of the Act requires licensing authorities to take any relevant code of practice issued by the Commission under s 24 into account when exercising their functions. Accordingly, to assist licensing authorities and for ease of reference, the 2016 document consolidates the various codes published by the Commission. These codes are taken from the following sources: The Commission’s Licence Conditions and Codes of Practice (LCCP), which apply to holders of Gambling Commission operating or personal licences (Section A  of the 2016 Code); and other codes such as the Commission’s code of practice for equal chance gaming and its code of practice for gaming machines in clubs and premises with an alcohol licence (Sections B and C of the document). 2 2012 Guidance, para 7.53.

Responsible authorities 10.58 The responsible authorities set out in s 157 of the GA 2005 are closely modelled on s  13(4) of the Licensing Act 2003, which defines responsible authorities for the purposes of that Act. Given that the licensing objectives under the GA  2005 differ from those under the Licensing Act 2003 (in 545

Premises licences particular in that public health, public safety and – subject to the discussion at Chapter 1 above – public nuisance do not feature as licensing objectives under the GA  2005), it may be questioned whether some of the bodies included have functions which are relevant to premises licensing under the 2005 Act.1 However, the Commission’s s 25 Guidance notes that even in cases where the relevant body has no representations relating to matters that might lead to the refusal of a premises licence (ie matters relating to the licensing objectives), the policy of the Act in requiring wide dissemination of applications will allow them to take action, where appropriate, under their own legislation and enforcement powers, even if they have no role to play in the gambling licensing process.2 1 See, for example, the comments of Kolvin ‘Blueprint for Uncertainty’ 63/4 Licensing Review, October 2005/January 2006, p 15 questioning what relevant contribution the fire and rescue and environmental protection authorities will be able to make to any debate concerning the licensing objectives. 2 2015 Guidance, para 8.5.

10.59 (a)

The responsible authorities are as follows:

A licensing authority in England and Wales in whose area the premises are wholly or partly situated. This means that the licensing authority to whom the application is made is a ‘responsible authority’. The effect is that the licensing authority is enabled to make representations about applications relating to premises licences for which it is the licensing authority. It will obviously be important for a licensing authority in such a position to ensure that there is strict separation between officers tasked with advancing representations by the authority as a ‘responsible authority’ and officers preparing the matter for hearing by a committee and advising the committee. Concern has arisen in practice whether any more than lip-service is given to the need for that separation. In addition, where premises straddle the boundaries of more than one authority, any authority within whose area the premises are in part situated is a responsible authority. For the position as regards applications where this occurs see 10.35. A licensing authority may well wish to make representations, in particular about crime and disorder within their area, and also about the interests of children and the vulnerable. Although the ‘fair and open’ licensing objective is less likely to be relevant to a licensing authority, they might have observations, for example, about the layout of the premises.

(b) The Gambling Commission: in principle the Commission might wish to make representations about any and all of the licensing objectives. In practice they seldom do. (c)

(i) In England and Wales the chief officer of police for a police area in which the premises are wholly or partly situated, or (ii) in Scotland, the chief constable of the police force maintained for a police area in which the premises are wholly or partly situated: the police are likely, of course, to be the primary source of information about matters relating to the crime and disorder objective.

(d) The fire and rescue authority for an area in which the premises are wholly or partly situated: although this authority may not often have 546

Premises licences relevant representations to make, it will be useful for it to be aware of proposals for the layout of the premises. Where premises are laid out in a particular way (eg  to advance the ‘fair and open’ objective or to control access by children and young persons), then it will be relevant for this authority to point out (if it should be the case) that the proposed layout may give rise to concerns under the fire safety legislation. (e) (i) In England and Wales the local planning authority for an area in which the premises are wholly or partly situated, or (ii) in Scotland the planning authority under the relevant Scottish legislation for an area in which the premises are wholly or partly situated: although a licensing authority, in deciding whether to grant a premises licence, are not to have regard to the question whether the premises will be granted any relevant planning permission,1 it may be relevant for the planning authority to inform the licensing authority of any planning implications of the proposals, in particular where proposed changes to the layout of a building which are necessary or desirable for reasons relating to the licensing objectives will require planning permission. (f)

In Scotland the council constituted under s 2 of the Local Government etc (Scotland) Act 1994 for an area in which the premises are wholly or partly situated: such a council is likely to have similar interests to those of an English licensing authority discussed at (a) above.

(g) An authority having functions in connection with environmental pollution or public health. Although such an authority may not often have relevant representations to make, it might possibly do so in a case where concerns over the environmental impact of premises were sufficiently severe to amount to a ‘public nuisance’ (see Chapter  1). In addition, it might be relevant for such an authority to inform the licensing authority of the way in which environmental and public health legislation will impact on the proposals if they did so in a way which affected the layout of the building so as to impact on the licensing objectives such as crime prevention and ‘fair and open’ gambling. (h) A body designated in writing by the licensing authority for the area in which the premises are wholly or partly situated as competent to advise them about the protection of children from harm: in many licensing authority areas it is expected that the body recognised by the licensing authority to be competent will be the Local Safeguarding Children Board in England and Wales, or the Child Protection Committee in Scotland.2 The licensing authority are required to set out in a separate section of their three-year licensing policy the principles which they will apply in designating a body competent to advise them about this matter.3 (i)

Her Majesty’s Commissioners of Customs & Excise: it seems probable that the inclusion of Customs is principally designed to provide them with information about premises where gambling is carried on, although it should be borne in mind that if offences were committed against the excise legislation, Customs as a responsible authority could initiate review proceedings. 547

Premises licences (j)

Any other person prescribed by regulations made by the Secretary of State.

(k) In cases where a premises licence is sought for or issued to a vessel (see 10.35, n 1) the following are also responsible authorities: (i)

a navigation authority within s 221(1) of the Water Resources Act 1991 which has functions in relation to any place where the vessel is or is likely to be while activities are carried on in the vessel in reliance on a premises licence;

(ii) the Environment Agency; (iii) the British Waterways Board; (iv) Canal and River Trust; and (v) the Secretary of State.4 1 GA 2005, s 210. 2 Gambling Commission Revised Guidance to Licensing Authorities (2nd edn) October 2008, para 6.22; 8.8. 3 Gambling Act 2005 (Licensing Authority Policy Statement) England and Wales Regulations 2006 (SI 2006/636), reg 5(a). 4 GA 2005, s 211(4), as amended by SI 2012/1659, art 2(3), Sch 3, Pt 1, para 17(1), (2).

Interested parties 10.60

The expression ‘interested party’ is defined by s 158 as follows:

‘For the purposes of this Part a person is an interested party in relation to a premises licence or in relation to an application for or in respect of a premises licence if, in the opinion of the licensing authority which issues the licence or to which the application is made, the person— (a)

lives sufficiently close to the premises to be likely to be affected by the authorised activities,

(b) has business interests that might be affected by the authorised activities, or (c)

represents persons who satisfy paragraph (a) or (b).’

A licensing authority is required to set out in a separate section of its threeyear licensing policy the principles which it will apply in determining whether a person is an interested party for the purposes of the above definition.1 It will be seen that the definition provides for two basic types of interested party, and for persons representing them: (i) a person is an ‘interested party’ if he lives sufficiently close to the premises to be likely to be affected by the authorised activities (‘resident interested parties’) or if he represents resident interested parties (eg the chairman of a residents association, an ad hoc spokesman etc); (ii) a person is an interested party if he has business interests that might be affected by the authorised activities (‘business interested parties’) or 548

Premises licences if he represents business interested parties (eg the chairman of a local chamber of commerce, an ad hoc spokesman etc). 1 Gambling Act 2005 (Licensing Authority Policy Statement) (England and Wales) Regulations 2006 (SI 2006/636), reg 5(b).

10.61 There are two preliminary points to consider, which apply both to resident interested parties and to business interested parties (and their representatives) and these will be dealt with before turning to the individual cases. First, the definition of an ‘interested party’ in both cases is designed to specify the class of persons who may make representations. Apart from responsible authorities and interested parties, no one else has the right to make a representation about a premises licence. But it does not follow that the characteristics which enable a person to qualify as an interested party under the s  158 definition will necessarily qualify him to make representations which are relevant to the issues to be determined under s 153. Representations will only be relevant if they relate to matters that are directly engaged by the exercise which the licensing authority has to carry out under s 153, balancing a basic duty to aim to permit the use of premises for gambling against a hierarchy of factors which may qualify that duty in the individual case. Generally speaking, representations will only be relevant if they relate to the licensing objectives (though, for a discussion of the merits of a contrary view, see 10.120 below). A person might, however, qualify as a resident interested party because he lives sufficiently close to the premises to be affected by the activities there, even though the effect on him will not give rise to issues relevant to the licensing objectives. For example, a person living near to the premises may have legitimate concerns that he will be disturbed by noise coming from them. This concern would be likely to qualify him as a resident interested party but, given that such noise would only be likely to amount to a private nuisance,1 the concern would be unlikely to give rise to relevant representations under s  153. Similarly, where an application is made for a licence to open a new gambling business, an existing business offering gambling of the same type is likely to qualify as an interested party because it has business interests that might be affected by the competition from the new premises. But the impact of competition on existing gambling businesses is not a relevant consideration for the purposes of s 153. 1 There is the possibility that in an extreme case noise could give rise to a ‘public nuisance’ and, as such, fall within the crime prevention objective; for the possibility that this might be relevant to the licensing objectives Chapter 1 above.

10.62 The second point is less straightforward. It will be noted that a person’s status as a resident interested party or a business interested party depends upon whether he will be affected ‘by the authorised activities’. The ‘authorised activities’ must be the activities which will be authorised by the proposed premises licence (if the case relates to an application for the grant of a licence), or which are authorised by the existing premises licence where such a licence already exists. It has been argued that, read literally, the section provides that a person will only be an interested party if it is the authorised and lawful activities on the premises which may affect him. If this is the correct reading of the section, the number of people who will be able to qualify as interested parties is likely, in most cases, to be small. Take, for example, the case of an application for a new adult gaming centre 549

Premises licences premises licence under s 150(1)(c). An adult gaming centre premises licence authorises the provision of Category B, C  and D  gaming machines1 that would otherwise be a criminal offence.2 The licence also authorises the provision of prize gaming.3 The gambling facilities may only be provided to adults; it would be an offence to offer them to children or young people,4 or to permit children or young people into the premises.5 It follows that the only ‘authorised activities’ relevant for the purposes of s  158 are the provision of gaming machines and of prize gaming to adults. Reading s 158 strictly, therefore, it is only if a person will be affected by those activities that he will qualify as an interested party. But the types of concern that arise where an adult gaming centre is proposed rarely relate to the provision of gaming machines and prize gaming as such. Taking the case of a resident interested party (ie someone living close to the premises), the only effect which those activities would be likely to have would be to create noise disturbance (eg from the sound of the machines or from a bingo caller) affecting the person in his dwelling. Such a concern would be unlikely, however, to be relevant under s 153, since it would amount at most to a private nuisance.6 The sorts of concern that tend to arise with adult gaming centres are concerns about people (usually youths) congregating outside and causing a disturbance, or hanging around inside and creating a threatening atmosphere; concerns about children and young people gaining access; and concerns about the premises giving rise to crime and disorder. Adopting a strict interpretation of s 158, none of these, however, is relevant to the question whether a person is a resident interested party. Youths congregating outside are not an ‘authorised activity’; nor are youths congregating inside; nor are children or young persons gaining access; nor are increases in crime and disorder. Accordingly, s 158, strictly interpreted, would not allow concerns such as these to qualify a person living nearby as a resident interested party. A similar conclusion would seem to follow in the case of a business interested party seeking to rely upon this type of concern. 1 2 3 4 5 6

Under GA 2005, s 37(2), s 150(1)(c) and s 172(1). Under GA 2005, s 37(1). GA 2005, s 290(1)(b). GA 2005, s 46(1). GA 2005, s 47(5). For the possibility that in an extreme case noise could give rise to public nuisance and that this could be relevant to the crime prevention objective, see Chapter 1.

10.63 It is suggested that this dilemma can be overcome by reading s 158 more broadly, so as to mean that a person will be a resident interested party if he lives sufficiently close to the premises to be likely to be affected by the consequences of the provision there of authorised activities (including anticipated effects of those activities which are undesired and undesirable). A similar reading should, it is suggested, be applied in the case of business interested parties. It is submitted that this is surely what was intended by the legislation. The whole purpose of s 158 is to qualify certain people to make representations which will be relevant under s  153 and, in order to be relevant, those representations will have to relate to the licensing objectives. The licensing objectives themselves are clearly founded on the recognition that the provision of lawful gambling may lead to crime, disorder, unfair dealing and harm to children and vulnerable persons. None of these consequences of gambling is of course an authorised 550

Premises licences consequence, and the whole purpose of permitting representations to be made is to reduce the potential for such harms. Interested parties must accordingly be permitted to deal with the unauthorised consequences of authorised gambling. 10.64 The approach adopted to s 158 in the voluminous material (61 pages) produced by DCMS to train councillors and licensing authority officers in their duties under the new legislation1 clearly assumes that a wide range of concerns may qualify a person as an ‘interested party’, even though they do not relate to ‘authorised activities’. For example, dealing with the case of an adult gaming centre licence application, the training material treats representations relating to noise, gangs of people milling around outside the premises, proliferation of gambling establishments and possible entry by children attending a nearby after-school club as being matters which would be sufficient to qualify the makers of the representations as interested parties, although it suggests that the only one of these factors that would be likely to be relevant to the s 153 decision would be concerns over children gaining access. It is clear, of course, that none of these factors form part of the ‘authorised activities’; they are all potential undesirable consequences of the provision of the ‘authorised activities’. Overall, therefore, DCMS assumes the broader interpretation of the provisions suggested at 10.63 above. 1 DCMS ‘The Gambling Act 2005: Training materials for licensing authorities’, July 2006, updated 2007.

Resident interested parties 10.65 As has been noted at 10.56 above, the Commission’s s 25 Guidance recommends that the following matters be taken into account in deciding whether a person lives sufficiently close to premises to be likely to be affected by the authorised activities: •

the size of the premises;

•

the nature of the premises;

•

the distance of the premises from the location of the person making the representation;

•

the potential impact of the premises (number of customers, routes likely to be taken by those visiting the establishment); and

•

the circumstances of the complainant. This does not mean the personal characteristics of the complainant, but the interests of the complainant which may be relevant to the distance from the premises; for example, it could be reasonable for an authority to conclude that ‘sufficiently close to be likely to be affected’ could have a different meaning for— (a) a private resident, (b) a residential school for children with truanting problems, and (c)

a residential hostel for vulnerable adults.1

1 2015 Guidance, para 8.13.

551

Premises licences 10.66 In effect, the Guidance recognises that premises may have a ‘footprint’ on the surrounding area, the size, nature and scope of the footprint varying as between different kinds of gambling premises. A large or regional casino, for example, or a large family entertainment centre is likely to have a wider footprint than a modestly sized betting office or even a large betting office. As the 2012 Guidance correctly noted: ‘An authority may take into account for example, the size of the premises and the nature of the activities taking place. Larger premises may be considered to affect people over a broader geographical area compared to smaller premises offering similar facilities.’1 1 2012 Guidance, para 6.24.

10.67 It would appear that a person may be a ‘resident interested party’ or a ‘business interested party’ even though they are not actually located within the area of the licensing authority to whom they make representations, provided, of course, that they have residential interests or business interests that are likely to be, or might be, affected: GA 2005, s 158(a) and (b). 10.68 It is worth reiterating that many of the factors which may qualify a person as a resident interested party under s  158 will nonetheless not amount to relevant representations for the purposes of s  153. Thus, for example, noise from inside the premises or noise from persons loitering outside the premises would be unlikely to be relevant under s  153 unless the concerns were intense enough to amount to ‘disorder’ or possibly, in an extreme case, public nuisance (see Chapter 1). Likewise, concerns over traffic congestion caused by the location of the premises, though they might qualify a person as an ‘interested party’, would be unlikely to be relevant under s 153.1 1 See eg 2015 Guidance, para 7.53.

10.69 In many ways it is curious (even allowing for the right of responsible authorities to make representations) that the Act has otherwise limited the right to make representations about the impact of the premises on the wide-ranging licensing objectives (crime, disorder, fairness and the interests of children and the vulnerable) to persons who happen to live within the premises’ footprint. The position can be contrasted with the much broader provisions of the Licensing Act 2003, under which ‘relevant representations’ about premises that are to hold an alcohol or public entertainment licence (for example) may be made ‘by a responsible authority or other person’. The 2003 Act is expressly concerned with public nuisance and public safety and it is obvious that premises of the type that it is dealing with may create public nuisance or compromise public safety and may impact directly on nearby residents and businesses. The problems with which the Gambling Act is concerned, however, are potentially much more extensive and diffuse and there is potentially a much wider range of people who may have pertinent observations to make. For example, a probation officer who lives outside the premises’ footprint may have well-informed observations to make about risks that the premises may have a harmful impact on young people; a private security officer who likewise does not live within the footprint may 552

Premises licences have valuable insight about ways in which to advance the crime prevention objective. Even allowing for the fact that such persons might be able to persuade a responsible authority to advance representations reflecting their concerns, it seems curious that they should be prevented from making representations in their own right by the mere accident that they do not live within the footprint of the premises, whereas other people will be qualified to make representations merely by virtue of living within the footprint, even though the effect which the premises have on them will not give rise to a relevant s 153 issue. 10.70 This leads to a further question. Is a resident interested party (and any person representing him) limited to making representations about those aspects of the premises which are likely to affect him personally? Suppose, for example, a householder near to the premises qualifies as an interested party on the basis that he may be affected by increased foot traffic near his house if the premises are opened. Is he limited to making representations about that factor (even though it seems virtually certain to be irrelevant under s 153) or may he, having qualified as a resident interested party, make representations about any and all aspects of the proposals which the licensing authority will be obliged to consider under s  153, even though these are matters which will not directly affect him and will not or may not affect residents living within the premises’ footprint? Could he, for example, raise concerns over possible access by children and young persons even though there are no children living in his household, and he has no professional connection with children as, for example, a teacher, youth leader, social worker etc? If a resident interested party is limited to making representations about those aspects of an application which affect him personally, this is likely, in many cases, to impose a strict limit on the number of residents who will be able to make representations. Moreover, it will impose a severe restriction on the representations that they could make and would appear to run counter to the intention of the Gambling Review Body that premises licensing should be a means of enabling local residents to help shape the communities in which they want to live (see 10.3). On the other hand, if resident interested parties are able to deal with broader issues, this highlights the anomaly of limiting the right to make representations to this group. There may be many people who will have pertinent observations to make on the application, and whose observations relate to the licensing objectives, who will be prevented from making them merely by the chance circumstance that they happen to live sufficiently far away from the premises not to be directly affected themselves. 10.71 The writer would contend that there is in fact nothing to stop a person who qualifies as a ‘resident interested party’ from making representations, even though they relate to issues other than those qualifying him as such. There appears to be nothing in the GA 2005 or in the Gambling Commission’s s  25 Guidance that would impose such a limitation upon an interested party. Moreover, the debates in Standing Committee  B  suggest that this was the government’s intention. An attempt was made to extend the definition of ‘interested party’ to include any person who had concern about or responsibility for addressing social well-being in the community from which the authorised gambling activities might draw custom. The government opposed the amendment (which was withdrawn), but in the 553

Premises licences course of the debate Mr Richard Caborn, the Minister for Sport and Tourism, stated that: ‘Evidence from persons who have responsibility for social well-being might well form part of an individual representation, but we consider it important that there should be a clear link between the premises and the person making the representation.’1 It appears, therefore, that an individual resident interested party (or business interested party) could make ‘social well-being’ representations or could allow persons who have responsibility for social well-being to use his representations as a platform for considerations which they wish to bring forward. Note also that interested parties will be entitled to make representations on various applications relating to an existing licence and that they may apply for, or make representations on, a review. In such circumstances they may very well make representations on matters which have no bearing on the impact which the licensed premises have on them. For example, a review may be instituted if a licensing authority thinks that premises have been used in breach of a licence condition. It appears that a resident or business interested party can make representations upon such a review, even though the breach of condition might have no impact on their residential or business interests. This appears to support the view that they have the power to make broad representations on all relevant issues on the first application for a licence. 1 HC SC B, Thursday 2 December 2004, PM, col 359.

Representatives as ‘interested parties’ 10.72 An ‘interested party’ may be a person who represents a resident interested party, or parties. The Commission’s s 25 Guidance notes that such interested parties could be county, parish or town councillors and MPs, who are democratically elected. In other cases it recommends that authorities should require written evidence that a person ‘represents’ someone who either lives sufficiently close to the premises to be likely to be affected by the authorised activities and/or business interests that might be affected by the authorised activities. A letter from one of these persons requesting the representation is sufficient.1 1 2015 Guidance, para 8.17.

Business interested parties 10.73 The expression ‘business’ is not defined in the Act and the guidance given in the Commission’s s 25 Guidance is limited. In other contexts it has been said that: ‘“Business” is a wider term than “trade”, and not synonymous with it, and means almost anything which is an occupation as distinguished from a pleasure. However, the term must be construed according to its context.’1 554

Premises licences It has further been said that: ‘It seems easier to say what is not “business” than what is. Purely domestic activities are not “business”. Purely recreational activities are not in my opinion “business”, unless, maybe, when carried on by a body of persons. Nor, I  think, are purely cultural pursuits, distinct from the business of providing education. A commercial element may not be essential, but on the other hand a philanthropic activity may not constitute a business if it be a gratuitous pursuit of a spare-time activity. But a serious undertaking earnestly pursued for the purpose of fulfilling a social obligation may constitute a business, even if not undertaken for profit.’2 These citations, and in particular the final sentence of the latter, suggest that ‘business’ in this context should be widely construed and not be limited to purely commercial activities. This interpretation is supported by the Commission’s s 25 Guidance, which suggests that trade associations and trade unions could qualify to make representations and states that the category: ‘…  could include trade associations and trade unions, and residents’ and tenants’ associations.’3 This mirrors previous DCMS ‘Guidance issued under section 182 of the Licensing Act 2003’ as to the meaning of ‘a person involved in a business in the vicinity’ (who will be an ‘interested party’ under that Act)4 which was as follows: ‘In addition, it is expected that “individuals involved in business” will be given the widest possible interpretation, including partnerships, and need not be confined to those engaged in trade and commerce. It is also expected that the expression can be held to include the functions of charities, churches and medical practices.’5 1 47 Halsbury’s Laws (4th edn), para 2. 2 Town Investments Ltd v Department of the Environment [1976] 3 All ER 479 at 496. 3 2015 Guidance, para 8.16. 4 With effect from 2012 the concept ‘interested party’ no longer obtains in the 2003 Act. 5 DCMS ‘Guidance issued under section 182 of the Licensing Act 2003’, June 2006, para 5.32.

10.74 The question whether a person has business interests that might be affected by the authorised activities will have to be judged by the licensing authority on a case by case basis. A business will obviously qualify where it is sufficiently close to the premises to be directly affected by the activities there. It is, however, submitted that a business interest could be affected even though the relevant business was too far away from the premises to be directly affected by the setting up of a gambling business there. For example, a charity set up to help the financially vulnerable might have offices some distance away from a town centre. If an application were made for a licence for a large adult gaming centre, the charity might well be too far away from the application premises to argue with any plausibility that it would be 555

Premises licences directly affected by the opening up of the business. Suppose, however, that it had legitimate concerns over the adequacy of proposals to control access by children and young persons, and to protect the vulnerable, then it ought surely to be treated as a business whose interests might be affected, since protection of the potentially financially vulnerable lies at the heart of its business functions. 10.75 The Commission’s s  25 Guidance points out that in principle any gambling business could be affected by another gambling business expanding into any part of Great Britain.1 It goes on, however, to state that this fact alone is unlikely to qualify such a gambling business as being ‘a person with business interests that might be affected by the premises’ under consideration.1 It advises that: ‘…  an operator in a particular sector (be it casino, bingo, betting etc) should not be able to lodge representations on every application put in by a rival operator anywhere in the country, simply because they are in competition within the same gambling sector.’1 It advises that the licensing authority should be satisfied that the relevant business is likely to be affected and suggests that: ‘Factors that are likely to be relevant include: •

the size of the premises;

•

the “catchment” area of the premises (ie how far people travel to visit); and

•

whether the person making the representation has business interests in that catchment area, that might be affected.’1

1 2015 Guidance, para 8.14.

10.76 It will be important to bear in mind in the case of business interested parties that the ‘demand test’ which existed under the previous legislation has not been preserved in the 2005 Act and is not a relevant issue under s  153. Where an application for a premises licence is made to provide gambling facilities of a type that are already provided within the locality by existing traders, it is clear that their business interests are likely to be affected, and this would appear to qualify them as business interested parties under s  158(b). However, the impact upon their business of the proposed competition will not be a relevant matter for the purposes of s  153, and accordingly the authority will not be entitled to take into account representations to the effect that there is no sufficient demand to warrant the grant of a further premises licence.1 As in the case of a resident interested party, the question arises whether a business interested party who has qualified as such under s  158 will be entitled to make representations about any matter which the licensing committee are entitled to take into account under s 153, even though it is not a matter that has qualified him as an interested party. It is suggested that he is entitled to do so, this conclusion being consistent with the views expressed in the Committee debate, and consistent also with the fact that a business interested party will be able to deal with a range of issues when making 556

Premises licences representations on applications and reviews relating to an existing licence even though the issues raised on the application or review may have no bearing on the impact of the premises on his business interests. 1 See GA  2005, s  153(2) and Commission s  25 Guidance, paras 7.54 and 8.1. Note, however, that it is possible that an over-provision of gambling facilities in a locality could be relevant if it results in rising problems in crime, disorder, underage gambling or problem gambling: para 7.54.

Representatives of business interested parties 10.77 The Commission’s s  25 Guidance advises licensing authorities to give guidance in their policy statements as to who would be suitable representatives. Representatives would include democratically elected representatives such as local councillors and MPs, and bodies such as trade associations and trade unions, as well as residents’ and tenants’ associations. In other cases licensing authorities will, it suggests, probably wish to satisfy themselves on a case by case basis, and possibly request written evidence that a person who so claims does represent interested parties; for example, a school head or governor might act in representing the interests of pupils or parents and a community group might represent vulnerable people living near to the proposed premises.1 1 2015 Guidance, para 8.17.

Determination of application 10.78 In determining an application the licensing authority must hold a hearing if: •

representations have been made by an interested party or responsible authority and have not been withdrawn;

•

the authority intend to use their discretion under s 169(1) to attach a condition to a licence; or

•

the authority intend to use their discretion under s  169 to exclude a default condition (ie a condition automatically attached to the licence under s 168 unless excluded by the authority in its discretion).1

A  hearing may, however, be dispensed with if the applicant and any interested party or responsible authority who have made representations consents to this course,2 or the authority think that the representations are vexatious or frivolous or will certainly not influence their determination of the application.3 If the authority do propose to dispense with a hearing on these latter grounds, they must as soon as is reasonably practicable notify the person who made the representations.4 It would appear that in these circumstances any person making representations who wished to pursue them would need to seek a remedy by way of judicial review. If there is a hearing, there is no express power to exclude otherwise relevant representations on the ground that they are frivolous or vexatious – although some licensing authorities have been known to do so. 557

Premises licences Where the applicant for the premises licence is an applicant for an operating licence,5 the authority cannot determine the application until the relevant operating licence has been granted.6 For the conduct of the proceedings on the application before the licensing committee, see Chapter 9. 1 2 3 4 5 6

GA 2005, s 162. GA 2005, s 162. GA 2005, s 162(3). GA 2005, s 162(4). Under GA 2005, s 159(3)(b). GA 2005, s 163(2).

PRINCIPLES TO BE APPLIED BY THE LICENSING AUTHORITIES IN THE DISCHARGE OF THEIR FUNCTIONS 10.79 There are three principal sources of guidance provided to licensing authorities as to the way in which they are to discharge their functions under the Act; these are: (i)

the ‘licensing objectives’ contained in GA 2005, s 1;

(ii) Guidance given by the Gambling Commission.1 Section 25 of GA 2005 provides that: ‘(1) The Commission shall from time to time issue guidance as to— (a) the manner in which local authorities are to exercise their functions under this Act, and (b) in particular, the principles to be applied by local authorities in exercising functions under this Act.’ Section 25(2) provides that: ‘A  local authority shall have regard to guidance issued under subsection (1)’;2 (iii) The three-year licensing policy which the authority are required to prepare under s 349; for a discussion of the requirements relating to the preparation and publication of such a policy see 10.10 above. 1 In referring to the Gambling Commission’s Guidance the writer has adopted the convention of referring to the printed document as ‘Guidance’ and to its contents as ‘guidance’. 2 The current guidance is found in Gambling Commission Guidance to Licensing Authorities (5th edn, September 2015).

10.80 It might have been supposed that the Act would impose a requirement on licensing authorities to have regard to the licensing objectives, to any relevant code of practice, to the s  25 Guidance and to their own licensing policy, perhaps establishing an order of precedence between the four factors. The approach adopted is, however, nowhere near so simple. The Act in fact defines very specifically the circumstances in which the licensing authority 558

Premises licences may have regard to the licensing objectives (often specifying the weight to be attached to them in a hierarchy of other considerations) and likewise specifies the weight to be accorded to the relevant codes of practice, to the s 25 Guidance and to the three-year licensing policy. There is a basic requirement imposed by s 25(2) to ‘have regard’ to the s 25 Guidance but, in addition, the Act imposes a bewildering variety of different requirements in respect of different licensing authorities’ functions. These will be set out below. First, however, since we are concerned (at least in the case of the s  25 Guidance and the three-year licensing policy) with the correct approach by a decisionmaker to general policy guidance, it may be helpful to summarise the general public law principles which form the context within which these matters have to be considered before turning to the GA`s very specific treatment of guidance and policy.

LICENSING POLICY: BASIC PRINCIPLES 10.81 It is well established that a body possessing public law powers to issue permissions in the form of licences or permits is entitled to adopt a policy (or rule)1 to guide it in the determination of the various applications which come before it,2 provided the policy is lawful,3 and provided the body does not, by virtue of adopting the policy, refuse to hear and determine individual applications made to it, in particular to decide whether the policy should apply in the circumstances of the individual case.4 The policy should be published, so that applicants may be aware of it.5 1 There is probably no significant difference between a policy and a rule: see British Oxygen Co Ltd v Minister of Technology [1971] AC 610 at 625D per Lord Reid. 2 The principles governing the adoption of policies have been worked out to a large degree in cases involving liquor licensing by licensing justices: see especially R  v Torquay Licensing Justices, ex  p Brockman [1951] 2  QB  784, BC (described as the modern locus classicus in R  v Chester Crown Court, ex  p Pascoe and Jones (1987) 151 JP 752 at 756C per Glidewell LJ). Similar principles have been stated in non-licensing contexts: see R  v Port of London Authority, ex  p Kynoch Limited [1890] 1  KB  176 at 184 per Bankes  LJ and British Oxygen Co Ltd v Board of Trade [1971] AC 610 at 625C–F per Lord Reid. In Kolvin Licensed Premises: Law, Practice and Policy (2nd edn, 2013, Bloomsbury), 10.04–10.32 it is suggested that for some years the treatment of policy in licensing cases diverged from the treatment accorded to policy in non-licensing cases (exemplified by British Oxygen Co Ltd v Minister of Technology) with policies being accorded a weaker determining status in the licensing context than in non-licensing contexts. The discussion goes on to suggest that in more recent times the two lines of authority have converged, with licensing courts according a stronger position to policy. It is suggested, however, that the essential principles of licensing policy are stated in Ex parte Brockman and that this case accorded a substantial weight to licensing policies. 3 That is, is a policy or rule which is consistent with the purpose of the legislation which confers the power on the decision-making body (see eg  R  v Rotherham Licensing Justices, ex  p Chapman [1939] 2  All ER  710: licensing justices were not entitled to adopt a general rule limiting to two per annum the number of occasional licences to be granted for the benefit of any individual promoter where this was inconsistent with the statutory requirement to grant a licence wherever the grant would be ‘conducive to public convenience, comfort or order’). This was treated as a ratio of the decision in R  v Torquay Licensing Justices, ex  p Brockman [1952] 2 KB 784 at 790–1 per Lord Goddard CJ. See more recently The British Beer and Pub

559

Premises licences Association and Others v Canterbury City Council [2005]  EWHC  1318 (Admin) at [88] and [105] (Canterbury City Council’s Licensing Statement published under s 5 of the Licensing Act 2003 was unlawful as being over-prescriptive in a number of places, suggesting that the Council had power to impose requirements on applicants where no such power existed). In order to be lawful a policy must not be Wednesbury unreasonable (Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223); it must moreover be in accordance with any policy or guidance contained in the legislation conferring the power on the decision-making body: see British Oxygen Co Ltd v Board of Trade [1971] AC 610 at 623H per Lord Reid applying Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997). 4 R v Walsall Justices (1854) 18 JP 757 (licensing justices who had adopted a policy not to grant new licences were not entitled to refuse to hear an application for such a licence); R v LCC, ex p Corrie [1918] 1 KB 68 (the LCC which had passed a resolution not to permit sale of literature in its parks was not entitled to refuse to hear an application for such permission). See also R v Torquay Licensing Justices, ex p Brockman [1961] 2 KB 784; British Oxygen Co Ltd v Board of Trade [1971] AC 610, HL. 5 R v Holborn Licensing Justices, ex p Stratford Catering Co (1927) 36 LT 278 at 280.

10.82 The application of these principles can be illustrated in the case of R v Torquay Licensing Justices, ex p Brockman1 where the facts were as follows. Under the licensing legislation then in force a distinction existed between a ‘full licence’ (which permitted sale of alcohol to the public in a bar) and a ‘restricted licence’ (which could be granted to a hotel for the sale of alcohol to hotel residents and patrons using the restaurant, but which did not permit sale at a bar on the premises). The Torquay Licensing Justices became concerned at the number of hotels which, having obtained restricted licences, then sought to upgrade them to full licences. They announced a policy to the effect that in the future circumstances would have to be very exceptional before they would grant full in place of restricted licences. The applicant, having obtained a restricted licence, applied for a full licence. The bench considered his application but concluded that in the light of the policy it was not prepared to grant it. An application for judicial review of that determination was rejected, the Lord Chief Justice, Lord Goddard, stating the principles as follows: ‘… it would seem clear that if the justices have decided upon a policy to guide them in considering applications it is only fair that they should make it public so that applicants may know what to expect. That there is no objection to justices deciding among themselves the general lines upon which they will exercise their judicial discretion has been recognised in a number of cases, and the first to which we will refer is R v Walsall Justices 18 JP 757 decided as long ago as 1854. There the justices made it known that they would not hear applications for any new licences, and, when an application was made to them at the annual licensing meeting, they refused to hear what was to be urged on behalf of the applicant. The court held that the justices were not entitled to take up that position – but if the applicant wished to be heard he was entitled to be heard; but it is quite clear that the court considered that there was nothing wrong in the justices prescribing a policy for themselves, although they were bound to hear an application which a person was entitled to make and it would be for them to decide whether the general policy was to be applied in that particular case. Lord Campbell, CJ said: “The justices cannot exercise the discretion 560

Premises licences reposed in them unless they hear the facts and arguments which the applicant is prepared to adduce”. Erle  J  said: “There may have been good reason why a general resolution, otherwise proper, ought not to be applied in the case of this individual”. The observation of that judge seems to contain the kernel of the matter: the justices cannot make a rule to be applied in every case without hearing it. They may lay down for themselves a general rule but are bound to consider whether it is applicable to any particular case’ (at 788–9). The court concluded that the justices had considered the application fairly and had concluded, as they were entitled to do, that they were not prepared to alter in the particular case before them the general line of policy which they had laid down (792). Accordingly, their application of the policy was lawful.2 1 [1951] 2 KB 784. 2 For other licensing cases on the application of policy see: R  v Torbay Licensing Justices, ex p White [1982] All ER 25; R v Windsor Licensing Justices, ex p Hodes [1983] 1 WLR 685, CA; R v Chester Crown Court, ex p Pascoe and Jones (1987) 151 JP 752; R v Sheffield Crown Court, ex p Consterdine (1992) Licensing Review 19; R (Westminster City Council) v Middlesex Crown Court and Chorion plc [2002] LLR 538; The British Beer and Pub Association and Others v Canterbury City Council [2005] EWHC 1318 (Admin); R  (on the application of JD  Wetherspoon plc) v Guildford Borough Council [2006] EWHC 815 (Admin).

10.83 Where a decision-maker has taken account of a lawful policy in determining an application for a licence or permit and an appeal is brought against that determination (for example, to the Crown Court or magistrates’ court), the appellate court should accept the policy and apply it as if it was standing in the shoes of the original decision-making body: see R (Westminster City Council) v Middlesex Crown Court and Chorion plc1 where the Divisional Court held that this was the approach to be adopted by a Crown Court dealing with an appeal relating to a public entertainment licence where the Council had a policy relating to the grant of such licences in areas suffering from cumulative stress.2 1 [2002] LLR 538. 2 The conclusion that the appellate court should adopt and apply the policy of the original decision-making body is consistent with views expressed in R v Chester Crown Court, ex p Pascoe and Jones (1987) 151 JP 752 and R v Sheffield Crown Court, ex p Consterdine (3 July 1998).

10.84 Where a decision-making body considers an individual application in the light of a policy which would prima facie defeat the application in order to determine whether an exception exists which will allow the application to be granted, it is important for it to consider the reasons for the policy and to consider whether, if the application were granted by way of an exception to the policy, those reasons would still be met.1 Thus, for example, it was held that a Crown Court was wrong to refuse a supermarket’s application for an off-licence to enable alcohol to be displayed and sold on a self-service basis in reliance on a general policy of the licensing justices requiring that supermarkets should sell alcohol from a ‘shop, within a shop’ without properly considering the reasons for the policy (viz the deterrence of theft of alcohol and of sale to juveniles), and without properly considering the 561

Premises licences supermarket’s evidence that these policy objectives would be achieved by the high levels of supervision of self-service sales which it provided.1 1 R v Chester Crown Court, ex p Pascoe and Jones (1987) 151 JP 752.

10.85 Where an applicant applies for a licence or permit in circumstances where the grant would, if made, amount to an exception to a policy, it appears that the onus lies on him to demonstrate that an exception should be made in his case, at least where no challenge is made to the lawfulness of the policy. This point was considered in the case of R v Sheffield Crown Court, ex p Consterdine,1 where an applicant sought judicial review of the decision of a Crown Court upholding the decision of licensing justices to refuse an application for a provisional on-licence in Sheffield. The Sheffield justices had adopted a policy that applications for new justices’ licences would not normally be granted unless there was a proven need or demand in the public interest for an additional licensed premises. The purpose of the policy was to control the availability of alcohol to prevent drink-related problems in the city centre. The justices refused the applicant a licence and the Crown Court on appeal upheld that decision, concluding that the appellant had not shown that there was need or demand for another licence. Applying for judicial review of that decision, the applicant argued, inter alia, that the Crown Court should, following R v Chester Crown Court, ex p Pascoe and Jones, have enquired whether the application could be granted without prejudicing the objects of the policy. In principle, and to the extent that it applied the reasoning in Pascoe and Jones, the submission was uncontroversial. However, the applicant proceeded to argue, relying upon the unreported case of R v Sheffield Crown Court, ex  p Mead2 that in order to determine whether grant of a licence would damage the objectives of the policy it was necessary for the court to ask whether there was any evidence that the maintenance of the policy had forwarded its objects. In other words, it was argued, it was necessary to examine whether the policy worked, or was capable of working, and, in effect, to justify the existence of the policy. The judge, Mr Justice Turner, rejected this second limb of the argument on the grounds: (i)  that in accordance with general principles where an applicant asserted that an exception applied to him the onus lay on him to prove it, and (ii)  that the approach proposed would undermine the whole purpose of having a policy, namely the creation of a presumption which will normally govern the decision-maker’s approach. Referring to the Pascoe and Jones case, he said: ‘It is nowhere suggested … that licensing justices have to approach the hearing of an application where there is no challenge to their previously announced policy, but where there may be an application which requires justices to consider whether or not to allow an exception to it, as meaning that they must revisit those same matters which had been considered by the Committee when it formulated and adopted the policy in the first place. In my judgment, the considerations which appear to have led to the actual decision in Ex p Mead must surely be relevant to the exercise involved in formulating a policy. But where it is an exception which is being considered then, in accordance with long established legal principle, the burden of proving that an exception should be made must lie with the party which is seeking to justify that exception.’3 562

Premises licences He went on to say: ‘In my judgment, the Crown Court, as well as the justices, were entitled to assume not only that their policy was properly formulated, but also were entitled to assume that it was a consequence of that policy that there was an absence of problems of a public order character. It was, in my judgment, incumbent on the applicant if he wished to establish a case for an exception to the policy to make that case good. As to the second limb of the dictum from the decision in Mead, here again, there can be little doubt that it was for the applicant to satisfy the justices and the Crown Court that a (yet) further licence would not create problems of the kind which it was one of the purposes of the policy to obviate. In my respectful opinion, any such approach as that adumbrated by Hutchinson  J  would be to turn the purpose of a licensing committee who, after due consideration of relevant matters, published a policy which was not itself being challenged, on its head. It would no doubt be otherwise if the policy itself was shown to be flawed in any way’.4 Having concluded that the onus lay on the applicant to prove that the grant of a licence to him would not damage the objects of the policy, the judge held that the Crown Court had been justified in concluding that the applicant had failed to make a case out for another licence as an exception to the policy and it had been justified in refusing the appeal. 1 2 3 4

(1992) Licensing Review 19. Transcript, 20 December 1991. At p 12C–G. At p 14C–H.

10.86 It is submitted that the approach adopted by Turner J in Consterdine is to be preferred to that adopted in R  v Sheffield Crown Court, ex  p Mead1 where Hutchison J had held that in deciding whether to permit an exception to a policy (in fact the same ‘demand’ policy of the Sheffield licensing justices as was considered in Consterdine) the court should consider both whether granting a licence by way of exception to the policy would damage the policy objectives and whether the existence of the policy had the effect of advancing those objectives. It should be noted that in the Mead case the applicant expressly declined to attack the justices’ policy as being one which they could not lawfully adopt. In those circumstances it was wrong, it is respectfully submitted, for the judge to conclude that the whole basis and efficacy of the policy could be investigated by the court in determining whether a licence should be granted as an exception to the policy. As Turner J stated in Consterdine, the effect of this approach was in effect to require the decisionmakers who had adopted the policy to defend it before the Crown Court. It required them to prove that the policy was soundly based and efficacious (even though no attack was made directly upon it) rather than treating it as a given and requiring the applicant to prove, if he could, that an exception should be made in his case. Support for Turner  J’s approach can be found in R  (on the application of JD  Wetherspoon plc) v Guildford Borough Council.2 There the court was concerned with the council’s ‘cumulative impact policy’ designed to prevent the proliferation of alcohol licensed premises in a stress area. The judge noted that the statutory guidance: 563

Premises licences ‘… permits the adoption of such a policy if there is an evidential basis for it and the specified procedure is followed. The guidance provides that, where a cumulative impact policy is so adopted, there will be a rebuttable presumption that applications for new premises licences or material variations will normally be refused. To that extent, where there is such a policy, the guidance must permit an individual application to be considered on the basis of the rebuttable presumption so that the burden of proof lies on the applicant.’3 1 [2002] LLR 730. 2 11 April 2006. 3 At para 73.

10.87 There may appear to be some tension between the fact that a decisionmaking body may adopt a policy which will normally determine the outcome of an application and the requirement that each individual application should nonetheless be considered ‘on its merits’. However, in R  (on the application of JD Wetherspoon plc) v Guildford Borough Council1 Beatson J discounted any such tension by reference to the burden of proof. Where, as in that case, a ‘cumulative impact policy’ had been adopted pursuant to which there was a rebuttable presumption that applications for new licences or extensions of drinking facilities in existing licensed premises in the stress area would be refused, the effect was to place the burden of proving an exception on the applicant. In those circumstances the judge concluded that: ‘… requiring an applicant for variation of the hours of premises in the area to demonstrate that the variation would not add to the area’s problems does not mean that the “merits” of the application are not considered. A reversed burden of proof does not preclude consideration of the “merits” of an application.’2 1 11 April 2006. 2 At para 73.

10.88 Moreover, the requirement that applications be heard on their merits is not inconsistent with a strong policy presumption against the grant of an application. In particular, where a policy is one designed to control the cumulative impact upon an area of a large number of premises (eg  entertainment premises or alcohol led premises) of the same type by creating a presumption against the grant of further licences for such premises or the expansion of facilities at existing licensed premises within the affected area, an applicant will not be able to argue that he should be granted a licence as an exception to the policy merely because his premises will be well managed and he is fit and proper to run them and hold a licence. The fact that additional premises (however well managed) will add to the harmful effect upon the area will be enough to engage the policy and lead to the lawful rejection of the application.1 Even here, however, an applicant might be able to show that the policy should not be applied in his case if, for example, licensed premises in one place were to replace licensed premises in another.1 1 R (Westminster City Council) v Middlesex Crown Court and Chorion plc [2002] LLR 538.

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Interpretation of policy 10.89 A licensing authority is obliged to ‘have regard’ to guidance issued by the Commission under s 25 (see s 25(2)); in addition, it will have to take into account its own licensing policy produced under s 349. Licensing authorities will therefore have to interpret guidance and policies, and the question arises to what extent such an interpretation by an authority may be rejected as incorrect by a court either hearing an appeal of the authority’s decision or conducting a judicial review of it. The basic principles have been laid down in a series of cases, mainly from the planning context, although the relevance of these decisions to the context of licensing under the Licensing Act 2003 was acknowledged by the Administrative Court in R  (on the application of JD  Wetherspoon plc) v Guildford Borough Council.1 The governing principles were set out by Brooke LJ in the Court of Appeal in R v Derbyshire County Council, ex p Woods:2 ‘If there is a dispute about the meaning of the words included in a policy document which a planning authority is bound to take into account, it is of course for the court to determine as a matter of law what the words are properly capable of meaning. If the decision-maker attaches a meaning to the words they are not properly capable of bearing, then it will have made an error of law, and it will have failed properly to understand the policy (see Horsham DC v Secretary of State for the Environment [1992] 1 PLR 81 per Nolan LJ at 88). If there is room for dispute about the breadth of the meaning the words may properly bear, then there may in particular cases be material considerations of law which will deprive a word of one of its possible shades of meaning in that case as a matter of law. This, in my judgment, is the underlying principle of law which Auld  J  was putting into words in his judgment in Northavon DC  v Secretary of State for the Environment [1993] JPL 761. When discussing the meaning of the expression “institutions standing in extensive grounds”, the report reads at 763: “The words spoke for themselves and were not readily susceptible to precise legal definition. Whether a proposed development met the description was in most cases likely to be a matter of fact or degree and planning judgment. He [the judge] said ‘In most cases’ because it was for the court to say as a matter of law whether the meaning given by the Secretary of State or one of his Officers or Inspectors to the expression when applying it was outside the ordinary and natural meaning of the words in their context: see Gransden (EC) v Secretary of State for the Environment [1987] 54 P & CR 86 per Woolf J, as he then was, (upheld by the Court of Appeal [1987] JPL 465). The test to be applied by the court was that it should only interfere if the decision-maker’s interpretation was perverse in that he has given to the words in their context a meaning that they could not possibly have or restricted their meaning in a way that the breadth of their terms could not possibly justify.”’3 1 11 April 2006. 2 [1997] JPL 958.

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Premises licences 3 Cases in which this issue has been considered in the planning context are: Gransden & Co Ltd v Secretary of State for the Environment (1987) 54  P  &  CR  86; Northavon District Council v Secretary of State for the Environment [1993] JPL 761; R v Derbyshire County Council, ex p Woods [1997] JPL 958; Cranage Parish Council v First Secretary of State [2004] EWHC 2949 (Admin). A similar approach has been adopted in nonplanning contexts see R v Secretary of State for the Home Department, ex p Ozminnos [1994] Imm AR  287; R  v Ministry of Defence, ex  p Walker [2001]  WLR  806. The approach has been applied to policy documents promulgated under the Licensing Act 2003 in R (on the application of JD Wetherspoon plc) v Guildford Borough Council CO/8028/2005, 11 April 2006.

10.90 The reasons (or some of them) underlying this approach to the interpretation of policy documents and comparable material were set out by Davies J in the Cranage Parish Council case1 as follows: ‘There are in fact pragmatic reasons for this being the approach to be adopted in this particular planning context … For one thing, in the planning field policies and development plans of this kind are commonly drafted by planners for planners and often are very loosely drafted. They are not, putting it broadly, intended to be legally binding documents in the strict sense. For another, the relevant phrases used will often be hardly sensible as bearing a strict hard edged interpretative approach and resort will be needed to elements of value judgment: for example, “institutions standing in extensive grounds” (the Northavon2 case) or “existing town centre” (the Wandsworth3 case).’ Having provided this explanation the judge proceeded, however, to sound a note of caution, commenting that the approach did not have the result that a particular planning policy means whatever the decision-maker decides that it should mean. First, it was plain that Ex parte Woods did not sanction such an approach; the decision made clear that the court would need to assess whether the proposed interpretation was one that the words were in law properly capable of bearing; second, if one meaning was highly probable but a counter-meaning was advanced on behalf of the decision-maker which was no better than ‘tenuous’, then the courts would be likely to choose a robust approach in preferring the more probable interpretation; third, there might be instances where, although the words of a policy might prima facie support the interpretation of the decision-maker, consideration of the purpose and underlying objective of the policy might show that the interpretation did not accurately reflect the true policy; fourth, decision-makers would need to bear in mind that the adoption of a particular interpretation of a policy in a particular case might make it difficult (at least in the absence of a convincing explanation) for them to adopt a different interpretation in another case.4 1 CO/3152/2004, 9 December 2004. 2 Northavon District Council v Secretary of State for the Environment and the Trustees of the Congregations of Jehovah’s Witnesses [1993] JPL 761. 3 Wandsworth London Borough Council v Secretary of State for Transport, Local Government and Regions [2003] EWCA Civ 142. 4 Cranage Parish Council v First Secretary of State CO/3152/2004, 9 December 2004 at para 50.

10.91 It has been held in the planning context that there is no general principle that where there is any real issue about the meaning or application 566

Premises licences of a planning policy it is unlawful for an officer to exercise delegated powers of decision-making;1 the same principle would seem to apply in the licensing context. 1 R (on the application of Springhall) v Richmond-upon-Thames London Borough Council [2006] EWCA Civ 19, CA.

LICENSING PRINCIPLES AND POLICY SPECIFIC TO THE GA 2005 10.92 The discussion at 10.79 to 10.91 above is concerned with general principles. Where, however, a statute provides guidance as to the way in which a decision-maker should exercise their discretion then the discretion must, of course, be exercised in accordance with the guidance of the statute.1 It is necessary, therefore, to turn to the GA 2005 to determine how a licensing authority is to take account of the licensing objectives, the s 25 Guidance and its own three-year licensing policy. 1 British Oxygen Co Limited v Minster of Technology [1971]  AC  610 at 623H per Lord Reid.

10.93 The starting point is that there is in fact no general duty imposed by the Act itself on a licensing authority to have regard to the licensing objectives. The position of licensing authorities is therefore in stark contrast to that of the Gambling Commission, which has a statutory duty to promote the licensing objectives by pursuing them and, where appropriate, having regard to them (s 22), and which is required to prepare a statement setting out the principles to be applied in exercising its functions and explaining how those principles will assist in the pursuit of the licensing objectives (s 23). As we shall see, however, the Commission’s s 25 Guidance itself imposes a duty on licensing authorities to promote the licensing objectives. It does this in two ways. 10.94 First, a licensing authority is required, as we have noted, to have regard to the s 25 Guidance: see s 25(2). This requirement provides the first means by which the licensing objectives impinge upon the decision-making of licensing authorities. Since in formulating the s 25 Guidance the Commission will be under its general duty to promote the licensing objectives, it is to be expected that the Guidance will reflect and promote those objectives, so that the requirement placed upon the licensing authorities to have regard to the Guidance will affect the authority’s own discretion in their approach to their functions in ways which advance the licensing objectives. 10.95 Second, so far as the three-year licensing policy under s  349 is concerned, the s  25 Guidance itself imposes an obligation on the licensing authorities in drafting their policy to promote the licensing objectives. Part 6 of the Guidance deals with statements of licensing policy and, under the heading ‘Fundamental principles’, para 6.3 provides that: ‘All licensing authorities statements should begin by stating the three licensing objectives, which the licensing policy will promote.’ 567

Premises licences This, then, imposes a general duty on authorities to promote the three licensing objectives. The Guidance then proceeds in clause 6.7 to state in general terms that: ‘… licensing authorities can only consider matters within the scope of the Guidance, Act and Codes of Practice. Even if there is a large response regarding a certain issue, an authority may be unable to deal with the issue under the Gambling Act. However the issue may be a matter for other legislation, for example, planning.’ 10.96 Two points should be made about the requirement imposed by the Guidance that an authority’s policy should be one which promotes the licensing objectives: (1) The requirement to ‘promote’ the objectives does not amount to a requirement to attain the objectives. Indeed, to the extent that the authority grants premises licences or permits authorising the use of premises for gambling it may in fact create circumstances from which crime or disorder may result, or in which gambling is conducted unfairly or in which children or other vulnerable persons may be harmed. That is an inevitable risk of permitting gambling premises to exist. The licensing objectives are clearly based upon a recognition that the provision of gambling facilities in itself can give rise to the mischiefs which it is the purpose of the Act, and of the objectives, to prevent or minimise. The requirement to seek to promote the licensing objectives is a requirement that the licensing authority should discharge their functions with a view to achieving them and, in particular, a requirement that they should exercise their powers so as to minimise the risk of harm to the licensing objectives. (2) Although the Guidance imposes a general duty on authorities to promote the licensing objectives, this duty must be seen against a much more detailed regulation of the way in which an authority is to exercise its discretion in individual cases. To this we now turn. 10.97 It is necessary to make a fundamental distinction between those functions of the authority which are governed by the principles laid down in GA 2005, s 153 and those which are not. The s 153 principles apply to all of the authority’s functions in relation to premises licences in Part 8. These are the functions relating to the grant, transfer, review etc, of premises licences. In addition, the s 153 principles apply to certain decisions made in connection with temporary use notices under Part 9.1 Section 153 (which is discussed at 10.106 below) states the matters to which the authority must have regard in the discharge of these functions, setting them out in a hierarchy which makes clear the weight which is to be given to each individual factor. As the Commission’s s  25 Guidance makes clear (at paras 1.18–1.9),2 s  153 is more prescriptive in dictating the way in which the authority must exercise its discretion in the discharge of the functions to which s  153 applies than is the case with the discharge of functions to which s 153 does not apply. In these latter cases, the presumption that the authority must follow guidance etc is weaker, although the picture is complicated by an array of differently defined discretions which apply to different cases. We will deal with the non-s 153 cases first. 1 Section 153 is applied by s 224(7). 2 See also to the same effect paras 4.11; and 4.12.

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Non-section 153 functions 10.98 The functions to which s 153 does not apply are set out in tabular form at 10.104 below. The starting point is that in the case of these functions the general duty imposed on an authority by s  25(2) ‘to have regard to guidance’ issued by the Gambling Commission under s  25 applies. So far as that duty is concerned, the approach advocated in the introduction to the current (5th) edition (‘About this Guidance’) is as follows: ‘This Guidance does not… attempt to fetter the discretion that authorities have under the Act and it is not intended to replace their judgment in individual cases. Moreover, this guidance cannot anticipate every set of circumstances that may arise and, as long as it has been understood and taken into account, licensing authorities may depart from it where they consider it will be right to do so. There should, however, be strong reasons for departing from this Guidance and these need to be clearly expressed and explained if a licensing authority is to avoid judicial review or challenge for failing to take this Guidance into account.’ 10.99 This passage envisages a weaker role for guidance than did previous statements by the Commission (see ‘Status of this Guidance’ in earlier editions); though the final sentence of the above introduction would appear to reinstate guidance as the dominant consideration (by requiring ‘strong reasons’ for departing from it). 10.100 The imposition of a statutory requirement to ‘have regard to’ specified matters has been considered in other contexts, most notably planning. It is arguable that planning jurisprudence would suggest that a requirement to ‘have regard to’ guidance confers a weaker status on guidance than the Gambling Commission contends. A document of central importance in the making of any planning decision is the development plan. Under the Town and Country Planning Act 1990 the status of the development plan in cases where a local planning authority has to consider an application for planning permission is set out in s 70(2) as follows: ‘(2) In dealing with such an application the authority shall have regard to the provisions of the development plan, so far as material to the application, and to any other material considerations.’1 It is clearly established by a series of decisions that the requirement to ‘have regard to’ the development plan does not mean ‘slavishly adhere to’ and that there is nothing to suggest that the provisions of the development plan are mandatory and must be implicitly followed.2 1 This provision reflected the Town and Country Planning Act 1971, s 29. 2 See Simpson v Edinburgh Corporation [1960] SC 313; Enfield London Borough v Secretary of State for the Environment and Anor [1975] JPL 155; Chelmsfield Borough Council v Secretary of State for the Environment and Halifax Building Society [1985] JPL 554.

10.101 In contexts other than planning, a statutory requirement to ‘have regard to’ specified factors has likewise been treated as not conferring a strong status upon those factors. For example, under the Human Rights Act 1998, s 12 a court, in considering whether to grant relief which might affect the 569

Premises licences exercise of the Convention right to freedom of expression (eg by injuncting a newspaper from publishing a story), ‘must have particular regard to the importance of the Convention right to freedom of expression …’.1 It has been held that the phrase ‘must have particular regard to’ does not indicate that the court should place extra weight on the matters to which the subsection refers; rather it points to the need for the court to consider those matters specifically and separately from other relevant considerations.2 1 Human Rights Act 1998, s 12(2). 2 See Ashdown v Telegraph Group [2001] 2 All ER 370 at [34] per Sir Andrew Morritt VC. See also discussions of the statutory requirement placed upon local authorities under the Homeless Persons legislation (Housing Act 1985) to ‘… have regard in the exercise of their functions to such guidance as may from time to time be given by the Secretary of State’. It has been held that the relevant Code of Guidance would be: ‘of great assistance for the purpose of determining how a reasonable authority would act’ (R v Royal Borough of Kensington & Chelsea, ex p Bayani [1990] HLR 406 at 410 per Neill LJ) and as ‘providing a useful yardstick’ (in R v Tower Hamlets LBC, ex p Ojo [1991] 23 HLR 488 at 49 per Steyn J). See also the New Zealand case of R v CD [1976] 1 NZLR 436, where the court in interpreting the Costs in Criminal Cases Act 1967 and its requirement that the court ‘in deciding whether to grant costs and the amount of any costs granted, shall have regard to all relevant circumstances and in particular (where appropriate) to’ [seven specified considerations] held that the seven matters, or as many as were appropriate, were to be considered and that in any particular case all or any of them might be rejected or given such weight as the case suggests was suitable.

10.102 In R  (on the application of the London Borough of Newham) v Thames Magistrates’ Court1 Blake J  commented in the course of argument that the GA 2005, s 25(2) requirement was, merely, to take the Commission’s guidance into account. 1 (2014, unreported).

10.103 In the light of these authorities it may be that the s 25(2) requirement to ‘have regard to’ the Commission’s guidance is weaker than the Commission suggests in the concluding words of the introductory paragraph cited above. 10.104 In practice, quite apart from the general requirement to have regard to the Commission’s Guidance, licensing authorities will be subject to specific requirements laid down by the Act in the exercise of their discretion. These variously expressed requirements as they apply in non-s 153 cases are set out in tabular form below. No

Licensing authorities function

Statutory requirement

1

Considering applications for non-licensed family entertainment centre permits.

Licensing authorities: (i) may prepare a statement of principles they propose to apply in exercising their functions; (ii) need not (but may) have regard to the licensing objectives; (iii) shall have regard to any relevant guidance under s 25. Sch 10, para 7.

570

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No

Licensing authorities function

Statutory requirement

2

Considering applications for prize gaming permits.

Licensing authorities: (i) may prepare a statement of principles that they propose to apply in exercising their functions; (ii) need not (but may) have regard to the licensing objectives; (iii) shall have regard to any relevant guidance under s 25. Sch 14, para 8.

3

Considering applications for club gaming permits and club machine permits.

Licensing authorities may only refuse application for permit on one or more of five specified grounds, and in considering these they must have regard to: (i) any relevant guidance under s 25; (ii) subject to (i) the licensing objectives. Sch 12, paras 6 and 27.

4

Considering applications for licensed premises gaming machine permits.

Licensing authorities must have regard to: (a) the licensing objectives; (b) any relevant guidance under s 25; (c) such other matters as they think relevant. Sch 13, para 4.

5

Registration of small society lotteries.

Licensing authorities must have regard to Commission s 25 guidance under the general duty imposed under s 25(2).

6

Preparation of threeyear licensing policy.

Licensing authorities must have regard to Commission s 25 guidance under the general duty imposed under s 25(2).

10.105 The variety of these differently articulated discretions is puzzling. Why, for example, is an authority obliged to have regard to the licensing objectives when considering applications for licensed premises gaming machine permits (number  4) but given discretion whether or not to have regard to them in considering applications for FEC permits and prize gaming permits (numbers 1 and 2)? The individual requirements are dealt with in the relevant sections of this book, but it may be questioned generally whether the differently stated requirements are likely to lead to different conclusions in individual cases. 571

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Licensing authority functions subject to section 153 principles 10.106 Where a licensing authority’s functions are governed by the principles laid down in s 153, a more prescriptive regime applies. As noted above, s 153 applies principally to decisions relating to premises licences, although it also applies to temporary use notices. The cases to which it applies are set out in tabular form below. No

Licensing authorities function

Application of s 153

1

Grant/refusal of applications for premises licences.

Section 153 applies.

2

Grant/refusal of applications for provisional statements.

Section 153 applies: see s 204(2).

3

Decision whether to attach a condition/exclude a default condition to a premises licences.

Section 153 applies, as the power to attach/exclude conditions is relevant to the duty to ‘aim to permit’ use of premises for gambling.

4

Decision whether to give a counternotice to a temporary use notice.

Section 153 applies: see s 224(7).

5

Determination of application for variation of premises licence.

Section 153 applies: see s 187(3).

6

Determination of application for transfer of premises licence.

Section 153 applies: see s 188(2).

7

Reinstatement of premises licence following lapse on death, incapacity etc.

Section 153 applies: see s 195(3).

8

Rejection of application for review of premises licence on grounds that the grounds of review raise no issue relevant to the s 153 principles.

Section 153 applies: see s 198(1)(a).

9

Conduct of review of a premises licence.

Section 153 applies: see s 201(5).

10.107 Although the s  153 principles apply to a wide range of decisions that an authority may have to make, they will be considered here in the context of an application for a new premises licence. Section 153 provides as follows: ‘Principles to be applied (1) In exercising their functions under this Part a licensing authority shall aim to permit the use of premises for gambling in so far as the authority think it— (a) in accordance with any relevant code of practice under section 24, 572

Premises licences (b) in accordance with any relevant guidance issued by the Commission under section 25, (c) reasonably consistent with the licensing objectives (subject to paragraphs (a) and (b)), and (d) in accordance with the statement published by the authority under section 349 (subject to paragraphs (a) to (c)). (2) In determining whether to grant a premises licence a licensing authority may not have regard to the expected demand for the facilities which it is proposed to provide. (3) This section is subject to section 166.’ It will be seen that this section provides for five matters which are to be taken into account in the making of the relevant decision. First, the authority must ‘aim to permit the use of premises for gambling’. Set over against this duty are four factors which may, in the particular circumstances of an application, qualify the duty to aim to permit the use of the relevant premises: such use may only be permitted in so far as it is in accordance with the four factors. Not only are the factors set out, but their relative importance is laid down, the first two being equally important, the third being subject to the first two and the fourth being subject to the first three. This is undoubtedly more prescriptive than the general provisions governing discretion in non-s 153 cases. The s 25 Guidance notes further (in para 1.35): ‘… a licensing authority has no discretion in exercising its functions under Part 8 of the Act to grant or refuse premises licences where that would mean choosing to depart from the guidance contained in this document, Commission codes of practice and the licensing authority’s own statement of licensing policy.’ For consideration of the argument that licensing authorities’ powers are not so circumscribed as the Guidance would suggest, see 10.122 below. Whatever the merits of that argument, the section undoubtedly confers a very tightly circumscribed discretion on the authority, but the discretion is not non-existent. The authority must ‘aim to permit the use of premises for gambling’, but only in so far as the authority thinks it in accordance with the four potentially qualifying factors. In deciding to what extent the qualifying factors (or any of them) may tell against the use of the premises for gambling, the authority will have to engage in two processes. First, in the case of the first, second and fourth factors, they will have to interpret the relevant code, guidance or policy statement. As noted at 10.89 above, the interpretation of such documents may give some leeway to the authority in that, provided their interpretation is one which the words are reasonably capable of bearing, the meaning of the provision is a matter for them to decide. So far as the third qualifying factor, namely reasonable consistency with the licensing objectives, is concerned, here again it will be a matter for the licensing authority to assess whether the proposals are reasonably consistent with those objectives. Second, once the authority has interpreted the material, it has to make its own judgment whether use of the premises for gambling would be in accordance with the relevant code, guidance, licensing objectives or policy statement. It is the authority that is to make that decision 573

Premises licences and in many cases this will involve it carrying out a balancing exercise. Provided the authority’s interpretation of the factors it must consider and its approach to the balancing exercise is fair and reasonable, its decision should be proof against challenge. Third, even where the authority conclude that the application is not consistent with one of the relevant considerations (and so is liable to fail) its overarching duty to ‘aim to permit the use of premises for gambling’ must, it is submitted, mean that it is obliged to consider whether it can exercise any of its powers (particularly its powers to impose conditions) in a way which would overcome the problem and allow the application to be granted. Here again, there will be a genuine discretion in the authority as to whether, and if so how, it should exercise its powers. We will now consider the individual elements.

The duty to aim to permit 10.108 Under s  153(1) a licensing authority exercising its powers under GA 2005, Pt 8 is under a general duty to ‘aim to permit the use of premises for gambling’. This duty is analogous to the duty laid on the Commission to aim to permit gambling so far as it thinks it reasonably consistent with the licensing objectives: see GA  2005, s  22. The first point to make is that this amounts to a legal duty. The authority will need to have regard to this overarching duty at all stages of their deliberations. In the 5th edition of its 2015 Guidance, the Gambling Commission would seem to be at pains to encourage licensing authorities in the belief that, in spite of s 153 equating to a presumption in favour of permitting premises to be used for gambling, they have what the Guidance repeatedly describes as a ‘broad discretion’ in the exercise of their functions. It is the concerned view of this author that the cumulative effect of frequent glosses on the actual words of the GA  2005, together with some misstatement of those words, might result in a steer to licensing authorities that comes perilously close to leading them into error and increasing the number of appeals from their decisions. Some examples are as follows. Paragraph 1.2 states: ‘The Act gives local regulators very broad discretion to manage local gambling provision, including discretion as to the level of fees set to cover the cost of administering the local system of regulation. It sets out some boundaries to that discretion, consistent with the recognition of gambling as a mainstream leisure activity.’ On analysis, the statement is not wrong in law: but the opening 13 words can hardly be thought to steer licensing authorities towards a proper understanding of the ‘boundaries’ to the discretion subsequently given a brief mention in that paragraph. Paragraph  1.28 begins with the words: ‘To reflect the breadth of licensing authority discretion …’. Paragraph 5.20 wrongly states that the licensing authority must be satisfied that the use of premises for gambling would be in accordance with the licensing objectives. The requirement of s 153 is that the authority should be satisfied that an application is ‘reasonably consistent’ with the licensing objectives. The omission of the word ‘reasonably’ in para  5.20 of the 2015 Guidance is not 574

Premises licences an immaterial oversight: the gap between the two propositions is a large one, and the misstatement of law has the potential to encourage licensing authorities in an exaggerated and erroneous belief in their powers, of which the 2015 Guidance makes no great effort to disabuse them. Paragraph 5.23 states that ‘A licensing authority is … afforded significant scope to exercise its powers under s 153 …’. The duty to ‘aim to permit’ must, it is submitted, create a presumption in favour of granting a premises licence or, in the case of applications other than applications for a new grant, of taking steps which permit the licence to continue to exist, since in all cases it is only if there is a subsisting licence that the premises may lawfully be used for gambling. The duty also, it is submitted, involves the authority using their powers, so far as they lawfully can, to achieve a state of affairs where the premises can lawfully be used for gambling. The verb ‘to aim’ is defined by the OED1 as meaning: ‘5.  To calculate one’s course with a view to arriving (at a point); to direct one’s course, to make it one’s object to obtain. Hence fig. To have it as an object, to endeavour earnestly.’ The Shorter OED2 defines it as: ‘3. Direct one’s course, make it one’s object to attain, intend, try.’ To ‘aim’ to achieve a result involves making efforts to bring it about. Where, in the case of an application for a new licence, there are no considerations which should defeat the grant, then the authority’s duty will be discharged by granting the licence. Where, however, one or more of the countervailing considerations laid down in s 153 is such as to defeat the grant of a licence, the authority’s duty to ‘aim to permit’ will make it necessary for them to consider whether they can take steps which will overcome the relevant concerns and allow the licence to be granted. In particular, they will have to consider whether it is open to them to frame conditions which, if attached to the licence, would overcome legitimate concerns and allow it to be granted. And even in a case where suitably drafted conditions would not be sufficient to allay concerns, the authority should, it is submitted, consider whether amendments to the application might overcome the objections and enable it to be granted and, if so, discuss this possibility with the applicant. 1 The Oxford English Dictionary (2nd edn, Oxford 1989). 2 OUP, 5th edn.

Codes of practice and section 25 Guidance First qualifying factor: codes of practice 10.109 The duty to ‘aim to permit’ is qualified, first, by s  153(1)(a), which provides that premises should only be used for gambling in so far as the authority think it in accordance with any relevant code of practice under s 24. Section 24 requires the Commission to issue codes of practice about the manner in which facilities for gambling are to be provided (whether by the holder of a licence or by another person). For the issue of codes of practice by the Commission see Chapters 3 and 6. In issuing a code of practice the Commission will be subject to its general duty under s  22 to pursue the licensing objectives. 575

Premises licences

Second qualifying factor: guidance 10.110 Second, s 153(1)(b) qualifies the duty to ‘aim to permit’ by requiring that it be in accordance with any relevant guidance issued by the Commission under s 25. Again, in issuing such guidance the Commission will be under its general s 22 duty to pursue the licensing objectives. The effect is that any code of practice and any guidance to local authorities ought to pursue the licensing objectives, with the result that such codes of practice and guidance are given places of equal importance by s 153(1)(a) and (b) as considerations which may qualify the authority’s general duty to aim to permit the use of premises for gambling.

Third qualifying factor: the licensing objectives 10.111 The third qualifying factor which is set out in s 153(1)(c) is that use of premises for gambling must be reasonably consistent with the licensing objectives, However, the provision goes on to state that consideration of this matter must be ‘subject to paragraphs  (a) and  (b)’. The effect is to impose upon the authority a duty to consider whether use of the premises for gambling would be reasonably consistent with the licensing objectives (and in so doing to apply their own assessment of all relevant considerations) but to make their assessment subject to the Gambling Commission’s assessment of the licensing objectives as reflected in codes of practice and the Guidance. In principle, of course, since the Gambling Commission and the authority will both be considering the same licensing objectives, there should be no conflict between codes of practice and the Guidance and the outcome of the authority’s deliberations on those objectives. However, the effect of the provisions is that the views of the Commission as reflected in codes and the Guidance will override the licensing authority’s assessment of the impact of gambling use upon the licensing objectives, should that conflict with the Commission’s views.

Fourth qualifying factor: the authority’s three-year licensing policy 10.112 Finally, s 153(1)(d) deals with the status of the authority’s licensing policy issued under s 349. It provides that the duty to ‘aim to permit’ must be in accordance with the policy statement. In preparing the statement, the authority is required by the Gambling Commission Guidance to promote the three licensing objectives,1 so that the authority’s licensing policy should itself be consistent with those objectives and should not conflict with any code of practice or guidance issued by the Commission, nor with the licensing objectives themselves. However, the effect of the provision in s 153(1)(d) that consideration of the licensing authority’s own policy is ‘subject to paragraphs  (a) to  (c)’ is that if an inconsistency should arise between the authority’s licensing policy and any code of practice, s  25 Guidance or the licensing objectives themselves, then the code, guidance or licensing objectives would override the provisions of the authority’s licensing policy. 1 2015 Guidance, para 6.7.

576

Premises licences

Other factors: demand, planning and building regulation 10.113 As is noted at 10.3, the Gambling Review Body recommended the abolition of the demand test for casinos, bingo premises and licensed betting offices which had existed under the former legislation.1 This recommendation was accepted by government. GA 2005, s 153(2) gives effect to the recommendation by providing that: ‘In determining whether to grant a premises licences a licensing authority may not have regard to the expected demand for the facilities which it is proposed to provide’. It should be noted that the provision prohibits the authority from considering the ‘expected demand’,2 which might appear to leave it open to a licensing authority to have regard to the existing demand for such facilities. However, since the purpose of considering the existing demand for facilities would almost inevitably be to assess the future demand for facilities at the time when the premises licence applied for would, if granted, take effect, the considering of present demand would also appear to be prohibited by s 153(2). 1 Gambling Review Report 2001, Cm 5206, paras 20.28 and 20.31. 2 Contrast the wording of Betting, Gaming and Lotteries Act 1963, Sch 1, para 19(b) (ii) referring to ‘the demand for the time being in the locality’ and the Gaming Act 1968, Sch 2, para 18(1) (requirement to consider whether ‘a substantial demand already exists’ for gaming facilities).

10.114 Although an authority will not be able to have regard to future or existing demand as a self-standing consideration, it appears that they would be entitled to take into account representations that gambling premises were proliferating to an undesirable degree if, but only if, the basis of the representations was that the alleged proliferation was having an impact upon the licensing objectives. The Gambling Commission’s 2012 Guidance advised that a representation that there are already too many gambling premises in the locality might be relevant, ‘if it points, as a result, to rising problems in crime, disorder, underage gambling or problem gambling.’1 1 2012 Guidance, para 7.54.

Demand and casino premises licences 10.115 We turn now to consider how the statutory disregard of ‘expected demand’ for facilities laid down by s 153(2) affects an authority’s functions in connection with the grant of casino premises licences. By virtue of s 153(3) the whole of s 153 (including s 153(2)) is ‘subject to s 166’. Section 166 confers upon a licensing authority the power to resolve not to issue casino premises licences. The first three subsections provide as follows: ‘(1) A  licensing authority may resolve not to issue casino premises licences. (2) In passing a resolution under subsection (1) a licensing authority may have regard to any principle or matter. (3) A resolution under subsection (1)— (a)

must apply to the issue of casino premises licences generally,

(b) must specify the date on which it takes effect, 577

Premises licences (c)

may be revoked by a further resolution, and

(d) shall lapse at the end of the period of three years beginning with the date on which it takes effect (without prejudice to the ability to pass a new resolution).’ A licensing authority which makes such a resolution is required to publish it in its three-year policy statement (or a revision of it) under s 349.1 1 GA 2005, s 166(5).

10.116 Section 166(6) states that: ‘Section 153 is subject to this section’. As to the interaction between s 153 and s 166, certain things seem tolerably clear. Since s  153 (including the statutory disregard of expected demand under s 153(2)) is subject to s 166, and since s 166(2) provides that a resolution not to issue casino premises licences ‘may have regard to any principle or matter’, it seems clear that a licensing authority, in considering whether to resolve not to issue casino premises licences, could have regard to the question whether there is existing demand for casinos (or for more casinos than already exist) and the question whether demand could be expected if casinos, or more casinos than currently exist, were to be provided. Such a consideration is not only clearly permitted by the terms of s 166(2); it is also a consideration which is highly relevant to the question whether the authority should pass a resolution or not. 10.117 A matter of greater contention, however, is whether the interaction of ss 153 and 166 has the result that a licensing authority that has not passed a resolution not to issue casino premises licences, and that may or will therefore have to consider applications for such licences can have regard to the expected demand for casino gambling in considering whether or not to grant any applications made to it. The writer would suggest that the answer to that question is clearly ‘No’; there is nothing in the statute which has that effect. Although s 153 is made subject to s 166, the latter section is only concerned with the passing of a resolution not to issue casino premises licences at all. This is made quite clear by the terms of s  166(3)(a), which provide that a resolution must apply to the issue of casino premises licences generally. It must, in other words, amount to a resolution not to issue any casino premises licences; it cannot be a resolution to issue a certain limited number of casino premises licences, or licences for casino premises up to a certain size or in a certain part of a licensing authority’s area, or for premises licences to be granted for casinos in certain specified circumstances. The resolution is an ‘all or nothing’ decision: either the authority pass the resolution and decide to issue no casino premises licences or they do not pass the resolution and decide to consider any and all applications for casino premises licences that may be made on their merits. The question of ‘expected demand’ is relevant to the decision whether to make a resolution; if, however, no resolution is passed, the question of ‘expected demand’ is made irrelevant to any licence applications by the provisions of s 153(2). 10.118 It is, however, possible to read certain exchanges in the Parliamentary debates in Standing Committee  B  as pointing to a different conclusion, namely that a licensing authority could consider the question of demand in determining an application for a casino premises licence, provided they had 578

Premises licences made it clear in their three-year policy statement that they would consider demand as one of their criteria. The exchanges arose out of an attempt to introduce a demand test which licensing authorities could use in considering casino premises licences applications in cases where they had not passed a complete ban on casinos under s 166 (then clause 157 of the Bill).1 In the course of the debate there was an exchange between an MP and the Minister, Mr Richard Caborn, as follows: ‘Mr Foster:

…  I  ask the Minister one question. Could a local authority, in its policy statement, make it clear that it would consider new casinos only if there was clear evidence of demand for them? Could that be incorporated in the statement?

Mr Caborn:

Yes.

Mr Foster:

In that case, I humbly suggest that the Minister’s brief is slightly redundant. He is saying on one hand that Budd recommended that the demand test should go – the scrutiny Committee did not press for it to be reinstated – and the Minister is now making it clear that in fact the demand test can, in effect, remain as part of a local authority’s policy statement. It seems to me that I’ve got exactly what I want, albeit by another method, unless the Minister wants to correct me.

Mr Caborn:

That is just for casinos.

Mr Foster:

It is just for casinos. I am talking just about casinos; I  wanted that just for casinos and it is just casinos that are referred to in the clause. I am delighted that I have achieved what I wanted by a different method. The Minister has now put it firmly on the record that the demand test can be used by local authorities if they put in their statement their intention to use the demand test as a criterion in their consideration of applications. I beg to ask leave to withdraw the amendment’ (italics supplied).

Although this exchange is unhappily ambiguous and could be read as an acknowledgement by the Minister that, quite apart from a s 166 resolution, the question of demand can be relevant to casino premises licence applications, the writer would submit that this is not correct and that it would be wrong in principle to treat this exchange as establishing the proposition. First, it must be questioned whether the exchange should be considered at all for the purposes of interpreting the Act. It is clearly established that reference to parliamentary material should only be made where (a)  legislation is ambiguous or obscure or leads to absurdity, (b)  the material relied upon consists of statements by a Minister, and (c) the statements relied upon are clear.2 It is submitted that the provisions of ss 153 and 166 are clear and that they show that demand is only relevant to the decision whether to pass a no-casino resolution or not. Second, although the exchange involves a Minister, it is submitted that the meaning of the exchange is not clear. Mr Caborn’s acceptance that a local authority could ‘make it clear that it would 579

Premises licences consider new casinos only if there was clear evidence of demand for them’ could be a reference to the process by which the authority had approached the question whether to pass a s  166 resolution or not. Although it is true that the italicised passage in Mr Foster’s reply adopts a very different (and unchallenged) interpretation it is submitted that it would be wrong to override the clear meaning of the Act by reference to this exchange. The Act, it is submitted, is clear and is consistent with the Gambling Review Body’s conclusion that the demand test should be abolished for casinos, as for bingo premises and licensed betting offices. 1 HC Official Report, SC B, 2 December 2004, col 353. 2 Pepper (Inspector of Taxes) v Hart [1993] AC 593, HL.

Planning permission and building approval 10.119 In making a decision in respect of an application in relation to a premises licence, a licensing authority must not have regard to whether or not the proposal by the applicant is likely to be permitted in accordance with the law relating to planning or building.1 A decision by a licensing authority in connection with a premises licence will not constrain any later decision by the authority under planning or building law.2 1 GA 2005, s 210(1). 2 GA 2005, s 210(2).

Exclusivity of section 153 factors 10.120 We turn finally to the question whether s 153 lays down an exclusive set of criteria for decision-making which must be applied without reference to other factors, or whether it is permissible for the licensing authority to have regard to factors outside s 153 in making decisions relevant to premises licences, and in particular in deciding whether to grant one. Such additional factors might include possible regeneration benefits to the area from permitting the development, the possibility that the proposed facilities will be superior to existing facilities in the area or, on the other side of the balance sheet, the fact that the development will cause nuisance which is no more than private nuisance to nearby residents and businesses.1 As a matter of first impression, s 153 appears to create a tightly confined discretion limiting the authority to the factors set out there. This is how the Gambling Commission interpreted the provision in the 2012 Guidance: ‘… a licensing authority has no discretion in exercising its functions under part 8 of the Act to grant or refuse premises licences where that would mean choosing to depart from the guidance contained in this document, Commission codes of practice and the licensing authority’s own statement of licensing policy’.2 1 For the possibility that ‘public nuisance’ might be relevant to the licensing objectives, see Chapter 1 above. 2 2012 Guidance, para 1.19.

580

Premises licences 10.121 The converse has, however, been argued.1 It is suggested that the effect of s 153 is that: ‘… local people and statutory agencies do have a full role to play; that licensing authorities do have the ability to take into account material factors unless expressly excluded by the Act; and that they also have a wide discretion to grant or refuse in the wider public interest.’2 The effect of the section, so the argument runs, is that: ‘The licensing authority is given a broad discretion, although it will be strongly guided by the answers to (a)–(d). Non-compliance with any one of those factors will be a powerful, but not overriding, consideration. There may be a powerful countervailing factor which would hinder grant nonetheless. Similarly, compliance with all of them would be a strong, and usually conclusive, factor in favour of grant, but the “aim to permit” may yet be overridden by a sufficiently powerful consideration to the contrary.’3 1 Kolvin Gambling for Local Authorities (IOL), (2nd edn), ch 11. 2 Kolvin, para 11.3. 3 Kolvin, para 11.102.

10.122 The 2015 Guidance introduces a fundamental departure in the Commission’s thinking, consonant with the above paragraph, and possibly derivative of it, in that it expresses the s  153 limitations to a licensing authority’s discretion only in relation to its discretion to grant: ‘… a licensing authority has no discretion to grant a premises licence where that would mean taking a course which it did not think accorded with the Guidance contained in this document, and relevant Commission code of practice, the licensing objectives or the licensing authority’s own statement of policy.’1 1 2012 Guidance, para 1.19.

PREMISES LICENCE CONDITIONS 10.123 There are four ways in which conditions may be attached to a premises licence: (i)

a condition may be imposed by the express provisions of the GA 2005. The Act also contains provisions excluding the possibility of attaching certain kinds of conditions;

(ii) a condition may be attached to a premises licence pursuant to regulations made by the Secretary of State (or the Scottish Ministers) under s 167 (‘mandatory conditions’); (iii) a condition may be attached to a premises licence pursuant to regulations made by the Secretary of State (or Scottish Ministers) under s 168 providing for a specified condition to be attached to any premises licence unless excluded by the licensing authority (‘default conditions’); 581

Premises licences (iv) a condition may be imposed on a premises licence by the licensing authority who issue it pursuant to powers conferred under s  169 (‘individual conditions’).

Conditions imposed by the GA 2005 10.124 A number of conditions and authorisations are attached automatically to premises licences by the GA  2005. The Gambling Commission s  25 Guidance at paras 9.4–9.18 sets them out. Although it is arguable that not all the provisions set out are strictly conditions, they are noted briefly below for the sake of completeness. (i)

Section 172 sets out the numbers and categories of gaming machines which may be provided on premises holding various types of premises licence.

(ii) Section 173 provides that the holder of a casino premises licence or a betting premises licence may make facilities available for betting on the outcome of a virtual game, race etc (such as ‘Portman Park’ in betting offices). (iii) Section 174 provides that the holder of a casino premises licence may provide, in addition to casino games permitted by s  150(1)(a), the following: (a) equal chance games (eg cardroom games); (b) betting (but not in pre-2005 Act casinos with grandfather rights and only with a betting operating licence); and (c)

bingo (but only in large casinos and the regional casino, and only with a bingo operating licence).

(iv) Section 176 provides that the Commission must issue at least one code of practice about access to casino premises for children and young persons. The code must: •

specify steps that the premises licence-holder must take to ensure that children and young persons do not enter the casino premises or, in the case of a regional casino, do not enter the gambling area;

•

amongst those specified steps, ensure that each entrance to the casino or gambling area is supervised by at least one person (‘the supervisor’) who is responsible for compliance with the code of practice; and

•

require that, unless the supervisor is certain that a person seeking admittance is an adult, evidence of age must be required of all those seeking to enter the casino or gambling area.

Section 176(3) provides that a casino premises licence is subject to the condition that the licensee ensures compliance with any such code of practice. (v) Section 177 provides that a casino premises licence and a bingo premises licence are subject to the condition that the licensee does not: 582

Premises licences (a)

give credit in connection with gambling authorised by the licence, or

(b) participate in, arrange, permit or knowingly facilitate the giving of credit in connection with gambling authorised by the licence. The condition does not prevent the licensee from permitting the installation and use on the premises of a machine enabling cash to be obtained on credit from a credit provider, so long as certain conditions are satisfied. (vi) Section 178 provides that where a condition is attached to a premises licence requiring door supervision, then if the supervisor is required by the Private Security Industry Act 2001 to hold a licence under that Act, the requirement under that Act is to be treated for the purposes of the GA 2005 as if it were a condition of the premises licence itself. Note that bingo premises and casino premises are exempt from the need to have licensed door supervisors by virtue of an exclusion in the Private Security Industry Act 2001 which was introduced by the Gambling Act 2005, Sch 17, para 17. (vii) Section 179 provides that a track betting premises licence may not authorise pool betting to take place other than in respect of horse-racing or dog-racing and only where the acceptance of bets is by the holder of the betting premises licence or in accordance with arrangements made by him. (viii) Section 180, which ceased to have effect at the end of 31 December 2012, provided that where a betting premises licence existed for premises other than a dog track (eg for a high street betting office) it was subject to the condition that pool bets might only be accepted in respect of dog-racing in accordance with arrangements made with the occupier of the dog track at which the racing was taking place. By sub-s (4) any condition still ostensibly attached by sub-s (1) to premises licences in force on 31  December 2012 lapsed in respect of anything done after that date. (ix) Section 182 provides that a betting premises licence in relation to a track is subject to the condition that children and young persons are excluded from (a) any area in which facilities for betting are provided, and (b) any area where a gaming machine (other than a Category  D  machine) is situated. There is an exception to this for betting areas only on racedays (ie on those days when racing occurs or is expected to take place) at a dog-racing track or a horse-racing track. On race-days, on those tracks only, under 18s may have access to betting areas, though they are not permitted to bet there. (x) By s 183 a premises licence is subject to the condition that the premises shall not be used to provide facilities for gambling on Christmas Day.

Prohibited conditions 10.125 The GA 2005 specifically provides that conditions of the following types may not be attached to a premises licence: 583

Premises licences (a) a condition that prevents compliance with a condition of the operating licence which authorises the holder to carry out the activity in respect of which the premises licence is granted (s 169(4)); (b) a condition about the number or categories of gaming machines that may be made available for use on premises holding a premises licence that contradicts the terms of s 172 or contradicts a provision of regulations made under ss 236, 240 or 241 (s 172(10)); (c)

a condition requiring that the activities on premises holding a premises licence must be operated or carried on as a club or other body with membership (s 170);

(d) a condition imposing limits on stakes, fees, winnings or prizes. This provision does not prevent the imposition by virtue of s  167 of a condition about fees for admission to a track (s 171).

Mandatory conditions 10.126 The Secretary of State (and Scottish Ministers) may make regulations requiring that a specified condition or conditions (‘mandatory conditions’) be attached to premises licences generally, or to licences for premises in a specified class or in specified circumstances.1 The position as regards England and Wales is governed by the Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007,2 the effect of which is summarised at 10.129 below. The Gambling Commission’s s  25 Guidance notes that mandatory conditions are set by the Secretary of State with the intention that no further regulation in relation to that matter is required. The Guidance suggests that it is therefore extremely unlikely that licensing authorities will need to impose individual conditions enforcing a more restrictive regime in relation to matters dealt with by mandatory conditions, and they should only do so where there are regulatory concerns of an exceptional nature.3 1 GA 2005, s 167(1), (2) and (3). 2 SI 2007/1409 (see below for the terms of such conditions). 3 2015 Guidance, para 9.21.

Default conditions and individual conditions 10.127 The Secretary of State and Scottish Ministers may make regulations prescribing a specified condition or conditions (‘default conditions’) to be attached to any premises licence unless excluded by the licensing authority that issues the licence; the regulations may provide for such conditions to apply to premises licences generally, or only to a specified class of premises licence, or in specified circumstances.1 Where a licensing authority proposes to exclude a default condition, it must hold a hearing of the application unless the applicant and any interested party or responsible authority who have made representations agree to dispense with a hearing.2 The position as regards England and Wales is governed by the Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007.3 The provisions are summarised at 10.129 below. Third, the licensing 584

Premises licences authority may itself attach a condition or conditions to a premises licence.4 Such a condition may address a matter which would have been catered for by a default condition which the licensing authority has decided to exclude,5 thus enabling the licensing authority to attach conditions which it considers are better framed to deal with the circumstances of the individual application than the default condition would be. However, the discretionary power to attach conditions is not limited to this situation and the licensing authority has a wide discretion (subject to the controls noted below) to attach conditions to licences. Such conditions may apply to the premises generally or to a specified part of the premises.6 As noted above, a licensing authority may not attach a condition in its discretion that prevents compliance with a condition of the operating licence which authorises the holder to carry out the activity for which the premises licence is granted.7 1 2 3 4 5 6 7

GA 2005, s 168(1), (2) and (3); s 169(1)(b). GA 2005, s 162(1)(c) and (2). SI 2007/1049 (see below for the terms of such conditions). GA 2005, s 169(1)(a). GA 2005, s 169(2). GA 2005, s 169(3). GA 2005, s 169(4).

10.128 It should be noted that a default condition could be excluded and substituted with one that is either more or less restrictive in its effects. However, the Gambling Commission’s s 25 Guidance notes that the default conditions are intended to be the basic industry norm and that whilst, given the requirements of s 153, it would expect default conditions to be excluded and replaced with less rigid conditions on a relatively regular basis, licensing authorities would need to ensure that they have clear regulatory reasons for excluding default conditions and replacing them with more restrictive ones.1 1 2015 Guidance, para 9.23.

Mandatory and default conditions laid down by regulation 10.129 For England and Wales the mandatory and default conditions are laid down by the Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007.1 The following is a summary of the regulations as they apply to the different types of premises licence conditions. A.

Standard mandatory conditions – all premises licences •

Summary of terms and conditions of licence displayed.

• Layout2 of premises maintained in accordance with plan. • B.

No sale of tickets in private lottery, customer lottery or other lotteries (eg National Lottery) where sale on premises prohibited.

Mandatory conditions – casino premises licences (all types) As above and also: •

Principal entrance to premises to be from a street.

•

No entrance from premises used by children or young persons. 585

Premises licences

C.

•

Two metre gap (at least) between any gaming table and other gambling equipment.

•

No more than 40 separate player positions on wholly automated gaming tables.

•

Prominent display or distribution of rules3 for casino games.

Mandatory conditions – regional casino premises licences As under A and B above and also:

D.

•

Prominent notice at every entrance to gambling area that no under 18 year olds admitted.

•

Gambling area not to be visible from parts of premises to which children or young persons have access.

•

Table gaming area to be not less than 1,000m2.

•

Only gambling permitted in table gaming area is table gaming.

•

Non-gambling area of at least 1,500m2.

•

No facilities for gambling in the non-gambling area.

•

Whenever gambling facilities are provided, the non-gambling area(s) must contain recreational facilities.

•

Prominent notice setting out terms for betting on the premises.

•

Prominent notice giving details of costs and participation fees for bingo on the premises.

•

Rules for playing bingo on the premises to be displayed on a sign, or distributed by leaflets or audio-visual guide.

•

No more than 40 separate betting positions on betting machines.

Mandatory conditions – large casino premises licences As under A and B above and also:

586

•

Prominent notice at every entrance that no under 18 year olds admitted.

•

Table gaming area to be not less than 1,000m2.

•

Only gambling permitted in table gaming area is table gaming.

•

Non-gambling area of at least 500m2.

•

No facilities for gambling in the non-gambling area.

•

Whenever facilities for gambling are provided, the non-gambling area(s) must contain recreational facilities.

•

Prominent notice setting out terms for betting on the premises.

•

Prominent notice giving details of costs and participation fees for bingo on the premises.

•

Rules for playing bingo on the premises to be displayed on a sign or distributed by leaflets or audio-visual guide.

•

No more than 40 separate betting positions on betting machines.

Premises licences E.

Mandatory conditions – small casino premises licences As under A and B above and also:

F.

•

Prominent notice at every entrance that no under 18 year olds admitted.

•

Table gaming area to be not less than 500m2.

•

Only gambling permitted in table gaming area is table gaming.

•

Non-gambling area of at least 250m2.

•

No facilities for gambling in the non-gambling area.

•

Whenever facilities for gambling are provided on the premises the non-gambling area(s) must contain recreational facilities.

•

Prominent notice setting out terms for betting on the premises.

•

No more than 40 separate betting positions on betting machines.

Mandatory conditions – converted casino premises licences As under A and B above and also:

G.

•

Prominent notice at every entrance that no under 18 year olds admitted.

•

Where premises have gambling area not less than 200m2 there must be a non-gambling area of not less than 10% of the gambling area.

•

No facilities for gambling in the non-gambling area.

•

Whenever facilities for gambling are provided on the premises the non-gambling area(s) must provide recreational facilities.

Default conditions – all casino premises licences •

H.

No facilities for gambling to be provided between 6.00am and noon.

Mandatory conditions – bingo premises licences •

Prominent notice at every entrance that no under 18 year olds may play bingo.

•

No direct access from premises holding casino premises licence, AGC premises licence or betting premises licence (except track premises licence).

•

Where children or young persons are admitted, any area where Category B or C gaming machines are provided must be physically separated from rest of premises, supervised as specified and with prominent notice at entrance that no 18 year olds admitted.

•

Prominent notice of any charge for admission to premises.

•

Prominent notice setting out specified information about other charges for gaming.

•

Rules for games on the premises (excluding gaming machines) to be displayed on a sign or distributed by leaflets or audio-visual guide. 587

Premises licences • I.

Default conditions – bingo premises licences •

J.

K.

L.

588

ATM (if any) located so as to require customers to stop gambling to use it. No facilities for gambling (except gaming machines) to be provided between midnight and 9.00am.

Mandatory conditions – adult gaming centre premises licences •

Prominent notice at every entrance that no under 18 year olds admitted and no alcohol allowed.

•

No direct access from other premises with GA  2005 premises licence, FEC gaming machine permit, club gaming permit, club machine permit or licensed premises gaming machine permit.

•

ATM (if any) located so as to require customers to stop gambling to use it.

•

No alcohol to be consumed on premises during time when facilities for gambling are provided.

Mandatory conditions – family entertainment centre premises licences •

‘No alcohol’ notice displayed at entrance.

•

No direct access from premises with casino premises licence, AGC premises licence, betting premises licence (except track premises licence).

•

ATM (if any) located so as to require customers to stop gambling to use it.

•

Where Category C machines are provided, any area where they are located must be physically separated from rest of the premises and supervised as specified, and with prominent notice at entrance that no under 18 year olds admitted.

•

No alcohol to be consumed on premises during the time when facilities for gambling are provided.

Mandatory conditions – betting premises licences (non-track) •

Prominent notice at every entrance that no under 18 year olds admitted and no alcohol allowed.

•

Only access from street or other premises with betting premises licence.

•

No direct access between premises and other premises used for retail sale of merchandise or services.

•

Premises to be used only for providing facilities for betting (subject to activities below).

•

Content of sound and visual broadcasting limited to sporting events, betting on sporting events, matter incidental to sporting events and betting on any event on which bets may be/have been effected in the premises.

Premises licences • • • •

No publications to be sold except racing periodicals or specialist betting publications. No music, dancing or other entertainment. No alcohol to be consumed on the premises during times when facilities for gambling are provided. Prominent display of terms on which customers entitled to bet.

M. Default conditions – betting premises licences (non-track) • No facilities for gambling to be provided on the premises between 10.00pm and 7.00am next day. N.

Mandatory conditions – track premises licences (all types) • No direct access to premises from premises with casino premises licence or AGC premises licence. • Prominent notice at every entrance that no under 18 year olds permitted to bet. • Prominent display of terms on which bets may be placed. • Premises licence holder to ensure betting operators have valid operating licence and comply with GA 2005, ss 92, 93 and 94. • Premises licence holder to arrange for removal of persons accepting bets not in accordance with GA 2005. • ATM (if any) located so as to require customers to stop gambling to use it.

O. Mandatory conditions – track premises licences that are horse-race courses Converted track premises licences As under N and also: • Licence holder to make available ‘betting area’ on track to enable betting operators and their assistants to provide facilities for betting. • Charge for admission to betting area not more than five times the cost of public admission for betting operator and cost of public admission for assistant. • Charges to betting operators and betting operator’s assistants not to vary as between different operators and assistants. • No additional charges for betting operators and assistants except for charges to cover costs reasonably incurred in enabling betting operators and assistants to operate. Non-converted track premises licences • Licence holder to provide a place where betting operators and betting operator’s assistants (including small-scale operators) may provide facilities for betting with the public. P.

Mandatory conditions – dog-racing tracks •

Totalisator only to be operated while public are admitted for purpose of attending dog-races and may only be used for betting with persons on the premises on dog-races taking place there. 589

Premises licences Whilst totalisator in use—

Q.

•

no betting operator or assistant to be excluded from betting on premises;

•

space to be made available on premises for betting operators and assistants to bet.

Default conditions – all track premises licences •

Except where sporting event is taking place on the premises, no gambling to be provided on the premises between 10.00pm and 7.00am next day.

•

Where sporting event taking place on premises, gambling transactions may take place at any time during the day.

1 SI 2007/1409. 2 See also the Social responsibility code provision 4.2.5 in the Gambling Commission’s Gambling codes of practice – Consolidated for all forms of gambling (October 2016), which provides: ‘Supervision of games All non-remote casino licences 1 Licensees must have and put into effect policies and procedures designed to ensure that proper supervision of gaming at tables is carried out by supervisors, pit bosses and croupiers in order to ensure the integrity of the gaming is not compromised. Such policies and procedures must take into account, but need not be limited by, any mandatory premises licence conditions relating to the layout of premises.’ 3 Note that the Social responsibility code provision 4.2. in the Gambling codes of practice makes specific arrangements for the display of rules in all non-remote casino and bingo premises and all remote licences (including ancillary remote betting licences), except gaming machine technical, gambling software, ancillary remote bingo, ancillary remote casino and remote betting intermediary (trading rooms only) licences.

Conditions imposed by licensing authorities 10.130 The power granted to licensing authorities to impose individual conditions is expressed in wide terms. Section 169 provides as follows: ‘(1) Where a licensing authority issue a premises licence they may— (a) attach a condition to the licence; (b) exclude a condition that would otherwise be attached to the licence by virtue of section 168. ‘(2) A condition attached to the licence under subsection (1)(a) may, in particular, address a matter addressed by a condition excluded under subsection (1)(b).’ Although this power is conferred in wide terms, it is likely that the courts will restrict this condition-making power by reference to the principles developed in other statutory contexts. 10.131 There are a number of statutory contexts in which a decision-maker, empowered to make a decision conferring authorisation upon a person 590

Premises licences to do something, is authorised to impose conditions upon the authority granted. The grant of planning permission provides an obvious example. For decades local planning authorities have possessed the statutory power to grant planning permission ‘subject to such conditions as they think fit’.1 Despite the breadth of the language in which the power to impose conditions is conferred, the courts, in a series of cases culminating in Newbury District Council v Secretary of State for the Environment,2 have laid down that the power must be exercised in accordance with the following principles: (i)

conditions imposed must be for a planning purpose and not for any ulterior purpose;

(ii)

conditions imposed must fairly and reasonably relate to the development permitted;

(iii) conditions must not be so unreasonable that no reasonable planning authority could have imposed them.3 Similar principles, derived from the planning cases, have been applied to the power of various licensing bodies to attach conditions to the licences they grant.4 1 See the Town and Country Planning Act 1947, s 14; Town and Country Planning Act 1971, s 29 and Town and Country Planning Act 1990, s 90. 2 [1981] AC 578. 3 Newbury District Council v Secretary of State for the Environment [1981]  AC  578 at 599H–600A per Viscount Dilhorne. In stating these principles, reference was made to Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1  KB  223; Pyx Granite Co Ltd v Ministry of Housing and Local Government [1958] 1 QB 554; Fawcett Properties Ltd v Buckingham County Council [1961] AC 636; Hall & Co v Shoreham-by-Sea Urban District Council [1964] 1 WLR 240; Mixnam’s Properties Limited v Chertsey Urban District Council [1965] AC 735; City of London Corporation v Secretary of State for the Environment [1971] 23 P & CR 169 and R v Hillingdon London Borough Council, ex p Royco Homes Ltd [1974] QB 720. 4 See Mixnam’s Properties Ltd v Chertsey Urban District Council [1965]  AC  735 applying Pyx Granite and Fawcett Properties v Buckingham County Council to conditions imposed on caravan site licences under the Caravan Sites and Control of Development Act 1960. Giving judgment in the Court of Appeal Willmer  LJ stated that there were four principles governing the power to impose conditions under the legislation namely: (i)  the conditions must not be such as to effect a fundamental alteration in the general law relating to the rights of the persons on whom they were imposed unless the power to effect such an alteration was very clear; (ii)  the power to impose conditions must be such as fairly fell within the ambit of the statute; (iii)  the conditions must not be unreasonable in the public law sense, and (iv)  a condition must be sufficiently clear to avoid being void for uncertainty: see [1963] 3  WLR  38 at 43–4. In R  v North Hertfordshire District Council, ex  p Cobbold the planning cases were considered in deciding upon the consequences of the imposition upon a public entertainment licence under the Local Government (Miscellaneous Provisions) Act 1982, Sch  1 of a condition which was void on public law grounds. See also Stewart (AP) (Respondent) v Perth & Kinross Council (Appellants) (Scotland) [2004] UKHL 16: the provisions of Part 11 of the Civic Government (Scotland) Act 1982 authorising local authorities to licence second hand dealers and to impose conditions on licences did not, on their proper interpretation, authorise conditions requiring second hand car dealers to provide ‘pre-sales information reports’ to purchasers, in particular because the form of report under discussion compelled the seller to make representations

591

Premises licences about the condition of the vehicle which would affect the contractual terms on which the cars were sold. Reference was made to the Newbury requirements and Lord Rodger of Earlsferry said (at [55]) that: ‘the conditions attached to the licence must be for a licensing purpose and not for any ulterior purpose. They must also fairly and reasonably relate to the business that the licence holder is permitted to carry on as a dealer in second-hand cars. In addition they must not be so unreasonable that no reasonable licensing authority would have imposed them.’ Baroness Hale of Richmond (at [71]) said: ‘… conditions imposed by local authorities must (a) be for the purpose of regulating the activity required to be licensed and not for any other purpose; (b) fairly and reasonably relate to the activity being licensed; and (c) be reasonable in the modern public law sense of that word: see Newbury District Council v Secretary of State for the Environment [1981] AC 578, 599.’

10.132 The Gambling Commission’s s  25 Guidance foreshadows the application of Newbury principles to the attaching of individual conditions by stating that licensing authorities should ensure that the premises licence conditions: •

are relevant to the need to make the proposed building suitable as a gambling facility;

•

are directly related to the premises and the type of licence applied for;

•

are fairly and reasonably related to the scale and type of premises; and

•

are reasonable in all other respects.1

In anticipation that questions relating to the legitimacy of individual conditions will be viewed along Newbury lines, the Newbury requirements will be considered in turn. 1 2015 Guidance, para 9.31.

Condition imposed for a planning purpose and not for an ulterior purpose 10.133 An example of a case where conditions imposed upon planning permission infringed this principle is to be found in R v Hillingdon LBC, ex p Royco Homes,1 where planning permission granted under s 29 of the Town and Country Planning Act 1971 for the development of land for flats had imposed conditions requiring that the dwellings, once completed, should be occupied by persons on the local authority’s housing list on terms giving them the equivalent protection to that available under the Rent Acts. It was held that the conditions were ultra vires and void because they did not relate to planning considerations but were an attempt to force the developer to discharge the local authority’s duty to provide house for homeless persons. It was held, in addition, that the conditions were unreasonable in the public law sense. 1 [1974] QB 720.

592

Premises licences

Condition must fairly and reasonably relate to the development permitted 10.134 The Newbury case itself provides an example of a condition which failed this test. Planning permission was granted for a period of ten years to use two buildings originally erected as aircraft hangars as warehouses for the storage of synthetic rubber. A  condition was imposed requiring the removal of the hangars on expiry of the planning permission. It was held that the condition was ultra vires and void as it did not fairly and reasonably relate to the permitted development. Similarly, in Tarmac Heavy Building Materials UK  Ltd v Secretary of State for the Environment, Transport and the Regions1 a planning condition imposed in 1952 in relation to mineral working, requiring the applicants, upon the completion of working, to remove from the site all buildings, huts and other structures, and gravel and other materials was struck down as invalid as not fairly relating to the permitted development. Likewise, in Delta Design & Engineering Ltd v Secretary of State for the Environment2 the Court of Appeal concluded that it was wrong to impose upon the grant of planning permission for the change of use of a country house which was a listed building to use for research and development purposes a condition requiring that part of a barn in its grounds should be demolished within two years of occupation of the main building. It concluded that the reasons for the condition, namely that demolition of the barn would improve the appearance and setting of the listed building, was contrary to the Newbury approach. There was no obvious connection between the change of use of the listed building and the demolition of the barn. 1 [1999] EGCS 97. 2 [2000] 4 PLR 1.

10.135 By way of contrast, in R v Bristol CC, ex p Anderson1 a condition was held to satisfy the second Newbury requirement in the following circumstances. Planning permission was granted for the construction of flats for students with sixty cycle spaces and thirty-three car parking spaces. A  condition was imposed that prior to occupation there should be submitted to the local planning authority for approval a proposed management agreement including welfare/support for students and a system of control over use of cars. It was held that this was valid on Newbury grounds as fulfilling a planning purpose, namely minimising potential nuisance to the amenity of neighbouring occupiers. 1 [2000] 79 P & CR 358.

Condition must not be so unreasonable that no reasonable planning authority could have imposed it 10.136 The third Newbury test reflects the classic description of public law ‘unreasonableness’ laid down in the Wednesbury case.1 In that case a cinema licence was granted under the Cinematograph Act 1909 and the Sunday Entertainments Act 1932. On the question whether a condition could lawfully be attached to it by the licensing authority, the court held that a condition could only be treated as ultra vires on the grounds of being unreasonable 593

Premises licences if in exercising their discretion the authority (i)  had taken into account irrelevant matters or not taken into account relevant matters, or (ii)  had reached a conclusion that no reasonable authority could ever have come to. These principles have, of course, been extensively applied in the public law context. In Hall v Shoreham-by-Sea UDC2 the principles were applied to strike down a condition attached to planning permission. Planning permission was granted to develop land for industrial purposes. A condition was attached requiring the land occupiers to provide land along the frontage of their site, to build a road on it at their own expense and, in effect, to dedicate it to the public. It was held that even though the condition was imposed to try to meet concerns over increased traffic on nearby busy roads as a result of the proposed development and possible future developments of other land, the condition was Wednesbury unreasonable and void, as its effect was to require the developers to build at their own expense and on their own land a highway which the local authority could, as highway authority, have built, and to do so without compensation which would have been payable if the local authority had built the highway under their powers. 1 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, CA. 2 [1964] 1 WLR 240.

10.137 There are two specific cases where a planning condition may be void under the third Newbury test, namely where its meaning is uncertain and where it would be impossible to enforce. As to the first, a planning condition may be so uncertain as to be invalid, but it will only be in extreme cases of unintelligibility that it should be struck down. In Fawcett Properties Ltd v Buckinghamshire CC1 Lord Denning said: ‘… I am of opinion that a planning condition is only void for uncertainty if it can be given no meaning or no sensible or ascertainable meaning, and not merely because it is ambiguous or leads to absurd results. It is the daily task of the courts to resolve ambiguities of language and to choose between them; and to construe words so as to avoid absurdities or to put up with them. And this applies to conditions in planning permissions as well as to other documents.’2 If, however, it is held that a planning condition is genuinely too uncertain to be interpreted, then it will be void as irrational or unreasonable in the public law sense.3 An example of a case where a condition failed for uncertainty is Shanley MJ  Ltd (In Liquidation) v Secretary of State for the Environment, 4 where a proposed condition which required that local people be given the first opportunity to buy the houses to be erected was held to be invalid for uncertainty. It gave no indication as to the method or terms upon which the first opportunity was to be offered. 1 [1961] AC 636. 2 [1961] AC 636 at 678. 3 Chichester District Council v Secretary of State for the Environment [1992] 3 PLR 49 applying Bromsgrove District Council v Secretary of State for the Environment [1988] 1 PLR 59. 4 [1982] JPL 380.

594

Premises licences 10.138 If a condition attached to planning permission would be impossible to enforce (because, for example, it would be impossible to tell whether the condition had been broken, or to enforce it if it were broken), the condition could well, it has been said, fail as being absurd and therefore unreasonable in terms of the third Newbury test.1 1 Bromsgrove District Council v Secretary of State for the Environment [1988] 1 PLR 59 at 62H.

Consequences of condition being void 10.139 Where a condition attached to planning permission is found to be invalid, the court has no general power to remove it and allow the permission to stand.1 It will only be able to delete the condition and leave the planning permission standing if the condition can be treated as severable. The test of severability is to ask whether the condition goes to the root of the permission, or whether it deals with some ulterior, collateral or trivial matter: see Kingsway Investments (Kent) Ltd v Kent CC.2 In Hall & Co Ltd v Shoreham-bySea UDC3 (for the facts of which see 10.136 above) the void condition was held to be one which could not be severed and the whole planning permission failed. In R v London Borough of Hillingdon, ex p Royco Homes Ltd4 (for the facts of which see 10.133 above) the offending conditions were likewise treated as inseverable and the planning permission failed. Similarly, in a licensing case, R v North Hertfordshire District Council, ex p Cobbold,5 conditions attached to a licence for a pop concert requiring reimbursement for additional policing services to be required were held to be inseverable because to sever them would alter the whole character of the licence by removing any policing requirement.6 The balance of the authorities suggests that it will only rarely be appropriate to sever a void condition so as to leave the relevant planning permission (or licence) in force, and there is always likely to be a risk that a person attacking the validity of a condition will, if successful, destroy the permission or licence to which the condition is attached 1 Pyx Granite Ltd v Ministry of Housing and Local Government [1958] 1 QB 554 at 578 per Hodson LJ. 2 [1971] AC 72, HL. 3 [1964] 1 WLR 240. 4 [1974] 1 QB 720. 5 [1985] 3 All ER 486. 6 See also R  v Inner London Crown Court, ex  p Sitki [1992] 157  JP  523: an invalid condition imposed upon a justices on-licence under the Licensing Act 1964 prohibiting the sale of beer could not be severed to leave the licence standing. The licence granted was wholly invalid.

10.140 In considering the power of licensing authorities to impose individual conditions, it should be borne in mind that under s  153 they are under a general duty to aim to permit the use of premises for gambling. As the Gambling Commission points out in its s 25 Guidance, this has the result that they should not attach conditions that limit the use of premises for gambling except where that is necessary in order to fulfil their duties under s 153.1 On the other hand, the power of a licensing authority to impose an individually drafted condition may enable it to meet relevant objections to the grant of a 595

Premises licences premises licence and so to grant it in accordance with their general duty to aim to permit use of premises for gambling. The Gambling Commission’s Guidance notes that licensing authorities should not turn down applications for premises licences where relevant objections can be dealt with through the use of conditions.1 1 2015 Guidance, para 9.28.

10.141 In The Queen on the Application of Betting Shop Services Ltd v Southendon-Sea Borough Council1 the Administrative Court considered the position that could arise where a licensing authority had to determine an application for a premises licence in respect of premises which were not in an adequate state of development to be used for gambling. It noted that it would be open to the authority in such a case to consider whether appropriate conditions could be attached to the licence to cater for the fact that the premises were not yet in the state in which they ought to be before gambling took place. It would be a matter for the authority to decide whether a condition ought to be imposed to deal with this situation.2 1 [2008] EWHC 105 (Admin). 2 The Queen on the Application of Betting Shop Services Ltd v Southend-on-Sea Borough Council [2008]  EWHC  105 (Admin) at [20] and [29]. It should be noted that the effect of GA  2005, s  151(1)(g) and the Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), regs 21 and 22 and Sch 9 is that a premises licence must have a scale plan of the licensed premised annexed to it. Accordingly, it is certainly arguable that premises which were built or developed in such a way as not to comply with the plan would not be properly licensed, leading to the commission of offences under s 37.

Sample of premises licence conditions 10.142 Guidance published by the Commission sets out examples of conditions that have been attached to premises licences by licensing authorities, with some amended for illustrative purposes. The Commission makes it clear that the examples are provided purely for illustrative purposes and that any actually imposed must be as a consequence of evidenced-based concerns within the local area. It is further emphasised that the conditions have not been provided as blanket measures as each must be considered on a case by case basis. Part 9 of the Guidance to Licensing Authorities provides further details on the principles licensing authorities should apply when exercising their discretion to impose premises licence conditions. The conditions set out in the guidance have been grouped by the Commission under specific headings for ease of reference. The Commission acknowledges that there is inevitably some overlap between those conditions that address different concerns (eg  those relating to security and to antisocial behaviour). 1 Security 1.1 No pre-planned single staffing after 8pm and, when this is unavoidable, for a Maglock to be in constant use. 1.2 A minimum of two members of staff after 10pm. 596

Premises licences 1.3 A minimum of two members of staff will be on duty throughout the whole day. 1.4 The premises will have an intruder alarm and panic button. 1.5 Maglock systems are employed and access is controlled. 1.6 Requirements for full-height security screens to be installed. 1.7 A  requirement for 50% of the shop frontage to be clear of advertising so that staff have a clear view and can monitor the exterior of the premises. 1.8 The premises shall maintain a ‘safe haven’ to the rear of the counter. 1.9 The premises shall install and maintain a comprehensive CCTV system as per the minimum requirements of a Metropolitan Police Crime Prevention Officer. All entry and exit points will be covered enabling frontal identification of every person entering in any light condition. The CCTV system shall continually record whilst the premises is open for licensable activities and during all times when customers remain on the premises. All recordings shall be stored for a minimum period of 31 days with date and time stamping. Recordings shall be made available immediately upon the request of Police or an authorised officer throughout the preceding 31-day period. 1.10 A member of staff from the premises who is conversant with the operation of the CCTV system shall be on the premises at all times when the premises are open to the public. This member of staff must be able to show a member of the police or authorised council officer recent data or footage with the absolute minimum of delay when requested. 1.11 A  monitor shall be placed inside the premises above the front door showing CCTV images of customers entering the premises. 1.12 If at any time (whether before or after the opening of the premises), the police or licensing authority supply to the premises names and/or photographs of individuals which it wishes to be banned from the premises, the licensee shall use all reasonable endeavours to implement the ban through staff training. 2 Anti-social behaviour 2.1 The licensee shall develop and agree a protocol with the police as to incident reporting, including the type and level of incident and mode of communication, so as to enable the police to monitor any issues arising at or in relation to the premises. 2.2 The licensee shall take all reasonable steps to prevent street drinking of alcohol directly outside the premises and to ban from the premises those who do so. 2.3 Notices indicating that CCTV is in use at the premises shall be placed at or near the entrance to the premises and within the premises. 597

Premises licences 2.4 The licensee shall place and maintain a sign at the entrance which states that ‘only drinks purchased on the premises may be consumed on the premises’. 2.5 The licensee shall implement a policy of banning any customers who engage in crime or disorder within or outside the premises. 2.6 The licensee shall install and maintain an ultraviolet lighting system in the customer toilet. 2.7 The licensee shall install and maintain a magnetic door locking system for the customer toilet operated by staff from behind the counter. 2.8 Prior to opening the licensee shall meet with the Crime Prevention Officer in order to discuss any additional measures to reduce crime and disorder. 3 Underage controls 3.1 The licensee shall maintain a bound and paginated ‘Think 21 Refusals’ register at the premises. The register shall be produced to the police or licensing authority forthwith on request. 3.2 Customers under 21 will have to provide ID. 3.3 The premises will operate a ‘challenge 25’ policy and prominent signage and notices will be displayed showing the operation of such policy. 3.4 Compulsory third party test purchasing on a twice-yearly external system and the results to be reported to the local authority and police. In the first 12 months (from the date of the review) two additional internal test purchase operations to be carried out.1 3.5 A  physical barrier (eg  a supermarket metal type or similar) acceptable to the licensing authority, and operated in conjunction with the existing monitored alert system, to be put in place within three months from the date of the review. 3.6 No machines in the Unlicensed Family Entertainment Centre to be sited within one metre of the Adult Gaming Centre entrance. 3.7 Staff training records or certified copies should be available at the premises for inspection. 4 Player protection controls 4.1 Prominent GamCare documentation will be displayed at the premises. 4.2 There shall be no cash point or ATM facilities on the premises. 4.3 The licensee shall train staff on specific issues related to the local area and shall conduct periodic refresher training. Participation in the training shall be formally recorded and the records produced to the police or licensing authority upon request. 598

Premises licences 4.4 New and seasonal staff must attend induction training. All existing staff must attend refresher training every six months. 4.5 All notices regarding gambling advice or support information within the vicinity of Chinatown must be translated into both simplified and traditional Chinese. 4.6 Infra-red beam to be positioned across the entrance to the premises. To be utilised whenever: a)

The first member of staff is not positioned within the cash box or,

b)

The second member of staff is not on patrol.

1 Note that Commission advice to licensing authorities is that ‘In some cases it will be more practical to request test purchasing to be carried out on a minimum number of occasions (eg at least twice a year) rather than during a specific a timeframe (eg  once every six months). For example, it would not be practical to impose a condition on premises within a holiday park that requires test purchasing to be carried out “once every six months” as the park may not be open for business during the winter months.’

Steps to be taken on grant of application 10.143 Where the application is granted, the authority must as soon as reasonably practicable give notice of the grant in the form specified in Sch 7, Pt 1 of the regulations1 to the applicant, the Commission, any person who made representations, the chief officer of police for any area in which the premises are wholly or partly situated and HM  Customs & Excise,2 and must issue the licence to the applicant in the form set out in Sch  9 of the regulations and must give him a summary of the terms and conditions in the form set out in Sch  10 of the regulations.3 If they have attached a condition to the licence under s  169(1)(a) or have excluded a default condition,4 they must give their reasons.5 If representations were made by an interested party or a responsible authority, they must give their response to the representations.6 1 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), reg 17(2)(a). 2 GA 2005, s 164. 3 GA  2005, s  164(1)(b) and (c); The Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007, regs 22 and 23. 4 That is, a condition under GA 2005, s 168. 5 GA 2005, s 164(2)(b). 6 GA 2005, s 164(2)(c).

10.144 The information to be included in a premises licence is set out in s 151 of the Act and in para 20 of the regulations. Section 151(1)(g) requires a plan to be attached to the licence and this must be a scale plan complying with the requirements of the regulations.1 1 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), reg 21(2).

599

Premises licences

Steps to be taken on rejection of application 10.145 Where the application is rejected, the authority must as soon as reasonably practicable give notice of the rejection in Sch  8, Pt  1 of the regulations1 to the applicant and to the same parties as are entitled to be notified of a grant.2 The notice must give the authority’s reasons for rejecting the application.3 1 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), reg 18(2)(a). 2 GA 2005, s 165. 3 GA 2005, s 165(2).

PARTICULAR TYPES OF PREMISES Casinos 10.146 For a discussion of casinos, see Chapter 14.

Bingo premises licences 10.147 For a discussion of bingo premises, see Chapter 14.

Adult gaming centre premises licences 10.148 An adult gaming centre premises licence1 authorises the holder to make available for use on the premises a number of Category B  gaming machines not exceeding 20 per cent of the total number of gaming machines which are available for use on the premises, together with an unlimited number of Category  C  and Category  D  gaming machines.2 In addition, facilities for prize gaming may be provided in a licensed adult gaming centre, provided certain conditions are satisfied.3 For a discussion of adult gaming centre premises see Chapter 25. 1 GA 2005, s 150(1)(c). 2 GA 2005, s 172(1). 3 GA 2005, s 290(1). For the meaning of ‘prize gaming’ see s 288. The conditions to be complied with are specified in s 293 and in the Gambling Act 2005 (Limits on Prize Gaming) Regulations 2007 (SI 2007/1777).

Family entertainment centre premises licences 10.149 A  family entertainment centre premises licence1 authorises the holder to make an unlimited number of Category C and Category D gaming machines available for use on the premises.2 In addition, facilities for prize gaming may be provided on the premises, provided certain conditions are satisfied.3 For a discussion of family entertainment centre premises see Chapter 25. 1 GA 2005, s 150(1)(d).

600

Premises licences 2 GA 2005, s 172(2). 3 GA 2005, s 290(1). For the meaning of ‘prize gaming’ see s 288. The conditions to be complied with are specified in s 293 and in the Gambling Act 2005 (Limits on Prize Gaming) Regulations 2007 (SI 2007/1777).

Betting premises licences 10.150 A  betting premises licence authorises premises to be used for the provision of facilities for betting,1 and it also authorises the holder to make available for use up to four gaming machines, each of which must be of Category B, C or D.2 The provision relating to gaming machines only applies to a betting premises licence in respect of a track if the holder also holds a pool betting operating licence.3 In addition, a betting premises licence authorises the holder to make facilities available for betting on the outcome of a virtual game, race, competition or other event or process4 (eg  bets on virtual horse racing or greyhound racing). For a discussion of betting premises see Chapter 13. 1 2 3 4

GA 2005, s 150(1)(e). GA 2005, s 172(8). GA 2005, s 172(9). GA 2005, s 173.

10.151 Where a betting premises licence is held in respect of a track, it may only authorise the acceptance of bets by way of pool betting if the bets are on horse-racing or dog-racing and the bets are accepted by the holder of the betting premises licence or in accordance with arrangements made by him.1 Where a betting premises licence is held for a premises which are not a dog track, it will be subject to the condition that pool bets on dog-racing may not be accepted in reliance on the licence, except in accordance with arrangements made with the occupier of the dog-track on which the racing takes place.2 1 GA 2005, s 179. 2 GA 2005, s 180.

10.152 In addition to its entitlement to up to four gaming machines, premises for which a betting premises licence is held may also make available betting machines which can be used to bet on future real events; such machines do not qualify as gaming machines.1 Conditions may be attached to a betting premises licence relating to the number and nature of the betting machines to be used on the premises and the circumstances in which they may be made available for use.2 1 GA 2005, s 235(2)(c). 2 GA 2005, s 181(1).

10.153 Where a betting premises licence is held in respect of a track, it must be subject to a condition that the licensee must ensure that children and young persons are excluded from any area where facilities for betting are provided and any area where a gaming machine (other than a Category D machine) is situated.1 The requirement to exclude children and young persons from betting areas does not, however, apply to a dog track or to a horse-race course 601

Premises licences on days when dog-racing or horse-racing take place or are expected to take place there.2 1 GA 2005, s 182(1). 2 GA 2005, s 182(2).

DURATION OF PREMISES LICENCE 10.154 The GA 2005 provides for various ways in which a premises licence may be brought to an end (ie  surrender, revocation, lapse and revocation on review) which are discussed below. Subject to these, however, the basic principle is that a premises licence will be of unlimited duration, although the Secretary of State has power to make regulations providing that premises licences, or a class of premises licences, shall expire at the end of any prescribed period.1 Regulations so made may make provision about renewal of licences and may contain provisions which apply to licences issued before the regulations are made.2 1 GA 2005, s 191(1) and (4). 2 GA 2005, s 191(2) and (3).

THE LICENCE 10.155 A  premises licence must be in the form set out in Sch  9 of the Regulations1 and must contain information specified in the Regulations.2 The Regulations provide that the licence must contain the following information: (a) the date on which it takes effect; (b) the operating licence number of the relevant operating licence held by the premises licence holder; (c) the name of the licensing authority which issued the licence and the address of its principal office, and (d) the number of the premises licence.2 1 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), reg 22. 2 Regulation 20.

10.156 A  premises licence must specify the name of the person to whom it is issued, together with a home or business address for him, specifying the premises to which it relates and the activities permitted and specifying any condition attached under s 169(1)(a) and any default condition excluded under s  169(1)(b). It must also include a plan of the premises, which must be a scale plan complying with the requirements of the Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 20071 and, if a period has been prescribed for the expiry of the licence, it must specify the period.2  A  licensing authority must maintain a register of premises licence issued by it and must make arrangements for public inspection of the register and for copies of entries on the register to be provided to the 602

Premises licences public.3 Regulations may be made about the form of such registers and the manner in which they are to be maintained.4 Regulations may also be made requiring licensing authorities to give to the Gambling Commission specified information about premises licences issued by them, and for the Gambling Commission to maintain a register of such information and to make it available for public inspection, and for copies of the entries to be supplied.5 The information on the publicly available premises register is based on the statutory notifications received from licensing authorities regarding grants, variations, revocations, lapses etc, and is updated monthly. Licensing authorities are encouraged by the Commission to use email to submit details of grants, transfers, notices, revocations and permits. 1 Regulation 21. 2 GA 2005, s 151(1). 3 GA 2005, s 156(1). 4 GA 2005, s 156(3). 5 GA 2005, s 156(4).

10.157 A first annual fee is payable on the grant of a premises licence and an annual fee is payable thereafter before each anniversary of the issue of the licence.1 For premises licence fees, see 10.32 above. A premises licence must be kept on the premises to which it relates,2 and it must be made available on request to a constable, an enforcement officer, or an authorised local authority officer.3 Where a premises licence or a summary of the licence is lost, stolen or damaged, the licensee may apply to the licensing authority for a copy,4 and the licensing authority must, on payment of the prescribed fee, grant the application and issue a certified copy of the licence or summary if it is satisfied that the original has been lost, stolen or damaged and that, in a case where it has been lost or stolen that loss or theft has been reported to the police.5 The copy is to be treated as if it were the licence or summary.6 1 2 3 4 5 6

GA 2005, s 184(1). GA 2005, s 185(1). GA 2005, s 185(1). GA 2005, s 190(1). GA 2005, s 190(2), (3) and (4). GA 2005, s 190(5).

10.158 If the holder of a premises licence ceases to reside or attend at the address specified in the licence, he must as soon as reasonably practicable notify the licensing authority and inform them of a home or business address at which he resides or attends.1 Regulations may be made requiring the holder of a premises licence to notify the licensing authority of any change of circumstances of a prescribed kind.2 Where a change of circumstances notified to the licensing authority falsifies information contained in the premises licence, the notification must be accompanied by the licence (or an application for a copy) and the prescribed fee, and the licence must be altered by the licensing authority, or any copy issued on the application must be issued by the authority in such a form as to reflect the change in circumstance.3 1 GA 2005, s 186(1). 2 GA 2005, s 186(2). 3 GA 2005, s 186(3), (4) and (5).

603

Premises licences

Variation of premises licence 10.159 The holder of a premises licence may apply to the licensing authority to vary the licence by adding, amending or removing an authorised activity, amending another detail of the licence, excluding a default condition or adding, amending or removing a discretionary condition.1  A  licence may not, however, be varied so as to relate to premises to which it did not previously relate.2 The application must be made in the form, and contain the information specified in, Sch  2 of the Regulations.3 Where the application includes an application to vary the plan (which forms part of the licence under s  151(1)(g)), the application must be accompanied by a scale plan (the scale is not prescribed), which shows the matters which it would be required to show under reg 4 of the Regulations if the application were for the issue of a premises licence of the same type as that to which the application relates, and which included the variations specified in the application.4 An application for a variation must be accompanied by a statement of the variation sought,5 and also by the licence to be varied, or a statement explaining why this is not reasonably practicable, and an application for a copy.6 Notice of the application must be served in the form specified in Sch  6, Pt  3 of the Regulations on the authorities which are the responsible authorities in relation to the premises within the period of seven days beginning on the date when the application is made,7 and notice in the form prescribed at Sch  6, Pt  4 of the  Regulations must be published in a newspaper and by display on the premises in the same way as is required on an application for a new licence.8 The slip rules in regs 13 and 14 apply in the same way as they do to applications for a new licence (see 10.43–10.45). 1 GA 2005, s 187(1). 2 GA 2005, s 187(2). 3 See the Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), reg 7. 4 See reg 7(2) and (3). 5 GA 2005, s 187(5). 6 GA 2005, s 187(6). 7 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), reg 12(1), (3)(b) and (4). 8 Regulation 12(5)(b), (6) and (9).

10.160 Where the licensing authority grants the application, they must give notice of grant in the form specified in Sch 7, Pt 2 of the Regulations.1 If they reject the application, the authority must give notice of rejection in the form specified in Sch  8, Pt  2 of the Regulations.2 When granting an application for a variation, the licensing authority must specify a time when the variation will begin to have effect, and it may make transitional provisions.3 1 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), reg 17(2)(b). 2 Regulation 18(2)(b). 3 GA 2005, s 187(7).

604

Premises licences

Transfer of premises licence 10.161 A person may apply to a licensing authority for a premises licence to be transferred to him.1 The application must be made in the form and contain the information specified in Sch 3 to the Regulations.2 Notice of the application must be given in the form specified in Sch 6, Pt 5 of the Regulations to some, but not all, of the responsible authorities in relation to the premises, namely to any licensing authority in whose area the premises are situated, the Gambling Commission, the police, the child protection advisory authority and HMCE.3 The notice must be given within the period of seven days beginning on the date on which the application is made.4 Only the ‘responsible authorities’ specified above are entitled to make representations;5 there is no provision for ‘interested parties’ to do so and accordingly no provision is made for notice of the application to be published in a newspaper or by site display.6 The slip rule under reg  13, which is applicable where an applicant fails to give proper notice of an application to the relevant authorities, applies to transfer applications. For a discussion of the rule see 10.43 above. 1 GA 2005, s 188(1). 2 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), reg 8. 3 Regulation 12(1), (2) and (3)(c). 4 Regulation 12(4). 5 GA 2005, s 188(4) and s 189(5). 6 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), reg 12(5).

10.162 The application must specify the time when the transfer is to take effect and be accompanied by a written statement by the licensee consenting to the transfer,1 though the licensing authority has a discretion to dispense with this requirement and to proceed to determine the application without the licensee’s consent if the application states that the applicant has failed to contact the licensee, having taken all reasonable steps to do so.2 Where the licensing authority do dispense with the requirement of the licensee’s consent, they must themselves take all reasonable steps to notify the licensee.3 The application for transfer must be accompanied by the licence, or a statement explaining why this is not reasonably practicable, and an application for a copy.4 Where the application for transfer is made by an applicant who states that he has failed to contact the licensee, any application for a copy of the licence must be made by that applicant and a reference to the licence being lost, stolen or damaged is to be treated as a reference to the licence being unavailable to the applicant for transfer.5 1 2 3 4 5

GA 2005, s 188(3). GA 2005, s 189(1). GA 2005, s 189(1)(a). GA 2005, s 189(2). GA 2005, s 189(3).

10.163 A licensing authority must grant the application for transfer, unless it thinks it would be wrong to do so having regard to representations made by one or more responsible authorities.1 On granting the application, the authority must alter the licence to show the applicant as the licensee and 605

Premises licences must specify the time when the transfer takes effect (which will be either the time specified in the application or, if later, the time when the application is granted).2 The authority may also make such other alterations as appear to be required.3 1 GA 2005, s 188(4). 2 GA 2005, s 188(5)(a) and (b). 3 GA 2005, s 188(5)(c).

10.164 An application for transfer of a premises licence may include a request that the licence shall have effect as if the applicant for transfer were the licensee during the period between the receipt of the transfer application by the licensing authority and the determination of the application, and if such a request is made, the licence will have effect in those terms.1 1 GA 2005, s 189(6).

10.165 Where there has been a competition under GA  2005, Sch  9 (see Chapter  14), and a casino premises licence has been granted subject to a condition which gives effect to a written agreement between the licensee and the licensing authority, the licence may not be transferred unless the transferee enters into an agreement which appears to the licensing authority to have substantially the same effect as the original agreement and the condition is altered to give effect to the new agreement.1 1 GA 2005, s 188(6).

Termination of premises licences 10.166 As noted (see 10.154 above), premises licences will be of unlimited duration unless regulations provide otherwise. A licence may, however, be determined in a number of ways.

Surrender 10.167 The licensee may surrender the licence by notifying the licensing authority of his intention to surrender it and by giving to the authority either the licence or a written statement explaining why it is not reasonably practicable to produce it.1 The licensing authority must as soon as reasonably practicable after receipt of the notification notify the Gambling Commission, the chief officer of police for any area in which the premises are wholly or partly situated and HM Customs & Excise.2 1 GA 2005, s 192(1). 2 GA 2005, s 192(2).

Revocation 10.168 Where the licensee fails to pay the annual renewal fee, the licensing authority must revoke the licence, unless they think that the failure to pay is attributable to administrative error.1 1 GA 2005, s 193.

606

Premises licences

Lapse and reinstatement of premises licence 10.169 Where a premises licence has been issued to an individual, the licence will lapse if the licensee dies, becomes in the opinion of the licensing authority as notified to the individual incapable of carrying on the licensed activities by reason of mental or physical disability, becomes bankrupt within the meaning of s 381 of the Insolvency Act 1986 or a debt relief order is made in respect of the licensee (under Pt 7A of the Insolvency Act 1986), or (in Scotland) sequestration of the licensee’s estate is awarded under s 12(1) of the Bankruptcy (Scotland) Act 1985.1 In other cases (ie in practice where the licensee is a company) the licence lapses if the licensee ceases to exist or goes into liquidation within the meaning of s  247(2) of the Insolvency Act 1986.2 Where a licensing authority becomes aware that a premises licence issued by it has lapsed, it must as soon as is reasonably practicable notify the Gambling Commission, the chief officer of police for any area in which the premises are wholly or partly situated and HMCE.3 During the period of six months beginning with the date of the lapse of the premises licence, a person may apply to the licensing authority for the licence to be reinstated, with the applicant as licensee.4 The person seeking reinstatement will have to hold a relevant operating licence, except in the case of betting premises licences in respect of tracks. The application must be made in the form, and contain the information specified in, Sch  4 of the Regulations.5 The application for reinstatement must request that the reinstatement take effect upon the application being granted.6 It must be accompanied by the licence or by a statement explaining why it is not reasonably practicable to provide the licence, and an application for the issue of a copy of the licence7 made by the applicant for reinstatement.8 Any reference in such an application to the licence being lost, stolen or damaged is to be treated as a reference to the licence being unavailable to the applicant for reinstatement.9 Notice of the application must be given in the form prescribed in Sch  6, Pt 6 of the Regulations to some, but not all, of the responsible authorities in relation to the premises, namely to any licensing authority in whose area the premises are situated, the Gambling Commission, the police, the child protection advisory authority and HMCE.10 The notice must be given within the period of seven days beginning on the date on which the application is made.11 Only the responsible authorities specified above are entitled to make representations;12 there is no provision for ‘interested parties’ to do so, and accordingly there is no provision for notice of the application to be published in a newspaper or by site display.13 The slip rule under reg  13, which is applicable where an applicant fails to give proper notice of an application to the relevant authorities, applies to a reinstatement application. For a discussion of the slip rules see 10.43–10.45 above.   1 GA 2005, s 194(1).   2 GA 2005, s 194(2).   3 GA 2005, s 194(3).   4 GA 2005, s 195(1) and (2).   5 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), reg 9.   6 GA 2005, s 195(4).   7 GA 2005, s 196(1).   8 GA 2005, s 196(2)(a).   9 GA 2005, s 196(2)(b).

607

Premises licences 10 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), reg 12(1), (2) and (3)(d). 11 Regulation 12(4). 12 GA 2005, s 195(5) and s 196(4). 13 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), reg 12(5).

10.170 The licensing authority must grant the application for reinstatement unless they think it would be wrong to do so having regard to representations made by one or more of the notified responsible authorities.1 On granting the application, the licensing authority must alter the licence so that the applicant for reinstatement becomes the licensee, must specify in the licence that the reinstatement takes effect at the time when the application is granted, and must make any other alteration of the licence that appears to be required.2 Notice of the grant of the application must be given in the form specified in Sch 7, Pt 4 of the Regulations.3 Where an application for reinstatement is made, the licence has effect as if the applicant for the reinstatement were the licensee during the period beginning with the receipt of the application for reinstatement and ending with the determination of the application.4 1 GA 2005, s 195(5) and s 196(4). 2 GA 2005, s 195(6). 3 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), reg 17(2)(d). 4 GA 2005, s 196(5).

10.171 Where an application for reinstatement is rejected, notice of rejection of the application must be given in the form specified in Sch 8, Pt 4 of the Regulations.1 1 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), reg 18(2)(d).

Review of a premises licence 10.172 Power is granted to the licensing authority to review a premises licence so that it can monitor the provision of gambling on the premises and take such steps as may be necessary to control the use made of the premises and, in an appropriate case, put an end to the use of the premises for gambling by revoking the licence. There are two basic types of review, the first being a review initiated by a third party who is qualified to apply for a review by virtue of being a responsible authority or an interested party in relation to the premises, and the second being a review carried out by the licensing authority on its own initiative. The legislation in fact specifies two types of the second class of review which a licensing authority may initiate, namely a general review of premises licences of a certain class and a specific review of a particular licence.

Application for review by third party 10.173 A  responsible authority or an interested party may apply to the licensing authority for a review by the authority of a premises licence.1 As has 608

Premises licences been noted at 10.59 above, the licensing authority will itself be a responsible authority in relation to premises to which it has granted premises licences.2 Moreover, various departments of the local authority which is the licensing authority, such as the planning authority and the environmental authority, will rank as responsible authorities for such premises. This creates the possibility that the licensing authority, or some department of the same local authority, may apply for a review of a premises licence by the licensing authority itself. In those circumstances the licensing authority would clearly not be an independent and impartial tribunal for the purpose of ECHR, Art 6, but the fact that there is a right of appeal to a magistrates’ court should have the result that the procedure as a whole will be Convention compliant. 1 GA 2005, s 157(1). 2 See GA 2005, s 157(a).

10.174 The procedures governing applications for reviews in England and Wales are laid down by The Gambling Act 2005 (Premises Licences) (Review) Regulations 2007,1 which are discussed in the following paragraphs. Though the regulations to some extent apply to Scotland, there are in addition separate regulations governing reviews in Scotland.2 The following discussion relates to the procedure in England and Wales. 1 SI 2007/2258. 2 Gambling Act 2005 (Review of Premises Licences) Scotland Regulations 2007 (SSI 2007/394).

10.175 The application must be made in the form prescribed in the Regulations1 and must contain prescribed information. In particular, the application must set out the grounds on which the review is sought.2 Applications and notices under the regulations must be made in writing,3 and an application or notice sent by fax or email will satisfy this requirement provided: (a) the text— (i)

is capable of being accessed by the recipient,

(ii) is legible, and (iii) can be read and reproduced in written form; and (b) the recipient has agreed in advance that an application or notice may be made or given by the particular electronic means used.4 The regulations make provision for the deemed time of receipt of such electronically transmitted documents.5 1 Gambling Act 2005 (Premises Licences) (Review) Regulations 2007 (SI 2007/2258), reg 3. 2 Regulation 3 and Sch 1. 3 Regulation 12(1). 4 Regulation 12(3). 5 Regulation 12(4).

10.176 The applicant must give notice of the application in the form prescribed at Sch 2 of the Regulations to the licensee and to the authorities 609

Premises licences which are the responsible authorities in relation to the premises.1 Where, however, an application is made by a responsible authority, it does not need to serve notice upon itself.2 The notice must be given within the period of seven days, starting on the date when the application is made,3 and must specify the period of 28 days starting on the day immediately following the last day of that seven day period during which the licensee, responsible authorities and interested parties may make representations about the application.4 1 Gambling Act 2005 (Premises Licences) (Review) Regulations 2007 (SI 2007/2258), reg 4(1). 2 Regulation 4(2). 3 Regulation 4(4). 4 Regulation 4(3) and (4).

Failure to give proper notice of the application 10.177 Where the applicant fails to give proper notice of the application within the relevant seven-day period1 to the licensee or a relevant responsible authority, a provision exists requiring him to give later notice in a proper form to the person to whom proper notice has not been given.2 Upon receipt of the proper notice, the licensee or responsible authority has 28 days to make representations,3 and the notice must specify the period for making representations.4 The licensing authority may not grant the application until proper notice has been given as described above and until the period for representations has elapsed.5 Except as described above, the licensing authority may disregard any irregularity in the giving of notice,6 although it is not easy to think of an irregularity which would not be caught by the above requirements. 1 A person fails to give proper notice of the application if he fails to give a notice which complies with the requirements of the regulations as to the form and manner in which it is to be given: Gambling Act 2005 (Premises Licences) (Review) Regulations 2007 (SI 2007/2258), reg 6(2). 2 Regulation 6(3). 3 Regulation 6(4). 4 Regulation 6(5). 5 Regulation 6(6). 6 Regulation 6(7).

10.178 Upon receipt of the application, the licensing authority must publish notice of the application in the form specified at Sch  3 of the Regulations either: (a)

(i) in a local newspaper or, if there is none, a local newsletter, circular or similar document circulating within the local authority’s area,1 or (ii) on the licensing authority’s internet website;2 and

(b) by displaying the notice at a place— (i) which is as near as practicable to the premises to which the application relates, and (ii) where it can conveniently be read by members of the public.3 610

Premises licences A notice published in a newspaper, newsletter etc must be published at least once during the period of ten working days4 starting on the first working day after the day on which the application was made to the authority.5 Publication on a website and by site display must be for no less than 28 consecutive days starting no later than the day immediately following the period of seven days starting with the date on which the application was made.6 The notice must specify the 28-day period during which representations about the application may be made by the licensee, a relevant authority or an interested party.7 1 Gambling Act 2005 (Premises Licences) (Review) Regulations 2007 (SI 2007/2258), reg 5(1)(a). 2 Where the licensing authority has more than one website, the notice must be published on the website which is wholly or mainly used to publicise matters relating to gambling licensing: reg 5(2). 3 Regulation 5(1)(b). 4 ‘Working day’ means a day which is not a Saturday, Sunday, Christmas Day, Good Friday or a day which is a bank holiday in England and Wales under the Banking and Financial Dealings Act 1971: reg 2. 5 Regulation 5(3). 6 Regulations 5(4) and 4(4). 7 Regulation 5(5).

Failure properly to publish notice of application 10.179 Where the licensing authority fails to publish a proper notice of the application1 as set out above, provision exists requiring late publication to be effected. Notice of the application must be published in the correct form and manner as soon as practicable after the end of the 10 working day period (in the case of a newspaper notice) and the 28 working day period (in the case of the internet and site notices).2 Interested parties will then have 28 days from the day on which the notice is published to make representations.3 In the case of website and site notices, the date of publication for these purposes is the date on which the notice is first published.4 The notice must specify the period for making representations.5 The licensing authority may not grant the application until the notice has been published as described and the period for representations has elapsed.6 Except as provided above, the licensing authority may disregard any irregularity in the publication of a notice,7 although again it is difficult to see what irregularity would not be caught by these provisions. 1 A  licensing authority fail to publish a proper notice if they fail to publish a newspaper, internet or site notice or if the published notice does not comply with the requirements of the regulations as to its form and manner: Gambling Act 2005 (Premises Licences) (Review) Regulations 2007 (SI 2007/2258), reg 7(2). 2 Regulation 7(3). 3 Regulation 7(4). 4 Regulation 7(5). 5 Regulation 7(6). 6 Regulation 7(7). 7 Regulation 7(8).

611

Premises licences

Grant or rejection of application 10.180 A  licensing authority may reject an application for review of a premises licence, the effect being that the application will be dismissed without full consideration. They may do so if they think that the grounds on which the review is sought: (a) do not raise an issue relevant to the principles to be applied in accordance with s  153:1 this (see 10.106) is the section which lays down the general principles to be applied by the licensing authority in exercising their functions in relation to premises licences, including their review functions; (b) are frivolous or vexatious;2 (c) will certainly not cause them to wish to take action which they could take following a review (ie to revoke or suspend the licence or modify one or more conditions);3 (d) are substantially the same as the grounds specified in an earlier application for review;4 (e) are substantially the same as representations made in relation to the application for the grant of, or a variation of, the premises licence.5 In considering the two latter grounds for rejection of the application, the authority must consider the length of time that has elapsed since the making of the earlier application for review or since the making of the representations.6 Where the licensing authority consider that grounds for rejection of the application apply to some but not all of the grounds on which the application for review is made, they may reject the application so far as it relates to those grounds, but allow it to proceed on the other grounds7. If, or in so far as, the licensing authority do not reject the application, they must grant it and proceed to carry out the review.8 1 2 3 4 5 6 7 8

GA 2005, s 198(1)(a). GA 2005, s 198(1)(b)(c). GA 2005, s 198(1)(d) GA 2005, s 198(1)(e). GA 2005, s 198(1)(f) and (4). GA 2005, s 198(2). GA 2005, s 198(3). GA 2005, s 199(2); s 201(1)(a) and (2).

10.181 GA  2005, s  201(2) provides that where a licensing authority has granted an application made by a responsible authority or interested party for a review, it must as soon as reasonably practicable review the premises licence. In considering a review of a premises licence, a licensing authority must hold a hearing unless: (a) the applicant for the review and each person who has made representations have consented to the conduct of the review without a hearing; or (b) the licensing authority thinks that each representation is frivolous or vexatious or will certainly not influence the review.1 612

Premises licences Where a hearing is required, the procedure will be governed by the Gambling Act 2005 (Proceedings of Licensing Committees and Subcommittees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007,2 reg 3(1)(b) of which provides that the regulations shall apply to such a hearing. For a discussion of the effects of the regulations see Chapter 9. 1 GA 2005, s 201(4). 2 SI 2007/173.

Review initiated by licensing authority 10.182 A licensing authority has the power to initiate two different types of premises licence review. These are: (i) a review of the use made of premises which trade under premises licences of a particular class;1 (ii) a specific review of the use of premises under a particular premises licence.2 The two types of review are different in important respects. The first type of review appears to be intended to allow the authority to review the operations of a particular sector of the gambling industry (eg  the casino sector, the licensed track betting sector, the licensed family entertainment sector) within their area. The review may cover the use made of premises and, in particular, the arrangements made by licensees to ensure compliance with the licence conditions.3 No provision is made for the authority to give notice of its intention to conduct such a review, nor is there provision for the licensee or anyone else to make representations or for any hearing to be held, although in practice the authority will probably need to seek information from licence holders in order to conduct the review. There is no provision obliging the authority to publish findings on completing the review, nor to take any particular steps in the light of it. The purpose of the provision appears to be to enable the authority to gain information. Clearly, if a licensing authority uncovered evidence to suggest that businesses were being run badly, they could use their powers to conduct specific reviews of individual licences or otherwise to initiate inspections through their inspectors, who are ‘authorised persons’ under GA 2005, Pt 15. 1 GA 2005, s 200(1). 2 GA 2005, s 200(2). 3 GA 2005, s 200(1).

10.183 The second type of review is premises specific. An authority may review any matter connected with the use of premises in reliance on a premises licence if they have reason to suspect that the premises may have been used in purported reliance on a licence but not in accordance with a condition of the licence, or if for any reason (which may relate to the receipt of a complaint about the use of the premises) they think that a review would be appropriate.1 1 GA 2005, s 200(2)(a) and (b).

613

Premises licences 10.184 Before conducting such a review, the licensing authority must: (a) give notice of its intention to hold the review to the licensee; and (b) publish notice of its intention to hold the review.1 The notification and publication procedure is set out for England and Wales in the Gambling Act 2005 (Premises Licences) (Review) Regulations 2007.2 The procedure closely matches the notice and publication procedures applying to applications by responsible authorities and interested parties. The notice to the licensee must be in the form specified at Sch  4 to the Regulations,3 and must specify the period of 28 days starting on the day notice is given to the licensee as a period during which representations may be made by the licensee, by each of the authorities which is a responsible authority in relation to the premises and by a person who is an interested party.4 It should be noted that, although the Act by s 200(3)(a) states that the licensing authority shall give notice to the licensee, the Regulations impose an obligation also to serve notice upon the responsible authorities (see eg reg 8(3)).5 The notice must be served upon the responsible authorities within a period of seven days starting on the day when notice is given to the licensee.6 1 GA 2005, s 200(3)(a) and (b). 2 SI  2007/2258. For Scotland see the Gambling Act 2005 (Review of Premises Licences) Scotland Regulations 2007 (SI 2007/394). 3 Regulation 8(1). 4 Regulation 8(2). 5 It is understood that the view was taken by DCMS that the basis for imposing the obligation in the regulations to serve notice on responsible authorities is to be found in GA 2005, s 200(5), which necessitates regulations requiring a notice to specify a period of time during which representations may be made by, inter alia, a responsible authority. 6 Regulation 8(3).

Failure to give proper notice of intention to hold a review to the licensee 10.185 If the licensing authority give to the licensee a notice of intention to hold a review which is not in all respects in the form and manner required by the regulations, the notice is of no effect and a further notice must be given.1 1 Gambling Act 2005 (Premises Licences) (Review) Regulations 2007 (SI 2007/2258), reg 9.

Failure to give proper notice of intention to hold a review to the responsible authorities 10.186 As has been noted, the regulations interpret s 200(3)(a) as imposing an obligation to serve notice of intention to hold a review on responsible authorities. They further provide that, if the authority fail to give proper notice,1 they must serve notice on any authority to whom proper notice has not been given in a form and manner which complies with the regulations as soon as practicable 614

Premises licences after the seven-day period for giving notice to responsible authorities.2 The responsible authority may make representations within the period of 28 days starting on the day on which the notice is received.3 The notice must specify the period during which the responsible authority may make representations.4 The licensing authority may not grant the application until notice has been served, as set out above, and the 28 day period has elapsed.5 Except as set out above, the licensing authority may disregard any irregularity in relation to the giving of notice to the responsible authority concerned.6 1 A licensing authority fail to give a proper notice of their intention to hold a review if they fail to give a notice to the responsible authority which complies with the requirements of the regulations as to the form and manner in which it is given: Gambling Act 2005 (Premises Licences) (Review) Regulations 2007 (SI 2007/2258), reg 10(2). 2 Regulation 10(3) and 8(3). 3 Regulation 10(4). 4 Regulation 10(5). 5 Regulation 10(6). 6 Regulation 10(7).

Publication of notice of intention to conduct a review 10.187 The licensing authority must publish notice of its intention to hold a review.1 The notice must be in the form specified in Sch 5,2 and must specify the period of 28 days starting on the day on which notice is given to the licensee for the making of representations by the licensee, authorities which are responsible authorities in relation to the premises, and interested parties.3 The notice must be published either: (a) (i) in a local newspaper, or, if there is none, a local newsletter, circular or similar document, circulating within the licensing authority’s area;4 or

(ii) on the local authority’s internet website;5 and

(b) by displaying the notice at a place which is as near as reasonably practicable to the premises to which the application relates and where it can conveniently be read by members of the public.6 A  newspaper notice must be published at least once during the period of 10 working days7 starting on the first working day after the day on which the licensing authority give notice of their intention to hold a review to the licensee.8 A notice on the internet and the site notice must be published for a period of at least 28 consecutive days starting on the day on which the licensing authority give notice to the licensee.9 1 GA 2005, s 200(3)(b). 2 Gambling Act 2005 (Premises Licences) (Review) Regulations 2007 (SI 2007/2258), reg 8(5). 3 Regulation 8(6). 4 Regulation 8(7)(a)(i). 5 Regulation 8(7)(a)(ii). Where a licensing authority have more than one website, the notice must be published on the website which is wholly or mainly used by them to publicise matters relating to gambling licensing: reg 8(8). 6 Regulation 8(7)(b).

615

Premises licences 7 ‘Working day’ means a day which is not a Saturday, Sunday, Christmas Day, Good Friday or a day which is a bank holiday in England and Wales under the Banking and Financial Dealings Act 1971: reg 2. 8 Regulation 8(9). 9 Regulation 8(10).

Failure properly to publish notice of intention to hold a review 10.188 Where the licensing authority fails to publish a proper notice1 of its intention to hold a review during the periods laid down, it must publish a notice complying with the regulations as soon as practicable after the times specified for notice (ie within 10 working days of service on the licensee for the newspaper notice and for a period of 28 days following such service for the internet and site notices).2 An interested party may make representations about the review within the period of 28 days starting on the day on which the notice is published.3 In the case of a notice published on the internet or on site, this is the date on which the notice is first published.4 The notice must specify the period of 28 days for making representations by an interested party.5 The licensing authority may not hold a review until notice has been published as specified above, and the period of 28 days has elapsed.6 The licensing authority may disregard any irregularity in the publication of a notice which does not fall within the above provisions.7 1 A licensing authority fail to publish a proper notice of their intention to hold a review if they fail to publish a notice in the manner in which they are required to publish it under the regulations, or the published notice does not comply with the requirements of the regulations as to the form and manner in which it is to be published: Gambling Act 2005 (Premises Licences) (Review) Regulations 2007 (SI 2007/2258), reg 11(1) and (2). 2 Regulation 11(3). 3 Regulation 11(4). 4 Regulation 11(5). 5 Regulation 11(6). 6 Regulation 11(7). 7 Regulation 11(8).

10.189 The licensing authority is obliged to hold a hearing unless: (a) each person who has made representations about the review has consented to the conduct of the review without a hearing; or (b) the authority thinks that each representation made about the review is frivolous or vexatious or will certainly not influence the review.1 The procedure for conducting a hearing of a review is laid down in the Gambling Act 2005 (Proceedings of Licensing Committees and Subcommittees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007 (SI  2007/173).2 For a discussion of the procedures see Chapter 9. 1 GA 2005, s 201(4). 2 See Gambling Act 2005 (Proceedings of Licensing Committees and Subcommittees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007, reg 3.

616

Premises licences

Review 10.190 Where a licensing authority has granted an application for a review or has given notice of its intentions to hold a review it must as soon as reasonably practicable after the expiry of any period for representations by the licensee, a responsible authority or an interested party, review the licence.1 The purpose of the review is to consider whether to take in relation to the licence action of a kind specified in s 202(1) (ie to revoke or suspend the licence or to exclude a condition or to add, remove or amend a condition).2 Once the review is completed, the licensing authority may: (a) revoke the licence; (b) suspend the licence for a specified period not exceeding three months; (c) exclude a condition attached to the licence under s 168, or remove or amend an exclusion; (d) add, remove or amend a condition under s 169.3 1 GA 2005, s 201(1) and (2). 2 GA 2005, s 201(3). 3 GA 2005, s 202(1).

10.191 The statute provides that the authority ‘may’ take any of the above steps, so it clearly has discretion not to take any action following a review, even if it should find that the conduct of the premises has been unsatisfactory. In deciding whether to take any of the permitted steps following a review, the licensing authority must have regard to: (i)

the matters specified in s 153 (ie the general principles to be applied by the licensing authority in exercising its functions in relation to premises licences – see 10.106 above): this means that the general duty upon a licensing authority to ‘aim to permit the use of premises for gambling’ applies to a review as much as it does to an application for a grant, with the consequence that revocation or suspension of the licence must be treated as remedies of last resort, to be used only if dissatisfaction about the conduct of the premises (if justified by the matters emerging on the review) cannot be dealt with by changes to the conditions on the licence;

(ii) any representations made by the licensee, a responsible authority or an interested party; (iii) any representations made at the hearing of the review (if there is one), and (iv) where the review is held in response to an application made by a responsible authority or an interested party, the grounds specified in the application (apart from any which have been rejected).1 A licensing authority may, in particular, take one of the steps permitted on review on the grounds that the licensee has not used the licence, a provision designed to prevent the ‘banking’ of premises licences.2 Where the authority 617

Premises licences do decide to take one of the above steps, they must specify the time at which the action is to take effect.3 1 GA 2005, s 201(5). 2 GA 2005, s 202(3). 3 GA 2005, s 202(2).

10.192 As soon as possible after completion of a review of a premises licence, a licensing authority must give notice in the form prescribed by the regulations, which must give the authority’s reasons for its decision1 to the licensee, the applicant for review (if any), the Commission, to any person who made representations, to the Chief Office of Police for any area in which the premises are wholly or partly situated and to HM Customs & Excise.2 1 For the prescribed form see the Gambling Act (Premises Licences) (Review) Regulations 2007 (SI 2007/258), reg 13. 2 GA 2005, s 203(1).

PROVISIONAL STATEMENT 10.193 In certain circumstances a person may apply for a ‘provisional statement’ from the licensing authority under GA  2005, ss  204–205. The purpose of a provisional statement is to give to a person who may wish to apply for a premises licence at some stage in the future something akin to a provisional grant. In the words of the Explanatory Notes it will ‘offer a degree of certainty to the applicant when he comes to apply for a premises licence’.1 The ‘provisional statement’ procedure is clearly modelled on the ‘provisional statement’ created by ss 29–32 of the Licensing Act 2003, though there are significant differences. As with provisional statements under the 2003 Act, there is room for doubt how great a degree of certainty a provisional statement will in fact give to an applicant. 1 Explanatory Notes to GA 2005, para 522.

10.194 A  person may apply for a provisional statement in respect of premises: (a) that he expects to be constructed; (b) that he expects to be altered; or (c)

that he expects to acquire a right to occupy.1

1 GA 2005, s 204(1).

10.195 As is noted at 10.46 above, the Gambling Commission originally took the position that an application for a provisional statement was the only route open to an applicant where premises were not constructed and finished to a degree that gambling could take place there. However, in The Queen on the Application of Betting Shop Services Ltd v Southend-on-Sea Borough Council and Others1 the Administrative Court held that this was not the correct interpretation and that it was open to an applicant to apply either for a provisional statement or a full premises licence in respect of premises which 618

Premises licences were not constructed or fitted out. Since it is unlikely that an applicant would apply for a provisional statement in a case where he was entitled to apply for a full premises licence, this conclusion may seem to reduce the usefulness of the ‘provisional statement’ procedure. However, there remain a number of cases where the procedure may be of value. There are three important points to note about an application for a provisional statement. First, a provisional statement may be issued for premises even though a premises licence already exists for the premises.2 This is in contrast with the position as regards premises licences, since a premises licence cannot be issued for the premises in relation to which a premises licence already exists.3 It would, therefore, be possible for an applicant to seek (say) a provisional statement for a casino premises licence in respect of premises which already held a betting premises licence. Or he could apply for a provisional statement for a betting premises licence in respect of premises for which he already held a betting premises licence but which he wanted to modify or reconfigure. Second, a person can apply for a provisional statement for a premises even though he neither holds or has applied for an operating licence to carry on the relevant activity on the premises.4 This has the advantage that an applicant could, by applying for a provisional statement, get some idea whether he is likely to obtain a premises licence before going to the trouble and expense of applying for a relevant operating licence. Finally, an applicant for a provisional statement does not need to have any property rights, including the right to occupy, in respect of the premises to which the application relates.5 So here again the provisional statement procedure provides a promoter with a useful way of assessing whether a premises licence is likely to be forthcoming before committing himself to obtaining a property interest. It is perfectly possible to explain the purpose and utility of the provisional statement procedure as being designed to permit applications to be made which would explore the possibility of various gambling uses for premises without prejudicing premises licences which already exist for them, without committing the applicant to obtaining an operating licence and without compelling him to obtain a property interest. 1 [2008] EWHC 105 (Admin). 2 GA 2005, s 204(4) and s 152(1)(b). 3 GA 2005, s 152(1)(b), as to which, see Clockfair Ltd v Sandwell Metropolitan Borough Council and Grosvenor Casinos Ltd [2012]  EWHC  1857 (Admin), [2012]  LLR  845, which was a special case concerning a bingo licence and a casino licence converted pursuant to the transitional provisions of the GA 2005 and a subsequent application to review the latter. 4 GA 2005, s 204(4) and s 159(3). 5 GA 2005, s 204(4) and s 159(5).

10.196 The procedure for making an application is contained in the Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007.1 The application must be made in the form and contain the information specified in Sch 5, Pt 1 for ordinary premises and in Sch 5, Pt 2 for premises which are a vessel.2 The application must be accompanied by a scale plan (no scale is prescribed), which contains prescribed details matching the details which would be required on a plan accompanying an application for a premises licence for the particular type of premises for which the provisional statement is sought.3 Where the premises are premises which the applicant expects to be constructed or altered, the plan must show 619

Premises licences the premises as they are expected to be when constructed or altered.4 Notice of the application must be given in the form specified in Sch 6, Pt 7 to the authorities which are the responsible authorities in relation to the premises to which the application relates.5 The notice must be given within the period of seven days beginning on the date when the application is made.6 There are requirements to publish notice of the application in the form specified in Sch 6, Pt 8 in a local newspaper and to display notice on the premises which mirror the requirements of publication and display in the case of a premises licence application.7 When the premises have not been constructed, or the applicant does not have the right to occupy them, the site notice must be displayed at a place which is as near as reasonably practicable to the premises or proposed premises where it can conveniently be read by members of the public.8 The slip rules governing defective notice of application (reg 13) and defective publication (reg 14) apply. For a discussion of the slip rules see 10.43 above. 1 SI 2007/459; see reg 2. 2 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), reg 10. 3 Regulation 10(2). 4 Regulation 10(3). 5 Regulation 12(1) and (3)(e). 6 Regulation 12(4). 7 Regulation 12(6), (7) and (8). 8 Regulation 12(7) and (8).

10.197 The provisions of Part 8 of the Act governing premises licence applications apply to an application for a provisional statement as they do to an application for a premises licence, subject to specified modifications.1 The modifications are, as noted, that a provisional statement may be granted for premises even though a premises licence exists for them, that an applicant for a provisional statement does not need to hold, or to have applied for, an operating licence authorising the relevant activities, and that the applicant does not need to have a right to occupy the premises.2 In addition, the provisions of Part  8 governing the attachment to premises licences of mandatory conditions (s  167), default conditions (s  168), the exclusion of default conditions (s  169) and the attachment of discretionary conditions (s 169) apply to provisional statements as they do to premises licences.3 1 GA 2005, s 204(2). 2 GA 2005, s 204(4). 3 GA 2005, s 204(2). See the form of Notice of Grant of a provisional statement in Sch 7, Pt 6 providing an Annex of conditions to be attached.

10.198 Responsible authorities and interested parties may make representations in the same way as they can on an application for a premises licence. Where such representations are made and not withdrawn, the licensing authority must hold a hearing,1 and it will also have to do so if it proposes to attach a discretionary condition or exclude a default condition.2 Procedure on the hearing is governed in England and Wales by The Gambling Act 2005 (Proceedings of Licensing Committees and Subcommittees) (Premises Licences and Provisional Statements) (England and Wales) Regulations 2007,3 which are discussed in Chapter 9. 1 GA 2005, s 162(1)(a); s 204(2).

620

Premises licences 2 GA 2005, s 162(1)(b) and (c); s 204(2). 3 SI 2007/173.

10.199 The Act contains no specific provisions as to the matters which the licensing authority should have regard to in considering an application for a provisional statement. However, the provisions of s 153 will apply, so that the authority will have to aim to permit the use of the premises for gambling, subject to the four qualifying factors, and will have to exclude considerations of demand1 and whether planning or building regulation approval would be given.2 1 GA 2005, s 153(2). 2 GA 2005, s 210.

10.200 Where an authority grants an application for a provisional statement, it must give notice of the grant in the form specified in Sch  7, Pt  5 of the Regulations.1 Where an authority rejects an application, it must give notice of rejection in the form specified at Sch 8, Pt 5 of the Regulations.2 1 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007 (SI 2007/459), reg 17(2)(e). 2 Regulation 18(1)(e).

10.201 In a case where a provisional statement has been issued for premises and an application is subsequently made for a premises licence for the premises, the licensing authority must disregard any representations made in relation to that application unless they think that the representations: (a) address matters that could not have been addressed in representations in relation to the application for the provisional statement; or (b) reflect a change in the applicant’s circumstances.1 1 GA 2005, s 205(2).

10.202 The first ground would seem to be wide in scope and appears to be capable of applying in a case where there has been a change in circumstances relating to the premises or to the area in which the premises are located between the time when the provisional statement is granted and the time when the premises licence is applied for. It should be noted that the second ground applies only where there has been a change in the applicant’s circumstances (as distinct from a change in the premises or location). The Explanatory Note gives as an example of such a change the case where an applicant has been convicted of a relevant offence following his application for a provisional statement such that he is now unable to get an operating licence.1 1 Explanatory Notes to GA 2005, para 523.

10.203 However, the scope of the matters excluded by the above provisions is unclear. In the case of  (a), for example, are ‘matters that could not have been addressed in representations’ generic, or are they matters that were not open to the particular persons who could have made representations as matters stood at the time of the provisional statement application? To take an 621

Premises licences example, suppose at the time of the provisional statement application there was room for some concern over whether the layout of the premises might enable children and young persons to gain access, but the view was taken that these concerns should not be advanced in the form of representations because they were insufficient to override the authority’s duty to ‘aim to permit’ the use of premises for gambling, having regard in particular to the fact that there was no school in the vicinity of the premises. Following the grant of the provisional statement, but before the application for a premises licence, a school is opened close to the premises and wishes to make representations (ideally that the licence should not be granted) as a business interested party. If paragraph (a) is read generically, then the school will have no standing, because ‘children and young persons’ concerns could have been addressed in representations on the provisional statement application. But if paragraph (a) is read as referring to representations that could in a practical sense have been made, the school should have standing to make representations, as it could not have made representations on that application, since it did not exist. The writer would suggest that the latter interpretation is to be preferred, whilst recognising that such an interpretation lessens the degree of certainty which a provisional statement gives to an applicant for a licence. The licensing authority may only refuse the application, or may only grant it on terms and conditions not included in the provisional statement: (a) by reference to matters which the licensing authority have considered on the basis that they could not have been addressed in representations relating to the application for the provisional statement; or (b) by reference to matters which in their opinion reflect a change in the applicant’s circumstances.1 1 GA 2005, s 205(3)(a) and (b).

10.204 It should be noted, however, that these limits on the matters which the licensing authority may take into account only apply if the premises have been constructed or altered in accordance with the plans and information included with the application for the provisional statement.1 Accordingly, if the plans or information are departed from, the provisional statement becomes irrelevant and the licensing authority will be able to entertain any representations by responsible authorities or interested parties on the licence application and to deal with the application under s 153 without regard to the grant of a provisional statement. Given the frequency with which plans are modified in the course of developing leisure premises, this is a state of affairs that is likely to occur quite often. It would appear that the holder of a provisional statement who wished to make changes to the plans upon which the statement had been granted could make an application to vary the statement on the basis that the provisions of Part 8 relating to the variation of premises licences would apply to a provisional statement.2 However, given that a variation application will give standing to responsible authorities and interested parties to make representations on the proposed variations, this may not appear a very attractive option to the applicant. As is noted at 10.195 above, it seems likely that applicants for premises licences will wish to apply for full licences on the basis of plans, if the Act permits them to do so. 1 GA 2005, s 205(4). 2 See s 204(2).

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APPEALS 10.205 Where a licensing authority rejects an application relating to a premises licence, the applicant may appeal to a magistrates’ court.1 In Freddie Williams Bookmakers v East Ayrshire Licensing Board & William Hill Organisation Ltd2 the Extra Division, Inner House, Court of Session considered first whether an appeal lodged in a sheriffdom other than that in which the relevant betting premises were situated was a competent appeal; and second, whether the appeal was competent although lodged prior to the time-period prescribed by the Act. As regards the first issue, the court found that the relevant provision3 was ‘mandatory, not directory or permissive’. An appeal lodged in the wrong sheriff’s court was void as the latter did not have the necessary jurisdiction. On the second issue, again, on a proper construction of the statute the relevant wording was mandatory rather than directory or permissive. It required the appeal to be lodged at some time within that 21-day period: ‘that is, neither before, nor after, but during it (cf dicta at paragraph 74 of Mucelli v Government of Albania [2009] 1 WLR 276). In our opinion, Parliament intended that written reasons for the decision should be issued and known to everyone before any party should be entitled to institute an appeal. That appears to us to be a sensible and rational approach which is likely to prevent misconceived, ill-directed, or unnecessary appeals.’ Accordingly, the appeal in the present case was invalid for that reason also. Note that a similar provision requires an appeal to be brought to the local magistrates’ court in England and Wales (cf Licensing Act 2003, Sch 5, para 9 which provides that any magistrates’ court will suffice). Where they grant such an application, any person who made representations in relation to the application, or the applicant, may appeal.4 The right of appeal conferred on the applicant in a case where the application is granted is presumably designed to enable him to appeal against a grant made on terms (eg as to conditions) which he wishes to challenge. The applications in respect of which appeal will lie are applications for a premises licence,5 applications to vary a premises licence,6 applications for transfer of a premises licence,7 applications for reinstatement,8 applications for review of a premises licence,9 and applications for a provisional statement.10 In addition, where a licensing authority takes action as a result of a review11 by revoking or suspending a premises licence or by modifying conditions attached to it,11 then the licensee, any person who made representations in relation to the review, the person (if any) who applied for the review and the Gambling Commission may appeal to the magistrates’ court.12 In addition, where a licensing authority, as the first stage of the two-stage process for determining competing casino premises licence applications under Sch 9 (see Chapter 14), decides whether it would grant an individual licence application on its merits,13 an appeal lies to the magistrates’ court:14 if the application is rejected, the applicant may appeal, and if it is granted, any person who made representations in relation to the application and the applicant may appeal.14 No appeal, however, may be brought against a determination made by a licensing authority at the second stage15 of the process to grant one competing application in preference to another or others.16   1 GA 2005, s 206(1).

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Premises licences   2 [2012] Scot (D) 25/11, [2012] CSIH 89.   3 GA 2005, s 207(1)(a) and (5)(a)   4 GA 2005, s 206(2); s 207(1).   5 GA 2005, s 159.   6 GA 2005, s 187.   7 GA 2005, s 188. In the case of a transfer application, an appeal lies both on the grant or rejection of the application and, by the licensee or the applicant for transfer, on the exercise by the licensing authority of its powers to alter the licence on granting the application: GA 2005, s 88(4) and (5); s 206(4).   8 GA 2005, s 195.   9 GA 2005, s 197. 10 GA 2005, s 204. 11 Under GA 2005, s 202. 12 GA 2005, s 206(3). 13 Under GA 2005, Sch 9, para 4(1). 14 GA 2005, Sch 9, para 8; s 206(1) and (2). 15 GA 2005, Sch 9, para 5. 16 GA 2005, Sch 9, para 8(4).

10.206 GA 2005, Sch 9 also provides for the two-stage process applicable to casino premises licences to apply to applications for provisional statements in respect of premises for which it is intended to apply for a casino premises licence,1 if the Schedule would apply to the premises licence application (ie if there would be more applications for premises licences than the licensing authority would have authority to grant).1 On granting such a provisional statement, the licensing authority may provide for it to cease to have effect at the end of a specified period,2 and it may extend that period on the application of the holder of the provisional statement.3 Where the authority reject an application for extension, or grant such an application, the applicant may appeal to the magistrates’ court.4 There is no provision for the making of representations on such an application and so no appeal lies on the part of any other person.4 1 2 3 4

GA 2005, Sch 9, para 9. GA 2005, Sch 9, para 10(3). GA 2005, Sch 9, para 10(4). GA 2005, Sch 9, para 10(4)(b).

Procedure 10.207 For a discussion of the procedure on appeals see Chapter 8.

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Chapter 11 The temporary use of premises

INTRODUCTION 11.1 Part 9 of the Gambling Act 2005 is concerned with the temporary use of premises.1 Albeit that it falls outside Part 9, it is submitted that a glance at s 37(1) of the GA 2005 – which creates one of the general offences created under Part 4 of the Act2 – provides a useful starting point in understanding the provisions of the Act dealing with the temporary use of premises. Section 37 provides that a person commits an offence if he uses premises, or causes or permits premises to be used for any of the kinds of gambling activity listed under that section. The gambling activities listed under s  37(1) are: operating a casino;3 providing facilities for the playing of bingo;4 making a gaming machine available for use;5 providing other facilities for gaming;6 and providing facilities for betting (whether by making or accepting bets, by acting as a betting intermediary or by providing other facilities for the making or accepting of bets).7 However, and as discussed in detail elsewhere in this title, there are a number of exceptions to the offence under s  37(1) including, for example: its complete disapplication where the gambling constitutes private or non-commercial gaming or betting; and, by way of further example, where the use of the premises for gambling is authorised by one of the permits created under the Act.8 1 Gambling Act 2005, Pt 9 (ss 214–234). For the meaning of ‘premises’ in the GA 2005, see s 353(1) and 11.7 below. 2 For GA 2005, s 37, see Chapter 4. For the general offences created under GA 2005, Pt 3 (ss 33–44), see Chapter 4. 3 GA  2005, s  37(1)(a); see Chapter  4. For the meaning of ‘casino’, see s  7 and Chapter 2. 4 GA 2005, s 37(1)(b); see Chapter 4. For the meaning of ‘bingo’, see s 353(1) and Chapter 2. For ‘providing facilities for gambling’, see s 5 and Chapter 2. 5 GA 2005, s 37(1)(c). For the meaning of ‘gaming machine’, see s 235 and Chapter 25. 6 GA  2005, s  37(1)(d). For the meaning of ‘gaming’, see s  6 and Chapter  2. For ‘providing facilities for gambling’, see s 5 and Chapter 2. 7 GA  2005, s  37(1)(e). For the meaning of ‘betting’, see ss  9–11; and for ‘betting intermediary’, see Chapter 2. 8 For the exceptions to the offence under s  37(1), see GA  2005, s  37(2)–(7) and Chapter 2.

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The temporary use of premises 11.2 In relation to commercial forms of gaming or betting, the most significant exceptions to the commission of the offence under GA  2005, s  37(1) arise where the use of the premises is authorised by a premises licence.1 Although recourse should be made to Part  8 of the 2005 Act for its provisions relating to the duration of premises licences,2 a premises licence will generally be required where it is proposed to use premises for commercial gaming or betting activity of any of the kinds listed under s  37(1) on a longer term basis. Where, however, premises are to be used on a temporary basis, a person using premises, or causing or permitting the premises to be used for the kinds of gambling activity listed under s  37(1), may find adequate protection from the commission of an offence under that Section by using the temporary use notification procedure set out under Part  9 of the Act.3 Such a person – who must be the holder of an operating licence4 – may give a ‘temporary use notice’ in accordance with the provisions of Part 9, stating his intention to carry on one or more specified prescribed activities.5 The significance of a temporary use notice is that a person who uses premises, or who causes or permits premises to be used, to carry on a gambling activity of a kind listed under s 37(1) does not commit an offence under that section if a temporary use notice under Part 9 has effect in respect of the premises,6 and the activity is carried on in accordance with the terms of the notice.7 1 See GA 2005, s 37(2)–(4) and Chapter 4. For premises licences, see GA 2005, Pt 8 (ss 150–213) and Chapter 10. 2 See, in particular, GA 2005, ss 191–213 and Chapter 10. 3 GA 2005, Pt 9 (ss 214–234). 4 GA 2005, s 215(1)(a). For ‘operating licences’, see GA 2005, Pt 5 (ss 65–126) and Chapter  6. Where eg  a poker tournament is to be held on very large premises necessitating the use by participants of tablet devices or smartphones connected to a Wi-Fi or other network, the person giving the notice might additionally need to hold a relevant remote operating licence. 5 GA 2005, s 215(1)(b). The Secretary of State may by regulations prescribe: activities which may be specified in a temporary use notice; combinations of activity that may not be specified in a temporary use notice; activities which may be specified in a temporary use notice only if no other prescribed activity is specified in the notice: s 215(2). 6 GA 2005, s 214(1)(a). 7 GA 2005, s 214(1)(b).

11.3 Regulations have been made prescribing the activities which may be specified in a temporary use notice.1 The activities are providing facilities for any form of equal chance gaming where those participating in the gaming are taking part in a competition which is intended to produce a single, overall winner.2 The reference to providing facilities for equal chance gaming does not include providing such facilities in circumstances where any person participating in the gaming does so by means of a gaming machine. The effect is to make possible the temporary offering of some forms of gaming: in particular poker tournaments or competitions, which will generally take place in venues such as hotels. The DCMS has stated that in its view: ‘… it was reasonable in the case of such one-off events for the operator exceptionally to be relieved from the requirement to obtain a premises licence. However, the Department considered such an exemption was only appropriate for equal chance gaming. Other forms of gambling, such as gaming machines 626

The temporary use of premises or casino games, which are liable to present greater risks to the licensing objectives, or in terms of problem gambling have been excluded.’ 1 Gambling Act 2005 (Temporary Use Notices) Regulations 2007 (SI 2007/3157). 2 Regulation 2(2).

11.4 The requirement in reg 2(2) that competitions should produce a single overall winner does not mean that, for example, a poker tournament organised pursuant to the Part 9 procedure cannot comprise a number of heats or rounds, the winner of each of which then goes through to the next round or rounds until a final play-off is reached to decide the ultimate winner. The ability to hold eliminators in order to get to an ultimate winner seems to follow from the use of the expression ‘overall winner’ in reg 2(2). There may even be parallel competitions. The Gambling Commission is of the same view. Thus para 14.4 of the 5th edn of the Commission’s Guidance to licensing authorities states: ‘In relation to tournaments, the requirement that the gaming is “intended to produce a single overall winner” does not restrict the gaming to only one winner through the course of the tournament, although there will ultimately be one final tournament winner. It is considered acceptable for each qualifying round of the tournament; (for example comprising several hands/games of poker) to produce a single overall winner of that qualifying round, whose prize may be the right to progress to the next stage in the tournament. There can also be additional competitions run alongside or leading up to the main event, provided that each of these also only provides one winner.’1 1 Guidance (September 2015).

11.5 As will be seen below, amongst a number of requirements as to the form of a temporary use notice, the notice must specify the period of time during which it is to have effect.1 Subject to the provisions of GA 2005, Pt 9, and provided that there is compliance with Part 9’s requirements, a temporary use notice has effect during the period specified in the notice.2  A  further requirement as to the form of the notice is that the temporary use notice specifies the premises on which the activity is to be carried on.3 There are, however, some restrictions on the use of temporary use notices for certain types of premises.4 1 GA 2005, s 216(1)(d). Note, however, that s 218 provides for a maximum permitted period during which a set of premises may be the subject of temporary use notification; see 11.10 below. 2 GA 2005, s 217. 3 GA 2005, s 216(1)(c); see 11.21 below. 4 See GA 2005, s 231 and 11.23 below.

11.6 A  temporary use notice is given to the licensing authority for the area in which the premises specified in the notice are situated.1 However, GA 2005, Pt 8 also contains important provisions as to the delegation of the functions of a licensing authority in respect of temporary use notices.2 1 GA  2005, ss  219(1), 216(1)(c) and see 11.22 below. For the meaning of ‘licensing authority’, see s 2 and Chapter 9. Note, however, that where premises are situated

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The temporary use of premises partly in the area of one licensing authority and partly in the area of another, the person giving the notice may give it to either authority, but must give a copy of the notice to the other authority: s  219(6). In relation to a vessel, a reference in Part 9 (ss 214–234) to a place in which premises are wholly or partly situated is to be construed: in the case of a vessel situated at a fixed place in or on water, as a reference to that place; in the case of a vessel which is permanently moored at a place, a reference to that place; in the case of a vessel which is habitually moored at one place more frequently or for longer periods than at any other place, as a reference to that place; and in any other case, as a reference to any place at which a vessel is moored or is likely to be moored, or to the place in the United Kingdom nearest to any place at which a vessel is or is likely to be, while activities are carried on in the vessel in reliance on a temporary use notice: s 231(2). See also s 231(1)(b)–(c) and 11.23 below as to the restrictions on the use of temporary use notification in relation to vessels. 2 GA 2005, s 232 (for England and Wales, see 11.16 below) and s 233 (Scotland).

PROHIBITIONS AND RESTRICTIONS ON TEMPORARY USE NOTIFICATION Certain premises 11.7 The definition of ‘premises’ under the GA 2005 includes any place and, in particular, a vessel and a vehicle.1 With the exceptions of seaplanes and amphibious vehicles, ‘vessel’ includes: anything designed or adapted for navigation or other use in, on or over water; a hovercraft; and also anything, or any part of any place, situated on or over water.2 Seaplanes and amphibious vehicles (other than hovercraft) fall within the Act’s definition of ‘vehicle’, as do trains and aircraft.3 In respect of vehicles and vessels, temporary use notification is prohibited or restricted as follows. 1 GA 2005, s 353(1). 2 GA  2005, s  353(1). ‘Hovercraft’ means a hovercraft within the meaning of the Hovercraft Act 1968. 3 GA 2005, s 353(1).

Vehicles 11.8 A  temporary use notice cannot be given in respect of a vehicle or part of a vehicle.1 1 GA 2005, s 231(1)(a).

Vessels 11.9 A temporary use notice may be given in respect of all or part of a passenger vessel,1 and it may be given in respect of all or part of a vessel situated at a fixed place in or on water.2 With the foregoing exceptions, a temporary use notice may not be given in respect of all or part of a vessel.3 1 GA 2005, s 231(1)(b). 2 GA 2005, s 231(1)(c). 3 GA 2005, s 231(1)(d).

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Maximum permitted period 11.10 Section 218 of the Gambling Act 2005 sets out the maximum permitted period for temporary use notices to have effect in respect of a set of premises. A  set of premises may not be the subject of temporary use notification for more than 21 days in a period of 12 months.1 However, this does not operate so as prevent a set of premises being the subject of more than one temporary use notice in a period of 12 months, as long as the aggregate of the periods for which the notices have effect does not exceed 21 days.2 For the purposes of s 218 a set of premises is the subject of a temporary use notification (or of a notice) if any part of the premises is the subject of a temporary use notification (or of a notice).3 1 GA 2005, s 218(1). 2 GA 2005, s 218(2). 3 GA 2005, s 218(8).

11.11 Section 218 applies the maximum permitted period in respect of a ‘set of premises’ but does not further define what is meant by this. A very large building may, for example, contain a number of separate areas possibly used for different commercial purposes. Each could possibly be regarded as separate premises. An attempt might then be made to circumvent the maximum permitted period prescribed in s 218 by giving multiple notices in respect of different gambling events in various of those areas on the basis that each was a ‘set’ of premises in its own right. What will constitute a ‘set’ of premises for these purposes is a question of fact and degree in each case. In Commissioners of Customs & Excise v Griffith1 the Court of Appeal held that the definition of premises in a predecessor of the Licensing Act 1964 was not limited to an entire building. Thus any part of a building which was defined by ‘metes and bounds’ was capable of being separate premises in respect of which a licence could be granted provided it was structurally adapted and suitable for the type of licence applied for. Clearly the 1964 Act is a different statute from the GA 2005, but to the extent that both concern the licensing of premises for particular activities they may be regarded as being in pari materia. Thus the fact that different parts of a building such a retail or leisure centre are occupied by different commercial tenants or licensees may militate strongly in favour of each occupying a separate ‘set’ of premises, depending upon such factors as the nature and length of the right to occupy and the degree of physical separation between them, the division of control between them and the landlord, responsibility for business rates etc. The arguments may be substantially weaker where the building is used eg as an exhibition hall where the right to occupy each separate area is of short duration and the landlord is responsible for paying business rates for the entire building. Paragraph 14.11 of the Gambling Commission Guidance is helpful in this regard.2 1 [1924] 1 KB 735. 2 Guidance (September 2015).

Contravention of maximum permitted period 11.12 The period of 12 months referred to above is calculated in the following way. The temporary use notice must specify, inter alia, the period 629

The temporary use of premises of time during which the notice is to have effect (s 216(1)(d)). This is referred to as the ‘specified period’ (s  218(4)). In addition, the temporary use notice must specify any periods during ‘the previous 12 months’ during which a temporary use notice had effect in respect of the premises or any part of the premises to which it relates (s 216(1)(f)). Though the Act does not so provide this may be referred to as ‘the previous 12 months period’. The ‘previous 12 months period’ means the period of 12 months ending with the last day of the ‘specified period’ (s 216(3)). 11.13 A  temporary use notice must be given before the period of three months ending with the day before the ‘specified period’ (s 219(2)). Suppose an applicant wants to use premises for gambling under a temporary use notice during the period 1  September 2008 to 14  September 2008. His temporary use notice will need to be served before the period of three months ending on 31 August 2008 (ie before 1 June 2008). The notice will specify the period of time during which the notice is to have effect (ie the ‘specified period’) as 1 September 2008 to 14 September 2008. The last day of the period specified is 14  September 2008; so, in the case of this application, ‘the previous 12 months’ means the period of 12 months ending with 14  September 2008 (ie  the 12-month period 15  September 2007 to 14  September 2008). If the premises have not been the subject of temporary use notification for any part of that 12-month period then the application would not infringe the principle that premises may not be the subject of temporary use notification for more than 21 days in a period of 12 months, so there would be no reason for the licensing authority to give a counter-notice on that ground. Likewise, if a temporary use notice has had effect in respect of the premises for no more than 7 days in the 12-month period (eg  between 1 and 7  December 2007) then again the additional 14 days proposed would not infringe the 21 day maximum provision. If, however, the premises have been subject to a temporary use notification for a period of 21 days during the 12 months (eg from 1 to 21 December 2007) the proposed use will contravene the 21 day maximum provision if any part of the ‘specified period’ of 1 to 14 September is given effect to. In those circumstances the licensing authority would be obliged to give a counter-notice providing for the temporary use notice not to have effect (s 218(3)).

Partial contravention of maximum permitted period 11.14 Section 218(4) deals with the case where a temporary use notice is given and there would be an infringement of the 21 day maximum provision if the notice had effect for the whole of the ‘specified period’ (ie 1 to 14 September 2008), but where the notice could have effect for some part of that period without contravening the provisions. Suppose, for example, the premises had been the subject of temporary use notification for 14 days during the 12-month period (eg  from 1 to 14  December 2007). In those circumstances it would be possible for a temporary use notice to have effect between 1 and 7  September 2008 or 8 and 14  September 2008. In those circumstances the licensing authority is obliged to give a counternotice providing that the temporary use notice shall not have effect during such part of the specified period as the licensing authority may specify in the counter-notice (the ‘excluded period’), and the notice shall be treated for the 630

The temporary use of premises purposes of Part 9 as if it related only to the non-excluded period (s 218(5)). Where there is a choice as to which part of the specified period to exclude the licensing authority must consult the person who gave the temporary use notice before giving a counter-notice under these provisions (s 218(6)).

Counter-notices 11.15 As will be seen later in this chapter, the giving of counter-notices by licensing authorities under Part  9 of the GA  2005 is not restricted to circumstances where, if the period specified in a temporary use notice has effect, there would be a contravention or partial contravention of the Act’s provisions under s 218 as to the maximum permitted period for temporary use notification.1 Section 224 of the Act contains further provisions as to counternotices.2 Where a counter-notice is given under s 218 of the Act, it must be in the prescribed form,3 contain the prescribed information,4 and be given as soon as is reasonably practicable.5 Where a licensing authority gives a counternotice under s 218, they must as soon as is reasonably practicable give a copy to any person who was entitled to receive a copy of the temporary use notice.6 1 For the giving of counter-notices in other circumstances, see GA 2005, s 224 and 11.41–11.43 below. 2 For commentary on the provisions of GA 2005, s 224, see 11.41 below. 3 GA  2005, s  224(4)(a) as applied by s  218(7). ‘Prescribed’ means prescribed by regulations made by the Secretary of State: s 224(8) as applied by s 218(7). 4 GA 2005, s 224(4)(b) as applied by s 218(7). 5 GA 2005, s 224(4)(c). 6 GA 2005, s 224(6) as applied by s 218(7). See s 219 and 11.26 below as to the persons entitled to receive a copy of a temporary use notice given to a licensing authority.

DELEGATION OF LICENSING AUTHORITY FUNCTIONS 11.16 As has been seen earlier in this title, in England and Wales the functions of a licensing authority under Part  8 of the GA  2005 in relation to premises licences are, with certain exceptions, delegated to the licensing committee of the authority established under s 6 of the Licensing Act 2003.1 Similarly, in England and Wales the functions of a licensing authority under Part 9 of the 2005 Act in relation to temporary use notices are delegated to the licensing committee of the authority established under s 6 of the Licensing Act 2003.2 There are, however, some important provisions relating to referral of functions back to the licensing authority and sub-delegation of functions by the licensing committee. 1 See GA  2005, s  154(1) and Chapter  9 for the delegation of the functions under Part 8 (ss 150–213) to the licensing committee of the authority established under Licensing Act 2003, s  6. For the exceptions, see: GA  2005, s  154(2)(a), s  166 and Chapter 9 (licensing authority’s resolution not to issue casino licences); GA 2005, s 154(2)(b), s 212 and Chapter 9 (fees); and GA 2005, s 154(2)(c), s 349 and Chapter 9 (licensing authority’s three-year licensing policy). For premises licences generally, see GA 2005, Pt 8 (ss 150–213) and Chapter 10. 2 GA 2005, s 232(1). See s 233 in relation to Scotland.

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Referral back to the licensing authority 11.17 Where a licensing committee is unable to discharge any function delegated to it under the above-mentioned provisions because of the numbers of its members who are unable to take part in the consideration or discussion of any matter or vote on any question with respect to it, the committee must refer the matter back to the licensing authority and the authority must discharge that function.1 1 Licensing Act 2003, s 7(9) as applied by GA 2005, s 232(2)(a).

Sub-delegation of functions 11.18 Section 10 of the Licensing Act 2003 provides that a licensing committee may arrange for the discharge of any functions exercisable by it to a sub-committee established by it or by an officer of the licensing authority. With adaptations, these provisions apply to a function delegated under Part 9 of the GA 2005 to a sub-committee.1 Section 10(4) of the LA 2003 contains a list of matters that cannot be delegated to an officer of the licensing authority. As far as the GA 2005 is concerned, this list is substituted for a reference to any function under s 224 of the 2005 Act, ie any function as to the giving a counter-notice under that section cannot be delegated to an officer of the licensing authority.2 1 LA 2003, s 10 as applied by GA 2005, s 232(2)(b). 2 LA 2003, s 10(4) as applied by GA 2005, s 232(3).

11.19 Section 9 of the Licensing Act 2003 and regulations under it apply to the proceedings of licensing committees and their sub-committees in relation to the exercise of their functions under Part 9 of the Gambling Act 2005,1 thus: (1) A  licensing committee may establish one or more sub-committees consisting of three members of the committee.2 (2) Regulations may make provision about: (a)

the proceedings of licensing committees and their sub-committees (including the provision about the validity of proceedings and the quorum for meetings);3

(b) public access to the meetings of those committees and subcommittees;4 (c)

the publicity to be given to those meetings;5

(d) the agendas and records to be produced in respect of those meetings;6 and (e) public access to such agendas and records and other information about those meetings.7 (3)

Subject to any such regulations, each licensing committee may regulate its own procedure and that of its sub-committees.8

1 LA 2003, s 9 as applied by GA 2005, s 232(4).

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The temporary use of premises 2 3 4 5 6 7 8

LA 2003, s 9(1) as applied by GA 2005, s 232(4). LA 2003, s 9(2)(a) as applied by GA 2005, s 232(4). LA 2003, s 9(2)(b) as applied by GA 2005, s 232(4). LA 2003, s 9(2)(c) as applied by GA 2005, s 232(4). LA 2003, s 9(2)(d) as applied by GA 2005, s 232(4). LA 2003, s 9(2)(e) as applied by GA 2005, s 232(4). LA 2003, s 9(3) as applied by GA 2005, s 232(4).

11.20 At the time of writing, the current regulations made under s 9 of the Licensing Act 2003 are the Licensing Act 2003 (Hearings) Regulations 2005.1 The GA 2005 provides that regulations may, in particular, make provision which applies only in relation to functions under the 2003 Act, only in relation to functions under Part 9 of the GA 2005, or differently in relation to functions under the 2003 Act and functions under Part 9 of the GA 2005.2 1 SI 2005/44. 2 GA 2005, s 232(4).

THE TEMPORARY USE NOTIFICATION PROCEDURE Form of notice 11.21

A temporary use notice must:

(1) be in the prescribed form;1 (2) specify the activity to be carried on in reliance on the notice;2 (3) specify the premises on which the activity is to be carried on;3 (4) specify the period of time during which the notice is to have effect;4 (5) specify the times of day during the period at which the activity is to be carried on;5 (6) specify any periods during the previous 12 months during which a temporary use notice has had effect in respect of the premises or any part of the premises;6 (7) specify the date on which the notice is given;7 and (8) contain any other prescribed information.8 1 GA 2005, s 216(1)(a). ‘Prescribed’ means prescribed by regulations made by the Secretary of State: s 216(2). 2 GA 2005, s 216(1)(b). 3 GA 2005, s 216(1)(c). See also s 231 and 11.4–11.6 above as to the prohibition on the use of temporary use notification in relation to vessels and the restrictions on the use of temporary use notification in relation to vessels. 4 GA 2005, s 216(1)(d). See also s 218 and 11.7–11.11 as to the maximum permitted period for temporary use notification. 5 GA 2005, s 216(1)(e). 6 GA  2005, s  216(1)(f). ‘The previous 12 months’ means the period of 12 months ending with the last day of the period specified (under s 216(1)(d)) during which the notice is to have effect: s 216(3). 7 GA 2005, s 216(1)(g). 8 GA 2005, s 216(1)(h).

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The temporary use of premises

Giving a temporary use notice Temporary use notice to be given to the licensing authority 11.22 As has been seen, one of the requirements that the GA  2005 sets down as to the form of a temporary use notice is that the notice must specify the premises on which the activity is to be carried on.1 Section 219 of the Act provides that a temporary use notice must be given to the licensing authority for the area in which the premises specified in the notice are situated.2 In a case where the premises are situated partly in the area of one licensing authority and partly in the area of another, the person giving the notice may give it to either authority3 (but must also give a copy of the notice to the other authority).4 1 2 3 4

GA 2005, s 216(1)(c); see 11.21 above. GA 2005, s 219(1). GA 2005, s 219(6)(a). GA 2005, s 219(6)(b).

11.23 When it is proposed to give a temporary notice in respect of a vessel, care is required in identifying the appropriate licensing authority.1 In relation to a vessel, a reference in Part 9 of the GA 2005 to a place in which premises are wholly or partly situated is to be construed: in the case of a vessel situated at a fixed place in or on water, as a reference to that place;2 in the case of a vessel which is permanently moored at a place, as a reference to that place;3 in the case of a vessel which is habitually moored at one place more frequently or for longer periods than at any other place, as a reference to that place;4 and in any other case, as a reference to any place at which a vessel is moored or is likely to be moored, or to the place in the United Kingdom nearest to any place at which a vessel is or is likely to be, while activities are carried on in the vessel in reliance on a temporary use notice.5 1 See also GA 2005, s 231(1)(b)–(d) and 11.8 above as to the restrictions in giving a temporary use notice in respect of a vessel. 2 GA 2005, s 231(2)(a). 3 GA 2005, s 231(2)(b). 4 GA 2005, s 231(2)(c). 5 GA 2005, s 231(2)(d).

11.24 A  temporary use notice must be given before the period of three months ending with the day before the period specified in the notice is to have effect,1 and the person who gives the notice must ensure that it is received by the licensing authority within the period of seven days beginning with the date specified in the notice as the date that it is given.2 The temporary use notice given to the licensing authority for the area in which the premises specified in the notice are situated must be accompanied by a copy of the notice,3 and such fee as may be prescribed by regulations made, for premises in England and Wales, by the Secretary of State.4 1 GA 2005, s 219(2). 2 GA 2005, s 219(5). This is a reference to the date which must be specified in the notice by virtue of s 216(1)(g): see 11.18 above. 3 GA 2005, s 219(3)(a).

634

The temporary use of premises 4 GA  2005, s  219(3)(b)(i). The provisions relating to fees in respect of premises licences contained in s 212 (see Chapter 10) have effect in relation to fees under s  219 (ie  in relation to temporary use notices): s  219(8). In relation to premises in Scotland, the temporary use notice must be accompanied by such fee as may be prescribed in regulations made by the Scottish Ministers: s  219(3)(b)(ii).

11.25 Where a licensing authority is given a temporary use notice in accordance with these provisions, the authority is required to complete all proceedings on the notice before the end of six weeks beginning with the date on which it receives the notice.1 1 GA  2005, s  228(1). The reference to proceedings on a temporary use notice in s 228(1) is a reference to: considering whether to give a notice of objection under s  221 (see 11.30 below); holding a hearing in relation to any notice of objection under s 221 (whether or not by the licensing authority) (see 11.33 below); agreeing to dispense with such a hearing in accordance with s  222(3) (see 11.34 below); giving a counter-notice under s  224 (see 11.41 below); or, giving a notice under s 225 (see 11.45 below): s 228(2).

Copies of the temporary use notice 11.26 When a person gives a temporary notice to a licensing authority in accordance with s  219 of the GA  2005, there are a number of persons (other than the licensing authority who are given the actual notice) who are entitled to be given a copy, and the person who gives the notice must ensure that these copies are received by these persons within the period of seven days beginning with the date specified in the notice as the date that it is given.1 1 GA 2005, s 219(5). This is a reference to the date which must be specified in the notice by virtue of s 216(1)(g): see 11.18 above.

11.27 In all cases, the person who gives the temporary notice must give a copy of it to: (1) the Gambling Commission;1 (2) in England and Wales, the chief officer of police for any area in which the premises specified in the notice are wholly or partly situated;2 and (3) the Commissioners for Her Majesty’s Revenue and Customs.3 1 GA 2005, s 219(4)(a). For ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3. 2 GA 2005, s 219(4)(b)(i). ‘Chief officer of police’ has the meaning given by Police Act 1996, s 101(1): GA 2005, s 219(7)(a); and a reference to a chief officer’s area is a reference to the area in respect of which he has responsibility under the Police Act 1996: GA 2005, s 219(7)(b). In Scotland, a copy of the temporary use notice must be given to the chief constable of the police force in which the premises are wholly or partly situated: GA 2005, s 219(4)(b)(ii). 3 GA 2005, s 219(4)(c).

11.28 Where premises are situated partly in the area of one licensing authority and partly in the area of another, the person who gives the 635

The temporary use of premises temporary use notice may give it to either authority.1 He must, however, give a copy of the notice to the other authority.2 1 GA 2005, s 219(6)(a). 2 GA 2005, s 219(6)(b).

Licensing authority to acknowledge receipt of the temporary use notice 11.29 Where a licensing authority receives a temporary use notice (ie  as the recipient, not of a copy, but as the recipient of the actual notice as the licensing authority in whose area the premises specified in the notice are wholly or partly situated), it must as soon as is reasonably practicable send a written acknowledgment of the notice to the person who gave it.1 1 GA 2005, s 220.

Objections to the temporary use notice 11.30 Section 221 of the GA  2005 applies to the licensing authority that receives a temporary use notice (ie as the recipient, not of a copy, but as the recipient of the actual notice as the licensing authority in whose area the premises specified in the notice are wholly or partly situated) and all other persons entitled to receive a copy of the notice.1 If such a person thinks that, having regard to the licensing objectives of the 2005 Act, the temporary use notice should not have effect, or should have effect only with modification, he may give a ‘notice of objection’ to the person who gave the temporary use notice.2 A person who gives a notice of objection is also required to give a copy to the licensing authority to which the temporary notice was given (unless it is that licensing authority which is giving the notice of objection).3 1 GA 2005, s 221(1). See s 219(4) and 11.27–11.28 above as to the persons who are entitled to receive a copy of the temporary use notice. 2 GA 2005, s 221(2). For the licensing objectives of the 2005 Act, see s 1 and Chapter 1. 3 GA 2005, s 221(3). Where a licensing authority are given a temporary use notice in accordance with the provisions of s 219, they must complete all proceedings on the notice before the end of the period of six weeks beginning with the date on which they receive the notice: s 228(1). The reference to proceedings on a temporary use notice is a reference to: considering whether to give a notice of objection under s 221; holding a hearing in relation to any notice of objection under s 221 (whether or not by the licensing authority) (see 11.33 below); agreeing to dispense with such a hearing in accordance with s 222(3) (see 11.34 below); giving a counter-notice under s 224 (see 11.41 below); or, giving a notice under s 225 (see 11.45 below): s 228(2).

11.31

A notice of objection must state:

(1) that the person giving the notice of objection objects to the temporary use notice;1 and (2) the person’s reasons.2 1 GA 2005, s 221(5)(a). 2 GA 2005, s 221(5)(b).

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The temporary use of premises 11.32 A notice of objection, and any copy of it which must be given by virtue of these provisions, must be given within the period of 14 days beginning with the date on which the temporary use notice is given, as specified in the temporary use notice.1 If a person who gives a notice of objection to a temporary use notice later withdraws it by notice (in writing to the person who gave the temporary use notice and the licensing authority which received the temporary use notice), the notice of objection is to be disregarded.2 1 GA 2005, s 221(4). This is a reference to the date which must be specified in the notice by virtue of s 216(1)(g); see 11.21 above. 2 GA 2005, s 221(6).

Hearing of objections 11.33 Where a temporary use notice is given to a licensing authority in accordance with s  219 of the GA  2005,1 and a notice of objection is given in accordance with s 221,2 the licensing authority must hold a hearing at which any of the following may make representations about the notice of objection: (1) the person who gave the temporary use notice;3 (2) the person who gave the notice of objection;4 and (3) any other person who was entitled to receive a copy of the temporary use notice in accordance with s 219.5 1 2 3 4 5

GA 2005, s 222(1)(a). For commentary on the provisions of s 219, see 11.22–11.24 above. GA 2005, s 222(1)(b). For commentary on the provisions of s 221, see 11.30–11.32 above. GA 2005, s 222(1) and (2)(a). GA 2005, s 222(1) and (2)(b). GA  2005, s  222(1) and (2)(c). For those persons entitled to receive a copy of a temporary use notice, see s 219 and see 11.27–11.28 above.

11.34 However, the licensing authority need not arrange a hearing if the authority and each person who would be entitled to make representations agree in writing that a hearing is unnecessary.1 1 GA 2005, s 222(3).

Modification of the temporary use notice by agreement Reaching agreement to modify the temporary use notice 11.35 The GA 2005 allows for modification of a temporary use notice by agreement where a temporary use notice is given to a licensing authority in accordance with s 219,1 a notice of objection has given by a person (‘the objector’) in accordance with s 221,2 and a hearing of the notice of objection has neither taken place nor been dispensed with.3 The objector may by notice in writing to the person who gave the temporary use notice propose a modification of the temporary use notice.4 1 GA 2005, s 223(1)(a). For commentary on the provisions of s 219, see 11.22–11.24 above. 2 GA 2005, s 223(1)(b). For commentary on the provisions of s 221, see 11.30–11.32 above.

637

The temporary use of premises 3 GA 2005, s 223(1)(c). For notice of objection, see s 222 and see 11.33 (hearings) and 11.34 (dispensing with hearings) above. 4 GA 2005, s 223(2).

Modified temporary use notice to be given to the licensing authority 11.36 If the person who gave the temporary use notice accepts the modifications that have been proposed: (1) he must give a new temporary use notice which incorporates the modification;1 and (2) the objection is to be treated as withdrawn (but without prejudice to the right of any person other than the objector to give a notice of objection in relation to the new temporary use notice).2 1 GA 2005, s 223(3)(a). 2 GA 2005, s 223(3)(b).

11.37 As with the original temporary use notice, the new (ie  modified) temporary use notice must be given to the licensing authority for the area in which the premises specified in the notice are situated,1 and the person who gives the new notice must ensure that it is received by the licensing authority within the period of seven days beginning with the date specified in the notice as the date that it is given.2 The new temporary use notice must be accompanied by a copy of the notice.3 1 GA 2005, s 219(1) as applied by s 223(3)(a) and (4). 2 GA 2005, s 219(5) as applied by s 223(3)(a) and (4). This is a reference to the date which must be specified in the notice by virtue of s 216(1)(g); see 11.21 above. 3 GA 2005, s 219(3)(a) as applied by s 223(3)(a) and (4).

Copies of the new modified temporary use notice 11.38 As with the giving of the original temporary use notice, various persons are entitled to be given a copy of the new (ie modified) temporary use notice, and the person who gives the new notice must ensure that these copies are received by the persons entitled to receive a copy within the period of seven days beginning with the date specified in the notice as the date that it is given.1 1 GA 2005, s 219(5) as applied by s 223(3)(a) and (4). This is a reference to the date which must be specified in the notice by virtue of s 216(1)(g); see 11.21 above.

11.39 In all cases, the person who gives the new temporary notice must give a copy of it to: (1) the Gambling Commission;1 (2) in England and Wales, the chief officer of police for any area in which the premises specified in the notice are wholly or partly situated;2 and (3) the Commissioners for Her Majesty’s Revenue and Customs.3 1 GA 2005, s 219(4)(a) as applied by s 223(3)(a) and (4). For ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3.

638

The temporary use of premises 2 GA 2005, s 219(4)(b)(i) as applied by s 223(3)(a) and (4). ‘Chief officer of police’ has the meaning given by Police Act 1996, s  101(1): GA  2005, s  219(7)(a); and a reference to a chief officer’s area is a reference to the area in respect of which he has responsibility under the Police Act 1996: GA 2005, s 219(7)(b). In Scotland, a copy of the temporary use notice must be given to the chief constable of the police force in which the premises are wholly or partly situated: GA 2005, s 219(4)(b)(ii). 3 GA 2005, s 219(4)(c) as applied by s 223(3)(a) and (4).

11.40 Where premises are situated partly in the area of one licensing authority and partly in the area of another, the person who gives the new temporary use notice must give a copy of the notice to the authority that is not the recipient of the actual new temporary use notice.1 1 GA 2005, s 219(6)(b) as applied by s 223(3)(a) and (4).

Counter-notice Giving a counter-notice 11.41 Section 224 of the GA 2005 – which provides for the giving of counternotices by the licensing authority which receives the actual temporary use notice (rather than a copy)1 – applies where a temporary use notice is given to a licensing authority in accordance with s 219,2 a notice of objection has been given by a person (‘the objector’) in accordance with s 221,3 and a hearing of the notice of objection has either taken place or been dispensed with.4 1 That is, a copy by virtue of the provisions of GA 2005, s 219(6)(b); see 11.22 above. 2 GA 2005, s 224(1)(a). For commentary on the provisions of s 219, see 11.22–11.24 above. 3 GA 2005, s 224(1)(b). For commentary on the provisions of s 221, see 11.30–11.31 above. 4 GA 2005, s 224(1)(c). For notice of objection, see s 222 and see 11.33 (hearings) and 11.34 (dispensing with hearings) above.

11.42 If the licensing authority think that the temporary use notice should not have effect or should have effect only with modification, the authority may give a counter-notice under GA 2005, s 224 to the person who gave the temporary use notice.1 Section 224(3) states that a counter-notice may provide for the temporary use notice: (1) not to have effect; (2) to have effect only in respect of a specified activity; (3)

to have effect only in respect of an activity carried on during a specified period of time or at specified times of day;

(4) to have effect subject to compliance with a specified condition; and provision made under s 224(3) shall have effect. 1 GA 2005, s 224(2).

11.43 A  counter-notice must be in the prescribed form,1 contain the prescribed information,2 and be given as soon as is reasonably practicable.3 In addition, the counter-notice must state the licensing authority’s reasons 639

The temporary use of premises for giving it.4 Where a licensing authority gives a counter-notice, they must as soon as is reasonably practicable give a copy of it to any person who was entitled to receive a copy of the temporary use notice.5 1 GA 2005, s 224(4)(a). ‘Prescribed’ means prescribed by regulations made by the Secretary of State: s 224(8). 2 GA 2005, s 224(4)(b). 3 GA 2005, s 224(4)(c). 4 GA 2005, s 224(5). 5 GA 2005, s 224(6). For the persons entitled to receive a copy of the temporary use notice, see 11.27–11.28 above.

Principles to be exercised by the licensing authority 11.44 In exercising its functions as to the giving of counter-notices, a licensing authority must aim to permit the use of premises for gambling in so far as the authority thinks it: (1)

in accordance with any relevant code of practice issued under GA 2005, s 24;1

(2) in accordance with any relevant guidance issued by the Gambling Commission under s 25;2 (3) subject to the matters set out in sub-paragraphs (1) and (2) above, reasonably consistent with the licensing objectives of the 2005 Act;3 and (4) subject to the matters set out in sub-paragraphs (1), (2) and (3) above, in accordance with the statement published by the licensing authority under s 349.4 1 GA 2005, s 153(1)(a) as applied by s 224(7). Under s 24 the Gambling Commission is required to issue one or more codes of practice about the manner in which facilities for gambling are provided (whether by the holder of a licence under the 2005 Act or by another person). For ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3. 2 GA 2005, s 153(1)(b) as applied by s 224(7). Under s 25 the Gambling Commission is required from time to time to issue guidance as to: the manner in which local authorities are to exercise their functions under the Act and, in particular, the principles to be applied by local authorities in exercising their functions under the Act; see Chapter 10. Part 14 of the 5th edn of the Commission’s Guidance to Licensing Authorities published in September 2015 deals with temporary use notices. 3 GA  2005, s  153(1)(c) as applied by s  224(7). For the ‘licensing objectives’, see Chapter 1. 4 GA 2005, s 153(1)(d) as applied by s 224(7). Under s 349 each licensing authority is required, before each successive period of three years, to prepare a statement of the principles they propose to apply in exercising their functions under the Act during that period, and publish the statement; see Chapter 10.

Dismissal of objection(s) to the temporary use notice Dismissal 11.45 Section 225 of the GA 2005 applies where a temporary use notice is given to a licensing authority in accordance with s 219,1 a notice of objection has 640

The temporary use of premises given by a person (‘the objector’) in accordance with s 221,2 and the licensing authority has determined not to give a counter-notice.3 The licensing authority must, as soon as is reasonably practicable, give notice of its determination to the person who gave the temporary use notice,4 and to each person who received a copy of the temporary use notice in accordance with s 219.5 1 GA 2005, s 225(1)(a). For commentary on the provisions of s 219, see 11.22–11.24 above. 2 GA 2005, s 225(1)(b). For commentary on the provisions of s 221, see 11.30–11.32 above. 3 GA 2005, s 225(1)(c). For counter-notices see s 224 and 11.41–11.44 above. 4 GA 2005, s 225(2)(a). 5 GA  2005, s  225(2)(b). For the persons who are entitled to receive a copy of the temporary use notice under the provisions of s 219, see 11.27–11.28 above.

Appeals 11.46 Where a licensing authority gives notice of its determination not to give a counter-notice, the following may appeal: (1) the person who gave the temporary use notice;1 (2) a person who was entitled to receive a copy of the temporary use notice.2 1 GA 2005, s 226(1)(b) and (2)(a). 2 GA 2005, s 226(1)(b) and (2)(b).

11.47 (1)

An appeal must be instituted:

in the magistrates’ court for a local justice area in which the premises to which the temporary use notice relates are wholly or partly situated;1

(2) by notice of appeal given to the designated officer;2 (3)

within the period of 14 days beginning with the day on which the appellant receives notice of the action against which the appeal is brought.3

1 GA  2005, s  226(3)(a). In Scotland, the appeal lies to a sheriff within whose sheriffdom the premises are wholly or partly situated: s 226(9). 2 GA 2005, s 226(3)(b). 3 GA 2005, s 226(3)(c).

11.48 A person who was entitled to receive a copy of the temporary use notice must determine whether to appeal, and institute any appeal, as soon as is reasonably practicable.1 Where an appeal is brought against the giving of a notice of the licensing authority’s determination not to give a counternotice, the person who gave the temporary use notice is to be a respondent in addition to the licensing authority.2 1 GA 2005, s 226(4). 2 GA 2005, s 226(5).

11.49

On appeal, the magistrates’ court may:

(1) dismiss the appeal;1 641

The temporary use of premises (2) direct the licensing authority to take action of a specified kind;2 (3) remit the case to the licensing authority to decide in accordance with a direction of the court;3 (4) make an order about costs.4 1 GA  2005, s  226(6)(a). In Scotland, the appeal lies to a sheriff within whose sheriffdom the premises are wholly or partly situated: s 226(9). 2 GA 2005, s 226(6)(b). 3 GA  2005, s  226(6)(c). The provisions relating to appeals set out under s  226(2) apply to a decision of a licensing authority following remittal: s 226(7). 4 GA 2005, s 226(6)(d).

11.50

A further appeal lies to the High Court on a point of law.1

1 GA 2005, s 226(8). In Scotland, it lies to the Court of Session: s 226(9)(e).

Endorsement of notice 11.51 Section 227 of the GA 2005 – which provides for the endorsement of temporary use notices by the licensing authority – applies where a temporary use notice is given to a licensing authority in accordance with s  219.1 The procedure which applies depends on whether or not a notice of objection is pending. A notice of objection is pending if it has been given in accordance with the provisions of s  221 and it has not been withdrawn or treated as withdrawn following agreed modification of the temporary use notice.2 1 GA  2005, s  227(1). For commentary on the provisions of s  219, see 11.22–11.24 above. 2 GA 2005, s 227(4). For the Act’s provisions as to the giving of a notice of objection, see s  221 and 11.30–11.32 above; for withdrawal of an objection by an objector, see s 221(6) and 11.32 above; and for the circumstances in which an objection is to be treated as withdrawn following a modification of a temporary use notice by agreement, see s 223(3)(b) and 11.36 above.

No notice of objection pending 11.52 A  notice of objection must be given within the period of 14 days beginning with the date on which the temporary use notice is given.1 If no notice of objection is pending in relation to a temporary use notice when this 14-day period expires, the licensing authority must: (1)

endorse the copy of the temporary use notice in such manner as may be prescribed by the Secretary of State by regulations;2 and

(2) return the endorsed copy, as soon as is reasonably practicable, to the person giving the notice.3 1 GA 2005, s 221(4). The date on which a temporary use notice is given is the date specified in the notice in accordance with s 216(1)(g); see 11.21 above. 2 GA 2005, s 227(2)(a). The reference here to a copy of the temporary use notice is a reference to the copy which was submitted with the temporary use notice in accordance with s 219(3)(a); see 11.37 above. 3 GA 2005, s 227(2)(b).

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The temporary use of premises

Notice of objection pending 11.53 If a notice of objection is pending in relation to a temporary use notice when the 14-day period for giving a notice of objection expires,1 then as soon as is reasonably practicable after the completion of proceedings on the temporary use notice, the licensing authority – unless they give a counter-notice – must: (1)

endorse the copy of the temporary use notice in such manner as may be prescribed by the Secretary of State by regulations;2 and

(2) return the endorsed copy, as soon as is reasonably practicable, to the person giving the notice.3 1 See 11.32 above. 2 GA  2005, s  227(3)(a). The reference here to a copy of the temporary use notice is a reference to the copy that was submitted with the temporary use notice in accordance with s 219(3)(a); see 11.37 above. For these purposes, proceedings on a temporary use notice are completed, if any notice of objection given in relation to the temporary use notice has been withdrawn, or the licensing authority has given a counter-notice or a notice of their determination not to give a counter-notice: s 228(5). 3 GA 2005, s 227(3)(b).

Loss, theft or damage to an endorsed copy of a temporary use notice 11.54 Licensing authorities are required to make arrangements to allow for the person who gave a temporary use notice to obtain a new endorsed copy of a temporary use notice, where the original has been lost, stolen or damaged.1 1 GA 2005, s 227(6). Such arrangements may include the charging of such fees as the Secretary of State may prescribe by regulations: s 227(6)(a). Section 212 (which relates to regulations prescribing fees under Part  8 of the Act and in respect of premises licences – see Chapter 10) has effect in relation to fees for a new endorsed copy of a temporary use notice: s 227(6)(b).

11.55 Where an enforcement officer or an authorised person seeks to exercise a power under or by virtue of Part  15 of the GA  2005, he must produce evidence of his identity and authority to a person (if there is one) who appears to the enforcement officer or the authorised person to be occupying the relevant premises or to have responsibility for their management.1 1 GA 2005, s 321.

WITHDRAWAL OF TEMPORARY USE NOTICE 11.56 If a person who gives a temporary use notice to a licensing authority notifies the licensing authority that the notice is withdrawn, the notice is to have no effect (or if it has started to have effect, it will cease to have effect),1 and no further proceedings are to take place in respect of the notice (except 643

The temporary use of premises in respect of a matter arising during or in relation to a time at which the notice had effect).2 1 GA 2005, s 230(a). 2 GA 2005, s 230(b).

DISPLAY AND PRODUCTION OF TEMPORARY USE NOTICES 11.57 The GA 2005 imposes duties on a person who gives a temporary use notice in respect of premises to display a copy of the notice on the premises and to produce the notice endorsed by the licensing authority on request to various persons specified in the Act.1 1 GA 2005, s 229.

Display of notice 11.58 A person who gives a temporary use notice in respect of premises must arrange for a copy of the notice to be displayed prominently on the premises at any time when an activity is being carried on in reliance on the notice.1 1 GA 2005, s 229(1)(a).

Production of notice 11.59 A person who gives a temporary use notice in respect of premises must arrange for the notice endorsed by the licensing authority to be produced on request to a constable,1 an officer of customs and excise,2 an enforcement officer,3 or an authorised local authority officer.4 1 GA 2005, s 229(1)(b)(i). 2 GA 2005, s 229(1)(b)(ii). 3 GA 2005, s 229(1)(b)(iii). See s 303 and Chapter 26 for the meaning of ‘enforcement officer’. 4 GA 2005, s 229(1)(b)(iv). See s 304(1) and (2) and Chapter 26 for the meaning of ‘authorised local authority officer’.

Offence 11.60 Section 229(2) of the GA  2005 provides that a person commits an offence if he fails without reasonable excuse to comply with the Act’s requirements as to the display of a copy of the temporary use notice or as to the production of the endorsed copy of the temporary use notice.1 A person guilty of an offence is liable on summary conviction to a fine not exceeding level 2 on the standard scale.2 1 GA 2005, s 229(2). 2 GA 2005, s 229(3).

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The temporary use of premises

Offenders and prosecutors 11.61 The offence under GA 2005, s 229(2) may committed by a ‘person’. Whilst ‘person’ includes an individual, it also includes bodies of persons. Section 341 contains important provisions relating to the prosecution of bodies of persons for offences under the Act.1 Where an offence under the Act is committed by a body of persons corporate or by an unincorporated body of persons (other than a partnership) and it is proved that the offence was committed with the consent or connivance of an officer of the body or as a result of the negligence of an officer of the body, the officer as well as the body is guilty of an offence.2 Where the offence is committed by a limited partnership, the foregoing provisions apply, save that it is a partner, rather than an officer, who is guilty of the offence, as well as the limited partnership.3 In the case of an offence committed by a partnership, other than a limited partnership, each partner is guilty of the offence.4 Unincorporated associations are to be treated as if they were incorporated bodies for all procedural purposes when prosecuted for an offence under the Act. 1 GA  2005, s  341. The Secretary of State is given the power to make regulations providing for the modification of a provision of s 341 in its application to a body of persons formed under, or in so far as the body is recognised by, law having effect outside the United Kingdom: s 341(7). 2 GA 2005, s 341(1) and (2). An ‘officer of a body’ includes: a director, manager or secretary; a person purporting to act as a director, manager or secretary; and, if the affairs of the body are arranged by its members, a member: s 341(3). 3 GA 2005, s 341(5). 4 GA 2005, s 341(4).

11.62 The Gambling Commission may institute criminal proceedings in respect of any offence under the Gambling Act 2005.1 The power of licensing authorities to institute criminal proceedings in respect of an offence under the Act is limited to those offences listed under s 346,2 which includes the offence under s 229. 1 GA 2005, s 28; see Chapter 3. 2 GA 2005, s 346(1). However, s 346 is without prejudice to the Local Government Act 1972, s  222 (the power of local authorities to prosecute or defend legal proceedings): s 346(2).

MAINTENANCE OF A REGISTER 11.63 A  licensing authority must maintain a register of temporary use notices given to them, together with such other information as may be prescribed,1 make the register and information available for inspection by members of the public at all reasonable times,2 and make arrangements for the provision of a copy of an entry in the register, or of information, to a member of the public on request.3 However, a licensing authority may refuse to provide a copy of an entry or of information unless the person seeking it pays a reasonable fee specified by the authority.4 1 GA 2005, s 234(1)(a). The Secretary of State may make regulations about the form of the register and the manner in which it is maintained: s  234(3). Further, the

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The temporary use of premises Secretary of State may make regulations requiring licensing authorities to give to the Gambling Commission specified information about temporary use notices given to them; requiring the Gambling Commission to maintain a register of the information provided to it in accordance with the foregoing; requiring the Gambling Commission to grant access to the register to members of the public (without charge); requiring the Gambling Commission to make copies of entries available on request, and on payment of a reasonable fee, to members of the public; excusing licensing authorities, wholly or partly, from compliance with the requirement to maintain a register of the temporary use notices given to the authority together with such other information as may be prescribed: s 234(4). 2 GA 2005, s 234(1)(b). 3 GA 2005, s 234(1)(c). 4 GA 2005, s 234(2).

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Chapter 12 Clubs, pubs and fairs

INTRODUCTION 12.1 Part 12 of the Gambling Act 20051 is concerned with certain forms of gambling2 by members of certain associations, by the public in some premises having the benefit of a premises licence under the Licensing Act 2003, and at travelling fairs. This somewhat eclectic grouping within Part 12 arises because, as explained in the Explanatory Notes to the Act, under the previous regulatory system for gaming3 (the Gaming Act 1968)4 these various associations, premises and entities enjoyed particular gaming entitlements, either as of right or with express permission.5 Notwithstanding this historic justification for these special arrangements there are, however, certain features which are common to the forms of gambling with which Part 12 is concerned: (1)

Part 12 does not provide any entitlements to conduct betting or lotteries, only gaming and the use of gaming machines in some circumstances.6

(2) The effect of the provisions of Part 12 is to create exceptions to actions which would otherwise constitute offences under provisions elsewhere in the Act. Specifically: (a) the offence of providing facilities for gambling (s 33);7 (b) the offence of using premises, or causing or using premises to be used for certain forms of gambling activity (s 37);8 and (c) the offence of making a gaming machine available for use by another (s 242).9 (3) Although other exceptions to the offences created under ss 33, 37 and 242 are to be found elsewhere in the Act, the effect of the provisions of Part 12 is either to disapply these particular sections by defining specific forms of exempt gaming or to disapply them by allowing certain forms of gaming to take place under the authority of a permit. In the absence of such provision such gaming, unless another exception under the Act applied, would either require the authorisation of an operating licence, or a premises licence. 647

Clubs, pubs and fairs (4) Where Part 12 does disapply the provisions of ss  33, 37 or 242, the disapplication is dependent upon the gaming satisfying conditions specified in the Act. 1 2 3 4 5 6

GA 2005, Pt 12 (ss 266–287). For the meaning of ‘gambling’, see GA 2005, s 3 and Chapter 2. For the meaning of ‘gaming’, see GA 2005, ss 6–8 and Chapter 2. The whole of the Gaming Act 1968 is repealed by GA 2005, s 356 and Sch 17. Explanatory Notes to the Gambling Act 2005, para 670. See GA 2005, s 235 and Chapter 25 as to the meaning of ‘gaming machine’. See Chapter 25 as to the categories of gaming machine. 7 See Chapter 4. 8 See Chapter 4. 9 See Chapters 4 and 25.

12.2 The exceptions to the offences under ss 33, 37 and 242 – including those arising out of the provisions of Part  12 – are considered in detail elsewhere in this title.1 In these circumstances, it is proposed in this chapter to provide only a summary of the exceptions provided under Part  12 and the associations, premises or entities to which they apply. However, where a disapplication of one or more of ss 33, 37 or 242 is dependent on a permit, commentary on the Act’s provisions as to the procedure for applying for such a permit (including the exercise of the licensing authority’s functions), as well as other matters such as appeals from the licensing authority, maintenance of the permit and its duration, is set out below. 1 For the offences under ss  33 and 37, see GA  2005, Part  3 (ss  33–44) ‘general offences’ and Chapter 4. For the offence under s 242, see Part 10 (ss 235–251) and Chapter 25.

THE ASSOCIATIONS TO WHICH PART 12 APPLIES 12.3 Three main types of association are defined in Part  12 of the Gambling Act 2005: ‘members’ clubs’, ‘commercial clubs’ (which, outside the GA 2005, are sometimes referred to as ‘proprietary clubs’) and ‘miners’ welfare institutes’.

Members’ clubs 12.4

A ‘members’ club’ means a club:

(1) which is established and conducted wholly or mainly for purposes other than the provision of facilities for gaming;1 (2) which is established and conducted for the benefit of its members (and which is not otherwise established or conducted as a commercial enterprise);2 (3) which is not established with the purpose of functioning for only a limited period of time;3 and (4) which has at least 25 individual members.4 1 GA 2005, s 266(1)(a).

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Clubs, pubs and fairs 2 GA 2005, s 266(1)(b). 3 GA 2005, s 266(1)(c). 4 GA 2005, s 266(1)(d).

12.5 However, notwithstanding the requirement that the club must be established and conducted wholly or mainly for purposes other than the provision of facilities for gaming, a club may still be a members’ club if it is established or conducted wholly or mainly for the purpose of the provision of facilities for gaming of a prescribed kind (currently bridge and whist), and facilities are not provided for any other kind of gaming in the course of the club’s activities.1 In any other case, if gaming is the main purpose of the club, that gaming cannot be treated as exempt gaming under s 269 of the GA 2005. Clubs falling into this category include working mens’ clubs, miners’ welfare institutes, branches of the Royal British Legion and clubs with political affiliations. The Gambling Commission advises licensing authorities to take particular care when assessing applications for gaming permits as there have been a number of cases where enforcement action has been taken against illegal poker clubs, operating under the guise of members’ clubs. Authorities in any doubt as to the bona fides of an applicant are advised to contact the Commission, which will offer the appropriate support, advice and any available intelligence. In its Guidance to Licensing Authorities (Sept 2015), the Gambling Commission recommends the application of the following tests to determine a club’s status (paras 25.45 and 25.46): ‘25.45 In determining whether a club is a genuine members’ club, the licensing authority should take account of a number of matters, such as: •

Is the primary purpose of the club’s activities something other than the provision of gaming to its members? This is an indicator that it’s a genuine members’ club.

•

Are the profits retained in the club for the benefit of the members? This is the key difference between a members’ club and a commercial club

•

Are there 25 or more members? This is the amount of members a club has to have to qualify

•

Are there genuine domestic addresses on the register of members? Are domestic addresses listed for every member? Are members local to the club? These are all indicators that the member lists are bona fide and are made up of genuine members

•

Do members participate in the activities of the club via the internet? It is less likely to be a genuine members’ club if this is the case

•

Do guest arrangements link a member to every guest? Is there evidence of a signing-in register for guests? Guests must be genuine guests of members and not members of the general public

•

Is the 48 hour rule between applying for membership and participating in any gaming properly applied? This is an indication that the club has a proper membership scheme 649

Clubs, pubs and fairs •

Are there annual accounts for more than one year? This would indicate that the club is permanent in nature, rather than temporary

•

How is the club advertised and listed in directories, including on the internet? If the club is categorised under ‘gaming’ or ‘poker’, it is less likely to be genuine members’ club

•

What information is provided on the club’s website? This can be a useful source of information about the club.

•

Are children permitted into the club? Appropriate access to the premises by children may indicate that it is less likely that the club is primarily for gambling activities

•

Does the club have a constitution and can it provide evidence that the constitution was approved by the members of the club? This provides further evidence that it is a properly constituted members’ club

•

Is there a list of committee members and evidence of their election by the members of the club? Can the club provide minutes of committee and other meetings? These are further evidence that the club is a properly constituted members’ club.

25.46 The constitution of the club could also indicate whether it is a legitimate members’ club. Amongst the things to consider when examining the constitution are the following:

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•

Who makes commercial decisions on behalf of the club and what are the governance arrangements? Clubs are normally run by a committee made up of members of the club, rather than individuals or managers, who make decisions on behalf of the members. There will normally be a system (consultation, voting, paper ballots, annual general meetings, special meetings, etc) which allows members to be involved in major decisions concerning the management and running of the club. Such arrangements would normally be spelt out in the constitution

•

Are the aims of the club set out in the constitution? A  lack of aim or aims which involve gaming could indicate that it is not a genuine members’ club

•

Are there shareholders or members? Shareholders would indicate a business enterprise linked to a commercial club

•

Is the members’ club permanently established? Clubs can’t be temporary and must be permanent in nature

•

Can people join with annual or quarterly membership? This would indicate that the club is permanent in nature

•

Are there long term membership benefits? This would also indicate that the club is permanent in nature and that it is a genuine members’ club. The benefits of membership would normally be set out in the rules of membership.’

Clubs, pubs and fairs As regards the need to provide ‘substantial’ evidence of activities other than gaming, the same Guidance suggests (at 25.47): ‘•

How many nights is gaming made available? If gaming is available for all or most nights with little other activity, then it is likely that the club is established wholly or mainly for gaming

•

Is the gaming advertised? If gaming is advertised with little or no reference to the other activities of the club, then it is likely that gaming is the main activity of the club and that the gaming is run commercially

•

What are the stakes and prizes offered? The stakes and prizes limits must be complied with. Unlimited stakes and prizes are only available to genuine members’ clubs once a club gaming permit has been granted. If high stakes and prizes are offered, this is also likely to indicate that gaming is one of the main activities of the club

•

Is there evidence of leagues with weekly/monthly/annual winners? This could indicate that the club’s main activity is gaming

•

Is there evidence of non-playing members? If members participate in gaming exclusively, this is an indication that the main or only activity of the club is gaming

•

Are there teaching sessions to promote gaming, such as poker? This could be evidence that the club’s main activity is gaming

•

Is there tie-in with other clubs offering gaming, such as poker, through tournaments or leagues? This is also an indication that gaming is possibly one of the main activities of the club

•

Is there sponsorship by gaming organisations, for example online poker providers? Similarly, this could indicate that poker is one of the main activities of the club

•

Are participation fees within limits? The licensing authority could consider club records and adverts for gaming, etc. Fees that exceed the limits could indicate that the gaming is run commercially.’

Should designated premises supervisors or club officials accept bets on behalf of licensed bookmakers, or facilitate betting through their own telephone accounts, they will be acting as betting intermediaries and acting unlawfully. 1 GA 2005, s 266(2).

Commercial clubs 12.6

A ‘commercial club’ means a club:

(1) which is established and conducted wholly or mainly for purposes other than the provision of facilities for gaming;1 651

Clubs, pubs and fairs (2) which is not established with the purpose of functioning for only a limited period of time;2 and (3) which has at least 25 individual members.3 1 GA 2005, s 267(1)(a). 2 GA 2005, s 267(1)(b). 3 GA 2005, s 267(1)(c).

12.7 However, notwithstanding the requirement that the club must be established and conducted wholly or mainly for purposes other than the provision of facilities for gaming, a club may still be a commercial club if it is established or conducted wholly or mainly for the purpose of the provision of facilities for gaming of a prescribed kind (currently bridge and whist), and facilities are not provided for any other kind of gaming in the course of the club’s activities.1 In any other case, if gaming is the main purpose of the club, that gaming cannot be treated as exempt gaming under s 269 of the GA 2005. Examples of such operations include commercial snooker clubs, clubs established as private companies and clubs established for personal profit. Commercial clubs may only apply for club machine permits. 1 GA 2005, s 267(2).

Miners’ welfare institutes 12.8 In the Gambling Act 2005 a ‘miners’ welfare institute’ means an association established and conducted for social and recreational purposes.1 In addition, it must be either: (1) an association whose affairs are managed by a group of individuals of whom two-thirds are miners’ representatives;2 or (2)

an association which operates on premises the use of which is regulated in accordance with a charitable trust,3 and the trust has received money from: (a) the Miners’ Welfare Fund established by s  20 of the Mining Industry Act 1920,4 (b) the former body corporate which was known as the Coal Industry Social Welfare Organisation and incorporated under the Companies Act 1948,5 or (c) the charitable trust known as the Coal Industry Social Welfare Organisation.6

1 2 3 4 5 6

GA 2005, s 268(1)(a). GA 2005, s 268(1)(b) and (2). GA 2005, s 268(1)(b) and (4)(a). GA 2005, s 268(1)(b), (4)(a) and (4)(b)(i). GA 2005, s 268(1)(b), (4)(a) and (4)(b)(ii). GA 2005, s 268(1)(b), (4)(a) and (4)(b)(iii).

12.9 A  ‘miners representative’ is a person who has been nominated or appointed by a person who employs or has employed individuals in the 652

Clubs, pubs and fairs course of a coal-mining business,1 nominated or appointed by the charitable trust known as the Coal Industry Social Welfare Organisation,2 nominated or appointed by an organisation representing persons who are or were employed in connection with coal mining,3 or who is employed or was is employed in connection with coal mining.4 1 GA 2005, s 268(3)(a). 2 GA 2005, s 268(3)(b). For further details of the services provided by the organisation, see its website at http://ciswo.org/. 3 GA 2005, s 268(3)(c). 4 GA 2005, s 268((3)(d)

PREMISES IN RESPECT OF WHICH AN ‘ON-PREMISES ALCOHOL LICENCE’ HAS EFFECT 12.10 The Licensing Act 2003 defines a ‘premises licence’ as a licence granted under Part 3 of that Act which authorises the premises to be used for one or more of the ‘licensable activities’ of the 2003 Act.1 In the Gambling Act 2005 an ‘alcohol licence’ slightly confusingly means any premises licence granted under Part 3 of the Licensing Act 2003,2 and an ‘on-premises alcohol licence’ means a premises licence under Part 3 of the 2003 Act which authorises the supply of alcohol for consumption on the licensed premises3 and a ‘relevant Scottish licence’, which means a premises licence issued under the Licensing (Scotland) Act 2005, except where such a licence only applies to the sale of alcohol for consumption off the premises.4 The GA 2005, ss 279–284 only apply to premises in respect of which an on-premises alcohol licence (in England and Wales) or a premises licence under the Licensing (Scotland) Act 2005 has been issued – provided that, in the case of Scotland, it is not a licence authorising the sale of alcohol for consumption off the premises only. In either case it is also a requirement that such premises have a bar5 at which alcohol is served, without a requirement that alcohol is served only with food. Accordingly, any hotel, restaurant or pub with a bar can offer gambling under Part 12 of the Act. 1 Licensing Act 2003, s 11. 2 GA 2005, s 277(a). 3 GA 2005, s 277(b). 4 GA 2005, s 277(c), substituted by SSI 2009/248, art 2(1), Sch 1, Pt 1, para 12(1), (6). 5 See 12.29 below.

TRAVELLING FAIRS 12.11 (1)

In the Gambling Act 2005 ‘fair’ means:

a fair consisting wholly or principally of the provision of amusements;1 and

(2) a fair held on a day in a calendar year (not, it should be noted, any 12-month period) is a ‘travelling fair’ if provided wholly or principally by persons who travel from place to place for the purpose of providing fairs, and at a place no part of which has been used for the provision 653

Clubs, pubs and fairs of a fair on more than 27 days in that calendar year.2 The Commission recommends that authorities should therefore monitor the use of land and maintain a record of the dates on which it is used.3 The Act does not change the principles on which travelling fairs have been regulated under previous legislation. Travelling fairs may provide an unlimited number of Category D  gaming machines provided that facilities for gambling amount to no more than an ancillary amusement at the fair. Higher stake Category B  and C  fruit machines are not permitted.4 Equal chance prize gaming may be provided at travelling fairs provided the gaming satisfies the conditions specified in GA 2005, s 293 and provided the facilities for gambling amount to no more than an ancillary amusement at the fair.5. 1 GA 2005, s 286(a). 2 GA 2005, s 286(b). 3 Local authorities in England and Wales may adopt by laws to control travelling fairs under a discretionary power set out in the Public Health Act 1961, s  75, as amended. In Scotland travelling fairs are licensed by the Civic Government (Scotland) Act 1982. 4 GA 2005, s 287. 5 GA 2005, s 292. See 2.40 below.

EQUAL CHANCE GAMING BY SOME ASSOCIATIONS Which offence-creating sections of the GA 2005 are disapplied? 12.12 Subject to conditions for the gaming,1 and with the caveat that the disapplication does not extend to ‘high turnover bingo’ played during a ‘high turnover period’,2 s  269 of the Gambling Act 2005 disapplies s  33 (the offence of providing facilities for gambling)3 and s  37 (the offence of using premises, or causing or using premises to be used for certain forms of gambling activity)4 to the provision of facilities for equal chance gaming5 by the following associations: (1) a members’ club;6 (2) a commercial club;7 (3) a club that would be a members’ club but for the requirement that a members’ club is established and conducted wholly or mainly for purposes other than the provision of facilities for gaming; (4) a club that would be a commercial club but for the requirement that a commercial club is established and conducted wholly or mainly for purposes other than the provision of facilities for gaming; or (5) a miners’ welfare institute.8 1 For the conditions, see GA 2005, ss 269(2)–(6), 270(2)–(6) and Chapter 4. 2 GA 2005, s 275; see 12.15–12.18. 3 See Chapter 4.

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Clubs, pubs and fairs 4 See Chapter 4. 5 See GA 2005, s 8 and Chapter 2 for the meaning of ‘equal chance gaming’. Broadly it is gaming that does not involve staking against a bank and the chances of winning are equally favourable to all participants. It includes games such as backgammon, mah-jong, rummy, kalooki, dominoes, cribbage, bingo and poker. 6 GA 2005, s 269(1)(a); and see s 266 and 12.4–12.5 for the meaning of ‘members’ club’. 7 GA 2005, s 269(1)(b); and see s 267 and 12.6–12.7 for the meaning of ‘commercial club’. 8 GA  2005, s  269(1)(e); and see s  268 and 12.8–12.9 for the meaning of ‘miners’ welfare institute’.

12.13 Under s 269 the provision of facilities by these associations includes the provision of facilities made by, or by arrangement with, the association and in the course of its activities.1 1 GA 2005, ss 269(1) and 270(1).

12.14 The disapplication by s 269 of ss 33 and 37 applies only if the equal chance gaming provided satisfies each of the five conditions set out in the section. Supplementary provisions relating to the five conditions are contained in s 270. The five conditions are: (i) the arrangements for the gaming must satisfy the prescribed requirements (if any) in relation to – (a) amounts that may be staked, or (b) the amount or value of a prize;1 (ii) no amount may be deducted or levied from sums staked or won; (iii) any participation fee2 must not exceed such maximum as may be prescribed; (iv) a game played on one set of premises may not be linked with a game played on another set of premises; and (v) except in the case of a commercial club, or a club that would be a commercial club but for s  267(1)(a) each person who participates in the gaming must be (a) a member of the club or institute who applied for membership, was nominated for membership or became a member, at least 48 hours before he participates, or (b) must be a guest of a member of the club or institute who would satisfy the above requirement. 1 For the different higher stakes and prizes allowed for exempt gaming in clubs compared with those allowed in alcohol-licensed premises, see SI  2007/1944: Gambling Act 2005 (Exempt Gaming in Clubs) Regulations 2007 and the Commission’s ‘Gambling Codes of Practice – Consolidated for all forms of Gambling’, which incorporates the Code of Practice for gaming in clubs and premises with an alcohol licence. The limits are set out in Appendix C  to the Consolidated Guidance. 2 Although clubs may charge a levy for participation in equal chance gaming under the exempt gaming rules, the amount they may charge is as prescribed in SI 2007/1944: Gambling Act 2005 (Exempt Gaming in Clubs) Regulations 2007.

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Clubs, pubs and fairs

High turnover bingo 12.15 If an association of one of the five kinds specified in 12.12 above wants to provide facilities for playing bingo with high stakes and/or valuable prizes on a regular basis it will need to apply to the Gambling Commission for a bingo operating licence under Part 5 of the Gambling Act 2005,1 since it cannot offer facilities for ‘high turnover bingo’ during a ‘high turnover period’ under the Act’s provisions which exempt equal chance gaming by some associations. This is because the offence of providing facilities for gambling under s 33 is not disapplied by virtue of the exemption in the case of the provision of facilities for high turnover bingo during a high turnover period.2 1 See GA 2005, s 65(2)(b) for the meaning of ‘bingo operating licences’ and Chapter 6 for operating licences generally. 2 GA 2005, s 275(1).

12.16 ‘High turnover bingo’ is defined as bingo played in the course of the activities of a club or institute in any period of seven days where: (1) the aggregate of the stakes at bingo played during the period in the course of the activities of the club or institute exceeds £2,000;1 or (2) the aggregate of prizes at bingo played during the period in the course of the activities of the club or institute exceeds £2,000.2 1 GA 2005, s 275(2)(a). The Secretary of State may by order vary a monetary amount specified by s 275: s 275(9). 2 GA 2005, s 275(2)(b).

12.17 If a club or institute does not have a bingo operating licence but bingo is played by virtue of the Act’s provisions which exempt equal chance gaming by associations of the five kinds described above, the first occasion on which the bingo is played in the course of the activities of the association does not of itself constitute an offence, but triggers the onset of a ‘high turnover period’. The high turnover period begins at the end of the sevenday period during which the bingo played in the course of the activities of the club or institute meets the Act’s definition of ‘high turnover bingo’,1 and expires at the end of one year from the beginning of the seven-day period when the bingo played in the course of the activities of the club or institute met the Act’s definition of ‘high turnover bingo’.2 Although a further period of high turnover bingo which falls wholly or partly within a high turnover period does not cause a new high turnover period to begin,3 the offence under s 33 is thereby committed.4 1 2 3 4

GA 2005, s 275(3). GA 2005, s 275(4). GA 2005, s 275(5). GA 2005, s 275(1).

12.18 To ensure that the Gambling Commission is aware that the bingo being played at a club or institute is being played during a high turnover period, the Act requires clubs and institutes in relation to which a high turnover begins to inform the Commission as soon as is reasonably practicable 656

Clubs, pubs and fairs (unless, of course, a bingo operating licence is held).1 A club or institute which fails to comply with this obligation to inform the Commission is guilty of an offence,2 and is liable on summary conviction to a fine not exceeding level 3 on the standard scale.3 1 GA 2005, s 275(6). 2 GA 2005, s 275(7). 3 GA 2005, s 275(8).

CLUB GAMING PERMITS Which offence-creating sections of the GA 2005 are disapplied? 12.19 With the caveat that the disapplication of s  33 does not extend to the provision of facilities for ‘high turnover bingo’ played during a ‘high turnover period’,1 s  33 (the offence of providing facilities for gambling),2 s 37 (the offence of using premises, or causing or using premises to be used for certain forms of gambling activity)3 and s 242 (the offence of making a gaming machine available for use by another) 4 do not apply to the provision of facilities for certain forms of gaming in accordance with a club gaming permit5 if the provision of those facilities is on premises where the following associations operate and in the course of their activities: (1) a members’ club;6 or (2) a miners’ welfare institute.7 1 2 3 4 5 6 7

GA 2005, s 275; and see 12.21–12.24. See Chapter 4. See Chapter 4. See Chapter 25. GA 2005, s 271(1). GA 2005, s 271(2); and see s 266 and 12.4–12.5 for the meaning of ‘members’ club’. GA 2005, s 271(2); and see s 268 and 12.8–12.9 for the meaning of ‘miners’ welfare institute’.

12.20 Subject to conditions for club gaming permits generally,1 club gaming permits authorise: (1) making up to three gaming machines available for use (each of which must be Category B, C or D);2 (2) the provision of facilities for gaming3 (subject to specific conditions for the gaming) which satisfies the conditions in s 269 except for the first condition;4 and (3) the provision of facilities for games of chance5 (subject to specific conditions for the games of chance).6 The specific conditions for games of chance referred to above are set out in s 271(4) as supplemented by the provisions of s 272. They are as follows: (i)

no participation fee may be charged otherwise than in accordance with regulations (which may make provision about the circumstances in which a fee may be charged and about the amount of the fee); 657

Clubs, pubs and fairs (ii) no amount may be deducted or levied from sums staked or won otherwise than in accordance with regulations (which may make provision about the circumstances in which an amount may be deducted or levied, about the amount of the deduction or levy and about the method by which the amount is determined); (iii) the public must be excluded from any area of the club’s or institute’s premises where gaming is taking place; and (iv) children and young persons must be excluded from the area of the club’s or institute’s premises where gaming is taking place. 1 For the conditions for club gaming permits generally, see GA 2005, s 271(6) and (7), s 272(4) and Chapter 4. 2 GA 2005, s 271(3)(a). See s 235 and Chapter 25 for the meaning of ‘gaming machine’; and see s 236, regulations made thereunder, and Chapter 25 for the categorisation of gaming machines. 3 GA 2005, s 271(3)(b). 4 For the conditions for the gaming, see GA 2005, s 269(3)–(6), s 270(3)–(6) as applied by s 271(3)(b) and Chapter 4. 5 GA 2005, s 271(3)(c). Games of chance are prescribed by Gambling Act 2005 (Club Gaming Permits) (Authorised Gaming) Regulations 2007 (SI 2007/1945), namely pontoon and chemin de fer. 6 For the conditions for the games of chance, see GA 2005, s 271(4), (5), s 272(1)–(3) and Chapter 4.

High turnover bingo 12.21 If a members’ club or a miners’ welfare institute wants to provide facilities for playing bingo with high stakes and/or valuable prizes on a regular basis, it will need to apply to the Gambling Commission for a bingo operating licence under Part 5 of the Gambling Act 2005,1 since it cannot offer facilities for ‘high turnover bingo’ during a ‘high turnover period’ under the authority of a club gaming permit. This is because the offence of providing facilities for gambling under s 33 is not disapplied by virtue of a club gaming permit in the case of the provision of facilities for high turnover bingo during a high turnover period.2 1 See GA 2005, s 65(2)(b) for the meaning of ‘bingo operating licences’ and Chapter 6 for operating licences generally. 2 GA 2005, s 275(1).

12.22 ‘High turnover bingo’ is defined as bingo played in the course of the activities of a club or institute in any period of seven days where: (1) the aggregate of the stakes at bingo played during the period in the course of the activities of the club or institute exceeds £2,000;1 or (2) the aggregate of prizes at bingo played during the period in the course of the activities of the club or institute exceeds £2,000.2 1 GA 2005, s 275(2)(a). The Secretary of State may by order vary a monetary amount specified by s 275: s 275(9). 2 GA 2005, s 275(2)(b).

658

Clubs, pubs and fairs 12.23 If a club or institute does not have a bingo operating licence, but bingo is played under the authority of a club gaming permit, the first occasion on which the bingo is played in the course of the activities of a club or institute does not of itself constitute an offence, but triggers the onset of a ‘high turnover period’. The high turnover period begins at the end of the seven-day period during which the bingo played in the course of the activities of the club or institute meets the Act’s definition of ‘high turnover bingo’,1 and expires at the end of one year from the beginning of the seven-day period when the bingo played in the course of the activities of the club or institute met the Act’s definition of ‘high turnover bingo’.2 Although a further period of high turnover bingo which falls wholly or partly within a high turnover period does not cause a new high turnover period to begin, 3 the offence under s  33 is thereby committed.4 1 2 3 4

GA 2005, s 275(3). GA 2005, s 275(4). GA 2005, s 275(5). GA 2005, s 275(1).

12.24 To ensure that the Gambling Commission is aware that the bingo being played at a club or institute is being played during a high turnover period, the Act requires clubs and institutes in relation to which a high turnover begins to inform the Commission as soon as is reasonably practicable (unless, of course, a bingo operating licence is held).1 A club or institute which fails to comply with this obligation to inform the Commission is guilty of an offence,2 and is liable on summary conviction to a fine not exceeding level 3 on the standard scale.3 1 GA 2005, s 275(6). 2 GA 2005, s 275(7). 3 GA 2005, s 275(8).

Applications for club gaming permits 12.25 The procedure for applications for club gaming permits is set out in GA  2005, Sch  12.1 Save that the potential applicants for club gaming ­permits are restricted to members’ clubs2 and miners’ welfare institutes,3 Sch 12 also applies to club machine permits (which allows for applications by commercial clubs4 as well as by members’ clubs and miners’ welfare institutes). Commentary on the provisions of Sch 12 is set out at 12.41–12.71 below. 1 GA 2005, s 274 and Sch 12. 2 GA 2005, Sch 12, para 1(1); and see s 266 and 12.4–12.5 for the meaning of ‘members’ club’. 3 GA 2005, Sch 12, para 1(1); and see s 268 and 12.8–12.9 for the meaning of ‘miners’ welfare institute’. 4 GA  2005, Sch  12, para  1(2); and see s  267 and 12.6–12.7 for the meaning of ‘commercial club’.

659

Clubs, pubs and fairs

CLUB MACHINE PERMITS Which offence-creating sections of the GA 2005 are disapplied? 12.26 Section 37 (the offence of using premises, or causing or permitting premises to be used for certain forms of gambling activity) 1 and s 242 (the offence of making a gaming machine available for use by another) 2 do not apply to making a gaming machine available in accordance with a club machine permit3 if it is made available on premises where the following associations operate and in the course of their activities: (1) a members’ club;4 (2) a commercial club;5 or (3) a miners’ welfare institute.6 1 2 3 4 5

See Chapter 4. See Chapter 25. GA 2005, s 273(1). GA 2005, s 273(2); and see s 266 and 12.4–12.5 for the meaning of ‘members’ club’. GA  2005, s  273(2); and see s  267 and 12.6–12.7 for the meaning of ‘commercial club’. 6 GA 2005, s 273(2); and see s 268 and 12.8–12.9 for the meaning of ‘miners’ welfare institute’.

12.27 Subject to conditions,1 club machine permits authorise making up to three gaming machines available for use (each of which must be Category B, C or D).2 The conditions imposed upon permits are contained in s 273(3)–(5). Some conditions apply to all club machine permits. Some conditions apply only to a club machine permit issued to a members’ club or a miners’ welfare institute. The conditions which apply to all permits are as follows: (i) no child or young person may use a Category B or C gaming machine on the club’s or institute’s premises; and (ii) the holder of the permit must comply with any relevant provision or code of practice under s 24 about the location and operation of a gaming machine. The condition which applies to a permit issued to a members’ club or a miners’ welfare institute is: (iii) each person to whom a machine is made available for use in reliance on the permit must be (a) a member of the club or institute who applied for membership, was nominated for membership or became a member, at least 48 hours before he uses the machine, or (b) a guest of a member of the club or institute who would qualify under the above requirements. A person is not to be treated as the guest of a member if the member extends an invitation (a) having had no previous acquaintance with the person, and (b) for the purpose only of enabling the person to take advantage of facilities of the gaming (s 273(5)). 1 For the conditions for club machine permits, see GA  2005, ss  273(3)–(5) and Chapter 4.

660

Clubs, pubs and fairs 2 GA 2005, s 273(2). See s 235 and Chapter 25 for the meaning of ‘gaming machine’ and see s 236, regulations made thereunder, and Chapter 25 for the categorisation of gaming machines.

Applications for club machine permits 12.28 The procedure for applications for club machine permits is set out in Sch  12 of the Gambling Act.1 Save that the potential applicants for club machine permits include commercial clubs,2 as well as members’ clubs3 and miners’ welfare institutes,4 Sch 12 also applies to club gaming permits (but restricts applications to members’ clubs and, miners’ welfare institutes). Commentary on the provisions of Sch 12 is set out at 12.41–12.71 below. 1 GA 2005, s 274, Sch 12. 2 GA  2005, Sch  12, para  1(2); and see s  267 and 12.6–12.7 for the meaning of ‘commercial club’. 3 GA 2005, Sch 12, para 1(2); and see s 266 and 12.4–12.5 for the meaning of ‘members’ club’. 4 GA 2005, Sch 12, para 1(2); and see s 268 and 12.8–12.9 for the meaning of ‘miners’ welfare institute’.

EXEMPT GAMING BY SOME PREMISES IN RESPECT OF WHICH AN ON-PREMISES ALCOHOL LICENCE HAS EFFECT Which offence-creating sections of the GA 2005 are disapplied? 12.29 With the caveat that the disapplication does not extend to ‘high turnover bingo’ played during a ‘high turnover period’,1 s 33 (the offence of providing facilities for gambling)2 and s 37 (the offence of using premises, or causing or using premises to be used for certain forms of gambling activity)3 do not apply to the provision of facilities for equal chance gaming on premises to which s 279 applies4 and which satisfy the conditions of that section.5 A  fee may not be levied for participation in the equal chance gaming offered by an alcohol-licensed premises under the exempt gaming rules. A  compulsory charge, such as charging for a meal, may constitute a participation fee, depending on the particular circumstances. 1 2 3 4 5

GA 2005, s 281; see 12.31–12.34 below. See Chapter 4. See Chapter 4. GA 2005, s 279(1)(a). GA 2005, s 279(1)(b).

12.30 Section 279 applies to premises (other than a vehicle) in respect of which an on-premises alcohol licence has effect,1 which contain a bar at which alcohol is served for consumption on the premises (without a requirement that alcohol is served only with food),2 and at a time when alcohol may be supplied in reliance on the alcohol licence.3 1 GA 2005, s 278(1)(a). See s 277(a) and (b) and 12.10 above for the meaning of ‘onpremises alcohol licence’.

661

Clubs, pubs and fairs 2 GA 2005, s 278(1)(b), 3 GA 2005, s 278(1)(c).

High turnover bingo 12.31 If facilities are to be provided on premises to which s  279 applies (ie  some premises in respect of which an on-premises alcohol licence or relevant Scottish licence has effect) for playing bingo with high stakes and/or valuable prizes on a regular basis, an application to the Gambling Commission for a bingo operating licence under Part 5 of the Gambling Act 20051 is required, since facilities for ‘high turnover bingo’ during a ‘high turnover period’ cannot be provided under the Act’s provisions which create an exemption for equal chance gaming by some premises in respect of which an on-premises alcohol licence has effect. This is because the offence of providing facilities for gambling under s  33 is not disapplied by virtue of the exemption in the case of the provision of facilities for high turnover bingo during a high turnover period.2 1 See GA 2005, s 65(2)(b) for the meaning of ‘bingo operating licences’ and Chapter 6 for operating licences generally. 2 GA 2005, s 275(1).

12.32 ‘High turnover bingo’ is defined as bingo played on premises in any period of seven days where: (1) the aggregate of the stakes at bingo played on the premises during the period exceeds £2,000;1 or (2) the aggregate of prizes at bingo played on the premises during the period exceeds £2,000.2 1 GA 2005, s 275(2)(a). The Secretary of State may by order vary a monetary amount specified by s 275: s 275(9). 2 GA 2005, s 275(2)(b).

12.33 If the holder of the on-premises alcohol licence for premises to which s 279 applies (ie some premises in respect of which an on-premises alcohol licence has effect) does not hold a bingo operating licence, but bingo is played on the premises by virtue of s 279’s provisions which exempt equal chance gaming on some premises in respect of which an on-premises alcohol licence has effect, the first occasion on which the high turnover bingo is played on the premises does not of itself constitute an offence, but triggers the onset of a ‘high turnover period’. The high turnover period begins at the end of the seven-day period during which the bingo played in the course of the activities of the club or institute meets the Act’s definition of ‘high turnover bingo’1 and expires at the end of one year from the beginning of the sevenday period when the bingo played in the course of the activities of the club or institute met the Act’s definition of ‘high turnover bingo’.2 Although a further period of high turnover bingo which falls wholly or partly within a high turnover period does not cause a new high turnover period to begin,3 the offence under s 33 is thereby committed.4 1 GA 2005, s 275(3).

662

Clubs, pubs and fairs 2 GA 2005, s 275(4). 3 GA 2005, s 275(5). 4 GA 2005, s 275(1).

12.34 To ensure that the Gambling Commission is aware that the bingo being played at a club or institute is being played during a high turnover period, the Act requires clubs and institutes in relation to which a high turnover begins to inform the Commission as soon as is reasonably practicable (unless, of course, a bingo operating licence is held).1 A club or institute which fails to comply with this obligation to inform the Commission of a high turnover period is guilty of an offence,2 and is liable on summary conviction to a fine not exceeding level 3 on the standard scale.3 The Commission has issued a code of practice4 under the GA 2005, s 24 in respect of exempt equal chance gaming. The code of practice requires owners/licensees to adopt good practice measures for the provision of gaming in general and poker in particular. The code also sets out the stakes and prizes limits laid out in regulations. 1 2 3 4

GA 2005, s 275(6). GA 2005, s 275(7). GA 2005, s 275(8). Code of Practice for Equal Chance Gaming in Clubs and Premises with an Alcohol Licence.

12.34A Gambling Commission v GK (Gambling: Other)1 concerned an appeal by the Gambling Commission against an order of the First-tier Tribunal, which had reversed an earlier refusal by the Commission. Upper Tribunal Judge H  Levenson set aside the decision(s) of the First-tier Tribunal2 and referred the matter(s) to a completely differently constituted panel in the General Regulatory Chamber of the First-tier Tribunal. The original reasoning of the First-tier Tribunal had been that, having accepted that Greene King was suitable and competent for the relevant purposes, the Commission had in reality refused the applications because of its concerns about premises. As Judge Warren had stated in para 31 of his decision: ‘… but here in my judgment they were trespassing on territory which the Act assigns to licensing authorities … the Commission’s purpose in refusing the applications, and indeed the only justification for doing so, is to prevent Greene King from applying for a premises licence’. The Upper Tribunal took a different view, holding that: ‘The combined effect of sections 1(c) (paragraph  15 above), 22 (paragraph  14 above) and 70(1)(a) (paragraph  22 above) is really to place on the Commission the main responsibility for ensuring compliance with the licensing objectives and, in particular, the protection of vulnerable persons (as referred to in the section 23 statement – see paragraph 29 above). The provisions of sections 159(3) (paragraph  27 above) and 169(4) (paragraph  28 above) make it clear that primacy is to be given to the decisions of the Commission on whether to grant an operating licence. In light of these provisions, it cannot really be the case that when such matters are at issue the legislation, having established the Commission and detailed its responsibilities, then requires the Commission to step back in individual applications and let the multitude of local licensing 663

Clubs, pubs and fairs authorities deal with these national policy issues on a case by case basis. Neither can it be the case that in pursuit of such national policy objectives the Commission is required to conduct some kind of guerrilla warfare in each separate locality. That would run the risk of undermining the kind of approach approved in the Gibraltar case (paragraph  52 above) and of not controlling betting activities in a “consistent and systematic matter”.’ 1 [2016] UKUT 50 (AAC). 2 Made on 8 December 2014 under references GA/2014/0001 and 0002.

GAMING MACHINES – AUTOMATIC ENTITLEMENT OF SOME PREMISES IN RESPECT OF WHICH AN ONPREMISES ALCOHOL LICENCE HAS EFFECT Which offence-creating sections of the GA 2005 are disapplied? 12.35 An automatic entitlement to make one or two machines available arises under the Gambling Act 2005 for some premises in respect of which a premises licence under the Licensing Act 2003 has effect.1 Subject to the satisfaction of conditions specified in the 2005 Act,2 s  37 (the offence of using premises, or causing or using premises to be used for certain forms of gambling activity)3 and s 242 (the offence of making a gaming machine available for use by another)4 do not apply to making one or two gaming machines, each of which is of Category C or D,5 available for use on premises (other than vehicles) in respect of which an on-premises alcohol licence or relevant Scottish licence has effect,6 which contain a bar at which alcohol is served for consumption on the premises (without a requirement that alcohol is served only with food),7 and at a time when alcohol may be supplied in reliance on the alcohol licence.8 There are two conditions which must be complied with contained in s 282(2) and (3). These are: (i)

the person who holds the on-premises alcohol licence or the relevant Scottish licence must send the licensing authority (a) written notice of his intention to make gaming machines available for use in reliance on the section, and (b) the prescribed fee; and

(ii) any relevant provision of a code of practice under s 24 about the location and operation of a gaming machine must be complied with. There is no requirement to stipulate whether the alcohol licensed premises intends to site Category C  or D  or one of each category, nor is there any statutory requirement for pubs and other alcohol-licensed premises to display a notice of their automatic entitlement to gaming machines. 1 2 3 4 5

GA 2005, s 282. See GA 2005, s 282(2) and (3) and Chapter 4. See Chapter 4. See Chapter 25. See GA  2005, s  235 and Chapter  25 for the meaning of ‘gaming machine’ and see s 236, regulations made thereunder, and Chapter 25 for the categorisation of gaming machines.

664

Clubs, pubs and fairs 6 GA 2005, s 278(1)(a). ‘Alcohol licence’ means (s 277(a)) a premises licence under LA 2003, Pt 3 and ‘on-premises alcohol licence’ means (s 277(b)) a premises licence under LA 2003, Pt 3 which authorises the supply of alcohol for consumption on the licensed premises. A ‘relevant Scottish licence’ means a premises licence issued under the Licensing (Scotland) Act 2005, except where such a licence only applies to the sale of alcohol for consumption off the premises (s 277(c)). 7 GA 2005, s 278(1)(b). 8 GA 2005, s 278(1)(c).

12.36 Under these provisions neither s 37 nor s 242 of the Gambling Act 2005 is disapplied in respect of premises at a time when gaming machines are made available for use on the premises in reliance on a club gaming permit or a club machine permit.1 1 GA  2005, s  282(4). See 12.19–12.25 for ‘club gaming permit’ and 12.26–12.28 for ‘club machine permit’.

LICENSED PREMISES GAMING MACHINE PERMITS Which offence-creating sections of the GA 2005 are disapplied? 12.37 A  person who applies to a licensing authority in its capacity as a licensing authority under the Licensing Act 2003 for an on-premises alcohol licence or a person who holds an on-premises alcohol licence issued by a licensing authority (in its capacity as a licensing authority under the 2003 Act) may apply to that licensing authority (in its capacity as a licensing authority under the Gambling Act 2005) for a licensed premises gaming machine permit.1 Licensing authorities may consider applications for licensed premises gaming machine permits for any number of Category C  or D  machines in licensed premises. The application does not require notification to the Commission or police before determination, however, licensing authorities are able to specify this as a requirement should they see fit. The licensing authority may grant or refuse an application. In granting the application, it may vary the number and category of gaming machines authorised by the permit. The licensing authority must not refuse an application, or grant it for a different number or category of machines, unless they have notified the applicant of their intention to do so and given the applicant an opportunity to make representations, orally, in writing, or both. Subject to the satisfaction of a condition specified in the Gambling Act 2005,2 s 37 (the offence of using premises, or causing or using premises to be used for certain forms of gambling activity)3 and s 242 (the offence of making a gaming machine available for use by another)4 do not apply to making one or two gaming machines (each of which is Category C or D)5 available for use in accordance with a club machine permit6 on premises (other than vehicles) in respect of which an on-premises alcohol licence has effect,7 which contain a bar at which alcohol is served for consumption on the premises (without a requirement that alcohol is served only with food),8 and at a time when alcohol may be supplied in reliance on the alcohol licence.9 Any permit granted by a licensing authority will be subject to a condition that the holder complies with any relevant provision of the code of practice 665

Clubs, pubs and fairs under s  24 about the location and operation of the gaming machine: see s  283(3). Where a permit authorises the making available of a specified number of gaming machines in particular premises, this will effectively replace, and not be in addition to, any automatic entitlement to two machines under the Gambling Act 2005, s 282. The permit holder must keep the permit on the premises and it must be produced on request for inspection by a constable, enforcement officer or local authority officer. Not to do so is an offence. If the permit is lost, stolen or damaged, the holder may apply to the issuing authority for a copy, accompanied by the prescribed fee. The holder may apply to vary the permit by changing the number and/or category of machines authorised by it. The Gambling Commission publishes practical guidance to licensing authorities. The Guidance points out that it is a legal requirement that the gaming machine category is clearly labelled on the body of the cabinet. Genuine skill with prizes machines (SWPs) can be sited without permissions. However, the Gambling Commission considers that the higher the payout offered by this type of machine, the less likely the machine will be viable (or, perhaps, regarded) as a genuine skill machine simply because of the risk that very skilful players will win the top prize too frequently to make the machine commercially viable. The Commission’s advice note Is a prize machine a gaming machine?10 provides further information including a flow diagram to help determine whether a prize machine is a gaming machine. Under the Gambling Act 2005, s 317 an authorised person may ‘remove and retain anything if he reasonably believes that it is being used or has been used in the commission of an offence under this Act’. This power has been used by a licensing authority to seize suspected illegal machines.   1 GA 2005, Sch 13(1).   2 See GA 2005, s 283(3) and Chapter 4.   3 See Chapter 4.   4 See Chapter 25.   5 See GA  2005, s  235 and Chapter  25 for the meaning of ‘gaming machine’; and see s 236, regulations made thereunder, and Chapter 25 for the categorisation of gaming machines.   6 GA 2005, s 273(1).   7 GA 2005, s 278(1)(a). ‘Alcohol licence’ means (s 277(a)) a premises licence under LA 2003, Pt 3, and ‘on-premises alcohol licence’ means (s 277(b)) a premises licence under LA 2003, Pt 3 which authorises the supply of alcohol for consumption on the licensed premises.   8 GA 2005, s 278(1)(b).   9 GA 2005, s 278(1)(c). 10 Published in July 2010.

12.38 Under these provisions neither s 37 nor s 242 of the Gambling Act 2005 is disapplied in respect of premises at a time when gaming machines are made available for use on the premises in reliance on a club gaming permit or a club machine permit.1 1 GA  2005, s  283(4). See 12.19–12.25 for ‘club gaming permit’ and 12.26–12.28 for ‘club machine permit’.

666

Clubs, pubs and fairs

Applications for licensed premises gaming machine permits 12.39 The procedure for applications for licensed premises gaming machine permits is set out in Sch 13 of the Gambling Act.1 A more detailed commentary on the provisions of Sch 13 is set out at 12.72–12.100 below. 1 GA 2005, s 274 and Sch 12.

GAMING MACHINES AT TRAVELLING FAIRS Which offence-creating sections of the GA 2005 are disapplied? 12.40 A  person does not commit an offence under s  37 (the offence of using premises, or causing or using premises to be used for certain forms of gambling activity)1 or s  242 (the offence of making a gaming machine available for use by another)2 of the Gambling Act 2005 if: (1)

he makes one or more Category D gaming machines available for use at a travelling fair;3 and

(2) facilities for gambling (whether by way of gaming machine or otherwise) amount together to no more than an ancillary amusement at the fair. 1 See Chapter 4. 2 See Chapter 25. 3 GA 2005, s 287(a). See s 235 and Chapter 25 for the meaning of ‘gaming machine’ and see s 236, regulations made thereunder, and Chapter 25 for the categorisation of gaming machines. See s 286 and 12.11 above for the meaning of ‘travelling fair’.

SCHEDULE 12 – CLUB GAMING PERMITS AND CLUB MACHINE PERMITS Introduction 12.41 Schedule 12 makes provision for the grant of club gaming permits and club machine permits. The statutory provisions are discussed below. In addition the Gambling Commission has given guidance about these matters to licensing authorities in its Revised Guidance to Licensing Authorities (5th edn, September 2015). Schedule 12 provides that: (1) a members’ club1 or miners’ welfare institute2 may apply to a licensing authority3 for a club gaming permit;4 and (2) a members’ club, a commercial club5 or miners’ welfare institute may apply to a licensing authority for a club machine permit.6 1 GA 2005, s 273(2); and see s 266 and 12.4–12.5 for the meaning of ‘members’ club’. 2 GA 2005, s 273(2); and see s 268 and 12.8–12.9 for the meaning of ‘miners’ welfare institute’. 3 For the meaning of ‘licensing authority’, see GA 2005, s 2 and Chapter 9.

667

Clubs, pubs and fairs 4 For the meaning of ‘club gaming permit’, see GA 2005, s 271(2). 5 GA  2005, s  273(2); and see s  267 and 12.6–12.7 for the meaning of ‘commercial club’. 6 For the meaning of ‘club machine permit’, see GA 2005, s 273(2).

Applying for a club gaming permit or a club machine permit 12.42

The application for a permit must:

(1) be made to a licensing authority in whose area the premises are wholly or partly situated;1 (2) specify the premises in relation to which the permit is sought;2 (3) be made in the prescribed form and manner;3 (4) contain or be accompanied by the prescribed information and documents;4 and (5) be accompanied by the prescribed fee.5 1 GA 2005, Sch 12, para 2(a). 2 GA  2005, Sch  12, para  2(b). Under the GA  2005, ‘premises’ includes any place and, in particular, a vessel and a vehicle: s 353(1). A club gaming permit or club machine permit may not, however, be issued in respect of a vehicle or vessel (or part of a vehicle or vessel): Sch 12, para 29. 3 GA 2005, Sch 12, para 2(c). In Sch 12, ‘prescribed’ means prescribed by the Secretary of State by regulations: para 30. 4 GA 2005, Sch 12, para 2(d). 5 GA 2005, Sch 12, para 2(e).

12.43 A club or institute making an application for a permit under Sch 12 must within the prescribed time send a copy of the application and of any accompanying documents to the Gambling Commission and to the chief officer of police for any police area in which the premises are wholly or partly situated.1 This is an important requirement, since a failure to comply means that the application – and any permit issued in response to it – has no effect.2 The Gambling Commission and a chief officer of police who receives a copy of an application for a permit may object to the application within the prescribed period of time and in the prescribed manner.3 1 GA 2005, Sch 12, para 3(1). In Sch 12 ‘prescribed’ means prescribed by the Secretary of State by regulations: para 30. 2 GA 2005, Sch 12, para 3(2). 3 GA 2005, Sch 12, para 4.

12.44 Paragraph 27 of Sch 12 provides that, in exercising a function under Sch  12, a licensing authority must have regard to any relevant guidance issued by the Gambling Commission under s  25 of the Gambling Act 20051 and, subject to that guidance, the licensing objectives.2 The licensing ­authority to whom the application for a club gaming permit or club machine permit is made must consider the application and either grant it or refuse it.3 The authority has no power to attach conditions to a permit (paragraph 8(2)). A licensing authority may refuse an application for a permit only on one or more of the following grounds (having regard to the matters mentioned in para 27 as to the exercise of its functions): 668

Clubs, pubs and fairs (1) In the case of an application for a club gaming permit, the licensing authority must refuse the application if it is satisfied that the applicant is not a members’ club or a miners’ welfare institute.4 (2) In the case of an application for a club machine permit, the licensing authority must refuse the application if it is satisfied that the applicant is not a members’ club, a commercial club or a miners’ welfare institute.5 (3) The licensing authority must refuse the application if it is satisfied that the premises on which the applicant conducts its activities are used wholly or mainly by children, by young persons or both.6 (4) The licensing authority may refuse an application on the ground that an offence, or a breach of a condition of a permit, has been committed in the course of gaming activities carried on by the applicant.7 The reference to breach of a condition of a permit must, it is suggested, be to a permit other than a club gaming permit since there is no power to attach conditions to such a permit; (5) The licensing authority may refuse an application on the ground that a permit held by the applicant has been cancelled during the period of ten years ending with the date of the application.8 (6) The licensing authority may refuse an application on the ground that an objection has been made by the Gambling Commission or by a chief officer of police.9 1 GA 2005, Sch 12, para 27(a). For the ‘Gambling Commission’, see GA 2005, Pt 2 (ss 20–32) and Chapter 3. 2 GA 2005, Sch 12, para 27(b). For the ‘licensing objectives’, see s 1 and Chapter 1. 3 GA 2005, Sch 12, para 5. 4 GA 2005, Sch 12, para 6(1)(a)(i) and (2). 5 GA 2005, Sch 12, para 6(1)(a)(ii) and (2). 6 GA 2005, Sch 12, para 6(1)(b) and (2). 7 GA 2005, Sch 12, para 6(1)(c). 8 GA 2005, Sch 12, para 6(1)(d). 9 GA 2005, Sch 12, para 6(1)(e).

12.45 In general, a licensing authority must hold a hearing to consider the application and any objection made by the Gambling Commission or by a chief officer of police before refusing an application.1 However, a licensing authority may dispense with the requirement for a hearing with the consent of the applicant and any person who has made (and not withdrawn) an objection.2 1 GA 2005, Sch 12, para 7(1). 2 GA 2005, Sch 12, para 7(2).

12.46 Where licensing authorities grant an application for a permit, they must as soon as reasonably practicable give notice of their decision and, where an objection was made, of the reasons for it to the applicant, the Gambling Commission and the chief officer of police for any area in which the premises specified in the application are wholly or partly situated,1 and issue the permit to the applicant.2  A  licensing authority may not attach conditions to a club gaming permit or a club machine permit.3 1 GA 2005, Sch 12, para 8(1)(a).

669

Clubs, pubs and fairs 2 GA 2005, Sch 12 para 8(1)(b). 3 GA 2005, Sch 12, para 8(2).

12.47 Where a licensing authority rejects an application for a permit, it must as soon as is reasonably practicable give notice of its decision and the reasons for it to the applicant, the Gambling Commission and the chief officer of police for any area in which the premises specified in the application are wholly or partly situated.1 1 GA 2005, Sch 12, para 9.

Fast-track procedure for holder of club premises certificate 12.48 Schedule 12, para 10 provides for a fast-track procedure for applying for a club gaming permit or a club machine permit where the applicant is the holder of a club premises certificate under s 72 of the Licensing Act 2003, the application asserts that to be the case, and the application is accompanied by the club premises certificate.1 Where the fast-track procedure applies, the applicant makes the application in the normal way,2 but is not required to send a copy of it and any accompanying documents to the Gambling Commission or to the chief officer of police for any police area in which the premises are wholly or partly situated, and thus there is no scope for objections from these persons.3 1 GA 2005, Sch 12, para 10. 2 In accordance with the provisions of Sch  12, para  2, which require that the application is made to the licensing area in whose area the premises are wholly or partly situated, specifies the premises in relation to which the permit is sought, is made in the prescribed form and manner, contains or is accompanied by the prescribed information and documents, and is accompanied by the prescribed fee: see 12.42. 3 GA 2005, Sch 12, para 10(2). It should be noted that in its latest Guidance to Licensing Authorities (5th edn, September 2015), the Commission has commented that (para 12.25) ‘The Commission is aware that this fast track procedure has been used inappropriately by applicants to avoid full scrutiny of applications and licensing authorities should pay particular attention to such applications.’.

12.49 Where the fast-track procedure applies, the licensing authority must grant the application unless they think: (1)

that the applicant is established and conducted wholly or mainly for the purposes of the provision of facilities for gaming, other than gaming of a prescribed kind;1

(2) that the applicant is established or conducted wholly or mainly for the purposes of the provision of facilities for gaming of a prescribed kind (currently bridge and whist) and also provides facilities for gaming of another kind;2 (3) that a club gaming permit or a club machine permit issued to the applicant has been cancelled during the period of ten years ending with the date of the application.3 1 GA  2005, Sch  12, para  10(3)(a). In Sch  12 ‘prescribed’ means prescribed by the Secretary of State by regulations: para 30. 2 GA 2005, Sch 12, para 10(3)(b). 3 GA 2005, Sch 12, para 10(3)(c).

670

Clubs, pubs and fairs 12.50 In general, a licensing authority must hold a hearing to consider an application made under the fast-track procedure.1 However, a licensing authority may dispense with the requirement for a hearing with the consent of the applicant.2 Where licensing authorities grant an application for a permit under the fast-track procedure, they must as soon as is reasonably practicable give notice of their decision to the applicant, the Gambling Commission and the chief officer of police for any area in which the premises specified in the application are wholly or partly situated,3 and issue the permit to the applicant.4 A licensing authority may not attach conditions to a club gaming permit or a club machine permit granted under the fast-track procedure.5 1 2 3 4 5

GA 2005, Sch 12, para 7(1) as applied by para 10(2)(b). GA 2005, Sch 12, para 7(2) as applied by para 10(2)(b). GA 2005, Sch 12, para 8(1)(a) as applied by para 10(2)(b). GA 2005, Sch 12, para 8(1)(b) as applied by para 10(2)(b). GA 2005, Sch 12, para 8(2) as applied by para 10(2)(b).

12.51 Regulations prescribing anything for the purposes of the Gambling Act 2005 may, in particular, make provision that differs in effect according to whether or not a permit is granted in pursuance of an application made under the fast-track procedure.1 1 GA 2005, Sch 12, para 10(4). See SI 2007/1834.

Form and maintenance of permits 12.52

A permit must be in the prescribed form,1 and must specify:2

(1) the name of the club or institute in respect of which it is issued; (2) the premises to which it relates; (3) whether it is a club gaming permit or a club machine permit; (4) the date on which it takes effect; (5) such other information as may be prescribed; and (6) if the application for the permit was made in accordance with the fasttrack procedure (for holders of club premises certificates), identify the club premises certificate under s 72 of the Licensing Act 2003. 1 GA 2005, Sch 12, para 11. In Sch 12, ‘prescribed’ means prescribed by the Secretary of State by regulations: para 30. 2 GA 2005, Sch 12, para 11(1)(a).

12.53 The holder of the permit must keep it on the premises to which it relates.1 The provisions of Part  15 of the GA  2005 give the Gambling Commission various powers of inspection.2 Amongst other things, under Part  15 the Commission is empowered to designate employees and other persons as ‘enforcement officers’.3 An occupier of premises to which a permit relates commits an offence if without reasonable excuse he fails to produce the permit on request for inspection by a constable or an enforcement officer.4 A person guilty of such an offence is liable on summary conviction to a fine not exceeding level 2 on the standard scale.5 1 GA 2005, Sch 12, para 12.

671

Clubs, pubs and fairs 2 3 4 5

GA 2005 Part 15 (ss 303–326), see Chapter 26. GA 2005, s 303(1). GA 2005, Sch 12, para 13(1). GA 2005, Sch 12, para 13(2).

12.54 The holder of a permit: (1) must pay a first annual fee to the issuing licensing authority within such period after the issue of the permit as may be prescribed;1 and (2) must pay an annual fee to the issuing licensing authority before each anniversary of the issue of the permit.2 1 GA 2005, Sch 12, para 14(1)(a). ‘Annual fee’ means a fee of such amount as may be prescribed: para 14(2). In Sch 12 ‘prescribed’ means prescribed by the Secretary of State by regulations: para 30. 2 GA 2005, Sch 12, para 14(1)(b), but this does not apply in relation to an anniversary of the issue of permit immediately before which the permits expires in accordance with the provisions as to the expiry of a permit under para 17: see para 14(3) and 12.57 below.

12.55 If the information contained in a permit ceases to be accurate, the holder of the permit must as soon as is reasonably practicable apply to the issuing licensing authority to have the permit varied.1 Where the information contained in the permit ceases to be accurate, a person commits an offence if he fails to apply for a variation of the permit without reasonable excuse,2 and is liable, on summary conviction, to a fine not exceeding level 2 on the standard scale.3 The application for a variation of the permit must be accompanied by the prescribed fee4 and either the permit or a statement explaining why it is not reasonably practicable to produce the permit.5 Where an application for a variation of the permit is made under these provisions, the licensing authority to whom the application is made (ie the issuing licensing authority) must issue a copy of the permit, varied in accordance with the application, and the copy is to be treated as if it were the original permit.6 However, if the licensing authority think that they would refuse an application for the permit if it were made anew, they may refuse the application for a variation of the permit7 and cancel the permit.8 1 2 3 4 5 6 7 8

GA 2005, Sch 12, para 15(1). GA 2005, Sch 12, para 15(6). GA 2005, Sch 12, para 15(7). GA  2005, Sch  12, para  15(2)(a). In Sch  12 ‘prescribed’ means prescribed by the Secretary of State by regulations: para 30. GA 2005, Sch 12, para 15(2)(b). GA 2005, Sch 12, para 15(3). GA 2005, Sch 12, para 15(4)(a). GA 2005, Sch 12, para 15(4)(b).

12.56 In general, a licensing authority must hold a hearing to consider the application for a variation of the permit before refusing an application.1 However, a licensing authority may dispense with the requirement for a hearing with the consent of the applicant.2 Where licensing authorities reject an application for a variation of a permit, they must as soon as is reasonably practicable give notice of their decision and the reasons for it to the applicant, the Gambling Commission and the chief officer of police for any area in 672

Clubs, pubs and fairs which the premises specified in the application are wholly or partly situated.3 The provisions in Schedule 12 as to appeals also apply to applications for a variation of a permit.4 1 2 3 4

GA 2005, Sch 12, para 7(1) as applied by para 15(5). GA 2005, Sch 12, para 7(2) as applied by para 15(5). GA 2005, Sch 12, para 9 as applied by para 15(5). GA 2005, Sch 12, para 15(5), see 12.67–12.69 for the appeal provisions of Sch 12.

12.57 Where a permit is lost, stolen or damaged, the holder may apply to the issuing licensing authority for a copy.1 Such an application must be accompanied by the prescribed fee.2  A  licensing authority must grant application for a copy of a lost, stolen or damaged permit if satisfied that the permit has been lost, stolen or damaged and, where the permit has been lost or stolen, that the loss or theft has been reported to the police.3 As soon as reasonably practicable after granting an application for a copy of a lost, stolen or damaged permit, the licensing authority must issue a copy of the permit certified by the authority as a true copy (and the copy is to be treated as if it were the original permit).4 1 GA 2005, Sch 12, para 16(1). 2 GA  2005, Sch  12, para  16(2). In Sch  12 ‘prescribed’ means prescribed by the Secretary of State by regulations: para 30. 3 GA 2005, Sch 12, para 16(3). 4 GA 2005, Sch 12, para 16(4).

Duration, lapse, cancellation and forfeiture of permits 12.58 Club gaming permits and club machine permits cease to have effect at the end of the period of ten years beginning with the date of issue, unless the permit ceases to have effect before that time in accordance with the provisions of Sch 121 or the permit is renewed.2 However, where a permit is issued under the fast-track procedure (where the applicant is a holder of a club premises certificate under s 72 of the Licensing Act 2003),3 the permit: (1) does not cease to have effect at the end of ten years beginning with the date of issue;4 (2) may cease to have effect in accordance with Sch 12’s provisions as to surrender, cancellation and forfeiture;5 (3) must lapse if the club premises certificate on which the application relied ceases to have effect.6 1 GA 2005, Sch 12, para 17(1)(a). A permit shall not cease to have effect in accordance with para 17 while an application for renewal of the permit is pending or an appeal against a decision on an application for renewal of the permit is pending: Sch 12, para 24(5). 2 GA  2005, Sch  12, para  17(1)(b); see 12.66 below for renewals of permits under Sch 12. 3 See GA 2005, Sch 12, para 10; and see 12.48–12.51 above. 4 GA 2005, Sch 12, para 17(2)(a). 5 GA 2005, Sch 12, para 17(2)(b). 6 GA 2005, Sch 12, para 17(2)(c).

673

Clubs, pubs and fairs 12.59 If the holder of a permit ceases to be a members’ club (whether or not it becomes a commercial club), a commercial club or a miners’ welfare institute, the permit lapses.1 However, this provision does not apply to a permit issued under the fast-track procedure (where the applicant is a holder of a club premises certificate under s 72 of the Licensing Act 2003).2 1 GA 2005, Sch 12, para 18(1). 2 GA 2005, Sch 12, para 18(2); for the fast-track procedure, see Sch 12, para 10 and 12.48–12.51 above.

12.60 A permit ceases to have effect on its surrender, which is effected by the holder of the permit giving notice to the issuing licensing authority.1 Such a notice must be accompanied by either the permit or a statement explaining why it is not reasonably practicable to produce the permit.2 1 GA 2005, Sch 12, para 19(1). 2 GA 2005, Sch 12, para 19(2).

12.61 If the licensing authority which issues a permit believes that it has lapsed or has received notice of the surrender of the permit, it must as soon as reasonably practicable inform the Gambling Commission and the chief officer of police for any area in which the premises to which the permit relates are wholly or partly situated.1 1 GA 2005, Sch 12, para 20.

12.62 A licensing authority which issued a permit may cancel it if it thinks that the premises on which the holder of the permit conducts its activities are used wholly or mainly by children, by young persons or both,1 or that an offence, or a breach of a condition of a permit, has been committed in the course of gaming activities carried on by the holder of the permit.2 The Commission recommends that licensing authorities monitor premises holding club gaming permits to establish whether, for example, computers are being provided for use as gaming machines. In such circumstances, it is recommended that the following matters should be taken into consideration when determining whether a computer is knowingly adapted or presented to facilitate or draw attention to the possibility of it being used for gambling. The Commission suggests that the list is not exhaustive, and the presence or absence of any single factor will not necessarily be conclusive: •

icons for gambling websites displayed on the desktop screen;

•

links to gambling websites available via the start menu;

•

screensavers, desktop wallpapers referring to gambling websites;

•

internet browsing history or favourites menu containing gambling websites;

•

promotional material (posters, flyers) indicating the use of computers for gambling;

•

gambling software downloaded onto a computer;

•

staff informing customers of the existence of the computer for access to gambling websites;

674

Clubs, pubs and fairs •

email messages or other promotional material sent to customers/ individuals referring to the availability of computers on premises for gambling purposes.

Since no condition may be attached to a club gaming permit or a club machine permit the reference to breach of a condition of a permit must, it is suggested, relate to some other form of permit to which a condition has been attached. However, before cancelling a permit pursuant to these provisions, the licensing authority must give the holder of the permit at least 21 days’ notice of its intention to consider cancelling the permit,3 consider any representations made by the holder,4 hold a hearing if the holder requests one,5 and comply with any prescribed requirements for the procedure to be followed in considering whether to cancel a permit.6 If the licensing authority cancels a permit, they must as soon as is reasonably practicable inform the holder, the Gambling Commission, and the chief officer of police for any area in which the premises to which the permit relates are wholly or partly situated.7 The cancellation of a permit does not take effect until the period during which an appeal may be brought (21 days beginning on the day on which the appellant receives notice of the decision against which the appeal is brought) has expired,8 or any appeal brought has been determined.9 1 GA 2005, Sch 12, para 21(1)(a). A ‘child’ is an individual who is less than 16 years old: s 45(1); and a ‘young person’ is an individual who is not a child but is less than 16 years old: s 45(2). 2 GA 2005, Sch 12, para 21(1)(b). 3 GA 2005, Sch 12, para 21(2)(a). 4 GA 2005, Sch 12, para 21(2)(b). 5 GA 2005, Sch 12, para 21(2)(c). 6 GA  2005, Sch  12, para  21(2)(d). In Sch  12 ‘prescribed’ means prescribed by the Secretary of State by regulations: para 30. 7 GA 2005, Sch 12, para 20. 8 GA 2005, Sch 12, paras 21(4)(a) and 25(5)(c). 9 GA 2005, Sch 12, para 21(4)(b).

12.63 The licensing authority which issued a permit shall cancel it if the holder fails to pay the annual fee.1 However, this provision may be disapplied by a licensing authority if they think that a failure to pay is attributable to administrative error.2 1 GA 2005, Sch 12, para 22(1). 2 GA 2005, Sch 12, para 22(2).

12.64 Where the holder of a permit, or an officer of the holder of a permit, is convicted of an offence under the Gambling Act 2005 by a court in Great Britain, the court may order forfeiture of the permit on such terms (which may include terms as to suspension) as may be specified by: (1) the court which orders forfeiture;1 (2) a court to which an appeal against conviction, or against any order made on the conviction, has been or could be made;2 or (3) the High Court, if hearing proceedings relating to the conviction.3 1 GA 2005, Sch 12, para 23(1) and (2)(a).

675

Clubs, pubs and fairs 2 GA 2005, Sch 12, para 23(1) and (2)(b). 3 GA 2005, Sch 12, para 23(1) and (2)(c).

12.65 Subject to an express provision in the terms on which a forfeiture order is made, a permit shall cease to have effect on the making of a forfeiture order under GA 2005, Sch 12, para 23.1 The terms on which a forfeiture order is made must, in particular, include a requirement that the holder deliver to the licensing authority who issued the permit, within such time as the court may specify, the permit, or a statement explaining why it is not reasonably practicable to produce the permit.2 As soon as is reasonably practicable after making or suspending an order for forfeiture, the court must notify the licensing authority.3 1 GA 2005, Sch 12, para 23(3). 2 GA 2005, Sch 12, para 23(4). 3 GA 2005, Sch 12, para 23(5).

Renewal of permits 12.66 The holder of a club gaming permit may apply to the issuing licensing authority for its renewal.1 However, the application cannot be made before the period of three months ending on the date that the permit would otherwise expire,2 or after the beginning of the period of six weeks ending on the date that the permit would otherwise expire.3 The provisions of Sch 12 have effect (with any necessary modifications) in relation to an application for renewal as they have effect in relation to an application for a permit.4 Renewals of club gaming permits and club machine permits cease to have effect at the end of the period of ten years beginning with the date of renewal, unless the permit ceases to have effect before that time in accordance with the provisions of Sch 12,5 or the permit is renewed.6 1 2 3 4 5 6

GA 2005, Sch 12, para 24(1). GA 2005, Sch 12, para 24(2)(a). GA 2005, Sch 12, para 24(2)(b). GA 2005, Sch 12, para 24(3). GA 2005, Sch 12, para 17(1)(a) as applied by para 24(4). GA 2005, Sch 12, para 17(1)(b) as applied by para 24(4). A permit shall not cease to have effect in accordance with para 17 while: an application for renewal of the permit is pending; or, an appeal against a decision on an application for renewal of the permit is pending: GA 2005, Sch 12, para 24(5).

Appeals 12.67 Schedule 12, para  25 allows for appeals against decisions of the licensing authority in connection with permits. Where a licensing authority rejects an application for the issue or renewal of a permit, the applicant may appeal.1 Where a licensing authority grants an application for the issue or renewal of a permit in relation to which an objection was made under the provisions of Sch  12, any person who made an objection may appeal.2 Where a licensing authority cancels a permit, the holder may appeal.3 Where a licensing authority determines not to cancel a permit, any person who made representations to the authority in connection with its consideration whether to cancel the permit may appeal.4 Such representations can only 676

Clubs, pubs and fairs be made if regulations made under Sch 12, para 21(2) (which provides that, before cancelling a permit, a licensing authority must, amongst other things, comply with any prescribed requirements for the procedure to be followed in considering whether to cancel a permit) allow for such representations. 1 GA 2005, Sch 12, para 25(1). This also applies to a decision of a licensing authority following remittal under para  6(1)(d); see 12.69 below for remittal from the magistrates’ court: Sch 12, para 25(8). 2 GA 2005, Sch 12, para 25(2). This also applies to a decision of a licensing authority following remittal under para 6(1)(d). 3 GA 2005, Sch 12, para 25(1). This also applies to a decision of a licensing authority following remittal under para 6(1)(d). 4 GA  2005, Sch  12, paras 25(4) and 21(2)(d), for which latter provision see 12.62 above. This also applies to a decision of a licensing authority following remittal under para 6(1)(d).

12.68 (1)

An appeal under Sch 12, para 25 must be instituted:

in the magistrates’ court for a local justice area in which the premises to which the appeal relates are wholly or partly situated;1

(2) by notice of appeal given to the designated officer;2 and (3)

within the period of 21 days beginning on the day on which the appellant receives notice of the decision against which the appeal is brought.3

1 GA 2005, Sch 12, para 25(5)(a). 2 GA 2005, Sch 12, para 25(5)(b). 3 GA 2005, Sch 12, para 25(5)(c).

12.69 On appeal a magistrates’ court may: (1) dismiss the appeal;1 (2) substitute for the decision appealed against any decision that the licensing authority could have made;2 (3) restore a permit (with effect from such date and on such transitional or other terms as the court may specify);3 (4) remit the case to the licensing authority to decide in accordance with a direction of the court;4 (5) make an order about costs.5 1 2 3 4 5

GA 2005, Sch 12, para 25(6)(a). GA 2005, Sch 12, para 25(6)(b). GA 2005, Sch 12, para 25(6)(c). GA 2005, Sch 12, para 25(6)(d). GA  2005, Sch  12, para  25(6)(e). In the absence of specific statutory provision or criteria it would seem that in such circumstances magistrates should exercise their general discretion according to the criteria set out by Lord Bingham CJ in City of Bradford Metropolitan District Council v Booth [2000] All ER (D) 635.

Maintenance of a register 12.70 Licensing authorities must maintain a register of the permits issued by the authority, together with such other information as may be prescribed,1 677

Clubs, pubs and fairs make the register and information available for inspection by members of the public at all reasonable times,2 and make arrangements for the provision of a copy of an entry in the register, or of information, to a member of the public on request.3 However, a licensing authority may refuse to provide a copy of an entry or of information unless the person seeking it pays a reasonable fee specified by the authority.4 1 GA 2005, Sch 12, para 26(1)(a), but see para 26(4) (below). In Sch 12 ‘prescribed’ means prescribed by the Secretary of State by regulations: para 30. In relation to the register to be maintained by licensing authorities, the Secretary of State may make regulations about the form of the register and the manner in which it is maintained: Sch 12, para 26(3). Further, the Secretary of State may make regulations requiring licensing authorities to give to the Gambling Commission specified information about permits issued by them, requiring the Gambling Commission to maintain a register of the information provided to it in accordance with the foregoing, requiring the Gambling Commission to grant access to the register to members of the public (without charge), requiring the Gambling Commission to make copies of entries available on request (and on payment of a reasonable fee) to members of the public, excusing licensing authorities, wholly or partly, from compliance with the requirement to maintain a register of permits issued by the authority, together with such other information as may be prescribed: Sch 12, para 26(4). 2 GA 2005, Sch 12, para 26(1)(b). 3 GA 2005, Sch 12, para 26(1)(c). 4 GA 2005, Sch 12, para 26(2).

Exercise of functions by licensing authority 12.71 In exercising a function under Sch  12 of the Gambling Act 2005, licensing authorities must have regard to any relevant guidance issued by the Gambling Commission under s 25 of the Act1 and, subject to such guidance, the licensing objectives.2 As is the case in respect of premises licences under Part 8 of the Gambling Act 2005, the functions of a licensing authority under Sch 12 are delegated to its licensing committee established under s 6 of the Licensing Act 2003.3 1 GA 2005, Sch 12, para 27(a). 2 GA 2005, Sch 12, para 27(b); see s 1 and Chapter 1 for the ‘licensing objectives’. Updated Guidance to licensing authorities (5th edn) was published in September 2015. 3 GA 2005, s 154 (for which see Chapter 9) as applied by Sch 12, para 28. However, in the application of LA  2003, s  10(4) (matters not to be delegated to officer), the following shall be substituted for the list of functions in GA  2005, s  154(4): determination of an application for a permit in respect of which an objection has been made under Sch 12 and not withdrawn and cancellation of a permit under Sch 12, para 21 (for which see 12.62 above).

SCHEDULE 13 – LICENSED PREMISES GAMING MACHINE PERMITS Introduction 12.72 Schedule 13 provides that a person who applies to a licensing authority (in its capacity as a licensing authority under the Licensing Act 678

Clubs, pubs and fairs 2003) for an on-premises alcohol licence or who holds an on-alcohol licence issued by a licensing authority (in its capacity as a licensing authority under the Licensing Act 2003) may apply to that licensing authority (in its capacity as a licensing authority under the GA 2005) for a licensed premises gaming machine permit.1 An application may not be made under Sch 13 if a premises licence under Part 8 of the Gambling Act 2005 has effect in relation to the premises.2 Note that the Gambling Act 2005, Sch  13 does not apply in Scotland. Scottish Ministers have power under s  285 of the Act to make regulations about the regime in Scotland. The Scottish Executive has made separate regulations3 in this regard. 1 GA  2005, Sch  13, para  1(1). ‘Alcohol licence’ means a premises licence under LA 2003, Pt 3 (see GA 2005, s 277(a)) and ‘on-premises alcohol licence’ means a premises licence under LA 2003, Pt 3 which authorises the supply of alcohol for consumption on the licensed premises: GA 2005, s 277(b). 2 GA 2005, Sch 13, para 1(2). 3 Licensed Premises Gaming Machine Permits (Scotland) Regulations 2007 (SSI 2007/505) and Club Gaming and Club Machine Permits (Scotland) Regulations 2007 (SSI 2007/504).

Applying for a licensed premises gaming machine permit 12.73

The application for a permit must:

(1) be made in such form and manner as the licensing authority may direct;1 (2) specify the premises in respect of which the permit is sought;2 (3) specify the number and category of gaming machines in respect of which the permit is sought;3 (4) contain or be accompanied by such other information and documents as the licensing authority may direct;4 and (5) be accompanied by the prescribed fee.5 1 GA 2005, Sch 13, para 2(a). 2 GA 2005, Sch 13, para 2(b). Under the GA 2005, ‘premises’ includes any place and, in particular, a vessel and a vehicle: s 353(1). 3 GA 2005, Sch 13, para 2(c). 4 GA 2005, Sch 13, para 2(d). 5 GA 2005, Sch 13, para 2(e). In Sch 13 ‘prescribed’ means prescribed by the Secretary of State by regulations: para 23.

12.74 As is the case in respect of premises licences under GA 2005, Pt 8, the functions of a licensing authority under Sch 13 are delegated to its licensing committee established under s 6 of the Licensing Act 2003.1 1 GA 2005, s 154 (for which see Chapter 9) as applied by Sch 13, para 3.

12.75 Paragraph 4 of Sch 13 provides that a licensing authority to whom an application for a licensed premises gaming machine permit is made must, while considering it, have regard to the licensing objectives,1 any relevant 679

Clubs, pubs and fairs guidance issued by the Gambling Commission under s 25 of the GA 2005,2 and such other matters as they think relevant.3 The Scottish Government has set regulations4 on permits for alcohol-licensed premises in Scotland. On considering an application for a licensed premises gaming machine permit, a licensing authority must: (1) grant the application;5 (2) refuse the application;6 or (3) grant it in respect of: (a) a smaller number of machines than that specified in the application,7 (b) a different category of machines from that specified in the application,8 or (c) both.9 1 GA 2005, Sch 13, para 4(1). For the ‘licensing objectives’, see s 1 and Chapter 1. 2 GA  2005, Sch  13, para  4(1). For the ‘Gambling Commission’, see GA  2005, Pt 2 (ss 20–32) and Chapter 3. 3 GA 2005, Sch 13, para 4(1). 4 Licensed Premises Gaming Machine Permits (Scotland) Regulations 2007 (SSI 2007/505). 5 GA 2005, Sch 13, para 4(2)(a). 6 GA 2005, Sch 13, para 4(2)(b). 7 GA 2005, Sch 13, para 4(2)(c)(i). 8 GA 2005, Sch 13, para 4(2)(c)(ii). 9 GA 2005, Sch 13, para 4(2)(c)(iii)

12.76 A licensing authority cannot attach conditions to a licensed premises gaming machine permit.1 As soon as is reasonably practicable after granting an application for a permit, a licensing authority must issue a permit to the applicant.2 As soon as is reasonably practicable after refusing an application for a permit, a licensing authority must notify the applicant of the refusal and the reasons for it.3 1 GA 2005, Sch 13, para 5(1). 2 GA 2005, Sch 13, para 5(2). 3 GA 2005, Sch 13, para 5(3).

12.77 A  licensing authority may grant an application for a licensed premises gaming machine permit under Sch 13 only if the applicant holds an on-premises alcohol licence.1  A  licensing authority may not refuse an application for a permit or grant an application in respect of a different category or smaller number of gaming machines than that specified in the application unless they have: (1) notified the applicant of their intention to refuse the application, or grant the application in respect of: (a) a smaller number of machines than that specified in the application,2 (b) a different category of machines from that specified in the application,3 or 680

Clubs, pubs and fairs (c) both;4 and (2) given the applicant an opportunity to make representations.5 1 GA  2005, Sch  13, para  6(1). ‘Alcohol licence’ means a premises licence under LA 2003, Pt 3 (see GA 2005, s 277(a)) and ‘on-premises alcohol licence’ means a premises licence under LA 2003, Pt 3 which authorises the supply of alcohol for consumption on the licensed premises: GA 2005, s 277(b). 2 GA 2005, Sch 13, para 6(2)(a)(i). 3 GA 2005, Sch 13, para 6(2)(a)(ii). 4 GA 2005, Sch 13, para 6(2)(a)(iii). 5 GA 2005, Sch 13, para 6(2)(b).

12.78 The obligation to give the applicant an opportunity to make representations does not apply in respect of a refusal on the ground that the applicant does not hold an on-premises alcohol licence.1 The obligation to give the applicant an opportunity to make representations is satisfied by the licensing authority giving the applicant the opportunity to make oral representations or written representations, or both.2 1 GA 2005, Sch 13, para 6(4). 2 GA 2005, Sch 13, para 6(3).

Form and maintenance of permits 12.79

A permit must be in the prescribed form,1 and must specify:

(1) the person to whom it is issued;2 (2) the premises;3 (3)

the number and category of gaming machines which it authorises;4 and

(4) the date on which it takes effect.5 1 GA  2005, Sch  13, para  7(1). In Sch  13, ‘prescribed’ means prescribed by the Secretary of State by regulations: para 23. 2 GA 2005, Sch 13, para 7(1)(a). 3 GA 2005, Sch 13, para 7(1)(b). 4 GA 2005, Sch 13, para 7(1)(c). 5 GA 2005, Sch 13, para 7(1)(d).

12.80 If the person to whom a permit is issued changes his name or wishes to be known by another name, he may send the permit to the licensing authority with the prescribed fee and a request that a new name be substituted for the old name.1 The licensing authority must comply with such a request and return the permit to the holder.2 1 GA 2005, Sch 13, para 7(2)(a). 2 GA 2005, Sch 13, para 7(2)(b).

12.81 The holder of the permit must keep it on the premises to which it relates.1 The provisions of Part 15 of the Gambling Act 2005 give the Gambling Commission various powers of inspection.2 Amongst other things, the Commission is empowered to designate employees and other persons as ‘enforcement officers’.3 An occupier of premises in respect of which a permit 681

Clubs, pubs and fairs has effect commits an offence if without reasonable excuse he fails to produce the permit on request for inspection by a constable, or an enforcement officer, or an authorised local authority officer.4 A person guilty of such an offence is liable on summary conviction to a fine not exceeding level 2 on the standard scale.5 1 2 3 4 5

GA 2005, Sch 13, para 8. GA 2005 Part 15 (ss 303–326); see Chapter 26. GA 2005, s 303(1). GA 2005, Sch 13, para 10(1). GA 2005, Sch 13, para 10(2).

12.82

The holder of a permit:

(1) must pay a first annual fee to the issuing licensing authority within such period after the issue of the permit as may be prescribed;1 and (2) must pay an annual fee to the issuing licensing authority before each anniversary of the issue of the permit.2 1 GA 2005, Sch 13, para 9(1)(a). ‘Annual fee’ means a fee of such amount as may be prescribed: para 9(2). In Sch 13 ‘prescribed’ means prescribed by the Secretary of State by regulations: para 23. 2 GA 2005, Sch 13, para 9(1)(b).

12.83 Where a permit is lost, stolen or damaged, the holder may apply to the issuing licensing authority for a copy.1 Such an application must be accompanied by the prescribed fee.2  A  licensing authority must grant application for a copy of a lost, stolen or damaged permit if satisfied that the permit has been lost, stolen or damaged, and, where the permit has been lost or stolen, that the loss or theft has been reported to the police.3 As soon as is reasonably practicable after granting an application for a copy of a lost, stolen or damaged permit, the licensing authority must issue a copy of the permit certified by the authority as a true copy.4 A copy of a permit issued under these provisions is to be treated as if it were the permit.5 1 GA 2005, Sch 13, para 11(1). 2 GA  2005, Sch  13, para  11(2). In Sch  13 ‘prescribed’ means prescribed by the Secretary of State by regulations: para 23. 3 GA 2005, Sch 13, para 11(3). 4 GA 2005, Sch 13, para 11(4). 5 GA 2005, Sch 13, para 11(5).

Duration, cancellation and forfeiture of permits 12.84 A  licensed premises gaming machine permit continues to have effect unless and until it ceases to have effect in accordance with a provision of Sch 13.1 1 GA 2005, Sch 13, para 12.

12.85

A licensed premises gaming machine permit ceases to have effect if:

(1) an on-premises alcohol licence ceases to have effect with respect to the premises to which it relates;1 or 682

Clubs, pubs and fairs (2) the permit holder ceases to be the holder of an on-premises alcohol licence.2 Note that a renewal of the automatic entitlement is required only where there is a change in the alcohol licence premises holder (either due to a transfer of licence or an application for new licence), not for a change in designated premises supervisor/designated premises manager alone. 1 GA 2005, Sch 13, para 13(a). 2 GA 2005, Sch 13, para 13(b).

12.86 A  licensed premises gaming machine permit also ceases to have effect if the permit holder gives to the licensing authority notice of surrender, and either the permit or a statement explaining why it is not reasonably practicable to produce the permit.1 1 GA 2005, Sch 13, para 14.

12.87 The holder of a licensed premises gaming machine permit may apply to the issuing licensing authority to vary the number or category (or both) of gaming machines authorised by the permit.1 The procedure for applying for a variation of a licensed premises gaming machine permit is the same as for applying for the issue of a permit with any necessary modifications.2 Schedule  13’s provisions as to appeals apply (again with any necessary modifications) to an application for a variation of a permit.3 1 GA 2005, Sch 13, para 15(1). 2 GA  2005, Sch  13, para  15(2). See paras 1–7 and 12.72–12.83 above for Sch  13’s provisions relating to the application for issue of a licensed premises gaming machine permit. 3 GA  2005, Sch  13, para  15(2). See para  21 and 12.97–12.99 below for Sch  13’s provisions relating to appeals.

12.88 A  licensing authority which issued a licensed premises gaming machine permit may cancel it, or may vary the number or category (or both) of gaming machines authorised by it, if they think: (1) it would not be reasonably consistent with the pursuit of the licensing objectives for the permit to continue to have effect;1 (2) gaming has taken place on the premises in purported reliance on the permit but otherwise than in accordance with the permit or a condition of the permit;2 the latter provision appears to be a drafting error as there is no power to attach a condition to a licensed premises gaming machine permit; (3)

the premises are mainly used or to be used for making gaming machines available;3 or

(4) an offence under this Act has been committed on the premises.4 1 2 3 4

GA 2005, Sch 13, para 16(1)(a). GA 2005, Sch 13, para 16(1)(b). GA 2005, Sch 13, para 16(1)(c). GA 2005, Sch 13, para 16(1)(d).

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Clubs, pubs and fairs 12.89 Before cancelling a licensed premises gaming machine permit pursuant to these provisions, the licensing authority must give the holder of the permit at least 21 days’ notice of its intention to consider cancelling or varying the permit,1 consider any representations made by the holder,2 hold a hearing if the holder requests one,3 and comply with any prescribed requirements for the procedure to be followed in considering whether to cancel or vary a permit.4 1 2 3 4

GA 2005, Sch 13, para 16(2)(a). GA 2005, Sch 13, para 16(2)(b). GA 2005, Sch 13, para 16(2)(c). GA  2005, Sch  13, para  16(2)(d). In Sch  13 ‘prescribed’ means prescribed by the Secretary of State by regulations: para 23.

12.90 If the licensing authority cancels or varies a licensed premises gaming machine permit, they must as soon as is reasonably practicable inform the holder and the Gambling Commission.1 The cancellation or variation of a permit does not take effect until the period during which an appeal may be brought (21 days beginning on the day on which the appellant receives notice of the decision against which the appeal is brought) has expired,2 or any appeal brought has been determined.3 1 GA 2005, Sch 13, para 16(3). 2 GA 2005, Sch 13, paras 16(4)(a) and 21(2)(c). 3 GA 2005, Sch 13, para 16(4)(b).

12.91 The licensing authority which issued a licensed premises gaming machine permit shall cancel it if the holder fails to pay the annual fee.1 However, this provision may be disapplied by a licensing authority if they think that a failure to pay is attributable to administrative error.2 1 GA 2005, Sch 13, para 17(1). 2 GA 2005, Sch 13, para 17(2).

12.92 Where the holder of a licensed premises gaming machine permit, or an officer of the holder of a permit, is convicted of an offence under the Gambling Act 2005 by a court in Great Britain, the court before which he is convicted may order forfeiture of the permit on such terms (which may include terms as to suspension) as may be specified by: (1) the court which orders forfeiture;1 (2) a court to which an appeal against conviction, or against any order made on the conviction, has been or could be made;2 or (3) the High Court, if hearing proceedings relating to the conviction.3 1 GA 2005, Sch 13, para 18(1) and (2)(a). 2 GA 2005, Sch 13, para 18(1) and (2)(b). 3 GA 2005, Sch 13, para 18(1) and (2)(c).

12.93 Subject to an express provision in the terms on which a forfeiture order is made, a licensed premises gaming machine permit shall cease to have effect on the making of a forfeiture order under GA 2005, Sch 13, para 18.1 The terms on which a forfeiture order is made under these provisions must, 684

Clubs, pubs and fairs in particular, include a requirement that the holder deliver to the licensing authority who issued the permit, within such time as the court may specify: the permit, or a statement explaining why it is not reasonably practicable to produce the permit.2 As soon as is reasonably practicable after making or suspending an order for forfeiture, the court must notify the licensing authority.3 1 GA 2005, Sch 13, para 18(3). 2 GA 2005, Sch 13, para 18(4). 3 GA 2005, Sch 13, para 18(5).

Transfer of permits 12.94 A person may apply for the transfer of a licensed premises gaming machine permit to him if: (1) he is applying for the transfer of an on-premises alcohol licence to him in accordance with s  42 of the Licensing Act 2003 (application for a transfer),1 or he is applying for the transfer of an on-premises alcohol licence to him in accordance with Licensing Act 2003, s  50 (transfer following death of holder);2 and (2) a permit has effect in respect of the same premises.3 1 GA 2005, Sch 13, para 19(1)(a)(i). 2 GA 2005, Sch 13, para 19(1)(a)(ii). 3 GA 2005, Sch 13, para 19(1)(b).

12.95 The procedure for applying for a transfer of a licensed premises gaming machine permit is the same as for applying for the issue of a permit with any necessary modifications.1  A  person applying for the transfer of a permit to him must supply with his application the permit, or a statement explaining why it is not reasonably practicable to produce the permit.2 A licensing authority may not approve an application for the transfer of a permit under these provisions unless the transfer of the on-premises alcohol licence is approved under s 45 of the Licensing Act 2003 (determination of application).3 Where a licensing authority refuses an application for the transfer of a permit because the transfer of the on-premises alcohol licence is not approved, the provisions which provide that a licensing authority must give the applicant the opportunity to make representations before refusing an application for the issue of a permit do not apply.4 1 GA  2005, Sch  13, para  19(2). See paras 1–7 and 12.72–12.83 above for Sch  13’s provisions relating to the application for the issue of a licensed premises gaming machine permit. 2 GA 2005, Sch 13, para 19(3). 3 GA 2005, Sch 13, para 19(4). 4 GA 2005, Sch 13, paras 21(5) and 6(2)(b). See 12.77 above for commentary on the provisions of para 6(2)(b).

12.96 Special provisions apply where the transfer of an on-premises alcohol licence is to be given immediate effect under s 43 of the Licensing Act 2003 (interim effect of transfer application),1 and the applicant has also made an 685

Clubs, pubs and fairs application for the transfer to him of the licensed premises gaming machine permit in effect in respect of the premises.2 The special provisions allow that a licensed premises gaming machine permit in respect of the premises has effect during the application period as if the applicant were the holder of the permit.3 1 GA 2005, Sch 13, para 20(1)(a). 2 GA 2005, Sch 13, para 20(1)(b). 3 GA  2005, Sch  13, para  20(2). ‘Application period’ has the same meaning as in LA 2003, s 43: GA 2005, Sch 13, para 20(3).

Appeals 12.97 The Gambling Act 2005, Sch 13, para 21 allows for appeals against decisions of the licensing authority in connection with licensed premises gaming machine permits. The applicant for, or holder of, a permit may appeal if the licensing authority: (1) reject an application for a permit;1 (2) grant an application for a permit in respect of a smaller number of machines than that specified in the application, or a different category of machines from that specified in the application (or both);2 or (3) give a notice under Sch  13, para  16 (a notice cancelling or varying a permit).3 1 GA  2005, Sch  13, para  21(1)(a). This also applies to a decision of a licensing authority following remittal under para 3(d); see 12.99 below for remittal from the magistrates’ court: para 21(4). 2 GA  2005, Sch  13, para  21(1)(b). This also applies to a decision of a licensing authority following remittal under para 3(d). 3 GA 2005, Sch 13, para 21(1)(b). This also applies to a decision of a licensing authority following remittal under para 3(d). See 12.88–12.89 above for commentary on the provisions of Sch 13, para 16.

12.98 (1)

An appeal under Sch 13, para 21 must be instituted:

in the magistrates’ court for a local justice area in which the premises to which the appeal relates are wholly or partly situated;1

(2) by notice of appeal given to the designated officer;2 and (3) within the period of 21 days beginning on the day on which the appellant receives notice of the decision against which the appeal is brought.3 1 GA 2005, Sch 13, para 21(2)(a). 2 GA 2005, Sch 13, para 21(2)(b). 3 GA 2005, Sch 13, para 21(2)(c).

12.99

On appeal, a magistrates’ court may:

(1) dismiss the appeal;1 (2) substitute for the decision appealed against any decision that the licensing authority could have made (with effect from such date and on such transitional or other terms as may be prescribed);2 686

Clubs, pubs and fairs (3) restore a permit (with effect from such date and on such transitional or other terms as the court may specify);3 (4) remit the case to the licensing authority to decide in accordance with a direction of the court;4 (5) make an order about costs.5 1 2 3 4 5

GA 2005, Sch 13, para 21(3)(a). GA 2005, Sch 13, para 21(3)(b). GA 2005, Sch 13, para 21(3)(c). GA 2005, Sch 13, para 21(3)(d). GA 2005, Sch 13, para 21(3)(e).

Maintenance of a register 12.100 Licensing authorities must: maintain a register of the permits issued by the authority, together with such other information as may be prescribed,1 make the register and information available for inspection by members of the public at all reasonable times,2 and make arrangements for the provision of a copy of an entry in the register, or of information, to a member of the public on request.3 However, a licensing authority may refuse to provide a copy of an entry or of information, unless the person seeking it pays a reasonable fee specified by the authority.4 1 GA 2005, Sch 13, para 22(1)(a), but see para 22(4) (below). In Sch 13 ‘prescribed’ means prescribed by the Secretary of State by regulations: para  23. In relation to the register to be maintained by licensing authorities, the Secretary of State may make regulations about the form of the register and the manner in which it is maintained: para  22(3). Further, the Secretary of State may make regulations requiring licensing authorities to give to the Gambling Commission specified information about permits issued by them, requiring the Commission to maintain a register of the information provided to it in accordance with the foregoing, requiring the Commission to grant access to the register to members of the public (without charge), requiring the Commission to make copies of entries available on request (and on payment of a reasonable fee) to members of the public, excusing licensing authorities, wholly or partly, from compliance with the requirement to maintain a register of permits issued by the authority, together with such other information as may be prescribed: para 22(4). 2 GA 2005, Sch 13, para 22(1)(b). 3 GA 2005, Sch 13, para 22(1)(c). 4 GA 2005, Sch 13, para 22(2).

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Chapter 13 Betting

DEVELOPMENTS BEFORE GA 2005 13.1 This chapter offers a brief description of the application of the GA 2005 to the betting industry. In understanding how the legislation applies, it is helpful to have some understanding of the development of British betting. The Introduction deals with the development of bookmaking on horses from its inception until about the middle of the nineteenth century (at 0.21 to 0.26). The further development of bookmaking from the middle of the nineteenth century, together with the development of totalisator betting on horse racing and greyhound racing is discussed in the Introduction at 0.27 to 0.36, which take the story up to the enactment of the Betting and Gaming Act 1960, the statute which created the legal framework which governed these activities up until the enactment of the GA 2005. 13.2 A  brief description of the pre-GA  2005 regulatory framework that governed bookmakers, licensed betting offices, totalisator betting on horse racing on approved horse race courses and greyhound racing on licensed tracks is contained in the Introduction at 0.66 to 0.74. The pre-GA  2005 regulation of off-track pool betting (ie principally football pools) is considered at 0.75. 13.3 The development of the bookmaking industry, and in particular the development of facilities available in licensed betting offices, illustrates very clearly the ability of the industry to react to new commercial challenges and new developments in technology: the past few decades have seen such challenges and developments impacting on the industry on a grand scale. When licensed betting offices were introduced under the Betting and Gaming Act 1960, they (consistently with the philosophy that betting facilities should be permitted but that betting should not be encouraged) offered the most basic of amenities. There was a large number of restrictions: no television pictures were permitted within the office, windows and doors had to be blanked out so that there could be no view into the office, no refreshments could be provided and only limited advertising was permitted. The vast majority of betting was conducted on horse racing and there were then many fewer horserace meetings than are now provided; and of those 689

Betting that were scheduled it was common, in the absence of all-weather tracks, for meetings to be abandoned during the winter. In 1967 bookmakers set up the Bookmakers’ Afternoon Greyhound Services (‘BAGS’) as a nonprofit-making company the purpose of which was, initially, to provide a greyhound service for licensed betting offices on those occasions in the winter when horse racing was threatened by bad weather. BAGS did this by entering into agreements with greyhound tracks to supply greyhound racing at times when this was required in licensed betting offices. BAGS later expanded to provide live greyhound racing in the mornings so that there could be betting events in licensed betting offices before 2.00pm, which was when, in the early years, UK horse racing usually commenced. 13.4 In 1986 the first major piece of deregulation occurred when live televised coverage from on-course was permitted in licensed betting offices, together with the provision of light refreshments. In 1987 Satellite Information Services (‘SIS’) was formed by the major bookmaking companies to provide television pictures and information from racecourses to betting offices. In 1993, under a further deregulation, evening opening of betting offices was permitted between April and August. 13.5 In 1994 the National Lottery was launched. The bookmaking industry rose to this challenge by the introduction of numbers betting products, initially ‘Lucky Choice’ (bets on the Irish National Lottery) and subsequently ‘49’s’ (numbers bets on a draw of numbers specifically generated for the purpose). The launch of these products is described in the Introduction at 0.115. In 1995 there was a further deregulation by which betting offices could open on Sundays; they could also open up their shop frontages, thus permitting the advertising of odds and betting events, and they could extend the provision of food and snacks. In 1996 gaming machines were introduced into licensed betting offices. In 1997, by a further deregulation, there was a relaxation on the advertising and marketing of licensed betting offices and their services, and in 1998 the jackpots which could be offered on gaming machines in licensed betting offices were increased. In addition, bookmakers have made constant efforts to increase the number of events upon which customers could make bets. As well as UK horse racing and BAGS greyhound racing, there is now a variety of foreign horse racing, together with a wide range of sporting events including football, which has become a popular sport for betting. In addition, a number of products based upon numbers bets has been developed including ‘Rapido’ (introduced in August 1999), fixed odds betting terminals (see Introduction at 0.122 and 0.123), introduced into licensed betting offices in 1998, and virtual horse racing (introduced in 2002) and virtual greyhound racing (introduced in 2003) (see Introduction at 0.124). In addition to providing an enhanced range of opportunities for betting throughout the day, licensed betting offices have become typically much more spacious and well equipped than the first generation of offices licensed under the Act of 1960. 13.6 Finally, before turning to the impact of the GA  2005, it should be noted that one important factor contributing to the profitability of the high street betting office was the change made to betting duty with effect from October 2001. Prior to this change, betting duty was exacted as a charge on turnover and was passed on by the bookmaker to the customer as a 690

Betting deduction from his stake or winnings. From October 2001 this arrangement was replaced with a 15% charge on bookmakers’ gross profits, thus doing away with the need to make a deduction from customers’ stakes or winnings. This substantially increased the attraction of high street betting offices. 13.7 We will now turn to outline the main provisions of the GA 2005 as they apply to the provision of betting.

GENERAL BETTING OPERATING LICENCE 13.8 This replaces the bookmaker’s permit provided for under the previous legislation.1 A bookmaker’s permit was sufficient authority for making bets both physically (eg by a bookmaker on-course or in a licensed betting office) and by means of remote communication, such as by telephone or over the internet. In the case of a general betting operating licence, a non-remote operating licence will be required to authorise the making of bets on-course (where the bookmaker deals with the customer directly) or in a betting office (where bets are taken directly over the counter). There are two types of nonremote general betting operating licence, namely a ‘general betting (standard) operating licence’ permitting the holder to offer betting from premises other than a track (eg a high street licensed betting office) as well as on a track, and a ‘general betting (limited) operating licence’ authorising the holder to bet exclusively on tracks.2  A  remote general betting operating licence will be required where the bet is made by telephone or over the internet or by some other means of remote communication. This means that a bookmaker running an ordinary betting office will need both a non-remote and a remote operating licence if he takes bets over the phone. There are two types of remote betting operating licence, namely a standard remote licence which authorises the holder to provide betting services over any remote media and an ‘ancillary remote operating licence’, which may be granted to the holder of a non-remote general betting standard or limited operating licence, and which will authorise the holder to accept bets via telephone only in connection with his land-based betting business.2 In addition, there is a ‘remote general betting (limited) licence’ entitling the holder to run a telephone betting service on a limited scale from a location not open to the public.2 In the case of off-course premises used for betting, such as a high street betting office, a betting premises licence will also be required.3 This replaces the betting office licence provided for under the previous legislation.4 For the grant, review etc of premises licences see Chapter 10. For mandatory and default conditions to be attached to a betting premises licence (where the premises are not a track) see Chapter 10 at 10.149L–M. 1 2 3 4

Betting, Gaming and Lotteries Act 1963, s 2 and Sch 1. Gambling Commission ‘BETTING: Do I need a licence?’ GA 2005, s 150(1)(e). BGLA 1963, s 9.

13.9 Betting may also be carried out on a track for which a premises licence is held.1 For mandatory and default conditions attached to track betting premises licences see Chapter 10 at 10.141N–Q. 1 GA 2005, s 37(4); s 150(1)(e).

691

Betting 13.10 Specific provision is made for the attachment of certain conditions and terms to a general betting operating licence. GA  2005, s  92 provides that a general betting operating licence shall be subject to the condition that bets may be accepted on behalf of the licensee only by: (a) the licensee; (b) a person employed by the licensee under a written contract of employment; or (c) the holder of another general betting operating licence (s 92(1)). A general betting operating licence contains an implied term permitting the use of postal services for the making of bets (s 92(2)). This implied term may not be disapplied or restricted by a condition attached under ss 75, 77 or 78 (s 92(3)). A general betting operating licence is subject to the condition that nothing may be done in reliance on the licence in relation to a bet on the outcome of a lottery which forms part of the National Lottery (s 95(1)(2)).

POOL BETTING OPERATING LICENCE 13.11 It seems probable that the pool betting operating licence will in due course replace three different regimes covering pool betting under the previous legislation. Under the Betting, Gaming and Lotteries Act 1963 offcourse pool betting (ie essentially football pools) was governed by provisions requiring the promoter to be registered with the local authority.1 On-course, different regimes governed pool betting on horse racing and on greyhound racing. Pool betting on horse racing was subject to a monopoly in favour of the Horserace Totalisator Board. This had the exclusive statutory right to carry on pool betting business on horse racing conducted on an ‘approved racecourse’.2 The Board could also authorise other persons to conduct pool betting on such horseracing. In addition, the Board could conduct betting ‘at Tote odds’ or could authorise other persons to do so.3 So far as greyhound racing was concerned, pool betting could be conducted by means of a totalisator on a dog racecourse for which a track betting licence was held under the 1963 Act.4 The betting had to be conducted by the occupier of the track or by a person authorised in writing by him.4 The bets could only be placed on dog races run on the track where the totalisator was located or under a licensed inter-track betting scheme.5 1 Betting, Gaming and Lotteries Act 1963, s 4(2) and Sch 2. 2 That is, a racecourse for which there was a certificate of approval granted by the Horserace Betting Levy Board under BGLA 1963, s 13. 3 B BGLA 1963, s 14. 4 BGLA 1963, s 4(1)(b); s 16. 5 BGLA 1963, s 16; s 16A.

13.12 So far as off-course pool betting is concerned, a pool-betting operating licence under the GA  2005 will replace the provisions for registration by a pools promoter with the local authority. A promoter wishing to conduct football pool betting in the traditional way (ie by post) will be required to hold a non-remote pool betting operating licence. There is a specific provision1 that a non-remote pool betting operating licence is subject to an implied term permitting the use of postal services for the making of bets. A pools promoter who wished to permit the making of bets by on-line means such as email or SMS text messaging could apply for a remote pool betting operating licence. 1 GA 2005, s 93(7).

692

Betting 13.13 So far as pool betting on horse racing is concerned, it was the government’s announced intention that the enactment of the GA  2005 would coincide with fundamental changes to the way in which such pool betting would be conducted. For some time it had been the government’s plan to sell the Horserace Totalisator Board to the private sector. With that in mind the Horserace Betting and Olympic Lottery Act 2000 was enacted on 28  October 2004. Part  1 of that Act made provision for the dissolution of the Tote, for its rights and liabilities to be transferred to a successor company, and for the Gaming Board (now the Gambling Commission)1 to grant to the successor company an exclusive licence to carry on pool betting business on horseraces on approved horse racecourses.2 In June 2011 it was announced that bookmakers Betfred were the successful bidders in an auction for the Tote, with a bid of £265 million. (This was a significantly lower sum than was offered in 2007 (£400 million) by a consortium of racecourse owners: that bid was turned down by the Labour Government because it was backed by private equity. The exchequer took a further knock in 2014 when reports were rife that Betfred eventually paid £32 million less than they had bid.) The exclusive licence is in effect for a period of seven years.2 At the expiry of its exclusive licence Betfred will, no doubt, apply for a pool betting operating licence and will trade in competition with other operators who would have applied for such licences at the end of the seven-year period. 1 GA 2005, s 21. 2 Horserace Betting and Olympic Lottery Act 2004, s 8.

13.14 So far as greyhound racing on-course is concerned, a pool betting operating licence will authorise the provision of pool betting on such racing on track.1 In order for pool betting to be provided on the track, a betting premises licence will be required.2 Such a premises licence will provide that pool betting may only be conducted by the holder of the licence or in accordance with arrangements made by him.3 A betting premises licence for premises other than a dog track (eg a licensed betting office) will permit pool betting to take place in those premises, but where the pool bets are made on dog-racing, then the licence will require that the bets be taken in accordance with arrangements made with the occupier of the dog track on which the racing takes place.4 This provision was introduced to give some financial security to the dog-racing industry, which is reliant upon track betting for income and lapsed at the end of 2012.5 1 2 3 4 5

GA 2005, s 65(2)(d); s 93. Under GA 2005, s 150(1)(e). GA 2005, s 179(1) and (2). GA 2005, s 180(1). GA 2005, s 180(2).

13.15 A pool betting operating licence shall be subject to the condition that bets may be accepted on behalf of the licensee only: (a) by the licensee; (b) by a person employed by the licensee under a written contract of employment; (c) by the holder of another pool betting operating licence or under agency provisions or pools collector provisions set out below (s 93(1)). A pool bet may be accepted by a person (the agent) on behalf of the holder of a pool betting operating licence if: 693

Betting (a) the agent is authorised by the licensee in writing1 to accept bets on behalf of the licensee, (b) the agent is an adult, (c)

at the time of accepting the bet the agent is on a track,

(d) the bet is accepted in reliance on an occasional use notice, and (e)

the bet is in connection with a horse race or a dog race (s 93(2)).

The holder of a pool betting operating licence that authorises (whether expressly or impliedly) the provision of facilities for football pools may in writing authorise an adult or young person: (a)

to make documents or facilities available in connection with the licensed activities,

(b) to receive entries on behalf of the licensee, (c)

to receive payments on behalf of the licensee,

(d) to make payments of winnings on behalf of the licensee (s 93(3)). Such an authorisation is to be treated for the purposes of s 33 as if it were a pool betting operating licence but has no effect in relation to any activity, entry or payment that relates partly to a football pool and partly to any other form of gambling (s  93(4)). The authorisation may be issued on terms and conditions which may, in particular, include provision for payment by the person issuing the authorisation and provision for commission (s  93(5)). A condition may be attached to a pool betting operating licence under any of ss 75, 77 or 78 making provision regulating or restricting the activities of persons authorised under the above provision (s 93(6). As has been noted a pool betting operating licence contains an implied term permitting the use of postal services for the making of bets (s 93(7)). This implied term may not be disapplied or restricted by a condition attached to ss 75, 77 or 78 (s 93(8)). The Secretary of State may by order amend or repeal the provision that agency bets may only be conducted in connection with a horse-race or a dog race (s 93(9)(a)) and may amend the provisions relating to pool betting collectors to permit authorisation in relation to betting of a specified kind that relates to a sport but is not a football pool (s 93(9)(b)). 1 LCCP Condition 13.1.1 requires the operator to inform the Commission in writing within 14 days of such authorisation.

13.16 Further specific provision is made in connection with horse-race pool betting operating licences. The expression ‘horse-race pool betting’ is defined by s  12 which provides that ‘For the purposes of this Act pool betting is horse-race pool betting if it relates to horse-racing in Great Britain’, (s  12(2)). Where a pool betting operating licence provides for s  94 to apply the following provisions apply to the licence. The holder of the licence may authorise a person in writing to provide facilities for horse-race pool betting (s 94(1)(2)). Such an authorisation is to be treated for the purposes of s 33 as if it were a pool betting operating licence authorising the provision of facilities for horse-race pool betting (s  94(3)). Such an authorisation may be issued on terms and conditions which may, in particular, include: (a) provision for 694

Betting payment to or by the person issuing the authorisation; and (b) provision for agency or commission. A  condition of a pool betting operating licence to which s  94 applies (whether attached by ss  75, 77 or 89) may make provisions regulating or restricting the activities of persons authorised to provide facilities for horse-race pool betting under the above provisions (s 94(5)). A pool betting operating licence to which s 94 applies contains an implied term permitting use of postal services for the making of bets (s 94(6)). The effect of this implied term may not be disapplied or restricted by a condition attached under ss 75, 77 or 78 (s 94(7)). The Secretary of State may by order repeal s 94 (s 94(8)). 13.17 A  pool betting operating licence is subject to the condition that nothing may be done in reliance on the licence in relation to a bet on the outcome of a lottery which forms part of the National Lottery (s 95(1)(2)).

BETTING INTERMEDIARY OPERATING LICENCE 13.18 This is a new form of gambling authorisation provided for by the GA 2005 for which there was no true precedent in the previous legislation. It appears likely that most betting intermediary operating licences will be remote licences obtained to authorise the running of internet betting exchanges and bet broking sites where customers bet with each other over the exchange. It is believed that most such internet exchanges obtained bookmaker’s permits under the previous legislation and, to the extent that they did, the betting intermediary operating licence replaces the use of permits for that purpose. Provided a betting exchange is conducted purely over the internet so that customers do not visit premises to engage in betting, then no premises licence will be required.1 There may, however, be some cases where a terminal or terminals giving access to an internet betting exchange are provided in a high street betting office. In such a case the interaction of GA  2005, s  37(1)(e) and s  150(1)(e) will require this activity to be carried on under a betting premises licence, although such a licence will, of course, be necessary in any event if the business based in the betting office offers betting on its own account in addition to betting over the exchange terminals. It should, in addition, be noted that where ‘tic-tacs’ operate on a racecourse, they will need the authority of a non-remote intermediary operating licence to do so.2 A betting intermediary operating licence is subject to the condition that nothing may be done in reliance on the licence in relation to a bet on the outcome of a lottery which forms part of the National Lottery.3 1 GA 2005, s 37(1) and (6). 2 Gambling Commission FAQ ‘What licences do I need for my gambling business?’ 3 GA 2005, s 95(1)(2).

BETTING INTERMEDIARY (TRADING ROOM ONLY) OPERATING LICENCE 13.19 A  sub-category of the betting intermediary operating licence is a ‘betting intermediary (trading room only) operating licence’, which was 695

Betting added by the Gambling (Operating Licence and Single-Machine Permit Fees) (Amendment) Regulations 2008 (SI  2008/1803). A  trading room is characterised by the Commission as premises which provide access to live sporting pictures and remote communication such as an internet-enabled computer intended to be used for betting via a betting exchange. The operator’s involvement is limited to administering the arrangements for gambling by others. Whether the offer of trading room facilities amounts to the provision of a licensable gambling activity is a question of fact and degree: guidance is given by the Commission in an Advice Note issued in March 2011: ‘Is a trading room licence required?’1 1 See http://www.gamblingcommission.gov.uk/pdf/is%20a%20trading%20room %20licence%20required%20-%20march%202011.pdf.

BETTING PREMISES LICENCE 13.20 In the same way as, under the old law, an operator of a betting office needed to have in place both a bookmaker’s permit and a betting office licence, so an operator under the GA  2005 is required to have both an operator’s licence and a betting premises licence. Premises licensing is discussed in Chapter 10.

PRIMARY GAMBLING ACTIVITY 13.21 Between the publication of the 3rd edition of this book and the drafting of this 4th edition, the Gambling Commission had developed the concept of ‘Primary Gambling Activity’ – a concept nowhere to be found in the express language of the GA 2005, but which the Commission said was to be inferred from its structure. The development of the concept was spurred by an increasing tendency in operators to use licensed betting premises solely for the purpose of providing the gaming machines which their operating and premises licences entitled them to make available. In the Commission’s view the use of betting premises only for gaming on gambling machines was not within the contemplation of Parliament when drafting the GA 2005, and the proper inference from the legislation as a whole is that such use is not, or should not be, permitted. The contrary argument is that whatever the supposed contemplation of Parliament, there is nothing in the express language of the Act to prohibit such use, and the machine entitlements of the relevant operating and premises licences is express and unfettered. The issue was resolved by the First-tier Tribunal in Luxury Leisure Ltd.1 For a full discussion of ‘primary gambling activity’ see 6.92–6.96. 1 In Luxury Leisure Ltd v Gambling Commission GA/2013/0001; [2015] LLR 122 Judge NJ Warren, sitting as the President of the First-tier Tribunal (General Regulatory) Chamber, considered the case of Luxury Leisure Ltd, which held a non-remote betting operating licence for premises in Newcastle. In 2013 the Gambling Commission had notified the company that its regulatory panel had found the company in breach of condition 16 of the operating licence, which stated that ‘Gaming Machines may be made available for use in licensed betting premises only at times when there are also sufficient facilities for betting available.’ The

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Betting Commission had decided to issue a written warning. The operating condition related to the use of ‘fixed odds betting terminals’ (the so-called FOBTs), gaming machines found in betting shops but not bingo clubs or adult gaming centres. In Luxury Leisure Ltd  Judge Warren found that the condition meant no more than the plain words used, saying: ‘I  have concluded that I  cannot accept the submission made on behalf of the Commission. The first and simplest reason for this conclusion is that the construction inserts into the condition, without justification, words which are simply not there. It seems to me that the words to be applied are the plain words of the condition.’ At the same time the judge held that whilst s  86(1)(a) prevented the Gambling Commission from attaching conditions about the number and categories of gaming machines to be made available under an operating licence, it did not exclude regulation by the Commission of any activity relating to fixed odds betting terminals. It was open to the Gambling Commission to attach conditions concerning the atmosphere in which various facilities including gaming machines are made available. Condition 16 was therefore intra vires. The importance of the decision is that on the wording of that particular condition a betting shop will not be in breach merely because the use of fixed odds betting machines is observed to be greater than the use of the betting facilities offered. In the judge’s words, what mattered was the ‘existence’ of betting facilities, not the ‘dominance’ of them.

POWER OF GAMBLING COMMISSION TO VOID BET 13.22 The GA  2005 introduces a new power enabling the Gambling Commission to void bets in certain circumstances. This power is dealt with in this Chapter because it has specific reference to betting. Section 336 empowers the Commission to make an order in relation to a bet accepted by or through the holder of: (a) a general betting operating licence; (b) a pool betting operating licence; or (c) a betting intermediary operating licence voiding the bet.1 The Commission may make an order voiding a bet only if satisfied that the bet was substantially unfair.2 Where the Commission makes an order voiding a bet then: (a) any contract or other arrangement in relation to the bet is void; and (b) any money paid in relation to the bet (whether by way of stake, winnings, commission or otherwise) shall be repaid to the person who paid it, and repayment may be enforced as a debt due to that person.3 In considering whether a bet was unfair the Commission shall, in particular, take account of any of the following that applies: (a) the fact that either party to the bet supplied insufficient, false or misleading information in connection with it, (b) the fact that either party to the bet believed or ought to have believed that a race, competition or other event or process to which the bet related was or would be conducted in contravention of industry rules,4 (c) the fact that either party to the bet believed or ought to have believed that an offence under s 42 had been or was likely to be committed in respect of anything to which the bet related, and (d) the fact that either party to the bet was convicted of an offence under s 42 in relation to the bet.5 697

Betting An order under these provisions may be made in relation to a bet only during the period of six months beginning with the day on which the result of the bet is determined.6 However the six month limitation period does not apply to an order made taking account of the fact that a party to the bet was convicted of an offence under s 42 in relation to it.7 1 2 3 4

GA 2005, s 336(1). GA 2005, s 336(3). GA 2005, s 336(2). ‘Industry rules’ means rules established by an organisation having, by virtue of an agreement, instrument or enactment, responsibility for the conduct of races, competitions or other events or processes: s 337(7). 5 GA 2005, s 336 (4). 6 GA 2005, s 336(5). In 2011 the Commission made voiding orders, the first of their kind under the GA  2005, following its investigation into a report of suspicious betting activity involving employees of a large media organisation. It decided to void bets totaling over £16,000 placed on TV’s the X Factor. Following consultation with Ofcom steps were taken to prevent a repeat of such activity. 7 GA 2005, s 336(6).

13.23 Section 337 contains supplementary provisions relating to the power to void bets. Where the Commission makes an order voiding a bet a party to the bet or to any contract or other arrangement in relation to the bet may appeal to the Gambling Appeals Tribunal.1 The provisions of Part 7 governing proceedings before the Gambling Appeals Tribunal are applied to such an appeal with any necessary modifications.2 The Commission may make an order voiding a bet in relation to the whole, or any part or aspect of, a betting transaction.3 An order voiding a bet may make incidental provision, and in particular such an order may make provision about: (a) the consequences of the order for bets connected with the bet which becomes void under the order; and (b) the consequences of the order for other parts or aspects of a betting transaction one part or aspect of which becomes void under the order.4 For the purpose of considering whether to make an order voiding a bet the Commission: (a) may require a person by or through whom the bet is made or accepted to provide information or documents in relation to it; and (b) may take into account information received from any other person.5 A person commits an offence punishable on summary conviction by a fine not exceeding level 2 on the standard scale if without reasonable excuse he fails to comply with a requirement to provide such information or documents.6 1 2 3 4 5 6

GA 2005, s 337(1). GA 2005, s 337(1). GA 2005, s 337(2). GA 2005, s 337(3). GA 2005, s 337(4). GA 2005, s 337(5), (6).

13.24 Section 338 provides for an ‘interim moratorium’ in certain cases. Where the Commission has reason to suspect that it may wish to make an order voiding a bet the Commission may make an order under s 338(1) and whilst such an order has effect in relation to a bet an obligation to pay money in relation to the bet (whether by way of stake, winnings, commission or otherwise) shall have no effect.1 The order has effect for a period 14 days 698

Betting beginning with the day on which the order is made.2 The Commission may, however, extend the period for which an order has effect by the addition of not more than 14 days though more than one such order may be made in relation to a bet.3 Where an interim moratorium order has been made the Commission may cancel it (without prejudice to the making of a new order).4 The Commission must cancel any interim moratorium order as soon as is reasonably practicable after it ceases to entertain the suspicion that it may wish to make a voiding order under s 336(1).5 The Commission will not be liable to make any payment on account only of the fact that it: (a) has made an interim moratorium order under s 338(1); and (b) has not made a subsequent voiding order under s 336(1).6 However this provision is without prejudice to any power of a court in legal proceedings (whether for tort or otherwise).7 1 2 3 4 5 6 7

GA 2005, s 338(1), (2). GA 2005, s 338(3). GA 2005, s 338(4). GA 2005, s 338(5). GA 2005, s 338(6). GA 2005, s 338(7). GA 2005, s 338(8).

13.25 In its Licensing, Compliance and Enforcement [etc] Policy Statement March 2015 the Gambling Commission has set out briefly at paras 5.53–5.59 its policy approach to the exercise of its power to void bets.

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Chapter 14 Gaming

CASINOS Introduction 14.1 The GA  2005 defines a casino as ‘an arrangement whereby people are given an opportunity to participate in one or more casino games’.1 This is the first time ‘casino’ has been legislatively defined and the definition is not restricted to terrestrial casinos. The Act expressly legalises online casinos by providing that the arrangement referred to may be by remote communication.2 The legalisation of UK-based internet gaming is one of the pillars of the Act and replaces the previous legislation, which outlaws gaming by a person ‘who is not present on the premises at the time when the gaming takes place there’.3 Online gaming is further discussed at Chapter 17 of this work. 1 GA 2005, s 7(1). 2 GA 2005, s 7(4). 3 GA 1968, s 12(1)(a).

14.2 The provisions of the GA  2005 relating to casinos were the most controversial elements in terms of media exposure both before and for some time after the Act was published in its final form. Whilst the Act contains provisions that have a fundamental effect on all sectors of the gambling industry, it was the introduction of the so-called ‘supercasinos’ that caused the most intense debate amongst the media and the public.1 1 With the stagnation of casino licensing (as discussed below) controversy has turned its face towards fixed odds betting machines in high street betting offices. It remains to be seen whether the fate of FOBTs will be governed by empirical evidence or by media comment. FOBTs are discussed in Chapter 13.

Categories of casino 14.3 Under the GA 2005, each casino in Great Britain is classified as one of four types (regional, large, small or below the minimum size for a licensed casino).1 Although the Act permits these types to be defined by a wide choice 701

Gaming of factors, such as the number, location or concentration of gaming tables, or the floor area used or designated for a specified purpose, it was decided that casinos would be classified solely by the minimum size of the area2 within the casino that is used for providing facilities for gambling.3 The floor area referred to, which is termed in the Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007 the ‘gambling area’, is to be indicated on a plan attached to the premises licence4 for such casinos5 and specifically excludes any non-gambling areas (where customers are only permitted to participate in non-gambling facilities). A large casino has a minimum total gambling area of 1,500 square metres, but less than 3,500 square metres, and a small casino has a minimum total gambling area of 500 square metres, but less than 1,500 square metres. Any casino which does not qualify for the above three categories, ie which has a gambling area of less than 500 square metres, is designated as ‘below the minimum size for a [2005 Act] licensed casino’. Transitional provisions under the GA 2005 have ensured that existing operators of smaller casinos have had their licences converted into ‘converted casino premises licences’, albeit they are of a smaller size than the new minimum. The classification of the new casinos in terms of areas in which gambling is to be provided gives flexibility to operators in that there is no limit on the non-gambling area. This allows for the development of leisure facilities within the premises and, importantly, enables the new casinos to comply with the mandatory condition on premises licences, which requires recreational facilities to be available for use by customers in the non-gambling area at any time during which facilities for gambling are provided on the premises.6 1 GA 2005, s 7(5). 2 It was initially proposed that categories of casino would be defined by their minimum non-gambling area and their minimum table gaming area as well as by their total gambling area, but this plan was rejected in favour of the simplicity of a definition which was based solely on total gambling area. It was thought that classifying casinos by limiting the non-gambling area would serve no regulatory purpose. Minimum size requirements relating to each category of casino were set down, initially, by way of mandatory conditions to be attached to casino premises licences. 3 Categories of Casino Regulations 2008 (SI 2008/1330). 4 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulation 2007 (as amended). 5 Categories of Casino Regulations 2008 (SI 2008/1330). 6 Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007 (SI 2007/1409); the power to make those regulations is given by the GA 2005, s 174(7).

14.4 The GA  2005 provides for no more than 17 new casino premises licences to be issued – one regional casino premises licence, eight large casino premises licences and eight small casino premises licences. The first draft of the Gambling Bill, published in 2003, originally offered no cap on the number of new casinos to be introduced. By the end of 2004, however, casino policy was the subject of detailed amendments during which it was determined that the number of regional, large and small casinos would be limited to eight of each category. This concession was not sufficient, however, to allay opposition fears; and the government was forced to further amend the Bill to allow a sole regional casino in order for it to be approved by the 702

Gaming House of Lords. Following the House of Lords’ defeat of the draft Gambling (Geographical Distribution of Casino Premises Licences) Order 2007, the DCMS confirmed that no regional casino would be permitted until at least 2013. As at the date of publication of the fourth edition of this work (2017) there is no sign of a regional casino being in the government’s contemplation, or of any addition being made to the permitted number of eight large and eight small casinos. In December 2004, the government announced1 that it had decided to set up an independent advisory panel (the ‘Casino Advisory Panel’ or the ‘CAP’) to make recommendations as to which licensing authorities would have the power to award the categories of new casino premises licences, which are limited by s 175: it would then be for Parliament to make the ultimate decision on the basis of that recommendation.2 It is as a result of this process that the selection was made of the geographical areas of Great Britain in which the eight large and eight small casinos are located. The government asked the CAP to ensure that its selection would represent a good range of types and geographical spread of areas across Britain in order that the DCMS could address its primary consideration of providing the best test of social impact3 when assessing whether to introduce further casinos. Provided the stated criteria were satisfied, the CAP was then asked to ensure that each licensing authority selected was willing to license a casino,4 and that those areas selected were in need of regeneration (as measured by employment and other social deprivation factors). The CAP was also asked to have regard to the government’s Statement of National Policy. The CAP was additionally asked specifically to ensure that any areas it selected were compatible with the list of broad locations identified by the Regional Planning Bodies in England in their work on the Regional Spatial Strategies. 1 Casinos: Statement of National Policy, 16 December 2004. 2 The government was later criticised for failing to provide the CAP with sufficiently clear criteria and for consequently requiring it to manufacture its own interpretation of the terms of reference in the absence of sufficient governmental guidance. Such comments were made in the House of Commons on 28 March 2007 during the debate preceding the vote to approve the draft Gambling (Geographical Distribution of Casino Premises Licences) Order 2007. 3 The government suggested in its Statement of National Policy that it would be appropriate to achieve this aim by selecting a mix of areas that included ‘urban centres and seaside resorts across different parts of Britain’. 4 The licensing authorities of Brent, Canterbury, Dartford, Thurrock and Woking withdrew their proposals after a consultation of residents revealed a lack of willingness to license a casino in the area.

14.5 In circumstances where more than one operator applied for a new casino premises licence under the GA  2005, but only one casino licence could be granted, licensing authorities were required to take into account the potential benefit to the area in terms of regeneration when selecting the appropriate operator for the casino in the area. The underlying philosophy was that the development of extensive non-gambling facilities such as hotels and other leisure facilities as part of the casino development would add to employment and tourism in the area. Whether or not the redistribution of wealth from the residents of deprived areas to national casino operators should be regarded as a ‘benefit to the area’ is not fully explored in that philosophy. 703

Gaming 14.6 Not all the areas ultimately recommended by the CAP and approved by Parliament have been commercially attractive to casino operators. The following lists indicate the selected areas and the subsequent history of casino licensing in them as at the time of publication of this book: Large casino premises licences: (a) Great Yarmouth Borough Council: awarded, but not developed; (b) Kingston upon Hull City Council: only one applicant; awarded but not developed; (c)

Leeds City Council: awarded and still in construction;

(d) Middlesbrough Borough Council: awarded, but not developed; (e)

Milton Keynes Borough Council: awarded, opened at the end of 2013;

(f)

Newham London Borough Council, awarded, opened 2011;

(g) Solihull Metropolitan Borough Council: awarded, opened end 2015; (h) Southampton City Council: no award yet made. Small casino premises licences: (a) Bath and North East Somerset District Council: awarded, but not developed; (b) East Lindsey District Council: no applications for the licence received from operators; (c)

Luton Borough Council: awarded, opened 2015.;

(d) Scarborough Borough Council: awarded, but not developed; (e) Swansea City and County Council: no applications for the licence received from operators; (f)

Torbay Borough Council: no applications for the licence received from operators;

(g)

Wigtown Divisional Licensing Board (Dumfries and Galloway Council): no applications for the licence received from operators;

(h) Wolverhampton City Council. no applications for the licence received from operators. As can be seen, just four of the GA 2005 casinos have opened, with a fifth (Leeds) in construction at the time of writing. It is widely believed that these casinos are within the only commercially viable locations among the 16 available. Three of those that have opened are ‘large’ casinos. Because of the current machine-limits on small casinos it is not thought that there will be much interest taken in them by developers until those restrictions are relaxed. The licences that have been awarded but not developed are understood to have been taken by speculators who have not been able to be able to sell them on to commercial operators.

The new licensing regime 14.7 A comprehensive analysis of the background to the new legislation was given in Chapter 14 of the 3rd edn of this book, and the transitional 704

Gaming arrangements for the ‘grandfathering’ of 1968 Act licences were discussed in some detail. The editors have taken the view that, eight years later, these matters are of more historic than practical interest, and the discussion of them has been deleted from this edition. 14.8 Similarly, the bespoke regime for the grant of new casino licences, as set out in Sch 9 to the GA 2005, has all but run its course, since no new casino licenses are in contemplation at the time of writing, nor do any look likely to be in contemplation before a further edition of this book is published. A review of that regime is to be found in Chapter 14 of the 3rd edn, and it is not repeated here. 14.9 Newly granted casino licences are nonetheless ‘premises licences’ under the GA  2005, and those who hold them must also hold ‘operating licences’. Reference should be made to Chapters 6 and 10 of this edition for a general discussion of the issues arising under those headings. 14.10 The GA  2005 provides that the new casinos are for the most part larger, and contain more gambling and non-gambling facilities than any casino previously existing in the United Kingdom.1 In particular they are permitted to provide a greater number of gaming machines. Additionally, s  174 of the Act authorises the new casinos to provide facilities for betting, and the large casinos to provide facilities for bingo. Several of the licensing authority areas that have been given the power to grant new premises licences already have existing 1968 Act casinos in their jurisdictions. It was feared by existing casino operators that the extent of provision of facilities permitted to be offered by the new casinos would have an adverse impact on the level of business at existing casinos, betting shops and bingo halls. 1 There are a few GA 1968 casinos that have a floor area equal to or greater than that of the minimum total gambling area of the small casinos.

14.11 In May 2007, the British Casino Association lost its High Court action against the government in which it contended that the new casinos offer unfair competition owing to the extensive entitlements given to them that are not available to existing casinos: R  (on the application of British Casino Association Ltd) v Secretary of State for Culture Media and Sport.1 The BCA argued that the introduction of the new categories of casino would create ‘unfair competition’ for existing casinos. One way in which the BCA claimed existing casinos would be significantly disadvantaged was because of the discrepancy between numbers and categories of gaming machines to be permitted in: (a) existing casinos; and (b) in the different types of new casino. The application was ultimately dismissed on all grounds. Langstaff J stated in his judgment: ‘The evidence establishes that gaming machines are both highly profitable, and are generally more attractive to those of the general public who might be attracted into casinos than is traditional table gaming. Typically, a gaming machine currently in use produces a net profit of £30,000, and a Section 21 machine a net profit of £11,500 per annum. In simple terms, gaming machines are big business.’ 705

Gaming Langstaff J went on to say: ‘The important point is thus that there is no parity between existing casinos and the categories to be licensed under the 2005 Act. The Act provides effectively for disparity.’ But the learned judge found against the British Casino association, holding that: ‘No challenge can be brought against the government simply for adopting a particular policy in respect of the control of gambling, although inevitably any such policy will advantage some, and disadvantage others.’ It was further argued by the BCA that the Secretary of State had failed to give sufficient consideration to such factors as the impact of the proposals on fair competition, the fact that many of the existing casinos were large enough in size to qualify as small or large new casinos themselves and that existing casinos would be worse off under the new legislation than under the GA 1968. Following examination of the process by which the Secretary of State came to make the transitional provisions (part of which was the provision setting out the number of gaming machines to be permitted in existing casinos under the GA  2005), it was held that the process was not unfair. 1 [2007] EWHC 1312 (Admin).

Casino games 14.12 A casino game is any game which is a ‘game of chance which is not equal chance gaming’,1 a definition carried over from the GA 1968. Therefore, any game which involves a player staking against a bank, or which is not equally favourable to all players, is a casino game. The definition includes blackjack, baccarat and, still the most popular of casino games, roulette.2 Games of chance that are not equal chance gaming (or so-called ‘bankers’ games) have traditionally been those to which the more stringent controls apply,3 as the bank (ie the casino) has the edge, in terms of odds, over the player, and therefore the player is potentially more at risk of exploitation by the ‘house’ than if he was playing an equal chance game. The advantage possessed by the bank is clearly illustrated by a brief consideration of roulette. Roulette is played with a single ball and a roulette wheel, which has 37 equal compartments numbered, in any order, from 0 to 36. A player is able to put money on one or more specific numbers and, upon winning, is paid according to the odds. Should a player win on a bet placed on one specific number, for example, the bet will be payable at 35 to 1. However, given that there are 37 compartments on the roulette wheel, the odds against the player winning with a bet on one specific number are 36 to 1. Therefore, the banker has the advantage, or ‘edge’, over the player and it is this edge which provides the casino with its profit.4 1 GA 2005, s 7(2); the definition of ‘game of chance’ is discussed in Chapter 2. 2 American Roulette was responsible for 37.6% of the total drop in all casinos in Great Britain during the financial year 2014/2015 (Gambling Commission Industry Statistics, November 2015). 3 One of these controls is the fact that casino games are only permitted to be played in casinos, as opposed to games of equal chance, which do not have this limitation. 4 During the financial year 2014/2015, the total drop (money exchanged for chips) in casinos in Great Britain was £7317 million, of which £992 million was retained by casinos as house wins (Gambling Commission Industry Statistics, November 2015).

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Gaming 14.13 The GA  2005 states that regulations may be made which specify that a particular activity, or an activity which is carried on in particular circumstances, is to be treated as a casino game or not to be treated as a casino game.1 This does not relate to the types of casino games, such as blackjack or roulette, which are permitted to be played in casinos, but affords the Secretary of State the power to change the criteria for a ‘casino game’.2 1 GA 2005, s 7(3). 2 Any regulations under the GA 2005, s 7 may only be made after draft regulations have been laid before and approved by resolution of each House of Parliament, as required by s 355(4). No such regulations had been made at the time of writing.

14.14 Until 2011 a casino could only offer casino games that appeared on the Gambling Commission’s list of approved games.1 A final edition of the Rules of casino games in Great Britain was published in June 2011 in order to collate in one place all those games, side bets and variations that were then available in GB casinos. LCCP condition 9 was amended with effect from 20  June 2011 and removed the requirement for casino operators in Great Britain to seek the Commission’s approval to trial new games. The amended condition 9.1.1 reads: ‘Licensees must not offer or permit to be played casino games that appear on any list of games prohibited by the Commission.’ The Commission stated that it would prescribe a list of prohibited games. At the time of writing there is no such list. The ‘Rules of casino games in Great Britain – June 2007’ is designed to set out the standard rules for the five most popular games in GB casinos: blackjack; roulette; three card poker; punto banco; and dice. It does not, however, set out the rules for side bets or variations to these games. Social responsibility code provision 4.2.1 of the LCCP 2016 provides that all nonremote casinos: ‘… in complying with any condition on a casino premises licence requiring the display of rules about gaming, licensees must ensure that the following are included: (a) the rules of each type of casino game available to be played (b) a player’s guide to the house edge (c)

a player’s guide to the rules of any equal chance games which are made available.’

1 ‘Licence Conditions and Codes of Practice’, Part 1, para 9, dated June 2007.

14.15 Remote casinos are not subject to the same restrictions in terms of types of games permitted to be offered, and variations of traditional casino games are currently offered online. However, the functionality of each game made available must comply with the Commission’s Remote Gambling and Software Technical Standards (‘the Standards’) and must be tested before the game goes live. Testing may be undertaken either by an approved test house or by the company in-house, subject to certain criteria.1 The Commission has stated that it will test some new games itself to ensure reasonable consistency with the licensing objective of ensuring that gambling is conducted in a fair and open way.2 In terms of customers’ access to the rules of each remote game, the operator must make a player’s guide to each gambling 707

Gaming opportunity available to customers. Additionally, the Standards require that links to the applicable rules should be prominently placed on remote casino gaming websites so that customers can easily locate them. LCCP 2016 Social Responsibility code provision 4.2.3 requires that a player’s guide to each gambling opportunity (bet, game or lottery) is made available. 1 Criteria for testing software and hardware are detailed in the Commission’s ‘Testing Strategy for Compliance with Remote Gambling and Software Technical Standards’ (May 2016). 2 The Gambling Commission is under a duty, by virtue of the GA  2005, s  22, to ‘pursue, and wherever appropriate to have regard to, the licensing objectives, and to permit gambling, insofar as the Commission thinks it reasonably consistent with the pursuit of the licensing objectives’.

Card room and other games of equal chance 14.16 Equal chance gaming is usually found in card rooms within casinos and in premises with fewer controls such as members’ clubs. Card room games are games played for money or money’s worth by players (with no banker involved), and a participation charge is generally payable to the casino. The card room games are usually played in a designated card room, separate1 from the ‘hard’ gaming area.2 The nature of equal chance gaming (in that no advantage is given to the casino during the playing of the game) does not require the strict controls in terms of customer protection which are applicable to casino games, where it is statistically more likely that a player will lose. 1 Layout requirements are set out in the Gambling Act 2005 (Premises Licences and Provisional Statements) Regulation 2007, which details the requirements applying to plans to be submitted with applications for new casino premises licences. 2 ‘Hard’ gaming is a colloquialism that encompasses casino games and gaming on jackpot machines, as distinct from ‘soft’ gaming which usually refers to card room games and other games of equal chance. that games traditionally considered to constitute ‘hard gaming’ should be referred to as ‘bankers’ games’ and that games that fall within the ambit of ‘soft gaming’ should be referred to as ‘card-room and other games of equal chance’.

Poker 14.17 The steep rise in the popularity of poker, both online and terrestrial, and the legislative response of the government and the Gambling Commission to the phenomenon, has left UK casinos in the enviable position of being the only venues which are legally permitted to offer poker on a commercial basis with unlimited stakes and prizes. Equal chance gaming in clubs and premises with an alcohol licence is known as ‘exempt gaming’ and may be carried out without a gambling licence or permit. However, such premises may only offer equal chance gaming that does not involve staking against a bank and where there are set daily and weekly prize limits. Where a club holds a club gaming permit additional entitlements are available.1 Poker may be provided as ‘exempt gaming’ in members’ clubs, miners’ welfare institutes, alcohol licensed premises and at non-commercial events.2 With regard to members’ clubs, strict rules 708

Gaming surrounding the constitution of the club3 must be observed, the most significant being that the club must be established and conducted wholly or mainly for purposes other than the provision of facilities for gaming or for the provision of facilities for bridge or whist. This provision prevents a dedicated poker club from being run for profit and consigns poker to being an ancillary pursuit. In such circumstances, poker must be provided according to the following conditions, which are not exhaustive: (i)

the amount that may be staked by a person on any game of poker must not exceed £10;

(ii) the aggregate of the amount that may be staked on games of poker in any one day must not exceed £250; (iii) the aggregate of the amounts that may be staked on games of poker in any period of seven days must not exceed £1,000; (iv) the maximum amount or value of a prize that may be won in any game of poker is £250; (v) no amount may be deducted or levied from the sums staked or won; and (vi) the maximum participation fee that the club may charge a person is £1 a day. In addition to the above, these unlicensed clubs must comply with the Gambling Commission’s ‘Code of Practice for Equal Chance Gaming in Clubs and Premises with an Alcohol Licence’. The code includes specific provisions for poker and sets down that all games organised by the management of the premises should not be cash games but tournament poker played using chips supplied by the premises. The gaming supervisor must keep a record of the number of games played, the number of players and the amount staked, in order to ensure that the individual, daily and weekly stake and prize limits are not exceeded.4 1 Code of practice for equal chance gaming in clubs and premises with an alcohol licence: August 2014. 2 Members’ clubs are permitted to apply for a club gaming permit, which allows higher stake games. However, the club must be established and conducted wholly or mainly for purposes other than gaming, or for bridge or whist. 3 A  members’ club must have at least 25 individual members, must not be established with the purpose of functioning only for a limited period of time, must be established and conducted for the benefit of its members (and not otherwise established and conducted as a commercial enterprise), and must be established and conducted wholly or mainly for purposes other than the provision of facilities for gaming or for bridge or whist. 4 The Gambling Commission has published as useful guide to the various ways in which poker may be provided, and the rules pertaining: http://www. gamblingcommission.gov.uk/pdf/Poker-in-clubs-quick-guide.pdf.

14.18 The Gambling Commission has openly stated that it wishes to crack down on the number of unlicensed poker clubs operating illegally. An example of this is R  v Derek Kelly,1 in which Mr Kelly, the operator of a members’ club called Gutshot, was convicted as a result of imposing levies on winnings and charging participation fees on games of poker on 709

Gaming his premises. This high profile case turned on whether poker was regarded as a game of chance or a game of skill and, if a combination of both, the proportion of each element. It was held that poker fell within the definition of a game of chance under the GA 1968, and a gaming licence was therefore required to provide it. 1 [2008] EWCA Crim 137.

14.19 At the time of writing, the only practical option for those who wish to make commercial provision for poker is to purchase an existing casino and provide poker according to its licence. An important landmark, however, was the grant of the casino licence in respect of the ‘Dusk Till Dawn’ poker club in Nottingham. The casino was granted a casino licence which was restricted to the provision of poker, although doubts exist as to whether a licensing authority is lawfully entitled to restrict a casino licence in this way. It should be noted that the grant of this licence was, of course, under the GA 1968 rather than the GA 2005, under which there are limited opportunities, for the foreseeable future, for new casino licences.

Virtual games 14.20 Section 173 of the GA 2005 authorises the holder of a casino premises licence to make facilities available for betting on the outcome of a virtual game, race, competition or other event or process. ‘Virtual’ here refers to such games, etc, consisting of images generated by a computer and which represent all or part of a game, race, competition, event or process, or an imaginary version of those things, or any game, race, or other event or process the results of which are determined by a computer. Section 68(3)(a) provides the equivalent authorisation at an operating licence (as opposed to at a premises licence) level, by enabling casino operating licence holders to provide facilities for virtual gaming,1 but such provision is subject to any general or individual condition imposed on the operating licence by the Gambling Commission under ss 75 and 77 of the GA 2005. There is no corresponding condition in the LCCP, or list of ‘prohibited virtual casino games’, as for non-remote casino games. 1 The activity of making facilities available for betting on the outcome of a virtual game, race, competition or other event or process is categorised in the GA 2005 as ‘virtual gaming’, as opposed to ‘virtual betting’.

Advertising 14.21 The restrictions on advertising under the Gaming Act 1968 have been liberalised to a great extent following the recommendation in the Gambling Review Report that advertising of gambling products should be permitted. The Gambling (Licensing and Advertising) Act 2014 provides that only casino (and other) operators licensed by the Gambling Commission are allowed to advertise to consumers in Great Britain. Carriers (whether television broadcasters or newspaper publishers) of gambling advertising will need to ensure they only allow operators licensed by the Commission to advertise in Great Britain. 710

Gaming 14.22 Gambling operators wishing to advertise must comply with the advertising codes of practice that apply to the form and media in which they advertise their gambling facilities or services. The Committees of Advertising Practice (CAP) write and maintain the UK  Advertising Codes which are administered by the Advertising Standards Authority (ASA). Advertising of gambling products is discussed more fully in Chapter 18.

BINGO Introduction 14.23 The GA 2005 did not bring about as many far-reaching or fundamental legislative changes for the bingo1 industry as it did for other gambling sectors. One important change was the requirement to put into place procedures to ensure socially responsible gambling.2 However, this does not mean to say that the bingo industry has remained unchanged since the introduction of the Act. In fact, the current state of the industry has led many commentators to claim that the sector is ‘in crisis’. The ban on smoking in enclosed or substantially enclosed public places, the rise in popularity of online bingo, the GA 2005 prohibition on lucrative GA  1968, s  21 machines,3 and the government’s refusal to give tax relief to operators have all contributed to an unprecedented number of bingo hall closures since 2007. In 2008 and following persistent lobbying by the bingo industry, the government recognised the plight of the industry and launched a consultation which proposed that the maximum number of Category  B3 machines permitted in bingo premises be increased from four to eight. The formula subsequently arrived at and which came into force on 4 February 2009 was that such premises might offer a number of Category B gaming machines ‘not exceeding 20 per cent of the total number of gaming machines which are available for use on the premises’, whilst maintaining the entitlement for the premises to provide any number of Category C and Category D gaming machines.4 In the Budget speech of March 2014 a further major initiative was taken, with the Chancellor recognising the decline in bingo clubs by announcing a new higher rate of machine games duty and a cut in the rate of bingo duty: ‘Turning to gambling duties, fixed odds betting terminals have proliferated since gambling laws were liberalised a decade ago. These machines are highly lucrative, and therefore it is right that we now raise the duty on them to 25%. [ … ] While the number of betting machines have grown, the number of bingo halls has plummeted by three quarters over the last 30 years, yet bingo duty has been set at the high rate of 20%. [The] vigorous campaign to cut bingo duty [wants] the rate cut to 15%. I can go further. Bingo duty will be halved to 10% to protect jobs and to protect communities.’ 1 For the definition of ‘bingo, see s  353(1) and the Commission’s publication of January 2014 ‘What constitutes bingo’, which suggested that features would always include an ‘equal chance game’, a ‘degree of participation’ and a ‘a clearly defined end point’.

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Gaming 2 Speech by Peter Dean, Chairman of the Gambling Commission, to the Bingo Association AGM on 6 June 2006. 3 Such machines were provided under Gaming Act 1968, s 21. 4 Consultation: Gambling Act (Gaming Machines in Bingo Premises) Order 2008, 25  June 2008. This consultation resulted in the Gambling Act 2005 (Gaming Machines in Bingo Premises) Order 2009 (SI 2009/324) (made under sub-s (11)(a) of the GA 2005).

14.24 The number of bingo clubs in operation has been gradually declining since the 1980s (following a boom of popularity in the 1970s) and, between 2003 and 2005, there was a 3% net reduction in the number of clubs, despite the opening of new bingo premises. However, a third of the closures during that period were by operators with premises situated on holiday parks who replaced their commercial bingo operations with bingo ‘clubs’ governed by s  40 of the Gaming Act 1968, with the effect that the new operations were smaller in scale and did not require a licence. The amount staked on bingo in 2006/07 was down 0.3% on the previous year. In March 2007, 647 bingo clubs held a certificate of consent, while 634 clubs were actually in operation. The industry was headed up by Gala Leisure with 170 clubs and Mecca Bingo Limited with 103 clubs who, together, owned over 43% of all British bingo clubs.1 However, some eight years later there had been a further reduction in the number of clubs to just 615, with Gala Leisure having 135 clubs and Mecca Bingo some 91 clubs, jointly accounting for a reduced 37% of the total.2 Overall non-remote bingo gross gambling yield was £662m. Of this, just under half (£302m or 45.6%) was generated through 55,157 gaming machines. 1 The Gambling Commission’s Annual Report 2006/07. 2 The Commission’s Annual Report and Accounts 2014/15.

14.25 As was the case under the Gaming Act 1968, the GA 2005 does not provide a definition of ‘bingo’, but simply states that a reference to ‘bingo’ is a reference to any version of that game. This assumes that there may be more than one version of bingo and suggests that it may not be possible to provide a single definition which will apply to all cases. As a starting point we must rely on the everyday meaning of bingo, which can be defined as ‘a game of chance in which players, in return for a stake and in pursuit of a prize, receive a set of numbers which they have not chosen and mark them off cards as they are drawn at random’.1 In order to win, a player must be the first to mark off all the numbers in a line or multiple lines, or must achieve a full house (by marking off all of the numbers on his card), and must then call out that he has won – usually by shouting ‘Bingo!’.2 This will often provide a satisfactory description of bingo as it has traditionally been played, but reference is made to the discussion in Chapter 2 ‘Fundamental Terminology’ where it is suggested that there may be room for the development of variants of the modern game of bingo which may not necessarily contain each of the elements set out in the above description but which may still be regarded as games of bingo (see 2.185). 1 ‘Basic Facts about the British Gambling Industry’ published by the Gambling Commission in 2006. 2 The Gambling Review Report (July 2001).

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Gaming 14.26 Bingo has traditionally been seen as ‘soft’ gaming and has consequently been afforded various concessions from the restrictions placed on other gambling sectors such as casinos.1 The game was originally named ‘lotto’ and is, in important respects, a simple lottery, as there is a charge for participation, prizes are allocated and the process of that prize allocation relies wholly on chance.2 However, grafted onto the lottery is some form of active participation sufficient to amount to the playing of a game of chance so that the activity satisfies the definition of ‘gaming’ within GA 2005, s 6. Moreover, to the extent that bingo falls within the definition of a game of chance in s 6 and the definition of a lottery in s 14 it will, by virtue of s 17(4) be treated as a game of chance (and not as a lottery). Although the principal activity of bingo premises is ‘mainstage bingo’ (traditional, paper-based cash bingo games), it is the activities which may, at first glance, appear to be ancillary from which the majority of the typical bingo club’s income is derived. 1 The British Gambling Prevalence Survey 2007 released in September 2007 found that problem gambling amongst bingo players had increased from 2.0% in 1999 to 3.1% in 2007, although more significant rises were found in the incidence of problem gambling in greyhound racing and football pools. In July 2014 the results from 2012 surveys for Scotland and England were drawn together to produce a compendium report: Gambling behaviour in England and Scotland (Findings from the Health Survey for England 2012 and Scottish Health Survey 2012) prepared for the Gambling Commission. Whilst the figure will not be directly comparable with earlier statistics, the figure of 3.5% for non-remote bingo continued to compare very favourably with poker played in pubs or clubs (13.2%) and spread-betting (20.9%). 2 The definition of a simple lottery can be found at GA 2005, s 14(2).

Types of bingo 14.27 Bingo has historically been divided into two types of game – cash bingo and prize bingo. The GA 2005 abolishes this distinction for commercial bingo operators and provides that the holder of a bingo operating licence, a premises licence which permits the provision of facilities for playing bingo and any relevant personal licences is automatically permitted to provide both types of bingo.1 Until the enactment of the reforms contained in the GA 2005 the distinction between the two was that the reward won by the successful players in cash bingo was in the form of cash made up of the stakes paid by the players. The reward in prize bingo was (and remains), as its name suggests, in the form of non-cash prizes which have no direct relation to the stakes paid by players. Prize bingo retains the same characteristics but many of the restrictions on cash bingo have been removed (see paras 14.28–14.29 below). Prize bingo is currently offered as a secondary activity to cash bingo in bingo halls and is also offered in arcades and fairs, the activities of which will, under the GA 2005, generally be covered by either the relevant premises licence or a prize gaming permit. The two main bingo variants are linked bingo and multiple bingo, both of which are discussed below at 14.98. 1 This permission extends to holders of casino operating licences who also hold the relevant corresponding casino premises licences which permit bingo (ie  the licences for the new ‘regional’ and ‘large’ casinos).

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Cash bingo 14.28 Bingo is an equal chance game1 and there is therefore no house ‘edge’ or advantage, which is, by contrast, an integral part of bankers’ games.2 Consequently, bingo has historically been seen as ‘soft’ gaming as opposed to the ‘hard’ gaming which typically takes place in casinos and in relation to which it has been considered that more stringent controls are required in order to protect the player from exploitation. Part  II of GA  1968, which until the implementation of the GA 2005 on 1 September 2007 governed the provision of cash bingo, set out the rules which formed the structure of the game: the operator was prohibited from receiving a ‘levy’ from the stakes placed on the game by the player or from their winnings; the aggregate of the stakes had to make up the prize fund from which the players received their winnings; and the operator was not permitted to take a share of that fund. Any bingo duty payable, however, was taken from the winnings. The rule that the aggregate of the stakes had to make up the prize fund from which winnings were paid was buttressed by a provision that prizes could not be enhanced by injections of cash from other sources save to a limited defined extent (£20,000 per week at the date of repeal of the GA 1968, though more generous provision was made in the case of linked bingo). In addition there could be no roll-over of prize funds from one game to another. These various restrictions, and in particular the facts that the promoter could enjoy no ‘edge’ in the gaming and could deduct no levy from the stakes or winnings had the result that great importance was placed by operators, not on the amount of money staked on a bingo game by individual players, but on the attendance numbers at the premises.3 It therefore followed that high attendance led to large prizes, which in turn attracted more customers. Cash bingo was and remains most commonly played at premises licensed for the main purposes of providing bingo but can also be played non-commercially in clubs. 1 GA 2005, s 8 states that gaming is ‘equal chance gaming’ if: (a) it does not involve playing or staking against a bank; and (b) the chances are equally favourable to all participants. 2 The house ‘edge’ is the margin by which odds in casino games are set in favour of the casino (ie the favourable odds of the banker over the remainder of the players). It is the edge which provides a casino with its profit. 3 Alongside the principal bingo games, operators made and continue to make substantial profit from interval games and also from gaming machines as well as some profit from refreshment.

14.29 The Gambling Review Body reviewed the restrictions imposed upon bingo under the GA 1968 and concluded that substantial liberalisation and deregulation was in order. In particular it recommended that there should be no statutory limits on the stakes and prizes in bingo games1 and that roll-overs should be permitted.2 It also recommended that there should be no restriction on the frequency of multiple bingo games.3  All these recommendations were accepted by government and effect is given to them in GA 2005, s 91. Section 91(2) provides that a bingo operating licence may not be subject to a condition: (a) limiting the amount that may be accepted or charged by way of stakes; (b) limiting the amount that may be charged by way of participation fees; 714

Gaming (c)

restricting the nature, amount or value of prizes;

(d) controlling the proportion of stakes paid out by way of prizes; (e)

preventing the provision of prizes funded other than out of stakes;

(f)

preventing or limiting arrangements for roll-overs in bingo;

(g) requiring a game of bingo to be played entirely on one set of premises; or (h) imposing requirements that are specific to games of bingo played on more than one set of premises. These provisions amounted to an important and wide-sweeping liberalisation of the legal framework for bingo. However, s 91(1) provides that conditions may be attached to bingo operating licences by regulations4 made by the Secretary of State under s 78 imposing restrictions and requirements upon the matters set out in the first, second, third, fourth and eighth subparagraphs set out above. It should be noted that no provision is made for regulations limiting or imposing requirements upon the matters contained in the fifth and sixth subparagraphs, namely that there should be no condition preventing the provision of prizes funded other than out of stakes or preventing or limiting roll-overs. At the time of writing the only regulations which have been made imposing restrictions upon bingo operating licences contain provisions limiting the value of stakes and prizes in prize bingo (see para 14.30 below) but not cash bingo.5 Cash bingo operators were not slow to take advantage of the new provisions and a number launched cash bingo games in which substantial prizes based upon injected cash have been offered. It remains, however, the case that cash bingo operators seek to maximise the number of customers visiting their premises to play, and the large prizes now offered are one means of achieving this. 1 2 3 4

Gambling Review Report, para 25.12. Gambling Review Report, para 25.15. Gambling Review Report, para 25.13. See Chapter 10 for details of the mandatory and default conditions attached to a bingo premises licence under such provisions. 5 Gambling Act 2005 (Operating Licence Conditions) Regulations 2007 (SI  2007/ 2257).

Prize bingo 14.30 Prize bingo under the GA 2005 falls within the definition of prize gaming, which requires that neither the nature nor the size of a prize played for is determined by reference to either the number of persons playing or the amount paid for or raised by the gaming.1 Therefore, as distinct from cash bingo, the prizes are put up in advance and their value has no relation to the number of people playing or the amount they pay to participate. The charge for participation has traditionally been relatively low, as has been the value of the prizes. The maximum amount which can be charged by way of a participation fee is £1 per game, with a maximum aggregate amount of £500.2 This aggregate amount has been increased since the days of the Lotteries and Amusements Act 1976 (LAA 1976) and has enabled operators to allow 715

Gaming more players to participate in each game. The aggregate amount or value of the prizes for which a game is played may also not exceed £500.3 Those premises which are authorised by a bingo premises licence are at the time of publication permitted to offer a cash prize of up to £100 if no person under the age of 18 is allowed on the premises, and £70 if under 18s are permitted on the premises (those under 18s who are only on the premises by virtue of the fact that they are employed there are not included for these purposes).4 1 GA 2005, s 288. 2 Gambling Act 2005 (Limits on Prize Gaming) Regulations 2009 (SI 2009/1272). 3 Under the LAA 1976, there existed no maximum value of cash or non-cash prizes. In setting the maximum aggregate amount or value of prizes in any one game at £500, GA  2005 has ended any potential abuse of this loophole, eg  by operators offering a high value prize and thereby undermining the status of prize bingo as a low stake/low prize activity. 4 Current figures of £100 and £70 respectively in the Gambling Act 2005 (Operating Licence Conditions) Regulations 2007 substituted by SI 2010/774, reg 2(1), (3)(b).

14.31 The licensing of prize bingo was consolidated under GA 2005. Prize bingo is an ancillary activity to cash bingo and traditionally takes place at bingo halls as an interval game – ie it is played during the intervals between games of cash bingo – and also at seaside amusement arcades and travelling funfairs. As prize bingo is traditionally a game played with low stakes for relatively small prizes, it has historically been free from stringent control and has been accorded special privileges. One of these is that, with the exception of games which appear on any list of proscribed gaming games issued by the Gambling Commission, there can be no restriction on the games that may be played for a prize. Therefore, even what would normally be thought of as casino games may be played, as long as they are modified to ensure they are played according to the rules to which games of prize bingo must adhere.1 The rules, as discussed at 14.38 below, have the effect of rendering any game a game of equal chance, thereby significantly reducing the potential for exploitation of customers. 1 The Gambling Commission issued a statement on its website to the effect that it would proscribe certain games, by way of its powers under GA  2005, s  291, if the DCMS decided to set high, or no, maximum stakes in relation to prize bingo in bingo clubs. If the DCMS decided to set low stakes and prize limits, the Commission stated that it would not use its powers to proscribe certain games. The Gambling Commission has not so far issued a list of proscribed games.

Bingo authorisations 14.32 The manner in which terrestrial bingo clubs are permitted to operate under the GA 2005 is by way of a combination of three types of licence: a premises licence, an operating licence and personal licences. An operator who holds a bingo operating licence is permitted to provide facilities for playing any type of bingo by virtue of that operating licence.1 An operator offering terrestrial bingo additionally requires a bingo premises licence to authorise the provision of facilities for the playing of bingo on a particular premises.2 Where an operator provides bingo at more than one premises, a premises licence will need to be obtained in respect of each individual premises. The GA 2005 permits bingo to be offered in large casinos as well 716

Gaming as in bingo halls. Large casino premises licences themselves authorise the provision of facilities for bingo, and therefore no separate bingo premises licence is needed for such casinos.3 However, an operator of a large casino must obtain a combined non-remote operating licence, which permits the provision of facilities for bingo as well as the operation of a casino.4 Additionally, unless an operator is classified as a small-scale operator – ie there are no more than three individuals who hold specified management positions within the operating licence-holding entity – each individual who holds such a position must obtain a Personal Management Licence from the Gambling Commission.5 1 GA 2005, s 65(2)(b). Section 291 allows a bingo premises licence holder to provide prize bingo, although this right can be disapplied by the attachment of a condition to a premises licence by the licensing authority or to an operating licence by the Gambling Commission. 2 GA 2005, s 150(1)(b). 3 Such permission is granted at the GA 2005, s 174(3)(a). By s 174(4), however, small casinos are not permitted to provide facilities for bingo. 4 An operator may additionally require a remote operating licence, depending on any further activities it wishes to provide. Further information on operating licences can be found at Chapter 6 of this work. 5 GA 2005, s 80(3).

14.33 Under the GA  2005, the holder of an adult gaming centre (‘AGC’) or a family entertainment centre (‘FEC’) premises licence is automatically entitled to provide prize gaming and is subject to certain conditions made in accordance with GA 2005, s 293, described at 14.38 below. While operators of AGCs and FECs require premises licences, those premises licences solely authorise the making of Category B gaming machines available for use in an AGC and Category  C  gaming machines in an FEC.1 However, the Act itself gives these premises an automatic entitlement to offer prize bingo. Travelling fairs and unlicensed family entertainment centres also have an automatic right to provide facilities for prize gaming, without the need for any additional permission. All other relevant premises, mainly consisting of holiday and theme parks, are required to obtain a prize gaming permit from the relevant licensing authority. The holder of a bingo premises licence is automatically able to provide prize gaming (including, of course, prize bingo) and is subject to mandatory conditions on its operating licence, as provided for by GA 2005, s 291, in place of the conditions listed at s 293 to which all other premises offering prize gaming are subject. 1 AGC premises licence holders are additionally entitled to make any number of Category  C  and Category  D  gaming machines available for use. FEC premises licence holders are additionally entitled to make any number of Category D gaming machines available for use.

Gaming machines 14.34 In addition to authorising premises to be used for the provision of facilities for the playing of bingo, a bingo premises licence permits the holder to make available for use on the premises a number of Category B gaming machines not exceeding 20 per cent of the total number of gaming 717

Gaming machines which are available for use on the premises and an unlimited Category C and D gaming machines available for use on the subject premises.1 Category B machines are divided into five sub-categories, each with its own maximum charge and maximum prize value. Bingo premises are permitted to provide gaming machines which fall into the subcategories of B3 (ie  a machine with a maximum charge of £2 and maximum prize value of £500) or B4 (ie a machine with a maximum charge of £2 and maximum prize value of £400).2 Under the previous legislation, licensed bingo clubs were able, by virtue of GA 1968, s 31(2), to offer a maximum of four jackpot machines with a maximum stake of £1 and a maximum prize of £500 – ie the equivalent of Category B3 machines. The Deregulation (Bingo and Other Gaming) Order 2002 enabled bingo premises additionally to apply to the relevant licensing authority for any number of Amusement With Prizes (‘AWP’) machines under s 34 of the Gaming Act 1968. GA 2005 removed the need for this application by allowing an uncapped number of Category C and D machines. 1 GA 2005, s 172(7). In 2008, the DCMS released a consultation proposing an increase in the number of Category B3 gaming machines permitted in bingo premises from four to eight. This resulted in the Gambling Act 2005 (Gaming Machines in Bingo Premises) Order 2009 (SI 2009/324) (made under sub-s (11)(a)), which established the above formula. As a consequence of this change the number of Category B3 machines in clubs more than doubled over the next four years: 3,788 (Apr 2010– Mar 2011) to 7,667 (Apr 2014–Mar 2015) (Gambling Commission – Industry Statistics April 2010 to March 2015). 2 Categories of Gaming Machine (Amendment) Regulations 2014 (SI 2014/45).

14.35 The gaming machine entitlements provided for bingo operators by GA  2005 have been the subject of complaints from the industry and have been cited as being partially responsible for the downbeat trading conditions currently being experienced. The reason for this is that the Act makes no provision for the jackpot gaming machines which bingo operators previously routinely provided by virtue of GA 1968, s 21. Section 21 allowed gaming for prizes to be provided without the restrictions which applied to other forms of gaming and was historically used to allow bingo clubs to provide prize bingo. However, machines were developed which appeared to fall within the definition of s 21 and which fell outside of the definition of ‘gaming machine’ in Part III of GA 1968. Consequently, s 21 machines escaped the regulation imposed on s 34 and s 31 gaming machines. This position allowed operators to offer an unlimited number of these lucrative, high stake machines and provided a significant percentage of their profit.1 The Gaming Board was clear about its concerns: ‘The development and proliferation of these machines has raised concerns, not least because there is nothing in law to prevent children from playing them.’2 The equivalent of s 21 machines in terms of the maximum stake of £100 and maximum prize of £500 are Category B2 machines, which are now permitted only in betting premises and tracks occupied by pool betting and casinos. 1 The Gambling Commission reported that, as of May 2007, the number of s  21 machines in use in bingo halls was 2,668 and the number of s 31 machines in use in bingo halls was 1,783. 2 Gaming Board’s Annual Report 2004/5, June 2005.

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Gaming 14.36 Following the extent of the negative effect which the removal of GA 1968, s 21 machines has had on the state of the bingo industry as a whole, it is unsurprising that operators looked for ways to reverse their fortunes. Consequently, several bingo operators de-licensed some of the bingo gaming areas within their premises and introduced adult gaming centres (‘AGCs’) into those areas. This had the effect that if one bingo venue housed perhaps two or three AGCs within it, each AGC premises licence would authorise up to four Category B3 gaming machines, significantly assisting an operator’s profits. Some such applications were granted, although licensing authorities across the country have taken different views on the issues of direct access and whether such proposals will create ‘machine sheds’. Other operators have favoured subdividing their existing bingo venues in order to create separate bingo premises within what was previously a single bingo hall. Concerns have been raised that these newly-created areas are being used to house additional gaming machines but not to provide any facilities for bingo. Guidance from the Gambling Commission and the DCMS has been far from clear-cut on these matters, although that uncertainty might lessen following the publication of the Gambling Commission’s Guidance to Licensing Authorities (5th edn, September 2015). This issue is further discussed at 14.59 below.

Application for prize gaming permit and prize gaming conditions 14.37 Applications for prize gaming permits are dealt with in Chapter 22, ‘Prize Gaming’. By GA 2005, s 289, a prize gaming permit authorises a person to provide facilities for gaming with prizes on specified premises and Sch 14 provides, inter alia, for the making and determining of an application for a prize gaming permit. 14.38 With the exception of bingo premises licence holders, all operators who provide prize gaming must provide such gaming in accordance with the four conditions set out at GA 2005, s 293. Those conditions provide that: (i)

there are limits to the level of participation fees chargeable;

(ii) the game is played and its results are announced at the same premises on the same day; (iii) there is a limit to the value of the prize offered; and (iv) participation in that game does not entitle the player to participation in any other gambling. The Gambling Act 2005 (Limits on Prize Gaming) Regulations 20091 set out the revised conditions, which provide that the maximum participation fee is £1 per person per game, the aggregate amount of participation fees must not exceed £500 per game, no money prize can be greater than £70 and the aggregate value of prizes must not exceed £500.2 1 SI 2009/1272. 2 Participation fees and cash prize limits have historically been kept broadly in line with Category C gaming machines (or GA 1968, s 34 AWP machines under the

719

Gaming previous legislation). These machine limits were increased in October 2006, by the Gaming Act 1968 (Variation of Monetary Limits) Order 2006, to a maximum stake of 50p (from 30p previously) and a maximum prize of £35 (increased from £25).

14.39 Unlike other providers of prize bingo, operators of bingo halls are not required to abide by the prize gaming conditions set out in GA  2005, s 293 described above, but must instead comply with conditions attached to their operating licences.1 1 By virtue of GA  2005, s  291 and the Gambling Act 2005 (Operating Licence Conditions) Regulations 2007 (SI 2007/2257).

Bingo operating licences 14.40 In order to operate a bingo premises in Great Britain, an operator is required to obtain the grant from the Gambling Commission of a bingo operating licence which specifically authorises the operator to provide facilities for playing bingo. Such a licence can either be ‘remote’ or ‘nonremote’. The former authorises bingo to be provided in respect of remote gambling or by means of remote communication.1 Such a licence is needed, for example, by operators of online bingo. A non-remote licence is required by operators of terrestrial bingo halls. Provision is also made for the obtaining of so-called ‘ancillary remote operating licences’ which are to be held by operators holding non-remote bingo operating licences where the operator operates types of bingo which are ancillary to the principal activity of terrestrial bingo and which have a remote element – such as linked bingo and multiple bingo, or where remote equipment such as electronic bingo terminals are used to play ordinary terrestrial cash bingo. For a discussion on ‘ancillary remote operating licences’ see 14.100 below. 1 GA 2005, s 67. Remote gambling is gambling in which persons participate by the use of remote communication. Remote communication is communication using the internet, telephone, television, radio or any other kind of electronic or other technology for facilitating communication.

14.41 GA  2005, s  68(5)(b) provides that a non-remote bingo operating licence authorises the holder to make one or more gaming machines within Categories A to D available for use. Section 172(7) specifies that each premises is limited to a number of Category B gaming machines not exceeding 20 per cent of the total number of gaming machines which are available for use on the premises and any number of Category C and D machines. 14.42 An applicant for an operating licence submits its application to the Gambling Commission, which determines the application and which, if satisfied, then issues the operating licence. When making such a determination, the Gambling Commission must have regard to the licensing objectives,1 must reach a view as to the applicant’s suitability to carry on the relevant licensable activities, must consider the suitability of any relevant gaming machine and may consider the suitability of any other equipment to be used in connection with the provision of licensable activities.2 For a recent case in which the Commission considered a highly contentious application for an operating licence to enable premises to offer bingo games, 720

Gaming see Greene King Brewing and Retailing Ltd v The Gambling Commission3 where the First-tier Tribunal (Judge NJ Warren) held that the Gambling Commission could not refuse an operating licence for the purpose of preventing an otherwise suitable and competent applicant from applying for a premises licence saying: ‘In my judgment, it is not open to the Commission to use s 159(3) of the Act to give them an effective right of veto on an application for a premises licence.’ This decision was however reversed on appeal to the Upper Tier Tribunal,4 where Judge H Levenson held (at 54): ‘The combined effect of sections 1(c) (paragraph  15 above), 22 (paragraph  14 above) and 70(1)(a) (paragraph  22 above) is really to place on the Commission the main responsibility for ensuring compliance with the licensing objectives and, in particular, the protection of vulnerable persons (as referred to in the section 23 statement – see paragraph 29 above). The provisions of sections 159(3) (paragraph  27 above) and 169(4) (paragraph  28 above) make it clear that primacy is to be given to the decisions of the Commission on whether to grant an operating licence. In light of these provisions, it cannot really be the case that when such matters are at issue the legislation, having established the Commission and detailed its responsibilities, then requires the Commission to step back in individual applications and let the multitude of local licensing authorities deal with these national policy issues on a case by case basis. Neither can it be the case that in pursuit of such national policy objectives the Commission is required to conduct some kind of guerrilla warfare in each separate locality. That would run the risk of undermining the kind of approach approved in the Gibraltar case (paragraph  52 above) and of not controlling betting activities in a “consistent and systematic matter”.’ Given the significance of the decision, permission was given to pursue an appeal before the Court of Appeal. 1 GA 2005, s 1: (a) preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime; (b) ensuring that gambling is conducted in a fair and open way; and (c) protecting children and other vulnerable persons from being harmed or exploited by gambling. 2 Equipment used in bingo premises must comply with the ‘Bingo and Casino Equipment Technical Requirements’, revised in July 2008 from the document initially issued by the Gambling Commission in June 2007. The document sets out the standards with which equipment such as wireless network systems, bingo tickets and mechanically based RNG games must comply. 3 GA/2014/001. 4 [2016] UKUT 50 (AAC) (29 January 2016), GG/0281 and 0282/2015.

Premises licences – transitional provisions 14.43 Operators who held permissions under the Gaming Act 1968 which permitted the playing of bingo were entitled to ‘grandfather rights’ under the transitional arrangements provided for in Sch  18 to the Gambling Act 721

Gaming 20051 if they made application for a premises licence within the stipulated time period, ending on 31 August 2007. 1 Grandfather rights applied to premises licences only, and were not available in respect of operating licences.

Applications for premises licences – existing operators 14.44 As with all converted premises licences under GA  2005, s  159, an application for a converted bingo premises licence had to be made to a licensing authority in whose area the premises were wholly or partly situated. It had to be accompanied by a copy of the equivalent permission under the previous legislation upon which the applicant’s entitlement to grandfather rights relied.1 1 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulation 2007 (SI 2007/459).

Premises licences – new operators 14.45 A  person who wishes to apply for a bingo premises licence or a provisional statement1 under the Act has been able to apply at any time since 21  May 2007 by submitting an application which is in the form, and contains the information, specified in Gambling Act 2005 (Premises Licences and Provisional Statements) Regulation 2007, Sch 1, Pt 1. For details of the procedure, see Chapter 10 (premises licences). 1 Provisional statements are discussed in some detail in Chapter 10 (Premises Licences).

14.46 It is the premises licence which authorises a particular premises to be used to provide an activity listed in GA  2005, s  150, one of which is the provision of facilities for the playing of bingo.1 Under Part 8 of the Act, an application for a bingo premises licence may only be made by a person2 who holds an operating licence which authorises him to carry on the activity in respect of which the premises licence is sought, or who has made an application, which has not yet been determined, for such an operating licence.3 In the latter case, until such time as the operating licence has been issued, the premises licence cannot be determined.4 Consequently, if no premises licence is granted in respect of a particular premises, facilities for playing bingo may not be provided there without the commission of an offence under GA 2005, s 37(1)(b).5 An additional requirement is that an application may only be made by a person who has a right to occupy the premises to which the application relates.6 If a prospective applicant does not possess such a right, its only remaining option is to apply under s 204 for a provisional statement. Please refer above to Chapter 10 for further discussion of this topic. 1 GA 2005, s 150(1)(b). 2 ‘Person’ includes an individual, a company or a partnership – see the Gambling Commission’s Guidance to Licensing Authorities (5th edn, September 2015). 3 GA 2005, s 159(3).

722

Gaming 4 GA 2005, s 163(2). 5 GA 2005, s 37(1)(b) provides that a person commits an offence if he ‘uses premises, or causes or permits premises to be used, to … provide facilities for the playing of bingo’. Subsequent subsections provide that no offence is committed if such a person holds a premises licence authorising him to provide facilities for the playing of bingo on those premises. 6 GA 2005, s 159(5).

14.47 The application procedure and central issues relating to premises licences in general are discussed above in Chapter 10. The majority of matters discussed there also relate to bingo premises licences. Those matters which only apply to bingo premises are discussed here. 14.48 An application1 for a premises licence must be accompanied by a scale plan of the premises. In addition to the information which must be shown on the plan in respect of any type of premises,2 Gambling Act 2005 (Premises Licences and Provisional Statements) Regulations 2007, reg  4(5) provides that, where the application is for a bingo premises licence in respect of premises to which children or young persons will be permitted to have access,3 the plan must additionally show: the location and extent of any part of the premises which will be used to provide facilities for gaming in reliance on the licence (other than those parts which include Category B or C gaming machines), the location and extent of any part of the premises in which Category  B  or C  gaming machines will be made available, and the nature and location of any barrier or other thing separating any part of the premises in which Category B or C gaming machines will be made available for use from any other part of the premises. 1 An application form submitted in respect of a bingo premises licence must be in the form, and contain the information, specified in Sch 1, Pt 1 of those Regulations. The relevant forms may now be found on the Gambling Commission’s website. 2 This comprises the boundary of the premises; the location of external and internal walls; if the premises is a vessel, the sides and internal walls of that vessel; and the entry and exit points together with a description of the place from which entry is made and to which exit leads, in addition to any other matter required in accordance with reg 4. 3 Many bingo operators do not allow children or young persons access to their premises as a matter of policy.

14.49 When making an application for a premises licence, the applicant is required by GA 2005, s 159(6)(c) to pay the prescribed application fee. The maximum fee1 in respect of a new bingo premises licence is prescribed by the Gambling Commission from time to time.2 1 Licensing authorities are permitted to set their own fee levels for premises licences on a cost recovery basis subject to a maximum amount imposed by regulation: Gambling (Premises Licence Fees) (England and Wales) Regulations 2007 (SI 2007/479). 2 Fees relating to operating and personal licences are discussed in Chapters 6 and 7 respectively.

14.50 GA 2005, s 184(1) requires a premises licence holder to pay an annual fee to the licensing authority and enables regulations to be made making provision for such payment.1 The Act and regulations made thereunder2 723

Gaming distinguish between a ‘first annual fee’ and an ‘annual fee’ in name only and, as with application fees, both fees are to be set by the licensing authority, subject to a limit of £1,000. As the licensing authority is given the power to set the fees at whatever level it wishes, the regulations do not require it to set the first annual fee at a lower level than the ordinary annual fee, as is the case in relation to non-remote operating licences.3 It may be that, in practice, some licensing authorities decide that the first annual fee should be lower, considering that an applicant will have recently paid out for an application fee, and also considering the time frame within which the first annual fee is required to be paid.4 1 Refer to Chapter 10 (Premises licences) for more discussion of licensing authorities’ fees. 2 The Gambling (Premises Licence Fees) (England and Wales) Regulations 2007 (SI 2007/479). 3 Gambling (Operating Licence and Single-Machine Permit Fees) Regulations 2006, Pt 2, reg 8(3) provides that first annual fees for non-remote operating licences are subject to a 75% discount on the annual fee for subsequent years. 4 The first annual fee becomes payable within 30 days of the date on which the licence takes effect.

Other regulations 14.51 When considering applications for premises licences (including applications for provisional statements),1 the licensing authority is expressly forbidden2 from taking into account any building or planning regulations.3 Therefore, as is the case under the Licensing Act 2003 (LA 2003), a licensing authority may not, for example, refuse to exclude a condition because to do so would have the effect that a bingo hall would benefit from extended trading hours not permitted under its planning consent. Equally, it may not accept a representation as ‘valid’ if it relates only to matters of planning or building regulations.4 Such a representation would surely fall under GA 2005, s  162(3)(c) as being one which ‘will certainly not influence the authority’s determination of an application’ as, under s 210, the licensing authority is not permitted to be influenced by such matters. Equally, the grant of a licence under the Gambling Act 2005 should have no bearing on whether planning or building authorities grant the necessary consents required under planning or building regulations.5 1 Guidance to Licensing Authorities (5th edn, September 2015), para 1.36. 2 No further types of regulations, beyond planning and building law, are mentioned in the Act. The LA 2003, by contrast, prevents duplication with any other statutory regulations which place a requirement on an operator. 3 The prohibition on considering planning and building regulations is provided in GA  2005 itself. LA  2003 does not contain this prohibition, but it is included at para  7.13 of the Guidance to Licensing Authorities (issued under LA  2003, s  182) and has been relied upon in such cases as R  (on the application of Blackwood) v Birmingham Magistrates, Birmingham City Council [2006] EWHC 1800 (Admin). The provision under GA 2005 leaves no room for debate as, in contrast to LA 2003, it is made within primary legislation. 4 An example of this would be where a fire authority makes a representation to the application on the grounds that the details submitted on the plan accompanying the application do not comply with building regulations. 5 As stated at GA 2005, s 210(2).

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Gaming

Premises licences conditions 14.52 The Act makes provision for different types of conditions to be attached to all three types of licence which are generally required by an operator. In terms of premises licences, there are three types of conditions which may be attached: mandatory conditions under GA  2005, s  167, default conditions under s 168 and conditions imposed or excluded by the licensing authority under s  169. General conditions to be attached to all types of premises licence are considered in Chapter 10. Conditions relating to operating licences and personal licences are similarly discussed in Chapters 6 and 7 respectively.

Mandatory conditions set out in the Act 14.53 The Act itself sets out a number of conditions with which all bingo operators, whether existing or new, must comply and which neither an operator nor a licensing authority has the power to modify. These are referred to as ‘mandatory conditions’. Some of these conditions are clearly set out in the Act itself and some of them are required to be the subject of mandatory conditions to be attached either to a premises, operating or personal licence. 14.54 Both bingo and casino premises licences are subject to a condition that prevents the licensee from giving credit in connection with any gambling carried on at the premises and from participating, arranging, permitting or knowingly facilitating the giving of such credit.1 Under GA 2005, ‘machines enabling cash to be obtained on credit from a person’, under which definition Automatic Teller Machines fall, are permitted to be installed in bingo and casino premises.2 The ATMs may be used, provided that the premises licence holder does not receive any kind of payment or reward in relation to the machine, has no other commercial connection with the credit provider in relation to gambling, and complies with any conditions attached to the premises licence which relate to the nature, location or use of the ATM.3 Exempt from the ‘payment or reward’ at s 177(3)(b) is the agreement between the credit provider and the licence holder relating to the actual installation of the machine in the premises. The definition of credit here is extended to any form of payment which is not cash or which is not a cheque or debit card payment, which is not post-dated and for which full value is given.4 It appears that the use of debit cards is acceptable because funds are immediately withdrawn from a person’s account and so this does not strictly constitute credit. Section 177(3)(c) provides that the licensee may permit the installation and use of an ATM on the premises, provided any conditions attached to the operator’s premises licence are complied with. Mandatory conditions relating to the physical location of ATMs are to be attached to all bingo premises licences and are discussed at 14.66 below. 1 GA 2005, s 177. 2 Credit cards and debit cards may be used in the ATM to withdraw cash: Guidance to Licensing Authorities (5th edn, September 2015), para 9.12. 3 The implementation of these conditions clearly relates to the licensing objectives, as is required to be the case under s 153. 4 GA 2005, s 81.

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Gaming 14.55 GA 2005, s 178 enables regulations to be made to allow for a condition relating to door supervision to be attached to a premises licence. The government has not included any condition which requires bingo premises or casinos to employ door supervisors, but has instead left it to licensing authorities to attach to premises licences if local circumstances demand it. Bingo premises have previously benefited from an exemption from the requirement that any door supervisors employed at the premises to carry out security activities are registered with the Security Industry Association. This exemption is retained under the Act by way of the amendment to the Private Security Industry Act 2001, which excludes premises in respect of which a casino or bingo premises licence is in force from the need for their door supervisors to be SIA-registered. This does not preclude the attachment of an individual condition under s 169(1)(a) by a licensing authority to a bingo premises licence in the nature of that discussed at 14.70 below.1 1 See paras 9.14–9.15 Guidance to Licensing Authorities (5th edn, September 2015).

14.56 Any gambling operator who becomes aware that a person under the age of 18 has gambled at his premises must return the participation fee or stake made by that person as soon as is reasonably practicable and must not give a prize to that person. This provision does not apply to the use of a Category D gaming machine or to a licensed Family Entertainment Centre (‘FEC’) where the under-18 has participated in equal chance gaming.1 1 GA 2005, s 83.

Mandatory conditions on bingo premises licences set out in regulations under section 167 14.57 Mandatory conditions are those with which every bingo premises licence holder must comply in order to avoid a breach of the terms of its premises licence. Those mandatory conditions which are not set out in the Act itself have been set down by the Secretary of State by way of regulations.1 The Act gives very wide scope for the attachment of conditions to premises licences by way of regulations, in that regulations may specify that mandatory conditions are to be attached to a particular class of licence or only in specified circumstances, or may be attached to licences generally. Additionally, different conditions may be attached to different classes of licence or in different circumstances.2 It is stated in the Guidance to Licensing Authorities issued by the Gambling Commission that the restrictions covered by mandatory conditions are intended to be the final word on those subjects – ie  it should not be necessary for licensing authorities to further restrict operators in terms of those matters already dealt with by way of mandatory conditions. Where, in exceptional circumstances, a licensing authority considers that further regulation is necessary, any additional conditions imposed must be consistent with the licensing objectives.3 A list of sample conditions provided by the Commission may be found in Chapter 10 (Premises licence). Mandatory conditions may only be amended or removed from premises licences by way of further regulation by the Secretary of State. 1 The Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007 (SI 2007/1409).

726

Gaming 2 GA 2005, s 167. 3 For the full analysis of the Commission’s Guidance concerning conditions, see Guidance to Licensing Authorities (5th edn, September 2015), paras 9.19–9.32.

14.58 Under GA 2005 it is an offence to invite, cause or permit children or young people1 to play bingo on a premises which is being run in reliance on a bingo premises licence.2 In support of this, it is a mandatory condition on all bingo premises licences that a notice which states that no person under the age of 18 years is permitted to play bingo on the premises shall be displayed in a prominent place at every entrance to the premises.3 1 The extent of entitlements given to children and young persons in respect of bingo premises is discussed further at 14.101 below. 2 GA 2005, s 46. 3 Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007, Sch 2, Pt 1, para 1.

14.59 GA  2005, s  152 stipulates that only one premises licence can be in effect at any one time in relation to each premises. Initial consultation1 by the DCMS indicated that the government originally considered that no further regulation was needed in relation to this area. It believed that enough safeguards (namely the provisions on direct access) were already in place to prevent operators from artificially subdividing their premises and circumventing the maximum number of gaming machines allowed. However, the Gambling Commission has issued a revised version of its Guidance to Licensing Authorities relating to this issue, following calls from licensing authorities for clearer advice after significant numbers of applications for multiple premises within a single building were received across the country. Many of these applications were made in respect of existing bingo premises seeking to create adult gaming centres (‘AGCs’) within the same building. Guidance current at the time of publication2 states as follows: ‘7.4 By distinguishing between premises types, the Act makes it clear that the gambling activity of the premises should be linked to the premises described. Thus, in a bingo premises, the gambling activity should be bingo, with gaming machines as an ancillary offer on the premises. This principle also applies to existing casino licences (but not to licences granted under the Act) and betting premises licences. The Licence Conditions and Codes of Practice (LCCP) sets out in full the requirements on operators. Subject to the gaming machine entitlements which various types of licence bring with them (and except in the case of tracks), the Act does not permit premises to be licensed for more than one of the above activities.’ 1 Draft Gambling (Premises Licences: Mandatory and Default Conditions) Regulations for the implementation of the Gambling Act 2005, published in August 2006. 2 Guidance to Licensing Authorities (5th edn, September 2015).

14.60 Although the Act does not preclude the issue of one premises licence for a particular part of a building if another premises licence is in effect in respect of another part of that same building, each premises does have to be sufficiently ‘separate’ to satisfy the mandatory condition that there can 727

Gaming be no direct access between certain types of premises. The Commission has stated1 that it does not consider areas of a building that have been artificially or temporarily separated to be ‘different’ premises, saying: ‘7.7 The Commission does not consider that areas of a building that are artificially or temporarily separated, for example by ropes or moveable partitions, can properly be regarded as different premises. If a premises is located within a wider venue, a licensing authority should request a plan of the venue on which the premises should be identified as a separate unit. 7.8 The Commission recognises that different configurations may be appropriate under different circumstances but the crux of the matter is whether the proposed premises are genuinely separate premises that merit their own licence – with the machine entitlements that brings – and are not an artificially created part of what is readily identifiable as a single premises.’ Regarding direct access between premises, it is of course the case that there is no prohibition on direct access between two bingo premises, although there is to be no direct access between a bingo premises and an adult gaming centre (as under-18s may be admitted to bingo premises but not to AGCs). Historically, it has been the case that customers from one licensed premises should not be permitted access, without entering through the main entrance, to another licensed premises and the Gaming Clubs (Licensing) Regulations 19692 empowered licensing authorities to refuse licences for premises where internal access from another private premises existed. The relevant mandatory condition in the regulations3 departs from the previous position as a result of responses received to the initial consultation on mandatory and default conditions. 1 Paragraphs 7.7–7.8 of the Guidance to Licensing Authorities (5th edn, September 2015). 2 SI 1969/1110. 3 Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007 (SI 2007/1409), Sch 2, Pt 1, para 2.

14.61 As children are permitted entry to premises which are the subject of a bingo premises licence, there is no prohibition on direct internal access from a bingo hall to other premises to which children are permitted access, ie to family entertainment centres and alcohol licensed premises. The wording of the condition specifies those premises which do not permit children and to which, therefore, there must be no direct internal access from a bingo hall. They are premises in respect of which any of the following permissions have effect: a casino premises licence, an adult gaming centre premises licence or a betting premises licence other than a track premises licence. As stated in the Gambling Commission’s Revised Guidance published in September 2015 (para 7.22): ‘There is no definition of “direct access” in the Act or regulations, but licensing authorities may consider that there should be an area separating the premises concerned, for example a street or cafe, which the public go to for purposes other than gambling, for there to be no direct access.’ 728

Gaming Some operators have interpreted this guidance to mean that there must be an unlicensed area between the two premises in order to negate any direct access. The required size and use of this unlicensed area has differed from licensing authority to licensing authority, with some insisting that a café or vending machine be installed in that unlicensed area or ‘buffer zone’ and others being content that the area is simply unused and comprises a few feet in area. 14.62 A further concern that has been1 raised by the Gambling Commission in the past is that of ‘primary purpose’. In its open letter to the industry of 12 March 2008, the Commission stated its awareness that some bingo (and betting) operators had applied for licences which they did not intend to use to make available facilities for playing bingo. It stated that: ‘The operators may be applying for betting or bingo operating and premises licences under the Gambling Act 2005 because they believe that this will allow them to take advantage of the gaming machine entitlement which accrues from such licences.’ The operators in question were therefore relying on the fact that a premises licence would allow them (at that time) to install four B3 machines without having to hold traditional bingo games. The Gambling Commission has made clear its opinion that an operator is not entitled simply to make available gaming machines in reliance on its premises licence without providing facilities for the primary activity of playing bingo. There has, however, been some criticism of this interpretation of the Act, not least due to the fact that a premises licence entitles a bingo operator to make gaming machines available 24 hours a day while a default condition obliges it to cease providing facilities for bingo between midnight and 9am. The premises licence conditions in their current form, therefore, allow gaming machines to be made available when the primary activity of bingo is not being provided. This is an argument which is far from universally accepted, and further doubt is cast among operators in relation to the Gambling Commission’s view of the matter by the fact that both bingo and betting operators were entitled under the previous legislation to provide gaming machines without the primary activity under the licence being provided, and those entitlements were ‘converted’ by virtue of applications made during the transitional period to the GA  2005 by those applicants who were entitled to grandfather rights. The Commission however2 devised the following provisions in its Gambling Codes of Practice – Consolidated for all Forms of Gambling (May 2015): ‘Ordinary code provision 9.1.1 Primary gambling activity – bingo, betting and casino Non-remote general betting, bingo and casino operating licences, except where facilities are offered under a 2005 Act casino premises licence: 1.

In order to demonstrate that sufficient facilities for the primary gambling activity for which an operating licence has been issued are being made available in each licensed premises, licensees should have regard to the following general factors: 729

Gaming a b c

ratio of the space available to customers allocated to the primary gambling activity, to that allocated to other gambling activities the extent to which the primary gambling activity is promoted on the premises and by way of external advertising compared to other gambling activities the use, either expected or actual, to be made of the different gambling facilities.

Ordinary code provision 9.1.2 Primary gambling activity – bingo Non-remote bingo licences, except where bingo is offered under a 2005 Act casino premises licence: 1 Licensees should also have regard to the following additional sector specific factors: a the frequency and extent that bingo is, or is intended to be played on the premises, compared with the periods when the premises are open b whether there is: i capacity on the premises for the generation of main stage bingo numbers ii a facility to sell tickets or cards for bingo games on the premises iii bingo available to be played whenever sessions are advertised iv display of prize board information v a means of stopping a game to claim a win. 2 Not all the factors here and in ordinary code 9.1.1 would need to be present in a particular case, nor do they preclude others, but the combination of those factors that are present should be sufficient to indicate that the activity is the primary one in any given premises.’ In its Industry Statistics April 2010 to March 2015 the Commission noted that there had been a: ‘spike in premises numbers [as] the result of this operator choosing to split premises, which resulted in two or more premises licences being operational in a single building. Following an amendment to the way in which category B  gaming machines allowances are calculated, the majority of splits were subsequently removed and so the number of premises licences returned to a level more consistent with previous years.’ 1 The latest LCCP no longer refers to ‘primary gambling activity’. See 6.93–6.97 in Chapter 6 (Operating Licences) for a more detailed discussion on this issue. 2 See text referred to in the previous footnote for the position at the time of publication.

14.63 As discussed above, the provision of cash bingo is permitted within large casinos, but is not permitted in small casinos and continues 730

Gaming to be prohibited in casinos which were previously licensed under GA 1968. The Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007 place a condition on each bingo premises licence prohibiting direct access from a bingo premises to any casino premises. In reality, however, there is only likely to be a need for enforcement of the condition in relation to access between bingo premises and the specific casino premises set out above. 14.64 In addition to authorising a premises to be used for the provision of facilities for the playing of bingo, a bingo premises licence, by virtue of GA 2005, s 172(7) allows the holder to make available for use on the premises a number of Category B  gaming machines not exceeding 20 per cent of the total number of gaming machines which are available for use on the premises1 and an unlimited Categories C and D gaming machines available on the premises. In light of the liberalisation of rules as regards direct internal access between premises to which access by children is permitted (as discussed 14.60 above), there is a need to protect children and young people from being exposed to Category B and C gaming machines.2 Consequently, where a bingo licence holder permits children to enter the premises and the premises licence holder makes these categories of gaming machine available for use, it is a mandatory condition on the premises licence that the area in which those machines are located: •

must be separated from the rest of the premises by a physical barrier which is effective to prevent access other than by an entrance designed for the purpose;

•

must be supervised at all times to ensure children or young persons or both do not enter the area; and

•

must be arranged in such a way that ensures all parts of the area can be observed by ‘supervisors’.3

Additionally, those ‘supervisors’, who must at all times supervise the area, are defined as ‘one or more persons whose responsibilities include ensuring children or young persons or both do not enter the area. Alternatively, there must be ‘closed circuit television which is monitored by one or more persons whose responsibilities include ensuring that children or young persons or both do not enter the area’.4 Therefore, this ‘supervision’ does not have to be undertaken by persons whose sole function is to supervise entrances to areas in which Category B and C gaming machines are situated; it can simply be one of the duties of a member of staff who has sight of the entrances. Indeed, there is no need for a person to be present at all, because CCTV can instead fulfil the condition, provided it is properly monitored to ensure that children do not gain entry. In addition, a notice which states that no person under the age of 18 years is permitted to enter the area must be displayed in a prominent place at the entrance to any area of the premises in which Category B or C gaming machines are made available for use.5 These rules will, for obvious reasons, not apply to bingo premises which prohibit access by children to all of its areas. 1 Formula laid down by the Gambling Act 2005 (Gaming Machines in Bingo Premises) Order 2009 (SI 2009/324) (made under sub-s (11)(a) of the Act).

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Gaming 2 By s 46, it is an offence to invite, cause or permit a child or young person to gamble. An exemption is made at s 46(2)(e), which allows a person aged under 18 to use a Category  D  gaming machine. Under-18s may not use gaming machines of a higher category. 3 Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007, Sch 2, Pt 1, para 3(2). 4 Paragraph 3(3). 5 Paragraph 3(4).

14.65 The government made clear in its Consultation on Mandatory and Default Conditions1 that it considers that the compulsory display of certain information in licensed premises is fundamental to the promotion of the licensing objectives. It is easy to see that the display of information such as the rules of the games offered, the charges to be made for participation, the rules on children’s access and the relevant premises licence would contribute to gambling being conducted fairly and openly. For details of the relevant mandatory conditions,2 see Chapter 10 (Premises licences). 1 Point 8 of the Mandatory and Default Conditions: Consultation Document. 2 Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007, Sch 2, Pt 1, para 4(1).

14.66 With regard to the imposition of conditions regarding the location, nature and use of ATMs, the wording adopted as a mandatory condition1 provides that ATMs must be located in a place that requires any customer who wishes to use it to cease gambling in order to do so. The importance, no doubt when considered against all three of the licensing objectives, of the establishment of stringent rules regarding the giving of credit is underlined by the fact that the Act duplicates in exact terms the restrictions set out in GA  2005, s  177 by stating in s  81 that each non-remote bingo and casino operating licence must be subject to the same rules. This means that any breach of the conditions would constitute a breach of both an operating and a premises licence. Additionally, s 81 allows for further restrictions relating to credit and inducements to be placed on operators by way either of conditions attached to operating licences or by way of Codes of Practice to which all bingo operators must adhere. 1 Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007, Sch 2, Pt 1, para 6.

Default conditions on bingo premises licences 14.67 Default conditions are set out in regulations, under the power given by GA 2005, s 168, and are intended by the Commission, as it states in its Guidance to Licensing Authorities, to be the basic industry standard in terms of the matters to which they relate and will ensure a general consistency in regulation. Notwithstanding this, as explained in Chapter 10, licensing authorities are given the flexibility to determine whether or not those conditions specified as ‘default’ should be applied to premises licences. Where a licensing authority decides a default condition is not necessary in relation to a particular licence or set of premises licences, it has the power to exclude that condition entirely, under GA 2005, s 169(1)(b), or it may replace that condition with a different, less 732

Gaming restrictive condition under s 169(2). The licensing authority also has the power to replace the standard condition with a more restrictive one, but this is clearly intended to be an exception to the rule and s 153(1) (which sets out the principles by which licensing authorities must exercise their functions) ensures that the licensing authority has due regard to, amongst other documents, the Guidance to Licensing Authorities issued by the Gambling Commission, which clearly states this intention at para  9.23.1 Default conditions can be removed from premises licences by way of exclusion by a licensing authority, a variation application or a review of premises licence. 1 Paragraph  9.23 of the Gambling Commission’s Guidance to Licensing Authorities (5th edn, September 2015), states that: ‘Licensing authorities have more flexibility in relation to default conditions and may exclude a default condition and substitute it with one that is either more or less restrictive. Licensing authorities should note, however, that default conditions are intended to reflect normal industry operating practices. In circumstances where default conditions are excluded, the Commission would generally expect them to be replaced by other conditions, given the requirements of s 153. Where the condition is more restrictive, the licensing authority should ensure that they have clear regulatory reasons doing so.’

14.68 Where a licensing authority proposes to exclude a default condition from a premises licence as authorised by GA 2005, s 169(1)(b), it must hold a hearing in accordance with s 162. However, a hearing is not needed if the applicant – and any responsible authority or interested party who made a representation in respect of the exclusion of the condition – consents to no hearing being held. Where there are no representations, it is most likely that an applicant will consent to the exclusion of the condition without a hearing in order to save time and expense. 14.69 The only default condition that has so far been set down by regulation is in respect of hours during which facilities for the playing of bingo may be provided. In the GA 2005 government considered that the tighter regulation enshrined in the new Act would justify greater flexibility in terms of opening hours for all premises and it has therefore reduced, by way of default condition, the restrictions on opening for bingo premises, which are now limited to the hours of midnight to 9am each day.1 Again, the restrictions do not apply to making gaming machines available for use, and so the previous entitlement to open later solely to allow the use of gaming machines is retained.2 This allows for a weekly increase of 17 hours’ potential gambling time. However, for those bingo operators who do not wish to take advantage of the extended trading potential, there is no requirement to open, or to provide bingo or gaming machine facilities, during the revised opening hours. The limitations set down in GA 2005, s 153 stating that a licensing authority must have regard to codes of practice, the licensing objectives, the Commission’s guidance to local authorities and to its own statement of licensing policy serve to underpin this flexibility by only permitting the licensing authority to reduce the number of permitted hours set in the default condition if this is specifically warranted by one of the above policies. If, for example, a bingo premises is struggling to achieve the terms set out in a code of practice, the licensing authority has the power to reduce its hours if it believes this is the appropriate way to ensure that the bingo hall abides by that code of practice. However, 733

Gaming the fact that hours have been set as a default condition gives operators and licensing authorities the flexibility to extend such hours, in the same way as alcohol licensed premises can under the Licensing Act 2003. It is important to note, however, that a premises which has been granted the ability to trade under the default hours under the GA 2005 is not safe from breach of either planning laws or byelaws made by local authorities. Although gambling law has changed, an operator will have to pay careful attention to whether it will be in breach of this entirely separate legislation by trading to the extended hours under its premises licence. 1 Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007, Sch 2, Pt 2, para 1. 2 Paragraph 2.

Individual conditions imposed by the licensing authority 14.70 As explained in Chapter 10 (Premises licences), the licensing authority additionally has the power, under GA 2005, s 169(1)(a) to attach any condition (subject to those which are expressly forbidden to be attached)1 to a premises licence. 1 Certain conditions are expressly forbidden to be attached to a premises licence by virtue of GA  2005, s  169(4) (any condition which prevents compliance with a condition of the operating licence which authorises the holder to carry out the activity in respect of which the premises licence is granted), s 170 (requiring membership) and s 171 (imposing limits on stakes, fees, winnings or prizes). These provisions are discussed at 14.73–14.76 below.

Removal of conditions from bingo premises licences 14.71 The premises licence holder itself can apply to remove any condition, save those which are mandatory, from its premises licence by way of a variation application under GA 2005, s 187. The procedure for an application for variation is discussed further in Chapter 10.

Conditions which do not apply to bingo premises licences by way of exemption under the Act 14.72 GA  2005, s  178 allows for regulations to be made to enable the attachment of a condition relating to door supervision. The government has not included such a condition as either a mandatory or default condition and has instead left it to licensing authorities to attach to premises licences if local circumstances demand it. In any event, bingo premises have traditionally benefited from an exemption from the requirement to employ licensed door supervisors to carry out security activities. This exemption is retained under the Act by way of amendment of the Private Security Industry Act 2001 to exclude operators of bingo or casino premises, where they employ door supervisors, from the requirement for such door supervisors to be registered with the Security Industry Authority.1 1 GA 2005, Sch 16, para 17.

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Conditions not permitted to be attached to bingo premises licences under the Act 14.73 GA  2005, s  169(4) states that no condition may be attached to a premises licence which prevents compliance with a condition on an operating licence.1 1 Guidance to Licensing Authorities (5th edn, September 2015), para 9.32.

14.74 GA 2005, s 170 expressly states that no condition may be attached to a premises licence which requires the premises to be controlled by a system of membership.1 It has been the case, however, that some bingo or casino premises have elected to retain the membership system. One reason is that some operators consider that membership brings with it some advantages in terms of marketing. Further, membership may lend an element of ‘exclusivity’ to a premises. It may assist the premises in compiling a database of customers to whom it may forward marketing material. 1 Guidance to Licensing Authorities (5th edn, September 2015), para 9.32. Section 87 prohibits the attachment of a condition to an operating licence which would require a system of membership in order to provide facilities for gambling.

14.75 GA  2005, s  171 states that no premises licence conditions may be imposed which place limits on stakes, fees, winnings or prizes. Provision for such matters is made within the framework of the Act itself, and is to be enforced by way of regulations; it is therefore not within the powers of licensing authorities to determine such fundamental issues, which are to be kept nationally consistent. 14.76 Similarly, GA 2005, s 172(10) provides that conditions may not relate to gaming machine categories, numbers or method of operation.1 Such matters have been dealt with by secondary legislation and the Gambling Commission’s Technical Standards. 1 Guidance to Licensing Authorities (5th edn, September 2015), para 9.32.

Matters to be dealt with by way of conditions attached to operating licences 14.77 Some changes to the requirements imposed on, and rights of, the bingo industry are implemented by way of attachment of conditions, not to premises licences, but to operating licences. General conditions on operating licences are provided for by virtue of GA 2005, ss 75 and 76 and empower the Commission to attach such conditions to every operating licence it issues or to every class of operating licence it issues. Any such condition attached must be specified on the face of the licence.1 They are set out in the Commission’s document entitled Gambling Codes of Practice – Consolidated for all Forms of Gambling (May 2015).2 Those conditions are properly dealt with in the chapter on operating licences, but those which relate exclusively to bingo operators are briefly considered here. 1 GA 2005, s 66(1)(c).

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Gaming 2 The Commission has stated that this document is to be kept subject to review and will be updated as and when further regulations emerge from the statutory process. The effect of this is that the codes and conditions are subject to change and will continue to be updated to respond to any issues which arise as GA 2005 settles in.

14.78 The Gambling Act 2005 (Operating Licences Conditions) Regulations 20071 provide for the attachment of conditions relating to stakes and prizes in relation to prize gaming in bingo premises, as permitted by s 91 of GA 2005. These limits are discussed at 14.38 above. The Act allows for the concept of the ‘rollover’, created by the National Lottery and recommended to be introduced in the playing of bingo by the Gambling Review Report.2 The National Lottery operates its rollover by retaining the prize money raised by participation fees on occasions when no player selects the winning combination of numbers and adding it to the value of the prize in the subsequent draw to create an enhanced prize. In terms of bingo, however, at least as traditionally played, there will never be an occasion upon which there is no winner, as numbers will continue to be called out until a winner is found. It is suggested in the Gambling Review Report that the operator would retain a proportion of the total stakes for each game and add the retained amount to the stakes received for a later game in order to enhance the amount of the prize. Section 91(2)(f) appears to allow this, by stating that a bingo operating licence may not be subject to a condition ‘preventing or limiting an arrangement whereby the fact that a prize is not won or claimed in one game of bingo increases the value of the prizes available in another game of bingo …’ It is also possible that new versions of bingo may be developed in which numbers may cease to be called in a game before a winner is identified in that game. 1 SI 2007/2257. 2 Paragraph 25.14 of the Gambling Review Report, published in July 2001.

14.79 In common with other operating licences, it is a requirement that, unless a bingo operator is classified as a small-scale operator (ie  it has no more than three individuals who hold specified management positions), it must ensure that each individual holding such a position obtains a Personal Management Licence (‘PML’).1 As at least one person in the operator company must hold a personal licence in respect of a management position (unless the operator qualifies to benefit from the small-scale operator exemption), this condition will be fulfilled by the presence of a holder of the appropriate certificate of approval under the Gaming Act 1968, where there are no PML holders. 1 This requirement is set out at GA 2005, s 80(3).

14.80 Licensees must comply with the Commission’s specifications for bingo equipment. The Commission is releasing its requirements on a staggered basis, with the original version of ‘Bingo and Casino Equipment Technical Requirements’ having been published on 1 June 2007.1 The release of this document was timed to give the bingo industry an appropriate period to enable it to ensure that no equipment fell within the definition of ‘gaming machine’ once GA  2005 came into force.2 The requirements set down the specifications for the main stage prize information board, the required characteristics of random number generation and server-based system 736

Gaming requirements, amongst other technical equipment. Technical requirements which had not been resolved through the initial consultation were later implemented on 31 August 2008 following further discussion between the Commission and the industry.3 Those matters included the following: the requirement for devices which allow cashless play to automatically disallow play by self-excluded customers, the requirement that bingo tickets must have in play not less than 15 numbers each, and that no fewer than 75 numbers must be used in a game. 1 ‘Bingo and Casino Equipment Technical Requirements: Annex A’, published by the Gambling Commission in July 2007. 2 Were any bingo equipment to be considered a ‘gaming machine’, it would have had to comply with the gaming machine technical standards, regulations and limits on stakes and prizes and numbers of machines. 3 A revised version of the standards was published in July 2008 incorporating those requirements which had to be implemented on 31 August 2008.

14.81 Licensees must only allow games to be played that do not appear on the Gambling Commission’s list of proscribed games. At the time of writing, no such list had been released by the Gambling Commission.

Matters to be dealt with by way of codes of practice 14.82 The following matters will also be dealt with by way of operating licences. They will not be ‘conditions’ as such, but will instead form part of the codes of practice issued by the Gambling Commission.1 Non-compliance with codes of practice will not make a person liable to criminal or civil proceedings (unless they are part of the so-called ‘social responsibility provisions’ – as to which, see below) but a code may be taken into account by a court, tribunal or the Commission and is admissible in evidence in criminal or civil proceedings.2 Specific sections of some codes of practice are designated as ‘social responsibility provisions’ with which operators must comply.3 1 See Gambling Codes of Practice – Consolidated for all Forms of Gaming (May 2015). 2 GA 2005, s 24(8) and (9). 3 GA 2005, s 82.

14.83 At present there is no condition which deals specifically with antimoney laundering procedures in relation to bingo premises. Operators are nonetheless required, of course, to comply with the Proceeds of Crime Act 2002 and associated money laundering legislation as indicated in Code (May 2015) provision 2.1.2: ‘Ordinary code provision 2.1.2 Anti-money laundering – other than casino All licences except casino licences 1

As part of their procedures for compliance with the requirements in respect of the prevention and detection of money laundering in the Proceeds of Crime Act 2002 and the Terrorism Act 2000, licensees should take into account the Commission’s advice on the Proceeds of Crime Act 2002, Duties and responsibilities under 737

Gaming the Proceeds of Crime Act 2002 – Advice for operators (excluding casino operators).’ Further, ordinary Code provisions (May 2015 – provision 3.8.2) deal with the requirement for bingo operators to seek to prevent organised money lending between customers. 14.84 Bingo operators’ responsibilities towards the employment of children are dealt with in GA 2005 and also in an ordinary code provision. This is further discussed at 14.101 below. 14.85 It is a condition of a premises licence that the rules of each game be made available to customers on the premises. This is bolstered by an ordinary code provision which requires the display of rules about each variant of bingo and any prize gaming. 14.86 Social responsibility provisions deal with age verification policies with regard to access by children; procedures for the identification of, and contribution towards the treatment of, problem gambling; policies relating to the discounting of alcohol prices and to its general consumption and policies relating to marketing, in that anyone employed to promote the premises must not be paid according to the amount of gambling losses incurred by those customers brought in as a result of such marketing. Further, bingo staff themselves should be protected against problem gambling and procedures should ensure that relationships between staff and customers do not undermine the licensing objectives. 14.87 It is a social responsibility provision of a code of practice that if bingo (or casino) licensees offer customers free or discounted alcoholic drinks for consumption on the premises, they must do so on terms which do not in any way link the availability of such drinks to whether, or when, the customer begins, or continues, to gamble.1 Additionally, they must not offer free alcoholic drinks for immediate consumption by customers at a time when they are participating in a bingo game or playing a gaming machine. 1 Gambling Codes of Practice – Consolidated for all Forms of Gaming (May 2015), para 5.1.3.

Exempt and permitted gaming (bingo in private clubs) 14.88 GA  2005, s  269 allows facilities for equal chance gaming to be provided in certain premises without the need for an operating or premises licence or a club gaming permit. Those premises are members’ clubs under s  266, commercial clubs under s  267 and miners’ welfare institutes under s 268.1 This retains the position which existed under GA 1968 with regard to such premises, and covers venues where gaming is ancillary to other activities and is conducted mainly for social entertainment as opposed to commercial profit. Accordingly, there are certain restrictive conditions by which such premises must abide to ensure that gaming remains low-level. 1 Also exempt by virtue of s  269(1)(c) and  (d) are clubs that would be members’ clubs but for s  266(1)(a) and clubs that would be commercial clubs but for s 267(1)(a).

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Gaming 14.89 The characteristics that premises must possess in order to qualify as one of the above premises, and thereby be exempt from the requirement to obtain a licence for equal chance gaming, are broadly similar to those under GA 1968. The GA 2005, s 269 sets out those organisations which are able to provide gaming without a licence and are, therefore, able to offer ‘exempt gaming’. These are members’ clubs, commercial clubs, clubs that would be members’ clubs or commercial clubs but for the fact that they are not conducted wholly or mainly for purposes other than gaming, and miners’ welfare institutes.1 Such clubs must abide by the conditions set down in s 269 and in associated regulations. No amount may be deducted or levied from the stakes or prizes, clubs must abide by any maximum stakes, prizes and participation fees, no linked bingo is permitted,2 and (save in respect of commercial clubs) each participant must have applied to become a member of the club at least 48 hours before playing or must be a guest of such a member. There is currently no limit in terms of stakes and prizes per game, but the club must ensure it stays below the threshold for high turnover bingo. 1 A members’ club is a club which is: established and conducted wholly or mainly for purposes other than the provision of facilities for gaming; established and conducted for the benefit of its members (and which is not otherwise established or conducted as a commercial enterprise); not established with the purpose of functioning only for a limited period of time; and which has at least 25 individual members. Those clubs which provide bridge and whist as their primary function also qualify as members’ clubs for the purposes of exempt gaming, as provided for by The Gambling Act 2005 (Gaming in Clubs) Regulations 2007 (SI 2007/1942). 2 GA  2005, s  269(5) provides that a condition of exempt gaming is that ‘a game played on one set of premises is not linked with a game played on another set of premises’. This condition prevents linked bingo in such clubs and confines the lucrative cash bingo variant, therefore, to licensed bingo premises. The idea of introducing linked bingo to working men’s clubs was discussed briefly at para 25.17 of the Gambling Review Report. The point was made in the Report that gaming in such clubs has historically been intended to provide social entertainment as opposed to commercial gain and that it would therefore represent a significant departure from that principle, were clubs given the ability to participate in bingo for significantly enhanced prizes.

14.90 Clubs (providing exempt or permitted gaming) and alcohol licensed premises must comply with the Gambling Commission’s Code of Practice for Equal Chance Gaming in Clubs and Premises with an Alcohol Licence, issued under GA 2005, s 24. Compliance with the Code is the responsibility of a designated person who, in the case of clubs with a licence authorising it to sell alcohol, is the ‘designated premises supervisor’ under the Licensing Act 2003 or, where the sale of alcohol is not permitted, is a nominated responsible individual to be known as the ‘gaming supervisor’. The gaming supervisor is responsible for ensuring that the gaming remains ancillary to the other activities at the club, that appropriate age verification procedures are in place, the gaming takes place in a location where it can be properly supervised, stakes and participation fees are paid in cash before the start of the game, game rules are properly displayed and only the club’s equipment is used during gaming. It is additionally the responsibility of the gaming supervisor to contact the Gambling Commission if the total stakes or prizes in bingo exceed £2,000 in any seven-day period. 739

Gaming 14.91 GA 2005, s 275 removes the exempt status of those premises which would fall within the parameters of exempt gaming by virtue of s  269 or s 271 in circumstances where ‘high turnover bingo’ is played during a ‘high turnover period’. The section goes on to specify that bingo is considered to be ‘high turnover’ if the aggregate of stakes and prizes exceeds £2,000. The high turnover period is specified as seven days. If, then, a premises finds that the aggregate of stakes or prizes has exceeded £2,000 within seven days, it must either hold an operating and a premises licence or ensure that no further high turnover bingo takes place at the premises in the following 12-month period, since otherwise it commits the offence under GA 2005, s 33 of providing facilities for gambling. On the first occasion of falling into the high turnover parameters, a premises is required, by s 275(6), to inform the Gambling Commission of the situation or else face on summary conviction a fine not exceeding level 3 (which is currently £1,000). Section 279(9) allows the Secretary of State by order to amend the £2,000 limit.

Bingo in alcohol licensed premises 14.92 Exempt gaming provisions apply, by virtue of GA  2005, s  279, to premises licensed under the Licensing Act 20031 for the sale by retail of alcohol.2 It provides that facilities for equal chance gaming at such premises may be provided without the need for an operating or premises licence at times when alcohol is permitted to be supplied under LA 2003. As gaming on such premises is intended to be an activity which is secondary to the principal function of alcohol licensed premises – ie the sale of alcohol and any licensable activities permitted under its LA 2003 premises licence – its exemption from the need to be licensed carries with it certain conditions. The first four of these five conditions, set out in GA 2005, s 279, are almost identical to those set out at s 269, which deals with exempt gaming in relation to certain types of club.3 They are that the gaming must satisfy prescribed requirements which limit the amounts to be staked or the amount or value of a prize which, in the case of bingo, is limited to a maximum stake of £5 per person per game;4 no amount may be deducted or levied from sums staked or won; no participation fee may be charged;5 no game played on one set of premises may be linked with a game played on another set of premises; and children and young persons must be excluded from participation. A licensing authority is given the power at s  284 to make an order which negates the effect of exempt gaming in relation to a particular alcohol-licensed premises. It may only do so, however, on particular grounds and there exists a right of appeal to the magistrates’ court. For a case where a national pub company sought to obtain an operating licence from the Gambling Commission to provide high turnover bingo in a number of its premises, see Greene King Brewing and Retailing Ltd v The Gambling Commission.6 In this case Green King was successful before the First-tier Tribunal, but failed when the Upper-tier Tribunal reviewed that decision on appeal. As at the date of publication permission has been given for the issue to be determined by the Court of Appeal. 1 GA  2005, s  278 sets out the types of premises to which the exemption applies. Section 278(1)(b) states that the premises must have a bar ‘at which alcohol is served for consumption on the premises’. It follows that restaurants without such bars will not qualify for exempt gaming.

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Gaming 2 The provision also applies for those premises located in Scotland and which are licensed under the Licensing (Scotland) Act 1976. 3 Exempt gaming in clubs is briefly outlined at 14.88 above. 4 The Gambling Act 2005 (Exempt Gaming in Alcohol-Licensed Premises) Regulations 2007 (SI 2007/1940). 5 This is one condition which is different from that relating to clubs, in that s 279(4) provides that no participation fee may be charged on alcohol licensed premises, whereas s 269(4) provides that no prescribed participation fee may be exceeded in club premises. Note also that further provisions relating to participation fees are set out in GA 2005, s 344. In particular, it is stated that any admission charge to the premises and any ‘membership subscription’ will be treated as a participation fee. Further, s 344(1)(a) states that it is ‘immaterial how a fee is described, whether a fee is payable in money or money’s worth, when and how a fee is payable or to whom a fee is payable’. This is evidently an attempt to keep locked tight any potential loopholes of the type which existed under the Betting and Gaming Act 1960 in which clubs charged high admission fees but kept stakes and prizes within the statutory limit. Accordingly, gaming in clubs escalated because of the high profits made and gaming thereby transcended its status as an ancillary activity in such circumstances. 6 GA/2014/001 and [2016]  UKUT  50 (AAC) (29  January 2016), GG/0281 and 0282/2015.

14.93 Historically, GA 1968, s 6(1) permitted only dominoes and cribbage to be played in public houses1 as a right. With GA  2005, the government has departed from that position in that it now provides for the playing of any game of equal chance, subject to the general conditions set down in s  279. As with gaming in members’ clubs and miners’ welfare institutes, high turnover bingo is not permitted to occur in alcohol licensed premises more than once in any one year. Again, the permitted limit for aggregate stakes or aggregate prizes is £2,000 within a high turnover period of seven days. Should this limit be exceeded on more than one occasion in a 12-month period, the premises will commit an offence if it does not hold a bingo operating licence. 1 Other games of equal chance were permitted to be played upon application to the local licensing authority under GA 1968, s 6(3). Entitlements by virtue of that provision lapsed on 1 September 2007.

14.94 All alcohol licensed premises and clubs which provide gaming under the exempt gaming provisions are required to comply with the Gambling Commission’s ‘Code of Practice for Equal Chance Gaming in Clubs and Premises with an Alcohol Licence’.1 The designated premises supervisor2 under the Licensing Act 2003 is also the gaming supervisor for the purposes of exempt gaming. The gaming supervisor has a list of responsibilities which include ensuring that: gaming remains low-level, procedures are in effect to prevent underage gambling, all gaming equipment is supplied by the premises and all payment is made in cash before the start of the game, amongst other provisions of the Code. 1 Provisions included in the Gambling Codes of Practice – Consolidated for all Forms of Gaming (May 2015). 2 The designated premises supervisor is the person who, under LA  2003, s  19 is charged with authorising the sale of alcohol on any alcohol licensed premises.

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Bingo equipment 14.95 Mechanised cash bingo and electronic bingo ticket minders (known as ‘EBTs’) are not classed as gaming machines and are therefore exempt from the relevant controls under Part 10 of GA 2005.1 Electronic bingo terminals (also called ‘EBTs’)2 are devices which are used in some bingo premises as alternatives to paper tickets or game cards on which the numbers to be struck out are provided. As these devices are hand held, an advantage is that they enable players to move around while still participating in the game. GA 2005, s 85 allows conditions to be attached to operating licences which make provision for the number of pieces of equipment that may be used to provide facilities for gambling. However, s 85(2)(a) specifically provides that no such provision may be made in relation to equipment for playing bingo and, consequently, no condition restricting the number of, for example, EBTs, may be attached. Conditions relating to the specification of equipment,3 however, may be made by s 85(2)(b) and, consequently the use of EBTs and MCBs is subject to the Gambling Commission’s Bingo and Casino Equipment Technical Requirements. 1 Section 235(2)(e) exempts mechanised cash bingo (‘MCB’) equipment, which is used for playing real bingo games in accordance with a condition on a bingo operating licence. Section 235(2)(f) exempts equipment used for playing real prize bingo from being classed as a gaming machine in accordance with a condition on a gaming machine general operating licence. Explanatory Note 581 to the Act clarifies that these sections are intended to have the effect of exempting such machines from the gaming machine technical standards imposed by the Gambling Commission and have necessarily been carefully worded in order that the definition of the machine could not be interpreted as including a machine on which virtual bingo could be played. Were EBTs or MCBs to be classed as gaming machines, those who manufacture, repair, install or sell them would be required to obtain a gaming machine technical operating licence. 2 Electronic bingo terminals are also known as electronic daubers or ‘TEDs’. 3 ‘Equipment’ is defined for the purposes of s 85 as including ‘(a) a computer, (b) a device for the playing of a casino game, and (c) any other piece of equipment’. The definition is therefore very broad and could potentially lead to standards being set for any device used in connection with playing bingo.

14.96 Mechanised bingo is played in the same way as ordinary cash bingo but, instead of a player marking off the numbers on his paper card with a marker, plastic shutters are used to mark off numbers on a fixed plastic board.1 It is a very popular form of cash bingo which has been estimated to bring in 25–30% of a typical bingo club’s income. 1 Paragraph 8.2 – Gambling Review Report (July 2001).

14.97 If an operator provides EBTs, he will need to obtain an ancillary remote bingo operating licence to account for the digitalised, ‘remote’ element present. This is further discussed in Chapter 6.

Multiple and linked bingo 14.98 The playing of multiple bingo was first approved by the Gaming (Bingo) Act 1985.1 It was devised as a response to the phenomenon of 742

Gaming ‘newspaper bingo’, which was introduced in 1981. This involved newspapers offering substantial prizes in bingo games, some of up to £1 million, and was regulated by the Lotteries and Amusements Act 1976. However, newspaper owners were exempt from the requirement to pay duty and were obviously able to benefit from advertising in the newspaper which, understandably, caused much frustration on the part of bingo operators. The passing of the 1985 Act, then, was much welcomed and introduced multiple bingo or ‘the National Game’. 1 Paragraph 25.13 of the Gambling Review Report (July 2001). The Act was repealed by s  356 and Sch  17 of the Gambling Act 2005. By the Gambling Act 2005 (Commencement No  6 and Transitional Provisions) Order 2006 (SI  2006/3272), Sch  4, para  39(6) those holding a multiple bingo certificate issued under the Schedule to the 1985 Act were deemed to have made an advanced application for an operating licence under the new statute.

14.99 Linked bingo was permitted under GA 1968 by virtue of s 20 which amended, in respect of bingo clubs, the requirement that a person may not participate in gaming if he is not present on the premises when the gaming takes place there1 by effectively treating the various bingo clubs participating in the linked game as if they were one single premises. GA 2005 maintained the provision for linked bingo by, first, prohibiting the attachment of any condition to an operating licence which requires a game of bingo to be played entirely on one set of premises and, secondly, prohibiting the imposition of any conditions on the premises licence that are specific to games of bingo played on more than one set of premises (whether facilities for the game are provided in accordance with one bingo operating licence or more than one).2 There is a remote element to linked bingo in that a digital link, which can be construed as ‘remote communication’, is required in order for the participants, who are physically located in separate and distinct premises, to take part in the game. Consequently, linked bingo under GA  2005 falls within the arena of remote gambling.3 The remote element would, unless otherwise exempted, have the effect that licensees offering linked bingo would be required to apply for a remote bingo operating licence as well as a non-remote bingo operating licence which would authorise the terrestrial aspects of its provision of facilities for playing bingo.4 In September 2006 the Gambling Commission published ‘Licensing and technical standards with regard to bingo and casino equipment’, para 10 of which provided that: ‘…  a bingo club would not need a remote licence simply because its customers participated in a game of multiple or linked bingo; the delivery of the game to participating venues would involve remote communication, but players would not use the telephone, internet, or other means of remote communication to participate in the bingo game.’ Consequently, while there is certainly a remote element present in linked bingo, the Commission considers that the degree of ‘remoteness’ does not warrant a remote licence, as it is not the players themselves who are participating remotely. 1 This was a requirement under GA 1968, s 12(1). 2 GA 2005, s 91(2)(g)–(h).

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Gaming 3 By s 4(1), remote gambling is ‘gambling in which persons participate by the use of remote communication’. Further, remote communication is defined, at s 4(2), as ‘communication using (a) the internet, (b) telephone, (c) television, (d) radio, or (e) any other kind or electronic or other technology for facilitating communication’. 4 As explained in Chapter 6, operating licences fall into two categories – remote and non-remote. This is due to the fact that, while an operating licence can authorise more than one activity, it cannot authorise a combination of activities which comprise some non-remote activities and some remote activities. In order authorise such a combination, an operator must obtain a remote operating licence and a non-remote operating licence. This is further discussed in Chapter 6.

14.100 The Gambling (Operating Licence and Single-Machine Permit Fees) Regulations 2006,1 at Pt 1, para 2(1), created a new permission for this situation – the ‘ancillary remote operating licence’. The licence only authorises the licensee to provide facilities for the playing of bingo by means of remote communication and by people who are situated on licensed premises.2 It can only be held by a licensee who also holds a non-remote bingo operating licence. It is not intended, therefore, to authorise online bingo, as the players must be physically located on licensed premises, but is instead a way of authorising those types of bingo which are ancillary to the principal activity of terrestrial bingo (which is authorised by the licensee’s non-remote operating licence) and which have a remote element – such as linked bingo and multiple bingo. At £100, the application fee for an ancillary remote operating licence is significantly lower than an application fee for a remote operating licence and it may be that the Commission considered it unjust that a principally terrestrial bingo operation could be classed as ‘remote’, and would therefore be subject to higher application fees for operating licences while presenting a far lower risk to the licensing objectives than traditional online gambling operations, owing to its provision of linked bingo. Conditions will be attached to the operating licence which will provide that the equipment to be used in connection with the remote gambling equipment must be of a certain standard. 1 SI 2006/3284. 2 ‘Ancillary remote operating licence’ is defined at para  14(3) of the Gambling (Operating Licence and Single-Machine Permit Fees) Regulations 2006 (SI 2006/3284).

Children and bingo 14.101 GA 1968 permitted persons under the age of 18 to be present in a room when bingo was taking place, provided they did not participate in the game.1 The position was effectively retained under GA 2005 by s 47, which created the offence2 of permitting a person aged under 18 to enter certain gambling premises,3 and in which section, notably, bingo premises are not listed. Therefore, children of any age are still permitted to enter bingo premises. 1 By virtue of GA 1968, s 20(6) which amended s 17 in respect of bingo clubs only. 2 All offences relating to children and young persons are contained in Part 4 of the Act. Offences committed by young persons attract the penalty of a fine not exceeding level 3 on the standard scale (£1,000 at the time of writing). All other offences in this section are punishable by imprisonment for a term not exceeding 51 weeks (or 6 months for Scotland), a fine not exceeding level 5 on the standard scale (£5,000 at the time of writing), or both.

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Gaming 3 Section 49 provides that a young person himself commits an offence if he enters such premises.

14.102 GA  2005, s  48 provides that a young person (ie  someone aged between 16 and 18) himself commits an offence if he gambles. It is not an offence, however, to invite, cause or permit under 18s, or for a young person himself, amongst other activities, to participate in private or non-commercial gaming, to use a Category D gaming machine,1 to participate in equal chance gaming in accordance with a prize gaming permit (in which category prize bingo falls and which will typically be provided at holiday or theme parks), or to participate in prize gaming in a non-licensed family entertainment centre or at a travelling fair. This reflects the low-level nature of prize gaming and Category D machines.2 As discussed at 14.34 above, a bingo premises licence enables its holder to make available a number of Category B gaming machines not exceeding 20 per cent of the total number of gaming machines which are available for use on the premises and unlimited Category C and D machines available for use. In order to ensure that the s 46 offence of inviting under 18s to gamble is not breached, it is a mandatory condition on all bingo premises licences that the areas of the premises containing Category B and C machines are to be separated from any other area to which children have access, and the entrances to those areas containing such machines are to be supervised.3 Therefore, the position for children under GA 2005 is that they may enter bingo premises, may gamble on Category  D  gaming machines, but may not take part in bingo played in reliance on a bingo premises licence, although they may be present when bingo is taking place. However, if any gaming machines of above Category D are located in the area where bingo is taking place, children must not be permitted in this area. 1 Category D gaming machines have a maximum stake of 10p and 30p when nonmonetary. The maximum prize is £5 in cash or non-cash, or £8 for a token or nonmonetary prize. 2 However, s  59 allows the Secretary of State to create an offence of ‘inviting, causing or permitting a child or young person below a specified age to use a Category  D  gaming machine’. This must be done by Order and consultation must be conducted. Category  D  machines were the subject of much debate in Parliament, as GA 2005, s 46(2) exempts Category D machines, as well as some other forms of gambling, from the principal offence, and thereby allows children to gamble. The contention that the Category D machine is a variant of the traditional fruit machine to which many adults are addicted, led to several MPs asking for children to be prohibited from playing such games. Undoubtedly, such a move would cause considerable harm to businesses such as seaside arcades. The power under s 59 to introduce an age limit for playing Category D machines gives the government flexibility, should new evidence of harm caused by such machines comes to light. 3 This condition is discussed in more detail at 14.64 above.

14.103 By GA 2005, s 53 it is an offence to employ a child to perform any function on premises where, and at a time when, facilities are provided for the playing of bingo.1 The section omits any reference to ‘young person’, which is in contrast to all other employment offences in the Act, with the exception of employment for lottery or football pools.2 This means, therefore, that no person under the age of 16 years old may be employed in a bingo premises when bingo is being played but this does not preclude the employment of 16to 18-year-olds, or ‘young persons’.3 However, by GA 2005, s 54(2), no child or 745

Gaming young person may be employed to perform any function in connection with a gaming machine. The consolidated Code of Practice stipulates that bingo licensees should formulate policies and procedures designed to ensure that persons under the age of 18 are never asked to perform certain tasks which the Commission considers would breach the provisions of Part 4 of the Act. The Commission, in its Code of Practice, lists the offences4 (to employ children to provide facilities for bingo;5 for a child’s contract of employment to require him, or for him to be permitted, to perform a function in connection with a gaming machine;6 and to employ a child to perform any function on premises where, and at a time when, facilities are being provided for playing bingo)7 and adds that its view of the s 54(2) offence applies to any function at all in connection with a gaming machine, and so it would constitute an offence for a child to clean or service such a machine. Peter Dean, then Chairman of the Gambling Commission, in his speech to the Bingo Association AGM on 6 June 2006, provided more clarity when he stated that prohibited tasks would include ‘… selling bingo books or tickets, handing out TED machines, identifying winning players or paying out winners or prizes.’ 1 Children are only permitted to be employed in relation to bingo where it is prize bingo and takes place at a travelling fair in accordance with the conditions listed at GA 2005, s 292. 2 This offence is created by GA 2005, s 52. 3 ‘Child’ and ‘young person’ are defined at GA 2005, s 45. 4 Paragraph 3.6.2 of Part 3 of Gambling Codes of Practice – Consolidated for all Forms of Gambling (May 2015). Codes of practice are required by s  24 to be made by the Gambling Commission to prescribe arrangements that should be made by a person providing facilities for gambling for the purposes of, inter alia, protecting children and other vulnerable persons from being harmed or exploited by gambling. The Code at 3.6.2 is clearly an attempt to achieve this purpose. While non-compliance with a code will not generally give rise to civil or criminal liability, there are provisions in GA 2005, s 24(9) which are intended to encourage operators to comply with the codes. 5 GA 2005, s 51(1). 6 GA 2005, s 54(2). ‘Employment’ is defined at s 61. 7 GA 2005, s 53(a).

14.104 Additionally, the Commission states that policies and procedures should exist designed to ensure that all staff, including any who are children and young persons themselves, are instructed about the law relating to access to gambling by children and young persons. The Commission asks that bingo licensees should consider adopting a policy that children are not employed to work on bingo licensed premises at any time when the premises are open for business, and that neither children nor young persons are in any event asked to work in areas where gaming machines are situated.1 This, of course, reflects the position stated in the Act. 1 Paragraph 3.6.2 of Part 3 of Gambling Codes of Practice Consolidated for all Forms of Gambling (May 2015).

Demand 14.105 Under GA 1968, licensing justices were required, when considering applications for new casino and bingo licences, to take into account 746

Gaming the issue of customer demand for the proposed premises.1  GA  2005, s  153(2) abolished the notion of demand as a criterion when considering applications for grant of any type of premises licence2 by stating that a licensing authority may not have regard to the expected demand for the facilities which it is proposed to provide, but must judge each application on its merits. The change in attitude towards the demand criterion came earlier with regard to bingo halls than it did for casinos. The Home Office released a consultation paper in 1996 proposing the abolition of the criterion in respect of bingo premises because of the low social risk of the game, the adequacy of the requirement to obtain a certificate of consent as a control against proliferation, and the likelihood that greater competition between bingo clubs would benefit players.3 However, the proposal was not implemented. Further discussion of the demand criterion appears in the Casinos section of this chapter. 1 GA 1968, Sch 2, para 18(1). 2 The Act, by virtue of s 72, also expressly provides that the Gambling Commission must not take into account either the geographical area for gambling facilities or the expected demand for facilities during their determination of whether to grant an operating licence. 3 Gambling Review Report, para 20.26.

Advertising 14.106 In stark contrast to casino operators, bingo operators have long been permitted to advertise the provision of bingo facilities in their premises in all forms of media. Bingo has had a relatively high profile in television advertising campaigns. Under GA 2005, all gambling advertising is regulated by way of conditions attached to operating licences. Responsibility for developing the advertising code of practice falls on the Office of Communications (Ofcom) and, specifically, its two branches: the Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP). The two codes, collectively known as ‘the CAP and BCAP Gambling Advertising Rules’ apply to the advertising of all gambling products and are further discussed above in the section on Casinos. In April 2014 a four strand review of gambling advertising sought to ensure that regulatory controls are properly examined, especially in relation to children and other vulnerable people. This resulted in: (a) the Department for Culture, Media and Sport (DCMS) response to the review of gambling advertising which took place during 2014/15; (b) the Industry Group for Responsible Gambling (IGRG) introducing a series of enhancements to the Industry Code for Socially Responsible Advertising, including restrictions on the marketing of pre-watershed sign up offers on TV; (c) the Committees of Advertising Practice (CAP and BCAP) publishing their assessment of the regulatory implications of new and emerging evidence for the UK Advertising Codes; (d) the Advertising Standards Authority (ASA) publishing its review of how the UK Advertising Codes are applied. 747

Gaming The Gambling Commission reviewed its Licence Conditions and Codes of Practice (LCCP) and strengthened provisions relating to the marketing of promotional offers, such as free bets and bonuses. One point relating specifically to bingo is worth mentioning here. The current restrictions provide that gambling products should not be advertised on television before the commonly accepted watershed time of 9.00pm, save for bingo advertising and sports betting ads shown around televised sporting events. The most recent change means that from February 2016 the latter will also be restricted to post 9.00pm if they include a sign-up offer. Other changes (many of which are already standard practice for the majority of advertisers) include: •

all broadcast advertisements (both TV and radio) should end with a socially responsible gambling message;

•

pre-watershed television advertising may not make reference to other gambling products that would not normally qualify for pre-9pm exemption;

•

the Gambleaware website should be given greater prominence;

•

‘18+’ or similar must appear clearly in both TV and print ads.

Impact of the Health Act 2006 relating to smoke-free premises 14.107 The Health Act 2006 (HA 2006) has had a major effect on both the alcohol licensed industry and the gambling industry. Its main provision is to designate public places which are either fully enclosed or ‘substantially’ enclosed1 as smoke-free premises. The smoking of any substance in a smokefree place became an offence on various dates in 2007 in Wales, Northern Ireland and England. There were mixed reviews of the consequences of the ‘smoking bans’ in the Republic of Ireland and Scotland (implemented respectively on 29 March 2004 and 26 March 2006), with some initial reports suggesting there was initially a sharp downturn in business followed by a gradual return of customers to licensed premises, and others maintaining that this ‘levelling-off’ was a fallacy and that bingo premises continued to suffer, as it was during the intervals between the main games of commercial bingo that many operators made the significant portion of their profit from gaming machines and interval cash bingo games. Should players choose instead to exit the main premises in order to smoke, there is the potential for a large amount of revenue to be lost, particularly when one considers the high proportion of bingo players who smoke (significantly above the national average). In this regard, it is unsurprising that the major bingo operators were of the view that the HA 2006 had much more of an adverse impact on bingo premises than on other types of premises. Adapting to the effects of the Act, options taken by bingo operators hoping to lure customers away from the attraction of online bingo (which can be played at home while smoking but, of course, lacks the all-important social element of the bingo club, which is often regarded as the hub of some social communities2) ranged from installing gambling machines in outside areas to making portable electronic bingo machines more widespread. 1 For a room to be ‘substantially enclosed’, it must have a roof or ceiling and must have less than 50% of its walls open to the elements. Doors and windows are not to be counted as part of the 50%.

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Gaming 2 ‘“Unlucky For Some” – The Social Impact of Bingo Club Closures’ released by Henley Centre Headlight Vision in August 2007 and commissioned by the Bingo Association concludes as follows: ‘The closure of bingo clubs, especially those in the small, rural venues and deprived urban locations, has meant not only the loss of a pastime and form of entertainment but the disappearance of a unique social support network, relied upon especially by retired women. The demise of this pastime and network can have a detrimental impact upon the physical and mental wellbeing of patrons, particularly as there are often few other opportunities for this group to socialise. Bingo closures also appear to be both a manifestation and catalyst for a wider breakdown of local communities that could have a negative impact upon society.’

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Chapter 15 Lotteries

INTRODUCTION 15.1 In its modern form a lottery is a system of gambling in which prizes are distributed by chance amongst persons who are required to pay for their chance to take part. There is now a statutory definition of a lottery in the Gambling Act 2005, which this chapter will examine in detail. The purpose of this introduction is to sketch out briefly the history of lotteries, particularly in Europe and in Great Britain.1 1 See C L’Estrange Ewen Lotteries and Sweepstakes (1932) London; (1972) Benjamin Blom Inc NY; J Ashton History of Gambling in England (1899) London; Bendar Tickets to Fortune: The Story of Sweepstakes Lotteries and Contests (1938) New Hampshire.

15.2 Use of sortition, ie the drawing of lots, to distribute property and to allocate onerous duties or hardships is of immense antiquity, almost certainly predating written records. Biblical sources provide extensive evidence of the use of the lot to determine fortune: ‘And Aaron shall cast lots upon the two goats; one lot for the Lord and the other lot for the scapegoat.’1 Land was sometimes distributed by lot, as in the book of Numbers where Moses, after taking a census of the Israelites, apportioned the land west of the Jordan ‘For an inheritance according to the number of names to each tribe’; but in order to obviate the possibility of jealousy the territories were ‘divided by lot’.2 Sortition was also used to distribute individual articles,3 to determine who should suffer personal misfortune for the public good,4 to settle legal controversies5 and to identify criminals.6 The Romans used the ‘sortes’, in essence the drawing of lots, as an adjunct to fortune telling. The Roman emperors, at their banquets, determined the distribution of presents among their guests by lot, and visitors in the Saturnalia received tickets marked with the descriptions of gifts, each one representing a prize, there being no blanks. The depraved Emperor Elagabulus, at his feasts and games, distributed chances inscribed on spoons, the benefits varying greatly in utility and value from ten camels at one extreme to ten flies at the other. Here 751

Lotteries there was no payment and no chance of loss, but Augustus (63BC–AD14), who also made gifts to his followers, is said by Suetonius to have ‘sold by lot among his guests articles of very unequal value, and pictures with their fronts reversed, and so by the unknown quality of the lot, disappointed or gratified the expectation of the purchasers’. Such a scheme involving equal payments, unequal prizes, and the chance of loss or unequal gain matches in many ways the modern concept of a lottery. 1 Lev xvi 8. 2 Num xxvi 55. 3 Psalm XXII  18: ‘They part my garments among them and cast lots upon my vesture.’ 4 Joshua 1.6. Jonah was cast overboard in a storm at sea, having been selected by lot as the party whose conduct had provoked the storm. 5 Prov xvi. 33; xviii 18. 6 Joshua vii 6.

15.3 However, for evidence of the organised commercial development of public lotteries in which chances to participate were paid for, we must turn to the Low Countries in the middle of the fifteenth century, where records for the years 1443–9 show lotteries in operation at Ghent, Utrecht, Oudenarde, Bruges and L’Ecluse. The purpose of some, at least, of these was to raise money for public works. Thus, between 1444 and 1449 the town of L’Ecluse ran nine lotteries to raise money for building town walls and fortifications. The archives of Bruges record the drawing of two lotteries in 1445/6 which realised a net profit of £982 13s 10d (Flanders) which was paid into the parish coffers. Details of the second lottery show that it, at least, exhibited two characteristics which would become standard features of public lotteries in England between the sixteenth and the early nineteenth centuries. First, the lottery used the method of a double draw. Each participant received a ticket, the counterfoil of which was placed in a box or wheel. A second such box was filled with tickets which were either printed with details of a prize or which were left blank. At the draw, all the entrants’ counterfoils were drawn in sequence, a matching ticket being drawn from the other box so that each entry would either win a prize or ‘draw a blank’. This method no doubt extended the uncertainty and excitement of the draw but, as practised in England, it was to facilitate abuses which eventually led to the abolition of state lotteries in 1826. Second, the rules provided for prizes to be awarded not only to the participants whose counterfoils were drawn against prize tickets, but also to those whose counterfoils were drawn immediately before and immediately after the drawing of the principal prizes. It is worth noting that the entrants to this lottery included a Londoner and an Aberdonian,1 a fact which suggests that the first English lottery of 1556 was directed to a public which had some familiarity with such projects. Lotteries continued to be promoted in Bruges with some regularity between 1465 and 1561, when a Prohibition was placarded, probably as a preliminary step to the institution of a state lottery. During this period, lotteries are also recorded in territories now comprised in Holland, Belgium and France, namely Bergen op Zoom, Leyden, Malines, Delft, Damme, Ypres, Bois-le-Duc, Tirlemont, Antwerp, Utrecht, Louvain, Maastricht, Lille, Ghent and Courtrai. Such ventures were often organised for the benefit of churches or guilds. Again, it is possible to detect in the organisation of these lotteries features which were to reappear in later arrangements in eighteenth-century England. There were essentially 752

Lotteries two types, the simple ticket lottery and the ‘Class’ or ‘Dutch’ lottery, consisting of series or classes of drawings, the number and value of the prizes increasing with each class, it being a requirement that to participate in the later and more desirable classes the entrants had to purchase tickets for all the earlier series. 1 Details of the Bruges lotteries are taken from C  L’Estrange Ewen Lotteries and Sweepstakes (1932) London, (1972) Benjamin Blom Inc NY, pp 26–7.

15.4 In Germany there are records of a lottery in the Duchy of Bavaria during the fifteenth century, and in 1470 in Augsburg, the capital of Swabia, there was organised a venture with 36,000 tickets at 8pf each. Lotteries have been traced in Strassbourg (1473), Erfurt (1477), Gemünden (1480) and Nuremburg (three in about 1487). There is evidence that in various German states lotteries continued into the sixteenth and seventeenth centuries. It is said that the lottery was introduced to France in 1533 by the Italians in the suite of Catherine de’ Medici. A state lottery was organised in connection with the marriage of Louis XIV (1659) and after this such schemes became common. The earliest Italian lottery which is dated and documented was promoted in Florence in 1530. A hundred years later a new type of lottery, the Genoese lottery was introduced in Genoa and spread rapidly, achieving considerable popularity, although it was forbidden from time to time. In North America it appears that lotteries did not become generally used until the early eighteenth century. In 1720 a house property in Philadelphia was disposed of by lottery and in that city lotteries became a popular means of raising money for public improvements. In Connecticut in 1750 a building fund for Yale College was raised by lottery and in Massachusetts a lottery was promoted in 1772 to raise funds for buildings at Harvard College.

EARLY ENGLISH LOTTERIES 15.5 In England, lotteries were not regarded as illegal at common law, and until 1699 there was no statutory prohibition of private lotteries. Until the end of the seventeenth century, when control passed from the King in council to Parliament, lotteries were regarded as a form of monopoly licensed by letters patent from the Crown. 15.6 The first English lottery was projected under state auspices in 1566 and drawn in 1569 to raise public funds. The proceeds were to be ‘converted towards the reparation of the havens and the strength of the realme and towardes such other publique good workes.’ The project shows a number of resemblances to the European lotteries noted above and foreshadows a number of the characteristic features of the English state lotteries which were to follow. In all 400,000 lots were offered for sale at a price of 10s per lot to produce gross receipts of £200,000. The plan was to offer some 29,504 fixed prizes ranging from a single first prize of goods and money to a value of £5,000 down to 9,418 prizes of 14s in money. The total value of these prizes was a little under £60,000. There were in addition to be a number of contingent prizes, such as a prize of a life pension for anyone who, having bought 30 lots, failed to recoup his outlay beyond a stated sum. There was also provision for prizes to be awarded to those whose lots were drawn first, 753

Lotteries second and third in order. The scheme was also promoted on the basis that it was to be ‘without any blanks’, as each lot that failed to win a prize in excess of the 10s cost would receive a consolation ‘prize’ of 2s 6d. The project therefore provided for receipts of £200,000 from which were to be paid 29,504 fixed prizes of approximately £60,000 in value and approximately 370,496 consolation prizes of 2s 6d each, a total sum of £46,312. Thus, after payment of total prizes of £106,304, a gross profit of £93,696 would have resulted, had all gone according to plan. 15.7 All did not, however, go according to plan. The lottery was first advertised in 1567 with the draw to commence on 25 June 1568. However, the scheme wholly failed to kindle the enthusiasm necessary to generate sufficient ticket sales, and the date of the draw had to be adjourned, first, to November 1568 and then finally to January 1569. A series of increasingly pressing government proclamations and announcements poured forth designed ‘to animate the people’ and overcome their unaccountable reluctance to be parted from their money. Finally, matters could be delayed no further. Only about one-twelfth of the projected £200,000 had been collected and the advice of a French lottery consultant was sought. The upshot of his advice was that the value of all the prizes was reduced in proportion to the deficit in takings, producing a prize fund of approximately £9,000. In order to ensure that the total number of counterfoils to be drawn should remain at 400,000, each holder of a 10s lot was given a free issue of 11 additional lots, so that his name was entered in all 12 times. It appears that the consolation prizes of 2s  6d were done away with – although this is not entirely clear. With these adjustments the draw commenced on 11 January 1568 with one box containing 400,000 counterfoils and the other 29,504 prize tickets of the reduced values together with, it is to be presumed, 370,496 blanks. The draw continued day and night for 16 weeks. 15.8 The features of this lottery which were to be carried forward to other state promotions were: first, the method of double drawing, involving the sequential drawing of all tickets purchased and extending over many days; second, the proposal to have ‘no blanks’; and third the mix of different kinds of prizes (including the award of pensions payable over time). The fourth, and unintended, characteristic, namely the failure of the promoters to meet in full their original prize commitments, would also in time be faithfully reproduced.

ENGLISH LOTTERIES 1694–1826 15.9 Despite the failure of the 1569 lottery, the government continued to grant patents to individuals to promote public lotteries until the end of the sixteenth century. These, unsurprisingly, do not appear to have attracted much support. It is not until the late seventeenth century that the state lottery emerges as a regular and significant event. Its arrival coincides with, and is no doubt largely explained by, two factors, namely the demands of the government of William and Mary for revenue to defray the costs of prosecuting war over in Europe, and the emergence of London as a mercantile and commercial centre with financial institutions which were capable of raising the necessary loan capital. 754

Lotteries 15.10 The Nine Years War (1688–1697) and the War of the Spanish Succession (1702–1713) involved Britain in extensive continental and colonial warfare, the costs of which have been estimated at almost £150,000,000. A number of financial institutions were founded to enable the government to make adequate borrowings. Of these the Bank of England is probably the most noteworthy, and has certainly proved the most durable. Founded by Royal Charter in 1694 the bank began by raising capital of £1,200,000 by subscription. The whole of the sum was lent to the Crown at interest, and the government in return offered its promise to pay as security for a note issue of the same amount. The notes so authorised were then lent to worthy private borrowers – also at interest.1 This particular arrangement depended upon the creditworthiness of the government, and this in turn depended upon the willingness of parliament to vote the necessary revenues on a regular basis. The financial and political arrangements which made it possible to raise such sums have been described as follows:2 ‘The cost of the wars amounted to almost £150 million in an age when peacetime expenditure was thought excessive at two millions per annum. This vast outlay required a corresponding rise in levels of taxation, with widespread political repercussions. But more interesting in retrospect is the fact that a large proportion of the bill, approximately one third, was met by borrowing. Sums of this order could only be found in a buoyant and flexible money market, such as that created by the economic conditions of the late seventeenth century. Though land values were seriously affected by agrarian recession, trade had enjoyed a great upsurge in the 1680s and the investment surpluses released were to wash over the economy for a good many years. A post-revolution government, sorely in need of cash and prepared to mortgage the incomes of unborn generations of taxpayers to permit a competitive interest rate, offered promising investment possibilities. The financiers whose initiative eventually led to the foundation of the Bank of England in 1694 were not, in principle, engaging in anything new. As long as wars had been undertaken, governments had been forced to rely on loans from the business community. What was new was the political infrastructure which was necessitated by the exceptionally heavy borrowing in this period. The credit-worthiness of the new regime, based as it was on a parliamentary title, was negligible without the clear understanding that the propertied classes would ultimately be prepared to foot the bill … As war followed war and decade followed decade the burden of debt grew … The pretence that the National Debt could actually be repaid and the nation released from the threat of bankruptcy became increasingly thin … Yet, even at the time, there were those who had a shrewd perception of one quite priceless political advantage of the new system. This arose from its impact on Parliament, and especially on the House of Commons. For everything depended on Parliament’s part in this elaborate process, and Parliament was understandably jealous of its rights in matters of finance. The land tax, the basic guarantee of the taxpayers commitment to the National Debt, was cautiously voted for a year at a time. Even the customs and excise duties, granted for much longer periods, were extended and renewed only after the most prolonged debate and haggling. The “budget” was nominally an achievement of the mid-century when the term was first 755

Lotteries used during Henry Pelham’s time as First Lord of the Treasury (1743– 54). But its essential features can be traced back to the Revolution and it is this aspect of 1689 which more than anything else finally secured Parliament’s central place in constitutional development.’ 1 For the Bank of England see JK  Galbraith Money, Whence it came, where it went (2nd edn, 1995, Penguin); Clapham A  Concise Economic History of Britain (1957) Cambridge. 2 KO Morgan (ed) The Oxford History of Britain (1988) OUP, pp 403–5.

15.11 As it was parliament that authorised the raising of money by taxation, so it was parliament that was to authorise the raising of funds by means of the state lottery. Between 1694 and 1768 parliament authorised approximately 43 state lotteries which, albeit they varied in many ways, all had one common feature which distinguishes them from the state lotteries (126 in all) run between 1768 and 1826. These early lotteries were, in essence, methods of raising repayable loans to the government on terms which provided for the distribution by the luck of the draw to some of the lenders of exceptionally favourable terms of repayment. Each was authorised under a separate Act of Parliament which, in addition to authorising the lottery and laying down detailed provisions for its promotion, also raised the necessary imposts by way of taxes and excise duties to repay the loan and honour the prize commitments. The first lottery of this type, the so-called ‘Million lottery’ was promoted by Act of Parliament passed in 1694, the draw to commence on 8 October 1694. 100,000 tickets, each of a nominal value of £10, were sold. Each ticket entitled the bearer to an annuity of £1, or (by chance) to a greater yearly sum, for 16 years. Thus, every participant was lending the government £10 for 16 years on terms that at worst he would be repaid in full with interest at 60% over a 16-year period. The allure, however, resided in the so-called ‘Fortunate Tickets’ which ­provided for annual payments as follows: •

1 ticket: £1,000 yearly

•

9 tickets: £500 yearly

•

20 tickets: £100 yearly

•

80 tickets: £50 yearly

•

90 tickets: £25 yearly

•

300 tickets: £20 yearly

•

2000 tickets: £10 yearly.

In addition, the owner of the first drawn ticket was to receive £150 yearly and the owner of the last drawn ticket £100 yearly. 15.12 The Act set out detailed provisions for the use of the double draw method noted above. The effect of the scheme was that the government returned £2,200,000 spread over 16 years for a £1,000,000 advance, providing a tempting investment opportunity to subscribers. Although the Act also provided for duties upon salt, beer, ale, and other liquors to ensure that the loan and winnings could be repaid, it appears that the winners had difficulty in obtaining their annuities, and in 1698 parliament had to legislate to ensure that these payments were honoured. 756

Lotteries 15.13 This lottery had some of the characteristics of a flotation of government stock coupled with an offer of premium bonds. The lotteries that followed up until 1768 were, broadly, variations on this method. Ewens summaries the principal types as follows:1 (a) the hit or miss lottery, in which the return may be nil, the prizes being either cash or annuities; (b) the lotteries of annuities certain, in which the least return is greater than the cost of the ticket, and is repayable in instalments spread over a fixed period of years; (c) the lottery of perpetual annuities, in which the minimum benefit is not less than the cost of the ticket, all benefits carrying interest until redemption; (d) the lottery of perpetual annuities, in which the minimum benefit is less than the cost of the ticket, all benefits carrying interest until redemption; (c) and (d) are, in effect, loans for an uncertain period, which cannot be called in by the lender – the terms ‘loan’, ‘annuity’ and ‘interest’ were used interchangeably by the draughtsmen of the Acts; (e) the lottery of life annuities, in which the benefits are contingent upon the survival of the life of the adventurer or his nominee; (f)

the loan lottery, in which the principal money, or part of it, is repayable almost immediately, the blanks sometimes bearing interest and sometimes not.

1 C L’Estrange Ewen Lotteries and Sweepstakes (1932) London, (1972) Benjamin Blom Inc NY, pp 160–2.

15.14 Around 1769 the character of the state lotteries changed. Although the annuity system was not completely abandoned, the lotteries for the most part adopted a more recognisably modern form in which participants either won or lost, though the chance of losing entirely was small, there seldom being more than four blanks to a prize. Between 1769 and 1823 parliament authorised 126 such lotteries.1 About this time also there was a change in the method of selling lottery tickets. Instead of selling the tickets itself, the government farmed out the tickets to contractors, first at a set figure, and afterwards upon a competitive basis. The contractors then sold the tickets to the public adding their own profit to the nominal price. 1 For details see C L’Estrange Ewen Lotteries and Sweepstakes (1932) London, (1972) Benjamin Blom Inc NY, Table 2, pp 238–9.

15.15 The institution of a well-publicised series of state lotteries with effect from 1694 did not exhaust the public’s appetite for such ventures, and there were a large number of lotteries promoted by private venturers throughout the country often on a substantial scale. Some of these may have been honest enough promotions – others were downright swindles; all of them, however, diverted money which might have gone to the government’s own state lotteries. In 1699 parliament passed ‘An Act for suppressing of lotteries’ which recited that: 757

Lotteries ‘…  several evil disposed persons, for divers years last past, have set up many mischievous and unlawful games, called Lotteries, not only in the cities of London and Westminster, and in the suburbs thereof and places adjoining, but in most of the eminent towns and places in England and in the dominion of Wales, and have thereby most unjustly and fraudulently got to themselves great sums of money from the children and the servants of several gentlemen, traders and merchants, and from other unwary persons, to the utter ruin and impoverishment of many families, and to the reproach of the English laws …’ It went on to provide that as from 29 December 1699 all lotteries should be unlawful save for those authorised by the state. The 1699 Act, which remained in force until repealed by the Betting and Lotteries Act 1934 (‘BLA 1934’), laid down the principle that has obtained ever since and which is still the law: lotteries are unlawful unless expressly authorised by statute. This principle is now contained in the Gambling Act 2005 which is the governing statute and which (together with the National Lottery Act 1993) defines such lotteries as are now lawful. 15.16 It is sometimes suggested that parliament’s expressed concern for the moral and social consequences of lotteries was disingenuous given that it continued to promote lotteries itself. The accusation undoubtedly has force, but it may not be wholly fair. An examination of the terms of the state lotteries shows that between 1694 and 1823 the price of a ticket rarely fell below £10, so that participation was in theory limited to the wealthier members of society. However, by the time of the first state lottery there already existed in London a body of stockbrokers and jobbers, ‘low wretches who got money by buying and selling shares in the funds.’1 These rapidly developed a number of forms of accommodation by which the chance of gain and the risk of loss could be shared out more democratically. It was the growth of what was essentially an uncontrolled derivative market on the back of the state lotteries that, the government having persistently failed to stamp it out, produced abuses which eventually in 1826 led to the discontinuance of the state lotteries. 1 See the definition of ‘stockjobber’ in Johnson’s Dictionary of the English Language (1773).

15.17 The first such form of accommodation involved the division and sale of lottery tickets in portions. The broker would purchase a ticket, divide it into parts, and sell them individually for less than the nominal price of the ticket on terms that any prize won by that ticket would be shared in those proportions. Thus, poorer members of society could participate. The extremes to which this could be carried are illustrated in an advertisement for 1766 which offers shares in the following proportions: sixty-fourths, thirty-seconds, sixteenths, quarters and halves. This was found to create an undesirable temptation for the poor, and in 1789 a clause was added to the Lottery Act prohibiting the division of tickets into proportions other than halves, quarters, eighths or sixteenths. 15.18 A second form of accommodation involved the selling of what were effectively ‘time-shares’ in tickets. The lottery was drawn over several days. Brokers would sell the right to ‘hire’ a ticket for a fixed period of anything 758

Lotteries between an hour and a day during the draw for a suitably reduced price. If the ticket were drawn during that period, the hirer received the relevant winnings (or a part of them). The broker charged a premium for the service and, provided he could hire out a ticket to a succession of participants for the whole of the draw, would receive more than its nominal price. 15.19 Each of these forms of accommodation presupposed that the broker actually owned the ticket he was dealing with. The third, and ultimately the most damaging form of accommodation, was the so-called ‘insurance’. Although described as ‘insurance’, this was no more than a form of betting or wagering on the drawn numbers. A  customer would pay to a lottery ticket seller a sum of money on terms that if a particular lottery ticket were drawn during a particular period of the draw, the seller would pay him a sum larger than the sum so paid. The arrangement was a simple wager in which the customer bet the seller that the ticket would be drawn whilst the seller made a contrary bet that it would not. In order to provide this facility it was not, of course, necessary for the ticket seller even to own the ticket which he was betting on; all he needed to do was to meet the bet should the ticket to be drawn. This form of ‘insurance’ became enormously popular at all levels of society, both among the poor and also, as a letter from Horace Walpole to the Countess of Ossory (17  December 1780) shows, among the upper orders: ‘As folks in the country love to hear of London fashions, know, Madam that the reigning one amongst the quality, is to go, after the Opera, to the lottery offices, where their Ladyships bet with the keepers. You choose any number you please; if it does not come up the next day you pay five guineas, if it does receive forty, or in proportion of the age of the tirage. The Duchess of Devonshire in one day won £900. General Smith, as the luckiest of all mites, is of the most select parties, and chooses the numeros.’1 1 Toynbee (ed) The Letters of Horace Walpole (1904) cited in Ewen Lotteries and Sweepstakes (1932) London, (1972) Benjamin Blom Inc NY, p 267.

15.20 From as early as 1737 onward the Lottery Acts contained provisions designed to prevent the activities of the brokers. The 1737 Act contained a clause which was to become virtually standard: ‘And whereas many evil disposed persons out of lucre of exorbitant gain, may attempt to defraud ignorant people of their money, by selling the chances of tickets, by disposing of shares of tickets, by giving receipts of notes to be responsible for money, in case certain tickets prove fortunate, or by laying wagers, whether particular tickets may be drawn in a certain time, or may prove fortunate or unfortunate, or by other ways, means, or contrivances may cheat and delude ignorant people, if sufficient provision be not made to prevent the same; be it therefore further enacted by the authority aforesaid, that no person or persons shall sell the chance or chances of any ticket or tickets in the said lottery, or any share or shares in any ticket or tickets in the said lottery, for a day, or part of a day, or for a longer time, less than the whole time of drawing the lottery then to come, or shall receive any 759

Lotteries money whatsoever on consideration of the repayment of any sum or sums of money, in case any ticket or tickets in the said lottery shall prove fortunate, or shall lay any wager relating to the drawing of any ticket or tickets in the said lottery, either as to the time of such ticket or tickets being drawn, or whether such ticket or tickets be drawn fortunate or unfortunate.’ 15.21 The attempt to legislate against these activities proved, however, doomed to failure. As the eighteenth century wore on, a substantial secondary industry based upon the state lotteries flourished. A  large number of so-called ‘Clandestine Insurance Houses’ sprang up, which were in substance no more than cash betting offices in which people could place bets on the drawing of the lottery numbers. Another method of approaching the public was by commission agents who went out from the lottery offices to collect the ‘insurances’ on a house to house basis or in public houses. So strong was the demand for this kind of gambling that the insurance offices themselves promoted lotteries (so called ‘Little-Goes’) during the periods when there was no state lottery to be drawn. Although these were designed with blanks and prizes in the same way as the official lotteries, their principal function was to form a basis for ‘insurance’ betting. These lotteries were, of course, illegal, but it proved impossible to suppress them. 15.22 Much of the public concern over the moral harm done by the state lotteries focused upon the ‘insurance’ business. In 1792 the grand jury at the Old Bailey described the effects of insurance as follows: ‘servants, mechanics, labourers, after having made away with their money, clothes, furniture and working tools, have, with a view to recover what they have lost, been induced to lay hold on what was the property of another; and from a state of cheerful independence, have been reduced to misery in the extreme.’ In the same year parliament appointed a committee to enquire how far the laws for preventing illegal insurances had been effectual. It concluded that the laws directed at preventing the so-called ‘Clandestine Insurances’ had had virtually no effect. 15.23

A second parliamentary committee in 1808 concluded that:

‘The lottery and illegal insurances are inseparable, that the former cannot exist without the latter for its support; that a system of connivance in those acts which the law prohibits purveys all ranks concerned, from the persons, contracting with Government under the law, down to the meanest wretch employed in the violation of the law, and its most ordinary victim.’1 1 Ewen Lotteries and Sweepstakes (1932) London, (1972) Benjamin Blom Inc NY, p 266.

15.24 Finally, by Act passed in 1823, parliament authorised the final state lottery, which was eventually drawn on 18 October 1826. That Act, which also remained in force until 1934, contained provisions prohibiting other lotteries and against the sale in Great Britain of tickets in foreign lotteries, and until 760

Lotteries its repeal was the statute most commonly employed in the prosecution of unlawful lotteries. 15.25 Until the enactment of the Gambling Act 2005 there was no statutory definition of a lottery. However, the essential features of a lottery were established by the courts in a number of cases, so that it was possible to say that for the purposes of English law a lottery was: ‘the distribution of prizes by chance where the persons taking part in the operation, or a substantial number of them, make a payment or consideration in return for obtaining their chance of a prize’ (per Lord Widgery CJ in Readers Digest Association Ltd v Williams).1 1 [1976] 1 WLR 1109 at 1113.

15.26 Inevitably, the existence of statutory control has affected the attitude of the courts to the schemes which they have had to consider, and an awareness of the development of such control may be of assistance in understanding the cases. The first statutory incursion into the principle that lotteries are unlawful was made by the Art Unions Act 1846, which made lawful voluntary associations formed for the purpose of distributing works of art by chance or otherwise among their members. For many years the Act was of little practical significance and it was finally repealed in 2004.1 1 See the Statute Law (Repeals) Act 2004, s 1(1), Sch 1, Pt 17, Group 3.

15.27 The next significant statute was the Betting and Lotteries Act 1934, which was enacted in the light of the recommendations of the Royal Commission of 1932/3 (Cmd 4341, 1933). This repealed inter alia the 1699 and 1823 Acts, replacing them with its own provisions rendering lotteries unlawful. It provided, however, that certain small lotteries and private lotteries should be lawful, provided they were conducted in the manner which it laid down. In addition, the BLA 1934 introduced for the first time legislation to control so-called ‘prize competitions’. These were competitions run largely by newspapers which, because they involved a small element of skill, narrowly escaped the prohibition on lotteries. Section 26 of the BLA 1934 rendered unlawful competitions in which prizes were awarded for the forecast of future events and competitions, success in which did not depend to a ‘substantial degree’ upon the exercise of skill. These provisions were replaced by LAA 1976, s 14. They should be borne in mind in reading cases on lotteries decided prior to 1934, for a number of these involved competitions where, notwithstanding there was arguably some slight element of skill, the court held the scheme a lottery. After 1934 most such schemes would have been unlawful prize competitions, and the courts, in the light of this consideration, might have been less likely to condemn them as lotteries. 15.28 The Small Lotteries and Gaming Act 1956 (‘SLGA  1956’) and the Lotteries and Gaming Act 1962 (‘LGA 1962’) made lawful so called ‘societies’ lotteries’, that is to say, small public lotteries conducted by societies which were established for charitable purposes, the support of sport and athletics, or purposes not involving private gain. This provision was reproduced in the LAA 1976, and has been carried on into the GA 2005. 761

Lotteries 15.29 The Betting, Gaming and Lotteries Act 1963 (‘BGLA 1963’) repealed and consolidated the provisions of the BLA  1934, the SLGA  1956 and the LGA 1962. Next, the Lotteries Act 1975 (‘LA 1975’) repealed the BGLA 1963, s 45, which authorised societies’ lotteries, but re-enacted it to increase their scope and financial limits. It also empowered local authorities to conduct lotteries on conditions substantially similar to those applying to societies’ lotteries. The next step was the consolidation of the BGLA  1963 and the LA 1975 into the LAA 1976. Next was the enactment of the National Lotteries Act 1993 (‘NLA 1993’) authorising the setting up of the National Lottery. This was amended by the National Lottery Act 1998 (‘NLA 1998’). The GA 2005 has repealed the LAA 1976 in its entirety. 15.30 The final picture that emerged before the GA  2005, therefore, was that lotteries were unlawful (LAA 1976, s 1) unless they were small lotteries (s 3), were private lotteries (s 4), were society lotteries (s 5), were local lotteries run by local authorities (s 6) or were lotteries forming part of the National Lottery under the NLA 1993.

THE ELEMENTS OF A LOTTERY 15.31 Before the Gambling Act 2005, the word ‘lottery’ was not defined in any statute, but the cases stamped a fairly precise meaning upon it.1 However, as often happens with the common law, where concepts are developed in the light of the facts of specific cases, there were a number of areas of uncertainty about the exact scope and content of the term. For this reason the GA 2005 provides a statutory definition of the expression ‘lottery’, to be found in s 14 and Sch 2. This definition is intended to put into statutory form the essential features of the common law definition and to clarify it where necessary. The Explanatory Notes to the Gambling Act 2005, para 67, referring to s 14, state as follows: ‘This section provides a definition of a lottery. It is intended to give statutory effect to the broad definition which the courts have evolved over recent years, while making specific additional provision in relation to arrangements whose status under the current law has proved problematic or uncertain.’ In these circumstances it is, the writer would contend, relevant to take account of the common law definition and of the old case law, which may, from time to time, throw light on the meaning and application of the new statutory definition, always subject to the important caveat that it is the Act which provides the governing definition. This is the approach which has been adopted in this chapter. 1 See Re Senator Hanseatische Verwaltungsgesellschaft mbH [1997] 1 WLR 515 at 523G.

Lotteries at common law 15.32 In the case of Imperial Tobacco Ltd v A-G1 the majority of the House of Lords adopted the classic modern formulation of the essential features of a lottery given by Lord Widgery CJ in Readers Digest Association Ltd v Williams:2 762

Lotteries ‘A  lottery is the distribution of prizes by chance where the persons taking part in the operation, or a substantial number of them, make a payment or consideration in return for obtaining their chance of a prize. There are really three points one must look for in deciding whether a lottery has been established: first of all, the distribution of prizes; secondly, the fact this was to be done by means of a chance; and thirdly, that there must be some actual contribution made by the participants in return for their obtaining a chance to take part in the lottery.’ 1 [1981] AC 718, [1980] 2 WLR 466. 2 [1976] 1 WLR 1109 at 1113.

15.33 In Re Senator Hanseatische Verwaltungsgesellschaft mbH1 Millett LJ said as follows: ‘So Parliament has left it to the Courts to decide what constitutes a lottery by reference to the general underlying idea. They have consistently held that what lies at the heart of the concept is “the distribution of prizes by lot or chance” see Taylor v Smetten (1883) 11  QBD  207; Atkinson v Murrell [1970] 2 QB 274; Whitbread & Co Ltd v Bell [1972] QB 547; Readers Digest Association Ltd v Williams [1976] 1 WLR 1109; Imperial Tobacco Ltd v A-G [1981] AC 718.’ 1 [1997] 1 WLR 515.

15.34 Against the background of these (and other) cases it was possible to say that a lottery typically comprised three essential elements, namely: (i)

a distribution of prizes;

(ii) by chance; and (iii) the making of some payment, consideration or ‘contribution’ from participants in order to take part. Areas of uncertainty attached in particular to the second and third elements. As to the second, although it was simple to state that it was a requirement of a lottery that the distribution of prizes should be ‘by chance’, difficulties could arise where a scheme involved a mix of skill and chance. Thus, for example, where the first stage of the scheme involved the exercise of some skill but the effect of the skill was merely to winnow out some of the participants, leaving a substantial number amongst whom the prizes were to be distributed by chance, the question arose whether this amounted to a lottery. The answer, normally, was that it did. As to the third element, questions could arise as to the effect of an arrangement where although many or most participants paid to enter, each of them was given the opportunity to enter free (often referred to as a ‘free entry route’ or a ‘“no purchase necessary” mechanic’). The received wisdom was that, provided the free entry route was properly advertised and genuinely made available to all potential participants before they entered, it would normally be sufficient to prevent the scheme from being a lottery, as element  (iii) (a requirement to pay) would be missing. However, the legal position was not entirely clear. 763

Lotteries 15.35 In addition uncertainty flowed from the fact that the common law definition of ‘lottery’ was applied fairly flexibly and sometimes rather impressionistically. In the Readers Digest case itself, Caulfield  J, agreeing with the conclusion that the scheme there was not a lottery, commented as follows: ‘I would not like to define a donkey; I would not like to define a lottery. But the fact that I do not define does not prevent me from recognising a donkey or a lottery when I  see it. I  think the approach to cases of this sort is to examine the facts, and not then to decide whether or not the facts satisfy a particular definition, but whether the Court can then declare that the facts show a lottery.’ 15.36 A  similar approach was advocated in the leading speech of Lord Wilberforce in Seay v Eastwood.1 The decision involved the question whether a specific form of activity was ‘betting’, but the approach to the interpretation of gambling legislation and the rationale underlying that approach are of general application. Lord Wilberforce said (at 155): ‘Legislation against, or controlling, gaming, wagering and betting is many centuries old in the United Kingdom. With only moderate success Parliament has endeavoured to keep up with the enormous variety of these activities which has arisen from the ingenuity of gamblers and of people who exploit them. It is impossible to frame accurate definitions which can cover every such variety; attempts to do so may indeed be counter-productive, since each added precision merely provides an incentive to devise a variant which eludes it. So the legislation contains a number of expressions which are not, or not precisely, defined: bet, wager, lottery, gaming are examples of this. As to these, while sections appear in various Acts saying that a particular activity is, or is deemed to be, within the word, the general meaning is left to be decided by the Courts as cases arise under the common law. The process, and I  think it a very sound one, is then for Magistrates, using their local knowledge, experience of the world and common sense, to give a sensible interpretation of the expressions used, subject to control of their decisions by a Court itself experienced in deciding this type of question. When, as should rarely occur, higher Appellate Courts are required to review these cases, they should, in my opinion, endorse decisions which they can see have been reached, and confirmed in this way. Refined analytical tools are not suitable instruments in this context.’ This statement of principle was and, it is suggested, remains of cardinal importance and has been repeatedly applied by courts in recent years. Although there is now a statutory definition of a lottery, this commonsense approach is, the writer would contend, likely to be adopted by the courts in defining many of the concepts in s 14, such as ‘skill’ and ‘wholly on chance’. 1 [1976] 3 All ER 153.

15.37 In deciding whether an activity is betting, gaming or a lottery, it is essential to analyse the true nature of the contractual relationship into 764

Lotteries which the parties are entering. This is especially the case when a new form of gambling appears, in order to see whether it should be characterised as betting, gaming or a lottery, or some combination of these forms. This has long been a problem with gambling law, and the 2005 Act does not resolve the difficulties. Despite the statutory definitions, it will still be necessary to identify with some precision the formal differences between the different species of gambling. In recent years, for example, the question arose as to whether fantasy football competitions were betting and, if so, whether they were pool betting or fixed odds betting.1 It was also necessary to consider whether Keno, and a number of variants such as ‘lucky choice’, ‘49’s’ and ‘Pronto’ and fixed odds betting terminals (FOBTs) should be characterised as betting, gaming or lotteries.2 Of course, it is also important to decide whether any scheme involves ‘gambling’ (ie  betting, gaming or participating in a lottery) to see whether it is regulated by the GA 2005 at all. The differences will remain important, not least because of the advent of lotteries machines.3 Furthermore, the scheme may not be gambling, but a lawful prize competition (GA 2005, s 339). 1 This will in future be dealt with under GA 2005, ss 9 or 11. 2 FOBTs under the GA 2005 are Category B2 machines: see Chapter 24 3 Category B3A machines. See 15.94 and Chapter 24.

Definition of a lottery under the GA 2005 15.38 For the first time there is a statutory definition of a lottery for the purposes of the GA  2005. (However, the old common law definition of a lottery may still be in use for duty purposes under the Finance Act 1993 (see Chapter 19 on ‘Duty’.) Although the definition includes a new concept, a ‘complex lottery’, the essential elements of what constitutes a lottery have not changed from the previous law. Section 14 provides that an arrangement is a lottery if it is either a simple or a complex lottery. 15.39

An arrangement is a simple lottery if:

(a) persons are required to pay to participate in the arrangement; (b) in the course of the arrangement one or more prizes are allocated to one or more members of a class; and (c)

the prizes are allocated by a process which relies wholly on chance.1

1 GA 2005, s 14(2).

15.40

An arrangement is a complex lottery if:

(a) persons are required to pay in order to participate in the arrangement; (b) in the course of the arrangement, one or more prizes are allocated to one or more members of a class; (c)

the prizes are allocated by a series of processes; and

(d) the first of these processes relies wholly on chance.1 1 GA 2005, s 14(3). The provision gives statutory effect to the principle developed in DPP v Bradfute & Associates Ltd [1967] 2 QB 291.

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Lotteries 15.41 Therefore a simple lottery has one ‘process’ which relies wholly on chance and a complex lottery has more than one ‘process’, the first of which relies wholly on chance. This essentially puts into statute the previous definition of a lottery as enunciated in the Readers’ Digest case, although some difficulties around the meaning of ‘payment’ have been clarified by GA 2005, Sch 2.1 1 The complex lottery is, however, different from the previous law in that the final element may now be chance. See paras 15.98 ff.

15.42 There are therefore three ingredients necessary for there to be a lottery: the first is that there must be a requirement to pay; the second is that prizes must be distributed; and the third is that they are distributed wholly by chance, or, if more than one process is involved, the first process relies wholly on chance. 15.43 Section 14(1) refers to ‘an arrangement’ being a lottery if it satisfies the requirements for a simple or a complex lottery. No definition is given of what an ‘arrangement’ may mean. It is a word used regularly in the GA 2005.1 No doubt it will mean different things in different contexts, but it is potentially both a broad and a general description. Lotteries have regularly been described colloquially as ‘schemes’, as they involve a variety of actions, such as the purchase of a ticket or chance, payment, the prize selection process, and the distribution of the prizes. All these could be part of the scheme or ‘arrangement’,2 but how far the ‘arrangement’ under the GA 2005 will extend will, of course, depend upon the circumstances and facts of each particular case. Complex lotteries have more than one ‘process’ involved and cover what would have been described as ‘hybrid’ schemes under the previous law.3 There are limits, though, to how far the ‘arrangement’ can stretch. In a simple lottery it will cover the payment to enter, the allocation of the prizes, and the process which decides the allocation of the prizes; in a complex lottery, in addition, there will be a series of processes to decide the allocation of the prizes, as those are the constituents of a lottery. (These processes may not fall into obvious stages.) The rules are likely to be a crucial element in identifying whether there is a single ‘process’ or a ‘series of processes’. In appropriate circumstances the court will also, it is suggested, take into account other matters, such as advertising, and how the scheme actually functions. 1 See eg. the definition of a casino in GA 2005, s 7(1). 2 For cases where courts have dealt with lotteries as ‘schemes’ see eg  Barnes v Strathern [1929]  SLT  37; DPP  v Phillips [1935] 1  KB  391; Atkinson v Murrell [1973] AC 289; Readers Digest Association Ltd v Williams [1976] 1 WLR 1109 at 1115 where Lord Widgery CJ described the ‘scheme’ set up by the brewers in Whitbread & Co Ltd v Bell [1970] 2 QB 547; Imperial Tobacco Ltd v A-G [1981] AC 718 at 735; Bartlett v Parker [1912] 2 QB 497; Re Hanseatische Verwaltungsgesellschaft mbH [1997] 1  WLR  515; Re Titan International Inc [1998] 1  BCLC  102; One Life Limited v Roy [1996] 2 BCLC 608, Carnwath J; and see the footnote to para 15.54 below. 3 See the discussion at Smith & Monkcom, Law of Betting, Gaming and Lotteries, 2nd edn, ch 18 and para 15.129 below.

15.44 The Secretary of State has power to make regulations that a specified arrangement is or is not to be treated as a lottery for the purposes of the 766

Lotteries Act. That power is not limited by GA 2005, s 14(1)–(6) or Sch 2 and may also amend those provisions.1 This is a failsafe in case some new form of scheme, which escapes being a lottery, is considered to need to be regulated. That can be achieved without the necessity for primary legislation, which is not always easy to get through Parliament. 1 GA 2005, s 14(7).

Types of lottery 15.45 As the concept of ‘lottery’ developed at common law, it became possible to detect certain common features which were usually to be found in lottery schemes. It is suggested that these common features are still, in many cases at least, likely to be found in lotteries under the GA 2005, so brief mention will be made of them. They are as follows.

First type of lottery 15.46 The classic form of a lottery is where P, the promoter, invites people to make payments to enter. They receive tickets in exchange for their payments. The payments are all pooled and there is a draw to determine the winner or winners. P takes his expenses from the pool and distributes the balance as a prize or prize(s). Such a lottery obviously falls within the definition in s  14(2) and is a simple lottery.1 The principles may be demonstrated at work from the simplest charity draw right up to the draws of the National Lottery. Of course, individual features may vary. Instead of having a draw of numbers from a drum as the determining event, the arrangement may take the form of a sweepstake on a race, where horses are given numbers which are distributed at random to participants, who may thus by chance ‘draw’ the winning horse.2 The principle, however, remains the same. 1 There may be more than one ‘process’ involved, some of which may involve skill or judgment, in which case it may be a complex lottery under GA 2005, s 14(3); see 15.129 ff below. 2 See Mearing v Hellings (1845) 14 M&W 711; Allport v Nutt (1845) 1 CB 974; R v Hobbs (1898) 2 QB 647; Hardwick v Lane [1904] 1 KB 204.

15.47 There are four features of such a classic lottery which are worthy of comment and are still relevant, as the statutory definition has not changed the essential nature of a lottery, although it has introduced a complex lottery. As mentioned above, it is still necessary to be able to differentiate between the different forms of gambling and so it will be necessary, despite the broad definition of a lottery, to look at the nature of the arrangement in order to do so. The definitions of ‘gaming’, ‘betting’ and ‘lottery’ in the GA  2005 use some of the same terms, eg ‘prize’, ‘event’, ‘process’. Understanding the essential nature of a lottery, as shown by the cases prior to the GA 2005, is still necessary to assist with a correct analysis.1 1 For the distinction under the GA 2005 between lotteries and betting see Chapter 2; for the distinction between lotteries and gaming see Chapter 2.

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Lotteries 15.48 First, the arrangement necessarily creates a conflict of interest between each of the participants. Each participant is in conflict with all the others to win some or all of the pool. Although in one sense it is to the advantage of any participant that a large number of other participants should take part, since this will increase the pool, it is also to his disadvantage, since it will reduce the chances of his ticket being drawn. Second, and by way of contrast, there is no conflict of interest involving the promoter. Provided he has not guaranteed a minimum return in prizes, he cannot lose. It is, of course, always possible that the lottery might not take enough in receipts to cover his expenses, but that is a commercial and not a gambling risk. In gambling terms the promoter has no interest in the outcome; he merely collects the pool, deducts his expenses and distributes the pool to the winners. Third, it will be seen that the arrangement is designed to be a multipartite arrangement in which a large number of different persons will take part. The whole purpose of such a lottery is to attract a large number of participants who will pay to enter on the understanding that this will generate substantial prizes which will be paid out to one, or a few, lucky winners. By definition, the arrangement involves a scheme to attract a large number of entries. The fourth point follows from the third; it is easy to see that the scheme involves the ‘allocation’ of ‘prizes’. A prize is essentially something given to one who wins as against others who are striving for the same prize and the definition of a ‘prize’ in GA  2005, s  14(4) ‘includes’ any money, articles or services, but as the definition is inclusive and not exclusive, it is not limited to those, and the previous law may still be relevant.

Second type of lottery 15.49 The second type of lottery differs from the first in that there is a prize or prizes put up by the promoter, or by some third party, before the lottery is launched. In other respects, the scheme remains the same. The promoter sells tickets for a prize, organises a draw or determining event and awards the prize or prizes to the winners. The money paid over by participants may be used to defray the cost of the prizes or it may be that the prize is simply donated for the purpose of the lottery. Such an arrangement is typical of, for example, a charity raffle. Section 14(4) makes it clear that prizes do not need to be provided by or from the participants in the lottery.1 In all other respects, however, the arrangements in this type of lottery have the same characteristics as the arrangements in the classic type described above. First, there is the same conflict of interest between the entrants, all of whom are in competition for the prizes. Second, the promoter again has no interest in the outcome of the lottery. It is true that if he pays the cost of the prizes he runs the risk that he may not sell enough tickets to cover his expenditure, but as mentioned before, that is a commercial, not a gambling risk. What is certain is that, if the lottery is drawn, he will have to pay the prize or prizes to somebody and it is a matter of indifference to him which of the entrants wins in the lottery. His obligation to pay derives from the running of the lottery, not from the resolution of any contingency between him and any entrant: see Ellesmere v Wallace.2 Third, the arrangement is designed to attract multipartite participation by a large number of people, each of whom enters into a 768

Lotteries competitive relationship with all the others. Fourth, it is easy to see how it can be said that ‘prizes’ are ‘allocated’ among the participants. 1 GA 2005, s 14(4)(b). 2 [1929] 2 Ch 1.

Third type of lottery 15.50 Prior to the GA 2005 lotteries of the second type were commonly run as sales promotion schemes. In such a case P, a seller of goods or services, offered to persons purchasing his goods the right to enter into a draw in which prizes were awarded. The effect of the previous law was that such an arrangement would amount to a lottery even though the price paid by participants for the good or service was the standard sale price for that good or service, and even though it was not in any way ‘loaded’ to reflect the chance to enter the draw. A series of cases beginning with Taylor v Smetten,1 and culminating in the Imperial Tobacco case established that where the price paid was a mixture of the price for the goods and for entry to the draw, the draw could not be regarded as ‘free’, even though there was no extra charge made for entry to it so that a lottery existed. Importantly, the GA 2005 by Sch 2, para 2(c) reverses the legal position by providing that paying for goods or services at a price or rate which does not reflect the opportunity to participate in an arrangement does not amount to paying.2 If, however, a ‘sales promotion’ draw were run in circumstances where the price of the goods was ‘loaded’ to reflect the draw entry, then the arrangements would be a lottery within the statutory definition and it would share the same features as types one and two, namely that there would be a competition between the entrants for a prize, the promoter would have no interest in who won or lost, the scheme would be designed to achieve multi-partite competition and it would be easy to see how prizes were being allocated among the participants. In those circumstances it is considered that the previous cases would still be good law.3 1 (1883) 11 QBD 207. 2 The proposition in the text reflects the effect of the provision, although it reverses its wording. The provision in fact says: ‘For the purposes of section 14 and this Schedule a reference to paying includes a reference to— … (c) paying for goods or services at a price or rate which reflects the opportunity to participate in an arrangement’. 3 That is, Taylor v Smetten (1883) 11  QBD  207 and Imperial Tobacco Limited v A-G [1981] AC 718.

Fourth type of lottery 15.51 The three types of lottery described above may also be complex lotteries (a fourth type of lottery) under GA  2005, s  14(3). Their four characteristics set out above are still present, but the vehicle used incorporates more than one process, usually with some form of skill requirement in one 769

Lotteries or more of them (eg a multiple choice question followed by a draw to decide the winner).

Fifth type of lottery 15.52 The fifth type of lottery is the ‘instant’ or ‘scratch card’ lottery. In such a lottery there is no draw, but tickets are sold containing symbols covered by a seal. The participant removes the seal to discover whether the symbols on his tickets are a winning combination. Suppose a promoter prints one million cards which he puts on sale at £1 each. Suppose, further, that one ticket offers a prize of £50,000, ten offer prizes of £10,000, 50 offer prizes of £1,000, 500 offer prizes of £50, and 10,000 offer prizes at £5. The rest are all losing tickets. On that basis, total potential winnings are £275,500 (if all the winning tickets are bought and claimed) and the potential receipts of the lottery are one million pounds. It can be seen that, with one possible exception, the four characteristics noted in the first three types of lottery can be identified. First, there is obviously competition between the entrants: each is hoping to obtain one of the limited number of winning tickets. The position of the promoter is slightly less straightforward. His position will depend upon whether all the one million tickets are sold. If they are sold, then he will cover his prize and other expenses and make a profit. He does, however, face at least a theoretical risk that he may sell all the winning tickets without selling enough tickets overall to cover the cost of the prizes and other expenses. This might happen for one of two reasons. It might simply happen that all the winning tickets were sold in the early part of the promotion and that public interest waned before enough tickets were sold to cover the prize expenditure. Alternatively, the promoter might commit himself to withdraw the tickets from sale once all the winning tickets had been sold. Again, if all the winning tickets were sold in the early stages of the promotion, he might fail to make enough sales to cover expenses. In one sense the risk which the promoter takes is like that taken by the example of the promoter in the second type of lottery, where prizes of fixed value are promised and the promoter takes a commercial risk that he may not sell enough tickets to cover the expense of providing them. However, in the case of an ‘instant’ lottery it is perhaps possible to adopt a slightly different analysis. It could be said that until the promoter in an instant lottery has sold enough tickets to cover his prize and other expenditure, he does have an interest in whether each ticket purchased by a customer is a winning or losing ticket. If it is a winning ticket, it increases the risk that he will make a loss on the scheme overall; if it is a losing ticket, then it increases his chance of making a profit. However, although this may be theoretically the case, in reality instant lotteries are designed to ensure that sufficient tickets will be sold to ensure a profit, so that in practice the promoter, as in other types of lottery, is at little or no risk of loss in the gambling sense. 15.53 The third point of comparison, namely that the scheme is set up as a multipartite one to attract large numbers of participants, is obviously present, as is the fourth, namely that it is easy to see how ‘prizes’ are ‘allocated’ among the participants. All the elements required by GA  2005, s 14 are there: the requirement to pay and the allocation of prizes wholly by chance. 770

Lotteries 15.54 Summarising the above analysis of five typical kinds of lottery, it is suggested that the following defining characteristics emerge: (a) First, and, however it may be expressed, the setting up of a lottery involves some form of ‘scheme’ or (in the words of s 14) ‘arrangement’ which is designed to attract a large number of participants who are required to make payments in order to participate and who will be, in some sense, in competition each with the others for the prize or prizes. Although this competition characteristic is not explicitly spelt out in these terms in any of the old cases, and the concept does not appear explicitly in the GA 2005, it nonetheless follows, it is suggested, from an examination of the characteristics of lotteries as they are in fact promoted, and it is to be noted that in one way or another virtually all the leading lottery cases under the previous law do refer to lotteries as involving ‘schemes’ of one sort or another;1 so are still of use in construing the law under the GA 2005. Post the GA 2005 coming into force, in R on the application of Camelot UK Lotteries Ltd v The Gambling Commission and The Health Lottery (ELM) Ltd,2 Lord Justice Burnton also referred to the Health Lottery as a scheme several times. The cases, however, should be treated with caution; in particular, in many, payment was the cost of purchasing a product, which may now not constitute a payment under the GA 2005. Some were ‘snowball’ schemes which are now dealt with generally under s 43, although care should be taken to see whether or not such a scheme is also a lottery. (b) Second, the promoter typically has no competitive interest as against the entrants. It is of no concern to the promoter whether participant A or B wins the prize. Subject to the possibility of commercial failure, he cannot ‘lose’ in the gambling sense on the outcome of the draw or other determining event. (c)

Third, the payment which each participant must make in order to take part is valuable consideration for his chance to participate in a scheme from which he may derive winnings, and this may be contrasted with a stake on a bet which is put at hazard, but which will be returned to the bettor in the case of a winning bet.

1 Barnes v Strathern [1929] SLT 37: ‘There is no limit to the ingenuity of the devisers of projects such as this, and there is, accordingly, no end to the variety of schemes which may constitute a lottery. But the particular scheme with which we are here concerned presents characteristics which prevent it from falling … into any of the classes of lottery which have hitherto been the subject of judicial determination. A  lottery has been compendiously defined as a scheme for the distribution of money by chance’ (at 40 per The Lord Justice-General); ‘the word “lottery” has been so construed as to include many schemes which cannot have been originally within the purview of the Act. It is often difficult to say whether any individual scheme falls within the definition or not. But it is settled law, that if the winning of a prize in a scheme in which a number of persons take tickets depends entirely upon chance the scheme is a “lottery”’ (at 42 per Lord Blackburn). This is still true for a simple lottery. DPP v Phillips [1935] 1 KB 391: ‘… but wherever one looks in this undoubtedly ingenious scheme one finds it impossible to discover anything of a really commercial nature. What is it that is being done? There is here the publication of a scheme. What is the nature of that scheme? Is it not a scheme for the “distribution

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Lotteries of prizes by lot or chance”? (at 400–1 per Lord Hewart CJ); ‘The scheme is dressed in the guise of a commercial transaction’ (at 401 per Branson J). (Now see s 43 as well.) Reader’s Digest Association Ltd v Williams [1976] 1 WLR 109 at 1115 Lord Widgery CJ, referring to Whitbread & Co Ltd v Bell, said: ‘The brewers, Whitbread, set up a scheme whereby people patronising their public houses might be given an envelope … it was contended by Whitbread that, there being no consideration for obtaining the individual chance, the whole scheme was not a lottery … I do not think it is sufficient to say that the prize is paid out of funds which are themselves derived from the scheme …’ Imperial Tobacco Ltd v A-G  [1981]  AC  718 at 735 Viscount Dilhorne posed the question ‘Was the Spot Cash scheme an unlawful competition?’ Lord Fraser at 744: ‘In my opinion a scheme will be a lottery if the prizes are distributed by chance and if persons are induced to make a money payment  …’; and at 746: ‘Thus in Bartlett v Parker [1912] 2 KB 497 where the prize was a bicycle presented by an outside firm as an advertisement, and the participants’ payment made no contribution to the cost of the bicycle or to the profits of the firm that had presented it, the scheme was held to be a lottery … For these reasons I  am of the opinion that this scheme was a lottery.’ Lord Lane at 747 said: ‘The object of the respondents’ scheme … was to encourage sales of their … cigarettes … The whole object of the scheme was to induce them to ask for a special packet of the respondents’ kingsize cigarettes …’ Re Hanseatische [1997] 1  WLR  515 at 518 per Saville  LJ: ‘The case made by the Secretary of State is … that the … business of the appellants … is the operation of the Titan scheme; and that since this scheme is either an unlawful lottery or has … undesirable characteristics … the promoters of the scheme should be stopped from operating it’; and at 520: ‘In the present case, the reality of the matter is undoubtedly that those persuaded to join the scheme did so … in the hope of the rewards that would result … It seems to me that a scheme can be a lottery even if some of the rewards could be said to be gained by the application of an element of skill  …’; and at 522: ‘…  It follows as a matter of ordinary language and commonsense that … the participant is taking part in a scheme properly described as the distribution of prizes or rewards entirely by chance.’ Millett LJ at 524: ‘The Titan scheme is a multi-level snowball … scheme  … In the Titan scheme they pay substantial sums to take part  … But people do not join such schemes without the hope of reward … It was the presence of this feature which was held in DPP  v Phillips … to make the scheme there under consideration an unlawful lottery. Mr Bannister rightly conceded the Titan scheme is not distinguishable in any material respect from the scheme in that case  … Both schemes are well within the mischief which the Lottery Acts have been enacted to prevent.’ (Now see s 43.) Re: Titan International Inc [1998] 1  BCLC  102, CA at p  1 per Peter Gibson LJ: ‘Parliament and the Courts have viewed with considerable disfavour a scheme not constituting gaming but amounting to a lottery.’ (Now see s 43.) One Life Ltd v Roy [1996] 2 BCLC 608 at p 2 per Carnwath J: ‘The company was incorporated … as a vehicle for a scheme called “The Businessman Game”. The First Defendant had been a participant in a similar scheme in Germany …’ (Now see s 43.) 2 [2012] EWHC 2391. ‘It follows that even if the Health Lottery scheme was initially proposed with a view in part for private gain on the part of (the ELM), provided its charges for its services are reasonable, the (community interest companies) were not ineligible for the grant of operating lottery licences. Similarly, the fact that (the ELM) may profit from the Health Lottery scheme is not a bar to the (community interest companies) retaining their licences.’ (para 71).

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Lotteries ‘In the present connection, I should also mention the criticism of the Commission’s decision in September 2010 to grant the Health Lottery licences on the basis that the proposed scheme was “capable of being compliant”. The suggestion is that the Commission should not have granted the licences unless it was satisfied that the scheme would be compliant. However, on reflection, I have concluded that this criticism is misplaced. The scheme was at an early stage.’ (para 75).

Lotteries and competitions 15.55 The Lotteries and Amusements Act 1976, s 14 restricted the promotion of so-called ‘prize competitions’. Its historic rationale was to prevent the promotion of schemes which, by incorporating a slight element of skill, avoided being classified as lotteries. Before the GA 2005, schemes were disqualified as lotteries if any element of skill were involved in the distribution of the prizes. The Act of 1976 did not define the word ‘competition’ for the purposes of the section, but in Imperial Tobacco Ltd v A-G,1 the House of Lords held that, for the purposes of LAA 1976, s 14, a ‘competition’ necessarily involved ‘the active exercise of skill, or strength or prowess of some sort, a striving to do better than other contestants in the hope of excelling them’.2 It follows that, at least for the purposes of LAA 1976, s 14, a ‘competition’ was necessarily distinguished from a lottery by the fact that it gave scope for the exercise of some form of skill or merit, whereas a lottery did not. Under the GA 2005 this distinction does not necessarily hold. A simple lottery may have some skill but it may not be sufficient to prevent the prize allocation depending wholly on chance. A complex lottery may amount to a lottery even though skill is involved in the distribution of the prize(s), if the first process in the arrangement depends on chance. ‘Wholly on chance’ does not necessarily exclude all skill elements, so some prize competitions are now regulated as lotteries.3 However, under s 339, if competitions are not gambling (ie betting, gaming or participating in a lottery),4 they are unregulated by the GA 2005.5 1 [1980] 2 WLR 466. 2 No definition is given of ‘competition’ in the GA  2005. The Imperial Tobacco definition is still helpful. 3 See GA 2005, s 14(5). 4 See GA 2005, s 3. 5 See 15.141 ff below on ‘spot the ball’.

15.56 The statutory definition of a lottery has various essential ingredients: persons must be required to pay; prizes must be allocated; the prize allocation process must rely wholly on chance in a simple lottery; and the first of the series of processes must do so in a complex lottery. The following paragraphs will deal with each of those essential elements.

Payment Requirement to pay 15.57 Sections 14(2) and (3) state that it is a requirement of a simple lottery and of a complex lottery that ‘persons are required to pay’. This is in contrast with the previous Reader’s Digest definition which provided that a scheme 773

Lotteries could be a lottery if a substantial number of the participants paid.1 The use of the word ‘required’ would suggest that it is a necessary element in a scheme being a lottery under s  14 that the participants have to pay. However, the subsections do not specify that all the participants must be required to pay; provided some of them are required to pay, this will render the scheme a lottery within the definition. The explanation for this may lie in Sch 2 and the various definitions it contains surrounding the meaning of payment and the necessary constituents of free routes.1 If there is a requirement of a payment to enter within the meaning of Sch 2 and there is no free route, then it is likely that there is a lottery. Any free route would have to comply with the requirements of Sch 2 to be valid, which requires, inter alia, that there is a choice.2 1 Although one reading of the Readers Digest formulation suggested that a scheme would be a lottery if a substantial number of participants in fact paid, it was possible to read passages in the judgment as providing that a scheme would only be a lottery if a substantial number of the participants were required to pay to enter. See the discussion at Smith & Monkcom Law of Betting, Gaming and Lotteries (2nd edn), paras C14.115–141. 2 See GA 2005, Sch 2, para 8(1).

The meaning of payment 15.58 Section 14(6) provides that Sch 2 ‘makes further provision about when an arrangement is to be or not to be treated for the purposes of this section as requiring persons to pay’. Schedule 2 is headed ‘Lotteries: Definition of Payment to Enter’. As has historically been the case with lotteries, the notion of payment has its own meaning and may well not accord with what might generally be considered to be payment. This is tacitly acknowledged in the opening paragraph to Sch 2 (picking up the terms of s 14(6)) when it refers to the circumstances in which an arrangement is to be or is not to be ‘treated’ for the purposes of s 14 as requiring persons to pay in order to participate in an arrangement. 15.59

A reference to ‘paying’ in s 14 and Sch 2 includes a reference to:

(a) paying money; (b) transferring money’s worth; and (c) paying for goods or services at a price or rate which reflects the opportunity to participate in an arrangement.1 It makes no difference to whom a payment is made or who receives the benefit from a payment.2 Therefore the payment may be made to a third party such as a telecommunications company and not just to the promoter of the lottery.3 This is clearly an anti-avoidance provision. Of course, the cost of a postage stamp or ordinary telephone call involves payments to third parties, but there are specific exceptions for those.4 The Schedule also makes clear that it is irrelevant whether or not a person knows when he makes the payment that he is actually entering into an arrangement.5 This is contrary to the previous law, where it was generally accepted that if a person entered into an agreement (eg  to purchase goods or services) whereby he also 774

Lotteries obtained entry into a prize draw, the fact that he did not know because he had not been told (and the scheme was usually organised so that he would not know) that his payment to enter into the agreement also entitled him to the prize draw entry, meant that he was not to be regarded as paying for the prize draw so that there was no lottery. For example, it was generally accepted that if a person signed up for a utility company and paid money, he would be considered to be paying the money for the utility services and not for any prize draw that he might also be entered into, if he did not know, at the time that he entered into the utility agreement, that he would gain free entry into the prize draw. Paragraph 4 of Sch 2 reverses this and makes it clear that it does not matter whether he knows or not, so that even if he does not know the effect of the payment, it will still be regarded as entering him into a lottery.6 1 GA 2005, Sch 2, para 2. 2 Paragraph 3. 3 See the Gambling Commission Advice Note: ‘Prize competitions and free draws: The requirements of the Gambling Act 2005’ (December 2009), para 4.6(i). 4 Paragraph 5; and see 15.61 ff below. 5 Paragraph 4. 6 Payment for a utility by itself at the usual price would not now be considered to be payment; see 15.60 below.

15.60 Schedule 2 effects an important change in the law with respect to sales promotion prize draws. Under the previous law a series of cases culminating in Imperial Tobacco v A-G1 established the principle that where a purchaser bought and paid for a good or service in circumstances where the purchase or payment entitled him to enter into a prize draw for no extra cost, the making of the relevant payment should be regarded as a payment to enter the prize draw, thus rendering it a lottery even though the payment represented no more than the proper commercial price of the goods or services and was not ‘loaded’ to reflect the entry into the prize draw. This principle caused enormous inconvenience to promotional schemes and has been reversed by Sch 2. Under the GA 2005, if a participant buys a packet of cigarettes or other product, or pays for services, and receives a ticket for a lottery in exchange for the price of the product or services, then, provided the price for the product or services does not reflect the opportunity to participate in the arrangement, the payment will no longer be considered to be payment for the purposes of s 14 and Sch 2.2 The consequence is that the arrangements will not, in those circumstances, amount to a lottery. This is intended to reverse the decision in Imperial Tobacco v AG.1 This does somewhat beg the question of what the expression ‘reflects the opportunity to participate in an arrangement’ means. It is clear that the payment in question must not be ‘loaded’ to reflect the entry into the draw. On the one hand, the cost of running the scheme and providing the prizes (if not donated from a third party), must all be paid for somehow and generally has to come in one way or another from the price of the product or the services. The better interpretation is that there is no payment unless the ‘opportunity to participate’ is reflected in the price or rate charged by some loading to reflect the entry into the draw, rather than just that the cost of running the promotion is paid from the proceeds of the sale of the ticket. Therefore, if the price or rate makes it clear that an entry price is being charged for the arrangement, then that would be considered to be payment. The Commission 775

Lotteries has put forward its view3 that it will be a question of fact in individual cases. If the price bears little relation either to the cost of producing the product or comparable products, then the arrangement may be challenged as an illegal lottery. However, a price rise just before the promotion starts is not fatal, provided it is an increase unrelated to the promotion itself (eg because of a rise in new materials or transport). In addition to those views, a price rise may be necessitated by sudden and urgent market forces, economic factors, take-overs, new management of the company and other understandable scenarios. 1 [1981] AC 718. 2 GA 2005, Sch 2, para 2(c). 3 See the Gambling Commission ‘Prize competitions and free draws: The requirements of the Gambling Act 2005’ (December 2009), para  4.9 where the Commission acknowledges that the costs of the product promotion must be recovered through the revenues obtained through sales. See also GA 2005, s 14(4) (b) where it is made clear that the prizes can be paid for by the proceeds.

Exclusions from ‘payment’ definitions 15.61 Certain matters are specifically excluded from payment. Sending a letter by ordinary post, making a telephone call, or using any other method of communication at a normal rate are within this category.1 In these respects Sch 2 gives a statutory basis to what was generally accepted practice under the previous legislation. 1 GA 2005, Sch 2, para 5(1).

Normal rate 15.62 A  ‘normal rate’ is one which does not reflect the opportunity to enter a lottery.1 This would contrast in particular with a ‘premium rate’, particularly in use for telephone calls. It is a question of fact whether the price paid reflects the chance to enter. Mobile phones are charged at a variety of different rates according to the subscriber’s package and the telephone company, but the general rates in those packages are likely to be considered to be ‘normal rates’ if they are just the rates charged for making telephone calls and nothing more.2 The Commission considers that it does not matter who gets paid even if that includes the promoter of the draw. However, if there is a cost to enter the scheme, then that is not a normal rate. 1 GA 2005, Sch 2, para 5(2)(a). 2 The Commission agrees. See para  4.6(iii) of the Gambling Commission’s ‘Prize competitions and free draws’ paper, (December 2009).

15.63 Premium rates are not only charged for telephone calls, but may also be charged for entry via the web and are likely always to be considered to be ‘payment’ for the purposes of s 14 and Sch 2. 15.64 It does not matter that the promoter makes no money from the payment,1 and so payment for a lottery may be being made even though the promoter makes no money from it if another party, (eg a telecommunications company) does. If the cost of the call is entirely at the normal rate for making 776

Lotteries calls charged by that telephone company, then that is unlikely to involve any payment for a lottery. If, however, the cost of entry by phone is higher than the subscriber would normally pay to that telephone company, then that is likely to involve a payment for a lottery even though the promoter of the scheme may receive no benefit from it. The Commission has stated in its ‘Prize competitions and free draws’ paper in December 2009, para 4.6(iii) that if the call is charged at a tariff which includes an element of paying for a service (eg entering a ‘competition’) that involves, in the Commission’s view, a payment for the opportunity to enter regardless of who benefits from the element of the payment. 1 GA 2005, Sch 2, para 3.

15.65 Sending a letter by ordinary post means ordinary first class or second class post.1 However, if there are special arrangements for delivery, which cost more than an ordinary first class or second class letter, then that would be considered to be a payment. 1 GA 2005, Sch 2, para 5(2)(b).

15.66 ‘Any other method of communication’ would include using the internet, text messaging and interactive TV. More and more schemes are being promoted on the web and on TV. If payment to enter is required by these media, it is frequently at a premium rate and therefore will be considered to be payment within the meaning of Sch 2. However, if there is no additional payment over and above the basic cost of using either of those media, then they would be considered to be being used at a normal rate, with no payment for a lottery. The web in particular has been used to provide a free entry route successfully, although the Commission1 has now thrown doubts on whether web entry is always a sufficient free route to qualify as such, as not everyone has a home computer. The Commission has put forward various ‘principles’ it intends to take into account, such as that, for those without web access at home, about three working days around the draw date is reasonable for those people to get access. Web access should always be available, including where other methods of entry are available. If entry is only via the web, then that is the ‘class’ at whom the scheme is solely aimed, and in the view of this writer, if entry is via the web and there is no payment required save the normal costs of using the web, then that is free entry, and no other method of entry should generally be required, depending on the specific facts.2 1 See para 4.6(ii) of the Gambling Commission’s paper ‘Prize competitions and free draws. The requirements of the Gambling Act 2005’, November 2007; and see 15.70 ff. 2 See 15.74.

Payment to discover whether a prize has been won or to claim a prize 15.67 A  common way to try to circumvent the previous definition of a lottery as enunciated by Lord Widgery in Reader’s Digest v Williams,1 was to have a free entry but to require a participant, generally by telephoning a premium rate telephone number, to pay to find out whether he had won, or to obtain a verification number which was essential before a prize could be 777

Lotteries claimed. Now paras 6 and 7 of Sch 2 make it clear that a payment either to discover whether a prize has been won or to take possession of a prize are to be treated as requirements to pay in order to participate in the scheme. However, as the Commission has made clear,2 the payment of normal delivery costs or other usual costs before the prize may be used, such as road tax for a car, are not payment for a lottery. Therefore, normal costs such as routine delivery or post and packaging costs at a normal rate should not be considered to be payment. 1 1976 1 WLR 1109. 2 See Gambling Commission’s ‘Prize competitions and free draws’ paper (December 2009), para  4.6(v). See also the Committee of Advertising Practice (‘CAP’) Help Note: ‘Promotion with Prizes’ (August 2013) at para  5.1, stating that promoters must not invite consumers to call a telephone number to leave their contact details in order to claim a gift or prize if there is any charge for that call unless the call is free.

Data 15.68 Some promotions do not require a payment of money to enter, but do require participants to provide information about themselves, often in the form of long and detailed questionnaires, as a condition of entry. Much of this information is highly confidential and would certainly amount to the giving of ‘consideration’ in the contract sense. 15.69 The GA 2005 does not shut out the giving of consideration as being payment, inasmuch as para  2 of Sch  2 states that, for the purposes of s  14 and Sch  2, a reference to paying includes a reference to paying money, transferring money’s worth, and paying for goods or services at a price or rate which reflects the opportunity to participate, without limiting payment to those three examples. Certainly the confidential information given would be valuable to the promoter, who may not only use it for his own purposes, but can, together with the information received from other entrants, put together information and a mailing list which he may then sell (subject to the Data Protection Act). The Commission1 generally does not consider that the provision of data would be within the definition of payment in Sch 2, para 2 and states that it is ‘not inclined to seek to argue’ that it amounts to payment on the basis that it involves transferring money’s worth, if the requests for data are proportionate. However, it rightly leaves open the question where a considerable amount of data is required, particularly where it is intended to be sold on. 1 See Gambling Commission’s ‘Prize competitions and free draws’ paper (December 2009), para 4.6(iv).

The free entry route 15.70 For the first time, the free entry route is now set out in statute and can be found in para 8(1) of Sch 2.1 The arrangement is not to be ‘treated’ as requiring persons to pay to participate if: ‘(a) each individual who is eligible to participate has a choice whether to participate by paying or by sending a communication, 778

Lotteries (b) the communication mentioned in paragraph (a) may be— (i)

a letter sent by ordinary post, or

(ii) another method of communication which is neither more expensive nor less convenient than entering the lottery by paying,’. Further, the choice must be publicised in such a way as to be likely to come to the attention of each prospective participant, and there must be no discrimination in prize allocation between those who participate by paying and those who participate by sending a communication.2 1 The free entry is specified to be for the purposes of s 14 and Sch 2. 2 GA 2005, Sch 2, para 8(1).

Each individual who is eligible to participate must have a choice 15.71 The new statutory free entry route makes it clear that to utilise a free entry route, each individual who may participate must have a choice whether to pay for entry or to enter via the free route. For most schemes, particularly those requiring a paper entry or which take place over a period of time, this need not cause a problem, as the free route can be embodied into the scheme from the inception and run right up until entry in the competition closes. Care must be taken, however, in rather more immediate schemes such as those to be seen on television. Frequently, entry is by premium rate telephone number, which of course is considered to involve payment.1 For many such schemes the practice has been for participants to telephone in during the programme on a premium rate telephone line to enter a scheme taking place ‘live’ at the time that they telephone. No doubt the participants are a mixture of those participants who have participated before, possibly regularly, and those who participate for the first time during the programme. All those participants need to have a choice of a valid free entry. 1 GA 2005, Sch 2, paras 2–5; and see 15.62–15.64 above.

The communication: postal entry 15.72 A letter sent by ordinary first or second class post (without special arrangements for delivery)1 is one of the communications that would satisfy a free entry route. It must be available at the time that persons are becoming participants in the scheme. If the whole scheme or arrangement, including the allocation of prizes, takes place during the course of one television programme of eg an hour long, it would obviously not be possible to provide a valid postal free route. 1 See GA 2005, Sch 2, para 8(1)(b)(i) and (2), and para 5(2)(b).

15.73 If the free route chosen is a postal one, care needs to be taken to see to it that there is a sufficiently generous time scale given over the life of the scheme so that when participants enter they do have a genuine choice whether to enter by way of a premium rate call or by a postal route. Therefore, it would not be possible for the whole scheme to run from start to final prize allocation during a one hour show. 779

Lotteries Other communication 15.74 The other communication which would satisfy a free route is ‘another method of communication which is neither more expensive nor less convenient than entering the lottery by paying.’1 If the paying method is via a premium rate telephone line, then the alternative route, apart from the postal one, must not cost more nor be less convenient. The ordinary post has for many years been acceptable as an alternative free entry, and gradually telephone entry at a normal rate has been accepted too. Most recently, entry via the web has been utilised as a free route, as these days that is effectively free, or as free as the ordinary post and ordinary telephone calls are. It has been accepted by the Commission2 that web entry generally costs little or nothing to use and therefore meets the first part of the test in GA  2005, Sch  2, para  8(1)(b)(ii). However, serious doubts have been raised about web entry as a valid free route on the grounds of whether or not it is as convenient as entering by telephone. The Commission, in its publication ‘Prize competitions and free draws: The requirements of the Gambling Act 2005’ in December 2009, considers that many people do not have ready access to the World Wide Web at home and therefore entry via the internet may not offer substantial proportions of those who wish to enter a genuine choice, or not as convenient a choice as the paid route. It puts forward several principles which the Commission intends to use as a guide:3 ‘•

Potential participants who do not have home web access need sufficient time to gain web access elsewhere. The Commission considers three working days around the date of the particular draw as a reasonable length of time to obtain such access.

•

Participation by web access should be available at all times while the scheme is being actively promoted. Therefore, a quiz taking place during a television programme should permit web entries while the programme is being aired.

•

The availability of free entry via the web should be made known, for example as the general policy for schemes organised by the operator concerned.

•

Where any doubts exist as to whether the web entry arrangements in any particular case fully satisfy the Act’s requirements, other routes, for example by post that has been specifically sanctioned by Parliament, should be offered in addition.’

This view may be overly restrictive. For example, it may not be relevant where it can be shown that the participants or potential participants have computers or can conveniently access them when the draw is taking place. 1 GA 2005, Sch 2, para 8(1)(b)(ii). 2 See the Commission’s ‘Prize competitions and free draws’ paper (December 2009), para 4.6(ii). 3 Ibid, para 4.6(ii).

15.75 Further, generally, GA 2005, Sch 2, para 8(1)(b) should be looked at as a whole. Entry by ordinary post is a highly inconvenient way of entering and certainly far less convenient than entering by telephone. That method has been sanctioned by Parliament and so an interpretation of the meaning in 780

Lotteries para 8(1)(b)(ii) regarding another method of communication and how much less convenient it can be before it falls foul of that paragraph should be given a wide interpretation. 15.76 Both the Commission1 and the Explanatory Notes to the Gambling Act 20052 agree that the alternative method must be one that would be ‘free’ under the rest of Sch 2. 1 Gambling Commission: ‘Prize competitions and free draws’ paper (December 2009), para 4.5. 2 See para 89 of the Explanatory Notes. This is the implication of this note.

Publication of the choice 15.77 The free route must be publicised in such a way as to be likely to come to the attention of each individual who proposes to participate;1 it must therefore be publicised in sufficiently large lettering, and with sufficient clarity and prominence that those who are entering are likely to see it. If the scheme is a television scheme or on the radio, then sufficient prominence must be given during the course of the programme(s) so that participants are going to become aware of it. The test is that the free route has to be ‘likely to come to the attention of each individual who proposes to participate’, and not that it does come to their attention. What is likely depends upon the circumstances of the case, but obviously an eye-catching premium rate number which is likely to absorb the attention of the prospective participant, to the exclusion of the free route, will not suffice. This was the situation in the Telemillions case, decided under the previous law (for the facts of this case see 15.129). In that case the promoters of a premium rate scheme were prosecuted and convicted of running an unlawful lottery. One line of defence was that it was possible to enter the scheme not only by telephoning in and paying the premium rate charges, but that there was an alternative free route by writing in and gaining a free entry. However, the evidence showed that the proportion of the participants using the postal route never exceeded 0.184% of the total number of participants in any one month. The magistrate concluded that: ‘The postal route was never intended and never was used by any more than a tiny minority of participants. The reality is that this route should be regarded as being de minimis.’ On the facts it was not surprising that this was the case as, although the television and other advertising in eg newspapers did carry the fact that there was a postal route, the details were in the small print, whereas the premium rate telephone number was in very large print with other distractions to draw the viewer’s or reader’s eyes to the telephone number. It was therefore clearly intended and highly likely that the entrants would use the premium rate telephone number and would not use the free postal route. 1 GA 2005, Sch 2, para 8(1)(c).

15.78 If, as in the Telemillions case, it is shown that in fact only a very small proportion of the participants did use the free entry route, that would be strong evidence that the free route was not likely to come to the attention 781

Lotteries of potential participants. Of course, this would not preclude evidence being brought forward to show that, despite the small number of users of the free entry route, this was a matter of choice by the participants and not an indication that the free route was not likely to come to their attention. 15.79 What the subparagraph does not require is that there should be equal prominence given to the free route, contrary to what is suggested in the Explanatory Notes.1 It may be that in the context of a particular scheme, equal prominence is the only way that the free route is likely to come to the attention of the prospective participants, but that need not necessarily be the case. The test is that it has to be likely to come to their attention rather than that the promoter must ensure that it does come to their attention, or that the two routes have equal prominence.2 1 See para 86. 2 The Committee of Advertising Practice Code (the CAP  Code): the UK  Code of Non-broadcast Advertising and Direct and Promotional Marketing (12th edn) states that any free-entry route should be explained clearly and prominently, para 8.17.2.

The allocation of prizes must not differentiate between the two routes 15.80 The system for allocating prizes must not differentiate between those who participate by paying and those who participate by sending a communication.1 This does not mean that the two need to be identical (although if they are not there is a risk that this may result in there being two arrangements, one paid for and one free, unless the overall arrangement is carefully set up) but that those entering by eg the non-paying route are not penalised in any way, but have the same chance of winning. This requirement may have particular relevance in the case of competitions in broadcast media such as radio and television. For example, call-in quiz shows have different levels of filtering of calls. Sometimes only a certain number from all callers may be chosen at random to go forward to the final draw (possibly in front of the viewers) to decide who is the winner of the prize. Exactly the same filtering system (it need not be in front of the viewers) must be applied to those entering by the paying route and those entering by sending a communication in accordance with GA 2005, Sch 2, para 8. Any differentiation between the two is likely to mean that there is a breach of para 8(1)(d). 1 GA 2005, Sch 2, para 8(1)(d).

Regulations 15.81 The Secretary of State is given power under GA 2005, s 14(7) to make regulations. Paragraph 9 of Sch 2 provides that those regulations may provide that an activity of a specified kind or performed in specified circumstances is to be or is not to be treated as paying to enter the lottery.

The allocation of prizes 15.82 The second essential ingredient for a lottery is that there is an allocation of prizes in the course of the arrangement to one or more members 782

Lotteries of a class. The allocation of the prizes is part of the actual arrangement constituting the lottery. GA 2005, s 14(2)(b) provides that an arrangement will be a simple lottery if ‘in the course of the arrangement one or more prizes are allocated to one or more members of a class,’ and s 14(3)(b) provides that an arrangement will be a complex lottery if ‘in the course of the arrangement one or more prizes are allocated to one or more members of a class’. As a matter of first impression, this seems to be saying that to be a lottery there must be an allocation of prizes. If that be the case, an arrangement where, although there are prizes on offer, they are not, in fact allocated, would not be a lottery. Such a situation might arise, for example, in the case of a scratchcard lottery where the scheme is, for commercial reasons, withdrawn before any winning scratchcards are sold. If it is an essential requirement of the provision that a prize or prizes must in fact be allocated, the arrangements would seem to fall outside the definition. This, however, is at odds with the concept of rollovers, which are acceptable (see eg s 99(4)). Section 256 gives a definition of a rollover as ‘an arrangement whereby the fact that a prize is not allocated … in one lottery increases the value of the prizes available for allocation in another lottery’, which implies that the fact that prizes are not in fact allocated in an arrangement does not prevent it being a lottery if the other ingredients are present. 15.83 The writer would suggest that the solution to this apparent dilemma can be found in the fact that s 14 is concerned with defining when ‘an arrangement’ will be a lottery. By way of further clarification s  14(2) defines when ‘an arrangement’ will be a simple lottery and s 14(3) defines when ‘an arrangement’ will be a complex lottery. These provisions must, it is contended, be read as focusing attention on the ‘arrangement’ (ie what is planned and intended) rather than upon what actually happens. This is because it must be possible to know whether ‘an arrangement’ is a lottery before it is actually run. There are various offences of promoting a lottery (s 258) and a person promotes a lottery by doing various acts such as printing lottery tickets, printing and distributing promotional material etc (s  252) which will necessarily be done before the lottery is actually run. So it must be possible to know whether an arrangement is a lottery before it is actually launched, in order that a prosecution for the commission of such preliminary acts could be brought if the arrangements amount to a lottery. The intentions underlying the arrangement can be inferred from the rules, the advertising etc. If the arrangement is one which falls within the definition of lottery, then it will not cease to be one merely because, as things turn out, no tickets are sold or no prizes are allocated. The court has traditionally always looked at the reality of schemes to see whether a scheme was or was not a lottery and no doubt will continue to do so. 15.84 The class amongst whom the prizes are to be distributed need not be the same (although generally it will be) as the participants who are required to pay in order to participate. Therefore, the prizes could be distributed to third parties rather than those who have paid to take part in the arrangement. The prize winners’ class must be capable of definition and generally one would expect that the provisions of the lottery arrangement (generally the rules) would make clear what the class is, both by specifying who may and who may not enter (eg those associated with the promoter are usually not eligible to enter). 783

Lotteries 15.85 The fact that the prize winners’ class must be capable of definition does not, however, mean that the class of participants has to be defined before the prizes are allocated (as would be the case in a simple raffle, where there would be a defined class of ticket holders before the raffle is drawn). It is contended that this requirement will also be satisfied in a case where participants in a lottery participate separately and in sequence, so that one person may enter and win a prize in the lottery before other participants enter. In the case, for example, of a scratchcard lottery (which must surely be intended to fall within s  14) participant  A  will buy his card, scratch it and may win/lose before participants B, C … Z do so. It appears that in the case of such a lottery the members of the class among whom the prizes are allocated are all those who in accordance with the arrangements purchase cards during the time the promotion is offered, and it is not necessary that the members of the class should be identified before any prize is won.

Prizes 15.86 In the vast majority of cases the attraction of a lottery is the chance to win a cash prize, sometimes a substantial one.1 However, ‘prizes’ are by no means limited to money. A  lottery ‘prize’ includes money, articles and services.2 It does not need to be described as a prize, nor need the prize be provided by those who are members of the class amongst whom the prizes could be allocated.3 In DPP v Bradfute and Associates Ltd4 (for the facts of which see 15.131 below) Lord Parker CJ said:5 ‘… it is quite clear that a prize need not be a sum of money; it can of course be an article, a commodity, and in my judgment can be anything which can be sold, or indeed anything which can be said to be of value.’ 1 The CAP  Code: The UK  Code of Non-broadcast Advertising and Direct Promotional Marketing (12th edn), differentiates between ‘prizes’ and ‘gifts’, para 8.19. 2 GA 2005, s 14(4). 3 GA 2005, s 14(4)(a) and (b). 4 [1967] 2 QB 291, [1967] 1 All ER 112, [1967] 2 WLR 459. 5 [1967] 2 QB 291 at 296.

15.87 The new definition of prize in GA 2005, s 14(4) does not repeat Lord Parker CJ’s dictum that a prize could be ‘anything said to be of value’, but the new definition by merely ‘including’ money, articles and services is a wide definition and capable of including the previous law set out in the Bradfute case. This is of particular relevance with television programmes, where a prize of a right to appear on a television programme or the right to take part in a further round of a talent show would be considered to be something of great value to many people, and would have been a prize under the previous law. (These might be described as ‘services’.) The Divisional Court in the Bradfute case held that where winners in a competition which involved no skill were entitled by virtue of their win to participate in a second competition where skill was necessary to win a cash prize, the entitlement to enter that competition was itself a thing of value and therefore a prize.1 In reaching this conclusion, the court applied the decision of the Divisional Court in Kerslake v Knight,2 where it was held that a scheme was a lottery 784

Lotteries where it involved the distribution by chance of the opportunity to ‘earn’ a sum of money by the performance of a trivial service for the promoter. The court held that the service was in fact a mere sham and negligible, but that, even if it had been substantial, ‘the chance of rendering that service for money was as much a prize as if a book or any other article had been offered’ (per Lord Hewart CJ).3 The remark is obiter and it may perhaps be doubted whether the courts would now hold that the distribution by chance of the opportunity to earn money where the service was reasonably commensurate with the money offered was a lottery. 1 Under the 2005 Act such a scheme would be a complex lottery (if the price of the cat food had reflected the opportunity to enter the scheme), as it would have a series of processes, the first process of which relied wholly on chance and involved no skill whatsoever. 2 (1925) 41 TLR 555, [1925] 94 LJKB 919, [1925] All ER Rep 679. 3 (1925) 41 TLR 555 at 557.

15.88 In the past, the courts have not allowed technical arguments over definitions to obscure the existence of a lottery if the essential elements of a lottery were demonstrated; and this has applied to the requirement that there should be a ‘prize’ or ‘prizes’, as well as to all the other requirements The 2005 Act has now put this into statute, as it is made clear that a prize can be a lottery prize whether or not it is described as a prize.1 Setting this against the background of the previous law in DPP  v Phillips,2 where participants obtained the chance to gain money by means of a scheme for the sale of notecases, the court concluded that there was a lottery, and rejected the argument that the money payments could not count as prizes because they were described in the scheme as ‘commission’ earned by the participants for sales. ‘There is no magic in the word “distribution”. The word “payment” will do just as well. There is no magic in the word “prizes”. “Commission” or “reward” will do just as well.’3 1 GA 2005, s 14(4)(a). 2 [1935] 1 KB 391. 3 [1935] 1 KB 391 per Lord Hewart CJ.

15.89 DPP  v Phillips concerned a scheme which was dressed up as a commercial venture to promote the sale of note cases. Any participant could purchase at a cost of £1 a note case worth, at most, 1s 6d together with the chance to participate in a ‘sales scheme’. The latter was advertised as capable of yielding ‘commission’ to a maximum of £20,000. The participant received with his note case a supply of order forms marked with a personal serial number and was to use these to obtain further orders of the defendant’s note cases. For each direct sale after the first three he would obtain 10s commission. The purchaser in each such sale would himself receive order forms marked with the participant’s serial number and the participant was entitled to receive 10s ‘commission’ on the first three sales effected by that purchaser to the next participant in the chain, who would also receive order forms with the participant’s number, so that sales by him would yield ‘commission’. The Divisional Court held that the scheme, although dressed in the guise of a commercial transaction in which the participant was being 785

Lotteries paid ‘commission’ to induce others to buy note cases, was in fact a lottery because the ‘commission’ which the participant ‘earned’ was not received in exchange for the exercise of skill or effort, but depended entirely upon the efforts of persons over whom he had no control. It was a question of pure chance whether sellers down the chain exercised enough skill and diligence to generate for any participant the money which the scheme was theoretically capable of producing.1 1 See 15.91 below.

15.90 In Re Senator Hanseatische1 the Court of Appeal cited DPP v Phillips in concluding that a lottery is a distribution of money or other prizes by chance.2 There is, the court concluded (citing DPP v Phillips), ‘no magic in the word ‘prizes’. Any form of reward or commission is sufficient.’3 1 [1997] 1 WLR 515. 2 At 519E per Saville LJ. 3 At 523H per Millett LJ.

15.91 These cases under the previous law illustrate that merely to describe what is in substance and reality a prize by some other name has not prevented the courts spotting the deception and holding the scheme a lottery. Thus, in cases where money or goods have been described as a ‘bonus’ (Howgate v Ralph),1 ‘gifts’ (Minty v Sylvester)2 and ‘presents’ (Morris v Blackman),3 the court penetrated to the reality of the offer and concluded that, since the schemes involved the distribution of money or items by chance, a lottery was involved.4 Notwithstanding this, for the reasons noted at 15.160–15.162, it may be that snowball, pyramid and chain-letter schemes exemplified by DPP v Phillips and the Hanseatische case do not fall within the definition of a lottery in s 14, but it may now be caught by the GA 2005, s 43 as a chain gift scheme. 1 2 3 4

(1929) 141 LT 512. (1915) 25 Cox CC 247. (1864) 2 H & C 912. See also Barnes v Strathern [1929]  SLT  37; Atkinson v Murrell [1972] 2  All ER  31, [1972] 2 WLR 509, affd [1973] AC 289.

15.92 The prizes do not have to be provided from the money paid by the participants in the lottery. The House of Lords in Imperial Tobacco v A-G1 made that clear under the previous law. Section 14(4) of the GA  2005 now carries that on. 1 [1981] AC 718.

Universal prizes 15.93 Under the previous law a scheme could be a lottery even though every participant in it obtained a prize. This is, the writer would contend, still the case under the GA  2005, at least in a lottery where the prizes are of differing values, so that each participant takes a chance as to the value of the article he will get. The GA  2005 places no limit on the number of 786

Lotteries prizes that may be allocated. The concept of a ‘prize’ is thus rather broader in the context of lotteries than is the case with other competitions. A ‘prize’ is normally understood to be the reward given to those who ‘win’, so that by definition a loser gets nothing. However, lotteries have repeatedly been promoted on the basis that there are to be ‘no blanks’ (ie no ticket which fails to win something). The first recorded English lottery of 1566, which offered for sale 400,000 tickets at 10s each, provided for all participants to win something, though the prizes ranged from a first prize of £5,000 in money and goods down through a variety of prizes totalling 29,501. The balance of the participants (ie 370,499, if all the tickets were sold) were each to get 2s 6d.1 So the ‘loss’ of the losers lay in failing to recoup the cost of their tickets. In the case of a number of subsequent state lotteries (such as the ‘Million’ lottery of 1694 noted at 15.11 above) participants did not suffer any loss at all as the scheme provided, in the case of all tickets, for repayment of the whole of the ticket price plus interest over a 16-year period. Thus the ‘loss’ of the losers was their failure to win one of the more valuable prizes and their willingness to forego having the money paid for the ticket available as a liquid asset. 1 See 15.6 (history section) above. The scheme was not actually run as advertised, and it is likely that the ‘consolation’ prizes were not awarded.

15.94 Coming forward to more recent times, the effect of a scheme in which everyone was to win something was considered in Taylor v Smetten.1 The appellant sold 1lb packets of tea for 2s  6d each. In each packet there was a coupon entitling the purchaser to a prize. No purchaser could know what prize he would get until he had purchased the tea, and prizes varied in character and value. The tea, it was conceded, was good and worth 2s 6d. The appellant was prosecuted for keeping an unlawful lottery. The justices were of the opinion that, although every packet of tea contained a coupon entitling the purchaser to a prize, yet there was a chance or uncertainty as to the value of the prizes and that this chance or uncertainty constituted the scheme a lottery. They therefore convicted the appellant. The Divisional Court upheld the conviction. The price of 2s 6d was to be regarded as the aggregate price of the tea and the chance to win a prize. In the words of Hawkins J, a purchaser ‘bought the tea coupled with the chance of getting something of value by way of a prize but without the least idea what that prize might be’.2 1 (1883) 11 QBD 207. Under the 2005 Act, the scheme would not be a lottery unless the price of the tea reflected the opportunity to enter the lottery: see paras 15.59– 15.60. See also Christensen & Co Ltd v Byers [1967] NZLR 416. 2 (1883) 11 QBD 207 at 212.

15.95 In so far as the decision held that a scheme in which everyone wins something is a lottery, it is submitted that the real basis for the decision lay in the fact that the available prizes varied in value. It is true that the judgment of the Divisional Court does not expressly state this as a factor in the decision, although Hawkins J observed that the prizes were ‘of infinite variety, both in character and value …’. However, it was this consideration which clearly formed the basis upon which the justices found the scheme constituted a lottery, and it was their decision which was upheld by the court. Moreover, in Re International Securities Corpn Ltd1 Swinfen Eady J regarded this as forming part of the ratio of the decision: 787

Lotteries ‘it was formerly argued that where there are all prizes and no blanks there can be no lottery, and in this case it is suggested that since the bonds must ultimately be drawn it cannot be said that there are any blanks … That argument was used in Taylor v Smetten … where in all packets of tea sold were placed coupons of varying value and the court upheld a conviction … Every one of the packets contained, indeed, one prize and there were no blanks but there was the chance as to what the value of the prize would be.’ 1 (1908) 99 LT 581.

15.96 There are, however, dicta in the judgment of Hawkins  J  which on one reading might perhaps be thought to go further than this and suggest that a scheme may be a lottery even though everyone wins a prize and all prizes are of the same value. Thus, he said:1 ‘If the coupon alone sealed up had been offered for sale, the purchaser taking his chance whether it represented a pen or a silver pencil case, or if a number written on a slip of paper were sold, entitling the purchaser to some article the name of which was written against a corresponding number on an undisclosed list, could anyone doubt that these would have been lotteries?’ Under the GA  2005, there is no limit on the number of prizes that may be available, so the fact that every participant received a prize would not prevent the scheme from being a lottery. All prizes must be allocated wholly by chance, which was the case in Taylor v Smetten.2 1 Taylor v Smetten (1883) 11 QBD 207 at 212. 2 See also the CAP Code: the UK Code of Non-broadcast Advertising and Direct and Promotional Marketing (12th edn), which differentiates between prizes (offered to a small minority of participants) and gifts (offered to a significant proportion of participants), para 8.19.

Wholly on chance 15.97 The third ingredient necessary for an arrangement to be a simple lottery is that the prizes must be allocated by a process which relies wholly on chance; in a complex lottery, where the prizes are allocated by a series of processes, the first of those processes must rely wholly on chance. So far as simple lotteries are concerned, on the face of it, that provision repeats the law prior to the GA 2005, in that a scheme was not a lottery if any element of skill which was more than colourable entered into the final determination of prizes. 15.98 So far as complex lotteries are concerned, GA  2005, s  14(3)(d) introduces a marked change. No longer is a scheme a lottery if the final process or processes are decided by chance, provided the first process does not rely wholly on chance. Under the previous law, if the element of skill became ‘spent’ before the final determining process, then the scheme was a lottery.1 Now s 14(5) brings into the concept of lotteries the skill prize competitions previously regulated by s 14 of the LAA 1976. Save for s 339 of the GA 2005, which makes it clear that participating in a competition for a prize does not 788

Lotteries come within the definition of gambling for the purposes of the Act unless it is betting, gaming or a lottery, there are no other specific provisions which deal with prize competitions any more. Forecast competitions are covered by s 11 of the GA 2005. 1 See dictum of Lord Hailsham in News of the World v Friend [1973] 1 All ER 422; [1973] 1 WLR 248, and the Telemillions case discussed at 15.129.

15.99 The first approach, therefore, to the phrase ‘wholly on chance’ must be to see whether in fact the process by which prizes are allocated, or the first process in a complex lottery, does or does not rely wholly on chance. That is a question of fact. Although s 14(5) gives some assistance as to what can be treated as relying wholly on chance, that is not the only meaning: the phrase should be given its own normal reading. If, however, the process requires people to exercise skill or judgment or to display knowledge, then it is nevertheless to be treated as relying wholly on chance if two conditions are fulfilled: first, that the requirement cannot reasonably be expected to prevent a significant proportion of participants from receiving a prize and, secondly, that it cannot reasonably be expected to prevent a significant proportion of people who wish to participate (prospective participants) from doing so.1 In colloquial language the skill, judgment or knowledge required to prevent the arrangement from being a lottery must be reasonably expected to be sufficient either (i) to ‘knock out’ a significant proportion of the participants or (ii) to stop a significant proportion of potential participants from participating. The wording would suggest that it must be a requirement to exercise skill or judgment or to display knowledge. As may be seen, the definition of ‘wholly on chance’ in GA  2005, s  14(5)(a) encompasses ingredients of the previous law, in that if, by the exercise of skill or judgment or a display of knowledge, a significant proportion of participants are prevented from receiving a prize, then it is not a lottery. Consequently, some previous decisions are still relevant. 1 GA 2005, s 14(5)(a) and (b).

15.100 Under the previous law the skill or judgment involved did not need to be of any particular kind. In Scott v DPP1 Atkin J said that: ‘any kind of skill or dexterity, whether bodily or mental, in which persons can compete would prevent a scheme from being a lottery if the result depended partly upon such skill or dexterity.’ The writer would contend that this remains the case under s 14 and that any kind of skill, judgment or knowledge can in principle be engaged to prevent the scheme from depending on chance, provided, of course, the terms of s  14(5) are satisfied. Under the GA  2005, in a complex lottery it is the first process that has to rely wholly on chance, not the overall result. 1 [1914] 2 KB 868.

15.101 In examining the role of skill or judgment in a scheme, the courts have, of course, looked at realities, and it may be confidently predicted that they will continue to do so under the new Act. Promoters of competitions have frequently designed schemes to embody, or to appear to embody, some 789

Lotteries element of skill in order to avoid the prohibition on lotteries. The common law history of lotteries is largely the history of the fate of such schemes as have come under the scrutiny of the courts, either because their promoters were prosecuted for running unlawful lotteries, or because participants, suing for winnings, have been met with the defence that the competition was an unlawful lottery and the winnings were therefore irrecoverable. Inevitably, most decisions turn closely on their facts. The courts have repeatedly stressed this and it should be borne in mind in examining any decision for guidance as to the likely reaction of the courts to a new scheme. Not only must caution be exercised because the 2005 Act provisions are different (although some of the previous concepts are retained) to the previous law, but also the doctrine of precedent is of limited application in this field. However, it is hoped that there may be some value in trying to identify broadly the features of schemes which have led to their being held to be lotteries and to describe some of the analytical methods which the courts have brought to bear upon schemes coming before them. 15.102 At the outset it may be useful to distinguish three types of scheme. First, it may be quite apparent from the rules of a competition that it provides no true opportunity to participants to win by the exercise of skill or judgment or by displaying knowledge. Where the court so holds, it will declare the scheme a lottery, however assiduously it has been dressed up to resemble something else. The cases of DPP  v Phillips,1 Howgate v Ralph,2 Minty v Sylvester3 and Morris v Blackman4 are illustrations of this. There are numerous instances of courts concluding that the skill or effort allegedly required to succeed in a competition was a merely colourable device or sham and that in substance prizes were distributed by chance. Thus, where match manufacturers inserted in one out of every 2,000 boxes a match which burnt with a green flame and offered £1 to anyone who spotted such a match, it was held that no skill was required to win. A participant needed, at most, not to be colour blind.5 Where competitors were required to identify three electrical appliances made by one manufacturer in a shop window, it was held that no real skill or merit was involved. Competitors only required the ability to read and sufficient shrewdness not to be misled by appearance.6 As we have seen in Kerslake v Knight,7 the requirement that participants should ‘earn’ their prizes by exhibiting in a window a card bearing the name of the promoting newspaper was held a colourable part of the scheme. 1 2 3 4 5 6 7

[1935] 1 KB 391. (1929) 141 LT 52. (1915) 25 Cox CC 247. (1864) 2 H & C 912. Andren v Stubbings (1924) The Times, 16 October. John Wagstaffe Ltd v Police [1965] NZLR 973. (1925) 41 TLR 555, [1925] 94 LJKB 919, [1925] All ER Rep 679.

15.103 None of those schemes involved any skill, judgment or knowledge from the participants. It is suggested that a similar approach to the analyses of the role of of skill, or the absence of skill, would be applicable under the s 14 definition.1 1 The Commission goes further and states, that in its view, there is not sufficient skill or knowledge if the answer can be found easily on the internet, is widely

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Lotteries or commonly known, is easily found in the accompanying narrative or in the surrounding programme. (See Gambling Commission, ‘Prize competitions and free draws: The requirements of the Gambling Act 2005’ (December 2009), para 3.6. See also 15.117 below.) However, that must be seen in the context of the audience/ participants that the competition is aimed at, and the prize offered. What may seem simple questions or internet searches to some, may not be to others, and it all comes back to the test in s 14(5).

15.104 At the other extreme are competitions such as prize essay competitions, poetry competitions, competitions to provide solutions to chess and bridge problems, art competitions and so forth where it is obvious that skill is essential to win and so will in fact alone decide the winner.1 In this second type of case the recognition of a direct link between the exercise of skill and success should cause no difficulties and would therefore take the competition outside GA 2005, s 14(5). 1 See ‘Prize competitions and free draws: The requirements of the Gambling Act 2005’ from the Gambling Commission (December 2009), para 3.5.

Assessing the character of a scheme 15.105 Under GA  2005, s  14(5), if a significant proportion of participants have not in fact been prevented from receiving a prize or deterred from entering the competition, the promoters will have to show that they had a reasonable expectation that the skill element would prevent or deter, as appropriate. This in part encapsulates the attitude of the court in the past that it would look at the reality of the situation and how a scheme works in practice. The Commission has made it clear1 that where they have concerns over a competition they will express those concerns to the promoters and, if the correct proportion cannot be shown to have been prevented or deterred, they would look at steps genuinely taken by the organisers to establish the way that the competition will operate. The elements of the test in s 14(5), in the Commission’s view are: ‘Did the skill, judgment or knowledge requirement in fact eliminate a significant proportion from participation or success and, if it did not, on what basis did the organisers conclude it was reasonable to expect that it would have done so?’2 1 Gambling Commission ‘Prize competitions and free draws: The requirements of the Gambling Act 2005’ (December 2009), paras 3.10–3.14. 2 Paragraph 3.7.

15.106 Where there is a skill requirement, how far will the court look beyond the scheme itself and take into account evidence of how it actually functions to determine whether or not the skill requirement will prevent a significant number of participants from receiving a prize or entering the scheme, or that there is a reasonable expectation that it will? 15.107 Assistance in answering these questions may be gained from some of the old cases. Obviously, caution must be exercised in relying on them, but they are still useful. The judgments of the Divisional Court in Scott v DPP 791

Lotteries may be helpful.1 In that case, newspaper proprietors offered money prizes for winning entries in a competition in which participants were required to compose phrases (subject to certain stated rules) illustrating the meaning of given words. The proprietors undertook to examine all entries and to award prizes according to merit. The major argument in the case was directed to whether the absence of an objective standard of literary merit rendered the scheme a lottery. The court decided that it did not (see 15.149 below). However, Lush  J  made a number of preliminary observations about the approach which the courts should adopt in analysing competitions generally to see whether they may be lotteries. These may be stated as follows: (1) A scheme may ‘on its face’ be a lottery; here the court is merely called upon to recognise the obvious and dispose of it accordingly. (2) A  scheme may not be a lottery on its face, but ‘extraneous’ evidence may be admitted to show that the parties concerned contemplated that it would be conducted as a lottery. If the parties do not expect it to be run as a genuine skill competition, then it is hard to see how there can be any reasonable expectation that it would be. It appears that by ‘extraneous’ evidence of what the parties contemplated Lush  J  was not referring to express evidence of the parties’ intentions, for this, after all, would hardly ever be available. He said (at 875): ‘I agree with what was contended before us, that if reasonable people ought to contemplate from the facts made known to them that it would be so conducted, the scheme is nonetheless a lottery although on the face of it it appears not to be …’ In giving judgment in the same case Channell J said (at 882): ‘here there is no extrinsic evidence from which it could properly be held that the competition could not be, and could not have been intended to be, carried out according to its terms.’ 1 [1914] 2 KB 868, 78 JP 267, 83 LJKB 1025.

15.108 The principle to be extracted from these observations appears to be that the court may by an objective examination of the facts of a competition conclude that, since skill could play no part in the outcome (or the first process, if more than one), the promoters and participants must be treated as intending that it should be conducted by pure chance.1 In positing this objective test, the Divisional Court was clearly influenced by the approach adopted by the Court of Appeal in Blyth v Hulton & Co Ltd.2 There, periodical proprietors ran a competition in which a reward of £300 was offered for completing the last line of a limerick. The closing date for entries was 25 December 1907 and the results were to be published on 3 January 1908. A  total of £600 in prize money was offered and a fee of 6d per entry was charged. The advertisement represented that every entry would be examined by competent staff and judged on its merits. The editor’s decision was to be final. There was no evidence how the competition was in fact judged, nor how the editor purported to select the most meritorious entries. The Court of Appeal unanimously held the scheme a lottery. In their view the following 792

Lotteries facts were significant: first, everyone must have realised that if the scheme were to break even financially, the prize money of £600 would necessitate at least 24,000 entries at 6d each. There was in fact evidence that some 60,000 entries were received. Second, the time between the closing date and the declaration of winners was obviously insufficient to enable the editor (even with assistance) to judge on merit, so that it must have been contemplated that he would decide by arbitrary unfettered choice. The court also gave weight to the existence of an offer of a substantial number of sovereigns as consolation prizes which were, so it was held, obviously to be distributed by chance (see ‘consolation prizes’ below). 1 So there would be no reasonable expectation that the arrangement would not rely in fact on chance. 2 (1908) 72 JP 401.

15.109 In Scott v DPP the Divisional Court distinguished Blyth v Hulton on the grounds that there was in that case express evidence as to the conduct of the competition that showed that it was a lottery. It is respectfully suggested that this is incorrect, for although there was evidence that some 60,000 entries were submitted it is doubtful whether the court was particularly concerned with this fact. It was more concerned with the inferences to be drawn from a consideration of the framework of the scheme itself and it is that approach which Lush and Channell JJ appear to be approving in the passages cited. In principle, therefore, an analysis of proposals in a scheme may lead to the objective finding that the promoters and competitors could not have meant that any skill would be exercised to affect the result (or the first allocation process in a complex scheme). For a typical application of this approach see Smith’s Advertising Agency v Leeds Laboratory Co1 where the scheme failed because: ‘it was impossible seriously to contend that any reasonable person could read these advertisements as indicating that any real competition was to take place’ (per Kennedy LJ at 337). 1 (1910) 26 TLR 335, 54 Sol Jo 341.

15.110 An example of an arrangement where there could be no reasonable expectation of the operation of skill is the decision in Singette Ltd v Martin.1 There promoters of a pool betting scheme ran a club whose members were given a membership card containing four numbers drawn at random from 1 to 55. Every week the 55 home teams in the football league were each allotted a number, and prizes were awarded to those members whose four numbers coincided with four winning teams. A member could ascertain each week from a schedule the numbers allotted to the various teams for that week and was entitled to vary his numbers to select four teams. He could thus exercise a skilled selection of teams he thought likely to win, but the evidence was that 99% of the members did not bother to do so and retained the same four numbers from week to week. On this ground the scheme was held a lottery as, although it gave an opportunity for the exercise of skill, it was not a requirement that should be exercised and the majority of participants did not in fact seek to exercise it. On the facts, therefore, it operated wholly on chance. The promoters’ experience would have made it clear that that was 793

Lotteries the way that it would run and it therefore could not reasonably be expected that any action by the participants would affect the outcome. 1 [1971] AC 407, CA.

15.111 More recently, in examining the workings of money circulation schemes such as those involved in Titan No  2,1 the courts have rejected arguments that the schemes should be held to involve skill on the basis that a senior partner’s entitlement to be paid commission depended upon his demonstrating that he exercised skill to assist in the recruitment of the new member in respect of whom the commission was payable. The court, having examined the way in which the schemes were advertised and the way in which they were actually promoted, concluded that this aspect of the arrangements had simply never been made clear. Rather, the impression was given that senior partners would automatically be entitled to their commission without exercising any skill or effort at all. 1 Re Titan International LLC (9 August 1996, unreported).

Types of scheme 15.112 It seems clear, therefore, that the courts will analyse both the way that schemes are formulated on paper, and the way they work out in practice, to assess the scope they give for the exercise of skill. Broadly speaking, the competition schemes which have been subjected to scrutiny in the past under LAA 1976 have fallen into two classes. In the first class are schemes in which competitors have been required to predict the outcome of a future event or to make some statement about a past event, the result of which is not generally known. These schemes are now dealt with under GA 2005, s 11 as a form of betting.1 In the case of such schemes the exercise by a competitor of skill or effort which is superior to that of other participants cannot, of course, affect the outcome of the event itself; it can only enable his prediction or assertion to be more accurate than those of his competitors. In the second class are competitions in which participants are required to produce something (an artefact, literary production, puzzle solution or answers to competition questions). In such cases skill or effort directly affects the quality of the entry. These are the competitions which have to be scrutinised in the light of s 14(5) of the GA 2005. 1 See Chapter 2.

15.113 If no skill is required, however the competition is dressed up, then the scheme must rely wholly on chance and it will be a lottery, provided, of course, the other necessary elements are present.1 Equally, if it is obvious that a very high degree of skill is involved such that it is likely to be skill alone which will decide the winner, then that would be a lawful prize competition (provided it is not betting or gaming) and not a lottery. There may also be a high level of skill required such that it is obvious that only a few of those who enter the scheme are likely to go into any final draw to determine the winner, and those competitions would be lawful prize competitions too and not lotteries.2 Difficulty will arise, however, with competitions which fall somewhere between the two. 1 See 15.38–15.42 above.

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Lotteries 2 This would also seem to be the view of the Gambling Commission: see its publication ‘Prize competitions and free draws: The requirements of the Gambling Act 2005’ (December 2009), para 3.5.

No genuine skill etc requirement 15.114 As has been said earlier, competition promoters frequently design competitions to appear to have a skill element, which may turn out to be illusory. This may be because, whatever may be stated on paper, it is the intention and design of the promoters that in fact the scheme will be decided purely by chance. (Blyth v Hulton & Co Ltd, Singette Ltd v Martin and Smith’s Advertising Agency v Leeds Laboratory Co are examples of that.) If in fact there is no skill required, although the scheme may be dressed up to give the impression that there is, then the scheme relies wholly on chance, even if the illusory skill may have put off a significant proportion of potential participants from entering.

Illusory skill 15.115 In Barclay v Pearson1 the defendant ran a series of competitions in connection with the newspaper of which he was editor. By means of an advertisement, the public were invited to contribute 1s each to a fund which the defendant undertook to divide equally amongst such of the contributors as should correctly guess a word which was omitted from a given paragraph or sentence printed in his paper. The winning word had been chosen before the competition was run. The court found that the scheme was a lottery. It was not part of the competition that the correct word should be the most appropriate to fill the gap and, indeed, Stirling J considered that many words appeared to be more appropriate than the winning word. No clues were given to assist with choosing the word, and the selection of the word was perfectly arbitrary and made by chance. In his judgment, Stirling J approved of the statement made by a magistrate, Sir John Bridge, sitting hearing a similar case at Bow Street: ‘“If the competition is decided by skill and judgment and not by chance, then it is not a lottery … If competitors were asked to supply the word” (by which I understood him to mean the most appropriate word) “and not a word, it makes a difference. The defendants do not pretend to say that they call for the selection of the most fitting word with which to complete the sentence. The selection of the word must be entirely a matter of chance. On that ground the case comes within the meaning of the Lottery Acts.” I agree with these observations, and think them applicable to the present case. Neither the circumstance that the word is determined before the competition begins, nor the circumstance that the mode of selection is unknown, appears to me to give rise to any real difference’2 (emphasis added). This would seem to be a rather extreme case and under s  14(5), on the facts of Barclay v Pearson, there might well be sufficient skill to prevent the requirement relying wholly on chance. 1 [1893] 2 Ch 154, 62 LJ Ch 636. See also Coles v Odhams Press Ltd [1936] 1 KB 416, [1935] All ER Rep 598, 105 LJ KB 208. 2 [1893] 2 Ch 154 at 165.

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Lotteries 15.116 The court will always look at the reality and substance of a scheme to decide whether or not it is a genuine competition or something else, such as a lottery.1 In Singette Ltd v Martin,2 Coles v Odhams Press Limited3 and Barclay v Pearson4 the Court found that the promoters of the competitions were dressing them up to look as though skill were required when, in fact, it was not. In each case, the court dissected what was required and what was actually happening in coming to the conclusion that success did not depend upon skill. In Singette Limited v Martin Lord Pearson made it clear that in deciding whether a competition was a lottery or not, a realistic view should be taken, and regard should be had as to the way in which the competition was actually conducted.5 Therefore, not only should one look at the realities of what the competitors have been asked to do, but one should also look to see how the competition is conducted in practice. In that case, it was found that there was a long established course of business, and that the promoters well knew the actual character of the competitions which they were promoting, because on average in any one week, 99% of the participants did not make a forecast. In such cases promoters are likely to know how a competition is going to work in practice. It is thought by some that it is unfair that how the competition works in practice should be looked at by the courts on the grounds that, until the competition is run, a promoter cannot know how it is actually going to work. This objection does not stand up to scrutiny in most cases because the promoter will know from experience how participants in a particular competition are likely to behave, and also because it is often obvious from the way in which the competition is framed that participants are, or are not, likely to exercise skill. Lush  J  in Scott v DPP6 agreed that extraneous evidence may be brought in to show that the parties concerned contemplated that the scheme would be conducted as a lottery.7 1 See Singette Ltd v Martin [1971] AC 407; News of the World v Friend [1973] 1 WLR 248; Moore & Elphick [1945] 2 All ER 155; and Scott v DPP [1914] 2 KB 868. 2 [1971] AC 407. 3 [1936] 1 KB 416, [1935] All ER Rep 598, 105 LJ KB 208. 4 [1893] 2 Ch 154, 62 LJ Ch 636. 5 [1971] AC 407 at 423C. 6 [1914] 2 KB 868. 7 [1914] 2  KB  868 at 875; and see Russell v Fulling & Page [1999] 39  LR  12; [2000] 40 LR 29.

15.117 There may also be no genuine skill requirement in a knowledge or puzzle competition where the answer is blatantly obvious and is essentially contained within the words of the competition itself. For example, a scheme containing material stating that Paris is the capital of France, followed by a multiple choice question asking which city is the capital of France and showing Paris as one of the answers would not contain a genuine skill requirement.1 The Commission considers that one simple question, the answer to which is commonly and widely known or is blatantly obvious in the material accompanying the competition, does not meet the skill test but that the more questions or clues that have to be solved or the more obscure or specialist the subject, the more likely it is that the statutory test would be satisfied. It does not consider the test is met where the answer can be found easily on the internet, is widely or commonly known by the general public, appears in the accompanying text or narrative or is obvious within a programme.2 So far as internet searches are concerned, the prospective 796

Lotteries audience or participants that the scheme is aimed at ought to be taken into account: what are simple searches for some, may be obscure for others. The Commission considers that there is a balance to be struck between the level of skill, knowledge or judgment required, and the size of the prize or cost of entry. Clearly it considers the level of skill required increases according to the cost of entry or value of the prize.3 This is an interesting view to take and may be based upon the fact that if there is a high value prize the participants are more likely not to be deterred by a skill requirement and will put in more effort or skill in order to try to win the prize.4 However, the test in s 14(5) must always determine the amount of skill required. In some arrangements, given the participants who do or are likely to participate, basic research on the Internet may not be sufficient to prevent a significant proportion of them from receiving a prize. 1 See para 3.6 of the Gambling Commission’s ‘Prize competitions and free draws: The requirements of the Gambling Act 2005’ (December 2009). 2 So far as internet searches are concerned, the prospective audience or participants that the scheme is aimed at are to be taken into account. Simple searches for some may be obscure for others. 3 See the Gambling Commission’s ‘Prize competitions and free draws: The requirements of the Gambling Act 2005’ (December 2009), para. 3.17. 4 Ibid, para 3.6.

Significant proportion 15.118 Both of the tests in GA 2005, s 14(5) speak of preventing a significant proportion of persons from either receiving a prize or from participating. To avoid s 14(5) therefore, the first question is: did the skill requirement actually prevent a significant proportion (a)  of those who entered from receiving a prize or (b) of those who wished to enter from doing so? This is obviously a question of fact in each case, and if either can be shown to be the case, then clearly the competition would not be a lottery.1 1 The Commission agrees with this approach: see its paper ‘Prize competitions and free draws: The requirements of the Gambling Act 2005’ (December 2009), para 3.7.

15.119 In order to decide what is a significant proportion, the lotteries provisions generally in the GA 2005 must be taken into account. The scheme of those provisions is that offences will be committed if a lottery is promoted or facilitated unless it is one of the exempt lotteries, or an operating licence is held in respect of it.1 Lottery operating licences may only be issued to noncommercial societies, local authorities, or external lottery managers acting on behalf of a non-commercial society or a local authority.2 The effect is that the only types of lottery that may be lawfully promoted or facilitated on a large scale are lotteries run for good or public causes. The policy of the legislation is that the promotion of large-scale lotteries on a commercial basis is not permitted and, consistently with this, the National Lottery is promoted to raise funds for various specified good causes. In that context, a significant proportion must be a sufficiently large proportion of the whole that it is (a) not de minimis, or (b) not merely colourable (in which case it would be of no real effect anyway), and (c) consistent with the policy of the Act (which is 797

Lotteries to restrict lotteries other than the exempt lotteries or lotteries run for good or public causes). 1 GA 2005, ss 258 and 259; and see 15.305 ff. 2 GA 2005, s 98(1).

15.120 There is no definition of ‘significant proportion’ given in the Act, and the Commission merely states that it is likely to depend on the context and facts of the case.1 As there is no specific definition, the word must be given its ordinary natural meaning, but that is not easy to discern. Richard Caborn, Minister for Sport and Tourism as the Gambling Bill was being considered in Standing Committee B stated: ‘A number of amendments have been tabled that represent contrasting views in a debate over the level of skill required in a prize competition fit to fall outside lottery regulation under the Bill … the Government believes that the amendments that introduce the notion of “substantial skill” into the definition of a lottery bring an unreasonably stiff test. The government prefers its own amendments to clause 14, which seek to make the definition of a lottery more user-friendly, without diluting the level of the test or the principle underpinning it. The Government amendments introduce the notion of “reasonable expectation” into the test. This changes the nature of the test from a strictly empirical one to a normative one, and thereby improves its practical application.’ That would seem to suggest that it was the intention of the government that the test under s 14(5) of ‘a significant proportion’ would be at a lesser level than a ‘substantial proportion but would be at the same level as that under s 14(1) of the LAA 1976 that spoke of success in a competition depending to a ‘substantial’ degree on the exercise of skill. 1 See the Gambling Commission’s paper ‘Prize competitions and free draws’ (December 2009), para 3.8.

15.121 Case law from other contexts is not very helpful on the meaning of ‘significant’ in this context. In Lambeth Borough Council v Grewal,1 in considering whether the defendant’s premises were a sex shop, the court had to consider whether a business consisted to a ‘significant degree’ of selling sex articles within the meaning of Local Government (Miscellaneous Provisions) Act 1982, Sch 3, para 4(1), which defines a sex shop as ‘any premises … used for a business which consists, to a significant degree of selling (a) sex articles …’. The same Schedule provides for the licensing of sex shops. 1 [1985] 82 Cr App Rep 301.

15.122 The defendant had been prosecuted and convicted by a magistrates’ court of running a sex establishment without a licence from the local authority. Sale of sex items accounted for between 1 to 1.5% of the annual turnover of the business. The Crown Court and the High Court in turn upheld the defendant’s appeal. The central issue was the proper construction 798

Lotteries of the words ‘to a significant degree’. Mustill  LJ refused to attach a rigid meaning to the term. ‘The word “significant” has more than one meaning. It is capable, in some contexts, of meaning “more than trifling”. It does not have this meaning in the present context. A  higher standard is set: how much higher cannot be prescribed by any rule of thumb. The ratio between the sexual and other aspects of the business will always be material. So also will be the absolute quantity of sales. Since the fundamental question is whether the establishment is a “sex shop” … the court will no doubt find it appropriate to consider the character of the remainder of the business. The nature of the display can be a relevant factor, and the nature of the articles themselves will also be material since the definition in para 4 which I have not quoted in full, covers a wide spectrum of offensiveness. It would be wrong to say that in law any single factor is decisive. It is up to the court of trial to decide which considerations are material to the individual case and what weight is to be attached to them.’1 Mustill LJ also rejected the contention that ‘significant’ is necessarily the antonym of ‘insignificant’. ‘Nor do I  accept that the meaning of significant can be arrived at by assuming that it is the obverse of “insignificant”. Granted that a word may on occasion mean the same as its antonym with a negative attached, it is often the case in the English language that the two expressions convey a quite different shade of meaning.2 1 [1985] 82 Cr App Rep 301 at 307–8. 2 At 306–7.

15.123 Tunbridge Wells Borough Council v Quietlynn Ltd1 similarly involved a prosecution for running a sex establishment without a licence. The court was called upon to consider, inter alia, whether the defendant business consisted ‘to a significant degree’ of the sale of sex articles. On the construction of that term, May LJ said: ‘There is certainly no definition of the word “significant”. For my part, I  always deprecate seeking to redefine ordinary English words used in a statute. For the purposes of this judgment I merely comment that “significant” must mean something which signifies, something which is not insignificant, perhaps something which cannot be dismissed under the de minimis rule. One need not, in my judgment, restrict the construction of “significant” for the purposes of the instant case.’ 1 [1985] Crim LR 594.

15.124 In Reader’s Digest Limited v Williams 66% of participants did not pay, therefore the 33% who did may be thought too few to be ‘a substantial number of participants’ to bring them within the definition of a lottery given by Lord Widgery in that case.1 What would be a significant proportion must be more than what would be considered to be de minimis: in Imperial 799

Lotteries Tobacco Limited v A-G,2 although one per cent of participants did not pay for their scratch card, that was considered to be de minimis by the House of Lords. In R v Interactive Telephone Services (the Telemillions case)3 40% of the original participants failed the skill part and were not entered in the final draw. Under the GA 2005 that would be likely to be a sufficient proportion to satisfy s  14(5). How much lower than that would qualify as significant cannot accurately be set out, but it is tentatively suggested that a significant proportion would be less than a substantial proportion. 1 [1976] 1 WLR 1109; [1976] 3 All ER 737. Note, however, that ‘a substantial number’ does not necessarily mean ‘a substantial majority’. 2 [1981] AC 718. 3 See 15.129 for the facts of this case.

15.125 It will be easy to calculate how many participants failed to win a prize, but it is much more difficult to determine the proportion who wished to enter but were put off because of the skill etc requirement. With those who run regular competitions, a body of knowledge may build up as to the numbers who are likely to wish to participate in competitions and/or in competitions of a particular type. Comparisons can then be made and a level of expertise developed as to the level of skill that would put off otherwise interested participants.1 Market research may also be helpful. The Commission do not consider that it is sufficient to compare the numbers of entrants with eg the audience figures for a TV programme or the readership figures for a newspaper carrying the competition, but evidence would be needed of the propensity of that audience to enter such competitions.2 In practice, this may be very difficult to provide, not least because the composition of TV audiences and newspapers can change from day to day. In particular with TV programmes, weekly or daily audiences can change radically according to the day of the week and eg national events. Equally, in a website competition, the numbers who went to the site but did not enter the competition are not, in the Commission’s view, sufficient to show that a significant proportion of those who visited to enter were deterred from doing so.3 That however, must depend on the particular facts of the case. 1 And see the Commission’s ‘Prize competitions and free draws: The requirements of the Gambling Act 2005’ (December 2009), para 3.11. 2 Ibid, para 3.15. 3 Ibid, para 3.15.

Reasonable expectation 15.126 The s  14(5) test does not require an actual prevention of entry or of participants winning a prize, but that there should be a reasonable expectation of either of those. Obviously, if figures show that a significant proportion have actually been prevented or deterred (as the case may be), then that would be sufficient to prevent a prosecution.1 It is probable that it is only in the event that the numbers prevented or deterred do not amount to a significant proportion that a competition promoter will have to show that there was a reasonable expectation that the skill etc requirement would prevent or deter. This is an objective test, but what would amount to a reasonable expectation will obviously vary with the facts of the individual 800

Lotteries competition and circumstances. The Commission has indicated that it is likely to be satisfied about the reasonable expectation if the promoters can produce material demonstrating they have taken steps to estimate the likely proportion of potential or actual participants who are or will be eliminated by the skill etc element.2 So far as showing a reasonable expectation that a significant proportion has been deterred is concerned, the Commission considers that it will not be sufficient to compare the number of entrants with eg the TV programme’s audience figures or the newspaper’s readership figures, but that evidence will be needed of the propensity of the audience to enter such competitions.3 1 Gambling Commission: ‘Prize competitions and free draws: The requirements of the Gambling Act 2005’ (December 2009), para 3.14. 2 Ibid, paras 3.13–3.14. 3 Ibid, para 3.15.

15.127 The Commission expresses itself to be willing to accept that where steps have genuinely been taken to establish the way the competition will operate:1 ‘a misjudgement may be made on the first occasion that a particular type of competition is organised such that it transpires that only an insignificant proportion of participants, actual or prospective, are eliminated by the skill, judgment or knowledge element’. Further promotions of similar or the same types of competition following such evidence must be harder to defend, in the view of the Commission. However, there may be genuine reasons why, contrary to reasonable expectation, a competition did not succeed in shutting out a significant proportion of participants or prospective participants, and the promoters may well be able to produce satisfactory evidence of that. 1 Gambling Commission, ‘Prize competitions and free draws: The requirements of the Gambling Act 2005’ (December 2009), para 3.16.

The attitude of the Commission 15.128 Generally the Commission’s attitude is that it is up to the organisers to satisfy themselves that the competition will be compliant with the law. If the Commission has any doubt about the competition it will bring its concerns to the organiser’s attention as soon as they arise. The Commission does not appear to be in any hurry to mount prosecutions, but will pursue a course of asking organisers how they have come to the view that the competition is compliant. It suggests that suitable figures, whilst they do not have to be produced will, if produced, mean that the Commission would be unlikely to take the matter further. If no such figures are available, the Commission is still likely to be satisfied if the organisers can show that they have taken steps to estimate the likely proportions. Overall the Commission appears to be taking a pragmatic view of pursuing a dialogue with the organisers rather than rushing to prosecutions.1 1 See Gambling Commission, ‘Prize competitions and free draws: The requirements of the Gambling Act 2005’ (December 2009), paras 3.10 ff.

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Complex lotteries 15.129 Before the GA 2005, many competitions were found to be lotteries because the final determining factor was chance. The skill element may have ‘winnowed out’1 many competitors, but the skill element then became spent, leaving the final element to be pure chance. In those cases the actual determination of the prizes was pure chance and the scheme would be a lottery. A  good example of this, illustrating the different approach under the GA 2005 is R v Interactive Telephone Services2 (the Telemillions case). This was a case decided in the magistrates’ court in 1995. ITS was charged with distributing chances in an unlawful lottery and of conducting an unlawful competition. The case concerned a telephone phone-in scheme called ‘Telemillion’, for which money prizes were offered, the first prize being £250,000. On telephoning a premium rate telephone number the participant was asked a skill question on one of six topics. If the participant answered correctly, his name and address were taken over the telephone, and his name was automatically entered into a prize daw. The winners of the money prizes were chosen at random. One prize of £250,000 was offered each month, and there were a variety of other small money prizes. There were carefully drawn rules for the scheme. It was admitted in the case that the first part of the scheme did involve skill and that approximately 60% of the participants successfully answered the questions (and therefore went through to the prize draw). It was also admitted that the prize winners of the draw were chosen at random. The scheme was advertised on television and radio and in the newspapers. The prosecution argued that the reality of the ITS scheme was that people only entered the competition in the hope of winning the money prize, which could only be won if they successfully passed through both parts of the scheme, ie the skill part and the draw. Taking the scheme as a whole, 60% of the original entrants were entered in the draw. Therefore, on the facts of the case, in one month over 600,000 people were entered in a draw for one first prize of £250,000. It was accepted by the stipendary magistrate that, although some skill was required to answer the question posed, the skill part of the scheme merely had the effect of reducing the numbers of participants who entered the draw. This scheme was held to be a lottery. Entry was by premium rate telephone number.3 This competition would be likely now to be found to be a lawful competition. Although it would be a complex scheme because it had a series of processes to decide the allocation of the prizes (ie a skill part and a chance part), it would not satisfy the definition of complex lottery as the first of the processes relied on skill and it is likely that the 40% who were knocked out by that skill element would amount to a significant proportion of participants. 1 Per Lord Hailsham in News of the World v Friend [1973] 1 All ER 422 at 425a. 2 Unreported. 3 There was also a free entry route. It was a postal route and details were given in advertising both in the newspapers and on television, but they were in the small print and would be unlikely to satisfy the test in GA 2005, Sch 2, para 8.

15.130 Conversely, schemes which begin with chance and end with skill will be complex lotteries. In the past many such schemes were found to be lotteries by the court severing the scheme into two and holding the first part to be a lottery. 802

Lotteries 15.131 In DPP v Bradfute & Associates Ltd1 labels on tins of cat food had the words ‘Play 30,000 bingo. Your card is inside the label’ on the outside of the label. On the inside there was a provision for playing a bingo game and a square with 16 differently numbered boxes. Whether or not the purchaser won at bingo was a matter of pure chance, the label being a winning label or not, and the square with numbered boxes was a puzzle which required some small skill to solve. The Divisional Court severed the scheme in two, saying that the first part was a lottery. As a prize could be anything of value, including the right to obtain a sum of money subject to a test or to undertaking some service, the right obtained by acquiring a winning label was a prize in itself. Therefore the first part was a lottery. Clearly the court was unimpressed with the amount of skill required to solve the puzzle. There were suggestions that on realising the label was a winning label, a purchaser would rejoice because she knew that she had won a prize and, although the puzzle required some skill, she was confident that she could do it. Bradfute followed Kerslake v Knight,2 where holders of winning tickets drawn by lot had to exhibit in their windows for a specified period a card bearing the name of the newspaper. Lord Hewitt CJ found that the service was merely a colourable part of the scheme and therefore irrelevant, but that even if it had been substantial, he considered that it was clear that the chance of rendering the service for money was as much a prize as if a book or other article had been offered. He therefore severed off the first part of the scheme. 1 [1967] 2 QB 291, [1967] All ER 112, [1967] 2 WLR 459. This would not now be a lottery unless the price of the cat food (which was considered to be ‘payment’ for the lottery) reflected the opportunity to enter it (see GA 2005, Sch 2, para 2(c)). 2 [1925] 41 TLR 555.

15.132 These cases were followed in turn by A-G  v Healy,1 an Irish case, where the scheme was a mixture of a form of bingo where success was decided by chance and skill, ie a successful player did not become a prize winner without giving the proper answer to a skill question. The court found that, although the questions were comparatively simple, they did involve a degree of skill and knowledge to answer. Under the scheme, the question had to be answered by the successful participant, ie he could not sell it, nor could he get others to help him. However, still the court severed this scheme into two parts, as in Bradfute. 1 [1972] IR 393.

15.133 In all those cases the court was clearly very unimpressed with the level of skill or the service required and considered that the schemes were lotteries. In future, cases relying on such an initial chance element would be complex lotteries.1 1 Provided the other necessary elements are present. In the Bradfute case, payment for the tin of cat food was considered to be payment for the lottery. Under the provisions in GA 2005, Sch 2, para 2(c) (provided the price is not inflated due to the lottery) that would no longer be considered to be payment.

15.134 These provisions have caused some problems for many TV programmes following the ‘Call TV’ format. The typical format is that viewers will phone in on a premium rate telephone line for the opportunity 803

Lotteries to be able to answer the skill question live on TV to win a prize. Whether or not the caller gets through is a matter of pure chance, as the callers that are put through are chosen at random. Such schemes are likely now to be complex lotteries, as all the elements for a lottery are present. 15.135 In the past, severance was used by the court to find that certain schemes were lotteries even though there were skill elements. Under the GA 2005 lotteries are ‘arrangements’. There is no definition of an ‘arrangement’ under the Act, but it is clearly intended as a wide concept and, in view of the definition of a complex lottery, one which may involve several processes or stages. The determination of a lottery may therefore be sufficiently flexible in future for the courts not to need to sever on the one hand or be able to do so on the other. However, it is up to the courts to decide in the circumstances of the case what would comprise the arrangement. Normally, one would expect that that would cover all the different stages of a scheme and any rules. Matters such as advertising surrounding it may well be relevant.1 However, severance may still occur. 1 See eg Coles v Odhams Press Limited [1936] 1 KB 416, [1935] All ER Rep 598, 105 LJ KB 208.

Wholly on chance 15.136 Many schemes are a mixture of skill and chance. Coles v Odhams Press Limited1 concerned a crossword puzzle competition with a money prize published in an advertisement in a newspaper. Entry was by post with a fee to the newspaper office. The puzzle was so constructed that some clues could be satisfied by only one word having no alternative, while in other cases the clue suggested two or more different words which might not all be equally appropriate. The competition editor had prepared a test solution of the puzzle in advance and the prize was awarded to the competitor whose solution happened to correspond most closely to that of the competition editor, although, if all the solutions sent in were examined and compared on their merits, the solution of that competitor might not be found to be intrinsically the best. The Divisional Court held that the proprietor and the printer of the newspaper were guilty of printing and publishing an advertisement of a lottery. The court found that the advertisement was an invitation to persons to guess: ‘what will be the view of some unknown person who is called the competition editor as the correct answer to give to a question connected with the crossword puzzle. That seems to me to be plainly a lottery.’2 1 [1936] 1 KB 416, [1935] All ER Rep 598, 105 LJ KB 208. 2 [1936] 1 KB 416 at 429 per Humphreys J.

15.137 If this case were looked at today in the light of GA 2005, s 14(5), it would not necessarily be held to be a lottery. A crossword puzzle where a few of the clues could have more than one answer, but where most of them had only one answer, might well be a lawful prize competition if the clues with only one answer were sufficiently difficult that it could reasonably be expected to prevent a significant proportion of the entrants from receiving 804

Lotteries a prize. That is on the basis that there were only a few clues which relied totally on chance, ie the whim of the editor in choosing which ones would fit. 15.138 The old cases on competitions and lotteries may be useful as illustrations of the type of scheme that have been promulgated in the past, but obviously must be treated with caution because the GA 2005 provisions are somewhat different to the previous law. However, although on the face of it, GA  2005, s  14(5) gives a different test to the provisions of s  14(1) (b) of the LAA 1976, the end result in some cases may not be that different. A  competition in which success depends to a substantial degree on the exercise of skill is likely to be one in which a skill etc requirement can reasonably be expected to prevent a significant proportion of participants from receiving a prize. Therefore, if a scheme were to pass the level of skill test under the LAA  1976, the chances are that it would also pass the test under GA 2005, s 14(5). However, the mechanics are of course different and the new test is more specific and, as may be seen from the way the Gambling Commission is approaching it, more precise information may be required in order to prove compliance with the law.1 1 Gambling Commission, ‘Prize competitions and free draws: The requirements of the Gambling Act 2005’ (December 2009), para 3.

15.139 In Witty v World Service Limited1 the defendant was a publisher and printer of a weekly newspaper called The Winner, in which was published a picture puzzle competition. Participants had to study nine pictures representing the names of places in the United Kingdom, either as spelt or pronounced. More than one place could have been suggested by a picture, but the participants were told that upon examination of all the details in the picture they would find one name more fitting than the others. There were no sealed solutions to guess and each attempt was to be individually scrutinised. In the event of entries of equal merit, the prize would be equally divided. Eve J found that the competition was a legal prize competition in which success depended to a substantial degree on the exercise of skill. He considered that the solution required the exercise of considerable skill. It is suggested that the same conclusion would be reached under GA 2005, s 14(5). 1 [1936] Ch 303, [1935] All ER Rep 243.

15.140 In a scheme which requires so much skill to win a prize that the proposed participants of the scheme are shown to have had to guess the answers rather than to have used skill, and where it is obvious that they would do so, it is likely that the skill element could not be reasonably expected to prevent a significant proportion of participants from receiving a prize. Indeed, it is likely that it may not be found to be a genuine skill process but one of chance. If, however, research, eg upon the internet could produce the right answer, then the participants could still be using skill, provided it can reasonably be expected to prevent a significant proportion of them from receiving a prize.1 1 See the Gambling Commission’s comments in ‘Prize competitions and free draws: The requirements of the Gambling Act 2005’ (December 2009), para 3.6; and 15.103 and 15.117 above.

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Lotteries

Spot the ball competitions 15.141 In News of the World Limited v Friend1 a scheme, in which there was published each week in a newspaper a photograph of an instant in a football match portraying ‘a scene of vigorous movement and action’ from which the image of the ball was deleted, was found not to be an unlawful forecast competition within the meaning of s 47(1)(a)(i) of the Betting, Gaming and Lotteries Act 1963, the forerunner of LAA  1976, s  14(1)(a)(i). Entrants were given certain information about the match and were invited by examining the photograph and using this information to decide the spot where the ball was most likely to be and to indicate it by marking a cross on the picture. Each week a panel of football experts met and by the same process produced a ‘correct’ answer (which might not, of course, coincide with the true position of the deleted ball). The Divisional Court (following a previous Divisional Court decision on a similar scheme – Ladbroke (Football) Limited v Perrett)2 held the scheme to be a competition in which prizes were offered for forecasts of the result of a future event. It was said that since competitors were trying to predict the spot on the photograph which would coincide with that selected by the judges, they were trying to forecast the result of the panel’s consideration, which was an ‘event’. The House of Lords in allowing the appeal rejected this as an artificial approach. In truth, participants were merely exercising skill in the hope that they would produce an answer which would be the same as the judges’, much as competitors in a chess or bridge competition do. 1 [1973] 1 WLR 248, [1973] 1 All ER 422. See also 15.146 below. 2 [1971] 1 WLR 110.

15.142 In the News of the World case the prosecution only alleged that the  scheme was a forecast competition and in breach of s  47(1)(a)(i) of the Betting, Gaming and Lotteries Act 1963, the forerunner of s  14(1)(a) of the LAA 1976, not that it was an illegal competition because it did not require skill. At first instance, MacKenna J thought that the final result had depended upon chance. Lord Hailsham left the matter open, but Lord Reid was rather clearer. He thought it was a proper inference from the findings of fact in the case that the participant’s decision did depend upon skill. The findings of fact included the fact that the experts used their skill and judgment to decide where was the most likely position of the ball, taking into account a range of circumstances including the postures of the players, the directions in which they appeared to be looking and moving, the position of the referee, the teams involved, the individual players and the apparent weather conditions. The participants were also asked to use their skill and judgment to decide, from all the information in the pictures, where they thought the centre of the ball was most likely to be. 15.143 Following the News of the World case, spot the ball competitions became an accepted feature of the competition landscape. Although it might have been open to the authorities to bring a prosecution, in an appropriate case, based upon a breach of LAA  1976, s  14(1)(b), contending that the competition did not depend to a substantial degree on the exercise of skill, or on the basis that there was no skill and the arrangements were a lottery, no such prosecution was ever brought. 806

Lotteries 15.144 Interestingly, however, in Church, Vice Horseman v News Ltd,1 an Australian case, a spot the ball competition was found to be a lottery and not a competition. The court found that the determination of prizes was really a matter of chance in that particular scheme. Piper J considered that all the skill and knowledge that anyone could apply would only result in a judgment that the ball was within an area and that his final act in choosing the spot must not be an expression of judgment but a mere guess. The court considered that no judgment or reasoning could help one to decide where in the picture the centre of the ball was. As the final act of the competitor was a mere guess, the scheme was therefore a lottery. 1 [1933] SASR 70. It should be noted that in this case the court was concerned with the statutory definition of a lottery contained in the Lottery and Gaming Act 1970, s 4, which defines ‘lottery’ as ‘Any scheme or device for the sale or gain or disposition or distribution of … money … or of any share thereof depending upon or to be determined by … any chance whatsoever’.

15.145 News of the World is not authority for the proposition that all spot the ball competitions do involve sufficient skill so as not to have breached LAA 1976, s 14(1)(b) (let alone GA 2005, s 14(5)), particularly as the point was specifically left open by eg Lord Hailsham. However, if the competition is properly set up, there is no reason why, despite the Australian authority of Church, Vice Horseman v News Ltd, a spot the ball scheme should not be run as a legal prize competition, provided it can be shown that the skill requirement can reasonably be expected to prevent a significant number of competitors from winning a prize or from entering the competition. The Australian authority does highlight the point, however, that each case depends upon its own facts, and care should be taken by the promoters to point out the skill required to be used. In addition, promoters of spot the ball competitions should consider whether, on the particular facts of their case, GA 2005, s 11 may have application. 15.146 In 2013 spot the ball again came under judicial scrutiny in the case of ‘Spotting the Ball’ Partnership v Commissioners for Her Majesty’s Revenue and Customs.1 The main companies promoting spot the ball appealed a decision of the Commissioners for Revenue and Customs to the First-tier Tribunal. They wanted to reclaim £72.5 million of VAT paid by them on spot the ball from 1979 to 2006, on the basis that they had wrongly accounted for output VAT on the payments they received from the participants over that period, as the supplies were in fact exempt supplies because, they alleged, spot the ball was in fact gaming and therefore exempt under European and British VAT laws.2 The issue in the case therefore does not concern lotteries but is of interest because of the facts as described in the First-tier Tribunal,  Tax Chamber.3 There were ten different companies, all of whom promoted spot the ball during the relevant period and inevitably there were different rules and variations in the judging over that time. A common element of the wording on the coupons was that the participants should use ‘skill and judgment’ in order to decide ‘where the centre of the ball’ was, or was most likely to be, on the photograph. The rules generally conveyed that the participants were not to decide the actual position of the ball on the original photograph, but by reference to the opinion of a panel of experts as to which entry was most ‘skilful’ or closest to the panel’s opinion of the most logical position of 807

Lotteries the ball. The way in which participants marked on the coupons changed, in that originally they would mark in ink or biro, but from about 1994 the operators made available various patches or stickers in different sizes, thereby permitting participants simply to stick up to 1,000 small crosses on very easily. Rubber stamps were also made available to do the same thing. 1 [2013] UKFTT 210(TC). 2 For the full facts of this case see 2.200–2.201. The case was appealed to the Upper-tier Tribunal by the Commissioners for Revenue and Customs: see [2014] UKUT 0398 (TCC) and finally to the Court of Appeal by the claimants: [2016] EWCA Civ 436. For a discussion of these appeals see 2.202–2.211. 3 See FTT decision, para 22.

15.147 Once the panel had made the decision each week and marked the position of the ball on a blank coupon, a pinhole was made in the coupon on that spot and a final mark using a small joystick, put on a hairline cross where a member of management, using a magnifying lens, judged was the exact centre of the panel’s chosen spot. Precise co-ordinates for the chosen spot were then chosen. Various other processes were used over the years but ultimately after 2002, computers were employed. The same procedures of the panel selecting the location for the centre of the ball and its co-ordinates being identified were used, but thereafter computers decided the closest entries. The computers effectively divided each coupon mathematically into about 31.5 million unique spots. Determining the exact co-ordinates was thereafter done by the software, and the distance between each cross and the centre of the ball was considered in pixels. In a sample four weeks, the distances between the panel’s centre of the ball and the nearest cross were examined. In one case, the nearest cross was 0.030 pixels away (approximately 0.003mm) and the furthest winning cross was 0.153 pixels or 0.013mm away. On one occasion a winning cross in 2011 had its centre 0.0057mm from the panel’s centre of the ball and there were 56 coupons with crosses, the centres of which were less than about 0.0595mm from the panel’s centre of the ball. A piece of ordinary paper was declared to be approximately 0.1mm thick. The process itself was not without various inaccuracies inherent in the system. For example, in the process post2002, the scanning process was subject to an error of up to three pixels, which in the context was declared to be a huge potential error. Therefore it has to be open to question whether, had the issue been were the competitions lotteries or lawful competitions, they would in fact have been found to be lotteries, particularly pre-GA 2005. Interestingly, in a sample occasion taken from 2011, approximately one-quarter of all the coupons submitted had a centre of the cross within an area of 1.524mm by 1.524mm from the centre of the panel’s ball. That does not really assist in deciding whether the skill and judgment requirement prevented a significant proportion of persons from receiving a prize.1 1 See GA 2005, s 14(5)(a).

Tie-breakers 15.148 In the past, where there was a real risk that the final factor determining which participant received a prize was chance, and where, therefore, there was a real possibility that the scheme would be held to be a lottery, tie-breakers 808

Lotteries became popular. Typically one would see this in competitions where several questions were posed which required skill to answer. The questions were generally of a level of skill which resulted in there being several, possibly a large number of participants who would answer them correctly. To determine the final winner a tie-breaker was required, usually along the lines of ‘say in no more than 10 words why Bonzo’s dog food is the best food to feed your dog and keep him healthy’. Provided the tie-breakers sent in were properly judged to an advertised standard, they did not make a legal prize competition illegal. In the example quoted, the criteria against which the tie-breaker would be judged (both of which would require skill and judgment) were not only the reasons why Bonzo’s was the best food to feed the dog to keep him healthy, but also the encapsulating of the reasons into 10 words. The scheme might mention various matters to be taken into account by participants. Tie-breakers were necessary to ensure that there was a final skill-based selection of winners in cases where skill was used in the initial stages of the competition but where the skill left a substantial number of participants amongst whom the prize or prizes had to be allocated, and also in cases where there was a substantial number of consolation prizes and the promoter needed to make clear that the distribution of the consolation prizes was not based upon pure chance. The problems involved in the awarding of consolation prizes are illustrated by the following cases. 15.149 In Scott v DPP1 a newspaper published an advertisement for a competition for money prizes. Each competitor was to select one of a number of given words and compose a short sentence which defined or illustrated the words selected, and the initial letter of each word in the sentence had to be a letter occurring in the selected word. All the sentences reaching the editor of the newspaper were to receive careful consideration, and the editor’s decision was to be final. A number of prizes were offered, consisting of first, second, third and fourth prizes of substantial sums of money, together with 200 prizes of £1 and 100 prizes of 10/-. The Divisional Court found that the scheme was not a lottery. The prosecution had argued that the literary merit involved was of such a low order that it was not possible to say that one answer was ‘better’ (ie more appropriate and more happily and neatly put together) than another. Lush J was not impressed by this. He did not see how the poor degree of literary merit converted the competition into a scheme for distributing money by mere chance. Nor did he see how the absence or presence of a standard could convert the adjudication into a lottery or not a lottery according to whether the merit was of a low or high order. ‘At all events, it appears to me that a decision according to honest taste or fancy is not a decision by chance and nothing else, however justly one may belittle the class or degree of merit. The distinction is a very plain one between a person who buys a ticket for a lottery and a person who competes even in a scheme like this. Nothing that the former does or can do can affect the result. He only awaits the result of the drawing of lots. The other invents an answer which he thinks most likely to appeal to the taste or fancy of the editor; and if the competition is honestly conducted it is what he does that determines the result.’2 1 [1914] 2 KB 868. 2 At 877.

809

Lotteries 15.150 Although the rules did not state that the prizes would be given for the best answers, Atkin J looked at the offer as a whole and considered that the offer was intended to be, and would reasonably be understood to be, an offer of prizes for the best answers. ‘The quality of goodness would be neatness, appropriateness, truth, humour; the test of merit would be the individual taste of the editor.’1 1 [1914] 2 KB 868 at 880.

15.151 Arguments were put forward that in fact, as there were so many entries and only a comparatively short time in which to decide the winner, it must have been planned that the winners would in reality have been decided by chance rather than by proper judgment. That was not accepted by the court in that particular case. However, if it were obvious that a scheme were going to be decided by chance, or if in fact it were decided by chance and not by judging it on the basis of merit, then the skill requirement might not be operating to prevent any participants from receiving a prize, nor could it reasonably be expected to do so. Furthermore, if there were many prizes offered, it might become too difficult to distinguish between the entrants. As Channell J said,1 although he had no doubt that the award of first, second and third prizes did not make the competition a lottery, he had much more doubt with regard to the 200 prizes of £1 and the 100 prizes of 10s: ‘These are very like the “consolation” prizes which Fletcher Moulton LJ much relied on in his judgment in Blyth v Hulton, but those were boldly stated to be “consolation” prizes, which does not appear to oblige the judge to decide by his idea of merit at all and I think that the editor, who was the judge there, might according to the terms, and very likely would, give a consolation prize to a person who had frequently competed without success. Here the terms of this competition suggest that the editor can distinguish between the 203rd and 204th competitions in order of merit, and between the 303rd and 304th. I suspect that long before he got so far in placing his competitors he would be driven by what one of my brothers called the “inanity” of the sentences to decide by chance or even by favouritism.’2 1 [1914] 2 KB 868 at 882. 2 At 882. See also Smith’s Advertising Agency v Leeds Laboratory Co [1910] 26 TLR 335.

15.152 Blyth v Hulton & Co Ltd1 was a limerick competition run through a journal. There was a first prize of £300 for the best last line of a limerick. Other prizes were offered, including 100 consolation prizes. The competition specified that competitors should complete the last line of the limerick with the line that seemed to be the smartest and most appropriate completion of the limerick. The journal stated that every coupon would be carefully examined by competent staff and that every entry would be judged entirely on its merits. The prize winners were to be announced one week later. Despite what was said in the journal, the Court of Appeal found that the scheme was a lottery, as it was impossible for all the entries to be judged on their merit because there were too many entries to be judged in the one week 810

Lotteries available before the prize winners were to be announced. Therefore, in fact it was impossible that the editor could really make his selection of the best lines according to any real comparison of the lines. The circumstances made it impossible for the entries to be judged by the editor using his ‘best skill and discretion’. Indeed, it must have been understood by the participants that the editor would not choose the winners on merit but according to his own ‘fancy or arbitrary rule’. 1 [1908] 72 JP 401, 24 TLR 719, 62 Sol Jo 599, CA.

15.153 A  further point was that there were consolation prizes. Fletcher Moulton LJ considered that the consolation prizes made the scheme a lottery: ‘Now, in my opinion, that is not a promise that those sovereigns will be sent according to any scheme of decision as to the literary merits of the lines sent in – it is a statement that if you go in for the competition you have a chance of getting one of the 100 prizes of £1 each, which are to be given in no specified way at all – by caprice or by chance – if you are lucky enough to get one, you get one; and I think that every person who took a coupon and entered into this competition, among other things entered into a scheme whereby he got a chance of getting one of these 100 sovereigns, quite apart from any question of merit at all.’1 1 [1908] 72 JP 401 at 403.

15.154 In another limerick competition, Smith’s Advertising Agency v Leeds Laboratory Co,1 prizes were not only offered for the best line but there were also consolation prizes to be awarded, and every competitor who sent in a line by a certain date was to receive a prize worth a guinea. The Court of Appeal had no difficulty in saying that the scheme was not a competition but a lottery. Clearly the Court of Appeal thought that the lines would be judged by the arbitrary will of the editor and not on merit. Blyth v Hulton was followed. 1 [1910] 26 TLR 335.

15.155 In Blyth v Hulton1 and Smith’s Advertising Agency v Leeds Laboratory2 the court clearly considered that there was no active skill requirement at all, and that the competitions were going to be decided purely by chance. Such schemes would still be lotteries under the GA  2005, as there would be no operative skill requirement and therefore no skill requirement that could reasonably be expected to prevent participants from receiving a prize. Despite that, it may be that promoters would be able to provide persuasive evidence that a significant proportion of prospective entrants were put off entering because of the supposed skill requirement. However, the better view is that s  14(5) refers to ‘a process which requires persons to exercise skill or judgment or to display knowledge’, and this means that it must be a genuine skill etc process and not a mere sham, as was the situation in the Blyth v Hulton and Smith’s Advertising Agency cases. 1 [1908] 72 JP 401, 24 TLR 719, 62 Sol Jo 599, CA. 2 [1910] 26 TLR 335.

811

Lotteries 15.156 Tie-breakers were a useful tool to prevent an otherwise skill competition from being found to be a lottery because the final determining process was one of chance. Under the GA 2005 that would no longer make a skill competition into a lottery, because of the provisions of s 14(3)(d), which makes it clear that, provided the first of a series of processes does not rely wholly on chance, the scheme will not be a complex lottery even if succeeding processes do rely on chance. The cases are, however, useful illustrations of ‘sham’ skill, although some might be illustrations of what could be used in the early stages of a scheme to prevent a significant proportion of possible entrants from participating in it.

Snowball, pyramid, chain-gift and similar schemes 15.157 Before the GA  2005, it was possible to identify a type of ‘lottery’ which represented an extension of the classic type of lottery. This is the ‘snowball’, ‘pyramid’, ‘chain-letter’ or ‘money circulation’ type of scheme, which in essence functions as follows. A promoter, P, invites members of the public to join the scheme and pay money to do so. Assume that a member of the public, A, joins and pays. A’s joining fee will be shared out among P and other existing members of the scheme in accordance with its rules. In order to recover his money and make a profit, A must then get other people to join the scheme. Assume that A persuades A1 and A2 to join the scheme and pay money. A1’s and A2’s joining fee will be shared out, some to A, some to P and some to other members of the scheme. In order to recoup his outlay and make a profit, A1 then gets A1a and A1b to join. Their joining fees are then shared out among A1, A, and P. So it continues down the line, with each new rank of members persuading others to join on the basis that their joining fees will be transmitted up the line and shared out among other members in the scheme. The theoretical justification for including such schemes under the description of ‘lotteries’ was that they involve the allocation of money to members of the scheme by chance, in that members up the line exercise no skill to secure the payments made to them. Whether such payments are made depends upon the success of members down the line in recruiting new members, and this is, so far as the benefiting members are concerned, a matter of chance.1 1 Chain gift schemes are dealt with by GA 2005, s 43.

15.158 Although such schemes involved an extension of the lottery concept at common law, it is nonetheless possible to detect readily the four characteristics noted in connection with the five types of lotteries in paras 15.46–15.54 above. First, the promoter takes no risk in the gambling sense and only a modest commercial risk. Provided takings from people joining the scheme cover the expenses of setting it up, he cannot fail to make a profit. He is under no commitment to pay money to anybody until it has been collected in from new members’ joining fees. Second, in the case of participants, it is possible to identify some degree of conflict of interests. Given that there will be a limited number of people who can be persuaded to join the scheme, then each member is in competition with all the others to try to ensure that new members join his branch of the scheme rather than that of another member. Only thus can the new member’s joining fee, and that of any new members 812

Lotteries or subgroups of new members procured by him to join generate profits for that member. So there is a degree of competition between the participants. As to the third point, the scheme is clearly set up as one involving multiparticipation, and it can only generate profits if it succeeds in attracting large numbers of participants. Fourth and finally, although such schemes involve interpreting the idea of ‘the allocation’ of ‘prizes’ rather broadly, it is possible to see how money is distributed among participants. A  series of cases established that schemes of this type could amount to lotteries at common law and were therefore unlawful under the lotteries legislation, most recently under the LAA 1976. The earliest case was a decision of the High Court of Justiciary, Barnes v Strathern,1 where promoters of the ‘British Bonus Bonds’ scheme published ‘£150 Bonds’ in a sequence of six colours, white, yellow, rose, green, blue and gold. They guaranteed to pay the holder of any bond £150 provided the rules of the scheme were complied with. A  participant (P1) was to purchase a white bond from the promoters at a price of 1/-. He would thereby become entitled to purchase four other bonds in the next colour category at a price of 3/-. These four he was to sell at 1/- each to four new participants (P2(a), (b), (c) and (d)) thus recouping his outlay of 4/-. Each of the four new participants was entitled to purchase from the promoter four bonds in the next colour category at a price of 3/- and to sell these to four new participants at 1/- each, thus generating in all 16 participants. This process was repeated until the final colour category was reached, in which there would be 4,096 participants. Then, and only then, would P1 be entitled to receive £150. The High Court of Justiciary held that the scheme was a lottery, since the likelihood of P1 receiving a price depended on the chance that each of the necessary sub-purchases and sales would be effected and this, so far as P1 was concerned, was a matter of chance. However, in giving judgment the court noted that the scheme differed from a classic lottery. Lord Clyde noted that: ‘… the particular scheme with which we are here concerned presents characteristics which prevent it from falling – obviously and at once – into any of the classes of lottery which have hitherto been the subject of judicial determination.’ Lord Blackburn noted that: ‘The word “lottery” as defined in the Act of 1823, by which “lotteries” were rendered illegal, has been so construed in a long series of decisions as to include many schemes which cannot have been originally within the purview of the Act and which hardly fall within a strict construction of the definition.’ Despite these observations the court was prepared to hold that the scheme was a lottery. 1 (1929) SLT 37.

15.159 The reasoning in Barnes v Strathern was applied by the English court in DPP  v Phillips,1 and subsequent to that the principle has been applied to a number of snowball, chain letter and pyramid schemes, including a multi-level snowball or money circulation scheme considered by the Court 813

Lotteries of Appeal and held to be a lottery in the influential modern decision In re Senator Hanseatische Verwaltungsgesellschaft mbH,2 where participants paid a substantial fee to join the scheme and sought to recoup their outlay and make a profit by introducing other members to the scheme, thereby earning commission on those members who they caused to join and members which those members themselves subsequently caused to join.3 1 [1935] 1 KB 391. 2 [1997] 1 WLR 515. 3 For other cases on ‘snowball’ and ‘chain-letter’ schemes see Atkinson v Murrell [1973] AC 289, HL; Re Koscot Interplanetary (UK) Ltd (1972) unreported; Secretary of State v Global Pioneers Ltd (2 November 1994, unreported); Re Senator Hanseatische Verwaltungsgesellschaft mbH and others [1996] 2 BCLC 562, Sir Richard Scott V-C; Re Senator Hanseatische Verwaltungsgesellschaft mbH and others [1997] 1  WLR  515; Re Titan International LLC (9 August 1996, unreported); One Life Ltd v Roy [1996] 2  BCLC  608; Re Vanilla Accumulations Ltd Ch D  (1998) Times, 24  February; Re Guardearly Ltd Ch D (Companies Court) 14 March 1997; Re Delfin International (SA) Ltd [2001]  BCLC  71; Re Alpha Club [2002] 2  BCLC  612; Re GLI (Galaxy Lifestyles) Ltd [2005]  All ER (D) 104 (Aug); In the matter of Treasure Traders Corporation Ltd [2005] EWHC 2774 (Ch).

15.160 Importantly, the GA 2005 contains a specific section (s 43) providing for chain gift schemes. Under s 43 a person commits an offence if he either invites another to join a chain gift scheme, or knowingly participates in the promotion, administration or management of one. An arrangement is a ‘chain-gift’ scheme if in order to participate in the arrangement a person must make a payment, ie a joining fee, to one or more of the other participants and every person who does participate is required or invited to invite others to participate and is encouraged to believe he will receive the joining fees of the other participants, or at least part of them, that will be more than the joining fee he has paid.1 ‘Payment’ has a specific meaning as a payment of money or money’s worth, but does not include providing goods or services, and it does not matter whether the payment is made directly or via a manager or administrator of the scheme.2 The definition of the expression ‘chain-gift scheme’ appears to be an attempt to put into statutory form the essential elements of snowball, pyramid and chain-gifting schemes. In the light of this specific provision, it is doubtful whether schemes of this type should be treated as falling within the statutory definition of ‘lottery’. The following considerations would suggest that they should not (but, of course, each case will have to be considered on its own facts). 1 GA 2005, s 43(2). 2 GA 2005, s 43(3).

15.161 First, although the definition of ‘prize’ in s 14 is wide and ‘includes any money, articles or services whether or not they are described as a prize and whether or not they consist of money paid by members of the class among whom the prize is allocated’, it is suggested that there has always been a degree of artificiality in treating the payments made in schemes of the snowball type as ‘prizes’. As reference to the Barnes v Strathern case has shown, the judges accepted that the snowball scheme considered in that case did not obviously fall within ordinary conceptions of a lottery. Similarly, in the Re Senator Hanseatische case, at first instance Sir Richard Scott commented that the scheme: 814

Lotteries ‘… is not what I, basing myself simply on the natural meaning of the word “lottery”, would have understood to be a lottery. Of course, whether the authority of decided cases requires a different and wider view to be taken is another question’.1 Subsequently, having considered the cases which laid down the standard meaning of ‘lottery’ at common law, he noted that: ‘If that were where the law rested I would have no hesitation in finding that the Titan Scheme was not, in law, a lottery’. He went on, however, to note that the line of cases beginning with Barnes v Strathern had brought schemes of the snowball type within the common law definition of ‘lottery’. These cases, and in particular DPP  v Phillips, led him to conclude that the Titan Scheme was a lottery at common law, although he commented that without those cases he would probably have reached a different conclusion. He said: ‘If I, without those cases having been placed before me, had been invited to conclude on the Phillips facts whether the scheme with which the court was there concerned was a lottery, I am rather doubtful that I would have concluded that it was. I think I probably would have concluded that it was not. I do not see any particular reason why the scope of the lottery legislation should be extended beyond the competition type of cases, for which the legislation was plainly intended.’2 The Court of Appeal, whilst upholding the finding that the scheme was a lottery, also noted that the snowball scheme involved was not like a typical lottery. Millett LJ said: ‘…  It most closely resembles a chain-letter, versions of which have consistently been held to be lotteries. It has little in common with the traditional form of lottery in which participants pay nominal sums to buy tickets enabling them to take part in a draw for prizes. In the Titan scheme they paid substantial sums to take part, and thus may be said to buy tickets. But there is no draw and there are no prizes, at least in the traditional sense.’3 It is suggested that the policy reasons which may have encouraged the courts to extend the concept of lottery at common law to cover schemes of the snowball type no longer apply where the Act provides a definition of ‘chaingift scheme’ and a specific criminal sanction which is clearly designed to apply to schemes of this type. 1 Re Senator Hanseatische Verwaltungsgesellschaft mbH [1996] 2 BCLC 562 at 585. 2 [1996] 2 BCLC at 593. 3 [1997] 1 WLR at 524B.

15.162 Second, in the case of some schemes of the snowball type it may be possible to argue that there is a degree of skill and effort to be exercised in encouraging other participants to join the scheme. In a number of the snowball cases, attempts have been made to persuade the courts that the schemes involved were not lotteries, because sufficient skill was required in effecting introductions to the scheme to prevent the arrangements being a lottery. These arguments have on the whole failed on the facts. However, in 815

Lotteries Re Senator Hanseatische Saville LJ, whilst rejecting the argument that on the particular facts sufficient skill was involved, noted that it might plausibly be argued that some skill was involved. He said (page 599): ‘True it may be said that a given member might be able, by the exercise of his own skill, to select and persuade others to attend a recruitment meeting and (if they were acceptable) to induce them to become a member. By doing so that person will recover £450 or (after the second success) £1,220 from each, but the scheme does not stop there, for once a member becomes a senior partner there is a chance that other and potentially much greater glittering prizes will come (if at all) from further down “the family tree”. Whether or not they do depends on the success or failure of others down the line.’ For these reasons he concluded that the scheme was a lottery. However, under s  14 it might be possible to argue on the facts that a snowball type scheme, even if it could potentially be regarded as a lottery within s 14, was nonetheless to be treated as a potentially complex lottery, but that the first of the processes (ie encouraging others to join the scheme) did not rely wholly on chance. For this additional reason, on the particular facts a scheme might fall outside s 14. Note that the definition of ‘chain-gift scheme’ in s 43 would apply to a scheme of this type even though participants might use skill to invite others to join in it. Snowball, pyramid and chain-gift schemes may be in breach of the (Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/ 1277), which make certain commercial practices, which are defined as unfair in the Regulations, offences. One of the described unfair commercial practices is: ‘Establishing, operating or promoting a pyramid promotional scheme where a consumer gives consideration for the opportunity to receive compensation that is derived primarily from the introduction of other consumers into the scheme rather than from the sale or consumption of products.’1 1 See the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277), regs 3, 8 and Sch 1, para 14.

THE PERMITTED LOTTERIES 15.163 In order to avoid being prosecuted for promoting or facilitating a lottery,1 either the lottery must be an exempt lottery or it must be promoted by a person who has a lottery operating licence, or be promoted or facilitated under the auspices of one. Operating licences may only be issued to noncommercial societies, local authorities or external lottery managers.2 In this way parliament has kept control over lotteries and fulfils its desire to keep lotteries either small scale, as in the exempt lotteries, or for non-commercial purposes only. The categories of lottery that are therefore permitted by the GA 2005 are: •

816

A non-commercial society lottery: this is a public lottery promoted by a society conducted for specified good causes, not for private gain,

Lotteries and run under an operating licence issued by the Commission and in accordance with its terms. •

A  local lottery: this is a public lottery promoted by a local authority and run under an operating licence issued by the Commission and in accordance with its terms.

•

Exempt Lotteries: (a) Small society lotteries; these must be registered with the relevant local authority. (b) Incidental non-commercial lotteries. (c) Private lotteries, ie  private society lotteries, work lotteries, and residents lotteries. (d) Customer lotteries.

In addition, lotteries which are part of the National Lottery, rendered lawful by the National Lottery Act 1993, are also lawful under their own provisions.3 1 See GA 2005, ss 258 and 259. 2 See s 98. 3 The National Lottery has its own regime and it is a defence to the charges both of promoting and facilitating a lottery that the lottery is part of the National Lottery. See GA 2005, ss 258 and 259. See Chapter 16 on the National Lottery.

15.164 Furthermore, by the Finance Act 1956, s 43, the legislation relating to lotteries is disapplied from Premium Savings Bonds, a form of security issued by HM  Treasury in which interest is awarded randomly by means of weekly and monthly draws. In the absence of this specific provision, premium savings bonds would almost certainly infringe the provisions of the GA 2005. The purchase price of a Premium Bond is repayable in full on application to the relevant government office, and it is this feature which brings them within the provisions of the Finance Act 1956, s 43 and enables them to be promoted even though they are a form of lottery. 15.165 A  brief description of the history of legislative control is set out below. Unfortunately, legislation designed to regulate lotteries has come into existence in a piecemeal fashion, often in response to contemporary developments. In so far as there have been any consistent policies underlying it, it is necessary to distinguish the position during the period prior to the enactment of the National Lottery Act in 1993 from the position following its enactment, for the Act reflects a fundamental change in attitudes. Prior to 1993 it could be said that the legislation controlling lotteries had three principal objectives, namely to control crime and ensure that participants would be treated honestly; to avoid the stimulation of demand for gambling, with its attendant risks of damaging social consequences; and to ensure that lotteries should be operated, not for personal profit, but for the public benefit, especially for charitable, sporting or cultural purposes. It is possible to detect in addition a fourth characteristic underlying the pre-1993 legislation, namely an intention to keep lotteries within strict financial limits, both as regards the value of tickets that could be sold, and as regards the value of the prizes. It would be academic to debate whether this fourth characteristic was 817

Lotteries regarded as a desirable end in itself, or was regarded as a means of achieving the first three objectives. 15.166 This threefold rationale for lottery legislation prior to the enactment of the National Lottery Act 1993 was given to the ECJ by the High Court as referring court in Customs and Excise Commissioners v Schindler.1 1 [1994] QB 610 at 668.

15.167 It is clear that the enactment of the National Lottery Act 1993 effectively marked an abandonment of the second and fourth objectives, at least so far as any lotteries comprising the National Lottery are concerned. The NLA  1993, s  4, whilst providing that the Secretary of State and the Gambling Commission are under a duty to ensure that the National Lottery is run with all due propriety and that the interests of participants are protected, nonetheless also puts upon them the duty to do their best to ensure that the net proceeds of the National Lottery are as great as possible. Consistently with this approach, the National Lottery is permitted to advertise extensively, and to offer prizes of an order of magnitude not seen since the state lotteries of the eighteenth and nineteenth centuries. At the same time the monetary limits on societies’ and local lotteries were relaxed to enable them to offer larger prizes and consequentially to attract more income. The GA has relaxed the limits further – rollovers are now permitted and no longer are specific monetary limits put on ticket prices. (The previous limit of £2 per ticket has gone.) The National Lottery has its own legislation and is still not regulated by the general law, now in the GA 2005. That Act repeats the gist of the previous law (outside the National Lottery) in as much as the three licensing objectives set out in s 1 of GA 2005 reproduce the principles of controlling crime, ensuring participants are treated honestly and gambling must be conducted openly, and protecting children and vulnerable persons. The Act also ensures that lotteries are not operated for private or commercial gain but for the public benefit. Those previous principles have been expanded, as participants must now be treated ‘fairly’ as well as honestly, and the objective to protect the vulnerable is clearly set out, and not just dealt with by the avoidance of stimulating demand. There have always been provisions to protect children.1 1 Amongst other matters, setting age limits for the various types of gambling and preventing those under age from having access to gambling, or its advertising.

15.168 For a sketch of the law governing lotteries before the nineteenth century the reader is referred to paras 15.1–15.23. As has been noted, the first incursion into the provisions of the Lotteries Act 1823 declaring all lotteries unlawful was the Art Unions Act 1846 (now repealed), which made lawful voluntary associations formed for the purpose of distributing works of art by chance or otherwise among their members. 15.169 The Royal Commission of 1932–33 recommended that a modest extension of permission should be granted to allow the running of ‘small lotteries’, ie public lotteries on a modest scale as incidental entertainments at such functions as bazaars, fêtes and sales of work, subject to control over the size of prizes and subject to the proceeds being devoted to purposes other than private gain. It also recommended that private lotteries should be 818

Lotteries permitted, provided the profits of any such lottery were devoted either to the provision of prizes or the purposes of the society which promoted it. These recommendations were embodied in ss 23 and 24 of the Betting and Lotteries Act 1934 (‘BLA 1934’). BLA 1934, s 23 (‘small lotteries’) was the forerunner of GA 2005, Sch 11, para 1 (‘incidental non-commercial lotteries’), and BLA, s 24 (private lotteries) was the forerunner of GA  2005, Sch  11, paras  10 and 11 (‘private society and work lotteries’). 15.170 The BLA 1934 provided that private lotteries could be run by societies which were ‘established and conducted’ for purposes which were not ‘connected with’ gaming, betting or lotteries. In reliance on this exemption a number of football club supporters’ clubs began to promote lotteries as part of their fund-raising activities. In a pair of cases decided in 1955 (see 15.281–15.282) the Divisional Court held that they did not fall within the exemption. Since one of the purposes of such clubs was to raise money for the teams they supported, and since they ran lotteries for that purpose, they were ‘conducted for purposes connected with a lottery’. The lotteries were therefore illegal. 15.171 The Small Lotteries and Gaming Act 1956 (‘SLGA 1956’) (the statutory forerunner of LAA  1976, s  5)1 was in part enacted to provide a further exemption pursuant to which such clubs could continue to promote lotteries (see Payne v Bradley).2 It permitted societies established and conducted for charitable purposes or for participation in sports, games, and cultural activities, or for other purposes not connected with commerce or private gain to register with their local authorities in order to run public lotteries in which the size of prizes was controlled. 1 Now s 19 of GA 2005. 2 [1962] AC 343.

15.172 In Payne v Bradley1 the House of Lords drastically reduced the permissive scope of the SLGA 1956 by holding that a private members’ club, in devoting the proceeds of a lottery to its general purposes for the benefit of its members, was devoting them to purposes of ‘private gain’, as each member benefited as an individual. To reverse the effect of this decision, the Lotteries and Gaming Act 1962 introduced a statutory restriction on the meaning of ‘private gain’, the essence of which is now contained in GA 2005, s 19. 1 [1962] AC 343.

15.173 The Betting and Gaming Act 1960 (‘BGA 1960’) made lawful certain forms of gaming subject to the controls which it laid down. Since certain forms of lottery also qualified as gaming within the definition contained in the BGA 1960, it was provided that no lottery should be rendered unlawful by the BLA 1934 if it were also gaming which was being lawfully conducted under the BGA 1960.1 1 See the BGA 1960, s 21, which was the forerunner of LAA 1976, ss 1 and 2(2).

15.174 The provisions were consolidated in the Betting, Gaming and Lotteries Act 1963 (‘BGLA  1963’). The provisions of that Act which related 819

Lotteries to gaming were repealed and replaced by the Gaming Act 1968, which re-enacted the exemption preserving the legality of lotteries which are also gaming. Under GA  2005, s  17, for activities which are both gaming and a lottery, certain activities are treated as gaming and others as lotteries. 15.175 By the Lotteries Act 1975 local authorities were empowered to run public lotteries, subject to controls which were designed to prevent them from enjoying any competitive advantages over lotteries which were being run by registered societies. The BGLA 1963 and the Lotteries Act 1975 were consolidated in the LAA 1976, now repealed and replaced by the GA 2005.1 1 See GA 2005, Sch 17.

15.176 The National Lottery Act 1993, passed on 21  October 1993, made provision for the setting up of a National Lottery which was launched in November 1994.1 1 See Chapter 16 on the National Lottery.

NON-COMMERCIAL SOCIETY LOTTERIES Society lotteries 15.177 The 2005 Act allows society lotteries to be promoted lawfully. There are two types of lawful society lottery: large ones, which will require an operating licence from the Commission, and small society lotteries, which are exempt from requiring an operating licence, and may be promoted provided the conditions set out in GA 2005, Sch 11, Pt 4 are fulfilled, which include registration with the relevant local authority. 15.178 In each case the lottery must be promoted to the public on behalf of a non-commercial society. A society is non-commercial if it is established and conducted for one or more of the following purposes: (a) for charitable purposes; (b) for the purpose of enabling participation in, or of supporting, sport, athletics or a cultural activity; or (c)

for any other non-commercial purpose other than that of private gain.1

The purposes are only charitable in England and Wales if the purposes are exclusively charitable according to English and Welsh law; and in Scotland ‘charitable purposes’ has the same meaning as in the Income Tax Acts.2 1 See GA 2005, s 19. 2 GA 2005, s 19(2).

15.179 This form of lawful lottery was introduced by the Small Lotteries and Gaming Act 1956 and was in part designed to confer legal status upon lotteries run by football supporters’ clubs which had, until then, been run as private lotteries, but which were threatened by the decision of the Divisional Court in Maynard v Williams.1 However, it went beyond what was needed to 820

Lotteries reverse the effect of that decision and it extended the scope of lotteries which certain societies could promote by allowing them to run public lotteries. 1 [1955] 1 WLR 54, [1955] 1 All ER 81 (see 15.271 (private lotteries) below for the facts).

15.180 These lotteries were continued by the LAA 1976, ss 5–13 and Schs 1, 1A, 2 and 2A as amended by the National Lottery Act 1993, which relaxed the monetary limits on society lotteries to enable them to offer larger prizes, and to simplify the rules governing them. The Gaming Board published a booklet ‘Lotteries and The Law’,1 which dealt, amongst other things, with societies’ lotteries and local lotteries. Regulations were also found in the Lotteries Regulations 1993 (SI 1993/3223). 1 The Gambling Commission has now published a series of advice notes on society and local lotteries including: ‘Promoting Society and Local Authority Lotteries. Advice for Society and Local Authority Lotteries which require a licence or registration’ in September 2014; ‘Lottery guidance for charity trading companies and sporting clubs: Gambling Act 2005’ in December 2007; ‘External Lottery Managers. The main requirements of the Gambling Act 2005, licence conditions and their role in promoting society and local authority lotteries’ in September 2014 and guidance may also be found in the Commission’s Guidance to Licensing Authorities (5th edn, September 2015), para 34.1 ff.

15.181 The provisions relating to small society lotteries have largely, but not entirely, been reproduced in the 2005 Act, albeit not always in the same language. As the provisions are generally similar, it is likely that the previous law will remain of assistance.

Society 15.182 ‘Society’ is defined by GA  2005, s  353(1) as including a branch or section of the society. Under LAA  1976, s  23 it was defined as including ‘any club, institution, organisation or association of persons, by whatever name called, and any separate branch or section of such a club, institution, organisation or association’. Although that has not been reproduced in its entirety in the 2005 Act, it does give an illustration of what may be a society, as the new provision is not limited, but is inclusive. 15.183 The effect of treating each branch or section of a society as a separate society in its own right is to permit each such branch or section to seek individual registration or an operating licence for the purpose of running its own lotteries. It should, however, be noted that before such branch or section is registered or an operating licence is granted, it will be necessary for the registering authority (the relevant local authority)1 or the Commission to be satisfied that the branches or sections concerned are entities having a genuine existence and function, and not mere paper creations set up purely for the purpose of running lotteries.2 1 See 15.240 ff below on small society lotteries. 2 See the Commission’s Guidance to Licensing Authorities (5th edn, September 2015), paras 34.33–34.35.

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Lotteries 15.184 A  society wishing to run society lotteries may consider that there are advantages in being registered with a local authority rather than in obtaining an operating licence from the Commission. The Commission, in considering an application for an operating licence, makes detailed enquiries into the proposals and into the backgrounds of the promoter and of other persons connected with the lottery. The Commission’s enquiries are likely to be more extensive than those which, typically, would be carried out by a local authority. Moreover, once a society has an operating licence, the Commission has extensive powers to require from the society information about any lottery promoted by it and information about the management of any such lottery (as well as its other general powers regarding operating licences), which are more extensive than the powers possessed by a local authority. As we have noted, the definition of ‘society’ in GA  2005, s  353, whereby each separate branch or section of a society is to be regarded as a ‘society’, opens the way to individual branches or sections to seek registration in their own right. Therefore, a society with a number of branches might regard it as advantageous to cause the individual branches to register with a local authority to run individual lotteries within the local authority limits, rather than running one lottery which will necessitate a licence from the Commission. 15.185 This was the position considered by the Divisional Court in R  v Royal Borough of Kensington and Chelsea, ex p Blennerhasset.1 The case involved a society known as the National Hospital Trust, a body set up to raise funds for the National Health Service. In about May or June 1995, the society launched a scheme under which there were, or were purported to be, 100 different lotteries run by 100 branches of the Trust. There was a common entry form for all 100 lotteries and this required the player to choose five different numbers between 1  and 49 and enter them on the form. On the entry form the player was asked to indicate whether the entry was to be allocated to the society nearest to the entrant’s address or whether the entry could be allocated to any branch. If the entrant chose the first option, his entry was allocated either to the society whose geographical area covered his post code or, if that lottery were full in the sense that the value of tickets sold was up to the maximum under the requirements of the LAA 1976, then the entry was put into the next nearest society lottery which was not full. 1 CO/922/96 [1996] CLY 3958. See also R on the application of Camelot UK Lotteries Ltd v The Gambling Commission, The Health Lottery ELM Ltd, 51 Community Interest Companies and the People’s Health Trust [2012] EWHC 2391 (Admin) and 15.192 ff below.

15.186 The winning numbers for each of the 100 society lotteries were chosen at the same time each particular week and were the same numbers for each of the 100 societies. The results of the societies’ lotteries were broadcast on Channel  4 television. The top prize of each society’s lottery each week was £10,000. In addition, each week there was a free prize draw where a second set of five winning numbers was drawn. Each paying entrant was automatically entered for that draw unless he asked not to be. The draw was also open to anybody who wished to enter it, without charge and without entering the societies’ draw. The prize for the free prize draw was £1 million. It should be noted that the question of the legality of the ‘free’ prize draw 822

Lotteries was not considered by the court and this element in the arrangements was only taken into account to the extent that it threw any light upon the true nature of the 100 society lotteries. 15.187 All 100 branches of the Trust were separately registered with the respondent, the Royal Borough of Kensington and Chelsea, on 24  May 1988. The Trust’s application for judicial review arose when the respondent decided that the registration of the branches was inappropriate under Sch 1 of the Gaming Act 1968, and that the Trust should be registered with the Gaming Board. By letter dated 6  March 1996 the respondent’s director of legal services wrote to the Trust setting out his reasons for this conclusion: ‘In my view, having a separate branch does not mean that there is a separate society. The definition of society embraces the society and all its branches. The society for the purposes of section 5 of the Lotteries and Amusements Act 1976 is the National Health Trust being a charity established and governed by the Trust Deed of 30 March 1988. Even if you argue that the legislation envisages separate branches of a society being registered, do such branches exist? Separate constitutions do not in my view determine the issue and are illusory. I  have re-read the correspondence and noted what was said at the meeting. It is clear that the Trustees of the branches are the same. The meetings are held at the same place, and at the same time. The bank account for all branches is centrally located. The arrangements with the service provider are identical. There are no separate addresses for branches. All this is at variance with what would commonly be regarded as a branch of any organisation. In reality, therefore, there is one society (the NHT) and one lottery (the NHS Lotto).’1 Since it was clear that the tickets or chances sold by NHS Lotto, taken as a whole, exceeded £250,000 in value, the society should, it was contended, be registered with the Gaming Board. 1 For a lawful multiple society lottery scheme see R  on the application of Camelot UK  Lotteries Ltd v The Gambling Commission, The Health Lottery ELM  Ltd, 51 Community Interest Companies, and The People’s Health Trust [2012]  EWHC  2391 (Admin) and para 15.193 ff below.

15.188 The Trust applied for judicial review of the respondent’s decision, seeking a declaration that the respondent had validly exercised its powers under Sch  1 to register the societies and that the societies were validly registered. The Trust contended that the setting up of the 100 separate trusts had two purposes, to reflect the local nature of the National Health Service itself and to keep administrative costs down to the minimum. Since each lottery was organised by an individual society to a maximum value of £10,000, the societies were validly registered. It was contended on behalf of the Trust 823

Lotteries that there were 100 regional branches, that each branch was a society within the meaning of the Act, that each society administered and promoted a lottery, that each of the 100 lotteries was distinct from the other 99 lotteries, that each lottery fell below the relevant financial thresholds and, consequently, that the societies were properly registered with the respondent. It was submitted that each of the branches was an unincorporated association governed by its own constitution and that the definition of ‘society’ in LAA  1976, s  23 was deliberately framed in broad generic terms which excluded the need to examine the legal nature of the body in question. 15.189 In opposing the application, the local authority and the Gaming Board submitted that a realistic appraisal of the scheme demonstrated that the purported 100 branches were not in any realistic sense ‘separate’ from the Trust. Summarising these submissions the judge said: ‘[Counsel] submitted that the question in this case was whether each of these societies was a separate branch and submitted that “separate” was a crucial adjective in the Act in relation to the branches. He said that as to that crucial test, it had never been shown how each one was said to be separate. He put forward ten points to support that attack: first, they all had the same address in London and the same phone number; second, the legal personality was identical in that the same individuals were involved in each branch; third, there were no separate members; fourth, there did not appear to be any separate bank accounts; fifth, they had identical constitutions, save for one; sixth, they were all marketed under the NHS Lotto trade name; seventh, they all had the same administration; eighth, they all had the same promoter; ninth, the branches were based on postal codes; tenth, they made virtually the same applications for registration with a lump sum cheque for all of them.’ In addition, there was only one entry form for the society’s lotteries and only one draw and one set of winning numbers. While the legality of the free prize draw was not directly relevant, it was suggested that its existence helped to demonstrate that the so-called 100 separate lotteries were really part of the unitary scheme. In the words of counsel for the Gaming Board it was ‘the cement which sticks together the one hundred separate lotteries.’ 15.190 In support of its contention that the branch structure was a legitimate one, the Trust referred to the branch structure of three other charities, including the Red Cross. In reply to this the respondent put in evidence which demonstrated that the branches of the Red Cross had a distinct existence and function. The evidence was that: ‘(i) the British Red Cross consisted of 86 branches. Each is a separate legal entity and is registered as a charity. Each branch operates from its own premises. Each branch is managed by separate and independent trustees, a President, and a branch director, and has its own employees. (ii) although, by reason of the structural review which is currently taking place it is anticipated that during 1997 the branches 824

Lotteries will lose their separate charitable status, there will be no other alteration of the separate structure of each branch; (iii) the Red Cross National Headquarters is currently running its third National Raffle, and for these purposes it is registered as a society with the Gaming Board. Each of the branches is able to participate in the national raffle and receives books of tickets produced and controlled by National Headquarters. The collection and storage of tickets at the end of the draw is carried out by National Headquarters and the prizes are awarded centrally; (iv) if any of the individual branches wish to organise its own lottery it registers as a society in its own right either with the relevant local authority or with the Gaming Board in accordance with the requirements of the 1976 Act (as amended) and depending on the number of tickets which are put on sale.’ 15.191 The judge concluded that, having regard to the reality of the NHT scheme, there was one lottery organised by one society, the National Hospital Trust, and that society ought therefore to be registered with the Gaming Board. He said: ‘There is, in my view, only one lottery here, organised entirely by the National Hospital Trust and organised as one lottery. There is only one common entry form, only one draw and only one set of winning numbers for each of what are said to be one hundred separate lotteries. The individual entrant does not even necessarily know, according to the way the applicant puts its case, for which of the one hundred lotteries he is entered, since if the one relating to his post code were full, his entry would be passed on to the nearest lottery which was not full. When one looks at the reality, therefore, and on the authorities I have quoted it is to the reality that one must look, one sees that what the entrant is doing is seeking to buy and what the National Health Trust by its publicity is seeking to sell, is a ticket in one lottery, centrally run by the NHT, which will mean that his numbers may stand a chance, first, of winning up to £10,000, and then of winning a different prize of up to £1 million in the free prize draw.’ As to the question whether the existence of 100 separate branches had been shown, the judge said as follows: ‘… I am satisfied, as a matter of construction, that what are said to be separate branches in this case are in truth not separate at all. Unlike the example of the Red Cross given in evidence in this case, there is no basic reality to or activity in any of them. They perform no other function than facilitating as a paper exercise the running of the weekly draw for the applicants. As [Counsel] pointed out in his ten points, where the crucial test is the separate nature of the branches, it has not been shown in the evidence before me that each one is in any way separate. The names of the Chairman, the Treasurer and the Honorary Secretary are in each case identical, as is the address of each of the branches … and its telephone numbers. They all share the same bank account, despite the suggestion in the rules that there is a movement of money out of 825

Lotteries the bank account on the morning of the draw day, [Counsel] admitted to me that that was a notional transfer. The branches all have identical constitutions, are identically marketed, have the same administrator and the same promoter and have no separate members. Most importantly, again unlike the Red Cross, they have no other activity whatsoever than to be used as a vehicle for the running of the NHT lottery. They are a paperwork facade beyond which the court has to look in order to see the reality. It follows that they cannot be a separate branch and therefore they do not fall within the provisions of s 23 of the 1976 Act.’ It followed that the societies were not validly registered with the respondent authority and the application was dismissed. 15.192 The judgment provides important guidance in assessing any scheme where lotteries are promoted by subordinate branches or sections of a society. It seems clear that if the branches or sections concerned can be shown to have a genuine existence separate from the main society and from each other, there is nothing to prevent them from seeking either registration with the relevant local authority or an operating licence from the Commission, whichever is appropriate, for the purpose of promoting lotteries. What a society cannot do, however, is to generate a number of branches on paper in order to enable them to register as separate societies, either to expand the number of lotteries which may be promoted or to evade the requirement to obtain an operating licence from the Commission. It will be a question of fact and degree in each case whether what are alleged to be separate branches have sufficiently substantial existence to qualify for registration. It is suggested that the following points are likely to be relevant on this question: (1)

The starting point will be the constituting documents of the society and of any branches or sections under consideration. These may be a formal constitution, memorandum and articles, a set of rules or a trust deed. It will be relevant to see how far the constituting documents provide for the branches to have their own management structure (eg in the form of a committee) and what degree of autonomy in policy and financial matters is given to the branch.

(2) In addition, it will be important to establish what functions other than the running of lotteries the branches have. In Blennerhasset there was a stark contrast between the NHT branches which had no function at all other than ‘facilitating as a paper exercise the running of the weekly draw’ for the NHT, and the branch structure demonstrated to exist in the case of the Red Cross, where each branch was a separate legal entity, registered as a charity, operating from its own premises and employing its own staff. (3) The fact that the branches have their own members, employ their own staff and occupy their own premises are important considerations, both to the extent that they throw light on the branches’ activities and functions, and in their own right in suggesting that the branches have a degree of financial and administrative autonomy. (4) The existence of other administrative arrangements such as separate bank accounts, separate contracts with service providers and so on may also throw light on the extent to which the branches in question have 826

Lotteries an independent existence. It is suggested, however, that where there is evidence pointing towards the existence of genuine branches, the mere fact that they use common service providers, or present their individual lotteries in a common format, should not of itself necessarily be taken as a contra-indication of separate existence. This will particularly be the case if it can be shown that by adopting this approach the branches enjoy significant economies of scale. 15.193 A multiple society lottery considered under the GA 2005 is R on the application of Camelot UK Lotteries Ltd v The Gambling Commission, The Health Lottery ELM Ltd, 51 Community Interest Companies and The People’s Health Trust.1 Camelot, the National Lottery operator, judicially reviewed the Gambling Commission’s decision to grant licences to 51 community interest companies (‘CICs’), all of which operated under the brand ‘The Health Lottery’, and to their professional lottery manager, The Health Lottery External Lottery Manager Ltd (‘THL’). A community interest company is a company that is set up to serve a particular community. Each CIC operated for the benefit of a different region of Britain, and its assets had to be used to tackle health inequalities in and be used for the benefit of its own community. Each week different CICs promoted lotteries under the branding of ‘The Health Lottery’ for its own community. Each CIC donated all the proceeds it received from its lottery, less THL’s expenses and a small amount for the CIC’s own operating costs, to a charity called The People’s Health Trust, which in turn distributed the money to charities and other good causes to tackle health inequality within the identified community of the CIC whose lottery had generated the profit. There was no dispute that this money was distributed properly. 1 [2012] EWHC 2391 (Admin).

15.194 Camelot alleged that the CICs did not have any independent existence from one another because they all had the same directors, the same registered office, and played no part in the real decision-making of the lottery, and further that the Health Lottery was, in fact, one lottery. If all the proceeds of all the weekly draws were added together, they would be in excess of the limits permitted under s 99 of the GA 2005 in that the maximum proceeds of the lottery would exceed £4 million, and it was therefore unlawful. 15.195 Camelot also alleged that, as the CICs had been set up with the aim of operating the lotteries in conjunction with a professional commercial lottery manager, that was itself set up to make money for itself (and therefore its commercial parent company Northern and Shell) (both were unconnected to the CICs), part of the reason for the establishment of the CICs was to make money for the ELM, in which case they were not non-commercial societies within the meaning of s  19 of the GA  2005. Camelot’s claim was rejected. The court held that the fact that a professional lottery manager would make money from managing these lotteries did not make the societies ‘established or conducted’ for purposes of private gain. The GA  2005 did not require the ELM to be non-profit making. The CICs were clearly established and conducted for non-commercial purposes, namely to tackle health inequalities in their respective areas. It made no difference whether the professional lottery manager approached the society or the society approached the lottery manager initially to set the scheme up. 827

Lotteries 15.196 The administrative court held that, although the CICs were under common control, they were all separate legal entities as community interest companies, and there was no reason to pierce the corporate veil as there was no suggestion that they were operated fraudulently, and their assets were applied properly. Furthermore, each weekly lottery was a separate lottery, operated in accordance with the statutory limits. Therefore the Health Lottery, although it operated under one brand, was not one large lottery. Employing the same lottery manager did not of itself permit the proceeds of all the lotteries to be amalgamated to see if the annual limit for a lottery had been exceeded. 15.197 However, care must be taken to see that each society is, in fact, a genuine separate entity, albeit it may have common directors, and so each must meet the requirements of a non-commercial society in s  19 of the GA 2005 and each lottery must be run clearly separately from every other lottery. The proceeds from one lottery must not be used to fund any of the prizes or expenses in another lottery promoted under the same brand. Equally, the proceeds from each lottery should be kept strictly separate for each society, in separate bank accounts with separate accounts and separate returns. (This could clearly be demonstrated in the Health Lottery case, but on the evidence in the Blennerhassett case, the societies were essentially shams.) Each society must be able to demonstrate that it claims overall management control of its own lotteries, even though there may be an ELM involved, not least because each society is promoting its own lottery under s  252 of the GA 2005, and is responsible for the lottery complying with its conditions. Each society ought, therefore, to be able to demonstrate that they retain overall control of management and strategic decision-making for the promotion of the lottery, including control over its social responsibility policies and marketing. Each society should also have control over the proceeds of its lottery, including how those proceeds are apportioned and distributed. With the Health Lottery, although the proceeds were ultimately distributed to the People’s Health Trust, officers of each CIC were still involved in the overall distribution of the proceeds for each CIC.1 1 See the Gambling Commission’s Advice Note: ‘Promoting Multiple Society Lotteries’ (August 2011). See also the Commission’s Advice Note: ‘External Lottery Managers: The main requirements of the Gambling Act 2005, licence conditions and their role in promoting society and local authority lotteries’ (September 2014), para 5.

15.198 Although multiple society lotteries are promoted under one overall brand, in order to underline the fact that they are in fact separate societies promoting separate lotteries, the Gambling Commission considers that it must be clear to a participant in each lottery which society lottery they are being asked to participate in. It states that certain indicators are relevant in deciding if it is one lottery or multiple ones, such as the extent to which the general advertising and marketing material make it clear that each draw will be on behalf of separate identified societies, and the relevant prominence, before each draw, of the overall brand in the advertising and marketing material, compared to that of the individual society, as well as the extent to which the document or ticket given to participants clearly, at the time of purchase, makes clear and shows the name of the society promoting the draw.1 This may also be relevant to the licensing objective of ensuring that 828

Lotteries gambling is conducted in a fair and open way. In Camelot, Burnton LJ held2 that the Commission was entitled to take the view that this objective required that ticket purchasers know and intend that at least 20% of that particular lottery’s proceeds are going to the good cause in that community. Therefore, common marketing and identical branding between lotteries and societies may well not satisfy the Commission and it is recommended, therefore, that there should be marked differences between the marketing and branding of each society and its lotteries, which may need to include differently branded websites, albeit there can still be marked identical branding for the common brand. 1 See the Gambling Commission’s Advice Note: ‘Promoting Multiple Society Lotteries’ (August 2011). 2 [2012] EWHC 2391 (Admin), para 75.

15.199 A society established for one purpose may come to be conducted for another (Maynard v Williams).1 There is no longer the qualification (as there was under the LAA 1976, s 5(1)) that the society should be established and conducted ‘wholly or mainly’ for the permitted purposes, but if the society is established and conducted for charitable purposes, in England and Wales, those purposes must be exclusively charitable according to English and Welsh law.2 1 [1955] 1 WLR 54. 2 See GA 2005, s 19(2)(a)).

15.200 Instead of being established for charitable purposes or those connected with sport, athletics or a cultural activity, the society may be established and conducted for any other non-commercial purpose.1 If one or more individuals do benefit during the activities of a non-commercial society set up for charitable purposes or for sporting, athletic or cultural purposes in accordance with GA 2005, s 19(1)(a) or (b), provided that private gain is made in the course of the activities of the society, then the private gain by the individuals is not private gain for the purposes of the 2005 Act.2 Thus, supporters’ clubs may continue to run lotteries in support of professional sporting clubs run commercially. 1 It should be noted that the exclusion of private gain is confined to GA 2005, s 19(1) (c) and does not apply to societies set up for participation in or support of sport, athletics or a cultural activity under s 19(1)(b). However, the wording of s 19(1)(c) referring to ‘any other non-commercial purpose’, coupled with the title of ‘noncommercial’ societies, shows that the intention is that the society should not have private gain as a purpose. 2 See GA 2005, s 19(3).

Large society lotteries 15.201 A  large society lottery1 is one in which the proceeds for it may exceed £20,000 or where the aggregate of the society’s proceeds2 from society lotteries promoted wholly or partly during a calendar year exceeds £250,000. If its proceeds may exceed £250,000 during a calendar year (disregarding any other society lottery which is not completed), it may become a large lottery 829

Lotteries because of that.3 Once a society has promoted a large society lottery,4 any other society lottery promoted by that society is a large lottery if is wholly or partly promoted during the calendar year in which the first lottery is promoted or in any of the three calendar years following that year.5 All other lotteries would be small society lotteries and can therefore be operated as exempt lotteries within GA 2005, Sch 11, Pt 4. 1 GA 2005, Sch 11, Pt 4, para 31. 2 ‘Proceeds’ means the aggregate of amounts paid for lottery tickets: s 254(1). 3 GA 2005, Sch 11, Pt 4, para 31(4). See 15.209 below for the overall monetary limits for a society in one year. 4 Within the meaning of GA 2005, Sch 11, Pt 4, para 31(2), (3) or (4). 5 GA 2005, Sch 11, Pt 4, para 31(5).

15.202 These public lotteries must be promoted on behalf of a noncommercial society, which is a society established and conducted for charitable purposes, and/or for the purposes of enabling participation in, or of supporting, sport, athletics or a cultural activity, and/or for any other noncommercial purpose other than that of private gain.1 The purposes are only charitable in England and Wales if the purposes are exclusively charitable according to English and Welsh law. In Scotland, charitable purposes has the same meaning as in the Income Tax Acts.2 1 GA 2005, s 19. 2 GA 2005, s 19(2).

Local lotteries 15.203 The Commission may issue an operating licence to a local authority to promote a lottery.1 A local authority means, in relation to England, a district council, a county council and a parish council, a London borough council, the Common Council of the City of London and the Council of the Isles of Scilly.2 In Wales it refers to a county council, a county borough council and a community council.3 In Scotland it refers to a council constituted under s 2 of the Local Government etc (Scotland) Act 1994.4  A  local authority under GA 2005, s 98 is not quite the same as a licensing authority under s 2. 1 2 3 4

GA 2005, s 98(1)(b). GA 2005, s 98(7)(a). GA 2005, s 98(7)(b). GA 2005, s 98(7)(c).

An operating licence from the Commission 15.204 It should be noted that an operating licence may be remote or nonremote and a society or local authority lottery may also be remote or nonremote. For further detail on remote gambling see Chapter 17. 15.205 The Commission may issue lottery operating licences to a noncommercial society, a local authority or a prospective external lottery manager for a non-commercial society or local authority.1 1 GA 2005, s 98(1).

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Lotteries 15.206 Large society and local lotteries may only be operated lawfully under an operating licence issued by the Commission and in accordance with the licence terms. The procedure for obtaining an operating licence from the Commission and the mandatory and usual conditions attached to operating licences generally together with the Commission’s Codes of Practice, are discussed in Chapter  6. There are in addition certain conditions which are specific to lottery operating licences granted to noncommercial societies, local authorities and prospective external lottery managers. The terms of the licence may limit the activities authorised under the licence by specifying that only certain promotion activity is authorised, and/or only in particular circumstances. Conversely, it may authorise the promotion of lotteries or promotion generally.1 The Commission has discretion to attach a condition to the operating licence requiring that the arrangements for the lottery are made by an external lottery manager (ie  the holder of a lottery manager’s licence).2 If the Commission does this, it does not have to take account of the society’s (or local authority’s) suitability to promote the lottery. This ensures that large lotteries are not run by amateurs who cannot satisfy the Commission that they have sufficient knowledge and expertise to do so. 1 GA 2005, s 98(2). 2 See the Gambling Commission’s Advice Note, ‘External Lottery Managers. The main requirements of the Gambling Act 2005, licence conditions and their note in promoting society and local authority lotteries’ (September 2014).

Mandatory conditions of lottery operating licences 15.207 Six requirements are specified in GA 2005, s 99 and the Commission must attach conditions to an operating licence to achieve those requirements. The precise wording of the conditions is therefore left to the Commission and may be seen in the Commission’s document ‘Licence conditions and Codes of Practice’ (‘LCCP’).1 The requirements are similar to the previous mandatory conditions under which society lotteries had to operate under the LAA  1976. The Commission has stipulated certain other conditions in addition that will be attached to lottery operating licences. 1 The latest version of the LCCP was produced in July 2016, coming into force 31 October 2016.

First requirement 15.208 At least 20%1 of the proceeds of any lottery promoted under the licence must be applied to one of the society’s purposes. Under the LAA 1976 there were limits on the percentage of the proceeds which could be utilised for the provision of prizes and of expenses. These provisions have not been repeated in the GA 2005. Therefore, provided at least 20% of the proceeds go to the society’s purposes, the percentage of the proceeds given to prizes and expenses which could be as high as 80% is left to the promoters. However, the Commission is likely to take issue with expenses which appear to be unreasonably high. It should be noted that GA 2005, s 254 when defining the profits of a lottery, refers to amounts deducted and inter alia mentions ‘other 831

Lotteries costs reasonably incurred in organising the lottery’. The proceeds of a lottery are the aggregate of the amounts paid for the purchase of the lottery tickets.2 1 This percentage may be varied by order: GA 2005, s 99(11). 2 GA 2005, s 254(1).

Second requirement 15.209 The total proceeds of any one lottery must not exceed £4 million,1 and there is an overall limit of £10 million2 on the total proceeds of lotteries promoted by one society wholly or partly in any one year.3 These provisions are clearly kept in to differentiate between the National Lottery and all other permitted lotteries. 1 See GA  2005, s  99(5)(a) as amended by the Gambling Act 2005 (Variation of Monetary Limit) Order 2009 (SI 2009/207). 2 These limits may be waived by order: GA 2005, s 99(11). 3 A calendar year: GA 2005, s 99(3)(b).

Third requirement 15.210 The total prizes that may be won by a ticket purchaser in a lottery are limited to £25,000 or 10% of the proceeds of the lottery (ie up to £400,000), if greater. The wording would seem to be designed to prevent the ticket entitling the purchaser to win a prize or prizes in excess of those specified, not only in the lottery itself, but in other lotteries or otherwise, thereby circumventing the limits. These limits also apply to any rollovers1 and may be varied by order (GA 2005, s 99(11)). A rollover means any unallocated or unclaimed prizes which can be held over into another lottery to increase the value of prizes in that lottery.2 Rollovers are therefore prevented from being used to circumvent the prize limits. Furthermore, a restriction is put on the ability of promoters to link prizes in different lotteries to inflate the prize level, because in s 99(4) it is made clear that it must not be possible for a participant to win,3 by purchasing one ticket, more than the specified prizes (the maximum possible being £400,000 in total if all the lottery tickets to a total value of £4 million are sold). 1 GA 2005, s 99(4). 2 GA 2005, s 256(1). 3 Whether in money, money’s worth or partly one and partly the other.

15.211 Another anti-avoidance provision is that several draws are treated as one simple lottery if the participants (ie those eligible for a prize) are and must be the same in all the draws. (see GA 2005, s 256(2)(a)). If a participant may enter different lotteries which are not linked but, by selecting the same numbers or combination of numbers in all the lotteries, he may win more than £400,000 (if all the tickets are sold), no advertisement or marketing of the lotteries may publicise that.1 Lotteries are ‘linked’ if a win in one is a win in all of them,2 and no linking is permitted by the Commission unless no participant can win more than £400,000 if all the tickets are sold. This restriction also applies to a lottery linked to a free prize draw.2 Many lottery promoters are anxious to inflate the prizes as much as possible, and there 832

Lotteries have been various attempts to try to put together a prize of £1 million. However, the changes in the law relating to hybrid schemes (now complex lotteries) whereby a scheme in which the first element or ‘process’ consists of skill followed by a draw to decide the winner, which would escape being a lottery and therefore regulation, means that there is no limit on the prizes that may be promoted in those schemes. Although these are not lotteries, many promoters may find them useful promotional tools. 1 See the Gambling Commission’s ‘Licence Conditions and Codes of Practice’ (July 2016), condition 11.1.6. 2 Ibid at condition 11.1.5(a).

Fourth requirement 15.212 This requirement only applies to a non-commercial society and not a local authority. Certain information must be contained on lottery tickets or a document provided ancillary to the sale of a lottery ticket by a non-commercial society.1 The information must identify the promoting society, and the designated member of the society by the society with responsibility for the promotion of the lottery. The wording of s 99(5) which is repeated in condition 11.7(b),2 by stating ‘a member of the society who is designated, by persons acting on behalf of the society, as having responsibility within the society for the promotion of the lottery’ seems to avoid having to list all the names and addresses of all the committee members, providing a specified person is actually so designated, thus reversing the decision of Stacey v Wilkins. In Stacey v Wilkins3 a private lottery was promoted by the Sports Entertainment Committee of the Briton Ferry Branch of the British Legion, Port Talbot. Ticket sales were therefore supposed to be limited to members of that branch in accordance with the BLA 1934, s 24 which provided that a ‘private lottery’ means ‘a lottery … which is promoted for, and in which the sale of tickets or chances by the promoters is confined to … (a)  members of one society  …’. The lottery was supervised by the sports secretary, one Richards. Stacy was a printer engaged to print lottery tickets. The tickets, in purported compliance with s 24(3)(d) (which required that ‘every ticket shall bear upon the face of it the name and address of each of the promoters’) contained the words: ‘Promoters: The British Legion, Briton Ferry Branch Benevolent Fund. OD  Richards, Sports Secretary’. The prosecutor contended that this was insufficient compliance with the conditions imposed by s  24(3)(d) and Stacy was prosecuted, not under s  24(4), which provided penalties for breach of the conditions (including those relating to tickets), but under s 22(1)(a) for printing tickets for use in a lottery. On his appeal against conviction, the Divisional Court upheld the prosecutor’s contention that the legend on the ticket was insufficient compliance with BLA 1934, s 23(3) (d). The ticket should have contained the name and address of each committee member who had supported the lottery. However, it quashed the conviction on the ground that the printing of a ticket which contravened s 24 did not constitute an offence under s 22 because it did not render the lottery, which was a lawful private lottery, unlawful. This would no longer be the case.4 1 GA 2005, s 99(5). 2 See the LCCP for non-remote and remote lotteries (July 2016). 3 [1946] KB 271. 4 See 15.271–15.301 below on private lotteries.

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Lotteries 15.213 The information must also specify the date of the draw or, if more than one, each draw in the lottery, or give sufficient information for the dates to be determined. A  lottery ticket may be ‘purchased’ by any action by a person resulting in him becoming a participant in the lottery.1 A draw includes any process by which a prize in the lottery is allocated.2 The Commission will attach a condition that lottery promoters must display ‘licensed by the Gambling Commission’ and details of the Commission’s website on tickets.3 1 GA 2005, s 253. A lottery ticket may be sold or supplied by a person doing anything resulting in a person becoming a participant. 2 GA 2005, s 255. 3 See Part 1, para  11.1.8 of the Commission’s ‘Licence Conditions and Codes of Practice’ (October 2016).

15.214 A lottery ticket is not only a document but may also be an article, provided it proves membership of the participants amongst whom the prizes are to be allocated (GA 2005, s 253(1)). A wide meaning is given to a ‘document’. Not only does it include a written document, but also electronic messages, provided (without incurring significant expense or delay) the participant may retain the message electronically or print it. This would cover text messaging and email.1 Although the document must be sent without significant delay, the section does not require that it should be sent instantaneously or even on the same day that the ticket is purchased. It is therefore possible for lottery operators to sell a ticket online and at a later stage to send to the participant written confirmation of the purchase of the ticket containing the details required by s 99.2 If the participant regularly purchases tickets, there is no reason why a statement detailing all his purchases may not be sent at regular intervals, rather than a separate document for each ticket purchase. 1 GA 2005, s 99(7). 2 This includes the details in GA 2005, s 99(5) and (6).

Fifth requirement 15.215 The price of each ticket must be the same, but there is no longer any limit on the amounts that may be charged for a ticket.1 In recent years, there have, for example, been a number of schemes where the prize was an expensive high performance motor car or a house. The tickets were limited and commensurately high in price. Such schemes could now be run as lotteries. The amount of the ticket price must be shown on the ticket or in some document received by the purchaser and must be paid to the lottery promoter before the ticket or the rights contained in that ticket pass to the participant.2 1 Under the LAA 1976, the maximum permitted price was £2. 2 GA 2005, s 99(6).

Sixth requirement 15.216 Apart from the price of the ticket, no other payment may be required for participation.1 1 GA 2005, s 99(8).

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Commission conditions 15.217 In addition to the conditions required by the GA 2005, the Commission has specified certain licence conditions to be attached to lottery operating licences which are contained in its Licence Conditions and Codes of Practice document published in July 2016 and coming into effect 31  October 2016.1 These are in addition to those attached generally to operating licences, for which see Chapter 6. 1 In para 11.

15.218 The Commission’s conditions require that lottery operating licensees must lodge a description and copy of the rules of any lottery to be promoted under the licence and any rule amendments at least 28 days before tickets go on sale.1 1 Commission’s ‘Licence Conditions and Codes of Practice’ (October 2016), condition 11.1.1.11.

15.219 Lottery tickets must not be sold to a person in any street.1 This follows the previous law under the Lotteries Regulations 1993 (issued under the LAA 1976). As under the previous law, a ‘street’ includes any bridge, road, lane, footway, subway, square, court, alley or passage, including passages through enclosed premises such as shopping malls, whether a ­thoroughfare or not. However, tickets may be sold from a kiosk or shops with no space for customers, or door to door. 1 Commission’s ‘Licence Conditions and Codes of Practice’ (October 2016), condition 11.1.1.12.

Lottery returns 15.220 The Commission requires lottery returns for each lottery promoted to be sent to the Commission within three months of the date of the lottery or, if it is an instant lottery within three months of the last date on which tickets are on sale.1 They may be sent online.2 The returns must show the total proceeds of the lottery, their distribution between prizes and expenses, and how much has been applied directly to the society’s purposes, as well as the number of sold and unsold tickets. There must be a declaration on every return that the information in it is correct and it must be shown to have been approved before submission by either the holder of a personal licence3 or a qualified person4 or, unless the promoter is a local authority, the promoter as set out in the tickets. 1 Commission’s ‘Licence Conditions and Codes of Practice’ (October 2016), condition 11.1.13 and 11.1.15. 2 See the Commissions Advice Note: ‘Promoting society and local authority lotteries’ (September 2014), para 15.3. 3 Issued under GA 2005, Pt 6. 4 See the GA  2005 (Definition of Small Scale Operator) Regulations 2006 (SI 2006/3266), para 2(3).

15.221 Accounting records should be kept, together with supporting records, for all lotteries promoted under the licence, for at least three years 835

Lotteries from the date of the lottery. They must be made available for inspection by the Commission on request. The records must contain: (a) the total proceeds of each lottery; (b) the expenses of each lottery; (c) the amount of proceeds allocated to expenses; (d) the number of sold and unsold tickets in each lottery; and (e) the amount applied directly to the purposes of the society. 15.222 The lottery operator must also keep accurate records to support the returns for each lottery, and these must be made available for inspection by the Commission when required. The records must show in respect of each lottery: • • • •

the total proceeds; the proceeds percentage allocated to prizes; the amount of proceeds allocated to expenses and the details of those expenses for each lottery; and the number of sold and unsold tickets.

15.223 In addition, where cumulative proceeds of lotteries in any one calendar year exceed £1 million, written confirmation must be provided to the Commission from a qualifying auditor within ten months of the accounts being made up. The qualifying auditor1 must confirm that the proceeds of the lotteries have been fully accounted for in the licensee’s annual audited accounts. A condition will be attached requiring the lottery operating licensee to ensure that the correct person holds a personal management licence. This condition is in addition to the general condition requiring certain persons to hold personal management licences. (See Chapter 6 on operating licences.) This is the person who has the overall management responsibility for the promotion of the lottery. In a company licensee this would be the relevant director, for a partnership licensee it would be the relevant partner, and for an unincorporated association or local authority licensee it would be the relevant officer (‘the specified management office’). Operating licensees must take all reasonable steps to ensure that anything done in the performance of the functions of that specified management office is done in accordance with the terms and conditions of the holder’s personal management licence. If that personal licence is reviewed, the operating licensee has to comply with any new conditions imposed on that licence by the Commission as to redeployment, supervision, or monitoring of the person’s work, and any other requirements during the period of the review.2 1 A  qualifying auditor is a person who is eligible for appointment as a company auditor under s 1212 of the Companies Act 2006, but does not include a member of the society in the cases of a society, a partner, officer or employee of such a member, or a partnership in which any of them are a partner. 2 See the LCCP (July 2016), condition 1.2.3.

15.224 None of these provisions about personal management licences apply to a licensee as long as he is a small-scale operator.1 1 As defined in the Gambling Act 2005 (Definition of Small-Scale Operator) Regulations 2006 (SI 2006/3266).

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Lotteries 15.225 So far as the lottery returns for local authorities are concerned, the return must specify the amount applied for the authority’s purposes for which it has power to incur expenditure, and the return need only be signed by a personal licence holder, or a qualified person (as defined in the Gambling Act 2005 (Definition of Small-scale Operator) Regulations 2006).

Social responsibility 15.226 The Commission has issued codes of practice for gambling operators (which are discussed generally in Chapter  6). These change from time to time. Certain parts of the code are specific to lottery licensees: not all of them are social responsibility code provisions. It is a social responsibility code provision that non-remote lottery licensees must have and put into effect policies and procedures to minimise the risk of lottery tickets being sold to under-16s.1 These must include procedures for checking the age of those who are apparently under-16 purchasers, and for taking action where there are unlawful attempts to purchase such tickets. There are also social responsibility code provisions aimed at preventing under age gambling by promoters of remote lotteries.2 Additionally, licensees must take all reasonable steps to ensure that all those engaged in the promotion of non-remote lotteries under the licence understand their responsibilities for preventing under age gambling, returning stakes and not paying prizes to under age customers. A  non-social responsibility provision of the code provides that licensees should require a person who appears to be under 16 to be asked to produce proof of identity and age before purchasing a lottery ticket for nonremote lotteries. Remote lotteries must carry out age verification procedures too where operators consider the lottery is likely to attract underage play.3 In view of the fact that it is an offence to sell a lottery ticket to someone under the age of 16, these provisions are sensible procedures to be followed by lottery operating licensees in order to protect themselves. 1 See LCCP (July 2016) code 3.2.9. 2 See LCCP code 3.2.13. 3 LCCP code 3.2.14.

15.227 A further social responsibility code requires that remote and nonremote licensees of non-commercial societies or external lottery managers must set an upper limit on the value of lottery tickets which may be sold to a person either in a single transaction or over a specified period of time without interacting with the customer. They must maintain records of all such customer interactions, including whether tickets were permitted beyond the limit set, and must ensure that those records can be made available to the Commission for inspection when requested. Those records should be retained for at least three years from the date of any lottery involved. 15.228 Social responsibility codes specific to non-remote lottery licences specify that licensees must have and operate procedures for self-exclusion and should take all reasonable steps to refuse service or otherwise prevent anyone who has entered a self-exclusion agreement from participating in gambling. Further steps licensees must take include taking all reasonable steps to prevent any marketing material being sent to a self-excluded customer 837

Lotteries as soon as practicable, and, within two days of receiving the completed selfexclusion notification, removing the name and details of the person from any marketing database used by the company or group, including specifying that the person should not have marketing materials sent to him, Marketing material in this context covers marketing material relating to gambling, and includes other activities taking place on the premises where gambling may take place. This marketing material does not cover blanket marketing targeted at a particular geographical area provided the excluded individual was not knowingly included. 15.229 Customer accounts for self-excluded persons must be closed and any funds in the account returned to them; it is not enough just to prevent the person from withdrawing funds from such accounts whilst still accepting wagers from them. The code provides that where the giving of credit is permitted, the licensee may retain details of the amount owed to them by the individual, although the account must not be active. It is debatable how relevant this last code is because the ticket price has to be paid to the promoter of the lottery before the participant is given a ticket or any right to participate by s 99(6)(c). 15.230 There must be further procedures designed to ensure that a selfexcluded person cannot gain access to gambling, including keeping a register of those who have self-excluded, with their names, addresses and any membership or account details held by the operator. There must be a facility for someone self-excluding to provide a signature, and the individual must be sign-posted to counselling and support services. There must also be staff training to ensure that staff are able effectively to administer the systems.1 1 See LCCP (July 2016), Part II, para 3.5.8.

Compliance with advertising codes 15.231 All advertising of lotteries and services must be undertaken in a socially responsible manner, and in particular the Committee of Advertising Practice (CAP) and Broadcast Committee of Advertising Practice (BCAP) advertising codes of practice must be abided by as well as their guidance about advertising lotteries. No one who is or seems to be under 25 years old may be featured gambling. 15.232 There are further non-social responsibility provisions of the code specific to remote and non-remote lotteries. These require licensees who employ 16- and 17-year-olds to sell tickets, collect payments or pay out winnings, to have policies and procedures to ensure that all staff, including 16- and 17-year-olds, are made aware that the law prohibits under age gambling, and that tickets may only be sold to persons aged 16 or over. Again, this is a sensible precaution to be taken in any event by operating licensees. 15.233 To minimise fraud, remote and non-remote non-commercial society licensees and external lottery manager licensees must either prohibit 838

Lotteries unsolicited mailing of tickets to non-members of the society and/or limit the value of the tickets so sent to £20, and/or keep records of tickets sent and not returned.1 1 See LCCP code 5.1.5.

Other conditions 15.234 The Commission has power to attach further conditions to a lottery operating licence, but they must be similar to the mandatory conditions in GA 2005, s 99, although they may be more onerous.1 The Commission also has the power to attach a condition that all the arrangements for the lottery must be made by an external lottery manager who has a lottery manager’s operating licence.2 If the Commission does attach such a condition, then it does not have to take account of the suitability of the society to promote the lottery.3 This is a useful provision to ensure that inexperienced societies can run large lotteries properly by making them appoint experienced lottery promoters to run their lotteries for them. 1 GA 2005, s 99(10). 2 GA 2005, s 98(2) and (3). 3 GA 2005, s 98(3)(b).

15.235 The Commission may further attach conditions preventing, restricting or controlling rollovers under GA 2005, s 75 or s 77.1 1 GA 2005, s 98(6).

Post 15.236 GA 2005, s 98(4) specifically permits lottery tickets being delivered by post, and no condition on a licence may limit that.1 1 GA 2005, s 98(4) and (5). However, see 15.233 on the unsolicited mailing of tickets to non-members of a society.

Regulations 15.237 The Secretary of State can vary any monetary amount or percentage.1 1 GA 2005, s 99(11).

Lottery machines 15.238 Certain machines escape being classified as gaming machines under GA  2005, s  235 if they dispense lottery tickets or enable people to enter a lottery.1 There are conditions: the results of the lottery must not be determined by the machine and there must be a gap of at least one hour between entry into the lottery and the announcement by the machine of the results (by display or otherwise).2 They may only be sited on a members club or miners’ welfare institute that has a club gaming or club machine permit 839

Lotteries issued by the local licensing authority; only one machine is permitted on each such premises. 1 GA 2005, s 235(2)(d). 2 GA 2005, s 235(2)(d)(ii) and the Gambling (Lottery Machine Interval) Order 2007 (SI 2007/2495).

THE EXEMPT LOTTERIES 15.239 Certain lotteries as set out in the GA 2005 are exempt from requiring an operating licence to operate lawfully and the person promoting or facilitating one of those lotteries does not commit offences under GA 2005, s 258 (promotion of a lottery) or s 259 (facilitating a lottery).1 These lotteries are set out in Sch  11 and they are incidental lotteries,2 private lotteries, customer lotteries, and small society lotteries. The lotteries are only exempt if all the conditions in the relevant part of Sch 11 are satisfied. Otherwise, the lottery is not exempt, and offences are committed. 1 See GA 2005, Sch 11, s 258(1)(b) and s 259(1)(b). 2 Previously these had to be incidental non-commercial lotteries, but the law was changed by the Legislative Reform (Exempt Lotteries) Order 2016 (SI 2016/124).

Small society lotteries 15.240 A  small society lottery must be promoted wholly on behalf of a non-commercial society,1 and may be promoted for any of the purposes for which the promoting society is conducted.2 It must also comply with the small society lottery conditions set out in GA  2005, Sch  11, Pt  4. In these circumstances, the lottery is an exempt lottery.3 1 For non-commercial societies generally, see 15.177 ff. 2 GA 2005, s 19 and Sch 11, Part 4, para 32. 3 Schedule 11, Pt 4, para 30. Furthermore, it may operate by remote communication, and does not need a remote operating licence. See the Commission’s Advice Note, ‘Promoting society and local authority lotteries. Advice for society and local authority lotteries which require a licence or registration’ (September 2014), para 5.5 and 9.4.

15.241 Lotteries are either small or large. The way the GA 2005 works is to define a large lottery and then provide that if the lottery is not a large one, it is a small one.1 1 See GA  2005, Sch  11, Pt  4, para  31(1). See the Commission’s Advice Note, ‘Promoting society and local authority lotteries’ (September 2014), para 5.1.

15.242 A  large society lottery is one in which the proceeds from it may exceed £20,000, or where the aggregate of the society’s proceeds1 from society lotteries promoted wholly or partly during a calendar year exceeds £250,000.2 If its proceeds may exceed £250,000 during a calendar year (disregarding any other society lottery which is not completed), it may become a large lottery because of that.3 Once a society has promoted a large society lottery,4 any other society lottery promoted by that society is a large lottery if is wholly 840

Lotteries or partly promoted during the calendar year in which the first lottery is promoted or in any of the three calendar years following that year.5 All other lotteries would be small society lotteries and can therefore be operated as exempt lotteries within GA 2005, Sch 11, Pt 4. 1 ‘Proceeds’ means the aggregate of amounts paid for lottery tickets: GA  2005, s 254(1). 2 GA 2005, Sch 11, Pt 4, para 31(2) and (3). 3 GA 2005, Sch 11, Pt 4, para 31(4). 4 Within the meaning of GA 2005, Sch 11, Pt 4, para 31(2), (3) and (4). 5 GA 2005, Sch 11, Pt 4, para 31(5).

15.243 GA 2005, Sch 11, Pt 4 sets out various conditions for a small society lottery that must be complied with. If these conditions are not complied with, then the lottery is not exempt and an offence under GA 2005, s 258 or s 259 will be committed. 15.244 The arrangements for small society lotteries must ensure that at least 20% of the proceeds of the lottery are applied for the purpose for which it is conducted.1 The maximum prize permitted for the purchaser of the ticket by virtue of that ticket must be no more than £25,000 (whether in money, money’s worth, or partly one and partly the other).2 This applies also to any rollover.3 Rollovers are permitted, but a rollover may only roll into another small society lottery promoted by or on behalf of the same society.4 This is an anti-avoidance provision to prevent the accumulation of a larger prize than the specified one of £25,000. The wording of Sch 11, Pt 4, para 34 is not limited to a single prize, but merely requires that a ticket purchaser may not win by virtue of that ticket more than £25,000. Therefore, although the ticket may entitle him to win more than one prize, the aggregate of the prizes must not come to more than £25,000. 1 GA 2005, Sch 11, Pt 4, para 33. 2 Paragraph 34. 3 Paragraph 35(2). 4 Paragraph 35(1).

15.245 A lottery ticket purchaser must receive a document which identifies the society, states the price of the ticket, the date of the draw or each draw in the lottery, or enables the date to be determined.1 The document must also state the name and address of the member of the society designated as having responsibility for the promotion of the lottery by those acting on behalf of the society, or if there is one, the name of the external lottery manager. If more than one member of the society is designated, then each member so designated must have his name on the ticket. It is particularly relevant if it is a committee that is designated as having responsibility for the promotion of the lottery.2 In Stacey v Wilkins3 it was held that where a private lottery was promoted by the committee of the society, it was insufficient to print the title of the committee on the ticket: the name and address of each committee member who supported the lottery should be printed. 1 GA 2005, Sch 11, Pt 4, para 36. 2 See Stacey v Wilkins [1946] KB 271, the facts of which are discussed at 15.212. 3 [1946] KB 271.

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Lotteries 15.246 The document sent to the person purchasing the lottery ticket may be sent by text or email, provided he may retain the message electronically or print it.1 1 GA 2005, Sch 11, Pt 4, para 36(2).

15.247 The price for each ticket must be the same and must be paid to the promoter before any person is given the ticket or any right to be a participant in the lottery.1 No payment may be required from participants to enter the lottery apart from the ticket price. 1 GA 2005, Sch 11, Pt 4, para 37.

15.248 If the lottery does not comply with the conditions, then it is not exempt and an offence may be being committed under GA  2005, s  258 or s 259.1 By s 258(2), the promoter commits no offence if he holds an operating licence, or he is acting on behalf of someone who holds an operating licence, and in accordance with the terms and conditions of the licence.2 1 See 15.303 ff on offences. 2 GA 2005, s 258(3) and (4).

Registration of a society 15.249 A society promoting a small society lottery must be registered with the relevant local authority throughout the time that the lottery is being promoted.1 Registration must be carried out in accordance with GA  2005, Sch  11, Pt  5. A  local authority in England is a district council or a county council (for a county where there are no district councils), a London borough council, the Common Council of the City of London and the Council of the Isles of Scilly. In Wales, a local authority is a county council and a county borough council.2 The relevant local authority to which the application must be made is the local authority where the principal premises of the society are situated or, if a branch or section of a society is applying for registration, the principal premises of the branch or section.3 The application must be in the prescribed4 form, specifying the purposes for which the society is conducted, be accompanied by the prescribed fee,5 and must contain any other information or documents as are prescribed.6 There is an arrival fee, and if it is not paid, the registration may be cancelled. If it is cancelled, the licensing authority must tell the Commission and the society as soon as reasonably practicable. 1 2 3 4

GA 2005, Sch 11, Pt 4, para 38. GA 2005, Sch 11, Pt 5, para 41. GA 2005, Sch 11, Pt 4, para 43. As to the meaning of ‘prescribed’, see GA 2005, Sch 11, Pt 5, para 56; and see the Small Society Lotteries (Registration of Non-Commercial Societies) Regulations 2007 (SI 2007/2328). 5 Currently £40. See the Small Society Lotteries (Registration of Non-Commercial Societies) Regulations 2007, and see GA 2005, Sch 11, Pt 5, para 42. 6 GA 2005, Sch 11, Pt 5, para 42(2). By the Small Society Lotteries (Registration of Non-Commercial Societies) Regulations 2007 the current fee is £20 and must be paid within two months of the annual anniversary of registration.

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Lotteries 15.250 There are very limited grounds on which a registration may be refused. A local authority must refuse a registration application if, within the previous five years of the date of the application,1 either an operating licence application made by the applicant has been refused or an operating licence held by the applicant has been revoked by the Commission.2 Registration may be refused if the local authority think the applicant is not a non-commercial society, or a person who will or may be connected with the promotion of the lottery has been convicted of a relevant offence,3 or false or misleading information has been provided with the registration application.4 However, a local authority has to have given the applicant an opportunity to make representations before they refuse an application for registration.5 No specific type of representation is prescribed: there may be circumstances when an oral representation would be appropriate, particularly if there are disputed matters of fact. As the Commission agrees, the authority should give the society notice of the reasons why it is minded to refuse the application and an outline of the evidence supporting them to give the society opportunity to deal with them properly. The application and representations should be dealt with in the same way as the authority’s other licensing functions, and publicised in a statement of policy or on its website.6 1 GA 2005, Sch 11, Pt 5, para 47. 2 Under GA  2005, s  119. The Commission’s Guidance to Licensing Authorities (5th edn) states that the authority should consult the Commission: see para 34.42. 3 GA 2005, s 353, s 126 and Sch 7. 4 GA 2005, Sch 11, Pt 5, para 48. 5 GA 2005, Sch 11, Pt 5, para 49. 6 See the Commission’s Guidance to Licensing Authorities (5th edn), paras 34.43–34.44.

15.251 In its Guidance to Licensing Authorities (5th edn, September 2015) the Commission recommends (at para 34.20) that local authorities require small society lottery operators to keep records of unsold and returned tickets for one year after the lottery draw. Whilst it may be good practice by the operator to do so, there is however, no power to attach conditions to the registration. There is also no power to refuse or to revoke a registration, except on those grounds set out in paras 47–50 of GA 2005, Sch 11, Pt 5, and none of those grounds would seem apt to cover such a situation. 15.252 The Commission further recommends that licensing authorities ‘should apply the following criteria to all small society lottery operators’: (a) tickets should not be sold in a street, where ‘street” includes any bridge, road, lane, footway, subway, square, court or passage (including passages through enclosed premises such as shopping malls); and (b) tickets may, however, be sold from a kiosk, in a shop or door to door.1 These requirements too may not be attached as conditions for a registration. As exempt lotteries may be operated lawfully without an operating licence, that route is not available to attach conditions either. 1 Gambling Commission Guidance to Licensing Authorities (5th edn, September 2015), para 34.20.

15.253 The Commission has issued a code of practice for social responsibility in gambling under s 24 of GA 2005. For operators with operating licences, compliance with the social responsibility provisions will be a condition of 843

Lotteries all operating licences (see s 82). Otherwise, breach of the code does not per se make the operator liable to criminal or civil proceedings (s 24(8)), although it is admissible in criminal or civil proceedings. For example, inviting, causing or permitting a person under 16 to participate in a lottery is an offence (s 56), and it is a defence to prove that all reasonable steps were taken to determine the child’s age, and that the person charged believed he was not a child (s 63). In the light of this, following the social responsibility code for small society operations may well be a sensible precaution. 15.254 As soon as reasonably practicable after receipt of the application for registration, the local authority must enter the applicant society in a register kept for the purpose (together with any information prescribed to be entered).1 It must also notify the applicant and the Commission of the registration. However, this need not be done in a situation in which a local authority must or may refuse an application for registration. Therefore, there ought to be a period within which, after receipt of the application, the local authority can consider whether it must refuse the application or there are circumstances in which it may refuse it, and it must have a reasonable time to do so before it needs to put the registration on the register. Interestingly, GA  2005, Sch  11, Pt  5, paras  45 and  46 provide that the Commission must record the registration as soon as ‘reasonably’ practicable after receipt of notice of a registration from the local authority, thereby implying that the registration has taken place. 1 GA 2005, Sch 11, Pt 5, para 44.

15.255 Registration may be revoked on any of the grounds permitting a local authority to refuse registration in the first place.1 It has to give the registered society an opportunity to make representations before it revokes it and it may not revoke it unless it has done so. The Commission’s Guidance (para  34.45) recommends that authorities should inform the licensee of its reasons for contemplating revocation and the evidence on which they are based. The effect of the revocation can begin immediately or at the end of any period specified by the local authority, limited to a maximum of two months after the day of the revocation.2 1 GA 2005, Sch 11, Pt 5, para 50(1). 2 Paragraph 50(2).

Appeal 15.256 If registration is refused or revoked by the local authority, the society may appeal to a magistrates’ court.1 The authority must notify the society as soon as reasonably practicable and, within 21 days beginning on the day when it is notified of the refusal or revocation, notice of appeal must be given to the designated officer of the relevant court. The magistrates’ court hearing the appeal may affirm or reverse the local authority’s decision or make any other order, including transitional provision. The magistrates’ court therefore has wider powers to deal with the registration than the local authority, which merely has the power to register or refuse to make a registration or to revoke it. 1 By GA 2005, Sch 11, Pt 5, para 51(2) the magistrates’ court specified is the one for a local justices area wholly or partly within the area of the local authority against whose decision the society is appealing.

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Lotteries 15.257 There is no automatic continuation of the registration of a society pending appeal. However, the local authority has power to provide that the revocation need not take place immediately, but can take place during any period up to two months after the revocation, and this could allow some time for an appeal to be mounted while the registration continues, albeit it may not always be enough time for the appeal to be heard.1 1 GA 2005, Sch 11, Pt 5, para 50(2).

15.258 GA 2005, Sch 11, Pt 5, para 51(3) gives the magistrates the power to make any other order, including an order dealing with transitional provision. The Act does not set out what it means by ‘transitional provision’, so it has its normal and natural meaning, which would most naturally cover what is to happen between the revocation and the hearing of the appeal. The power would give the magistrates’ court the power to delay, if it saw fit to do so, revocation of a registration until the appeal is finally disposed of. It may make any other order (as well as affirming or reversing the local authority’s decision), and is therefore not limited to allowing the registration to continue in effect for only two months after the appeal is disposed of. It would therefore have the power to permit registration to continue on terms, for example, as to the filing of records and the details of the lotteries to be carried out by the society.

Cancellation 15.259 A society can apply to the local authority who registered it for the registration to be cancelled. The application must be in writing. As soon as reasonably practicable after receiving the application for cancellation, the local authority must cancel the registration and notify the society and the Commission of the cancellation.1 1 GA 2005, Sch 11, Pt 5, paras 52 and 53.

15.260 The local authority may cancel the registration if the society fails to pay the annual fee to the local authority.1 If it does so, as soon as reasonably practicable after doing so, it must notify the society and the Commission.2 1 GA 2005, Sch 11, Pt 5, para 54. See the Small Society Lotteries (Registration of NonCommercial Societies) Regulations 2007 (SI 2007/2328) for the fee. 2 GA 2005, Sch 11, Pt 5, para 54(4).

Annual fee 15.261 Whilst the society is registered, it must pay an annual fee to the local authority. The fee is prescribed in regulations by the Secretary of State, as is the time when it must be paid.1 1 GA  2005, Sch  11, Pt  5, paras  54(2) and 56. See the Small Society Lotteries (Registration of Non-Commercial Societies) Regulations 2007.

Records 15.262 Once registered, the society must send the local authority a statement setting out various matters, which are specified in GA  2005, 845

Lotteries Sch 11, Pt 4, para 39(2). The statement must include the arrangements for the lottery, including the dates when tickets are available for sale or supply, the dates of the draws and the arrangements for prizes and rollovers. The total proceeds of the lottery must be detailed, as well as the prizes deducted from the proceeds (including rollovers) and the amount of other costs deducted, including those of organising the lottery. If any of the lottery expenses were paid for other than by a deduction from the proceeds, the amount and the sources used to pay for them must be set out. In addition, any amount applied for the society’s purposes must be set out. (This must be at least 20% of the total proceeds.) The operator should be able to send the statement electronically and manually.1 1 See Gambling Commission Guidance to Licensing Authorities (5th edn, September 2015), para 34.54.

15.263 The statement must be signed by two members of the society appointed in writing for the purpose by the society or by its governing body1 (electronically, if sent by email). It must be sent to the local authority within three months of the date of the draw or of the last draw taking place in respect of each lottery, or in the case of ‘instant’ or scratch card lotteries, the last date that they were on sale.2 If, after receiving the society’s statement, the local authority thinks that the lottery was a large lottery, it must notify the Commission in writing, enclosing a copy of the statement and any other statement relating to any other lottery relevant as to whether the lottery in question was a large lottery.3 1 A  copy of the appointment must accompany the statement. See further the Commission’s Guidance to Licensing Authorities (5th edn, September 2015), para  34.52. Those signing the statement must be adults: GA  2005, Sch  11, Pt  4, para 39(4)(b). 2 GA 2005, Sch 11, Pt 4, para 39(3). 3 GA 2005, Sch 11, Pt 4, para 40; and see 15.201 on what is a large lottery.

15.264 The statement must be kept by the local authority for at least 18 months.1 The Commission, in its Guidance to Licensing Authorities (5th edn, September 2015), requires that the statement be kept for three years from the date of the last draw.2 It must make the statement available for public inspection at reasonable times and for a minimum of 18 months and provide copies of it on request. However, the local authority can charge a fee for providing access or copies and can refuse access unless it is paid. The amount of the fee may not exceed the reasonable cost of providing access or copies, but the cost may include a share of indirect expenditure as well.3 1 GA 2005, Sch 11, Pt 5, para 55(1)(a). 2 See the Guidance, para 34.53. 3 GA 2005, Sch 11, Pt 5, para 55.

15.265 An offence is committed if the requirements of GA  2005, Sch  11, Pt 4, para 39 as to providing statements properly signed and containing the relevant information are not complied with. It is also an offence to provide false or misleading information in respect of such statements, in breach of GA 2005, s 262. A person found guilty of such an offence is liable on summary conviction to a fine not exceeding level 5, up to 51 weeks in prison or both.1 1 GA 2005, s 263.

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Lotteries 15.266 If the offence is committed by a company or unincorporated association with the consent or connivance of, or as a result of the negligence of, any officer, then the officer as well as the body is guilty of the offence.1 If the offence is committed by a partnership other than a limited one, each partner is guilty of the offence. An ‘officer’ includes a director, manager, secretary or someone purporting to act as such, and a partner, if the body is a limited partnership. If the affairs of the body are arranged by its members, then each member is an ‘officer’ for these purposes. If the body is an unincorporated body, it is to be treated as if it were a body corporate for procedural purposes. The Secretary of State has power to make regulations modifying GA 2005, s  341 in respect of a body formed under, or recognised by, foreign law.2 An enforcement officer3 or an authorised local authority officer4 may enter premises without a warrant if they are owned or used by a registered society, to make enquiries in respect of one of the society’s lotteries.5 A warrant is required in the case of a dwelling house. Section 318 sets out the conditions and circumstances in which a warrant may be granted. 1 GA 2005, s 341. 2 GA 2005, s 341(7). 3 A  designated Commission employee or other person appointed by the Commission: see s 303. 4 GA 2005, s 304. 5 GA 2005, s 314.

Incidental non-commercial lotteries 15.267 A lottery is an exempt lottery if it is incidental to an event, and the conditions in Pt 1 of Sch 11 are complied with.1 These include that the lottery must be promoted wholly for a purpose other than private gain.2 For the meaning of ‘private gain’ see 15.200 above. This provision has recently been amended;3 before the amendment the lotteries had to be incidental to an event that was itself non-commercial, where no money raised by the organisers’ of the event from entrance or participation fees, by a sponsorship, traders’ commission or otherwise was appropriated for the purposes of private gain. The results of the lottery had to be made public while the event was taking place as well, but this is no longer the case. The provisions were amended because Parliament considered that this was a disincentive for pubs, clubs, events and concert organisers and other commercial businesses to hold a raffle for charity or good causes because they would also need to pass on any other revenue collected during the course of the event to the good cause.4 No more than the prescribed sum5 may be deducted from the proceeds for prizes, no matter how much they cost, and no more than the prescribed sum for the cost of organising the lottery, maybe deducted, no matter the actual costs incurred.6 The prescribed sum for the cost of the prizes is £500, and no more than £100 may be deducted from the proceeds for other expenses, such as the cost of printing tickets or hire of equipment.7 1 2 3 4

See GA 2005, Sch 11, Pt 1, para 1. GA 2005, Sch 11, Pt 1, para 5. By the Legislative Reform (Exempt Lotteries) Order 2016, SI 2016/124. Ibid and the explanatory notes to the Order.

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Lotteries 5 ‘Prescribed’ means prescribed in regulations by the Secretary of State – see GA 2005, Sch 11, Pt 1, para 8. 6 GA 2005, Sch 11, Pt 1, para 3 and 4. 7 See the Gambling Act 2005 (Incidental Lotteries) Regulations 2016 (SI 2016/237).

15.268 Otherwise, there is no limit on the amount of the prizes that may be won at these lotteries. Promoters may spend more than they may recover from the proceeds of the event or the lottery. Equally, people may donate prizes. However, no rollovers are permitted.1 These lotteries are intended, as the name suggests, to be incidental to an event and not the reason for the event, and the limit on the amount that may be reclaimed for the cost of prizes serves to underline that. 1 GA 2005, Sch 11, Pt 1, para 6.

15.269 No lottery ticket for one of these lotteries may be sold or supplied except on the premises where the event itself takes place and while it is taking place.1 Therefore, no sales of lottery tickets should take place prior to the event. 1 GA 2005, Sch 11, Pt 1, para 7.

15.270 These provisions replace the small lotteries incidental to exempt entertainment provisions under LAA 1976, s 3. The type of event is no longer defined as it was in s 3 ‘as a bazaar, sale of work, fête, dinner, dance, sporting or other athletic event or other entertainment of a similar character’, but it is likely that the incidental lotteries will still take place at such events.

Private lotteries 15.271 GA 2005, Sch 11, Pt 2 (‘Private Lotteries’) gives exemption to private society lotteries, work lotteries and residents’ lotteries. The conditions of Part 2 must be satisfied for the lottery to be exempt.

Private society lotteries 15.272 Private society lotteries must be promoted only by members of the society authorised in writing by the society or its governing body.1 Tickets in a private society lottery may only be sold to a member of the society or on premises wholly or mainly used for the administration of the society or the conduct of its affairs, known as ‘society premises’.2 A private society lottery may be promoted for any of the purposes for which the society is conducted, or any other purpose other than that of private gain.3 1 GA 2005, Sch 11, Pt 2, para 10(1)–(3). 2 Paragraph 10(1)(b). 3 Paragraph 13(1), as amended by the Legislative Reform (Exempt Lotteries) Order 2016 (SI 2016/124).

Society 15.273 ‘Society’ in relation to a private lottery means any group or society established and conducted for purposes not connected with gambling.1 848

Lotteries Furthermore, if the society has branches or sections, each single branch or section may be a society for the purposes of running a private lottery.2 These definitions extend the possibilities open to societies to run private lotteries, and also impose constraints upon them. Provided it is genuine, any branch or section of a society is to be regarded as a separate society, and it may, therefore, run its own private lotteries. However, because it is a separate and distinct society, it may only sell tickets or chances to members of the relevant branch or section or to persons who are on the premises of the relevant branch or section. It cannot sell tickets to members of other branches or sections of the society. In Keenan v Walter3 a private lottery was promoted by the ‘London District’ of the Communist Party. The London District comprised ward and borough branches and factory groups. Tickets were sold to members of these groups. The promoters were prosecuted and convicted under the Betting and Lotteries Act 1934, s  22(1)(f) of using premises for the conduct of the society, on the basis that since each branch was to be treated as a separate society, the sale to various branch members was a sale to persons outside the class to whom sales of private lottery tickets might lawfully be made under s  24(1). The Divisional Court upheld the conviction on this ground. The decision was followed in Hudson v Chamberlain,4 where on similar facts the Divisional Court again upheld a conviction for selling private lottery tickets to the public. 1 GA 2005, Sch 11, Pt 2, para 10(2). 2 Paragraph 10(2) and (4). See 15.276 below. 3 [1948] 1 KB 19. 4 [1949] WN 501.

15.274 An infringement of this provision by the sale of tickets to other branch members (or indeed any sale of tickets to members of the public) would constitute an offence, as the lottery would no longer be an exempt lottery because the condition limiting ticket sales to society members would not be satisfied. 15.275 Category B3A gaming machines can offer lottery games in such clubs.1 Only those who are over 18 may use those machines. 1 See the Categories of Gaming Machine Regulations 2007 (SI  2007/2158) and Chapter 24 on gaming machines.

Separate branches 15.276 Whether a society is organised in such a way that it can genuinely be said to have separate branches or sections, will depend upon a variety of factors; but as the decision of the Divisional Court in R v The Royal Borough of Kensington and Chelsea, ex p Blennerhasset1 (a case on society lotteries under LAA 1976, s 5) demonstrates, the fact that a society is set up with a number of separate branches ‘on paper’ will not prevent the conclusion that the branches should be discounted as having no real substance, if that is the reality. 1 CO/922/96 (1996) CLY 3958 – see also 15.185–15.192.

15.277 In Blennerhasset the court was concerned with whether a society known as The National Hospital Trust should, for the purposes of promoting 849

Lotteries society lotteries under LAA 1976, s 5, be regarded as one society running one lottery (in which case it should have been registered with the Gaming Board under LAA 1976, Sch 1A), or (as the Trust contended) it should be regarded as a society having 100 different branches, each promoting its own separate lottery (in which case, each of the branches was entitled to be registered separately with the respondent local authority under LAA 1976, Sch 1). The Trust contended that there were 100 regional branches, each with a separate constitution, that each branch administered a lottery, that each lottery fell within the relevant financial thresholds and that the societies were therefore entitled to be registered with the respondent. 15.278 The respondent authority and the Gaming Board disputed this contention and maintained that the 100 branches were a purely paper creation having no real substance. They pointed to ten features which they claimed supported this view. First, all the branches had the same address and telephone number; second, the legal personality of each branch was identical, in that the same individuals were involved in each branch; third, there were no separate members; fourth, there did not appear to be any separate bank accounts; fifth, they had identical constitutions, save for one; sixth, they were all marketed under the same NHS lotto trade name; seventh, they all had the same administration; eighth, they all had the same promoter; ninth, the branches were based on postal codes; tenth, they made virtually the same applications for registration with a lump sum cheque for all of them. In addition, although it was contended that each society ran a separate lottery, there was only one form of entry for the different lotteries and they were all determined by one draw and one set of winning numbers. 15.279 The court, in agreement with the local authority and the Gaming Board, concluded that the separate 100 branches had no real existence or functions. The judge said: ‘… there is no basic reality to or activity in any of them. They perform no other function than facilitating as a paper exercise the running of the weekly draw for the applicants. As [Counsel] pointed out in his ten points, where the crucial test is the separate nature of the branches, it has not been shown in the evidence before me that each one is in any way separate. The names of the Chairman, the Treasurer and the Honorary Secretary are in each case identical, as is the address of each of the branches … and its telephone numbers. They all share the same bank account, despite the suggestion in the rules that there is a movement of money out of the bank account on the morning of the draw day, [Counsel] admitted to me that that was a notional transfer. The branches all have identical constitutions, are identically marketed, have the same administrator and the same promoter and have no separate members. Most importantly, they have no other activity whatsoever than to be used as a vehicle for the running of the NHT lottery. They are a paperwork facade beyond which the Court has to look in order to see the reality. It follows that they cannot be a separate branch and therefore they do not fall within the provisions of s 23 of the 1976 Act.’1 1 See also 15.185–15.192 and R  on the application of Camelot UK  Lotteries Ltd v The Gambling Commission, the Health Lottery ELM Ltd, 51 Community Interest Companies

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Lotteries and the People’s Health Trust [2012] EWHC 2931 (Admin) for an example of how different ‘branches’ might operate. The societies were all separate community interest companies.

15.280 In order to qualify for the exemption the society must be both ‘established’ and ‘conducted’ for purposes unconnected with gambling, under GA 2005, Sch 11. Pt 2, para 10. It is clearly envisaged that a society which is established for purposes which qualify it to run private lotteries may in the course of its existence come to be conducted for purposes which, because they are connected with gambling, disqualify it. Curiously, cases decided on the meaning of these words in former legislation (namely the Betting and Lotteries Act 1934, s 24), show that a society may, in certain circumstances, by conducting the very lotteries which the section is designed to permit, be held to be ‘conducted for purposes connected with gambling’ thereby losing the protection of Sch 11. The crucial question is at what stage will the promoting of lotteries be held to have this effect? 15.281 The question came before the Divisional Court in Pearse v Hart1 and Maynard v Williams.2 Both cases concerned the conduct of clubs set up to assist professional football clubs by the efforts of their supporters. In the latter case Torquay United Supporters Club had for its purpose ‘the welfare of the football club and for that purpose to obtain funds and use them’ according to the direction of the executive committee. It promoted numerous activities, some of a fund-raising nature, and others by way of providing voluntary services to assist in the administration of the club and grounds. The club appointed a sub-committee to promote lotteries on a weekly basis. Some 5,000 tickets were sold each week, producing a net sum for the football club after expenses of a little under £5,000 per annum. Other fund-raising activities raised a net annual total of about £2,000. 1 [1955] 1 WLR 67n, [1955] 1 All ER 91n. 2 [1955] 1 WLR 54, [1955] 1 All ER 81.

15.282 The justices held that the club was ‘conducted for a purpose connected with lotteries’ and that the lottery was therefore not a ‘private’ lottery within the meaning of s  24 of the Betting and Lotteries Act 1934. They therefore convicted the promoters of running an unlawful lottery. Quarter Sessions allowed the club’s appeal. The Divisional Court (Devlin J dissenting) restored the conviction. In giving the leading judgment, Lord Goddard CJ held that in determining whether a society was ‘conducted for purposes not connected with lotteries’ the court should examine the club’s objects and see if those objects were being advanced by the use of lotteries. If they were, the society was conducted for purposes connected with lotteries. ‘What is the object here of the promoters of this lottery? It is to raise money. That is their business, or part of their business, to raise money for the purpose of handing that money over to the football club. If that is part of their business, as it clearly is, and is so found by Quarter Sessions, the fact that they are raising money by means of lotteries seems to me to show that the society is conducted for purposes connected with a lottery.’1 1 [1955] 1 WLR 54 at 59 per Lord Goddard.

851

Lotteries 15.283 It is submitted with respect that this approach fails to distinguish between purposes and means. The purpose of the club, or one of its purposes, was to raise money. One of the means by which it did so was through lotteries. It may be that on the facts of the case the scale on which it was doing so warranted a finding that the running of lotteries had become one of the purposes for which the club was conducted and justified the conviction. However, this is not the basis of the test proposed by Lord Goddard. That test, strictly applied, would justify a finding that a club, which had fundraising on behalf of some cause as an object, was conducted for purposes connected with lotteries if it promoted one lottery only in pursuance of this object. In a convincingly reasoned dissenting judgment, Devlin J drew the distinction suggested above between a purpose and the means of carrying it out. The means might, on the facts, become so disproportionate as to become a purpose in themselves, as had happened in Pearse v Hart but, unless that occurred, the fact that the means used for the purpose of raising money for the football club was a lottery did not mean that the Supporters Club was established or conducted for the purposes connected with lotteries. 15.284 Cassels J agreed with the judgment of Lord Goddard, but went on to stress the sheer scale on which lotteries were being conducted, their weekly occurrence and the degree of organisation implicit in having a committee to promote them in reaching his conclusion that the lottery had become one of the purposes of the club. It is respectfully submitted that this is the correct approach, and that the court should examine all the circumstances of the society’s private lottery scheme to determine whether, given its size, the regularity at which draws take place, the turnover and the degree of time and organisation devoted to promoting it, it can fairly be said that the running of lotteries has become a purpose of the club, removing it from the statutory exemption. This appears to have been the approach of the Divisional Court in Pearse v Hart.1 In that case the supporters club starting holding lotteries in January 1953. It had then 1,400 members. Within six months its membership rose to 12,500. The justices came to the conclusion that the lotteries were unlawful because, in their view, it could not be said that the club was not conducted for a purpose connected with lotteries. The Divisional Court upheld this conclusion. This is hardly surprising, as it seems reasonable, as Devlin J noted in Maynard v Williams,2 to conclude that the vast majority of new members were attracted solely by the idea of joining in the lotteries. 1 [1955] 1 WLR 67n, [1955] 1 All ER 91n. 2 [1955] 1 WLR 54 at 65.

Work lottery 15.285 A lottery is a work lottery if the promoters work on a single set of premises and each person to whom a ticket is sold or supplied also works on the same premises. These provisions are designed to permit such entertainments as the office or factory sweepstake. A  person works on premises if he is employed under a contract of employment to work at or from those premises, or undertakes to do so, or conducts a business1 at or from the premises.2 The lottery must be organised so as to ensure that no profits are made from it, thereby underlining the small, non-commercial 852

Lotteries nature of the lottery, or that it is promoted for a purpose other than private gain.3 1 ‘Business’ includes a trade or profession. See GA 2005, Sch 11, Pt 7, para 62. 2 See GA 2005, Sch 11, Pt 2, para 11. 3 GA 2005, Sch 11, Pt 2, para 13(2), as amended by the Legislative Reform (Exempt Lotteries) Order 2016 (SI 2016/124).

Residents’ lottery 15.286 A lottery is a residents’ lottery if the promoters live in a single set of residential premises and each person to whom a ticket is sold or supplied also lives at those premises.1 A person lives in the premises if he habitually resides in any part of them, although he may also live in other premises habitually as well. These provisions are designed to cover halls of residence, residential homes, staff quarters in hotels and at places of work, and hostels. It is the Commission’s view that this includes multiple buildings on a single site, such as a hospital site, or the site of a large company, provided they are all on the same site.2 The lottery must be organised to see to it that no profit is made from it or it is promoted wholly for a purpose other than private gain.3 As with work lotteries, this underlines the small, and non-commercial nature of these lotteries, justifying their exempt status. 1 GA 2005, Sch 11, Pt 2, para 12. 2 See the Commission’s Advice Note, ‘Organising small lotteries. Advice on lotteries that do not require a licence or registration’ (November 2009), para 5.10. This Advice Note does not make allowance for the 2016 amendments to exempt lotteries. 3 GA 2005, Sch 11, Pt 2, para 13(2) as amended by the Legislative Reform (Exempt Lotteries) Order 2016 (SI 2016/124).

Conditions of a private lottery 15.287 The following conditions must be satisfied, including by Category B3A machines,1 or the lottery will not be exempt. There is no limit on the price that may be paid for each ticket in a private lottery, but the price payable for each ticket must be the same (and so no tickets may be sold at a discount – eg five tickets for the price of four), and the price must be paid to the lottery promoters before any participant is given a ticket or any right to enter the lottery to win the prize.2 This distinction means that an entrant need not have a ticket before he has entered the lottery, but he must have paid for his entry. 1 Category B3A machines have additional conditions imposed; see Chapter 25 on gaming machines. 2 GA 2005, Sch 11, Pt 2, para 18.

15.288 There are no limits on the prizes that may be awarded, but no rollovers are permitted.1 The participant’s rights to enter and, if he wins a prize, to claim that prize are not transferable.2 1 GA 2005, Sch 11, Pt 2, para 19. 2 Paragraph 16(2).

853

Lotteries 15.289 There are a series of provisions about the lottery tickets. Each ticket must be a document,1 but this does not override any of the provisions of GA 2005, s 253 dealing with lottery tickets. The document is a lottery ticket if it confers or can be used to prove membership of the class to whom prizes are going to be allocated in a lottery (s 253(1)). The sale or supply2 of a lottery ticket includes a person doing anything which results in another person becoming a member of those amongst whom the prizes are allocated, and purchasing a lottery ticket includes any action by a person which means he becomes a member of those amongst whom the prizes are to be allocated.3 This would cover the normal sale of goods, and usually a person would not become eligible for a prize unless he had agreed to the price, and entered or been entered for the lottery. As no tickets may be sold on credit,4 in practice the price must have been paid before the person enters the lottery. 1 GA 2005, Sch 11, Pt 2, para 15. 2 For ‘supply’ see GA 2005, s 353(2) and s 253. This appears to be wider than the definition of ‘supply’ in s 353(1). 3 GA 2005, s 253(2) and (3). 4 GA 2005, Sch 11, Pt 2, para 18(c).

15.290 Tickets in private lotteries may only be sold or supplied by or on behalf of the promoters,1 and the rights given by each ticket are not transferable.2 1 GA 2005, Sch 11, Pt 2, para 16(1). 2 GA 2005, Sch 11, Pt 2, para 16(2).

15.291 No longer is it a requirement to print on each ticket: (a) the name and address of each of the promoters of the lottery; (b) to whom the promoters are willing to sell or supply tickets; and (c) that the rights conferred by the sale or supply of the tickets are not transferable and that any purported transfer will be treated by the lottery promoters as being ineffective; (d) the entry price. These requirements were repealed by the Legislative Reform (Exempt Lotteries) Order 2016 (SI 2016/124) but it may well be prudent still to print some or all of that information on tickets. 15.292 Private society lottery advertisements1 may only be displayed or distributed on the society’s premises; work lottery advertisements may only be displayed or distributed on the work premises; and advertisements for a residents’ lottery may only be displayed or distributed on the residential premises. No advertisements for private society, work or residents’ lotteries may be sent to any other premises.2 1 For the meaning of ‘advertisement’, see GA 2005, Sch 11, Pt 7, para 61. 2 GA 2005, Sch 11, Pt 2, para 14.

15.293 There are no limits on the proceeds of a private lottery, or the amounts that may be deducted by way of expenses, but work and residents’ 854

Lotteries lotteries must be organised to ensure that no profits are made, or they must be promoted wholly for purposes other than private gain.1 1 GA 2005, Sch 11, Pt 2, para 13(2), as amended by the Legislative Reform (Exempt Lotteries) Order 2016 (SI 2016/124).

15.294 It was held in Stacey v Wilkins1 (a case dealing with the private lottery provisions of the Betting and Lotteries Act 1934) that where a private lottery was promoted by the committee of a club, it was insufficient to print the title of the committee on the ticket; the name and address of each committee member who supported the lottery should be printed.2 The tickets contained the words ‘Promoters: The British Legion, Briton Ferry Branch Benevolent Fund. OD Richards, Sports Secretary’. 1 [1946] KB 271. 2 Now see GA 2005, Sch 11, Pt 2, para 17(a).

15.295 Private lotteries cannot be conducted on vessels.1 1 GA 2005, Sch 11, Pt 7, para 63. For the meaning of ‘vessel’, see GA 2005, s 353(1).

Customer lotteries 15.296 Rumour has it that this category of lottery came about because the butcher of one of the leading civil servants at the Department for Culture Media and Sport dealing with the Gambling Bill mentioned to the civil servant that he would like to run a raffle at Christmas for a turkey. A customer lottery is only exempt if it is promoted by a person who occupies premises in the course of a business,1 and the various other conditions set out in Pt 3 of Sch 11 are satisfied.2 1 This includes a trade or profession. See GA 2005, Sch 11, Pt 7, para 62. 2 GA 2005, Sch 11, Pt 3, para 20.

Customer lottery conditions 15.297 Tickets may only be sold or supplied to customers of the business when they are on the business premises.1 Although the promoter of the lottery must be the person who occupies the premises in the course of his business, this does not include persons such as those arranging for the printing of the tickets and the advertisements of the lottery, or those selling or supplying tickets, even though they may occupy the premises and could fall within the definition of promoting a lottery in GA 2005, s 252.2 1 GA 2005, Sch 11, Pt 3, para 20(1)(b). Although premises means any place, including a vehicle and vessel (s 353), no customer lotteries may be conducted on vessels: see Sch 11, Pt 7, para 63. 2 See GA 2005, Sch 11, Pt 3, para 20(3)(a) and (b).

15.298 There are strict limitations on the ambit of customer lotteries. No profits1 may be made and the lottery must be organised in such a way as to ensure that.2 A ticket must not enable the purchaser to win more than £50, 855

Lotteries whether in money, money’s worth or partly one and partly the other,3 and there may be no rollovers.4 At lease seven days (beginning with a previous draw) must elapse between draws5 in a customer lottery and another customer lottery promoted on the premises,6 and advertisements7 for the lottery may only be displayed on the business premises and may not be sent to any other premises.8 Therefore, distribution of adverts may only be on the business premises, and adverts may not be mailed to customers, or put in newspapers. 1 See GA 2005, s 254 for the meaning of ‘lottery profits’. 2 GA 2005, Sch 11, Pt 3, para 21. 3 Paragraph 27. 4 Paragraph 28. For the meaning of ‘rollover’ see s 256. 5 For the meaning of a ‘lottery draw’, see GA 2005, s 255. 6 GA 2005, Sch 11, Pt 3, para 29. For the meaning of ‘premises’ see s 353. 7 For the meaning of ‘advertisements’ see GA 2005, Sch 11, Pt 7, para 61 and 15.301 below. 8 GA 2005, Sch 11, Pt 3, para 22.

15.299 Each ticket must be a document.1 Tickets may only be sold or supplied2 by or on behalf of the promoter and the rights conferred by the sale or supply of the ticket are not transferable.3 This preserves the local and small nature of the lottery, confining it strictly to the customers of the business premises on which the lottery is held. 1 See GA 2005, Sch 11, Pt 3, para 23, which states that this is without prejudice to s 253. That section provides that a document or article is a lottery ticket if it confers, and can be used to prove membership of, a class to whom prizes of a lottery may be allocated. 2 Sale or supply of a ticket includes a person doing anything which may result in another person becoming a member of a class that might win a prize, and the purchase of a lottery ticket includes a reference to any action by someone which means he becomes a member of a class amongst whom prizes may be allocated (s 253). 3 GA 2005, Sch 11, Pt 3, para 24. This includes that any purported transfer shall be treated by the promoter as being ineffective.

15.300 Each ticket must state the name and address of the promoter of the lottery, specifying to whom the promoter is willing to sell or supply tickets and must set out that the rights conferred by the ticket are not transferable and that the promoter will not accept any purported transfer.1 The price for each ticket must be the same (so no discounting (eg five tickets for the price of four) is possible), shown on the ticket, and paid to the promoter before the purchaser is given the ticket or is given any right to join those amongst whom the prizes are going to be allocated.2 This means no tickets may be sold on credit. There is no limit on the price of the tickets but, as the maximum prize is £50 in money or value, and no profit may be made, there is likely to be a self-limiting price. 1 GA 2005, Sch 11, Pt 3, para 25. 2 GA 2005, Sch 11, Pt 3, para 26.

Advertisements and exempt lotteries 15.301 Exempt lotteries have their own provisions about advertisements, set out in GA  2005, Sch  11, Pt  7, para  61. An advertisement of an exempt 856

Lotteries lottery includes any document or electronic communication, such as text messages or via the internet, inviting people to participate or announcing that it will take place. It does not matter whether or not other information is included. The definition is inclusive not exhaustive and so the definition of advertising in s 327 may be relevant in an appropriate situation.1 1 See also the definition of ‘advertisement’ in respect of misusing the profits of a lottery in s 260, and see 15.320 below.

15.302 So far as electronic advertising is concerned, there is an interesting distinction between advertisements being ‘distributed’ and ‘sent’. The advertisement is treated as bring ‘distributed’ to any ‘place’ where it can be accessed, but it is only treated as ‘sent’ to ‘premises’ at which it can be accessed. In neither case does this include a vessel1 for private and customer lotteries, even though the definition of ‘premises’ in GA  2005, s  353 does include vessels. Displaying an advertisement includes publishing a notice. 1 GA 2005, Sch 11, Pt 7, para 63.

LOTTERY OFFENCES 15.303 The general scheme is that, only certain lotteries will be permitted, but instead of making all other lotteries unlawful as was the case under the LAA 1976, it is now an offence to promote or to facilitate lotteries unless they are specifically permitted (because they are ‘exempt’ or licensed). Certain lottery offences have been created, in addition to the general ones under the GA 20051 which are dealt with in Chapter 4. 1 Not all general offences apply to lotteries. See eg GA 2005, s 34.

15.304 Schedule 11 of GA 2005 deals with exempt lotteries and in respect of each exempt lottery there are various conditions which apply to it; if those conditions are not complied with, the lottery is not exempt. If the lottery is not exempt and the promoter or facilitator was relying on it being exempt, then he will commit an offence,1 unless he can show that he reasonably believed that it was exempt. In this way, there are sanctions to ensure that the conditions of each exempt lottery are complied with. 1 See, for example, s 56, s 258 and s 259.

Promoting a non-exempt lottery without a licence 15.305 A person commits an offence if he promotes a lottery, unless it is an exempt lottery, or he holds an operating licence authorising the activity, or he acts on behalf of a person who does have such a licence.1 In each case, the terms of the licence must be complied with. 1 See GA 2005, s 258. An exempt lottery is a lottery which is an exempt lottery under Sch 11; see 15.239 ff.

15.306 A person promotes a lottery if he makes or participates in making the arrangements for a lottery.1 A ‘participant’ in relation to a game of chance, 857

Lotteries includes a person who discharges an administrative or other function in relation to the game: see s 353(1). The definition, of course, only applies to gaming, but it may give a clue as to the intended meaning of ‘participates in making arrangements’ for a lottery. GA 2005, s 252(1) provides the overall definition of promotion of a lottery and s  252(2) gives specific examples, although it is not necessarily an exhaustive list, as the subsection begins with the words ‘In particular’. Otherwise, no definition is given of what is meant by ‘making the arrangements’. However, s 252(2) covers a wide range of activities concerning lotteries. A  person promotes a lottery if he makes arrangements for the printing of lottery tickets2 or promotional material,3 arranges for the distribution or publication4 of promotional material or possesses it to distribute or publish it, or makes other arrangements to advertise a lottery. This all concerns the person who is making the lottery happen, ie  the organiser: there would seem to be a difference between a person who makes arrangements for tickets to be printed and the printer. The former may be promoting the lottery, and the latter not. The printer may be covered by s 259 as a facilitator of a lottery if his acts are done in relation to a specified lottery. 1 GA 2005, s 252(1). 2 For the meaning of lottery tickets see GA 2005, s 253. 3 For the meaning of ‘promotional material’ see GA 2005, s 252(3) and 15.309–15.311 below. 4 Publication includes ‘display’: see GA 2005, s 353(2)(j).

15.307 A person inviting another to participate in a lottery and selling or supplying,1 or offering to sell or supply lottery tickets is also promoting a lottery, as indeed is one who does or offers to do anything whereby a person becomes a participant.2 Clearly, this covers the person with whom the lottery contract is made. However, does the volunteer or small shopkeeper physically selling a lottery ticket make or participate ‘in making the arrangements for a lottery’, when that is the only connection that he has to the lottery? There is a difference in language in the different elements of s  252(2). Section 252(a)–(c) and  (e) speaks of ‘makes arrangements’ for various activities; in s 252(f)–(k), no such phrase is used, and only the specific activity is mentioned, eg  sells or supplies a lottery ticket, possesses a lottery ticket with a view to its sale or distribution. It would seem that the act of selling, supplying or possessing a lottery ticket would be considered to be making arrangements or participating in making arrangements for a lottery, and would cover the person physically selling or supplying the ticket, and not only the organiser of the lottery with whom the lottery contract would be made.3 Using premises4 for the purpose of allocating prizes or for any other purpose connected with the administration of a lottery is also promoting a lottery. Promoting a lottery is therefore meant to have a wide ambit. 1 Or possessing them to sell or supply them. For the meaning of supply see GA 2005, s 353(1). See also s 253(2). 2 GA 2005, s 252(2). 3 Compare with the situation under LAA, s 14 and see ITP (London) Ltd v Winstanley [1947] KB 422. 4 ‘Premises’ by GA  2005, s  353(1) includes any place, including a vehicle and a vessel.

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Lotteries 15.308 The ‘sale or supply of a lottery ticket’1 includes a person doing anything by which another participates in a lottery.2 Equally, a person purchases a lottery ticket if he does anything whereby he becomes a participant, ie a member of the class among whom prizes are to be allocated.3 Interestingly, no mention is made of money having to have changed hands or the ticket having been delivered but, as it is an essential ingredient of a person becoming a participant in the lottery that he should have been required to pay to enter the lottery,4 it seems likely that the sale would have had to have been completed, save for delivery. If a person were to purchase a lottery ticket on behalf of another, it could be argued that the purchaser was supplying the ticket to the beneficiary because he was doing something whereby the beneficiary joined the class among whom the prizes were to be allocated within the meaning of s 253(2). However, the better explanation is that the ticket was supplied by the original lottery promoter to the beneficiary, although the ticket was paid for by someone else. The payer never became a member of the class among whom the prizes were to be allocated and therefore never purchased the ticket within the meaning of s 253(3). 1 Any document or article conferring or proving membership of a class among whom prizes in a lottery are to be allocated amounts to a lottery ticket by s 253(1). It would cover the internet. 2 GA 2005, s 253(2). 3 GA 2005, s 253(3). 4 GA  2005, s  14 and see para  15.57 above. See also s  99(6)(c): it is a mandatory condition of a lottery operating licence that the ticket price must be paid to the lottery promoter before any person is given the ticket or any right to be a member of the class among whom the prizes are to be allocated. There are similar provisions in respect of some exempt lotteries: see GA  2005, Sch  11, para  18(c) (private lotteries): ibid, para  26(c) (customer lotteries); ibid, para  37(b) (small society lotteries). There is no specific requirement in respect of incidental lotteries but the ticket may only be sold or supplied on the premises where the connected event is taking place and while it takes place (GA 2005, Sch 11, para 7(1)).

15.309 ‘Promotional material’ in s 252(2) means a ‘document’ which advertises a specified lottery, invites participation in one, contains information about how to participate in one, or lists winners in one.1  All these are matters which encourage participation in a particular lottery. In the case of a list of winners, it could be used to encourage participation in subsequent lotteries. The definition of advertising in s 327 is also in terms of encouraging participation and/or increasing business. In Pitts v The Evening Standard Co Ltd2 it was held that there was a distinction between ‘advertising’ matter on the one hand and ‘editorial’ matter on the other. The court accepted that the proper definition of an advertisement in the context of the GA 1968, s 42 was ‘matter published by or on behalf of the owner of a gaming business which on its true construction is solely or primarily intended to solicit custom’. In upholding the decision of a stipendiary magistrate to dismiss a prosecution brought against the Evening Standard in respect of editorial features appearing in the well-known ‘Londoner’s Diary’ relating to and descriptive of the facilities offered at certain London casinos, the court stated that it did not believe that Parliament could have intended to stifle all references to gaming merely because they referred to the various addresses at which gaming took place. The Lord Chief Justice pointed out that casino gaming conducted in accordance with the Act is a lawful activity and newspapers were entitled 859

Lotteries to comment upon such an activity. See also the judgment of Lightman J in Victor Chandler International Limited v The Commissioners for Customs & Excise,3 dealing with s 9(1) of the Betting and Gaming Duties Act 1981. He said: ‘an advertisement is some form of public notice or announcement, generally of goods or services and intended to draw attention to them and promote their sale and use.’4 1 See also Bottomley v DPP  [1914] 84  LJKB  54 and para  15.314 and generally Chapter 18. 2 (17 July 1972, unreported), DC. 3 [1999] 1WLR 2160. 4 At 2164H.

15.310 The definition of ‘promotional material’ in GA 2005, s 252(3) refers to doing various acts for a ‘specified’ lottery, eg ‘in Tuesday’s Draw you could win £1 million’. By s  252(2)(e) the person promotes a lottery if he ‘makes other arrangements to advertise a lottery’ which is not limited to a specified lottery. Section 252(2), in setting out various examples of lottery promotion, such as selling lottery tickets, does not appear to require that there should be a ‘specified’ lottery. 15.311 A  contrast may be made with the position under the previous legislation, viz the BLA  1934 and the LAA  1976 as interpreted in McKay v Gillies.1 There the Divisional Court held that the effect of the Betting and Lotteries Act 1934, s 22 (which was in identical terms to the LAA 1976, s 2) was that the words ‘the lottery’ in the BLA 1934, s 22(1)(a) and (b) related back to the words ‘any lottery promoted or proposed to be promoted’ in s 22(1) of the BLA 1934. Accordingly a printer who, by way of business, printed tickets for sale to anyone who might wish to buy them for promoting lotteries, both lawful and unlawful, committed no offence under BLA  1934, s  22(1)(a) by printing, under s  22(1)(b) by possessing or under s  22(1)(c) by distributing them, as it could not be shown that the tickets related to any specific lottery promoted or proposed when the acts were done. Those words ‘any lottery promoted or proposed to be promoted’ have not been repeated in the opening of GA 2005, s 252(1) or (2). Section 252(1) defines promoting a lottery as making arrangements for a lottery, and s 252(2) gives examples, but the requirement for the acts to be done in respect of a specified lottery are not as clear cut as under the previous legislation (most recently the LAA 1976). The McKay v Gillies situation is now covered by s 259, where it is made clear that for a printer to commit an offence he must print tickets for a ‘specified lottery.’2 1 [1956] 1 WLR 1402. The effect of the BLA 1934 as interpreted in this case appears to reverse the position as it was under the Lotteries Act 1923, s 41 as interpreted in Ranson v Burgess (1927) 91 JP 133; A-G v Walkergate Press Ltd (1930) 142 LT 408. 2 GA 2005, s 259(2).

15.312 Although the effect of ss 252 and 258 is to make illegal the sale of a ticket in a lottery (unless it is an exempt lottery, or an operating licence is held), they do not expressly or, apparently, impliedly make illegal the purchase of such a ticket or chance.1 In Corfield v Dolby2 the Divisional Court held3 that this was the effect of the Betting and Lotteries Act 1934, 860

Lotteries s  22(1)(b) (which was in similar terms) in concluding that no offence had been committed by the appellant as agent of a lottery syndicate. The appellant received from one Robertshaw a block of 48 tickets in the Irish Free State Hospitals’ Derby Sweepstake. Robertshaw had purchased the tickets from one Petch (apparently within Great Britain), so that there was an unlawful sale by Petch. The appellant held the tickets as agent for a syndicate consisting of himself and 20 other men from whom he collected weekly sums of money which he paid over to Robertshaw to reimburse him for the cost of purchase. The tickets were held on terms that each syndicate member had a one twenty-first part in the whole of the tickets and would be entitled to an equivalent share of any prize won by the tickets. The appellant was charged and convicted of having in his possession for the purpose of sale or distribution 48 tickets in a lottery. The Divisional Court quashed the conviction. Although there had been an unlawful sale by Petch to Robertshaw, the statute did not make it an offence to purchase lottery tickets. Thus, even if the syndicate were to be regarded as purchasing the tickets, this was not an offence: ‘By the Betting and Lotteries Act 1934, Parliament had made the sale of lottery tickets unlawful, but has expressly refrained from making the purchase of a ticket in a lottery an offence. If the buying of a ticket by an individual is lawful, the buying of a ticket by two persons jointly is equally lawful, and, if two persons can lawfully buy a ticket jointly, it seems to follow that there can be no reason why any number of persons should not buy jointly with an agreement between themselves that, if a fund comes into existence as a result of the purchase, they should all be entitled to share in it.’4 Moreover, there was no evidence that the appellant was in possession of the tickets with a view to selling or distributing them to anybody else; his function was to hold them and to distribute any winnings. However, if the promoter sells tickets knowing or suspecting that the sale is illegal then the proceeds of the sales may well amount to ‘criminal property’ within s 340 of the Proceeds of Crime Act 2002. A prize winner who knew or suspected that the sale was illegal and received a prize from the sale proceeds might commit an offence of acquiring/possessing criminal property under s 329 of the same Act. Similarly, where the proceeds are used to purchase prizes the prizes might amount to ‘criminal property’ as being the converted proceeds of the unlawful sales. 1 Contrast s  48, by which a young person commits an offence if he gambles: by s 48(2)(c) this does not cover participation in a lottery. 2 (1935) 30 Cox CC 341. 3 Contrast Gorenstein v Feldmann (1911) 27  TLR  457, a decision under legislation prior to the BLA 1934 making it illegal to sell a share in a ticket in a foreign lottery, where the High Court held that a claim to a share of winnings on a ticket purchased by a syndicate in the Hamburg State Lottery failed for illegality, as the statute rendering sale of a share in a ticket unlawful, by implication rendered purchase of such a share unlawful. The decision was, it is submitted, clearly superseded by Corfield v Dolby. In Clayton v Clayton (1937)  SC  619 the Court of Session left undecided the question whether for the purposes of the Betting and Lotteries Act 1934, s 22(1)(b) the purchase of a lottery ticket was an illegal transaction. 4 (1935) 30 Cox CC 341 at 344–5 per Goddard J.

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Lotteries 15.313 The situation concerning the sub-sale of part of a lottery ticket is not clear. In Clayton v Clayton1 the Court of Session left this question undecided under the BLA  1934, s  2(1)(b).2 The question never arose for consideration under the LAA  1976. The case of Gorenstein v Feldmann3 decided that sale of a share in a lottery ticket was unlawful under the Act to Prevent Foreign Lotteries 1722, s 4 (9 Geo I c 19) which made it unlawful to ‘sell or dispose of any ticket or tickets in any foreign lottery’. In the past, when Parliament has intended to legislate to control the sale of shares in lottery tickets, it has usually done so explicitly (see the Introduction to this chapter and see, for example, the Lotteries Act 1823, s  41), and this may support the view that the present provisions were not intended to apply to the sale of parts or shares of a ticket. However, GA 2005, s 253 is widely drawn. A sale or supply of a lottery ticket takes place when a person does ‘anything as a result of which another person becomes a member of the class among whom prizes in a lottery are to be allocated’. A sub-sale would, it can be argued, have the effect of including the purchaser in the class among whom prizes are to be allocated. Furthermore, a sub-sale may be covered by s 252(2)(j) on the basis that the seller is doing something by virtue of which a person becomes a member of a class among whom prizes in a lottery are to be allocated’. The contrary argument would be that the reference to the allocation of prizes is intended to refer to the allocation of prizes by the promoter to the purchasers and holders of the tickets (who will be the only persons able to prove that they are members of the class to whom prizes are to be allocated) and would not cover the subsequent transmission by the holder of a winning ticket of part of the prize to a third party under a contract of sub sale. 1 (1937) SC 619. 2 (1937) SC 619 at 629. 3 (1911) 27 TLR 457.

15.314 Although under LAA 1976, s 23 there were definitions of ‘printing’ and ‘distribute’, definitions have not been included in the GA 2005. It is clear that the ‘distribution’1 of tickets is potentially wider in its application than the sale of them, and would cover, for example, the sending of lottery tickets in bulk by a printer to a lottery promoter and their transmission by a carrier. In Bottomley v DPP2 it was said obiter that where a newspaper published an article commenting favourably and in detail on various lotteries, then, although no offence had been committed of publishing a proposal or scheme for the sale of tickets in a lottery under the Lotteries Act 1823, s 41, the proprietors could have been charged and convicted of advertising the lotteries under the same section. The decision would seem to be applicable, bearing in mind the definition of advertising gambling in s 327,3 whereby a person advertises gambling if he does anything to encourage persons to take advantage of facilities for gambling.4 Furthermore, an offence of arranging for the distribution or publication of promotional material under s 252(2)(c) may be committed. 1 By the LAA 1976, s 23 ‘distribute’ in relation to documents or other matters was defined to include ‘distribution to persons or places within or outside Great Britain and “distribution” was to be construed accordingly’. There is no definition in the GA 2005, so the word must be given its normal and natural meaning. 2 (1914) 84 LJKB 54. 3 GA 2005, s 353(2)(b).

862

Lotteries 4 See also GA  2005, s  260(5) and Sch  11, para  61. But contrast, McNee v Persian Investment Corpn [1890] 44 Ch D  306: no ‘advertisement’ or ‘notice’ of a lottery within an Act to Prevent the Advertising of Foreign Lotteries 1836 for a newspaper to give information about the promotion of lotteries. See also Pitts v The Evening Standard Co Ltd 17  July 1972, unreported, discussed in 15.309 above; and the judgment of Lightman J in Victor Chandler International Limited v The Commissioners for Customs and Excise [1999] 1 WLR 2160 at 2164H and Chapter 18 on advertising.

15.315 In Dew v DPP1 it was held that a person had ‘published’ a proposal and scheme for the sale of tickets in a lottery contrary to the Lotteries Act 1823, s  41 where he sent circulars relating to a lottery scheme to printers for printing. The publication was made to the printers, who must, it was inferred, have read the material. The decision was followed and applied in Ranson v Burgess.2 1 (1920) 89 LJKB 1166. 2 (1927) 91 JP 133.

15.316 If an external lottery manager is acting on behalf of a society or authority and makes arrangements for a lottery, both the external lottery manager and the society or authority promote the lottery.1 1 See the Gambling Commission’s Advice Note, ‘Promoting multiple society lotteries. Advice for society lotteries and external lottery managers promoting individual lotteries under one brand’ (August 2011), para 2.2.

15.317 Defences are set out in GA 2005, s 258(4). It is a defence for someone to show that he reasonably1 believed that the lottery was not a lottery or that it was one of the lotteries within the National Lottery. Obviously, there would be no offence if the arrangement promoted were not a lottery at all, but was, for example, a prize competition,2 or that one of the essential lottery requirements were missing. Equally, no offence is committed if an operating licence is held for the lottery, either by the person charged or some other person if the person charged is acting under a licence held by another person. In both cases, the terms and conditions of the licence must be being complied with. If neither were the case, there is a defence if the person charged reasonably believed there was a relevant licence and the terms were being complied with.3 Further, no offence is committed if the lottery is an exempt lottery; if not, there is a defence if the person charged reasonably believed that it was. 1 For a discussion of reasonably believed, see Chapter 4 on offences. 2 See GA 2005, s 339 for the definition of prize competition. 3 GA 2005, s 258(4).

Facilitating a non-exempt lottery without a licence 15.318 A  person commits an offence if he facilitates a lottery unless it is an exempt lottery or he acts in accordance with the terms and conditions of an operating licence.1 Anyone who prints lottery tickets or promotional material2 for a specified lottery or advertises one facilitates a lottery.3 The person does not have to hold his own operating licence; he must merely act in accordance with one.4 This section would seem to be aimed at eg the printers and advertisers and not the lottery organisers (who would be promoters 863

Lotteries under GA 2005, s 258 and s 252) and it is highly unlikely that they would have operating licences. 1 2 3 4

GA 2005, s 259(1) and (3). For the meaning of promotional material see s 259(5) and 15.309–15.311 above. GA 2005, s 259(2). GA 2005, s 259(3).

15.319 By GA  2005, s  259(4) it is a defence for a person to prove that he reasonably believed that the lottery was an exempt lottery or that he was acting in accordance with the terms and conditions of an operating licence.1 He has further defences if he reasonably believed the arrangement was not a lottery or that it was part of the National Lottery.2 What is reasonable would depend on the particular circumstances of the case.3 1 GA 2005, s 259(4)(a). 2 GA 2005, s 259(4)(b) and (c). 3 See generally Chapter 4 on offences.

Misusing the profits of a lottery1 15.320 Where a promoter has stated a fund-raising purpose for the promotion of a lottery, he commits an offence if he uses2 any part of the lottery profits for a different purpose. This only applies to statements on lottery tickets or advertisements for the lottery,3 although it may be in ‘whatever terms’. The definition of ‘advertisement’4 for the purposes of GA 2005, s 260 is expressed to include any written notice saying the lottery will take place or inviting people to participate. It does not matter whether other information is given. As it will generally be the case that the fund-raising purpose is advertised in order to sell the tickets, the purpose should therefore be in general terms so as to limit the likelihood of any breach. 1 2 3 4

GA 2005, s 260. ‘Uses’ includes permitting profits to be used; see s 260(3). GA 2005, s 260(4). GA 2005, s 260(5). See otherwise the definition in s 327 (and s 353(2)(b)) for other gambling, where the definition of advertising is different. Section 260(5) is an exception to the general definition of ‘advertisement’. It is, however, merely an inclusive definition and not an exhaustive one.

Misusing the profits of an exempt lottery1 15.321 An offence is committed if a person uses any part of the profits of certain exempt lotteries for a purpose other than the ones permitted by GA  2005, Sch  11.2 This includes not only directly using the profits, but permitting the profits to be used.3 Not all exempt lotteries are covered, but only incidental lotteries,4 private society lotteries, and small society lotteries.5 Schedule 11 sets out the purposes for which each of those lotteries may be promoted. An incidental6 lottery must be wholly for purposes other than private gain.7 The general terms of the purposes (ie not for private gain) give wide leeway as to the nature of the lottery. 1 GA 2005, s 261.

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Lotteries 2 GA 2005, Sch 11, paras 5, 13(1) and 32. 3 GA 2005, s 261(3) and s 260(3). 4 No longer need the event be non-commercial following the amendment by the Legislative Reform (Exempt Lotteries) Order 2016 (SI 2016/124), para 2. 5 Within GA 2005, Sch 11, Pts 1, 2 and 4. 6 See n 4 above. 7 GA 2005, Sch 11, Pt 1, para 5.

15.322 As regards private society lotteries the purposes are those for which the society is conducted or any other purpose other than that of private gain.1 Private society lotteries may not be established and conducted for purposes connected with gambling,2 and small society lotteries must be conducted only by non-commercial societies within the meaning of GA 2005, s 19, and for the purposes for which the society is conducted. 1 The purposes were amended by the Legislative Reform (Exempt Lotteries) Order 2016 (SI 2016/124). See GA 2005, Sch 11, Pt 2, para 13 and Pt 4, para 32. 2 Schedule 11, para 10(2).

Breaches of condition of small society lotteries1 15.323 This encompasses three offences which can be committed by a noncommercial society.2 1 See GA 2005, s 262. 2 As to who would commit the offences see s 341.

15.324 A society commits an offence if it promotes a purportedly exempt lottery when the society is not registered with the relevant local authority.1 An offence is committed even if the society is unregistered for only part of the time when the lottery is promoted. 1 GA 2005, s 262(a). See Pt 5 of Sch 11 as to registration and see 15.249 above.

15.325 An offence is also committed if the society fails to file the required records with its registering local authority.1 Further, any society providing false or misleading information in filing those records commits an offence.2 1 GA 2005, Sch 11, para 39; and see 15.262 ff above. 2 GA 2005, s 262(b).

15.326 The Commission gives advice to licensing authorities about enforcement in respect of small society lotteries.1 The Commission expects licensing authorities to investigate offences, and if appropriate, for them as opposed to the Commission or the police, to prosecute. 1 See the Commission’s Guidance to Licensing Authorities (5th edn, September 2015), para  34.25. The Commission refers to ‘Licensing’ authorities instead of local authorities just to be consistent with the rest of the Guidance where ‘licensing authorities’ are referred to, and as they are broadly the same bodies for these purposes; and see the Regulators Compliance Code.

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Lotteries

Children and lotteries 15.327 It is an offence to invite, cause or permit someone under 16 years (a ‘child’) to participate in a lottery.1 Although the GA 2005, s 46 offence of inviting a child to gamble does not apply to lotteries (s 46(2)(c)), the general provisions contained in s 46(3)–(6) do apply to an offence under s 56.2 1 GA 2005, s 56(1). 2 GA 2005, s 56(2); and see Chapter 4 on offences.

15.328 It is not an offence under GA 2005, s 56, however, to invite, cause or permit a child to participate in a lottery if the lottery is part of the National Lottery (as it has its own offences regime) or is one of certain exempt lotteries: an incidental lottery or a private lottery, ie a private society, work or residents’ lottery.1 This exemption does not apply to a customer lottery. 1 GA 2005, s 56(1).

Penalties1 15.329 Any person committing an offence under GA  2005, Pt  11 (which applies to lotteries) on summary conviction is liable to imprisonment not exceeding 51 weeks, a fine not exceeding level 5 or both.2 1 See s 263. 2 Interestingly, in Scotland the term of imprisonment is limited to only 6 months: see GA 2005, s 263(2).

Foreign lotteries 15.330 United Kingdom lottery legislation has traditionally adopted a strictly territorial approach in its application to foreign lotteries. Where a lottery is promoted and conducted wholly outside the United Kingdom, Parliament has normally allowed the question of the legality or otherwise of the lottery to be determined by the law of the country where it is promoted. However, legislation prohibiting the conduct of lotteries within the jurisdiction (such as by prohibiting advertisements and the sale of tickets) has normally applied to foreign lotteries in exactly the same way as to domestic lotteries. Indeed, on occasions, specific legislation has been enacted to prevent the conduct of foreign lotteries within the jurisdiction when it was thought that they might elude the legislation designed to catch domestic ones.1 1 See eg An Act to Prevent Foreign Lotteries 1722 (9 Geo I c 19) discussed in MacNee v Persian Investment Corpn (1890) 44 Ch D 306.

15.331 In MacNee v Persian Investment Corpn1 it was held that no offence under the Act to Prevent Foreign Lotteries 1722 (9 Geo I c 19) was disclosed where a company was formed and registered in England for the purpose, inter alia, of acquiring a concession to promote lotteries in Persia, where lotteries were lawful. In an action brought by one of the company’s shareholders, Chitty J declined to grant an injunction to restrain the company from acquiring 866

Lotteries the concession. The shareholder argued that acquiring the concession would involve the company in illegality by infringing the provisions of the 1722 Act, s 4 making it an offence to ‘erect, set up, continue or keep or [to] cause or procure to be erected, set up, continued or kept any lottery’ under colour of ‘any Grant or Authority from any foreign Prince, State or Government …’. In the judge’s view the proposals did not involve setting up a lottery within the jurisdiction (which would have been illegal), but rather the setting up within the jurisdiction of a company to run lotteries in a foreign state where lotteries were lawful. There was nothing, either express or implied, in the domestic legislation to prevent this. The judge said (at 312): ‘The company, by virtue of its contract, do not propose to set up any lottery in this country. The proposal, or the subject of the contract, is very simple. In Persia, I take it, seeing that the concession has been granted by the Shah, lotteries are lawful, and this company proposes, under the concession, to set up lotteries in that country. This Act of Parliament is not addressed to such a case as that; it is unquestionably directed against the erection of lotteries in this country; but the Legislature of Great Britain of that day did not intend to exercise any jurisdiction over lotteries in foreign countries, kept and carried on exclusively in foreign countries; and there is nothing in this Act, nor indeed in any of the Acts that I have been referred to, which would prevent two Englishmen in this country, British subjects, from putting together a fund for the purpose of employing that fund in erecting a lottery in a foreign state, where foreign lotteries are lawful. By no ingenuity can the case be brought within that section; and it is to be borne in mind, in considering these Lotteries Acts, that they are particular enactments directed to particular offences, which are specified; and I am not at liberty to take some general notion of what may, or may not have been, the intention of the Legislature, because I  am dealing with criminal law, and it is important to remember that the Act of Parliament is so framed to create and deal with specific offences.’ 1 (1890) 44 Ch D 306.

15.332 By contrast, the specific activities of advertising foreign lottery tickets or dealing in foreign lottery tickets were unlawful under the old legislation if committed within the jurisdiction. Thus, in Re International Securities Corpn Ltd1 a company formed with the object of dealing in foreign premium bonds was wound up by order of the court as conducting an illegal business, the dealing being contrary to the provisions of the Act to Suppress Lotteries 1802 (42 Geo III c 119) which made it an offence to promote any lottery not authorised by statute. 1 (1908) 99 LT 581.

15.333 In Prothero v Watson1 and Barker v Wood2 convictions were upheld of selling tickets in the Irish Free State Hospitals Sweepstake contrary to the Lotteries Act 1823 (4 Geo V c 60), s 41, which made it an offence to sell tickets or chances in a lottery, the sales having occurred in England. 1 (1931) 95 JP 184, 145 LT 643. 2 (1932) 48 TLR 402.

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Lotteries 15.334 In R v Registrar of Joint Stock Companies, ex p More1 it was held that the Registrar of Companies had been right to refuse to register on the grounds of illegality a company whose objects included the sale in England of tickets in the Irish Free State Hospitals Sweepstake. The fact that the sweepstake was lawful in Ireland did not override the provisions of the Lotteries Act 1823, s 41, making it unlawful to sell lottery tickets in England. 1 [1931] 2 KB 197.

15.335 The specific lottery offences in Pt 11 of GA 2005 (including promoting or facilitating a lottery) are specified to apply to things done in relation to a lottery in Great Britain or by remote gambling equipment situated in Great Britain.1 Therefore, the prohibition against the sale of tickets in foreign lotteries in Britain is continued. At first glance, promoters, printers and advertisers of foreign lotteries in Great Britain could be guilty if they carry out their activities in Great Britain relating to foreign lotteries including printing tickets for them or organising for them to be advertised abroad. However, this is not the case. None of Pt 11 applies if no one in Great Britain does anything so that he becomes a participant in the lottery and no-one possesses any tickets for the lottery aiming to sell or supply them to those in Great Britain, ie if no one in Britain buys any tickets and the tickets are not intended to be sold here, no offence is committed.2 Therefore it is not an offence to produce or to permit the production of lottery material in Great Britain solely for the purposes of export for use in lawful foreign lotteries. 1 GA 2005, s 265. The offence of advertising unlawful gambling under s 330 does not apply to lotteries; see s 330(3). None of the recent amendments to GA 2005 by the Gambling (Licensing and Advertising) Act 2014 which amend those sections and also s 36, change the specific provisions covering lotteries. 2 GA 2005, s 265(2).

15.336 Anyone charged with an offence of promoting or facilitating a lottery has a defence if he can show that he reasonably believed that no one would sell or supply tickets to anyone in Great Britain nor that anyone in Great Britain would do something to become a participant in the lottery,1 ie that no one in Great Britain would buy tickets. 1 GA 2005, s 265(3).

15.337 GA  2005, s  258 makes it an offence for anyone to sell a ticket in a lottery unless it is an exempt lottery or authorised by an operating licence. As mentioned above, this undoubtedly applies to the sale of tickets in a foreign lottery as well as to those in a domestic lottery, provided the tickets are sold and/or intended to be sold in Great Britain. What is less clear, however, is the question what effect this section has upon joint ventures between parties within the jurisdiction to purchase tickets in foreign lotteries. The position, it is suggested, is that it is lawful for an individual or a syndicate within the jurisdiction to buy and hold lottery tickets in a foreign lottery which is lawful within the country of its promotion, provided the tickets are purchased within that country; and that it is probably lawful for an individual or a syndicate based within the jurisdiction to purchase tickets in a lawful foreign lottery by purchasing tickets within the jurisdiction, even though the transaction will involve the commission of an offence under s 258 by the seller of the tickets. 868

Lotteries 15.338 To the extent that cases decided under previous legislation can provide guidance, the relevant authorities are Clayton v Clayton and Corfield v Dolby. In Clayton v Clayton1 the three plaintiffs brought an action against the defendant to recover money produced by a ticket in the Irish Free State Hospital Sweepstake which they alleged had been purchased by the defendant as agent for a syndicate, based in Scotland, of which they and he were the former members. Their case was that they had agreed to contribute to the purchase of the ticket before the defendant bought it. The defendant contended amongst other things, by way of defence, that he had purchased the ticket in Scotland and that only subsequently had the first and second plaintiffs (but not the third) offered to pay for a share in the ticket. In the light of this he contended that the plaintiffs’ claim was bound to fail for illegality: lotteries were, he maintained, illegal at common law in Scotland; alternatively, they were rendered illegal by the Betting and Lotteries Act 1934, s 21. Alternatively the BLA 1934, s 22(1)(b) rendered the sale of a lottery ticket unlawful. This applied to render the instant transaction unlawful in one or both of two ways. First, although the statute did not expressly render the purchase of a lottery ticket unlawful, this must necessarily be implied, since a sale necessarily involves a purchase. On that basis, the agreement which the plaintiffs relied on was necessarily an agreement with an illegal purpose, namely the purchase of a lottery ticket. Second, it was contended that on the basis of the defendant’s pleaded case, he had sold or agreed to sell to the plaintiffs a part or share in a lottery ticket already owned by him. This was itself illegal under s 22(1)(b), which prohibited, so it was argued, a sale of part of a lottery ticket as well as the sale of a whole ticket. 1 (1937) SC 619 and see Chapter 21 as to syndicates generally.

15.339 The defendant applied to have the plaintiffs’ claim dismissed upon the basis that the pleadings disclosed that it was based upon an illegal transaction and must necessarily fail. At first instance the Lord Ordinary, Lord Stevenson, allowed the application and dismissed the action. Although holding that lotteries are not illegal at common law in Scotland, he concluded that the Betting and Lotteries Act 1934, s  21 did render the lottery, albeit a foreign one, unlawful, and accordingly the court would not enforce any contract relating to it. Further, he concluded obiter that the BLA 1934, s 22(1) (b) did render unlawful the purchase of a lottery ticket, so that the contract relied on by the plaintiffs was, for this additional reason, unlawful. 15.340 However, the First Division of the Court of Session allowed the case to proceed to trial. Whilst agreeing that lotteries are not illegal at common law in Scotland, two members of the court disagreed with the Lord Ordinary as to the effect of the Betting and Lotteries Act 1934, s 21 and concluded that it did not apply to render unlawful a lottery carried on lawfully in the Irish Free State. It followed that there was nothing in s 21 which had the effect that the setting up of a partnership in order to purchase a ticket in a lawful foreign lottery involved the setting up of a partnership with an illegal purpose. As to the prohibition upon the sale of lottery tickets under s 22, the court left open the question whether the prohibition upon sale necessarily had the effect that the purchase of such a ticket was also rendered illegal, since the issue did not arise on the plaintiffs’ pleaded case. That case was that the parties agreed that the plaintiff should purchase a foreign lottery ticket. However, 869

Lotteries it would have been open to him to carry out the agreement by purchasing a ticket in Ireland, which would have been unarguably lawful, so that it could not be said that the agreement necessarily involved the unlawful purchase of a ticket in Scotland – if indeed such a purchase was unlawful, a point which the court did not decide. 15.341 The court concluded that the case turned upon the resolution of the dispute between the plaintiffs and the defendant as to the circumstances in which the plaintiffs had taken a share in the ticket, and that, as evidence was necessary to resolve the dispute, the case must proceed to trial. If the plaintiffs’ case were correct, and their agreement to contribute to the price had preceded the purchase, then, for the reasons noted, there was nothing inherently illegal in the agreement. If, however, the defendant’s version was correct and he had agreed to allow them to buy shares in a ticket already purchased by him, then, if the legislation prohibited the sale of shares in tickets, the transaction had involved an illegal sale by him. Lord Normand said:1 ‘We can only repel the plea if the defendant’s averments are themselves clearly consistent with a lawful contract, and the defendant’s averments are that two of the pursuers each offered to take a 2s 6d share in a ticket which had already been bought by the defender. That raises a question which may be attended with considerable difficulty, whether a sale by the defender of part of a ticket (to use popular language) is a sale of a ticket or chance in a lottery prohibited by section 22(1)(b).’ 1 (1937) SC 619 at 629.

15.342 Clayton v Clayton thus left open the questions whether the prohibition on sale of lottery tickets in the Betting and Lotteries Act 1934 rendered their purchase illegal, and whether sale of part of a ticket was illegal. In Corfield v Dolby1 (for the facts of which see 15.312 above), the Divisional Court held that purchase of a lottery ticket was not rendered unlawful by the Betting and Lotteries Act 1934, s 22 (the predecessor to s 258 of GA 2005). It could not be said that the appellant Corfield had the syndicate tickets in his possession for the purpose of sale or distribution. ‘The legal view of the position of those members [sc of the syndicate] is that they were co-partners in the purchase of the tickets. To use a common expression, they had clubbed together to buy the tickets, and nothing was further from their minds than that one should sell tickets or fractions of tickets to other members. The intention was that one should hold them all as custodian and agent on behalf of all.’2 1 (1935) 30 Cox CC 341. 2 At 344 per Lord Hewart CJ.

15.343 If Corfield v Dolby states the law correctly under the Gambling Act 2005, then it would seem that a syndicate formed to purchase within the jurisdiction tickets in a lawful foreign lottery does not infringe s 258 even though the transaction will involve an unlawful sale under that subsection. However, the point is clearly open under the Gambling Act 2005. Moreover, the Divisional Court in Corfield v Dolby obliquely hinted that whilst the 870

Lotteries offence charged was not made out, the prosecution might have succeeded if brought under other provisions of the BLA 1934. A similar comment may be apposite under the GA  2005. It is possible, for example, to see how the provisions now contained in GA 2005, s 258 might be infringed on the basis of s  252(2)(j),1 in that the agent of the syndicate may be doing something within Great Britain whereby another person (as well as himself) becomes a participant in a lottery. 1 And see GA 2005, s 253(2). See also Chapter 21 on syndicates.

15.344 In summary, the impact of the GA  2005 upon foreign lotteries appears to be as follows: (1) There is no legal bar upon a person purchasing tickets in a lawful foreign lottery within the country where the lottery is promoted and bringing them back to the jurisdiction for his own use. It may be noted that the UK government conceded that this was the position in Customs and Excise Comrs v Schindler [1994] QB 610 at 635 under the LAA 1976. (2) By parity of reasoning, there would appear to be no objection to the setting up within the jurisdiction of a syndicate to buy tickets in a lawful foreign lottery, provided they are purchased abroad and brought into the United Kingdom to be held for the purposes of the syndicate. This conclusion can be supported by reference to previous law as interpreted in Clayton v Clayton and Corfield v Dolby. (3) Corfield v Dolby can be marshalled to support the view that an individual who buys a ticket in a lawful foreign lottery within the jurisdiction commits no offence, although the seller will commit an offence. (4) Again, Corfield v Dolby can be marshalled to support the view that a syndicate set up within the jurisdiction to purchase tickets in a lawful foreign lottery commits no offence, even if the tickets are purchased within the jurisdiction, though the seller will commit an offence. (5) There is nothing in the GA 2005 to reverse the effect of the old cases of MacNee v Persian Investments Corpn and Clayton v Clayton, namely that it is lawful to set up a company or partnership within the jurisdiction with a view to running lotteries abroad in a country where they are lawful, or to deal in tickets in such a lottery in the country where it is lawfully promoted; otherwise the legal restraints upon the conduct of lotteries within the jurisdiction contained in the GA 2005 apply to foreign lotteries in the same way as they apply to domestic ones. As the Explanatory Notes to the GA 2005 provide, as soon as a person in Britain becomes a participant in a lottery, or a person possesses tickets with a view to their sales in Great Britain, the lottery will be regulated by Pt 11.1 1 See para 645.

External Lottery Managers 15.345 An External Lottery Manager (‘ELM’) is a person who makes arrangements for a lottery on behalf of a society or authority of which he is not 871

Lotteries a member, an officer, or an employee under a contract of employment.1 ELMs have to have an operating licence from the Commission and in addition to the other conditions and codes of practice that must be complied with, there are conditions specific to ELMs.2 Both ELMs and the societies or authorities for whom they manage the lottery carry the responsibility for promoting a lottery. The Commission has set out its views on ELMs when working with societies and authorities in its Advice Note: ‘External Lottery Managers. The main requirements of the Gambling Act 2005, licensed conditions and their role in promoting society and local authority lotteries’ in September 2014. Further advice has been given in other Advice Notes.3  A  successful multiple society lottery which had an ELM is R on the application of Camelot in UK Lotteries Ltd v The Gambling Commission, The Health Lottery ELM Ltd, 51 Community Interest Companies, and The People’s Health Trust.4 1 GA 2005, s 257. 2 LCCP Condition 11.2.1. 3 ‘Promoting multiple society lotteries. Advice for society lotteries and external lottery managers promoting individual lotteries under one brand’ (August 2011); and ‘Offering lottery, gaming and betting products under common branding. Advice for society lotteries and external lottery managers’ (June 2012). 4 [2012] EWHC 2391 (Admin).

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Chapter 16 The National Lottery

INTRODUCTION 16.1 The launch of a National Lottery in November 1994 was inspired by two principal considerations. First, there had for some time been a growing public interest in the possibility of a public lottery to raise money for good causes to supplement sums available from regular taxation. In its report published in 1978 the Rothschild Commission, after a detailed study, recommended that there should be a National Lottery for good causes to be run by a National Lottery Board.1 Second, there was the perception that the growth of modern technology would make it increasingly difficult to enforce the prohibition contained in the Lotteries and Amusements Act 1976 upon the promotion of foreign lotteries in Great Britain. There was especial concern that large public lotteries promoted in the countries of the European Community would penetrate the British gambling market. As the government concluded in its White Paper ‘A National Lottery Raising Money for Good Causes’ published in March 1992:2 ‘Cheaper telecommunications and new means of payment, might in due course make participation in a foreign lottery as easy as a phone call. The British public might therefore be able to participate in lotteries benefiting the citizens of other countries but not their own.’3 1 Royal Commission on Gambling: Final Report, Cm 7200, Vol I, Chapter 13. 2 Cm 1861, March 1992. 3 Cm 1861, para 10.

16.2 The National Lottery was set up under the National Lottery etc. Act 1993 (‘NLA 1993’).1 Although that Act has subsequently been amended by the National Lottery Act 1998 (‘NLA 1998’), the Horserace Betting and Olympic Lottery Act 2004 (‘HBOLA  2004’), the Gambling Act 2005 (‘GA  2005’), the National Lottery Act 2006 (‘NLA 2006’) and the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013,2 the amendments do not affect the essential scheme of the legislation, which was designed to enable the National Lottery to be run by a private sector operator or operators under licence from a government department. This was achieved by a two-tier licensing system. In overall charge of the lottery was the Director General of the National Lottery appointed by the Secretary 873

The National Lottery of State. He was responsible for running the Office of the National Lottery (‘Oflot’) which was a non-ministerial government department. The Director General and Oflot had a number of statutory duties to supervise and control the running of a National Lottery in the private sector. 1 The first Director General was appointed by the Secretary of State on 25 October 1993. 2 SI 2013/2329.

16.3 The Director General was authorised to license a body corporate to run the National Lottery under NLA 1993, s 5. Once licensed, the holder of the s 5 licence was itself entitled to promote lotteries, although for each lottery, or separate description of lotteries, so promoted, it was required to obtain from the Director General a licence under s 6 of the Act. In addition, a s 5 licensee was authorised to enter into agreements with other promoters permitting them to promote a lottery or lotteries pursuant to the agreement, though such a promoter had also to obtain from the Director General a licence under s 6 of the Act to promote the lottery or description of lotteries provided for by the agreement.1 It was a statutory requirement that the s 5 licence should contain conditions obliging the s 5 licensee to make payments to the Secretary of State from the proceeds of the lotteries for the purpose of distribution to good causes.2 1 NLA  1993, s  1(4). Section  1 is prospectively substituted by NLA  2006, s  6 and Sch 1, paras 1 and 2: see 16.30–16.31 below. 2 NLA  1993, s  5(6). Section 5 is prospectively substituted by NLA  2006, s  6 and Sch 1, paras 1 and 4: see 16.30–16.31 below.

16.4 The NLA  1993 also made detailed provision for the holding of the proceeds of the National Lottery and their distribution to the various recipient good causes. 16.5 The NLA 19981 introduced a number of amendments to the statutory framework laid down in the NLA 1993. Its principal change was to replace the Office of Director General of the National Lottery by a body corporate known as the National Lottery Commission2 and to transfer to that body the functions of the Director General. The NLA 1998 made provision for the continuing validity of acts done by the Director General,3 and for any approval, authorisation, consent, delegation, direction, licence or appointment of the Director General to have effect as if done by the Commission.4 With effect from 1 October 2013, the National Lottery Commission was abolished and its functions were transferred to the Gambling Commission in similar terms.5 In the ensuing discussion, references to acts done by the Director General or the National Lottery Commission prior to the relevant transfer date should be read subject to that qualification. Unless otherwise stated, references in this chapter to the Gambling Commission’s functions, duties or powers are references to its functions, duties or powers in its capacity of regulator of the National Lottery under Part I of the NLA 1993. 1 2 3 4

NLA 1998 was passed on 2 July 1998. NLA 1998, s 1 brought into force on 1 April 1999. NLA 1998, s 1 and Sch 1, para 5. NLA 1998, s 1 and Sch 1, para 5.

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The National Lottery 5 The Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013 (SI  2013/2329), made pursuant to the Public Bodies Act 2011.

16.6 The HBOLA 20041 amended the NLA 1993 to enable lottery games to be established as part of the National Lottery for the purpose of raising funds for the 2012 Olympic and Paralympic Games in London, and to provide for the holding and distribution of proceeds from those lottery games towards the cost of staging the Games.2 1 HBOLA 2004 was passed on 28 October 2004. See also amendments to HBOLA 2004 made by the Transfer of Functions (Olympics and Paralympics) Order 2007 (SI 2007/2129), by virtue of which certain of the functions of the Secretary of State under Part 3 of HBOLA 2004 were exercisable concurrently with the Paymaster General; and now also amendments to HBOLA 2004 made by the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) 2013 (SI 2013/2329), Sch, para 27. 2 HBOLA 2004, Pt 3, Pt 4, s 38 and Schs 5 and 6.

16.7 The NLA 20061 amended the NLA 1993 to create a new good cause and distributor, the Big Lottery Fund, to supersede the National Lottery Charities Board (also known as the Community Fund), the New Opportunities Fund and the Millennium Commission, and to make various amendments to the powers and obligations of all lottery distributors.2 The NLA  2006 also amended certain provisions of the NLA 1993 relating to the constitution of the National Lottery Commission.3 It also amended the licensing structure of the National Lottery and gave the Secretary of State a power further to amend the licensing structure at a later date.4 1 NLA 2006 was passed on 11 July 2006. Sections 6, 16, and 22–24 came into force on 11 July 2006: s 22(1). Section 14 and Sch 2 were brought into force on 1 August 2006 by the National Lottery Act 2006 (Commencement No  1) Order 2006 (SI  2006/2177). Sections  1–4, 8 and 10–12 were brought into force on 1  October 2006 by the National Lottery Act 2006 (Commencement No  2) Order 2006 (SI 2006/2630). Section 7(1) and (2) and (except as to the insertion of s 22(3B)(e) of NLA 1993) (3), s 13(1) (except as to the addition of s 25(6)(b) of NLA 1993) and (2) (except as to the addition of s 25(A)(13) of NLA 1993), s 15, ss 17–20, s 21 and Sch  3 were brought into force on 1  December 2006 by the National Lottery Act 2006 (Commencement No 3) Order 2006 (SI 2006/3201). On commencement of s 5 of NLA 2006, see 16.34 below. 2 NLA 2006, ss 7–20 and Sch 2. 3 NLA 2006, ss 1 and 2. 4 NLA 2006, ss 3–6 and Sch 1.

16.8 The principal provisions of the GA  2005 relevant to the National Lottery are described at 16.11 below. 16.9 The rules governing the National Lottery are to be found in the NLA  1993, the NLA  1998, the HBOLA  2004, the GA  2005, the NLA  2006, the National Lottery Regulations 1994,1 certain other statutory instruments noted below, in various licences granted under ss 5 and 6, directions to the Gambling Commission by the Secretary of State under s 11 of the NLA 1993 and in rules contained in the licences for the regulation of particular lottery games. In addition, there are several publications produced by the Director 875

The National Lottery General of the National Lottery and/or the National Lottery Commission and/or the Gambling Commission setting out, inter alia, policy in connection with the exercise of various of the Gambling Commission’s powers and laying down standards to be achieved by the s  5 licensee. Taken together, these sources of regulation provide an extremely detailed framework of control, and it cannot be emphasised too strongly that any attempt to discover the exact functions, duties, rights and liabilities of the Gambling Commission, of the s 5 licensee and any s 6 licensees, of persons providing services for the purposes of the National Lottery, of persons participating as players, and of persons who distribute or receive the proceeds of the National Lottery must involve a careful examination of all the relevant material, both statutory and non-statutory. A comprehensive survey of all the material would be wholly beyond the scope of this chapter: what follows is no more than a sketch plan designed to assist the reader to find his or her bearings. 1 SI 1994/189, as amended by the National Lottery (Amendment) Regulations 2007 (SI 2007/2307) with effect from 1 September 2007.

The licensing system 16.10 For the purposes of the NLA  1993 the expression ‘the National Lottery’ means all the lotteries that form part of the National Lottery taken as a whole.1 A lottery forms part of the National Lottery if it is promoted or proposed to be promoted: (i)

by the person licensed by the Gambling Commission to run the National Lottery under s 5 (the ‘s 5 licensee’), or

(ii) pursuant to an agreement between the s  5 licensee and the lottery’s promoter or proposed promoter, provided, in either case, that its promotion is authorised by a licence granted to the promoter or proposed promoter by the Gambling Commission under s 6.2 It follows from this, first, that the s 5 licensee is required to obtain a separate licence for each individual lottery it wishes to promote, thus maximising the Commission’s control over its activities;3 and, second, that promotion of lotteries which are to form part of the National Lottery is not confined to the s 5 licensee. Any promoter which is able to reach an agreement with the s 5 licensee and to obtain a s 6 licence from the Gambling Commission may promote such a lottery. So far, one such promoter had launched a lottery game, discussed below.4 1 NLA 1993, s 1(1). 2 NLA 1993, s 1, as amended by NLA 2006, s 3. Under s 6 of NLA 2006, the Secretary of State may by order provide for Sch 1 to NLA 2006 to come into effect, having consulted the National Lottery Commission. Sch  1 would amend the licensing structure of the National Lottery by substitution of ss 1, 5 and 6, the addition of s 6A and amendment of ss 4(3), 7, 7A(1), 8, 9, 10 10A, 10C, 22, 32 of, and Sch 3 to, NLA 1993, and by consequential amendments to ss 21, 22(1), 24(1), 26(4)(a), 28(3) (a) and 32(3)(a) of HBOLA 2004. See 16.30–16.31 below. 3 The National Lottery Commission has also granted s  6 licences authorising the promotion of lotteries which fall within classes described by the relevant licence. See 16.27–16.29 below. 4 See 16.28 below.

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The National Lottery 16.11 Participating in a lottery which forms part of the National Lottery is not gambling for the purposes of the GA 2005, except for the purposes of s 42 (the offence of cheating) and s 335 (enforceability of gambling contracts) and, where such participation would also constitute gaming within the meaning of s 6 of the GA 2005, it shall be treated as gaming for the purposes of the GA 2005 if and only if a person participating in the lottery is required to participate in, or to be successful in, more than three processes before becoming entitled to a prize.1 In addition, participation in a lottery which forms part of the National Lottery will not be treated as betting for the purposes of the GA 2005 where it would satisfy the definition of pool betting in s  12, or satisfy the definition of betting in s  9 by virtue of s  11 of that Act.2 Furthermore, it is a defence for a person charged with an offence under s 258 (promotion of lottery) or s 259 (facilitating a lottery) of the GA 2005 that the arrangement to which the charge relates was a lottery forming part of the National Lottery.3 To put the matter beyond doubt, presumably, s 264 of the GA 2005 (Exclusion of the National Lottery) provides that the preceding provisions of Part 11 of the GA 2005 (which, though, include ss 258 and 259) do not apply to the National Lottery. Finally, in the NLA 1993, ‘lottery’ has the same meaning as in the GA 2005.4 1 GA  2005, s  15(1)–(3), which were brought into force on 1  October 2005 by the Gambling Act 2005 (Commencement No  2 and Transitional Provisions) Order 2005 (SI 2005/2455). 2 GA 2005, s 15(4), which was brought into force on 1 October 2005 with s 15(1)– (3). Section 2 of the NLA 1993 (which provided that a lottery that forms part of the National Lottery is not unlawful), and the consequential amendments made by Sch 1 of the NLA 1993 to the Gaming Act 1968, s 62(3) and the Lotteries and Amusements Act 1976, s  1 and  2 were (together with the 1968 and 1976 Acts) repealed by GA 2005, s 356(3) and (4) and Sch 17 with effect from 1 September 2007 (which latter provisions came into effect on that date under the Gambling Act 2005 (Commencement No 6 and Transitional Provisions) Order 2006 (SI 2006/3272)). 3 GA  2005, ss  258(4) and 259(4), which were brought into force with effect from 1 September 2007 by the Gambling Act 2005 (Commencement No 6 and Transitional Provisions) Order 2006 (SI 2006/3272). 4 NLA 1993, s 20 (as amended by the GA 2005, Sch 3, para 3).

The Gambling Commission 16.12 The legal constitution and membership of the Gambling Commission is described elsewhere in this work.1 The Commission is under a specific duty to give written reasons for any decisions which it may make in the exercise of its functions under the NLA 1993, ss 5 to 10 (licensing), or Sch 3 (revocation of licences).2 1 See Chapter 3 above. 2 NLA 1993, s 3A and Sch 2A, para 9.

16.13 In the exercise of their statutory functions under the NLA 1993 both the Secretary of State and the Gambling Commission are under a duty to act in the manner they consider most likely to secure that the National Lottery is run, and every lottery that forms part of it is promoted, with all due propriety, and that the interests of every participant in a lottery that forms part of the National Lottery are protected.1 Subject to these requirements, both the 877

The National Lottery Secretary of State and the Commission must in exercising those functions do their best to secure that the net proceeds of the National Lottery are as great as possible.2 Certain of the functions of the Secretary of State under the NLA 1993 and Part 3 of the HBOLA 2004 are exercisable concurrently with the Paymaster General.3 1 NLA  1993, s  4. A  reference to functions in Part I  of the NLA  1993 is treated as including a reference to functions under Part  3 (National Lottery: Olympic Lotteries) of the HBOLA 2004: s 34(2) of the HBOLA 2004. 2 NLA 1993, s 4. The reference in s 4(3) of the NLA 1993 to the net proceeds of the National Lottery is treated as including a reference to sums paid into the Olympic Lottery Distribution Fund by virtue of s 24 of the HBOLA 2004. 3 Functions under NLA 1993, s 4, but only so far as that section applies by virtue of s 34(2) of the HBOLA 2004; functions under NLA 1993, s 11, but only so far as that section applies by virtue of s 34(7) of NLA 2004; functions under NLA 1993, s 33, but only so far as that section applies by virtue of s 34(11) of HBOLA 2004; functions under HBOLA  2004, Pt  3 (except ss  22(2), 25 and 32(2)(a)(i)): see the Transfer of Functions (Olympics and Paralympics) Order 2007 (SI  2007/2129), para 3, which order came into force on 22 August 2007 and also made consequential amendments to HBOLA 2004.

16.14 The Gambling Commission’s duties in respect of the National Lottery following the merger are the same as those of the National Lottery Commission prior to the merger. However, the latter Commission’s obligation to consult with the former (if in the course of the exercise of its functions the National Lottery Commission became aware of a matter about which the Gambling Commission was likely to have an opinion, the National Lottery Commission was obliged to consult the Gambling Commission), and to comply with any direction of the Secretary of State (general or specific) to consult the Gambling Commission, no longer subsist.1 The National Lottery Commission was also permitted to provide any information received by it in the exercise of its functions to the Gambling Commission, for use in the exercise of the Gambling Commission’s functions.2 The Gambling Commission has established a National Lottery Committee to provide advice to the Commissioners and the Commission’s Chief Executive in relation to the Commission’s functions under the NLA 1993.3 1 NLA  1993, s  4A, inserted by GA  2005, s  15(5), and Sch  3, para  2, with effect from 1  October 2005 (the Gambling Act 2005 (Commencement No  2) Order 2006 (SI  2006/2455)), repealed by the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013 (SI  2013/2329), art  4, Sch, para  3. The Gambling Commission’s reciprocal obligation under the GA 2005, s 31, to consult with the National Lottery Commission was also repealed by SI 2013/2329, art 4, Sch, para 31. 2 GA 2005, s 30(2) and Sch 6, Pt 1; see also Sch 6, Pt 4, which came into force on 1  October 2005 by virtue of the Gambling Act 2005 (Commencement No  2 and Transitional Provisions) Order 2005 (SI 2005/2455), repealed by the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013 (SI 2013/2329), art 4, Sch, para 3. 3 See www.gamblingcommission.gov.uk/About-us/Corporate-governance/national -lottery-committee.aspx.

16.15 Exchange of information between the Commissioners for Her Majesty’s Revenue and Customs and the Gambling Commission in the exercise of the latter’s national lottery functions is expressly authorised 878

The National Lottery by s  4B of the NLA  1993, subject to restriction as to further disclosure, and subject also to a criminal offence under s  4C of wrongful disclosure of information received from HM Revenue and Customs.1 ‘National lottery functions’ means functions conferred or imposed under or by virtue of a provision of the NLA 1993 (other than s 10C (Annual Levy)) or Pt 3 (National Lottery: Olympic Lotteries) of the HBOLA 2004.2 The equivalent provisions in the GA 2005, s 30 relating to the Gambling Commission’s other functions expressly do not apply in relation to its national lottery functions.3 1 Inserted by NLA  2006, s  2, with effect from 1  October 2005 by virtue of the National Lottery Act 2006 (Commencement No  2) Order 2006 (SI  2006/2630), as amended by the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013 (SI 2013/2329), art 4, Sch, para 4. See also para 12A of the Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001 (SI  2001/2188) (as amended by the Financial Services and Markets Act 2000 (Disclosure of Confidential Information) (Amendment) (No 2) Regulations 2001 (SI 2001/3624), and by the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013 (SI 2013/2329), art 4, Sch, para 34), under which the Gambling Commission is empowered to disclose certain information to the National Audit Office. See also Companies Act 1989, s  87(4) (as amended by the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013 (SI  2013/2329), art  4, Sch, para  23), under which the Gambling Commission is empowered to disclose certain information in connection with investigations by an overseas authority. See also Companies Act 1985, s 449 and Sch 15D, paras 23 and 24 (as amended by the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013 (SI  2013/2329), art  4, Sch, para 22), under which in certain circumstances information obtained under s 447, s  448A(2) or s  453A of the 1985 Act may be disclosed. See also Companies Act 2006, s 948 and Sch 2, Part 2, paras A31 and A32 (as amended by the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013 (SI 2013/2329), art 4, Sch, para 29(a)), in respect of similar provisions relating to disclosure of certain information provided to the Takeover Panel in connection with the exercise of its functions. See also Companies Act 2006, s 1224A and Sch  11A, Pt 2, paras  46 and 47 (as amended by the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013 (SI  2013/2329), art  4, Sch, para  29(b)), which permit disclosure of certain confidential information to or by the Commission in restricted circumstances: the Statutory Auditors and Third Country Auditors Regulations 2007 (SI 2007/3494). 2 NLA 1993, s 4B(6). 3 GA  2005, s  30(9), inserted by the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013 (SI  2013/2329), art 4, Sch, para 12.

The section 5 licence 16.16 The Gambling Commission may by licence authorise a person to run the National Lottery.1 Only one person may be so licensed at any one time.1 The Commission may not grant a licence unless an application in writing has been made to it containing such information as it has specified as necessary for enabling the Commission to determine whether to grant it.2 1 NLA  1993, s  5, as amended by s  1(5), Sch  1, para  5 of NLA  1998; s  34(1), (3) of HBOLA 2004; s 3 of NLA 2006; and the Public Bodies (Merger of the Gambling

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The National Lottery Commission and the National Lottery Commission) Order 2013 (SI  2013/2329), art 4, Sch, para 28. Under s 6 of NLA 2006, the Secretary of State may by order provide for Sch 1 to NLA 2006 (which would amend the licensing structure of the National Lottery by substituting s 5 and s 6 by new ss 5, 6 and 6A) to come into effect, having consulted the Gambling Commission. See 16.30–16.31 below. 2 NLA 1993, s 5(3), as amended by s 1(5), Sch 1, para 5 of NLA 1998. On 21 December 1993 the then Director General of the National Lottery published a document ‘The National Lottery: Invitation to Apply (“ITA”) and Draft Licences’, to invite applications from operators for the grant of a s 5 licence. The ITA ran to some 128 pages, and the accompanying draft licences to 121 pages. It set out in exhaustive detail the information which applicants were required to provide to the Director General. For subsequent licence competitions, see below.

16.17 The Commission shall not grant such a licence unless it is satisfied that the applicant is a fit and proper person to run the National Lottery.1 In determining whether to grant such a licence the Commission may consider whether any person who appears to it to be likely to manage the business or any part of the business of running the National Lottery under the licence is a fit and proper person to do so, and whether any person who appears to it to be likely to be a person for whose benefit the business would be carried on is a fit and proper person to benefit from it.2 A licence under s 5 must include a condition requiring the licensee to pay into the National Lottery Distribution Fund sums out of the proceeds of lotteries forming part of the National Lottery.3 Such a licence must also include provision for the amount and timing of such payments.4 Where such a sum is required to be so paid in respect of a period, such proportion of that sum as is determined in accordance with s 21(2) or (4) of the HBOLA 2004 to be attributable to Olympic Lotteries shall be paid instead into the Olympic Lottery Distribution Fund.5 Such a licence may also include a condition requiring the licensee to make arrangements for securing that in circumstances specified in the licence such sums as may be determined are paid to the Commission for distribution to participants in lotteries forming part of the National Lottery.6 The holder of a licence under s 5 is required to pay to the Commission a first annual fee of an amount and within such period after issue of the licence as may be prescribed by the Secretary of State; and an annual fee before each anniversary of the issue of the licence (except where the licence ceases to have effect by virtue of its terms on or immediately before such anniversary). The fees are intended to reflect the expenses incurred by the Commission in the exercise of all of its functions under Pt 1 of the NLA 1993.7 The Commission is required to pay such licence fees into the Consolidated Fund.8 1 NLA 1993, s 5(1), as amended by s 1(5), Sch 1, para 4 of NLA 1998 and s 3(b) of NLA 2006. 2 NLA 1993, s 5(4) (as amended by s 1(5), Sch 1, para 4 of NLA 1998 and s 3(b) of NLA 2006) and (5) (as amended by s 1(5), Sch 1, para 4 of NLA 1998). 3 NLA 1993, s 5(6), as substituted by s 34(3) of HBOLA 2004. For these conditions see the current Licence to Run the National Lottery under s 5, granted on 1 February 2009, condition  11 (available at www.natlotcomm.gov.uk). Section 21(2) of HBOLA 2004 also requires a s 5 licence to include provision (a) for determining in respect of any period the proportion of proceeds of lotteries forming part of the National Lottery that is attributable to Olympic Lotteries, and (b)  enabling the Commission to determine that proportion in respect of any period: see condition 18 and Sch 1 of the current s 5 licence. Section 21(2) ibid is prospectively disapplied by NLA 2006, Sch 1, para 16(1) and (2)(b): see 16.30–16.31 below.

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The National Lottery 4 NLA 1993, s 5(6A), as substituted by s 34(3) of HBOLA 2004. 5 HBOLA  2004, s  24(1). Whilst these requirements (and those of s  21(2) of HBOLA  2004) are still in force, following the London 2012 Olympic Games the Olympic Lottery Distribution Fund was wound up on 30  January 2015 (the Olympic Lottery Distribution Fund (Winding Up) Order 2015 (SI  2015/85): see 16.69, n 1 below. 6 NLA 1993, s 5(7) as amended by s 1(5), Sch 1, para 4 of NLA 1998 and s 3(b) of NLA 2006. 7 NLA 2006, Explanatory Notes, para 12. 8 NLA  1993, s  7A, inserted by s  5(1) of NLA  2006. The amount and timing of payment of licence fees have been prescribed in the National Lottery (Annual Licence Fees) Regulations 2010 (SI  2010/17) (as amended by the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013 (SI 2013/2329), art 4, Sch, para 40). In the case of a s 5 licence, a first annual fee of £35,000 payable within 12 months after the issue of the licence, and an annual fee of £3,900 before each anniversary, have been prescribed. Section 7A(1) is prospectively amended by NLA 2006, s 6, Sch 1, paras 1 and 6: see 16.34 below.

16.18 A  licence to run the National Lottery under s  5 of the NLA  1993 was granted on 29  July 1994 by the then Director General of the National Lottery to Camelot Group plc (now named Camelot UK Lotteries Limited). The licence had effect from that date until 30 September 2001. Subsequently, an interim licence was granted to run from 1 October 2001 until 26 January 2002 and a full seven-year licence from 27 January 2002 until 31 January 2009, in both cases to Camelot and unless suspended or revoked pursuant to the provisions of the NLA 1993. 16.19 In 1999 the National Lottery Commission established a competitive procedure for the award of a new licence with effect from 1 October 2001. Bids were received from Camelot and from a concern known as The People’s Lottery (‘TPL’). After a lengthy process of evaluation the Commission announced on 23 August 2000 that it had decided that neither of the bidders’ plans met the statutory criteria laid down in s 5 for granting a licence and that the competitive procedure for granting a licence was therefore at an end. It announced, however, that it proposed to negotiate exclusively with TPL for one month to give TPL an opportunity to allay its concerns. 16.20 Camelot brought an application for judicial review of the National Lottery Commission’s decision1 on the basis that it was unfair for the Commission to give to TPL, but not to Camelot, the opportunity to seek to meet the concerns which it entertained over its bid. This application succeeded, the court concluding that the Commission’s decision to negotiate exclusively with TPL was, in all the circumstances, so unfair as to amount to an abuse of power or to be Wednesbury unreasonable. Camelot was therefore let back into the bidding process in competition with TPL. One consequence of this decision was that the Chairwoman of the Commission resigned. On 12 October 2000 it was announced that she was to be replaced by Lord Burns, who was to proceed, along with the other members of the Commission, to evaluate the bids and to reach a decision as speedily as possible. On 19 December 2000 the Commission announced that the new licence would be awarded to Camelot. On 10 January 2001, TPL announced that it would not challenge the decision. 1 R v National Lottery Commission, ex p Camelot Group plc [2001] EMLR 43, Richards J.

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The National Lottery 16.21 In January 2005 the National Lottery Commission formally initiated public discussion of the competitive procedure for the award of a new licence with effect from 1 February 2009 with the publication of a discussion paper on the structure of the procedure, which was followed in July 2005 by a further publication setting out a summary of responses together with areas for further analysis.1 The formal start of the competition was marked by the publication in November 2005 of a ‘Statement of Main Principles: A Lottery for the Future’, which set out the key features of the competition structure adopted by the Commission.2 The Commission also conducted a public consultation of players’ attitudes to the National Lottery and the licence competition, from February to May 2006, and published a summary of the findings in August 2006.3 The Commission then followed a similar process to that adopted for the first and second licence competitions. A draft Invitation to Apply and draft s 5 Licence were published in April 2006; final drafts were published in June 2006.4 Bids were due to be submitted on 9 February 2007, with evaluation to be completed by the end of June 2007, to be followed by finalisation of the draft s 5 licence with the preferred bidder and licence award by late August 2007. The draft s 5 licence contained conditions similar to those contained in the previous s 5 licence, but with some additional obligations on the licensee and increased powers for the Commission (such as the ability to require the transfer of certain assets at nil value, and in connection with regulation of supplier contracts), and also the ability of the licensee to apply for an extension of the licence period by up to five years.5 Two bids were submitted, by Camelot and Sugal & Damani. On 7 August 2007 the Commission announced Camelot as the preferred bidder, and on 30  August 2007 the Commission awarded the new s 5 licence to Camelot which came into effect on 1 February 2009 for a period of ten years (rather than the seven-year period of the first two s 5 licences).6 In May 2011 Camelot submitted to the Commission a Notice of Investment Opportunity under condition 23 of the s 5 licence, seeking to increase the number of lottery terminals by 8,000 in return for a five-year extension of the licence (subsequently amended by Camelot to a proposed four-year extension). On 14 February 2012 the Commission decided to adopt the proposal on the basis that it was ‘likely to (a) secure a significant increase in the net proceeds of the National Lottery; and (b) continue to ensure that the National Lottery is run with all due propriety and the interests of every participant in the National Lottery are protected’.7 The current s  5 licence therefore is due to expire on 31 January 2023. 1 ‘A  Lottery for the future: Shaping the structure of the third competition’, and ‘A Lottery for the future: Summary of responses and areas for further analysis’, copies of which may be downloaded from www.natlotcomm.gov.uk. 2 A copy may be downloaded from www.natlotcomm.gov.uk. 3 ‘A  Lottery for the future: public consultation summary report’, available for download from www.natlotcomm.gov.uk. 4 Copies may be downloaded from www.natlotcomm.gov.uk, together with numerous briefings, amendments and clarifications. 5 Final draft s 5 Licence for the Licence Period beginning 1 February 2009, conditions 18.20ff, 15 and 23. 6 A  copy of the Enabling Agreement under which the award was made, and of the final text of the licence as awarded, are available for download from www. natlotcomm.gov.uk. 7 See the ‘Notice of Decision of the National Lottery Commission in relation to a Notice of Investment Opportunity served by the Holder of the National Lottery Licence 6 March 2012’, available for download from www.natlotcomm.gov.uk.

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The National Lottery

The section 6 licence 16.22 The Commission may by licence authorise a person to promote lotteries as part of the National Lottery.1 Such a licence must specify the lotteries, or descriptions of lottery, the promotion of which it authorises.1 Such a licence may designate a lottery to which the licence relates as an Olympic Lottery.2 If the Secretary of State by order had declared that the election of London by the International Olympics Committee as host city for the 2012 Olympic Games had been revoked, then any s 6 licence which designated a lottery as an Olympic Lottery would have ceased to have effect in so far as it related to such Olympic Lottery on a date as specified in the order, and the National Lottery Commission would have been unable to grant any other s 6 licence to the extent to which it related to an Olympic Lottery.3 The Commission may not grant such a licence unless an application in writing, containing such information as it has specified, has been made to it.1 An application for a s 6 licence will need to have the support of the s 5 licensee. Moreover, although the applicant’s agreement under NLA 1993, s 1(3) with the s 5 licensee need not be executed prior to making an application for a s 6 licence, that agreement will have to be in final form before the terms of such a s 6 licence can be finalised. 1 NLA  1993, s  6, as amended by s  1(5), Sch  1, para  4 of NLA  1998 and s  3(c) of NLA 2006. 2 HBOLA 2004, s 21(1). Section 21(1) is prospectively amended by NLA 2006, Sch 1 para  16(1) and (2)(a): see 16.30–16.31 below. The National Lottery Commission designated the National Lottery ‘Dream Number’ Game and various scratchcard lotteries launched by Camelot from July 2005 as ‘Olympic Lotteries’, and good cause monies raised from their sale were paid into the Olympic Lottery Distribution Fund. Whilst s  21(1) of HBOLA  2004 is still in force, following the London 2012 Olympic Games the Olympic Lottery Distribution Fund was wound up on 30 January 2015 (see the Olympic Lottery Distribution Fund (Winding Up) Order 2015 (SI 2015/85)). 3 HBOLA  2004, s  22(3)(b) and (4), as amended by the Transfer of Functions (Olympics and Paralympics) Order 2007 (SI 2007/2129) and by the Secretary of State for Culture, Olympics, Media and Sport Order 2010 (SI 2010/1551), art 11, Sch, para 4(a).

16.23 The Commission may not grant such a licence unless it is satisfied that the applicant is a fit and proper person to promote lotteries under the licence. In determining whether to grant such a licence the Commission may consider whether any person who appears to it to be likely to manage the business or any part of the business of promoting lotteries under the licence is a fit and proper person to do so, and whether any person who appears to it to be likely to be a person for whose benefit the business would be carried on is a fit and proper person to benefit from it.1 1 NLA 1993, s 6(4), (5), as amended by s 1(5), Sch 1, para 4 of NLA 1998 and s 3(c) of the NLA 2006.

16.24 A  licence granted under NLA  1993, s  6 may include a condition requiring a licensee to obtain the Commission’s approval of the rules of any lottery before the lottery is promoted under the licence.1  A  fee of the prescribed amount is payable to the Commission on the grant of such a 883

The National Lottery licence, and the Commission is required to pay such licence fees into the Consolidated Fund.2 The fees are intended to reflect the expenses incurred by the Commission in the exercise of all of its functions under Pt 1 of the NLA 1993.3 1 NLA 1993, s 6(6), as amended by s 1(5), Sch 1, para 4 of NLA 1998. 2 NLA  1993, s  7A (inserted by s  5(1) of NLA  2006). The amount and timing of payment of licence fees have been prescribed in the National Lottery (Annual Licence Fees) Regulations 2010 (SI  2010/17) (as amended by the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013 (SI 2013/2329), art 4, Sch, para 40). In the case of a s 6 licence, £2,500 as a first annual fee and £2,500 as the subsequent annual fee have been prescribed, except where: (1) the s 6 licence authorises promotion of an unrestricted number of lotteries which fall within a particular description specified in the licence (in which case the fees are £8,000 and £8,000 respectively); or (2) the s 6 licence authorises the promotion of a lottery pursuant to an agreement with promoters of other lotteries in other countries of the European Union, sharing a common game structure and prizes (ie EuroMillions) (in which case the fees are £16,000 and £16,000 respectively). Section 7A(1) is prospectively amended by NLA 2006, s 6, Sch 1, paras 1 and 6: see 16.34 below. 3 NLA 2006, Explanatory Notes, para 12.

Licence to promote the ‘National Lottery Game’ 16.25 On 8  November 1994 the then Director General of the National Lottery granted to Camelot a licence under NLA  1993, s  6 to promote lotteries to be known as the ‘National Lottery Game’.1 The lottery game so authorised consisted of a weekly televised draw (subsequently expanded to a twice weekly draw) for cash prizes. At a cost of £1 per entry, players were able to select any six numbers from the numbers 1–49, or choose a ‘lucky dip’ whereby the National Lottery equipment produced a random selection. To reinvigorate the game, in October 2013 the cost of entry became £2, the prize fund was increased, the allocation of the prize fund between the parimutuel prize tiers was adjusted and a new prize tier (a guaranteed minimum of 20 £20,000 raffle prizes per draw) was introduced. In October 2015, the game was further changed so as to enable players to select any six numbers from the numbers 1–59, and two new prize tiers were introduced (a guaranteed £1 million raffle prize per draw, and a new ‘Match 2’ prize of a free lucky dip entry into a future draw). The selection is entered via one of a number of alternative routes(in an authorised retailer, via the internet or mobile digital devices, or by subscription), and is registered with central computer systems. Televised draws take place in which six balls are drawn from 59 numbered balls and these numbers make up the jackpot winning combination. Additionally, a seventh ‘bonus ball’ determines who gets the largest consolation prizes (by matching five of the first six numbers drawn and the bonus ball). Other prizes are available for players who match two, three, four or five of the first six numbers, or whose entries are drawn in the associated £20,000 or £1 million raffle draws. 1 Licence under NLA  1993, s  6 (8  November 1994). The licence had effect from 14  November 1994 to 31  December 1997 and has been replaced by successive licences. The lotteries are now collectively known as the National Lottery ‘Lotto’ Game.

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The National Lottery 16.26 The licence was varied by consent with effect from 23 October 1996 to allow for the introduction of a mid-week draw. On 24 December 1997 the Director General granted a new licence to Camelot to run the National Lottery On-Line Game,1 draws to take place on Wednesdays and Saturdays during the term of the licence. The current s 6 licence for the National Lottery ‘Lotto’ Game came into effect on 1 February 2014 and continues until the earlier of 31  January 2019 and the date on which the current s  5 licence terminates. The licence contains, inter alia, all of the rules and game procedures which are applicable to Lotto.2 In addition to the National Lottery ‘Lotto’ Game, Camelot currently promotes a number of other draw-based lotteries: the National Lottery ‘HotPicks’ Game, the National Lottery ‘EuroMillions’ Game and the National Lottery ‘Thunderball’ Game. 1 Licence under NLA  1993, s  6: the National Lottery On-Line Game, December 1997. The licence had effect from 1 January 1998 to 30 September 2001. ‘On-Line’ alluded to the fact that the lottery terminals through which National Lottery tickets for draw-based games are sold are connected to a central system where entries are recorded electronically in real time, in contrast with the traditional ‘offline’ methods of the pre-electronic era under which the counterfoils for all tickets sold had to be physically collected and entered into the draw. 2 A copy of the licence may be downloaded from www.natlotcomm.gov.uk.

Licences to promote instant lotteries 16.27 Since May 1995 a number of s  6 licences have been granted to Camelot to promote instant lotteries of the scratchcard variety. Instants tickets are available from all National Lottery outlets. The games typically consist of variations on one or more scratch-off panels revealing various play and prize symbols, the successful combination of which results in cash prizes of various amounts (subject to the rules and procedures applicable to the relevant lottery). The largest single cash prize offered to date in a National Lottery scratchcard lottery was £4,000,000. Prizes in kind have also been offered (such as cars and holidays), and ‘cash for life’ prizes whereby an annuity is purchased for the prize winner resulting in regular payments during the life of the winner. 16.28 On 7 May 1998 the first s 6 licence1 was granted to a private sector operator other than Camelot, namely Vernons Lotteries Limited, to run a lottery under the title ‘Vernons Easy Play’. The lottery format was designed to resemble the football pools. A  player was presented with a slip which enabled him to play one or more games at a price of £1 per game. The slip was inserted into a lottery terminal which generated a selection of 11 football fixtures from the Vernons Easy Play fixture list of 49 football fixtures. These were then printed on a ticket as the player’s entry. Players won a share in a jackpot if their 11 fixtures matched a stated number of score draws. This lottery was discontinued in 1999. 1 The licence had effect from 7 May 1998 to 30 September 2001 (the date of expiry of the first s 5 licence), but was terminated following discontinuation of ‘Easy Play’.

16.29 On 24  February 2003 the first ‘class licence’ under NLA  1993, s  6 was granted to Camelot for the promotion of interactive instant win game 885

The National Lottery lotteries via the National Lottery website (now also via the National Lottery app on mobile devices); and the first class licence under s 6 for scratchcard lotteries was granted to Camelot on 25 July 2003. Lotteries which fall outside the scope of the relevant class licence require a separate s 6 licence. The first National Lottery scratchcard to comprise a complex lottery (£2 Monopoly (Second Chance Draw) Scratchcard) was licensed on 15 July 2015.1 1 The current class licences for scratchcards and interactive instant win games were granted on 1  February 2014 and each continues until the earlier of 31  January 2019 and the date on which the current s  5 licence terminates. The licence for the £2 Monopoly (Second Chance Draw) scratchcard continues until the earlier of 14 January 2017 and the date on which the current s 5 licence terminates. All licences are available for download at www.natlotcomm.gov.uk.

Licences under sections 5 and 6: prospective amendments 16.30 The Secretary of State may by order provide for Sch 1 to the NLA 2006 (which sets out an alternative licensing structure) to have effect.1 The Secretary of State must consult the Gambling Commission before making such an order.2 Any such order would be subject to the Parliamentary negative resolution procedure.3 It is intended that such an order would only be made if the Secretary of State considered that the current licensing structure set out in the NLA 1993 has failed to create an effective competition for the s 5 licence, thereby risking a failure to maximise returns to good causes.4 1 NLA 2006, s 6(1). 2 NLA  2006, s  6(2), as amended by the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order 2013 (SI  2013/2329), art 4, Sch, para 28. 3 NLA 2006, s 3(d) and (e). 4 Explanatory Notes relating to the NLA 2006, para 14.

16.31 The alternative licensing structure which would be effected by NLA  2006, Sch  1 essentially comprises the Gambling Commission awarding one or more licences to promote individual lotteries or types of lotteries under substituted ss 5 and 6 of the NLA 1993, removing the current distinction between the single s 5 licence to run the National Lottery and the various s 6 licences to promote lotteries forming part of the National Lottery.1 Under a new s  6A, the Gambling Commission would be prohibited from issuing a licence under the new s 5 unless it had complied with regulations of the Secretary of State about inviting competing applications for licences.1 However, were such an application related to a lottery already licensed, the Commission would be permitted to issue the new licence without complying with such regulations, if the Commission thought it likely to be in the interests of compliance with its duty under NLA  1993, s  4(2), or necessary in order to prevent lapse of the lottery.1 Were such a licence issued without a competition in order to prevent the lapse of the lottery, the period specified for the duration of the licence could be no longer than the Commission thinks necessary to enable a further licence to be issued, having complied with the regulations.1 1 NLA 2006, Sch 1, para 4. Schedule 1 also makes prospectively various consequential amendments to other parts of the NLA 1993 and the HBOLA 2004.

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The National Lottery

Licences under sections 5 and 6: further provisions 16.32 A  licence granted under NLA  1993, s  5 or s  6 must be in writing and must specify the period for which (subject to being revoked or suspended) it is to have effect.1 The period specified must begin with the date of the grant of the licence and not exceed 15 years.2 Such a licence may (subject to the 15-year maximum) include provision enabling the period for which the licence is to have effect to be extended by the Commission or by agreement between the Commission and the licensee.3 In addition to such conditions as are required or authorised to be included in it by s  5 or s  6, a licence granted under s  5 or s  6 may include such conditions as the Commission considers appropriate, and in particular may include conditions requiring the licensee: (a) to obtain the consent of the Commission before doing anything specified, or of a description specified, in the licence; (b) to refer matters to the Commission for approval; (c)

to ensure that such requirements as the Commission may from time to time determine or approve are complied with;

(d) to provide the Commission at times specified by it with such information as it may require (including, if the information is of a description specified in the licence, information for publication by it); (e)

to allow the Commission to inspect and take copies of any documents of the licensee, including any information kept by the licensee otherwise than in writing, relating to the National Lottery or a lottery forming part of it;

(f)

where such information is kept by means of a computer, to give the Commission such assistance as it may require to enable it to inspect and take copies of the information in a visible and legible form or to inspect and check the operation of any computer, and any associated apparatus or material, that is or has been in use in connection with the keeping of the information;

(g) to do such things (and, in particular, to effect such transfers of property or rights) as the Commission may require in connection with the licence ceasing to have effect and the grant of the licence to another person.4 References in (e) and (f) to the Commission include any representative of the Commission and any member of its staff authorised to make the inspection.4 1 NLA 1993, s 7(1). Section 7 is prospectively amended by NLA 2006, Sch 1 para 5: see 16.30–16.31 above. 2 NLA 1993, s 7(1A), inserted by NLA 2006, s 4. 3 NLA 1993, s 7(1B), inserted by NLA 2006, s 4. 4 NLA 1993, s 7(2)(a)–(g), (3) (s 7(2) having been amended by s 1(5), Sch 1, para 4 of NLA 1998 and NLA 2006, s 3(d) and s 4(2)).

16.33 Conditions in a licence under s 5 or s 6 may impose requirements to be complied with by the licensee after the licence has ceased to have effect.1 1 NLA 1993, s 7(4).

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The National Lottery

Variation of conditions in licences 16.34 The Commission may vary any condition in a licence granted under s  5 or s  6 if the licensee consents.1 Except where a variation would result in a condition requiring the licensee to transfer any property or rights, or (in the case of a licence granted under s  5), in relation to a condition that the licence provided may only be varied with the consent of the licensee, the Commission may vary any condition in such a licence without the licensee’s consent if the licensee has been given a reasonable opportunity of making representations to the Commission about the variation.2 Where the Commission varies a licence without consent, it must serve a notice on the licensee informing the licensee of the variation and specifying a period of at least 21 days beginning with the date of the notice at the end of which the variation will take effect.3 The variation takes effect at the end of that period.3 The power to vary a condition in a licence includes power to add a condition to the licence or to omit a condition from it.4 1 NLA  1993, s  8(1) (as amended by s  1(5), Sch  1, para  4 of NLA  1998) which is prospectively amended by NLA 2006, Sch 1 para 7(a): see 16.30–16.31 above. 2 NLA  1993, s  8(2) and (3) (as amended by s  1(5), Sch  1, para  4 of NLA  1998). Section 8(3)(b) is prospectively amended by NLA 2006, Sch 1 para 7(a): see 16.30– 16.31 above. 3 NLA 1993, s 8(4) (as amended by s 1(5), Sch 1, para 4 of NLA 1998) and (5). 4 NLA 1993, s 8(6) (as amended by s 1(5), Sch 1, para 4 of NLA 1998).

Enforcement of conditions in licences 16.35 If, on an application made by the Commission, the High Court1 is satisfied (a) that there is a reasonable likelihood that a person will contravene a condition in a licence granted under s 5 or s 6, (b) that a person has contravened such a condition and there is a reasonable likelihood that the contravention will continue or be repeated, or (c) that a person has contravened such a condition and there are steps that could be taken for remedying the contravention, the court may grant an injunction restraining the contravention or (as the case may be) make an order requiring the licensee, and any other person who appears to the court to have been party to the contravention, to take such steps as the court may direct to remedy it.2 The enforcement scheme set out in NLA 1993 has not been utilised to date and is distinct from the enforcement activity undertaken by the Commission within its own powers.3 1 In Scotland the Court of Session may grant an interdict prohibiting the contravention: NLA 1993, s 9(1) and (2). Section 9(1) is prospectively amended by NLA 2006, Sch 1, para 8(a): see 16.30–16.31 above. 2 NLA 1993, s 9(1) (as amended by s 1(5), Sch 1, para 4 of NLA 1998) and (2). 3 For a record of licence breaches, see www.natlotcomm.gov.uk/regulating-thelottery/enforcement/licence-breaches.

16.36 Where a sum is due to be paid to the National Lottery Distribution Fund or the Olympic Lottery Distribution Fund by virtue of s  5(6) of the NLA 1993, the sum is recoverable by the Secretary of State as a debt due to the Fund.1 The licensee’s liability to pay is not affected by his licence ceasing to have effect.1 1 NLA  1993, s  9(3) (as substituted by s  34(5) of HBOLA  2004), and as  applied to the Olympic Lottery Distribution Fund by 24(2) of HBOLA 2004. Whilst s 24(2)

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The National Lottery of HBOLA 2004 is still in force, following the London 2012 Olympic Games the Olympic Lottery Distribution Fund was wound up on 30  January 2015 (see the Olympic Lottery Distribution Fund (Winding Up) Order 2015 (SI  2015/85)). NLA  1993, s  9(1) is prospectively amended by NLA  2006, Sch  1 para  8(b): see 16.30–16.31 above.

Revocation of licences granted under sections 5 and 6 Mandatory revocation 16.37 The Commission must revoke a licence granted under s  5 if it is satisfied that the licensee no longer is, or never was, a fit and proper person to run the National Lottery.1 Likewise, the Commission must revoke a licence granted under s 6 if it is satisfied that the licensee no longer is, or never was, a fit and proper body to promote lotteries under the licence.2 The Commission must revoke a licence granted under s 5 or s 6 if the licensee fails to pay the annual fee in accordance with s 7A of the NLA 1993,3 but the Commission may disapply s  10(3A) if it thinks that a failure to pay is attributable to administrative error.4 1 NLA 1993, s 10(1), as amended by s 1(5), Sch 1, para 4 of NLA 1998 and NLA 2006, s 3(e). Section 10(1) is prospectively amended by NLA 2006, Sch 1 para 9(a): see 16.30–16.31 above. 2 NLA 1993, s 10(2), as amended by s 1(5), Sch 1, para 4 of NLA 1998 and NLA 2006, s 3(e). Section 10(2) is prospectively repealed by NLA 2006, Sch 1 para 9(b): see 16.30–16.31 above. 3 NLA 2006, s 5(3). 4 NLA 1993, s 10(3A), inserted by NLA 2006, s 5(3)(a). Section 10(3A) is prospectively amended by NLA 2006, Sch 1 para 9(d): see 16.30–16.31 above.

Discretionary revocation 16.38 The Commission may revoke a licence granted under s 5 or s 6 if the licensee consents,1 or if it appears to it that any of the following grounds for revocation exists:2 (1) a condition in the licence has been contravened; (2) any information given by the licensee to the Commission: (a) in or in connection with the application for the licence, (b) in pursuance of a condition in the licence, or (c) in making representations under s  8(2) or Sch  3, Pt  2 of the NLA 1993 was false in a material particular. (3) (a)  a proposal for a voluntary arrangement under Part  1 of the Insolvency Act 1986 or Part 2 of the Insolvency (Northern Ireland) Order 1989 has been made in relation to the licensee; (b) a petition for the winding-up of the licensee has been presented to the court; 889

The National Lottery (c)

a resolution for the voluntary winding-up of the licensee has been passed;

(d) a receiver or manager of the whole or any part of the licensee’s property has been appointed; (e) an administration application has been made or a notice of intention to appoint an administrator or a notice of appointment of an administrator under para 14 or 22 of Sch B1 to the Insolvency Act 1986 has been filed.3 (4) In the case of a licence granted under s 5: (a)

the licensee is not providing or proposing to provide facilities that are necessary or desirable for running the National Lottery;

(b) any person who is managing the business or any part of the business of running the National Lottery under the licence is not a fit and proper person to do so; (c)

any person for whose benefit that business is carried on is not a fit and proper person to benefit from it.4

(5) In the case of a licence granted under s 6: (a) the licensee is not taking or proposing to take steps that are necessary or desirable for preventing the commission of fraud by participants in any lottery promoted under the licence; (b) a person who is managing the business or any part of the business of promoting lotteries under the licence is not a fit and proper person to do so; (c) a person for whose benefit that business is carried on is not a fit and proper person to benefit from it.5 1 NLA 1993, s 10(3)(b) (as amended by s 1(5), Sch 1, para 4 of NLA 1998), which is prospectively amended by NLA 2006, Sch 1 para 9(c): see 16.30–16.31 above. 2 NLA  1993, s  10(3)(a) and Sch  3, Pt  1 (as amended by s  1(5), Sch  1, para  4 of NLA 1998). Section 10(3) is prospectively amended by NLA 2006, Sch 1, para 9(c): see 16.30–16.31 above. 3 Inserted as Sch 3, Pt 1, para 3(5) of NLA 1993 by the Enterprise Act 2002 (Insolvency) Order 2003 (SI 2003/2096), art 4, Sch, para 21(b) which order repealed the reference in Sch 3, Pt 1, para 3(2) to an administration order. 4 NLA 1993, Sch 3, Pt 1, para 4, prospectively substituted by NLA 2006, s 6, Sch 1, para 14: see 16.30–16.31 above. 5 NLA 1993, Sch 3, Pt 1, para 5, prospectively substituted by NLA 2006, s 6, Sch 1, para 14: see 16.30–16.31 above.

Procedure on revocation 16.39 Where the Commission proposes to revoke a licence it is required to serve a notice on the licensee stating: (1) that it proposes to revoke the licence; (2) the ground or grounds for revocation; 890

The National Lottery (3) that the licensee may within the period of 21 days beginning with the date of the notice either make written representations about the matter to it or notify it in writing of the licensee’s intention to make oral representations; (4)

that the right of appeal conferred by NLA 1993, Sch 3, para 11 is dependent on the licensee having made such written or oral representations; and

(5) that if within the period mentioned in the notice the Commission receives neither written representations nor written notification of the licensee’s intention to make oral representations, the revocation shall take effect at the end of that period.1 If within the period mentioned in the notice, neither written representations nor written notification of the licensee’s intention to make oral representations are received, the revocation takes effect at the end of the period.2 1 NLA 1993, s 10 and Sch 3, Pt 2, para 6(1) (as amended by s 1(5), Sch 1, para 4 of NLA 1998, and ss 4(1),(2), 26, Sch 5, Pt II of NLA 1998). 2 NLA 1993, s 10 and Sch 3, Pt 2, para 6(2) (as amended by s 1(5), Sch 1, para 4 of NLA 1998).

16.40 The Commission may suspend a licence as from the date of any notice served in respect of it if: (a)

it reasonably believes that the ground or any of the grounds specified in the notice involves fraud by the licensee; or

(b) the ground or one of the grounds specified in the notice is that the licensee, in the case of an NLA  1993, s  6 licence, is not taking or proposing to take steps that are necessary or desirable for preventing the commission of fraud by participants in any lottery promoted under the licence.1 1 NLA 1993, s 10 and Sch 3, Pt 2, para 7(1) (as amended by s 1(5), Sch 1, para 4 of NLA 1998).

16.41 Where a licence is suspended, the suspension lasts until the revocation takes effect, or the Commission decides not to revoke the licence, or an appeal against the revocation is allowed; the notice of proposal to revoke the licence must inform the licensee accordingly.1 1 NLA 1993, s 10 and Sch 3, Pt 2, para 7(2) (as amended by s 1(5), Sch 1, para 4, and s 4(1), (3) of NLA 1998).

16.42 Where a licensee has notified the Commission of its intention to make oral representations, the Commission is obliged to hold a hearing of the representations.1 1 By NLA  1993, s  10 and Sch  3, Pt 2, para  8(1) and (2) the Secretary of State is empowered to make regulations as to the procedure to be followed where a licensee’s intention to make oral representations is notified. The Secretary of State has made the National Lottery (Imposition of Penalties and Revocation of Licences) Procedure Regulations 1999 (SI 1999/137), which replaced the National Lottery (Revocation of Licences) Procedure Regulations 1994 (SI  1994/1170).

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The National Lottery Regulation 19(2) is amended by: the Postal Services Act 2000 (Consequential Modifications No 1) Order 2001 (SI 2001/1149), Sch 1, para 125, which substitutes ‘postal operator (within the meaning of the Postal Services Act 2000) concerned’ for ‘Post Office’; the Postal Services Act 2011 (Consequential Modifications and Amendments) Order 2011 (SI  2011/2085), Sch  1, para  37, which substitutes ‘Part 3 of the Postal Services Act 2001’ for ‘the Postal Services Act 2000’; and the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order (SI 2013/2329), Sch, para 33, which substitutes ‘the Commission’ for ‘Director General’ and inserts ‘the Gambling Commission’ as the definition of ‘the Commission’. Regulations 7(4) and 14(4) have been deleted by the Tribunals, Courts and Enforcement Act 2007 (Transitional and Consequential Provisions) Order 2008 (SI 2008/2683), Sch 1, paras 86–88.

16.43 After taking into account any written representations against the revocation of the licence or any oral representations against the revocation of the licence, the Commission must: (a) decide whether or not to revoke the licence; and (b) serve a further notice on the licensee informing the licensee of its decision.1 1 NLA 1993, Sch 3, Pt 2, para 9(1) (as amended by s 1(5), Sch 1, para 4 of NLA 1998).

16.44 Where the decision is that the licence should be revoked, the revocation must not take effect until the end of such period of at least 28 days beginning with the date of the further notice as may be specified in the notice1 or, if the licensee appeals within that period against the revocation and the court makes an order under NLA 1993, Sch 3, para 11(2), until such time as is specified in the order, whichever is the later.2 1 NLA  1993, s  10, Sch  3, Pt 2, para  9(2) (as amended by s  4(1), (4) of NLA  1998) and (3). 2 NLA 1993, s 10, Sch 3, Pt 2, para 9(2).

Appeals against revocation1 16.45 Where the Commission decides to revoke a licence, the licensee may appeal against the decision on the grounds: (a) that the Commission made an error as to the facts; (b) that there was a material procedural error; or (c) that the Commission made some other error of law.2 The appeal lies to the High Court or, in Scotland, to the Outer House of the Court of Session.3 1 The provision for appeal against revocation to the High Court replacing the provision for appeal to the Secretary of State originally contained in NLA 1993, Sch 3, para 10 is contained in para 11, inserted by the National Lottery Act 1998, s 4(1), (6) with effect from 2 September 1998 (see NLA 1998, s 27(5)), as amended by s 1(5), Sch 1, para 4 of NLA 1998. 2 NLA 1993, Sch 3, para 11(1) (as amended by s 1(5), Sch 1, para 4 of NLA 1998). 3 NLA 1993, Sch 3, para 11(3), (4).

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The National Lottery 16.46 Where a licensee appeals against revocation of the licence, the court has power pending the withdrawal or final disposal of the appeal to make an order preventing the revocation taking effect until such time as may be specified in the order, if the court considers it just and equitable to do so in all the circumstances of the case.1 1 NLA 1993, Sch 3, para 11(2).

16.47 In respect of its functions under NLA 1993, s 10 and Sch 3 relating to revocation of licences granted under s  5 and s  6 of the 1993 Act, the Commission is subject to review by the Administrative Justice and Tribunals Council.1 1 Tribunals, Courts and Enforcement Act 2007, Sch 7, by virtue of the Administrative Justice and Tribunals Council (Listed Tribunals ) Order 2007 (SI 2007/2951), art 2, which order came into force on 1 November 2007, and the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order (SI 2013/2329), art 8(4).

Financial penalties for breach of conditions in licences1 16.48 If the Lottery Commission2 is satisfied that a person has contravened a condition of a licence under s 5 or s 6, it may impose a financial penalty on that person in respect of the contravention. The matters to which the Commission may have regard in imposing a financial penalty include the desirability of both (a)  deterring persons from contravening conditions in licences under s 5 or s 6, and (b) recovering any diminution in the sums paid to the Secretary of State from the proceeds of the lottery which is attributable to the contravention.3 1 The power to impose financial penalties in lieu of revocation contained in NLA 1993, s 10A and s 10B (as amended by s 1(5), Sch 1, para 4 of NLA 1998) was introduced by NLA 1998, s 2 and s 3 with effect from 2 September 1998: ibid s 27. Section 10A(1) and (2) are prospectively amended by NLA 2006, Sch 1, para 10: see 16.30–16.31 above. 2 The power was originally conferred upon the Director General by the terms of NLA 1993, s 10A and s 10B inserted by NLA 1998, s 2. Upon the replacement of the Office of Director General by the National Lottery Commission, the power was transferred to the Commission by the effect of NLA 1998, s 1(4), which transferred to the Commission the functions of the Director General under the NLA  1993, including those functions conferred or imposed on him by the NLA 1998. 3 NLA  1993, s  10A. On 10  July 1998 the Director General published a statement ‘Financial Penalties: Principles and Procedures’ describing the principles he proposed to follow in using the power and the procedures he expected to adopt. The Secretary of State has directed the Commission to act in accordance with that statement in the exercise of its functions under s  10A: see direction 10 of ‘Directions to the National Lottery Commission under Section 11 of the National Lottery Etc Act 1993’: a copy of the directions (last updated on 26  September 2013) is available at www.natlotcomm.gov.uk (and see 16.59 below). Financial penalties have been imposed on Camelot on five occasions, ranging from £5,000 to £300,000: see www.natlotcomm.gov.uk/regulating-the-lottery/enforcement/ licence-breaches.html in respect of 2002–2003, 2003–2004, 2005–2006, 2013–2014, 2016–2017.

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The National Lottery 16.49 If the Commission proposes to impose a financial penalty on a person it must serve on that person a notice: (a) stating that the person has contravened conditions in the licence; (b) identifying the contraventions in question; (c) stating that the Commission proposes to impose a financial penalty; (d) specifying the amount of the financial penalty; (e) stating the Commission’s reasons— (i) for the imposition of a financial penalty, and (ii) for the amount of the financial penalty; (f)

stating the person to whom the financial penalty is to be paid and the manner in which, and place at which, payment may be made; and (g) stating that if within the period of 21 days beginning with the date of the notice the Commission does not receive either written representations or written notification of intention to make oral representations the financial penalty becomes payable at the end of the period, and that payment is required to be made within 14 days beginning with the date on which the financial penalty becomes payable.1 1 NLA 1993, s 10A(3), (4) and (12).

16.50 In addition, the notice must state that the person may, within the period of 21 days beginning with the date of the notice, either (a)  make written representations about the matter to the Commission, or (b) notify the Commission in writing of the person’s intention to make oral representations and that the right of appeal is dependent on the person having made such written or oral representations.1 If the Commission receives neither written representations nor written notification of intention to make oral representations within the 21-day period set out in the notice, the financial penalty becomes payable at the end of that period.2 Where the Commission is notified of an intention to make oral representations, arrangements must be made for a hearing of the representations.3 1 NLA 1993, s 10A(4). 2 NLA 1993, s 10A(5). 3 NLA 1993, s 10A(6) and (7) provides for the Secretary of State to make regulations as to the procedure to be followed on the hearing of oral representations: see n to 16.43 above.

16.51 After taking into account any written or oral representations, the Commission must: (a) decide whether or not to impose a financial penalty; and (b) serve a further notice on the person informing the person of the decision.1 Where the decision is to impose a financial penalty, the further notice must identify the contraventions in question, specify the amount of the financial penalty imposed, state the Commission’s reasons for the imposition of a financial penalty and for the amount of the financial penalty, state the person to whom the financial penalty is to be paid and the manner in which, and 894

The National Lottery place at which, payment may be made.2 The further notice must also state that the financial penalty becomes payable on the date of that further notice and that the financial penalty is required to be paid within 14 days beginning with that date.3 Provision is made for the charging of interest on unpaid penalties,4 and for the recovery of unpaid penalties and interest as a debt due to the Secretary of State.5 A penalty may be payable partly to the National Lottery Distribution Fund and partly to the Olympic Distribution Fund.6 1 2 3 4 5 6

NLA 1993, s 10A(9). NLA 1993, s 10A(10). NLA 1993, s 10A(10), (11) and (12). NLA 1993, s 10A(13). NLA 1993, s 10A(14) (as substituted by HBOLA 2004, s 34(1), (6)). NLA 1993, s 10A(15) (as substituted by HBOLA 2004, s 34(1), (6)). Note that the Olympic Lottery Distribution Fund was wound up on 30  January 2015 (see the Olympic Lottery Distribution Fund (Winding Up) Order 2015 (SI 2015/85)): see 16.70, n 1, below.

Appeals against financial penalties 16.52 Where the Commission decides to impose a financial penalty on a person, that person may appeal against the decision to the High Court or, in Scotland, to the Outer House of the Court of Session.1 Where the appeal is against a finding by the Commission that a person has contravened a condition of a licence, the grounds for the appeal are: (a) that the Commission made an error as to the facts; (b) that there was a material procedural error; or (c) that the Commission made some other error of law.2 1 NLA 1993, s 10B(1), (6) and (7). 2 NLA 1993, s 10B(2).

16.53 Where the appeal is against the amount of the financial penalty, the grounds for the appeal are: (a) that the amount of the penalty is unreasonable; (b) that there was a material procedural error; or (c) that the decision was based on a manifest material misapprehension as to the facts.1 Where on appeal the court reduces the amount of a financial penalty, it has power to make such orders as to interest on the penalty as it considers just and equitable in all the circumstances of the case.2 1 NLA 1993, s 10B(3). 2 NLA 1993, s 10B(4) and (5).

16.54 In respect of its functions under the NLA  1993, s  10A relating to imposition of financial penalties for breach of conditions in licences granted under s 5 and s 6 of the NLA 1993, the Commission is subject to review by the Administrative Justice and Tribunals Council.1 1 Tribunals, Courts and Enforcement Act 2007, Sch 7, by virtue of the Administrative Justice and Tribunals Council (Listed Tribunals) Order 2007 (SI 2007/2951), para 2,

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The National Lottery which order came into force on 1 November 2007, and the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order (SI 2013/2329), art 8(4).

ANNUAL LEVY 16.55 The Secretary of State may make regulations requiring holders of s 5 or s 6 licences to pay an annual levy to the Gambling Commission.1 The Gambling Commission shall, with the consent of the Treasury and the Secretary of State, expend money received by way of levy for purposes related to, or by providing financial assistance (including grants or loans and any other form of financial assistance) for projects relating to, addiction to gambling, other forms of harm or exploitation associated with gambling, or any of the licensing objectives for the purposes of the GA 2005.2 The Secretary of State may make regulations under s 10C of the NLA 1993 only if he has made regulations under the GA 2005 requiring holders of operating licences to pay an annual levy to the Gambling Commission and he has consulted the Gambling Commission pursuant to s 10C(7) of the NLA (such consultation, it is submitted, to be considered by the Commission from the perspective of its functions and duties under the NLA 1993, given that s 10C(8) (repealed on their merger) required the Gambling Commission to consult the National Lottery Commission before incurring the expenditure referred to in s 10C(5) of the NLA 1993).3 1 NLA 1993, s 10C, inserted by GA 2005, s 15(5) and Sch 3, paras 1 with effect from 1 September 2007 by virtue of the Gambling Act 2005 (Commencement No 6 and Transitional Provisions) Order 2006 (SI 2006/3272), para 2(4), and as amended by the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order (SI 2013/2329), art 4 Sch, paras 1, 6. No regulations have been made to date. Recommendation 159 of the Government White Paper ‘A Safe Bet for Success’ (Cm 5397) published in March 2002 was that ‘… the industry should set up a voluntarily funded Gambling Trust. We recommend that the Government should reserve powers to impose a statutory levy, possibly linked to gross profit, if such a Trust is not established or subsequently ceases to operate’. This recommendation was also made in chapter 32.29 of the report of the Gambling Review Body (Cm 5206) published in July 2001. The Responsibility in Gambling Trust (formerly known as The Gambling Industry Charitable Trust) was set up in January 2002. 2 NLA 1993, s 10C(5) and (6). 3 NLA 1993, s 10C(7).

REGULATIONS AS TO THE PROMOTION OF LOTTERIES FORMING PART OF THE NATIONAL LOTTERY 16.56 Regulations have been made by the Secretary of State1 to govern various aspects of the sale of tickets in the National Lottery. The Regulations provide as follows: (1) No National Lottery ticket shall be sold by or to a person who has not attained the age of 16 years (reg 3). In Harrow London Borough Council 896

The National Lottery v Shah2 the Divisional Court held that the offence of selling a National Lottery ticket to a person under 16 years of age contrary to reg  3 of the National Lottery Regulations 1994 and s 13 of the NLA 1993 was an offence of strict liability, so that shopkeepers were liable when their employee sold a ticket to a 13-year-old who he reasonably but mistakenly believed to be at least 16. (2) No National Lottery ticket shall be sold to a person, nor shall a person be invited to purchase a National Lottery ticket, in a street. The prohibition does not have effect in relation to the sale of or invitation to purchase a National Lottery ticket by a person present in a kiosk or shop premises having no space for the accommodation of customers. ‘Street’ includes any bridge, road, lane, footway, subway, court, alley or passage, whether a thoroughfare or not, which is for the time being open to the public without payment (reg 4). (3) No National Lottery ticket shall be sold to a person, nor shall a person be invited to purchase a National Lottery ticket: (a)

in or on any premises in respect of which a premises licence under Part  8 of the GA  2005 for the time being has effect (but, in the case of a horse-race course in respect of which a betting premises licence has effect, only on any day on which horse-racing takes place, or is expected to take place, on the premises; or, in the case of any other track, on any day on which the premises may be used for gambling in reliance on the licence);

(b) in any premises in respect of which a family entertainment centre gaming machine permit issued under GA 2005, s 247 for the time being has effect; (c) in any licensed betting office within the meaning of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985; (d) on any licensed track within the meaning of the 1985 Order on any day on which under arts 36, 47 and 48 of that Order betting may lawfully be carried out on the track; (e) in any premises in Northern Ireland used wholly or mainly for providing amusements in the form of amusements with prizes, amusements by means of slot machines, or both; or (f) (4)

in any bingo club premises within the meaning of the 1985 Order (reg 5).

No National Lottery ticket shall be sold by means of a vending machine unless such a machine is, at all times when tickets can be sold by means of it, attended by a person authorised by either: (a) the holder of the licence under s 5 of the NLA 1993; or (b) the holder of a licence under s 6 of the NLA 1993 which authorises the promotion of the lottery, the tickets or chances of which are being sold by means of the vending machine. A  vending machine is not to be treated as attended for the purposes of this Regulation unless the person attending the vending machine 897

The National Lottery is in a position where he can control the operation of the machine and in particular take action to prevent purchase of tickets by any person whom he believes has not attained the age of 16 years (reg 6). (5) No National Lottery ticket shall be sold, nor shall a person be invited to purchase a National Lottery ticket, by a person when visiting any other person at his home in the discharge of any official, professional or commercial function (including the function of selling National Lottery tickets) (reg 7). 1 The National Lottery Regulations 1994 (SI  1994/189) made under NLA  1993, s  12, as amended with effect from 1  September 2007 by the National Lottery (Amendment) Regulations 2007 (SI 2007/2307). 2 [2000] 1 WLR 83.

16.57 If any requirement or restriction imposed by the Regulations is contravened in relation to the promotion of a lottery that forms part of the National Lottery, then: (a) the promoter of the lottery is guilty of an offence, except if the contravention occurred without the consent or connivance of the promoter and the promoter exercised all due diligence to prevent such contravention; (b) any director, manager, secretary or other similar officer of the promoter, or any person purporting to act in such a capacity, shall be guilty of an offence if he consented to or connived at the contravention or if the contravention was attributable to any neglect on his part; and (c)

any other person who was party to the contravention shall be guilty of an offence.1

1 NLA 1993, s 13. A person guilty of such an offence is liable on summary conviction to a fine not exceeding the statutory maximum and on conviction on indictment to imprisonment for a term not exceeding two years, to a fine or to both (NLA 1993, s 13(2)). Section 13 may be enforced under Part 8 of the Enterprise Act 2002, by virtue of the Enterprise Act 2002 (Part  8 Domestic Infringements) Order 2003 (SI  2003/1593). A  local weights and measures authority in England and Wales intending to start proceedings for an offence under s  13 has to give notice to the Competition and Markets Authority in accordance, and must otherwise comply, with the Enterprise Act 2002, s  230, by virtue of the Enterprise Act (Part 8 Notice to OFT of Intended Prosecution Specified Enactments, Revocation and Transitional Provision) Order 2003 (SI  2003/1376); the local authority must exercise those regulatory functions having regard to the five principles of good regulation referred to in the Legislative and Regulatory Reform Act 2006, s 21(2) and in accordance with the code of practice issued pursuant to s 22, ibid, by virtue of the Legislative and Regulatory Reform (Regulatory Functions) Order 2007 (SI 2007/3544), art 2 (which order came into force on 6 April 2008). Sections 12 and 13  NLA  1993 are also subject to Part 1 of the Regulatory Enforcement and Sanctions Act 2008 (see Sch 3), which came into force on 1 October 2008 by virtue of the Regulatory Enforcement and Sanctions Act 2008 (Commencement No  1) Order 2008 (SI 2008/2371).

16.58 In Camelot Group plc v Beech1 the High Court considered the effect of a breach of reg 3 (no sale of tickets to under-16-year-olds) upon the civil rights of parties to the lottery contract. The facts were as follows. Proprietors 898

The National Lottery of a newsagents shop sold several National Lottery scratchcards to a youth, C, who they believed to be 16 years or over. In fact C was aged 15 years.2 One of the scratchcards turned out to be a winner entitling the owner to a prize of £10,000. Subsequently C and his mother attended the shop with the ticket and claimed the prize. The ticket was confirmed as a winning ticket and the prize was subsequently collected from the post office. Afterwards, however, the fact that C  was aged 15 years emerged and caused some controversy. C and his mother maintained, however, that C had purchased the ticket on her behalf and with money provided by her, so that she should be regarded as the true purchaser of the winning ticket. Camelot brought proceedings in the form of an originating summons against C’s mother as defendant. For the purpose of the proceedings Camelot were prepared to assume, but without conceding, that in purchasing the winning scratchcard C was in fact acting on behalf of his mother. The issue which the court had to determine was whether on the presumed facts C’s mother had any legal right to the prize, or whether the scratchcard had been bought by C in breach of reg 3 so that the whole transaction was tainted with illegality. The judge formulated the question as follows: ‘It is clear … that the sale to a person under 16 of a National Lottery ticket, such as a scratchcard of the kind sold … in this case before me, is unlawful. It follows that no enforceable right to participate in the National Lottery and claim a prize, if the ticket purchased is a winning ticket, can arise if the person purchasing the ticket is under the age of 16. That is because the very transaction of sale in such a case is one which Parliament has prohibited. It can, therefore, give rise to no enforceable right. The question which arises in this case is whether, for the purpose of the Regulations, the winning ticket … was sold to C  with the result that the transaction of sale was unlawful and no prize became payable; or whether the sale of the winning ticket was in truth to [C’s mother] even though the physical act of paying over the £1 in return for the ticket was undertaken by C as her agent.’ The judge concluded that upon its true construction reg 3 prohibited the sale of a ticket to a person under the age of 16 whether or not he was acting as agent for a person over that age, so that even where such an agency could be shown, the adult principal acquired no enforceable rights under the contract. In his view that was the natural meaning of the word ‘sold’ in reg 3. ‘In ordinary popular parlance when C paid £1 … in exchange for the winning scratchcard he was “purchasing” the scratchcard in question. In ordinary parlance Mrs Tredgold “sold” the ticket to C and this is so nonetheless because, unbeknown to Mrs Tredgold, C was doing so, as I am asked to assume, on behalf of his mother … I have no doubt that the expression “sold”, as used in Regulation 3, has the ordinary popular meaning which I have described, so that when a person under 16 buys a lottery ticket on behalf of an adult, in the sense of agreeing and carrying out a transaction with the vendor whereby the person under 16 hands over the money, in this case £1, in exchange for the ticket, there is a sale to the person under 16 within the meaning of the Regulations.’ 899

The National Lottery Further, it would, so the judge held, create enormous practical difficulties in enforcing the regulation if it could be said that where an adult purchased a ticket through a person under 16 years the ticket was ‘sold’ to the adult. ‘A  construction of the Regulation which prohibited sale of lottery tickets to under-age persons buying as principals, but permitted them to under-age persons acting as agents on behalf of adults, would, as it seems to me, cause no end of practical difficulties. It would require those selling the tickets to differentiate the one kind of sale from the other, a task which, in the circumstances in which these tickets are sold up and down the country each day could prove exceedingly difficult (if not wholly impossible) to carry out. Human nature being what it is, it would encourage minors, under-age persons, to claim, if asked, that they were buying tickets on behalf of adults where in truth they might be acting on their own behalf and, in the event of a win, would encourage them to persuade an adult to claim that he or she had been the real purchaser all along. In short, it would tend to dishonesty on the part of the under-age purchaser.’ The judge therefore concluded that the transaction was an unlawful one and that C’s mother, on the assumption that C had been acting as her agent, had no right to claim the prize. 1 Ch D (16 November 1996, unreported). 2 There was a conflict of evidence as to whether C had told the proprietors that his age was 16 years, but this conflict was not relevant to the question which the court had to determine.

DIRECTIONS TO THE NATIONAL LOTTERY COMMISSION UNDER SECTION 11 OF THE NATIONAL LOTTERY ETC ACT 1993 16.59 Directions have been given by the Secretary of State to the National Lottery Commission under s 11 of the NLA 1993 regarding the exercise of certain of the Commission’s functions under ss 5–10A of the NLA 1993 and (by virtue of s  34(7) of the HBOLA  2004) Part  3 of the HBOLA  2004.1 The Directions provide as follows: (1) The Commission shall exercise its functions under s  5 and s  6 of the NLA 1993 in such a manner as to ensure that no licence is granted which authorises the promotion of any lottery or lotteries of any description which in the opinion of the Commission: (a) encourage persons to participate excessively in such lotteries; or (b) do not allow for sufficient controls to prevent persons under the age of 16 from participating in such lotteries. (2) The Commission shall exercise its functions under s 6 of the NLA 1993 in such a manner as to ensure that no licence is granted which allows more than two draws to take place in any period of two hours, save and except for the EuroMillions draws only for which a maximum of four draws are permitted in any two hour period. This direction applies 900

The National Lottery irrespective of whether the draws are made in the same or in different lotteries authorised to be promoted under the licence, but it does not apply to any lottery where each prize in the lottery is allocated to a ticket or play before any ticket or play is sold or is pre-determined at the point of purchase of any ticket or play. (3) The Commission shall exercise its functions under s 6 of the NLA 1993 in such a manner as to ensure that no licence is granted where the effect would be to allow more than one draw to take place in any period of one hour where the draws are made in associated lotteries. For the purposes of this direction, two lotteries promoted under separate licences under s 6 of the NLA 1993 are to be treated as associated lotteries where: (a) one lottery is of the same description as the other lottery (apart from any variation with respect to the time when any draw in the lottery can take place); or (b) in the opinion of the Commission, one lottery is of the same description as the other lottery except for a minor variation in the timing, prize structure, entry price or some other aspect of the lotteries; but the directions described in this paragraph (3) do not apply to any lottery where each prize in the lottery is allocated to a ticket or play before any ticket or play is sold or is pre-determined at the point of purchase of any ticket or play. (4) The Commission shall exercise its functions under s  5 and s  6 of the NLA 1993 in such a manner as to ensure that no licence is granted which authorises the promotion of a lottery, the price of tickets and plays for which is, in the opinion of the Commission, unreasonably high. (5) The Commission shall: (a) exercise its functions under s 5 and s 6 of the NLA 1993 in such a manner as to ensure that the rules of every constituent lottery provide for a period for claiming prizes which in the opinion of the Commission is reasonable in order to allow a claim for a prize to be made; and (b) exercise its powers under s  5 of the NLA  1993 to include a condition in the s 5 licence which provides that all prizes which have not been claimed in accordance with the rules of the relevant constituent lottery are paid to the Secretary of State. (6) The Commission shall exercise its functions under s 7 of the NLA 1993 to include in the s  5 licence or, as appropriate, s  6 licence conditions which have the following effects: (a) that the Commission and persons authorised by the Commission will have the powers to inspect all forms of records relevant to lottery contracts or operations held by any s 5 or s 6 licence holder or any contractor of such licence holder who in the opinion of the Commission is a significant contractor; (b) that the Commission has the power to approve any party to a contract with any s 5 or s 6 licence holder where in the opinion of the Commission the contract is significant; 901

The National Lottery (c) that information for participants as to whether they have won a prize in any constituent lottery is available without any payment to the s 5 or s 6 licence holder being required and without undue inconvenience to the participant; (d) that no tickets or plays in a constituent lottery are given away free or sold for less than the full price applicable in accordance with the rules of the relevant constituent lottery (whether in connection with the advertisement or marketing of the National Lottery or any constituent lottery or otherwise) unless: (i)

a payment reflecting the full price of the ticket or play is made, whether by the s  5 or s  6 licence holder or another person,

(ii) the price of the ticket or play applicable in accordance with the rules of the relevant constituent lottery is counted in full in the value of sales when calculating the licence holder’s primary contribution to good causes in accordance with the terms of the s 5 licence, or (iii) the Commission has given its consent (having satisfied itself that the proposal will not encourage excessive or underage play and that the proposal is likely to increase overall returns to good causes); (e)

that the identity of any person who has won a prize in a constituent lottery shall not be disclosed without the consent of that person, unless required by law (and for the purpose of this direction, where a ticket in a constituent lottery is presented by a player to a retailer to ascertain whether that ticket is a prize-winner, or to claim a prize, a sound made by a lottery terminal to indicate that a winning ticket has been presented and/or the presentation of a prize entitlement message will not of itself constitute disclosure of a person’s identity); and

(f) that information as to the percentages of the National Lottery Distribution Fund which are allocated for the good causes is available at places where tickets in constituent lotteries are sold; (7) In the exercise of its functions under s  10A of the NLA  1993, the Commission shall act in accordance with a specified extract (attached to the Directions) from the former Director General’s publication ‘Financial Penalties: Principles and Procedures’ (which extract the Commission shall not amend without the prior consent of the Secretary of State). (8) The Commission shall establish and publish appropriate performance standards in respect of its functions under ss 5–10A of the NLA 1993, which standards should, in particular, relate to the Commission’s relationship with s  5 and s  6 licence holders and the public; and the Commission shall report its performance against those standards in the annual report it is required to make under s 14 of the NLA 1993. (9)

902

The Commission shall facilitate the operation of a body whose purpose shall be to raise positive public awareness of and support for the benefits of the distribution of funding from the proceeds of the National Lottery,

The National Lottery with the aim of helping to maximise returns to good causes from those proceeds. (10) The Commission shall obtain the prior approval of the Secretary of State before exercising its functions under s 21(2) of the HBOLA 2004 in relation to the determination of the proportion of proceeds of lotteries forming part of the National Lottery that is attributed to Olympic Lotteries.2 (11) The Commission shall exercise its functions in respect of any licence granted under s  5 of the NLA  1993 such that any adjustment to the sum that is payable to the National Lottery Distribution Fund or the Olympic Lottery Distribution Fund2 under s 5(6) for the purposes of any promotional prize activity to be undertaken by the licence holder shall: (a) be subject to the consent of the Commission; (b) not exceed, in any financial year, the amount of unclaimed prizes paid to the Secretary of State in accordance with (5)(b) above in the previous financial year; and (c) be subject to repayment on such terms as the Commission shall require. 1 A copy of the directions (last updated on 2 September 2016 is available at www. natlotcomm.gov.uk (references to the National Lottery Commission now being references to the Gambling Commission by virtue of the Public Bodies (Merger of the Gambling Commission and the National Lottery Commission) Order (SI 2013/2329), art 8(4). The functions of the Secretary of State under NLA 1993, s 11 were to exercisable concurrently with the Paymaster General, but only so far as that section applied by virtue of s  34(7) of HBOLA  2004: see the Transfer of Functions (Olympics and Paralympics) Order 2007 (SI  2007/2129), para  3(2)(a) (ii), which Order came into force on 22 August 2007. The functions ceased to be exercisable concurrently by the Paymaster General by virtue of the Secretary of State for Culture, Olympics, Media and Sport Order 2010 (SI 2010/1551), art 7(a). 2 Note that the Olympic Lottery Distribution Fund was wound up on 30 January 2015 (see the Olympic Lottery Distribution Fund (Winding Up) Order 2015 (SI 2015/85)): see 16.70, n 1, below.

FURTHER CONTROLS RELATING TO THE NATIONAL LOTTERY False representations as to the National Lottery 16.60 It is an offence for a person advertising, or offering the opportunity to participate in, a lottery, competition or game of another description to give, by whatever means, a false indication that it is a lottery forming part of, or is otherwise connected with, the National Lottery.1 1 NLA 1993, s 16. A person guilty of an offence is liable on summary conviction to a fine not exceeding the statutory maximum and on conviction on indictment to imprisonment for a term not exceeding two years, to a fine or both. Section 16 may be enforced under Part 8 of the Enterprise Act 2002, by virtue of the Enterprise Act 2002 (Part 8 Domestic Infringements) Order 2003 (SI 2003/1593). A local weights

903

The National Lottery and measures authority in England and Wales intending to start proceedings for an offence under s 16 has to give notice to the Competition and Markets Authority in accordance, and must otherwise comply, with the Enterprise Act 2002, s 230, by virtue of the Enterprise Act (Part 8 Notice to OFT of Intended Prosecution Specified Enactments, Revocation and Transitional Provision) Order 2003 (SI 2003/1376).

16.61 Following the launch of the National Lottery, a number of newspaper competitions and sales promotion schemes have been developed which derive some of their appeal from establishing a connection with the National Lottery. These are discussed at 16.95 below. Designers of such schemes need to take particular care to avoid infringing this provision.

Control of betting on the National Lottery 16.62 The creators of the National Lottery were fully aware of the fact that one of the reasons why the state lotteries of the eighteenth and nineteenth centuries had fallen into disrepute was that extensive betting had taken place on them. Section 18 of the NLA  1993 was designed to prevent the recurrence of this problem. It amended the Betting, Gaming and Lotteries Act 1963, Sch 1 to make it a mandatory ground for refusing the renewal of a bookmaker’s permit or a betting agency permit, and a mandatory ground for cancellation of a bookmaker’s permit, that the applicant or an employee of his received or negotiated a bet on the outcome of any lottery forming part of the National Lottery for the purposes of Part 1 of the NLA 1993. Section 18 was repealed by the GA 2005,1 and now the GA 2005 provides that a general betting operating licence, a pool betting operating licence and a betting intermediary operating licence must be subject to the condition that nothing may be done in reliance on the licence in relation to a bet on the outcome of a lottery which forms part of the National Lottery.2 In addition, it is a mandatory condition of every premises licence for the purposes of Part 8 of the GA 2005 that the premises shall not be used for the sale of tickets in any lottery in respect of which the sale of tickets on the premises is otherwise prohibited;3 and sale of, and invitations to purchase, National Lottery tickets are prohibited in or on any premises in respect of which a premises licence under Part 8 of the GA 2005 for the time being has effect.4 It follows that no bookmaker may take bets on the results of the National Lottery. 1 GA 2005, s 356(4) and Sch 17, which came into force on 1 January 2007 by virtue of the Gambling Act 2005 (Commencement No 6 and Transitional Provisions) Order 2006 (SI 2006/3272), para 2(1) and Sch 1. 2 GA 2005, s 95, which came into force on 1 January 2007, idem. 3 The Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007 (SI 2007/1409), para 3, which order came into force on 21 May 2007. 4 The National Lottery Regulations 1994 (SI 1994/189), para 5 (as substituted with effect from 1 September 2007 by the National Lottery (Amendment) Regulations 2007 (SI 2007/2307), para 2).

Control of advertising relating to the National Lottery 16.63 Camelot is required under the current section 5 licence to comply with all industry regulations set out in the UK Code of Broadcast Advertising 904

The National Lottery (BCAP Code), the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (CAP  Code), and by the Advertising Standards Authority, Ofcom, Clearcast, the Radio Advertising Clearance Centre, the Direct Marketing Association and any other relevant industry bodies.1 1 See the Licence to Run the National Lottery under s 5 of the NLA 1993 condition 7.53, available at www.natlotcomm.gov.uk.

16.64 The current section 5 licence also contains other controls relating to advertising, including an obligation on Camelot to ensure that any material produced by it which is designed to encourage, or encourages, the purchase of tickets is accurate and, in the case of any factual statements, is true and capable of independent verification or confirmation; an obligation to ensure that no unsolicited telephone calls or facsimile transmissions are made with a view to encouraging the purchase of tickets; and, subject to limited exceptions, a prohibition on the inclusion in advertisements of the recipients of good cause funding.1 1 See the Licence to Run the National Lottery under s 5 of the NLA 1993, conditions 7.60, 7.61, available at www.natlotcomm.gov.uk.

Protection of confidentiality of prize winners’ identity 16.65 Although Camelot is obliged by the terms of its s 5 and s 6 licences,1 the National Lottery Rules for Draw-Based Games played at Retailers or by Subscription (edn 18a, rule 15), Rules for Draw-Based Games Played Interactively (edn 7.1, rule 9), Rules for Scratchcard Lottery Games (10th edn, rule 9), and Rules for Interactive Instant Win Games (edn 12.2, rule 9) not to disclose the identity of, or to publicise details of, any prize winner in a National Lottery game without the winner’s written consent unless required by law,2 it appears that Camelot may have no clear basis in law to obtain an order of the court to prevent the publication of such details. This was the conclusion reached in a judgment3 given by Sir John Wood sitting as a deputy High Court judge upon an application made by certain newspapers to discharge an injunction which had been obtained ex parte by Camelot to restrain the disclosure of the identity of a National Lottery winner. On 10 December 1994 a jackpot prize of £17.8 million was won by a single winner who wished to remain anonymous. A number of newspapers invested a great deal of effort and expense in trying to identify the winner, and although they had not named the winner they had published a great deal of information about the winner. However, this decision would now need to be considered in the light of the substantial developments in privacy law since then, which are outside the scope of this work. 1 See the ‘Licence to Run the National Lottery’ under s 5 NLA 1993, condition 7.48, 7.49 and, for example, the Licence under s 6 NLA 1993 for Lotto, Sch 2, condition 6, available at www.natlotcomm.gov.uk. 2 All rules are available at www.national-lottery.co.uk. 3 The judgment was given in chambers. The editors are grateful to Camelot and to Mr A L Marks, at that time partner of Cameron McKenna, solicitors, for making available a note of the judgment, and to Sir John Wood for permission to refer to it.

905

The National Lottery 16.66 Camelot commenced proceedings against the defendants and obtained, ex parte, an injunction prohibiting them from disclosing the identity of the winner or from publishing or disclosing any information from which such identity could be ascertained or inferred. The injunction was expressed to continue until an inter partes hearing, but the newspapers applied ex parte on notice to discharge the injunction. Camelot’s case was that it was entitled to obtain an injunction to restrain publication of the details of a prize winner. This entitlement, it contended, arose from the fact that its licence to run the National Lottery was granted pursuant to the NLA 1993, that the licence imposed upon it obligations to prevent publication of a prize winner’s name and that a combination of its obligations under the licence and its statutory duties entitled it to prevent the publication of information obtained from sources outside its control. Camelot argued that to prevent such publication was in the public interest because it was announced, and understood by the public, that the confidentiality and the identity of winners would be maintained. 16.67 The newspapers disputed the contention that Camelot’s obligations under its licence and its statutory duties provided a legal basis for the orders sought. Moreover, the newspapers contended that the injunction should not be continued, as the winner’s identity was, to all intents and purposes, in the public domain. 16.68 The learned judge upheld the newspapers’ contentions and set aside the injunction. He concluded that the licence obligations and statutory duties placed upon Camelot did not create any clear basis of law upon which the injunction could be obtained. In his view the right to confidentiality, or more probably the right to privacy, was that of the individual winner himself or herself. Moreover, although the prize winner had not been named, it was clear from what had been published that a substantial number of people in the immediate locality of the winner would know his identity and that anyone wishing to find out his identity had only to travel in the right direction and to read the articles which had already been published to be able to obtain his identity. In the judge’s view the matter was to all intents and purposes in the public domain. Looking at the broad picture and taking into account the fact that the matter was in the public domain the case was not, in his view, one where an interlocutory judgment ex parte was suitable, and the injunction was set aside.1 1 It is understood that Camelot did not seek to pursue the application beyond the interlocutory stage. For a review by the Director General of the events giving rise to the disclosure of the prize winner’s identity and for recommendations to strengthen the procedures to protect winners’ identity see Oflot publication: ‘Review by the Director General of the National Lottery of Arrangements for the Protection of the Anonymity of the Winner of the Jackpot drawn on 10 December 1994’, April 1995.

DISTRIBUTION OF NATIONAL LOTTERY PROCEEDS 16.69 The task of selecting suitable good causes to receive funds from the National Lottery and of making payments to them is conferred upon 906

The National Lottery 12 distributing bodies, one of which (the Big Lottery Fund) is set up under Part II of the NLA 1993. (In addition, the National Endowment for Science, Technology and the Arts (‘NESTA’), a body set up under the NLA 1998, relied for part of its financing upon National Lottery funding (as did the Olympic Lottery Distributor, a body set up under the HBOLA 2004).)1 These bodies are all subject to extensive control by the Secretary of State, who selects the constituent members of those bodies set up under the NLA  1993 and NLA 1998, and has various supervisory powers and duties.1 1 NESTA was abolished on 1  April 2012 under the Public Bodies (Abolition of the National Endowment for Science, Technology and the Arts) Order 2012 (SI 2012/964). Whilst the provisions of the HBOLA 2004 relating to the Olympic Lottery Distribution Fund appear still to be in force as at the date of preparation of this chapter, following the London 2012 Olympic Games the Olympic Lottery Distribution Fund was wound up on 30  January 2015 (the Olympic Lottery Distribution Fund (Winding Up) Order 2015 (SI 2015/85)). The remainder of this section will therefore generally not cover the Olympic Lottery Distribution Fund (for which the reader is directed to the third edition of this work).

The National Lottery Distribution Fund 16.70 The National Lottery Distribution Fund is a fund maintained under the control and management of the Secretary of State.1 At such times as the Secretary of State with the approval of the Treasury determines, payments are made from the National Lottery Distribution Fund into the Consolidated Fund to meet: (a) payments made or to be made to the Commission for the purpose of enabling the Commission to meet such of its expenses as cannot be met out of fees paid to the Commission under the GA 2005, so far as those payments relate to expenses of the Commission in exercising its relevant functions; (b) expenses of the Secretary of State or the Minister for the Cabinet office in exercising his functions under the NLA 1993; and (c) expenses of the National Debt Commissioners in making investments under the NLA 1993.2 So much of the money in the National Lottery Distribution Fund as is not allocated for making such payments, and as is not required for immediate distribution, may be paid over to the National Debt Commissioners and invested or, as the case may be, reinvested by them in accordance with directions given by the Treasury.3 The proceeds of such investment, if not reinvested, are treated as if paid into the National Lottery Distribution Fund by virtue of s  5(6) of the NLA  1993.4 Both the Secretary of State and the National Debt Commissioners are required to prepare accounts dealing with their activities under the NLA 1993 in such form and manner and at such times as the Treasury may direct, and to send them to the Comptroller and Auditor General, who must examine, certify and report on them and lay copies of them and of his report before Parliament.5 1 NLA  1993, s  21(1). Section  21(2) of NLA  1993 (requiring the Secretary of State to pay sums out of the proceeds of lotteries and financial penalties payable by the s  5 licensee into the National Lottery Distribution Fund) was repealed by HBOLA 2004, s 34(8): the 1993 Act, s 5(6) (as substituted by s 34(3) of HBOLA 2004) now requires the s 5 licence to contain a condition requiring the s 5 licensee to pay sums from proceeds of lotteries to the Fund (not the Secretary of State). 2 NLA  1993, ss  22 and 31. The Commission’s ‘relevant functions’ are functions conferred or imposed under or by virtue of a provision of the NLA 1993 (other

907

The National Lottery than s 10C), Part 3 of the HBOLA 2004 (ie National Lottery: Olympic Lotteries), and s  6(2) of the NLA  2006 (see 16.30–16.31 above). For the functions of the Minister of the Cabinet Office under the NLA 1993, see 16.72 below. 3 NLA 1993, s 32(1). 4 NLA  1993, s  32(3), as amended by NLA  2006, s  9 with effect from 1  April 2007 by virtue of the National Lottery Act 2006 (Commencement No  4) Order 2007 (SI 2007/539). Section 32(3) ibid is prospectively amended by NLA 2006, Sch 1, para 13: see 16.30–16.31 above. 5 NLA 1993, s 33. For the power of the Comptroller and Auditor General to require information from the s 5 licensee see ibid s 33(4)–(10) inserted by NLA 1998, s 5(2).

Distribution of funds to the distributing bodies 16.71 Subject to the duty of the Secretary of State to allocate sums held in the National Lottery Distribution Fund for the purpose of making payments to the Consolidated Fund to meet expenses (see 16.71 above), and subject to the power of the Secretary of State under HBOLA  2004, s  25 to make payments into the Olympic Distribution Fund,1 every sum paid into the National Lottery Distribution Fund must be apportioned as follows: (a) 20% shall be allocated for expenditure on or connected with the arts; (b) 20% shall be allocated for expenditure on or connected with sport; (c)

20% shall be allocated for expenditure on or connected with the national heritage; and

(d) 40% shall be allocated for prescribed expenditure that is charitable, connected with health, connected with education or connected with the environment;2 including in each case, for establishing or contributing to endowments in connection with such expenditure.3 ‘Prescribed expenditure’ as referred to in (d) above means expenditure of a description prescribed by order of the Minister for the Cabinet Office, which description may in particular refer to expenditure in relation to England, Wales, Scotland, Northern Ireland or the Isle of Man4. Before making such an order the Secretary of State must consult the Big Lottery Fund, the National Assembly for Wales, the Scottish Ministers, the Northern Ireland Department of Culture, Arts and Leisure and such other persons (if any) as he thinks appropriate.5 The Secretary of State may by order substitute different percentages in place of those set out above, although no percentage may be reduced to less than 5%, and the percentages must amount in total to 100%.6 1 HBOLA 2004, s 25 and NLA 1993, s 22(4) (as amended by s 34(9)(c) of HBOLA 2004): see 16.70, n 1 above on the abolition of the Olympic Distribution Fund. 2 NLA 1993, s 22(1), (3) as amended by NLA 1998, s 6, s 26, Sch 5, Pt II and s 19(7) and subsequently the Apportionment of Money in the National Lottery Distribution Fund Order 1999 (SI 1999/344), the HBOLA 2004, s 34(9)(b), the Apportionment of Money in the National Lottery Distribution Fund Order 2000 (SI 2000/3356), the NLA 2006, s 7(2)(a), (b), and the Apportionment of Money in the National Lottery Distribution Fund Order 2010 (SI  2010/2863). Section  22(1) of the NLA  1993 is prospectively amended by NLA 2006, Sch 1, para 11: see 16.30–16.31 above.

908

The National Lottery 3 NLA  1993, s  22(3), inserted by the National Lottery (Funding of Endowments) Act 2003, s  1(2). ‘Endowment’ includes permanent endowment: NLA  1993, s 44(1) (as amended by the National Lottery (Funding of Endowments) Act 2003, s 1(8)). The power of the Secretary of State to make payments out of the National Lottery Distribution Fund under the NLA 1998, s 19 to the National Endowment for Science, Technology and the Arts (NESTA) ceased on the abolition of NESTA (and revocation of that section) on 1 April 2012 under the Public Bodies (Abolition of the National Endowment for Science, Technology and the Arts) Order 2012 (SI 2012/964). 4 Potentially, too, any of the Channel Islands: see NLA 1993, s 22(3B)(e), prospectively inserted by the NLA  2006, s  7(1), (3). The power to prescribe expenditure as referred to in (d) was transferred from the Secretary of State to the Minister for the Cabinet Office under the Transfer of Functions (Big Lottery Fund) Order 2011 (SI 2011/739) with effect from 13 April 2011. 5 NLA  1993, s  22(3A)–(3C), as inserted by the NLA  2006, s  7(3) with effect from 1  December 2006 by virtue of the National Lottery Act 2006 (Commencement No 3) Order 2006 (SI 2006/3201), and as amended by the Transfer of Functions (Big Lottery Fund) Order 2011 (SI 2011/739), art 4, Sch, paras 1, 2. 6 NLA 1993, s 28.

Payment to the distributing bodies 16.72 The Secretary of State may make payments to the distributing bodies1 out of the money held in the National Lottery Distribution Fund for distribution by those bodies.2 The distributing bodies and their entitlements to receive a share of the funds held in the National Lottery Distribution Fund are set out below: •

The arts: the money allocated for expenditure on or connected with the arts is held for distribution by the Arts Council of England (which is entitled to 69.78%), Creative Scotland (which is entitled to 8.9%), the Arts Council of Wales (which is entitled to 5%), the Arts Council of Northern Ireland (which is entitled to 2.8%) and the British Film Institute (which is entitled to 13.52%).3

•

Sport: the money allocated for expenditure on or connected with sport is held for distribution by the English Sports Council (now known as Sport England) (which is entitled to 62%), the Scottish Sports Council (now known as sportscotland) (which is entitled to 8.1%), the Sports Council for Wales (now known as Sport Wales) (which is entitled to 4.5%), the Sports Council for Northern Ireland (now known as Sport Northern Ireland) (which is entitled to 2.6%) and the United Kingdom Sports Council (now known as UK Sport) (which is entitled to 22.8%).4

•

National heritage: the money allocated for expenditure on or connected with the national heritage is held for distribution by the Trustees of the National Heritage Memorial Fund.5

•

Charitable, health, education or environment: the money allocated for expenditure on or connected with charitable expenditure or connected with health, education or the environment is held for distribution by the Big Lottery Fund.6

•

The Secretary of State may by order substitute a different body for any of the Arts Councils, the Sports Councils, the British Film Institute, the 909

The National Lottery National Heritage Memorial Fund or the Big Lottery Fund and may substitute different percentages for the percentages shown above as due to be received by them.7 •

The Secretary of State may also by order provide for money allocated for a purpose under s 22(3) of the NLA 1993 and held for distribution by a body under s 23 of that Act, to be held for distribution by a different body specified in the order (without altering the purpose for which the money is allocated).8 Before making such an order, the Secretary of State must consult each body mentioned in the order, the National Assembly for Wales, the Scottish Ministers, the Northern Ireland Department of Culture, Arts and Leisure and such other persons (if any) as he thinks appropriate.8

•

The Secretary of State may also make an order under s  25(1) of the HBOLA  2004 permitting the Secretary of State to make payments from the National Lottery Distribution Fund into the Olympic Lottery Distribution Fund. Before making such an order, the Secretary of State must consult each of the distributing bodies referred to above.9 A payment by virtue of such an order shall be treated as if paid out of money allocated for any of the purposes listed in s 22(3) of the NLA 1993 as the order shall specify.10

  1 For the distributing bodies see NLA 1993, s 23.   2 NLA 1993, s 24.   3 NLA 1993, s 23(1), as amended by the National Lottery etc Act 1993 (Amendment of Section 23) Order 1994 (SI  1994/1342), the National Lottery etc Act 1993 (Amendment of Section 23) Order 1995 (SI  1995/2088), the National Lottery etc Act 1993 (Amendment of Section 23) (No  2) Order 1999 (SI  1999/2090), the National Lottery etc 1993 (Amendment of Section 23) Order 2007 (SI 2007/743), the National Lottery (Amendment of Section 23) (Creative Scotland) Order 2010 (SI 2010/223), and the National Lottery etc Act 1993 (Amendment of Section 23) Order 2011 (SI  2011/685). Although it is beyond the scope of this work, note that the Scottish Ministers amended s  23(1) of the NLA  1993 to the extent it extends to Scotland, by reducing the allocation to the Arts Council of Scotland from 8.9% to 7.74% and creating an allocation of 1.16% to Scottish Screen: the National Lottery etc Act 1993 (Amendment of Section 23) (Scotland) Order 2000 (Scottish SI  2000/78); SI  2011/685 subsequently prescribed payment of the full 8.9% to Creative Scotland in place of the Arts Council of Scotland and Scottish Screen.   4 NLA 1993, s 23(2), as amended by the National Lottery etc Act 1993 (Amendment of Section 23) Order 1996 (SI  1996/3095), the National Lottery etc Act 1993 (Amendment of Section 23) Order 1999 (SI 1999/1563) and the National Lottery etc Act 1993 (Amendment of Section 23) Order 2006 (SI 2006/654). See 16.79–16.80 below on the sports councils.   5 NLA 1993, s 23(3).   6 NLA 1993, s 23(4), as substituted for s 23(4)–(6) by NLA 2006, s 15(1) with effect from 1 December 2006 by virtue of the National Lottery Act 2006 (Commencement No 3) Order 2006 (SI 2006/3201).   7 NLA 1993, s 29.  8 NLA  1993, s  29A, inserted by NLA  2006, s  8 with effect from 1  October 2006 by virtue of the National Lottery Act 2006 (Commencement No  2) Order 2006 (SI 2006/2630). Such an order must be approved by both Houses of Parliament: see s 60(2) of NLA 1993, as amended by NLA 2006, s 8(3). See the Payments into the Olympic Lottery Distribution Fund etc Order 2008 (SI 2008/255), arts 3 and 4, which Order came into force on 3 February 2008.

910

The National Lottery  9 HBOLA  2004, s  25(3). See the Payments into the Olympic Lottery Distribution Fund etc Order 2008 (SI 2008/255), art 2. 10 HBOLA 2004, s 25(2). As noted previously in this chapter, whilst the provisions of the HBOLA 2004 relating to the Olympic Lottery Distribution Fund appear still to be in force as at the date of preparation of this chapter, following the London 2012 Olympic Games the Olympic Lottery Distribution Fund was wound up on 30 January 2015 (the Olympic Lottery Distribution Fund (Winding Up) Order 2015 (SI 2015/85).

Distribution by the arts councils and the British Film Institute 16.73 The Arts Council of England is a body corporate incorporated by Royal Charter with perpetual succession and a common seal.1 The objects for which the Council is established and incorporated are: (1) to develop and improve the knowledge, understanding and practice of the arts; (2) to increase the accessibility of the arts to the public in England; and (3) to advise and co-operate with government departments, local authorities, the other Arts Councils and other bodies on any matters concerned, whether directly or indirectly, with those objects.2 1 Charter of Incorporation of the Arts Council of England, 30  March 1994. See generally 77 Halsbury’s Laws (2010), para 961. 2 Charter of Incorporation of the Arts Council of England, art 2, and Supplemental Charter of 31 May 2002.

16.74 The Arts Council of Wales is a body corporate incorporated by Royal Charter with perpetual succession and a common seal.1 The objects for which the Council is established and incorporated are: (1) to develop and improve the knowledge, understanding and practice of the arts; (2) to increase the accessibility of the arts to the public; (3) to advise and co-operate with government departments, local authorities, the other Arts Councils and other bodies on any matters concerned, whether directly or indirectly, with those objects; and (4) to carry out the objects through the medium of both the Welsh and English languages.2 1 Charter of Incorporation of the Arts Council of Wales, 30 March 1994. See generally 77 Halsbury’s Laws (2010), para 962. 2 Charter of Incorporation of the Arts Council of Wales (incorporating amendments of 24 November 1999 and 13 October 2004), art 2.

16.75 Creative Scotland was established on 1 July 2010 through enactment of the Public Services Reform (Scotland) Act 2010 following the merger of Scottish Screen and the Scottish Arts Council. Its purpose is to support the arts, screen and creative industries across all parts of Scotland on behalf of everyone who lives or works in, or visits, Scotland.1 1 See www.creativescotland.com, and the Annual Report and Financial Statements 2010/11 (ibid).

911

The National Lottery 16.76 The Arts Council of Northern Ireland is a body corporate consisting of persons appointed by the head of the Education Department in Northern Ireland.1 The Arts Council’s functions are: (1) to develop and improve the knowledge, appreciation and practice of the arts; (2) to increase the public access to, and participation in, the arts; (3) to advise the department and other government departments, district councils and other bodies in Northern Ireland on matters relating to the arts; and (4) to discharge such other functions as are conferred on it by any other statutory provisions2 (including National Lottery functions).3 1 The Arts Council (Northern Ireland) Order 1995 (SI 1995/1623). 2 The Arts Council (Northern Ireland) Order 1995, art 4(1). 3 ‘National Lottery Functions’ in relation to the Arts Council means the functions of the Council under or for the purpose of the NLA 1993: Arts Council (Northern Ireland) Order 1995, art 2(2).

16.77 The British Film Institute is a registered charity incorporated under Royal Charter since 1983. The objects of the Institute are to encourage the development of the arts of film, television and the moving image throughout the United Kingdom, to promote their use as a record of contemporary life and manners, to promote education about film, television and the moving image generally, and their impact on society, to promote access to and appreciation of the widest possible range of British and world cinema, and to establish, care for and develop collections reflecting the moving image history and heritage of the United Kingdom.1 1 Royal Charter (as amended and in effect from 19 March 2015), art 2 – available at www.bfi.org.uk. The Institute assumed the role as a distributing body from the UK Film Council with effect from 1 April 2011 (see the National Lottery etc Act 1993 (Amendment of Section 23) Order 2011 (SI 2011/685)), and the Council was subsequently abolished.

16.78 The Arts Councils and the British Film Institute are under a duty to distribute any money paid to them by the Secretary of State from the National Lottery Distribution Fund for meeting expenditure on or connected with the arts.1 In determining how to distribute money, they may consult any person and take account of opinions expressed to them or information submitted to them.2 For their power to delegate their functions, to participate with other bodies in joint schemes for the distribution of money, to make or participate in publicity and for their duty to prepare and adopt strategic plans setting out their policies for the distribution of money, the reader is referred to 16.88–16.93 below. As soon as possible after the end of every financial year each of the Arts Council and the British Film Institute is obliged to make a report to the Secretary of State on the exercise of its functions under the NLA 1993, and he is obliged to lay a copy of the report before Parliament.3 The report must set out the distributing body’s policy and practice in relation to the principle that proceeds of the National Lottery should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by a government department, the Scottish Ministers, a Northern 912

The National Lottery Ireland department or the National Assembly for Wales.4 Each of the Arts Councils and the British Film Institute is obliged to prepare a statement of accounts in respect of each financial year and to send copies to the Secretary of State and the Comptroller and Auditor General who is to examine, certify and report on the statement, and who must lay copies of the statement and of his report before Parliament.5 1 NLA  1993, s  25. Their duty to distribute money for meeting expenditure includes distribution of money for the purpose of establishing, or contributing to, endowments in connection with expenditure of the relevant description: NLA  1993, s  25(5) (inserted by National Lottery (Funding of Endowments) Act 2003, s 1). Such expenditure also includes expenditure which relates to the Isle of Man: NLA 1993, s 25(6) (inserted by NLA 2006, s 13(1) with effect from 1 December 2006 by virtue of the National Lottery Act 2006 (Commencement No 3) Order 2006 (SI 2006/3201)). 2 NLA 1993, s 25(2C), inserted by NLA 2006, s 10 with effect from 1 October 2006 by virtue of the National Lottery Act 2006 (Commencement No  2) Order 2006 (SI 2006/2630). See also NLA 1993, s 25(1A) and (2A), inserted by NLA 1998, s 9(1) and s 10. For the limited scope of the obligation of a particular distributing body to give reasons for refusing an application for National Lottery funding, see R v The Millennium Commission, ex p The Asha Foundation [2003] EWCA Civ 88. 3 NLA 1993, s 34. 4 NLA 1993, s 34(2A), inserted by NLA 2006, s 12 with effect from 1 October 2006 by virtue of the National Lottery Act 2006 (Commencement No  2) Order 2006 (SI 2006/2630). 5 NLA 1993, s 35.

Distribution by the sports councils 16.79 The English Sports Council (now known as Sport England) is a body corporate established in 1996 by Royal Charter replacing the then existing Sports Council.1 The Sports Council of Wales (now known as Sport Wales) and the Scottish Sports Council (now known as sportscotland) are bodies corporate established by Royal Charter in 1972.1 The Sports Council for Northern Ireland (now known as Sport Northern Ireland) is a body corporate, charged with the task of the furtherance of sport and physical recreation in Northern Ireland.2 The activities of the four sports councils are co-ordinated by the United Kingdom Sports Council (now known as UK Sport) established by Royal Charter in 1996. The functions of the sports councils include supporting, encouraging and fostering the knowledge and development of sport and physical recreation and the achievement of excellence therein. 1 For the English Sports Council see generally 77 Halsbury’s Laws (2010), para 965; see also www.sportengland.org. For the Scottish Sports Council see ‘The Laws of Scotland’ Stair Memorial Encyclopaedia (Butterworths 1990), vol 19, paras 1209– 1216, and www.gov.uk/government/organisations/scottish-sports-council. For the Sports Council of Wales see generally 77 Halsbury’s Laws (2010), para  965 and http://sport.wales/. For the Sports Council for Northern Ireland see www. sportni.net. 2 Civil Service Year Book 1998.

16.80 The sports councils are under a duty to distribute any money paid to them by the Secretary of State from the Distribution Fund for expenditure on or connected with sport.1 In determining how to distribute 913

The National Lottery money, they may consult any person and take account of opinions expressed to them or information submitted to them.2 For their power to delegate their functions, to participate with other bodies in joint schemes for the distribution of money, to make or participate in publicity and for their duty to prepare and adopt strategic plans setting out their policies for the distribution of money the reader is referred to 16.88–16.93 below. As soon as possible after the end of every financial year each sports council is obliged to make a report to the Secretary of State on the exercise of its functions under the NLA  1993, and he is obliged to lay a copy of the report before Parliament.3 The report must set out the distributing body’s policy and practice in relation to the principle that proceeds of the National Lottery should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by a government department, the Scottish Ministers, a Northern Ireland department or the National Assembly for Wales.4 Each sports council is obliged to prepare a statement of accounts in respect of each financial year and to send copies to the Secretary of State and the Comptroller and Auditor General who is to examine, certify and report on the statement, and who must lay copies of the statement and of his report before Parliament.5 1 NLA  1993, s  25. Their duty to distribute money for meeting expenditure includes distribution of money for the purpose of establishing, or contributing to, endowments in connection with expenditure of the relevant description: NLA  1993, s  25(5) (inserted by National Lottery (Funding of Endowments) Act 2003, s 1). Such expenditure also includes expenditure which relates to the Isle of Man: NLA 1993, s 25(6) (inserted by NLA 2006, s 13(1) with effect from 1 December 2006 by virtue of the National Lottery Act 2006 (Commencement No 3) Order 2006 (SI 2006/3201)). 2 NLA 1993, s 25(2C), inserted by NLA 2006, s 10 with effect from 1 October 2006 by virtue of the National Lottery Act 2006 (Commencement No  2) Order 2006 (SI 2006/2630). See also NLA 1993, s 25(1A) and (2A), inserted by NLA 1998, s 9(1) and s 10. For the limited scope of the obligation of a particular distributing body to give reasons for refusing an application for National Lottery funding, see R v The Millennium Commission, ex p The Asha Foundation [2003] EWCA Civ 88. 3 NLA 1993, s 34. 4 NLA 1993, s 34(2A), inserted by NLA 2006, s 12 with effect from 1 October 2006 by virtue of the National Lottery Act 2006 (Commencement No  2) Order 2006 (SI 2006/2630). 5 NLA 1993, s 35.

Distribution by the Trustees of the National Heritage Memorial Fund 16.81 The National Heritage Memorial Fund was established in succession to the National Land Fund as a memorial to those who have died for the United Kingdom.1 It is vested in and administered by a body corporate known as the trustees of the National Heritage Memorial Fund, consisting of a chairman and not more than 14 other members appointed by the Secretary of State.2 The Trustees have power to give financial assistance for any project which appears to them to be of public benefit and which secures the preservation or enhancement of, the study of, access to, the enjoyment of, or the maintenance of things of any kind which are of scenic, historic, archaeological, aesthetic, 914

The National Lottery architectural, engineering, artistic or scientific interest, including animals and plants which are of zoological or botanical interest.3 1 National Heritage Act 1980, s 1(1). For the National Heritage Memorial Fund see generally 77 Halsbury’s Laws (2010), para 815 et seq. 2 National Heritage Act 1980, s 1(2). 3 National Heritage Act 1980, s 3 as amended by the National Heritage Act 1997, s 1 (brought into force with effect from 4 March 1998: see the National Heritage Act 1997 (Commencement) Order (SI 1998/292)).

16.82 The Trustees of the National Heritage Memorial Fund are under a duty to distribute any money paid to them by the Secretary of State from the Distribution Fund for expenditure on or connected with the national heritage.1 In determining how to distribute money, they may consult any person and take account of opinions expressed to them or information submitted to them.2 They may apply any such money for any purpose for which they have power to apply money under s 4 of the National Heritage Act 1980.3 1 NLA  1993, s  25. Their duty to distribute money for meeting expenditure includes distribution of money for the purpose of establishing, or contributing to, endowments in connection with expenditure of the relevant description: NLA  1993, s  25(5) (inserted by National Lottery (Funding of Endowments) Act 2003, s 1). Such expenditure also includes expenditure which relates to the Isle of Man: NLA 1993, s 25(6) (inserted by NLA 2006, s 13(1) with effect from 1 December 2006 by virtue of the National Lottery Act 2006 (Commencement No 3) Order 2006 (SI 2006/3201)). 2 NLA 1993, s 25(2C), inserted by NLA 2006, s 10 with effect from 1 October 2006 by virtue of the National Lottery Act 2006 (Commencement No  2) Order 2006 (SI 2006/2630). See also NLA 1993, s 25(1A) and (2A), inserted by NLA 1998, s 9(1) and s 10. For the limited scope of the obligation of a particular distributing body to give reasons for refusing an application for National Lottery funding, see R v The Millennium Commission, ex p The Asha Foundation [2003] EWCA Civ 88. 3 NLA 1993, s 25(4).

16.83 For their power to delegate their functions, to participate with other bodies in joint schemes for the distribution of money, to make or participate in publicity and for their duty to prepare and adopt strategic plans setting out their policies for the distribution of money the reader is referred to 16.88–16.93 below. As soon as possible after the end of every financial year the Trustees of the National Heritage Memorial Fund are obliged to make a report to the Secretary of State on the exercise of their functions under the NLA 1993, and he is obliged to lay a copy of the report before Parliament.1 The report must set out the Fund’s policy and practice in relation to the principle that proceeds of the National Lottery should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by a government department, the Scottish Ministers, a Northern Ireland department or the National Assembly for Wales.2 The Trustees are also obliged to prepare a statement of accounts in respect of each financial year and to send copies to the Secretary of State and the Comptroller and Auditor General who is to examine, certify and report on the statement, and who must lay copies of the statement and of his report before Parliament.3 1 NLA 1993, s 34.

915

The National Lottery 2 NLA 1993, s 34(2A), inserted by NLA 2006, s 12 with effect from 1 October 2006 by virtue of the National Lottery Act 2006 (Commencement No  2) Order 2006 (SI 2006/2630). 3 NLA 1993, s 35.

Distribution by the Big Lottery Fund 16.84 The Big Lottery Fund is a body corporate set up under the NLA 1993.1 It consists of a chairman and between 8 and 11 other members, all of whom are appointed by the Minister for the Cabinet Office.2 1 NLA  1993, s  36A and Sch  4A (as inserted by NLA  2006, s  14, with effect from 1 August 2006 by the National Lottery Act 2006 (Commencement No 1) Order 2006 (SI 2006/2177), and as amended by the National Lottery etc Act 1993 (Big Lottery Fund) (Amendment of Schedule 4A) Order 2011 (SI 2011/2385) and the Transfer of Functions (Big Lottery Fund) Order 2011 (SI 2011/739)) which make provision for membership, tenure, staff, committees, status, supervision, disqualification, selfregulation, records, saving, remuneration, payments, investment and accounts in connection with the Fund. The National Lottery Charities Board, the Millennium Commission and the New Opportunities Fund ceased to exist, and their property, rights and liabilities (including undistributed good cause money) transferred to the Big Lottery Fund, on 1  December 2006: NLA  2006, s  17, s  18, the National Lottery Distributors Dissolution Order 2006 (SI  2006/2915) and the Big Lottery Fund (Prescribed Expenditure) Order 2006 (SI 2006/3202). 2 NLA 1993, Sch 4A, para 1(1) and (2) (as amended). The Minister for the Cabinet Office may by order vary the number of members: ibid, para 1(5) and (6).

16.85 The Fund is under a duty to distribute any money paid to it by the Secretary of State from the National Lottery Distribution Fund for expenditure that is charitable, connected with health, connected with education or connected with the environment.1 The Fund is empowered to make out of any money it receives grants or loans, or enter into other arrangements, for meeting such expenditure.2 ‘Charitable’, in relation to expenditure, means expenditure for a charitable, benevolent or philanthropic purpose.3 In determining how to distribute money, the Fund may consult any person and take account of opinions expressed to it or information submitted to it.4 1 NLA  1993, s  25. Its duty to distribute money for meeting expenditure includes distribution of money for the purpose of establishing, or contributing to, endowments in connection with expenditure of the relevant description: NLA 1993, s 25(5) (inserted by National Lottery (Funding of Endowments) Act 2003, s 1). Such expenditure also includes expenditure which relates to the Isle of Man: NLA 1993, s 25(6) (inserted by NLA 2006, s 13(1) with effect from 1 December 2006 by virtue of the National Lottery Act 2006 (Commencement No 3) Order 2006 (SI 2006/3201)). 2 NLA 1993, s 36B (as inserted by NLA 2006, s 15, with effect from 1 August 2006 by the National Lottery Act 2006 (Commencement No 1) Order 2006 (SI 2006/2177)). 3 NLA  1993, s  44(1), as amended by NLA  2006, s  20, which came into force on 1  December 2006 by virtue of the National Lottery Act 2006 (Commencement No 3) Order 2006 (SI 2006/3201). 4 NLA 1993, s 25(2C), inserted by NLA 2006, s 10 with effect from 1 October 2006 by virtue of the National Lottery Act 2006 (Commencement No  2) Order 2006 (SI 2006/2630). See also NLA 1993, s 25(1A) and (2A), inserted by NLA 1998, s 9(1) and s 10. For the limited scope of the obligation of a particular distributing body to give reasons for refusing an application for National Lottery funding, see R v The Millennium Commission, ex p The Asha Foundation [2003] EWCA Civ 88.

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The National Lottery 16.86 In making grants, the Fund may impose such conditions as it thinks fit, including conditions as to repayment with interest.1 The Minister for the Cabinet Office may (after consulting the Fund, the National Assembly for Wales, the Scottish Ministers, the Northern Ireland Department of Culture, Arts and Leisure and such other persons, if any, as he thinks appropriate) by order make provision limiting the amounts distributed by the Fund, including specifying maximum and minimum amounts that may be distributed during a specified period.2 The Fund has express power to enter into arrangements with a person under which the person pays money to the Fund and the Fund distributes that money to a third party, provided that the distribution meets expenditure that is charitable, connected with health, connected with education or connected with the environment.3 The Fund also has an express power to give advice about the distribution of money under the NLA 1993, inviting, making or considering applications for grants and loans under any provision of the NLA 1993, and the use of money paid under any provision of the NLA 1993.4 The Secretary of State may give directions to the Fund under the NLA 1993, s 36E(1)(a): (i) relating to the management and control of money received by the Fund; (ii) (with the consent of the Treasury) relating to the form of accounts or methods and principles for the preparation of accounts; and (iii) (in so far as it relates to those matters referred to in (i) and (ii) above), relating to the persons to whom or the terms on which the Fund delegates functions, requiring the Fund to obtain the Secretary of State’s consent before taking action of a specified kind, or requiring the Fund to provide information to the Secretary of State. The Minister for the Cabinet Office may give directions to the Fund under s 36E(1)(b) of the NLA 1993 which may in particular: (i) specify matters to be taken into account in determining the persons to whom, the purposes for which and the conditions subject to which the Fund distributes money; (ii) relate to the employment of staff; (iii) (in so far as it relates to the employment of staff), relate to the persons to whom or the terms on which the Fund delegates functions, require the Fund to obtain the Minister’s consent before taking actions of a specified kind, or require the Fund to provide information to the Minister. In effect, the Minister may not give a direction in relation to a matter in respect of which the Secretary of State has power to give a direction under s  36E(1)(a). In addition, the Minister may not give a direction under s  36E(1)(b) (unless only by virtue of giving a direction in relation to the matters referred to (ii) and (iii) above in relation to the Minister) in relation to Welsh, Scottish or Northern Ireland devolved expenditure (which may be given by the National Assembly for Wales, the Scottish Ministers and the Northern Ireland Department of Culture, Arts and Leisure, respectively). Before giving any direction under s 36E(1)(b) (other than in relation to the matters referred to in (ii) and (iii) above in relation to the Minister), the Minister must consult the Fund, the National Assembly for Wales, the Scottish Ministers and the Northern Ireland Department of Culture, Arts and Leisure.5 1 NLA 1993, s 36B(2). 2 NLA 1993, s 36B(3)–(5). This power was transferred from the Secretary of State to the Minister for the Cabinet Office under the Transfer of Functions (Big Lottery Fund) Order 2011 (SI 2011/739) with effect from 13 April 2011. 3 NLA 1993, s 36C. 4 NLA 1993, s 36D. 5 NLA  1993, s  36E, as amended by the Transfer of Functions (Big Lottery Fund) Order 2011 (SI 2011/739).

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The National Lottery 16.87 For the Fund’s power to delegate its functions, to participate with other bodies in joint schemes for the distribution of money, to make or participate in publicity and for its duty to propose and adopt strategic plans setting out its policies for the distribution of money the reader is referred to 16.88–16.93 below. As soon as possible after the end of every financial year the Fund is obliged to make a report to the Minister for the Cabinet Office on the exercise of its functions under the NLA 1993, and he is obliged to lay a copy of the report before Parliament.1 The report must set out the Fund’s policy and practice in relation to the principle that proceeds of the National Lottery should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by a government department, the Scottish Ministers, a Northern Ireland department or the National Assembly for Wales.2 The Fund is also under a duty to prepare a statement of accounts in respect of each financial year and to send copies of it to the Minister for the Cabinet Office, the National Assembly for Wales, the Scottish Ministers, the Northern Ireland Department for Culture, Arts and Leisure and the Comptroller and Auditor General; the Comptroller and Auditor General must examine, certify and report on the statement, and lay a copy of the statement and of his report before Parliament.3 1 NLA 1993, s 34, as amended in relation to the Fund by the Transfer of Functions (Big Lottery Fund) Order 2011 (SI 2011/739). 2 NLA 1993, s 34(2A), inserted by NLA 2006, s 12 with effect from 1 October 2006 by virtue of the National Lottery Act 2006 (Commencement No  2) Order 2006 (SI 2006/2630). 3 NLA 1993, Sch 4A, Pt 3, para 21 (as inserted by NLA 2006, s 14(1)), as amended by the Transfer of Functions (Big Lottery Fund) Order 2011 (SI 2011/739).

Delegation by distributing bodies of their powers of distribution 16.88 Each of the distributing bodies may appoint any other body or person to exercise on its behalf any of its functions relating to, or connected with, the distribution of the money under its powers of distribution, including the making of decisions as to the persons to whom such distributions are to be made.1 Such delegation may be made in any particular case or in cases of any particular description.2 A body established under the law of the Isle of Man may be the subject of such an appointment in connection with expenditure which relates to the Isle of Man.3 The persons to whom the functions may be delegated include a member, employee or committee of the body itself2 and: (a) any of the other distributing bodies having power to make distributions under NLA 1993, s 25; (b) any charity or any charitable, benevolent or philanthropic institution; (c) any body established by or under an enactment; and (d) any body established by Royal Charter.4 1 NLA  1993, s  25A. The distributing bodies also have power to delegate their functions to committees (NLA  1993, s  25A(6)); for the constitution of such committees see s 25A(7). 2 NLA 1993, s 25A(5). 3 NLA 1993, s 25A(12) (inserted by NLA 2006, s 13, with effect from 1 December 2006 by virtue of the National Lottery Act 2006 (Commencement No  3) Order

918

The National Lottery 2006 (SI  2006/3201). NLA  2006, s  13 permits similar arrangements to apply in respect of the Channel Islands, should the operation of the National Lottery be extended there (though that section is not yet in force to that extent). With consent of the National Lottery Commission, Camelot extended operation of the National Lottery to the Isle of Man with effect from 2 December 1999. No amendment to the s 5 licence was necessary, but changes to Manx law were effected by Tynwald to incorporate into Manx law Part  1 of the NLA  1993 and the National Lottery Regulations 1994; the National Lottery Commission was appointed by the Isle of Man government as regulator of the National Lottery as operated in the Isle of Man, and was given directions identical to those issued to the Commission by the Secretary of State under NLA  1993, s  11: see the National Lottery Act 1999, the National Lottery Legislation (Application) Order 1999 and the Customs and Excise Acts (National Lottery) (Application) Order 1999, each of the Isle of Man. Until s 25(6) and s 25A(12) of the NLA 1993 came into force, however, good cause money raised from sales in the Isle of Man could not be distributed there. Lottery duty deriving from National Lottery ticket sales made in the Isle of Man is at present remitted to the Isle of Man Treasury by HM Revenue and Customs: see the Excise Duty (Amendment of the Isle of Man Act 1979) Order 1999 (SI 1999/2925). 4 NLA 1993, s 25A(4). Bodies to which functions have been delegated may discharge the delegated function by committee: s 25A(6) and (7).

16.89 A body which has been appointed to exercise a function on behalf of another may itself appoint any of its members or employees, or a committee, to exercise the function in its stead, but only if: (a) the terms of the body’s appointment so permit; and (b) the body has power apart from NLA 1993, s 25A to appoint a member or, as the case may be, an employee or committee of the body to exercise some or all of its functions.1 1 NLA 1993, s 25A(5).

Joint schemes for distribution of money by distributing bodies 16.90 A  distributing body has power to participate with one or more other distributing bodies in a joint scheme for the distribution of lottery money.1 A distributing body may, however, only participate in a joint scheme if the principal purposes of the joint scheme include purposes for which the body has power to distribute money. Provided that requirement is satisfied, a body may so participate even though that body would not have power to distribute money for meeting expenditure on some of the particular projects for which money may be distributed under the scheme.2 Money may not under a joint scheme be distributed for meeting expenditure on any particular project unless the expenditure is such that: (a) at least one of the bodies participating in the joint scheme has power, acting alone, to distribute money for meeting the expenditure; or (b) two or more of the bodies participating in the joint scheme, taken together, have power between them to distribute money for meeting the expenditure.3 1 NLA 1993, s 25B(1). 2 NLA 1993, s 25B(2). 3 NLA 1993, s 25B(3).

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The National Lottery 16.91 Where the maximum amount of money which could be distributed under a particular joint scheme in any year exceeds £15 million (or such increased sum as the Secretary of State may by order specify) the joint scheme, in order to have effect, must be authorised by order of the Secretary of State. Where the maximum amount is less than £15 million (or such other sum as the Secretary of State may specify) the scheme, to have effect, must have the written approval of the Secretary of State.1 1 NLA  1993, Sch  3A which contains Supplementary Provisions Governing Joint Schemes. See the Sport and Arts Joint Scheme (Authorisation) Order 2000 (SI  2000/3320) (the joint scheme terminating no later than 31  March 2013), the Awards For All (England) Joint Scheme (Authorisation) Order 2007 (SI 2007/696), the Parks for People (England) Joint Scheme (Authorisation) Order 2008 (SI  2008/3103) (revoking SI  2005/3274, and instituting the joint scheme which came to an end on 31 March 2015), and the New Parks for People (England) Joint Scheme (Authorisation) Order 2013 (SI 2013/1098).

Distribution of funds: publicity 16.92 The distributing bodies may make or participate in arrangements for publishing information relating to the effect of a provision of the NLA 1993, publishing information relating to the distribution of money under that Act or the expenditure of money distributed under that Act, or encouraging participation in activities relating to the distribution of money under that Act.1 1 NLA  1993, s  25E, inserted by NLA  2006, s  11 with effect from 1  October 2006 by virtue of the National Lottery Act 2006 (Commencement No  2) Order 2006 (SI  2006/2630). In relation to the Big Lottery Fund, this power includes money it distributes in its capacity of distributor of dormant account money: see the Dormant Bank and Building Society Accounts Act 2008, s  16, Sch  3, Pt 4, para 14(2).

Strategic plans for distributing bodies 16.93 The Secretary of State may require a distributing body to prepare and adopt a strategic plan, or to review and modify any strategic plan which it has adopted, or to replace any strategic plan which it has adopted by preparing and adopting another.1  A  strategic plan means a statement containing the body’s policies for the distributing of money likely to be available to it for distribution under NLA  1993, s  25(1).2 The strategic plan must also contain:3 (a)

a statement of any directions given to the body by the Secretary of State or the Minister for the Cabinet Office under s 26(1) or s 36E4;

(b) a statement of the estimate given to the body by the Secretary of State of the money likely to be available for distribution by the body; (c)

a statement of the body’s assessment of the needs which the body has power to deal with, in whole or in part, by distributing money;

(d) a statement of the body’s priorities in dealing with those needs by the distribution of money. 920

The National Lottery The strategic plan must be such as to demonstrate how the body is taking into account or, as the case may be, complying with the directions referred to in (a) above.5 Before adopting a strategic plan, a body must undertake a process of consultation with such other bodies as it thinks fit for the purpose of identifying needs and formulating policies, and with the Secretary of State.6 Where a strategic plan is adopted, copies must be sent to the Secretary of State who is to lay a copy before each House of Parliament.7 1 NLA 1993, s 25C(1) and (7). 2 NLA 1993, s 25C(2). 3 NLA 1993, s 25C(3), as amended by NLA 2006, s 19(2) with effect from 1 December 2006 by virtue of the National Lottery Act 2006 (Commencement No 3) Order 2006 (SI 2006/3201). 4 The Minister for the Cabinet Office has power to make directions under s 36E in relation to the Big Lottery Fund, but no powers under s 26(1). 5 NLAA 1993, s 25C(4). 6 NLA 1993, s 25C(5). 7 NLA 1993, s 25C(6).

Devolution 16.94 Certain functions of the Secretary of State under the NLA  1993 (principally in relation to the distribution of funds) have been transferred (so far as they are exercisable as regards Scotland) to the Scottish Ministers, and (so far as they are exercisable as regards Wales) to the Welsh Ministers and the National Assembly for Wales.

DRAWS/SCHEMES BASED ON THE NATIONAL LOTTERY 16.95 The first National Lottery draw took place in November 1994. Right from the start promoters began to develop derivative ‘lotteries’ or schemes which were associated in some way with the National Lottery draws. These were principally run in the tabloid newspapers.1 It may be that some forms of them could be used by other promoters, although each scheme would have to be looked at carefully. 1 Where newspapers have run schemes of this sort they have done so on the basis of free entry, so that the schemes have not strictly been lotteries at all. This point does not, however, affect the discussion in the text, which would apply whether the scheme is run as a free draw or, say, as a society lottery.

Lotteries/schemes using the National Lottery draw 16.96 It is possible to identify at least two types of ‘derivative’ schemes based on the National Lottery.1 The first type, where the outcome depends upon the National Lottery draw, is closely based on free newspaper bingo in its classic form. In one of the first versions which was run by a newspaper, millions of lottery tickets were distributed absolutely free to households in the UK. Each card had six numbers printed on it and these varied. An 921

The National Lottery offer was made that if the numbers matched the numbers drawn in the next Saturday’s National Lottery draw, then the cardholder would win a prize. 1 This chapter does not address a third type of format which is not strictly a derivative scheme, namely an arrangement where a promoter makes his own entries in the National Lottery and awards either those lottery tickets or shares in syndicates based on those lottery tickets as prizes in a separate lottery or competition run by him. Provided the separate scheme is lawful (eg because it is a free lottery or a skill competition) this would appear to be legal. However, it should be noted that under present rules applicable to all National Lottery tickets and scratchcards ‘[Camelot] will not be liable to pay a Prize on a Ticket which it knows or suspects has been resold or otherwise transferred by way of trade’: see the National Lottery Rules for Draw-Based Games played at Retailers (edn 18a), rule 9.4; the Rules for Scratchcard Games (10th edn), rule  7.3, both available at www.national-lottery. co.uk.

16.97 The disadvantage from the promoter’s point of view of this type of scheme was that there was no link between the cardholder and the newspaper. The cardholder could find out whether he had won a prize by looking at the National Lottery draw or discovering the numbers from some other source, and not necessarily by looking at the newspaper. So there was inserted a secondary link. Every weekday the newspaper published its own sets of numbers. A daily prize of £10,000 was awarded to the holder of the card whose numbers matched the published numbers for the relevant day. It was not necessary for the cardholder to buy a newspaper in order to discover what the numbers were, because he could borrow a friend’s newspaper or look at one in a library, and in addition enquiries could be made free of charge at a number of centres set up by the newspaper, and it was possible to write in for the winning numbers by writing with an enclosed SAE at the end of the week. In addition, the numbers could be obtained either by phoning in on a premium rate telephone line, or by looking at Teletext. It may be noted that under the GA 2005 a promoter of a derivative scheme of this type would now be able to distribute his own tickets in exchange for the normal price of his goods or services under the provisions of Sch 2, para 2(c), which provides (in effect) that the payment of the normal price of goods or services in circumstances where the payment also permits entry to a lottery shall not be treated as payment to enter the lottery, provided the price has not been loaded to reflect the entry. However, it appears that it will still not be lawful to link the publication of the promoter`s own numbers with a purchase of an item such as a newspaper, having regard to the provisions of Sch 2, para 6 which provides that ‘… a requirement to pay in order to discover whether a prize has been won under an arrangement shall be treated as a requirement to pay in order to participate in the arrangement.’ 16.98 Schemes of this type give rise to three sets of questions. First, is there any principle of lottery law that prevents the result of one lottery being determined by a draw in another lottery? Second, could it be said that the use of the National Lottery numbers in this way infringes any kind of intellectual property rights which Camelot might have in its own draw? Third, does the scheme infringe the NLA 1993 and in particular s 16? 16.99 Taking the first question, namely whether there is any objection in principle to one lottery or scheme determining its results by reference to a 922

The National Lottery draw in another lottery, the short answer looked at from the point of view of lotteries law seems to be ‘No’.1 1 It is notable in this context that the draws for the National Lottery ‘Lotto’ Game constitute the draws for the National Lottery ‘Lotto Hotpicks’ Game: see the National Lottery ‘Lotto Hotpicks’ Game Procedures, para  (A)(3), available at www.national-lottery.co.uk.

16.100 As to the second question, the principal areas to consider are copyright, registered trade marks and passing off. These are technical areas of law and what follows is necessarily only a very brief and tentative summary of possible issues.1 Proposals for schemes would need to be individually vetted. 1 The editors would like to acknowledge the assistance received from Michael Hicks, Barrister, of Hogarth Chambers, 5 New Square, Lincoln’s Inn, London WC2A 3RJ in dealing with the intellectual property issues discussed in this chapter, though Mr Hicks is not responsible for the views expressed in this chapter.

16.101 The starting point is that the only material over which Camelot might claim intellectual property rights which the derivative scheme promoter must necessarily use is the drawn numbers. There is no need to use any other material (eg the National Lottery logo and Camelot’s promotional and advertising material), and such material should not be used, as it is clear that copyright would subsist in such material, either in favour of Camelot or, in the case of the logo, in favour of the Gambling Commission to whom copyright has been transferred. Further, use of this material (such as the National Lottery logo) is protected as a registered trade mark. Moreover, use of such material would create problems under NLA  1993, s  16.1 As to the drawn numbers there is a question whether the numbers generated in the National Lottery draw could rank as an ‘original literary work’ to which copyright protection could attach under s 1 of the Copyright, Designs and Patents Act 1988 (‘CDPA 1988’). 1 See 16.105 below.

16.102 By s 3(1) of the CDPA 1988 ‘literary work’ is defined to include ‘any work, other than a dramatic or musical work, which is written, spoken or sung’ and it includes ‘a table or compilation’. To claim copyright it is necessary to show the expenditure of independent skill and labour by the author in creating the work. The amount of labour, skill, judgment or ingenuity required to support successfully a claim for copyright is a question of fact and degree in every case: Football League Ltd v Littlewoods Pools Ltd.1 Undoubtedly sporting and gambling material can qualify for copyright protection. In the Football League case, the Football League successfully claimed protection for its fixture lists of matches for the football season. In Ladbroke (Football) Ltd v William Hill (Football) Ltd2 William Hill successfully claimed copyright protection for the lists of matches and odds provided on its fixed odds football coupons. In Express Newspapers plc v Liverpool Daily Post and Echo plc3 it was held that grids of letters from which readers could discover whether their free bingo cards were winning cards was protected as copyright material. One of the characteristics of a literary work is that it 923

The National Lottery affords either information and instruction, or pleasure in the form of literary enjoyment. The judge said: ‘Of course, [Counsel] can well say that some tables – and he gave the example of a table of logarithms – even if to some people they may give very little pleasure, do at least provide information. So, in my judgment, do the grids and the 5-letter sequences. They are looked at by those who have had one of the Millionaire of the Month cards for the very purpose of acquiring information; they want to know whether they have won or lost. They might find out that they have won, or more probably that they have lost; but information is the whole purpose of the publication of these grids and 5-letter sequences.’ 1 [1959] 1 Ch 637. 2 [1964] 1 WLR 273. 3 [1985] 1 WLR 1089.

16.103 Could Camelot argue that the drawn numbers result from the exercise of skill and labour by Camelot and that, when they are written down in a visible form in order to provide information to ticket holders, copyright attaches? It may, perhaps, be doubted whether the generation of numbers in a draw and the publishing of the numbers really constitutes a sufficient expenditure of skill and labour to produce copyright protection, but the point is sufficiently doubtful to justify some caution. However, there will only be an infringement of copyright if the work in which copyright subsists is in some way copied,1 issued in the form of copies to the public,2 or communicated to the public3 in circumstances where the copier cannot claim that his act is justified as ‘fair dealing’. One example of ‘fair dealing’ is where a work is copied for the purpose of reporting current events.4 Since a newspaper is likely to publish the National Lottery numbers as part of its reporting of current events, it is thought likely that it could rely on this as sufficient to justify copying the numbers. Such a justification would not, however, be open to a non-newspaper promoter who wanted to run a derivative lottery/scheme of this type, and it would appear that such a promoter is faced with a choice: either he should refrain from copying the National Lottery numbers, and should require entrants to check them from some publicly available source; or he will have to risk the (perhaps relatively small) possibility that Camelot might assert rights over the drawn numbers. 1 2 3 4

That is, reproduced in a material form: CDPA 1988, ss 16 and 17. CDPA 1988, ss 16 and 18. CDPA 1988, ss 16 and 20. CDPA 1988, s 30.

16.104 The second area of concern relates to passing off. Passing off occurs when a person sells goods or carries on business under a name, mark or description or in such a manner as to mislead the public into believing that the goods or business are those of another person. It is not necessary to discuss this possible head of liability in detail because NLA  1993, s  16 provides what is in effect a statutory prohibition on passing off a lottery, competition or game as part of the National Lottery. 924

The National Lottery 16.105 NLA 1993, s 16 is entitled ‘False representations as to the National Lottery’ and provides as follows: ‘(1) If a person advertising, or offering the opportunity to participate in, a lottery, competition or game of another description gives, by whatever means, a false indication that it is a lottery forming part of, or is otherwise connected with, the National Lottery, he shall be guilty of an offence. (2) A person guilty of an offence under this section shall be liable— (a)

on summary conviction, to a fine not exceeding the statutory maximum;

(b) on conviction on indictment, to imprisonment for a term not exceeding two years, to a fine or to both.’ In order to avoid difficulties with this section it is suggested that a ‘health warning’ should be printed on all advertising material emphasising that the derivative lottery is the promoter’s own scheme and is not part of the National Lottery. It is true that the advertising will indicate that the scheme is ‘connected with’ the National Lottery in the sense that it uses the same draw of numbers; however that indication is not a ‘false indication’ because the representation is true, so that there should be no infringement of s 16.

‘Second chance’ schemes 16.106 The second type of derivative scheme was also developed towards the end of 1994. In this case, the draw was not based on the National Lottery draw at all. Rather, advertisements were put in a newspaper telling people who had bought National Lottery tickets not to throw their tickets away after the relevant draw, but to keep them. The promise was made that the newspaper would in the succeeding week publish its own numbers in the newspaper and that if their National Lottery numbers matched the newspaper’s numbers they would win a prize. Again, it was not necessary to buy a newspaper to see what numbers were published in it; the numbers could be obtained via the usual free routes. 16.107 There also exists a refinement of second chance schemes in which, to take part, the ticket holder must make a telephone call on a premium rate line. 16.108 Prior to the GA 2005 this type of free draw passed without comment or objection and appeared to be acceptable. However, even as the law then stood it was possible to question whether the entry to the lottery was genuinely free (and therefore lawful) or whether some payment had to be made. The point is that the participant pays for the National Lottery ticket and therefore has to make a payment to somebody (ie Camelot) before he can take advantage of the derivative draw’s own free offer. So was that offer free? Under the law prior to the GA 2005 this question gave rise to a number of difficult issues which are discussed in the second edition of this book. The conclusion to which that edition came was that the better arguments were that derivative lotteries of this type were lawful on the basis that the price paid by 925

The National Lottery a purchaser of a ticket in the National Lottery is exhausted by his winning or losing in that lottery, so that there was no payment made for the entry into the derivative lottery, which was accordingly free and lawful. However, this conclusion may well not be open under the GA  2005, particularly having regard to the terms of Sch 2. The question now is whether or not the ticket holder is ‘required to pay in order to participate in the arrangement’ for the purposes of GA 2005, s 14(2)(a) (assuming the other requirements for a lottery set out in s 14(2)(b) and (c) are met). In that connection, GA 2005, Sch 2 (‘Lotteries: Definition of Payment to Enter’) is highly relevant. 16.109 GA 2005, Sch 2 makes provision about the circumstances in which an arrangement is or is not to be treated for the purposes of s 14 as requiring the ticket holder to pay in order to participate in an arrangement. It is particularly relevant to note that:1 (1) ‘paying’ includes paying money, transferring money’s worth and paying for goods and services at a price or rate which reflects the opportunity to participate in an arrangement; (2)

it is immaterial to whom the payment is made and who receives benefit from a payment;

(3) it is immaterial whether a person knows when he makes a payment that he thereby participates in an arrangement; (4) ‘paying’ does not include incurring the expense, at a normal rate (ie a rate which does not reflect the opportunity to enter a lottery), of sending a letter by ordinary first-class or second-class post, making a telephone call or using any other method of communication; (5)

a requirement to pay in order to discover whether a prize has been won under an arrangement is treated as a requirement to pay in order to participate in the arrangement;

(6) a requirement to pay in order to take possession of a prize is treated as a requirement to pay in order to participate in the arrangement; (7) there is no requirement to pay if under the arrangement: (a) each individual eligible to participate has a choice whether to participate by paying or by sending a communication by letter sent by ordinary first-class or second-class post or another method of communication which is neither more expensive nor less convenient that entering the lottery by paying, (b) the choice is publicised in such a way as to be likely to come to the attention of each individual proposing to participate, and (c) the system for allocating prizes does not differentiate between those who participate by paying and those who participate by sending a communication. The Secretary of State may make regulations specifying whether or not a specified kind of arrangement is to be or is not to be treated as a lottery for the purposes of the GA  2005 (including provision that an activity of a specified kind or performed in specified circumstances is to be or not to be 926

The National Lottery treated as paying to enter a lottery).2 The exercise of this power from time to time ought in principle to reduce the scope for any doubt. 1 GA 2005, Sch 2. 2 GA 2005, s 14(7) and Sch 2, para 9.

16.110 It would appear to be clear that a second chance lottery of the kind described in 16.107 above which required the ticket holder to make a telephone call on a premium rate line would include a ‘requirement to pay’: in making the telephone call on such a line the ticket holder would incur an expense which was not ‘normal’.1 In addition, reg 41 of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 20132 now provides that ‘where a trader operates a telephone line for the purpose of consumers contacting the trader by telephone in relation to contracts entered into with the trader, a consumer contacting the trader must not be bound to pay more than the basic rate’. ‘Gambling’ within the meaning of GA  2005 is excluded from the scope of the Regulations (reg 6(1)(a)).3 It would seem, therefore, that even if a promoter could craft an arrangement so that it fell outside the scope of GA 2005, it could in any event therefore not include the use of a premium rate line. Moreover, subject always to any relevant regulations which may be issued by the Secretary of State under GA 2005, s 14(7), it appears likely that the scheme described in 16.106 without a premium rate line or similar mechanic, would be held to involve a ‘requirement to pay’. The reason is that GA 2005, Sch 2, by stating that it is immaterial to whom the payment is made and who receives benefit from a payment, provides a strong argument that payment to Camelot for the original National Lottery ticket (in the scenario contemplated in 16.106) is a ‘requirement to pay’, albeit an indirect one. The argument is further strengthened by the terms of Sch 2, para 4, which provides (in effect) that a person may be held to be making a relevant payment for lottery purposes even if he does not know that a payment which he is making will entitle him to enter a lottery. Taken together, these provisions must raise serious doubts whether derivative schemes of the second type are lawful. 1 GA 2005, Sch 2, para 5. 2 SI  2013/3134, amended by the Consumer Contracts (Amendment) Regulations 2015 (SI 2015/1629). 3 Participating in a lottery which forms part of the National Lottery is also excluded from the scope of the Regulations: art 6(1)(a)(iii).

927

Chapter 17 Remote gambling

INTRODUCTION 17.1 Remote gambling has been carried on in some shape, manner or form since a reliable postal system was first developed. By the beginning of the twenty-first century bookmakers had been conducting credit betting business via the telephone for decades. Issues relating to the conduct of this business under the legislation then in force did occur from time to time. An illustration can be seen in the early cases of Samuel v Adelaide Club1 and Milne v Commissioner of Police for the City of London2 which concerned the use by members of telephones located in club premises in order to communicate bets to a particular bookmaker. The question that the courts had to resolve was whether the bookmakers concerned were ‘using’ the club premises to make bets with club members even though they were not physically present on the premises. 1 [1934] 2 KB 69. 2 [1940] AC 1, [1939] 3 All ER 399, (1940) 27 Cr App R 90.

17.2 As long as the telephone remained at the cutting edge of communications technology, gambling legislation that had its genesis in the early part of the twentieth century was able to do a passably decent job of regulating the relatively small amount of gambling business being transacted by remote means. Indeed when the Final Report of an early review of Britain’s gambling laws conducted by the Royal Commission on Gambling chaired by Lord Rothschild was presented to Parliament in July 1978, it was untroubled by issues relating to remote gambling. 17.3 The rapid development of the internet as a commercial medium in the 1990s, however, served to expose the inadequacies of the legislation then in force as a vehicle for regulating interactive online gambling and highlighted the need for radical reform. By the time the new millennium dawned and the Gambling Review Body (‘GRB’) chaired by Sir Alan Budd embarked upon its review of Britain’s gambling laws the UK was already a significant market for online gambling services. The GRB therefore devoted a good deal of its time and an entire chapter (12) of the Final Report1 to a 929

Remote gambling consideration of the options for regulating online gambling. The Report as presented to Parliament in July 2001, rejected outright prohibition in favour of a discrete licensing regime with proper safeguards for consumers. 1 CM 5206.

17.4 The BRB’s recommendations were endorsed by the then Government and a discrete licensing regime for what had by that time come, in the argot of the genus, to be called ‘remote’ gambling was introduced by the GA 2005. 17.5 When the GA 2005 came into force in October 2007 all online gaming operators were perforce located offshore as no form of remote gaming could lawfully be provided from the UK under the ancien regime. Most of the large UK bookmakers had also taken their online and telephone betting operations offshore, in order to free themselves of the burdensome general betting duty, at that time imposed as a levy on punters’ stakes or winnings. Although the Government’s intention was to make Great Britain an attractive, indeed a ‘World class’ jurisdiction for remote operators to establish themselves in, no effort was made to disturb the status quo as far as offshore operators were concerned. Indeed a conscious decision was taken not to do so in the legislation, which adopted a point of supply approach to regulation. 17.6 Thus an operator supplying online gambling services from within Great Britain would require an operating licence. On the other hand, an operator whose entire technical infrastructure was located abroad, would not be subject to regulation by the Gambling Commission here even if his business was targeted at British consumers. As will be seen, the threshold for the licensing requirement was set according to whether the operator had at least one piece of remote gambling equipment located in Great Britain. If he did, he would be deemed to be supplying his services here and would be subject to the full burden of regulation by the Gambling Commission. 17.7 Restrictions were, however imposed on the ability of offshore operators to promote their activities in the UK. Thus only operators established in EEA States, Gibraltar (which was effectively given the status of an EEA State for these purposes) and other jurisdictions specified by the Secretary of State in regulations – so-called ‘White-Listed’ jurisdictions were able to advertise their services to consumers in the UK subject to compliance eg  with the ASA  Code. Four jurisdictions were afforded White-Listed status, namely Alderney, Antigua and Barbuda, the Isle of Man, and Tasmania. Such status was conferred only after rigorous scrutiny and assessment by the authorities here of the systems in place for the regulation of remote gambling. 17.8 In 2001 substantial changes were made to the general betting duty regime. What was effectively an excise duty on stakes or winnings was replaced by a tax on gross win profits. The bookmakers had lobbied heavily for this and it was hoped that the change would encourage those among them who had moved offshore to repatriate their operations to the UK. In reality, this aspiration met with only limited success. Indeed, none of the significant operators serving the UK online gaming market chose to locate their remote operations here once the GA 2005 came into force. Jurisdictions such as Gibraltar, the Channel Islands and Malta, where most of the UK-facing operators were located had themselves 930

Remote gambling developed first-class regulatory systems that gave UK consumers confidence that operators licensed there would behave responsibly and treat them fairly. They also offered significant tax advantages when compared with the UK, not just in respect of gambling taxes. 17.9 The financial crisis that began to affect the UK in 2007–2008 proved to be a watershed. Haemorrhaging tax revenues from traditional sources due to decreased activity in the economy in the years that followed, the Treasury began to look at novel sources of revenue. Online gambling had proved to be relatively recession-resilient and the demand from UK consumers had continued to grow in spite of it. The Treasury clearly wanted a piece of that action. 17.10 It may therefore be no coincidence that in April 2009 the then Minister for Sport asked the DCMS and the Gambling Commission to scrutinise certain aspects of the system for regulating gambling in Britain, including the controls applicable to operators licensed overseas. Thereafter, on 7 January 2010, the Minister announced that the department would consult on the feasibility of extending the existing licensing system to offshore operators offering their services or advertising them to consumers in the UK. Following the consultation process the draft Gambling (Licensing and Advertising) Bill was published in December 2012. Pursuant to the Government’s obligations under the Technical Standards Directive then in force1 the draft Bill was duly notified to the European Commission on 3 December 2012.2 1 Directive 98/34/EC. 2 No 2012/673/UK.

17.11 The notification expressed the justification for the measure in the following terms: ‘The regulation is a necessary measure to ensure the effective protection of all British based consumers of remote gambling products. Currently, consumers based in Great Britain face different consumer protection arrangements, and have to deal with a myriad of different regulators, depending on where the remote gambling they are taking part in is regulated. This problem is growing as more countries permit online gambling. The Bill will simplify the system of remote gambling regulation in Great Britain by amending the regulatory regime from a “point of supply” to a “point of consumption” basis, whereby all operators seeking to transact with GB based consumers will require an operating licence regardless of where they are located.’ 17.12 In April 2012 the Government commenced a consultation process on proposed changes to the taxation of remote gambling. To inform that process and in an attempt to justify the proposals it published a document entitled ‘Taxing remote gambling on a place of consumption basis: consultation on policy design’.1 The justification for the change was said to be that it would: ‘… level the playing field, providing a fair basis for competition between remote gambling supplied from the UK and overseas.’ 931

Remote gambling Paragraph 2.10 states that: ‘… to ensure the lowest burdens on business and the integrity of a consumption-based duty regime, the intention is for tax and regulatory changes to complement each other and to be progressed in tandem’. 1 HM Treasury and HM Revenue & Customs (5 April 2012).

17.13 From a tax-collector’s standpoint it is clearly more straightforward to extract revenue from an overseas undertaking that is compulsorily locked into the domestic regulatory system by means of a licensing requirement, than one that has no regulatory or other presence in the jurisdiction at all. Although Government has consistently denied any fiscal motives for the changes to the regulatory system that brought overseas operators into the net, the timing of the proposals and the desire to progress them in tandem with those relating to taxation has given the conspiracy theorists considerable food for thought. Moreover, evidence that the regulatory system based on point of supply was so broken that it needed the fix prescribed by the Gambling (Licensing and Advertising) Bill 2013/2014 was pretty thin on the ground. Despite having the most open and diverse gambling market of any EEA State, the incidence of problem and illegal gambling in the UK has consistently remained one of the lowest in the developed world. The professed storm clouds on the regulatory horizon were, as a matter of fact, difficult to discern whatever weather radar system was employed. 17.14 The draft Bill ultimately passed into law as the Gambling (Licensing and Advertising) Act 2014 and came into force on 1 November 2014. It effects a sea-change in the regulatory regime for remote gambling by amending the GA  2005 so as to introduce a licensing requirement for all operators transacting business with gamblers in the UK, irrespective of whether the operator has any remote gambling equipment located here or not. The privileges as regards advertising formerly granted to operators established in EEA States, Gibraltar and white-listed jurisdictions have been abolished. Only operators licensed by the Gambling Commission may lawfully promote their services to British consumers. 17.15 The Act has survived a challenge to its validity based on incompatibility with EU law (see Gibraltar Betting and Gaming Association Ltd v Secretary of State for Culture Media and Sport).1 A similar challenge to the new tax scheme, however, may offer greater promise of success; on 14 July 2015 Charles J handed down a decision referring three questions relating to the scheme’s compatibility with EU law to the CJEU for a preliminary ruling (see R (on the application of) the Gibraltar Betting and Gaming Association Ltd).2 1 [2014] EWHC 3236 (Admin), [2015] 1 CMLR 28. 2 [2015] EWHC 1863 (Admin).

THE DEFINITION OF REMOTE GAMBLING 17.16 Section 4(1) of the GA  2005 defines remote gambling as gambling in which persons participate by the use of remote communication. Remote communication is further defined in sub-s (2) as communication using: 932

Remote gambling (a) the internet; (b) telephone; (c) television; (d) radio; or (e) any other kind of electronic or other technology for facilitating communication. 17.17 Items (a)–(d) clearly cover all the methods that enable persons to participate in gambling without the need to be physically present at the place where the gambling is being provided, from the traditional management of telephone credit betting by bookmakers, through to interactive television and beyond to the internet. The inclusion of radio is interesting given that s 4(1) requires that the media referred to must be the means by which persons ‘participate’ in gambling. Clearly radio is capable of operating as an interactive medium – the walkie-talkie being a prime example. Broadcast radio is, however, generally an informative as opposed to an interactive medium and it is not easy to see that it would be an attractive method for delivering gambling services unless used in combination with some other method of communication. 17.18 In any event, the internet is now blurring the traditional distinctions between different types on media. The use of Voice over Internet Protocol (VoIP) apps such as Skype blurs the distinction between the telephone and the internet, just as internet radio blurs the distinction between radio and the internet. 17.19 The reference to ‘other technology for facilitating communication’ is clearly consistent with Parliament’s intention to make the legislation ‘future proof’. Communications technology is developing at an exponential rate. Microwave and fibre optic media may require electricity to power them but might give rise to a debate whether they are ejusdem generis when compared with radio, telephone, the internet etc. In fact, they would most likely fall into the category of other communications technology, even if not truly ‘electronic’. The GA’s ability to adapt to new developments in technology is reinforced by the power given to the Secretary of State by sub-s (3) to include (or indeed exclude) particular methods of communication to or from the scope of s 4.

REMOTE GAMBLING EQUIPMENT 17.20 Section 36(4) of the GA 2005 defines ‘remote gambling equipment’ as electronic or other equipment used by or on behalf of a person providing facilities for remote gambling: (a)

to store information relating to a person’s participation in the gambling;

(b) to present, to persons who are participating or may participate in the gambling, a virtual game, virtual race or other virtual event or process by reference to which the gambling is conducted; 933

Remote gambling (c)

to determine all or part of a result or of the effect of a result; or

(d) to store information relating to a result. 17.21 The definition remains subject to s 36(5) to the extent that equipment used to take advantage of remote gambling facilities provided by another person but which is not ‘provided’ by that other person will not fall within the definition of remote gambling equipment. 17.22 It can be seen that the relevant parts of ss 33 and 36 only catch the provision of facilities for remote gambling by means of ‘equipment’. Not all equipment will be caught since the definition remains restricted to equipment used for one or all of the four discrete purposes mentioned in s 36(4). Subparagraphs (a) and (b) introduce a concept of storing information relating to specific aspects of the gambling operation. This is capable of being interpreted very widely. In its original form the Gambling Bill struck at the physical process of registering a person’s participation in gambling and/or of accepting payment in respect thereof, not the process of storing information about participation and payment once they had taken place. 17.23 The GA  2005 as passed, however, seeks to regulate the ‘storing’ of relevant information on equipment located in GB. Clearly, subparagraph (a) of s  36(4) is capable of catching the establishment of databases containing personal information about individual players’ gambling transactions on computers in the UK. Indeed even where equipment in the UK operates by merely retrieving data from a database on a remote computer, information obtained from that interrogation may be said to be ‘stored’, albeit fleetingly, in the RAM of the interrogating computer even if it is not purposefully downloaded to the latter’s hard disc or other storage media. Indeed it may be stored for a significantly longer period in that computer’s cache. Where information is held for anything other than a fleeting period it would appear to be ‘stored’ for the purposes of s 36(4)(a) and (b). 17.24 Some assistance may be gleaned from para 140 of the Explanatory Notes to the Act which provides: ‘•

Subsection (4)(a) captures equipment which stores information eg a computer database or server, about a person’s participation in gambling. This includes the “game history” of a player, including the player’s identity and records of their wins and losses. Equipment used for storage of information for general promotional purposes would not be caught by the definition, unless the information relates to someone’s participation in gambling;’

17.25 Further assistance may be gleaned from a helpful Guidance Note on remote gambling equipment first published by the Gambling Commission in March 2008 setting out its views on which elements of a gambling system would come within the definition of remote gambling equipment in the Act.1 As always with such documents, the Guidance contains the caveat that it will always be for the courts, ultimately to interpret the law. It does, however, give very strong pointers to how the Commission would approach enforcement 934

Remote gambling given the presence of what might be taken to be remote gambling equipment in GB. 1 Gambling Commission ‘Remote gambling equipment; Guidance Note’ (March 2008, updated October 2014).

17.26 The Advice refers to remote gambling equipment as ‘key equipment’. It further uses the term ‘component’ to refer to software that is run by ie executed or data that is stored on an item of equipment. An example of a component would be a random number generator. It can therefore be seen that any number of components may be housed in a piece of equipment. 17.27 It is important to bear in mind, as the Commission emphasises, that equipment only falls to be treated as remote gambling equipment if it is ‘used in the provision of facilities for gambling’ and the components running within it carry out one or more of the functions listed in s 36(4)(a)–(d). The Commission takes the view that the expression ‘used in the provision of facilities for gambling’ should be given a narrow interpretation and should not be extended to encompass all equipment used by an operator generally in connection with, or incidentally or ancillary to the provision of remote gambling. Thus equipment used eg for integrity testing, money laundering compliance and monitoring, complaints handling and responsible gambling analysis should not regarded as being used to provide facilities for gambling as they are utilised neither by the operator or the player to gamble one with the other. 17.28 Thus only equipment which can be said to be used directly in the delivery of gambling facilities should be treated as coming within the definition of remote gambling equipment. It is submitted that this is the correct interpretation of s 36(4). Clearly difficult questions of fact and degree can arise when one is trying to determine whether specific pieces of equipment come within the definition or not. In order to navigate a way through the minefield, the Commission has sought to identify particular types of equipment that will normally be excluded. 17.29 One example of such equipment would be that used to store customer data for marketing purposes including the awarding of bonuses or other incentives related to a customer’s gambling transactions with the operator. Such data may be stored in various parts of the operator’s infrastructure. The Commission considers that only the core system whose principal function is to ‘offer, operate and settle’ gambling transactions should be considered to be ‘used in’ the ‘provision of facilities for gambling’. Thus whilst systems whose function is to calculate bonuses or other incentives allocated in the course of a particular gambling transaction or session may well be remote gambling equipment the same may not be true of systems that only operate to allocate rewards and incentives based on past play. 17.30 Another example will be systems designed to ensure continuity of business in the event of some form of technical failure or maintenance programme. Such systems will normally operate to prevent operational downtime and/or data loss. In determining whether such systems constitute remote gambling equipment the Commission draws a distinction between 935

Remote gambling equipment used to store a backup of operational data for a gambling system and equipment that is used as a standby or disaster recovery system. Since the latter is intended to be used as a replacement for primary system in the event that it becomes unavailable for use, it is by definition intended to be used in the provision of facilities for gambling and will be caught by the Act if located in Great Britain. 17.31 On the other hand, if equipment is merely used to store backup data for gambling systems in the sense that it holds a copy of operational data which will not be used as part of the ‘live’ gambling system but will only be restored onto ‘live’ standby or disaster recovery equipment, such equipment will not be considered as being used in the provision of facilities for gambling. Thus an operator with a gambling system located offshore who utilises equipment in Great Britain to store a mirror copy of his operational data will not need a remote gambling licence provided that the sole function of that equipment is to restore data to the offshore system in the event of failure. 17.32 Thus before equipment can be said to be used in the provision of facilities for gambling its use must be closely related to the physical delivery of the gambling services to the customer. Equipment storing historical data used for dispute resolution, monitoring, promotional or marketing purposes, for example, should not be treated as remote gambling equipment. Thus the purpose for which data is held becomes as much a critical factor as the inherent nature of the data in terms of subparagraphs (a)–(d). Marketing, dispute resolution, data recovery etc are not exhaustive of the purposes for which relevant data might be stored without triggering the requirement for a remote gambling licence. 17.33 The provisions of s 36(5) provide that remote gambling equipment does not include equipment which: (a) is used by a person to take advantage of remote gambling facilities provided by another person; and (b) is not provided by that other person. 17.34 The effect of this provision is that a piece of computer equipment used by a player to take part in remote gambling is not caught by the GA  2005 unless it is ‘provided’ by the person ‘providing’ the facilities so used. The expression ‘provided’ is not defined in the Act, the term therefore bears its ordinary meaning. The Shorter Oxford dictionary defines ‘provide’ in this context as ‘Supply or furnish for use: make available’. Most significantly, the subsection is specific to the person providing the remote gambling facilities. It does not, for example, extend to a person ‘associated with’ or ‘in a commercial arrangement’ with the person providing the facilities for remote gambling. Likewise it does not extend to equipment provided ‘on behalf of’ that person. Thus even if a piece of computer equipment used by a player to take advantage of remote gambling facilities performs all or any of the functions listed in s 36(4), the effect of sub-s (5) is that it will not be remote gambling equipment unless it was supplied by the legal or natural person who actually provides the remote gambling facilities. 936

Remote gambling

THE NEW TERRITORIAL APPLICATION PROVISIONS 17.35 The GA 2005, s 36 deals with the territorial application of s 33 and in its pre-2014 Act form only applied s  33 if an operator chose to locate at least one piece of remote gambling equipment (as defined in s 36(4) in Great Britain. 17.36 The key amendment made by the 2014 Act is to s 36 (3) which now provides: ‘Section 33 applies to the provision of facilities for remote gambling only if (a) at least one piece of remote gambling equipment used in the provision of the facilities is situated in Great Britain, or (b) no such equipment is situated in Great Britain but the facilities are used there.  (3A) In a case within subsection (3)(b), the person providing the facilities commits an offence under section 33 only if the person knows or should know that the facilities are being used, or are likely to be used, in Great Britain.’ 17.37 Accordingly the requirement to hold an operating licence is triggered either if at least one piece of an operator’s remote gambling equipment is located in the UK or in a case where all of that equipment is located overseas but the operator’s remote gambling services are used by persons in Great Britain. In the former case it is immaterial that the operator does not actually service the British market; it is the location of the remote gambling equipment that triggers the licensing requirement, not the geographical location of the persons who consume the services. In the latter case, the geographical location of the consumer is critical. 17.38 The mens rea gloss added by sub-s (3A) however means that an offence under s 33 will only be committed if the operator knows or should know that his facilities are being or are likely to be used by persons in the UK. 17.39 It is important to note that sub-s  3(A) sets the mens rea threshold quite high by virtue of its requirement for actual or constructive knowledge. Mere suspicion that a consumer might be in Great Britain would not appear to be enough. The test whether an operator should know that his facilities are being used by a person in the UK is objective. Thus if a reasonable operator appraised of all the relevant circumstances would have known, the mental element will have been established. 17.40 No attempt is made to define what is meant by ‘used’. The 2014 Act therefore continues the vagueness and loose drafting that is an unfortunate characteristic of the GA  2005 which it amends. In ordinary parlance ‘use’ is capable of being an expression of extraordinary width when applied in the context of facilities for gambling. Some online gambling websites permit consumers to play for fun either for simple amusement or to trial the products 937

Remote gambling as a precursor to moving on to playing for real money. If no stakes can be hazarded and no prizes can be won, the facilities being used are not, in fact, gambling facilities at all and no offence would be committed under s 33 if consumers in Great Britain were allowed to use them. 17.41 The concept of providing facilities for gambling is itself extremely wide. A person can provide facilities for gambling by the mere act of inviting others to gamble in accordance with arrangements made by him. Section 33(3) does not make it clear whether ‘using’ facilities is restricted to accepting an invitation to gamble. The question therefore arises whether merely visiting an online gambling website to see what is on offer or telephoning a bookmaker’s call centre to make an enquiry is ‘using’ the operator’s facilities for gambling. This would clearly be an extreme interpretation, particularly if the operator makes it clear that he will not accept transactions from British consumers. 17.42 The Explanatory Notes to the 2014 Act are not particularly helpful in this regard. Paragraph 19 states: ‘For example, an overseas-based operator who makes remote gambling facilities available on the internet will need to obtain an operating licence from the Commission if their website is used in Great Britain and the operator knows, or should know, that the facilities are being used or are likely to be used in Great Britain. If the overseas operator wants to avoid having to obtain a licence, they will need to take action to prevent consumers using their website here.’ It is unfortunate that para 19 seems to equate using the operator’s website with the use of his facilities for gambling when they may not necessarily be the same thing. 17.43 The Gambling Commission appears to take the view that a licence is only needed and an offence under s 33 can only be committed if the operator is actually entering into gambling transactions with British Consumers. Thus in the section on its website entitled ‘About remote gambling (including online gambling)’ under the heading ‘Permissions needed to offer remote gambling’ it states: ‘An operator requires a relevant remote operating licence from the Commission if it currently runs or wants to run a gambling service through remote communication (including online gambling) and: •

any part of its remote gambling equipment is based in Great Britain or

•

its remote gambling equipment is based outside Great Britain but it transacts with or advertises to consumers in Britain.’

17.44 It is therefore submitted that ‘used’ in the amended s  33(3) means used by the consumer in the sense of entering into gambling transactions with the operator. Merely visiting a website, making a telephone enquiry etc would not in themselves amount to using facilities for gambling. 938

Remote gambling 17.45 Even this interpretation can lead to strange results. Suppose an Australian citizen who regularly uses a bookmaker at home in Melbourne is visiting London. If he telephones his bookmaker from his hotel to place a bet on the Melbourne cup does that mean that the bookmaker commits an offence if he accepts the bet in the knowledge that his customer is in Great Britain? The bookmaker has not invited anyone in Great Britain to gamble with him. The telephone in his Melbourne premises is arguably not remote gambling equipment within the meaning of s 36(4) because it has none of the functions specified in that subsection. To say that he commits an offence in these circumstances would appear disproportionate not to say absurd. The customer hardly needs the protection of British law when dealing with his regular bookmaker and it would be absurd to subject the latter to a British licensing requirement merely to transact the odd piece of business with clients who happen to be here. This may be an extreme example but it may serve to demonstrate how hard cases can make bad law. 17.46 The question then arises where the use of facilities for remote gambling actually takes place for the purposes of s  33. If it does not, as a matter of fact and law, take place in Great Britain then no offence would be committed. There is certainly an argument that the consumer who gambles via a website located overseas is virtually travelling to that website to make use of its facilities. The contract that underpins the gambling transaction may well be completed not in Great Britain, but in the jurisdiction where the operator is located. If the ‘use’ of the operator’s facilities consists in entering into gambling transactions with the latter that actually crystallise in the jurisdiction where the facilities are located it is arguable that the facilities are used there. 17.47 This legislation is new and as yet untested. Clearly any court interpreting the amended s 33(3) would strive to adopt a meaning that did not emasculate its effect. Nonetheless it might, one day, have to grapple with arguments such as those proffered above. 17.48 Precisely what lengths an overseas operator who does not wish to go to the trouble and expense of obtaining a British remote operating licence must go to in order to ensure that he does not commit an offence is not easy to ascertain. Geo-blocking persons with a UK IP address is not always effective in an age where potential customers may be sufficiently IT savvy to know how to use a proxy server or the Tor Browser so as to be able to show an IP address in any country they choose. Even totalitarian regimes have enjoyed patchy success when attempting to impose effective geo-blocks. 17.49 In its publication entitled Implementing the Gambling (Licensing and Advertising) Bill Frequently asked questions published in April 2014, the Commission expressed the view that the 2014 Act is directed at the physical presence of consumers in Great Britain, as opposed to where their habitual residential address happens to be.1 This is almost certainly the correct approach. Thus the mere fact that a consumer has an account registered at an address in Great Britain might not automatically require a refusal to accept gambling transactions. On the other hand it might be arguable that the operator could be taken to know that the consumer is in Great Britain unless 939

Remote gambling he provides some proof to the contrary. The prudent, compliant operator will normally err on the side of caution. 1 At para 15.1.

THE NEED FOR A LICENCE 17.50 Many operators licensed to provide land-based gambling services will also have some form of remote gambling aspect to their businesses. In some instances this will be merely ancillary to the main land-based operation. In other cases the remote operation will be run effectively as separate businesses. A  good example of the former is the bookmaker whose primary business involves the operation of cash betting offices but who also has a number of clients who bet with him on credit by telephone. An example of the latter would be a well known land based casino brand with an estate of several city-centre casino premises that also has a branded online casino business. In these cases the question arises precisely what type of operating licence is required? Whereas it is not unreasonable to require two self-contained, wholly independent licences in the latter case, it may be disproportionate to require this in the former given that the operator has already been found to be suitable in every respect to conduct betting business on a face to face basis. 17.51 The Gambling Commission has taken a pragmatic and common sense approach to this problem in order to cut what might otherwise be seen as a regulatory Gordian knot. There was perceived to be sufficient flexibility within the Act to enable it to develop the concept of an ancillary remote operating licence, issued, in effect, as an add-on to an existing non-remote licence covering the gambling activity in question. This allows a licensed operator whose main business is the provision of a non-remote gambling service to pursue a secondary remote aspect of his business without the need to go through the full panoply of obtaining an additional remote operating licence for the activity in question. The following is a summary of the potential licensing requirements for remote betting and gaming operators.

Betting 17.52 Operators providing remote fixed odds betting services who utilise remote gambling equipment located in Great Britain need to hold a remote general betting (standard) operating licence (‘RGBS’). There are three categories for this type of licence depending on the precise nature of the betting activity namely: (i)

RGBS (real events) authorising the provision of remote betting services on real events;

(ii) RGBS (virtual events) authorising the provision of remote betting services on virtual games, races, events, or other processes; (iii) RGBS (remote platform) authorising the use of remote platforms to back or lay bets in the course of a business. 940

Remote gambling 17.53 Operators using remote platforms simply to back or lay bets in the course of conducting a betting office, an on course betting business or who do so in the course of conducting a telephone betting business who hold or are applying for non-remote general betting (standard), non-remote general betting (limited) and remote general betting (limited) operating licences respectively do not have to make any additional application or pay additional annual fees in order to use remote platforms. 17.54 A bookmaker wishing to take bets exclusively via the telephone or email provided the latter are to be manually processed by him and the gross gambling yield in respect of those bets does not exceed £550,000 can apply for a remote general betting (limited) operating licence. 17.55 Remote betting intermediaries require a remote betting intermediaries operating licence. Intermediaries who merely wish to operate a physical trading room containing communications equipment enabling persons visiting the premises to bet with a third party which might be a remote betting exchange or bookmaker can apply for a remote betting intermediaries (trading room only) operating licence for that limited purpose. Whether such a licence is required depends in effect on the extent to which the facilities on offer can be said to be dedicated to the making of bets or of a more general nature. The question will be one of fact and degree in each case. At one end of the spectrum might be an internet café whilst at the other might be a corporate hospitality suite at racecourse effectively providing dedicated facilities for punters.1 1 See the Gambling Commission’s helpful publication entitled, Is a trading room licence required? (March 2011).

17.56 A  remote pool betting licence is required to conduct commercial pool betting operations by means of remote communication. 17.57 Applicants for or holders of either a non-remote general betting (standard) or (limited) operating licence who want to take bets by telephone or email provided the latter are to be manually processed by him and the gross gambling yield in respect of those bets does not exceed £550,000 can apply for an ancillary remote betting operating licence to authorise this activity.

Gaming 17.58 Providing online casino games eg  roulette, blackjack and virtual slots will require a remote casino operating licence. Even operating an online poker website will require a remote licence since the law does not recognise a poker only licence. 17.59 Land-based casino operators holding non-remote casino operating licences who wish to offer some casino gaming restricted to one set of premises using remote communications equipment such as handheld terminals must also apply for an ancillary remote casino operating licence. Such a licence will not however serve to authorise the use of such equipment 941

Remote gambling to link players to facilities for gaming located in another set of premises. In the latter case a full remote casino operating licence must be held in addition to the appropriate non-remote licence.

Software 17.60 By virtue of the interaction of ss 41, 243 and 67(1)(b) an appropriate remote operating licence is required not only for the provision of facilities for remote gambling but also, quite independently, for the manufacture, supply, installation or adaptation of gambling software and the manufacture, supply, installation, adaptation, maintenance or repair of a gaming machine where, in either case, the activity is carried on by means of remote communication. 17.61 Software occupies a key position in the provision of facilities for remote gambling. Indeed since 31  March 2015 operators licensed by the Commission have been required to source their gambling software exclusively from entities who themselves hold appropriate software licences issued by Commission. 17.62 The first reference to gambling software in the GA  2005 is in Pt 3 under the heading ‘Miscellaneous offences’. Section 41 therefore provides: ‘(1) person commits an offence if in the course of a business he manufactures, supplies, installs or adapts gambling software unless he acts in accordance with an operating licence. (2) In this Act “gambling software”— (a)

means computer software for use in connection with remote gambling, but

(b) does not include anything for use solely in connection with a gaming machine. (3) A  person does not supply or install gambling software for the purposes of subsection (1) by reason only of the facts that— (a)

he makes facilities for remote communication or non-remote communication available to another person, and

(b) the facilities are used by the other person to supply or install gambling software. (4) A person guilty of an offence under this section shall be liable on summary conviction to— (a) imprisonment for a term not exceeding 51 weeks, (b) a fine not exceeding level 5 on the standard scale, or (c) both.’ 17.63 There are currently no decided cases on the interpretation of s 41. The definition of gambling software is ‘computer software for use in connection with remote gambling’. On the face of it these words are extremely wide and might be apt to include any software that could be used in any way 942

Remote gambling for the purposes of remote gambling. That cannot, however, have been the intention of Parliament. To place a licensing requirement on the provision of any software that might be used in connection with remote gambling, for example price comparison software or software designed to trawl the internet for information about the optimum deals offered by bookmakers or online casinos etc would be both disproportionate and serve no useful purpose. Even a cursory look at the legislative history in fact reveals that Parliament did not intend that such an extreme interpretation should be given to s 41(2). 17.64 Thus in order to see where the boundaries concerning the interpretation of s  41 lie, it is necessary to examine the legislative history of that provision and secondly to see where it fits in relation to other key provisions of the Act. Before embarking upon that exercise it is useful to examine the Explanatory Notes to s 41 which provide as follows: ‘158. The Act places controls on people who wish to provide facilities for gambling by means of remote communication. This section concerns computer software for gambling that is used in connection with such facilities, but not software designed for use in a gaming machine. 159. It is an offence under subsection (1) to manufacture, supply, install or adapt, in the course of a business, computer software for remote gambling, unless an operating licence is held for such activity. The purpose of this offence is to ensure that people responsible for generating gambling software do so in a regulated environment, to ensure, in particular, fairness for players. While an operating licence for remote gambling covers someone offering gambling, for example by means of the internet, it does not, itself, cover someone who is manufacturing the gambling software that will be used in providing such facilities (ie the software supplier to a remote gambling operator). This section covers this latter situation.’ 17.65 Although these Notes are not definitive as to the interpretation of the relevant provisions, they do provide important clues as to what those provisions were designed to achieve. Clear clues are provided in para  159 which suggest that the provisions are designed to bring those who supply software to remote gambling operators within the regulatory framework, so as to achieve the attainment of the licensing objectives eg ensuring that gambling is conducted in a fair and open way. It is therefore to the manufacture, supply etc of software used by remote gambling operators to deliver facilities for remote gambling that s 41 is directed. 17.66 The Report of the GRB made no specific recommendations concerning the licensing of gambling software providers. Chapter 30, which dealt with online gambling merely expressed a desire (para 38) that software used in the process of providing facilities for online gambling eg random number generators and virtual game generators should not be open to manipulation by operators. 17.67 The original draft of the Gambling Bill did not contain any clause approximating to s  41 of the GA  2005. Provisions to licence ‘software 943

Remote gambling providers’ and to curb the activities of unlicensed providers came only as the result of a recommendation in the First Report of the Joint Committee on the Draft Gambling Bill published in April 2004 and couched in the following terms: ‘571. We have received a great deal of evidence suggesting that certain providers of technology for remote gambling should be regulated under the draft Bill, on the basis that the Software Provider is a critical component of the operations of an Operator’s business and can significantly affect the outcome of games and wagering. The Alderney Gambling Control Commission, which has significant experience of regulating remote gambling businesses located within its jurisdiction, has explained that the draft Bill and policy statements do not make specific provision for the approval of system and software providers, and has described this as a “material omission”: “The providers of software in the remote gambling industry can best be compared with the manufacturers and suppliers of gambling machines [to] terrestrial casinos. The significant difference is that a gaming machine only affects a small part of the casino operation, while remote gambling software in effect constitutes the whole casino. It is the software providers who develop and maintain software which ensures the games are fair and that the systems are secure and auditable. Furthermore, it is common practice in the remote gambling industry for casino operators to contract with software providers to operate their casinos on a revenue sharing basis.” 572. In its response to such comments, included in the Schedule of Detailed comments on the draft Bill (Annex 1), DCMS has helpfully explained their policy with respect to the regulation of software providers: “The intention is that suppliers of software for use in remote gambling operations will be required to hold a remote operating licence for the type of gambling facilities they generate […]Clauses 4 and 21 capture such software providers, but DCMS will look further at how to clarify the need for an operating licence in this respect.” This has also been confirmed in written evidence from the Secretary of State: “[software providers] like gaming machine suppliers, perform an important gambling function, and they need to be licensed to ensure that they are suitable and competent for those tasks.” 573. We recommend that the draft Bill should be amended to clarify that relevant software providers would be required to be licensed under the new regime. We consider that this is not adequately clear from the existing wording in Clauses 53(2)(h) and 194(3)(b), as DCMS has acknowledged in the Schedule of Detailed Comments on the draft Bill.’ 17.68 What is now s 41 of the GA 2005 appeared as Clause 38 of the Bills presented to the Commons in October and November 2004, which in turn became Clause 40 of the Bill as amended in Standing Committee B  on 11 January 2005. The provision underwent no metamorphosis. 944

Remote gambling 17.69 Again, it seems clear that the Select Committee was concerned to regulate persons who provided software to gambling operators for use in their remote gambling systems. The objective was to ensure the overall integrity of the systems that deliver online gambling services to the end user. It is unfortunate that such wide words were used in what ultimately became s  41 of the GA  2005. This looseness of drafting is an unfortunate shortcoming of many provisions of this legislation, imposing a considerable burden on the Gambling Commission in terms of having to issue guidance, advice, etc on issues of interpretation in order to achieve clarity and certainty for operators. It does seem clear, however, that the legislative intention was to keep regulation within narrower limits than a strict reading of the words used would suggest. A purposive interpretation, therefore, has the effect of circumscribing the operation of those words and keeping their remit within sensible limits where a literal interpretation might be productive of chaos. 17.70 It would appear that such a purposive approach to interpretation almost certainly underpins the view taken by the Gambling Commission. In June 2014, in anticipation of the 2014 Act coming into force, the Commission published Advice entitled ‘What is gambling software?’1 This consolidates and extends information previously displayed on its website. 1 ‘What is gambling software?’ Advice (June 2014).

17.71

Paragraph 2.1 of the Advice provides:

‘The Commission does not consider that software which is used by nongambling businesses as well as gambling businesses, such as general infrastructure or business applications, to be gambling software. For example we do not intend to licence companies that supply or install general Microsoft, Oracle or Apple applications.’ This view does not, of course, extend to software produced using such applications if the resulting product falls within the definition of gambling software in section 17.72

At paragraph 2.3 the Commission goes on to state:

‘The Gambling Commission considers any software which is designed for use in connection with remote gambling (including online gambling), that is intended to be used or is used by a gambling operator, to be gambling software. That includes any gambling-specific application, such as software used in: •

virtual event webpages

•

virtual event control

•

bet capture/matching

• settlement •

random number generation

•

gambling records, showing detailed results of games.’ 945

Remote gambling 17.73 The Commission considers that the regulatory objective is to ensure that persons who manufacture software that can affect the fairness of remote gambling should operate in a properly regulated environment. In para 2.4 it states: ‘At its core this generally means the software that accepts and records gambling transactions, determines the result, calculates and allocates any wins to the customer’s account. It would not include software developed more generally for associated activities such as performance analytics, affiliate and CRM management.’ 17.74 The Advice goes on to provide fairly precise guidance as to how the Commission will approach the specific activities of manufacturing, supplying, installing or adapting gambling software. 17.75 The Commission takes the view that generally speaking, supplying software to a third party should not trigger the requirement to hold a licence unless the supplier has some role in its manufacture adaptation or installation. However, the final supplier of software to the holder of a gambling operating licence will need to hold a software licence even if he plays no such role. In such a case the mere fact of entering into the supply contract triggers the licensing requirement. 17.76 In some cases the last person in the supply chain may be an IP holding company whose sole function is to hold and manage the IP rights in a particular software product. These are often established to ring-fence IP assets and secure tax advantages. The manufacture, development and/ or installation of the software will be the responsibility of another company within the group and the supply of the software to the IP holding company via an internal arrangement. The latter may then sell or licence the software to an operator licensed by the Commission. 17.77 Provided the software manufacturer/developer and the IP holding company are under common ownership, management and control and the arrangement meets the requirements of its information note on ‘umbrella’ licensing,1 the Commission may grant the developer/manufacturer a group umbrella licence, authorising the software to be supplied via the agency of the IP holding company, thereby obviating the need for the latter to hold a separate licence. 1 Gambling Commission, Information Note: ‘When can a company operate under another’s licence?’ (March 2014).

17.78 It sometimes happens that the holder of a remote operating licence may wish to undertake the installation and/or adaptation of gambling software on its systems in-house, rather than let the supplier or a subcontracted third party perform these functions. The Commission considers that the operator will require a gambling software licence, but that this may, in appropriate cases, take the form of a supplementary or linked licence. The cost of installing/adapting the software may not exceed £50,000 per annum, otherwise a full gambling software operating licence must be obtained. 946

Remote gambling 17.79 The Commission regards manufacturing and adapting software as similar in that their objective is to develop a finished or almost finished product. Potential complexity arises due to possible multi-party involvement governed by different contractual arrangements in creating different aspects of what becomes the completed product. 17.80 When determining precisely which parties involved in the process will require licences the Commission focuses on where ultimate control of the development of the product lies. Circumstances will vary and the key factor may be whether the contractual relationship between the relevant parties involves the purchase of a product or mere consideration for time and expertise. 17.81 In order to determine who, in these multi-party situations has sufficient control over development to trigger the requirement for a licence the Commission will consider where responsibility lies for: •

design and functionality of the product;

•

approval of any changes to its design;

•

functionality and acceptance testing;

•

quality assurance/regulatory compliance testing.

17.82 The Commission will also need to know who holds the IP in respect of the product and precisely what is said in the contract about the division of responsibilities and liabilities. The contracts should therefore contain sufficient detail to assist the Commission in making its decision. In the absence of such detail, the parties should give careful thought to what other sources of information might be available to satisfy the Commission. 17.83 If a party is only providing part of a game such as artwork or audio content subject to the design specifications of another party this would tend to suggest that the latter should hold a licence rather than the former. 17.84 There is no indication during any of the debates or scrutiny processes prior to the passing of the GA 2005 that the Government or Parliament took a different view from that of the Joint Committee as to how far its ambit should extend as regards gambling software. To that extent the views expressed by the Gambling Commission on the limits of regulation may properly be regarded as broadly in line with those of the Joint Committee. 17.85 Further support for the Commission’s approach can be found when one considers the place occupied by s 41 in the broader scheme of the GA 2005. The Joint Committee saw the need to regulate gambling software used by gambling operators in the systems used by them to provide gambling facilities. An essential feature of those systems is the remote gambling equipment used to deliver the facilities. 17.86 Gambling software is viewed as an essential component of remote gambling equipment. This is recognised by the Gambling Commission in its Guidance Note on remote gambling equipment published in March 2008.1 This sets out the Commission’s view as to which elements of an operator’s 947

Remote gambling ‘gambling system’ will or will not fall within the definition of remote gambling equipment in s 36(4). 1 Gambling Commission, Guidance Note ‘Remote gambling equipment’ (March 2008, updated October 2014).

17.87 In that Guidance the Commission uses the expression ‘component’ to describe inter alia software that is ‘run’ by a piece of equipment. At para 3.1 the Commission states: ‘In this document we use the term “component” to refer to software that is run by (executed) or data that is stored on a piece of equipment. A  component fulfils a specific purpose (for example, an RNG is a component that generates random numbers); a piece of equipment may host one or more components.’ 17.88 At para 4.3 the Commission attaches a very narrow interpretation to the expression ‘used in the provision of facilities for gambling’: ‘We read “used in the provision of facilities for gambling” as relatively narrow and as not extending to all equipment used by a remote gambling operator generally in connection with, or incidentally to, the provision of the gambling. Thus, for example we do not consider equipment used for integrity testing, money laundering compliance and monitoring, complaints handling and responsible gambling analysis to be “used in” the provision of the gambling activity because they are not used by the customer or operator as part of that gambling.’ 17.89 Further at para 5.2 the Commission gets to the nub of what aspects of an operator’s gambling system is covered by the definition: ‘… we consider only the core system whose principal function is to offer, operate and settle the gamble to be “used in” the provision of facilities for gambling.’ 17.90 As to the ‘components’ which enable that system to operate, the Commission states at para 8.1: ‘Whether or not any piece of equipment that is used in the provision of facilities for gambling will be classified as “remote gambling equipment” is determined by the components that reside on it. If any of the components perform the functions listed in section 36(4) of the Act, then that piece of equipment is remote gambling equipment, regardless of what other components may be deployed on the equipment.’ 17.91 A  table, Table 2 then summarises the components that meet the Commission’s interpretation of the definition set out in s  36(4) where they are used in the provision of facilities for gambling. A Component Glossary sets out a more detailed description of the components. 17.92 The Gambling Commission’s approach is therefore sensible and has a sound basis in terms of statutory interpretation. 948

Remote gambling

Personal licences 17.93 Remote Personal Management Licences will be required for persons in key management positions unless the operator can claim ‘small scale operator’ exemption.1 1 See Chapter 6 (Operating licences), at 6.117.

RESPONSIBILITIES OF LICENCE HOLDERS 17.94 It is not feasible in a general work of this kind to give a detailed account of the very specific responsibilities imposed on remote operators once a licence has been obtained. Broadly speaking, once licensed, remote operators will have to comply with: •

codes of practice issued by the Commission (s 24);

•

specific conditions attaching to the remote licence, as may be imposed upon grant (s 75 and s 77); and

•

the provisions of the Act – particularly ss 89 to 99.

License Conditions and Codes of Practice 17.95 By the time this book is published in the latest version of the LCCP scheduled to come into effect on 31  October 2016 will be operational.1 As with previous versions this document prescribes the Commission’s general licence conditions and associated code of practice provisions pursuant to its powers under the GA 2005. 1 Licence Conditions and Codes of Practice (July 2016).

17.96 This document is divided into three parts each helpfully colour coded differently for ease of reference. Part I  in orange prescribes the suite of general conditions to be attached to operating licences. Part II in blue prescribes the principle code of practice distinction being drawn between social responsibility provisions and ordinary provisions. It will be recalled that breaches of the former are criminal offences. Part III in purple prescribes the suite of general conditions attached to personal licences. Since the document runs to 75 pages an index is provided to assist navigation. Some conditions and code of practice provisions are applicable to all types of licence others apply only to licences for particular gambling activities or only to remote licences.

Technical Standards 17.97 Section 89 of the GA 2005 gives the Commission power to establish technical standards remote gambling systems and to enforce those standards by attaching conditions under ss 75 or 77 and to prescribe arrangements to test for compliance. Section 97 confers similar powers in respect of standards for gambling software. 949

Remote gambling 17.98 Pursuant to those powers the commission has published comprehensive ‘Remote gambling and software technical standards’ (RTS).1 The RTS broadly fall into two categories, namely: (i) technical standards governing how remote gambling should be provided including fairness of games, player account functionality and other aspects of information provision; (ii) security standards relating to the licensee’s information security management system. Some standards apply to all forms of gambling others only to specific forms and sectors. 1 ‘Remote gambling and software technical standards’ (July 2015).

Testing 17.99 The Commission has also published a comprehensive testing strategy document to be read in conjunction with the RTS in order to assist operators to comply with remote gambling and software technical standards.1 1 ‘Testing strategy for compliance with remote gambling and software technical standards’ (May 2016).

17.100 This sets out the Commission’s requirements for the timing and procedures to be adopted for the testing of remote gambling products ie games and software to include: (i)

the types of testing the Commission requires in order to be satisfied that its technical standards are being complied with;

(ii) when independent third party testing will be required and who the Commission regards as appropriate to do this; (iii) the testing procedures to be adopted. 17.101 The Commission takes an outcome based approach to compliance with all technical standards. Likewise, it takes a risk based approach when shaping the testing requirements having regard to such matters as the likelihood and impact of non-compliance together with the means available to assess compliance and the burden imposed. 17.102 The Commission also maintains and publishes a list of testing houses approved to carry out third party testing when this is deemed to be required – predominantly in the context of the fairness elements of RNG based products eg casino, bingo and virtual betting products. 17.103 An annual games testing audit requirement is due to come into force during the first half of 2017 for licensees holding gambling software, remote bingo, casino, or virtual betting licences. The audit will need to be carried out by an approved testing house. 950

Remote gambling 17.104 Information security standards are based on ISO  27001 and encompass all critical gambling systems and operations. Relevant licence holders are subject to annual security audits by an independent and appropriately qualified auditor. Audit results together with any response by management thereto must be sent to the Commission.

ADVERTISING 17.105 For a comprehensive commentary on the rules relating to the advertising of gambling services readers should refer to Chapter 18. What follows is a short commentary on the changes to the prohibitions on the advertising of remote gambling services and their territorial application brought about by the 2014 Act. 17.106 The GA  2005 created two basic advertising offences contained in ss 330 and 331. 17.107 Section 330 provides for an offence of advertising unlawful gambling either by remote or non-remote communication. Advertised gambling is unlawful if an operator does not hold the appropriate licence from the Gambling Commission for the gambling to take place as advertised. In the case of remote gambling, the offence of advertising unlawful gambling could, by virtue of s 333, only be committed if at least one piece of remote gambling equipment to be used in the provision of the facilities for the advertised gambling is located in Great Britain. 17.108 Section 331 made it an offence to advertise foreign gambling, whether facilitated by remote or non-remote communication. ‘Foreign gambling’ was effectively gambling that either took place in a non-EEA state, remote gambling that was not regulated by the relevant law of any EEA state. For these purposes Gibraltar was treated as if it were an EEA state, as were the white-listed jurisdictions. 17.109 Section 3(1) of the 2014 Act repeals the offence of advertising foreign gambling in s 331 of the GA 2005. The effect of this amendment is to abolish the White List and the advertising rights previously enjoyed by remote operators regulated in EEA and EEA equated states. 17.110 Section 4(3) of the 2014 Act amends s 333(9) so that the prohibition in s 330 now extends to the advertising of remote gambling by an operator who does not hold an appropriate licence from the Gambling Commission if: (i) at least on piece of the remote gambling equipment to be used in providing facilities for the gambling is situated in Great Britain; or (ii) no such equipment is or will be situated in Great Britain, but the facilities are or will be capable of being used there. 17.111 The object of these amendments is to bring the advertising rules in line with the point of consumption licensing requirement created by the amended s 36(3). Their impact was summarised by Green J in Gibraltar Betting 951

Remote gambling and Gaming Association Ltd v Secretary of State for Culture Media and Sport as follows: ‘The net effect of the amendments is that whereas it was previously a criminal offence to advertise the unlawful services of operators who had at least one piece of remote gambling equipment located in Great Britain or who were not in an EEA (including Gibraltar) or White List jurisdiction, it is, pursuant to these amendments, now a criminal offence to advertise the unlawful services of operators based anywhere in the world even though no gambling equipment is located in Great Britain. It is a criminal offence provided the operator’s facilities are capable of being used in Great Britain. It follows that an operator, wherever they are located in the world, whose services are capable of being used by customers in Great Britain and who is not licensed by the GC will attract criminal liability if it advertises its services in this jurisdiction. This will apply even if the operator has no intention of targeting British customers but is not able effectively to block such customers accessing its services.’1 1 [2014] EWHC 3236 (Admin) at para 50.

17.112 Such a wide interpretation is clearly capable of creating problems for operators and advertisers given the equally wide definition of advertising contained in s  327. A  storm has already started to brew in the context of sports sponsorship, an extremely powerful and valuable form of advertising with world-wide reach. 17.113 Overseas-based gambling operators with no UK-facing business may nonetheless derive enormous value from sponsoring say English or Scottish Premier League teams. The question therefore arises how far they need to go in taking measures to deny British consumers access to their gambling facilities in order to prevent the clubs they sponsor and others being exposed to criminal liability under s 330 of the GA 2005. 17.114 The Gambling Commission has suggested that since measures to block transactions with British consumers can never be totally effective, sports bodies should only enter into sponsorship deals with operators that hold operating licences from the Commission. There is something of the Catch-22 here in that the Commission will not normally licence operators whose business plan envisages servicing the British Market. The possibility of tapping into the Commission’s normally pragmatic and creative thinking to develop an ‘advertising only’ licence has been mooted, but has met with a relatively frosty response from the latter. Such an extreme position may well deprive British sport of valuable revenue, whilst delivering little benefit to gamblers here. 17.115 It may be that given the amount of money at stake, not just for the operators but also for British sport some form of legal challenge may be mounted. It must certainly be decently arguable that unlicensed overseas operators who take all reasonably practicable measures to exclude British consumers (including eg geo-blocking, refusing accounts to anyone with a British address or bank account etc) should be able to promote their brands 952

Remote gambling internationally. Neither they nor those who promote their advertising should be put in jeopardy merely because there is a possibility that a very limited number of such consumers may be able to circumvent the rules. To hold otherwise seems wholly disproportionate.

953

Chapter 18 Advertising

INTRODUCTION 18.1 One of the general aims of the Gambling Act 2005 (the ‘GA 2005’) was to unify and update the existing legislative framework governing gaming, betting and participating in lotteries, all now classed as gambling. This unification of existing legislation was to be in a regulated, but more generally liberalised way, and considerable attention was paid to the rules on advertising gambling. Not only was the previous legislation rather piecemeal across different statutes, and was not able to accommodate the rapid changes in technology in the last 40 or so years since it was enacted, but as the internet was not operating commercially at that time, the legislation was not designed for adverts which informed the public about the existence of off-shore ‘play for real’ or online gaming sites, nor for the medium of that advertising to be online. The latter has also been boosted by the enormous growth of affiliate advertising, and that industry has also deployed technology in driving traffic to online gambling sites albeit that junket operators have also deployed digital marketing to assist in promoting non-remote gambling. Prior to 2005, legislation intended to cover physical premises was stretched (in some cases unnaturally so) to embargo certain types of online casino promotions (specifically where there were references to money or money’s worth) and there was a broadcast embargo on most types of gambling advertisements (betting or gaming). Betting adverts for overseas operators were also outlawed. 18.2 The GA  2005 addresses this whole area in fairly general terms, with specific attention paid to all the key parties involved in any way in an advertising campaign. These include advertising agencies, the owners of the various media channels that carry the advertisements, and of course the commercial entities deriving value from the advertisement. The Act originally provided a liberal framework to permit operators based in EEA territories (or those in the so called ‘white listed’1 jurisdictions) to freely advertise in Great Britain. However, significant amendments to the GA 2005 in relation to the territorial application of the laws applying to gambling 955

Advertising advertisements were made by the Gambling (Licensing and Advertising) Act 2014 (the ‘GLAA 2014’). 1 These were the territories of the Isle of Man, Alderney, Antigua and Barbuda and Tasmania. Each of these were obliged to make an application in the Secretary of State to demonstrate that their licensing regimes were at least the equivalent of those in Great Britain or other European territories.

18.3 The framework provided by the GA 2005 is supplemented by various codes of practice, several issued by the Gambling Commission (the successor to the Gaming Board of Great Britain) (the ‘Commission’) pursuant to s 24 of the GA 2005, and those issued by various advertising industry bodies, and a gambling-specific industry body. While the sections of such codes relevant for gambling advertisements are set out below, the respective codes in full should always be considered in devising any gambling advertising strategy and/or campaign. What is important to emphasise is that, despite the clear principles, guidance and in some cases a process of prior clearance, there is still scope for interpretation and gambling advertisements have been closely monitored and heavily criticised; in numerous cases campaigns have been pulled from the air (with associated costs).

REGULATORY FRAMEWORK FOR ADVERTISING 18.4 The GA  2005 provides a framework for regulation, and shares responsibility for the regulation of advertising by gambling operators between a number of entities: the Office For Communication (Ofcom), The Secretary of State for the Department for Culture, Media & Sport (DCMS), the Commission, and various advertising regulatory bodies – the Committee of Advertising Practice (CAP), the Broadcast Committee of Advertising Practice (BCAP) and the Advertising Standards Authority (ASA). The Industry Group for Responsible Gambling (the IGRG) and Remote Gambling Association (RGA) also play critical roles, as does the working forum of the Gambling Advertising and Monitoring Unit comprising the DCMS, the Commission, Ofcom, ASA, CAP, BCAP and PhonepayPlus (the entity which regulates all premium rate phone paid services). 18.5 The GA  2005, Pt 16, s  328 allows the Secretary of State to make regulations controlling the advertising of gambling, (none of which had been enacted by September 2016, despite an extensive review in 2014) and s 328(4) imposes a specific duty on the Secretary of State, in relation to making any such regulations, to have regard to the need to protect children and other vulnerable persons from being harmed or exploited by gambling. This is specifically in line with one of the key licensing objectives under the Act. 18.6 The GA 2005 addresses the issues from the perspective of those who facilitate advertising. Section 327 clarifies when a person is considered to be advertising gambling: this occurs if he is doing any one of three things. First, he does anything to encourage people to take advantage (directly or indirectly) of facilities for gambling; second, if he brings information about such facilities to people’s attention, with a view to increasing the use being made of such facilities: and/or third, he takes part in, or facilitates an activity, 956

Advertising knowing or believing it to be designed either to encourage people to use gambling facilities, or to bring such facilities to people’s attention, with a view to increasing their use. Bringing facilities for gambling to people’s attention with such a view in mind includes entering into arrangements (sponsorship and brand-sharing are given as two examples in the subsection) where a name is displayed in connection with an event or product, and either gambling is the only or main activity under that name, or the way in which the name is displayed is designed to indicate that gambling goes on under that name. 18.7 The provisions are clearly intended to catch more than just the gambling operator placing the advertisement, so as to include the media agents working on the advertising campaign, the media channel owner over which the advertisement is carried, as well as any venue owner or promoter or artist or team who become involved in a promotion, sponsorship, brandsharing arrangement, etc, where the gambling operator gets some promotion in association with such an event or match. 18.8 However, of key importance under the GA  2005 is to determine what advertising or facilitation is not permitted. In broad terms the GA  2005 addresses what comprises unlawful gambling so as to focus on who is advertising what product, as distinct from the underlying content and presentation of the advertisement (which are addressed by the detailed codes). In no circumstances can unlawful gambling be advertised. 18.9 Under s 330 of the GA 2005, gambling is unlawful (for the purposes of the prohibition against advertising unlawful gambling) if in order for it to take place as advertised without the commission of an offence it would be necessary to rely on a licence, permit or authorisation, and no such licence, permit or authorisation is in place. The changes imposed by the GLAA 2014 mean that if a customer accesses any gambling facilities from within Great Britain (even those remotely hosted), the relevant operator will need a licence from the Commission otherwise the advertising of those services would comprise the promotion of unlawful gambling. Operators who operate in the non-remote industry in Great Britain already needed to hold licences under the GA 2005, but as a consequence of the GLAA 2014 are to be treated the same as their offshore remote counterparts. 18.10 All entities in the advertising facilitation chain therefore need to display a high degree of caution in determining whether the underlying gaming actually is lawful by virtue of the correct licence being held by the entity supplying any element of the gambling services. In other words, there is a good deal of self-regulation and censorship by media entities who do not want to take any risks in the provision of their services. Note however that there are separate specific provisions intended to preclude advertising of lotteries not licensed in Great Britain.

Territorial application of regulations and ability to advertise 18.11 The GA 2005, s 332 specifically addresses any uncertainty over the territorial application of the regulations and application to different media 957

Advertising channels for non-remote advertising. Any regulations issued under s  328 apply to any advertising wholly or partly in Great Britain and otherwise than by way of remote communication, save that under s 329 there are limits to such regulations which fall within the purview of Ofcom, as specified in s 319 of the Communications Act 2003. The offence of advertising unlawful gambling under s  330 (discussed in further detail below) precludes the advertising of all gambling services and products which, if the gambling were to take place as advertised, would require a licence or licences and such licences are not in place. Lotteries are specifically excluded however as (as emphasised) there are separate provisions that address the advertising of unlicensed lotteries. 18.12 (For non-remote advertising the prohibitions of advertising unlawful gambling also apply to advertising which is done wholly or partly in Great Britain and otherwise than by way of remote communication (provisions for remote advertising are addressed in s 333).) 18.13 For remote advertising, which would include internet, television broadcast, e-mail, SMS, etc, to be covered by the regulations under GA 2005, s  328, there are two tests which must always be satisfied, and two further tests that apply in certain circumstances, under s  333, if the regulations issued under this part of the GA 2005 promulgated by the Secretary of State are to apply. 18.14 The first test is to establish if the advertising is targeted or aimed at people in the United Kingdom. To satisfy this, the advertising needs to involve providing information intended to come to the attention of such people, sending a communication intended to come to the attention of such people, or making data available with a view to it being accessed by such people in the United Kingdom or in circumstances such that it is likely to be accessed. 18.15 The next tests only apply for advertising via specific media which is broadcast by television, or is an information society service under Directive 2000/31/EC (on electronic commerce). Television broadcast advertising will be caught by any remote advertising regulations if the broadcaster is either under the jurisdiction of the United Kingdom for the purposes of the Television Without Frontiers Directive 89/552/EEC (now the Audio Visual Media Services Directive (the ‘AVMD’)), or is not under the jurisdiction of an EEA state for the purposes of that Directive. This is to make sure that the provisions relating to the imposition of regulations do not apply to an advertising broadcast by a party which is properly regulated by another EEA state. 18.16 If the advertising is an information society service, then GA  2005, Pt  16 only applies where the service provider is either established in the United Kingdom for the purposes of the Directive 2000/31/EC, or is established in a non-EEA state for these purposes, or has been notified that the conditions for derogation in Art  3(4) of that Directive have been satisfied for that service provider. Directive 2000/31/EC broadly covers situations where the provider of any information society service is regulated by the State where it is established, and an ‘information society 958

Advertising service’ means any service that takes place online, is normally provided for remuneration, by means of electronic equipment for the processing and storage of data, and at the individual request of a recipient of the on-line service. 18.17 The second and mandatory tests to be satisfied will vary dependent on whether the advertising relates to non-remote gambling or remote gambling. If the remote advertising relates to non-remote gambling, the additional test is whether the gambling itself is to take place in Great Britain; where it is remote gambling, either the remote gambling equipment must be located in Great Britain, or the facilities for remote gambling are or will be capable of being accessed there (see revised provisions of s 333(9)(b))1 as implemented by the GLAA. Where the advertising is non remote advertising of non-remote gambling then the only issue to consider is whether the advertising takes place wholly or partly in Great Britain and is not by way of remote communication (see s  333(1)). If it does then the consideration to determine whether unlawful gambling is being advertising is whether if the gambling takes place as advertised then it is being done without the benefit of the correct licence (see above; s  330(2)). The GLAA removed the anomalous provisions of s 331 (advertising of foreign gambling) which had inadvertently and unintentionally made the advertising of, for example, Las Vegas non-remote casinos illegal because Nevada was not part of the EEA ,or a white listed jurisdiction. 1 Remote gambling equipment is defined under the GA  2005, s  33 as that which stores information relating to gambling participation: to present a virtual game or process, ‘to determine a result or part of a result’, or to store information in relation to a result. Remote gambling is defined under s 4 as gambling by remote communication using the internet, telephone, television, radio or any other kind of electronic or other technology for facilitating communication. These provisions were critical when the only test in relation to needing a licence in the UK was whether any remote gambling equipment was located in Great Britain and the Commission provided specific guidance as to what equipment the wording of the GA  2005 was intended to catch. Suffice to say it was relatively easy to ensure that remote gambling equipment was not based in Great Britain (which also comprised the test for whether a Commission licence was needed) so that the changes imposed by the GLAA 2014 make the reference to remote gambling equipment being located in Great Britain in part redundant, as any consumer will need to access an operator’s equipment (based offshore) from within Great Britain in order to play or wager.

18.18 Note that, the requirements relating to an assessment as to where a broadcaster or ISS is located are only relevant for the ability of the Secretary of State to impose regulations; the offence of advertising unlawful gambling under GA  2005, s  330 will apply to all forms of remote communication (broadcast and via an information society service) in order to ensure that any dissemination of advertising for operators who need to hold a licence in the UK is caught irrespective of whether or not that entity is established in an EEA state. The embargoes do not seem to properly address the issue of the freedoms permitted under the AVMD in relation to broadcasts transmitted from a Member State into Great Britain, but the restrictions have not as yet been challenged. Also the impact of the Brexit on the position is yet to be determined. 959

Advertising 18.19 In short there is a two pronged test where the offence of unlawful advertising is under consideration (ie the targeting of the advertising to people in the UK, and where the facilities are or will be capable of being accessed in Great Britain) whereas the additional tests will apply to regulations imposed by the Secretary of State.

NON-BROADCAST ADVERTISEMENTS 18.20 For non-broadcast adverts, while the Commission can issue codes of practice in line with the Secretary of State’s power to make regulations (as referred to above), so far only the updated CAP code covers this albeit that the Commission have provided guidelines as to the acceptable levels of incentivisation and have made specific mention in the Licensing Conditions and Codes of Practice (the LCCP) to the CAP and BCAP rules relating to the potential misleading nature of free bets. The Commission (after its creation following the passing of the GA 2005) asked CAP to draw up a set of rules for advertising gambling and, after extensive public consultations by CAP (and BCAP), new gambling advertising rules were published in advance of the GA 2005 coming into force fully in September 2007. The CAP non-broadcast gambling advertising rules have been incorporated into the British Code of Advertising, Sales Promotion, and Direct Marketing (CAP Code), with effect from 1 September 2007. The relevant sections replaced those in the Eleventh Edition of the CAP Code, which originally came into force on 4 March 2003, and were also included in the Twelfth Edition (the Twelfth Edition was released primarily because the remit of the ASA which administers the advertising codes had extended to online internet advertising). The ASA’s remit now covers magazine and newspaper advertisements; radio and TV commercials (not programmes or programme sponsorship); television shopping channels; internet advertising including: (i) banner ads; (ii) paid for (sponsored) searches; and (iii) marketing on a company’s own website. It also oversees commercial email and SMS text message ads; posters on legitimate sites; leaflets; cinema advertising; advertising on smartphone or tablet apps; direct mail and door drops; CD, DVD, video and text marketing; and sales promotions. It also regulates online behavioural advertising (the practice of gathering information from browsers which is then used to customise online advertising for the use a of a particular computer). 18.21 CAP is the self-regulatory body, made up of trade bodies representing advertisers, advertising agencies and media owners, which determines, publishes and reviews the CAP  Code. This governs all non-broadcast adverts and is primarily enforced against the advertiser. The CAP  Code’s main provisions require adverts to be legal, decent, honest, and truthful, and there are a number of separate sections detailing rules on adverts for specific industry products, such as drink, gambling products, and in relation to specific audiences, especially children. 18.22 CAP also provides a free, confidential, copy advice service (that aims to provide a 24-hour turnaround in the majority of cases), to check on whether the proposed advertisement campaign is likely to comply with the Code. It checks print adverts, posters, direct mailings, sales promotions, cinema commercials and new media adverts, including banner adverts, pop-ups, 960

Advertising text messages and voicemail adverts. While not binding in the event of a complaint, the Copy Advice team asserts that it can point out danger areas in the copy, and can advise on whether a similar advert in the past has been in breach of the Code. (Note that pre-clearance is the norm for broadcast advertising.) Also the CAP website is informative in connection with ‘repeat offenders’ and commonly made mistakes. 18.23 The administration of the CAP Code is carried out by the ASA. This is an independent body to which complaints can be made about adverts, which it will then investigate. The complaints can come from members of the public who might be offended, confused, misled, etc, by the advert, and/or from other members of the industry. If an advert is controversial, in terms of compliance with the CAP Code, the industry complainants are often competitors of the advertised company. On receipt of a complaint, the ASA will first decide if the complaint has merit; if it does, the ASA will usually write to the advertiser, drawing attention to the complaint, the relevant section of the CAP Code supposedly infringed, and asking for the advertiser’s response. 18.24 The advertiser can be asked to provide evidence to back up any factual claims made in the advertisement (it should be borne in mind that the CAP Code requires marketers to hold documentary evidence to prove all claims capable of objective substantiation before publishing their advert), and sometimes in circumstances where there does appear, at first glance, to be a breach of the CAP Code, the ASA will provide a draft of its proposed finding on the complaint to the advertiser for their comment. Once the ASA has received the response, it will then finalise and publish its adjudication on the complaint. In the case of gambling advertisements a number of adjudications have been high profile and garnered wider press interest.

Limits on ASA Powers 18.25 The ASA is often criticised due to its having limited power to enforce the CAP Code against advertisers who may be in breach of it. However, aside from the negative publicity that can result from an adverse adjudication, it is their ability to require the advertiser to submit future advertising to them for pre-clearance, combined with the threat of denial of media space to run future advertising campaigns, working in conjunction with its media members, that results in high levels of adherence. The important point to also emphasise is that the ASA powers relate to content and context. Media companies will need to independently assess if an operator brand can be promoted by it due to the potential for transgressing the GA 2005 (as amended by the GLAA 2014) by the promotion of unlawful gambling. Moreover, given that the entities that advertise in the UK are almost invariably seeking a British customer base1 they will hold a licence from the Commission, which will give added teeth to the ASA’s adjudications. The CAP and BCAP rules form part of those licensee’s binding codes of practice under the LCCP. In short, there may be wider pressures that could be brought to bear. 1 A number of operators wanting to continue sponsorship of British sports teams argued when the GLAA 2014 was implemented that if they sponsored but then

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Advertising blocked UK customers (so that their gambling facilities would not be accessed in Great Britain) that would not transgress the statute as drafted. The Commission disagreed with that view and did not think it appropriate to issue ‘advertising only’ licences.

18.26 Insofar as advertising companies are found to transgress the codes, the ASA has additional powers. These include Ad Alerts (whereby CAP advises its Members to withhold media space) and CAP membership intervention (CAP monitors ‘repeat offenders’). Legal action involving eg Trading Standards could be a last resort. 18.27 In any event media companies generally are wary of being associated with too many negative findings, particularly where those entities may hold broadcast licences. Online sanctions are also easier, given that requests can be made to online search websites. 18.28 In 2014 the ASA published the results of independent research as to whether it was responding appropriately to the number and content of gambling advertisements. This followed a public clamour (including questions being raised in the House of Lords) in connection with the perceived glut of television advertising for gambling (see further below). Overall the independent company conducting the research (Research Works Ltd) was satisfied that the ASA’s decision making was in line with public opinion. However, one area identified for improvement was the greater proactivity in reviewing gambling advertisements (as stressed the ASA reviews are mostly complaint driven). The ASA stated that it would therefore be more proactive and give the review of gambling advertisements priority. Moreover the Commission has stated that it too will make non-compliant advertising a focus for licence censure and review.

CAP Code 18.29 The CAP Code applies to advertisements in newspapers, magazines, brochures, leaflets, circulars, mailings, e-mails, text transmissions, fax transmissions, catalogues, follow-up literature and other electronic and printed material. It also applies to all other channels of promotion available in public places, including moving images, cinema and video commercials including DVD and Blu-ray as well as videos on demand, other advertisements in non-broadcast electronic media, including especially online advertisements in paid-for space, such as pop-up and banner advertisements, view data services, marketing data-based adverts containing consumer’s personal information and other sales and advertisement promotions. 18.30 The CAP Code specifically does not apply to broadcast commercials (which are instead governed by Ofcom with BCAP writing and maintaining the code with administration and complaints dealt with by the ASA, or to premium rate services, which instead come under the responsibility of PhonepayPlus, the industry-funded regulatory body for all premium rate charged telecommunications services (previously the Independent Committee for the supervision of Standards of Telephone Information Services (ICSTIS)), although any marketing communications that promote 962

Advertising these services are still subject to the Code, as well as to PhonepayPlus regulation. Other exclusions include editorial content and sponsorship (albeit that marketing communications that refer to sponsorship are covered by the Code). 18.31 The CAP  Code does not apply to marketing communications in foreign media; however, direct marketing communications originating outside the United Kingdom, but targeted at United Kingdom customers, will normally be subject to the jurisdiction of the relevant authority in the country where it originates, as long as that authority operates an appropriate cross-border complaint system. If no such system exists, the ASA will do what it can, although it is likely to have to escalate the complaint to the European Advertising Standards Alliance (EASA) a not for profit organisation based in Brussels. All members of the European Union, as well as some non-European countries, have self-regulatory organisations that are members of EASA, which co-ordinates the cross-border complaints system for its members; the ASA is a member of EASA. Again, it is difficult to assess if Brexit will impact the alliance in the future. Moreover, as stressed, given the requirement for any remote operator who knowingly allows customers to access its gambling facilities in Great Britain to hold a licence, and that licence includes a requirement to adhere to both CAP and BCAP codes, advertising emanating from outside Great Britain will still need to conform or place the entity being licenced in breach. 18.32 The CAP  Code also does not apply to any packages, wrappers, labels, tickets, timetables or price lists, unless they advertise another product, another sales promotion, or are visible in a marketing communication; also, point of sale displays, other than those covered by the sales promotion rules, are not covered, nor is website content.

General rules 18.33 Aside from the need to comply with the specific new provisions in the CAP  Code relating to gambling, as well as sales promotions, all those involved in advertising gambling need to take account of the general rules contained in the CAP  Code, where it applies to the particular form of advertisement. 18.34 The CAP  Code has its own set of definitions; these include that a ‘product’ encompasses goods, services, ideas, causes, opportunities, prizes or gifts; a ‘consumer’ is anyone who is likely to see a given marketing communication, whether in the course of business or not; a ‘claim’ covers both implied or direct, written, spoken, or visual claims; references to ‘a marketer’ include an advertiser, promoter or direct marketer; a ‘supplier’ is anyone who supplies products that are sold by distance selling marketing communications, and a reference to ‘a child’ is to anyone aged under  16. 18.35 There are certain criteria specifically set out in relation to the CAP  Code. These include that the ASA  Council’s interpretation of the CAP  Code is final; it is worth mentioning that the ASA makes provision 963

Advertising for an independent review procedure, under which an advertiser can challenge an adjudication if it believes it to be flawed, although it is still the ASA Council that decides, on the independent reviewer’s recommendation, if the advertiser’s challenge is justified. As stressed above, it should also be borne in mind that compliance with the CAP (and BCAP) Codes forms part of the LCCP. The ASA also specifically reserves the right to draw the attention of the Commission to certain advertising complaints involving licensed operators or suppliers. Thus, if a complaint is made about a gambling operator’s advertisement, and an adjudication is issued by the ASA which found the advertisement to be in breach of the CAP Code, then the Commission may take regulatory action, which might ultimately jeopardise an operating licence. 18.36 Any questions as to whether or not an advertisement complies with the CAP  Code will be assessed taking into account the advertisement’s probable impact, taken as a whole and in context. This will clearly depend upon the medium in which the advertisement appears, the audience and their likely response, the nature of the product, and any additional material distributed to consumers. Once an advertisement comes within the scope of the CAP Code, all relevant parties must comply with all the appropriate rules in the CAP  Code relevant to that advertisement. The CAP  Code is specifically only concerned with advertisements, promotions and direct marketing communications, and does not cover the terms of business or products themselves. However, the ASA’s remit does not include arbitration of conflict between ideologies and, whilst allowing for public sensitivities, the Code will not be used as a way of diminishing freedom of speech unjustifiably. 18.37 The Code has certain General Rules, divided into 22 separate sections. 18.38 The general principles contained within the General Rules are that all marketing communications have to be legal, decent, honest and truthful. They are to be prepared with a sense of responsibility to consumers and to society, and are to respect the principles of fair competition generally accepted in business. Marketing communications are not to bring advertising into disrepute – something that is often used as a general reason for an advertisement being found to be in breach of the CAP  Code, sometimes in addition to a specific breach of a particular rule under the CAP  Code. All non-broadcast marketing communications have to comply with the CAP Code, and the primary responsibility for this falls on marketers. Under the GA 2005 the responsibility clearly goes much wider than that, although it is primarily aimed at the entities providing gambling services. The CAP Code also obliges other parties involved in preparing and publishing marketing communications to abide by the CAP  Code. If the ASA makes an enquiry about a particular advertisement, any unreasonable delay in responding to that can itself be considered to be a breach of the CAP Code; if any genuinely private or secret material is supplied to the ASA in the course of its investigations, and expressed to be provided specifically in confidence, it will respect that, unless the courts or officials, when acting within their statutory powers (if relevant), compel the disclosure. 964

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Substantiation 18.39 There is a general obligation, before distributing or submitting a marketing communication for publication, to hold documentary evidence to prove all claims, whether direct or implied, that are capable of objective substantiation. If the ASA or CAP request such documentary evidence, it must be sent without delay, and the adequacy of this evidence is judged on whether it supports both the detailed claims, and the overall impression created by the advertisement. Full names and geographical business addresses of all marketers are to be provided without delay, if so requested by the ASA or CAP. Also, in relation to substantiation, where informed opinion is significantly divided over any claims made in a marketing communication, they must not be portrayed as generally agreed. If there are claims made about the content of non-fiction books, tapes, videos, etc, that have not themselves been independently substantiated, then the value, accuracy, scientific validity or practical usefulness of the product is not to be exaggerated. Marketers are allowed to include obvious untruths or exaggerations which are unlikely to mislead, as well as incidental minor errors and unorthodox spellings, provided they do not affect the accuracy or perception of the marketing communication in any material way.

Legality 18.40 The primary responsibility under the CAP  Code for ensuring that marketing communications are legal rests with advertisers and, aside from the general obligation under the CAP  Code to comply with the law, marketing communications are specifically not to incite anyone to break it. In the context of gambling, this would be especially relevant if there were some encouragement in an advert to use facilities for gambling which are provided by an unlicensed operator. In addition, there is an outright prohibition on claims that products can facilitate in winning in a game of chance.

Decency 18.41 Marketers are specifically directed to ensure that marketing communications do not contain anything likely to cause serious or widespread offence. Particular care is needed to avoid causing offence on the grounds of race, religion, sex, sexual orientation or disability. As to whether a communication complies with the CAP  Code, this will be judged on the context, medium, audience, product and prevailing standards of decency at that particular time. The advertisement can, however, be distasteful without necessarily conflicting with the obligation not to cause serious or widespread offence, although marketers are specifically urged to consider public sensitivities before using potentially offensive material. It is especially accepted that a particular product may be offensive to some people, but that does not necessarily provide sufficient grounds for objecting to an advertisement for that product.

Honesty 18.42 Marketers are specifically directed not to exploit the credulity, lack of knowledge, or inexperience of consumers. 965

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Truthfulness 18.43 No marketing communication should mislead, or be likely to mislead, by inaccuracy, ambiguity, exaggeration, omission or otherwise.

Opinion 18.44 Opinions may be given about any matter, including the qualities or desirability of the products involved, as long as it is made clear that these are opinions, not facts. Any assertions that go beyond subjective opinions, will of course be subject to the substantiation obligations referred to above.

Fear and distress 18.45 Advertisements should not cause fear or distress without good reason, and marketers are directed not to use shocking claims or images merely to attract attention. Marketers can use an appeal to fear to encourage prudent behaviour, or to discourage dangerous, or ill-advised actions. However, in such cases, the fear likely to be aroused should not be disproportionate to the risk.

Safety 18.46

Advertisements are not to condone or encourage unsafe practices.

Violence and anti-social behaviour 18.47 Advertisements are not to contain anything that condones or is likely to provoke violence or anti-social behaviour. 18.48 There are a number of additional sections in the CAP  Code, not immediately of general relevance to gambling, but which should be checked, where relevant to a particular proposed advertisement; these include sections on political advertising, protection of privacy, testimonials and endorsements, availability of products, guarantees, comparisons with identified competitors and/or their products, other comparisons, denigration and unfair advantage, imitation, recognising marketing communications and identifying marketers and advertisement features and free offers.

Gambling-specific rules 18.49 These are contained in section 16 of the CAP  Code. Lotteries are addressed separately. 18.50 For these purposes, ‘gambling’ has the same meaning as in the GA  2005 (gaming and betting) including spread betting (see below). Lotteries including the National Lottery are addressed in section 17 of the Code. 966

Advertising 18.51 Although GA  2005 only applies to activities taking place in Great Britain, the CAP  Code also directs promoters and advertisers to seek specialist legal advice when looking at advertising gambling products in Northern Ireland or the Channel Islands. Not seeking such advice is not a CAP  Code breach in itself, but if unlawful in that territory, that will be a breach of the obligation for marketing communications to comply with the law, as mentioned above. The CAP  Code itself applies to marketing communications distributed in Northern Ireland, and any non-broadcast gambling advertising which is legal there will still be caught by the CAP Code, even though the GA 2005 does not apply there.1 1 This caused specific problems particularly with broadcast advertising for online casinos (where the same content would typically be broadcast there as throughout the rest of Great Britain) given that similar embargoes contained in the Gaming Act 1968 (specifically those which precluded any reference to promoting subscriptions for gambling in money or money’s worth) still apply in Northern Ireland under the provisions of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 (SI 1985/1204) despite the implementation of the GA  2005. Other products were legal too in Great Britain but not in Northern Ireland. The Northern Irish executive announced plans to change the law in 2015 to address this and other anomalies but has not implemented any changes at the date of publication, and the cautious response of broadcasters is to assume that advertising which expressly excludes Northern Irish players is still potentially illegal if the advertisement is broadcast there.

18.52 The CAP Code links up with the three key licensing objectives under the Act, and provides that all marketing communications for gambling should be socially responsible, having particular regard (in line with the licensing objectives in GA 2005, s 1(c)) to the need to protect children, young persons and other vulnerable persons from being harmed or exploited by advertising that features or promotes gambling. The age rules are clarified by the CAP Code, which confirms that children are those aged 15 and under, and young persons are those aged 16 and 17. 18.53 The CAP  Code specifically then links this principle in rule 16.1 (dealing with gambling) with one of the key general rules under the CAP Code set out in rule 1.2, which provides that the CAP Code is applied in the spirit as well as the letter of the Code, and this will apply whether or not a gambling product is shown or referred to in the marketing communication. This is again trying to pre-empt the creative advertiser who might only be promoting a gambling product obliquely, without actually showing it or referring to it directly, but in circumstances where most adult viewers would understand that it was actually referring to a gambling product. 18.54 In cases of concern about marketing communications that are themselves responsible and unlikely to promote a brand or type of gambling, but which are specifically intended to help problem gamblers, there is a clear provision which emphasises that these clauses are not intended to inhibit such communications. There is also a specific carve-out from the Code applying to marketing communications for non-gambling leisure events or facilities, the examples given being hotels, cinemas, bowling alleys or ice rinks, in the same complex as, but separate from, gambling events or 967

Advertising facilities, unless such communications do portray or refer to gambling, when they will still be covered. 18.55 Finally, in addition the Code makes clear that ‘play for free’ products are caught by the Code if either a prize can be won (which in most cases would bring it within the definition of gaming) or if it explicitly or implicitly directs consumers to play for money products. This would certainly be the case where for example the domains of the options (for free or pay to play) were deliberately or confusingly similar. 18.56 Set out below are the specific sections contained in section 16 of the CAP Code, dealing with marketing communications relating to gambling. 18.57

The CAP Code provides that marketing communications should:

(a) not portray, condone, or encourage gambling behaviour that is socially irresponsible or could lead to financial, social or emotional harm; (b) not exploit the susceptibilities, aspirations, credulity, inexperience or lack of knowledge of children, young persons or other vulnerable persons; (c) not suggest that gambling can provide an escape from personal, professional or educational problems such as loneliness or depression; (d) not suggest that gambling can be a solution to financial concerns, an alternative to employment, or a way to achieve financial security; (e) not portray gambling as indispensable or as taking priority in life, eg over family, friends or professional or educational commitments; (f) not suggest that gambling can enhance personal qualities, eg  that it can improve self-image or self-esteem, or is a way to gain control, superiority, recognition or admiration; (g) neither suggest peer pressure to gamble nor disparage abstention; (h) not link gambling to seduction, sexual success or enhanced attractiveness; (i)

not portray gambling in a context of toughness or link it to resilience or recklessness;

(j)

not suggest gambling is a rite of passage;

(k) not suggest that solitary gambling is preferable to social gambling; (l)

not be likely to be of particular appeal to children or young persons, especially by reflecting or being associated with youth culture;

(m) not be directed at those aged below 18 years (or 16 years for lotteries, football pools, equal chance gaming (under a prize gaming permit or at a licensed family entertainment centre), prize gaming (at a non-licensed family entertainment centre or at a travelling fair) or Category D gaming machines) through the selection of media or context in which they appear; (n) not include a child or young person. No one who is, or seems to be, under 25 years old can be featured gambling or playing a significant role. No one may behave in an adolescent, juvenile or loutish way in the 968

Advertising advertisement. By amendments to the CAP  Code (largely to address the issues of using images of sports men and women who can often be under the age of 25) this provision is now caveated so that individuals who are or seem to be under the age of 25 years (18–24 years old) may be featured playing a role only in marketing communications that appear in a place where a bet can be placed directly through a transactional facility, for instance a gambling operator’s own website. The individual may only be used to illustrate specific betting selections where that individual is the subject of the bet offered. The image or other depiction used must show them in the context of that bet and not in a wider gambling context; (o) advertisements should not exploit cultural beliefs or traditions about gambling or luck; (p) condone or encourage criminal or anti-social behaviour; and (q) the advertisements should not condone or feature gambling in a working environment. An exception exists for licensed gambling premises. 18.58 In addition marketing communications for family entertainment centres, travelling fairs, horse race course and dog race tracks, and for nongambling leisure facilities, that incidentally refer to separate gambling facilities, for example, as part of a facilities on a cruise ship, may include children or young persons provided they are accompanied by an adult and are socialising responsibly in areas that the GA 2005 does not restrict by age. 18.59 Finally marketing communications for events or facilities that can be accessed only by entering gambling premises must make that condition clear.

Prize promotions 18.60 For prize promotions, a specific direction is incorporated in rule 8 of the CAP  Code for promoters to take legal advice prior to putting on promotions with prizes, which includes competitions, prize draws and instant win offers, to make sure such promotions do not inadvertently fall into the definition of lotteries under GA 2005, s 14. 18.61 Previously, the law in connection with the definition of a lottery was more complex; the GA 2005 created more exemptions such that there is more flexibility around sales promotions where prizes are available even if there has been some form of purchase in order to qualify for entry provided the cost of the purchase is not enhanced to cover the cost of entry.

Adjudications 18.62 There have been a number of specific adjudications in connection with gambling advertisements which are set out in further detail below. CAP and BCAP have also summarised these in a publication Help Note (Guidance on the Rules for Gambling Advertisements). 969

Advertising

LOTTERIES 18.63 Lotteries have similar but not identical rules that apply to the National Lottery and society lotteries (registered with either the Gambling Commission or local authorities) which are contained in section 17 of the code. They comprise the following requirements for all marketing communications which: (a) must not portray, condone or encourage gambling behaviour that is socially irresponsible or could lead to financial, social or emotional harm; (b) must not suggest that participating in a lottery can provide an escape from personal, professional or educational problems such as loneliness or depression; (c) must not suggest that participating in a lottery can be a solution to financial concerns, an alternative to employment or a way to achieve financial security. Advertisers may however refer to the other benefits of winning a prize; (d) must not portray participating in a lottery as indispensable or as taking priority in life; for example, over family, friends or professional or educational commitments; (e) must not neither suggest peer pressure to participate nor disparage abstention; (f)

must not suggest that participating in a lottery can enhance personal qualities, for example that it can improve self-image or self-esteem, or is a way to gain control, superiority, recognition or admiration;

(g) must not link participating in a lottery to seduction, sexual success or enhance attractiveness; (h) must not portray participation in a context of toughness or luck to resilience or recklessness; (i)

must not suggest that participation is a rite of passage;

(j)

must not suggest that solitary gambling is preferable to social gambling;

(k)

for lotteries that can be participated only by entering gambling premises must make that condition clear;

(l)

must not exploit susceptibilities, aspirations, credibility, inexperience or lack of knowledge of children, young persons, or other vulnerable persons;

(m) must not be likely to be of particular appeal to children or young persons, especially by reflecting or being associated with youth culture; (n) should not be directed at those aged under 16 years1 through the selection of media or context; (o) may include children or young persons but no one who is or seems to be, under 25 years old may be featured gambling or playing a significant role; (p) in circumstances where they exclusively feature the good causes that benefit from the lottery and include no explicit encouragement to buy 970

Advertising a lottery product they may include children or young persons in a significant role; (q) must not exploit cultural beliefs or traditions about gambling or luck; (r)

must not condone or encourage criminal or antisocial behaviour; and

(s) must not condone or feature gambling in a working environment (an exception exists for workplace lottery syndicates and gambling premises). 1 The legal age of participation in lotteries is lower than for other products where, with limited exceptions, 18 is the minimum age of participation.

TELEVISION AND RADIO ADVERTISING BCAP codes 18.64 For gambling advertisements to be broadcast on television and/or radio, Ofcom has the responsibility under the Act for setting, reviewing and revising standards in respect of such adverts. The regulations (issued by the Secretary of State under GA 2005, s 328) cannot cover advertisements carried on the BBC, or where they would be otherwise licensable under Parts 1 or 3 of the Broadcasting Act 1990, or Parts  1 or  2 of the Broadcasting Act 1996. Ofcom also has to ensure that their rules reflect any regulations to be issued by the Secretary of State, so as to ensure consistency for broadcast gambling advertisements, and consult with the Commission for this purpose. Ofcom has delegated that duty to BCAP, given its familiarity with setting codes of practice governing broadcast advertisements. 18.65 BCAP is a regulatory body which has been contracted by Ofcom to determine, publish and revise the UK  Code of Broadcast Advertising (the BCAP Code). This first started in 2004, when Ofcom delegated the regulation of broadcast advertising to BCAP and the ASA, via its broadcasting entity given the collective experience of regulating non-broadcast adverts over many years. All of the radio and TV channels licensed by Ofcom, including the teleshopping channels, come under the scope of the codes issued by BCAP, but unlike in the CAP  Code, they are primarily enforced against the broadcaster, the Ofcom licensee. (Note the revised Memorandum of Understanding between all interested parties dated October 2014 given the agreed ten-year period of cooperation was due to expire.) 18.66 The BCAP members include broadcasters and some associations representing advertisers and advertising agencies. In drawing up and altering BCAP-issued codes, BCAP has to seek advice from the Advertising Advisory Committee (AAC), an expert consumer body, as well as seek feedback on any changes to the BCAP codes by means of a non-exclusive public consultation. Under the obligations in the Communications Act 2003, which gives Ofcom these duties, the rules are meant to be transparent, accountable, proportionate, consistent and properly targeted. Ofcom ultimately has to approve any change to the BCAP codes before they can take effect. 971

Advertising 18.67 Television and radio broadcasters in the UK operate under licences issued by the broadcasting and telecommunications regulator, Ofcom, under the Broadcasting Acts 1990 and 1996 (as amended). The Communications Act 2003 requires Ofcom to set, and from time to time review and revise, codes containing such standards for the content of such licensed television and radio services as appear to Ofcom to be best calculated to secure the standards objectives set out below. 18.68 The standards objectives are contained in the Communications Act 2003, s  319 and the following six standards, which do not constitute a complete list, have most potential relevance to gambling advertisements: (1) persons aged under 18 are protected; (2) generally accepted standards are applied to the contents of television and radio services so as to provide adequate protection for members of the public from the inclusion in such services of offensive and harmful material; (3) the inclusion of advertising which may be misleading, harmful or offensive in television and radio services is prevented; (4) the unsuitable sponsorship of programmes included in television and radio services is prevented; (5)

there is no undue discrimination between advertisers who seek to have advertisements included in television and radio services; and

(6) there is no use of techniques which exploit the possibility of conveying a message to viewers or listeners, or of otherwise influencing their minds, without their being aware, or fully aware, of what has occurred. 18.69 Ofcom, as stressed, has contracted out its advertising standards codes function to BCAP. This function is to be exercised in consultation with, and with the agreement of, Ofcom. BCAP issues the BCAP Code, the relevant provisions of which are covered below. The BCAP  Code set out the rules that govern, respectively, advertisements shown on any television channel licensed by Ofcom, and those broadcast on any radio station licensed by Ofcom; the BCAP Code was initially updated with effect from 1 September 2007 to include new rules relating to gambling products. As with the CAP Code, the rules in the BCAP Code are framed so as to ensure that the advertisements are legal, decent, honest and truthful, and do not mislead or cause harm or serious or widespread offence. Both codes were revised and new codes published in 2010 after an extensive public consultation. 18.70 Ofcom has also contracted out its powers of handling and resolving complaints about breaches of the BCAP Code to the broadcasting division of the ASA; however, Ofcom retains complaint investigation functions for, amongst other things, unsuitable sponsorship, discrimination between advertisers, and scheduling of advertisements, although complaints relating to the scheduling of individual spot advertisements are still investigated by the ASA. The Authority for Television on Demand (ATVOD) handles complaints about on demand services on its behalf. BCAP can also impose scheduling restrictions, and the gambling industry itself has included a selfimposed voluntary 9pm watershed for broadcast adverts in the Gambling 972

Advertising Industry Code for Socially Responsible Advertising (discussed below at 18.112). 18.71 While the broadcasters themselves have the primary responsibility to ensure that the advertisements they transmit comply with both the spirit and letter of the BCAP Code, as with the non-broadcast copy advice service provided by CAP (see 18.22 above), Clearcast (which replaced the Broadcast Advertising Clearance Centre in 2008) offers a pre-transmission advertising checking service for television adverts and the Radio Centre (previously RACC) offers a similar service for pre-transmission advertising and checking service for radio adverts. While both Clearcast and the Radio Centre can give advice on proposed campaigns and the interpretation of the respective codes, the ASA is a separate body and is not bound by decisions of either. If an advert is considered misleading or harmful, the ASA can still require the suspension of such advert during an investigation and before the adjudication is finalised and it is irrelevant that the advertisement has been reviewed by Clearcast or the Radio Centre. This can mean an ill judged campaign can be extremely costly given media expenses are usually pre-paid.

Television and radio advertising 18.72 The BCAP Code contains some general provisions which are relevant to gambling advertising, aside from the specific provisions covered below. 18.73 Under Section 1: Compliance. All adverts have to comply with the law, and Ofcom licensees must make that a condition of acceptance of the advert as well as preparing the advertisement with a sense of responsibility to the audience and society. At Appendix 3, the BCAP Code also contains a non-exhaustive list of relevant statutes affecting advertising and promotions, eg the Consumer Protection from Unfair Trading Regulations 2008. 18.74 Section 2 sets out general rules on programmes and advertising, where it provides, in rule 2.1, that there has to be a clear distinction between programmes (editorial content) and advertisements. It is headed the Principle of Recognition of Advertising. Rule 2 inter alia also provides that advertisements must not: (a) use expressions reserved for important news and public service announcements, such as ‘news flash’; and (b) use a situation, performance or style reminiscent of a programme in a way that might confuse viewers as to whether they were watching a programme or an advertisement, and use of a title, logo, set or music associated with a broadcast on that media needs to ensure that the audience is quickly aware that the message is an advertisement. In addition, there are additional rules for television advertisements. Television advertisements (except those promoting a programme) cannot refer to themselves in a way that may lead viewers to believe they are watching a programme; feature visually or orally anyone who currently and regularly presents news or current affairs on television; and advertisements cannot include extracts from broadcasts of parliamentary proceedings. 973

Advertising There are also rules specific to television; a person who currently and regularly reads the news on radio or television may voice radio advertisements, but must not advertise products or services that are likely to be seen to compromise the impartially of the other news reading role. 18.75 Editorial independence is paramount and broadcasters, in their agreements with advertisers and others, have to retain editorial independence and responsibility for the content and scheduling of programmes; this is not least because it is the broadcaster’s Ofcom licence that would be in danger if there was a serious breach. 18.76 The BCAP  Code refers to unacceptable products and some are relevant to gambling, namely, that advertisements must not claim a product or service can facilitate winning in a game of chance (the same for the CAP Code), and also advertisers cannot claim that their jobs are in jeopardy if the consumer does not buy their product or service. 18.77 As with the CAP Code there is an obligation contained in section 3, which requires that no advertisement can directly or by implication mislead viewers about any material fact or characteristic of a product or service. The rule suggests an objective view is taken here on the basis that the judgment depends on the context and the medium, which if limited in time or space, then the effort made to get the information to consumers by other means will be taken into account. 18.78 All claims must be backed up by adequate objective evidence, which should always be in place prior to the advert being shown. All relevant limitations and qualifications have to be made clear, and use of the word ‘free’ has to be avoided if there are any costs, other than actual postage or carriage, non-premium rate telephone charges, or reasonable travel costs (see rule 3.25), required to collect the subject matter of the offer. (Note too that there has been specific concerns raised in connection with ‘free’ wager promotions which have been widespread.) If there is any guarantee, any significant limitations to that advertised guarantee must be made clear (see rule 3.50). For all pricing matters in advertisements, costs of entry, costs of participation, minimum payments to play etc must all be accurate, not mislead by omission, undue emphasis or distortion, and any non-optional taxes, duties and fees which apply to the buyers must be included with the quoted price (see rules 3.18–3.24). For creative treatments, advertisements cannot use techniques that are likely to give a misleading or unfair impression of the product or service, and any superimposed text on an advertisement must be legible and comply with the BCAP Guidance on On-Screen Text and Subtitling in Television Advertisements (see rule 3.11). Texts in an advert can expand or clarify a claim, or add a minor qualification, but must not contradict the claim. The advertisement must also not discredit or unfairly attack other products or services, advertisers or advertisements (see rule 3.42). 18.79 Where any testimonials or endorsements are used in advertising, these must be genuine and be supported by documentary evidence. Fictitious testimonials cannot be presented as genuine, and any statement in a testimonial that is likely to be interpreted as a factual claim, must be 974

Advertising substantiated (see rule 3.45). Testimonials must only be included with permission and in accordance with the BCAP rules relating to privacy. 18.80 There are rules on subliminal advertising (rule 3.8), which specifically line up with the standards objectives mentioned above. Advertisements cannot use images of a very brief duration, or any other technique which is likely to influence viewers without them being fully aware of what has been done. For comparative advertising (see rules 3.33–3.38), advertisers must satisfy themselves that there will be no realistic likelihood that viewers will be misled as a result of any comparison, whether about the product or the service advertised, or that with which it is compared. If there might be any doubt about the actual identity of an advertiser, where viewers might be misled as to who the actual advertiser is, the identity must be made clear. 18.81 Additionally, advertisements under rule 4 must not be harmful or offensive. Specifically rules 4.1 to 4.2 could have a bearing on gambling advertisements; advertisements must contain nothing that could cause physical, mental, moral or social harm to persons under the age of 18; advertisements must not cause serious or widespread offence against generally accepted moral, social or cultural standards. For television there are also visual techniques that are embargoed, and advertisements must not condone or encourage harmful discriminatory behaviour or treatment. Advertisements must not prejudice respect for human dignity or condone or encourage violence, crime, disorder or anti-social behaviour. They cannot distress the audience without justification (complaints are sometimes received relating to hard hitting messages for certain charities) and cannot exploit audience fears or superstitions. Finally, animals cannot be a harmed or distressed as a result of a production of an advertisement. 18.82 Specific radio embargoes relate to the noise of sounds that may create a safety hazard eg to someone who is driving. 18.83 Whilst there are certain limited exceptions, living people must not be portrayed, caricatured or referred to in advertisements without their permission. These rules are contained in rule 6 relating to privacy. There are necessary exemptions for advertisements for a particular product which feature the person referred to, such as a book by that person. For radio advertising, broadcasters are asked to ensure that if prior permission is not sought and/or not obtained, then no one can be featured in an offensive, adverse or defamatory way. In cases of doubt the BCAP  Code urges broadcasters to take legal advice. 18.84 Part 17 of the BCAP Code addresses advertising for gambling, and Part 18 Lotteries. 18.85 The rules contained in BCAP section  17 specifically apply to advertisements for ‘play for money’ gambling products and advertisements for ‘play for free’ gambling products that offer the chance to win a prize, or which explicitly or implicitly direct the consumer to a ‘play for money’ gambling product, whether on-shore or off-shore. (The reference to offshore is likely to be of reduced relevance given the changes effected by the GLAA 2014.) 975

Advertising 18.86 The rules contained in section 17 apply to all television advertisements and, broadly, mirror the provisions above under the CAP  Code for nonbroadcast advertisements. 18.87 Mindful, again, of the fact that there may well be advertisements specifically aimed at problem gamblers, the notes contained in the first paragraph (‘Background’) specifically state that they are not intended to inhibit advertisements to counter problem gambling, which are themselves responsible and unlikely to promote a brand or type of gambling. The use of the word ‘unlikely’ here is not helpful but it does not appear that any problem gambling advertisements have formed the basis of consistent complaints to the ASA. 18.88

The specific rules are that all advertisements must not:

(a) portray, condone or encourage gambling behaviour that is socially irresponsible, or could lead to financial, social or emotional harm; (b)

suggest that gambling can provide an escape from personal, professional or educational problems, such as loneliness or depression;

(c) suggest that gambling can be a solution to financial concerns, an alternative to employment or a way to achieve financial security; (d) portray gambling as indispensable or as taking priority in life, eg over family, friends or professional or educational commitments; (e)

either suggest peer pressure to gamble nor disparage abstention;

(f) suggest that gambling can enhance personal qualities, eg  that it can improve self-image or self-esteem, or is a way to gain control, superiority, recognition or admiration; (g) link gambling to seduction, sexual success or enhanced attractiveness; (h) portray gambling in a context of toughness or link it to resilience or recklessness; (i)

suggest gambling is a rite of passage; and

(j)

suggest that solitary gambling is preferable to social gambling.

18.89 Unless they portray or refer to gambling the rules in section 17 of the BCAP code do not apply to advertisements for non-gambling leisure events or facilities, eg  hotels, cinemas, bowling alleys or ice rinks, that are in the same complex as, but separate from, gambling events or facilities. 18.90 The BCAP rules for gambling advertisements (ie  those that specifically promote gambling products) also require the following: (1) advertisements for gambling products must not exploit cultural beliefs or traditions about gambling or luck; (2) advertisements for gambling products must not condone or encourage criminal or anti-social behaviour; 976

Advertising (3) advertisements for gambling products must not condone or feature gambling in a working environment. An exception exists for licensed gambling premises; (4) advertisements for gambling must not exploit the susceptibilities, aspirations, credulity, inexperience or lack of knowledge of under 18’s or other vulnerable persons; (5) advertisements for gambling must not be likely to be of particular appeal to under 18’s, especially by reflecting or being associated with youth culture; (6) no one who is, or seems to be, under 25 years old, may be featured gambling or playing a significant role in a gambling advertisement. No one may behave in an adolescent, juvenile or loutish way. Advertisements for family entertainment centres, travelling fairs, horse race courses and dog race tracks, and for non-gambling leisure facilities that incidentally refer to separate gambling facilities (eg as part of a list of facilities on a cruise ship) may include under 18’s, provided they are accompanied by an adult and are socialising responsibly in areas that the GA 2005 does not restrict by age. 18.91 Note that in addition the rules require central clearance for all radio advertisements for gambling. 18.92 Finally, advertisements for events or facilities that are only accessed via gambling premises must make that condition clear. 18.93 Section 18 specifically addresses lotteries similar to the gambling embargoes. Radio broadcasters additionally must centrally clear all lottery advertising. 18.94 The balance of the rules contained in section 18 mirror the CAP rules, as set out above, save that all references to children/young persons or anyone who is 16, instead refers to 18 year olds, presumably on the basis that television advertising would be deemed to have more influence and could have the potential to be more harmful.

Television scheduling and sponsorship 18.95 Aside from rules on the content of television advertisements, there is a Code aptly titled ‘Rules on the Scheduling of Television Advertisements’. A  revised version came into effect in April 2016; these again apply to advertisements on any television channel licensed by Ofcom, and provide detailed rules on the separation of advertisements and programmes. While BCAP has responsibility for maintaining, reviewing and updating the Code, complaints about possible breaches of this part are still to be made to the broadcasting arm of the ASA. 18.96 Section 32 of the BCAP Code in particular addresses the separation of advertisements and programmes; specifically, in relation to children and 977

Advertising young people, certain specified advertisements may not be advertised in or adjacent to children’s programmes or programmes commissioned for, principally directed at, or likely to appeal particularly to audiences below the age of  18. The section specifies that this applies to adverts relating to gambling, except lotteries, football pools, equal chance gaming (under a prize gaming permit or at a licensed family entertainment centre), prize gaming (at a non-licensed family entertainment centre or at a travelling fair), or Category D gaming machines. Those restrictions also extend to betting tipster adverts which prior to 2010 were not permitted. 18.97 Accompanying guidance notes provide that ‘adjacent’ refers to a break immediately before or after the programme in question, ‘children’s programmes’ means those made for children under 16, and that channels devoted to children’s programmes, or whose programmes are likely to be of particular appeal to children will be unlikely to be able to carry, at any time, any advertising referred to in the later sections, which includes gambling, with the exceptions mentioned above. 18.98 Broadcast television text and interactive advertisements for gambling (including lotteries and betting tipster services) cannot be directly accessible from programmes commissioned for or principally directed at children, or likely to appeal to them, or be directly accessible to or adjacent to such programmes, nor can they appear on editorial pages that are likely to be of particular appeal to a significant audience of children. 18.99 In addition there is an Ofcom code of programme sponsorship; bookmakers (including those whose principal business is bookmaking) may not sponsor programmes that include coverage of horse or greyhound racing or results of such racing. Gaming companies (including companies whose principal business is gaming) may not sponsor television game shows that closely resemble the gaming that takes place in bingo halls and casinos. No advertiser is allowed to sponsor a programme during which they would not be permitted to advertise and thus the restrictions relating to content appealing to children and young appeal would preclude sponsorship of certain programmes too. 18.100 There are also strict guidelines around brand references/product placement during programming. The parameters of these restrictions were stretched considerably (pre the 2007 changes which permitted the broadcast advertising of gambling) via the various televised poker tournaments that gained huge popularity with almost all the known poker players becoming brand ambassadors for the online gaming companies (with the inevitable branded items of clothing) during that period. 18.101 Finally, for radio scheduling restrictions there are specific requirements that in deciding whether a station’s programming has or is likely to have particular appeal to children or young persons, BCAP or the ASA would consider relevant factors such as the audience figures for the time-slot, the nature of the station and programming and whether the advertisement was scheduled in the school run or in a time-slot when children are likely to be listening in larger numbers. 978

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GAMBLING INDUSTRY CODE FOR SOCIALLY RESPONSIBLE ADVERTISING 18.102 This industry-led Code, which was a product of the Commission’s consultation on gambling advertisements and their impact on responsible gambling, issued in January 2007, was finalised shortly before the GA 2005 came into force fully in September 2007. The code was prepared by the Remote Gambling Association and Business in Sport and Leisure, and supported by a large number of the relevant trade associations, including those two bodies, and the Association of British Bookmakers, the Bingo Association, the British Amusement Catering Trade Association, the British Association of Leisure Parks, Piers and Attractions, the British Casino Association, the British Holiday and Home Parks Association, the British Hospitality Association, the Casino Operators Association, Kerzner International and the Pools Promoter’s Association. A second and updated edition of the Code was published in August 2015. 18.103 The Code provides certain social responsibility standards for gambling operators to follow in all gambling advertising under the GA 2005. In addition to the standards, the Code also provides a number of recommendations for operators who want to go beyond these minimum standards. 18.104 This Code is expressed to be read in conjunction with, and not to be seen as replacing or standing separate from, the codes produced by CAP and BCAP; it was intended to provide some minimum industry standards in specific areas, especially educational messaging, which are not covered by the CAP or the BCAP Codes. The Code was devised specifically in relation to the social responsibility obligations in gambling advertising, where the Commission pay particular attention to the licensing objective of protecting children and other vulnerable persons from being harmed or exploited by gambling. 18.105 The Code contains some general principles in para  10; these include a requirement of compliance with the CAP and BCAP rules, that all advertisements must be legal and not misleading, that advertisements and promotions should be socially responsible, as described in the BCAP rules, that care must be taken not to exploit children and other vulnerable persons in relation to gambling activity, and that advertisements should not be specifically and intentionally targeted towards those under 18, through the selection of media, style of presentation, content or context in which they appear.

Warning and educational messages 18.106 For education and warning messages, the Code recognises that there is clear merit in having a common strap line or similar, as a minimum standard for operators to use. It was also considered sensible, in many instances, for consumers to be directed to a further source of information about gambling, and gambling responsibly. With this in mind, the Code makes reference to a website set up by the Responsibility in Gambling Trust (RGT) at www.gambleaware.co.uk, a 979

Advertising website that provides information about gambling and gambling responsibly. The website is run by the RGT and is designed to offer advice and information about gambling generally, as well as providing links both to national and local problem gambling services, such as GAMCARE (a registered charity, providing information and advice on addressing the social impact of gambling).. Where this is on television ‘Gamble Aware’ must remain on the screen for at least ten per cent of the advert’s length. For printed advertising this should be clearly legible in proportion to the rest of the script. Finally for digital advertising, it must be at least 100px across. 18.107 The Code provides in para  26, as a minimum standard, that this website address has to be carried on all advertising, where it is feasible, practical and necessary to do so. It is to be presented in such a way that it is clearly legible, and the same principles are suggested to apply also to broadcast advertising. 18.108 There remain some qualifications to this obligation. This website address does not have to be included where the name of the operator’s brand or the name of the premises is used, where the provision of facilities for gambling is not the sole or main activity undertaken under that name, or the manner or context under which such name is displayed is not designed to draw attention to the fact that facilities for gambling are provided. The inclusion of the website’s address alone is considered under the Code to be sufficient to meet the basic requirements of the Code, but it also suggests that operators should consider adding words along the lines: ‘for more information and advice visit …’ and reference to the website. 18.109 The Code reminds operators that they may provide additional educational messaging in their advertising material, and acknowledges that some operators already have their own messaging which they will want to continue using. For operators that have not already devised such messaging, the Code reminds them that the Commission gave certain examples of messaging in its consultation paper, ‘Gambling advertisements and impact on Responsible Gambling’ issued in January 2007. The types of messaging described included adding ‘Don’t let the game play you’, ‘If it is no longer fun walk away’, ‘Winners know when to stop’, ‘Please play responsibly’, and ‘Gamble for fun, not to win’. These examples are taken from the full list given by the Commission, which is not a prescriptive list, but is provided by way of suggestions for appropriate messaging. After research the Senet Group comprising the larger operators has adopted the strap line ‘When the fun stops, stop’. (This is trademarked but can be used by Senet Group members.) Due to the wide variety of advertising, and the media over which such advertisements might be carried, the Code does not provide rules about how these messages have to be presented, in what font size etc; instead, it states that the aim should be to ensure that any educational messages are displayed in such a way as to be likely to come to the attention of those viewing the advertisement. For those in any doubt, the Code recommends that they seek the advice of the relevant trade association. 18.110 The Code’s provisions concerning licensed status have changed as a consequence of the GLAA as all advertising in Great Britain requires the relevant operator to hold a licence issued by the Commission. 980

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Television and radio advertisements 18.111 For television and radio advertising, the Code compares television advertising with print advertising, and expects the same educational messages to be displayed in both. For radio advertising, which raises different presentational issues, the Code accepts that it will not always be practicable or appropriate to carry the website address. The Code provides that the default position should be to refer to the gamble aware website (referred to above), but accepts that there may be occasions when it will be confusing or unclear to do so; it cites the example of where a remote gambling operator is primarily using an advertisement to promote its own website, perhaps rather than the gambling opportunities presented to those visiting such websites. In these circumstances, the Code recommends that an educational message along the lines of the ‘Don’t let the game play you’ (referred to above) should be used. 18.112 Partly due to concerns voiced by a number of parties shortly prior to GA  2005 coming into force about the potential effect of the rapid growth in television advertising, especially on children, once the previous restrictions had gone, the Code has a ‘watershed’ requirement which does not apply to certain products such as bingo. In para 31 the Code requires that new gambling products should not be advertised on television before the commonly accepted watershed time of 9pm. ‘New’ means those products that could not previously be advertised on television. There is also an exception for advertising sports betting around televised sporting events; even though the majority of these begin before 9pm. 18.113 The second edition of the Code also enhances the pre-watershed obligations. URLs that are permitted to be advertised pre-9 pm but carry links to a landing page containing a gambling advertisement are not permitted. To avoid this, the gambling content must be at least ‘two clicks’ away. Also there is the enhanced requirement that any pre-watershed advertising that is permitted cannot include offers targeted at new customers, and further cannot reference products which are only permitted to be advertised after the watershed.

Sponsorships 18.114 For all sponsorship agreements concluded after 1  September 2007, and where the sponsorship in question is not about a brand or a name of premises used where the provision of facilities for gambling is not the sole or main activity undertaken under that name, para  41 requires gambling operators not to allow their logos or other promotional material to appear on any commercial merchandising which is designed for use by children. This is in the context of the requirement that adults-only gambling products or product suppliers should never target their advertising at children; the example given is the use of logos on children’s shirts, which had begun to be prevalent as gambling operators increased their sponsorship of various football clubs in the few years prior to the GA 2005 coming into force, and concerns had been expressed in the media and elsewhere about the replica kits being worn by children carrying the gambling operator’s logo or name. 981

Advertising Children’s sport shirts and other such merchandise includes all those that do not attract VAT. Also, it is made clear that sponsorship of television programmes will be deemed to be advertising for the purposes of the watershed embargoes.

Review 18.115 The Industry for Responsible Gambling (the IGRG) (working with the RGA) announced in 2015 that improvements would be made to the Code amidst increasing criticism of the prevalence of gambling advertising. In particular and as partially referenced above: (a) there is now a requirement to have socially responsible gambling messages at the end of all television and radio advertisements; (b) the removal from any pre-watershed television advertising to sign up others and are targeted at new customers. Pre-watershed advertising cannot make reference to other gambling products that would not normally qualify for a pre-9pm exemption (as referenced above); (c)

there is now a requirement for improved prominence to Gamble Aware in all print/broadcast adverts;

(d) additionally there should be reference to Gamble Aware included in all television programmes sponsorship undertaken by gambling operators; (e) there must be inclusion of clear 18+ or no under 18’s messaging on all print and television adverts; (f)

new provisions are included to cover aspects of marketing on social media (the example being given that corporate web pages should also carry responsible gambling messages and links to access additional information).

These have now been included in the Second Edition of the Code.

SPREAD BETTING ADVERTS 18.116 Spread betting remains subject to regulation by the Financial Conduct Authority (FCA), which also regulates the conduct of business and advertising for what are classified as investment products. However, prior to September 2007, advertisements for spread betting were classed under unacceptable products for general advertising in section 3.1 of the Television Code; the updated BCAP  Code removes the unacceptable products classification, and provides at section 17, that adverts for spread betting can be advertised as an investment activity under the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and in accordance with the FCA handbook. 18.117 Spread betting can only, however, be advertised on specialised financial stations or channels, in specialised formal programming or on interactive or additional television services (including text services). In 982

Advertising addition, spread betting advertisements need to also comply with the gambling specific rules. Rule 14.5.2 also requires that the products should only be available to clients who have demonstrated a pre-vetting process that accords with the FCA’s tests to demonstrate relevant financial trading experience. 18.118 The BCAP Code defines a ‘spread bet’ as a contract for differences, which is classed as a gaming contract under the definitions contained in the FCA  Handbook. The FCA does not provide pre-publication advice on proposed financial marketing communications; they will provide technical guidance on specific matters or rules of interpretation only. 18.119 As is made clear in the 2014 Memorandum of Understanding between the ASA and the FCA the lead regulator for non-broadcast advertising as the latter, whether the promotion is broadcast or non-broadcast the regulators will liaise and co-operate where appropriate. There are in addition specific CAP rules applicable to financial products, in particular, the familiar warning that investment products contain an element of risk. The ASA’s jurisdiction will however extend to non-broadcast financial promotions that are not regulated by the FCA. 18.120 The advert should make clear that the value of the investment is variable, especially so with spread betting, and can go down as well as up; in the context of spread bets, this would translate to include making it clear that more money can be lost than the original amount staked. (Spread betting companies can provide tools such as stop losses but any significant movement in the spread can cause losses to accumulate quickly.) 18.121 Advertisements also have to make clear that past performance or experience does not provide any guide for the future, and any examples given should not be unrepresentative.

ENFORCEMENT 18.122 One of the additional tools to ensure compliance with the CAP and BCAP Codes, the BCAP Rules on the Scheduling of TV Advertisements, and the industry-led code for Socially Responsible Gambling is by linking these with the licences issued by the Commission. 18.123 GA  2005, ss  75–88 deal with the general framework under which conditions may be attached to an operating licence, and s  24 directs the Commission to issue one or more codes of practice about the manner in which facilities for gambling are provided: this is irrespective of whether such facilities are provided by a holder of a licence issued under the Act, or by another person. Section 82 provides that an operating licence is subject to the condition that the licensee ensures compliance with any relevant social responsibility provisions of a code of practice issued under s 24. 18.124 The codes of practice are intended to describe the arrangements that have to be made by someone providing facilities for gambling, for the 983

Advertising purposes of ensuring compliance with two of the key licensing objectives under GA 2005, namely; ensuring that gambling is conducted in a fair and open way, and protecting children and other vulnerable persons from being harmed or exploited by gambling. There are also additional requirements that address the issue of making assistance available to persons who are or may be affected by problems related to gambling. Section 24(3) also provides that a code may include provision about how facilities for gambling are advertised or described. 18.125 The LCCP (July 2016) states in the introduction to Part II: Codes of Practice, that compliance with the social responsibility provisions set out in Part II, is a condition of the licensee’s licence, by virtue of GA 2005, s 82, as above. 18.126 Section 4 of Part II of the LCCP specifically covers ‘marketing’ and, as a general ordinary code provision, provides that all licensees ‘should comply with the advertising codes of practice … which apply to the form and media in which they advertise their gambling services’. This originally referred only to the CAP  Code covering non-broadcast adverts, but now includes all the relevant codes, the CAP Code, the BCAP Code, and the IGRE Code referred to above. 18.127 The breach of an ordinary code provision has certain consequences. Unlike the social responsibility provisions, which themselves amount to licence conditions, the consequences under the GA  2005  of a failure to comply with an ordinary code provision does not itself render a person liable to criminal or civil proceedings, but the section is subject to any provision of or by virtue of the GA 2005 making an exception to an offence dependent on compliance with a code. The code is admissible in evidence in criminal or civil proceedings, which could be the case if there were persistent breaches of the CAP Code and/or the BCAP Codes. In addition, the LCCP are to be taken into account by a court or tribunal in any case in which it appears to such court or tribunal to be relevant, and are to be taken into account by the Commission in the exercise of any function under the GA  2005. The Commission have powers to review, suspend or remove licences and persistent breaches are likely to have a bearing on the Commission’s view of a person’s or entity’s ongoing suitability. 18.128 Ordinary code provision 5.1.2 provides that all licensees (which includes ancillary remote licensees) but excluding those licensees for gaming machines, technical and gambling software, should only offer incentive or reward schemes in which the benefit available is proportionate to the type and level of customers’ gambling. 18.129 The social responsibility provisions cover three areas; incentives and reward schemes, discounted alcoholic drinks, and payments to promoters. 18.130 For incentive and reward schemes, generally any such scheme has to be socially responsible; if the licensee sets up a scheme whereby a customer or potential customer can receive an incentive, other reward or other arrangement where the customer may receive money, goods, services or any other advantage (a pretty broad list, not least as it specifically makes 984

Advertising reference to a discharge in whole or in part of any liability of such customer or potential customer), LCCP code 5.1.1 gives guidance on how the scheme has to be set up in a particular way, with four key requirements: (1) the circumstances in which, and the conditions subject to which, the benefit is available must be clearly set out and readily accessible to customers; (2) neither the receipt nor the value or amount of the benefit can be dependent on the customer gambling for a pre-determined length of time, or with a pre-determined frequency. Neither can the receipt nor the value or amount of the benefit be altered or increased if the qualifying activity or spend is reached within a shorter time than the whole period over which the benefit is offered – as, for example, where an offer for matched bonuses is available for 24 hours, but additional bonuses are given for all deposits made in the first two hours of the offer; (3) if the value of the benefit increases with the amount the customer spends, it does so at a rate no greater than that at which the amount spent increases, ie no disproportionate increase is allowed; (4) if the benefit comprises free or subsidised travel or accommodation which facilitates the customer’s attendance at particular licensed premises, the terms on which it is offered must be directly related to the level of the customer’s prospective gambling. For example it would not be appropriate for a non-VIP customer to be given extensive hospitality; it would clearly encourage a desire to motivate higher spending. Note too that there has been increasing scrutiny of all hospitality events for customers on the basis that if a customer is deemed to be at a VIP level, operators should also be alive to the fact they may have a gambling problem and that therefore such events which may permit customer interaction for the first time should refine careful handling. 18.131 If customers are offered free and unlimited drinks for consumption on the licensed premises, this can only be permitted on terms that do not in any way link the availability of such drinks to whether or when the customer begins, or continues to gamble. In addition, in a similar way as existed before GA 2005 came into force in relation to casinos, licensees cannot make unsolicited offers of free alcoholic drinks for immediate consumption by customers, at a time when they are participating in a casino game, bingo game, or playing a gaming machine. 18.132 As regards free or subsidised travel or accommodation which facilitates the customer’s attendance at particular licensed premises the terms on which it is offered must not relate directly to the level of the customer’s prospective gambling. 18.133 In addition there is an ordinary code provision which requires that there is no advertising or marketing appearing on any primary web page/ screen message that provides advice on problem gambling. There are also tight restrictions in connection with marketing to players who have selfexcluded, even after the exclusion period has expired (players who re-open accounts must specifically request marketing material). 985

Advertising 18.134 Criticism concerning the misleading nature of some free bets and promotional schemes prompted the Commission to strengthen provisions relating to free bets and bonuses. These were regarded by the online industry as the most important marketing tool, particularly in the UK where customers tend to have multiple accounts and no particular brand loyalty. Also for the gaming operators, until the Chancellor announced a change in the March 2016 budget, matched bonuses and similar incentives such as poker rake backs were deemed to be deductible for tax purposes (in contrast with betting products). As a consequence there may well be, in any event, a decline in popularity of such marketing tools. 18.135 The Commission has now augmented the Social Responsibility Code  5.1.7 (which has the force of a licence condition) to require that all such advertisements are not misleading and comply with the CAP and BCAP  Codes. Any advertisements must state any limitations and qualifications, and the latter may clarify not contradict the claims that they qualify. Where promotions are limited by time or space they must include as much information about significant conditions as practicable, and must direct players clearly to an easily accessible alternative source of the relevant conditions of the promotion. In particular, where a customer has to make a commitment (eg  matched deposit) to take advantage of a ‘free’ bet this generally should be stated in the advertisement itself. 18.136 Also, where the advertisement is limited in time and space (for example a banner advertisement), significant conditions likely to affect a customers’ decision to participate in promotions should be displayed no further than one click from the advertisement itself. These advertisements are being strictly policed by the Commission particularly where there are other impediments to accessing terms and conditions (as in steps required). Finally the terms and conditions need to be made available for the duration of the promotion.

RECENT ADJUDICATIONS AND GUIDANCE BY CAP AND BCAP 18.137 The adjudications where complaints have been upheld by the ASA have fallen into several key categories which give a good insight into its overall approach to complaints. Generally, advertisements have not been given the leeway of other products which can deploy humour or be of dubious taste, despite the fact that the intended appeal is to an adult audience.

General grounds of taste 18.138 A good example of this is an operator’s newspaper advertisement in 2014 around the time of the Oscar Pistorius trial. The image was of the latter superimposed on an Oscar statuette with the strap line which stated: ‘It’s Oscar time’; ‘Money back if he walks’; and ‘We will refund all losing bets on the Oscar Pistorius trial if he is found not guilty.’ 986

Advertising 18.139 The ASA upheld the complaint on the basis that it was not just in poor taste, but could cause widespread offence with the words ‘if he walks’ being not a reference just his disability but also a trivialising reference to a criminal trial. 18.140 On the other hand the more recent (April 2016) operator advertisement, referring to the extensive injuries being suffered by the Liverpool football team, was cleared after a review. The advertisement which carried the text ‘You’ll never walk alone (or again if you play for Klopp)’ prompted two complaints but given it was only disseminated in the Liverpool area and the text displayed on the pictured wheelchair was ‘property of LFC’ (Liverpool Football Club), suggesting that the inability to walk was only connected to playing for Liverpool, which would be widely understood in the Liverpool area, the advertisement was deemed to fall on the right side of humour. 18.141 A  much earlier adjudication illustrates the borderline nature of taste/humour and a very broad view as to material that would be deemed to appeal to children. The Intercasino television advertisements featuring dwarves rolling down hills in dice outfits etc were criticised as being juvenile and were deemed to be of particular appeal to children. 18.142 In the adjudication it also alluded to the fact that since dwarves feature in children’s stories such as Snow White that this would increase the appeal. This clearly illustrates a very conservative approach.

Connection with sexual prowess 18.143 Two examples of upheld complaints have been an early newspaper campaign in 2008 with a Gordon Gecko Wall Street character (again being played by a dwarf), flanked by two attractive female models in a limousine, who is smoking a cigar and holding a champagne glass with the strapline ‘Who says you can’t make money being short’, with a double meaning clearly intended to also reference shorting markets. The complaints were upheld as it was deemed to link gambling to sexual success and enhanced attractiveness. 18.144 A  second advertisement in 2016 via an affiliate of the operator promoted a Liverpool football match and featured a close-up of a woman pulling down her trousers with text on her underwear stating ‘If you can read this it’s your lucky day’. The ASA determined that despite an assertion by the operator that it was not within its remit as it was not intended for a UK audience, and the affiliate responsibly for the promotion was based in Croatia, that it had power to consider the matter. This was on the basis that it was in English, referenced an English team and there was nothing to suggest English customers were excluded. That having been established the complaint was upheld given the obvious linkage to sexual prowess/success. 18.145 CAP and BCAP have also advised that linking enhanced attractiveness with gambling can breach the codes, as could references to fame, being special, and any VIP status. A  concession is made in the 987

Advertising guidance that gambling advertisements can feature attractive or admired people as long as the advertisement as a whole does not link gambling to these qualities.

Appeal to minors 18.146 We have already referenced the early adjudication to Intercasino, but the general approach of the ASA seems to have been that any reference to comic book characters in advertising, despite games often being branded with such characters, and despite the advertisement being placed in an only adult context, would be regarded as unacceptable. 18.147 This was amply demonstrated by a complaint upheld against an Isle of Man licensee 2011 where the home page included a cartoon like image of a meerkat below which were a number of games including ‘Piggy Payout’ and ‘Legend of Fairies’. 18.148 Therefore where undoubtedly branding cartoon characters can appeal to adults and enhance the chances of a game being successful, very great care must be taken on promotion, even if the content of promotion is aimed at adults (eg  in the financial press/pages in a newspaper), or on a home page where the ‘adult’ content is not a number of clicks away from the home page.

Gambling as a solution to personal issues 18.149 BCAP and CAP emphasise in their guidance that gambling cannot be seen as an escape from life or as a way of resolving financial problems. Objection was made to one advertisement headed ‘Discover how George wins £50,000 per year’, including a claim that a scheme was guaranteed success. The advertisement also stated that the author of the system had been able to retire. 18.150 The ASA upheld the complaint on the basis that the advertisement suggested that gambling could be a solution to financial concerns/an alternative to employment and a way to achieve financial security. Whilst BCAP and CAP advise that any reference to salary or debts are likely to fall foul of the rules, it is acceptable to show gambling as being important and interesting to characters as long it is not to the exclusion of other activities or interactions with people. 18.151 Likewise any advertisements portraying private fantasy, secretive gambling is likely to offend the code in that solitary gambling should not be seen as preferable to social gambling.

Misleading advertisements 18.152 A number of these have focused on the way in which free promotions and bets have been described, which now are also circumscribed by the LCCP requirements. 988

Advertising 18.153 Most recently an operator in April 2016 had a complaint upheld against it for its advertisement for ‘No Lose Month throughout January’, on the basis that there was a suggestion that the gambling was risk free. The clarification in the terms and conditions made it clear that funds were nonwithdrawable until wagered again with a cap on a return for certain losses, which clearly could introduce a risk factor. Similar adjudications have also upheld complaints in connection with misleading advertisements. 18.154 In addition both the Commission and the ASA have evidenced concern around the confusing nature of certain brands, for example, where adverts for social games and or skill games carry links on the home pages to gambling games, or where play for fun and play for real sites are branded in an identical or similar way that is not permitted, as is the promotion of a legitimate product to indirectly promote a product which is the subject to a number of constraints. Any promotion on any website has to ensure that the unacceptable product is a number of clicks (no less than two) from the acceptable one.

SOCIAL GAMES 18.155 Whilst not strictly gambling, these ‘pay for fun’ games have come under close scrutiny in the last couple of years. In particular, an Office of Fair Trading review determined that companies should be careful about advertising free play, where there was significantly enhanced play (or any play) only though in-app purchases or where charges were not clear; or those games which may comprise direct exhortations to children to buy in-app purchases which may exploit vulnerability, or be generally exploitive; or where charges were not clear or game play messages were not being distinguished from marketing messages. 18.156 Social games advertising has also been the subject of ASA adjudications and one high profile adjudication in 2014 against an operator in particular focused on a description of a game being ‘free’ where there were in reality many in-app purchases to make the game even remotely interesting. 18.157 In short, whilst social games generally fall outside gambling regulations because no ‘prize’ is won, special care needs to be taken in instances where any purchase is being made for any ongoing participation. Note: this applies to all social games, not just the ones that resemble casino games.

AFFILIATES 18.158 It is worth making some reference to this now very large industry that has specifically supported the gambling industry by targeting and securing customers for the online casinos, in some instances by creating domains with news and content relating to certain gaming such as poker. The network of entities can be located in numerous jurisdictions which can give rise to challenging issues in relation to the legality of gambling in the 989

Advertising jurisdiction in which they are based and from which they source customers. Affiliates similar to junkets are licensed in certain jurisdictions but currently not in the UK. However, under LCCP social responsibility code provision 1.1.3 licensees are expected to take some responsibility for third parties and affiliates. In particular the provision requires remote licensees to ensure that the terms on which they contract with third parties/affiliates who provide user interfaces enabling customers to access their remote gambling facilities, enable them to terminate the third party’s contract promptly where it is in breach of the advertising codes of practice. At the time of writing a consultation has recently concluded, as a result of which the Commission decided to add an additional obligation to ensure that operators also prevent affiliates from advertising on illegal download sites, which had been a common occurrence. 18.159 Affiliates have in most cases no customer interaction once the business of that customer has been driven or diverted to a specific operator. The majority of affiliates are not paid by reference to the life time value of the customer to that operator. Clearly, in that environment it makes sense to put an onus on the operator but it is probably a fair assessment that linked understanding of the affiliate industry has led to a delayed response in creating a minimum level of expedited compliance protocols. Therefore, it may be that wider global initiatives on data protection and privacy will impact affiliate activity in advance of gambling regulation.

OFFENCES Unlawful gambling 18.160 The principal statutory offence related to advertising gambling under the GA 2005 is advertising unlawful gambling: s 330(1). The section provides that advertising gambling is unlawful if the relevant licence is not in place, the relevant notice, permit or registration required by the GA 2005 to be in place has not been completed, or that the gambling is not such as could benefit from an exception to the offence; such an exception would apply to a situation where someone is broadly promoting or advertising gambling, by doing anything to encourage people to take advantage of facilities for gambling (directly or through an agent), or by passing on information which is itself intended to increase the use of facilities for gambling, where he reasonably believed the advertised gambling was lawful; this is an express defence to a charge under this section: s 330(4). It is specifically provided that this offence does not apply to anything done by way of promoting a lottery (s  330(3)), because the offence of facilitating a lottery, unless an exemption applies, includes, at s  259(2), printing promotional material for a specified lottery, or advertising a specified lottery. 18.161 For those parties more loosely associated with promoting or advertising gambling, but who are nonetheless encouraging people to gamble, or increase their amount of gambling (which can include those carrying the adverts, such as newspapers, magazines and websites etc), there is a defence against committing the offence, if they can show that they did 990

Advertising not know, or should not have known, that the advertised gambling was unlawful. This prevents it being a strict liability offence, but may lead to considerable legal debate over the level of knowledge or implied knowledge required about unlawful gambling. It does prompt a question mark as to how pro-active advertisers, and those who carry such advertisements, need to be. For instance, is there an obligation on them to check the ASA website regularly for recent decisions, or to sign up to receive reports of recent decisions? Being better informed in formulating an advertising campaign may be a more prudent tactic than trying to rely on ‘innocence’ as a defence, when it is quite likely that a good part of the advertising industry will be aware of the regulatory situation. 18.162 There is also an exception to the offence, under GA  2005, s  330(6), if the party involved is only delivering, transmitting or broadcasting a communication, or making data available, subject to certain provisions. These provisions are, first, that the party is in the business of so delivering, transmitting or broadcasting communications, or making data available; secondly, due to the nature of the business, the party has no control over the nature or content of the communications or data. This is the so-called ‘mere conduit’ exception, the defence often used by telecommunications providers when in the dock over any allegedly infringing material carried over their networks. 18.163 The offences carry a penalty on summary conviction of imprisonment up to 51 weeks (or six months in Scotland) and/or a fine up to level  5 on the standard scale. For those involved in causing such advertisements to be displayed or made accessible (which would also include the owner of the media channel on which they were carried, as well as the party or agency booking the advertisement etc), the offence is committed each day when the advertisement is so displayed or made available. 18.164 It is also worth bearing in mind the specific offence created in GA  2005, Pt 4: Protection of Children and Young Persons, which, in part, touches on gambling advertising; this is quite separate from obligations under the various advertising codes. Under s  46(1), a person commits an offence if he invites, causes or permits a child or young person to gamble. There are a number of exceptions which, in effect, remove certain activities from what amounts to gambling (but only for these purposes), which include participation in non-commercial gaming, in a lottery or in football pools (although for lotteries or football pools, s 56 and s 57 in effect re-insert this offence in relation to a child); however, s 46(3) clarifies that the reference to ‘inviting’ a child or young person to gamble specifically includes, under s 46(3)(a), sending a child or young person any document which advertises gambling and, in s  46(3)(b), bringing to the attention of a child or young person information about gambling with a view to encouraging the child or young person to gamble. A ‘child’ here is someone under 16 years old, and a ‘young person’ includes someone who is either 16 or 17.

Lotteries 18.165 Promoting lotteries is covered under GA 2005, Pt 11, aside from the National Lottery which is specifically excluded from this part of the Act 991

Advertising (s 264), but is subject to its own rules under Part 2. (Note than ‘promotion’ in this context is not just concerned with advertising as it is intended to cover a broader range of activities.) Any person who makes or participates in making arrangements for a lottery is classified as promoting a lottery under s 252(1). A  non-exhaustive list also includes those who print the tickets, distribute promotional material, make arrangements to advertise a lottery, deal with any promotional material (which in itself is defined to include material advertising a specified lottery inviting participation in a specified lottery or contains information as to how to participate or even which lists winners in a specified lottery) and where an external lottery manager organises a lottery for a society or authority; there, the manager and the society or authority are also classified as ‘promoting’ the lottery. 18.166 An offence is committed under GA 2005, s 258 if the person promotes a lottery, unless either the lottery itself is an exempt lottery, or two exemptions apply: the first is that such person holds and complies with an operating licence authorising that activity; or, second, the person in question, other than as an external lottery manager (‘ELM’), acts on behalf of someone who holds a relevant operating licence authorising that activity, and such activity is carried on in accordance with the terms of that licence. The external lottery manager, being someone who makes arrangements for a lottery on behalf of a society or authority where he is not a member, officer or employee, would need its own operating licence anyway. The exempt lotteries are set out in Sch 11 to the GA 2005 and cover for example lotteries in the work place or draws which are incidental to a non-commercial event (ie those events not intended to create any kind of private gain). See further below. There is also an offence of facilitating a lottery which is either not exempt or unlicensed (see s  259 of the GA  2005). The offence covers the printing of tickets or promotional materials as well as advertising. 18.167 The Commission has given some indication as to whether services provided to an authorised lottery operator (an ELM or the society or charity) amounts to a promotion of a lottery, in which case a licence will also be needed for the services provided. The Commission points out that a printing company printing tickets on behalf of a society or ELM would not be committing an offence because it would be acting in accordance with directions from a licenced charity, likewise a direct mailing company. However, in circumstances where ‘a person or body is responsible for and manages part or all of the lottery and decides issues such as where to target promotional material, sources people to enter the lottery and deals with ticket for transactions …’, the Commission is of the view that such activity would need to be licensed (see the Guidance note ‘Promoting Society and Local Authority Lotteries’ (September 2014)). 18.168 Whilst there is nothing to preclude a British resident under UK laws from participating in a non-UK lottery (except that the terms of ticket purchase in that other jurisdiction may preclude participation) the impact of the embargos contained in Part 11 of the GA 2005 in effect preclude the promotion of non-UK lotteries. The provision of s 265 addresses territorial application, and unlike the gambling restrictions contained in ss 328 and 330 makes no distinctions based on the medium of advertising. Part 11 will apply to anything either done in Great Britain or via remote gambling equipment (as 992

Advertising defined by s 36(4) of the GA 2005) which equipment is located in Great Britain.. Part 11 does not apply if the only people participating in the lottery are not in the jurisdiction and there is no person who is in the jurisdiction possessing tickets with a view to getting people to participate in a lottery in Great Britain. 18.169 In the Explanatory Notes to the GA 2005 it is asserted that the effect of these regulations is that they will apply as soon as someone in Great Britain becomes a participant in a non-UK licensed lottery or possesses tickets for such lotteries in Great Britain with a view to selling or supplying them, etc. Section 265(2) of the GA 2005, however, provides territorial exemption to a lottery in which no person in Great Britain is a participant and no person in Great Britain possesses tickets with view to sell or supply. It is the view of this author that the Explanatory Notes seem better to promote the purposes of the legislation by commercially undermining any attempt to market a non-UK lottery. Whether or not a court will be prepared to interpret s 265(2) (a) and (b) disjunctively, however – in spite of the word ‘and’ – remains to be tested. In any event, one still needs to link the territorial application to the offences set out in ss 258 and 259, the provisions of which are quite specific and narrowly defined and one can see that not all lottery products would be caught by the provisions. Interesting too are the products which allow customers to bet on the outcome of lotteries (excluding the UK  National Lottery or lotteries forming part of it in circumstances where the operator is supporting the supply under a UK licence – see the GA 2005, s 95), as well as the large syndicate models. The point of referencing them here is that the same advertising restrictions will not apply in the same way as when customers are asked to participate by buying a ticket. 18.170 Exempt lotteries are those which fall under GA 2005, Sch 11, which covers incidental non-commercial lotteries, private lotteries (including private society lotteries, work lotteries and residents’ lotteries) customer lotteries, small society lotteries and local authority registered lotteries. For exempt lotteries, there are some advertising restrictions which are partly designed to stop these being used as a way of getting round the more onerous provisions applying to advertising general lotteries; under Sch 11, Pt 2, para 14, private society lotteries, work lotteries and residents’ lotteries cannot be advertised other than by an advert displayed at the respective society, work or residential premises. For a customer lottery, advertisements are only allowed on the business premises (Sch 11, Pt 3, para 22). 18.171 Schedule 11, Pt 7 to the GA  2005 deals with relevant definitions relating to exempt lotteries, including that an advertisement for a lottery includes any document or electronic communication announcing the lottery or inviting potential participants in the lottery, on its own or with other information. Displaying an advert includes reference to publishing a notice and, for electronic adverts, it is treated as distributed to any place where it can be accessed (not even necessarily has been accessed), as well as any premises to which it is sent or, again, where it can be accessed (whether or not it is) being irrelevant; businesses include trades or professions. There is an additional interesting exemption in para  63, which provides that the rules relating to private lotteries in Pt 2 and customer lotteries in Pt 3 do not apply to anything done on a vessel – possibly so as not to interfere with such lotteries that may take place on cruise ships. 993

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CONCLUSION 18.172 Aside from the GA  2005 itself and the various codes covered elsewhere in this chapter, in devising and implementing any advertising relating to gambling regard should also be taken of other relevant general law. Any detailed consideration of such general law is outside the scope of this chapter, but perhaps one of the most important pieces of general legislation to consider in this area is the Consumer Protection from Unfair Trading Regulations 2008, as amended by the Consumer Protection (Amendment) Regulations 2014. These Regulations, which implement EU  Directive 2005/29/EC concerning unfair business to consumer practices, revoke, amend or replace substantial parts of the previous consumer protection legislation in the United Kingdom. Chiefly, for advertising, they revoke the Control of Misleading Advertisements Regulations 1988, which had a general impact on all advertising, whether relating to gambling or not. Very broadly, reg 3 of the 2008 Regulations prohibits unfair commercial practices, and sets out certain circumstances when a commercial practice would be considered to be unfair. These include, without being an exhaustive list: where the practice materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product where it is a misleading action in accordance with the subsequent reg  5; where it is a misleading omission in accordance with the subsequent reg 6; or if it is one of the outlawed practices listed in Sch 1 to the Regulations. It is worth mentioning that among the 31 commercial practices listed in Sch 1 are included those claiming the products are able to facilitate winning in games of chance, claiming in a commercial practice to offer a competition or prize promotion without awarding the prizes described or a reasonable equivalent, together with a host of other such ‘outlawed’ practices. If an operator, or other party involved in advertising gambling, fails to comply with the Regulations, they can be guilty of a criminal offence, the penalty for which, on summary conviction, is a fine not exceeding the relevant statutory maximum, or on conviction on indictment, is a fine or imprisonment for a term not exceeding two years, or both. There are certain specified defences in reg 17 relating to conducting certain due diligence, and in reg 18 dealing with innocent publication of advertisements. Nothing contained in the Regulations is gambling-specific, and many of the practices referred to in the Regulations are matters of common sense, but it would still be wise to bear the Regulations in mind in conducting any gambling advertising. Again it is open to debate whether these regulations will be overhauled following the Brexit negotiations. 18.173 The GA  2005 and the various codes mentioned in this chapter make for quite a complex interlinked framework for all forms of advertising gambling, across all different types of media. Case law and decisions of the ASA, as well as the various other regulatory bodies mentioned elsewhere in this chapter, will help inform operators and all those involved in advertising gambling, in devising their various advertising campaigns. Continued awareness of such case law and decisions, as well as seeking appropriate legal advice where necessary, should help operators meet the key statutory licensing objectives, but also enable them to take full advantage of the more liberalised regime the GA 2005 seeks to put in place. That having been said, gambling, particularly online gambling, has been the subject of scrutiny and 994

Advertising criticism not least because of the perceived prevalence of online and offline marketing since 2007 when the GA 2005 was implemented. The industry is clearly making attempts to have a more coordinated lobbying voice and those initiatives have already gained momentum in self-imposed restrictions on marketing but there is no guarantee that an ill judged marketing campaign may not result in a more draconian regime being introduced.

ORGANISATIONS RELEVANT TO THE ADVERTISING OF GAMBLING AAC – Advertising Advisory Committee: www.cap.org.uk ASA – Advertising Standards Authority: www.asa.org.uk ASA(B) – Advertising Standards Authority (Broadcast) Limited: www.asa. org.uk BCAP – Broadcast Committee of Advertising Practice: www.cap.org.uk CAP – Committee of Advertising Practice: www.cap.org.uk Clearcast – http://www.clearcast.co.uk/ DCMS – Department of Culture, Media & Sport: www.culture.gov.uk FCA – Financial Conduct Authority: https://www.fca.org.uk Gambling Commission – www.gamblingcommission.gov.uk Ofcom – Office of Communications: www.ofcom.org.uk PhonepayPlus – www.phonepayplus.org.uk (formerly ICSTIS – Independent Committee for the Supervision of Standards of Telephone Information Services: www.icstis.org.uk) Radio Centre – http://www.radiocentre.org/ RGT – Responsibility in Gambling Trust: www.rgt.org.uk

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Chapter 19 Gambling and tax

19.1 This chapter is concerned with the impact of UK taxation on gambling. 19.2 Income, profits and gains associated with gambling may incur charges to direct tax, meaning income tax, capital gains tax or corporation tax, as appropriate to the item in question and status of the taxpayer. Direct taxes are covered in Part 1 of this Chapter. 19.3 The majority of gambling activities are exempt from VAT. Payments falling outside of the scope of exemption are normally standard rated. VAT is discussed in Part 2 of this Chapter. 19.4 There are seven types of gambling duty: general betting, pool betting; remote gaming; gaming; bingo; lottery; and machine games. Each duty has its own rate regime and all are excise duties. Since 1  December 2014 all of general betting duty, pool betting duty and remote gaming duty are charged on a ‘point of consumption’ basis. These three gambling excise duties (referred to collectively as ‘POC duties’) are dealt with in Part 3 of this chapter, with the remaining four duties being explained in Part 4 of this chapter. 19.5 All of the above taxes and duties fall within the remit of HM Revenue & Customs (‘HMRC’). 19.6 Horserace betting levy is payable by bookmakers, it is assessed and collected by the Horserace Betting Levy Board. The horserace betting levy is discussed in Part 5 of this Chapter.

PART 1 – DIRECT TAX 19.7 The direct taxation treatment is best considered by reference to: (i)  the ‘house’, by which is meant the bookmaker, casino operator, bingo promoter and so on; (ii) the ‘punter’, meaning a playing member of the public; 997

Gambling and tax and (iii) ‘professional punters’, meaning individuals who make a living from gambling and associated activities.

Taxes on income 19.8 In the case of individuals1 and non-UK resident companies outside the scope of corporation tax,2 it is income tax that is in question. For UK resident companies3 and non-UK resident companies carrying on a trade in the UK through a permanent establishment,4 corporation tax is relevant. 1 2 3 4

Income Tax Act 2007 (‘ITA’), s 3. ITA 2007, s 5, and Corporation Taxes Act 2009 (‘CTA 2009’), s 5(2). CTA 2009, s 5(1). CTA 2009, s 5(2) and (3).

Taxes on gains 19.9 Winnings from betting, including pool betting, lotteries or games with prizes are not chargeable gains and so are not subject to capital gains tax or corporation tax on chargeable gains. Further, no chargeable gain or allowable loss accrues on the disposal of rights to winnings obtained by participating in any pool betting, lottery or game with prizes.1 1 Taxation of Chargeable Gains Act 1992, s 51.

The house 19.10 The house will normally be subject to direct tax on its profits on the basis that such profits derive from a trade, profession or vocation.1 1 In the case of individuals see Income Tax (Trading and Other Income) Act 2005, s 5. For companies within the charge to corporation tax, reference should be made to the CTA 2009, s 2.

19.11 A person who organises his affairs as a bookmaker will be carrying on a trade. In Partridge v Mallandaine1 the court considered whether two individuals who attended horse races as bookmakers and betters were carrying on a trade. The court found that the individuals had systematically and annually carried on the business and so were subject to income tax on their profits. The court found that betting was their ‘vocation’ – they were professional bookmakers. 1 Partridge v Mallandaine (Surveyor of Taxes) (1886) 2 TC 179.

19.12 The decision in Partridge v Mallandaine of itself is of limited assistance in considering whether economic returns realised from a particular person’s activities will constitute profits from a trade, profession or vocation. In relation to the question of whether a trade is being carried on, the so-called ‘badges of trade’ should be considered. Six badges of trade were identified by the Royal Commission in 1954 as being relevant factors. These are as follows (in each case followed in italics by current HMRC categorisations, as set out in the Business Income Manual):1 998

Gambling and tax (1) the subject matter of the realisation (the nature of the asset); (2) the length of period of ownership (interval of time between purchase and sale); (3)

the frequency or number of similar transactions by the same person (the number of transactions; existence of similar trading transactions or interests);

(4) supplementary work on or in connection with the property realised (changes to the asset); (5) the circumstances that were responsible for the realisation (the way the sale was carried out; method of acquisition; the source of finance); and (6) motive (profit seeking motive). 1 At paras 20205–20315.

19.13 It will normally be the case that the activities of the house will constitute trading, whether the activity in question is bricks and mortar based (eg a high street bookmaker, or casino operator) or remote (eg telephone or internet betting). HMRC’s manual reflects this by confirming1 that: ‘betting and gambling as such, do not constitute trading … however, an organised activity to make profits out of the gambling public will normally amount to trading.’ 1 Business Income Manual, at 22015.

Activities aligned to a trade 19.14 The case of Burdge v Pyne1 concerned the proprietor of a gambling club; activities included the playing of three-card brag. The proprietor himself played this game alongside customers and made winnings overall, which (what is now) HMRC sought to tax. 1 Burdge v Pyne (HM Inspector of Taxes) [1969] 1 All ER 467.

19.15 The court held that the winnings were assessable to tax because they were made in the course of the proprietor carrying on his trade of running the gambling club. In arriving at this decision the court stated1 that: ‘… in the present case the club was not merely the occasion which enabled the Appellant to play private games of cards. The playing of cards was part of the activities of the club, and his winnings from those cards … arose in the full sense of the carrying on of the club’. The activities in question, when looked at in isolation, would not normally have amounted to trading (for which see the comments below). But in this case the proprietor’s activities were considered part and parcel of the activities of the house, within the charge to tax. Indeed, the club’s activities only just covered overheads – it was the proprietor’s winnings from threecard brag which accounted for the profit element. 1 [1969] 1 All ER 467 at 469–470.

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Gambling and tax Territorial considerations 19.16 The ability of operators to establish ‘UK-facing’ remote gambling operations outside the UK can result in them enjoying certain direct tax advantages (as compared to UK based operations). If a gambling company is both incorporated and ‘centrally managed and controlled’ outside of the UK, it will not be subject to corporation tax on its worldwide profits and gains by virtue of its place of residence. Furthermore, provided that it does not trade in the UK through a ‘permanent establishment’ it will not be subject to UK corporation tax on its trading profits and provided that it does not trade in (as opposed to with) the UK, it will not be subject to income tax. Whether or not the profits of a company will escape UK direct tax (directly or indirectly) can depend on further considerations which may include: the terms of any applicable tax treaty, the UK’s controlled foreign company regime, transfer pricing and the application of the UK’s ‘diverted profit tax’ (all of which are outside the scope of this book).

The punter 19.17 A  person who places bets with a bookmaker or plays cards or other casino games as a punter will not normally be carrying on a trade (or profession or vocation). Accordingly, winnings will not be subject to tax on income, nor will losses be eligible for offset. 19.18 In Graham v Green1 the taxpayer’s sole means of livelihood was betting on horses. In concluding that these winnings were not the profits of a trade, the court looked at what constitutes a trade or a vocation. The court treated a ‘trade’ and a ‘vocation’ as being indistinguishable and discussed the two terms interchangeably. 1 [1925] 2 KB 37.

19.19 In the context of a simple trade where assets are bought and sold, the court highlighted the difference between simply acquiring things in isolation (which, in itself, neither results in profit nor constitutes a trade) and having an organised activity or adventure whereby things are bought and sold in a commercial manner (from which a profit or a loss can be derived and which does constitute a trade). 19.20 Turning specifically to gambling, the court discussed the fact that it was settled law that a bookmaker does carry on a trade. This was explained to be the case due to the bookmaker having a system whereby he calculates odds over a period of time and offers them to the general public in such a way that the odds are in his favour. Clearly, this is not the case in relation to a member of the public who places bets subject to such odds as may be offered. 19.21 The court considered (in the context of Sch  D, Case  VI, discussed below) whether one could derive ‘profit or gain’ from an individual bet and concluded that, in isolation, one could not: ‘What is a bet? A bet is merely an irrational agreement that one person should pay another person something on the happening of an event … 1000

Gambling and tax There is no relevance at all between the event and the acquisition of property. The event does not really produce it at all.’ 19.22 In relation to a person who places a number of bets, the court determined that by placing a bet a person was not organising his efforts in the same way as a bookmaker. There is a difference between activities that are ‘habitual’ or ‘systematic’ and activities that constitute a ‘trade, adventure, profession or vocation’. The court compared the situation to a man who regularly and skilfully plays cards: ‘In effect all he is doing is just what a man does who is a skilful player at cards, who plays every day. He plays today and he plays tomorrow and he plays the next day and he is skilful on each of the three days, more skilful on the whole than the people with whom he plays, and he wins. But I  do not think that you can find, in his case, any conception arising which his individual operations can be said to be merged in the way that particular operations are merged in the conception of a trade. I  think all you can say of that man, in the fair use of the English language, is that he is addicted to betting. It is extremely difficult to express, but it seems to me that people would say he is addicted to betting, and could not say that his vocation is betting. The subject is involved in great difficulty of language, which I  think represents great difficulty of thought. There is no tax on a habit. I  do not think “habitual” or even “systematic” fully describes what is essential in the phrase “trade, adventure, profession or vocation.” All I can say is that in my judgment the income which this gentleman succeeded in making is not profits or gains …’ 19.23 The court also observed that if habitual gamblers who are winners were to be taxed on their winnings, then habitual gamblers who are losers might, as a necessary consequence, be afforded tax relief on amounts that they lose. Thus, it was noted that making the losses of a gambler taxdeductible would give the ‘remarkable’ result of making ‘the State a partner in his gambling’. 19.24 So, in Graham v Green the court concluded that persons who place bets on horse races and, by comparison, persons who habitually play and win at card games do not carry on a trade of ‘betting’. 19.25 The decision, which remains the leading case on the taxation of winnings from gambling, is reflected in HMRC guidance:1 ‘The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling, does not make their activities a trade.’ 1 Business Income Manual, at para 22017.

19.26 The house carries on a trade in that its activity is organised along business lines and the odds are in its favour, but a member of the gambling public does not; success or frequency of betting of itself do not result in the activity becoming a trade. 1001

Gambling and tax 19.27 This was most recently considered by the Court of Appeal in the case of Hakki v Secretary of State for Work and Pensions.1 In that case the court held that a ‘professional’ poker player was not liable to make payments by way of child support because his winning did not constitute earnings.2 1 [2014] EWCA Civ 530. 2 There was no argument against the view that the child support regime is the same as the social security regime, which is the same as the tax regime.

19.28 The court considered that Mr Hakki did not have sufficient organisation in his poker playing to make it amount to a trade (or a business) let alone a profession or a vocation. This was so notwithstanding the facts found by the First-tier Tribunal (Social Security), which included some appearances on television as well as the taxpayer having his own website and communicating strategies for online poker. Having regard to the decision in Graham v Green, it was simply a case of a person frequently and successfully playing at cards. 19.29 Of Rowlatt J’s decision in Graham v Green (in which he held that the effort of a gambler is not ‘susceptible to organisation’ in the same way that a bookmaker organises his efforts), Lord Justice Longmore noted that ‘the authority has stood for many years and I would certainly not in 2014 wish to question it’. Activities aligned to a trade 19.30 In Down v Compston1 a professional golf player who habitually engaged in private games of golf for bets, was not found to be taxable on his winnings. The games of golf were usually with amateurs, who paid green and tuition fees. The court held that the winnings arose from bets and not from his vocation as a professional golfer. His vocation as a professional golfer merely afforded the opportunity for making the bets. The court found that the taxpayer’s winnings were not akin to gratuities for his services (which, had they been gratuities, would have been taxable) and that it was not the case that every receipt which is in any way connected with employment or a trade, profession or vocation is taxable. 1 [1937] 2 All ER 475.

19.31 Whilst the judgment in Down v Compston considered primarily whether the proceeds of the taxpayer’s betting activities were so closely aligned to his trade as a golf professional that they should be taxable, the court also considered whether the betting activity, of itself, constituted a separate trade. With reference to the decision in Graham v Green (above) and the question of the taxpayer organising his affairs in a way that might be seen as a trade, the court found that there was: ‘no organisation in this case which would support the view that the Respondent was carrying on a business of betting on these private games of golf.’ 19.32 When looked at together, the decisions in Burdge v Pyne and Down v Compston suggest that the court will be reluctant to find that an individual 1002

Gambling and tax is carrying on a trade of gambling subject to tax, unless: (i) that individual’s activities are consistent with him being the house; or (ii) arise to the individual as an adjunct to his acting as the house. The professional punter 19.33 Leaving to one side the taxation of employment income, it is suggested that the direct taxation treatment of professional punters be considered by reference to the following: (1) tuition – if the individual gives lessons for fees (eg  on how to play poker), then such fees would normally be subject to tax as income deriving from a trade; (2) as the house – an individual who so organises his gambling activities that he is acting as the house (eg by hosting games in such a way that the odds are systematically in his favour) may be found to be trading; (3) appearance and other sponsorship fees – a celebrity professional punter, or indeed a celebrity who can command appearance or other sponsorship fees for playing may be found to have taxable income. The practice of certain commercial organisations of paying so-called stake money to individuals who then use such monies in order to bet in televised or other published forms of gambling raises the interesting possibility of the stake itself being a taxable receipt, but the subsequent loss (or winnings) being outside the scope of taxation.

PART 2 – VAT The exemption from VAT 19.34 VAT is, for the most part, charged on supplies of goods or services by a taxable person1 at the standard rate.2 However, Group 4 of Sch 9 to the Value Added Tax Act 1994 (‘VATA  1994’) exempts from VAT the following items: (i)

Item 1: the provision of ‘any facilities for the placing of bets or for the playing of any games of chance for a prize’. For these purposes, a ‘prize’ does not include the opportunity to play again3. The meaning of ‘game of chance’ and ‘playing’ are considered below.

(ii) Item 1A: the provision of any facilities for the playing of dutiable machine games but only to the extent that: (a) the facilities are used to play such games; and (b) the takings and payouts are taken into account in determining the charge to machine games duty. A dutiable machine game is a game (whether of skill or chance or both) played on a machine for a prize (which must include at least one prize of cash which is of an amount greater than the lowest charge for playing the game on the machine).4 1003

Gambling and tax (ii) Item 2: the granting of a right to take part in a lottery. 1 Meaning a person who is, or who is liable to be, registered for VAT. 2 From 4 January 2011 to the date of publication of this edition the standard rate of VAT has been 20%. VAT is a turnover tax; the rate is therefore usually based on the consideration for the supply. 3 VATA  1994, Sch  9, Group  4, Note  (4). So, for example, pinball machines that provide a free play as the only prize are not exempted from VAT. 4 FA 2012, Sch 24, para 2.

19.35 Subject to the specific exclusions outlined above and below, therefore, it follows that most charges associated with gambling are exempt from VAT, with the consequence that the operator will not have an ‘output’ VAT liability that it would otherwise pass on to the punter as a direct VAT cost. The bookmaker, casino operator or other relevant provider will, by making exempt supplies, be ineligible to recover VAT charged to it in respect of goods and services used in its gambling activities. Such ‘input’ VAT will represent an additional cost to the business and accordingly, will be borne by the punter indirectly. 19.36 The scope of the exemption is to be construed narrowly, as a matter of statutory interpretation.1 In addition, the Notes to Group  4 of Sch  9 to VATA 1994 provide for certain exclusions. Items 1 and 1A (set out above) do not include: (a) admission to any premises; or (b) the provision by a club of such facilities to its members as are available to them on payment of their subscription but without further charge.2 Consequently, admission charges to ‘bricks and mortar’ casinos and bingo halls are subject to standard rated VAT. Item 1 does not apply to the provision of facilities to the extent that the facilities are used to play a relevant machine game.3 Relevant machine games and VAT are considered below. 1 Since it constitutes an exemption to the general principle that turnover is levied on all services supplied for consideration by a taxable person. See para 13 of the Court of Justice judgment in Stichting Uitvoering Financiele Acties v Staatssecretaris van Financien (Case 348/87) [1989] ECR 1737 at 1753. 2 For which see VATA 1994, Sch 9, Group 4, Note (1). 3 For which see VATA 1994, Sch 9, Group 4, Note (1A).

Meaning of ‘playing a game of chance’ 19.37

With effect from 1 November 2006:1

(1) a ‘game of chance’ includes: (a) a game that involves both an element of chance and an element of skill; (b) a game that involves an element of chance that can be eliminated by superlative skill; and (c) a game that is presented as involving an element of chance, but does not include a sport;2 (2) a person plays a game of chance if he participates in a game of chance: (a) whether or not there are other participants in the game, and (b) 1004

Gambling and tax whether or not a computer generates images or data taken to represent the actions of other participants in the game.3 Each of these definitions is identical to that used in GA 2005.4 1 For a general explanation as to the changes made at this time, reference should be made to HMRC Business Brief 16/06. 2 VATA 1994, Sch 9, Group 4, Note (3). 3 VATA 1994, Sch 9, Group 4, Note (2). 4 GA 2005, s 6(2) and (3).

Spot the Ball competitions and VAT – games of chance? 19.38 ‘Spot the Ball competitions’ are competitions where players are invited to study a photograph of a past football match from which the football has been erased and indicate the position of the football by marking a cross. In a typical competition, participants are invited to use their skill and judgement to determine the location of the ball and the winner is decided, not by reference to the actual position of the ball which has been removed from the picture, but by reference to the opinion of a panel of experts as to which entry is the most skilful. 19.39 For many years, such competitions were treated as falling outside of the VAT exemption, as ‘skill competitions’, which were standard rated. In 2009, however, Sportech plc and others made VAT reclaims on the basis that Spot the Ball was a ‘game of chance’ in which competitors put up money and were sometimes lucky enough to win. Consequently, such competitions should be exempt from VAT. 19.40 The First-tier Tribunal held1 both that the competitions were ‘games’ and that, because ‘the most that skill and judgement can do is to estimate the approximate position to place the participant’s cross’ (thereafter chance almost entirely taking over), they involved a significant element of chance. Consequently, they found that this form of ‘panel spot the ball’ fell within the meaning of ‘game of chance’ for the purposes of the VAT exemption. 1 [2013] UKFTT 210 (TC).

19.41 The Upper Tribunal reversed this decision,1 finding that the First-tier Tribunal had erred in law by finding that panel Spot the Ball was a ‘game’. Norris J agreed with HMRC’s contention that there was a requirement in law that a ‘game’ involved inter-player interaction and, since a player simply had to send in his coupon, it was not a game. 1 [2014] UKUT 0398 (TCC).

19.42 The Court of Appeal, however, found that there is no hard and fast rule or presumption about inter-player participation in a game and that, therefore, the First-tier Tribunal had made no error of law in holding that panel Spot the Ball was a ‘game of chance’.1 Consequently they allowed the appeal.2 1 [2016] EWCA Civ 436. 2 For further discussion of this case see Chapter 2 of this book at 2.199–2.211.

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Gambling and tax

Calculation 19.43 Where the exemption applies, the value of the output is determined by reference to the full amount of the stake less monies paid out or cost (including irrecoverable VAT) of prizes. Any betting or gaming duty is not deductible for these purposes.1 1 This is confirmed in VAT Notice 701/29, at para 2.3. Reference might also be made to the European Court of Justice decision in HJ Glawe Spiel- und Unterhaltungsgeräte Aufstellungsgesellschaft mbH & Co KG  v Finanzamt Hamburg-Barmbek-Uhlenhorst [1994] STC 543, where it was decided that, in the case of gaming machines offering the possibility of winning, the taxable amount did not include the statutorily prescribed proportion of the total of the coins inserted which corresponded to the winnings paid out to players.

19.44 Stake money paid by a punter (when placing a bet or to play the game) is outside the scope of VAT as it does not represent consideration for the supply of a service by the operator.1 1 This is confirmed in VAT Notice 701/29, at para 3.2.

19.45 Cash prizes (including the return of stake money) are outside the scope of VAT. Such amounts are not consideration for any supply by the punter, simply the financial return due on the bet. A prize of goods in a free lottery gives rise to an output tax obligation, but only if the purchase price of the prize exceeds £50.1 1 See VAT  Notice 701/29, at para  13. The business gift rules are considered by HMRC to apply.

What is the consideration for? 19.46 To determine whether or not payments fall to be exempted by reason of VATA 1994, Sch 9, Group 4, it is first necessary to ask what was the consideration for the payment made? This is not always an easy question to answer. So, for example, in a case involving the Tynewydd Labour Working Men’s Club,1 the High Court remitted the case back to the Tribunal to determine whether payments were for: (a)  the provision of entertainment; (b)  the provision of facilities to play bingo; (c)  an admission fee; or (d)  a combination of two or three of such possibilities. In the case of a combination, an apportionment is required. 1 Tynewydd Labour Working Men’s Club and Institute Ltd v Customs and Excise Commissioners [1979] STC 570.

19.47 In determining what is supplied, the substance and commercial reality of the transaction must be considered. It is wrong to artificially dissect what is supplied so as to identify separate taxable and exempt supplies. An example of this approach can be given by reference to the Tribunal decision in Logic Limited,1 where it was held that the placing of bets over the telephone by way of a premium rate call was a single supply of facilities for betting, not 1006

Gambling and tax a composite supply of both standard rated (telephone services) and exempt supplies. 1 Mr David Rose t/a Logic Limited (decision number 13934).

19.48 The fact that the activity in question is carried on in breach of licensing or other requirements does not preclude exemption.1 1 Reference should be made to the decision of the European Court of Justice in Finanzamt Gladbeck v Linneweber; Finanzamt Henne-West v Akritidis [2008] STC 1069.

Participation fees 19.49 With effect from 27 April 2009, payments received for ‘the granting of a right to play a game of chance for a prize’ were removed from the exception to the exemption; ie these payments, which had previously been subject to VAT, became exempt. Such payments include participation and session charges for bingo1 and participation fees (also referred to as ‘table money’ or ‘competition fees’) payable in respect of games such as poker or backgammon.2 1 See VAT Notice 701/29, para 8.1. 2 See VAT Notice 701/29, para 2.4.

Relevant machine games and VAT 19.50 When machines games duty was introduced in 2012, machines games that pay out cash prizes and which are subject to machine games duty (ie ‘dutiable machine games’ referred to in 19.34 above) were removed from the exception to the exemption; ie their takings became exempt from VAT. 19.51 A ‘relevant machine game’ is a machine game, whether of skill or chance, or both, played on a machine for a prize and the takings of which are not subject to machine games duty or any other form of gambling duty.1 The takings from relevant machine games are subject to VAT at the standard rate. Examples of a relevant machine game include non-cash prize games (eg a teddy bear in a crane grab machine) and redemption ticket games, which pay out tickets which can be redeemed for non-cash prizes. 1 VATA, s 23A.

Supplies made to gambling operators 19.52 The exemption from VAT for gambling exists for practical reasons, associated with the difficulties that would arise if VAT was charged. Indeed, as highlighted by the explanatory memorandum to the Proposal for a Sixth Council Directive,1 gambling activities are ill-suited to taxation on a VAT basis and are better dealt with by means of special taxes. To fall within the scope of the exemption the taxpayer must do more than merely operate in the gaming industry. 1007

Gambling and tax In United Utilities plc v Customs and Excise Commissioners2 the European Court of Justice held that the provision of call centre services did not benefit from exemption. In that case Littlewoods Promotions Limited outsourced call-centre services to Vertex Data Science Limited. In return for fees, Vertex took calls from customers placing bets with Littlewoods. The events were chosen by Littlewoods, who set the odds, appraised the bets and managed the revenue and expenditure associated with them; Vertex took no financial risks in relation to the bets. Whilst the communication of the acceptance of bets by Vertex telephonists was a stage in the placing of the bets, the telephone services provided by that company did not, of themselves, constitute a betting transaction eligible for exemption. 1 Bulletin of the European Communities, Supplement 11/73, p  16: Proposal for a sixth Council Directive on the harmonisation of Member States concerning turnover taxes. 2 [2006] STC 1423.

19.53 A further example of the restricted scope of the exemption can be given by reference to the decision in Annabel’s Casino.1 The appellant’s business was that of operating casinos; each roulette table had its own chip sorting machine, which was hired. The appellant claimed that the hire charges were exempt, on the basis that they assisted the croupier in the efficient conduct of the game and so directly facilitated the game. Overturning the decision of the Tribunal in favour of the appellant, the High Court ruled that the exemption was designed to exclude gambling, as distinct from the supply of equipment to those who use it for gambling. 1 Customs and Excise Commissioners v Annabel’s Casino Ltd [1995] STC 225.

19.54 In the case of J  Seven Ltd,1 however, the tribunal held that the granting of the right by P&O  to the appellant to operate blackjack and roulette games on board its cruise ships was nonetheless the provision of a facility for the playing of a game of chance. This was so even though the appellant itself supplied the necessary physical facilities (such as tables, cards) and croupiers. 1 VAT and Duties Tribunal decision number 2024.

Fiscal neutrality 19.55 Pursuant to the EU principle of fiscal neutrality, identical or similar services must be afforded the same VAT treatment.1 1 For which see Linneweber [2003] ECR 1–12691.

19.56 In 2008 Rank Group plc (‘Rank’) commenced litigation regarding several VAT claims based on ‘fiscal neutrality’ arguments. There have been many twists and turns in this litigation, broadly the claims have proceeded through the courts in three separate strands. Each of these strands is concerned with a comparison of two types of gambling machine which have been afforded different VAT treatment but, as Rank has argued, are so similar they should be afforded the same VAT 1008

Gambling and tax treatment. By championing this ‘fiscal neutrality’ argument and comparing machines on which the UK has imposed VAT with similar machines which the UK has treated as VAT exempt, Rank has sought to claim repayment of the VAT on the former where it has been able to show that the services supplied by these machines are sufficiently ‘similar’. Strand 1 – The bingo appeal1 19.57 Prior to its amendment in 2007,2 VATA 1994, Sch 9, Group 4, Note (1) (b) excluded from exemption the granting of a right to take part in a game for which a charge may be made by virtue of regulation under s 14 of the Gaming Act 1968. The result in the context of bingo was that so-called ‘section 14 games’ were subject to VAT, but that so-called ‘section 21 games’ were exempt. Whether a game fell within s  14 or s  21 depended upon the amount of the stake and cash prize. Rank established that a game could switch from being a s  21 game to a s  14 game as more players joined the game. Consequently, it argued that objectively there was no difference between the two, so the VAT difference in treatment was arbitrary and could not be justified. 1 Rank Group Plc v Revenue and Customs Commissioners [2009] LLR 225. 2 By the VAT (Betting, Gaming and Lotteries) Order 2007 (SI  2007/2163), which reflected the coming into force of GA 2005 on 1 September 2007.

Strand 2 – The ‘Slots 1’ appeal1 19.58 Prior to the amendment of VATA 1994, Sch 9, Group 4, Note (3) in December 2005,2 gaming machines were specifically excluded from the VAT exemption if the element of chance in the game was ‘provided by the machine’. Consequently, slot machines with a built-in random number generator (‘RNG’), which created the chance element in the games played on the machine, were subject to VAT. However, otherwise identical slot machines with remote RNGs (for example, slot machines linked by a cable to a RNG server which serviced more than one machine) were treated by HMRC as exempt from VAT. Rank argued that, since HMRC had in practice treated slot machines with remote RNGs as exempt from VAT, they had therefore infringed the principle of fiscal neutrality. 1 Rank Group Ltd v Revenue and Customs Commissioners [2008] 3 CMLR 31. 2 By the Value Added Tax (Betting, Gaming and Lotteries) Order 2005.

Strand 3 – The ‘Slots 2’ appeal1 19.59 In ‘Slots 2’, Rank compared the VAT treatment of fixed odds betting terminals (‘FOBTs’) and ‘Part III machines’ (being traditional gaming machines, where the element of chance is provided by the machine, being the subject of the ‘Slots 1’ appeal). FOBTs have a RNG located outside of the machine in a different location and are treated by HMRC as VAT exempt. Rank’s case was for the repayment of VAT paid in respect of the traditional gaming machines. 1 Rank Group Plc v Revenue and Customs Commissioners [2009] UKFTT 363 (TC).

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Gambling and tax The bingo and ‘Slots 1’ appeals 19.60 In both the bingo and ‘Slots 1’ appeals, Rank succeeded with its fiscal neutrality arguments both in the First-tier Tribunal and subsequently in the High Court.1 HMRC was granted permission to appeal to the Court Appeal but before that hearing, the Court of Appeal referred several questions to the European Court of Justice. Following the ruling of the European Court of Justice,2 HMRC accepted defeat in relation to the bingo appeal but continued the fight as regards the Slots 1 appeal. 1 Revenue and Customs Commissioners v Rank Group Plc [2009] EWHC 1244 (Ch). 2 Revenue and Customs Commissioners v Rank Group Plc (C-259/10) [2012] STC 23.

19.61 The ‘Slots 1’ appeal was heard by the Court of Appeal, who found in favour of HMRC.1  HMRC effectively neutralised Rank’s fiscal neutrality argument by conceding that they had been mistaken in treating the comparator machines (ie  those with an RNG that was separate to the terminal containing the slot into which the punter inserted one or more coins as payment to play) as exempt and that, consequently, all of the machines in question should have been treated as being subject to VAT. The case, therefore, turned on whether or not these comparator machines should be treated as falling outside of the exception to the exemption from VAT. 1 Revenue and Customs Commissioners v Rank Group Plc [2013] EWCA Civ 1289.

19.62 The Court of Appeal’s ruling focussed on the equivalent regulatory provision (s 26 of the Gaming Act 1968). Such regulatory provision (unlike the relevant VAT definition, which was narrower and used the definitive article: ‘the element of chance in the game is provided by means of “the” machine’) defined ‘machine’ to include ‘any apparatus’. Rimer J  focussed on the absurdity of adopting a narrow and literal interpretation so as to exclude machines with external RNG’s from the regulatory provisions. Having reached that view (and notwithstanding that HMRC had treated the machines differently for VAT purposes for many years), he saw no reason to take a different stance as regards the VAT provisions. Again, he rejected a narrow and literal interpretation which would effectively make VAT a ‘voluntary tax’ (ie it could be avoided by ensuring that the RNG was housed outside of the terminal into which the player inserted payment). 19.63 Rank appealed to the Supreme Court.1 Lord Carnworth (with whom all of the other Lords agreed) was seemingly unimpressed with Rimer J’s emphasis on the regulatory provisions and his reliance on arguments of absurdity. In dismissing the appeal ‘albeit for somewhat different reasons’ to those of the Court of Appeal, he considered that one could readily conclude that a terminal connected to a separate RNG comprised a single ‘machine’ on the natural meaning of that word. Of the word ‘machine’ he said: ‘It is in some ways a chameleon-like word, and the dictionaries contain a variety of meanings. A  typical and in my view accurate definition, taken from the Concise Oxford English Dictionary, is: “an apparatus using or applying mechanical power, having several parts, each with a definite function and together performing certain kinds of work”.’ 1 Revenue and Customs Commissioners v Rank Group Plc [2015] UKSC 48.

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Gambling and tax 19.64 He noted, in particular, the synonymous use of the word ‘apparatus’ and the emphasis, not so much on the physical nature of the equipment or its parts, as on the functions that they perform together for the purpose of a particular type of work. He concluded that, since the terminal and the RNG play, and are designed to play, essential and connected functions in the context of the overall purpose of creating a game of chance for the player, it should not matter whether that purpose is being performed by a single item or a combination of linked items designed for the same purposes. Consequently, whether the RNG and the terminal were housed within the same, or separate, units, there was a single ‘machine’ for the purposes of the VAT provisions. As such, each type of slot machine in question (regardless of the RNG configuration) should have been subject to VAT and, consequently, Rank’s claim for repayment of VAT failed. The ‘Slots 2’ appeal 19.65 This third strand of litigation has taken a slightly different route through the courts than the other strands. Rank won in the First-tier Tribunal and HMRC was given permission to appeal to the Upper Tribunal.1 However, before the case was heard in the Upper Tribunal, it referred certain questions to the European Court of Justice seeking guidance on how to determine whether or not the services supplied by traditional gaming machines and FOBTs are ‘similar’.2 1 Rank Group Plc v Revenue and Customs Commissioners [2012] UKUT 347 (TCC). 2 This reference and the reference made by the Court of Appeal, referred to in 19.60 above, were considered by the European Court of Justice in the same proceedings; Revenue and Customs Commissioners v Rank Group Plc (C-259/10) [2012] STC 23.

19.66 Following the ECJ’s ruling, the Upper Tribunal decided that the First-tier Tribunal had erred in law by applying an incorrect test and failing to take into account the correct considerations when determining whether or not the services offered to consumers by traditional gaming machines and FOBTs are similar. The Upper Tribunal therefore referred the matter back to the First-tier Tribunal to be reconsidered by that tribunal in the light of the ECJ’s guidance. 19.67 More specifically, the Upper Tribunal decided that the First tier-tribunal erred by: (i) ignoring the differences between traditional gaming machines and FOBTs relating to permitted stakes, prize limits and available betting patterns; and (ii) failing to apply a test of ‘similarity’ based on examining the features of the two types of machines which were likely to influence consumers’ decisions to play one type of machine or the other. 19.68 The First-tier Tribunal proceedings were held-over, pending the outcome of the Slots 1 case. At the time of writing, the second First-tier Tribunal hearing has not yet taken place. It will be interesting to see whether, this time around, the First-tier Tribunal will reach a different conclusion on the similarity of traditional gaming machines and FOBTs when it applies the tests as prescribed by the ECJ. 1011

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Territorial considerations 19.69 By establishing ‘UK-facing’ remote gambling operations both outside the UK and outside the EU VAT zone (in jurisdictions such as Gibraltar and Alderney), operators can achieve material VAT advantages. Since ‘business to business’ supplies of services are treated as ‘supplied where received’, such operators will suffer no input VAT on services received where they are established; namely outside the EU VAT zone. This is a material advantage because, as explained above, gambling operators make exempt supplies and, consequently, they are prevented from recovering input VAT charged to them in respect of goods and services used in their gambling activities. 19.70 In the Summer Budget of 2015, it was announced that the Government was considering extending the ‘use and enjoyment’ VAT place of supply rules to ‘business to business’ supplies of advertising. Whilst primarily aimed at perceived VAT avoidance in the insurance sector (following the Ocean Finance1 case), there were concerns that, were such rules to apply across the board – including, to the remote gambling industry – this could result in a significant irrecoverable VAT cost for those remote operators based outside the EU VAT zone. The concern is that, were the place of supply VAT rules to be changed so that UK advertising was treated as supplied where ‘used and enjoyed’, if that use and enjoyment was treated as taking place in the UK, the supply would be treated as taking place in the UK and so would be subject to UK VAT (which would be irrecoverable). In accordance with Athesia Druck,2 advertising services are considered to be used and enjoyed where the advertising material is disseminated; hence UK targeted advertising would seem likely to be treated as used and enjoyed in the UK. There were no further announcements in the Spring Budget of 2016 and it remains to be seen if this change will be introduced. 1 Revenue and Customs Commissioners v Newey (t/a Ocean Finance) (C-653/11) [2013] STC 2432. 2 Athesia Druck Srl v Ministero dell’Economia e delle Finanze (C-1/08) [2009] STC 1334.

PART 3 – ‘POINT OF CONSUMPTION’ GAMBLING DUTIES Introduction 19.71 This part of the chapter is concerned with the three excise duties which, since 1 December 2014, are (for the most part) charged on what can be loosely described as a ‘point of consumption basis’. Suppliers are charged by reference to where their customers are located. 19.72 Such duties (referred to hereafter as ‘point of consumption duties’) include: (1) general betting duty (although, in practice, this covers several duties under a single heading); 1012

Gambling and tax (2) pool betting duty; and (3) remote gaming duty. 19.73 The paragraphs that follow set out the primary and secondary legislation relevant to the point of consumption duties. Thereafter the operative provisions of each duty are explained, including some of the history which explains how the different duties have evolved over time. At the end of this part of the chapter, administrative provisions common to each of the point of consumption duties are explained.

Primary legislation 19.74 From 1 December 2014, all of general betting duty, pool betting duty and remote gaming duty have been imposed under the Finance Act 2014 (‘FA 2014’). The key provisions relating to general betting duty are contained in Chapter 1 of Part 3 of the FA 2014 (ss 125–142). Chapter 2 of Part 3 of the FA 2014 (ss 143–153) contains the key provisions relating to pool betting duty; and Chapter 3 of Part 3 of the FA 2014 (ss 154–162) contains those relating to remote gaming duty. Chapter 4 of Part 3 of the FA 2014 (ss 163–198) contains provision relevant to the administration of all such duties. Prior to 1 December 2015 all of general betting duty, pool betting duty and remote gaming were imposed under the Betting Gaming and Duties Act 1981 (‘BGDA 1981’). Since 1 September 2007, all forms of gambling in the UK have been subject to the regulatory regime implemented by the GA 2005. Spread betting, which is subject to general betting duty and is carved out of the GA 2005 regime, is subject to the Financial Services and Markets Act 2000.

Secondary legislation and notices 19.75 Further administrative requirements (ie  in addition to those contained in the FA  2014) are imposed on persons liable to the point of consumption duties by the following: (i) the General Betting, Pool Betting and Remote Gaming duties (Registration, Records and Agents) Regulations 2014 (SI  2014/2257) (Registration Regulations 2014); and (ii) the General Betting, Pool Betting and Remote Gaming Duties (Returns, Payments, Information and Records) Regulations 2014 (SI 2014/2912) (Returns Regulations 2014). The Revenue Traders (Accounts and Records) Regulations 1992, as amended by the Revenue Traders (Accounts and Records) (Amendment) Regulations 1995, 1998 and 2015) impose accounting and record-keeping requirements on bookmakers and pool betting promoters. 19.76

HMRC has published notices relating to:

(i) General Betting Duty (HMRC  Notice 451a ‘General Betting Duty’, which was last updated on 15 April 2016); 1013

Gambling and tax (ii) Pool Betting Duty (HMRC Notice 147a ‘Pool Betting Duty’, which was last updated on 15 April 2016); (iii) Remote Gaming Duty (HMRC  Notice 455a ‘Remote Gaming Duty’, which was last updated on 16 December 2014); For the most part, these notices summarise the applicable law and give useful guidance as to how these duties are operated in practice. Whilst the majority of these notices constitute HMRC’s interpretation of the law, certain provisions have the force of law. HMRC Notices 451a, 147a and 455a repeal and replace HMRC Notices 451, 147 and 455 which dealt with general betting duty, pool betting duty and remote gaming duty prior to the implementation of the FA 2014. 19.77 HMRC has also published guidance notes relating to the operation and payment of general betting duty, pool betting duty and remote gaming duty, including (at the time of publication): (i)

General Betting Duty, Pool Betting Duty and Remote Gaming Duty (published 14 August 2014 and last updated 28 August 2015 – https:// www.gov.uk/guidance/general-betting-duty-pool-betting-duty-andremote-gaming-duty). This guidance provides information regarding whether an operator needs to pay duty, when and how to register, the rates, how to fill in returns and make payments.

(ii) General Betting Duty, Pool Betting Duty and Remote Gaming Duty: appoint a representative in the UK (published 9  September 2014 – https://www.gov.uk/guidance/remote-gaming-duty-appointing-arepresentative-in-the-uk). This guidance provides information regarding when and how to appoint a UK representative and obtain HMRC approval for such (UK representatives are discussed at 19.220 below). (iii) Gambling Tax Services: online service guide for General Betting Duty, Pool Betting Duty and Remote Gaming Duty (published 17  March 2015 – https://www.gov.uk/guidance/gambling-tax-service-onlineservice-guide-for-general-betting-duty-pool-betting-duty-and-remotegaming-duty). This guidance provides information regarding how operators can register, make changes to their registration, view their accounts and submit returns online.

General betting duty A brief history 19.78 Until those sections dealing with general betting duty were repealed with effect from 1 December 2014, general betting duty was imposed under the BGDA 1981. The BGDA 1981, as originally enacted, was a consolidating act which brought together the previous legislation (primarily the Betting and Gaming Duties Act 1972) into one Act. In 1981 general betting duty was 1014

Gambling and tax charged at different rates depending upon whether bets were ‘on-course’ or ‘off-course’ bets, with on-course bets subject to a lower rate of duty. Since the cost of betting duty is ultimately borne by the betting public (although that was more obviously the case before general betting duty was charged on a ‘gross profits’ basis, as explained below), the purpose and effect of the differential charge was to make on-course betting more attractive than off-course betting. This was done partly for the good of racing and partly because a strong on-course market is desirable, as it is this which provides the starting prices which are widely used to settle bets nationally. Carrying this policy to its ultimate conclusion, the Finance Act 1987 abolished betting duty on on-course bets altogether, so that duty was (and remains) payable in respect of off-course bets only. 19.79 Prior to the introduction (in the Finance Act 2001) of the current regime of charging general betting duty on a bookmaker’s gross profit (general betting duty is often referred to colloquially in the bookmaking industry as ‘gross profits tax’ or ‘GPT’), general betting duty was charged at the rate of 6.75% of the amount staked on an off-course bet. At this time, duty was chargeable as a percentage of the total money staked on a bet, and was payable by the bookmaker, the Tote or the totalisator operator taking the stake. This system, which assessed duty on stakes received, regardless of whether or not a bet was a winning bet and regardless of a bookmaker’s profits, was effectively a charge on gross receipts. No relief was given to reflect the fact that some of the stakes received, on which duty was payable, would be winning bets and accordingly, it was possible for a bookmaker to make a net loss (due to winnings paid out exceeding stakes received) whilst at the same time having a (perhaps substantial) duty liability. Bookmakers, the Tote and totalisator operators were free to decide whether, and how, to pass on the charge to the betting public. In the case of the Tote and totalisator operators, this was done by paying winnings net of duty. In the case of bets with bookmakers there were two possibilities: either adopt the same practice as the Tote and pay the return on a winning bet (ie stake and winnings) net of duty or agree that the punter should pay his stake ‘tax-on’ at the time of making the bet. In practice this meant that the stake would be increased by an amount specifically earmarked for duty on terms that, if the bet proved to be successful, winnings would be paid on the nominal value of the stake without deduction. 19.80 This system, which in effect was a tax on punters wishing to place a bet, was not popular with bookmakers. Consequently, the bookmaking industry lobbied for a change to a duty which taxed bookmakers on their net profits rather than their gross receipts. 19.81 The bookmakers’ desire to see the system changed coincided to an extent with the ‘dot-com’ boom which saw many bookmakers setting up ‘UK-facing’ online operations outside of the UK so as to avoid having to pay general betting duty (and other UK taxes). Whilst the prohibitions on advertising offshore bookmakers in the UK were, at the time, tightly drafted and carried criminal sanction, bookmakers with retail or online operations in the UK (in relation to which certain advertising was permitted) could, in practice, operate offshore online bookmaking operations with appropriate Uniform Resource Locators (‘URLs’) without the need to advertise them 1015

Gambling and tax (ie by ensuring the URL for the website of the non-UK operation was very similar to the name of the UK operation that was advertised in the UK). 19.82 As a result, the Government, eager to bring these bookmaking revenues back within the UK’s tax net, reached a ‘gentleman’s agreement’ with the UK’s major retail bookmakers such that, provided those bookmakers agreed to bring their online bookmaking operations back to the UK, the government would replace the existing regime of general betting duty with a new regime based on a bookmaker’s gross profits. Such a system of taxing a bookmaker’s gross profits was introduced for general betting duty in 2001 and for pool betting in 2002. 19.83 Despite other remote operators remaining outside the UK, or subsequently relocating offshore, the UK’s major retail bookmakers kept their side of this agreement for many years. However, in July 2010, William Hill’s then CEO, Ralph Topping, declared that William Hill would move some of its bookmaking operations to Gibraltar to counteract the material tax benefits enjoyed by many of its competitors which were located offshore. The other major retail bookmakers followed soon after. 19.84 The reasons for remote bookmaking operators wanting to move outside the UK were, to a very large extent, tax-related. At the time, general betting duty, and the other gambling duties relevant to remote gambling operations, were levied on a ‘place of supply’ basis; the previous legislation provided that a liability to general betting duty only arose in respect of ‘a bet made with a bookmaker who is in the United Kingdom’. As such, to the extent that a bookmaker could demonstrate that it was not in the United Kingdom (for general betting duty purposes1) it did not have to pay general betting duty in the UK. Given that the local gambling duties payable in the jurisdiction in which the operator was established (typically Gibraltar, Alderney, Malta or the Isle of Man) were either very low or non-existent, this tax saving represented a corresponding increase in profit. 1 In its Excise Notice 451: General Betting Duty (see para  2.6), HMRC interpreted the phrase ‘in the United Kingdom’ for general betting duty purposes materially differently from equivalent provision for other taxes.

19.85 As a consequence of so many remote gambling operators having established their operations outside of the UK (and so outside the scope of UK gambling duties), the Government announced, in the 2012 budget, that the gambling duties relevant to remote gambling operations would be changed such that they would be levied on a ‘place of consumption’ basis. 19.86 There followed a consultation as to the design of the new rules with the new ‘place of consumption’ duty ultimately being introduced with effect from 1  December 2014. In the Government’s consultation documents, it explained the rationale behind the new tax in the following terms: ‘With a place of consumption tax basis, remote gambling operators will pay tax on the gross gambling profits generated from UK customers, no matter where in the world the operator itself is located. Premises based gambling will be unaffected. 1016

Gambling and tax A place of consumption approach supports the Government’s objective of a fairer tax system. Currently, remote gambling operators can and do avoid UK gambling taxes by supplying from abroad. The reform will level the playing field in terms of UK gambling tax liability and provide a fairer basis for competition between remote gambling operators supplying the UK market from the UK and from overseas.’ The Gibraltar Betting and Gaming Association (‘GBGA’), which represents a number of the Gibraltar-based UK-facing remote gambling operators, has challenged the introduction of the new ‘point of consumption’ duty by way of judicial review. The GBGA argues that the new duty regime is discriminatory and restricts free movement of services in breach of Art 56 of the Treaty on the Functioning of the European Union (‘TFEU’). In a judgment of Mr Justice Charles handed down in July 2015, the High Court referred two key issues to the Court of Justice of the European Union; namely: (i) constitutional questions relating to the ability of nationals of Gibraltar to rely on Art 56 of the TFEU; and (ii) fundamentally, whether the new ‘point of consumption’ duty engages Art 56 of the TFEU. The hearing before the CJEU is unlikely to take place before late 2016 at the earliest. In due course it may be necessary to consider the impact of any exit from the EU by the United Kingdom.

The current regime Different classes of bet subject to general betting duty 19.87 The general betting duty rules are different for different classes of bets. These classes include: (1) ‘general bets’,1 which are, broadly, fixed odds bets; (2) ‘spread bets’,2 both financial and non-financial; and (3) ‘chapter 1 pool bets’,3 which are pool bets relating to horse or dog racing. There are also rules dealing with certain tripartite situations, which are subdivided into: (4) provisions dealing with ‘bet-brokers’;4 and (5) provisions dealing with ‘betting exchanges’.5 1 2 3 4 5

FA 2014, s 126. FA 2014, s 128. FA 2014, s 134. FA 2014, s 133. FA 2014, s 141.

Defined terms 19.88 The general betting duty rules utilise a number of defined terms. Some of these definitions are also relevant to pool betting duty and remote gaming duty. However, rather confusingly, some definitions do not apply 1017

Gambling and tax uniformly to each class of bet and some of the same definitions have different meanings for pool betting duty purposes. Given that an understanding of these defined terms is key to a comprehension of how the point of consumption duties apply, these terms are explored below before going on to consider the operative provisions themselves. ‘Bookmaker’ 19.89 Other than in respect of the betting exchange provisions, all of the other general betting duty provisions (and pool betting duty provisions) apply to a ‘bookmaker’. ‘“Bookmaker” means a person who: (a) carries on the business of receiving or negotiating bets or conducting pool betting operations (whether as principal or agent and whether regularly or not); or (b) holds himself or herself out or permits himself or herself to be held out, in the course of a business, as a person within paragraph (a).’1 1 FA 2014, s 189.

‘Stake money’ and ‘winnings’ 19.90 Other than in respect of the betting exchange provisions, general betting duty is charged on a ‘bookmaker’s profits’. As discussed in more detail below, a ‘bookmaker’s profits’ are calculated differently in respect of, on the one hand, ‘general bets’ and ‘spread bets’ and, on the other hand’ ‘chapter 1 pool bets’. However, all of these calculations refer to both ‘stake money’ and ‘winnings’. For the most part, these definitions import the provisions used in BGDA 1981 and applied before 1 December 2014. Note that, confusingly, identical definitions of ‘stake money’ and ‘winnings’ are also used in relation to a ‘bookmaker’s profits’ for pool betting duty purposes. However, for pool betting duty purposes both ‘stake money’ and ‘winnings’ are defined slightly differently (see 19.158–19.165). The legislation distinguishes between the different definitions of stake money and winnings in the section headings by prefixing each definition with either ‘Chapter 1’ (general betting duty) or ‘Chapter 2’ (pool betting duty). ‘Chapter 1: stake money’ 19.91 ‘Stake money’ is defined widely for general betting duty purposes. It is defined as the ‘aggregate of the amounts which fall due in respect of the bet’.1 Such stake money is treated as falling due when the bet is made.2 1 FA 2014, s 139(1). 2 FA 2014, s 139(3).

19.92 In calculating an amount due to a person in respect of a bet, no deduction may be made in respect of: 1018

Gambling and tax (1) any other benefit secured by the person who makes the bet as a result of paying the money; (2) a person’s expenses, whether in paying duty or otherwise; or (3) any other matter.1 As a consequence of this rule and the fact that, for fixed odds bets, the stake is treated as falling due (and so becomes potentially subject to duty) when the bet is made, bookmakers are not entitled to relief from general betting duty for ‘bad debts’. 1 FA 2014, s 139(6).

19.93 Included within the definition of stake money are amounts falling due to a person other than the bookmaker.1 Also included, save where the contrary can be proved by the bookmaker whose profits on the bet are being calculated, are payments made: (i)

for or on account of or in connection with the bet;

(ii) in addition to amounts falling due in respect of the bet; and (ii) by the person making the bet.2 1 FA 2014, s 139(2). 2 FA 2014, s 139(5).

19.94 In Sherman v Customs and Excise Commissioners1 it was held that the extension of the definition of ‘stake money’ to include amounts paid ‘for or on account of or in connection with the bet’ clearly applied to make duty chargeable on a ‘service charge’ imposed on stakes by a bookmaker to cover ‘duties, levies and selective employment tax’. 1 (1971) 115 Sol Jo 657.

Chapter 1: stake money – free and discounted bets 19.95 Finally there is a deeming provision which includes as stake monies the notional stakes wagered in free or discounted bets. This provision provides that: ‘where the person who makes the bet does so in pursuance of an offer which permits the person to pay nothing or less than the amount which the person would have been required to pay without the offer, the person is to be treated as being due to pay that amount (a) to the bookmaker with whom the bet is made; and (b) at the time when the bet is made.’1 In such circumstances, therefore, the notional value of the free or discounted bet will have to be included in the bookmaker’s profit calculation. Consequently, where a free fixed odds bet is a losing bet, the bookmaker is subjected to general betting duty on an amount (the notional stake) which he never receives. Likewise, where a free fixed odds bet is a winning bet, the bookmaker’s net deduction for general betting duty purposes will be the (actual) winnings paid out less the (notional) stake received. 1 FA 2014, s 139(4).

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Gambling and tax ‘Chapter 1: winnings’ 19.96 The return of a stake is counted as winnings.1 For example, if a £10 fixed odds bet is placed on a horse at 10/1, all £110 returned (being £100 of winnings together with the stake) is treated as winnings, leaving a net deductible amount, for general betting duty purposes, of £100. 1 FA 2014, s 140(2)(a).

19.97 In determining winnings for the purposes of calculating a bookmaker’s profits, only payments of money are to be taken into account.1 Winnings include amounts credited to a person’s account to the extent that such amounts may be withdrawn by that person on demand.2 1 FA 2014, s 140(1). 2 FA 2014, s 140(2)(b).

19.98 As a consequence of these rules, were a bookmaker to award points to a punter for placing a bet or to ‘pay’ some or all of a punter’s winnings otherwise than in cash (eg  in goods or services), neither the value of such non-cash consideration nor the cost to the bookmaker of providing such non-cash consideration can be taken into account to reduce the bookmaker’s general betting duty liability.

‘UK person’ and ‘excluded bet’ 19.99 The definitions of ‘UK person’ and ‘excluded bet’ are key components of the legislative machinery which charges general betting duty on a ‘point of consumption’ basis. These definitions are relevant to ‘general bets’, ‘chapter 1 pool bets’, the ‘betting exchange’ provisions and, albeit indirectly, the ‘bet-broker’ provisions. They are also relevant to the pool betting duty and remote gaming duty provisions. They are not, however, relevant to the provisions dealing with ‘spread bets’; since general betting duty, as it relates to ‘spread bets’, remains to be charged on a ‘place of supply’ basis. ‘UK person’ 19.100 The definition of ‘UK person’ (and the manner in which remote gambling operators must determine whether or not a customer is a UK person) is a key component of levying duty on a point of consumption basis. ‘UK person’ is defined to mean: (a) an individual who usually lives in the United Kingdom; or (b) a body corporate which is legally constituted in the United Kingdom.’1 1 FA 2014, s 186(1).

19.101 A  body corporate which is legally constituted in the United Kingdom will include a UK limited company. United Kingdom for these purposes includes England, Scotland, Wales and Northern Ireland but does not include the Isle of Man, the Channel Islands or Gibraltar.1 1 Notice 451a (General Betting Duty), Notice 147(a) (Pool Betting Duty) and Notice 455a (Remote Gaming Duty) all refer, under the heading ‘Terminology’.

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Gambling and tax 19.102 It may not always be obvious to a bookmaker whether a customer should be treated as a ‘UK person’. The FA 2014, s 186 and Notice 451a (General Betting Duty) (the relevant extracts of which have the force of law) provide detailed guidance regarding the steps that a bookmaker must take in order to determine whether or not a customer is a ‘UK person’ for the purposes of general betting duty. The FA 2014, s 186 applies equally to pool betting duty and remote gaming duty and the relevant HMRC notices relevant to those duties (Notice 147a for pool betting duty and Notice 455a for remote gaming duty) provide the same detailed guidance (as for general betting duty) which also has the force of law. The boxes below reproduce the relevant extracts from the FA 2014, s 186 and the three HMRC notices. FA 2014, s 186(3) ‘The Commissioners may by notice published by them— (a) specify steps that must be taken in order to determine whether a person making a bet or entering into arrangements to participate in remote gaming is a UK person, (b) specify who must take those steps, (c)

specify circumstances in which a person making a bet or entering into arrangements to participate in remote gaming is to be treated as a UK person because of a failure to produce sufficient evidence to the contrary, and

(d) specify circumstances in which a person making a bet or entering into arrangements to participate in remote gaming is to be treated as not being a UK person on the basis of evidence of a description specified in the notice.’ Extract from Notices 451a (general betting duty), 147a (pool betting duty) and 455a (remote gaming duty) ‘The following has the force of law under section 186 of the [FA 2014] HMRC specifies that, where it’s relevant for the purposes of establishing liability for [the relevant duty] whether a customer is or isn’t a UK person, the following steps must be taken. Step 1 1.1. [Bookmakers/gaming providers] must keep appropriate records to enable them to verify whether customers are UK persons (that is, whether they usually live in the UK) or whether they usually live outside the UK. [Bookmakers/gaming providers] have a responsibility to keep their records on customer location up to date. These records must be capable of audit by HMRC. 1.2. All [bookmakers/gaming providers] should initially require their customers to state the address at which they usually live at the time the customer registers to bet with the bookmaker. If no address is given the customer will be regarded as being a UK person. 1021

Gambling and tax 1.3. When a UK address is given, the customer will be regarded as being a UK person. Step 2 2.1. If a customer gives a non-UK address, [bookmakers/gaming providers] must verify the customer’s declared location by reference to other information in their systems. It is not acceptable for [bookmakers/ gaming providers] to simply accept assertions from customers about where they live. 2.2. In cases of a verification system returning a conflicting result, with some information indicating the customer is a UK person and other information indicating the contrary, then the following tests should be applied. 2.3. [Bookmakers/gaming providers] should consider the customer’s statement that they don’t live in the UK against all other information they hold about the customer (for whatever reason it has been collected). If 2 current pieces of information indicate a UK address the customer will be deemed to be a UK person regardless of their statement that they live elsewhere. Typical information items will be the customer’s: •

address on a bank statement

•

address associated with a credit card

•

address on their driving licence

•

contact phone number and the country code attached to it.’

19.103 In each of the three HMRC notices, HMRC confirm that they are not prescriptive about what the information at step 2.1 should be or how many information items should be collected. Having said this, HMRC expect a robust system to have in-built verification but are not prescriptive about what that verification has to be. The ‘UK person’ test set out in the duty legislation differs from the test determining whether overseas gambling operators require an operating licence from the Gambling Commission to serve customers based in Great Britain (which, for such purposes, would not include Northern Ireland). Under the licensing regime, the place where the operator’s customers usually live is irrelevant, the key question is if any customers are in Great Britain at the time of placing their bets or wagers. ‘Excluded bet’ 19.104 A bet is an ‘excluded bet’ if: ‘(a) it is not made in or from the United Kingdom; and (b) the facilities used to receive or negotiate the bet or (in the case of pool betting) to conduct the pool betting operations are not capable of being used in or from the United Kingdom’.1 1 FA 2014, s 187(2).

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Gambling and tax 19.105 A consequence of the ‘excluded bet’ definition is to exclude from the scope of general betting duty, bets which are taken from ‘UK persons’ when they are outside of the UK (eg  in appropriate circumstances, on holiday abroad). Where in litigation proceedings it is necessary to determine whether facilities used to make a bet (or to participate in remote gaming) are or were capable of being used in or from the UK, the burden of proof lies on the person claiming that the facilities were not capable of being so used (which, one assumes, will generally be the operator).1 1 FA 2014, s 181.

On course or off course? 19.106 ‘General bets’ and ‘chapter 1 pool bets’ which are treated as ‘on-course’ bets are exempt from general betting duty. The term ‘on-course’ is defined so as to prevent attempts by off-course punters to make bets on the racecourse through agents or nominees and thereby claim entitlement to bet free of duty. A bet is an ‘on-course’ bet if it: (a) is made by a person present at a horse or dog race meeting or by a bookmaker; (b) is not made through an agent of an individual making the bet or through an intermediary; and (c) is made: (i)

with a bookmaker present at the meeting; or

(ii) by means of a totalisator situated in the United Kingdom, using facilities provided at the meeting by or by arrangement with the person operating the totalisator.1 1 FA 2014, s 187(1).

19.107 The effect of these provisions is that a private (ie  non-bookmaker) punter can only place an on-course bet by his physically going onto the course and placing it there. If an off-course bookmaker, however, bets with an on-course bookmaker, the bet will be treated as an on-course bet, provided the off-course bookmaker is betting on his own behalf. He cannot use this concession to lay money on-course on behalf of a customer. The purpose of the concession is to encourage off-course bookmakers to send money (ie lay off bets – see below) on-course and thereby strengthen the on-course market. An on-course bookmaker may, of course, accept bets from off-course nonbookmaker clients, but these will be off-course bets and he will be liable to account for duty in respect of such bets. The ‘on course’ exemption does not apply to the bet-broker provisions or the betting exchange provisions since these, by definition, involve either an intermediary or agency arrangement. The ‘on course’ exemption also does not apply to spread bets. 1023

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‘Bets’ and distinguishing ‘pool bets’ from bets at ‘fixed odds’ 19.108 Historically, general betting duty and pool betting duty were charged at different rates and so it was important to be able to identify which bets fell within which regime. More recently, the rates of general and pool betting duty became aligned and, since the FA 2014, so has the way in which one calculates the profits to which the rates of duty must be applied. However, there remain some differences (eg what is included as ‘stake money’) and so the need to distinguish between the different types of bet remains important. The term ‘bet’ is not defined for duty purposes, but is generally accepted as meaning an arrangement whereby each party to that arrangement stands to win or lose something, depending upon the outcome of a particular event. The classic definition of a ‘bet’1 is that given by Hawkins J in Carlill v Carbolic Smoke Ball Co (extract below):2 ‘A wagering contract is one by which two persons, professing to hold opposite views touching the issue of a future uncertain event, mutually agree that, dependent upon the determination of that event, one shall win from the other, and that other shall pay or hand over to him, a sum of money or other stake; neither of the contracting parties having any other interest in that contract than the sum or stake he will so win or lose, there being no other real consideration for the making of such contract by either of the parties.’ 1 The courts have treated the terms ‘bet’ and ‘wagering contract’ as being synonymous. 2 [1892] 2 QB 484.

19.109 ‘Bets’, for the purposes of general and pool betting duty, do not include ‘any bet made or stake hazarded in the course of, or incidental to, gaming’.1 1 FA 2014, s 183.

19.110 A bet is ‘deemed’ to be made by way of pool betting unless it is at ‘fixed odds’.1 Accordingly, where betting has taken place, it will attract a charge to pool betting duty unless the operator can show that it is fixed odds betting (or is pool betting on horse and dog racing subject to general betting duty). 1 FA 2014, s 184(1).

19.111 Betting with the following characteristics is specifically1 to be regarded as pool betting: ‘… wherever a number of persons make bets— (a)

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on terms that the winnings of such of those persons as are winners are to be, or to be a share of, or to be determined by reference to, the stake money paid or agreed to be paid by those persons, whether the bets are made by means of a totalisator, or by filling up and returning coupons or other printed or written forms, or in any other way,

Gambling and tax (b) on terms that the winnings of such of those persons as are winners are to be, or are to include, an amount (not determined by reference to the stake money paid or agreed to be paid by those persons) which is divisible in any proportions among such of those persons as are winners, or (c) on the basis that the winners or their winnings are, to any extent, to be at the discretion of the promoter or some other person.’ 1 FA 2014, s 184(2).

19.112 A bet is deemed not to be made at fixed odds if the winnings consist or may consist wholly or partly of something other than money.1 1 FA 2014, s 185(2).

19.113 Save where one of the exceptions applies, a bet is a bet at ‘fixed odds’ only ‘if, when making the bet, each of the persons making it knows or can know the amount the person will win …’.1 1 FA 2014, s 185(1).

19.114 This covers a simple forecast bet. If A stakes £2.00 at 4/1 on a runner to win, he knows he will win £8.00 if it wins. He will also recover his £2.00 stake money, such that the funds returned to him will total £10.00. In the case of many forms of bet made by bookmakers, however, there is no such certainty as to the amount of a winning bet, and such bets would, therefore, not fall within the definition of fixed odds betting. Similarly, bets placed at guaranteed best odds or ‘starting price’ odds would not fall within this definition. As a result, certain bets where there is no such certainty are specifically kept within the definition. The legislation provides that uncertainty as to the amount of winnings will not prevent a bet being one at fixed odds in any of the situations set out below.1 1 FA 2014, s 185(1)(a)–(e).

Insofar as that amount is to depend on the result of the event or events betted on1 19.115 This exception would cover the possibility, for example, of a winning bet being reduced because an event ends in a tie or dead heat. If the judge of a horse race cannot tell which of two horses crossed the line in first place, he will announce a dead heat. Any stake to win on either of the two horses involved is halved and winnings are paid out on the halved stake at the agreed odds or starting prices. Thus, in our example, A would be paid out at 4/1 on half his stake, ie £1.00; winning £4.00, recovering £5.00 in all. The existence of such uncertainty does not affect the principle that the original bet is at fixed odds. 1 FA 2014, s 185(1)(a).

Insofar as that amount is to depend on any such event taking place or producing a result1 19.116 The payout on a multiple bet (see below) may be affected if one of the races in the bet should be cancelled or rendered void. This possibility does not affect the original bet being one at fixed odds. 1 FA 2014, s 185(1)(b).

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Gambling and tax Insofar as that amount is to depend on the numbers taking part in any event1 19.117 In certain circumstances the rules of racing provide for automatic variation of the terms of bets where, for example, the size of the field drops below a certain number. Thus, if a punter puts £2.00 ‘each way’ on a horse in an eight-horse race, and four horses are withdrawn, leaving four runners, the bet is automatically varied to one of £4.00 to win. This alters the basis of calculation of winnings, but the statutory provision preserves the original bet as one at fixed odds. 1 FA 2014, s 185(1)(c).

Insofar as that amount is to depend on the starting prices1 19.118 ‘Starting prices’ means, in relation to any event, the odds ruling at the scene of the event at the start. When on-course bookmaking begins on a race (usually some 20 minutes before the race starts) bookmakers offer odds on each runner based upon their estimate of its likely performance. As bets are placed, they vary their odds to reflect the weight of money placed on different runners. The starting prices for a race are arrived at by, in the case of horse races, official validators (under the auspices of the Starting Price Regulatory Commission), who record prices on offer by a sample of the on-course bookmakers and arrive at a mean figure, the ‘starting price’ for each runner at the time of the off. Bookmakers both on-course and offcourse accept bets both at the prices on offer by them from time to time and also at starting prices. When a bookmaker accepts a bet at starting price, neither he nor the punter knows the odds which will regulate the return on a winning bet. Such knowledge is acquired only when the starting price is announced. 1 FA 2014, s 185(1)(d).

Except insofar as that amount is to depend on totalisator odds for any such event1 19.119 Where winnings bets are made with a totalisator, the dividend payable on them will be determined by dividing the total value of stakes pooled (after the operator’s ‘take’ has been removed) by the total number of winning betting units purchased, a system known as payment at totalisator odds. This rate of return cannot be calculated until the close of betting with the totalisator, so that no person placing a bet with the totalisator can know at the time he makes it what he will win. Since neither punter nor bookmaker can know the value of a winning bet until this announcement is made, totalisator odds would, unless preserved, fall outside the definition of ‘fixed odds’ betting. Where there are no winning bets on the totalisator, there will be no dividend and therefore no totalisator odds. In these circumstances the amount payable by a bookmaker on a winning bet made at totalisator odds will depend upon his terms of betting. He may, for example, stipulate that such winning bets should be settled at starting prices. In any event, this is preserved as ‘fixed odds’ betting. 1 FA 2014, s 185(1)(d).

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Gambling and tax Except insofar as that amount is to depend on the time when the person’s bet is received by any person with or through whom it is made1 19.120 This exception would seem to be designed to cover the position which would arise if there was a change of odds between receipt of a bet by a bookmaker’s agent and transmission to his principal. 1 FA 2014, s 185(1)(e).

General betting duty on ‘general bets’ Overview 19.121 General betting duty is charged at 15% of a bookmaker’s profits on general bets for an accounting period.1 General bets include bets at fixed odds. 1 FA 2014, s 127(1) and (2).

‘General bets’ and point of consumption 19.122 General bets are, in effect, defined in two parts.1 The first part states that a bet is a ‘general bet’ if it is: (a) not an on-course bet; (b) not a spread bet; and (c) not a pool bet. In practice, this will usually equate to a bet at fixed odds which is not exempted from duty as a consequence of it being an on course bet. The second part requires one of three conditions (A to C) also to be present. This part deals with the effective geographical application of the duty. •

Condition A  requires the person making the bet to be physically present at a place in the UK where the betting facilities are provided. This captures, broadly, off-course fixed odds bets placed at ‘bricks and mortar’ premises located in the UK.

•

Condition B requires the person making the bet (not being an excluded bet) as principal to be a UK person. This captures, broadly, remote fixed odds bets, which are now levied on a ‘point of consumption’ basis. Note that, subject to Condition C below, remote fixed odds bets taken from non-UK persons are not subject to duty, even if the bookmaker is physically located in the UK.

•

Condition C  is an anti-avoidance provision which applies to make a bet, other than an excluded bet, a ‘general bet’ where the person placing the bet as principal is a body corporate not legally constituted in the UK (being a person outside of the definition of ‘UK person’) and the bookmaker with whom the bet is made knows, or has reasonable cause to believe, that at least one ‘potential beneficiary of any winnings from the bet is a UK person.

1 FA 2014, s 126.

19.123 The meaning of ‘potential beneficiary of any winnings’ is not clarified in either the relevant legislation or in any of the guidance issued 1027

Gambling and tax by HMRC or HM Treasury. Since this is an anti-avoidance provision, HMRC is likely to construe the phrase widely. The word ‘beneficiary’ is most commonly used in the context of trusts, where the beneficiaries are the persons for whose benefit the trust property must be held and applied. The relevant duty legislation, however, does not appear to envisage winnings being held on trust for UK persons (there is no reference to such a trust), so one assumes that the word ‘beneficiary’ refers to those persons who will, ultimately, benefit from such winnings. As such, it may be that shareholders (both direct and indirect) or employees of non-UK incorporated companies which place bets could be ‘potential beneficiaries’ of any winnings paid out under such bets. Neither condition B  nor C  are satisfied if the relevant bet is both made outside the UK and the relevant bookmaker’s facilities cannot be accessed in or from the UK (eg  by virtue of geo-blocking); such a bet will be an ‘excluded bet’ (as explained above) and so will fall outside of the definition of a general bet.

Bookmaker’s profits 19.124 A bookmaker’s profits from general bets are computed by aggregating two sub-categories of profit as follows: (i)

a bookmaker’s ‘ordinary profits’; and

(ii) a bookmaker’s ‘retained winnings profits’.1 1 FA 2014, s 127(3).

A bookmaker’s ‘ordinary profits’ 19.125 A  bookmaker’s ordinary profits are computed by deducting from the aggregate of stake money falling due to the bookmaker in the relevant accounting period, the aggregate amount paid by the bookmaker in that period by way of winnings.1 This is no different than under the rules that applied before 1 December 2014 (although under the previous regime the net amount was referred to as a bookmaker’s ‘net stake receipts’ rather than his ‘ordinary profits’). Note that this calculation has to be effected on a ‘class by class’ basis; ie if a bookmaker takes, in an accounting period, both general bets and chapter 1 pool bets, he cannot deduct the winnings paid in respect of chapter 1 pool bets from stakes received from general bets or vice versa. 1 FA 2014, s 131.

A bookmaker’s ‘retained winnings profits’ 19.126 Retained winnings profits is a concept that was newly introduced in the FA 2014. A  bookmaker’s retained winnings profits are amounts of winnings which, having both been taken into account in computing the bookmaker’s ordinary profits (ie  as a deduction) and credited to a customer’s account, are no longer capable of being withdrawn by the customer.1 This would, 1028

Gambling and tax for example, capture a situation where a bookmaker confiscates some or all of the winnings credited to a customer’s account in circumstances where there has been no activity on that account for a prolonged period of time; sometimes described as a dormant account charge. Once again, these profits are to be computed on a class by class basis. However, this could potentially cause difficulty in practice; eg  where winnings, which have been credited to a customer’s account, are not clearly indicated as having derived from a particular class of bet. 1 FA 2014, s 132.

Losses 19.127 If a bookmaker’s profits deriving from bets of a class in an accounting period are negative (ie there is a net loss for the period), no general betting duty is payable in respect of bets of that class for that accounting period. In addition, that net loss may be carried forward to the subsequent accounting period to be deducted from a bookmaker’s profits of that class in that period.1 To the extent that some or all of the loss cannot be used in the subsequent period (ie  taking into account the brought forward loss, the bookmaker’s profits for that subsequent period results in there being a net loss), the net loss for that subsequent period is carried forward to the next subsequent period and so on. Again, this is effected on a ‘class by class’ basis such that net losses arising from bets of a particular class can only be carried forward and set against bookmaker’s profits arising from bets of the same class in subsequent accounting periods. 1 FA 2014, s 127(4).

Multiple and any-to-come bets 19.128 Bets on horse races and dog races frequently take the form of ‘multiple bets’. In the case of such a bet, the punter stakes money on the result of two races (a ‘double’), three races (a ‘treble’) or in excess of three races (an ‘accumulator’) on terms that, should he win on the first race, his winnings and stake will form the stake on the second race and so on throughout the sequence of races in the bet. As between bookmaker and customer, such a multiple bet is to be regarded as one bet. If the customer loses on any of the races the whole bet is lost. Moreover, the customer usually1 has no right to bring the bet to an end after a win by demanding payment out of winnings and return of the stake before the sequence is complete. 1 Some bookmakers might offer cashbacks.

19.129 With this there may be contrasted an ‘any-to-come’ (‘ATC’) bet where a customer bets on terms that if he should win on the first race, the bookmaker is to put some or all of his winnings or stake on a runner in the second race and so on. This is really no more than a revocable instruction to the bookmaker to re-invest, and the customer may at any time break the sequence after a winning bet by demanding to be paid 1029

Gambling and tax winnings and stakes. Accordingly, such a bet is treated as a series of discrete  bets. Laying off bets and hedging 19.130 Where a bookmaker ‘lays off’ a bet (ie he places a bet with a second bookmaker to hedge a position), the amounts laid off (ie  both the stake wagered with the second bookmaker and, if the bet proves successful, any winnings received from the second bookmaker) are not included in the first bookmaker’s ordinary profits (or retained winnings profits) calculation. Put another way, in relation to bets made by a bookmaker, the bookmaker is treated as a customer. Only bets made with a bookmaker fall within that bookmaker’s profits for general betting duty purposes. By way of example, if a bookmaker receives a bet of £10,000 on a horse at odds of 2/1 and lays off £5,000 with a second bookmaker, the first bookmaker’s profits will include the stake of £10,000 and, if the bet proves successful, winnings of £30,000 (including the repayment of the stake). Neither the stake paid to, nor any winnings received from, the second bookmaker will be taken into account in the first bookmaker’s profit calculation. The second bookmaker’s profits will be calculated in the same way as if the first bookmaker were a customer (which, for these purposes, he is).

General betting duty on ‘spread bets’ Overview 19.131 Spread bets fall into two sub-classes: (i)

financial spread bets, being spread bets the subject of which is a financial matter;1 and

(ii) non-financial spread bets, being everything else (eg sports spread bets). 1 FA 2014, s 128(2).

19.132 General betting duty on spread bets is payable at the rate of: (1)

3% of the amount of the operator’s profits in respect of financial spread bets for that accounting period (if any),1 and

(2) 10% of the amount of the operator’s profits in respect of other spread bets for that accounting period (if any).2 1 FA 2014, s 129(2). 2 FA 2014, s 130(2).

Definition of ‘spread bet’ and ‘bookmaker’ 19.133 A  bet is a spread bet if it ‘constitutes a contract the making or accepting of which is a regulated activity within the meaning of s  22 of the Financial Services and Markets Act 2000’.1 In practice, a spread bet will generally be a contract for differences and so fall within this definition. 1030

Gambling and tax Whilst spread betting operators may not otherwise consider themselves to be bookmakers, the duty legislation refers to general betting duty on spread bets being payable by a ‘bookmaker’ and defines ‘bookmaker’ (being the same definition as that which applies to general and other bets) widely so as to include them.2 1 FA 2014, s 128(1). 2 FA 2014, s 189.

Place of supply 19.134 The provisions relating to spread bets in the BGDA  1981 were replaced by the FA  2014. However, general betting duty on spread bets remains to be charged on a ‘place of supply’ basis, rather than a ‘point of consumption’ basis. Consequently, general betting duty is accordingly charged on a financial or a non-financial spread bet ‘made with a bookmaker who is in the United Kingdom’. It follows that spread bets made by a punter in the United Kingdom with a foreign bookmaker will escape the charge to UK general betting duty. Dutiable profits and rates 19.135 Spread betting operators (being ‘bookmakers’ for duty purposes) are charged to general betting duty broadly in the same way as fixed odds bookmakers, save that the rates are different. Accordingly, for each accounting period duty is payable by spread betting operators by reference to that operator’s ‘profits’ which are comprised of ordinary profits and retained profits,1 each of which are computed in the same way as for general bets (ie fixed odds bets). For operators which offer both financial and non-financial spread bets, since they are subject to different rates of duty, such operator’s profits have to be calculated separately for each class of bet. As financial and non-financial spread bets represent different classes of bet, net losses in relation to financial spread bets cannot be set off against net profits from non-financial spread bets, and vice versa. 1 FA 2014, ss 131 and 132.

General betting duty on Chapter 1 pool bets Overview 19.136 Following the introduction of the FA  2014, pool bets on horse and dog racing remain subject to general betting duty. All other forms of pool betting remain subject to pool betting duty. Pool bets on horse and dog racing are referred to as ‘Chapter 1 pool bets’. General betting duty is charged at 15% of a bookmaker’s profits on Chapter 1 pool bets for an accounting period.1 Not only did the provisions introduced in the FA 2014 change Chapter 1 pool bets from being subjected to general betting duty on a place of supply basis to a point of consumption basis, such provisions also created a new 1031

Gambling and tax method of calculating the profits which are charged to general betting duty. This method of calculating profits is adopted in similar form in respect of pool betting duty and remote gaming duty. 1 FA 2014, s 135(2).

Chapter 1 pool bets and point of consumption 19.137 As with general bets, the definition of a ‘Chapter 1 pool bet’ is in two parts:1 (1) the first part states that a bet is a ‘Chapter 1 pool bet’ if it: (a) relates only to horse racing or dog racing; (b) is not an on-course bet; and (c) is a pool bet; (2) the second part requires one of three conditions (A to C) to be present. This part (as with general betting duty on general bets) deals with the effective geographical application of the duty. Conditions A to C, which are identical to Conditions A to C relevant to general bets, are described in detail at 19.122 above. In summary, Condition A captures off-course bets placed a ‘bricks and mortar’ premises in the UK. Condition B requires the person making the bet (not being an excluded bet) to be a UK person and Condition C is an anti-avoidance provision designed to catch bodies corporate constituted outside the UK in circumstances where the ‘potential beneficiaries of any winnings’ includes a UK person. These conditions change the bookmaker’s profits to general betting duty on a point of consumption basis. As with general betting duty on general bets, there is no requirement that the ‘bookmaker’ be ‘in the UK’. 1 FA 2014, s 134.

Calculating profits on Chapter 1 pool bets, Chapter 2 pool bets and remote gaming 19.138 The methodology of calculating the profits of different types of pooled gambling has been harmonised in the FA  2014. Consequently, the description set out below as to how the profits from Chapter 1 pool bets should be calculated is equally relevant to the way in which a bookmaker’s profits from Chapter 2 pool bets must be calculated (for pool betting purposes) and the way in which a gaming provider’s profits from remote gaming must be calculated (for remote gaming duty purposes). Profits are comprised of three separate elements as follows: (i) ‘pooled’ profits; (ii) ‘ordinary’ profits; and (iii) ‘retained’ profits. ‘Pooled’ profits (computed in the manner described below) derive from bets which are ‘pooled stake Chapter 1 pool bets’ (for general betting duty purposes), ‘pooled stake Chapter 2 pool bets’ (for pool betting duty purposes) 1032

Gambling and tax and ‘pooled prize gaming’ (for remote gaming duty purposes). In each case, such categorisation will apply where all or part of the stake money on the bet (or, as applicable to remote gaming duty, the gaming payment) is assigned by, or on behalf of, the operator to a ‘fund’ from which winnings (or, as applicable to gaming duty, prizes) are to be paid or provided.

Calculation of ‘pooled’ profits 19.139 For the purposes of general betting duty, pool betting duty and remote gaming duty, the ‘pooled’ profits of an operator (ie a bookmaker or a gaming provider, as appropriate) for an accounting period are calculated following the five-step process summarised below.1 Step 1: Take the aggregate amount of ‘relevant stake money’ falling due to the bookmaker and, from that amount, deduct the aggregate amount which is assigned to the fund (ie the ‘stake fund’ or the ‘gaming prize fund’, as explained below). This step captures deductions from stake money (or gaming payments) that are made before the operator assigns the balance of such amounts to the fund. Step 2: If any amount of the fund is used otherwise that to provide winnings (or prizes) to customers, that amount should be multiplied by the ‘relevant proportion’. Since the fund (ie the ‘stake fund’, for the purposes of Chapter 1 and Chapter 2 pool bets, or the ‘gaming prize fund’, for the purposes of gaming payments subject to remote gaming duty) may be comprised of both: • ‘relevant stake money’ or ‘relevant gaming payments’ (ie amounts which are within the scope of the relevant duty, such as stake monies or gaming payments received from UK persons); and • other amounts (ie  amounts which are outside the scope of the relevant duty, such as stake monies or gaming payments received from persons who are not UK persons), only the ‘relevant proportion’ of amounts extracted from the fund are subjected to duty. The ‘relevant proportion’ will be the proportion of the fund represented by ‘relevant stake money’ (or ‘relevant gaming payments’); ie those amounts which are within the scope of the relevant duty. Step 2, therefore, subjects to duty the ‘relevant proportion’ of amounts which, having been assigned to the fund, are subsequently extracted from it otherwise to pay winnings (or prizes). Such amounts would, for example, capture a pool betting operator’s ‘take out’ (being his share of the pool that covers his expenses and represents his profit). 1033

Gambling and tax Step 3: The results of steps 1 and 2 are added together. This step merely aggregates the operator’s takings which are referable to bets or gaming payments within the scope of the relevant duty. Step 4: Multiply the amount of any ‘top-up payments’ assigned by the bookmaker to the fund by the ‘appropriate proportion’. A  ‘top-up payment’ is an amount (other than customers’ stake money or gaming payments) which the operator assigns to the fund to satisfy a guarantee it has given regarding the minimum size of the fund. Steps 4 and 5 give the operator a deduction, for the purposes of the relevant duty, for the ‘appropriate proportion’ of such top-up payments. The legislation provides that the ‘appropriate proportion’ will be set out in a notice published by HMRC. Each of Notice 451a (general betting duty), Notice 147a (pool betting duty) and Notice 455a (remote gaming duty) state that ‘appropriate proportion’ has the same meaning as ‘relevant proportion’ (explained above). Accordingly, multiplying the ‘top-up payment’ by the ‘appropriate proportion’ effectively reduces the deduction, for the purposes of the relevant duty, to that proportion of the top-up payment that is equal to the proportion of the fund represented by stakes (or gaming payments) which are within the scope of duty. Step 5: Subtract the aggregate results of Step 4 from the result of Step 3. This gives the operator’s pooled profits for the accounting period. This five step system is a marked difference from the previous system and it makes good sense to harmonise the process of computing pooled profits across general betting duty, pool betting duty and remote gaming duty. Having seven separate gambling duties is arguably unnecessary and so further harmonisation and consolidation would be welcomed. A  key beneficial aspect of this system of computing dutiable pooled profits is that by subjecting to duty only the relevant proportion of amounts extracted from the fund (at Step 2) and granting a deduction for only the relevant proportion of top-up payments (at Step 4), the operator’s profits are, in practice, ‘smoothed out’. In contrast, a ‘stakes less winnings’ computation (when applied to pooled profits as part of a ‘point of consumption’ system of taxation) can give dramatically different results, from one accounting period to another, depending on whether a jackpot winner is a UK person or not (ie  dependent on whether or not the amount of winnings are deductible as part of the dutiable profit computation). The five step process explained above seems a sensible one. 1 FA 2014, s 136.

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Ordinary profits 19.140 Where none of the stake money on a bet (or, as applicable, the gaming payment) is assigned to a ‘fund’,1 such a pool bet will be an ‘ordinary Chapter 1 (or 2) bet’ (or, as applicable, the gaming will be ‘ordinary gaming’).2 Profits deriving from such ordinary bets (or ordinary gaming) are calculated by deducting expenditure on winnings (or prizes) paid out in the period from stake money (or gaming payments) falling due to the operator in the period. Consequently, when computing ‘ordinary’ profits the process is equivalent to that which applies to general bets, which is described in 19.125 above.3 1 FA 2014, ss 134(5), 143(5), 154(2). 2 FA 2014, ss 134(6), 143(6), 154(3). 3 FA 2014, ss 137, 146, 157.

Retained profits 19.141 ‘Retained’ profits deriving from ‘Chapter 1 pool bets’1 (for general betting duty purposes), from Chapter 2 pool bets,2 (for pool betting duty purposes) and for gaming payments3 (for remote gaming duty purposes) are all calculated in the same manner as for general bets (as described in 19.126 above). 1 FA 2014, s 138. 2 FA 2014, s 147. 3 FA 2014, s 158.

Losses 19.142 As with losses in an accounting period deriving from general bets and different classes of spread bet, a net loss deriving from Chapter 1 pool bets may be carried forward to subsequent accounting periods to be deducted from profits from bets of the same class (ie  Chapter 1 pool bets) arising in such later periods.1 1 FA 2014, s 135(4).

General betting duty levied on bet-brokers and betting exchanges Overview 19.143 The provisions in the FA 2014 also provide how general betting duty liabilities arise in certain tripartite arrangements. Such provisions fall into two categories; those applying to ‘bet-brokers’ and those applying to ‘betting exchanges’. Prior to 2003, the bet-broker provisions included two categories, which are described below as ‘agency’ arrangements and ‘facilitator’ arrangements. In 2003, the facilitator arrangements were subdivided into ‘betting exchange’ arrangements and facilitator arrangements which are not betting exchange arrangements. 1035

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Bet-brokers 19.144 It is important to note that the bet-broker sections apply at the same time and in conjunction with the principal general betting duty provisions relevant to general bets and spread bets. Accordingly, a bet-broker (ie  an agent or a facilitator other than a betting exchange) which is involved in the making of a bet and the bookmaker that takes the bet can both have a general betting duty liability in respect of the same bet. The bet-broker provisions do not apply to pool betting (including pool betting on horse or dog races).

Agency arrangements 19.145 Bet-broker ‘agency’ arrangements arise where a person (the ‘agent’), in the course of a business, places a bet with another person (eg a bookmaker) as the agent of a third person (i the person wanting to place a bet, the customer).1 Note that the agency arrangements do not apply where the agent is acting as the agent of the bookmaker. This is not required, since a person acting as an agent for a bookmaker himself falls within the definition of a ‘bookmaker’ for the purposes of the duty legislation.2 Accordingly, such a situation would be treated in the same way as a bookmaker receiving and laying off a bet in the way described above. 1 FA 2014, s 133(1)(b). 2 FA 2014, s 189.

19.146 Where an agency arrangement exists, the general betting duty provisions deem two separate bets to have been made as follows: (1) the first bet is treated as being placed by the customer with the agent (such that the agent is treated as a bookmaker); and (2)

the second bet is treated as being placed by the agent with the bookmaker (such that the agent is treated as a customer).

The net effect of these provisions is to treat the agent as a bookmaker who lays off the whole bet with another bookmaker. Accordingly, any amount paid to the agent for his services (eg commission) is ignored and any loss or winnings from the second bet are also ignored (for the reason explained at 19.130 above). Consequently, where both the actual customer and the agent (being the deemed customer in the second bet) are in the UK, the agent’s general betting duty liability will be identical to that of the bookmaker. These ensure that, regardless of whether a bookmaker receives bets as principal and then lays-off those bets with a second bookmaker or, instead, structures the laid-off bet as a bet received by him as the agent of the second bookmaker, the same result will ensue. However, for (genuine) agents placing bets on behalf of punters who are UK persons, these rules can give results which are difficult to manage commercially; because their duty liability is likely to be totally out of kilter with the revenues that they receive (ie  the commission that they charge).

Facilitator arrangements 19.147 Facilitator arrangements arise where a person (the ‘facilitator’) provides facilities such that two other persons can place bets with one another. 1036

Gambling and tax Prior to 2003, all bets placed via a facilitator arrangement were treated in the same way as agency arrangements as described above: ie there were deemed to be two separate bets, one between the person placing the bet and the facilitator (such that the facilitator was treated as a bookmaker), and a second bet was treated as being placed by the facilitator with the bookmaker (such that the facilitator was treated as a customer). The Finance Act 2003 introduced new provisions for betting exchanges, with the effect that the previous facilitator arrangements were narrowed. Today, the rules as explained above apply only to facilitator arrangements which do not fall within the provisions relating to betting exchanges.1 In practice, these non-betting exchange facilitator arrangements are those which involve the provision of physical premises for use by persons making or taking bets. 1 FA 2014, s 133(1)(a).

Betting exchanges 19.148 The ‘betting exchange’ provisions apply where a person provides facilities, in the course of a business, such that two other persons can place bets with one another but where those facilities do not involve physical premises.1 These are aimed squarely at online betting exchanges which, using the internet, create a virtual market place where members of the public can place bets with one another, choosing to act either in a manner similar to a traditional bookmaker (making a ‘lay’ bet) or in a manner similar to a traditional customer (making a ‘back’ bet). 1 FA 2014, s 141(1).

19.149 Where the betting exchange provisions apply, general betting duty is payable at the rate of 15% on the commission charged (whether or not paid) by the betting exchange to any party to the bet who is a UK person, whether by deduction from winnings or otherwise, for using the facilities.1 Consequently, since the FA  2014, the betting exchange provisions are now also charged onto a ‘point of consumption’ basis. 1 FA 2014, s 141(2) and (4).

‘Using facilities’ 19.150 Both the betting exchange provisions and the bet-broker ‘facilitator’ provisions apply where ‘one person makes a bet with another person using facilities supplied by a third person.’ Interpreted broadly, this might include the provision of any supplies to a bookmaker that facilitate the making of bets (eg supplies of website software to an online bookmaker). Since such a wide interpretation would give potentially far-fetched results (eg resulting in the software supplier having a general betting duty liability), the better interpretation must be that the provisions apply to create a general betting duty liability only when the third party is providing facilities to other persons that allow those other persons to communicate with one another, thereby enabling them to strike a bet. HMRC has historically described1 bet-brokers and betting exchanges as being persons who provide facilities that ‘allow’ people to bet against one 1037

Gambling and tax another suggesting that HMRC has adopted the interpretation suggested above. Whilst such description was in HMRC  Notice 451, which has been withdrawn and replaced with HMRC Notice 451a, Notice 451a does not deal with bet brokers or betting exchanges and therefore one might assume (in the absence of alternative published guidance from HMRC) that HMRC continues to hold this view. 1 HMRC Reference: Notice 451 (April 2007).

Pool betting duty Position before 1 December 2014 19.151 Before 1 December 2014, pool betting duty was charged at the rate of 15% of a person’s ‘net pool betting receipts’ which arose from ‘dutiable pool bets’.1 The relevant primary legislation was set out in ss 6 to 8C of the BGDA 1981, which has now been repealed. 1 BGDA 1981, ss 7 and 7A.

19.152 For the purposes of the BGDA  1981 regime, dutiable pool bets are those where either: (1)

the bet is made by means of a totalisator situated in the United Kingdom and the person whose net pool betting receipts are being considered is the operator; or

(2) the person whose net pool betting receipts are being considered is the promoter and is in the United Kingdom. Consequently, under the rules that applied before 1  December 2014, pool betting duty was charged on what can be described as a ‘place of supply’ basis. Under the BGDA 1981 regime, a person’s net pool betting receipts were calculated in accordance with the formula: S + E – W Where: ‘S’ or ‘Stakes’

=

the aggregate of amounts falling due to the person in the accounting period in respect of ‘dutiable pool bets’.

‘E’ or ‘Expenses’

=

the aggregate of certain expenses and profits falling within section 7E(2) that are attributable to the accounting period.

‘W’ or ‘Winnings’

=

the aggregate amount of winnings paid by the person in the accounting period by way of winnings on dutiable pool bets (irrespective of when the bets were made or determined).1

1 BGDA 1981, s 7A.

1038

Gambling and tax 19.153 A  more detailed commentary as to how net pool betting receipts should be calculated using the above formula can be found in the previous edition of this book. It is worth noting here that elements of both ‘S’ and ‘E’ (in the formula ‘S + E – W’) incorporated a series of anti-avoidance provisions which had been introduced in Finance Acts in the 1950s and 1960s to counter a number of duty avoidance schemes. Some of those anti-avoidance provisions (being those encompassed in ‘S’) have been reproduced in the current legislation (see the commentary relating to ‘Chapter 2: stake money’) whereas others (notably those encompassed in ‘E’) have not. A likely reason behind these latter anti-avoidance provisions not being replicated in the FA 2014 regime is on account of relevant operators lobbying the Government to change the rules. As a result of the anti-avoidance provisions in the BGDA  1981 regime being so wide in their ambit, operators found them practically unworkable in situations where the pools of different operators in different jurisdictions are notionally commingled together in order to increase the winnings pool. Commingling is an otherwise commonly practiced arrangement between pool betting operators in order to maximise pool sizes (and, therefore, potential winnings) and, consequently, make their offering as attractive as possible to punters.

Position from 1 December 2014 Overview 19.154 Pool betting duty is levied on pool betting other than pool betting on horse and dog racing. As previously stated (see the commentary on ‘Chapter 1 pool bets’ in 19.136), pool betting on horse and dog racing is subject to general betting duty (that also being the position prior to 1 December 2014). Unlike general betting duty, which applies to a number of different ‘classes’ of bet, pool betting duty applies to a single class of bet, referred to as a ‘Chapter 2 pool bet’. Consequently pool bets (in general) fall into three categories: (i)

Chapter 1 pool bets (which are subject to general betting duty);

(ii) Chapter 2 pool bets (which are subject to pool betting duty); and (iii) pool bets which are not subject to duty. This final category will include: •

pool bets which are pool bets on horse or dog racing but which do not fall within the definition of ‘Chapter 1 pool bet’; eg on-course pool bets or remote pool bets made by non-UK persons (note that pool bets on horse and dog racing are specifically excluded from being a Chapter 2 pool bet); and

•

pool bets otherwise than on horse or dog racing (eg football pool coupon bets) which do not fall within the definition of ‘Chapter 2 pool bet’; eg pool bets made for community benefit or remote pool bets made by non-UK persons.

Please see the commentary in 19.108–19.120 above in relation to the meaning of ‘bet’ and distinguishing ‘pool bets’ from bets ‘at fixed odds’. 1039

Gambling and tax Rate of duty and ‘bookmaker’ 19.155 Pool betting duty is charged at 15% of a bookmaker’s profits on Chapter 2 pool bets for an accounting period.1 Whereas pool betting duty under the previous, BGDA 1981, regime was payable by ‘promoters’ and ‘operators of totalisators’, it is now payable by ‘bookmakers’. The definition of ‘bookmaker’ used for pool betting duty purposes is the same as that used for general betting duty purposes (see 19.89 above). 1 FA 2014, s 144(1) and (2).

Chapter 2 pool bets 19.156 The FA  2014 legislation, levies pool betting duty on a point of consumption basis by virtue of the definition of a ‘Chapter 2 pool bet’. The structure of the definition of a Chapter 2 pool bet is similar to that of a Chapter 1 pool bet (and also a ‘general bet’) in that there are two parts. The first part states that a bet is a ‘Chapter 2 pool bet’ if it: (a) is not made wholly in relation to horse or dog racing; (b) it is not made for community benefit; (c) it does not constitute the taking of a ticket or a chance in a lottery; and (d) is made by way of pool betting. In short, this means that all pool betting (other than pool betting on horse and dog racing, which is subject to general betting duty) is subject to pool betting unless it qualifies for the community benefit exemption. The second part requires one of three conditions (A  to C) also to be present. This part (as with general betting duty on both general bets and Chapter 1 pool bets) deals with the effective geographical application of the duty. Conditions A to C, which are identical to Conditions A to C relevant to general bets, are described in detail at 19.122 above. In summary, Condition A captures off-course bets placed in a ‘bricks and mortar’ premises in the UK. Condition B requires the person making the bet (not being an excluded bet) to be a UK person and Condition C is an antiavoidance provision designed to catch bodies corporate constituted outside the UK in circumstances where the ‘potential beneficiaries of any winnings’ includes a UK person. The definitions of ‘UK person’ and ‘excluded bet’ and the obligations on bookmaker’s to verify whether or not their customers are UK persons are the same as those used for general betting duty purposes (see 19.99 to 19.105 above). Profits on Chapter 2 pool bets 19.157 Not only did the provisions introduced in the FA 2014 change Chapter 2 pool bets (described below) from being subjected to pool betting duty on a place of supply basis to a point of consumption basis, such provisions also created a new method of calculating the profits which are charged to pool betting duty. This method of calculating profits from pooled gambling has now been harmonised for all of general betting duty (on Chapter 1 pool bets), pool betting duty (on Chapter 2 pool bets), and remote gaming duty and this is explained above in 19.138 to 19.139. Despite this change being relevant to 1040

Gambling and tax all three of the point of consumption duties, as compared to the previous regime, the change in the manner of computing profits for pool betting duty purposes is the most fundamental in that the rules should now operate in a more predictable way in circumstances where international pools are commingled. As a consequence of this harmonisation , the pool betting duty provisions are now very similar indeed to the general betting duty provisions that apply to pool betting on horse and dog racing (ie Chapter 1 pool bets, described above). However, whilst the manner in which profits are computed are the same, the amounts (namely, what constitutes ‘stake money’ and ‘winnings’) are different. ‘Chapter 2: stake money’ and payments treated as bets for pool betting duty purposes. 19.158 For pool betting duty purposes, ‘stake money’ is defined, initially, as the ‘aggregate of the amounts which fall due in respect of the bet’.1 Where a pool bet relates to a single event or more than one event happening on the same day, the bet is treated as falling due when the event takes place. In all other circumstances the bet is treated as falling due when it is made. The definition of stake money is extended to include within the definition amounts of stake money falling due to a person other than the bookmaker.2 Also included, save where the contrary can be proved by the bookmaker whose profits on the bet are being calculated, are payments made: (1) for or on account of or in connection with the bet; (2) in addition to amounts falling due in respect of the bet; and (3) by the person making the bet.3 1 FA 2014, s 148(1). 2 FA 2014, s 148(2). 3 FA 2014, s 148(4).

19.159 All of the above extended definitions (which are anti-avoidance provisions) are identical to those used for general betting duty purposes (ie Chapter 1: stake money). However, such anti-avoidance provisions were first introduced to counter certain arrangements designed to avoid pool betting duty, some of which are explained briefly below. As originally introduced,1 pool betting duty was chargeable on ‘the stake money paid’. Stake money was not defined. At that time, the duty was charged as a percentage of the gross stakes paid, without any allowance for that proportion of the stakes which the promoter deducted from the pool on account of his profit and the expenses of running the competition. 1 By Finance (No 2) Act 1947, s 6.

19.160 It was soon realised that if participants were charged a sum to cover profit and expenses which was separate from the sum charged by way of stake, the amount of the pooled stakes would be reduced, resulting in a reduced liability to duty. A  number of schemes were implemented which adopted this approach. They frequently involved the running by the pool promoter of a club or organisation in close association with the pool betting 1041

Gambling and tax scheme, together with the making of a periodic charge to club members, of which part went as a stake in the pool competitions and part was used as a club subscription from which were defrayed the promoter’s profits, as well as the expenses both of running the club and of running the pool. This device is countered by the following two provisions:1 ‘Any payment that entitles a person to make a bet shall, if he makes the bet, be treated as stake money on the bet.’2 ‘Where any payment entitles a person to take part in a transaction that is, on his part only, not a bet made by way of pool betting by reason of his not in fact making any stake as if the transaction were such a bet, the transaction shall be treated as such a bet for the purposes of pool betting duty.’3 1 Originally introduced by FA 1952, s 4(5). 2 FA 2014, s 148(3). 3 FA 2014, s 150(2).

19.161 These provisions catch the payment of, for example, a club subscription if membership of the club is a condition of participating in the pool betting. However, they do not operate if the pool betting is open to non-club members. Accordingly, schemes such as that dealt with in Customs and Excise Comrs v Top Ten Promotions Ltd1 were developed in which the pool betting, though open to the public, was run in such close association with a club that virtually all those participating in the betting were in fact club members. 1 [1969] 3 All ER 39.

19.162 To combat these new schemes those provisions set out above at 19.158, at items (1) to (3), (being provisions which remain part of the definition of ‘stake money’) were introduced.1 1 By FA 1964, s 7(2). Now see FA 2014, s 148(4).

19.163 Such provisions were accompanied by yet more anti-avoidance provisions which have not been replicated in the FA  2014 regime. These further provisions subjected to duty both the expenses and profits of the pool betting operator and also those of his associates, unless the operator could show (and the onus was on him) that such expenses and profits had nothing to do with the betting. Such provisions were designed to counter schemes which made the profits and expenses of pool betting those of some person independent from the promoter (thus reducing the dutiable stakes in the promoter’s hands). Customs and Excise Comrs v Dodd1 considered pool competitions which involved participants who were entitled, but not obliged, to select teams to back but where the majority of participants did not exercise that power. The court held that such competitions were exempt from a charge to duty as the participants were not engaged in betting. As a result, the legislation now provides that where payments are made for the chance of winning any money or money’s worth on terms under which the persons making the payments have a power of selection which 1042

Gambling and tax may (directly or indirectly) determine the winner, those payments (unless they fall to be treated as gaming) are treated as pool bets, notwithstanding that the power is not exercised.2 1 [1961] 1 WLR 144. 2 FA 2014, s 150(1).

‘Chapter 2: winnings’ 19.164 With one exception, the definition of winnings for Chapter 2 (ie pool betting duty) purposes is identical to the definition of winnings for Chapter 1 (ie general betting duty) purposes. Such identical elements are discussed above in 19.96 to 19.97. Chapter 2: stake money and winnings – free and discounted bets 19.165 The one difference between the definition of winnings for general betting and pool betting duty purposes is that, where winnings are payable on a Chapter 2 pool bet in circumstances where no stake money fell due, those winnings are ignored for the purposes of computing a bookmaker’s profits subject to pool betting duty.1 In contrast to general betting duty, there are no provisions (ie  within ‘Chapter 2: stake money’) which deem the bookmaker to have received the notional stake (or discounted element of the stake) where the bookmaker offers a punter the opportunity to place a free or discounted bet. The combination of these two provisions is that, for pool betting duty purposes, notional stakes on free bets are not dutiable but winnings on free bets are not deductible. As regards winnings not being deductible: (i) this provision should not affect a bookmaker’s ability to deduct winnings in respect of bets which are merely ‘discounted’; (ii) where stakes are contributed to a fund (ie are ‘pooled’), the computational rules which determine a bookmaker’s ‘pooled profits’ for pool betting duty purposes will apply. These rules do not involve winnings being deducted at any stage of the calculation. 1 FA 2014, s 149(3).

Community benefit exemption 19.166 By virtue of such bets being excluded from the definition of Chapter 2 pool bets, an exemption from duty is allowed in respect of any bet made for ‘community benefit’. A  bet is made for community benefit if the promoter of the betting concerned is a society established and conducted for charitable purposes only, or a society established and conducted wholly or mainly for the support of athletic sports or athletic games and not for purposes of private gain (or if the promoter is bound to pay all benefits accruing from the betting to such a society), and the person making the bet knows, when making it, that the purpose of the betting is to benefit such a society. ‘Society’ includes any club, institution, organisation or association of persons.1 1 FA 2014, s 153.

1043

Gambling and tax Losses 19.167 A  net loss deriving from Chapter 2 pool bets received in an accounting period may be carried forward to subsequent accounting periods to be deducted from profits from Chapter 2 bets arising in such later periods.1 1 FA 2014, s 144(4).

Pool betting duty and ‘spot the ball’ competitions 19.168 Whilst most pool bets are made on future events, pool bets can also be made on past events if the result is not known. ‘Spot the ball competitions’ are competitions where players are invited to study a photograph of a past football match from which the football has been erased and indicate the position of the football by marking a cross. Where such competitions are decided by comparing the players’ marked photographs with the original, the players are betting on a past event, and so such competitions will constitute pool betting. Where the winner is picked by a panel of judges, however, the competition is not pool betting. For the VAT treatment of such competitions see 19.38 to 19.42 above.

Pool betting duty and ‘fantasy’ competitions 19.169 It has been necessary for the courts to consider the true legal character of so called ‘fantasy’ competitions with a view to determining whether they are liable to betting duty and, if so, whether they are liable to pool betting duty or general betting duty. The conclusion appears to be that for duty purposes certain types of such competitions involve pool betting and are liable to pool betting duty. Others, however, do not involve betting at all and so no charge to duty arises. It is possible that in certain circumstances such a competition might involve betting giving rise to a charge to general betting duty but not pool betting duty. For the purposes of the GA 2005 such competitions are likely to fall within s 11 and to be either pool or general bets. 19.170 Fantasy competitions made their appearance in the United Kingdom in the late 1980s and early 1990s. They were originally an import from the United States. Although they vary in detail, they typically involve certain set features. Participants are invited to select a team of players of some sport who actually exist and who perform in real sporting events. The participant enters details of his team with the promoter, usually by filling in a form or by means of a premium rate telephone line or over the Internet. Where the entry is made on paper, the promoter will usually require payment of an entry fee. Where entry is made by telephone, there will usually be an arrangement whereby the promoter shares in the profits generated by the premium rate calls. Performance of the players over a period of time is monitored and points are awarded or may be forfeited. Thus, each participant’s selected team may gain points over time. At the end of the competition the participants’ teams are ranked in the form of a league and prizes are awarded to those gaining the most points. The concept has been applied to a variety of sports, 1044

Gambling and tax including football, cricket, tennis, horse racing, Formula One motor racing and to activities such as share dealing on the Stock Exchange. It is a common feature of all such competitions that, although participants make skilled selections of players, shares etc, the actual result of the competition depends upon events happening in the real world in the future. 19.171 At an early stage HM Commissioners of Customs & Excise, as they were then, maintained that such competitions involved betting, specifically pool betting, and that the proceeds of the competitions were therefore liable to pool betting duty. Litigation between the Commissioners and News International Newspapers Limited, culminating in the decision of the Court of Appeal in News International Newspapers Ltd v Customs and Excise Comrs,1 throws some light upon this issue. In particular, it would appear that where entries in such a competition are made by means of a premium rate telephone line, the competition will not normally involve pool betting, or any kind of betting, provided money is transmitted to the promoter by the method adopted in the News International case itself. Where, however, participants make direct payments to the promoter in order to enter, then a finding that the activity involves pool betting is likely. 1 [1998] EWCA Civ 569, CA.

19.172 In the News International judgment the Court of Appeal was only concerned with one fantasy competition, which was of a type where direct cash payments were made to enter. However, the dispute between News International and the Commissioners of Customs & Excise originally involved in total four competitions, of which three involved premium rate line entries. The first of these, ‘Dream Team’, may be taken as typical of this particular type of competition. The concept underlying the competition enabled participants to act as managers of imaginary football teams in the Premier League. Each participant was credited with an imaginary £25 million to spend on players. The names of a large number of Premier League players were published in one of News International’s newspapers and these were categorised as strikers, defenders, mid-field players and goalkeepers. Each player had attributed to him a notional money value ranging from £5 million at the top to £300,000 at the bottom. These notional values were fixed by football experts. Participants were required to select a team of 11 players comprising one goalkeeper, four defenders, at least three but no more than four mid-field players, and at least two but no more than three strikers. The total value of the team could not exceed £25 million. 19.173 Once having selected his team, a participant entered the competition by telephoning in on a premium-rate telephone line. The lines were British Telecom lines. The processing of the calls was carried out by Broadsystem Limited, a company distinct from the promoter of the competitions but a member of the News International Group. Broadsystem, in addition to providing 1,000  BT lines, supplied a computerised answerphone system which was capable of recording selections of numbers which were keyed in on touch-tone telephones or entered by rotary pulse telephones. Participants entered the names of the 11 players who were to form their team, together with their own name and address and a team name. Payment for calls was at premium rate charges. The cost of the telephone call by which any 1045

Gambling and tax entry was made was payable as part of the telephone bill of the subscriber in whose name the telephone line was held. Such telephone charges were subject to VAT at the standard rate. BT paid to Broadsystem a sum of money representing 24.78p per minute in respect of the telephone calls made on lines dedicated to the competition. 19.174 During the course of the competition the performance of each of the players whose name had been printed in the newspaper was monitored. Each player was awarded points, or could forfeit points, according to stated rules. 19.175 At the end of the competition there was a prize of £100,000 for the participant whose fantasy team had achieved the highest number of points in the course of the competition. There was a second prize of £50,000 and a third prize of £20,000. The rules provided that if two teams shared top place they would share £150,000, with a third place team receiving or sharing £20,000. If there were three or more Dream Team League champions, the total £170,000 prize money was to be shared equally among the teams which tied on top points. 19.176 The arrangements between BT and Broadsystem were governed by a commercial contract between them under which BT was obliged to pay to Broadsystem 24.78p per minute in respect of all calls made to Broadsystem on the lines dedicated to the competition. The total sum paid by BT to Broadsystem under this arrangement was £660,070. This sum was divided between News International and Broadsystem. This sum, the Commissioners contended, was liable to be charged with pool betting duty as being a stake made on a pool bet. There were two other competitions concerned with fantasy cricket teams in which entries were made by premium rate telephone lines and which functioned in essentially the same way. 19.177 The fourth competition, ‘Fantasy Fund Manager’, was a competition in which entries were made on written forms. It applied the fantasy concept to allow participants to act as fund managers investing a notional sum of £10 million on shares quoted on the Stock Exchange and thereafter managing their ‘portfolio’. The competition was run in a newspaper which published each week the so-called ‘FATSY 250’ index, ie an index of 250 quoted shares with details in the case of each share of its price and of changes in its price over the preceding week. Participants were to buy between three and ten shares from the FATSY  250 index, spending a total notional sum of £10 million on their ‘portfolio’. Entries were made in writing on application forms published in the newspaper, and a registration fee of £5 was payable for each individual fund, participants being entitled to enter as many funds as they chose. The performance of the shares was monitored in the course of the competition. A weekly prize of £1,000 was awarded to the participant whose ‘portfolio’ grew more than any other during the course of the week. A grand prize of £100,000 was awarded to the participant whose fund had grown to the highest value in cash terms by 4 December 1994. 19.178 Participants were entitled to re-arrange their ‘portfolios’ by dealing during the course of the competition. Each £5 administration fee entitled the 1046

Gambling and tax participant to one free deal. A  charge of £5 was made for any subsequent deal, although participants could at the time of registration purchase the right to make future deals in the following combinations: three deals for £5, seven deals for £10 and twelve deals for £15. 19.179 The Commissioners of Customs & Excise in pursuance of their powers under the Finance Act 1994 assessed the competitions to pool betting duty. News International appealed against the assessments to the VAT and Duties Tribunal. That Tribunal made certain findings of fact as to the mutual undertakings of the promoter and the participants. In the case of Fantasy Fund Manager it concluded that the promoter’s obligations were: (1) to accept entries and deals on payment of the prescribed amounts; (2) to list the 250 share prices each week, to show the participants how to calculate their funds’ values and to offer tips on how to increase the value of their funds; (3) to provide the participants with a ‘welcome pack’ containing all the elements required to participate, including confirmation of the participant’s fund details, his share-value monitor, instructions on how to deal and a free deal form; (4) to send each participant a revised copy of his fund details each time he deals; (5) to list the top ten performers each week, to determine weekly winners and to determine the overall winner; and (6) to provide the advertised cash prizes and, in the event of ties, to divide the prizes equally among the winners. 19.180 The participant agreed: (1) to enter using the application form provided in the newspaper and to pay the £5 entry fee; (2) to abide by the rules of the competition; and (3) to pay the prescribed dealing fee and to use dealing forms to enter deals. 19.181 The total sum received by way of registration fees was £396,043. Customs & Excise maintained that this sum represented stake money on pool bets, liable to pool betting duty. Although News International’s arguments that the competitions did not involve pool betting, or betting of any kind, applied to all four competitions, for the purposes of this discussion the premium rate competitions will be dealt with separately from the Fantasy Fund Manager competition. 19.182 Customs & Excise’s contentions in the case of the premium rate competitions were that the participants were betting one against the other. Each participant, they maintained, was betting on the chance that his forecast would be more accurate than the forecasts of the other participants. That being so, there would be a bet if stake money could be identified. As to that, the payments made by BT to Broadsystem in respect of calls made on the 1047

Gambling and tax premium rate lines should be regarded as stakes, particularly having regard to the provisions of BGDA 1981, s 7(3) which, at the time, provided as follows: ‘For the purposes of pool betting duty, any payment which entitles a person to make a bet by way of pool betting or coupon betting shall, if he makes the bet, be treated as stake money on the bet; and this subsection shall apply to any payment entitling a person to take part in a transaction which is, on his part, only not a bet made by way of pool betting or coupon betting by reason of his not in fact making any stake as if the transaction were such a bet, and the transaction shall accordingly be treated as a bet for the purposes of pool betting duty.’ The Commissioners contended that the payments made by BT to Broadsystem fell within this subsection as being payments which entitled the participants to take part in the transaction comprised in the competition. The effect was that the transaction was to be treated as a bet for pool betting duty purposes. 19.183 This contention, was rejected by the VAT & Duties Tribunal on the basis of its findings of fact. A payment would only be ‘treated as stake money on [a] bet’ within BGDA  1981, s  7(3) if it was one which entitled a person to make a bet. However, in the Tribunal’s view the payments by BT to Broadsystem did not purport to entitle the participants to take part in the relevant transaction. The evidence showed that a participant entered the competition merely by making the relevant call on the premium rate telephone line in the prescribed way. Once he had done that, he had entered the competition and it made no difference whether or not BT subsequently made the agreed payment to Broadsystem, nor, indeed, whether the subscriber of the relevant telephone subsequently paid his telephone bill to BT. As the Tribunal concluded, the BT payments to Broadsystem: ‘… do not purport to entitle the participant to take part in the relevant transaction. There is no sufficient linkage between the subscriber paying his telephone bill to BT and the participant entering the competition. The subscriber frequently will not be the participant. And, under the rules of the three competitions entered by telephone, the promoter undertakes to admit to entry any person who completes the entry procedure; entry is not dependent upon payment, either of the telephone bill or, by BT, of its … obligation.’1 1 Decision of VAT and Duties Tribunal, London Tribunal Centre LON/95/8003, released 20 November 1995.

19.184 HM  Customs & Excise appealed against this decision to the High Court, but the appeal failed. The judge, Kay J, concluded that the Tribunal’s finding of fact was one to which it could properly come and that the payments to BT could not be regarded as ‘payment[s] entitling a person to take part in [the] transaction’: ‘A person was a valid competitor once the phone call had been made and that would be so if the subscriber, who might or might not be the competitor, subsequently defaulted on his bill to BT. Equally, no dispute 1048

Gambling and tax between BT and Broadsystem as to how much was to be paid nor any failure to pay could affect the validity of any competitor’s entry.’1 1 Customs and Excise Comrs v News International Newspapers Ltd [1996] V & DR 434 at pp 14–15 per Kay J.

19.185 The Commissioner’s appeal in respect of the premium rate line competitions was therefore dismissed. No attempt was made to pursue the matter further by way of appeal. 19.186 Turning to the Fantasy Fund Manager competition, the VAT and Duties Tribunal held that this too did not involve the making of a pool bet. The Commissioners maintained that the sum eligible to pool betting duty was the sum of £396,043 paid by way of registration fees. In the Tribunal’s view this was unsustainable. Pool betting duty is chargeable ‘…  on all bets made by way of pool betting  …’. In order to find that Fantasy Fund Manager involved pool betting it was necessary to find either that the entry fees were stakes in the normal sense of the word, or that they should be treated as stakes within the extended sense provided by BGDA 1981, s 7(3). The Tribunal concluded that neither analysis was possible. In its view, reflecting the analysis contained in Ellesmere v Wallace,1 the real nature of the agreement underlying the competition was one by which the promoter agreed to provide the facilities for the competition: ‘NI commits itself to give the prizes in any event; and its commitment is not dependent on the outcome of one or more events or of, for example, the performance of the individual players. It seems to us that NI as promoter gives a consideration to the participant which has nothing to do with betting. There is therefore no pool betting in the general sense of that expression.’2 1 [1929] 2 Ch 1. 2 Decision of the VAT and Duties Tribunal, at p 18.

19.187 The case for the Commissioners, the Tribunal concluded, depended upon the application of BGDA  1981, s  7(3), which section deemed certain payments to be bets. It was true that in the case of Fantasy Fund Manager the payment of the registration fee did entitle the participant to enter the competition. In the Tribunal’s view, however, this was not enough. Section 7(3) only applies if either the payment ‘entitles a person to make a bet by way of pool betting’ or the payment entitles a person to take part in a transaction which is only not a bet ‘by reason of his not in fact making any stake as if the transaction were such a bet’. In the Tribunal’s view it was not accurate to say that the Fantasy Fund competition was only not a bet by reason of the absence of a stake. There were two other reasons why it was not a bet: first, because the registration payment was an entry fee in return for which NI agreed to provide and run the Fantasy Fund competition; and, second, because the entrance fee was payable once and for all to NI. 19.188 The Commissioners appealed against this decision to the High Court and their appeal was allowed. News International’s appeal against the High Court’s judgment was dismissed by the Court of Appeal. In the Court 1049

Gambling and tax of Appeal’s view the key sections of the BGDA 1981 were s 10(1)(b) and s 7(3). Section 10 provides: ‘(1) For the purposes of this Part of this Act, a bet shall be deemed to be made by way of pool betting unless it is a bet at fixed odds, and, in particular, bets shall be held to be made by way of pool betting wherever a number of persons make bets— … (b) on terms that the winnings of such of those persons as are winners shall be, or shall include, an amount (not determined by reference to the stake money paid or agreed to be paid by those persons) which is divisible in any proportions among such of those persons as are winners …’ 19.189 The court concluded that the Fantasy Fund Manager competition fell within the terms of this subsection. In their view there were forecasts in the nature of bets and winnings consisting of sums of money put up by the promoters which were divisible among the winners. Beldam LJ, giving the leading judgment, said: ‘Approaching the construction of s  10(1)(b) with these factors in mind, it seems to me that the competitors in the Fantasy Fund Manager competition were making a forecast of an uncertain future event, namely whether a portfolio selected by them would have the greatest value on a given date on terms that the winnings of those of them who were winners should be or should include an amount (not determined by reference to the stake money paid or agreed to be paid by those persons) which was divisible in proportion among such of those persons as were winners. If they were outright winners at the end of a particular week they stood to receive £1,000 or, if an outright winner on the 4  December 1994, £100,000. If however there was on any occasion more than one winner, the amount was to be divided equally among them. If it was a bet, such a bet was to be held to be made by way of pool betting and it is to be observed that a bet is only at fixed odds if it fulfils the requirements of section 10(2). A bet cannot therefore be both made by way of pool betting and at fixed odds. To be a bet within section 10(2) the bet must be placed at odds and at odds which are fixed, except in the circumstances stated.’1 1 News International Newspapers Ltd v Customs and Excise Comrs [1998] V & DR 267 at p 20.

19.190 As to BGDA  1981, s  7(3) the court concluded that the registration payments were caught by this subsection. This finding clearly proceeds on the basis that in the light of the finding that the competition involved making forecasts of future uncertain events which were caught by s 10(1)(b), the only reason why the transaction might not be regarded as a bet was the absence of a stake, and this deficiency was remedied by the deeming provisions of s 7(3). Beldam LJ said: 1050

Gambling and tax ‘Section 7(3) provides that for the purpose of pool betting duty any payment which entitles a person to make a bet by way of pool betting or coupon betting shall, if he makes the bet, be treated as stake money on the bet and this sub-section applies to any payment entitling a person to take part in a transaction which is on his part only not a bet made by way of pool betting: ‘… by reason of his not in fact making any stake as if the transaction were such a bet and the transaction shall accordingly be treated as a bet for the purposes of pool betting duty.’ So, although the competitor paid the entrance fee to enter the Fantasy Fund Manager competition, it is to be regarded as stake money if it entitles him to make a bet by way of pool betting. Thus the £5 entrance money was to be treated as stake money on the bet if the £5 paid by the competitor entitled him to make a bet by way of pool betting.’1 1 News International Newspapers Ltd v Customs and Excise Comrs [1998] V & DR 267 at p 21.

19.191 The interaction of BGDA  1981, s  10(2)(b) and s  7(3) accordingly rendered the Fantasy Fund Manager competition pool betting. For the treatment of Fantasy Competitions under the Gambling Act 2005, and specifically s 11, see Chapter 2.

Remote gaming duty A brief history 19.192 Prior to the implementation of the GA  2005 it was unlawful for gaming to take place in the UK other than on licensed premises where all of the persons participating in the gaming were present on those premises at the time when the gaming took place. As a result, before 1 September 2007 (when GA 2005 came into force), egaming operators were based outside of the UK (popular jurisdictions at that time being Curaçao, Gibraltar, Alderney and the Isle of Man). 19.193 It was generally accepted that the location where online gaming took place was where the random number generator was located. Accordingly, egaming operators would ensure that, at the very least, the random number generating software used in their gaming products was hosted on servers which were physically located outside of the UK. 19.194 When the GA  2005 made it lawful to provide egaming services from the UK, then, because a gaming duty liability only arises where there are premises upon which certain types of games are played, a new form of duty was required to tax online gaming. Accordingly, remote gaming duty was introduced as a new form of gambling duty with effect from 1 September 2007. 19.195 It is worth noting that, as with bookmaking, there were (prior to 1 September 2007) prohibitions on the advertisement in the UK of offshore 1051

Gambling and tax egaming operators. The technical content of those prohibitions was different from those that applied to bookmakers (and, in some respects, less stringent) such that many offshore egaming operators managed effectively to advertise themselves in the UK, wherever they were located. 19.196 After 1 September 2007, the provisions relating to the advertisement of gambling were consolidated but at the same time it became lawful to advertise in the UK gambling services provided from certain jurisdictions outside the UK; namely, the EEA, Gibraltar and those territories on a specific list released by the UK Gambling Commission, dubbed the ‘white list’. 19.197 Since, like all of the other gambling excise duties in force at the time, remote gaming duty was levied on a ‘place of supply’ basis (more accurately, a liability to remote gaming duty only arose in circumstances where the relevant gambling facilities were provided in reliance on a remote operating licence or at least one piece of remote gambling equipment was situated in the United Kingdom), operators who were based outside of the UK were not subject to the new duty. 19.198 Following the GA 2005 coming into force and the decision by Gordon Brown (as then Chancellor of the Exchequer) to set the rate of remote gaming duty at 15% (rather than a very much lower rate, which had been widely hoped for at the time), egaming operators effectively ‘voted with their feet’. Even though it was now lawful to provide egaming services from the UK (subject to holding the appropriate licence from the Gambling Commission), the majority of egaming operators remained offshore (where necessary, relocating to, and becoming licensed in, one of those territories from where they could lawfully advertise their services in the UK) whilst, at the same time, operating outside the scope of the UK’s remote gaming provisions (popular jurisdictions being Malta, Gibraltar, Alderney and the Isle of Man). 19.199 Even though both the regulatory regime and the remote gaming regime were changed to a ‘point of consumption’ footing on 1 November 2014 and 1 December 2014 (respectively), the above position remains broadly the same today; ie most UK-facing egaming operators remain offshore. Despite the fact that such operators are now required to hold a remote operating licence from the Gambling Commission (in addition, where relevant, to the licence from their local regulator) and to account for UK remote gaming duty on a point of consumption basis (as explained below), most operators clearly consider that the benefits of remaining offshore outweigh those of relocating to the UK. 19.200 In respect of gambling duties, the remote gaming ‘playing field’ has now been ‘levelled’ by virtue of remote gambling duties being levied on a point of consumption basis; although this is subject to the outcome of GBGA litigation referred to at 19.86 above. One suspects that other taxes (particularly VAT) remain a material reason for operators remaining offshore. The proposed change of law whereby VAT would be charged on certain services, including advertising services, on a ‘use and enjoyment’ basis (discussed at 19.70 above) would further erode the benefits of offshore location. It remains to be seen whether such a change would result in egaming operators relocating to the UK. 1052

Gambling and tax

Position from 1 December 2014 Overview 19.201 Under FA 2014, the remote gaming duty provisions are similar to the general betting duty provisions that apply to pool betting on horse and dog racing (ie Chapter 1 pool bets, described above) and the pool betting duty provisions (ie Chapter 2 pool bets, described above). Remote gaming duty is chargeable at the rate of 15% of a gaming provider’s profits on remote gaming for an accounting period.1 ‘Remote gaming’ is gaming in which persons participate by the use of the internet, telephone, television, radio or any kind of electronic or other technology for facilitating communication.2 ‘Gaming’ means playing a game of chance for a prize. This definition is identical to the exemption from VAT for certain gambling services. Game of chance takes its meaning from the GA 2005 and so includes games which include both skill and chance.3 Remote gaming duty is not charged where another gambling excise duty applies. It is worth noting that since bingo duty only applies to licensed bingo (being bingo played at licensed premises), online bingo is subject to remote gaming duty.4 1 2 3 4

FA 2014, s 155(3). FA 2014, s 154(1). FA 2014, s 188. FA 2014, s 161(2), (3) and (4).

‘Gaming provider’, ‘chargeable person’ and ‘UK person’ 19.202 Whereas remote gaming duty under the previous (BGDA  1981) regime was explicitly stated to be payable by a ‘person who provides facilities for remote gaming’, this is implicit in the FA 2014 regime, which subjects to remote gaming duty a ‘chargeable person’s’ participation in remote gaming under arrangements with a ‘gaming provider’.1 1 FA 2014, s 155(1).

19.203 A ‘chargeable person’ is a UK person or a body corporate not legally constituted in the UK (being a person outside the definition of ‘UK person’) where the gaming provider knows or has reasonable cause to believe that at least one potential beneficiary of any prizes from remote gaming under the arrangements is a UK person. This definition is, therefore, similar to Conditions B  and C  relevant to the definitions of general bet, Chapter 1 pool bet and Chapter 2 pool bet (ie those elements that relate to remote, as opposed to ‘bricks and mortar’, betting).1 1 FA 2014, s 155(2).

19.204 The definition of ‘UK person’ and the obligations on gaming providers to verify whether or not their customers are UK persons are the same as those that apply for general betting duty purposes and pool betting duty purposes (see 19.99 to 19.103 above). 1053

Gambling and tax 19.205 There is an exemption from remote gaming duty (which is equivalent to the ‘excluded bet’ exemption from general and pool betting duty) where the arrangements between the gaming provider and the chargeable person are not entered into from the UK and the facilities are not capable of being used from the UK (the onus of so proving being on the gaming provider).1 1 FA 2014, s 161(1).

Profits from remote gaming 19.206 A gaming provider’s profits for remote gaming duty purposes are computed in the same way as a bookmaker’s in respect of Chapter 1 pool bets and Chapter 2 pool bets. However, some of the terminology is different; remote gaming profits are computed by reference to ‘gaming payments’ (rather than ‘stakes’) and ‘prizes’ (rather than ‘winnings’). These terms are considered below. 19.207 A  gaming provider’s profits on remote gaming for an accounting period are comprised of the same three elements, namely: (a) pooled profits (described as ‘profits on pooled prize gaming’); (b) ordinary profits (described as ‘profits on ordinary gaming’); and (c)

retained profits (described as ‘profits on retained prizes).1

As regards the accounting period in which they fall, however, gaming payments are taken into account when they are ‘made’ (contrast the position regarding stakes, which are taken into account when they ‘fall due’). This is relevant to the computation of both pooled profits and ordinary profits.2 If the gaming payments have not been made at the time when the chargeable person begins to participate in the remote gaming to which it relates, the gaming payment is treated as being made at that time.3 For the purposes of computing profits on ordinary gaming, one must deduct from the aggregate of gaming payments made in the accounting period, the aggregate of the value of prizes provided by or on behalf of the gaming provider in that period which have been won (at any time) by the chargeable persons participating in the ordinary gaming.4 1 2 3 4

FA 2014, s 155(4). FA 2014, s 156(1) and 157(1). FA 2014, s 159(3). FA 2014, s 157(2).

‘Gaming payments’ 19.208 ‘Gaming payments’ are defined to include the aggregate of: (i)

any amount that entitles the chargeable person to participate in the gaming; and

(ii) any other amount payable for or on account of or in connection with the chargeable person’s participation in the gaming.1 1054

Gambling and tax Gaming payments made to persons other than the gaming provider are treated as being made to the gaming provider.2 1 FA 2014, s 159(1). 2 FA 2014, s 159(2).

‘Prizes’ 19.209 A prize is defined to include: (i) the crediting of money to an account which the relevant person is entitled to withdraw on demand; and (ii) the return of all or part of the gaming payment. Prizes can include vouchers, but the expenditure which the gaming provider may deduct in respect of such vouchers (relevant to the computation of ordinary profits) depends on how the voucher may be used and whether or not the gaming provider acquired it at arm’s length.1 1 FA 2014, s 160.

‘Gaming payments’ and ‘prizes’ – free gaming 19.210 Where a person’s account is credited otherwise than by way of money withdrawable on demand that amount is treated as the provision of a prize.1 Consequently, bonus credits can result in a deduction for remote gaming duty purposes. 1 FA 2014, s 160(2).

19.211 In the Budget of March 2016, the Chancellor of the Exchequer announced that, from 1  August 2017, free gaming would be subjected to remote gaming duty. A consultation was published on 9 August 2016 providing further details. The Government’s intention is to bring the remote gaming rules in line with the equivalent general betting duty provisions such that: (i) ‘freeplays’ (including free spins, matched deposits and bonus credits) will be subject to duty on the full notional amount of the gaming payment; and (ii) ‘freeplays’ credited to customer accounts (such as bonus credits) will not be deductible for duty purposes. The consultation also raises the possibility of HMRC reviewing the current position and specifically, querying the basis upon which credits are deducted for remote gaming duty purposes.

Losses 19.212 A  net loss deriving from remote gaming period in an accounting period may be carried forward to subsequent accounting periods to be deducted from profits from remote gaming arising in such later periods.1 1 FA 2014, s 155(5).

1055

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Point of consumption gambling duties – administration Introduction 19.213 The key provisions relating to the administration of general betting duty, remote gaming duty and pool betting duty (the ‘POC duties’) are set out in the FA 2014, ss 163–182. This legislation gives HMRC and the Treasury power to make provisions regarding many aspects of the administration of these duties by way of regulations and notices. Regulations relevant to the administration of the POC duties are: •

General Betting, Pool Betting and Remote Gaming Duties (Registration, Records and Agents) Regulations 2014 (‘Registration Regulations 2014’);

•

General Betting, Pool Betting and Remote Gaming Duties (Returns, Payments, Information and Records) Regulations 2014 (‘Returns Regulations 2014’); and

•

Revenue Traders (Accounts and Records) Regulations 1992.

Certain sections of the following notices which provide further information on administration of the POC duties have the force of law by virtue of the primary legislation, or regulations made pursuant to such legislation: (a) Excise Notice 147a: Pool Betting Duty; (b) Excise Notice 451a: General Betting Duty; and (c)

Excise Notice 455a: Remote Gaming Duty.

Registration and group registration 19.214 All persons who are (or may become) liable to pay general betting duty, pool betting duty or remote gaming duty must register with HMRC (‘registrable persons’).1 Registration must be made at least 31 days before the start of the activities attracting any POC duty, albeit this is reduced to 14 days for businesses based in the UK or a country or territory with which the UK has satisfactory arrangements for the enforcement of liabilities (an ‘approved territory’). Examples of approved territories are set out in each of the HMRC Notices referred to in 19.213(a), (b) and (c) above and include the EU, Gibraltar, the Isle of Man, Norway, the Faroes, Iceland, New Zealand or South Africa.2 If the registrable person holds (or is required to hold) a remote operating licence under the GA  2005, it must use the prescribed electronic method of registration.3 Otherwise, save in respect of remote gaming duty (which always requires electronic registration) a paper registration application may be made.4 Group registrations are possible where two or more bodies corporate are under common control and each is required to be (but is not otherwise) registered in relation to a particular POC duty. The group registration can only be made in respect of one POC duty and, if appropriate, separate group registration will be necessary for each relevant duty. ‘Control’ for these purposes occurs where a body corporate is either: (i) empowered to control the relevant body corporate’s activities; or (ii) it is the relevant body 1056

Gambling and tax corporate’s holding company (as defined in the Companies Act 2006, s 1159), but the controlling entity need not itself be registrable for the relevant duty.5 The group must appoint a group lead member with a principal place of business in the UK which applies for group registration.6 Members of a group are jointly and severally liable for other group members’ liabilities in respect of the relevant POC duty and the group lead member must obtain written consent from all other group members confirming an understanding of this. If such consent is withdrawn by any company at any time, that company will cease to be a group member and the group lead member must notify HMRC.7 1 FA 2014, s 164(1). 2 Registration Regulations 2014, reg 3(4). Specific list of countries set out in Notice 147a, para  3.1 (for pool betting duty); Notice 451a, para  3.1 (for general betting duty); and Notice 455a, para 3.1 (for remote gaming duty). 3 Registration Regulations 2014, reg 3(3). 4 Notice 147a, paras 3.1 and 3.2 (for pool betting duty), Notice 451a, paras 3.1 and 3.2 (for general betting duty) and Notice 455a, para 3.1 (for remote gaming duty) in each case given the force of law under the Registration Regulations 2014, made under FA 2014, s 164(3)(a). 5 Registration Regulations 2014, reg 4. 6 Registration Regulations 2014, reg 4(4)(b). 7 Registration Regulations 2014, reg 4.

Accounting periods 19.215 A standard accounting period is three consecutive calendar months, starting on the first day of a calendar month (or the date of registration, if part way through a month). HMRC has statutory power to agree otherwise with a particular bookmaker or gaming provider.1 1 FA 2014, s 165(1)–(3).

19.216 HMRC will only agree to a non-standard accounting period if the relevant bookmaker or gaming provider’s alternative end dates for each period are within 16 days (before or after) of the date that such end date would otherwise have been in a standard accounting period.1 1 Notice 147a, para 4 (for pool betting duty); Notice 451a, para 4 (for general betting duty); and Notice 455a, para 4 (for remote gaming duty).

Duty returns 19.217 Each POC duty return is due on the last business day in the period of 30 days following the end of each accounting period.1 Returns are due even if the relevant bookmaker or gaming provider has no dutiable profits2. HMRC may impose penalties for failure to file returns on time.3 POC duty returns cannot be amalgamated and each bookmaker or gaming provider must make a separate return for each respective duty he is registered for. A group lead member may make a single return for that duty in respect of all members of the group.4 As with registration, POC duty returns must be submitted online if the bookmaker or gaming provider holds, or is required to hold, a remote 1057

Gambling and tax operating licence. Otherwise, paper returns may be submitted and these are provided by HMRC shortly after the end of the accounting period.5 On the basis that a gaming provider liable to make remote gaming duty returns is someone who holds or is required to hold a remote operating licence, remote gaming duty returns must all be made online and there is no option for paper filing.6 If a bookmaker or gaming provider has understated an amount of duty in a return, there are two available options: (a) if less than four years have elapsed since the due date for the return and the understatement is less than a particular amount,7 then the understatement may simply be included on the next return and paid on the due date for that return;8 and (b) otherwise, the bookmaker or gaming provider must write to HMRC setting out the amount of the underpayment, the circumstances by which it came about and the amount owed as a result. 9 Depending on the reasons for the understatement, HMRC may choose to impose late payment penalties.10  1 Returns Regulations 2014, reg 3(4). Requirement for filing on a business day pursuant to Notice 147a, para 5 (for pool betting duty); Notice 451a, para 5 (for general betting duty); and Notice 455a, para 5 (for remote gaming duty).   2 Notice 147a, para  5.1 (for pool betting duty); Notice 451a, para  5.1 (for general betting duty); and Notice 455a, para 5.1 (for remote gaming duty), each with the force of law under FA 2014, s 166.   3 FA 2014, s 175(3)(c) and (4); FA 1994, s 9(3).   4 Returns Regulations 2014, reg 3(1) and (2).   5 Notice 147a, para  5.1 (for pool betting duty); Notice 451a, para  5.1 (for general betting duty); and Notice 455a, para 5.1 (for remote gaming duty), each with the force of law under FA 2014, s 166.   6 Notice 455a, para 5.1, with the force of law under FA 2014, s 166.   7 At the time of publication, such amount being: (i) £10,000 or less; or (ii) £50,000 or less provided it is no more than 1% of the bookmaker’s or gaming provider’s profits (or commission charges on a betting exchange) (Returns Regulations 2014, reg 3(10)).   8 Returns Regulations 2014, reg 4(3).   9 Notice 147a, para  5.2 (for pool betting duty); Notice 451a, para  5.2 (for general betting duty); and Notice 455a, para 5.2 (for remote gaming duty), each with the force of law under FA 2014, ss 166 and 167. 10 Notice 147a, para  5.2 (for pool betting duty); Notice 451a, para  5.2 (for general betting duty); and Notice 455a, para 5.2 (for remote gaming duty).

Payments 19.218 Payment of the relevant duty must be made within 30 days following the end of the accounting period (or, if earlier, the last business day beforehand).1 Where a person fails to pay appropriate amounts of duty by the relevant due date, interest2 and penalties3 become payable. Interest is calculated on the outstanding duty from the due date of payment at HMRC’s standard late payment interest rate applicable at the relevant time.4 Penalties comprise an initial penalty calculated by reference to the duty payable, as well as daily penalties.5 1058

Gambling and tax Where a person has overpaid an amount of POC Duty, and no more than four years has elapsed since the date of payment, he may bring a claim against HMRC to recover the overpaid duty.6 Any such claim must be made in writing and must: (i) detail the amount of the claim; (ii) detail the method by which such amount was calculated; and (iii) be substantiated by documentary evidence.7 HMRC will not be required to repay such overpaid duty where they can show that such repayment will ‘unjustly enrich’ the claimant.8 1 Returns Regulations 2014, reg 4(1) and (2). 2 Finance Act 2009, Sections 101 and 102 (Remote Gambling Taxes) (Appointed Day) Order 2014 (SI 2014/3324) as made in exercise of the powers conferred by FA 2009, s 104(3) and (4) in accordance with the provisions under FA 2014, s 176. 3 FA 2014, s 175(1) and (3)(d) and (4). 4 Taxes and Duties, etc (Interest Rate) Regulations 2011 (SI  2011/2446), reg 3, as made in exercise of powers conferred in FA 2009, ss 101–104, pursuant to FA 2014, s 176. 5 FA 1994, s 9(4), applicable pursuant to FA 2014, s 175(1) and (4). 6 Customs and Excise Management Act 1979, s 137A(4). 7 Revenue Traders (Accounts and Records) Regulations 1992 (SI 1992/3150), reg 9. 8 Customs and Excise Management Act 1979, s 137A(3).

Liability 19.219 Generally speaking, POC duty is primarily payable by the bookmaker (in the case of general betting duty and pool betting duty)1 or the gaming provider (in the case of remote gaming duty).2 Where a liability to general betting duty arises on commission charges for the use of betting exchange facilities, the general betting duty is primarily payable by the person providing those facilities.3 Where POC duty is due and payable, HMRC can recover any unpaid duty from the following persons as if they and the bookmaker or gaming provider were jointly and severally liable for such duty: (a)

any other members of the same POC duty group4 (as discussed at 19.214 above);

(b) where the bookmaker or gaming provider is a body corporate, that body corporate and its directors;5 (c)

in the case of general betting duty and remote gaming duty, the holder of any licence which: (i) in respect of general betting duty, authorises the provision of facilities for betting by the business in the course of which the bets were made, or betting at the place where the bets were made;6 (ii) in respect of remote gaming duty, is a remote operating licence for the business in the course of which the gaming took place;7 and

(d) in the case of general betting duty and pool betting duty, a person responsible for the management of the relevant business in the course of which the bets were made;8 and in the case of pool betting duty, any person responsible for the management of any totalisator used for the purposes of such business.9 1059

Gambling and tax In Customs and Excise Comrs v Hedon Alpha Ltd10 it was held that persons jointly and severally liable for payment of general betting duty are statutory guarantors of the bookmaker’s liability to pay duty. Their liability is wholly independent of any fault on their part and accordingly, there was no power to grant to a company director who was so liable, relief under s 448 of the Companies Act 1948 (which, in certain circumstances, will relieve liability where a director has acted honestly and reasonably, and having regard to all the circumstances ought to be fairly excused from the liability).11  1 FA  2014, s  142(2)(b) in respect of general betting duty; FA  2014, s  151(1)(b) in respect of pool betting duty.   2 FA 2014, s 162(1).   3 FA 2014, s 142(4).   4 Registration Regulations 2014, reg 4(3).   5 FA 2014, s 142(3)(c) in respect of general betting duty; s 151(2)(d) in respect of pool betting duty; s 162(2) (in respect of remote gaming duty).   6 FA 2014, s 142(3)(a).   7 FA 2014, s 162(3).   8 FA 2014, s 142(3)(b) in the case of general betting duty; s 151(2)(b) in the case of pool betting duty.   9 FA 2014, s 151(2)(c). 10 [1981] QB 818. 11 Now Companies Act 2006, s 1157

Security and UK representatives 19.220 HMRC may issue a notice to a bookmaker or gaming provider who is a registrable person requiring that person to provide security, or further security, in respect of its existing or future POC duty liabilities. HMRC will only issue such a notice where it considers there is either a serious risk that the duty will not be paid or that the relevant person usually lives in, or (in the case of a corporate entity) is constituted in, a country or territory which is not an approved territory.1 The notice must specify: (i) the amount of security, or further security, to be given; (ii) the manner in which such security must be given; and (iii) the date on which the duty is due to be paid (which cannot be less than 30 days from the date of the notice).2 HMRC may also issue a notice to a bookmaker or gaming provider who is a registrable person and who usually lives in, or (in the case of a corporate entity) is constituted in, a country or territory which is not an approved territory, requiring that person to appoint a UK representative. Such notice must specify the date by which the UK representative must be appointed.3 The UK representative, who must be a person approved by HMRC, has responsibility for submitting returns on behalf of the bookmaker or gaming provider and may (at the bookmaker or gaming provider’s election) also have responsibility for discharging that person’s liability to POC duty. Where the UK representative is responsible for paying POC duty, this will negate any requirement for the bookmaker or gaming provider to provide security to HMRC.4 Any notice requiring a bookmaker or gaming provider to either provide security or appoint a UK representative may be reviewed or appealed provided (in the case of appeal) that any POC duty due and payable has 1060

Gambling and tax been paid at the date the appeal is brought (save where HMRC or an appeal tribunal decides such payment would cause hardship).5 Where a person is required by HMRC to provide security (or further security), or appoint a UK representative, and does not comply within the appropriate time frame, that person commits an offence which, upon summary conviction, will give rise to a fine.6 1 2 3 4 5 6

FA 2014, s 170(1) and (2). FA 2014, s 170(3) and (4). FA 2014, s 171(1) to (4). FA 2014, s 171(6) and (7). FA 2014, s 172. FA 2014, s 173.

Record keeping 19.221 Any person that is a ‘revenue trader’ is required to prepare and retain records. A  ‘revenue trader’ includes anyone carrying on a trade or business constituting dutiable betting, or as a gaming provider, and anyone carrying out the management or administration of a Chapter 1 stake fund (for general betting duty purposes), a Chapter 2 stake fund (for pool betting duty purposes) or a gaming prize fund (for remote gaming duty purposes).1 The revenue trader must allow HMRC to inspect such records in the UK within 14 days of a request.2 1 FA 2014, s 168; Registration Regulations 2014, reg 6. Detail provided in Notice 451a (for general betting duty) and Notice 455a (for remote gaming duty), Notice 147a, (for pool betting duty) and Excise Notice 206: revenue trader’s records. 2 Registration Regulations 2014, reg 6(3).

19.222 Broadly, such records are required to provide detail of: (a) payments received and payments made, in each case in respect of the relevant betting or gaming activity; (b) where any non-cash prizes and/or free or reduced cost bets or plays are given, details of the circumstances in which they are given and related offers, their take up and their full value had the full amount been paid; (c)

in respect of any stake fund or gaming prize fund, records of amounts assigned to or otherwise paid to the fund (including details of whether these amounts originated from a UK person) and records of amounts paid from, or otherwise deducted from, the fund and to whom they are given; and

(d) all information received which is relevant in determining whether or not a person is a UK person.1 Records used for the purpose of completing POC duty returns must be retained for at least four years in a readily accessible form, unless an exception applies.2 Notice 147a, 451a and 455a reminds bookmakers or gaming providers that, if they do not comply with the records requirement, HMRC can require that any Gambling Commission Remote Operating Licence held by it be revoked.3 1061

Gambling and tax 1 Notice 147a, para  9.1 (for pool betting duty); Notice 451a, para  8.1 (for general betting duty); and Notice 455a, para 8.1 (for remote gaming duty), each given the force of law under regs 6 and 8 of the Revenue Traders (Accounts and Records) Regulations 1992, and Registration Regulations 2014 made under FA 2014, s 168. 2 Exceptions are in respect of papers and other media used to record bets or play, which must be stored in readily accessible form and manner in daily batches for six months after the date when: (i) the bets, or payments to play, were made; (ii) in the case of winning bets or play, for six months after the date when the winnings were paid out (or notified as payments) to customers’ accounts. Regulations 6 and 8 of the Revenue Traders (Accounts and Records) Regulations 1992, and Registration Regulations 2014 made under FA 2014, s 168. 3 Ibid.

Penalties 19.223 Penalties (including daily penalties) may be charged by reference to a failure by a bookmaker or gaming provider to make payment of duty. Penalties (other than daily penalties) may also be charged where the bookmaker or gaming provider fails to comply with requirements relating to POC duties including the following: (a) a failure to comply with registration requirements; (b) a failure to provide a return on time; and (c)

a failure to comply with record keeping requirements.

If an offence is committed by a body corporate under FA 2014, Pt 3 (being the provisions relating to POC duties), then any director, general manager, secretary (or other similar person) of such body corporate at the relevant date is treated as also being relating to POC duties guilty of such offence, unless: (i) such offence was committed without the relevant person’s consent or connivance; and (ii) having regard to that person’s functions and all the circumstances, the person had exercised all such diligence as they could have done to prevent the offence.1 1 FA 2014, s 178.

Fraudulent evasion 19.224 A person commits an offence where he is knowingly concerned in, or in taking steps with a view to, the fraudulent evasion of any POC duty.1 Subject to minor exceptions, any person guilty of such an offence is liable on summary conviction to: (i) imprisonment for up to 12 months; or (ii) in England and Wales, a fine of up to £20,000 and, in Scotland or Northern Ireland, a fine of up to the statutory maximum (or, in each case, if greater, three times the amount of the unpaid duty or other amount sought to be avoided); or (iii) both.2 Any person guilty of such offence is liable on conviction on indictment to: (i) imprisonment for up to seven years; (ii) a fine; or (iii) both.3 1 FA 2014, s 174(1). 2 FA 2014, s 174(2). 3 FA 2014, s 174(3).

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PART 4 – OTHER GAMBLING DUTIES Gaming duty Legislation 19.225 Gaming duty is imposed under the provisions of ss  10–15 of, and Schs 1 and 2 to the Finance Act 1997 (FA 1997), as amended by subsequent Finance Acts. The gaming duty provisions are considered as one with the Customs and Excise Management Act 1979. Further provisions are contained in the Gaming Duty Regulations 1997 (SI 1997/2196) as amended. HMRC provides useful guidance on the operation of the legislation in Notice 453: Gaming Duty (updated 27 January 2016). This guidance replaces Notice 453 (October 2014). Whilst the majority of this notice constitutes HMRC’s interpretation of the law, the provisions regarding the completion of returns (para 5.8) and record keeping requirements (para 7.3) have the force of law.

Interaction with other gambling legislation 19.226 As with the majority of gambling duties, the gaming duty provisions operate separately from those of GA 2005 and so only minor changes were required to be made to the existing legislation when GA 2005 came into force on 1 September 2007. The provisions of GA 2005 and those of FA 1997 create parallel obligations in that, in addition to being ‘licensed’ to carry on gaming, certain persons and premises also have to be ‘registered’ with HMRC. In interpreting the duty legislation, therefore, one needs to keep in mind the difference between ‘lawful’ or ‘licensed’ gaming (which relates to regulatory obligations) and ‘registered’ gaming (which relates to duty obligations under FA 1997). The provisions of FA  2014, which amended the note relating to general betting duty, pool betting duty and remote gaming duty (referred to previously in this chapter) did not impact the rules relevant to gaming duty.

Charge to duty 19.227 Although gaming duty is a duty of excise chargeable on certain forms of gaming, the way in which the duty legislation affects the charge to duty is by reference to premises. Accordingly, for a gaming duty liability to arise there needs to be both premises and certain types of gaming carried on from those premises. A  charge to gaming duty is imposed regardless of whether or not premises are licensed and regardless of whether or not the gaming is lawfully carried on under the gaming legislation. Premises include any place and any means of transport. The need for gaming to take place on premises explains, in part, why remote gaming (or ‘egaming’) is not (and has never been) subject to gaming duty and why a new form of duty, ‘remote gaming duty’, had to be created to charge online gaming operators to duty. The forms of gaming subjected to gaming duty are of a kind which are typically provided in casinos licensed under GA 2005. The duty is, therefore, an excise charge on casino gaming. 1063

Gambling and tax 19.228 ‘Dutiable gaming’ is gaming which is carried on at premises in the UK and which includes: (a) the playing of ‘casino games’; or (b) ‘equal chance gaming’.1 Equal chance gaming is defined differently for each of Great Britain and Northern Ireland (so as to dovetail with the relevant regulatory provisions) but, in practice, it means games such as backgammon and poker where players play against each other rather than against a bank (however described, and whether or not controlled or administered by a player). The Treasury may by order made by statutory instrument provide that any specified game is or is not to be a casino game or equal chance gaming for these purposes.2 1 FA 1997, s 10(2) (as amended by Finance Act 2009, s 114(1)–(3)). 2 FA 1997, s 10(5) (as amended by Finance Act 2009, s 114(1), (2), (8).

Exceptions 19.229 The duty legislation has a number of exclusions whereby certain types of gaming are taken outside of the duty legislation. Certain types of lawful gaming do not constitute dutiable gaming and so are not subject to gaming duty. These include: (1) gaming at private parties (carried on in accordance with GA  2005, Sch 15, Pt 1 or Betting, Gaming Lotteries and Amusements (Northern Ireland) Order 1985, art 55(2)); (2) gaming at premises licensed for the sale of liquor (in accordance with GA 2005, s 279); (3) gaming at entertainments not held for private gain (pursuant to Betting, Gaming Lotteries and Amusements (Northern Ireland) Order 1985, art 126); (4) amusements with prizes (in accordance with GA 2005, Pt 13, or Betting, Gaming Lotteries and Amusements (Northern Ireland) Order 1985, arts 153 or 154);1 and (5) in Northern Ireland, any gaming to which art  128 of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 (certain clubs) applies.2 1 FA 1997, s 10(3). 2 FA 1997, s 10(4)(b).

19.230 Also excluded from gaming duty are gaming machines which are within the scope of bingo duty, lottery duty (or would be except for an express exception) or machine games duty. 1 Likewise, any gaming which takes place on premises in respect of which a members’ club or miners’ welfare institute is established is excluded.2 1 FA 1997, s 10(3AA). 2 FA 1997, s 10.

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Amount of duty 19.231 The amount of duty payable depends upon whether the gaming is registered or unregistered gaming. Where gaming is registered, gaming duty is charged in bands at increasing rates according to the gross gaming yield arising in the accounting period. The duty payable in respect of each band is then aggregated to give the total amount of duty payable. The bands and rates are set out below for accounting periods ending on after 31 October 2015:1 Part of gross gaming yield

Rate

The first £1,173,750

15 per cent

The next £809,000

20 per cent

The next £1,416,750

30 per cent

The next £2,990,500

40 per cent

The remainder

50 per cent

1 Gaming Duty Regulations 1997 (as amended by Gaming Duty (Amendment) Regulations 2015).

19.232 The Finance Bill provides for the following in relation to accounting periods beginning on or after 1 April 2016: Part of gross gaming yield

Rate

The first £2,370,500

15 per cent

The next £1,634,000

20 per cent

The next £2,861,500

30 per cent

The next £6,040,000

40 per cent

The remainder

50 per cent

Where unregistered gaming takes place at any time in an accounting period, gaming duty is charged on the gross gaming yield of the premises for the whole six-month accounting period at a flat rate equal to the top rate of gaming duty (ie 50%).1 Gaming will be unregistered gaming if the premises from where the gaming takes place is not specified in the entry on the gaming duty register for the registered person by whom they are notifiable at the relevant time. 1 Excise Notice 453: Gaming Duty – para 3.6.

19.233 The gross gaming yield in respect of premises is the aggregate of: (a) charges made in connection with dutiable gaming which has taken place on the premises (excluding any charges that confer no more than an entitlement to admission to the premises but, since April 2009, deductions are no longer available for VAT payable in connection with such gaming);1 and 1065

Gambling and tax (b) where the provider of the premises (or persons acting on that person’s behalf) is banker in relation to dutiable gaming, the banker’s profits from that gaming. The banker’s profits are equal to the value of stakes received, less the value of prizes paid out. Prizes are valued in the same ways as for bingo.2 1 FA 2009, s 113(5)(b). 2 FA 1997, s 10(9).

19.234 Where dutiable gaming is carried on in different premises at the same location or in very close proximity to each other and the activities are connected or form part of the same business or are connected businesses, HMRC may direct that for the purposes of gaming duty, those premises shall be treated as one and the same premises. Such a direction is, however, subject to a right to appeal.1 1 FA 2009, s 11(6) and (7).

Accounting periods and payments on account 19.235 Gaming duty is payable by reference to six-month accounting periods. Such periods commence on 1 April or 1 October, unless both HMRC and the taxpayer agree otherwise.1 1 FA 1997, Sch 1, para 9(1).

19.236 A payment on account of gaming duty likely to be due at the end of the six-month accounting period has to be made and a return must be filed after the first three months of an accounting period. To the extent such payment was an underestimate of the duty due, a further payment must then be made and another return filed at the end of the period. The amount of gaming duty payable in respect of the first three months of an accounting period is calculated by reference to the table set out above, but with the bands divided by two.1 1 See the Gaming Duty (Amendment) Regulations 2015 (SI 2015/1351) for quarters that end on or after 31 October 2015.

Persons liable to pay gaming duty 19.237 Gaming duty charged on any premises for any accounting period is the joint and several liability1 of: (a)

every person who is a ‘provider’ of the premises at a time in that period when dutiable gaming takes place there;

(b) every person concerned in the organisation or management of any dutiable gaming taking place on those premises in that period; (c) where any of the persons within the above two categories is a body corporate that is treated as a member of a group, every body corporate that is so treated as a member of that group; and 1066

Gambling and tax (d) where any of the persons mentioned in any of the above categories is a body corporate, every director of that body corporate. 1 FA 1997, s 12(1).

19.238 A person is a ‘provider’ of premises if he has a right to control the admission of persons to those premises, whether or not he has a right to control the admission of persons to the gaming.1 A person will be presumed to be a provider if he is registered on the gaming duty register and if the premises are specified in his registration.2 1 FA 1997, s 15(3). 2 FA 1997, s 12(2).

Groups 19.239 Companies will be treated as members of a ‘group’ in the circumstances set out below. Companies are within the same group for gaming duty purposes if they are resident, or have an established place of business in, the UK and one of them controls each of the others, or one person (whether a body corporate or an individual) controls all of them, or two or more individuals carrying on a business in partnership1 controls them all. A  person is taken to have control for these purposes if he or it is a holding company for Companies Act purposes or would (if he or they were a company) be a holding company for such purposes.2 1 FA 1997, Sch 1, para 8(1). 2 FA 1997, Sch 1, para 8(10).

19.240 To be treated as a group, companies need to make a separate application to HMRC, stating the date from which they wish to be treated as a group and nominating a representative member.1 Where companies constitute a group, only one duty return and one payment need be made on behalf of the group each quarter.2 1 FA 1997, Sch 1, para 8(2). 2 Excise Notice 453: Gaming Duty – para 4.3.

The gaming duty register 19.241 HMRC is under a duty to establish and maintain a register (the gaming duty register) of persons involved in the provision of dutiable gaming.1 1 FA 1997, Sch 1, para 1.

19.242 On application, HMRC adds to the register any registrable person.1 Although this is expressed as an obligation on HMRC, in reality the onus lies on the taxpayer, so that he can benefit from the lower rates of gaming duty applicable to registered gaming and avoid fines for not being registered. 1 FA 1997, Sch 1, para 3.

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Gambling and tax 19.243 The following1 are registrable persons: (a) the holder of a casino premises licence or club gaming permit if and for so long as dutiable gaming takes place on the premises in respect of which the licence or permit is for the time being in force; (b) a provider of unlicensed premises if and for so long as dutiable gaming takes place on those premises; and (c) a person if and for so long as he is concerned in the organisation or management of any dutiable gaming that takes place on unlicensed premises. 1 FA 1997, Sch 1, para 3(4)(a)–(c).

19.244 A person who expects dutiable gaming to take place, and to become a registrable person if it does, must also be registered on application made by him in respect of premises notifiable by him.1 The Commissioners must remove a person’s name from the register on his ceasing to be a registrable person.2 1 FA 1997, Sch 1, para 3(1)(b). 2 FA 1997, Sch 1, para 4(2).

19.245 A body corporate which is a member of a group of companies and treated as such for these purposes by the Commissioners is only registrable if it is the representative member, as defined, of that group.1 1 FA 1997, Sch 1, para 3(5).

19.246 A registerable person must, on making an application to be registered, notify HMRC of all premises which are notifiable by him (or will become notifiable by him if the expected gaming takes place).1 Those premises will then be specified in his entry on the register. Where premises become, or cease to be, notifiable by reference to a registered person, that person must notify HMRC,2 so that his entry on the register can be updated to include those premises which are notifiable by reference to him. 1 FA 1997, Sch 1, para 6(2). 2 FA 1997, Sch 1, para 6(4).

19.247 Where a person fails to comply with these registration or notification requirements, penalties become payable.1 1 FA 1997, Sch 1, para 7.

Records 19.248 All records relating to, or used to compile gaming duty accounts at each premises must be kept for four years. This was previously three years, but a recent update to Excise Notice 453: Gaming Duty with the force of law extended this period to four years.1 1 Excise Notice 453: Gaming Duty (27 January 2016) – paras 1.2 and 7.3.

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Gambling and tax

Bingo duty 19.249 A  duty of excise, known as ‘bingo duty’ is chargeable, subject to certain exceptions, on the playing of bingo1 in the United Kingdom.2 The principal legislation governing the duty is to be found in BGDA 1981, ss 17–20C and Sch  3, as well as in the Bingo Duty Regulations 2003 (SI  2003/2503). Bingo duty is payable by the promoter of the bingo concerned.3  HMRC guidance on bingo duty is contained in Notice 457, most recently updated on 19 October 2015. 1 ‘Bingo’ includes any version of that game by whatever name called, and, in any proceedings relating to bingo duty, under the Customs and Excise Management Act 1979 or any other Act relating to excise, an averment in any process that a particular game is a version of bingo is, until the contrary is proved, to be sufficient evidence that it is so: BGDA 1981, ss 6(3), 20C(2) and 35(2); Customs and Excise Management Act 1979, s 1(1). 2 BGDA 1981, s 17(1)(a), substituted for s 17 as originally enacted by FA 2003, s 9(1). ‘United Kingdom’ means Great Britain and Northern Ireland: see Interpretation Act 1978, s 5 and Sch 1. It also includes the territorial sea of the United Kingdom by virtue of BGDA 1981, s 20C(2). 3 BGDA  1981, s  17(1) provides that bingo duty charged in respect of a person’s bingo promotion profits shall be paid by him. There is a de minimis profit limit of £1 below which no duty is charged: s 17(5).

19.250 The identity of the promoter is normally determined, in the case of licensed bingo, by the holder of the bingo premises licence and, in the case of non-licensed bingo, by the person who provides the facilities for the game.1 Different rules apply in the context of combined bingo where a person promotes a game, if he is wholly or partly responsible for organising it or for providing facilities for it.2 1 BGDA 1981, s 20C(3). 2 BGDA 1981, s 20C(4).

Charge to duty 19.251 Bingo duty is charged at the rate1 of 10% of a person’s bingo promotion profits for an accounting period – essentially a one-month period ending at the end of the last Sunday in each calendar month.2 1 The 10% rate was substituted by FA  2014, s  122(1). It has effect in relation to accounting periods beginning on or after 30 June 2014. 2 Prior to changes introduced by the FA  2003, duty was charged by reference to each week beginning with Monday. There is scope for non-standard accounting periods. Notice 457 refers, at para 7.2.

19.252 The move to a profits based tax in 2003 was significant. Prior to that change duty was calculated on stake monies, which had a distorting effect on the commercial profit margins required by bingo operators. Profits are calculated on a bingo receipts minus bingo winnings basis.1 The general rule so far as receipts are concerned is to aggregate all payments that fall due in the period in respect of entitlement to participate in bingo promoted by the person charged to duty.2 HMRC normally accept (but see 1069

Gambling and tax below) that admission fees, membership fees and catering charges are not included within the receipts calculation.3 1 BGDA 1981, s 17(3). 2 BGDA 1981, s 19(1) and (2). For these purposes, s 19(3) provides that: (a) an amount in respect of entitlement to participate in a game of bingo is to be treated as falling due in the accounting period in which the game is played; (b) it is immaterial whether an amount falls due to be paid to the promoter or to another person; (c) it is immaterial whether an amount is described as a fee for participation, as a stake, or partly as one and partly as the other; and (d) where a sum is paid partly in respect of entitlement to participate in a game of bingo and partly in respect of another matter: (i) such part of the sum as is applied to, or properly attributable to, entitlement to participate in the game shall be treated as an amount falling due in respect of entitlement to participate in the game, and (ii) the remainder shall be disregarded. 3 Notice 457, at paras 4.1 and 4.2.

19.253 Prior to 27 April 2009, specific provision was made so as to disregard the VAT element in calculating duty where a payment relates to a supply of services. However, restrictions on the scope of VAT exemption relevant to participation fees were swept away by FA 2009, s 113(2) and (3), together with the disregard. If a discount is available for multiple purchases, then the discounted amount is included. Where necessary, apportionments as between bingo and other items to which a single charge applies1 should be made. 1 For example, admission, food and drinks. All apportionments should be on a reasonable basis; HMRC may require evidence to support the same.

19.254 Expenditure is calculated by reference to the value of prizes provided by the person charged to duty,1 unless the prize is obtained by that person from a person not connected2 with him, in which case cost is substituted.3 General business overheads are therefore excluded from the calculation. Also excluded are expenses relating to promotion which are not winnings.4 1 BGDA 1981, s 20(1). 2 Whether or not two persons are connected is construed in accordance with the Corporation Tax Act 2010, s 1122. 3 BGDA 1981, s 20(2). 4 HMRC, provide at an example in Notice 457 at para 5.2.3 which refers to cashbacks with specific conditions such as a ‘play tonight and the next five Saturdays and get £5 in cash’.

19.255 Special rules apply to determine expenditure on bingo winnings where this takes the form of a voucher1 or a non-cash prize.2 1 BGDA 1981, s 20(3) and (4). 2 BGDA 1981, s 20(5).

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Gambling and tax

Vouchers 19.256 Specific rules apply so as to determine the amount of expenditure on a voucher. If the voucher is obtained by the promoter from a connected person and the voucher: (i) may be used in place of money as whole or partial payment for benefits of a specified kind obtained from a specified person; and (ii) it specifies an amount as the sum or maximum sum in place of which the voucher may be used (for example, a £10 M&S voucher) then the expenditure is the specified amount (in this example £10).1 However, a voucher (whether obtained from a connected or unconnected person) is treated as having no value if: (a) it cannot be used in place of money as whole or partial payment for benefits of a specified kind obtained from a specified person; or (b) it does not specify an amount as the sum or the maximum sum in place of which the voucher may be used; or (c)

its use is subject to a specified restriction, condition or limitation which may make the value of the voucher to the recipient significantly less than the amount specified on its face.2

In the case of a voucher obtained by the promoter from an unconnected person, the amount of expenditure is normally the cost to the promoter. Again, the voucher is treated as having no value if it does not satisfy any of items (a), (b) or (c) above. On the basis that vouchers can often be purchased from retailers at a discount to face-value (given the expectation that some vouchers will not be redeemed), then the rules outlined above contain an incentive for the promoter to arrange purchases indirectly via a connected person. In this way an expenditure uplift to face-value may be obtained. 1 BEDA 1981, s 20(3). 2 BGDA 1981, s 20(3) and (4). The example given by HMRC is that of a winner in North Wales obtaining a next day benefit entitlement in New York, but excluding the means of transportation to get there (Notice 457, para 5.2.1).

Non-cash prizes 19.257 The amount of expenditure on a non-cash prize that is not a voucher1 obtained by the promoter from an unconnected person is the cost to the promoter. In the case of a non-cash and non-voucher prize obtained from a connected person, the value of the prize taken into account is the amount which the prize would cost the promoter if obtained from a person not connected with him; but if no amount can reasonably be determined then the amount of expenditure is nil.2 1 BGDA 1981, s 20(5). 2 BGDA 1981, s 20(5)(ii).

Decisions on bingo receipts 19.258 In the case of Cosmo Leisure,1  HMRC argued that admission fees charged by the taxpayer were to be included as bingo receipts on the basis 1071

Gambling and tax that either: (i) the breadth of the statutory concept was wide enough to include admission charges; or (ii) that such fees were mislabelled and were in reality charges in respect of an entitlement to participate in bingo. In upholding the taxpayer’s appeal the First-tier Tribunal concluded that bingo receipts are to be construed as payments just for the playing of bingo. Having regard to admissible parliamentary materials, admission fees and other charges such as membership fees are excluded from the charge. A payment which is not applied or properly attributable to an entitlement to play bingo is to be disregarded for the purpose of the charge. In this respect the tribunal found that members received added value from the social opportunities and facilities provided. On the facts the admission charges were not just for the playing of bingo. The above decision, may be contrasted with that in Thomas Estates,2 where it was concluded that so called admission fees were simply part of the charge for playing bingo. The reality was that there was no charge levied for admission of itself. The Upper Tribunal also considered the scope of bingo receipts in the Carlton Clubs case.3 The dispute related to hire charges for hard-held devices (EHDs) used to play bingo electronically. Customers had a choice whether or not to use EHDs, indeed the majority did not do so but played by way of paper bingo tickets with numbers being marked by a dabber or pen. The charge for playing was the same either way, but with an additional charge for EHD hire if that was chosen. The Upper Tribunal, which approved of the payments for bingo approach adopted in Cosmo Leisure, decided that EHD hire charges fell outside the scope of charge. Entitlement/opportunity to play was obtained only by the purchase of the bingo ticket. Even though an EHD was required in order to play bingo electronically, that did not mean that the charge for hire was a payment for play. 1 Cosmo Leisure Limited [2012] UKFTT 733 (TC). 2 Thomas Estates Ltd (Trading as Beacon Bingo) v Revenue and Customs Commissioners [2013] UKFTT 662 (TC),. 3 Carlton Clubs Ltd v The Commissioners for Her Majesty’s Revenue and Customs [2015] UKUT 682(TC).

Losses 19.259 Prior to the Finance Act 2003 no provision was made for losses from one period (then weekly, now monthly) to be set against the profits of another. Volatility in profits/losses from one period to the next therefore resulted in a higher overall charge to duty. This is largely remedied for bingo played after 27  October 2003, as losses in any accounting period are carried forward to the next,1 so that in the next accounting period the person’s expenditure on bingo winnings is increased and so on to the next period, if relevant. There is no ability to carry back or to surrender to group companies. On the other hand, there is no restriction on the ability of companies to carry forward amounts following a change of control or other specified event.2 1 BGDA 1981, s 20B. 2 The position might be contrasted with direct taxes; for example in the context of trading losses, for which see the Corporation Tax Act 2010, s 673.

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Gambling and tax

Combined bingo 19.260 Specific rules apply to ‘combined bingo’. For these purposes a game of bingo is combined bingo if it is played in more than one place and promoted by more than one person.1 1 BGDA 1981, s 20A(1)(b).

19.261 The general rule is that duty is payable by the first promoter to whom or at whose direction payments to participate are made.1 There is a mechanism to prevent double-counting for payments as between promoters.2 1 BGDA 1981, s 20A(2). 2 BGDA  1981, s  20A(3). This provides in respect of stake money paid by one promoter (the first promoter) to another (the second promoter) that: (i) the money shall not be treated as a bingo receipt of the second promoter; (ii) the payment shall be treated as expenditure of the first promoter on bingo winnings; and (iii) no subsequent payment of all or part of the money shall be treated as expenditure on bingo winnings.

Exemptions from duty 19.262 There are a number of exemptions from duty, as outlined below. Domestic bingo 19.263 No account is to be taken of bingo played in a private dwelling and on a domestic occasion.1 1 BGDA 1981, Sch 3, Pt I, para 1.

Small-scale bingo 19.264 Neither payments to participate nor winnings are brought into account in the context of non-licensed bingo where entitlement to participate depends on a person’s being: (a) a member of a group or organisation; (b) a guest of a member of a group or organisation; or (c) a guest of a group or organisation.1 For provisions under which ‘members’ clubs’ (s 266), ‘commercial clubs’ (s 267) and ‘miners’ welfare institutes’ (s 268) may provide facilities for equal chance gaming (including bingo) without holding an operating licence or a premises licence see Pt 12 of the GA 2005, and in particular s 269. These provisions are subject to s  275 which (in brief summary) removes the exemption from the requirement to hold an operating licence where the aggregate value of stakes and prizes are bingo played in a club or institute exceeds certain limits. 1 BGDA 1981, Sch 3, Pt I, para 2.

Other small-scale bingo 19.265 The small-scale bingo exemption is extended in circumstances where the primary exemption above does not apply, but the amounts involved 1073

Gambling and tax do not exceed certain limits. Under this rule non-licensed bingo is exempt provided that specified financial limits are not exceeded. These limits are briefly as follows: (i)

daily winnings of £500;1

(ii) daily stakes of £500;2 (iii) winnings in an accounting period of £7,500;3 (iv) stakes in an accounting period of £7,500.4 1 BGDA 1981, Sch 3, Pt I, para 2A(2). 2 BGDA 1981, Sch 3, Pt I, para 2A(3). 3 BGDA 1981, Sch 3, Pt I, para 2A(4). If the limit is exceeded, exemption is denied for that and the next two accounting periods. 4 BGDA 1981, Sch 3, Pt I, para 2A(5). Again, if the limit is exceeded, exemption is denied for that and the next two accounting periods.

Non-profit making bingo 19.266 Bingo is exempt from duty when a promoter does not charge1 a player a fee to participate in a game, either directly or by means of a levy on stakes or winnings.2 1 The definition of a ‘charge’ for this purpose includes an admission fee, but does not include: (a) any payment of the whole or any part of an annual subscription to a club; (b) any payment of an entrance subscription for membership of a club; or (c) any stakes hazarded. (BGDA 1981, Sch 5, Pt 1, para 2B.) 2 BGDA 1981, Sch 3, Pt I, para 2B, as amended by FA 2007, Sch 25, Pt 2, para 12(2). The requirement for exclusion states that it does not matter whether the charge or levy is compulsory, customary or voluntary.

Small-scale amusements provided commercially 19.267 Small-scale bingo played at commercial entertainments is exempt from bingo duty.1 The exemption is available if the bingo is played: •

on any family entertainment centre within the meaning of the GA 2005;2 or

•

on any premises in Northern Ireland3 pursuant to the relevant permit;4 or

•

on any premises in respect of which there is for the time being in force both an amusement machine licence and an adult gaming centre premises licence;5 or

•

at any pleasure fair consisting wholly or mainly of amusements provided by travelling showmen, which is held on any day of the year on premises not previously used in that year for more than 27 days for the holding of such a pleasure fair.6

1 BGDA 1981, Sch 3, Pt I, para 5. 2 See GA 2005, s 238. Also see FA 2007, Sch 25, Pt 2, para 12(3).

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Gambling and tax 3 BGDA 1981, Sch 3, Pt I, para 5(1)(aa). 4 The permit must be granted under art 111 of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985, or constitute a pleasure permit under art 157 of that Order. 5 Issued under GA 2005, Pt 8. 6 BGDA 1981, Sch 3, Pt I, para 5(1)(c).

19.268 In each case above, exemption is subject to conditions.1 The conditions are: (i)

that the amount payable by any person for a card2 for any one game of bingo does not exceed £1;

(ii) that the total amount taken as payment by the players for their cards for any one game does not exceed £500; (iii) that no money prize3 exceeding £70 is distributed or offered; (iv) that the winning of, or the purchase of a chance to win, a prize does not entitle any person (whether subject to a further payment by him or not) to any further opportunity to win money or money’s worth by taking part in any gaming or any lottery; and (v) in the case of a pleasure fair, that the opportunity to play bingo is not the only, or the only substantial, inducement to persons to attend the fair. 1 BGDA 1981, Sch 3, Pt I, para 5(2). 2 For the definition of ‘card’ see HMRC Notice 457, at para 13. 3 The monetary limits are those provided for by the Betting and Gaming Duties Act 1981 (Monetary Amounts) Order 1995 (SI 1995/2374) and the Betting and Gaming Duties Act 1981 (Bingo Monetary Amounts) Order 2007 (SI 2007/2152).

19.269 Prior to the Finance Act 2006, bingo duty was not chargeable in the case of bingo played by means of an amusement machine for which an excise licence was required.1 1 BGDA 1981, Sch 3, Pt I, para 6.

Administration and enforcement 19.270 Bingo duty is under the care and management of HMRC.1 Authority is conferred on HMRC to make regulations providing for any matter which appears to them to be necessary for the administration of bingo duty or for the protection of the revenue in respect of that duty; they may also make regulations as to who is to account for bingo duty and the manner in, and times at which, it is to be accounted for and paid.2 1 BGDA 1981, Sch 3, Pt 11, para 9(1). 2 BGDA 1981, s 20C(1) and Sch 3, Pt II, para 9(1) and (2). Regulations are to be made by statutory instrument, subject to annulment in pursuance of a resolution by the House of Commons: s 32(1) and (2). Reference may also be made to Sch 3, Pt II, paras 9, 11 and 12. The Bingo Duty Regulations 2003 (SI 2003/2503) are currently in force.

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Gambling and tax Registration 19.271 A  prospective bingo promoter must, not less than 14 days before the first day on which bingo is to be played, notify1 HMRC of his intention, specifying the premises on which the bingo is to be played and applying to be registered as a bingo promoter.2 On giving notice of his intention, the person is entitled to be registered, but HMRC may, when it appears to them to be requisite for the security of the revenue to do so, make it a condition of registration or of the continuance of registration that he shall give such security (or further security) by way of deposit or otherwise3 for any bingo duty which he is, or may become liable, to pay as HMRC may from time to time require.4 For details as to the registration form refer to HMRC Notice 457.5 1 A bingo promoter is a person who promotes the playing of bingo chargeable with bingo duty: BGDA 1981, Sch 3, Pt II, para 8. The obligation to notify is laid on any person who intends to promote bingo which will or may be chargeable to bingo duty: Sch 3, Pt II, para 10(1). 2 BGDA 1981, Sch 3, Pt II, para 10(1). Any person who is a bingo promoter but is not registered as such, and is not a person to whom para 10(1) applies must, within five days of becoming a bingo promoter (disregarding a Saturday, Sunday or bank holiday), notify HMRC of that fact and of the place where the bingo was and (if he intends to continue to promote bingo which will or may be chargeable with duty) is to be played and apply to be registered as a bingo promoter: para 10(1A). This registration obligation is aimed at persons who promote small-scale bingo, where the small-scale exemption limits are exceeded. Case law authority in the context of the Rent Act 1957, as well as in the context of the delivery of goods, suggests that the day on which notification is made and the day on which the event notified is to happen are excluded in computing the period of 14 days: see Thompson v Stimpson [1961] 1 QB 195, DC; Carapanayoti & Co Ltd v Comptor Commercial Andre et Cie SA (1971) 116 Sol Jo 96, CA. The decision in Schnable v Allard [1967] 1 QB 627 appears to be limited to landlord and tenant cases. 3 If a registered bingo promoter fails to give such security or further security, HMRC may cancel his registration, but without prejudice to his right to apply again to be registered: BGDA 1981, Sch 3, Pt II, para 10(3). 4 BGDA  1981, Sch  3, Pt  II, para  10(1) and (2) (amended by FA  1982, Sch  6, Pt  IV, para 10(2)). A condition is not to be imposed under BGDA 1981, Sch 3, Pt II, para 5, if the premises at which the bingo in question is or is to be played are not licensed under a bingo premises licence or under Chapter III of Part III of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985: BGDA 1981, Sch 3, Pt II, para 10(2). 5 At para 3.1, which refers to completion of Form EX250 Application for registration as a bingo promoter.

Books and records 19.272 A promoter of bingo other than bingo which is exempt from bingo duty must keep such books, records and accounts, in such form as may be prescribed,1 or as HMRC may specify in a notice published by them and not withdrawn by a further notice.2 These include directions requiring every bingo promoter who offers a prize3 to keep, and produce for inspection if required, records showing the value of prizes won at bingo.4 1 Namely, prescribed by regulations; see BGDA 1981, Sch 3, Pt II, para 8. 2 Notice 457 ‘Bingo Duty’ contains detailed rules relating to the record-keeping duties of promoters.

1076

Gambling and tax 3 ‘Prize’ means anything won at bingo: BGDA 1981, s 20C(2). 4 See Notice 457 ‘Bingo Duty’ at para  9.6. This paragraph has the force of law. The requirements include, in the case of non-monetary prizes, an obligation on the promoter to keep a record showing, inter alia, for each day and each week the value or purchase price of each prize won at bingo. In the case of a purchased prize, he must keep the purchase invoice and produce it to an officer on demand.

19.273 Excluding bingo cards that ‘form part of a machine’, every card which is issued by a bingo promoter to any person for the purpose of playing bingo must be marked with a unique identifying number in a numbered series1 and, if HMRC in any particular case so direct, with the amount of money to be paid for it or on behalf of the person to whom it is so issued.2 The bingo promoter must keep up to date a stock account of all such cards as are brought to the premises on which bingo is played, or taken from stock, or returned to stock, or destroyed, showing separately as to each category the serial numbers and, if appropriate, the face values of the cards.3 Every bingo promoter who promotes bingo playing on more than one premises must keep in respect of each of them a separate account. 1 Bingo Duty Regulations 2003, reg 6(2). Cards that can be used only once must be issued in numerical order (reg 6(3)), and a different series must be used at each point on the premises from which cards are issued (reg 6(4)). 2 Bingo Duty Regulations 2003, reg 6(5). 3 For which see Notice 457, at para 9.6.

Returns 19.274 Every bingo promoter must complete and sign a return for each accounting period, to be furnished to HMRC not later than 15 days after the end of the accounting period to which it relates.1 At the same time, he must pay the amount of duty shown by the return to be due.2 1 Bingo Duty Regulations 2003, reg 7(1). 2 Bingo Duty Regulations 2003, reg 8(1).

19.275 Returns are made by reference to accounting periods which begin at the end of the last Sunday of each month and end at the end of the last Sunday of the next month.1 There is scope for non-standard accounting periods by agreement with HMRC.2 For details as to return forms refer to HMRC Notice 457, para 8.5. 1 Bingo Duty Regulations 2003, reg 2. 2 Bingo Duty Regulations 2003, reg 5.

19.276 In addition to the obligations to make returns, each bingo promoter is obliged to keep a record known as a ‘bingo profits account’. This needs to show the amount of bingo duty due for the period, adjustments made, as well as amounts, dates and methods of payment.1 1 Revenue Traders (Accounts and Records) Regulations 1992 (SI 1992/3150), reg 5 and Sch 2. Reference might also be made to Notice 457, at para 9.6.

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Gambling and tax

Power to enter premises and obtain information 19.277 Any officer of HMRC may, without paying, enter on any premises where bingo is played or on which he has reasonable cause to suspect that bingo has been or is about to be played, and may inspect the premises and anything whatsoever which he finds there.1 He may, further: (1) require any person concerned with the management of the premises to provide him with information with respect to activities carried on there;2 and (2) require any person on the premises who appears to him to be, or to have been, playing any game to provide him with information with respect to the game.3 An officer who enters any premises in the exercise of these powers is permitted to remain there at any time when the premises are being used for gaming or when he has reasonable cause to suspect that they are about to be so used.4 Following the entry into force of the Human Rights Act 1998, any exercise of the power to enter premises must be carried out in compliance with the requirements of Art 8 of the ECHR, the right to respect for, inter alia, private life, home and correspondence. Article  8(2) requires that any interference with the right must be ‘necessary’ and ‘proportionate’. The protection of Art 8, though phrased in terms of ‘house’ and ‘private life’, also extends to professional premises.5 1 BGDA 1981, Sch 3, Pt II, para 13(1). 2 BGDA 1981, Sch 3, Pt II, para 13(1)(a). 3 BGDA 1981, Sch 3, Pt II, para 13(1)(b). In particular, the officer may require such a person to produce any document or thing in his possession which is or was used in connection with the playing of the game: para 13(1)(b). 4 BGDA 1981, Sch 3, Pt II, para 13(2). 5 See, for example, Niemietz v Germany (1992) 16 EHRR 97, paras 29–30; as to the question of whether a company enjoys a right to respect for ‘private life’, see inter alia R v Broadcasting Standards Commission, ex p BBC [2000] 3 All ER 989.

Disputes as to duty 19.278 For the power of HMRC to assess excise duty and the procedure whereby the person assessed may require a review and appeal against assessment, reference should be made to the Finance Act 1994, at ss  12–17. The taxpayer may appeal against an assessment to the First-tier Tribunal and from thereon to the Upper Tribunal, Court of Appeal and Supreme Court respectively.1 1 Tribunals, Courts and Enforcement Act 2007, ss 9–14C.

Offences and penalties 19.279 A person who is knowingly concerned in, or is taking steps with a view to, the fraudulent evasion, by him or any other person, of bingo duty is guilty of an offence and liable: 1078

Gambling and tax (1) on summary conviction to a penalty of the prescribed sum (£20,000) or, if greater, treble the amount of duty sought to be evaded, or to imprisonment for a term not exceeding six months, or both; or (2) on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding seven years, or both.1 Any person who is knowingly concerned with the promotion of bingo, which is or may be chargeable to bingo duty, where the promoter is not registered,2 is guilty of an offence and liable on summary conviction to a penalty of the prescribed sum, or imprisonment for a term not exceeding six months, or to both, or on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding two years, or to both.3 1 BGDA 1981, s 20(1) and Sch 3, Pt II, para 16(1)(a) and (b) (amended by FA 1988, s 12(1)(c)). Prior to GA 2005, failure to pay bingo duty was a ground for refusal of the grant or renewal or transfer of a licence under the Gaming Act 1968, Pt II, or the renewal of a registration under Pt III (ss 26–39) of that Act. Under the new legislation, this is not stated specifically – however, HMRC will still take a failure to pay duty into account. Further, such a failure may result in HMRC asking the Gambling Commission to review operating or premises licences, with a view to cancellation (as referred to in Notice 457 at para 11.3). 2 In other words registered by HMRC under BGDA 1981, Sch 3, Pt II, para 10: Sch 3, Pt II, para 16(2)(a). 3 BGDA 1981, Sch 3, Pt II, para 16(2).

19.280 If any person contravenes or fails to comply with the statutory provisions regarding the administration of bingo duty or of regulations made thereunder, or fails to comply with any requirement made of him by or under any such provision, his contravention or failure to comply attracts a penalty under s 9 of the Finance Act 1994 (civil penalties).1 1 BGDA  1981, Sch  3, Pt  II, para  16(3). Even though the aim of FA  1994, s  9 was to ‘decriminalise’ certain offences in excise law as a matter of domestic law, as a matter of human rights law it is arguable that certain contraventions covered by s 9 will amount to the determination of a ‘criminal charge’. In this respect, reference may be made to the 2000 decision of the European Court of Human Rights in Georgiou v United Kingdom [2001] STC 80, which was concerned with penalty proceedings in the context of VAT. It is doubted that this will normally give the ‘accused’ additional protection, given the right of states to enact laws necessary for the purpose of securing the payment of taxes; the legislative’s assessment in such matters is respected unless devoid of reasonable foundation (see Gasus Dosier und Fordertechnik GmbH v Netherlands (1995) 20 EHRR 403. Reference might also be made to Société Stenuit v France (1992) 14 EHRR 509 and to Bendenoun v France (1994) 18 EHRR 54.

19.281 Where an offence has been committed by a body corporate, a person is deemed guilty of the offence if at the time of the offence, he was a director, general manager, secretary or other similar officer of the company. The defences open to such a person are set out in BGDA 1981, s 27.

Miscellaneous 19.282 As is usual in the context of taxation, it is the taxpayer who is put to proof in the event of any dispute. Specifically, where HMRC issue a 1079

Gambling and tax certificate that: (1) any notice1 required to be given to them had or had not been given at any date; (2) that any permit, licence or authority required by or under BGDA 1981 had or had not been issued at any date; (3) that any return required had not been made at any date; or (4) that any bingo duty shown as due in any return or estimate had not been paid at any date, then such certificate is sufficient evidence of that fact until the contrary is proved.2 In addition, a photograph of any document furnished to and certified by HMRC to be such a photograph is admissible in any proceedings, civil or criminal, to the same extent as the document itself.3 Finally, a document purporting to be a certificate under any of the provisions described above is deemed to be such a certificate until the contrary is proved.4 1 2 3 4

Under BGDA 1981, Sch 3, Pt II, para 10(1). BGDA 1981, s 29A(1). BGDA 1981, s 29A(2). BGDA 1981, s 29A(3).

Lottery duty 19.283 A  duty of excise called ‘lottery duty’ was introduced1 to coincide with the launch of the National Lottery. The government’s stated purpose was to ensure that the National Lottery should be taxed at a ‘fair level’ compared with other forms of gambling such as off-course betting, pool betting, bingo, gaming and gaming machines. The duty falls principally on lotteries forming part of the National Lottery. 1 The duty is imposed by provisions contained in the FA  1993, Chapter  II, which came into force on 1 December 1993 by virtue of the FA 1993, Chapter II (Appointed Day) Order 1993 (SI 1993/2842) (made under FA 1993, s 41), with the exceptions of ss 24(1)(a), 29(1) and 39, which came into force on 1 February 1994 (along with the repeals connected with lottery duty set out in FA  1993, Sch  23, Pt I). In addition, the Lottery Duty Regulations 1993 (SI 1993/3212) (as amended by the Lottery Duty (Amendment) Regulations 2001 (SI  2001/4021) and the Lottery Duty (Amendment) Regulations 2002 (SI  2002/2355)) and the Lottery Duty (Instant Chances) Regulations 1995 (SI  1995/2815) (as amended by the Lottery Duty (Instant Chances) (Amendment) Regulations 2002), as well as the Lottery Duty (Exemption) Order 2010 (SI 2010/2959) have all been made under FA 1993.

Charge to duty 19.284 Lottery duty is chargeable on the taking in the United Kingdom of a ticket or chance in a lottery1 and, subject to determination by regulations, on the taking outside the UK of a ticket or chance in a lottery promoted in the UK.2 Exceptions to the charge, following changes made in 2011 to extend exemption to licensed lotteries,3 are as follows: (a) a lottery that constitutes a game of bingo;4 (b) in Great Britain, a lottery that is incidental to a non-commercial event;5 (c) in Great Britain, a private lottery which constitutes either a private society lottery, a work lottery or a residents’ lottery;6 1080

Gambling and tax (d) in Great Britain, a non-profit customer lottery where the maximum prize in respect of a single ticket does not exceed £50;7 (e)

in Great Britain, a small society lottery;8

(f)

in Northern Ireland, a lottery promoted as an incident of an exempt entertainment within the meaning of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 (the ‘BGLA Order’);9

(g) in Northern Ireland, a private lottery within the meaning of the BGLA Order;10 and (h) in Northern Ireland, a society’s lottery within the meaning of the BGLA Order;11 The effect is that lotteries forming part of the National Lottery are subject to charge, as are other non-exempted lotteries, including illegal lotteries.   1 FA 1993, s 24(1)(a).   2 FA 1993, s 24(1)(b).   3 The Lottery Duty (Exemption) Order 2010, which amends FA 1993, s 24(4).   4 FA 1993, s 24(3).   5 FA 1993, s 24(4); GA 2005, Sch 11, Pt 1.   6 FA 1993, s 24(4); GA 2005, Sch 11, Pt 2.   7 FA 1993, s 24(4); GA 2005, Sch 11, Pt 3.   8 FA 1993, s 24(4); GA 2005, Sch 11, Pt 4.   9 FA 1993, s 24(4)(a); BGLA Order. 10 FA 1993, s 24(4)(a); BGLA Order. 11 FA 1993, s 24(4)(a); BGLA Order.

19.285 In the case of the National Lottery, lottery duty is also chargeable on the taking of a ticket or chance outside the United Kingdom. The charge is imposed by a deeming provision, which provides that where any ticket or chance is taken outside the United Kingdom in the National Lottery the taking of the ticket or chance is to be treated as having occurred at the principal place of business within the United Kingdom.1 1 Lottery Duty Regulations 1993, reg 9.

The taking of a ticket or chance in a lottery 19.286 Specific provision has been made to determine the circumstances in which a chance is regarded as taken.1 From 17 October 2002 reg A9 of the Lottery Duty Regulations 1993 has provided that where a ticket or chance is taken in a lottery the taking of the ticket or chance shall be treated as occurring on the day the lottery takes place. This regulation also states that it applies to a ticket or chance taken in a lottery that is part of the National Lottery, but does not apply to a ticket or chance where, before it is taken, it has been determined whether or not it will win. 1 Lottery Duty Regulations 1993, reg A9(2).

19.287 In the case of instant lotteries forming part of the National Lottery, specific regulations apply to determine the circumstances in which a ticket 1081

Gambling and tax or chance is to be regarded as taken.1 Any such instant chance is treated as taken when the batch of which it forms part is settled.2 The regulations contemplate that instant chances are distributed in batches for the purpose of sale. ‘A batch’ means a number of instant chances of between 50 and 500 (determined by the registered promoter), provided the number produces a whole number when divided by 50.3 A batch is settled when either: (a) the registered promoter deems that batch to be settled; or (b)  304 days have elapsed since that batch was first activated, whichever is the earlier.5 A batch is activated when either: (i) the registered promoter deems that batch to be activated; or (ii) any instant chance in that batch is actually taken, whichever is the earlier.6 The effect of these provisions is that duty may become payable on all the instant chances in a batch before all the chances have been sold; indeed, depending upon when the promoter deems the batch to be settled or first activated, duty may become payable on the whole batch before any chance in it has been sold. Accordingly, provision is made for a duty credit to be made to a promoter at the conclusion of the lottery in respect of chances that have not been taken.7 1 ‘Instant chance’ means a ticket or chance where, before it has been taken, it has been determined whether or not it will win; the Lottery Duty (Instant Chances) Regulations 1995, reg 3. 2 LD(IC)R 1995, reg 5(1). 3 The unique reference for each instant chance must be arranged in a sequence that identifies it as part of a particular batch; LD(IC)R 1995, reg 4. 4 15 days prior to 17 October 2002. 5 LD(IC)R 1995, reg 5(2)(a) and (b). 6 LD(IC)R 1995, reg 5(3)(a) and (b). 7 LD(IC)R 1995, reg 6.

Amount of lottery duty 19.288 The amount of the lottery duty chargeable on the taking of a ticket or chance in a lottery is equal to 12% of the value of the consideration given for the ticket or chance.1 The aggregate of everything paid or given by (or debited to the account of) the person taking the ticket or chance is to be taken to be the consideration given for it;2 in other words, all stake money before deduction of expenses. If, however, a price is shown on a lottery ticket or on any other document providing evidence of the taking of a ticket or chance in a lottery, consideration to the value of the price shown is to be taken to be given for the ticket or chance, even if the actual consideration given is less than the price shown, or even if no consideration at all is given.3 1 FA 1993, s 25(1). 2 FA 1993, s 25(2). 3 FA 1993, s 25(3).

Time for payment 19.289 The lottery duty chargeable on the taking of a ticket or chance in a lottery becomes due and (subject to any regulations providing for the deferment of payment), payable at the time the ticket or chance is taken.1 A registered promoter2 of a lottery may, however, defer payment of 1082

Gambling and tax lottery duty which has become due and payable upon his complying with such conditions or requirements as HMRC think fit to impose.3 Where payment of any lottery duty is deferred, then, for duty due on or after 27 January 2002, it must be paid using either the Clearing House Automated Payment System (CHAPS) or the Bankers’ Automated Clearing Services (BACS); payment must be credited to such bank account as HMRC may require on or before the day by which the return showing that duty must be furnished.4 Regulations may require payments of amounts determined by or under the regulations to be made on account of any lottery duty that may become due in respect of a lottery of a description specified in the regulations that is being or is to be promoted.5 Such regulations have been made in respect of registered promoters of chargeable lotteries,6 making it a requirement of such registration that the promoter must, when HMRC by notice in writing so require, give security or further security (by means of a deposit or otherwise) for any lottery duty that may become due.7 1 FA 1993, s 26(1). For power to make regulations providing for the deferment of payment of lottery duty, see s 26(2). 2 For registration of promoters see FA 1993, s 29. 3 Lottery Duty Regulations 1993, reg 6(1). 4 Lottery Duty Regulations 1993, reg 6(2). 5 FA 1993, s 26(3). 6 For the requirement that the promoter of a lottery in respect of which lottery duty is chargeable should be registered see FA 1993, s 29(1). 7 Lottery Duty Regulations 1993, reg 4 and Sch 2, item (b).

Refunds 19.290 A person (‘the claimant’) may make a written application to HMRC for lottery duty which he has paid to be refunded (a ‘refund application’) in respect of a lottery promoted by him, provided that: (a) the lottery concerned is a lottery which did not take place but is one in which tickets or chances were taken;1 (b) at the time he promoted the lottery he was a registered promoter;2 (c) his refund application is received by HMRC within six months of the day upon which the lottery would have taken place;3 and (d) he has refunded to any person who took a ticket or chance in that lottery the amount of consideration given for it, or, if this is not the case, he has refunded the consideration given for every ticket or chance in respect of which he claims a refund of duty.4 1 Lottery Duty Regulations 1993, reg 7(1) and (2)(a). 2 Lottery Duty Regulations 1993, reg 7(2)(b). For registration of lottery promoters see the FA 1993, s 29. 3 Lottery Duty Regulations 1993, reg 7(2)(c). 4 Lottery Duty Regulations 1993, reg 7(2)(d).

19.291 A refund application must be made: (a) if the claimant is a registered promoter, as part of a return furnished in accordance with reg 14 or 14A of the Lottery Duty Regulations 1993; or 1083

Gambling and tax (b) in any other case, in a letter addressed to HMRC which is to be treated for the purposes of reg 15 of the Lottery Duty Regulations 1993 as if it were a return.1 1 Lottery Duty Regulations 1993, reg 7(3)(a) and (b). Although it is a condition of applying for a refund that the claimant should have been a registered promoter at the time when the relevant lottery was promoted, the regulations are designed to permit an application to be made by a claimant who has ceased to be a registered promoter after the time when he promoted the lottery.

19.292 The application must contain the following particulars: (a) the claimant’s name and address; (b) the date upon which the lottery would have taken place; (c)

a declaration that the claimant has refunded the consideration given for every ticket or chance taken in the lottery in question or, if this is not the case, that he has refunded the consideration given for every ticket or chance in respect of which he claims a refund of duty;

(d) the number of tickets or chances taken, the value of the consideration received for them and the amount of duty actually paid to HMRC in respect of them; (e)

the amount of duty which he claims should be refunded.1

1 Lottery Duty Regulations 1993, reg 7(4) and Sch 4.

19.293 No refund may be paid until the claimant has complied with the provisions of reg 7 of the Lottery Duty Regulations 1993; HMRC must cancel any entitlement to refund, or reduce the amount of that entitlement, if it appears to them that a refund application is untrue in any material particular.1 If HMRC, having paid a refund, do so cancel the entitlement, they are entitled to recover the amount of the refund from the claimant as if that amount was an amount of lottery duty due and payable on the date of cancellation.2 1 Lottery Duty Regulations 1993, reg 7(5). 2 Lottery Duty Regulations 1993, reg 7(6).

Persons liable for duty 19.294 Except in the case of lottery duty payable in respect of the National Lottery, where regulations provide that the duty to pay is imposed on the person licensed under s 5 of the National Lottery Act 1993 instead of on the lottery’s promoter,1 the primary liability to pay any lottery duty or payment on account of lottery duty in respect of a lottery is imposed upon the promoter of the lottery.2 Further, any lottery duty that is payable in respect of a lottery may be recovered jointly and severally from: (a) the promoter of the lottery3 (except where the duty is due in respect of the National Lottery);4 (b) any other person who occupies or has occupied a position of responsibility in relation to the lottery or who has had any degree of control over any of its proceeds;5 and 1084

Gambling and tax (c) where the promoter or a person within para  (b) above is a body corporate, any director of that body corporate.6 1 Lottery Duty Regulations 1993, reg 8, as amended by reg 2 of the Lottery Duty (Amendment) Regulations 2007 (SI 2007/870). 2 FA 1993, s 27(2). 3 FA 1993, s 27(3)(a). 4 See the Lottery Duty Regulations 1993, reg 8. 5 FA 1993, s 27(3)(b). 6 FA 1993, s 27(3)(c).

19.295 Where a person does not make a payment that he is required to make in his capacity as promoter under the FA 1993, s 27(1) or under regulations made under FA 1993, s 27(2) at the time the payment becomes payable, his failure to make the payment attracts a penalty under FA  1994, s  9 (civil penalties) which is to be calculated by reference to the amount which has not been paid; the failure also attracts daily penalties.1 1 FA 1993, s 27(4), as amended by FA 1994.

19.296 If duty remains unpaid by a person then HMRC might inform the National Lottery Commission and apply for revocation of the person’s licence or object to any renewal. Information may also be exchanged with the Director General of the National Lottery, the Department for Culture, Media and Sport and the Gambling Commission.1 1 HMRC Notice 458 (June 2011), para 6.8.

Registration of promoters 19.297 A  lottery in respect of which lottery duty is chargeable, or on the taking of a ticket or chance which will be chargeable, may not be promoted in the United Kingdom unless the chargeable person is registered with HMRC.1 ‘Chargeable person’ means the promoter of the lottery,2 or, where a person has been specified by regulations made under FA  1993, s  27(2) as the person who is to pay the duty instead of the promoter, that person.3 1 FA 1993, s 29(1). If this provision is contravened in relation to a lottery at any time during its promotion, the chargeable person is guilty of an offence and liable: (a) on summary conviction, to a penalty of the statutory maximum (£20,000) or to imprisonment for a term not exceeding six months, or to both; or (b) on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding two years or to both: s 29(7). 2 FA 1993, s 29(2)(a). 3 FA 1993, s 29(2)(b). By the Lottery Duty Regulations 1993, reg 8 (as amended by reg 2 of the Lottery Duty (Amendment) Regulations 2007 (SI 2007/870)), lottery duty payable in respect of the National Lottery must be paid by the person licensed under s  5 of the National Lottery Act 1993 instead of by the promoter (if different). In other words the s  5 licence holder is responsible for payment of all duty on National Lottery games including those promoted by s  6 licence holders.

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Application for registration by promoters 19.298 Application for registration must be made to HMRC on a form provided by them for that purpose.1 The applicant must provide with his application a copy of any licence issued to him under the National Lottery Act 1993.2 The application must contain the following particulars: (a) the name and address of the applicant; (b) the address of the applicant’s principal place of business; (c)

whether the applicant is a partnership or body corporate;

(d) if the applicant is a partnership, the name and address of each of the partners; (e)

if the applicant is a body corporate: (i)

the address of its registered office,

(ii) its registered number, (iii) its date of incorporation, and (iv) the name and address of each of the directors of that body; (f) if the applicant is registered for value added tax purposes, his registration number; (g) the date from which the applicant intends to begin to promote any chargeable lottery; (h) whether the applicant is licensed under s 5 of the National Lottery Act 1993.3 1 Lottery Duty Regulations 1993, reg 3 (made under FA 1993, s 29(3)). See also the Lottery Duty Regulations 1993, reg  15 for the requirement that the application should contain a declaration concerning truth and completeness. The person who is to sign the application should state their capacity. Applications should be made on Form BD601. 2 Lottery Duty Regulations 1993, reg 3. 3 Lottery Duty Regulations 1993, reg 3(2) and Sch 1, made under FA 1993, s 29(3)(a).

19.299 Every application for registration must be made at least 15 days before the day on which the applicant begins or, if earlier, intends to begin to promote a chargeable lottery; this occurs when the first ticket or chance is taken.1 1 See Lottery Duty Regulations 1993, reg 3.

Requirements to be satisfied as a condition of registration 19.300 Every applicant for registration must satisfy the following requirements as a condition of registration: (a) if the lottery forms part of the National Lottery, the promoter must be licensed pursuant to s 5 of the National Lottery Act 1993; (b) the promoter must, when HMRC by notice in writing so require, give security or further security (by means of a deposit or otherwise) for any lottery duty that may become due; 1086

Gambling and tax (c)

when registered, the promoter must comply fully with the requirements of regs 6 and 14 of the 1993 Regulations and with any directions made in accordance with s 116 of the Customs and Excise Management Act 1979.1

1 Lottery Duty Regulations 1993, reg 4 and Sch 2.

Requirements to be observed by registered promoters 19.301 A  registered promoter must notify the Commissioners within one month of: (a) any change of address; (b) any change of address of his principal place of business; (c)

if he is a partnership, any change of: (i) the membership of the partnership (including the name and address of any new member of the partnership), (ii) address of any partner;

(d) if he is a body corporate, any change of: (i)

the name of the body,

(ii) the directors of the body (including the name and address of any new director), (iii) address of any director.1 1 Lottery Duty Regulations 1993, reg 5, and Sch 3.

19.302 ‘Address’ in relation to a partner or director means that person’s usual place of residence in the United Kingdom.1 HMRC are obliged to register any person applying for registration, provided his application complies with the requirements contained in the Lottery Duty Regulations 1993, Sch 1 and in Sch 2, and provided he satisfies HMRC that he will be the chargeable person in relation to a lottery that is to be promoted.2 Once they have registered a person, HMRC must not remove him from the register unless it appears to them that no lottery is being or is to be promoted in relation to which he is or will be the chargeable person.3 Where it is determined that a person should be removed from the register because any requirement imposed under FA 1993, s 29(3)(b) is not (or is no longer) satisfied in relation to him, then if any lottery in relation to which he is a chargeable person is being promoted at the time they make the determination they must not remove him from the register until the promotion of the lottery has come to an end.4 1 Lottery Duty Regulations 1993, reg 5 and Sch 3 (made under FA 1993, s 29(3)(c)). Where a person contravenes or fails to comply with any of these requirements, his contravention or failure to comply attracts a penalty under s 9 of the FA 1994 (civil penalties): FA 1993, s 29(8) (as amended by FA 1994). 2 FA 1993, s 29(5)(a). 3 FA 1993, s 29(5)(b). 4 FA 1993, s 29(6).

1087

Gambling and tax

Returns and records 19.303 Every registered promoter must, not later than the thirteenth1 day following the end of every accounting period,2 furnish to HMRC a return in such form as they may approve containing specified particulars, namely: (a) the name and address of the registered promoter and any registration number allocated to him for purposes connected with lottery duty; (b) the accounting period to which the return relates; (c) the value of the consideration given for tickets or chances in that accounting period; (d) the amount of lottery duty due in that accounting period (calculated in accordance with FA 1993, s 25); (e)

the amount of any lottery duty due from any earlier accounting period, unless that amount has been shown on an earlier return;

(f)

the amount of any refund claimed;

(g) the amount of any lottery duty shown in error as due on any earlier return; (h) the net amount of lottery duty due and payable in that accounting period; (i) where payment is deferred, such other particulars as HMRC may require.3 1 Prior to 27 January 2002, 15 days. 2 ‘Accounting period’ means: (a) a period ending on the last Saturday of each month; or (b) where payment is deferred, such period as HMRC may require: Lottery Duty Regulations 1993, reg 2. 3 Lottery Duty Regulations 1993, reg 14(1) and Sch  5. See also reg  15 for the requirement that the return should contain a declaration of truth, and as to the person who is to sign the return.

19.304 Where the last day for furnishing a return would (if determined in accordance with the above provisions) fall on a day which is not a business day,1 the return must be furnished not later than the last business day before that day. Returns must be furnished to HMRC at their accounting centre for lottery duty,2 which address must be given to every registered promoter.3 1 ‘Business day’ means a day which is a business day within s  92 of the Bills of Exchange Act 1882: Lottery Duty Regulations 1993, reg 2. 2 Lottery Duty Regulations 1993, reg 14(2). 3 Lottery Duty Regulations 1993, reg 14(3).

19.305 A  registered promoter may furnish a return using electronic communications only on condition that: (a) the electronic return system in question takes a form approved by HMRC in a specific or general direction; and (b)  the promoter is authorised (and remains authorised) by HMRC.1 An electronic return system must incorporate a valid electronic validation 1088

Gambling and tax process.2 An electronic return is deemed furnished only if it has been successfully recorded as such by the relevant electronic validation process. The person furnishing the return to HMRC is presumed to be the person identified as such by any relevant feature of the electronic return system and the time of furnishing the return is the time recorded by the relevant electronic validation process.3 1 Lottery Duty Regulations 1993, reg 14A(3). 2 Lottery Duty Regulations 1993, reg 14A(5). 3 Lottery Duty Regulations 1993, reg 14A(6).

19.306 An electronic return authorisation may be revoked.1 In exercising any discretion to authorise or revoke, HMRC are directed to pay proper regard to the following factors: (a) the state of development of any relevant electronic return system; (b) the protection of the revenue; (c) the degree of compliance with the Regulations of the promoter concerned; and (d) any other relevant factor.2 1 Lottery Duty Regulations 1993, reg 14A(7). 2 Lottery Duty Regulations 1993, reg 14A(8).

19.307 Neither FA 1993 nor the Lottery Duty Regulations are prescriptive as to the books and records to be kept. HMRC’s views are set out in Notice 458, para 7, as well as in Notice 206.

Administration and enforcement of lottery duty 19.308 Lottery duty is under the care and management of HMRC, who may make regulations to provide for any matter for which provision appears to be necessary or expedient for the administration or enforcement of lottery duty or for the protection of the revenue derived therefrom.1 Where a person contravenes or does not comply with any such regulations, his contravention or failure to comply attracts a penalty under s 9 of the Finance Act 1994 (Civil Penalties).2 1 FA 1993, s 28(1) and (2). 2 FA 1993, s 28 as amended by FA 1994.

19.309 Regulations have been made under the above provisions as follows: (1) the price of every lottery ticket must be stated on the ticket;1 (2) the price of every chance in a lottery must be stated on any document which evidences the taking of that chance and which is given to the person who is taking that chance;2 (3) in every lottery, every ticket or chance must be allocated a unique reference which must be stated: (a)  on the ticket; and (b)  on any document which evidences the taking of the chance and which is given 1089

Gambling and tax to the person taking that chance. Such references must be arranged in a sequence or sequences in such a way as to enable: (i)  the number of tickets or chances already taken; and (ii)  the number of tickets or chances remaining untaken in any lottery to be ascertained at any time, both while the lottery is being promoted and so long thereafter as the registered promoter is required, by or under any enactment, to keep and preserve records relating to that lottery;3 (4) except in the case of lottery tickets which are not printed and allocated unique references until the time that they are taken, a registered promoter who intends to destroy lottery tickets must give seven clear days’ notice to HMRC of the unique references of the tickets to be destroyed.4 1 2 3 4

Lottery Duty Regulations 1993, reg 10. Lottery Duty Regulations 1993, reg 11. Lottery Duty Regulations 1993, reg 12. Lottery Duty Regulations 1993, reg 13.

General offences 19.310 A person who is knowingly concerned: (a) in the fraudulent evasion (by him or another person) of lottery duty; or (b) in taking steps with a view to such fraudulent evasion, is guilty of an offence.1 1 FA 1993, s 31(1). A person guilty of an offence under s 31(1) is liable: (a) on summary conviction, to a penalty of the statutory maximum (£20,000) or, if greater, treble the amount of the duty evaded or sought to be evaded or to imprisonment for a term not exceeding six months, or to both; or (b) on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding seven years, or to both: s 31(2).

19.311 A person who in connection with lottery duty: (a) makes a statement which he knows to be false in a material particular or recklessly makes a statement that is false in a material particular; or (b) with intent to deceive, produces or makes use of a book, account, return or other document that is false in a material particular, is guilty of an offence.1 1 FA 1993, s 31(3). A person guilty of an offence under s 31(3) is liable: (a) on summary conviction, to a penalty of the statutory maximum (£20,000) or to imprisonment for a term not exceeding six months, or to both; or (b) on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding two years, or to both: s 31(4).

19.312 Where a person has committed an offence under the above provisions, any goods used in the promotion of, or in any way related to, a relevant lottery are liable to forfeiture.1 1 FA 1993, s 33(1). ‘Relevant lottery’ means: (a) in relation to an offence under s 31(1), a lottery in respect of which lottery duty was fraudulently evaded or (as the case may be) in respect of which the fraudulent evasion of lottery duty was sought; and (b) in relation to an offence under s 31(3), a lottery to which the false statement or (as the case may be) false documents related: s 33(2).

1090

Gambling and tax

Offences by bodies corporate 19.313 Where an offence is committed by a body corporate, every person who at the time of the commission of the offence is a director, manager, secretary or other similar officer of the body corporate (or is purporting to act in such a capacity) is also guilty of the offence unless: (a)  the offence is committed without his consent or connivance; and (b)  he has exercised all such diligence to prevent its commission as he ought to have exercised, having regard to the nature of his functions in that capacity and to all the circumstances.1 1 FA 1993, s 32.

Protection of officers 19.314 Where a person takes an action in pursuance of instructions of HMRC given in connection with the enforcement of the lottery duty provisions of the FA 1993 or of regulations made thereunder, and, apart from the provisions of FA  1993, s  34, the person would in taking that action be committing an offence under any enactment relating to lotteries, he shall not be guilty of that offence.1 1 FA 1993, s 34.

Evidence and disclosure of information 19.315 For the power of HMRC to give evidence of certain matters by certificate, see FA  1993, s  35. For the power of HMRC to disclose certain information to the Secretary of State, or any person designated by him, to the Gambling Commission,1 or to an authorised officer of the Secretary of State or the Gambling Commission for the purpose of assisting the Secretary of State or the Gambling Commission in the performance of duties imposed by or under any enactment in relation to lotteries, see  s  37. 1 Pursuant to GA 2005, s 21 and Sch 5, para 4, from 1 September 2007, references to the Gaming Board in any enactment, instrument or document are treated as references to the Gambling Commission.

Lottery duty on insolvency 19.316 The status of lottery duty as a preferential debt on insolvency1 was abolished by the Enterprise Act 20022 with effect from 15 September 2003.3 Crown preference remains for insolvencies with a relevant date before 15 September 2003. 1 FA 1993, s 36. 2 Enterprise Act 2002, s 251. 3 Enterprise Act 2002 (Commencement No  4 and Transitional Provisions and Savings) Order 2003, art 2(1) and Sch 1.

1091

Gambling and tax

Amusement machine licence duty 19.317 Finance Act 2012 replaced amusement machine licence duty (‘AMLD’) with a new excise duty, machine games duty (see below). For details of AMLD please refer to the Third Edition of this work. The removal of AMLD, as well as associated transitional provisions and savings, is effected by Finance Act 2012, Sch 24, Pt 2.

Machine games duty 19.318 Following a consultation that commenced in 2010, the introduction of machine games duty was confirmed in the 2011 Budget and legislated for in Finance Act 2012.1 In part this new excise duty was a reaction to operator challenges to the VAT treatment of gaming machines. This was reflected in the standard rate of 20% on set takings, with a 5% rate for low stake and prize machines. A  duty based on gross profits looks to be welcome from an administrative perspective after the complexity of amusement machine licence duty with its myriad of rates. 1 Section 191 and Sch 24.

Overview 19.319 Secondary legislation relating to machine games duty is set out in Machine Games Duty Regulations 2012,1 the Machine Games Duty (Exemptions) Order 20122 and Revenue Traders (Accounts and Records) Regulations 1992.3  HMRC has published a notice relating to machine games duty (Notice 452 (Machine Games Duty)) which was last updated on 20 July 2016. 1 SI 2012/2500. 2 SI 2012/2898. 3 SI 1992/3150.

Calculation of the duty 19.320 Machine games duty applies to the total net takings from ‘dutiable machine games’. Dutiable machine games 19.321 A  machine game will be dutiable if it offers a cash prize which exceeds the lowest charge payable for playing the game.1 Cash for these purposes means money, or anything that may reasonably be considered to equate to money, including intangibles or vouchers that can be exchanged for cash.2 If an adult would reasonably assume that these conditions are met, the machine game will be taken to be a dutiable game, even where it does not in fact satisfy these tests.3  A  game that would otherwise be a dutiable machine game does not count as one if:4 1092

Gambling and tax (a)

it involves betting on future real events for example, horse or greyhound racing and sports events;

(b) bingo duty is charged on the laying of it; (c)

lottery duty is charged on the taking of a ticket or chance in it; or

(d) it is a real game of chance (such as a casino game) and playing it amounts to dutiable gaming within FA 1997, s 10 or would do so but for sub-ss (3), (3B) or (4).5 1 FA 2012, Sch 24, para 2(2). An offer that waives or permits a player to pay less than the charge payable without the offer is disregarded by sub-para 2(6). 2 FA 2012, Sch 24, paras 2(3) and (4) and HMRC Notice 452, para 2.3.2. 3 FA 2012, Sch 24, para 2(5). 4 FA 2012, Sch 24, para 3. 5 HMRC Notice 452, para 2.3.1.

Total net takings 19.322 A person’s ‘net takings’ from each relevant machine are: (i)

the charges due in the accounting period from players playing dutiable machine games on the machine; less

(ii) the amounts paid out to players as prizes in the accounting period as a result of those persons playing dutiable machine games.1 A charge is deemed to be the notional payment (or discounted element of the payment) where a player takes up an opportunity to play for free or a discounted amount.2 Non-cash prizes awarded as a result of play on a dutiable machine game may also be deducted from dutiable takings.3 Certain exemptions apply to the calculation of net takings, including: (i)

takings from domestic play;4

(ii) takings from play at a charitable event; (ii) takings from machine game-play in the course of a tournament; and (iii) takings from lottery machines regulated as a Category B3A gaming machine (where legally operated).5 1 2 3 4 5

FA 2012, Sch 24, para 7. FA 2012, Sch 24, para 7(9). FA 2012, Sch 24, para 7(3). FA 2012, Sch 24, para 7(3). FA 2012, Sch 24, para 8(1).

Rates 19.323 The rates of duty depend upon the type of machine being played. Type 1: to qualify as a Type 1 machine it must be demonstrated that: •

the cost to play every dutiable machine game on the machine once does not exceed 20p; and

•

the maximum cash prize for every dutiable machine game on the machine does not exceed £10. 1093

Gambling and tax Duty is imposed at the lower rate of 5% on Type 1 machines. Type 2: to qualify as a Type 2 machine it must be demonstrated that: •

it is not a Type 1 machine; and

•

the cost to play every dutiable machine game on the machine once does not exceed £5.

Duty is imposed at the standard rate of 20% on Type 2 machines. Type 3: are all machines that do not qualify as Type 1 or Type 2 machines. Duty is imposed at the higher rate of 25% on Type 3 machines.1 1 Machine Games Duty (Exemptions) Order 2012 (SI  2012/2898), regs 3, 4 and 5, brought under FA 2012, Sch 24, para 8(1)(b).

Liability and registration 19.324 A person is liable for machine games duty in respect of a machine at any time if: (a) the person is responsible for the premises1 in which the machine is located; (b) the machine is available for use; and (c) the machine is not an excluded dual-use machine.2 Applications for registration on the machine games duty register must be received by HMRC at least 14 days (or 31 days for non-EU applicants) before dutiable machine games are made available for play.3 Upon registration, the person will become the ‘registered person’ for machine games duty purposes. 1 FA 2012, Sch 24, paras 5, 6 and 9. 2 Machine Games Duty Regulations 2012 (SI 2012/2500), regs 7(3) and (4) brought under FA 2012, Sch 24, para 24. 3 FA 2012, Sch 24, para 14.

Returns and payment 19.325 Accounting periods are three consecutive months in length.1 A registered person must submit a return in respect of an accounting period within 30 days of the end of the relevant accounting period.2 There are three separate accounting period ‘staggers’ each year (according to which month is preferred for the end of each accounting period) and registrable persons can select their preferred ‘stagger’ for their accounting periods.3 Payments must be made to HMRC within 30 days of the end of the accounting period.4 Where a direct debit mechanism has been set up with HMRC collection will be made on this day.5 If a person is liable to pay machine games duty but is not a registered person, HMRC will send details of the means of making payment.6 1 Machine Games Duty Regulations 2012, reg 12, brought under FA 2012, Sch 24, para 18. 2 HMRC  Notice 452, para  12, brought under powers afforded to HMRC under Sch 24, para 14. 3 Machine Games Duty Regulations 2012, reg 13, brought under FA 2012, Sch 24, para 19. 4 HMRC Notice 452, para 16.2 with the force of law under Machine Games Duty Regulations 2012, reg 13.

1094

Gambling and tax 5 FA 2012, Sch 24, para 15 and HMRC Notice 452, para 16.3. 6 HMRC Notice 452, para 16.3.

PART 5 – HORSERACE BETTING LEVY 19.326 Horserace betting levy is a monetary contribution payable by bookmakers1 (as well as Tote (Successor Company) Limited2 (‘the Tote’)) on that part of their turnover which derives from betting on horseraces. 1 In William Hill v Horserace Betting Levy Board and Betfair [2013] EWCA Civ 487 the Court of Appeal found that customers of betting exchanges were not ‘bookmakers’ within the terms of the BGLA  1963 and accordingly had no obligation to pay the levy. 2 The obligation of the Tote to pay the levy was transferred from Horserace Totalisator Board to Tote (Successor Company) Limited on the date of the latter’s acquisition by Betfred pursuant to Sch  2 of the Horserace Betting and Olympic Lottery Act 2004.

19.327 The levy is assessed and collected by the Horserace Betting Levy Board.1 This is a body corporate, originally set up under the Betting Levy Act 1961. The Board is vested with extensive rights and powers to devote the levy collected to purposes conducive to: (1) the improvement of breeds of horses; (2) the advancement or encouragement of veterinary science or veterinary education; and (3) the improvement of horseracing. A  discussion of the Levy Board’s activities is beyond the scope of this book. Such activities are extensive and include, inter alia, the making of contributions to prize money and provision of funds for veterinary research and education, as well as the improvement of racecourse facilities. Details may be obtained from its annual report. 1 Betting, Gaming and Lotteries Act 1963 (BGLA 1963), s 24. Referred to as the ‘Levy Board’.

19.328 The Levy Board consists of a chairman and six other members. The chairman and two of the other members are appointed by the Secretary of State for Culture, Media and Sport. Certain of the powers of the Levy Board may only be exercised by these three (‘the government-appointed members’) or any two of them.1 Three members are appointed by the Jockey Club to represent horseracing (since 31 July 2007 this power has been delegated to the British Horseracing Authority) and the remaining member is the Chairman of the Bookmakers’ Committee. 1 Horserace Totalisator and Betting Levy Boards Act 1972, s 6.

19.329 The Bookmakers’ Committee is a committee constituted by the Secretary of State for Culture, Media and Sport to represent the interests of bookmakers.1 1095

Gambling and tax 1 BGLA 1963, s 26, and see the Horserace Betting Levy (Bookmakers’ Committee) Regulations 1999 (SI 1999/1468).

Levy schemes 19.330 The Levy Board is empowered to make a scheme for the collection of levy from bookmakers for each ‘levy period’, ie 12 months commencing on 1 April in any year.1 Such a scheme must include provisions ensuring that levy is payable only by a bookmaker who on his own account carries on a business which includes betting on horseraces and only on that part of the business which relates to horserace betting.2 1 BGLA 1963, s 27. 2 BGLA 1963, s 27.

19.331 The Bookmakers’ Committee is obliged to make recommendations to the Levy Board as to the scheme to be adopted prior to the commencement of each levy period. If the Levy Board approves the scheme so recommended, with or without revisions, that scheme becomes the governing scheme for the levy period. If no agreement has been reached or the Bookmakers’ Committee has failed to make recommendations five months before the commencement of the levy period, the Secretary of State for the Department of Culture, Media and Sport will determine the scheme.1 1 Horserace Betting Levy Act 1969 (‘HBLA 1969’), s 1.

19.332 Once approved, a scheme is promulgated at the beginning of the levy period by the service of copies on all bookmakers subject to levy. At the end of the levy period each bookmaker is required to complete and return to the Levy Board a Form of Declaration as to the category into which he falls. Claims to exemption must be made on this form. With certain exceptions, the Form of Declaration must be accompanied by a report from an independent accountant containing such information as the Levy Board may require. A  bookmaker is assessed to, or exempted from, levy in accordance with the opinion which the government-appointed members of the Levy Board form as to his category.1  A  notice of assessment is issued and served by the Levy Board and is conclusive as to the levy liability of the bookmaker, unless successfully appealed against.2 An appeal against assessment is made by notice in writing to the Levy Board and must be made not later than 28 days after service of the notice of assessment. Any appeal is determined by a Levy Appeal Tribunal established pursuant to BGLA  1963, s  29. Rules of procedure have been prescribed.3 The Levy Appeal Tribunal has power to confirm, increase or reduce the assessment, or to grant the appellant a certificate of exemption from the levy according to the tribunal’s opinion as to the category into which he falls.4 It may not, however, reduce the assessment or exempt the bookmaker, unless he has afforded it all the facilities it has required to investigate the case, and unless it is satisfied that the assessment should be varied or rescinded.4 The Levy Appeal Tribunal’s decision is final.5 The Levy Appeal Tribunal has power to award costs to a successful appellant,6 and to make against an unsuccessful 1096

Gambling and tax appellant an award to cover expenses incurred by the tribunal7 as well as power to award costs in favour of the Levy Board.8 1 2 3 4 5 6 7 8

HBLA 1969, s 2. BGLA 1963, s 28. Betting Levy Appeal Tribunal (England and Wales) Rules 1963 (SI 1963/748). BGLA 1963, s 28. BGLA 1963, s 28; though see Tehrani v Rostron [1971] 2 All ER 790. BGLA 1963, s 29(6). BGLA 1963, s 29(7). HBLA 1969, s 3.

Payments on account of levy 19.333 A  levy scheme under which the levy is determined by reference to the amounts staked with bookmakers during the levy period may incorporate a provision requiring payment of sums on account of levy before the assessment to levy is made.1 Bookmakers may be divided into different categories for the purpose of determining the amounts so payable and the times when payments are to be made.2 1 HBLA 1981, s 1. 2 HBLA 1981, s 1.

19.334 The amounts of duty payable on account and the times of payment are determined by the government-appointed members of the Levy Board and are notified to the bookmaker by a notice of determination of advance payment. Such a notice is conclusive as to the bookmaker’s liability to make the payments specified in the notice, unless successfully appealed against.1 An appeal against such a notice is by notice in writing to the Levy Board (not the Levy Appeals Tribunal) made not later than 28 days after service of the notice.1 Similar provisions apply to the conduct and determination of such appeals as apply in the case of appeals (to the Levy Appeals Tribunal) against assessment.1 1 HBLA 1981, s 2.

19.335 If a bookmaker accepts that a notice of advance payment served on him is in accordance with the scheme, but alleges that his circumstances make it unjust that he should make payment on account, he may apply at any time to the Levy Board to be excused from making payment on account in accordance with the notice.1 Such an application is determined by the government-appointed members, who may, if of the opinion that a reduction ought to be made in the payments on account to be made by a bookmaker, direct either that such payments, or some of them, shall cease to be payable or shall be reduced to a specified amount.2 A notice of cancellation or a revised notice of determination is issued, as appropriate. 1 HBLA 1981, s 3. 2 HBLA 1981, s 3(3).

19.336 It should be noted that a bookmaker who makes such an application for relief from payment forfeits his right to appeal against the notice of 1097

Gambling and tax determination of advance payment or any revised notice issued in place of it,1 although his right to appeal against the notice of assessment for that levy period is unaffected. A second or subsequent application for relief in the same levy period may only be made if there has been a change in the bookmaker’s circumstances since the last application.2 1 HBLA 1981, s 3(7). 2 HBLA 1981, s 3(6).

19.337 The contribution payable by the Tote for any levy period is determined by the Levy Board after consultation with the Tote before the commencement of the relevant levy period.1 1 BGLA 1963, s 30.

Recent developments 19.338 In March 2000 the Home Secretary announced to Parliament that it was the government’s view that the Levy Board should be abolished. The government therefore proposed to bring forward legislative proposals for the abolition of the Levy Board. As part of this process, the British Horseracing Board (BHB) was asked to prepare a realistic plan to show how racing would be run as a national sport without a statutory levy. In response, the BHB developed ‘The Future Funding Plan for British Racing’, which set out a structure for the future funding of the sport based on a combination of British horseracing’s rights into a package for sale to bookmakers and media companies. These rights were to comprise racing’s fixture list, its copyright and database and the television signals from the racecourses. Although the BHB’s Future Funding Plan had envisaged that both data and picture rights would be pooled and sold as a combined package to bookmakers, the racing industry did not ultimately support this approach. Instead, the racecourses sold the rights to televise racing, and the BHB therefore decided to use its pre-race data as the means of obtaining income from bookmakers in replacement for the Levy. In doing so, they were relying on the European Database Directive,1 which introduced a new intellectual property right conferring protection on databases, which directive was introduced into English law in 1998. 1 96/9/EC of 11 March 1996.

19.339 In February 2001, BHB succeeded in its action against William Hill in establishing that the use of lists of runners on William Hill’s website infringed BHB’s database right in the BHB database. William Hill appealed that decision to the Court of Appeal, who in turn referred certain questions of interpretation of European law to the European Court of Justice.1 1 [2001] IP&T 612, [2001] IP&T 1305.

19.340 BHB reached agreement with the off-course bookmakers in April 2002 on the terms of a data licence which provided for bookmakers to pay 9% of their gross profits from bets taken on British horseracing as consideration for the grant of the licence, being the same amount then 1098

Gambling and tax payable by British bookmakers under the levy.1 It was agreed that the amount otherwise payable to the Levy Board could be set off against the data charge. 1 Whereas the levy had previously been calculated by reference to bookmakers’ turnover, the 41st Levy Scheme, which was determined by the Secretary of State in January 2002, changed the base from turnover to a percentage of bookmakers’ gross win from bets on British horseracing.

19.341 The government introduced the Horserace Betting and Olympic Lottery Act in the House of Commons on 2 December 2003 and this received Royal Assent on 28 October 2004. This Act gave the Secretary of State power to abolish the Levy Board and the levy system. Just 12 days later, on 9  November 2004, the European Court of Justice delivered its judgment in the BHB/William Hill case.1 The ECJ’s decision was that the BHB had no protectable database rights in its database. This decision (subsequently confirmed by the Court of Appeal when the William Hill case was referred back to it)2 meant that the BHB’s attempts to use the commercialisation of pre-race data rights as a replacement for the levy effectively ended. It also meant that British horseracing was faced with its statutory funding being removed, but with no commercial replacement. 1 [2005] IP&T 407. 2 [2006] IP&T 210.

19.342 Following discussions between the interested parties, a review group was established under the chairmanship of Lord Donoughue in order to make recommendations regarding the future funding of British horseracing. The conclusion of the Donoughue group was that there was no legally robust commercial mechanism to replace the statutory levy. in December 2006, Richard Caborn, the then Minister of Sport, announced his intention to continue the statutory levy and, in due course, to introduce legislation in Parliament to repeal those provisions of the Horserace Betting and Olympic Lottery Act 2004 which empowered the government to abolish the Board and the levy. However, no such legislation was ever introduced and, almost ever since, a succession of Ministers have been grappling with reform of the levy and, in particular, removing government from its responsibility for determining the levy. Each of the 47th, 50th and 55th levy schemes had to be determined by the Secretary of State following a failure to reach agreement on the terms which should apply for the relevant levy years. Consultations were issued by the government in June 2011, June 2014, September 2014 and February 2015 all concerning levy reform. Nevertheless, the only legislative change which has actually been implemented was the inclusion in the Gambling (Licensing and Advertising) Act 2014 of a power to extend the ambit of the levy to bookmakers based outside of Great Britain. The reason for this power being introduced is because of the concern of the horseracing industry that the amounts yielded by the levy have declined significantly in large part as a result of the growth in remote betting where the overwhelming majority of remote bookmakers are based outside Great Britain and therefore outside of the jurisdiction of the levy. 1099

Gambling and tax Following the 2015 consultation, the Chancellor of the Exchequer in that year’s budget announced that the Government would bring forward legislative proposals to introduce a horserace betting right, being a quasiintellectual property right such that it would be an infringement of this right for bookmakers (wherever located) to take bets on British horseracing without a licence being in place with the rightholder. However, no such proposals were ever made and in March 2016, the Secretary of State at DCMS stated, in an answer to a parliamentary question: ‘that our aim is to introduce a new funding arrangement for British racing by April 2017. We will create a level playing field for British based and offshore gambling operators and ensure a fair return from all bookmakers to racing, including those based offshore. Racing will be responsible for making decisions on spending the new fund and we will be making further announcements shortly.’ A paper was subsequently issued by DCMS ‘Implementing the Replacement for the Horserace Betting Levy’ which sets out the key aspects of the Government’s latest proposal as follows: (i)

the scheme will remain as a levy imposed on gambling operators taking bets on British horseracing;

(ii) the obligation to pay the levy will be extended to gambling operators located outside Great Britain; (iii) the administration of the levy will be reformed with the Levy Board retained solely to collect the levy with the levy rate being set by government and specified in the legislation and the distribution of funds being undertaken by ‘a racing authority’. It is said that these changes will be achieved by secondary legislation made under s 2 of the Gambling (Licensing and Advertising) Act 2014. 19.343 In the DCMS paper, the Government recognises the need to obtain state aid clearance from the European Commission for these proposals. It sets out a timetable with the state aid notification process taking place over the summer of 2016, the statutory instrument and full impact assessment published towards the end of that year and the new funding model coming into force in April of 2017.

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Chapter 20 Contractual aspects of gambling

INTRODUCTION AND DEFINITIONS 20.1 Reference should be made to Chapters 2 and 15 for definitions of betting (in the old parlance, wagering) lotteries and gaming. The definitions in the Gambling Act 2005 build upon the pre-existing common law definitions, and so are satisfactory for the purposes of this chapter, although they may not equate exactly with the use of the equivalent terms in some of the older cases. 20.2 Chapters 2 and 15 also include analysis of the basic contractual ­structure of the various forms of gambling. The purpose of this chapter is to build upon those concepts and deal with contractual issues which may arise. 20.3 The general legalisation of gambling and the repeal of the old statutory restrictions rendering most forms of gambling contract void create a ‘brave new world’. Much of the analysis of the contractual position of parties to prima facie legal and enforceable gambling contracts is necessarily tentative, and many of the issues will need to be worked through and clarified by the courts over the next few years.

THE ENFORCEMENT REGIME UNDER THE GAMBLING ACT 2005 20.4 Prior to the coming into force of s 334(1) of the Gambling Act 2005, contracts of wager, lotteries and gaming were, subject to certain exceptions,1 void or unenforceable through the courts pursuant to various statutory regimes. These statutory restrictions had a long history, as to which see the second edition of this work.2 1 The principal exception being the National Lottery set up in 1993. The Art Unions Act 1846 created an exception, but was of little practical significance. The Betting and Lotteries Act 1934 authorised certain small lotteries, and private lotteries were authorised. These, and certain other lotteries, continued to be authorised by the Lotteries and Amusements Act 1976 which, at the date of its repeal by the

1101

Contractual aspects of gambling Gambling Act 2005, authorised small lotteries, private lotteries, societies’ lotteries and local lotteries. In addition, pool betting was regarded as not amounting to a wager within s  18 of the Gaming Act 1845, so that in England and Wales an action could be brought for stakes won in betting on a totalisator (Tote Investors Limited v Smoker [1968] 1  QB  509, CA). In principal, it appears that in England and Wales an action would have lain to claim winnings in football pool betting, but this result was invariably avoided by promoters by the insertion of a ‘binding in honour only’ clause, which the courts persistently upheld as preventing the transaction from having legal effect: see Jones v Vernons Pools Limited [1938] 3 All ER 626 and the discussion at 20.11–20.14 below. In Wright v Zetters Football Pools [1999] EWCA Civ 1204 the Court of Appeal wrongly treated s 18 of the Gaming Act 1845 as applying to football pool bets (Tote Investors Limited v Smoker was not cited), though the claim for winnings on a football pool was correctly struck out as the coupon contained an honour clause. In Scotland, football pool bets were void at common law as a ‘sponsio ludicra’: Kelly v Murphy (1940) SLT 108; Ferguson v Littlewoods Pools Limited [1997] SLT 309. 2 R v Kelly [2008] EWCA Crim 137 also includes a useful discussion of restrictions on gaming.

20.5 With effect from 1 September 2007, s 334(1) of the Gambling Act 2005 repeals the various existing statutory provisions rendering contracts for gambling void or otherwise unenforceable.1 Section 335 provides as follows: ‘(1) The fact that a contract relates to gambling shall not prevent its enforcement. (2) Subsection (1) is without prejudice to any rule of law preventing the enforcement of a contract on the grounds of unlawfulness (other than a rule relating specifically to gambling).’2 1 Some restrictions remain, most notably those contained in the National Lottery Act 1993; see GA 2005, s 15. See also the general repeals in GA 2005, s 356(3). The repeals do not have retrospective effect by virtue of s 334(2). Gambling contracts entered into prior to 1 September 2007, when the GA 2005 came fully into force, may be subject to the old statutory regime. 2 The ambit of this provision is discussed at 20.49 below.

20.6 In Feldman v Nissim1 it was observed that: ‘The Gambling Act 2005 repealed the prohibition on enforcement of gaming contracts and the law has adopted what has been described as a “morally neutral” approach to gambling, whilst at the same time introducing a licensing regime to promote socially responsible gambling.’ In Ritz Hotel Casino Ltd v Daher2 the GA 2005 was described as a ‘liberalising Act’3 and contains a useful discussion on the transition of gambling into a fully lawful activity by the passage of the GA  2005: ‘… the 2005 Act as a matter of purpose and policy balances two interests. In contrast to historical legislation, it expressly recognises gaming as a proper and lawful activity, where it is for the individual to choose to engage in or refrain from participating in it.’4 1 [2010] EWHC 1353 (Ch) Richard Snowden QC (sitting as a deputy judge of the High Court) at [76].

1102

Contractual aspects of gambling 2 [2014] EWHC 2847 (QB), [2015] 4 All ER 222; HHJ Seys Llewellyn QC. 3 Ritz Hotel Casino Ltd v Daher at [27]. 4 Ritz Hotel Casino Ltd v Daher at [19].

20.7 Section 18 of the Gaming Act 1845 rendered all wagering contracts null and void, but not illegal.1 By contrast, whilst the Gambling Act 2005 sweeps away the blanket restrictions under the old law and broadly legalises betting, gaming and lotteries, those forms of gambling which are proscribed are rendered illegal. The significance of this change to illegality is considered at 20.54–20.79 below. 1 Bridger v Savage (1885) 15 QBD 363 at 367, per Bowen LJ.

FORMATION OF A CONTRACT General 20.8 Rights under a gambling contract may now be enforced – provided, of course, that it can be established that there is a contract in accordance with ordinary principles. This may be a real issue where the context is a private, non-business arrangement. 20.9 It is an essential element of the formation of a contract in English law that there is an intention to create legal relations. This intention is presupposed between the gambling consumer and a commercial profitmaking establishment (eg  a casino). The same no doubt applies where the gambling is organised albeit not-for-profit (eg a local raffle for a charity or other ‘good cause’). Where neither party is operating in an organised fashion, there may be a real issue. The words ‘I bet you …’ or the conduct of a shake of the hands might or might not evidence the formation of a contract: it would depend on the circumstances. Similar issues arise in the context of lottery and bingo syndicates, discussed in detail in Chapter 21, and the courts will no doubt apply a similar approach.1 1 See Robertson v Anderson [2003] SLT 235 for a good example of the problems that can arise where an informal agreement is made between ‘friends’.

20.10 It is also necessary that there is sufficient certainty as to the essential terms of the agreement. In the case of a bet, for example, the essentials include the amount of the wager, the return if the bet is won, and the event on which the bet is made (including, if relevant, the mechanism by which the happening of the event is to be judged – for example, whether the result of a race is to be taken as the official result or to be independently adjudicated).

‘Honour clauses’ 20.11 In the context of commercially operated gambling, it may well suit the gambler to be able to sue for winnings, but it may well not suit the operator. The legalisation of credit betting (in certain circumstances) does not alter the fact that many operators will continue to want a cash stake from 1103

Contractual aspects of gambling the gambler, which, once paid, means that there will be little likelihood of the operator wishing to sue the gambler. 20.12 ‘Honour clauses’, ie clauses which provide that a bet is binding ‘in honour’ only, were not uncommon in the pre-2005 Act regime, especially in the case of football pools which, in England and Wales,1 were probably, in the absence of such a clause, capable of giving rise to a legally binding contract. An example of such a clause is found in Jones v Vernons Pools Limited:2 ‘It is a basic condition of the sending in and the acceptance of this coupon that it is intended and agreed that the conduct of the pools and everything done in connection therewith and all arrangements relating thereto (whether mentioned in these rules or to be implied) and this coupon and any agreement or transaction entered into or payment made by or under it shall not be attended by or give rise to any legal relationship, rights, duties or consequences whatsoever or be legally enforceable or the subject of litigation, but all such arrangements, agreements and transactions are binding in honour only.’ 1 In Scotland, pool bets were void at common law as being a form of sponsio ludicra: Kelly v Murphy (1940) SLT 108; Ferguson v Littlewoods Pools Limited [1997] SLT 309. 2 [1938] 2 All ER 626.

20.13 The courts in a series of cases held that the effect of such a clause was to prevent the transaction from giving rise to a legally binding contract, so that a right to claim winnings could not be enforced.1 In Halloway v Cuozzo2 the Court of Appeal held that an honour clause, the effect of which was to prevent legal liability attaching to an agent who collected pools coupons for transmission to the promoter, was reasonable within the terms of the Unfair Contract Terms Act 1977 and was therefore effective to prevent legal liability arising on the part of the agent. In delivering the leading judgment, Clarke LJ, in an obiter observation, concluded that an honour clause which prevented the formation of a contract between the pools promoter and the customer would likewise be reasonable under the UCTA 1977.3 1 See Jones v Vernons Pools Limited [1938] 2 All ER 626; Appleson v Littlewoods Pools Limited [1939] 1  All ER  464; Guest v Empire Pools Limited (1964) 108 Sol Jo 98; Ferrera v Littlewoods Pools Limited [1998]  EWCA  Civ 618, CA; Halloway v Cuozzo [1999] EWCA Civ 746, CA. In Wright v Zetters Pools Limited [1999] EWCA Civ 1204 the Court of Appeal wrongly held that a football pool transaction was governed by s 18 of the Gaming Act 1845, but their decision to strike out a claim to winnings was justifiable on the basis that the coupon contained an honour clause. 2 [1999] EWCA Civ 746, CA. 3 In the Scottish case of Ferguson v Littlewoods Pools Limited [1997] SLT 309, where the coupon contained an honour clause, the court, having decided that the claim must fail as based on a sponsio ludicra, did not decide whether the clause was reasonable under UCTA 1977 as it applied in Scotland.

20.14 By means of such a clause it will probably remain possible to ensure that no contract arises despite the legalisation of contracts by the Gambling Act 2005. Indeed, the legalisation may lead to a proliferation of and renewed emphasis upon such clauses, subject to any restrictions which the Gambling Commission may impose from time to time through the licensing regime. 1104

Contractual aspects of gambling

Consideration 20.15 In Lipkin Gorman v Karpnale Ltd1 the House of Lords held that there was no consideration given by a casino operator in respect of gaming at a casino. However, that result appears to have been driven by the context that any gaming agreement was void. The legalisation of gambling contracts would appear to return the position to that indicated by older authority: ‘By common law wagers were not illegal, and the nature of a wager is such that from the point of view of jurisprudence there is ample consideration for a valid contract.’2 The same would apply to other forms of gambling. However, a voluntary selfexclusion agreement, by which a problem gambler agrees with an operator not to be permitted to gamble, is not supported by consideration.3 1 [1991] AC 548. 2 Hyams v Stuart King [1908] 2 KB 696. 3 Calvert v William Hill Credit Ltd [2008] EWCA Civ 1427, [2009] Ch 330, at paras 175, 178–180 and 186; and Ritz Hotel Casino v Al-Geabury [2015]  EWHC  2294 (QB), at para 137.

Time of making the contract 20.16 It seems tolerably clear that in most cases, the contract will come into existence when the bet is placed, or the lottery or raffle ticket purchased, as the case may be. At roulette, presumably the contract is entered into once the ball is spun and the croupier declares ‘no further bets’.1 It is therefore not possible for the gambler to change their mind and recover the stake once placed, even if (as there may be with a lottery) there is a considerable delay between purchasing the ticket and the draw taking place. 1 No doubt with more sophisticated forms of gambling difficult issues could arise if and when a contractual analysis is applied. Taking the roulette example, can chips be removed from the table, as opposed to being moved on the table, once placed? If the house rules say ‘no’, is there a contract when the chips are placed on the table? Or at some earlier stage?

DISTANCE SELLING 20.17 Contracts for ‘gaming, betting or lottery services’ were exempt from the usual right to cancel in distance selling situations conferred by the Consumer Protection (Distance Selling) Regulations 2000.1 The Consumer Protection (Distance Selling) Regulations 2000 do not apply in relation to contracts entered into on or after 13  June 2014 by virtue of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013,2 reg 2. The 2013 Regulations themselves do not apply to ‘gambling within the meaning of the Gambling Act 2005 (which includes gaming, betting and participating in a lottery)’.3 1 SI 2000/2334. The exemption is in reg 13(f). 2 SI 2013/3134. 3 The exemption is in reg 6(1)(a)(i).

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Contractual aspects of gambling

E-COMMERCE 20.18 A  detailed exploration of the issues arising under the Gambling Act 2005 in gambling through electronic media is set out in Chapter 17, to which reference should be made. The EC Directive on Electronic Commerce1 does not apply to ‘gambling activities which involve wagering a stake with monetary value in games of chance including lotteries and betting transactions’.2 The Electronic Commerce (EC  Directive) Regulations 2002,3 which implement the Directive in the UK, similarly exclude ‘betting gaming or lotteries which involve wagering a stake or monetary value’.4 1 2000/31/EC. 2 Article 1(5)(d). 3 SI 2002/2013. 4 Regulation 3(1)(d)(iii).

CONCURRENT DUTY OF CARE ARISING OUT OF VOLUNTARY SELF EXCLUSION AGREEMENTS, OR GENERALLY? 20.19 Many of the post-GA 2005 cases concern persons who have, or allege that they have, a gambling addiction. These persons have almost invariably, at some point, entered into a voluntary self-exclusion agreement (‘VSE’) with a casino or bookmaker, but then continued to gamble. The gambler then alleges that in allowing him to gamble the casino or bookmaker has breached a duty of care. In Calvert v William Hill Credit Ltd1 the Court of Appeal considered the potential causation issues, where the gambler is equally free to gamble and lose his money at other establishments. In Calvert the claimant was a chronic gambling addict who had tried to close his telephone betting account with the defendant, but the defendant had allowed him to open another, which the claimant used to gamble away a large sum of money. Although expressing some doubts, the Court of Appeal upheld the judge’s decision on the facts of the case that the defendant assumed a responsibility not to allow the claimant to place telephone bets with them, but that the defendant did not assume a more general responsibility to prevent the claimant from gambling. Therefore, the quantification of the claimant’s loss arising from the defendant’s breach of duty could not ignore other gambling losses which the claimant would probably have sustained as a consequence of his gambling propensity but for the defendant’s breach of duty; and that, accordingly, causation could not be established and the claim failed. 1 [2008] EWCA Civ 1427, [2009] Ch 330.

20.20 The recognition of even a limited duty of care in Calvert v William Hill seems to be the exception rather than the rule. Ritz Hotel Casino v Al-Geabury1 also concerned a VSE; in that case the judge held that the fact that the gambler had entered into a VSE was not enough to establish a duty to the gambler to follow licence conditions concerning VSEs. Calvert was also considered in Ritz Hotel Casino Ltd v Daher.2 There was no VSE in that case; the defendant was a high net worth individual with a long track record of gambling who could on the face of it afford to lose. The court rejected an 1106

Contractual aspects of gambling argument a duty of care arose ‘by reason of the special relationship between the casino the gambler, and the existence of the social responsibility code’ and held that the casino was not in breach of any duty in extending her credit limit. In summary, to date the courts have failed to hold a provider of gambling services liable in tort for breach of a duty of care allegedly owed to a gambler to prevent him from gambling. 1 [2015] EWHC 2294 (QB). 2 [2014] EWHC 2847 (QB), [2015] 4 All ER 222.

UNFAIR CONTRACT TERMS – UNFAIR TERMS IN CONSUMER CONTRACTS REGULATIONS 1999; CONSUMER RIGHTS ACT 2015 20.21 The Unfair Terms in Consumer Contracts Regulations 19991 (UTCCR 1999) were revoked on 1 October 2015 by the Consumer Rights Act 2015.2 The revocation does not have retroactive effect,3 so the Unfair Terms in Consumer Contracts Regulations 1999 will still apply to contracts made prior to 1 October 2015. The Consumer Rights Act 2015, Pt 2 now deals with unfair terms in consumer contracts. As gambling contracts to which UTCCR 1999 apply may be encountered for some years hence, both regimes will be considered. 1 SI 1999/2083. 2 Schedule 4, para 34. 3 The revocation is subject to transitional provisions and savings specified in the Consumer Rights Act 2015 (Commencement No  3, Transitional Provisions, Savings and Consequential Amendments) Order 2015 (SI 2015/1630), at arts 6–8. Commencement Order SI 2015/1630, art 6(4) provides that: ‘The Unfair Terms in Consumer Contracts Regulations 1999 continue to have effect in relation to any contract or notice relating to any contract specified in paragraph (1)(a) provided or communicated before 1st October 2015 despite the revocation of those Regulations by paragraph 34 of Schedule 4 to the Act.’

20.22 It is thought that the UTCCR 19991 applied to gambling contracts in the commercial context. Regulation 4(1) states blandly: ‘These Regulations apply in relation to unfair terms in contracts concluded between a seller or supplier and a consumer.’ 1 SI 1999/2083.

20.23 ‘Seller or supplier’ is defined1 as meaning ‘any natural or legal person who, in contracts covered by UTCCR  1999, is acting for purposes relating to his trade, business or profession, whether publicly owned or privately owned’. There is no other definition or limitation on the ambit of the Regulations, and therefore a contract for the supply of gambling ‘services’ would, it seems, be covered. Bets between individuals, neither of whom is a ‘seller or supplier’, are not covered. Whether or not a person is acting as a consumer is a question of fact.2 1 Regulation 3(1). 2 See for example Alfred Overy v Paypal (Europe) Ltd [2012] EWHC 2659 (QB), [2013] Bus LR D1 at paras [169]–[181].

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Contractual aspects of gambling 20.24 It is thought that the Consumer Rights Act 2015 (CRA 2015) similarly applies to gambling contracts in the commercial context. Section 61(1) states: ‘This Part applies to a contract between a trader and a consumer.’ 20.25 ‘Trader’ is defined1 as meaning ‘a person acting for purposes relating to that person’s trade, business, craft or profession, whether acting personally or through another person acting in the trader’s name or on the trader’s behalf’. A  ‘consumer’ is defined2 as: ‘an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession.’ There is no other definition or relevant limitation on the ambit of the CRA 2015, Pt 2, and therefore a contract for the supply of gambling services, by a person who carries on a trade providing a gambling service, would, it seems, be covered. Bets between individuals, who are not acting as a ‘trader and a consumer’, are not covered. Whether or not person is acting as a consumer is a question of fact.3 1 CRA 2005, s 2. 2 CRA 2005, s 2. 3 For an example of the court determining whether a party is a ‘consumer’ for the purposes of the UTCCR 1999, in the context of gambling, see Alfred Overy v Paypal (Europe) LTD [2012] EWHC 2659 (QB), [2013] Bus LR D1 at paras [169]–[181].

20.26 In Overy v Paypal (Europe) Ltd1 the claimant, who was a professional photographer, had intended to sell his house. In order to obtain a higher profit he devised a competition in which ‘contestants’ paid to enter and in which the house was the prize. The claimant entered into an agreement with Paypal, the defendant, for the provision of electronic payment services. The agreement incorporated a gambling and lottery policy, by which the defendant’s approval was required for gambling activities. Shortly after the commencement of the claimant’s competition the defendant suspended and then terminated its payment service, resulting in the failure of the competition. The claimant commenced an action for breach of contract. On its application for summary judgment the defendant relied on a breach of the gambling and lottery policy as entitling it to suspend its payment services. Judge Hegarty QC held that, subject to the issue of whether it was unenforceable by virtue of reg 8 of the UTCCR 1999, the defendant had been entitled to suspend its payment services for breach of the gambling and lottery policy. At a subsequent hearing the judge found that he was satisfied that the totality of the information which the claimant provided was such as would have reasonably led the defendant to believe that he was seeking to open the account solely for business purposes. The judge held that the claimant had not acted as a ‘consumer’, as defined by art 3(1) of the Council Directive 93/13/EEC of 5/4/93 on Unfair Terms in Consumer Contracts, and therefore reg 4(1) of the UTCCR 1999 did not apply. There seems no reason to think the result would have been any different under the CRA 2015. 1 [2012] EWHC 2659 (QB), [2013] Bus LR D1.

20.27

The principal teeth of the UTCCR 1999 are found in reg 5:

‘A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it 1108

Contractual aspects of gambling causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.’1 Provisions drafted in advance which the consumer has not been able to influence are not ‘individually negotiated’.2 It is inconceivable that a commercial operator could operate without standard terms, which will therefore be subject to the Regulation. 1 Regulation 5(1). 2 Regulation 5(2).

20.28

The principal teeth of CRA 2015 are found in s 62:

‘(4)  A  term is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer. (5) Whether a term is fair is to be determined— (a)

taking into account the nature of the subject matter of the contract, and

(b) by reference to all the circumstances existing when the term was agreed and to all of the other terms of the contract or of any other contract on which it depends.’1 1 CRA 2015, s 62(4), (5).

20.29 CRA 2015, s 62(4) may be compared to the UTCCR 1999, reg 5 set out earlier. It is important to note that the requirement that a contract term has not been individually negotiated has been removed from the CRA 2015. 20.30 Under the UTCCR 1999 the assessment of the fairness of a term shall not extend to ‘the definition of the main subject matter of the contract’1 or ‘to the adequacy of the price or remuneration, as against the goods or services supplied in exchange’.2 Such terms are usually referred to as ‘core terms’, for convenience. The UTCCR 1999 also do not apply to contractual terms which reflect mandatory statutory or regulatory provisions.3 Terms which reflect licence conditions4 would appear to fall within this exception. 1 2 3 4

Regulation 6(2)(a). Regulation 6(2)(b). Regulation 4(2)(a). Whether operating licences, premises licences, casino licences, bingo licences or otherwise.

20.31 Similarly, under the CRA  2015 the assessment of the fairness of a term shall not extend to a term that ‘specifies the main subject matter of the contract’1 or ‘the assessment is of the appropriateness of the price payable under the contract by comparison with the goods, digital content or services supplied under it.’2 These exclusions only apply if the term ‘is transparent and prominent’.3 ‘Transparent and prominent’ mean that the term ‘is expressed in plain and intelligible language and (in the case of a written term) is legible.’4 Such terms are usually referred to as core terms for convenience. 1109

Contractual aspects of gambling The CRA 2015 does not apply to contractual terms which reflect mandatory statutory or regulatory provisions.5 Terms which reflect licence conditions6 would appear to fall within this exception.7 1 2 3 4 5 6

CRA 2015, s 64(1)(a). CRA 2015, s 64(1)(b). CRA 2015, s 64(2). CRA 2015, s 64(3). CRA 2015, s 73(1)(a). Whether operating licences, premises licenses, casino licenses, bingo licenses or otherwise. 7 The UTCCR  1999 contained similar restrictions. The corresponding regulations are regs 6(2)(a), 6(2)(b) and 4(2)(1).

20.32 Decisions of the courts must be awaited as to the extent of core terms of a gambling contract, but some observations can be ventured at this stage. In a simple betting situation, the definition of the ‘event’ upon which the bet is to be won or lost is the main subject matter, as is the amount bet and the sum to be paid out on the bet being won. The fairness, or otherwise, of the odds would appear to fall squarely within UTCCR 1999, reg 6(2)(b)/ CRA  2015, s  64(1)(b). More difficult questions might arise in the context of the precise definition of the event where that is capable of dispute, eg  in situations where the happening of the event on which the bet is made is to be determined by some mechanism. 20.33 In the context of gaming, the game may be played according to complex rules. On the face of it, there is a good argument that all the game rules are by definition part of the main subject matter of a gaming contract, but whether this argument holds good for every intricacy remains to be seen. Overly complex game rules,1 particularly those which include technical jargon, might also fall foul of the over-arching requirement2 that any written term ‘is expressed in plain, intelligible language’. 1 Note that the GA 2005 anticipates potential problems with game rules and s 90(2) permits the inclusion in casino licences of conditions specifying game rules. Such specified rules would be excepted from the UTCCR 1999 by reg 4(2)(a) and from CRA 2015 by s 73(1)(a). 2 UTCCR 1999, reg 7(1) and CRA 2015, s 64(2). Moreover, the UTCCR 1999, reg 6(2)/ CRA 2015, s 64(1) exclusion of fairness from ‘core terms’ only applies so far as the core term is in plain intelligible language.

20.34 UTCCR 1999, Sch 2 includes an indicative list of categories of terms which may be regarded as ‘unfair’. Part 1 of Sch 2 of CRA 2005 provides a list of 20 examples of consumer contract terms which may or must be considered unfair. The list is not exhaustive, but it is illustrative. Both lists include exclusion clauses and limitation of liability clauses.1 This raises interesting issues as to ‘cheating’. Under the old law, commercial operators were by and large operating in conditions of unenforceability, and so they could (and did) simply refuse to pay out where they suspected a gambler of cheating in some way. If there is a contract, there will have to be defined grounds for refusal to pay. Operators may be tempted to insert a blanket exclusion for ‘cheating’, but it may be questioned as to whether such a vague exclusion would survive scrutiny.2 This point did not arise in Ivey v Genting Casinos 1110

Contractual aspects of gambling UK Ltd (t/a Crockfords Club)3 because the claimant accepted that there was an implied term that players would not cheat. 1 UTCCR 1999, Sch 2, para 1(b) and CRA 2015, Pt 1, Sch 2, paras 1 and 2. 2 Unless, of course, the operator could prove ‘cheating’ within the meaning of GA 2005, s 42, as that would presumably render the purported performance by the gambler illegal and, if so, then the operator could presumably rely on illegality as a defence, regardless of any exclusion clause. But note that s 336(4)(d) appears to contemplate the Commission having to avoid a bet where the gambler has been convicted under s 42. 3 [2014] EWHC 3394 (QB), [2016] EWCA Civ 1093.

20.35 Ivey v Genting Casinos UK Ltd (t/a Crockfords Club)1 the claimant was a professional gambler. He was one of the world’s top poker players and he also played Blackjack, Craps, Roulette and Baccarat, against casinos. These games have what is known as a ‘house edge’ which means that when played over a long period the house should beat the individual player. The claimant was playing Punto Banco, a variant of Baccarat, at the defendant casino in London. It was not disputed that the claimant used a technique known as ‘edge-sorting’ to beat the ‘house edge’ and win £7.7m. ‘Edge-sorting’ is possible when the manufacturing process of a pack of cards causes tiny differences to appear on the edges of the cards, so that the player can tell them apart. 1 [2014] EWHC 3394 (QB), [2016] EWCA Civ 1093.

20.36 The defendant refused to pay and the claimant sued the defendant for his winnings. The defendant denied liability on three related grounds: (1) no game of Punto Banco was in fact played because the premise on which the game proceeds, that the cards will be dealt at random, was defeated because the player knew what the first card of any coup dealt was likely to be before it was turned face up; (2) there was an implied term that the claimant would not cheat and that term was breached; (3) the claimant committed the criminal offence of cheating under the GA  2005, s  42 and could not found his claim on his own criminal conduct. The claimant accepted that there was an implied term but denied cheating or committing a criminal offence of any kind. 20.37 The judge rejected the first of those lines of defence. In regards to the second ground the judge noted that: ‘There is a complete dearth of authority on cheating at common law, at least in the civil context’. Mitting J went on to analyse the meaning of ‘cheating’ at length (paras [36]–[50]) and determined that the ‘edge-sorting’ carried out by the claimant was cheating, and given his concession as to the implied term there was consequently no need to consider the illegality defence raised in regard to the GA 2005. The decision was upheld on appeal by the Court of Appeal by a 2/1 majority. As to the first of the defences no challenge was brought in the Court of Appeal to the Judge’s finding that what had been played in the 1111

Contractual aspects of gambling casino was a game of Punto Banco. As to the second defence, namely that there was an implied term that the claimant would not cheat and that term was breached the Court of Appeal provided three differing analyses. Arden LJ held that the meaning of the word ‘cheat’ in the implied term must be taken to mean the same as its meaning in s  42 of the Gambling Act 2005. In her view s 42 properly construed did not involve that cheating necessarily involved dishonesty so that it was possible for a player to cheat even though what he did was not to be regarded as dishonest. On that basis she dismissed the appeal. Tomlinson LJ held that the implied term not to cheat should be interpreted by reference to the general meaning of the word ‘cheat’ as ordinarily understood, not limiting the definition to any meaning the word might have in s 42. In his view the Judge was entitled to find that Mr Ivey’s conduct fell within the ordinary and natural meaning of the word ‘cheating’, a word which in his view was, in the common law, encapsulated by the notion of unfairness in order to gain an advantage as much as it is by conduct which is, by ordinary standards, dishonest. On that basis he too dismissed the appeal. Sharp LJ, dissenting, concluded that ‘cheating’ whether understood at common law or for the purposes of s  42 connotes dishonest conduct so that the Judge’s finding that Mr Ivey had not been dishonest precluded a finding that he had cheated. On that basis she would have allowed the appeal.1 1 Ivey v Genting Casinos UK Ltd CA Crockfords Club [2016] EWCA Civ 1093.

20.38 In the context of avoiding liability on ‘suspect’ bets, the Gambling Commission has powers under GA  2005, ss  336–338 to avoid bets.1 The existence of those powers and that right of recourse may provide grounds for arguing that it would be unfair for an operator to seek to rely on an exclusion clause which is wider in scope than those powers and/or which would permit avoidance of a bet where the Commission has refused to act. 1 Those powers are considered in Chapter 13.

20.39 Bookmakers frequently impose a condition that a claim to a win on a sporting (or other) event must be made within a relatively short time of the result. Such a term would not appear to be core term and an overly short period might be challenged as unfair. Bookmakers also sometimes impose conditions beyond simply presenting a betting slip – eg that some other security precautions are satisfied. Examples of both of these sorts of stipulations appear in O’Callaghan v Coral Racing Ltd:1 ‘We reserve the right to refuse the whole or any part of any bet offered to us and to declare void any betting slip with whose bona fides we are not satisfied. In addition, we reserve the right to refuse payment on any lost or stolen bet that cannot be substantiated by reference to our photographic records; on any bet where the validity of the bet cannot be substantiated for reasons beyond our reasonable control; and on any bet for which no claim has been received within two months of the date of the event …’ Whether this type of condition would survive a challenge under the UTCCR 1999 or the CRA 2015 may be open to question. The operator will 1112

Contractual aspects of gambling mount a powerful argument that such conditions are necessary to prevent fraud. The gambler will mount an equally strong argument that he has no control over the photography, and cannot know whether it has been carried out successfully, and hence that it is unfair to exclude the obligation to perform the agreement on grounds entirely within the operator’s control. 1 [1998]  EWCA  Civ 1801. The validity of Coral’s reliance upon this clause went undecided because, unsurprisingly, the court held that the agreement was void under the Gaming Acts.

20.40 Another interesting area for exploration might be the issue of the conduct of the draw, in lotteries and prize competitions. As discussed later, the common law position is in summary that the draw may be conducted in any manner which preserves the element of chance. That in effect provides a great deal of latitude to the promoter, and conceivably the rule could be challenged pursuant to the Regulations.

UNFAIR CONTRACT TERMS – ALTERNATIVE DISPUTE RESOLUTION CLAUSES Arbitration clauses 20.41 A  gambling contract may contain an arbitration clause, requiring that some or all disputes be referred to arbitration, either in the UK or abroad. An arbitration clause is usually easy to spot.1 It will almost always refer to ‘arbitration’ or the appointment of an ‘arbitrator’. Frequently it will include a reference to the Arbitration Act 1996 or (in older agreements) to its predecessors, the Arbitration Acts 1950 and 1979. Section 89 of the Arbitration Act 1996 extends the application of the Unfair Terms in Consumer Contracts Regulations 1999 and CRA 2015 to arbitration agreements.2 Where one party is a ‘consumer’,3 the arbitration clause is by s 91(1) of the 1996 Act deemed to be unfair (and hence unenforceable under the Regulations) so far as it relates to a pecuniary remedy not exceeding the amount specified by order. The present limit is £5,000.4 1 But see O’Callaghan v Coral Racing [1998] EWCA Civ 1801 (below). 2 This applies regardless of the law applicable to the agreement: AA 1996, s 89(3). For contracts made after 1  October 2015, s  89 of the Arbitration Act 1996 was amended by the CRA 2015, Sch 4, s 31(2). 3 As defined in the Regulations, but extended by AA  1996, s  90 to include legal persons. 4 The Unfair Arbitration Agreements (Specified Amounts) Order 1999 (SI 1999/2167).

20.42 Section 89(1) makes clear that the arbitration agreement or clause is caught even where the underlying dispute or difference is not contractual. An agreement to arbitrate a gambling debt enforceable in honour only would in principle fall within the ambit of this provision. However, the terms of the arbitration clause itself may be such as to take it out of the ambit of the Arbitration Act 1996. In O’Callaghan v Coral Racing Ltd1 a dispute resolution clause provided as follows: 1113

Contractual aspects of gambling ‘In the event of a bet giving rise to a dispute which cannot be resolved by Coral personnel, it will be submitted for arbitration to the Editor of The Sporting Life. The editor’s decision will be considered final, save that in the case of Horseracing bets, they can, at the customer’s wish, be subsequently referred to the Tattersalls Committee for a final decision.’ The Court of Appeal decided that the clause did not amount to an arbitration clause. The decision was made under s 32 of the old Arbitration Act 1950, but ‘arbitration agreement’ is defined in s 6(1) of the present Arbitration Act 1996 in such similar terms that this change in the statutory context would not appear significant. Whether the decision would have been the same if the underlying contract had not been void as a gaming contract under the 1845 Act is perhaps more open to question. 1 [1998] EWCA Civ 1801.

Expert determination or other ADR 20.43 It should be noted that the Arbitration Act 1996 only applies to arbitration agreements and clauses and not other forms of alternative dispute resolution such as expert determination. Expert determination clauses are more varied in their drafting than arbitration clauses. The word ‘arbitration’ is either absent or is mentioned so as to exclude it. Sometimes one sees the formula that the dispute is to be determined ‘…  by a [professional] acting as an expert …’, or ‘acting as expert not arbitrator’, or ‘by [x] whose decision shall be final and binding’. It should be noted that ‘expert determination’ need not be by a wholly independent party: a provision that the result or dispute shall be ‘… as certified by [employee or agent of the operator] whose decision shall be final …’ is plainly not an arbitration clause but is a form of expert determination clause, albeit one that provides scant comfort for the gambler. 20.44 Clauses providing for compulsory reference to alternative dispute resolution (other than true arbitrations) may be challenged for unfairness if the Unfair Terms in Consumer Contracts Regulations 19991 or the CRA 2015 apply. Expert determination or certification clauses which are not arbitration clauses within the scope of the Arbitration Act 1996 appear to fall within the ambit of UTCCR 1999, and CRA 20152 as being ‘… arbitration not covered by legal provisions …’, ‘arbitration’ being used there in a non-technical sense. True arbitrations are covered by ‘legal provisions’ in the 1996 Act. 1 SI 1999/2083 (discussed earlier). 2 UTCCR 1999, Sch 2, para 1(q) and CRA 2015, Sch 2, Pt 1, para 20.

20.45 The foregoing analysis is concerned only with clauses dealing with resolution of a dispute between the parties to a bet or other gambling contract as to whether or not the conditions for payment of winnings have been met. It does not apply to conditions of agreement which, for example, provide that the result of a sporting event shall be taken to be the result determined by the body appointed within the sport for adjudicating on disputes, such as stewards at a race meeting. There can be no winner and hence no dispute 1114

Contractual aspects of gambling between gambler and operator unless and until someone is declared the winner by the appropriate authorities.1 The same may be said of lotteries and draws where the winner is chosen by the promoter. 1 See 20.119–20.121 below.

UNFAIR CONTRACT TERMS – UNFAIR CONTRACT TERMS ACT 1977 20.46 The Unfair Contract Terms Act 1977 is essentially concerned with unfair exemption of exclusion clauses, ie  clauses restricting or excluding liability. In that respect it is far narrower in scope than the 1999 Regulations and CRA 2015. In the context of gambling, where one party deals as a consumer or on the other’s standard terms of business, s 3(2) may be applicable: ‘As against that party, the other cannot by reference to any contract term— (a)

when himself in breach of contract, exclude or restrict any liability of his in respect of the breach; or

(b) claim to be entitled— (i)

to render a contractual performance substantially different from that which was reasonably expected of him, or

(ii) in respect of the whole or any part of his contractual obligation, to render no performance at all, except in so far as (in any of the cases mentioned above in this subsection) the contract term satisfies the requirement of reasonableness.’ 20.47 The courts have considered the application of UCTA 1977, s 3(2) to ‘honour’ clauses (discussed at 20.11–20.14 above). In the football pool betting case of Halloway v Cuozzo1 the Court of Appeal held that an honour clause, the effect of which was to prevent legal liability attaching to an agent who collected pools coupons for transmission to the promoter, was reasonable within the terms of the Unfair Contract Terms Act 1977 and was therefore effective to prevent legal liability arising on the part of the agent. In delivering the leading judgment Clarke  LJ, in an obiter observation, concluded that an honour clause which prevented the formation of a contract between the pools promoter and the customer would likewise be reasonable under the UCTA 1977.2 In deciding on the fairness of the clause to the agent, the court was heavily influenced by the fact that pools coupons were often collected by an agent ‘collector’, who is the agent of the player, and sent in to the promoter by the collector, for a low commission of 15 pence per coupon. It could hardly be unreasonable to exclude potential liability by such an agent for ‘lost’ winnings of hundreds of thousands of pounds. The grounds for upholding the validity of the clause were closely tied to the circumstances of football pool betting being conducted by way of millions of coupons being sent by post, with all the risks of loss which such a system entails. Consequently, it does not follow that ‘honour clauses’ will necessarily be upheld in all forms of gambling. Much will depend on the facts, especially the way the particular 1115

Contractual aspects of gambling form of gambling is conducted and the perception of risks (not related to the gamble itself) which that method of conducting gambling entails. 1 [1999] EWCA Civ 746. It should be noted, however, that the decision is a refusal of leave to appeal, and as such its status as ‘authority’ may be doubtful. 2 In the Scottish case of Ferguson v Littlewoods Pools Limited [1997] SLT 309, where the coupon contained an honour clause, the court, having decided that the claim must fail as based on a sponsio ludicra, did not decide whether the clause was reasonable under UCTA 1977 as it applied in Scotland.

20.48 Section 3(2) may also conceivably bite on clauses which purport to permit, for example, variation of odds after the event, or perhaps a clause in competition rules which purports to permit the promoter to reduce the prize if ‘too many’ people win. There is a degree of overlap with the Unfair Terms in Consumer Contracts Regulations 1999,1 and CRA 2015 and reference may be made to the discussion at 20.22–20.40 above. 1 SI 1999/2083.

GAMBLING UPON OBJECTIONABLE SUBJECT MATTER 20.49 The Gambling Act 2005, s 335(1) makes plain that the repeal of the Gaming Acts does not revive the ancient common law rules restricting enforcement of gambling contracts and that no new rules can be developed. Furthermore the Interpretation Act 1978, ss 15 and 16 will apply: ‘15. Repeal of repeal. Where an Act repeals a repealing enactment, the repeal does not revive any enactment previously repealed unless words are added reviving it.’ ‘16. General savings. (1)

Without prejudice to section 15, where an Act repeals an enactment, the repeal does not, unless the contrary intention appears,— (a) revive anything not in force or existing at the time at which the repeal takes effect;

(b) affect the previous operation of the enactment repealed or anything duly done or suffered under that enactment; (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under that enactment; (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against that enactment; (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment; and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed, as if the repealing Act had not been passed.’ 1116

Contractual aspects of gambling 20.50 In any event, social mores have changed since the common law was subsumed by statute. Nevertheless, just because the Gambling Act has made gambling contracts enforceable, it does not follow that all such contracts will be enforced. Enforcement may be refused on grounds such as ‘public policy’, but it is clear from Feldman v Nissim and Ritz Hotel Casino Ltd v Daher1 that any suggestion that gambling itself might still be viewed with disfavour at common law by the courts is misconceived. Any public policy argument could only be made out if and so long as the ground is not peculiar to gambling and could equally apply to other sorts of contract. Possible examples are considered below. 1 Feldman v Nissim [2010]  EWHC  1353 (Ch); Ritz Hotel Casino Ltd v Daher [2014] EWHC 2847 (QB), [2015] 4 All ER 222 discussed in 20.06 above.

20.51 There was previously authority – Henkin v Gerss1 – that a wager on the answer to a question of law in which the parties had no direct interest would not be enforced. This sort of bet might provide a ready method of circumventing the rule that the courts do not decide hypothetical issues. Given the more robust and flexible procedural powers conferred on the courts by the Civil Procedure Rules, and the development of the court’s inherent jurisdiction, it seems likely that any action on such a bet would be struck out as an abuse of process. The courts may well take a robust line against analogous attempts to use an artificial dispute over a gambling contract as a vehicle to bring before the courts any issue which could not otherwise properly be litigated. 1 (1810) 2 Camp 408.

20.52 Some other examples culled from the old cases1 would also seem to remain relevant today. In the previous edition of this work it was suggested that a good example was betting on the results of an election,2 which might easily provide a vehicle for bribery, ‘treating’, or other election fraud, but such bets seem to be commonplace. A better example might be a wager on someone’s life, as that might provide an incitement to murder.3 1 Chitty on Contracts (31st edn), Vol II, Ch 40 – Gambling Contracts, at [40-010] has a list of gambling contracts which the courts used to refuse to enforce on the grounds of public policy. 2 Allen v Hearn (1785) 1 TR 56. 3 In Gilbert v Sykes (1812) 104 ER 1045 it was held that a wager on the life of Napoleon was void because this might lead to his assassination which would be against public policy in times of peace, or to his preservation, which would be against public policy in times of war.

20.53 It is also conceivable that the Human Rights Act 1998 may have an impact. The old cases record an instance of a wager on the gender of a third party.1 Paternity is another possible similar subject for a bet, now that DNA testing would enable proof on the balance of probabilities. Proof of this sort of subject matter would interfere with the private life of the subject of the bet and one would assume that the courts would decline to order any of the necessary steps which would be necessary to prove who had won the bet, and the claim would fail. As noted above, the courts in any event now possess ample procedural powers to control abuse of process, which was not the case in the eighteenth and nineteenth centuries. 1 Da Costa v Jones (1778) 2 Cowp 729.

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Contractual aspects of gambling

ILLEGALITY Introduction 20.54 As noted earlier, the GA  2005 on the one hand repeals existing restrictions so long as gambling is carried out in accordance with the Act, but on the other hand criminalises gambling in breach of the Act. Gambling in breach of the Act is, in the contractual sense, illegal. It may therefore be anticipated that losers (whether gamblers or operators) may seek to escape liability for their losses by contending that the gambling was in breach of the Act and illegal, and that the illegality is a defence to recovery.1 1 For a general treatment of the topic see Chitty on Contracts (31st edn), Vol 1, ch 16 and Vol 2, Ch 40 at [40-105–40-021]. See also Ritz Hotel Casino Ltd v Al-Geabury [2015] EWHC 2294 (QB) at [107]–[108], discussed further below.

20.55 In Ritz Hotel Casino Ltd v Al-Geabury1 the defendant, who allegedly had a serious gambling addiction, gambled away £2M on the roulette tables at the Ritz Hotel Casino run by the claimant. The claimant sought to recover from the defendant the sum of £2M (plus interest) in respect of the cheque in that sum which he signed in return for gambling chips that evening, but which was subsequently dishonoured by him. The claim was defended on the following grounds: (i) the consideration provided by the claimant for the cheque was an unlawful consideration because the gambling facilities were provided in breach of the mandatory conditions of section 2.5 of the Social Responsibility Code of the Gambling Commission’s Licence Conditions and Codes of Practice (May 2012) and therefore in breach of its gaming licence. Consequently, the provision of gambling facilities was unlicensed and unlawful by virtue of GA 2005, s 33. (Section 2.5 provided that licensees must have and put into effect procedures for self-exclusion of persons.); (ii) by way of counterclaim, it was said that the claimant owed a statutory or common law duty of care to take reasonable steps to ensure that the defendant was not harmed or exploited by the claimant’s provision of gambling facilities. The duty extended to taking reasonable steps to prevent the defendant from gambling at the casino following the execution of a voluntary self-exclusion agreement on 22 November 2009 (‘the 2009  VSE’), and that the duty was breached when the claimant readmitted the defendant to its casino; (iii) alternatively, the 2009 VSE was a binding contract requiring the claimant to exclude the defendant from the casino for life, and readmitting the defendant was a breach of contract. 1 [2015] EWHC 2294 (QB).

20.56 The judge found that there was no necessity for the implication of a provision into SRC 2.5 prohibiting revocation of a VSE. Consequently the claimant’s licence was valid and the first and second grounds of the defence failed, because there was no illegality. Further the judge found that the 2009 VSE did not give rise to a contract; so the third argument also failed. 1118

Contractual aspects of gambling 20.57 The state of the law concerning the illegality defence is in something of a state of flux at the time of writing,1 but to date it has been, in contract cases, usual to distinguish between illegality as to the formation of a contract (ie the contract itself is illegal) and illegality as to performance (ie the contract is not in itself illegal but it is performed in a manner which is illegal). In the context of the Gambling Act 2005, this does not advance the debate, because many of the offences, such as operating without the necessary operating and/or premises licence, can be said to be concerned with the formation of the contract. 1 The Supreme Court has recently considered the ‘illegality defence’ on three occasions; Allen v Hounga [2014] 1  WLR  2889; Les Laboratoires Servier v Apotex [2015] AC 430 and Bilta (UK) v Nazir [2016] AC 1, but still the scope of the defence remains uncertain.

20.58 Where parties enter into an illegal contract, the usual rule is that neither party may seek to enforce the contract, as the law proceeds in accordance with the maxim ‘ex turpi causa non oritur actio’. Moreover, provided both parties are equally blameworthy in having entered into the contract, neither will be able to seek release from its operation by depriving the other of a gain or benefit received under the contract, in accordance with the maxim ‘in pari delicto potior est conditio defendentis’.1 1 Chitty on Contracts (31st edn), Vol 1, para 16-180.

20.59 However, the latter principle may be qualified. The principle does not apply to cases where a contract is rendered illegal or unlawful by a statute which is passed to prevent the exploitation of certain vulnerable members of society, and where the party seeking to be released from the contract and to recover the benefit paid over is a member of the class of persons for whose protection the statute was passed. In such a case the parties are not to be treated as in pari delicto. The effect of such ‘class-protecting’ statutes was described by Lord Mansfield in Browning v Morris1 as follows: ‘But where contracts or transactions are prohibited by positive statutes, for the sake of protecting one set of men from another set of men, the one, from their situation and condition being liable to be oppressed or imposed upon by the other, there the parties are not in pari delicto; and in furtherance of these statutes, the person injured, after the transaction is finished and completed, may bring his action and defeat the contract.’ 1 (1778) 2 Cowp 790.

Gambling legislation as a class-protecting statute 20.60 In Barclay v Pearson1 Stirling  J  concluded that the statutes then in force prohibiting lotteries were to be treated as class-protecting statutes, with the result that an entrant in an illegal lottery was not to be treated as in pari delicto with the lottery’s promoter. The judge said as follows: ‘The law on this subject has been recently considered by the Court of Appeal in the case of Kearley v Thomson2 where Lord Justice Fry, in the course of his judgment, lays it down thus: “As a general rule, where 1119

Contractual aspects of gambling the plaintiff cannot get at the money which he seeks to recover without shewing the illegal contract, he cannot succeed. In such a case the usual rule is potior est conditio possidentis … To that general rule there are undoubtedly several exceptions, or apparent exceptions. One of these is the case of oppressor and oppressed, in which case usually the oppressed party may recover the money back from the oppressor. In that class of case the delictum is not par, and, therefore the maxim does not apply. Again, there are other illegalities which arise where a statute has been intended to protect a class of persons, and the person seeking to recover is a member of the protected class … In these cases of oppressor and oppressed, or of a class protected by statute, the one may recover from the other, notwithstanding that both have been parties to the illegal contract.” Amongst the cases under the Lottery Act referred to by Lord Justice Fry, that of Browning v Morris3 which was decided in 1778, may be one. That was an action in which the plaintiff and the defendant were both lottery office keepers, and it was brought by one against the other in order to recover money paid upon an illegal transaction or contract … I think that that case is an authority for holding in the present case that the competitors are a class protected by statute, and that in the absence of special circumstances, each unsuccessful competitor is entitled, notwithstanding that the competition is finished and the prize winners ascertained, to bring an action at law for the recovery of what was paid by him to the defendant Pearson, and would be so entitled even if the fund had been distributed.’4 1 2 3 4

[1893] 2 Ch 154. (1890) 24 QBD 742. (1778) 2 Cowp 790. [1893] 2 Ch 154 at 167–8 per Stirling J.

20.61 There seems little doubt that the courts will consider the licensing provisions and other restrictions in the Gambling Act 2005 to be for the benefit of the ordinary ‘gambler’ – particularly given that the gambler may not be in a position to know whether or not a commercial operator is or is not duly licensed. 20.62 Indeed, the structure of the GA  2005 restrictions would strongly support this view. Gambling and gambling contracts are not per se illegal or unlawful.1 Section 33 creates a criminal offence where someone ‘provides facilities for gambling’ save in specified circumstances. Those circumstances include2 holding an operating licence and operating in accordance with licence conditions. Section 37 creates a similar offence for the use of premises for gambling activity and with similar exceptions for use in accordance with a premises licence. If a gambling operator has no licence or is in breach of licence conditions, he commits an offence, but the gambler does not. It would therefore appear that the operator cannot escape liability to pay out on a win by pleading illegality arising out of his own breach of licence, whereas the gambler could successfully bring a claim to recover any bet, fee or stake paid over to an operator who had breached a licence.3 1 Discussed in detail in Chapters 1–15, 17–18 and 22–26, to which reference should be made. Familiarity with the detail is assumed in this chapter.

1120

Contractual aspects of gambling 2 Section 33(2). 3 See, however, 20.80–20.83 below discussing the case law on illegal lotteries, where the courts have refused to permit recovery of the prize, as opposed to the contribution.

ILLEGALITY – PARTICIPATION OF CHILDREN AND YOUNG PERSONS IN GAMBLING 20.63 The same cannot be said for the many restrictions on the participation of children in gambling and in services ancillary to gambling. The necessity to protect children is such that gambling by or through children would appear to preclude recovery of winnings. The claim in Camelot v Beech1 involved a National Lottery scratchcard sold to a child under 16. The sale of the ticket to him was therefore illegal as a breach of the National Lotteries Regulations 1994, reg 3. The court held that by reason of this illegality there was no enforceable entitlement to the prize. This decision would appear to apply equally to any other form of gambling legalised by the GA 2005 but where gambling by children is illegal. 1 6 November 1996, unreported (High Court, Chancery Division), Blackburne J.

20.64 Subject to specified exceptions, a young person1 commits an offence if he gambles.2 He also commits an offence3 if he enters premises where the operator commits an offence under GA 2005, s 47 by permitting him to be there. In such circumstances it would appear that, by application of the general law of contract, the operator could plead illegality as a defence to a claim, whether to recover winnings or to recover a bet or stake. The GA 2005 makes it an offence for a person to invite, cause or permit a child or young person to gamble.’4 1 Defined in GA 2005, s 45(2). 2 Section 48(1). The exceptions are listed in s 48(2). 3 Section 49. 4 Section 46.

20.65 However, it should be noted that GA 2005, s 83(1)1 imposes mandatory conditions into operating licences obliging operators who become aware that a child or young person has been gambling in reliance on the licence to return any stakes or bets placed by a child or young person and prohibiting the operator from giving any ‘prize’. This requirement applies ‘despite any contract or other agreement and despite any rule of law’,2 but does not permit recovery of a prize if already given.3 How precisely these conditions interact with the contractual position is unclear. The child or young person is not a party to the licence and, it is suggested, cannot directly rely on the licence conditions or on s  83. The conditions apply notwithstanding any contract, but do not purport to modify such contract as there may be. Probably the recourse of the child or young person is to demand repayment of stakes and, if that is refused, to refer the matter to the Commission. The consequences to an operator of breaching his licence conditions for (probably) a second time4 will almost certainly outweigh the modest pain of returning stakes. 1 Discussed in detail in Chapter 6 dealing with operating licences.

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Contractual aspects of gambling 2 GA 2005, s 83(3)(a). 3 Section 83(3)(b). 4 Having probably already done so once in permitting the child to gamble in the first place.

Children as agents 20.66 The court in Camelot v Beech1 went on to hold that a person under 16 years of age cannot purport to purchase a ticket on behalf of a person over 16 years of age so as to confer any right on that person to claim the prize. The rationale in this decision would appear to apply equally to any other form of gambling legalised by the Gambling Act 2005, but where gambling by children is illegal. 1 6 November 1996, unreported. See above.

Offences by gamblers 20.67 ‘Cheating’ is a criminal offence.1 If it is established that a gambler cheated, then it would follow that his gambling was illegal and the operator could plead illegality as a defence to a claim whether to recover winnings or to recover a bet or stake.2 Additionally, a gambling contract may contain an actual or implied term that players will not cheat, breach of which may afford a defence to a claim for payment.3 1 GA 2005, s 42, discussed in detail at 20.34. 2 But note that GA 2005, s 336(4)(d) appears to contemplate the Commission having to avoid a bet where the gambler has been convicted under s 42. If illegality is a defence to payment anyway, this power would appear to be unnecessary. 3 Ivey v Genting Casinos UK Ltd (t/a Crockfords Club) [2014] EWHC 3394 (QB) where the existence of such an implied term was conceded by the gambler. See the Court of Appeal decision at [2016] EWCA Civ 1093.

20.68 It is also a mandatory condition of a general betting operating licence, a pool betting operating licence and a betting intermediary operating licence that no bets are taken on the National Lottery.1 It is conceivable that the court might not treat this as simply a possible illegality by the operator, because it is well known that one of the reasons why the State Lottery was abolished in 1826 was that it had been brought into disrepute by extensive betting on the result. 1 GA 2005, s 95.

Injunctions against organised cheating 20.69 Cheating may go beyond individual gamblers and/or one off incidents. It may be significant, repeated and organised. The courts will be prepared to grant perpetual injunctions against those organising cheating. In Midasplayer.com Ltd v Watkins1 the defendant operated a website advertising what he himself described as ‘cheater programs’ for cheating at online games run by the claimant. The court found among other things that 1122

Contractual aspects of gambling the defendant’s conduct was an inducement to others to break the terms on which they contracted with the claimant and that he was interfering with the claimant’s business. The court granted a perpetual injunction restraining the defendant from using or distributing any software information or techniques designed to cheat the claimant’s online games. The case is a very useful point of reference, as the cheating is properly explained and the legal analysis of the rights and remedies arising from it is set out with clarity. There is also a good discussion of cheating in Ivey v Genting Casinos UK Ltd (t/a Crockfords Club).2 1 [2006] EWHC 1551. 2 [2014] EWHC 3394 (QB) at [36]–[50].

ILLEGALITY UNDER FOREIGN LAW 20.70 Now that gambling contracts are in general enforceable in the UK, and given the growth in offshore gambling, the situation may in future arise that a gambling contract which would be legal and enforceable under English or Scots law is governed by a foreign law and is unenforceable for illegality in that foreign law. In that situation, the contract will also be unenforceable here.1 This is an application of the general law of contract and so would appear to be unaffected by s 335 of the GA 2005. 1 Articles 8 and 10 of the Rome Convention, applied by the Contracts (Applicable Law) Act 1990.

20.71 Whereas lack of knowledge of illegality under domestic law is irrelevant where the formation of the contract is illegal, lack of knowledge of the illegality under foreign law by one party is treated as a mistake as to facts, and so the innocent party may still enforce.1 1 Fielding & Platt v Najjar [1969] 1 WLR 257, where an English company contracted to supply goods for export abroad and, unknown to the supplier, the buyer lacked the necessary licence to import into the country of destination. Since the claim in Fielding & Platt related to a contract price, this principle would by analogy with a gambling contract apparently permit recovery of winnings, not merely recovery of the stake.

20.72 It remains a possible scenario that a particular gambling transaction might be legal abroad but would have been illegal if entered into in England and Wales. There is old authority that the Gaming Act 1845, s  18 was not applicable to prevent either the recognition or the enforcement of a foreign judgment based on a wagering contract.1 Whether a similar position obtains under the GA 2005 remains to be worked out, and may depend on the reason why the transaction would have been illegal here. 1 See the Straits Settlements Court of Appeal decision of Ralli v Angullia (1917) 15 SSLR 33.

20.73 If a foreign national enters into a gambling contract which is governed by English law then the contract will be enforceable in the United Kingdom, provided that it is made in accordance with the GA 2005. It is inconsequential 1123

Contractual aspects of gambling that the gambling contract would not be valid in the foreign nation’s home jurisdiction. This was the situation which arose in Hillside (New Media) Ltd v Baasland.1 Hillside, the claimant betting operator, applied for summary judgment on a claim for a negative declaration against a Norwegian gambler, the defendant, who had incurred significant debts and was threatening legal action. The court granted the application holding that: (i)

applying the Private International Law (Miscellaneous Provisions) Act 1995 and Regulation (EC) No 864/2007 (the Rome II Regulation) any non-contractual claim was governed by English law and in any event was certainly not governed by Norwegian law;

(ii) under article 4 of the Rome Convention, subject to any express choice law clause, a contract was governed by the law of the country with which it was most closely connected. The position was no different when s 18 of the Gaming Act 1845 was in force; (iii) under English law there was no real prospect of the gambler establishing a claim against the operator either in tort or contract and the operator was entitled to summary judgment on its claim for a negative declaration. 1 [2010] EWHC 3336, [2010] 2 CLC 986.

ILLEGAL BETS – MONEY DEPOSITED WITH STAKEHOLDER 20.74 In so far as money deposited with a stakeholder1 is concerned, it was established under the Gaming Act 1845 that either party can recover his or her own stake, provided that it has not already been paid over,2 although the winning party as such cannot recover money deposited with the stakeholder by the other party in an attempt to recover his winnings.3 As stated previously the GA  2005 has now repealed the Gaming Act 1845 therefore such a stakeholder contract would now be enforceable as a contract related to gambling. 1 In Bristol Alliance Nominee No 1 Ltd v Bennett [2013] EWCA Civ 1626 at [23]–[25] the Court of Appeal gave recent consideration to the general principles concerning money deposited with stake-holders. That case concerned an appellant landlord who was appealing against a decision refusing them permission to bring proceedings against tenants for specific performance of agreements entitling them to moneys held in escrow by their solicitors. 2 See eg Hampden v Walsh (1876) 1 QBD 189, esp at 196, per Cockburn CJ; Varney v Hickman (1847) 5  CB  271, 136  ER  881; Diggle v Higgs (1877) 2 Ex D  422; and Trimble v Hill (1879) 5 App Cas 342. Contrast the situation where an illegal wager is involved; but cf Hastelow v Jackson (1828) 8 B & C 221, 108 ER 1026; but cf (in turn) E Peel Treitel on the Law of Contract (2007, Sweet & Maxwell), p 486. 3 See eg Savage v Madder (1867) 36 LJ Ex 178 and Varney v Hickman (1847) 5 CB 271, 136 ER 881.

20.75 The authority of the stakeholder is to pay the money over to the winner, although either party may ask for his or her stake to be repaid before it is paid over to the other (winning) party; if the money has already been paid, there is nothing the party concerned can do, particularly since the stakeholder 1124

Contractual aspects of gambling has merely exercised his or her authority in paying over the money to the other party. By parity of reasoning, however, the stakeholder will be liable to the party seeking repayment of his or her stake if, cognisant of the fact that repayment is so required, he or she nevertheless ignores this revocation of authority and proceeds nevertheless to pay over the money to the other party.1 1 See eg Varney v Hickman (1847) 5 CB 271, 136 ER 881; Diggle v Higgs (1877) 2 Ex D 422; Hampden v Walsh (1876) 1 QBD 189; and O’Sullivan v Thomas [1895] 1 QB 698.

USE OF STOLEN OR UNLAWFULLY OBTAINED FUNDS FOR GAMBLING Restitution for third parties 20.76 When gaming contracts were generally void, the possibility of restitutionary claims arose where the loser paid over to the winner not his or her money as such but, rather, a third party’s money. This was the case in the leading House of Lords decision in Lipkin Gorman v Karpnale Ltd,1 where the claimant third party was a firm of solicitors, whose money was embezzled and utilised by one of its salaried partners to pay over (in settlement of his betting debts) to the defendant club, who (in fact) received the money in good faith. The Lipkin Gorman case itself was not a case where the transaction was illegal. It was a case, instead, where the original transaction was void under the Gaming Act 1845, s  18. The House held that the claimant firm was entitled to restitution of the money concerned, subject to the defence of change of position. It held, inter alia, that the defendant’s promise to pay the errant employee his winnings could not possibly constitute consideration for their receipt of the plaintiff firm’s money, since this promise was itself void under GA 1845, s 18.2 1 [1991] 2 AC 548. 2 [1991] 2 AC 548 at 562 per Lord Templeman, and at 577 per Lord Goff of Chieveley.

20.77 With the repeal of the Gaming Acts, and the criminalisation of contracts which breach the conditions under the Gambling Act 2005, the position is now fundamentally different from the position analysed in Lipkin Gorman. If the GA2005 has not been breached, the contract is legal and binding, and hence good consideration is given by the loser. If there is a breach, the transaction is illegal and void for illegality. Recovery will be possible in the latter situation, but not the former. If the facts of Lipkin Gorman were repeated today, the claim should fail.

Liability for ‘knowing receipt’ 20.78 In the majority of cases where a gambler funds his gambling using money which he has obtained unlawfully or illegally, there will be no direct link between the unlawful act and the transfer of funds to the operator, and/or the source of the money will not be known to the operator.1 The reconsideration of Lipkin Gorman (above) proceeds on that basis. If, however, it is possible to prove a direct link and that the operator knew of the source 1125

Contractual aspects of gambling of the funds, then the operator may be liable to reimburse the loser of the funds. That was the case in Charter plc v City Index Ltd.2 The claimant was defrauded of large sums by an employee, who procured the transfer of over £9 million to the defendant to finance personal spread betting. The employee was in due course caught and convicted of theft, and the claimant claimed to recover the money from the defendant, alleging that it had been received by the defendant with knowledge of the breach of trust or breach of fiduciary duty by the employee, that it was unconscionable for the defendant to retain it, and that the defendant was liable to account to the claimant for the money transferred (‘liability for knowing receipt’). The judgment records that the defendant repaid £5.5 million by way of agreed settlement, even though the defendant’s profit from the transactions was only £3 million.3 1 As in Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548, where it was found that the casino had acted in good faith without notice of the fact that the money gambled was stolen. 2 [2007] EWCA Civ 1382, [2008] Ch 313, CA. 3 As to liability for ‘knowing receipt’, the court accepted that the analysis in BCCI v Akindele [2001] Ch 437, CA represents the current state of the law.

20.79 The Charter case found its way into the law reports despite the settlement, because the defendant in turn claimed contribution or indemnity1 against a number of former directors and against its auditors, alleging that the directors and auditors had breached their duties to the defendant, which (it was alleged) caused the unauthorised transfers to go undetected and thereby caused or contributed to the claimant’s losses. The Court of Appeal held that such a claim was a valid claim under the Civil Liability (Contribution) Act 1978, and allowed the contribution claim to proceed to trial to determine the extent (if any) of the appropriate contribution.. 1 Pursuant to the Civil Liability (Contribution) Act 1978.

CLAIMS TO PRIZES AND CONTRIBUTIONS IN ILLEGAL LOTTERIES AND CHAIN GIFT SCHEMES Recovery of prizes in illegal lotteries 20.80 It is perhaps worth stating the obvious, that many lotteries will be lawful since the Gambling Act 2005 came into force. If, nevertheless, the lottery is illegal, then Allport v Nutt, Mearing v Hellings and Gatty v Field1 established the principle that where a contribution lottery is illegal, this will defeat a claim against the holder of the prize fund for the recovery of prize money. 1 Discussed at 20.81 below.

Recovery of contributions to an illegal lottery or chain gift scheme1 20.81 A contribution to a legal lottery can not be recovered simply because the contributor has decided that he does not wish to participate, even if this 1126

Contractual aspects of gambling change of mind occurs before the draw. The contract came into existence when the ticket was bought. If a contribution lottery is illegal, the issue may arise as to whether a contributor may recover his contribution. The case of Gatty v Field2 appears to decide that a properly pleaded claim could succeed, provided the plaintiff can show that he has demanded the return of his contribution before the stakeholder has paid it out. This conclusion is consistent with the general position where a stakeholder holds stakes pursuant to an illegal contract, or pursuant to a contract which is void and unenforceable. In such a case a loser can normally recover back his own stake, so long as he demands it back from the stakeholder before the latter has paid it over to the winner.3 Similarly, in such a case, the winner can recover back his own stake, but cannot sue the stakeholder for the entire stakes.4 1 Prior to the Gambling Act 2005 ‘lottery’ could include ‘pyramid schemes’, ‘snowball schemes’ and similar, into which large amounts of money may be advanced. It is possible that such arrangements are not lotteries within the definition in s 14 (see Chapter 15) but, even if they are not, they are likely, in most cases, to be ‘chain-gift schemes’ and illegal under s  43, so this topic is of some importance. For convenience, this chapter continues to use the term ‘lottery’, but the discussion of illegality will equally apply to a ‘chain-gift scheme’. 2 (1846) 9 QB 431. 3 Varney v Hickman (1847) 5 CB 271; Hampden v Walsh (1876) 1 QBD 189; Batson v Newman (1876) 1 CPD 573; Diggle v Higgs (1877) 2 ExD 422; Trimble v Hill (1879) 5 App Cas 342. That the principle applies to illegal contracts as well as to contracts that are simply void was conclusively stated in Barclay v Pearson [1893] 2 Ch 154 at 168–9. 4 Savage v Madder (1867) 36 LJ Ex 178; Hampden v Walsh (1876) 1 QBD 189 at p 16.

20.82 However, cases subsequent to Gatty v Field suggest that the right of a contributor to an illegal contribution lottery to recover his contribution may not be limited by the requirement that a demand for repayment should be made before the stakeholder pays the money over to the winner, but that such a claim may succeed even where the stakeholder has disposed of the funds without such a demand having been made. The reasoning underlying this conclusion is that the gambler is not in pari delicto1 as a member of the class of persons to be protected by the statutory illegality. As already noted, in Barclay v Pearson Stirling J concluded that the statutes prohibiting lotteries were to be treated as class-protecting statutes, with the result that an entrant in an unlawful lottery is not to be treated as in pari delicto with the lottery’s promoter. As it happened, the fund was still available to enable the repayments to be made. However, the judge concluded that, even if the fund had been paid out, the contributors could still have claimed the return of their subscriptions.2 1 Browning v Morris (1778) 2 Cowp 790 cited at 20.59 above. See also Barclay v Pearson [1893] 2 Ch 154, citing Hastelow v Jackson (1898) 8 B & C 221 and Hodson v Terrill (1833) 1 Cr & M 797. 2 The relevant passage is set out at 20.60 above.

20.83 The conclusion that an action for recovery of contributions could have succeeded even if the fund had been distributed is strictly obiter, as the fund existed for distribution. However, it appears to be supported by a more recent decision in One Life Ltd v Roy.1 The case involved a claim by 1127

Contractual aspects of gambling the plaintiff company in liquidation through its liquidator to recover from Mr and Mrs Roy sums of money drawn by them as the sole shareholders of the company which they claimed to have drawn as dividends or salary. The sole business of the company had been the running of a snowball scheme. The liquidator contended that, as this was an illegal lottery, there were never any lawful profits out of which dividends could have been paid to the defendants. Rather, the company was and remained liable to repay to the contributors to the snowball the sums of money that they had paid in. The case, therefore, raised the question whether, in principle, contributors to an unlawful snowball type lottery are entitled to recover their contributions. Carnwath J, applying Barclay v Pearson, held that they were: ‘If I am right the activity was a lottery, but not a game, and it seems clear that the participants are entitled to recover their contributions. This is on the principle that they are within the category of persons intended to be protected by the provisions which make the activity unlawful. This was the view of Stirling J in Barclay v Pearson (relying on earlier cases such as Browning v Morris, reviewed by the Court of Appeal in Kearley v Thomson2  … That case concerned a competition held by a newspaper which was held to be an illegal lottery. [Counsel] suggests that the specific penalties in the Betting and Lotteries Act give rise to a presumption that those are the only remedies (see Green v Portsmouth Stadium Ltd).3 However, it seems to me that the prohibition of lotteries contained in that Act has the same objectives as the similar statutory prohibitions contained in earlier Acts, and that the same consequences should follow.’4 In One Life Ltd the defendants were the very persons to whom the funds had been paid, so the case is not strictly authority for the proposition that a lottery promoter could be held liable to refund contributions to contributors in a case where he had paid them over to other participants in the lottery. However, taken with the dictum of Stirling J in Barclay v Pearson, it supports the view that the promoter of an unlawful lottery may be exposed to such a liability. 1 2 3 4

[1996] 2 BCLC 608. (1890) 24 QBD 742. [1953] 2 QB 190, 2 All ER 102. [1996] 2 BCLC 608 at p 5.

CLAIMS IN RESPECT OF ILLEGAL GAMBLING – PROFESSIONAL CONDUCT ISSUES 20.84 In R v Weisz,1 a solicitor was found guilty of contempt of court for having indorsed a writ based on a claim on an account stated when it was, in substance, a claim on a wagering contract;2 however, the court held that the solicitor’s client had not committed a contempt of court (although it was indicated that this result might be different if the client brought exactly the same action after the first was struck out). According to the Law Society Gazette, vol 49, January 1952, p 17, after referring to the two references cited: 1128

Contractual aspects of gambling ‘The Council have now given further consideration to the question of the duty of a solicitor when asked by a client to take some legal action to recover a gaming debt. In their opinion it is professionally improper to seek to obtain payment of such a debt either by threatening the issue of process or by issuing a writ, however the statement of claim may be drawn.’ 1 [1951] 2 KB 611, [1951] 2 All ER 408. 2 For some indication of what was to come prior to this case, see the remarks by Lord Goddard CJ in his evidence submitted in June 1950 to the Royal Commission on Betting, reported in the Law Society Gazette, vol 48, March 1951, p 105 (see also September 1951, p 338).

20.85 Plainly this principle will fall into disuse in respect of the vast majority of gambling contracts, as these will, on the face of it, be legal. Any illegality is likely to arise in a somewhat technical context of breaches of licence conditions and no professional conduct point appears to have been taken in the cases under, for example, the Gaming Act 1968, where credit has been held to be illegal. Therefore, it is reasonable to expect that the regulators of the legal professions will not consider any professional conduct issue to arise in cases under the Gambling Act 2005, where there may, or may not, be some issue of illegality arising out of an alleged breach of licence conditions.1 Where, however, there is plainly illegal gambling, eg where facilities for gambling are provided by a totally unlicensed operator who may demonstrably be little better than a loan shark, the above principle may continue to apply. 1 See Ritz Hotel Casino Ltd v Al Geabury [2015] EWHC 2294 (QB), where the validity of the claimant’s licence was challenged. If the licence had been invalid then the claimant’s provision of gambling facilities would have been unlicensed and unlawful by virtue of the GA 2005, s 33.

GAMBLING THROUGH AGENTS Lawful gambling through agents 20.86 An agency can arise whereby the agent is instructed to place bets on behalf of his principal. Statutory restrictions on gambling through agents have now been swept away. The rights and liabilities of principal and agent will consequently be decided by application of the ordinary principles of the law of agency. 20.87 Before the intervention of s  1 of the Gaming Act 1892, there was authority that an agent is entitled to be indemnified if he acted in accordance with the authority and instructions given to him or her by the principal.1 The agent would also be entitled to claim any agreed fee or commission. The 1892 Act was passed specifically to deal with these issues; notwithstanding the principle that a repeal does not revive old rules it is difficult to see why the repeal of the 1892 Act should not open the door to such an indemnity claim. 1 See, in particular, Read v Anderson (1882) 10 QBD 100; affd 13 QBD 779. And see (on appeal) the dissenting judgment of Lord Esher, upon which Gaming Act 1892, s 1 is supposed to have been based.

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Contractual aspects of gambling 20.88 Equally, in respect of instructions to place a bet which is lawful, there appears to be no reason why the principal cannot maintain an action against the agent for failing to carry out his instructions. Damages could be claimed for the lost winnings on a bet which was not placed (assuming that the instructions were clearly to place a particular bet). It is firmly established that where the agent has received money in his or her capacity as agent, that money (including any winnings) has to be returned to its rightful owner (the principal).1 1 This was established by the cases where the agent unsuccessfully sought to plead the illegality of the bet as a defence (see 20.90 below).

Illegal gambling through or by agents 20.89 If the gambling is illegal, it was clearly established under the old legislation that the principal cannot maintain a cause of action against the agent for failure to carry out his or her instructions. The rationale for such a principle appears sound, for it could hardly accord with principle and logic to allow the principal to impose legal liability on the agent for not making a contract that would have been void, since the principal himself or herself would have suffered no loss under the circumstances.1 1 See eg Cohen v Kittell (1889) 22 QBD 680; Thomas Cheshire & Co v Vaughan Bros & Co [1920] 3 KB 240; and AR Dennis & Co Ltd v Campbell [1978] QB 365, [1978] 1 All ER  1215 (action against the agent for permitting a customer to make bets in a manner forbidden by instructions given by the principal).

20.90 Nevertheless, it was also established under the old legislation that where the agent has received money in his or her capacity as agent, that money (including any winnings) has to be made over to the principal and that the agent cannot raise as a defence an argument that the money was received pursuant to a void transaction.1 Developments in the law of unjust enrichment/restitution may also contribute towards a further avenue for recovery.2 1 See eg  Thomas Cheshire & Co v Vaughan Bros & Co [1920] 3  KB  240 at 255, per Scrutton LJ; Bridger v Savage (1885) 15 QBD 363; and De Mattos v Benjamin (1894) 63 LJQB 248. 2 Close v Wilson [2011] EWCA Civ 5, per Toulson LJ at [31].

20.91 Close v Wilson1 concerned an agreement pre-dating the GA  2005 in which £20,000 had been advanced by one gambler to another as agent, for the purpose of betting on horses, and which he sought to recover. It was argued that given the pre-GA 2005 context, it did not matter what the defendant had done with the money advanced by the claimant. The Court of Appeal disagreed. Toulson LJ analysed the old authorities on restitution in the context of gambling and concluded2 that it was not immaterial whether the whole of the £20,000 advanced was used for the purposes of betting. If part of the money was used for bets which were successful the claimant would have been entitled to the proceeds under the law of restitution. If part was used by the defendant for his own purposes the claimant would likewise be entitled to recover that sum under the ordinary 1130

Contractual aspects of gambling principles of restitution. The unenforceable nature of the agreement itself would be no bar to the claimant’s restitutionary claim if the money was used for a purpose outside the scope of the agreement under which it had been provided. 1 [2011] EWCA Civ 5. 2 At paras [25]–[31].

20.92

Gambling through children as agents is illegal.

GAMBLING ON CREDIT Meaning of credit 20.93 GA 2005, s 81(4) defines credit widely. 1 Under the old legislation the provision of chips has been held2 to constitute ‘money knowingly lent’.3 1 For a treatment of these provisions, see Chapter 6. See also Ritz Hotel Casino Ltd v Al Daher [2014] EWHC 2847 (QB), [2015] 4 All ER 222 at [19]–[30], [32]–[38]. 2 Stuart v Stephen (1940) 56 TLR 571. 3 For the purposes of s 1 of the Gaming Act 1710; although, literally speaking, no money as such is lent.

Cheques as credit 20.94 A cheque which is not post-dated and for which full value is given is not credit, but the acceptance of any other form of cheque is treated as giving credit1 and hence will be illegal if taken by a casino or bingo licensee. Difficult issues which have arisen in respect of cheques under the Gaming Act 1968 will therefore continue to arise under the Gambling Act 2005. Under s 16 of the Gaming Act 1968 the requirements were that the cheque itself is not post-dated; that the cheque itself is exchanged for the equivalent amount of cash or tokens; and that the cheque is delivered to a bank within two ‘banking days’ for either payment or collection. The first requirement is maintained, the second is replaced by the ‘full value’ test, while the third has disappeared. 1 GA 2005, s 81(4)(b). See also Ritz Hotel Casino Ltd v Al Daher [2014] EWHC 2847 (QB), [2015] 4 All ER 222 at [19].

Lawful credit 20.95 Shorn of the accretions of the old Gaming Acts,1 it is plain that the underlying position is that the provision of credit for lawful gambling is lawful. Statutory intervention aside, loans made to enable the borrower to gamble the advance are lawful and enforceable, as is security given by the borrower for such credit. 1 For an exposition of the complex and incoherent position under the old law, reference should be made to Chapter 21 of the second edition of this book.

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Contractual aspects of gambling 20.96 It was always the case, even when gambling was largely illegal or bets void, that money lent to a borrower and thereafter used to pay off bets lost may be recovered, provided that the terms of the loan themselves do not (either expressly or impliedly) impose any obligation on the borrower to disburse the money for this purpose (ie that the borrower is at liberty to apply the money towards any purpose(s) he or she wishes).1 The Gambling Act 2005 would not appear to alter this proposition. Such a loan clearly does not fall within the purview of the restrictions in the Act if general liberty to apply the money is present. 1 See Re O’Shea, ex p Lancaster [1911] 2 KB 981. See also MacDonald v Green [1951] 1 KB 594 at 605–6, [1950] 2 All ER 1240 at 1244–5, per Denning LJ; reference may also be made at 604 and 1244, respectively, per Asquith LJ.

20.97 The Gambling Act 20051 approaches the potential problems associated with the provision of credit for gambling by means of a power to impose on operating licences conditions as to the provision (or non-provision) of credit2, and mandatory prohibitory conditions against providing credit imposed on casino and bingo licences.2 The regulation of credit by the GA 2005 is intended to ensure that an individual should not be permitted to gamble unless he has the means immediately to pay for the wager if he loses.3 Provision of credit in breach of such a condition by the operator will render the provision of facilities for gambling illegal contrary to s 33 of the Act. 1 Section 81(1)(a), discussed in detail in Chapter 6. 2 Section 81(2). 3 Ritz Hotel Casino Ltd v Daher [2014] EWHC 2847 (QB), [2015] 4 All ER 222 at [19].

21.98 The offences of breaching a licence condition apply to the operator. There does not appear to be anything in the Gambling Act 2005 which renders unlawful or illegal the giving of credit by parties other than the operator, viewed from the perspective of such third party.1 Indeed, the Act expressly contemplates the provision of credit for gambling by banks, where a gambler overdraws his accounts using a debit card or uses a credit card to obtain a cash advance through third party cash machines located in casinos and bingo halls.2 1 The operator may be guilty of an offence of permitting or knowingly facilitating the giving of credit; see eg s 81(2)(b). 2 Section 81(3).

Credit by payment of gambling debts – ‘in connection with’ gambling 20.99 There may be situations where the lender pays the money lent, not to the borrower as such, but, rather, to the person to whom the borrower owes money under a gambling contract which is illegal. It was established under the previous legislation that in such a situation recovery is not possible, regardless of the subject matter of the wager;1 on the basis that such money is paid ‘in respect of’ a wagering contract within the proscription laid down by the Gaming Act 1892, s 1. Even where the money was paid to the borrower, no recovery was possible if the money was lent on the understanding that 1132

Contractual aspects of gambling it was to be passed to the winner in discharge of the wager,2 on the basis that such a loan also fell foul of s 1 of the 1892 Act. The same provision and consequent fate applied to money paid to a stakeholder to hold in respect of a wager between the borrower and a third party.3 Section 81 of the Gambling Act 2005 restricts the provision of credit ‘in connection with’ gambling, a formulation which appears, if anything, to be a wider formulation than ‘in respect of’. It may safely be assumed that any previous authority which held that a loan of a particular type was ‘in respect of’ a wager under the 1892 Act would be held to be ‘in connection with’ gambling under the 2005 Act. 1 See eg Tatam v Reeve [1893] 1 QB 44; Woolf v Freeman [1937] 1 All ER 178; Saffery v Mayer [1901] 1 KB 11; and CHT Ltd v Ward [1965] 2 QB 63, [1963] 3 All ER 835. 2 See MacDonald v Green [1951] 1 KB 594, [1950] 2 All ER 1240 and Hill v Fox (1859) 4 H & N 359, 157 ER 879. 3 See Carney v Plimmer [1897] 1 QB 634.

Illegal credit 20.100 Where the provision of credit is illegal, the position of the operator in respect of the loan would appear to equate to the previous position under s 16 of the Gaming Act 1968. It is well settled that the effect of illegality under s  16 of the 1968 Act on the provision of such credit was to make the loan irrecoverable.1 1 For a recent example where the illegality defence was successfully used to avoid summary judgment, see Aspinall’s Club Ltd v Al-Zayat [2007] EWCA Civ 1001.

Effect of illegal credit on otherwise lawful gambling 20.101 Issues which did not arise under the old legislation are as to the effect of the illegal provision of credit on the enforceability of the result of (otherwise lawful) gambling using the illegal advance. First of all, can the gambler enforce if he wins? On the assumption that the extension of credit is a separate transaction from the subsequent gambling of the advance, there would not appear to be any reason why the illegal extension of credit should preclude the gambler from enforcing a claim to winnings.1 However, it should be noted that Lord Hoffmann’s speech in Lipkin Gorman v Karpnale Ltd2 treats the provision of chips for gaming as indivisible from the gaming itself.3 If Lord Hoffmann’s speech is applied with full rigour, the winning gambler might not be able to recover winnings, as the contract would be tainted with illegality as to formation and the argument that the gambler is not in pari delicto with the operator would not permit recovery of a win. 1 The source of the money staked would not form any necessary part of the gambler’s claim to recover; cf Tinsley v Milligan [1994] 1 AC 362 – the fact that a coowner’s contribution to a property purchase was the proceeds of housing benefit fraud did not preclude assertion of a claim to a beneficial interest, as the source of the money was irrelevant to the claim. 2 [1991] 2 AC 548. 3 [1991] 2 AC 548 at 562 and 567. Lord Goff felt that there were two contracts. The difference in opinion did not affect the result in the case as the law then stood, but could be of great importance now that gambling itself is not per se illegal or unenforceable.

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Contractual aspects of gambling 20.102 Second, can the operator sue on the result of the gambling transaction, rather than seek to recover the illegal loan? Probably not. Leaving aside issues as to the taint of illegality, the operator would probably be construed as having agreed to accept the credit stake in satisfaction of the gambler’s liability to stake, leaving the operator to seek to recover the advance if he can.1 1 See Lipkin Gorman [1991] 2 AC 548 at 575.

Credit provided for gambling abroad 20.103 What about loans made for the purpose of gaming in foreign countries? Before the Gambling Act 2005, the issue was as to the recoverability of credit or security provided in England and Wales in respect of gambling which would have been unlawful in this country but was lawful abroad. It was well established that such loans could be recovered in England, on condition that the loan concerned would itself have been recoverable by the proper law of the contract.1 The question which will arise in future is the opposite, namely whether the provision of credit within this jurisdiction is enforceable if the purpose is to provide credit for gambling in another jurisdiction where gambling is illegal or gambling debts unenforceable. If it is simply an issue of enforceability of gambling debts, the loan would presumably be valid, as the necessary consideration is in the loan. If the gambling is illegal, then the loan may be irrecoverable as tainted by illegality, unless the enforcing party was unaware of this.2 1 See Quarrier v Colston (1842) 1 Ph 147, 41 ER 587 and Saxby v Fulton [1909] 2 KB 208, applied more recently in Rio Properties Inc v Al-Midani (2 August 2002, unreported), HHJ Maddocks QC, where the advance was lawful under the law of Nevada. 2 See 20.70–20.71 above.

Securities in respect of gambling or credit for gambling 20.104 The previous legislation included various statutory restrictions on the giving of security for gambling stakes or debts, or security for loans for gambling, around which a substantial body of case law had accumulated. The 2005 Act does not include comparable provisions, and the mass of case law1 can largely be consigned to history. Subject as always to any relevant licence conditions which may be imposed, it is lawful to grant security for legal gambling and legal loans for gambling. 1 Summarised in Chapter 21 of the previous edition.

20.105 However, it may be assumed that there will be instances where persons grant, or accept, security, for illegal gambling stakes or debts or for illegal credit, whether innocently or for precisely the reasons which drove the previous layers of legislation, ie attempting to circumvent the statutory restrictions on enforcement of the principal gambling debt or loan. In this respect, some of the old case law remains relevant. 1134

Contractual aspects of gambling 20.106 The Gaming Act 1835, s 1 provided that every security rendered void by the 1710 Act was not void, but deemed to have been given for an illegal consideration.1 Consequently, case law concerning the 1835 Act would appear to be applicable to securities for gambling which is illegal under the 2005 Act. An original party cannot sue upon a security given in respect of the wagering contract itself, since the objection from illegal consideration is necessarily insurmountable.2 It is suggested that ‘a security given for the payment of money lost under an illegal gambling contract, or of a debt incurred in connection with such a contract, has, between the parties to it, no greater validity than the principal contract.’ The courts would look to the substance of the transaction, as opposed merely to its form, particularly where the transaction has been structured in such a fashion as to attempt to evade the provisions of the Act.3 An innocent transferee of such a security, however, may be able to enforce. 1 The provision (the Gaming Act 1835, s 1) read as follows: ‘Every note, bill, or mortgage which if this Act had not been passed would, by virtue of the said several lastly herein-before mentioned Acts or any of them, have been absolutely void, shall be deemed and taken to have been made, drawn, accepted, given or executed for an illegal consideration; and the said several Acts shall have the same force and effect which they would respectively have had, if, instead of enacting that any such note, bill, or mortgage should be absolutely void, such Acts had respectively provided that every such note, bill, or mortgage should be deemed and taken to have been made, drawn, accepted, given, or executed for an illegal consideration: Provided always, that nothing herein contained shall prejudice or affect any note, bill, or mortgage which would have been good and valid if this Act had not been passed.’ 2 See William Hill (Park Lane) Ltd v Hofman [1950] 1 All ER 1013. 3 See eg  William Hill (Park Lane) Ltd v Hofman [1950] 1  All ER  1013 at 1016, per Roxburgh J.

20.107 As to transferees of security, the difficulties of absence of consideration and the taint of illegality are, in law, surmounted, by virtue of the Bills of Exchange Act 1882, by proof by the holder of the security concerned that he or she is a ‘holder in due course’,1 the burden lying on such a holder to prove that ‘subsequent to the … illegality value has in good faith been given’.2 The very status of a ‘holder in due course’ surmounts the two aforementioned difficulties simply because such a holder, under the terms of the Bills of Exchange Act itself, is one who takes in good faith and for value without notice of any defect in the title in the person who negotiated the security to him. The practical implications are clear: the holder, in addition to having to prove good faith, also has the burden of proving that he or she has given value for the security, thus overcoming the argument that the transaction concerned was unsupported by consideration by reason of its illegality under the GA 2005. 1 Bills of Exchange Act 1882, s 29(1)(a) and (b), and s 38(2). 2 Bills of Exchange Act 1882, s 30(2).

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LAWFUL LOTTERIES, PRIZE DRAWS AND SKILL COMPETITIONS AS CONTRACTS Lotteries 20.108 There seems little doubt that where a lawful lottery is set up in which participants pay or give a valuable consideration in exchange for obtaining from the promoter a chance to win a prize, a legally binding contract1 will normally come into existence between the promoter and each entrant. The terms of the contract will depend upon the terms of the contractual offer made by the promoter, and these will normally be contained in the advertisements of the scheme, together with any rules and regulations which may be held to have been incorporated into the contract in any particular case. However, the basic obligation of the promoter will normally be to promote the lottery in accordance with the rules and to distribute the prize(s) to those who have been selected as winners in accordance with the rules. 1 A legally binding contract might be avoided if the terms of the scheme made it plain that no legal liability was intended to arise, for example, if the promoter stipulated that the arrangements were ‘binding in honour only’. For arrangements where no legal liability arose see 20.11–20.14.

20.109 The above analysis is consistent with the principles governing so called ‘unilateral contracts’.1 The cases show that where ‘A’ advertises to the world at large that he will confer some benefit on any person who fulfils a task or requirement laid down by him, and where ‘B’ in reliance upon the offer contained in the advertisement fulfils the task or requirement, a contract will come into existence between them, placing A  under an obligation to B  to make good his promise. Thus, for example, in the celebrated case of Carlill v Carbolic Smoke Ball Company Ltd2 the defendant issued an advertisement promising to pay £100 to any person who used a carbolic smoke ball made by it in accordance with certain directions and who then caught influenza. This was held to be an offer which the plaintiff accepted when she purchased and used a smoke ball in accordance with the terms of the advertisement, thus creating a contractual liability on the part of the company to pay her the promised sum when she contracted influenza. Similarly, advertisements of rewards for the return of lost or stolen property, or for information leading to the capture or conviction of a criminal, are commonly regarded as offers capable of giving rise to contractual liability.3 1 See Chitty on Contracts (31st edn), Vol 1, paras 2.076–2.086. 2 (1893) 1 QB 256. 3 Gibbons v Proctor (1891) 64 LT 594; Williams v Carwardine (1833) 5 C & P 566.

Instant lotteries 20.110 In the case of instant lotteries lawfully promoted as part of the National Lottery, the contractual right of the purchaser of a winning ticket to a prize was recognised in principle in a judgment of the High Court in Camelot Group plc v Beech.1 The judgment proceeded on the basis that 1136

Contractual aspects of gambling where the sale of an instant lottery ticket (in that case, a National Lottery scratchcard) is lawful, it confers a contractual right on the purchaser to any prize which the ticket may produce. 1 6 November 1996, unreported, per Blackburne J. The actual decision went against the purchaser: see 20.63 below.

Prize draw competitions 20.111 In the case of lotteries which are designed to involve a draw for prizes there is, perhaps surprisingly, no English authority setting out the contractual position of the parties, but the analysis proposed above in respect of lotteries should equally apply. Prize competitions and free draws are free of statutory control under the GA 2005.1 1 Gambling Commission – ‘Prize competitions and free draws December 2009’ (the Gambling Commission published advice relating to prize competitions and draws. In particular the advice focused on where the boundaries lie between them and lotteries. The purpose of this advice was to make those organising competitions and draws aware of what the Commission considers necessary to avoid breaches of the GA 2005.

Skill competitions 20.112 Skill competitions may or may not amount to gambling,1 but whether or not they do, the contractual analysis would appear to be the same as for lotteries and prize draws. The usual situation is that a promoter offers a prize for a competition, the winner to be the competitor who exhibits the most skill. Such an offer, if accepted by a competitor who enters and performs in accordance with the rules of the competition, can give rise to a binding contract obliging the promoter to award the prize to the winning competitor. Hall v Cox2 involved a newspaper competition to predict numbers of births and deaths in London in a given week. The claimant claimed to have submitted an entry correctly predicting the relevant births and deaths required by the competition rules and succeeded in obtaining judgment for £1,000, the prize which the defendant had offered. 1 A question which may turn on the degree or type of ‘skill’ involved as to which see in particular Chapters 2 and 15. 2 [1899] 1 QB 198. The defence was the contention that the competition was a lottery, thus rendering the claim to the prize unenforceable. The Court of Appeal rejected this contention, a finding which may be open to criticism.

20.113 There seems no reason why a similar analysis should not apply in the case of an offer to award a prize or prizes in a lawful lottery so that a legally binding contract comes into existence between the promoter and any participant who takes up the offer. Such a conclusion appears to have been assumed in a series of cases discussed at 20.124–20.126 below dealing with the right of a lottery promoter to adjudicate on the winning entries. Moreover, this conclusion is expressly supported by United States and Canadian authorities. 1137

Contractual aspects of gambling

SWEEPSTAKES OR ‘SWEEPS’ 20.114 In Allport v Nutt1 the plaintiff claimed against the defendant as treasurer of a sweepstake. The sweepstake took the form of a sweep on the Derby stakes race for May 1844 in which 155 subscribers each paid £1 to the defendant on terms that before the race was run their names should be written on cards and drawn in sequence against a draw of the names of the 155 horses entered for the race, so that each subscriber drew by chance a horse, the prize of £100 to go to the subscriber whose horse was placed first in the race. It was admitted that the plaintiff had drawn the horse, Running Rein, which was placed first in the Derby and that under the rules of the sweepstake the plaintiff was entitled to be paid the sum of £100. The claim was framed as an action for money had and received by the defendant for the plaintiff’s use and, in the alternative, as a claim for £100 due upon an account stated. The only substantial defence pleaded (and which succeeded) was that the sweepstake was an illegal lottery.2 It would seem to follow that, had the court concluded that the sweep was a lawful lottery, it would have found no reason in principle why the plaintiff’s claim to recover the money staked from the defendant as stakeholder should not have succeeded. Allport v Nutt was followed to the same effect in a series of sweepstake cases.3 1 (1845) 1 CB 974. 2 The illegality defence relied on the Act for Suppressing of Lotteries 1699 and the Act to Suppress Certain Games and Lotteries 1802. 3 Mearing v Hellings (1845) 14 M&W 711; Jones v Carter (1845) 8 QB 134 (a case where illegality was not pleaded – the claim failed because the claimant was an assignee of the winning stake and the court took the view that only the assignor could claim); and Gatty v Field (1846) 9 QB 431. Mearing v Hellings may be wrong as to the non-return of stakes.

CONTRIBUTION LOTTERIES – QUASICONTRACTUAL ANALYSIS 20.115 For the purpose of analysing the rights and liabilities of lottery promoters and participants it may remain necessary to distinguish between lotteries where prizes are derived from a prize fund made up of participants’ contributions (‘contribution lotteries’) and lotteries where prizes are put up by the promoters or by some third party (‘non-contribution lotteries’). Most of the early English cases, involved contribution lotteries, so that any principles to be deduced from them must be applied to non-contribution lotteries by analogy. This may not always be permissible. Thus, for example, the quasi-contractual analysis of the relationship between promoter and participant which is to be found in the early cases is dependent upon treating the promoter as a stakeholder. Such an analysis would remain appropriate in the case of a contribution lottery, possibly in parallel with contractual considerations, but not in the case of a non-contribution lottery where the participant’s entry payments cannot be regarded as stakes. So in the case of non-contribution lotteries a straightforward contractual analysis seems more appropriate. 1138

Contractual aspects of gambling 20.116 In the nineteenth century the courts approached the relationship between the promoter and participants in a contribution lottery by analogy with the position arising where parties placed stakes with a stakeholder which were to be paid over to the winner of some lawful competition (such as a horserace) when the result was known. In cases of this type the courts, in principle, appear to have recognised the right of the winner to sue the holder of the stakes to recover them, the plaintiff’s cause of action being an action for money had and received by the defendant, as stakeholder, to the plaintiff’s use. Such an action against a stakeholder is one of a number of causes of action which in current legal theory are characterised as ‘quasi-contractual’ or ‘restitutionary’ claims.1 The principles governing a stakeholder’s liability have been described as follows.2 ‘A  stakeholder who has received money for the express purpose of holding it until it has been ascertained who is entitled to it is liable in an action for money had and received if he wrongfully parts with the money, and this principle applies to the case of an auctioneer holding a deposit; but the stakeholder is not bound to pay until it has been decided who is entitled to the money and the decision has been communicated to him. Similarly, a person to whom money has been entrusted for a specific purpose is liable if he fails to apply the money as directed or to account for it.’ 1 Wilkinson v Godefroy (1839) 9 Ad & EL 536; Lee v Munn (1817) 1 Moore CP 481; Gaby v Driver (1828) 2 Y & J 549; Brown v Overbury (1856) 11 Exch 715, which all appear to treat a stakeholder’s liability as arising by way of an action for money had and received, ie  in the modern terminology, in quasi-contract. See, however, Potters (A  Firm) v Loppert [1973] Ch 399; Hastingwood Property Ltd v Saunders Bearman Anselm (A Firm) [1990] 3 All ER 107; and Rockeagle Ltd v Alsop Wilkinson (A Firm) [1991] 4 All ER 659 for the modern view that a stakeholder’s duties and liabilities may arise in quasi-contract or in contract. 2 Halsbury’s Laws of England (4th edn) 1974, Vol 9, para 681.

20.117 So, for example, it was recognised in principle in Brown v Overbury1 that a winning racehorse owner could sue the stakeholder for the stakes in quasi-contract – in that case, by way of an action for money had and received to his, the plaintiff’s, use for the sum of £26.00, being the value of the stakes. 1 (1856) 11 Exch 715. The facts, and the reasons why the claims failed, are set out in detail at 20.119–20.120 below.

CONTRIBUTION LOTTERIES – TRUST ANALYSIS 20.118 There may also be room for analysis based on principles of trust law. A trust or fiduciary relationship has been found in some of the cases about lottery syndicates, eg Abrahams v Trustee in Bankruptcy of Abrahams.1 A trust analysis was also adverted to in the alternative to a contractual analysis, to decide the disposition of an unclaimed lottery prize in GASP  v Manitoba Lotteries Licensing Board.2 1 [1999] EWHC Ch 253. 2 [1980] 6 WWR 367, discussed in detail at 20.141–20.142 below.

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DETERMINATION OF WINNERS OF SPORTING EVENTS 20.119 Before considering the determination of winners of lotteries, sweepstakes and the like, it is convenient to consider the determination of winners of sporting events upon which such gambling may be based. In Brown v Overbury1 the plaintiffs claimed to be entitled to stakes allegedly won in a sweepstake on a steeplechase. A number of parties, including the plaintiff, contributed stakes, held by the defendant as treasurer, to be awarded to the winner of a steeplechase. The race stewards, who were charged with the duty of determining the winner, were unable to agree, two holding that the plaintiff’s horse had won, and two opting for a different horse. The plaintiff sued the defendant by way of an action for money had and received to his, the plaintiff’s, use for the sum of £26.00, being the total value of the stakes. It appears that the plaintiff contended, first, that the stewards had found in favour of his horse, thus obliging the defendant stakeholder to pay the stake money over to him. Second, if this contention failed, he contended that he was entitled to call evidence to prove to the court that his horse had in fact won, thus entitling him to the stakes. Third, and alternatively, he contended that he was in any event entitled to recover the amount of his own contribution. 1 (1856) 11 Exch 715.

20.120 The plaintiff failed on all three claims. As to the first contention, this was rejected on the facts: the stewards had not found in his favour. As to the second, the court refused to receive evidence on the question which horse had won the race. This question was to be determined in accordance with the rules governing the race, and these provided that the determination was to be that of the race judges or stewards. Until they had announced the winner the stakeholder was under no obligation to pay the stakes out, and the plaintiff’s claim for the stakes necessarily failed. Alderson B said (at 716–17): ‘Every contract must be determined according to the circumstances belonging to it. This is one of racing, and the universal practice has been, that, in order to ascertain who is to have the stakes, it must first be determined who is the winner, not in the opinion of a jury, but of the persons appointed to decide it, viz the judges or the stewards. If they have determined it then the event has happened which entitles the winner to recover the stakes.’ Martin B held (at 718) that: ‘The action was brought on a supposed decision of the stewards in favour of the plaintiff. If he had established that, the event would have happened which entitled him to recover. But he failed. For there had been no decision on the subject.’ 20.121 This case appears to ground a general principle that in gambling on the outcome of a sporting event, the winner of which is decided by the body running such event, the winner of a bet or sweepstake on the outcome of the event is also to be determined by reference to whoever has been declared the winner of the event by the responsible body. Arguments 1140

Contractual aspects of gambling that ‘England won because their try was wrongly disallowed’ and similar cannot succeed. Where (as with sailing and motor racing, to give but two examples) results may potentially be overturned on appeals heard days or even weeks after the result is declared, it is unclear how the courts will approach the issue of the ‘winner’. Promoters would be wise to ensure that this is provided for in the terms of entry.

DETERMINATION OF WINNERS IN LOTTERIES AND PRIZE DRAWS 20.122 The promoter of a lawful lottery is under an obligation to distribute the prizes to those persons who have been identified in accordance with the rules of the lottery as prize winners. As a principle this is easily stated, but is not necessarily so easily applied in practice.

Lotteries on sporting events 20.123 See the general discussion and Brown v Overbury1 at 20.119–20.120 above. As to the third claim in Brown v Overbury, for recovery of the plaintiff’s contribution, this too failed. The plaintiff contended that if, contrary to his contention, the stewards had not found in his favour, then the court should proceed on the footing that they were unwilling or unable to reach a decision, so that the stakes should be returned to the individual payers. The court, whilst accepting that this might be the correct conclusion if it proved impossible to obtain a ruling from the stewards, held that the plaintiff had failed to show that that was in fact the case. Alderson B (with whom Platt B agreed) said (at 717): ‘In this case, the stewards have come to no decision, but it may be that they will when they meet again. If the plaintiff cannot get a decision from the stewards, and it becomes impossible finally to determine to whom the stakes belong, it may be that each party may recover his contribution.’ 1 (1856) 11 Exch 715.

Determination by a promoter or third party 20.124 Where the rules provide that the winner is to be determined by the promoter or by an appointed adjudicator, and that that adjudication is to be final, this provision will become a term of the contract binding on the entrants,1 so that in the absence of fraud2 or bad faith3 or probably of some serious irregularity (including a fundamental misinterpretation of the rules governing the promotion of the lottery)4 on the part of the adjudicator, an entrant will be unable to enforce a right to recover a prize unless he can first show that he has been adjudged to be the winner. 1 See Brown v Overbury (1856) 11 Exch 715; Dines v Wolfe (1869) LR 2 PC 280; Cipriani v Burnett [1933] AC 83.

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Contractual aspects of gambling 2 Brown v Overbury (1856) 11 Exch 715 at 717 per Martin  B; Dines v Wolfe (1869) LR 2 PC 280 at 283–4. 3 Dines v Wolfe (1869) LR 2 PC 280 at 283–4; Blyth v Hulton & Co [1908] 72 JP 401 at 403 per Buckley LJ. 4 Schinotti v Bumsted (1796) 6 TR 646; Blyth v Hulton & Co Ltd (1908) 72 JP 401; Cipriani v Burnett [1933] AC 83.

20.125 In Cipriani v Burnett1 the respondent Burnett purchased a ticket in a club sweepstake which utilised an elaborate system for allotting by chance to ticket holders the names of horses which were to run in a club race meeting, prizes to be awarded in accordance with the aggregate points awarded to the horses in the course of the meeting. Each sweepstake ticket bore a letter and four numbers. The system was designed to generate a letter and four numbers which would be attributed to sealed envelopes containing the horses’ names, so that each ticket number was matched with a horse. Letters were drawn at random from a revolving sphere, and this gave rise to no difficulty. Controversy, however, arose with the numbers. These were generated by spinning a series of four revolving discs bearing numbers on their circumferences and by reading off the numbers which came to rest against a pointer on the device. The appellant, Mr Cipriani, presided at the disputed draw. He spun the wheels and when they came to rest he read off the four figures from the right to left, producing the serial number B9351. This was the number of a ticket held by one Mr Guevara. Had he read the figures from left to right he would have produced the serial number B1539, which was the serial number on the respondent’s ticket. The tickets, in addition to showing the manner in which the pool was to be distributed, bore on their face the words: ‘This ticket is sold subject to the condition that in the event of any dispute arising with respect to any matters connected with the drawing of a sweepstake or the awarding of the prizes the decision of the stewards of the Trinidad Turf Club thereon shall be accepted as final.’ 1 [1933] AC 83.

20.126 Mr Guevara’s ticket number was matched with the horse which came first and he was declared to be the winner of the first prize. The respondent protested, maintaining that the appellant should have read the figures from left to right, thus identifying the respondent’s ticket as the winning ticket. Proceedings were launched against Mr Cipriani and others representing the club, and Mr Guevara was allowed to intervene as co-defendant. Mr Burnett won at first instance, but the Privy Council allowed the club’s appeal, concluding in accordance with Brown v Overbury that a favourable stewards’ decision was a necessary precondition of any claim to the prize. ‘… the question which must be determined in the first place is whether [Burnett] had, in the absence of a decision in his favour by the stewards … any right of action at all. The ticket, which embodies the contract on which he sues, expressly requires him, as a condition of the sale to him of his ticket to accept as final the decision of the stewards of the Trinidad Turf Club on any dispute arising with respect to any matters connected with the drawing of the sweepstake or the awarding of prizes. The dispute between the parties is plainly of such a character but the respondent gives the go-by to this condition, subject to which he 1142

Contractual aspects of gambling purchased the ticket, and asks that the court shall substitute its judgment for that of the stewards of the Trinidad Turf Club. Their Lordships are of the opinion that he is not entitled to do so … their Lordships … read the condition on the ticket … as a condition precedent, the fulfilment of which is essential before any action for the stakes can be entertained by the courts. The respondent produces no decision in his favour by the stewards of the Trinidad Turf Club, by whose decision he contracted to be bound. Having thus failed to fulfil the condition precedent of his right to sue, he cannot be heard to ask that the court instead of the stewards should decide the dispute which he has raised.’1 (per Lord MacMillan pp 89-90). 1 [1933] AC 83 at 89–90 per Lord MacMillan.

Implied terms and restrictions on a ‘decision is final’ clause 20.127 That a promoter’s or adjudicator’s decision may be overturned if it is fraudulent is clearly envisaged in Brown v Overbury,1 where Martin B said: ‘It could never be contemplated in the event of a decision by the stewards erroneous but without fraud the question could be submitted to a jury’. As to what other deficiencies in an adjudicator’s determination may suffice for a successful challenge the position is less clear.2 However, it is suggested that bad faith or the failure on the part of an adjudicator to comply with the terms of the contract by which his power to make the adjudication is conferred would suffice. 1 (1856) 11 Exch 715 at 717. 2 The award of an arbitrator may be challenged on the grounds of ‘serious irregularity’ under s 68 of the Arbitration Act 1996, but it is probably unwise to seek to draw any analogy. The position is more akin to an expert determination.

20.128 Blyth v Hulton & Co Ltd1 deals with this issue in some detail2 The case involved a claim by the plaintiff to have won a newspaper limerick competition. The newspaper’s terms included the provision, ‘We can enter into no correspondence whatever appertaining to the contest, and the editor’s decision must in all cases be accepted as final.’ The plaintiff’s claim failed because the court concluded that the scheme was an unlawful lottery under the law as it then stood. However, Buckley  LJ considered the submission that the plaintiff’s claim would in any case have failed because he could not show that the editor’s decision had gone in his favour. As he pointed out, the formula ‘the editor’s decision is final’ must be read as incorporating a number of implied terms. ‘The plaintiff was a person who sent in a coupon under what is called “a limerick competition”, to which was attached this as a condition: “The editor’s decision must in all cases be accepted as final.” Now, of course, it is quite obvious that those words do not mean literally what they say. Almost all language, I think, even including that of the most prolix of conveyancers is elliptical. There is understood in a sentence, although not expressed, something which is to be found there by inference, by construction, but not in words. I  will give one or two illustrations of what I mean. 1143

Contractual aspects of gambling If the editor had decided that he should have the £300.00 himself, of course, his decision would not have been final; if he had decided that the £300.00 should be given to somebody who had not competed at all, of course, his decision would not have been final. In other words, the ellipsis is this: “The editor’s decision as between competitors in this competition must in all cases be accepted as final.” … The next question is: What is the subject-matter upon which the editor is to come to a decision? I find it in this: that what is offered is £300.00 for the best line, with the statement that every coupon is examined and every effort is judged entirely upon its merits. From that I  find that what the editor has to decide is: What is the best line? And he has to determine that upon judging every coupon entirely on its merits. Now here, I think, again a qualification is wanted. What is meant by “a line”? Would it be a line for the purposes of this scheme if it was a series of words which would neither scan nor rhyme, nor had any logical sequence in meaning with the words which preceded it? Would a mere row of figures, or a sentence in Arabic, or a quotation from the Psalms, be a line? If that is so, then certainly this would be a lottery, because if the editor is simply going to say what collection of letters, or figures, or words in his opinion is best, and is going to do that, not upon selecting a form of words with reference to some standard, but upon selecting a form of words as to which there is no standard at all of course, there would be no skill … But fairly read, I do not think this scheme is that … obviously “the best line” must mean something which, by way of scansion, and by way of rhyming, and by way of carrying some intelligible meaning, in connection with what proceeds it, can properly be called “the best”; and I am willing to deal with this case as if that were so.’ 1 (1908) 72 JP 401. 2 See also Dines v Wolfe (1869) LR 2 PC 280 at 283.

20.129 The principle to be extracted from this passage appears to be that the adjudication must be carried out fairly and in accordance with the terms which the competitors would reasonably be entitled to suppose would apply. Whether a failure to comply with this requirement should be characterised as a failure to act in good faith or a failure to act in accordance with the adjudicator’s contractual obligations may be a question of degree. 20.130 The case of Schinotti v Bumsted1 was a successful claim against the Commissioners of the State Lottery for what appears to have been treated as a breach of statutory duty to conduct the draw and award the prize in accordance with the procedures laid down in the statute authorising the lottery. The facts are a little difficult to follow from the report, but it appears that a difficulty arose because of a discrepancy between the tickets in the numerical wheel into which all the participants’ tickets had been placed, and those in the wheel into which all the winning tickets and the blanks had been placed. The plaintiff claimed that he was the holder of a ticket number 5278 which was the last one to be drawn from the numerical wheel, a fact which entitled him to a prize of £1,000.00 in accordance with the lottery rules. The Lottery Commissioners, however, refused to treat the plaintiff’s ticket as the 1144

Contractual aspects of gambling last drawn when it was discovered that there was a blank left in the other wheel for which there ought to have been, but was not, a corresponding number in the numerical wheel. The missing number was 31,000 and it was never known what became of it. The Commissioners were authorised under s 11 of the statute setting up the lottery to adjudicate on disputes over winning tickets as follows: ‘And if any contention or dispute shall arise in adjusting the property of the said fortunate ticket, the major part of the said managers and directors agreeing therein shall determine to whom it doth or ought to belong.’ 1 (1796) 6 Term Rep 646.

20.131 The Commissioners upon application by the plaintiff declared that his ticket was not to be considered the last drawn ticket. The plaintiff commenced proceedings against them. His claim appears to have been based upon their failure to discharge their statutory duty to declare his ticket as the last drawn. The Commissioners contended, inter alia, that s  11 gave them an absolute defence as ‘the adjudication of the Commissioners against the plaintiff was final, and no action would lie against them for a mistake in their judgment, they having acted within the limits of their jurisdiction.’ However, this defence was rejected and the plaintiff’s action succeeded. The court concluded that the Commissioners should have treated the plaintiff’s ticket as the last drawn, and as they were to be regarded as discharging a ministerial rather than judicial function they were liable to an action based on their neglect of duty.

Erroneous declaration of winners 20.132 The principle that in the absence of fraud, bad faith or breach of contractual or statutory duty an adjudicator’s decision will be binding on the participants in a lottery will normally be prayed in aid by a promoter to defeat a claim by a participant to be legally entitled to a prize. However, such an adjudication may in rare cases confer positive rights on a participant where a lottery promoter in pursuance of his power of final determination mistakenly determines that that participant is entitled to the award of the prize. 20.133 In Prince Albert Agricultural Society v Dobson,1 a decision of the Saskatchewan High Court, the plaintiff society ran a lottery on terms that its decision as to the prize winner was final. It mistook the defendant’s ticket for the winning ticket and awarded him the prize. When it discovered its mistake it brought proceedings to recover the prize or its value. The defendant contended that the plaintiff had, by its own adjudication, finally determined that the defendant was entitled to the prize and that he was therefore entitled to retain it. The court upheld the defendant’s case, holding that where a decision is made, the decision is binding upon the promoter as it is upon the claimant. It should be noted that the court was satisfied that the defendant had not been fraudulent in his claim to be the prize winner. It clearly contemplated, however, that if the defendant had been guilty of some 1145

Contractual aspects of gambling form of fraud or wrongful misrepresentation, a different conclusion would have been reached. 1 [1939] 1 WWR 719.

20.134 The logical counterpart decision to Prince Albert Agricultural Society v Dobson was handed down by the Saskatchewan Court of Appeal in Western Canada Lottery Foundation and Toronto Dominion Bank v Paul.1 It was held that where a lottery promoter who possesses the power to make final and binding determinations of prizes decides that a particular lottery ticket is a winning ticket, it will come under a contractual liability to pay the prize to the true and lawful holder of that ticket. It will be no defence to an action for the prize brought by the true ticket holder that the promoter has already paid the prize to another person who has fraudulently represented himself to be the owner of the ticket. In short, the promoter who mistakenly awards the prize to the wrong person has to award a duplicate to the ‘true’ winner. 1 [1981] 6 WWR 456.

False prizes 20.135 It may be that in some cases the ‘erroneous’ declaration of winners of prizes is quite deliberate, as part of a deliberate money-making scheme by an advertiser or dishonest promoter. Creating the false impression that the consumer has already won, will win, or will on doing a particular act win, a prize or other equivalent benefit would breach the Consumer Protection from Unfair Trading Regulations 2008,1 Sch 1, para 31.2 1 SI 2008/1277. 2 For further analysis see Purely Creative Ltd v Office of Fair Trading (C-428/11) [2013] Bus LR 985 (European Court of Justice (Sixth Chamber)).

CONDUCT OF A LOTTERY OR PRIZE DRAW 20.136 Cipriani v Burnett is discussed earlier but, to recap, the essential complaint was that a sweepstake which involved the random generation of four numbers by a machine had been wrongly conducted when the numbers were read from right to left rather than left to right. Although the appeal was allowed on other grounds, the Privy Council considered briefly the merits of this contention, and concluded that it was unfounded: there was nothing to prevent the club from deciding in which direction the figures should be read, provided this decision was taken before the figures were identified and provided all the figures were read in the same way. Lord MacMillan said: ‘It appears that throughout the draw he [Mr Cipriani] read all the figures the same way namely from right to left, and, that being so, the result was just as fortuitous as if he had read them all from left to right. The sweepstake, as their Lordships have observed, was controlled by the club, and there would appear to have been nothing to prevent the club, through its representative, from deciding in which way the figures 1146

Contractual aspects of gambling should be read, provided the decision preceded the ascertainment of the figures.’ However, the court concluded that: ‘It would certainly be improper for the person conducting the draw to decide, after the figures were known by the discs coming to rest, in which order he would read them, for that would plainly introduce an element of choice into a process intended to depend for its result entirely on chance.’1 1 [1933] AC 83 at 90 per Lord MacMillan.

20.137 Presumably the objection to such a course lay in the fact that, as the club knew or could know the identity of the individual holders of the tickets, it would be possible to manipulate the system to ensure that particular participants were matched with numbers and therefore qualified for the draw. The passage clearly suggests that the court would have been prepared to entertain a challenge to the adjudicator’s decision if there had been a suggestion that he had acted fraudulently or even in a way which involved a failure to carry out what the court clearly regarded as being a term of the contract, namely to provide a draw which depended entirely on chance and in which no choice could obtrude. 20.138 In the American case1 of Walters v National Beverages Inc2 the Supreme Court of Utah applied a straightforward contractual analysis where the plaintiff claimed to have won the prize in a prize draw competition. The defendant company, as part of a sales promotion scheme, encouraged entries to a prize draw in which the prizes varied from a first prize of a Chevrolet motor car through to a final group of 20 prizes consisting of cases of Pepsicola. The plaintiff put in many entries, one of which was drawn first. She claimed to be entitled to the car; the defendant, however, contended that, prior to the draw, it had announced that the prizes would be awarded in reverse order of value, so that the first winning entry drawn would be awarded a case of cola and the last winning entry drawn would be awarded the Chevrolet. The plaintiff failed because the court held that the defendant’s offer contained on the entry form did not oblige it to conduct the draw in any specified order: ‘So long as the drawing was conducted fairly as to all contestants, we are of opinion that the plaintiff had no reason to insist that the first number drawn should receive the first prize.’3 1 For a review of numerous decisions on civil claims arising out of competitions and draws in the United States see the annotation at (1963) 87 ALR 2d 649. 2 422 P (2d 524 Utah SC 1967). It appears that there was no entry payment. 3 At 525 per Tuckett J.

20.139 Schinotti v Bumsted, the facts of which are set out above, appears to support the proposition that in the (perhaps not uncommon) situation of lottery or raffle or tombola tickets found stuck in a drum after the draw is concluded, this discovery cannot affect the result of the draw.1 The possibility of difficulties in the draw is not confined to ad hoc charity raffles or to Victorian lotteries: on 26 January 2008, announcement of the result of 1147

Contractual aspects of gambling one of the UK National Lottery draws was delayed pending consideration as to whether a ball which stuck in the exit tube of the machine was duly ‘drawn’. 1 If it transpired, for example, that a batch of raffle tickets never found their way into the draw, presumably the ticket holders could recover the ticket price on the ground of total failure of consideration.

DETERMINATION OF WINNERS OF SKILL ­COMPETITIONS 20.140 It appears that there may be an implied term that skill competitions are conducted fairly. In Ranger v Herbert A Watts (Quebec) Ltd1 a dispute was brought before the Ontario High Court over the conduct of a sales promotion scheme which the court appears to have treated as a lawful skill competition. The defendants advertised that selected packets of cigarettes on sale to the public would contain a cash certificate varying in value from $1,000 to $10,000. In order to claim the cash prize the ticket holder had to answer a question involving some skill. The plaintiff bought a pack containing a $10,000 certificate but failed to answer the questions (involving mathematical computations) correctly when the promoters telephoned him without any prior warning and asked him to take the test. The court held that the test had not been fairly conducted and that since, in the court’s judgment, the plaintiff would have answered correctly if it had been fairly conducted, he was entitled to $10,000. As to the duty to conduct the test fairly the court found: ‘… the defendants’ duty does not end in developing a reasonable skilltesting question. It requires that the test be conducted with essential fairness to the contestant. That includes at least reasonable advance notice, a communication beforehand of the rules by which the test will be conducted, the institution of a means whereby the judge could discover that the contestant is in a reasonable condition to engage in the test, and finally to conduct it fairly under the circumstances.’2 1 (1970) 10 DLR (3d) 395. 2 At 404 per Haines  J. Whether all of the conditions identified by the Judge are elements of essential fairness may be open to question.

LOTTERIES AND PRIZE DRAWS – UNCLAIMED PRIZES 20.141 In GASP (Group Against Smokers’ Pollution) Inc v Manitoba (Lotteries Licensing Board)1 the Manitoba Court of Appeal had to consider the obligations of the appellant charity with respect to a car purchased by it and offered as a prize in a lawful lottery when the winner of the lottery failed to claim his prize and could not be traced. The court noted that there was room for debate whether a lottery promoter’s legal position with respect to the prize was governed by the law of trusts or the law of contract, but concluded that 1148

Contractual aspects of gambling it made no difference to the result in the case before it whether a trust or a contract analysis was adopted. Matas JA adopted a contractual analysis and held (at 372) as follows: ‘I  start with the fact that GASP purchased the automobile and earmarked it as the prize to be drawn in a lottery. It was contemplated that GASP would be owner until the date of the draw when a winning ticket would be drawn. Possession of the vehicle would remain in GASP until delivery to the winner. Any money collected over the cost of the automobile and the expenses of the lottery would belong to the sponsor as its profit to be used for its charitable purposes. If there were a loss, ie, if the cost of the automobile and the expenses exceeded the amount realised from ticket sales, GASP would have borne the loss. The financial benefit to the winner would be the obtaining of the automobile … Upon production of the winning ticket, GASP would be liable contractually to deliver the vehicle to the holder of that ticket in accordance with the rules of the lottery. In the absence of production of the winning ticket, GASP, as the owner of the vehicle, is entitled to use it or sell it, provided that it is used or the proceeds of sale are used for its charitable purposes.’ 1 [1980] 6 WWR 367.

20.142 Huband JA and Monnin JA considered that the same result followed from either a trust or a contractual analysis: ‘… Accepting the trust analogy for the sake of argument, I am compelled to conclude that the beneficiary is neither ascertained, nor ascertainable. Any intended trust must fail, and a resulting trust must be declared in favour of the initial grantor, GASP. Counsel for GASP says that the arrangement was not in the nature of a trust, but rather a contractual relationship where the person who holds the winning ticket is entitled by contract, to claim the vehicle (and the additional $1,000 prize). That person has not, and is not likely, to come forward, and GASP’s claim to title to the motor vehicle is superior to that of any other … Whether one applies contract law or trust concepts, the result is the same, namely, that GASP is entitled to the property, for its use, for charitable purpose.’1 1 [1980] 6 WWR 367 at 374–5 per Huband JA.

CONCLUSION Lawful and unlawful contribution lotteries 20.143 To summarise, in the case of a lawful contribution lottery the position appears to be as follows: 1149

Contractual aspects of gambling (i)

A person claiming to be a winner may sue the holder of the prize fund to recover the relevant prize, provided he can show that he has been identified as winner in accordance with the rules of the lottery. The action may be framed as a quasi-contractual claim for money had and received or, probably, in contract. If the rules provide for the determination of the result of a lottery to be made by some specified adjudicator, then the claimant would have to show that that adjudicator has ruled in his favour. If the adjudicator fails to make a final determination, the claimant is probably entitled to the return of his stake.

(ii) Except where a contributor may recover his contribution in the circumstances noted above, a person who pays to enter a lawful contribution lottery has no right to recover his contribution, either before or after the result is determined. The contribution is his consideration for his chance to share in the distribution of prizes. In the case of an unlawful contribution lottery: (i)

No action may be brought to recover a prize allegedly won. Illegality is a conclusive defence.

(ii) However, a contributor to an unlawful lottery may claim the recovery of his contribution from the promoter if he demands its return before the prize fund is distributed and before commencing proceedings, and also, it seems, if he brings his claim after the prize fund has been distributed and without making any prior demand.

Non-contribution lotteries: rights and liabilities of promoter and participants 20.144 Although there is less guidance as to the rights and liabilities of parties to a non-contribution lottery, it is thought that they are broadly similar to those arising in the case of a contribution lottery. On the basis that such a lottery creates a contract between the promoter and each entrant, obliging the promoter to award the prize(s) to the winner(s) selected in accordance with the rules, then (assuming the lottery is lawful): (i)

A winner should be entitled to sue the promoter to recover the prize if he can prove that he has been identified as the winner in accordance with the rules. The action would be an action in contract. He should be entitled to recover his payment if there has been no proper determination of winners in accordance with the rules.

(ii) Except in the case where there has been no determination of winners, a participant in a lawful non-contribution lottery cannot recover his contribution. It represents his contractual consideration for the chance to win in the lottery. In the case of an unlawful non-contribution lottery: (i)

1150

Any claim to be legally entitled to a prize would be defeated by a defence of illegality. Although there appears to be no English case to this effect, it is in accordance with principle, and it is supported by a decision of a Scots Sheriff Court in Christison v McBride.1

Contractual aspects of gambling (ii) A participant may claim to recover his payment. Such a claim would have to be founded, not on the basis that the promoter is a stakeholder, for in the case of a non-contribution lottery this is not the case, but on the principle applied in Barclay v Pearson and One Life Ltd v Roy, namely that the participant is one of a class for whose protection the lottery legislation was enacted. Whilst neither Barclay nor One Life Ltd is strictly authority to this effect, since those cases involved contribution lotteries, nonetheless there seems to be no reason why the class protection principle should not apply in the case of non-contribution lotteries. The principle is triggered by the need to protect a vulnerable class of persons, and not by the form of contractual relationship into which they may have entered. Thus, it applies, for example, to enable a bankrupt to recover money exacted by creditors as a condition of signing his certificate of discharge.2 1 (1881) 9 R (Ct of Sess) 34; 19 Sc LR 19. 2 Browning v Morris (1778) 2 Cowp 790.

GAMBLING AND FAMILY LAW 20.145 The question as to how winnings, or potential winnings, from gambling should be dealt with as part of the division of assets on divorce, is not an area in respect of which there is much authority. However, with the legalisation of gambling it is presumably an issue which may arise more frequently. 20.146 S  v AG (Financial Remedy: Lottery Prize)1 concerned financial relief following the breakdown of a marriage of two Colombian nationals. The parties had been married for 25 years, and they had two adult children. Unbeknownst to the husband the wife entered into a written syndicate agreement for the National Lottery with a friend, using her own money to purchase tickets. The syndicate purchased a winning ticket and each received prize money of £500,000. The wife used £300,000.00 to purchase a matrimonial home in her sole name. The parties lived in the house for approximately four years until their separation. Their marriage was subsequently dissolved in Colombia. Mostyn J held that the prize money fell to be characterised as non-matrimonial property. However, when the wife purchased the house in which she, her husband and the children thereafter lived, she converted that part of the winnings into matrimonial property. 1 [2011] EWHC 2637 (Fam).

20.147 In Elford v Elford1 the parties started living together in early 2003, married in 2007 and separated in late 2012. Early in the relationship, in January 2004, the husband won $622,842 on a lottery using numbers which he had been using for the previous ten years (including a long period before there was any relationship with his wife). Following the divorce the parties agreed that they should retain their own assets with the husband making a one off payment to the wife, but the amount of that payment was in dispute. Judge Roberts held that the lottery winnings should be treated as the property of the husband alone. He reasoned that: 1151

Contractual aspects of gambling ‘it is not only “the nature of the parties’ relationship at the time the lottery ticket was purchased” that sets this case apart from so many of the decided “lottery winnings” cases; it is also the manner in which the husband and the wife conducted their financial affairs after those winnings were received by the husband in 2004. Those winnings were placed into an account in the husband’s sole name and that is where they remain to this day. The parties also kept all their other finances separate for the entirety of their relationship.’ 1 [2014] FCCA 2531, Australian Federal Circuit Court (12 November 2014).

20.148 So it would seem that it is how the spouse treats their lottery winnings which will determine whether they become matrimonial property, or remain the property of the individual spouse. 20.149 In Hakki Hakki v Secretary Of State For Work & Pensions1 it was held that money won by a semi-professional poker player did not amount to earnings from gainful employment under the Child Support (Maintenance Assessments and Special Cases) Regulations 1992, as, in the instant case, the gambler did not have a sufficient organisation in his poker playing to make it a trade or business, let alone a profession or vocation. 1 [2014] EWCA Civ 530, [2015] 1 FLR 547, [2014] BTC 22, [2014] LLR 704, [2014] Fam Law 1238.

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Chapter 21 Gambling syndicates

INTRODUCTION 21.1 There is nothing novel in the running of syndicates. Lottery syndicates1 and football pools syndicates have a long history, but their popularity has undoubtedly grown as a consequence of the setting up of the National Lottery. 1 See eg Corfield v Dolby (1935) 154 LT 266 (syndicate on the Irish Free State Hospitals’ Sweepstake).

21.2 A  lottery syndicate exists where a number of people agree that they will pool their resources to make entries to a lottery on terms that the winnings will be shared by all. The number of persons involved may vary from two to many hundreds, and the arrangements between them may vary from those of the utmost informality to those in which a detailed written agreement is entered into.1 Similarly, pools syndicates often operate on the basis of pooled contributions. The nature of bingo (players have their own card in the bingo hall) is such that bingo syndicates tend to be agreements to the effect that all the players will share the aggregate of their winnings over an evening. 1 See H W Wilkinson ‘Running a lottery syndicate’ (1996) 145 NLJ 217. For a draft form agreement for a lottery syndicate see (1996) 145 NLJ.

FORMS OF SYNDICATE 21.3 There is obviously room for variety in the ways in which a syndicate may be organised. The arrangements will be influenced by the form of gambling with which the syndicate is concerned. For example, in the case of a syndicate on the National Lottery, the following four arrangements (at least) would seem possible: (1) The members make their own selection of numbers for the relevant draw and transmit them together with their entry payment to the organiser to enable him to make the entries. Any winnings are to be shared equally.1 1153

Gambling syndicates (2) The members pay their entry payments to the organiser who himself selects the numbers before making the entries. (3) Each of the members has a standard selection of numbers which the organiser will enter each week, provided he is put in funds by the relevant member. (4)

The syndicate has an agreed number of sets of entry numbers which are not attributed to any specific member and which the organiser enters each week, provided he is put into sufficient funds to do so.

Those examples imply a degree of repetition in the arrangement. In addition, there may be a one-off or ad-hoc arrangement between one or more persons to play once, which is perhaps more likely to result in litigation should the improbable happen and a large prize is won. Several of the cases referred to below fall into this category. Given the many different forms of gambling and the consequent multiplicity of forms of syndicate, this Chapter seeks to consider the issues arising from gambling syndicates in general terms. Although much of the case law relates to lottery, pools and bingo syndicates, the principles emerging are of general application. 1 This is the form of syndicate provided for in the draft agreement referred to in the note to 21.2 above.

LEGAL RIGHTS AND LIABILITIES 21.4 There are two types of legal rights and liabilities which need to be considered in connection with a syndicate, namely those which may exist between the syndicate members inter se, and those which may exist between the syndicate members and the organiser. The cases suggest that such rights and liabilities may be analysed as arising either by way of contract, or by way of trust or fiduciary duty, or both. However, it appears that in the absence of an agreement of some sort, a pure trust claim will fail.

Establishing an agreement 21.5 There may be cases, particularly where an alleged syndicate takes the form of an extremely informal domestic arrangement, where the courts will conclude that the arrangements give rise to no legal rights at all. Thus, for example, in Hoddinott v Hoddinott1 a wife who regularly submitted football pool entries with her husband, the stakes being paid from the family housekeeping monies, failed in a claim to be entitled to a share of the winnings. The court held that, the arrangement being one between husband and wife, there was no intention to create legal relations, so that the wife could not show a contractual right to a share. Nor, in the absence of an agreement, could she show that the winnings were impressed with a trust in her favour. 1 [1949] 2 KB 406.

21.6 It may well be that the critical factor in Hoddinott defeating the plaintiff’s claim was that the parties were husband and wife. In subsequent 1154

Gambling syndicates cases the courts have been willing to spell legally binding contracts out of very informal arrangements. Thus, in Simpkins v Pays,1 where the plaintiff, a paying boarder at the defendant’s house, co-operated with the defendant and the defendant’s granddaughter in submitting entries to a newspaper fashion competition on the basis that if they won they would ‘go shares’, the court held that an agreement existed and that, though informal, it was one giving rise to legal consequences: ‘It may well be that there are many family associations where some sort of rough and ready thing is said which would not, on a proper estimate of the circumstances, establish a contract which was contemplated to have legal consequences, but I  do not so find here. I  think that there was here a mutuality in the arrangement between the parties. It was not very formal, but certainly in effect it was agreed that every week the forecast should go in in the name of the Defendant, and that if there was success, no matter who won, all should share equally. That seems to be the implication from or the interpretation of what was said, that this was in the nature of a very informal syndicate so that they should all get the benefit of success.’2 The plaintiff accordingly obtained judgment for a one third share of the prize money. 1 [1955] 1 WLR 975. 2 [1955] 1 WLR 975 at 979 per Sellers J.

21.7 Likewise, in Peck v Lateu,1 where the plaintiff and the defendant, who attended bingo sessions together, had an agreement to share their winnings equally, the plaintiff was successful in a claim to a half share of a ‘bonanza’ prize of £1,107 won by the defendant. The court concluded that the agreement between them extended to this exceptionally large prize and that it was an agreement that was intended to create legal relations. The same result was arrived at in Robertson v Anderson2 as to an agreement reached orally in the car on the way to the bingo hall to ‘go halfers’ on all prizes, including the ‘National’ prize of £100,000, which was won on a game run nationally among all Mecca Bingo halls. Simpkins v Pays was followed, and suggestions that any agreement was not intended to create legal relations or was merely a non-binding statement of intent were rejected. 1 [1973] 117 Sol Jo 185. 2 [2002] SCS 312.

21.8 Kucukkoylu v Ozcan1 provides a much more recent example of an informal agreement, in the ‘one-off’ category, and which was found to be contractually binding. The defendant was employed by the claimant as a waiter in his restaurant. The claimant had a dream that he came into money and the defendant, who was superstitious, suggested that he should buy a lottery ticket. The defendant went to a nearby shop and collected a blank Euromillions lottery play slip. He returned shortly afterwards to the shop with the completed play slip, which had been filled in by both the claimant and the defendant – they had filled in different lines. Having purchased the lottery ticket, the defendant returned to the restaurant with the tickets,2 the 1155

Gambling syndicates receipt and pay slip. He handed the ticket to the claimant and retained the receipts and pay slip. The draw took place the next day. One of the lines was a winning line in the sum of £1 million. The defendant claimed that he was entitled to one half of the winnings because he and the claimant entered the lottery and purchased the ticket jointly with cash equally contributed. The claimant claimed that the defendant purchased the ticket on the claimant’s behalf with the claimant’s money and the defendant was entitled to nothing. The case turned largely on the facts. The judge found that the money was contributed equally and that the parties had agreed to go 50/50. On that basis, the judge upheld the agreement as a contract and the defendant was entitled to half the winnings. 1 [2014] EWHC 1972 (QB). 2 The report is unclear whether one or more tickets were bought.

21.9 Whether or not a contract has been formed will be a question of fact. As HH Judge Gosnell stated in Kucukkoylu at [40]: ‘Both counsel have agreed that the law is very straightforward and for the Defendant to succeed he would effectively have to prove that a contract existed with the Claimant for the purchase of a lottery ticket jointly and that the terms of the contract would give rise either expressly or impliedly to an equal share of the beneficial interest, in the form of the prize money. The case will turn on its facts and the standard of proof is on balance of probability.’ 21.10 Nevertheless, players enter into very informal agreements at their peril. In Wilson v Burnett1 the Court of Appeal refused to interfere with a judge’s finding that, although three players had discussed sharing any bingo winnings over £10 equally, they had not actually reached any agreement or, to put it another way, had not intended to create legal relations to share the winnings. The difference between this case and a case like Robertson v Anderson or Kucukkoylu v Ozcan lies simply in the findings of fact. 1 [2007] EWCA Civ 1170.

RIGHTS AND LIABILITIES BETWEEN SYNDICATE MEMBERS In contract 21.11 Although each case will depend upon the terms of the agreement reached, there appears to be no reason in principle why a person joining a syndicate should not be regarded as entering into contractual relationships with all the other members, even though he may deal only with the organiser. Such a multilateral contract may come into existence where, for example, a person joins a club or other unincorporated association. He may contract with all the other members, even though he may be unaware of their identity, and even though he may communicate only with the organiser or ‘secretary’.1 Similarly, in Touche Ross & Co v Colin Baker2 an insurance policy which was expressed to be between the assured and a syndicate of underwriters at Lloyd’s was held to constitute a number of separate contracts between 1156

Gambling syndicates the assured and each of the participating syndicates.3 It is suggested that many, if not most, lottery syndicates will give rise to a multilateral contract of this type, entitling each of the syndicate members to enforce his or her rights against each of the other members personally as well as against the organiser.4 Where syndicate members enter into an agreement that any prize won by the ticket of one of them will be shared out between all of them in agreed proportions, then in the normal case, subject to the terms of the agreement, and provided an intention to create legal relations exists, each of the members has a contractual right and also a right arising in trust against the organiser and against the other syndicate members to his or her share of any prize won by the syndicate. The proposition that a contractual right exists is supported by the cases of Simkins v Pays, Peck v Lateu, and Kucukkoylu v Ozcan noted at 21.6–21.8 above, where the plaintiffs’ claims were brought in contract. 1 Chitty on Contracts (32nd edn), vol 1, paras 18.012–18.013. 2 [1992] 2 Lloyd’s Rep 207. 3 See also The Satanita [1895]  P  248; affd sub nom Clarke v Earl of Dunraven [1897] AC 59. 4 See Taylor v Smith (1995) 128  DLR  (4th) 548, discussed at 21.18 below, where a claim by one lottery syndicate member against the organiser and all the other syndicate members was framed both in contract and in trust, the court disposing of it on trust principles.

In trust 21.12 In addition, as has been established in the decision of the High Court in Abrahams v Abrahams’ Trustee in Bankruptcy,1 members of a lottery syndicate have rights as beneficiaries under a trust in respect of the tickets purchased on behalf of the syndicate and in respect of any winnings generated by such tickets. There the court was concerned with a syndicate on the National Lottery run by a group of villagers, initially under the auspices of the publican of the local public house, and subsequently under the auspices of a local greengrocer. The arrangements for running the syndicate were extremely informal, the basic rules being that membership should be limited to 15 members, and that each member should pay £1.00 per week into the syndicate for the purchase of lottery tickets. It was not, as the judge found, a rule of the syndicate that each member was limited to acquiring one weekly share in the syndicate resulting from a £1.00 contribution. In the event, the claimant, having paid £2.00 in respect of a week when the syndicate won a substantial prize, established a claim to be entitled to two-fifteenths of the prize money. 1 [1999] 31 LS Gaz R 38 [1999] EWHC Ch 253, Lindsay J.

21.13 The facts of Abrahams v Abrahams’ Trustee in Bankruptcy were as follows. The claimant and her husband joined the syndicate and for some time £2.00, representing £1.00 for each of them, was paid into the syndicate each week. Then the claimant and her husband separated. The claimant continued to pay £2.00 to the syndicate each week and the money was recorded in the syndicate records as being a contribution of £1.00 for the claimant and £1.00 for her husband. However, there came a time when, the 1157

Gambling syndicates claimant having asked her husband to reimburse her for her outlay of money on his behalf, he refused in ‘crude and emphatic’ terms to pay her. Thereafter the claimant continued to pay £2.00 per week to the syndicate. The sums continued to be attributed as to £1.00 to her name and as to the second £1.00 to her husband’s name, but, as the judge found, she paid the money with the intention that if there was a win, she would be entitled to two-fifteenths of the winnings and not with the intention that any share in the winnings should accrue to her husband. 21.14 Shortly before the syndicate had the win which led to the dispute, its method of recording the claimant’s £2.00 contribution was varied so that the whole of the £2.00 was credited to the claimant’s name and her husband’s name was struck out. On 10 May 1997 the syndicate won £3,632,367 generating a return of £242,155.13 on each one-fifteenth share. The claimant duly received such a sum in respect of one of her £1.00 contributions, but a claim to be entitled to the one-fifteenth share generated by the second £1.00 contribution was made by the husband’s trustee in bankruptcy, who maintained that the payment of the second £1.00 should be treated as made on behalf of the husband. 21.15 The trustee’s claim failed. The judge held that the claimant’s payment of a second sum of £1.00 per week could not be regarded as made with the intention of benefiting her husband, but was intended to entitle her to a second one-fifteenth share of any winnings. However, the principal ground of decision was based upon conventional trust doctrines. The judge held that, to the extent that the sum of £1.00 was paid in the name of the husband, the husband held the rights accruing from that payment under a resulting trust for the benefit of the claimant. The judge characterised the right which was derived from the making of the contribution in the following terms: ‘… when money was paid by a member for the purposes of the syndicate the payor, in my judgment, thereupon gained a right; it was a right to have the winnings, if any, as received by whoever received them on the syndicate’s behalf duly administered in accordance with whatever rules of the syndicate then applied, or, in the absence of clear rules, as the Court shall determine.’ 21.16 The trustee in bankruptcy argued that there could be no such resulting trust because there was no purchase. No property, it was argued, was acquired by Mr Abrahams as a result of his wife’s payment of the £1.00. Nothing more was acquired than a hope, and this was not property in respect of which a resulting trust could arise. 21.17 The judge rejected this argument. In his view the rights accruing to a paying member of the syndicate to have winnings administered in accordance with the rules of the syndicate was a right which could be described as ‘property’ and which could be described as having been ‘purchased’ by the making of the relevant payment. He said: ‘It was a present right that would, of course, be valueless in relation to a losing draw but a right which could be immensely important should there be a big win. I  see no reason in principle, leaving aside 1158

Gambling syndicates the pointlessness and cost of such a claim in most cases and the fact that the grant of such relief may, in point of discretion, be refused, why even before a win, a syndicate member who had paid his dues should not be able to seek a declaration from the Courts that the ticket holder, if identified and joined as a party, would hold winnings upon trust to apply the same in accordance with the rules, if any, or otherwise as the Court shall direct. The fact that the right I  have described would be likely to arise and to become valueless week by week does not, in my judgment, deny it the description of being property, nor deny its acquisition, on payment therefor, of the description of being a purchase. Whilst I would not wish to encourage any such litigation, as another example one could imagine a case in which a syndicate bought so many tickets that some win, albeit only a small one, was little short of inevitable. I see no reason why, in principle, its members, other than the ticket holder, on learning that he had bought a ticket for, say, South America, should not be granted injunctive relief requiring the ticket to be lodged in safe hands. They would be asserting a right of the kind which the law can recognise; the right to have property duly administered if and when it is received. That right is itself property. The right, as such, would exist even if the prospects of winnings were less, but in that case the relief could well be declined not for want of a right but in the discretion of the Court.’ The claimant, accordingly, succeeded in establishing her right to be paid a second one-fifteenth share in the prize money. 21.18 The possibility of enforcing a claim in trust is also exemplified by the decision of the Ontario Court in Taylor v Smith.1 There the plaintiff and the defendants were members of a lottery club. Each Thursday $4 were collected from members of the club. Two dollars were used to purchase tickets for the draw on the following Saturday and the remaining $2 per person were used to purchase tickets for a draw the following Wednesday. Each person who participated in a draw was entitled to a share in the winnings equally. The plaintiff paid $4 on 3  June 1995 to purchase his share of the lottery tickets for the draws to be held on Saturday 5 June, and Wednesday 9 June. The first defendant, who was the unofficial treasurer of the club, contacted a number of members and asked if he could put all of the monies he had collected towards the purchase of tickets for the Saturday draw, as there was a shortfall in the amount he had collected. Two people who had paid were not contacted, one being the plaintiff. Acting without the plaintiff’s permission, Smith invested the whole of his $4 in the Saturday draw. On the following Monday the plaintiff was asked for a further $2 for the Wednesday draw, but refused to pay on the basis that he had already done so. In the circumstances the first defendant did not purchase a ticket on behalf of the plaintiff in the Wednesday draw. When the Wednesday draw took place, one of the syndicate tickets won a prize of $1.15 million. The syndicate members held a meeting at which it was decided not to allow the plaintiff to share the winnings because he was not regarded as a ‘regular’ participant in the syndicate and he had not, so the meeting held, contributed $2 to the Wednesday lottery. The plaintiff sued the syndicate, claiming a declaration of co-ownership in the winning ticket. The action was framed both in contract 1159

Gambling syndicates and in trust. The defendants were Smith, the treasurer of the club, and all the other club members. The judge found that the first defendant was acting as a trustee of the group’s funds and that as trustee he was bound to hold the funds and apply them according to the terms under which each member of the group paid. The terms of the trust were that $2 from each member would be used for each participant in the Saturday draw and that $2 would be used on the Wednesday draw. The nature of the trust relationship could be implied from the course of dealings between the parties. In the judge’s view the defendants had been guilty of three breaches of trust to the detriment of the plaintiff: ‘The terms of the trust were breached firstly by the Defendant, Marcus Smith, on Saturday, June 5th, 1993, when he used all of [the plaintiff’s] funds without his permission, to purchase tickets for the Saturday, June 5th, 1993 draw. Secondly, the terms of trust were breached when Marcus Smith failed to put in [the plaintiff’s] $2 to purchase tickets for the Wednesday, June 9th, 1993 draw. Thirdly, the terms of the trust were breached by all the Defendants when they voted at the meeting held on June 10th, 1993, not to include [the plaintiff] in a share of the winnings.’ 1 (1995) 128 DLR (4th) 548.

21.19 The plaintiff was accordingly entitled to damages for breach of trust quantified as a one-thirteenth share of the winnings. Although the judge based his conclusion on a trust analysis, it would seem that the same conclusion would have been reached if the defendants had been treated as being in breach of contractual obligations which each owed to the plaintiff.

Rights to share in the winnings when the member has not paid 21.20 This is an issue which has arisen several times in the reported cases and is no doubt a fairly common issue or potential issue. It is an issue which can only be decided by reference to the terms of the syndicate agreement (such as they are) and by reference to the conduct of the parties, which may either evidence the terms of the agreement or give rise to an estoppel. In the absence of evidence of agreement to the contrary, the court is likely to find that the most likely implication or construction of a syndicate agreement is that a member who has not paid is not entitled to share in a win.1 1 Horan v O’Reilly [2004] IEHC 425 (see below).

21.21 Nevertheless, such evidence may be available. The Irish case of Horan v O’Reilly1 involved a syndicate on the Irish national lottery. It was not in dispute that there was a syndicate, but it appears that there was nothing in writing. The syndicate won the jackpot at a time when the plaintiff was in arrears of his weekly payments. The organiser, supported by the other members, refused to share the win with the plaintiff. The evidence showed that there was a practice whereby the organiser ‘carried’ the plaintiff for several weeks at a time, contributing the plaintiff’s share of the price of the syndicate tickets and recovering the money from him at a later date. On the facts it was found that the plaintiff’s arrears had not, at the date of the win, exceeded the bounds 1160

Gambling syndicates established by this practice. Perhaps significantly, some small winnings had been ‘re-invested’ in the plaintiff’s name, thus negativing any suggestion that he had left the syndicate. Essentially on the basis that it was the accepted conduct of the syndicate that there could be some arrears, the plaintiff’s claim to his share of the winnings succeeded. By contrast, in the Australian case of Cole v Crain2 there was scant evidence that anyone in a syndicate had ever been ‘carried’ if they missed their regular payment, and in those circumstances a claim by a member in arrears of payment failed. For a much more complex situation involving re-investment of winnings, see Taylor v Smith.3 1 [2004] IEHC 425, Clarke J. 2 SCt NSW 8/89 [1989] NSW Lexis 11361 BC8901838. 3 (1995) 128 DLR (4th) 548; see 21.18 above.

21.22 Another example of a successful claim by a syndicate member who had not paid his contribution at the time of the draw may be found in Namberry Craft Pty Ltd v Watson.1 The facts were unusual. A  Mr Pezzin conducted a news agency business. As part of his business, he also operated a lottery syndicate open to his customers. Prior to the draw in question (‘The Big Kahuna’) the defendant Mr Watson had participated in 14 lottery draws, over two and a half years. On three previous occasions (including one occasion where the syndicate had won), Mr Watson had not paid Mr Pezzin for his ticket prior to the draw, but paid him afterwards. Mr Pezzin purchased a syndicate ticket for the Big Kahuna which authorised him to sell a total of 10 units at $741.95 per ticket. In the week before the Kahuna, Mr Pezzin asked Mr Watson if he wanted to participate and Mr Watson said he did. Mr Pezzin entered Mr Watson as a syndicate member in a running sheet. Mr Watson made no payment for his ticket, which was noted on the running sheet. The day before the draw, Mr Watson attended at the newsagent with the intention of paying for his ticket. He observed that the person taking payments for tickets was not Mr Pezzin. Mr Watson had no cash with him, and was hoping to pay by cheque. However, he realised that it was unlikely that his cheque would be accepted by someone other than Mr Pezzin so he went away. Unbeknown to Mr Watson, Mr Pezzin had in fact recently sold his business. On the afternoon before the draw, it was in fact the prospective new proprietor who was acting as a shop assistant. After Mr Watson left the shop, another customer expressed interest in purchasing a ticket in The Big Kahuna. The other customer approached the prospective new proprietor who was then serving. The prospective new proprietor checked the syndicate running sheet and advised that it was full, but that one customer, most likely Mr Watson, had not yet paid. An arrangement was entered into between the prospective new proprietor and the other customer whereby, if the other customer deposited the ticket price with him, and the customer entered in the running sheet had not paid by close of business that day, the other customer would be entered into The Big Kahuna syndicate in his place. The syndicate won Aus$687,000 in the Big Kahuna draw. On the following Monday morning, Mr Watson attended at the newsagent to pay for his ticket. He was advised of what had transpired. He then sued Mr Pezzin and his company in the local magistrates court for 10% of the winnings. The issue which found its way to the Supreme Court of Victoria was a challenge to the magistrate’s decision to allow Mr Watson to amend his pleadings during the trial. The challenge was rejected and the case referred 1161

Gambling syndicates back to the magistrate for the trial to be concluded. There is no copy of the magistrates’ decision. However, a local newspaper reports2 that Mr Watson was successful in his claim and that the newsagent owner was found to be ‘guilty of false and misleading conduct over the handling of the syndicate.’ It appears that the magistrate found that a valid contract was formed between Mr Watson and the newsagent owner, and that the newsagent owner then attempted to give a false explanation to the court in an attempt to justify Mr Watson’s exclusion. 1 [2011] VSC 136. 2 See http://www.theage.com.au/victoria/man-dropped-from-lottery-syndicatewins-share-in-court-20111113-1ndw6.html.

RIGHTS AND LIABILITIES BETWEEN THE SYNDICATE ORGANISER AND THE MEMBERS Generally 21.23 A  syndicate need not have an organiser (eg  in a bingo syndicate where each member plays their own card), but the role of syndicate organiser is central in the cases of lottery, pools and betting syndicates, as it usually falls to the organiser to make the syndicate’s entry into the pools or lottery by buying the ticket or posting the coupon, as the case may be, or to place the syndicate’s bet(s). Like the rights of members inter se, the rights and liabilities deriving from the relationship between the syndicate organiser and the members will be governed by the terms of the contract to which they are parties and by the trust principles set out in the Abrahams case (discussed above). 21.24 It is thought that the organiser’s basic responsibility will be to make entries to the lottery (or enter the pools or place bets) in accordance with his authority, to hold the relevant lottery tickets, pools coupons or betting slips on behalf of the syndicate members, to collect the winnings and to distribute any winnings between them in accordance with the agreed arrangements

Syndicate organisers gambling on their own account 21.25 In the absence of an agreement to the contrary, there seems nothing to prevent a syndicate organiser from eg buying tickets in a lottery on his own account merely because he has also purchased tickets on behalf of the syndicate. However, if he does so, the onus lies on him to keep his own tickets distinguished from the syndicate tickets. Having said that, the courts do not appear to treat this onus as being particularly hard to discharge. Presumably judges tend to think that it is just as likely that greed has founded a dishonest claim to share someone else’s good fortune as it is to have caused a syndicate organiser to seek to keep a syndicate win for himself. 21.26 In Van Rassel v Kroon1 the plaintiff and the defendant agreed to purchase a lottery ticket jointly. A dispute arose between them as to whether a ticket purchased by the defendant was one purchased in pursuance of the 1162

Gambling syndicates agreement (thus entitling the plaintiff to a half share in the £12,000 won by the ticket) or whether it had been purchased by the defendant on his own account. On the facts the defendant was able to establish that the ticket had been purchased for himself beneficially, and the plaintiff’s claim failed. In the course of giving judgment in the High Court of Australia, Dixon  CJ offered a helpful analysis of the duties of a syndicate organiser: ‘When one man agrees with another that he will obtain a lottery ticket for the latter or for the latter and himself jointly the identification of the lottery ticket he acquires in pursuance of the arrangement is likely to present difficulties. The person in whose name the lottery ticked is issued obtains the legal title to what is a chose in action. If he is the applicant he obtains custody of the ticket and is in a position to exercise whatever rights the ticket confers and deal with it as he chooses. If the application is or must be taken to be for the benefit of another or others or of himself and another or others he has the legal title unless the ticket issues in the names of the person or persons beneficially entitled. Otherwise they have nothing but an equitable interest in the ticket and its proceeds if it wins a prize. In other words he becomes a fiduciary agent or trustee. It is not a trust or a fiduciary agency involving many duties or burdens. It is of the simplest kind and the fiduciary obligations flowing from it are few and for the most part negative, that is to say he must do nothing to impair the rights of the person for whom he holds the ticket. But one of the duties that a person acquiring any piece of property, whether a chose in action or corporeal thing, for the benefit of others as a fiduciary is to distinguish the piece of property he so acquires from other similar things which he may obtain for himself or in which he may be interested. This duty has a particular application to the acquisition of a lottery ticket. For a lottery tickets is a chose in action possessing characteristics making the discharge of the duty specially important. When the ticket is applied for it is one of a series, very large in number, no one of which is distinguishable from the others except by the numerals they bear. Every one of them has the same value, a small uniform value. But when the lottery is drawn the value of some of the tickets will become very great indeed while most of the tickets will become valueless. The fiduciary is at perfect liberty before the drawing to acquire for himself beneficially any number of tickets in the same lottery as that in which he holds a ticket on behalf of others or of himself and others. It is evident that before the drawing the identity of the ticket which is held for others or for himself and others ought, if he fulfils his duty, to be ascertained so that it is clearly distinguished from those he holds for himself. If there is any confusion, the burden must be upon him of showing which is his property. It could not be otherwise where the duty rests upon him as a fiduciary not to confuse his own beneficial property with that which is subject to his fiduciary obligations and where at the same time his are the hands in which are placed the means of identifying the property. A ready means of identifying the lottery ticket as that applied for in the interests of others is furnished by the space in the form of application for the name or title of the syndicate. If it is part of the arrangement between the contributors that a given syndicate name should be used, 1163

Gambling syndicates then of course all that need be done by the person to apply for a ticket on their behalf is to use that name in the application. If a claim is made against him on the footing that some winning ticket purchased is that which he holds as fiduciary, he will discharge the burden of proof thrown upon him by proving that he used the syndicate name in his application for some other ticket. But in reference to the burden of proof, it is important to distinguish between the terms of the arrangement and the identification of the ticket acquired on behalf of the joint contributors. Where a joint contributor relies upon the terms of the arrangement in support of his title to a share or interest in the winning ticket which he asserts was bought on the joint account, the burden is upon him in establishing the terms in question. That is part of the contract or mandate, and it is for the plaintiff to prove what the contract or mandate was in so far as it forms part of the title which he asserts. The duty as a fiduciary not to confuse the property he holds in that character with his own beneficial property gives rise to the consequence that the burden of identifying by proof what is his own property rests on him. If it were not so, the task of the beneficiaries would be impossible.’2 1 Van Rassel v Kroon (1953) CLR 298 at 303. 2 (1953) 87 CLR 298 at 303–4.

21.27 Tomkins v East1 appears to be the only English case about a syndicate organiser claiming a win for his own, and again involved the National Lottery. The claimant member claimed a share of a large win; the defence was that the winning ticket was not a syndicate ticket, but was in fact bought by the defendant organiser’s father. This factual dispute did not, however, need to be resolved at trial; Rimer J dismissed the claim summarily, because the claimant could not establish that the winning numbers had ever been numbers played by the syndicate. Presumably this ground would not have applied, if the case had been that the syndicate played numbers chosen by the organiser, but it is common for lottery syndicates to play the same fixed numbers every week. 1 [2004] EWHC 1825, [2004] LL Rep 697.

Formal syndicate agreements 21.28 Given the importance of establishing the obligations of the syndicate members and of the organiser, careful thought needs to be given to the contents of a lottery syndicate agreement. It has been suggested1 that the following matters, at least, need to be considered: (1) The basic obligations of the organiser must be defined. These will depend upon the type of arrangement proposed. It should be made clear, for example, whether the members are to provide their own numbers to the organiser or whether he is to select numbers on their behalf. (2)

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The organiser’s authority to collect money and tickets should be stated. If he is to be paid, that fact and the amount and method must be stated.

Gambling syndicates If permission is needed from an employer to leave an office or factory to enter the lottery, that must be obtained and the employer’s non-liability for any failure by the organiser to enter or to enter all the members must be accepted. (3)

Where a person hands in a blank or incomplete entry, it should be made plain whether anyone else has the right or duty to complete it and enter it. It should also be made clear whether, if that entry wins, the proceeds come to the syndicate.

(4) It should be decided whether the syndicate may be allowed to vary in membership week by week. If X, who joins at the outset and who has by now ‘invested’ £10 without success, is joined by Y who has paid in only £1, do both receive a similar share? (5) Where a member fails to contribute in any particular week, does that fact exclude him from sharing in any prizes won in that week? Does it make any difference if his failure to pay for the week in question was a deliberate decision on his part or was due to an oversight? (6) What constitutes resignation from the syndicate? How many weeks of non-payment will disqualify? Is employment with a particular employer a requirement to participate? What happens if such employment is a requirement and an employee, having paid to contribute in the lottery, is dismissed for misconduct? (7)

On the assumption that winnings will be paid to the syndicate organiser, what obligations lie upon him to pay out the shares in the winnings? How must he go about identifying those entitled to participate, and within what timescale must he make the payments?

(8) As to the inheritance tax position, the Inland Revenue has stated that if the syndicate organiser or prize recipient dies within seven years of receipt of the prize, the sharing members will not be liable for IHT if they can provide satisfactory evidence of an agreement made before success in the lottery that the prize was to be divided, and in what proportions. (9) How is entitlement to a share established? If a person submits two tickets and pays two stakes, can he or she have a larger share and, if so, of what amount? A  person in a ten-strong syndicate with one share gains a one-tenth entitlement, but with two tickets, what is the share against the nine other members? What is the position, if, though the syndicate won, it was neither of the two tickets which gained a prize? (10) How does a person prove that he is a member of the syndicate? It is suggested that good practice entails that the names, addresses and signatures of all members be attached to a written syndicate agreement by way of a schedule. A photocopy of the schedule can then be made available to each member, and revised copies can be prepared as members join and leave the syndicate. 1 See H W Wilkinson (1996) 145 NLJ 217–18.

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Gambling syndicates

INSURANCE 21.29 Where a syndicate is comprised of a number of employees, all of whom work for the same employer, the risk is created that if the syndicate should win a large sum, the whole syndicate might resign en bloc, exposing the employer to the risk of considerable business disruption and financial loss. It is possible for employers to obtain insurance against this risk.1 1 A suitably framed Google search will produce stories of mass resignations by lucky lottery winners together with offers to provide business disruption insurance to cover this.

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Chapter 22 Prize gaming

INTRODUCTION 22.1 Part 13 of the Gambling Act 2005 (ss 288–294) deals with the provision of facilities for ‘prize gaming’. Prize gaming is essentially gaming which has the characteristic that the prizes (whether in money, goods or services) have to be fixed before the gaming begins and cannot depend on the number of persons playing or the amount paid to play, and which is therefore gaming conducted on a small scale which presents relatively minor risks to the licensing objectives. The provisions of Part  13 substantially (though not completely) mirror provisions under the previous legislation which permitted the provision of ‘amusements with prizes’ and ‘prize gaming’, which were the same forms of activity as are covered by Part 13. The most important form of ‘prize gaming’, commercially speaking, is ‘prize bingo’ where bingo is played for prizes in the form of goods or services or modest money prizes, as distinct from cash bingo where it is played for cash prizes, some of which may be substantial. 22.2 There were two main sets of provisions governing prize gaming under the previous legislation, one contained in the Lotteries and Amusements Act 1976 and one in the Gambling Act 1968. Section 16 of and Sch 3 to the LAA 1976 permitted ‘amusements with prizes’:1 (i) on premises for which a permit had been granted under Sch 3 of the Act;2 (ii) on premises used mainly to provide amusements with prizes machines pursuant to a permit under GA 1968, s 34;3 (iii) at a pleasure fair consisting wholly or mainly of amusements provided by travelling showmen, subject to certain time limits.4 1 For the meaning of the expression ‘amusements with prizes’ see Fox v Adamson [1968] 1 QB 765 affd [1970] AC 552, HL. LAA 1976, s 16 provided that ‘amusements with prizes’ might constitute ‘a lottery or gaming or both’. The provisions of GA 2005, Pt 13, by contrast, apply to ‘gaming’ (defined in s 6) but not to lotteries. Where, however, an arrangement is both a game of chance and a lottery, it will, in most cases, be treated as a game of chance (and not as a lottery) for the purposes of the 2005 Act – see s 17(4). This in particular has the result that bingo (which is usually regarded as a lottery played as a game of chance) will rank as ‘gaming’ and may therefore be conducted as prize gaming under Part 13.

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Prize gaming 2 LAA 1976, s 16(1)(a). 3 LAA  1976, s  16(1)(b). Correspondingly, where a permit under LAA  1976, s  16 had effect, amusements with prizes machines could be provided as an ancillary entertainment: see GA 1968, s 34(1)(c). 4 LAA 1976, s 16(1)(c).

22.3 Limits on the price of entry and the value of prizes for such ‘amusements with prizes’ or prize gaming were laid down in the legislation and periodically updated by statutory instrument. These limits enforced the essentially modest scale of the gaming.1 1 Immediately prior to the date of repeal, the maximum amount chargeable for one chance to win a prize was 50p and the maximum money prize was £25: LAA 1976, s  16(3)(a) and  (c) as amended by the Amusements with Prizes (Variation of Monetary Limits) Order 1999 (SI  1999/1259), art  2 and the Amusements with Prizes (Variation of Monetary Limits) Order 2001 (SI 2001/4034), art 2 respectively.

22.4 The Gaming Act 1968 permitted prize gaming to be provided (subject to limits) on premises for which a gaming licence under Part II was held.1 This provision enabled the holders of bingo licences to provide prize bingo as an interval game in bingo club premises. Again, the legislation contained limits on participation fees and the values of prizes, which were regularly updated by statutory instrument.2 1 GA 1968, s 21. 2 At the date of repeal of the provision, the maximum amount chargeable for one chance to win a prize was 50p and the maximum money prize was £25: GA 1968, s 21(2)(a) and (c), as amended by the Gaming Act (Variation of Monetary Limits) (No 2) Order 2001 (SI 2001/4035), art 2.

22.5 Part 13 of GA  2005 broadly replicates this pattern of provision. It provides a definition of ‘prize gaming’1 and enables prize gaming to be provided: (i) in premises holding a prize gaming permit granted under Sch  14, provided conditions laid down in s 293 are complied with;2 (ii) in an adult gaming centre or a licensed family entertainment centre, provided conditions laid down in s 293 are complied with;3 (iii) in premises for which a family entertainment centre gaming machine permit has effect, provided the gaming is equal chance gaming and provided the conditions laid down in s 293 are complied with;4 (iv) in premises for which a bingo premises licence has effect;5 conditions governing the prize gaming may be attached to the bingo operating licence which will be required to provide bingo on such premises and conditions have in fact been attached by statutory instrument imposing limits on prize gaming conducted under this provision, which mirror those contained in s 293;6 (v) at a travelling fair, provided the gaming is equal chance gaming and provided the provisions laid down by s 293 are complied with.7 In addition, a casino operating licence granted under s 65(2)(a) will entitle the holder to provide facilities for any game of chance (and therefore for prize 1168

Prize gaming gaming), except for bingo.8 In practice it is thought that this entitlement will be of limited commercial significance. 1 2 3 4 5 6

GA 2005, s 288. GA 2005, s 289. GA 2005, s 290(1). GA 2005, s 290(2). GA 2005, s 291. See the Gambling Act 2005 (Operating Licence Conditions) Regulations 2007 (SI  2007/2257) amended by Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2010 (SI 2010/774). 7 GA 2005, s 292. 8 GA 2005, s 68(3)(b).

22.6 Before turning to examine the above provisions in more detail, there are two preliminary points to be considered. First, it should be noted that, consistently with the low level of stakes and prizes, children and young persons may participate in prize gaming, provided it takes the form of equal chance gaming in cases where it is provided pursuant to a prize gaming permit, in a licensed family entertainment centre, in a non-licensed family entertainment centre, or at a travelling fair. This entitlement will be dealt with under the specific treatments of these provisions below. 22.7 Second, some attention must be paid to the relationship between ‘prize gaming’ and ‘gaming machines’. The Act of 2005 makes specific provision to govern use of machines for the playing of bingo, in recognition of the fact that certain types of equipment are commonly used to play bingo, including prize bingo. In particular, players of prize bingo often use illuminated bingo fascias or terminals which take the place of paper bingo tickets typically used in cash bingo. The fascia contains illuminated numbers which can be marked off or covered by the player. Under the previous legislation, the definition of gaming machine was sufficiently narrow to avoid catching equipment of this kind.1 The definition of ‘gaming machine’ for the purposes of the GA 2005 is contained in s 235 and is widely drafted in such a way as to catch equipment such as a bingo fascia. However, this result is avoided by specific provisions in s 235 which exclude bingo equipment, subject to certain conditions, from the definition of ‘gaming machine’, thus ensuring that it will be regulated under the general provisions of the Act, including, where appropriate, the prize gaming provisions of Part 13, and not the gaming machine provisions of Part 10. These exemptions (in the order in which they appear in s 235) are as follows. 1 See GA  1968, s  26, which defined gaming machine as a machine which (a)  is constructed or adapted for playing a game of chance by means of the machine, and (b) has a slot or other aperture for the insertion of money or money’s worth in the form of cash or tokens. The element of chance had to be provided by means of the machine: s 26(2). Bingo fascias eluded the definition because (i) the element of chance did not come from the fascia, and (ii) there was no slot or aperture.

Bingo licensed premises 22.8 Where a machine is used for the playing of bingo (including prize bingo)1 and it is used in accordance with conditions attached to a bingo 1169

Prize gaming operating licence under GA  2005, s  75 or s  77, then the machine is not a gaming machine.2 The machine may therefore fall within the prize gaming provisions of Part 13: specifically s 291. 1 By GA 2005, s 353: ‘“bingo” means any version of that game, irrespective of by what name it is described …’. 2 GA 2005, s 235(2)(e).

Adult gaming centres and licensed family entertainment centres 22.9 Where a machine is used for the playing of bingo by way of prize gaming and it is used in accordance with conditions attached to a gaming machine general operating licence under GA 2005, s 75 or s 77 (ie the form of gaming machine operating licence required to run an adult gaming centre or a licensed family entertainment centre), then the machine will not be a gaming machine.1 It will accordingly be governed by the provisions of Part 13: specifically s 290(1). 1 GA 2005, s 235(2)(f).

Prize gaming permits and family entertainment centre gaming machine permits 22.10 Where a machine is used for the playing of bingo by way of prize gaming and it is made available under a family entertainment centre gaming machine permit or a prize gaming permit, then, provided any requirement prescribed in any relevant code of practice under GA  2005, s  24 as to the specification of the machine or the circumstances in which it is made available for use are complied with, the machine is not a gaming machine.1 Accordingly, it will be governed by the prize gaming provisions of Part 13: specifically s  289 (prize gaming permits) or s  290(2) (family entertainment centre gaming machine permits). 1 GA 2005, s 235(2)(g).

22.11 We now turn to discuss the provisions of GA  2005, Pt  13 more broadly, beginning with the definition of prize gaming, then turning to the general conditions laid down in s 293 and the regulations made under that section, and finally dealing with each of the five permitted types of prize gaming identified at 22.5 above.

DEFINITION OF PRIZE GAMING 22.12 The expression ‘prize gaming’ is defined in GA 2005, s 288, which provides as follows: ‘Gaming is prize gaming for the purposes of this Act if neither the nature nor the size of a prize played for is determined by reference to— 1170

Prize gaming (a) the number of persons playing, or (b) the amount paid for or raised by the gaming.’ 22.13 The expression ‘gaming’ is, of course, to be understood in accordance with the definition contained in GA  2005, s  6. The expression ‘prize’ has the meaning contained in s  6(5), which provides that for the purposes of the Act ‘prize’ means ‘money or money’s worth’, and includes both a prize provided by a person organising gaming and winnings of money staked. The gaming can in principle be either ‘equal chance gaming’ or ‘non-equal chance gaming’.1 However, prize gaming in premises with a family entertainment centre gaming machine permit must be equal chance prize gaming,2 and prize gaming provided at a travelling fair must also be equal chance prize gaming.3 Moreover, where prize gaming is offered in any of the ways permitted by the Act in circumstances where children or young persons may participate, the gaming is required to be equal chance gaming – see below. 1 For equal chance gaming and non-equal chance gaming see GA 2005, s 7 and s 8 and Chapter 2. 2 GA 2005, s 290(2). 3 GA 2005, s 292.

22.14 In order to fall within the definition, an activity will have to amount to ‘gaming’, so that a lottery will not be able to fall within GA 2005, s 288. In this respect, the 2005 Act contrasts with the provisions of the Lotteries and Amusements Act 1976, s 16 which dealt with ‘amusements with prizes’ which, under the relevant definition, could constitute ‘a lottery or gaming or both’.1 Provided, however, an activity is both gaming and a lottery for the purposes of the GA 2005, then it will, in most cases, fall to be treated as gaming under the provisions of s 17(4). Accordingly, bingo which is the most obvious example of a lottery played as a game (see Chapters 2 and 14) will normally rank as gaming and may be provided as prize gaming under Part 13. 1 LAA 1976, s 16(1).

22.15 The essential requirement of the definition is that the nature and size of any prize played for must not be determined by reference to the number of persons playing, or the amount played for or raised by the gaming. This means that where prizes are non-monetary, their nature must be fixed before the gaming starts, and where prizes are money prizes, the size of the prize must be fixed before the gaming starts. This requirement can be contrasted with other kinds of gaming which is non-prize gaming, where the size of the winnings does depend on the amount of stakes or other participation fees or payments which are made in the course of the gaming. For example, in roulette the amount of a winning bet on (say) one number will depend upon the amount which the player stakes, and in cash bingo the award of the prize or prizes may well involve distributing or dividing up the pool of stakes paid, so that the size of the prize or prizes will vary according to the value of stakes paid into the pool. 22.16 The effect is that in prize gaming a promoter risks making a commercial loss if he offers a prize or prizes, the amount(s) or value(s) of which exceed the amount he is paid by players for participation. This results 1171

Prize gaming in a strong incentive upon the promoter to keep prize values at a modest level, an effect which is further enforced by the regulations made under GA 2005, s 293. None of this, of course, prevents operators from estimating what money will be raised from gaming, or predicting the numbers who will take part1 and seeking to set the values or amounts of prizes accordingly. It should be noted that s 288 does not prevent prizes from being won in a way that depends on the progress or outcome of the game. It is therefore permissible under s 288 for different prizes to be claimed, depending upon how quickly a win takes place (eg calling ‘House’ in a game of bingo within a certain number of calls).2 1 This is a point acknowledged in the Explanatory Notes to Gambling Act 2005, para 731. 2 Explanatory Notes to Gambling Act 2005, para 732.

CONDITIONS FOR PRIZE GAMING 22.17 The following four conditions are laid down by GA 2005, s 293 and must be complied with where prize gaming is offered in the circumstances set out in (i)–(iii) and (v) at 22.5 above, ie (i) in premises holding a prize gaming permit, (ii)  in an adult gaming centre or a licensed family entertainment centre, (iii) in premises with a family entertainment centre gaming machine permit, and (v) at a travelling fair.1 1 GA 2005, s 293(1)–(6).

First condition 22.18 The gaming must comply with prescribed limits for participation fees.1 The expression ‘participation fee’ is to be interpreted in accordance with the definition of that expression in GA  2005, s  344,2 which provides that ‘participation fee’ means an amount paid in respect of entitlement to participate in gambling, and that: (a)

it is immaterial how a fee is described, whether it is payable in money or money’s worth, when and how it is payable and to whom it is payable;

(b) a charge for admission to premises where gambling takes place is to be treated as a participation fee; (c) a membership subscription is not normally to be treated as a participation fee;3 (d) a stake is not a participation fee. The only case that calls for comment is (d) providing that a stake is not a participation fee. This is counter-intuitive since it would seem natural to regard the money paid for (say) the chance to take part in prize bingo as a stake. However, the definition of ‘stake’ in s 353 makes clear that a payment will only be a stake for the purposes of the Act if it is in some way used in calculating the amount of winnings or the value of prizes that may be won in the gambling.4 It follows that a payment to participate in prize gaming 1172

Prize gaming cannot be a ‘stake’ within the Act, since gaming can only be prize gaming if the amount or value of the prize or prizes is wholly independent of the amounts paid to participate. 1 GA  2005, s  293(2). The limits may, in particular, relate to players, games or a combination; and different limits may be prescribed in respect of different classes or descriptions. 2 GA 2005, s 353. 3 GA  2005, s  344(1)(c). The Secretary of State may make regulations providing for a membership subscription to be treated as a participation fee in specified circumstances: s 344(1)(c) and (2). Further, a membership subscription for gaming on premises to which s  279 applies (exempt gaming on premises for which an on-premises alcohol licence or a Scottish licence has effect) is a participation fee: s 344(1)(c) and (3). 4 Under GA 2005, s 353(1): ‘“Stake” means an amount paid or risked in connection with gambling and which either— (a) is used in calculating the amount of the winnings or the value of the prize that the person making the stake receives if successful, or (b) is used in calculating the total amount of winnings or value of prizes in respect of the gambling in which the person making the stake participates.’

22.19 Regulations have been made prescribing limits for participation fees in prize gaming. The current regulations are the Gambling Act 2005 (Limits on Prize Gaming) Regulations 2009.1 These provide that the maximum amounts that may be charged by way of participation fees2 for prize gaming are as follows: (a) the participation fee charged for any one chance to win a prize in a game shall not exceed £1.00; (b) the aggregate amount of participation fees charged for any one chance to win a prize in a game shall not exceed £500. The application of these limits can be illustrated by reference to prize bingo. Their effect is that the cost of one game card3 in one game must not exceed £1.00. Since the maximum aggregate amount of participation fees is £500, the effect is that if all cards are charged at the maximum of £1.00 the maximum permitted number of cards is 500. If, however, cards were charged at 50p each, the maximum number would be 1,000 cards; if they were charged at 25p each, the maximum number would be 2,000 cards, and so on. A player may, of course, buy more than one card, subject to the maximum number of cards permitted. Where in paying for a chance to win a prize in a game a person acquires an opportunity to win more than one prize, then the limit is still £1.00 for that chance.4 For example, in a game of bingo the purchase of one game card (the bingo chance) may provide the purchaser with (say) three opportunities to win a prize (one line, two lines, full house), but the maximum participation fee for each game card is still £1.00.5 Alternatively, a bingo game card purchased for 50p may allow different prizes to be claimed, dependent on how quickly a win takes place (eg calling ‘House’ in a game of bingo within a certain number of calls).6 1 SI 2009/1272. 2 The expression ‘participation fees’ is to be interpreted in the regulations by reference to the definition in GA 2005, s 344: see Interpretation Act 1978, s 11.

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Prize gaming 3 Or, in prize bingo, quite possibly, one chance to use an illuminated bingo fascia in a game. 4 Regulation 2(2) provides that: ‘The limit referred to in para (1)(a) applies even if the chance provides the opportunity to win more than one prize’. 5 See the Explanatory Note to the Gambling Act 2005 (Limits on Prize Gaming) Regulations 2009, which contains the proposition stated in the text. 6 See the Explanatory Notes to Gambling Act 2005, para 732.

Second condition 22.20 This comprises three requirements: (a) all the chances to participate in a particular game must be acquired or allocated on one day and in the place where the game is played; (b) the game must be played entirely on that day; (c)

the result of the game must be made public— (i)

in the place where the game is played, and

(ii) as soon as reasonably practicable after the game ends and, in any event, on the day on which it is played.1 This condition enforces the limited scope of ‘prize gaming’ by restricting the games played to one day. This is presumably to prevent arrangements designed to encourage players to return to premises to participate in gaming taking place over two or more days, and may be compared with the fourth condition, noted below, which prevents the linking of games. 1 GA 2005, s 293(3).

Third condition 22.21 Any prize for which a game is played, or the aggregate of prizes if more than one, must not, if it is a money prize, exceed the ‘prescribed amount’ and must not, if it is a non-money prize, exceed the ‘prescribed value’.1 The prescribed amount and the prescribed value have been laid down by regulations.2 The maximum amount or value for an individual prize is £70. The maximum aggregate amount or value of prizes for which a game is played must not exceed £500.3 1 GA 2005, s 293(4). 2 Gambling Act 2005 (Limits on Prize Gaming) Regulations 2009 (SI 2009/1272). 3 Gambling Act 2005 (Limits on Prize Gaming) Regulations 2009 (SI  2009/1272), reg 3.

Fourth condition 22.22 The fourth condition is that participation in the game by a person does not entitle him or another person to participate in any other gambling (whether or not he or the other person would have to pay in order to participate in the other gambling).1 In other words, there can be no linking of 1174

Prize gaming the prize gaming to any other form of gambling in a way which might draw players from the essentially modest activities involved in prize gaming into harder forms of gambling. 1 GA 2005, s 293(5).

PERMITTED PRIZE GAMING Prize gaming permits 22.23 GA 2005, s 289 provides as follows: ‘(1) A person does not commit an offence under section 33 or 37 by providing facilities for prize gaming if— (a) the gaming satisfies the conditions specified in s 293, and (b) the facilities are provided in accordance with a prize gaming permit. (2) A prize gaming permit is a permit issued by a licensing authority authorising a person to provide facilities for gaming with prizes on specified premises. (3)

Schedule 14 makes further provision about prize gaming permits.’

An application for a permit under Sch  14 can only be made by a person who occupies or proposes to occupy the premises,1 and may not be made if a premises licence or club gaming permit has effect in relation to the premises.2 The application is made to the licensing authority in whose area the premises are wholly or partly situated.3 The application must be made in such form and manner as the authority may direct, and must specify the premises and the nature of the gaming, and contain or be accompanied by such other information and documents as the authority may direct,4 and be accompanied by the prescribed fee (currently £300).5 The licensing authority may prepare a statement of the principles they propose to apply in exercising their functions under Sch  14,6 and may in particular specify matters that they propose to consider in determining the suitability of an applicant for a permit.7 In exercising their functions with respect to prize gaming permits, the licensing authority need not (but may) have regard to the licensing objectives, and must have regard to any relevant guidance issued by the Commission under s  25.8 On considering an application, the authority may either grant it or reject it, but may not attach conditions to it.9 Before granting an application, the authority must consult the police.10  A  permit application may not be refused unless the applicant has been given an opportunity to make oral or written representations (or both).11  A  permit must be in the prescribed form,12 and lasts for ten years, whereupon it may be renewed.13 1 2 3 4

Schedule 14, para 3. Schedule 14, para 4. Schedule 14, para 5. Schedule 14, para 6.

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Prize gaming 5 Schedule 14, para  6(e); the fee is prescribed by the Gambling Act 2005 (Prize Gaming) (Permits) Regulations 2007 (SI 2007/455), para 3. 6 Schedule 14, para 8(1). 7 Schedule 14, para 8(2). 8 Schedule 14, para 8(3). For guidance on prize gaming generally see the Gambling Commission’s Revised Guidance to Licensing Authorities (5th edn, September 2015) Part 27, and for guidance on prize gaming permits see in particular paras 27.9–27.27. In particular, the Commission notes (at para 27.12) that: ‘In their statement of policy, licensing authorities should include a statement of principles that they propose to apply when exercising their functions in considering applications for permits. In particular, they may want to set out the matters that they will take into account in determining the suitability of the applicant. For example, if the premises will appeal to children and young persons, licensing authorities should think about matters relating to protection of children from being harmed or exploited by gambling and where necessary consult the Safeguarding Children Board or local equivalent. Licensing authorities should ask the applicant to set out the types of gaming that they are intending to offer and the applicant should be able to demonstrate that: • they understand the limits to stakes and prizes that are set out in regulations; and • the gaming offered is within the law.’ 9 Schedule 14, para 9. 10 Schedule 14, para 10. 11 Schedule 14, para 11. 12 Schedule 14, para  12; the form is prescribed by the Gambling Act 2005 (Prize Gaming) (Permits) Regulations 2007 (SI 2007/455), reg 4 and Sch 1. 13 Schedule 14, paras 13 and 18. For fees on a renewal application see the Gambling Act 2005 (Prize Gaming) (Permits) Regulations 2007 (SI 2007/455).

22.24 Provision is made for the lapse,1 surrender,2 forfeiture3 and replacement4 of a permit. Where an authority rejects an application for the issue or renewal of a permit, an appeal lies to the magistrates’ court.5 The licensing authority must maintain a register of the permits issued by it in the prescribed form.6 A permit may not be issued in respect of a vehicle or vessel (or part of a vehicle or vessel).7 1 2 3 4 5 6 7

GA 2005, Sch 14, paras 14 and 15. Schedule 14, para 16. Schedule 14, para 17. Schedule 14, para 21. Schedule 14, para 22. Schedule 14, para 23. Schedule 14, para 24.

Children and young persons 22.25 Children and young persons may participate in prize gaming offered under a prize gaming permit, provided it is equal chance gaming: see GA  2005, s  289 and s  46(2)(f). Note that the provisions of s  289 do not require prize gaming on premises for which a prize gaming permit is held 1176

Prize gaming to be limited to equal chance gaming, but this is a requirement imposed by s 46(2)(f) if children or young persons are to participate in the gaming.

Prize gaming and entertainment centres 22.26 GA 2005, s 290(1) provides as follows: ‘A  person does not commit an offence under section 33 or 37 by providing facilities for prize gaming if— (a) the gaming satisfies the conditions specified in section 293, and (b) the facilities are provided in— (i)

an adult gaming centre, or

(ii) a licensed family entertainment centre.’ The effect of this provision mirrors the position under the previous law, under which amusements with prizes (typically prize bingo) could be provided in premises for which a gaming machine permit existed. Under the previous law the amusements with prizes had to be ancillary to the use of the premises for playing machines, which had to be the main form of amusement provided.1 This requirement is not reproduced under s 290, which lays down no requirements as to the relative use of premises of this kind for playing gaming machines or for prize gaming. 1 See LAA 1976, s 16(1)(b).

Children and young persons 22.27 It is unlawful for a child or young person to enter premises for which an adult gaming centre premises licence has effect.1 However, a child or young person may enter premises for which a family entertainment centre premises licence has effect, provided the entry is to part of a premises where there is no access to Category C gaming machines.2 Consistently with this, children and young persons may participate in prize gaming offered at a licensed family entertainment centre, provided the gaming is equal chance gaming: see GA 2005, s 290(1)(b)(ii) and s 46(2)(g). Note that the provisions of s 290 do not require that prize gaming in a licensed family entertainment centre must be equal chance gaming, but this is a requirement of s 46(2)(g) if children or young persons are to participate in the gaming. In addition, of course, the prize gaming will have to be in an area in the entertainment centre in which there is no access to a Category C gaming machine. 1 GA 2005, s 47(5)(a). 2 GA 2005, s 47(7)(a) and (b).

Non-licensed family entertainment centres 22.28 So far as non-licensed family entertainment centres are concerned (ie family entertainment centres which do not have a premises licence but 1177

Prize gaming trade under the authority of a gaming machine permit),1 GA 2005, s 290(2) provides as follows: ‘A  person does not commit an offence under section 33 or 37 by providing facilities for equal chance prize gaming if— (a) the gaming satisfies the conditions specified in section 293, and (b) the facilities are provided on premises in respect of which a family entertainment centre gaming machine permit has effect.’ It will be noted that it is a specific requirement of the provision permitting prize gaming in such premises that the prize gaming should be equal chance prize gaming. This is, of course, consistent with the fact that children and young persons are permitted to enter such premises. 1 Granted under GA 2005, s 247 and Sch 10.

Children and young persons 22.29 Children and young persons may participate in prize gaming offered at a non-licensed family entertainment centre: see GA 2005, s 290(2) and s 46(2)(h). As noted, it is a requirement of s 90(2) that such gaming shall be equal chance gaming.

Bingo halls 22.30 GA  2005, s  291(1) provides as follows: ‘A  person does not commit an offence under section 33 or 37 by providing facilities for prize gaming in premises in respect of which a bingo premises licence has effect.’ Note that the conditions imposed by s 293 and the regulations made under that section do not apply to such prize gaming. However, a condition may be attached to an operating licence (ie the bingo operating licence necessary for the provision of bingo in premises holding a bingo premises licence) under s  75 (general conditions imposed on operating licences by the Gambling Commission) or s  78 (conditions attached to operating licences by the Secretary of State by regulation) so as to prevent s 291(1) from being used to provided facilities for a specified description of game or to provide that s 291(1) shall apply in connection with a specified description of game, or subject to specified conditions or only in specified circumstances.1 A condition attached under s 78 may, in particular, relate to limits on stakes or participation fees, limits on the amount or value of prizes, requirements that at least a specified proportion of stakes be paid out in prizes, or requirements that are specific to games of bingo played on more than one set of premises.2 The Secretary of State has made regulations3 which provide for the attachment to all bingo operating licences of a condition setting out limits on participation fees (both individually and in the aggregate) and on individual and aggregate prizes for prize gaming which match those imposed by the regulations made under s  293(2) and  (4). In addition, the Gambling Commission has stated that a non-remote bingo operating licence will have attached to it a condition that the licensee must not offer or permit to be played games that appear on a 1178

Prize gaming prohibited list of prize gaming games issued by the Commission.4 The right to provide prize gaming where a bingo premises licence exists cannot be removed or modified by an individual condition attached to an operating licence by the Commission under s 77, or by way of a condition attached to a premises licence under s 167 (Secretary of State’s mandatory conditions for premises licences), s 168 (Secretary of State’s default conditions for premises licences) or s 169 (condition attached to or excluded from premises licence by licensing authority).5 1 GA 2005, s 291(2). 2 GA 2005, s 291(3), s 91(1). 3 Gambling Act 2005 (Operating Licence Conditions) Regulations 2007 (SI 2007/2257) amended by the Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2010 (SI  2010/774). Under reg 3 the maximum participation fee in respect of any one chance to win a prize is £1.00. The maximum aggregate amount of participation fees charged for one game is £500. The maximum individual money prize is £100 if no person under the age of 18 years is permitted to be on the premises at any time when the game is being played and £70 in all other cases, 4 See Gambling Commission: Licence Conditions and Codes of Practice (July 2016) para 9.1.2: ‘Licensees must not offer or permit to be played prize gaming games that appear on any list of game prohibited by the Commission’. 5 GA 2005, s 291(4).

Fairs 22.31 GA 2005, s 292 provides as follows: ‘A  person does not commit an offence under section 33 or 37 by providing facilities for equal chance prize gaming if— (a) the gaming satisfies the conditions specified in section 293, (b) the facilities are provided at a travelling fair, and (c) facilities for gambling (in whatever form) amount together to no more than an ancillary amusement at the fair.’ It will be noted that it is a requirement of this section that the gaming be equal chance gaming, consistently with the fact that children and young persons will be likely to form an important part of the clientele at a fair. The expression ‘travelling fair’ is to be interpreted in accordance with the definition in s 286 which provides as follows: ‘For the purposes of this Act— (a)

“fair” means a fair consisting wholly or principally of the provision of amusements, and

(b) a fair held on a day in a calendar year is a travelling fair if provided— (i)

wholly or principally by persons who travel from place to place for the purpose of providing fairs, and

(ii) at a place no part of which has been used for the provision of a fair on more than 27 days in that calendar year.’ 1179

Prize gaming It will be a question of fact whether the provision of amusements amounts to a ‘fair’ and whether, if so, that fair is a ‘travelling fair’ within this definition. Cases decided on the meaning of ‘pleasure fair’ under the previous legislation may throw some light on the issues involved, but are not, it is suggested, likely to provide reliable guidance to the meaning of the expression ‘travelling fair’ for the purposes of the 2005 Act.1 1 For ‘pleasure fair’ see R v Herrod, ex p Leeds City District Council [1974] 1 WLR 1275, DC; [1976] 1 QB 540, CA and sub nom Walker v Leeds City Council [1978] AC 403, HL. It is suggested that these authorities are unlikely to provide reliable guidance as to the meaning of the expression ‘travelling fair’ in the 2005 Act, but they contain a review of authorities and statutory definitions and in particular the meaning of ‘pleasure fair’ in the Public Health Act 1961.

22.32 It will be noted that it is a requirement of GA  2005, s  292 that the prize gaming, together with all other facilities for gambling in whatever form, should amount to no more than an ‘ancillary amusement’ at the fair, so the non-gambling amusements must be predominant. The Act gives no guidance as to the test to be applied in deciding whether gambling facilities are an ‘ancillary amusement’. However, some assistance may be obtained from the practice under the previous legislation, which required that where premises were used ‘mainly’ for the purpose of gaming machines under a permit granted under s  34 of the Gaming Act 1968, ‘amusements with prizes’ (such as prize bingo) could also be provided on the premises. This in effect imposed a requirement that the non-machine amusements should be ancillary to the machines. In practice, this matter was determined by examining, inter alia, (i)  the relative amounts of space on the premises devoted to the two types of activities, (ii) the time spent by patrons engaged in the two activities and the numbers of patrons involved, and (iii) the relative percentage contribution of the two activities to the premises’ turnover.

Children and young persons 22.33 Children and young persons may participate in prize gaming at a travelling fair – see GA 2005, s 292 and s 46(2)(i). As noted, it is a requirement of s 292 that the gaming shall be equal chance gaming.

Power to restrict exemptions 22.34 Under the GA  2005 the Secretary of State has power by order to provide that prize gaming of a specified description may not be provided in premises for which a prize gaming permit has effect (s 289), in adult gaming centre premises, in licensed family entertainment centre premises, in nonlicensed family entertainment centre premises (s 290), or at a travelling fair (s 292).1 There is no power to alter the provisions relating to prize gaming conferred in the case of bingo halls under s 291. 1 GA 2005, s 294.

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Chapter 23 Private and non-commercial gaming and betting

23.1 Speaking very generally the GA 2005 is concerned with the regulation of the commercial provision of betting and gaming facilities. Certain provisions, admittedly, like those relating to cheating at gambling1 apply whether the gambling is privately conducted or is commercial, but by and large the Act does not apply to betting and gaming carried on between private individuals with no commercial aspect attached to it. This result is achieved in two ways: first, by the provisions of ss 5, 33 and 37 and, second, by the provisions of Part 14 (ss 295– 302), which is entitled ‘Private and Non-Commercial Gaming and Betting’. In summary these provisions work as follows: (i)

Section 33 provides that a person commits an offence if he ‘provides facilities for gambling’ (which includes, of course, betting and gaming), unless one of a number of exemptions (and in particular the holding of an operating licence authorising the activity) applies. The expression ‘provides facilities for gambling’ is to be interpreted in accordance with s 5. The writer would contend that the mere making of bets between private individuals or the mere conduct of private gaming (eg  the playing of a game of cards between private individuals for stakes) would not amount to the provision of gambling facilities within s 5, so that s 33 would not apply, or would not normally apply. Admittedly, as regards betting, the Explanatory Notes contend that bets between private individuals are capable of amounting to the providing of facilities for betting,2 but the reader is referred to Chapter 2 above where this contention is disputed. The writer would contend that neither betting nor gaming carried on between private individuals would be likely to amount to the provision of facilities for gambling, so that s 33 should not be engaged and there would be no requirement for an operating licence.

(ii) Even, however, if this is wrong in the case of betting, there is a specific exclusion from s 33 provided for in s 296(3). (iii) Section 37 provides that a person commits an offence if he uses premises, or causes or permits premises to be used, for various kinds of gambling, including betting and gaming. The writer would contend 1181

Private and non-commercial gaming and betting that the mere making of bets between private individuals, or the mere conduct of gaming between private individuals, would not, or at least not normally, amount to the ‘use’ of premises for these purposes, so that the provisions of s 37 would not apply to such activities. (iv) Again, however, even if this is wrong, the effect of s 296(3) is to prevent betting otherwise than in the course of a business from falling within s 37. (v) For the above reasons, betting and gaming between private individuals on a non-business basis should not fall within s 33 or s 37. However, Part 14 takes matters further in two ways. First, it is central to the above analysis that the betting and gaming fall outside ss 33 and 37 in that no facilities are provided. However, ss 295, 296 and Sch 15 introduce the concepts of ‘private gaming’ and ‘private betting’ (ie  essentially gaming and betting carried on in circumstances where the general public do not have access). Where gaming and betting are ‘private’ in the defined sense, then it is possible to provide facilities for them without infringing ss  33 and 37 and therefore without requiring a licence. Second, ss 297–301 introduce the concept of ‘non-commercial gaming’, ie  prize gaming and equal-chance gaming conducted in accordance with specified requirements at a so-called ‘non-commercial event’ (eg a charity ball), the proceeds of which are not to be devoted to private gain. At such an event facilities may be provided for such ‘non-commercial gaming’, even though the public will be admitted to the event. The gaming is excluded from the provisions of ss 33 and 37, so that again no licence will be required to carry it on. The assumption is that the gaming will be on a modest scale (and in the case of noncommercial equal-chance gaming this is enforced by regulations), so that it can safely be conducted without the need for a licence. We will now turn to consider ‘betting’ and ‘gaming’ separately. 1 GA 2005, s 42. 2 Explanatory Notes to Gambling Act 2005, para 751.

BETTING 23.2 Broadly speaking, the legislation which the GA  2005 replaces imposed few restraints upon betting between private individuals which was not conducted by way of business. Except for provisions forbidding people from frequenting or loitering in streets or public places to bet,1 there were no controls prohibiting the use of premises for private betting; what was controlled was the use of premises for the business of betting with people resorting to those premises.2 Premises could only be dedicated to the business of betting if they were on approved horse racecourses or on a licensed track or if the premises held a betting office licence. Likewise, individuals did not require any form of authorisation to bet as between themselves on a nonbusiness basis. It was only when a person carried on the business of betting that he was required to hold a bookmaker’s permit.3 1 Betting, Gaming and Lotteries Act 1963, s 8.

1182

Private and non-commercial gaming and betting 2 BGLA 1963, s 1(1). 3 BGLA 1963, s 2 and s 55.

23.3 The GA 2005 achieves a similar result. As noted, the two principal regulatory sections by which the provisions of the Act are engaged are s 33 (provision of facilities for gambling) and s 37 (use of premises for gambling). Section 33 provides: ‘(1)  A  person commits an offence if he provides facilities for gambling’ unless one of a number of exemptions applies, the most important being the holding of an operating licence. Since gambling includes betting (s 3) it is an offence to provide facilities for betting. However, a person only commits an offence within the section if he ‘provides facilities for betting’; the provision does not make it an offence to bet as such. The circumstances in which a person provides facilities for gambling (including betting) are set out in s 5 discussed in Chapter 2. However, the mere making of a bet or bets between private individuals will not, the writer would contend, fall within s 33. It is true that the Explanatory Notes1 suggest that in certain circumstances a private ‘backer’ and ‘layer’ to a bet are capable of providing facilities for betting,2 but the reader is referred to the discussion in Chapter 2, where this contention is challenged. 1 Explanatory Notes to Gambling Act 2005. 2 Explanatory Notes to Gambling Act 2005, paras 750–3.

23.4 However, even if the provisions of the Act are capable of being read as applying to private individuals who are not conducting a business, such betting is taken out of the terms of both s  33 and s  37 by s  296(3), which provides that: ‘A person does not commit an offence under section 33 or 37 by making or accepting a bet, or by offering to make or accept a bet, if he acts otherwise than in the course of a business.’ Accordingly, in those circumstances no party to the bet will require a betting operating licence. 23.5 The position as regards betting under s  37 is possibly a little less clear, though any doubts are resolved by s 296(3) which, as noted, excludes non-business betting from s 37. Section 37 provides as follows: ‘Use of premises (1) A  person commits an offence if he uses premises, or causes or permits premises to be used, to— … (e)

provide facilities for betting (whether by making or accepting bets, by acting as a betting intermediary or by providing other facilities for the making or accepting of bets).’

23.6 Here again, the offence is that of ‘using premises or causing or permitting premises to be used to provide facilities for betting’ and not just that of ‘betting’. Although the expression ‘provide facilities for betting’ is not defined, it must clearly be interpreted by reference to the GA 2005, s 5 definition of ‘providing facilities for gambling’. The writer would contend that something other than the mere making of bets is required. There must, 1183

Private and non-commercial gaming and betting the writer would argue, be some use of the premises beyond the mere fact of the making of a bet there to amount to the use of premises to provide facilities for betting.1 1 This contention may receive some support from Sweet v Parsley [1970]  AC  132, HL. The House of Lords was concerned with the meaning of s 5 of the Dangerous Drugs Act 1965, which made it an offence to be ‘concerned in the management’ of any premises ‘used for the purpose of’ smoking cannabis resin. It was held that the appellant was not guilty of such an offence where she let out rooms to tenants who, without her knowledge, smoked cannabis there. It was held, inter alia, that the mere fact that cannabis was smoked at the premises did not mean that the premises were used for the purpose of smoking cannabis. Lord Morris of Borth-yGest, supposing the case of a landlord letting flats, said (at 154F–155A): ‘If a tenant, who was a non-smoker, had a guest one day who smoked a pipe of tobacco in the flat, it would be a strained and unnatural use of language to describe the flat which the tenant rented as being premises used for the purpose of smoking … If a tenant took sugar with his tea it would be fanciful to describe the flat as premises used for the purpose of putting sugar into tea … It seems to me, therefore, that the words “premises … used for the purpose of smoking cannabis” are not happily chosen if they were intended to denote premises in which at any time cannabis is smoked. In my opinion the words ‘premises … used for the purpose of …’ denote a purpose which is other than quite incidental or casual or fortuitous: they denote a purpose which is or has become either a significant one or a recognised one though certainly not necessarily an only one.’ (italics supplied)

23.7 This conclusion may possibly be called into question by the qualifying words in the parenthesis which provide that a person may provide facilities for betting ‘by making or accepting bets’, ‘by acting as a betting intermediary’ or ‘by providing other facilities for the making or accepting of bets’. As to these it can be said that the second case, a ‘betting intermediary’, will be providing a service designed to facilitate the making or acceptance of bets between others (see GA  2005, s  13) and so will necessarily be providing facilities for betting (see s  13(2)). As to the third case, this merely repeats the terms of s  37(1)(e) without adding anything. It is the first case, namely ‘by making or accepting bets’, which possibly raises a question. It could be read in one of two ways. The first, and the writer would suggest correct, construction is to read it as meaning simply that where a person provides facilities for betting (as defined by GA 2005, s  5), it does not matter whether the betting takes the form of the making or the acceptance of bets. So the facilities provided could be exclusively for bettors who ‘make bets’ or bettors who ‘accept bets’ by stating the terms on which they will agree to bet and then accepting the bets offered in response to those terms. An example of a business of the first type would be an internet betting exchange where customers make bets between themselves; an example of the second type would, of course, be any bookmaking business where the proprietor quotes the odds on which he will accept bets. The second way of reading the expressions would be to say that they are designed to make clear that the mere making or accepting of bets can amount to providing facilities for betting. The writer would submit that this is not the correct interpretation, particularly having regard to the meaning of the expression ‘provide facilities for betting’ viewed against the background of the s 5 definition. 1184

Private and non-commercial gaming and betting 23.8 However, again, any doubt in the matter is resolved by GA  2005, s 296(3) which makes clear that the making or accepting of bets otherwise than in the course of a business does not fall within s 37.

PRIVATE BETTING 23.9 For the above reasons it is submitted that the making of bets between private individuals on a non-business basis does not fall within the offencecreating sections – s 33 and s 37. However, GA 2005, Pt 14 takes the matter further. Section 295 provides that Sch 15 (which defines private gaming and private betting) shall have effect,1 and s 296 then goes on to provide that a person may provide facilities for ‘private betting’ without infringing s 33 and may use premises to carry on ‘private betting’ without infringing s 37.2 1 GA 2005, s 295. 2 GA 2005, s 296(1) and (2).

23.10 Schedule 15 provides for two types of ‘private betting’, namely ‘domestic betting’ and ‘workers’ betting’.1 The expression ‘domestic betting’ is defined by para 7 which provides as follows: ‘(1) A betting transaction is domestic betting if made on premises in which each party to the transaction lives. (2) For the purposes of this paragraph a person lives in premises if he habitually resides in any part of the premises (whether or not there are other premises in which he also habitually resides).’ The provision is designed to enable people living in the same premises to provide facilities for betting between themselves in their home. Provided each party to the betting transaction lives (ie habitually resides) in any part of the same premises, then each may provide facilities for betting with the other. The relevant betting is called ‘domestic betting’ and the essential feature is conveyed by the word ‘domestic’ which, according to the dictionary definition, means: ‘Of or pertaining to the home, house, or household; pertaining to one’s home or family affairs.’2 The central requirement is that the parties must ‘habitually reside’ in the premises. The expressions ‘reside’ and ‘habitually reside’ are, of course, expressions which feature in many legal contexts and have been the subject of a good deal of judicial discussion. Some of this may be of assistance in interpreting the phrase here, although its meaning may vary according to its statutory context. Paragraph  7(2) makes clear that a person may ‘habitually reside’ in more than one premises, a provision which reflects the meaning of the term as decided in other contexts.3 It has been said that ‘the place of residence of a person is the place where he eats, drinks and sleeps.’4 It seems reasonably clear that a person may ‘habitually reside’ in premises which are not a dwelling house in the ordinary sense, such as an hotel, if he does so with a degree of permanence which can be described as ‘habitual’.5 It may be a matter for debate whether a person can be said to ‘habitually reside’ in an institution such as a hospital.6 Although in the copyright context it has been held that visitors staying for no more than a week in a holiday camp were residents there for the purposes 1185

Private and non-commercial gaming and betting of the Copyright Act 1956,5 it is suggested that the requirement of habitual residence will prevent such a conclusion in the case of para 7. 1 GA 2005, Sch 15, Pt 2, para 6. 2 Shorter OED (5th edn). 3 Electoral law, for example; see Fox v Stirk, Ricketts v Registration Officer for the City of Cambridge [1970] 3 All ER 7, CA. See also Varsani v Relfo Limited (In Liquidation) [2010]  EWCA  Civ 560: ‘Whether a defendant’s use of property characterises it as his or her “residence”, that is to say the defendant can fairly be described as residing there, is a question of fact and degree. In the present case, the Edgware House is owned by the Appellant and his wife, and is the place where his wife, children, mother, father and sister permanently live. It is place which the Appellant has affirmed in corporate proceedings is not only his “residence” but his “home”. While such affirmation is not conclusive, it is plainly highly material. The Appellant visits that home every year to see his family, staying for not inconsiderable periods of time, as and when his work in Kenya permits him to do so. It is, in an obvious and very real sense, his “family home”. Taking these factors together, it seems to me quite impossible to contend that the Appellant does not reside at the Edgware House at all.” (per Etherton LJ). 4 Stoke-on-Trent Borough Council v Cheshire County Council [1913] 3 KB 699 at 706 per Ridley J. 5 See Phonographic Performance Limited v Pontin’s Limited and another [1968] 1 Ch 290 at 298 where Cross  J  noted that in some hotels the expression ‘hotel residents’ includes ‘old ladies who have lived there for years and are allowed to have their own furniture in their rooms …’. 6 Statute may provide that a person receiving treatment in a hospital is to count as a resident there; see s  1(1)(a) of the Divorce (Insanity and Desertion) Act 1958 providing for the case of a person ‘receiving treatment for mental illness as a resident in a hospital’, and Head v Head [1963] 3 All ER 640. Contrast dicta in Phonographic Performance Limited v Pontin’s Limited [1968] 1 Ch 290, where Cross  J  commented (at 297): ‘One would not ordinarily speak of the people in a prison or an asylum as residing in or residents in those establishments  …’. Detention in prison is not a period of residence in the UK for the purposes of the Immigration (European Economic Area) Regulations 2006 (HR (Portugual) v Home Secretary [2009] EWCA Civ 371).

Workers’ betting 23.11

GA 2005, Sch 15, para 8 provides that:

‘A betting transaction is workers’ betting if made between persons each of whom is employed under a contract of employment with the same employer.’ There are, therefore, two requirements: first, that the parties to the betting transaction are employed under a ‘contract of employment’, and second, that each contract of employment must be with the same employer. A contract of employment (also known as a contract of service) is to be distinguished from a ‘contract for services’ and from the position of certain office holders.1 Two points should be noted. First, although it is a requirement of workers’ betting that the transaction be made between persons each of whom is employed with the same employer, it is not necessary that each of them be employed at the same premises. Second, it would appear that the requirement that each person be employed under a contract of employment with the same 1186

Private and non-commercial gaming and betting employer will not be satisfied where the employees concerned are employed by different companies in the same corporate group, a position which is quite likely to arise in the modern employment environment. 1 The essence of a ‘contract of employment’ has been described in Tolley’s Employment Handbook (29th edn, 2015) at pp 362–363: ‘There are three essential elements which must be present to establish a contract of employment. These form the irreducible core of the contract of employment, without which a contract of employment will not arise: (a) the contract must impose an obligation on a person to provide work personally; (b) there must be mutuality of obligation between employer and employee; and (c) the worker must expressly or impliedly agree to be subject to the control of the person for whom he works to a “sufficient” degree. If any of these three elements is not present, the contract is not a contract of employment. If each element is present, the contract may be a contract of employment. Whether or not it is will depend on an assessment of all the other circumstances.’ This is a mere starting point and further clarification should be sought in the standard texts on employment and labour law.

23.12 Since the effect of GA  2005, s  296 is to permit a person to provide facilities for private betting and to use premises to carry on private betting without holding either an operating licence or a premises licence, the effect is that an employee could set up facilities at his workplace to bet with fellow employees (quite possibly on a substantial basis) without committing an offence. It should be noted that Sch  15, para  8 refers to a ‘…  betting transaction … made between persons’ who satisfy the relevant employment requirements. It does not require that the actual bet should be made between these persons, merely that the relevant ‘betting transaction’ should be so made. Accordingly, it would seem possible for an employee, acting as agent for a bookmaker located elsewhere, to carry on agency betting, the bets actually being made between the employees and the bookmaker. The expression ‘betting transaction’ is not defined in the GA 2005, but it would appear that, in the case proposed, there is a ‘betting transaction’ between the employee acting as agent and his fellow employee.1 1 See Stovell v Jameson [1940] 1  KB, where the expression ‘effect … betting transactions’ within s 3(2) of the Betting and Lotteries Act 1934 did not imply that a bet had actually to be made between the parties to the transaction. A  betting transaction was effected if acts were done which were a substantial part of the business of betting.

Private gaming 23.13 The regulatory system laid down by the Gaming Act 1968 created a fundamental distinction between, on the one hand, premises with a gaming licence (ie casinos and bingo halls) and registered clubs and miners’ welfare institutes and, on the other hand, non-licensed and non-registered premises. The Act created the distinction by first laying down certain prohibitions applying to all gaming on all premises and then creating a carefully structured series of exemptions permitting certain gaming to be conducted 1187

Private and non-commercial gaming and betting in certain premises. The general prohibitions applying to all gaming were as follows: (i)

No charge in money or money’s worth could be charged in respect of gaming. However, stakes hazarded did not amount to such a charge (GA 1968, s 3).

(ii) No levy could be charged on any of the stakes or winnings of any of the players (GA 1968, s 4). (iii) There could be no gaming in streets or public places; there was a specific provision dealing with gaming on premises licensed for the sale of alcohol (GA 1968, ss 5 and 6). 23.14 In addition, there was a specific provision in GA 1968, s 2 prohibiting games that involved playing against a bank (s  2(1)(a)) and games which involved non-equal chance gaming (s  2(1)(b) and  (c)). However, the s  2 prohibition on banker’s games and games of unequal chance did not apply to gaming which took place ‘on a domestic occasion in a private dwelling’, nor to gaming taking place in a ‘hostel, hall of residence or similar establishment which is not carried on by way of a trade or business’ and where the players consisted ‘exclusively or mainly of persons who are residents or inmates in that establishment’. The exception was designed to permit bankers games and games of unequal chance in people’s homes, or in hostels etc, where people were resident. Since bankers games and games of unequal chance were permitted, the consequence was that such domestic or residential gaming could be run so as to provide profit to a bank. However, the other provisions of the Act forbidding participation charges and levies on stakes or winnings applied to such domestic gaming as to any other kind of gaming. 23.15 Having laid down that framework, the GA  1968 then carved out exemptions, so that bankers games and unequal chance games could be provided in licensed casinos and (to a very limited extent) in clubs and miners’ welfare institutes. In addition, the equal chance game of bingo could be provided in licensed bingo clubs, and such clubs were permitted to make participation charges. 23.16 Speaking broadly, the Ga 2005 replicates this state of affairs. As noted at 23.1 above, gaming between private individuals does not fall within GA 2005, s 5 and therefore does not fall within s 33 or s 37. However, anyone wishing to provide facilities for commercial gaming will need to hold either a casino operating licence or a bingo operating licence.1 A person wishing to use premises for commercial gaming must apply for a premises licence to operate a casino or to provide facilities for the playing of bingo.2 Alternatively, the facilities provided will have to fall within the temporary use notice provisions of Part 9 or the clubs and pubs provisions of Part 12. 1 GA 2005, ss 33 and 65. 2 GA 2005, ss 37 and 150.

23.17 It is clear that these provisions are designed to control the commercial provision of gaming facilities. The provision of facilities for private, nonbusiness gaming and the use of premises for private, non-business gaming 1188

Private and non-commercial gaming and betting are permitted under provisions contained in GA 2005, Pt 14 (ss 295–302). The effect is that a person does not require an operating licence (or any other kind of exemption) or a premises licence to provide facilities for gaming or to use premises to carry on gaming if that gaming is ‘private gaming’. Section 296 provides as follows: ‘(1) A  person does not commit an offence under section 33 by providing facilities for— (a) private gaming … … (2)

Section 37 shall not apply to or in respect of the use of premises to carry on— (a) private gaming …’

23.18 The expression ‘private gaming’ is defined in GA  2005, Sch  15.1 This Schedule (which the writer would comment is slightly confusingly organised) provides a basic definition of ‘private gaming’ and then carves out two sub-classes of ‘private gaming’, namely ‘domestic gaming’ and ‘residential gaming’. The distinction is that ordinary ‘private gaming’ must be equal chance gaming, whereas both ‘domestic gaming’ and ‘residential gaming’ can involve non-equal chance gaming, so that players may play or stake against a bank. 1 GA 2005, s 95 and Sch 15.

23.19

GA 2005, Sch 15, para 1 provides that:

‘Gaming is private if it satisfies the conditions specified in this part of this Schedule.’ The relevant conditions are contained in paras 3, 4 and 5. It might be thought that the most fundamental property of ‘private gaming’ should be that it is ‘private’ (ie not ‘public’), and Sch 15 does indeed so provide, but instead of putting this first in the series of conditions, it leaves it until last. Paragraph 5 provides that: ‘It is a condition of private gaming that it does not occur in a place to which the public have access (whether or not on payment).’ So ‘private gaming’ cannot take place in a public place.1 1 For some of the issues that may arise in considering whether gaming is carried on in public see Panama (Piccadilly) Limited v Newberry [1962] 1 WLR 610 (persons applying for membership of a ‘club’ to view a striptease act remained members of the public); Lunn v Colston-Hayter [1991] 155 JP 384 (persons joining a ‘club’ for the purpose of attending a commercially organised party remained members of the public, since there was no sufficient degree of segregation or selection to cause them to cease to be members of the public).

23.20 There are (in effect) two other conditions of ‘private gaming’. First, GA 2005, Sch 15, para 3(1) provides that ‘it is a condition of private gaming 1189

Private and non-commercial gaming and betting that no charge is made for participation’. The meaning of this condition is then expanded in para 3(2) in such a way as to show that there must be no levy or deduction from stakes or winnings. Paragraph  3(2) provides as follows: ‘For the purposes of this paragraph— (a) it is immaterial how a charge is described, (b) it is immaterial whether a charge is in money or money’s worth, (c) an amount deducted or levied, by a person providing facilities for gaming, from sums staked or won in the course of gaming is a charge for participation in the gaming, (d) a charge for admission to premises where gaming takes place shall be treated as a charge for participation in the gaming, and (e)

a stake is not a charge for participation.’

It should be noted that the ‘no charge’ and ‘no levy’ condition applies to all ‘private gaming’, including ‘domestic gaming’ and ‘residential gaming’. Although a person providing ‘domestic gaming’ and ‘residential gaming’ may be able to make a profit by the introduction of a bank, they will not be able to make a profit by means of charges for the facilities or levies on stakes or winnings. 23.21 The third and final condition on ‘private gaming’ is laid down by GA 2005, Sch 15, para 4. This provides by para 4(1) that: ‘It is a condition of private gaming that it is equal chance gaming.’1 However, para  4(2) provides that: ‘…  this condition does not apply in relation to domestic or residential gaming.’ 1 For ‘equal chance gaming’ see GA 2005, s 8, which provides that gaming is equal chance gaming if: (a) it does not involve playing or staking against a bank, and (b) the chances are equally favourable to all the participants.

‘Domestic gaming’ 23.22 The expression ‘domestic gaming’ is defined in GA  2005, Sch  15, para 2(1) as follows: ‘For the purposes of this Part of this Schedule gaming is domestic if it takes place— (a) in a private dwelling, and (b) on a domestic occasion.’ It will be noted that there are two elements to the definition, namely that the gaming should take place in a ‘private dwelling’ and that it should take place ‘on a domestic occasion’. Since ‘domestic gaming’ must necessarily be ‘private gaming’ (and, therefore, not occur in a place to which the public have access), the ‘domestic occasion’ requirement must, it is submitted, be 1190

Private and non-commercial gaming and betting intended to confine the concept of ‘domestic gaming’ more narrowly than ‘private gaming’. The word ‘domestic’ is defined in the OED as meaning: ‘(1)  Of or pertaining to the home, house, or household; pertaining to one’s home or family affairs … (3)  Having the character or position of the inmate of a house …’1 Although it would be hazardous to offer a definition of ‘domestic occasion’, it is suggested that it conveys the idea that those taking part in the gaming either live in the ‘private dwelling’ as their home, or are relatives or close personal friends of such persons. It will be a question of fact and degree how far the intervention of persons outside such an immediate domestic circle has the effect of destroying the domestic quality of an occasion. 1 OED (5th edn).

23.23 As to the first requirement that the gaming must take place ‘in a private dwelling’, there is, of course, a good deal of reported case law on the concepts of a ‘dwelling’ and a ‘dwellinghouse’. It may be that some of the decisions can throw light on the meaning of the expression in this context, although naturally meanings vary between different statutory contexts. It has been said that: ‘A dwelling-house, of course, is a house which people normally dwell in. A  “private” dwelling-house is one actually used for domestic purposes.’1 The expression ‘a dwellinghouse’ has been extensively discussed in the context of the Rent Acts. The following propositions culled from the case law may be of assistance. First a ‘dwelling-house’ can be either a house or part of a house and it is common for more than one ‘dwellinghouse’ to exist within the walls of a single building.2 A flat is a dwelling house,3 and a single room may be a ‘dwelling’.4 Premises may be a ‘dwelling house’, even though not all the major activities of residential occupation are carried on there; accordingly, a bed-sitting room which a tenant occupies as his home, but which has no cooking facilities so that he must either eat out or bring in all his meals, is a dwelling-house under the Housing Act 1988.5 By contrast, a room occupied only as a bedroom is not a dwelling house.6 Nor is a room in which the tenant neither cooks nor sleeps, because he does not use it as his home, but as part only of his home.7 Premises or structures originally constructed for one purpose may, by adaptation, become a dwelling-house for the purposes of the Rent Act. This might apply to a converted warehouse8 or a beach hut adapted for permanent occupation.9 1 Bell v Alfred Franks & Bartlett Co Limited [1981] All ER 356 at 359 per Shaw LJ; the case concerned construction of a lease. 2 Abrahart v Webster [1924] 1 KB 563. 3 Langford Property Company v Goldrich [1949] 1 KB 511. 4 Curl v Angelo [1948] 2 All ER 189, CA. 5 Uratemp Ventures Limited v Collins [2001] 3 WLR 806, HL. 6 Metropolitan Properties Co (FGC) Limited v Barder [1968] 1 All ER 536. 7 Wright v Whole (1947) 92 Sol Jo 26. 8 Gidden v Mikes [1925] 2 KB 713. 9 Sraggs v Prentice [1950] EGD 313.

1191

Private and non-commercial gaming and betting

Residential gaming 23.24 ‘Residential gaming’ is defined in GA  2005, Sch  15, para  2(2) as follows: ‘For the purposes of this Part of this Schedule gaming is residential if— (a)

it takes place in a hostel, hall of residence or similar establishment which is not administered in the course of a trade or business, and

(b) more than half of the participants are residents of the hostel, hall or establishment.’ It will be seen that this provision largely reproduces the effect of s  2(2) of the Gaming Act 1968 with the difference that, whereas under GA  1968, s  2(2) the players had to consist ‘exclusively or mainly of persons who are residents or inmates in [the] establishment,’ under GA 2005, Sch 15, para 2(2) (b) the requirement is that ‘more than half of the participants are residents of the hostel, hall or establishment.’ So the criterion can be more easily satisfied. For a discussion of the concept of being ‘resident’ in premises see 23.10 above. As to the requirement in GA  2005, Sch  15, para  2(2)(a) that the gaming must take place in a ‘hostel, hall of residence or similar establishment’, it is thought that this should give rise to little difficulty in interpretation. More difficult is the requirement that the hostel etc should be one which is ‘not administered in the course of a trade or business’. This mirrors the requirement of GA  1968, s  2(2) that the relevant hostel etc should be one ‘which is not carried on by way of a trade or business’. The difficulty is that the expression ‘trade’ and, more particularly, the expression ‘business’ are capable of covering a wide range of activities, and it is suggested that most hostels etc are liable to be administered in the course of such activities, thus removing the ‘residential gaming’ exemption. This point never arose for decision under GA 1968, s 2(2). So far as the expression ‘administered in the course of a trade’ is concerned, it is suggested that this can be construed so that ‘trade’ refers to business which depends on the buying and selling of goods. This is its primary meaning, although it is capable of wider meanings.1 The consequence of adopting such a construction should be that few hostels etc will be ‘administered in the course of a trade’. More difficulty attaches to the expression ‘administered in the course of a … business’. The word ‘business’ has a wider meaning than ‘trade’. It is clear that any activity habitually carried on to make a profit is liable to be a ‘business’;2 however, an activity may be a ‘business’ if it is pursued as an occupation rather than as a pleasure.3 Although a ‘business’ is often carried on for profit, it has been said that ‘a serious undertaking earnestly pursued for the purpose of fulfilling a social obligation may constitute a business, even if not undertaken for profit.’4 The difficulty is that many hostels, halls of residence or similar establishments are likely to be administered as part of the activities of institutions such as hospitals, colleges, universities and training establishments which are capable of being businesses. It has been held in the context of the Landlord and Tenant Act 1954 that ‘business’ includes running a hospital.5 Unless the courts are willing to adopt a restricted interpretation of ‘business’ in this context, limiting it to cases where a business runs a hostel etc for the 1192

Private and non-commercial gaming and betting purpose of making commercial profits, it seems likely that the ‘residential gaming’ exemption will rarely apply. 1 For the primary meaning of ‘trade’ see the following: ‘“trade” … is a word having a technical meaning connected with buying and selling, and is limited to the case of the buying and selling of wares, and so forth’ (Harris v Amory [1865] 13 LT 504 at 505 per Willes J); ‘now, what does one mean by a trade, or the exercise of a trade? Trade in its largest sense is the business of selling, with a view to profit, goods which the trader has either manufactured or himself purchased’ (Grainger & Son v Gough (1896) AC 325 at 345 per Lord Davey); ‘To my mind a trading business is one which depends on the buying and selling of goods’ (Higgins v Beauchamp [1914] 3 KB 1192 at 1195 per Lush J). However, the word ‘trade’ is capable of a wider meaning. ‘No doubt in a great many contexts the word “trade” indicates a process of buying and selling, but that is by no means an exhaustive definition of its meaning. It may also mean a calling or industry or class of skilled labour’ (Skinner v Jack Breach Limited [1927] 2 KB 220 at 225–7, DC per Lord Hewart CJ). ‘A trade is an organised seeking after profits as a rule with the aid of physical assets’ (Aviation & Shipping Co Limited v Murray (Inspector of Taxes) [1961] 2 All ER 805 at 811, CA per Donovan LJ). ‘The word “trade” is no doubt capable of bearing a variety of meanings according to the context in which it is used. In its most restricted sense it means the buying and selling of goods; in a slightly wider sense, it includes the buying and selling of land; there is no reason to exclude, in an appropriate context, the buying and selling of choses in action … stocks and shares are traded in the market. The trading in that market is done by brokers, who are therefore traders’ (Kowloon Stock Exchange Limited v Inland Revenue Commissioners [1985] 1 All ER 205 at 210, PC). 2 ‘When a person habitually does a thing which is capable of producing a profit, for the purpose of producing a profit, he is carrying on a business’ (Smith v Anderson (1815) Ch D 247 at 258 per Jessel MR). 3 ‘The word “business” … means almost anything which is an occupation, as distinguished from a pleasure – anything which is an occupation or duty which requires attention is a business’ (Rolls v Miller (1884) 27 Ch D  71 at 88, CA per Lindley LJ). 4 Town Investments Limited v Department of the Environment [1976] 3  All ER  479 at 496 per Buckley LJ; on appeal [1978] AC 359, HL. In Financial Services Authority v Anderson [2010]  EWHC  599 (Ch) it was said that: ‘The word “business” is an etymological chameleon; it suits its meaning to the context in which it is found (Town Investments Ltd v Department of the Environment [1978]  AC  359, 383). At its broadest it may mean anything that is not done for pleasure (Rolls v Miller (1885) LR 27 Ch D 71 where keeping a house where working girls – in the literal sense – were given free board and lodging was a business). In some contexts the performance of regulatory activities may not count as business activities (Institute of Chartered Accountants v Customs & Excise Commissioners [1999] 1 WLR 701) but in other contexts it will. I do not think that I can or should try to define what the expression means in the context of section 22.’ 5 Hills (Patents) v University College Hospital Board of Governors [1956] 1 QB 90. See also Groveside Properties v Westminster Medical School [1984] 47 P&CR 507.

23.25 In summary, therefore, provided betting is ‘private betting’ and gaming is ‘private gaming’, it is possible for facilities to be offered and premises to be used without committing an offence. However, GA  2005, Pt 14 also deals with ‘non-commercial gaming and betting’. The applicable sections are ss 297–302. The essential feature of private gaming and betting is that either the public are excluded (in the case of private betting and domestic gaming) or the members of the public who can take part are strictly limited by residence requirements (residential gaming). ‘Non-commercial’ gaming, by contrast, is a form of gaming which is available to the public, but 1193

Private and non-commercial gaming and betting which takes place in circumstances where the provider of the gaming is not engaged in a business and is not seeking to make commercial profits from the activities.

Non-commercial gaming 23.26 The non-commercial gaming provisions take effect by excluding such gaming from the provisions of GA 2005, ss 33 and 37. A person does not commit an offence under s 33 by providing facilities for: (a)

non-commercial prize gaming,1 provided it complies with the conditions set out in s 299;2

(b) non-commercial equal chance gaming,3 provided it complies with the conditions in s 300.4 Likewise, a person does not commit an offence under s 37 where premises are used to carry on non-commercial prize gaming complying with the conditions in s 299 or non-commercial equal chance gaming complying with the conditions in s 300.5 1 2 3 4 5

For ‘prize gaming’ see GA 2005, s 288 and Chapter 22. GA 2005, s 298(1)(a). For ‘equal chance gaming’ see GA 2005, s 8 and Chapter 2. GA 2005, s 298(1)(b). GA 2005, s 298(2)(a) and (b).

23.27 Gaming is non-commercial gaming if it takes place at a noncommercial event.1 The gaming may be an incidental activity of the event or it may be the principal activity.1 A non-commercial event is essentially an event which is not designed to produce private profit, but which is designed to produce profits for a charitable or some other public beneficial purpose. The GA 2005 provides that an event is non-commercial if the arrangements for it are such that no part of the proceeds is to be appropriated for the purpose of private gain.2 The proceeds of an event are: (a) the sums raised by the organisers (whether by way of fees for entrance or for participation, by way of commission from traders or otherwise), minus (b) amounts deducted by the organisers in respect of costs reasonably incurred in organising the event.3 The provision of a benefit to one or more individuals is not a provision for the purposes of private gain if it is made in the course of the activities of a society which is established and conducted: (a) for charitable purposes,4 (b) for the purpose of enabling participation in, or of supporting, sport, athletics or a cultural activity, or (c)

for any other non-commercial purpose other than that of private gain.5

1 GA 2005, s 297(1). 2 GA 2005, s 297(2).

1194

Private and non-commercial gaming and betting 3 GA 2005, s 297(3)(a) and (b). 4 That is, in England and Wales, purposes which are exclusively charitable according to the law of England and Wales and, in Scotland, purposes which are charitable purposes within the meaning of the Income Tax Acts: GA 2005, s 19(2)(a) and (b) applied by s 353. 5 GA 2005, s 353 applying s 19(1) and (3).

Conditions for non-commercial prize gaming 23.28 Prize gaming must comply with four conditions in order to amount to non-commercial prize gaming. These are as follows: (i)

the first condition is that players are informed that the purpose of the gaming is to raise money for a specified purpose other than that of private gain;1

(ii) the second condition is that the arrangements for the gaming are such that the profits2 will be applied for a purpose other than that of private gain;3 (iii) the third condition is that the non-commercial event of which the gaming is part does not take place— (a) on premises, other than a track, in respect of which a premises licence has effect, or (b) on a track at a time when activities are being carried on in reliance on a premises licence, or (c) on premises at a time when activities are being carried on in reliance on a temporary use notice;4 (iv) the fourth condition is that the gaming is not remote. The above are the specific conditions imposed upon non-commercial prize gaming. It will be noted that there are no conditions limiting the value of stakes, participation fees or prizes. Presumably the definition of prize gaming (see GA 2005, s 288) as being gaming in which the nature and size of a prize is not determined by reference to the number of persons playing or the amount paid was thought sufficient to avoid the risk of prizes of substantial value being offered to tempt participants to spend large sums of money. 1 GA 2005, s 299(2). 2 Under GA 2005, s 299(6): ‘“Profits” in relation to gaming means— (a) the aggregate of amounts— (i) paid by way of stakes, or (ii) otherwise accruing to the person organising the gaming directly in connection with it, minus (b) amounts deducted by the person organising the gaming in respect of— (i) the provision of prizes, or (ii) other costs reasonably incurred in organising or providing facilities for the gaming.’ 3 GA 2005, s 299(3). 4 GA 2005, s 299(4).

1195

Private and non-commercial gaming and betting

Conditions for non-commercial equal-chance gaming 23.29 There are five conditions for non-commercial equal-chance gaming, as follows: (i) The first condition is that persons participating in the gaming are informed that the purpose of the gaming is to raise money for a specified purpose other than that of private gain.1 (ii) The second condition is that the arrangements for the gaming are such that the profits2 will be applied for a purpose other than that of private gain. (iii) The third condition is that the arrangements for the gaming ensure compliance with regulations of the Secretary of State.3 The relevant regulations are the Gambling Act 2005 (Non-Commercial Equal-Chance Gaming) Regulations 2007.4 Their effect is that the maximum amount that a player may be charged is £8 per day (and this includes entrance or participation fees, stakes and any other payments in relation to the gaming). The total amount paid out in prizes may not exceed £600, although where an event is the final one of a series in which all of the players have previously taken part, a higher prize fund of up to £900 is permitted.4 (iv) The fourth condition is that the non-commercial event of which the gaming is part does not take place— (a) on premises, other than a track, in respect of which a premises licence has effect; (b) on a track at a time when activities are being carried on in reliance on a premises licence; or (c) on premises at a time when activities are being carried on in reliance on a temporary use notice.5 (v) The fifth condition is that the gaming is non-remote.6 1 GA 2005, s 300(2). 2 Under GA 2005, s 300(8): ‘“Profits” in relation to gaming means— (a) the aggregate of amounts— (i) paid by way of stakes, or (ii) otherwise accruing to the person organising the gaming directly in connection with it, minus (b) amounts deducted by the person organising the gaming in respect of— (i) the provision of prizes, or (ii) other costs reasonably incurred in organising or providing facilities for the gaming.’ 3 GA 2005, s 300(4). Such regulations may: (a) limit amounts staked, (b) limit participation fees, (c) limit other amounts paid by a person in connection with the gaming, (d) limit a combination of matters specified in (a)–(c), (e) limit the amount or value of a prize, and (f) limit the aggregate amount or value of prizes.

1196

Private and non-commercial gaming and betting Such regulations may, in particular (s 300(5)): (i) make provision by reference to whether or not a game is part of a series; (ii) make provision by reference to whether or not a non-commercial event of which the gaming is part is associated, as defined by the regulations for another event; (iii) limit stakes in relation to a participant in more than one game; (iv) make different provisions for different kinds of game or for games played in different circumstances. 4 SI 2007/2041. 5 GA 2005, s 300(6). 6 GA 2005, s 300(7).

23.30 Since GA 2005, s 298 provides that no offence is committed under s 33 or s 37 where non-commercial prize gaming is provided which complies with the conditions in s 299, or non-commercial equal chance gaming is provided which complies with the conditions in s 300, it must follow that if such gaming is provided in circumstances where one or more conditions are not complied with, there will be an offence under both sections. Further, s 301 provides for the commission of an offence where non-commercial prize gaming or noncommercial equal-chance gaming are provided in such a way as to comply with the relevant conditions, but where the profits of the gaming are used for a purpose other than the fund-raising purpose which the promoter specified in accordance with the statutory conditions.1 It is also an offence to permit profits to be used for a non-specified purpose.2 A person guilty of an offence under these provisions is liable on summary conviction to: (a) imprisonment for a term not exceeding 51 weeks, or (b) a fine not exceeding level 5 on the standard scale, or (c) both.3 1 GA 2005, s 301(1) and (2). 2 GA 2005, s 301(3). 3 GA 2005, s 301(4). In Scotland the reference to 51 weeks has effect as a reference to six months: s 301(5).

NON-COMMERCIAL BETTING 23.31 Finally note should be taken of s  302, the final section of Part 14, which provides that for the purposes of the GA 2005 a betting transaction is non-commercial betting if no party to the transaction (a) enters it in the course of a business or (b) holds himself out as being in business in relation to the acceptance of bets.

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Chapter 24 Licensing Boards and some Scottish aspects of gambling

GAMBLING REMIT OF THE LICENSING BOARDS 24.1 The bodies responsible for the licensing of gambling premises in Scotland are the bodies set up to grant licences for the sale of alcoholic liquor under the Licensing (Scotland) Act 2005 (L(S)A 2005), namely the Licensing Boards. Section 2(1)(c) of the Gambling Act 2005 (GA  2005) provides that Licensing Boards continued in existence or established under s  5 of the L(S)A  2005 are ‘licensing authorities’ for the purposes of the GA  2005. Therefore, their remit under GA 2005 is as follows: (i)

The grant (s 163), variation (s 187), transfer (s 188) and reinstatement (s 195) of premises licences.

(ii) The review of premises licences (s 201). (iii) The making of resolutions not to issue casino premises licences (s 166). (iv) The grant of provisional statements (s 204). (v) The receipt of temporary use notices (s  219) and the hearing of objections, where necessary (s 222). There are in addition a number of other functions of a Board under the GA 2005 as follows: (vi) The grant of an FEC gaming machine permit: s 247 and Sch 10. (vii) The grant of a ‘relevant Scottish licence’ (ie a premises licence issued under the L(S)A 2005 except where such a licence only applies to the sale of alcohol for consumption off the premises) provided there is a bar.1 This triggers rights to permit equal chance gaming (s 279) and the automatic entitlement to two gaming machines of Categories  C  or  D  (provided notice is sent to the Licensing Board as licensing authority).2 (viii) The grant of a licensed premises gaming machine permit (s  283). Schedule 13, which regulates applications for such permits in England and Wales does not apply in Scotland,3 but provision is made by s 285 1199

Licensing Boards and some Scottish aspects of gambling for regulations to be made by the Scottish Ministers governing such applications and are to be found in the Licensed Premises Gaming Machine Permits (Scotland) Regulations 2007 (SSI 2007/505). (ix) The making of orders disapplying s  279 (exempt gaming) or s  282 (automatic entitlement to two gaming machines) in the case of specified premises.4 (x) The grant of club gaming permits (s 271).5 (xi) The grant of club machine permits (s 273).5 (xii) The registration of small society lotteries under GA 2005, Sch 11, paras 38 and 39.6 1 2 3 4 5

GA 2005, ss 277(b) and 278(1)(b). GA 2005, s 282. GA 2005, s 283(5). GA 2005, s 284. GA 2005, s 285 makes provision for regulations to be made by the Scottish Ministers governing the making of applications for such permits – Club Gaming and Club Machine Permits (Scotland) Regulations 2007 (SSI 2007/504). 6 GA 2005, Sch 11, para 41(c).

ADMINISTRATION OF LICENSING BOARDS 24.2 Scottish Licensing Boards are creatures of statute. They are made up of elected councillors, but a Board is independent of a council and is not a committee of a council. 24.3 In Scotland, the administration of Licensing Boards has, since 1 July 1977, been in the hands of local councils. 24.4 Licensing Boards have been appointed since 1 May 2007 under the Licensing (Scotland) Act 2005 (L(S)A  2005), which came fully into effect on 1  September 2009. The Act has been amended on several occasions and further amendments are pending as a result of the Air Weapons and Licensing (Scotland) Act 2015 which received Royal Assent on 4 August 2015. 24.5 Each district and islands area, which is not divided into licensing divisions, and each licensing division, is a separate Licensing Board (L(S) A 2005, s 5). Councils decide if they wish licensing divisions. Where they do so decide and there is to be a Board for a licensing division, at least one third of the Board must be councillors for wards in that division (Sch 1, paras 1 and 3).

LICENSING BOARD MEMBERSHIP 24.6 Since 1  May 2007 by virtue of the Licensing (Scotland) Act 2005 (Commencement No 3) Order 2007 (SI 2007/129) a Board must consist of not less than one quarter of the total numbers of members of the district or islands council, and in no case will there be less than five such members. There is a 1200

Licensing Boards and some Scottish aspects of gambling minimum of five and a maximum of ten members, as each council decides, with a minimum quorum of three. (L(S)A 2005, Sch 1, para 1). For many Boards this was a significant reduction in numbers of members, and in May 2007 a great many councillors and hence Board members took their ‘golden goodbyes’ and retired and, with the introduction of proportional representation in Scottish local council elections, the face of Scottish Boards changed quite radically, with many new members having no experience whatsoever of either liquor or gambling applications, or the relevant legislation. Whilst Board members have to be trained for liquor licensing purposes within three months of their appointment,1 no such regulation yet exists for gambling matters. In general, the Scottish Ministers have been slow to introduce regulations, or to consult on same, and since the spring of 2007 there has been a widespread lack of understanding of the new gambling legislation. This has been due to a mix of factors which initially all came together at the same time – ignorance of the law, the imminent Scottish elections, the sheer flood of information emanating from the Gambling Commission and thereafter the rapid introduction of regulations during 2007/2008 from the then Scottish Executive and now the Scottish Government to bring in aspects of the L(S)A 2005. This is compounded by the fact that Boards do relatively little gaming as opposed to liquor licensing work and do not take much interest in it unless they have to. Boards rely heavily on their clerks for advice and guidance, and many of those clerks are also in the position having little gambling experience. Although the GA 2005 has been in force for some years the relative lack of experience in gambling matters in Scotland remains. 1 See the Licensing (Training) (Scotland) Regulations 2007 (SI 2007/95).

24.7 Board members are elected at the first meeting of the district council held after the ordinary election of that council1 and stay until the next Board election. Members are eligible for re-election, provided they remain members of the council with office being held from the day after election until the next election of members.2 Vacancies arising from death, resignation, disqualification or other cause may be filled by another council member. Vacancies must be filled at the first relevant council meeting.3 A council may remove a Board member if they are unfit by reason of mental or physical inability.4 1 2 3 4

L(S)A 2005, Sch 1, para 2. L(S)A 2005, Sch 1, para 4. L(S)A 2005, Sch 1, para 2(4). L(S)A 2005, Sch 1, para 5.

The convener 24.8 A Board must appoint a convener (or chairman) who is elected by the members and that convener has a casting vote. If the chairman is absent from any meeting, the Board must elect one of its number present at the meeting to be chairman of that meeting.1 A convener may be removed from office by the Board if at least half the total membership of the Board votes for this.2 1 L(S)A 2005, Sch 1, para 6. 2 L(S)A 2005, Sch 1, para 7.

1201

Licensing Boards and some Scottish aspects of gambling

The clerk 24.9 The L(S)A  2005 provides that every Board must have a clerk, who must be a solicitor or advocate, and who takes the role of general adviser to the Licensing Board, dealing with both practical and legal matters.1 They are also required to keep a register of any applications for licences and of any decisions taken. No reference is made in the L(S)A  2005 to gambling records. The Board as licensing authority will, however, be obliged to maintain a register of premises licences issued by it, together with such other information as may be prescribed, and to make the register available for public inspection at reasonable times.2 1 L(S)A 2005, Sch 1, para 8(2). 2 GA 2005, s 156.

Meetings 24.10 Since 1 February 2008 Boards may hold such meetings as appear to them to be appropriate. The requirement for quarterly meetings ceased on 31 January 2008, and the L(S)A 2005 has no provisions in regard to quarterly or other meetings, although this may be provided in regulations to be made by Scottish Ministers. At the time of writing none has been promulgated. 24.11

Meetings are referred to in L(S)A 2005, Sch 1, para 12(5) and (6):

‘(5) … the arrangements for meetings of a Licensing Board and other matters relating to proceedings of the Board are to be such as the Board may by rules provide. (6) A  Licensing Board must ensure that any rules made by them under sub-paragraph (5) are published.’ Published rules may be available on the relevant Licensing Board’s website. 24.12 The quorum of a Board is one half of its members,1 with a minimum of three members.2 The convener has a casting vote.3 1 L(S)A 2005, s 5(3). 2 L(S)A 2005, Sch 1, para 12(1). 3 L(S)A 2005, Sch 1, para 6(6).

24.13 Meetings, votes and decisions must be held in public, but a Board may retire to deliberate and, are not required to take the clerk with them.1 This may be changed, in that the proceedings of Licensing Boards under L(S)A  2005 have been adjusted by regulations,2 and more regulations are expected. 1 L(S)A 2005, Sch 1, para 12. 2 Licensing (Appointed Day and Transitional Provisions) (Scotland) Order 2007 (SSI 2007/128).

24.14 A Board has a wide discretion – many would argue too wide – as to how it regulates its proceedings and reaches its conclusions. The provisions 1202

Licensing Boards and some Scottish aspects of gambling of L(S)A 2005, s 6 are extensive and the expectation is that this discretion may be wider than many envisaged. However, a Board will clearly have to comply with the requirements of the GA 2005 and, in particular, will have to comply with the approach to its licensing functions laid down in s 153 of that Act. Some Boards continue to ignore statutory timescales for the determination of applications under the L(S)A 2005 and delay in issuing documents. However, as there are no sanctions at present it may be that direction from the courts may ultimately be required. Section 61 of the Air Weapons and Licensing (Scotland) Act 2015 imposes a duty on Boards to acknowledge applications under the L(S)A 2005 and extends the period for determination from six to nine months. These provisions are not yet in force.

Disqualifications 24.15 The following are disqualified from membership of a Licensing Board:1 (1) A premises licence holder.2 (2) An employee of the premises licence holder, who works as such in licensed premises.3 (3) Anyone alone or in partnership with another person engaged in the business of producing or selling alcohol.4 (4) The director or other officer of a company so engaged;5 (5) An employee of any person so engaged, who works as such in that business.6 Any councillor who knowingly acts as a Board member when disqualified commits an offence and is liable to a fine not exceeding level 5 on the standard scale.7 1 2 3 4 5 6 7

L(S)A 2005, Sch 1, para 3. L(S)A 2005, Sch 1, para 3(1)(a). L(S)A 2005, Sch 1, para 3(1)(b). L(S)A 2005, Sch 1, para 3(1)(c). L(S)A 2005, Sch 1, para 3(1)(d). L(S)A 2005, Sch 1, para 3(1)(e). L(S)A 2005, Sch 1, para 3(2) and (3).

Training 24.16 There is a requirement that Board members be trained.1 Each member of a Board must no later than one month after the expiry of each three-month period produce to the clerk evidence that the member has, during the period, complied with such training requirements as may be prescribed.2 The threemonth period is to be calculated from the day the member is elected or is re-elected.3 The member cannot take part in Board proceedings until he has produced evidence of training,4 and if he fails to comply he ceases to be a member of the Board.5 Where a Board member does not take, or fails to pass the training, it seems to be the case, based on actual circumstances at one 1203

Licensing Boards and some Scottish aspects of gambling Board, that all they have to do is resign and be immediately reappointed for the three-month cycle to start again. 1 L(S)A 2005, Sch 1, para 11. 2 L(S)A 2005, Sch 1, para 11; and see the Licensing (Training) (Scotland) Regulations 2007 (SI 2007/95). 3 L(S)A 2005, Sch 1, para 11. 4 L(S)A 2005, Sch 1, para 11(3). 5 L(S)A 2005, Sch 1, para 11(4).

DELEGATION OF FUNCTIONS 24.17 In the discharge of their ordinary functions in connection with alcohol licensing the Licensing Boards in Scotland may arrange for the discharge of any of their functions1 by a committee of the authority, a member or members of the authority, their clerk, or any person appointed to assist the clerk. However, specific provision is made by GA 2005, s 155 for the delegation by the Board of their functions under Parts 8 and 9. Under s 155(1), and subject to s 155(2), and s 233, a licensing authority in Scotland may arrange for the discharge of any of their functions under GA 2005, Pt 8 and Pt 9 by a committee of the authority, a member or members of the authority, a clerk of the authority or any person appointed to assist the clerk. A licensing authority may not make any arrangements under s 155(1) in relation to their power under s 166 (resolution not to issue casino licences), or their functions under s 349 (licensing policy), or for the discharge by a clerk of the authority, or any person appointed to assist the clerk, of any of the authority’s functions mentioned in s 154(4)(a)–(e). These functions are: (a) determina­tion of an application for a premises licence where representations have been made; (b) determination of an application for variation of a premises licence where representations have been made; (c) determination of an application for transfer of a premises licence following representations by the Commission; (d) determination of an application for a provisional statement where representations have been made; and (e) review of a premises licence. The procedures applicable under the L(S)A 2005 also apply to the proceedings of Boards in the exercise of their functions under GA 2005, Pt 8 and Pt 9, and for that purpose regulations made by the Scottish Ministers may make provision which applies only in relation to functions under the 2005 Act, or only in relation to functions under GA 2005, Pt 8 and Pt 9, or differently in relation to functions under both Acts. 1 L(S)A 2005, Sch 1, para 10.

POLICIES AND GUIDELINES 24.18 Boards were required to consult, promulgate, finalise and make their alcohol licensing polices initially by November 2007 and thereafter every three years.1 These policies are available on Board websites. The threeyear period is to be amended to a ‘licensing policy period’, tied in to the council election dates, by virtue of the Air Weapons and Licensing (Scotland) Act 2015. The relevant provision came in to force on 30  September 2016. GA 2005, s 349 imposes an obligation on Boards as licensing authorities to 1204

Licensing Boards and some Scottish aspects of gambling prepare three-year licensing policies, and again, these are to be found on Licensing Board websites. At the time of writing many Boards are consulting on revised policies. 1 L(S)A 2005, s 6 as amended by the Alcohol etc (Scotland) Act 2010.

24.19 Even if there is a guideline or a policy, a Board should consider every application and every objection on its own merits. Whilst sometimes there is political bias in a Licensing Board, most Boards and their members do approach their work in a conscientious and reasonable way, although there are many occasions when the parties concerned simply do not understand the decision. Of course, in exercising its powers the Board will be required to observe the requirements of the GA 2005 and, in particular, will have to apply the principles laid down by s 153 in connection with their deliberations over applications relating to premises licences which has led some members to express frustration at what they see as fettering their discretion. The clerk’s role in guiding a Board will be of significant importance, given the general lack of experience and understanding of Boards in this area of law. The L(S) A 2005, s 51 imposed a new requirement for a Board to give reasons for all of their decisions and this will be an enormous challenge for clerks. The terms of the Act of Sederunt (Summary Applications, Statutory Applications and Appeals etc Rules) Amendment (Licensing (Scotland) Act 2005) 2008 (SSI 2008/9) are complex and can give rise to much debate. A requirement to give reasons for decisions in gambling matters is now imposed by the Gambling Act (Premises Licences and Provisional Statements) (Scotland) Regulations 2007 (SI 2007/196) and this too imposes its own challenges. 24.20 Different Boards take diverse views as to procedures: for example, some Boards insist on attendance by the applicant and/or his agent, and some do not. 24.21 Boards generally try to be fair to applicants and to objectors (ie under the GA 2005 ‘responsible authorities’ and ‘interested parties’), particularly to those objectors who are unrepresented and perhaps do not fully appreciate the ‘ins and outs’ of what goes on at a Board, but they must ensure that the statutory procedures have been correctly followed. Board members are local councillors, not lawyers, and many will probably know the areas and indeed the premises as well as, if not better than, the applicant and the objectors. It was envisaged that Boards would be less formal under the L(S)A 2005, but very little appears to have changed. 24.22 A Board is not ‘a court of law’. It is in effect a tribunal, and has great flexibility as to how to conduct its proceedings. For example some Boards do hear evidence but others do not. 24.23 Once a Board has all the information before them, they may retire to consider their position, but must take the final decision in open court1 and, as with any other council meeting, it is open to Board members to move grants, refusals, or various amendments. A simple majority is all that is required, with the convenor likewise having a casting vote.2 1 L(S)A 2005, Sch 1, para 12(3). 2 L(S)A 2005, Sch 1, para 6(6).

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Licensing Boards and some Scottish aspects of gambling

INVESTIGATION AND PROSECUTION OF OFFENCES 24.24

Under GA 2005, s 28:

‘(1) The Commission— (a) may investigate whether an offence has been committed under this Act, and (b) may institute criminal proceedings in respect of an offence under this Act.’ (2) The power in subsection (1)(a) may be exercised whether in response to information received by the Commission or otherwise. (3) Subsection (1)(b) shall not apply in relation to the institution of proceedings in Scotland. Offences in Scotland will require to be prosecuted through the normal channels by the Procurator Fiscal service. It is likely that the Gambling Commission, the police or other specialist reporting agencies will carry out an initial crime investigation and submit a report to the local Procurator Fiscal, who will then review the report, weigh the evidence and decide, whether in the public interest, criminal proceedings should take place. There is a prosecution code that the Fiscals follow, which includes matters such as the seriousness of the offence, the length of time that has passed since the offence, the age of the offender, any previous convictions and other relevant factors. The Fiscal will also consider local community interests or general public concern and has a wide discretion to look at all the facts and circumstances of each case. The Fiscal is not required to prosecute, and has other options such as issuing a warning. In relation to enforcement, ss 310 and 312 of the GA 2005 have created an anomaly in Scotland. In Scotland the equivalent of a licensing officer is a licensing standards officer (LSO). Although s 304(2) of the Act was intended to provide licensing authorities with the opportunity to empower licensing authority staff already involved in licensing, it does not apply to Scotland because those given responsibility by Scottish licensing authorities (usually the LSOs) are not officers of the licensing authority. The licensing boards are separate and LSOs are deliberately legally separated from the Boards. Section 304(3) and (4) of the GA 2005 were intended to provide licensing authorities with the opportunity to empower staff involved in other regulatory roles, such as trading standards officers and environmental health officers, but because most Scottish licensing authorities have given responsibility to LSOs instead, they are unable to do this. The Gambling Commission encourages local authorities to deploy suitably trained authorised persons under the Act to ensure that gambling is regulated effectively and that the public are afforded the protections set out in the three licensing objectives. They have published an updated version of their advice note entitled ‘The role of authorised persons in Scotland’ which sets out the Commission’s understanding of the powers of authorised persons in Scotland. The note also offers guidance to licensing authorities and others about how they might contribute to effective co-regulation of the gambling industry in Scotland. Of course, police officers have the power to enter and inspect premises that are licensed under the L(S)A 2005 at any time. An amendment was proposed to 1206

Licensing Boards and some Scottish aspects of gambling cl 45 of the Scotland Bill (cf 24.30) to remedy this anomaly but was deemed unnecessary during the Bill’s passage through the House of Lords (Hansard, 19 January 2016, Col 718). Test purchasing is another area where there is a difference in procedure. In Scotland it is the subject of an Enforcement Protocol with offences prosecuted by the Crown Office and the Procurator Fiscal.

APPEAL PROCESS IN SCOTLAND 24.25 Appeals from the decision of a Board as a licensing authority lie under GA 2005, s 206. An appeal under s 206 in relation to premises must be instituted to a sheriff within whose sheriffdom the premises are wholly or partly situated, within the period of 21 days beginning with the day on which the appellant receives notice of the decision against which the appeal is brought.1 Where an appeal is brought under s 206, the licence holder (or the applicant in the case of an appeal against the grant of an application for a premises licence) shall be a respondent in addition to the licensing authority (unless he is the appellant). On an appeal under s  206(3) the sheriff may (a) dismiss the appeal; (b) substitute for the decision appealed against any decision that the licensing authority could have made; (c) remit the case to the licensing authority to decide in accordance with a direction of the court; (d)  make an order about expenses. In practice, where a sheriff decides to reverse or modify a decision of the Board, they will be likely simply to remit the case to the Board to decide in accordance with a direction of the court – it being fairly rare for a sheriff to simply grant. 1 GA 2005, s 207(5).

Stay pending appeal 24.26 Under s 208 it is provided that: ‘(1) A  determination or other action under this Part shall have no effect while an appeal under section 206— (a) could be brought, or (b) has been brought and has not yet been either finally determined or abandoned. (2) But a licensing authority making a determination or taking other action under this Part may direct that subsection (1) shall not apply (in which case the sheriff determining an appeal may make any order that it or he thinks appropriate).’ This in contrast to the provisions of the L(S)A 2005 in regard to the premises themselves, where premises are shut pending an appeal (s  122) and/or a decision by a sheriff taken on the balance of convenience to allow them to remain open and recall any suspension or revocation in terms of s  123(7) and  (7A). In practice, where there are problems, those concerned may opt to raise liquor licensing rather than gambling grounds for liquor licensed premises to achieve an early objective of suspension or revocation of a licence relating to the premises. 1207

Licensing Boards and some Scottish aspects of gambling 24.27 Section 132(8) of the L(S)A 2005 also provides for interim suspension and the sheriff principal (who can delegate to a sheriff) can recall a suspension or revocation pending determination of an appeal. These cases will no doubt be decided on the balance of convenience, with the appellant claiming, probably correctly, that instant closure pending a hearing which may be days, weeks or months away is draconian and will cause irreparable harm to the business.

Further appeal 24.28 A party to an appeal under GA 2005, s 206 may appeal on a point of law in relation to premises in Scotland to the Court of Session: s 209(b).

TEMPORARY USE NOTICES 24.29 A Board is a licensing authority for the purposes of Pt 9 of the GA 2005 and is therefore the authority to which a temporary use notice is given under s  219, and is the authority which must deal with objections, if any. Under s 233, the delegation of functions under Part 9 in Scotland is similar to that under Part 8 (above). Subject to s 233(2), a licensing authority in Scotland may arrange for the discharge of any of their functions under Pt 9 of GA 2005 by a committee of the authority, a member or members of the authority, the clerk of the authority, or any person appointed to assist the clerk. However, a licensing authority may not make any arrangements under s 233(1) in relation to their function under s 224 to be discharged by the clerk or any person appointed to assist the clerk. The procedures applicable under L(S)A 1976 also apply under the proceedings of those Boards in the exercise of their functions under Part 8 of GA 2005 and for that purpose regulations made by the Scottish Ministers may make provision which applies only in relation to functions under the L(S) A 2005 and Pt 8 of GA 2005 or differently in relation to functions under the L(S)A 2005 Act and under Pt 8 of the GA 2005.

GAMBLING AND DEVOLUTION 24.30 Since the GA 2005 came into force the political landscape in Scotland has changed radically. The Scottish National Party has the largest number of seats in the Scottish Parliament and holds the majority of Scottish seats at Westminster. The current position is that gambling is a devolved matter. However, the SNP seek to change that. They consider that the Scottish Government needs legislative powers, in particular, to control the growth and impact of Fixed Odds Betting Terminals, and they believe the UK  Government should devolve these powers in full. In their view the problem of Fixed Odds Betting Terminals is linked to the proliferation of betting shops in some communities and so they will continue to argue for Scotland to have full responsibility for the regulation of gambling. Following the publication of the findings of the Smith Commission set up to consider further devolution after the 2014 independence referendum, 1208

Licensing Boards and some Scottish aspects of gambling the UK  Government published proposals for further devolution. In so far as gambling is concerned, the proposals are that under powers to be devolved to Scotland, the Scottish Government will be able to decide the number of gaming machines allowed in any new betting shop application. Existing bookmakers and other gaming operations such as casinos would be unaffected by the legislation. The draft clauses in the command paper were brought forward as a new Scotland Bill. The Bill passed into the statute books as the Scotland Act 2016 on 23 March 2016. Section 52 gives the Scottish Parliament power to make regulations amending the GA  2005 so that licensing authorities can limit the number of machines authorised by a betting premises licence. This will take some time and is likely to be consulted upon for the precise detail. It is unlikely that any Order will come into force before early 2017.

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Chapter 25 Gaming machines

HISTORY 25.1 Before 1960 there were a variety of statutory provisions dealing with gaming on machines. There was a Royal Commission of Betting, Lotteries and Gaming which reported in 1951, but it was not until 1960 that the Betting and Gaming Act was passed. The 1960 Act was replaced by the Betting Gaming and Lotteries Act 1963, which was added to by the Betting, Gaming and Lotteries Act 1964. 25.2 The increase in automatic gaming machines was quite unforeseen by the draftsmen of the 1960 or the 1963 Act. Their use under the old law seemed very narrowly circumscribed. Thus, by s 33 of the BGLA 1963, not more than two gaming machines could be installed on private premises and used for gaming, provided that the stake for playing a game once did not exceed sixpence, and provided further that all the stakes hazarded were either paid out in winnings to players or used for purposes other than private gain. By BGLA 1963, s 54 the proceeds of gaming by means of such machines promoted by members’ clubs, established and conducted for purposes other than for purposes of any commercial undertaking, could be applied for any purpose calculated to benefit the club as a whole without being held to be applied for purposes of private gain by reason only that such application resulted in benefit to the members as individuals. 25.3 This provision altered the law as decided by the House of Lords in Payne v Bradley,1 in which it had been held that where proceeds of a ‘tombola’ organised by a working men’s club were paid into the general funds of the club, each individual member derived a benefit therefrom, so that the receipt of such proceeds by the club was a private gain. This was clearly not what Parliament had intended by the expression ‘private gain’, which was aimed at the personal acquisition of money or money’s worth by individuals. The wording of BGLA 1963, s 54 restored the position to what it had been intended to be. 1 [1962] AC 343, [1961] 2 All ER 882.

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Gaming machines 25.4 Thus it was thought that such machines would only be available for gaming on private society or club premises for very small stakes, with correspondingly small prizes, and with the entire profit, if any, made from the machine being ploughed back into the society or club concerned for the benefit of all the members. However, Parliament had not taken into account the ingenuity and, it must be said, the determination of certain elements of the gaming industry. An industry grew up in retailing such machines to the clubs. In promoting the machines, the machine suppliers (or ‘operators’, as they came to be known) took little or no notice of the requirement that the stakes which were not paid back to the players in winnings could only lawfully be applied to purposes other than private gain. Apart from distributing the machines to bona fide members’ clubs and societies, they promoted their distribution to commercial proprietary clubs, private hotels, boarding houses, and even private houses. 25.5 Further, they sometimes took advantage of the fact that the law imposed no control whatsoever on their activities, to drive unconscionable and oppressive bargains with site owners whereby they derived very high rentals from leasing the machines, or alternatively reserved to themselves all or most of the profits therefrom to the exclusion of the site owners who, in some cases, were no more than agents for the operators and who thus had a direct interest in the use of the machines for gaming. Although charges for play could not exceed sixpence, Parliament had not imposed any limit on the size of jackpots or, even more importantly, on the percentage of stakes which could be retained by the machine, and thus, once the machine operators had gained a foothold in this market, there was a great deal of scope for abuse. 25.6 Parliament attempted to stem the tide by the Betting, Gaming and Lotteries Act 1964, which, by s  2, limited the value of prizes which could be won,1 but by 1968 things had gone from bad to worse and the gaming machine industry had become notorious. The Home Secretary, James Callaghan, during the second reading of the Gaming Act 1968 in the Commons, summarised the situation at the time with respect to gaming machines as follows: ‘Serious abuses also developed from use of gaming machines … stakes are limited to sixpence, but no limit is placed either on jackpots or on the percentage of stakes which the machines can retain. This has often been quite excessive, and while the law expresses the pious contention that the profits should be used for purposes other than private gain, there is no effective means of ensuring this. The condition has been widely and flagrantly perverted, less often to the profit of the clubs themselves than of the machine dealers. Machines have been forced on premises at high rentals by protection methods, or by rigorous forms of contracts designed to secure that the lion’s share of the profits go to the dealer. There has been bribery and sometimes downright robbery.’2 1 BG LA  1964, s  2(2). By s  3(2)(a) the Act also empowered the local authority to impose a condition limiting the number of machines which could be so provided. 2 See 758 HC Official Report (5th series), col 1164 (second reading).

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Gaming machines 25.7 Equally unforeseen, was the widespread appearance of gaming machines in public houses under permits granted by local authorities or, on appeal, by Quarter Sessions, under BGLA 1963, s 49 as a form of amusements with prizes. The draftsmen of the 1960 and 1963 Acts had not foreseen that, by adapting gaming machines so that they could be used with tokens rather than coins, which could then be exchanged for drink or food, it would be worthwhile for licensees of public houses to apply for permits for such amusements with prizes machines. Once again, James Callaghan explained to the House the position during the debates on the 1968 Act as follows: ‘When the 1960 and 1963 Acts were passed certainly the Home Office did not think that people in public houses would be able to get permits for what they thought were one-armed bandits. The Committee at the time did not recognise that it would be possible to invent a “disk operated” machine for use in a public house. What happened was that the operators went to counsel in this country and sought advice. As a result of that advice, it was pointed out to publicans, and thus to the brewer, that he could apply for a permit for a machine in his public house provided it returned to the operator a prize not exceeding five shillings. A machine was specially designed which led to applications for permits in public houses so that people could engage in this harmless game.’ 25.8 As with the mushrooming growth of casinos, so with gaming machines: by 1968 it was too late to turn back the clock to times prior to 1960. Jackpot machines, like casinos, were here to stay. So were amusement with prizes machines, which were not only available in numerous public houses, cafés, and hotels but also in amusement centres and arcades and travelling showmen’s pleasure fairs. Thus, the government wisely determined to employ the same policy towards gaming by means of machines as that to be applied to gaming other than by means of machines. No attempt was made to stamp out their use altogether. Instead, a basic distinction was made between the availability of pure gaming machines, known as ‘jackpot’ (or even ‘jumbo-jackpot’ machines), on the one hand, and amusements with prizes machines or amusement machines, on the other. For the future, the former were only to be available, for commercial purposes, on premises licensed under GA  1968 for gaming or on club or institute premises registered under Pt II or Pt III of the Act, and then only on condition that not more than two such machines were to be allowed on any one premises.1 Thus, the control of the use of such machines for gaming was vested in the licensing authority.2 The availability of amusements with prizes machines, on the other hand, although they were treated separately from other kinds of amusements with prizes, was to be under the control of the local authority in the case of premises other than premises licensed for the sale of alcoholic liquor, and under the control of the licensing justices in the case of such premises.3 The use of automatic machines4 for the purposes of amusement only, with no element of gaming, was subject to no control whatsoever under the gaming laws. 1 Casinos and bingo clubs were also permitted amusement with prizes machines. 2 For the definition of licensing authority see GA 1968, Sch 2, para 1 and BGLA 1963, Sch 1.

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Gaming machines 3 See GA 1968, s 34 and Sch 9. Licensed betting offices were latterly also permitted to have all cash amusement with prizes machines. 4 As distinct from their supply and maintenance.

25.9 However, apart from controlling the availability of such machines for gaming to members of the public, a primary objective of the GA  1968 was to stamp out the abuses which had sometimes occurred in relation to the supply of such machines by the operators to the site-owners. Thus, important provisions were included in Pt III of the Act whereby, first, those who intended to sell, supply or maintain machines constructed or adapted for playing a game of chance had to obtain a certificate from the Gaming Board entitling them to do so1 and, second, a general power was given to the Secretary of State to impose such terms and conditions as he might consider necessary or expedient with regard to the sale, supply or maintenance of such machines and, subject to certain exceptions, profit-sharing agreements (in the widest sense) were expressly prohibited.2 1 GA 1968. s 27 and Sch 6. 2 GA 1968, s 28.

25.10 Thus, in a nutshell, the scheme of GA 1968, Pt III was to define the machines to which it applied, to place restrictions on the sale, supply and maintenance of such machines, and to define the circumstances under which and the conditions in which they would be used for gaming. The law relating to gaming machines was necessarily somewhat piecemeal, since there were a number of different uses to which they could be put and the law imposed a greater or lesser degree of control and sometimes no control at all, depending on the uses to which it was intended that they should be put. There were also machines which were not categorised as gaming machines, either because the element of chance was not provided by the machine (commonly with permits under s  16 of the Lotteries and Amusements Act 1976) or because they were considered to be betting machines (‘Fixed Odds Betting Terminals’, known in the trade as ‘FOBTs’). In addition, there were skill only machines (known as ‘skill with prizes machines’). As skill only machines they escaped all regulation under any of the gaming law provisions. 25.11 The Gambling Act 2005 has swept away all the previous law on gaming machines and replaced it. There are now four categories of gaming machine (two of which have sub-categories), all of which must be supplied and operated under the auspices of a licence under the Gambling Act (or sometimes under the Licensing Act 2003) or under a permit granted under the Gambling Act, depending on the premises on which the machines are to be used. Skill with prizes machines still escape all regulation under the Act, provided there is no chance element, and so they are not gambling machines. 25.12 There is still a licensing procedure for those involved in the manufacture, supply, installation, adaptation, maintenance or repair of a gaming machine (or part of one) and also of gambling software. Operating licences for these must be obtained from the Gambling Commission. Profit sharing, which was specifically prohibited under the 1968 Act, is now permitted as the prohibition was not replicated in the new Act. 1214

Gaming machines

OVERVIEW OF THE GAMBLING ACT 2005 25.13 The basis of the regulation is contained, of course, in the GA 2005, but the law of gaming machines is not only contained in that Act but in a plethora of statutory instruments, and also in licence conditions and technical standards documents promulgated by the Gambling Commission. Many of these provisions are highly technical and this chapter does not deal with them in detail. However, a brief attempt is made below to try to show how the legislation and this body of subordinate legislation and non-legislative rules fits together. 25.14 The Gambling Act 2005, Pt 10 (ss 235–251) contains a large number of the basic provisions relating to gaming machines. Section 235 contains the definition of ‘gaming machine’. Section 236 provides for the making of regulations to define four categories of gaming machine, namely Categories A–D. Section 240 makes provision for the making of regulations to control the circumstances in which a gaming machine may be made available for use. These regulations may control the method of depositing stakes or making payments, the nature of prizes and how they are received or claimed, including rollovers, the proportion of stakes returned as prizes, and the information displayed. The regulations may also deal with any other matter relating to the way a machine operates. Interestingly, the regulations may also identify matters which may not be the subject of a condition on an operating or premises licence. Use of this latter power would prevent both an increase and a relaxation in regulation by the Commission or a licensing authority. The Secretary of State is also entitled to make regulations under s 241 about the supply, installation, adaptation, maintenance or repair of a gaming machine or part of one. Such regulations may also identify matters as to which conditions may not be attached to an operating or premises licence. 25.15 GA 2005, s 242 creates the basic offence of making a gaming machine available for use in the absence of an operating licence or one of a number of other exceptions. Section 243 creates the offence of manufacturing, supplying, installing etc a gaming machine without an operating licence, or being within one of a number of other exceptions. 25.16 However, to make sense of these provisions it is necessary to turn to other sections of the Act. GA 2005, s 172 is an important section setting out the numbers and types of gaming machine which may be located in premises holding different kinds of premises licence (eg  an adult gaming centre premises licence, a family entertainment centre premises licence, a casino premises licence etc). The section proceeds by reference to the categories of gaming machine (A–D) provided for in the regulations made under s 236. 25.17 Reference should also be made to GA 2005, s 96, which provides that the Gambling Commission may establish, or provide for the establishment of, standards in respect of the manufacture, supply, installation, adaptation, maintenance or repair of gaming machines or parts of gaming machines. These should be read in conjunction with regulations made under ss 236, 240 and 241 of the Act (referred to below), as together they include the definition 1215

Gaming machines of categories of gaming machines, methods of payment, the display of information and ‘any other matter relating to the manner in which a machine operates’ (s  240(1) and (2)(f)). The Commission may in particular enforce such standards by attaching conditions to operating licences under s 75 or s  77.1 Part  1, section  2 of the Commission’s Licence Conditions and Codes of Practice (the latest version is due to come into force on 31 October 2016) makes clear that all machine licensees must comply with the Commission’s technical standards and requirements as to testing. The Commission can also make arrangements for the administration of tests of compliance with standards (s 96(4)(c)), which it has done. There are also sections of the GA 2005 which restrict the conditions that can be attached to an operating licence, in particular ss 84, 86 and 87. 1 See GA 2005, s 96(4)(a).

25.18 Particular reference should be made to GA  2005, s  86, which deals with the conditions which the Gambling Commission may attach to operating licences dealing with gaming machines. In particular, s  86(2) provides that the Commission may attach a condition to an operating licence that a specified gaming machine may not be made available for use in reliance on the licence if the Commission has notified the licensee in writing that the manufacture, supply etc of the machine was not carried out in reliance on a gaming machine technical operating licence, or did not comply with the Commission’s technical standards. It should be noted that there is no general provision contained in the Act requiring that any gaming machine made available for use in the UK should be manufactured, supplied etc by the holder of a gaming machine technical operating licence. Rather the Commission has power under these provisions to prevent individual machines from being used if they do not come from the holder of such an operating licence. This is particularly relevant to machines imported from abroad. 25.19 As is noted above, a number of important statutory instruments have been made under the GA 2005, the main ones being: (i)

the Categories of Gaming Machine Regulations 2007 (SI 2007/2158 as amended by regulations in 2009 (SI 2009/1502) in 2011 (SI 2011/1711), and in 2014 (SI 2014/45)) – these define Categories A, B1, B2, B3, B3A and B4, C and D gaming machines, principally by reference to limits on stakes and winnings;

(ii) the Gaming Machines (Circumstances of Use) Regulations 2007 (SI 2007/2319 as amended by regulations in 2015 (SI 2015/121)) – these provide detailed regulations governing the use of the various categories of machine and dealing with such matters as display of information on machines, methods of payment, minimum payment amount and delivery of prizes; (iii) the Gambling Act 2005 (Gaming Machines) (Definitions) Regulations 2007 (SI  2007/2082) – these define the meaning of the expressions ‘domestic computer’ and ‘dual-use computer’ for the purposes of s 235(2)(a), which provides that such computers shall not be ‘gaming machines’ merely because they can be used to participate in remote gambling;1 1216

Gaming machines (iv) the Gaming Machine (Single Apparatus) Regulations 2007 (SI 2007/2289) – these provide that a single piece of apparatus which is a gaming machine and which can be used by more than one person at a time is to be treated as the number of gaming machines equal to the number of people able to use it;2 (v) the Gaming Machine (Supply &c) Regulations 2007 (SI  2007/2320) – these provide that a gaming machine may not be supplied or installed if it is designed or adapted to permit money to be paid by means of a credit card or debit card;3 (vi) the Gambling (Lottery Machine Interval) Order 2007 (SI  2007/2495) – this provides that where a machine dispenses lottery tickets and is capable of falling within the exemption from being a gaming machine contained in s 235(2)(d), there must be an interval of not less than one hour between each entry into a lottery and any announcement by the machine of the results of that lottery;4 (vii) the Gambling Act 2005 (Gaming Machines in Adult Gaming Centres and Bingo Premises) Order 2011 (SI  2011/1710) – this amends the number of permitted Category B gaming machines permitted in AGCs and licensed bingo premises.5 1 See 25.35–25.38. 2 See 25.31 below. 3 See 25.265 below. 4 See 25.41 below. 5 See 26.61 and 26.63 below.

25.20 Since the GA 2005 prescribes the premises and circumstances where specific categories of gaming machine may be offered for use, and since the manufacturers, suppliers etc of any such machine must comply with the relevant categories regulations and circumstances of use regulations, the subordinate legislation bites on the provisions of such machines. 25.21 So far as technical standards are concerned, it has been noted that under GA  2005, s  96 the Gambling Commission may establish, or provide for the establishment of, standards in respect of the manufacture, supply, installation, adaptation, maintenance or repair of gaming machines or parts of gaming machines, and it may enforce these standards by attaching conditions to operating licences (s 96(4)(a)). It may in addition make arrangements for the administration of tests of compliance with standards (s  96(4)(c)). The Gambling Commission has provided a set of typical licence conditions for various types of gaming machine technical operating licences under s 65(2) (h), and one of the conditions of the LCCP is that the licensee must comply with the Commission’s technical standards and with requirements set by the Commission relating to the timing and procedures for testing.1 1 See the Gambling Commission’s Licence Conditions and Codes of Practice. Condition 2.3.1. The latest version of the LCCP came into effect on 31 October 2016.

25.22 The Commission has produced (under GA 2005, s 96) a number of documents setting out technical standards relating to different categories of gaming machines and to different technical aspects of the provision of gaming machines. These are as follows: 1217

Gaming machines (i)

Machine Standards Category A and B1, June 2012, Revision 2.

(ii) Machine Standards Category B2, June 2012, Revision 2. (iii) Machine Standards Category B3 and B4 June 2012, Revision 2. (iv) Machine Standards Category B3A, June 2008. (v) Machine Standards Category C. (vi) Machine Standards Complex Category D, June 2012, Revision 3. (vii) Machine Standards Non-Complex Category D, June 2007. (viii) Machine Standards Category B3, B4, C  and D  (Legacy machines), June 2007. (ix) Machine Standards Cashless Payment June 2007. (x) Machine Standards Linked Progressives June 2007. (xi) Machine Standards Server Networked and Downloadable June 2007. (xii) Machine Standards Wireless Network June 2007. Each set of standards prescribes software standards to apply to each category. 25.23 Certain aspects of the above documentation have been updated in documents entitled ‘Gaming Machine Standards Supplement  1’ published in July 2008 and Supplement 2, published in June 2009. In addition, the Commission has prepared a document entitled ‘Gaming Machine Testing Strategy for Categories A  and B1, B2, B3, B3A and B4, C  and D, Server Networked and Downloadable, Cashless Payment, Linked Progressives and Wireless Networks’ Revision 1, January 2014. No doubt there will be regular revisions and updates to reflect the latest technological and security developments.

GAMING MACHINE DEFINITION UNDER THE GAMING ACT 1968 25.24 The definition of a gaming machine under the Gaming Act 1968 was designed to cover a traditional one armed bandit type of machine. The definition in s 26(1) of that Act only caught a machine that was constructed or adapted for playing a game of chance by means of the machine and it had to have a slot or other aperture for the insertion of money or money’s worth in cash or tokens. The essential elements were, therefore, that the machine only covered gaming and not any other form of gambling; the element of chance had to be provided by the machine; and the machine had to have a slot which could take cash or tokens. This limited definition was overtaken by modern technology. Machines were developed that were otherwise identical to a gaming machine under s 26(1), but escaped the definition, as the element of chance was provided by a random number generator which was not in the machine. Typically the RNG might be attached to the wire going into the machine, but outside the machine, or might be on a server located at a central point and connected in some way to the machine. It would be successfully argued that the gaming was being carried on under s 16 of the Lotteries and 1218

Gaming machines Amusements Act 1976 and was therefore an amusement with prizes, which had a different stake and prize regime to the amusement with prizes gaming machines under the GA 1968. Similar kinds of technical development were used to produce machines which could be used under the provisions of GA  1968, s  21 and these became particularly popular in licensed bingo clubs. The arrival of video screens and computer technology permitted a far greater display and variety in machines, and so machines which were not limited just to gaming appeared, and were able to take advantage of the differences in the definitions between gaming and betting. This permitted the development and exponential growth of fixed odds betting terminals (now categorised as B2 machines), argued to be carrying on betting rather than gaming and so not within the gaming machine regime. 25.25 Computer technology has now led to online and television machine games being available, as manufacturers and suppliers become content providers through a variety of distribution mechanisms.

A GAMING MACHINE UNDER THE GAMBLING ACT 2005 25.26 This chapter will deal with terrestrial gaming machines only and not remote gambling, which is dealt with in Chapter 17. 25.27 The approach of the GA 2005 to the definition of ‘gaming machine’ is to provide a very wide definition (see s 235(1)). The new definition does not require that a machine must have a slot for cash or tokens before it can be a gaming machine. A machine will be a gaming machine if it is designed or adapted for use for any type of gambling (ie betting, gaming or lotteries), so that obscure debates about whether an FOBT involves betting or gaming no longer arise. 25.28 The definition of gaming requires that a game of chance is being played.1 It used to be generally accepted that for a game to exist there had to be interactivity between the players or a player and an organiser or a machine. The case of IFX  Investments Company Ltd v The Commissioners for Her Majesty’s Revenue and Customs2 dealing with whether spot the ball was gaming, decided that it was not essential for there to be ‘inter-player interaction’ as it was a question of fact in each case in which all the relevant matters had to be considered. However, the court held that ‘inter-player interaction’ is a matter to be taken into account and to be given such weight as the decision-maker considers appropriate. 1 See GA 2005, s 6(1). 2 [2016] EWCA Civ 436.

25.29 However, with gaming machines, this interactivity is not so straightforward. Norris J  who gave a careful and helpful judgment in the Upper Tribunal,1 dealt with playing a game with a machine. He considered that the effect produced by the uncertain outcome of the random element in the game is one of the purposes of the game. 1219

Gaming machines ‘Classically in a game involving more than one “move” or “round” (whether the players are more than one or solo) the effect produced will be the deployment of skill in an attempt to overcome or limit the random element (as the poker player assesses the odds and responds, perhaps in the light of the responses or anticipated responses of other players, or the fruit machine player uses the “nudge” button)’ (para 23). ‘Classically in a game which might be thought to consist of only one “move” or “round” the point of the game will be the effect produced by the action, such as excitement or suspense awaiting the outcome (as the drums on a fruit machine spin, or a roulette wheel turns after bets are placed, or as each player in turn throws the dice)’ (para 23).2 Norris J’s decision that spot the ball was not a game, was overturned by the Court of Appeal and, of course, his judgment is obiter so far as gaming machines are concerned, but it is a helpful guide,3 as to relevant matters. 1 [2014] UKUT 0398 (TCC). 2 See eg Rosenbaum v Burgoyne [1965] AC 430, HL: the ‘game’ played on a fruit machine consisted solely of pulling the lever on the machine, and ‘playing the game once’ within s 17(2)(b) of the Betting and Gaming Act 1960 meant pulling the lever once. 3 This case and other cases on gaming are dealt with fully in Chapter 2.

25.30 In recognition, however, of the fact that the definition is so wide as to catch a number of machines (eg telephones, computers) which would not ordinarily be regarded as gaming machines, s  235(2) provides a large number of exemptions to the general broad definition. 25.31 To avoid the difficulties and limitations created by the GA  1968 definition, the new definition of a gaming machine in GA  2005, s  235(1) provides that a gaming machine means ‘a machine that is designed or adapted for use by individuals to gamble’ (whether or not it can also be used for other purposes). The definition only covers machines designed or ‘adapted’ for use by individuals to gamble and ‘adapting’ is given a wide definition1 by including adapting a machine so that it becomes a gaming machine. As can be seen, a gaming machine is no longer limited just to ‘gaming’, but covers all gambling, ie betting and participating in a lottery are included as well as gaming.2 Consequently, fixed odds betting terminals and other machines formerly permitted under s 16 of the Lotteries and Amusements Act 1976 as amusement with prizes are now caught by the definition of a gaming machine. 1 See GA 2005, s 235(3)(e). See 25.175–25.178. 2 See the definition of gambling in GA 2005, s 3.

25.32 Furthermore, the element of chance need no longer be provided by the machine itself, and payment to gamble can be made not only into the machine in the traditional way by coin or token, but can also be paid by notes, or (if permitted) smartcards can be used. However, the Commission’s Licence Conditions and Codes of Practice,1 condition  6 prevents operating licensees from providing or permitting the giving of credit for gambling. Payment may not be made by credit or debit card.2 1 The latest version is due to come into force on 31 October 2016. 2 See the Gambling Machine (Circumstances of Use) Regulations 2007 (SI 2007/2319), reg 4.

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Meaning of machine 25.33 What is a ‘machine’ and what exactly it covers is important in situations where the numbers of machines are limited, eg in AGCs, where there may be only a maximum of four Category  B3 or B4 machines, or in pubs, where all machines must be Category C or D. In the past, arguments have been put forward that ‘a machine’ covers a central unit and various ‘slave units’, thereby allowing more than one person to play a machine at the same time. Now GA  2005, s  235(5) gives the Secretary of State power to provide by regulation that a single piece of apparatus is to be treated as more than one gaming machine; this may be done by reference to the number of people who can play the machine at the same time. The Gaming Machine (Single Apparatus) Regulations 20071 have been made; these provide that where a single piece of apparatus is a gaming machine and is made available for use to more than one person at a time, it is to be treated as the number of gaming machines equal to the number of people able to use it at that time. 1 SI 2007/2289.

25.34 Under the GA  2005 a ‘machine’ refers to any apparatus using or applying mechanical power, electrical power, or both.1 Computer software, provided it is designed or adapted for use in the gaming machine, is now a ‘part of a gaming machine’, but no part of the machine (obviously including software) which does not influence the outcome of the game is considered to be part of the gaming machine.2 Installing a part of a gaming machine includes a reference to installing computer software to alter the machine operation.3 It should be noted that with the introduction of linked licences, operators of AGCs and FECs themselves could potentially be required to obtain licences for installing computer software where there are updates to game programs.4 1 GA 2005, s 235(3)(a). 2 GA 2005, s 235(3)(c). 3 GA 2005, s 235(3)(d). See also s 243 for the necessity for a licence to install, adapt, maintain or repair a machine or part of one. 4 See GA 2005, ss 243, 244. See 25.90–25.91.

25.35 The definition of a gaming machine refers to a machine designed or adapted for use to gamble. It is not necessary for it to be ‘available for use’ to come within the definition. Computers able to be used for gambling are considered to have been designed and adapted for gambling, except that domestic or dual use computers, simply used to participate in remote gambling, are exempted.1 If anything is done to other machines so that they can reasonably be expected to be used for gambling, then those machines would be considered to be designed and adapted to gamble as well.2 1 See GA  2005, s  235(2)(a) and the Gambling Act 2005 (Gaming Machines) (Definitions) Regulations (SI 2007/2082); see 25.37–25.40 below. 2 GA 2005, s 235(3)(b).

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Exceptions to the gaming machine definition 25.36 The definition of a gaming machine is much wider than the previous definition under s 26(1) of the Gaming Act 1968, and could potentially cover a whole range of machines that it is not intended to catch. There are therefore a series of exceptions contained in GA 2005, s 235(2). 25.37 The general definition is so wide that it could cover a home or office computer which is generally used for other matters but permits the operator to access remote gambling sites. Internet cafés providing computers which customers could use to access internet gambling sites might also be unintentionally brought into regulation. However, such computers are excepted from the definition.1 Section 235(2) provides that: ‘(a) a domestic or dual-use computer is not a gaming machine by reason only of the fact that it can be used to participate in remote gambling’. 1 GA 2005, s 235(2)(a).

25.38 Section 235(3)(f) provides that ‘domestic computer’ and ‘dualuse computer’ shall have the meanings assigned by the Secretary of State by regulations. The Gambling Act 2005 (Gaming Machines) (Definitions) Regulations 2007 (SI  2007/2082) have been made. They are convoluted regulations, but their effect, basically, is as follows. A ‘dual-use computer’ is: (i) a computer that is capable of being used for a purpose that is not related to gambling; and (ii) (a) is not knowingly adapted or presented by the owner or a person connected with the owner, in such a way as to facilitate, or to draw attention to the possibility of, its use for gambling, or (b) it is so adapted or presented but only where its use is limited to private use or it is being adapted, maintained or repaired, in specific circumstances.1 1 Gambling Act 2005 (Gaming Machines) (Definitions) Regulations 2007, reg 2(3).

25.39 It should be noted that a number of the expressions used, such as ‘owner’, ‘person connected’ and ‘private use’, are specifically defined. The basic effect of the definitions is that a computer provided in an internet café (or a pub) will not rank as a gaming machine merely because a customer could access a gambling website on it, but it will rank as a gaming machine if the computer’s owner (as defined) or a person connected to the owner (as defined) knowingly adapts it or presents it so as to facilitate, or draw attention to the possibility of, its being used for gambling (eg a terminal with advertising leading customers towards a particular gambling site or home page is likely to render the terminal a gaming machine). 25.40

The expression ‘domestic computer’ is defined1 as a computer that:

‘(a) is capable of being used for a purpose that is not related to gambling, (b) is located in a private dwelling, and (c) if used, is used on a domestic occasion.’ 1222

Gaming machines The effect is that an ordinary computer used at home in private and on a ‘domestic occasion’ will not rank as a gaming machine, even though it can access gambling websites. 1 Gambling Act 2005 (Gaming Machines) (Definitions) Regulations 2007, reg 3.

25.41 A  telephone is excepted from the definition of gaming machine if it would come within it only because it could be used to participate in remote gambling. The exception covers not only telephones, but also ‘other communication machines’;1 this would cover, for example, television sets. 1 GA 2005, s 235(2)(b).

25.42 Betting machines designed or adapted to bet on real future events (as opposed to virtual events),1 as commonly seen in betting shops, are excepted.2 This removes from the definition machines such as automated teller machines which customers use to place bets on real events. 1 GA 2005, s 353(3). 2 GA 2005, s 235(2)(c).

25.43 Lottery ticket dispensing machines (provided they do no more than that)1 are excepted. To escape being caught as a gaming machine, the results of the lottery must not be determined by the machine, nor must the results be displayed or otherwise communicated by the machine unless there is an interval between entry into the lottery and the announcement of the result by the machine, such interval to be decided by the Secretary of State by Order.2 The Gambling (Lottery Machine Interval) Order 20073 provides that there must be an interval of not less than one hour between each entry into a lottery and any announcement by the machine of the results of that lottery. This exception prevents such machines as ‘pull-tab’ ticket dispensers, which dispense pre-loaded physical society lottery tickets one at a time, from being held to be gaming machines. The order in which the tickets are dispensed is pre-set and not decided by the machine, as are the winners.4 1 GA 2005, s 235(2)(d). 2 GA 2005, s 235(2)(d)(ii). 3 SI 2007/2495. 4 See the Gambling Commission publication ‘Comparing lottery ticket dispensers and Category B3A gaming machines. A  quick guide for Licensing Officers’ (August 2012).

25.44 Electronic bingo machines escape being gaming machines, provided they are being used pursuant to a bingo operating licence which has conditions permitting the use of the machine.1 This exemption was included to cover the well-known mechanised cash bingo machines (‘MCBs’) and other forms of playing bingo electronically. The Commission has published technical requirements2 about bingo equipment, including machines. 1 GA 2005, s 235(2)(e)(i) and (ii). 2 See the Bingo and Casino Equipment Technical Requirements July 2008 from the Commission.

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Gaming machines 25.45 Machines are a major source of revenue and, as these machines are not gaming machines, they can provide an important additional source of revenue. Crucial to this is the definition of ‘bingo’. 25.46 The definition of bingo is given in GA 2005, s 353, but is unhelpful, in that it merely states that ‘bingo’ means ‘any version of that game, irrespective of by what name it is described’. The Royal Commission on Gambling, in volume 2, para 20.1, described bingo as: ‘… a lottery played as a game. Each player receives for his stake a set of numbers which he has not chosen. These are marked off against numbers selected at random and announced by a caller, and the winner is the person who can first substantiate a claim to have marked off all those, or a particular section of those, in the set he has been given. The length of the game is governed, apart from the speed of calling, by the number of players, by how many numbers are included in the selection and what proportion of these have to be marked off to claim a prize.’ 25.47 The Royal Commission’s description of bingo was used in a VAT case1 concerning participation fees in bingo clubs, ie on a different point. 1 WMT  Entertainments Ltd v The Commissioners of Customs & Excise, Manchester VAT Tribunal, MAN/91/282.

25.48

The Royal Commission description includes several elements:

•

Bingo is not only a lottery, but is also a game.

•

Each player is given a set of numbers which he has not chosen.

•

The player must, if he can, match selected numbers chosen at random with the numbers on his card.

•

The winner is the one who can first substantiate a claim, as against the other players.

•

The player is competing with the other players. Communication between him and the other players may be relevant.

•

Communication between the player and the organisers is an essential element.

25.49 In Rogers v Cowley1 and R v Herrod,2 similar descriptions were given of bingo. In the Rogers v Cowley case, the winner was the one to achieve a specified pattern of numbers, in that case a ‘Y’. The Gambling Review Report in 2001 is in very similar terms to the Royal Commission, although it does not specify that bingo must be a lottery as well as a game of chance. 1 [1962] 2 All ER 683. 2 [1976] 2 WLR 18.

25.50 As the definition in GA  2005, s  353 makes clear, there is no one definition of bingo, although traditionally bingo has been both a lottery and a game. However, as in all gambling, a concept can vary over time. For example, from the wording of s 91(2)(f), it does not seem that there is a 1224

Gaming machines necessity for there to be a winner in every game of bingo, but the prize that is not won may be rolled forwards into another game of bingo. Further, the traditional view that bingo is a lottery played as a game may need to be applied flexibly.1 It is not an ingredient of the definition of bingo that it needs to be a lottery. 1 The reader is referred to Chapter 2, where the concept of what ranks as bingo is looked at in more detail. The Commission has also published an Advice Note ‘What constitutes bingo?’ (January 2014), which incorporates at Annex B what it considers are the key characteristics of bingo.

25.51 By GA 2005, s 8, bingo must be equal chance gaming, otherwise the game would be a casino game within the meaning of s 7(2), which may only be played in casinos. Gaming is equal chance gaming1 if (a) it does not involve playing or staking against a bank, and (b) the chances are equally favourable to all participants. It does not matter how a bank is described, and whether or not it is controlled or administered by a player. In a lottery, the organiser or promoter does not play the game and has no interest in who wins or loses, but merely takes a percentage of the entry payment and makes provision for the prizes, either through the stake money paid or from another source (including his own). The prizes may be fixed in advance or, as in the National Lottery, be a share in a pool. The promoter is not operating as a bank. The same is true in traditional bingo where the operator takes participation fees and the remaining stakes are put into the prizes. The operator is not acting as a bank. 1 GA 2005, s 8(1) and (2).

25.52 The Commission has expressed concern that the new bingo terminals should not be operating fixed odds betting. Traditionally fixed odds betting is wagering.1 1 See eg Carlill v The Carbolic Smoke Ball Company [1892] 2 QB 484 and Chapter 2.

25.53 Bingo played by way of prize gaming1 via machines is not caught by the definition, provided the machines are being used under a gaming machine general operating licence and in accordance with its conditions.2 1 See GA 2005, s 288 for the definition of prize gaming; and see Chapter 22. 2 GA 2005, s 235(2)(f).

25.54 Machines playing bingo in unlicensed family entertainment centres with an FEC gaming machine permit or premises with a prize gaming permit, provided there is compliance with any Commission code of practice under GA 2005, s 24,1 are exempted from the gaming machine definition.2 1 GA 2005, s 235(2)(g)(iii). 2 GA 2005, s 235(2)(g)(i)–(iii). See Chapter 2.

25.55 There are two exceptions aimed at roulette. Section 235(2)(h) provides an exception for a machine playing a semi-automated real game of chance. This is a machine which, according to the section, is ‘controlled or operated by an individual employed or concerned in arranging for others to 1225

Gaming machines play a real game of chance’: clearly covered is an employee of the operator. Alternatively, a machine is excepted if it is used in connection with a real game of chance ‘the arrangements for which are controlled or operated by an individual’. There is a notable difference in that the first case obviously refers to an employee of the operator, whereas this is not obvious in the second case which would seem to include, for example, a player.1 The Commission comments on this type of machine in its Guidance to Licensing Authorities.2 This machine is often referred to as electronic roulette by, amongst others, the Commission, but there is no reason why it should be limited to that and it could encompass any machine playing a real game of chance controlled or operated by an employee of the operator or a player. 1 GA 2005, s 235(2)(h)(i) and (ii). 2 The current version is the 5th edition issued in September 2015.

25.56 Section 235(2)(i) provides an exception for a wholly automated machine playing a real game of chance. To come within the section, it must not be necessary for the machine to be controlled or operated by an employee of the operator, the operator himself, or by another individual including a player. Therefore it must operate without any human intervention. These machines may only be used in a casino and in accordance with conditions attached to the casino licence. The Gambling Act 2005 (Operating Licence Conditions) Regulations 20071 provide that a mandatory condition for every casino operating licence requires that a wholly automated gaming table must be capable of being played by four persons at the same time using four separate player positions. The definition of a wholly automated gaming table, the regulation provides, must fall within the exception in s  235(2)(i). Furthermore, another mandatory condition that must be attached to casino operating licences by the Gambling Act (Mandatory and Default Conditions) (England and Wales) Regulations 20072 limits the number of separate player positions that may be made available for use in wholly automated gaming tables at any time to 40. Both of those regulations specifically refer to gaming ‘tables’, rather than machines which would, of course, be apt for a wholly automated roulette game but does not necessarily limit the machine just to gaming tables as the exception in s 235(2)(i) is clearly wider than that. 1 SI 2007/2257, reg 2. 2 SI 2007/1409, Sch 1, Pt 1(3).

25.57 A real game of chance must be being played on the machine to come within the exception for a semi-automated and a wholly automated machine. It must not, therefore, be virtual and the Commission considers that a gaming outcome determined by a computer would normally be considered to be virtual.1 1 See the Commission’s Guidance to Licensing Authorities, (5th edn, September 2015), para 16.24.

CATEGORIES OF GAMING MACHINE 25.58 There are four classes of gaming machine – A, B, C and D – defined by regulation.1 Category B is further subdivided into five, B1, B2, B3, B3A and 1226

Gaming machines B4. Category D is also sub-divided into five sub-categories: a money prize machine; a non-money prize machine (other than a crane grab machine); a crane grab machine; a coin pusher or penny fall machine; and other Category D machines. 1 GA  2005, s  236(1) and the Categories of Gaming  Machine Regulations (SI  2007/2158), as amended by regulations in 2009 (SI  2009/1502), (SI 2011/1711) and 2014 (SI 2014/45). Machines may be ‘hybrid’ machines gaming content of different categories. See the Commission’s Paper ‘Skill prizes machines. A quick guide for licensing officers’, November 2013.

2007 2011 with with

25.59 There are now many more categories of machine than under the previous law but, as before, the primary method of defining the machines is by the size of the stakes and the prizes. The premises in which the machines may be located are also defined, partly in GA  2005,1 and in regulations.2 There are further regulations controlling the circumstances of use of the machines, made under s 240 of the Act, which also deal with various features of machines.3 In this way the government has put in a comprehensive system of regulations setting out the different types of machine, where they may be used, the stakes and prizes of each category of machine, some of the features of the machines and the circumstances in which they can be used. By putting many of these provisions into regulations, the government is hoping to maintain a flexibility that was lost under the Gaming Act 1968 where the main provisions were contained within that Act. However, the general definition of a gaming machine is still contained in GA 2005 itself,4 which provides some certainty for the future as to what is a gaming machine, but the power to make regulations as to the categories is wide.5 Under s 236 the Secretary of State may define the different categories according to the amounts paid for the use of the machine (eg the stakes), the value and nature of the prizes, the type of gambling for which the machine may be used, as well as the premises where it may be used. Those regulations may identify certain matters to which no condition may be attached in an operating or premises licence. Provision is also made for regulations under which a machine may change category if a mechanism or software which alters the type of gambling provided by the machine is changed.6 1 GA 2005, s 172 and Pts 12 and 13. 2 See the Categories of Gaming Machine Regulations 2007 (SI  2007/2158), as amended in 2009 (SI 2009/1502), 2011 (SI 2011/1711) and 2014 (SI 2014/45). 3 See Gaming Machine (Circumstances of Use) Regulations 2007 (SI 2007/2319), as amended in 2015 (SI 2015/121). 4 GA 2005, s 235. 5 GA 2005, s 236. 6 GA 2005, s 236(6).

Category A 25.60 There is no maximum charge for use or maximum prize for Category A machines. Under the Categories of Gaming Machine Regulations 2007 a Category  A  machine is defined merely as ‘a machine which is not a Category B, C or D machine’. These machines may only be in a regional casino.1 1 GA 2005,  s 172(3).

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Category B1 25.61 The maximum permitted charge for use is £5 and the maximum prize value is £10,000 or, where the prize value available is determined by reference to the use made of one or more other Category B1 machines, no more than £20,000. It must not be a Category B2-4 machine or a Category C or D machine.1 These machines are permitted to be in regional, large, small or existing ‘1968’ casinos (originally licensed under the Gaming Act 1968).2 1 See the Categories of Gaming Machine Regulations 2007 (SI 2007/2158), reg 5(6) as amended by the Categories of Gaming Machine (Amendment) Regulations 2014 (SI 2014/45). The Explanatory Notes state that the linked B1 machines must be on the same premises. 2 See the Categories of Gaming Machine Regulations 2007 (SI 2007/2158), reg 6(3) (b) and the Gambling Act 2005 (Commencement No 6 and Transitional Provisions) Order 2007 (SI 2007/3272), as amended, Sch 4, para 65(6).

Category B2 25.62 This category was devised to cover Fixed Odds Betting Terminals. The maximum permitted charge for use is £100 and the maximum prize is £500.1 However, no more than £50 may be paid as a charge for use of a machine (which is not in a casino) unless for each payment made either an identification condition, a supervision condition, or a proceeds condition is satisfied.2 This amendment reflects the public concern and controversy over these machines and the amount that can be staked for each game. The conditions are aimed at either identifying the person making the payment, or there being supervision of him by a person actually on the same premises as the machine, or the charge for play coming from winnings, as set out in the regulations. The controversy is ongoing at the time of writing and shows no signs of abating. It remains to be seen whether there will be further restrictions placed on them.3 In addition to casinos, they may only be on licensed betting premises, but if those premises are on a track, the licensee must also hold a pool betting operating licence.4 They have become very popular in licensed betting shops and are accordingly very lucrative for the operators. There was considerable debate as to whether these were gaming or gaming machines and therefore regulated under the Gaming Act 1968 or the Lotteries and Amusements Act 1976, or whether they were providing betting only and could therefore lawfully be placed into licensed betting shops. Under the GA 2005 this difference has vanished as, by definition, a gaming machine is not limited to gaming but covers gambling (which includes betting). The maximum number permitted in betting premises is four, in combination with other permitted Category B, C or D machines.5 1 Categories of Gaming Machine Regulations 2007 (SI  2007/2158), reg  5(5), as amended by SI 2015/121. 2 See the Gaming Machine (Circumstances of Use) Regulations 2007 (SI 2007/2319), reg 11, as amended by SI 2015/121 which sets out what the conditions are. 3 A Government Review of gaming machines in general, and FOBTs in particular, concluded in December 2016 and is expected to report in the spring of 2017. 4 GA 2005, s 172(9). 5 GA 2005, s 172(8).

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Category B3 25.63 The maximum charge for use permitted is £2 and the maximum prize value permitted is £500.1 In addition to all casinos and licensed betting premises, Category B3 machines are permitted to be in licensed bingo premises and adult gaming centres.2 In both those premises, Category B  machines, not exceeding 20% of the total number of gaming machines available for use on the premises, are permitted as well as3 an unlimited number of Category C and D machines.4 For adult gaming centres or bingo halls which had premises licences granted before 15 July 2011, the Gambling Act 2005 (Gaming Machines in Adult Gaming Centres and Bingo Premises) Order 2011 (S1 2011/1710) provides that if the number of Category B gaming machines authorised were more than 20% of the gaming machines on the premises then the Order does not have the effect of reducing the number permitted to 20%. If the licences for such premises were granted on or after 13  July 2011 but before 1  April 2014, then up to 1  April 2014 adult gaming centres were entitled to have the greater of either 20% of the total gaming machines permitted or four machines; bingo premises were entitled to have the greater of either 20% of the gaming machines available for use or eight machines. After that, the 20% rule applied to them.5 1 Categories of Gaming Machine Regulations 2007 (SI 2007/2158), reg 5(4). 2 GA 2005, s 172(1) and (7). 3 GA 2005, s 172(1) and (7) as amended by the Gambling Act 2005 (Gaming Machines in Adult Gaming Centres and Bingo Premises) Order 2011 (SI 2011/1710). 4 Ibid. 5 Ibid.

Category B3A 25.64 The maximum permitted charge for use is £2 and the maximum permitted prize value is £500.1 These machines are limited to be lottery machines only and are only permitted in clubs or miners’ welfare institutes with a club gaming permit or a club machine permit.2 Such clubs may only have a total of three Category B3A, B4, C or D machines in total, only one of which may be B3A.3 1 Categories of Gaming Machine Regulations 2007 (SI 2007/2158), reg 4 and 5(3), as amended by SI 2014/45. 2 GA 2005, ss 242, 271 and 273 and Sch 12. 3 GA 2005, s 271(3) and s 273(2). See ‘Advice on gaming and clubs with an alcohol licence. Gambling Act 2005’, March 2016, para 4.6, from the Commission.

Category B4 25.65 The maximum permitted charge for use is £2 and the maximum permitted prize value is £400.1 These machines are permitted in all casinos, licensed betting premises including tracks occupied by pool betting operating licensees, licensed bingo premises, adult gaming centres, and clubs and miners’ welfare institutes with permits under s 271 or s 273. 1 Categories of Gaming Machine Regulations 2007 (SI 2007/2158), reg 4 and 5(2), as amended by SI 2014/45.

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Gaming machines

Category C 25.66 The maximum permitted charge for use is £1 and the maximum permitted prize value is £100.1 It must not be a Category D machine. These are permitted in all the premises where machines are permitted, except for unlicensed family entertainment centres or travelling fairs. These machines essentially take the place of the former category of all cash amusement with prizes machines under s 34(5E) of the Gaming Act 1968. Premises with an on premises alcohol licence are automatically entitled to two machines, providing the licensee notifies the licensing authority that he intends to use the machine(s), pays the fee and complies with the relevant provisions of the Gambling Commission’s Code of Practice under s 24.2 More machines may be permitted if a licensed premises gaming machine permit is obtained.3 1 Categories of Gaming Machine Regulations 2007 (SI 2007/2158), reg 4, as amended by SI 2009/1502 and SI 2014/45. 2 GA 2005, s 282; see Chapter 12. 3 GA 2005, s 283 and Sch 13; see Chapter 12.

25.67 Licensed FEC, AGC and bingo premises may have any number of Category C machines; but clubs or miners’ welfare institutes with the correct permits and licensed betting premises and tracks occupied by pool betting operating licensees may only have Category  C  machines as part of their overall permitted total machines, which is three for clubs or miners’ welfare institutes, and four for licensed betting premises and tracks occupied by pool betting operating licensees.

Category D 25.68 There are in practice five sub-categories of Category D machines: a money prize machine; a non-money prize machine (other than a crane grab machine); a crane grab machine; a coin pusher or penny fall machine; and other Category D machines.1 1 Categories of Gaming Machine Regulations 2007 (SI 2007/2158), reg 3, amended by SI 2009/1502, reg 2.

25.69 (a)

In a money prize machine, the maximum charge for use is no more than 10 pence and the maximum prize value is £5 in money only.

(b) For a non-money prize machine, other than a crane grab machine, the maximum charge for use is 30 pence and the maximum prize value is £8. (c) For a crane grab machine, the maximum charge for use is £1 and the maximum prize value is £50. (d) For coin pusher or penny fall machines the maximum charge for use is 20 pence and the maximum prize value is no more than £20 of which £10 may be a money prize. 1230

Gaming machines (e) In any other Category D machine, the maximum charge for use is 10 pence and the maximum prize value is £8 of which the maximum of £5 may be in money.1 A money prize means cash or a cheque (or partly one and partly the other) or a document or token redeemable for its value on the premises in the form of cash and/or a cheque, or redeemable for goods or services on the premises. The document or token must not ordinarily be capable of being used for another purpose; in other words, it must be a useless token, which distinguishes it from non-money prizes. A  ‘non-money prize’ is any prize which is not a money prize. A  crane grab machine is a non-money prize machine where every prize is a physical object such as a stuffed toy and winning is dependent on the player’s success or failure in manipulating the machine so as to separate out one or more of those objects from the rest of the group. It is a gaming machine as winning depends on chance as well as skill. A coin pusher or penny fall machine is a gaming machine where the charge for use must be paid by means of a single coin or token, which must be an object of money’s worth, and must be inserted into the machine. Winning a prize is determined by the position in which the coin or token ends up after insertion into the machine, bearing in mind the position of the other coins or tokens previously inserted which may be displaced by where the coin or token lands.2 It must not be a money or non-money prize machine. 1 Categories of Gaming Machine Regulations 2007 (SI 2007/2158), reg 3, amended by SI 2009/1502, reg 2. 2 Regulation 2(3) and (6)(d).

25.70 Category D machines replaced the traditional amusement with prizes machines formerly under s 34(1) of the Gaming Act 1968. They have formed the backbone of seaside arcades open to children for many years and there was very considerable concern in the industry that the stakes would be limited to 10p, which would irreparably damage the industry and would have spelt the end of many traditional arcade machines, such as crane and grab machines and coin pusher machines, as they would not have been cost effective. The government eventually agreed to allow the traditional machines to continue, albeit in a slightly different form so far as stakes and prizes are concerned. Owing to the unease about children and gambling, and although currently Category D machines are permitted to be played by those who are under 181 (they are the only gaming machines which may be played by under-18s), the Secretary of State has power to change that age limit by order.2 1 GA  2005, s  46(2)(e). However all permit holders under s  271, 273, 282, and 283 must comply with the Commission’s Code of Practice for Gaming Machines in clubs and premises with an alcohol licence published in August 2014. See also the Commission’s Guidance to Licensing Authorities, (5th edn, September 2015), at para 16.11. Licensed premises, of course, are bound by the LCCP. 2 GA 2005, s 59.

Available for use 25.71 In setting the limits for the numbers of machines permitted in different types of premises, GA 2005, s 172 refers to the machines available 1231

Gaming machines for use and not the numbers of machines on the premises. There are good reasons why an operator might want to have more than the permitted number on the premises, including wanting to have a spare machine in case of a breakdown. Clearly there is a difference between a machine being available for use and a machine that is just on the premises: available for use refers to its use by players ie available to be played. This is also the Commission’s view as set out in its Advice on the point in November 2012. It considers a machine is available for use if a player can play it without the assistance of the operator, regardless of whether permission is sought from or granted by the operator. The operator must have a ‘robust’ system in place to see to it that no more than the permitted number are available for use at any one time, which he is expected to control, and he must be able to demonstrate eg to Commission officials, if required, that no more than the permitted number are available for use. For machines that operate in more than one category, no more than the permitted number for each category must be available for use at any one time; if, therefore, a machine is being used at a lower category, that does not contribute to the number of machines for a higher category until it switches to that higher category. If two people can play a gaming machine simultaneously, the machine counts as two machines.1 1 See the Commission’s Advice regarding when a machine is ‘available for use’ in November 2012.

Prizes 25.72 In gaming machines, a prize includes any money, article, right or service won, even if it is not described as a prize, but does not include an opportunity to play the machine again.1 Therefore, opportunities to play the machine more than once do not count towards any prizes that are available to be won. Although technically all machines can offer cash or non-cash prizes, in fact only Category D machines are permitted to do so.2 Prizes are often expressed to be limited to a ‘prize value’ of a specified amount. ‘Prize value’ means the amount or value of a prize winnable by playing a machine once.3 1 GA 2005, s 239. 2 Gaming Machine (Circumstances of Use) Regulations 2007 (SI 2007/2319), reg 6. 3 Categories of Gaming Machine Regulations 2007 (SI 2007/2158), reg 2(1).

25.73 The non-money prizes provided by Category D machines must not be goods or services which it is illegal to sell or supply to a child or young person, eg alcohol.1 For non-money prizes not delivered by the machine, the machine must still provide the winner with the means to collect it, most obviously by a token or ticket, and the prize must be available for collection at the premises where the machine is sited and when the machines are available for use: information of the type of prize won must be displayed on the machine.2 1 Gaming Machine (Circumstances of Use) Regulations 2007 (SI 2007/2319), reg 6(3). 2 Regulation 13. See also reg 4.

25.74 If a money prize is not delivered by the machine automatically, the machine must tell the winner how much he has won and he must be able to 1232

Gaming machines collect the whole prize either from the machine or on the premises where the machine is sited and when the machines are available for use.1 Money prizes must not be automatically used to pay for further games on the machine if not collected by the winner.2 Certain money prizes (ie £50 for Category A, B1, B2, B3 or B3A machines, £10 for Category B4 or C machines, and any money prize for Category D machines)3 may not be held in the machine (albeit not committed for playing games) without allowing the player to collect his prize first. 1 Gaming Machine (Circumstances of Use) Regulations 2007 (SI  2007/2319), reg 13(3). 2 Regulation 13(4). 3 Regulation 14(1). This is modified somewhat in the case of autoplay: see reg 14(2).

25.75 Money prizes include not only cash or a cheque but also tokens, which may be in the form of a document or an object which can be redeemed for cash and/or a cheque on the premises where the machine is situated, and may also be used to pay for goods or services on the premises as well as further gambling. However, even if a document or object is exchangeable in this way, it is not a money prize if it is ordinarily capable of being used for some other purpose (such as a teddy bear).1 A non-money prize is any prize which is not a money prize.2 There are restrictions on permitting prizes to be offered on Category D machines which would be illegal to be offered to or used by a child.3 1 Categories of Gaming Machine Regulations 2007 (SI  2007/2158), reg  3(8), as amended by SI 2009/1502. 2 Ibid. 3 Gaming Machine (Circumstances of Use) Regulations 2007 (SI  2007/2319), as amended, reg 6.

Trading-up 25.76 In the past there was considerable controversy about a practice known as ‘trading-up’, where a machine player, usually in a seaside arcade, would exchange several non-cash prizes won in different games on the machines for a larger prize. This was brought to a head in the case of R v Burt and Adams,1 which found the practice to be legal. 1 [1999] 1 AC 247, [1998] 2 All ER 417, [1998] 2 WLR 725.

25.77 The legality of trading-up has now been confirmed in the GA 2005. The stake for all machines is described as a ‘maximum charge for use’. ‘Charge for use’ means the amount a person pays for using a gaming machine once, according to reg  2(1) of the Categories of Gaming Machine Regulations 2007.1 In Category D machines the prizes are referred to in terms of the ‘maximum prize value’, which by reg  2 means the amount or value of any prize which can be won as a result of using a gaming machine once. Therefore, in a non-money prize Category  D  machine, (other than a crane grab, a coin pusher or a penny fall machine) a non-money prize of £8 is the maximum value prize that can be won by using a gaming machine once. Following the reasoning of eg R v Burt and Adams, this does not prevent that 1233

Gaming machines non-money prize being exchanged, together with others, for a larger prize. However, GA 2005, s 343(3) puts it beyond doubt by making it clear that a limit on the maximum value of the prize does not prevent the winner of one or more prizes exchanging the prizes for money or another non-money prize, provided that the total value of the exchanged prizes does not exceed the value of the new non-money prize. Therefore, two teddy bears of a maximum value of £8 each may only be exchanged for another prize with a maximum value of £16, and so on. The new prize, however, must comply with any rules in the Act or Regulations as to the nature or type of prize that could have been won from the machine.2 Therefore, the larger prize may only be a non-money prize if the prizes exchanged for it came from one of the Category D machines offering a non-money prize. 1 SI 2007/2158. 2 GA 2005, s 343(3). Only Category D machines may have non-money prizes: see the Categories of Gaming Machine Regulations 2007 (SI 2007/2158), as amended.

Charge for use 25.78 The cost of playing a gaming machine is not referred to as a ‘stake’ in the regulations, but as a ‘charge for use’, ie the amount that a person pays for using the machine once.1 This has undoubtedly been used to prevent a change of the use of machines that had previously arisen as result of s 16 of the Lotteries and Amusements Act 1976 (now repealed). No payment may be made by debit or credit card, as no machine may be supplied or installed that is designed or adapted to permit payment of money by debit or credit card.2 (Originally, no credit cards were permitted by GA 2005, s 245, but this has been repealed by the Gambling Act (Repeal) (Remote Operating Licence and Credit) Regulations 2007 (SI 2007/2321), reg 2.)3 Smart cards are acceptable. 1 Categories of Gaming Machine Regulations 2007 (SI  2007/2158), as amended, reg 2(1). 2 Gaming Machine (Supply etc) Regulations 2007 (SI  2007/2320) (made under GA  2005, s  241); and the Gaming Machine (Circumstances of Use) Regulations 2007 (SI 2007/2319), reg 4. 3 See para 25.185 below.

25.79 Under s  16 of the LAA  1970 amusements with prizes machines were permitted in certain premises, including premises with permits under s 34 of the Gaming Act 1968, or under the 1976 Act itself. There were certain conditions which had to be complied with, one of which provided a maximum cash limit on the sale of chances in ‘any one determination of ­winners’. 25.80 The use of the phrase ‘any one determination of winners’ allowed players to put down several stakes for several different games at the same time and then start all those games at once. In a machine with multiple RNGs all the games would be played simultaneously and separate results would be obtained for each. This permitted a form of roulette, in as much as the screen could be made to look like a roulette table albeit that each stake put down would technically go towards a different game, and would therefore come within the conditions of s 16 of the LAA 1976. 1234

Gaming machines 25.81 The intention of the government when drafting the GA 2005 was that s 16 machines should no longer be lawful. LAA 1976, s 16 has been repealed and not replaced. Regulation  2(2) of the Categories of Gaming Machine Regulations 2007, in defining what is meant by the ‘charge for use’ (which is fixed for each category of machine), states that it means the amount paid for playing a machine once. A person plays a machine once if the payment for each gamble is made before he knows the result of any of them.1 Therefore, if various different bets are put onto a virtual roulette table, and the player then presses a button to start the machine, that is treated as the player playing a game once rather than playing a series of different games simultaneously. Consequently, although there may be different stakes on different numbers, the total amount of all stakes must be no more than the permitted charge for use for the machine, before the result is known. 1 Gaming Machine (Circumstances of Use) Regulations 2007 (SI 2007/2319), reg 2(1) and (2).

25.82 An exception is made in the case of pusher machines, where the game is essentially played by coins being put through a slot or other aperture in the machine and where the game is decided by where the coin comes to rest, combined with the action of the machine in shifting all the coins towards the edge, from which they may fall into a hopper, thereby delivering the coins as prizes. There is no prohibition on the player not knowing at the time that he puts a second coin into the machine whether he has won from putting in the first coin.1 1 Gaming Machine (Circumstances of Use) Regulations 2007 (SI 2007/2319), reg 2(3).

Skill with prizes machines 25.83 Skill is not defined under the GA 2005, but is characterised as not being a game of chance. The Secretary of State has broad powers under s 6(6) to make regulations to ‘provide that a specified activity, or an activity carried on in specified circumstances, is or is not to be treated for the purposes of the Act as a game, a game of chance, or a sport. 25.84 Although their appeal and numbers are going down, skill with prizes machines (or SWPs) have traditionally formed an important part of entertainments, particularly in arcades. Unlike some other jurisdictions, where it is sufficient that machines are predominantly skill, GA 2005, s 6(2) is clear that a game of chance includes a game that involves both an element of chance and an element of skill, a game that involves an element of chance that can be eliminated by superlative skill, and a game that is presented as involving an element of chance but does not include a sport. Therefore the game played should have no element of chance (unless it is de minimis, so small as to be irrelevant) that affects the outcome of the game. Of course there are games where the element of chance is essential to test the skill of the player. Examples are shooting games where it is pure chance where and how fast the targets appear. The game must operate in a consistent manner and the result must be genuinely achievable; for example, the reaction time must not be so short that it is impossible for the player to react in time to exercise skill.1 1 See the Gambling Commission publication ‘Is a prize machine a gaming machine?’ (July 2010) and ‘Skill with prize machines, A  quick guide for licensing officers’ (November 2013).

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Gaming machines 25.85 It should also be noted that a ‘game of chance’ for the purposes of the GA 2005 under s 6(2)(iii) includes a game that is presented as involving an element of chance, and therefore there is a risk that a game which is a game of skill might be treated as a game of chance if it is presented as one. This became a significant issue in 2009 when HMRC and the Commission became concerned about skill games which were being presented with gambling icons and looked like well known games of chance, even though they were skill-based games. In a joint statement between HMRC and the Commission on 14 December 2009, it was made clear that games that were marketed and/ or designed to look like recognised games of chance (such as roulette, bingo or poker) were being presented as involving an element of chance and were therefore games of chance under the GA 2005. The machines on which they were played were therefore gaming machines and were liable to Amusement Machine Licence Duty unless they fell within one of the exemptions. The presentation did not only include the game title or the description on the machine’s livery but also how the game itself was presented. In its publication ‘Is a prize machine a gaming machine’ in July 2010, the Commission listed various matters that it would take into account in deciding whether a game is presented as involving an element of chance. These are: (i)

how the game appears to the player;

(ii) what the game is called and whether it contains language associated with gambling games; (iii) the livery of the machine and whether it contains symbols or graphics associated with gambling games; (iv) the appearance of the game itself and whether it contains symbols or graphics associated with gambling games, including (but not limited to) the turn of a wheel, the spin of a coin, the roll of a dice, reel bands, or the random selection of numbers; (v) whether the game involves the player in actions associated with gambling games including (but not limited to) placing chips or markers on numbers, or engaging in prediction; (vi) any contextual indications such as advertising signage or marketing material. The Commission made the point that a single one of those factors by itself may not be enough to convert the machine into a gaming machine.1 1 See HMRC and Gambling Commission joint statement, 14  December 2009; the Gambling Commission publication ‘Is a prize machine a gaming machine?’ (July 2010), para 2.

25.86 Genuine SWPs do not need any permission to be sited on premises, nor are there any limits on stakes or prizes, but in the Commission’s view, the higher the payout offered, the less likely the machine is to be viable as a genuine skill machine because of the risk that very skilful players will win the top prize too frequently, and it considers that the top commercially viable prize is likely to be £50.1 The Government in 2010 asked HMRC and the Treasury to review the situation regarding SWPs and the games played on them for the purposes of Amusement Machine Licence Duty 1236

Gaming machines (AMLD). HMRC consulted the relevant trade associations and businesses involved with SWPs as well as within Government and the Commission and published its conclusion in July 2010.2 It also published Guidance on Skill with Prizes games which it annexed to its review document, which states that this Guidance complements its previous joint statement with the Commission and the Commission’s publication ‘Is a prize machine a gaming machine?’ in July 2010. It sets out various characteristics which HMRC will take into account when considering whether a particular prize machine is not a gaming machine and therefore not subject to AMLD. The characteristics are: (i)

the game must be a test of skill such as knowledge, dexterity, visual recognition, logic, memory, reaction, hand-to-eye co-ordination, numerical and lexical ability, or a mixture of any of these skills;

(ii) the game rules and game play instructions must be available to the player prior to crediting the game; (iii) the game must not look like a recognised game of chance which will depend upon the whole presentation of the game. While no single factor is determinative, the game should seek to avoid: •

gambling themes (eg casino games, bingo and lotteries);

•

symbols associated with gambling (eg  fruit symbols associated with reel-based gaming);

•

words associated with chance or gambling (eg ‘lucky’, ‘random’, and ‘jackpot’);

•

any ‘Repeat Win Feature’ that enables a player to win a second prize without completing successfully another game of kill;

(iv) the game must not pay out a prize without a reasonable amount of player interaction. This will be demonstrated where the likelihood of any prize being paid increases with the level of skill applied. Where a player uses the machine without exercising skill (ie playing with their eyes closed) the likelihood of winning a prize should be significantly and demonstrably reduced; (v) all advertised prizes must be available to win in each game; (vi) the level and type of skills required to win (including reaction time) must be reasonable considering the context of the game in question: Indicative examples of this would include: •

the time to react to a visual stimulus should not be less than around 225 milliseconds;

•

for quiz games there should be sufficient time to read the question and all possible answers (normally at least five seconds);

•

in visual recognition games, such as spot the difference, all observations must be visible to the human eye and there should be at least two seconds per observation;

•

the time to memorise 50 upturned cards of various symbols should be at least ten seconds. 1237

Gaming machines It is important to note that the presence of one or more of the above examples does not necessarily mean that the level and type of skill is reasonable in the context of the game; (vii) the level of difficulty may vary from game to game for the purpose of challenging a player’s use of skill provided that it is within reasonable bounds, for example at its hardest setting a player is not required to complete more than three times as many actions as he would be required to do at the game’s easiest setting; (viii) the game must not enable the operator to change the game’s settings so that the game ceases to be compatible with characteristic (vi) above. 1 See the Commission publication ‘Skill with prize machines, A  quick guide for licensing officers’ (November 2013). 2 HMRC and HM Treasury ‘Amusement Machine Licence Duty: review of skill with prize games’.

GAMING MACHINE LICENCES 25.87 From September 2007, operators, manufacturers, suppliers, installers and adaptors of gaming machines or gaming machine software, and certain key individuals, are required to be licensed by the Commission under the Act. Operators of gaming machines in both adult gaming centres and family entertainment centres require specific operating and gaming premises licences. Unlicensed family entertainment centres, clubs and miners’ welfare institutes and premises licensed for alcohol may apply for permits to have gaming machines on their sites.1 1 GA 2005, Sch 10 and 25.126–25.153.

25.88 There are three categories of licence: operating, premises and personal licences. A gaming machine business will need multiple licences. Operating licences may cover remote or non-remote gambling. This chapter will only deal with non-remote gambling on gaming machines.

Gaming machine operating licences 25.89 There are several different gaming machine operating licences available: (a) Gaming machine general operating licence for an adult gaming centre. (b) Gaming machine general operating licence for a family entertainment centre. (c) Non-remote gaming machine technical (full) operating licence. This is required to manufacture, supply, install, adapt, maintain or repair all categories of gaming machine or part of a gaming machine. This licence includes computer software designed for gaming machines. (d) Non-remote gaming machine technical (supplier) operating licence, which authorises the licensee to supply, install, adapt, maintain or 1238

Gaming machines repair all categories of gaming machine or part of the gaming machine, but not to manufacture a machine or part of one. (e) Non-remote gaming machine technical (software) operating licence. This authorises the licensee for manufacture, supply, install or adapt software for all categories of gaming machine, but not to repair gaming machine software or to supply software using remote means eg  the internet. (f) Ancillary remote operating licence. An ancillary remote operating licence will be required by those seeking or holding a gaming machine technical (full) a gaming machine technical (supplier), and a gaming machine technical (software) operating licence, and authorises the licensee to supply software by email only. (g) Remote gaming machine technical (full). This authorises the licensee to manufacture, adapt, install, maintain, repair and supply all categories of gaming machine or part of a gaming machine through the internet or other remote communication method. (h) Remote gaming machine technical (supplier) licence. This authorises the licensee to supply, adapt, install, repair or maintain gaming machines or part of a gaming machine through the internet or other remote communication methods. (i) Remote gaming machine technical (software). This authorises the licensee to manufacture, supply, install or adapt gaming machine software for all categories of gaming machine by remote means, for example through the internet. It does not however permit the repair of gaming machine software or its supply through non-remote channels.

Linked licences1 25.90 Holders of or applicants for a casino, betting, bingo, AGC or FEC operating licence can apply for a linked software or supplier licence,1 to supply, install, adapt, maintain or repair a gaming machine or part of one (including software) providing the licensee or applicant owns the machines and the cost of doing so is no more than £50,000 per year. If that amount is exceeded a gaming machine technical operating licence must be applied for. There is also a remote version of this licence which permits the licensee to carry out these activities by remote communication. 1 The Commission states that the same application form as for the main licence can be used.

25.91 The holder of or applicant for a non-remote gaming machine operating licence can apply for an ancillary remote licence additional to the main licence to supply part of the service by email only. This does not authorise the supply of any service by means of remote communication which would require one of the remote gaming machine technical licences set out above.1 1 See 25.89.

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Gaming machines

What triggers a linked licence? 25.92 An operating licence which authorises the licensee to provide facilities for gaming machines (ie casino, bingo, general betting (standard), AGC, FEC) does not authorise the licensee to manufacture, supply, install, adapt, maintain or repair a gaming machine or part of a gaming machine (including software). These activities are illegal unless carried out by an operator who holds a gaming machine technical supplier licence, either linked, or the unrestricted version. 25.93 In addition, there are operating licence holders who create and install software onto their own gambling equipment as a small part of their licensed activities and are required to hold a gambling software licence to carry out these activities, either linked, or the unrestricted version. 25.94 However, there are actions that the writer suggests can be carried out by an operator under its existing licence.1 For example: •

Changing a power supply unit (like for like).

•

Plugging in a network cable, or a gaming machine.

•

Changing the front display of the machine (including glass or paper artwork, but not software modifications for video display).

•

Changing display notices on the machine.

•

Cleaning the machine.

•

Clearing coin jams.

•

Changing fuses.

•

Moving the machine to a new location within the operator’s own licensed premises.

•

Changing percentage, stake and/or prize settings, provided this does not require any software modification.

•

Swapping out components (like for like), provided that the component cannot affect the outcome of the game (note acceptors, coin mechanisms etc) and that no software installation is required.

1 See Gambling Commission, Gambling Machine FAQs.

25.95 The following actions, however, give rise to an additional licence requirement, according to the Commission: •

An upgrade kit from a licensed supplier (eg  download and software installation of an EPROM).

•

Using a CD, memory stick or computer downloads to make software changes.

•

Making changes that alter the category of that machine.

•

Repairing machine parts where the component may have an effect on the game outcome.

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Gaming machines •

Swapping out components that may affect the outcome of the game (primary logic boards, game memory devices etc).

•

Modifications (adaptations) to any game logic security devices (logic cage etc).

The above trigger points can be avoided if an operator arranges for these actions to be carried out by the licensed manufacturer/supplier. The main principle to consider is ‘Do the alterations affect, or potentially affect, the way in which the game operates?’ If they do, then it is likely to trigger the need for a licence.

Personal licences 25.96 Every operating licence application must be accompanied by at least one personal management licence application, except for small-scale operators that may be exempt from this requirement.1 1 See Chapters 6 and 7.

Premises licence 25.97 A premises licence is only required for a business offering gaming machine facilities to end users on fixed premises rather than remotely, so licensees operating solely as gaming machine or software manufacturers and suppliers will not require premises licences.

Single-machine supply and maintenance permits 25.98 The Commission may grant permits to supply, repair, install or maintain a single gaming machine or part of one, without a technical operating licence being held.1 The Commission suggests that this procedure is appropriate for people who collect gaming machines as private individuals, but a permit will only be issued in specific circumstances and is not intended for those who are operating in a commercial business, in which case a full operating licence is required. The Commission states that checks will be conducted to ensure that the applicant does qualify for a single machine permit. Any permit granted has to be time limited and may not exceed one year and must also specify the particular machine (or its part), as well as the activity that it authorises. Conditions may be attached to the permit.2 1 GA 2005, s 250. 2 GA 2005, s 250(7).

25.99 Anyone supplying, repairing, installing and maintaining a gaming machine or part of one under the auspices of a GA 2005, s 250 permit does not commit an offence under s 33 or s 243(1).1 1 GA 2005, s 250(1).

25.100 An application under s 250 must: 1241

Gaming machines ‘(a) be made in writing, (b) specify the gaming machine or part in relation to which the permit is sought, (c)

give such details of the activity in relation to which the permit is sought as the Commission may direct,

(d) be in such form, and contain such other information, as the Commission may direct, and (e)

be accompanied by the prescribed fee.’1

1 GA 2005, s 250(3).

25.101 On considering the application, the Commission is entitled either to grant or refuse the application.1 The Commission can, however, only grant an application for a permit if it is satisfied that the grant of a permit will not have any impact on the licensing objectives.2 If the Commission believes that, in the circumstances, an applicant should in fact be applying for a licence, they will not grant a single-machine permit. 1 GA 2005, s 250(4). 2 GA 2005, s 250(5).

25.102 A  single-machine permit must specify the period for which it is granted (which cannot exceed one year), the machine to which it relates and the activities which it authorises.1  A  permit may be subject to conditions attached by the Commission.2 1 GA 2005, s 250(6). 2 GA 2005, s 250(7).

25.103 This permit procedure replaces the permits issued by the Gaming Board under s 27 of the Gaming Act 1968 to individuals outside the gambling business who have single machines which they wish to dispose of, or repair. Regulations under GA 2005, s 248(2) could be used where a gaming machine did not offer prizes, so that a s 250 permit was not required for the specified activity. 25.104 The application form and related guidance is available from the Commission.

‘WHERE MACHINES MAY BE SITUATED’ 25.105 Machines may be situated in casinos, bingo halls and licensed betting shops.1 Machines may also be in adult gaming centres and licensed family entertainment centres. Furthermore, they are permitted in unlicensed premises by virtue of various provisions in GA  2005: these are unlicensed family entertainment centres, clubs (both members and commercial), miners’ welfare institutes, premises with on-premises alcohol licences, and fairs (certain machines are also permitted if they are providing prize gaming within the meaning of Pt 13 of the GA 2005).2 1242

Gaming machines Category B3A machine are only permitted in members’ clubs or miners’ welfare institutes. 1 See Chapters 13 and 14 and 25.107–25.110. 2 See Chapter 12.

25.106 In November 2015, the Gambling Commission published a consultation document on possible changes to the LCCP and the Guidance to Licensing Authorities concerning controlling where gaming machines may be played. In July 2016, it published the responses to that consultation together with its comments on them and its proposed amendments. At the time of writing, no amendments to the Guidance have yet been made. Also in July 2016, it published the proposed version of the LCCP which came into force on 31 October 2016. The Commission proposes three new code provisions that will apply to every non-remote betting, bingo and casino operating licence except for the GA 2005 casino operating licences.1 These changes may well have been prompted by the case of Greene King Brewing and Retailing Ltd v The Gambling Commission.2 1 See LCCP published July 2016, Code provisions 9.1.1, 9.1.2 and 9.1.3. 2 Upper Tribunal: 2016 UKUT 0050 (AAC) on appeal from the First-tier Tribunal: GA/2014/0001 and GA/2014/0002. The appeal to the Court of Appeal is due to be heard in 2017. For full details of this case see 6.142.

Machines in casinos 25.107 There are four categories of casino permitted: regional, large, small and those originally licensed under the Gaming Act 1968. Different numbers and types of machines are permitted in the different types of casino.1 Regional casinos are permitted machines of all descriptions, but not Category B3A, up to no more than 25 times the number of gaming tables2 used in the casino, and no more than 1,250 in total. At least 40 tables must be used. Large casinos using at least one gaming table (or a regional casino using fewer than 40 tables) may make machines available, provided the number is not more than five times the number of gaming tables, to a maximum of 150 machines in total. Only Category B, C or D machines may be used. 1 GA 2005, s 172(3)–(5). 2 For a definition of ‘gaming table’ see the Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007 (SI 2007/1409).

25.108 Small casinos using at least one gaming table may make machines available for use, provided the number is no more than twice the number of tables used, to a maximum of 80 machines in total. Category  B  (except Category  B3A), C  or D  machines may be used. Original/existing casinos may only have a maximum of 20 machines in total if there are any Category B machines: if there are none, there may be an unlimited number of Category C or D machines.1 1 Gambling Act 2005 (Commencement No 6 and Transitional Provisions) Order (as amended) 2007 (SI 2007/3272), Sch 4, para 65(6).

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Bingo halls 25.109 Premises with a bingo premises licence may have a maximum of 20% of the total number of gaming machines which are available for use on the premises as Categories B3 or B4 and an unlimited number of Category C or D machines. For premises in existence before 13 July 2011 it is somewhat different, as the provisions originally in place under s 172(7) of the GA 2005 were amended.1 Such premises are entitled to make either 20% of the total number of gaming machines of Categories B3/B4 available for use or eight Category B3/B4 gaming machines, whichever is the greater. Any number of Category C or D machines may be made available for use. This was to ensure that premises in existence before 13 July 2011 did not have the machines that they were entitled to before that date reduced. A stay of execution was also granted for premises granted a bingo premises licence between 13 July 2011 and before 1 April 2014 in that they too were entitled to a maximum of eight Category B3/B4 gaming machines or 20% of the total number of gaming machines whichever is the greater but as from 1 April 2014, in those premises and all premises granted a licence after that date only 20% of the total number of gaming machines may be Category B3/B4. Again, any number of Category C or D machines may be made available for use. 1 GA 2005, s 172(7). See the Gambling Act 2005 (Gaming Machines in Adult Gaming Centres and Bingo Premises) Order 2011 (SI 2011/1710).

Betting premises 25.110 Premises with a betting premises licence are entitled to make up to four gaming machines in total available for use, each of which must be of either Category B2, B3 or B4, C or D.1 If the licensed premises are a track, the licence holder must also hold a pool betting operating licence.2 1 GA  2005, s  172(8) and Categories of Gaming Machine Regulations 2007 (SI 2007/2158) reg 6(3)(d), as amended. 2 GA 2005, s 172(9).

Fairs 25.111 Category  D  machines may be supplied to travelling fairs which do not have an operating or premises licence or other permits. GA  2005, s  287 provides that no offence is committed under s  37 or s  242 if the Category D machines are made available for use at travelling fairs, but the gambling must be no more than ancillary amusement at the fair.1 ‘Gambling’ in this context means all gambling and not just machine gambling. A fair is not defined, except that it must consist solely or principally of the provision of amusements.2 A fair is a travelling fair if those providing it travel from place to place for the purpose of providing a fair and the place is not used for more than 27 days in any calendar year for that purpose.3 Category D machines are the only machines able to be played by those who are under 18.4 1 GA 2005, s 287. 2 GA 2005, s 286(a).

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Gaming machines 3 GA 2005, s 286(b). 4 GA 2005, ss 46(2)(e) and 48(2)(e).

Adult gaming centres (‘AGCs’) 25.112 These are premises which have an adult gaming centre premises licence.1 The same provisions as apply to licensed bingo premises regarding numbers of machines also apply to AGCs,2 save that whereas bingo halls are permitted eight Category B3/B4 machines, AGCs may only have four. 1 GA 2005, s 237. 2 GA 2005 s 172(1), as amended by the Gambling Act 2005 (Gaming Machines in Adult Gaming Centres and Bingo Premises) Order 2011 (SI 2011/1710). See 25.109.

Family entertainment centres (‘FECs’) 25.113 There are two types of family entertainment centre: licensed and unlicensed. In both cases it means premises which are not an AGC. An ­unlicensed FEC has to have a permit under GA 2005, s 247 and Sch 10. A licensed FEC has a family entertainment centre premises licence, and is wholly or mainly used for making gaming machines available for use. It may have an unlimited number of Category C or D machines available for use.1 However, the Category C machines must be in an adult only area. An unlicensed FEC is only permitted to have an unlimited number of Category D machines.2 1 GA 2005, s 172(2). 2 GA 2005, s 247.

Licences 25.114 Both adult gaming centres (‘AGCs’) and licensed family entertainment centres (‘FECs’) require operating licences (and any necessary personal licences required) and premises licences. Operating licences are issued by the Gambling Commission.1 Machines may not be made available for use by another unless provided under an operating licence in accordance with any conditions on the licence, or one of the exceptions set out in GA 2005, s  242 applies.2 Conditions may be applied to the operating licence by the Commission, but there may be no conditions3 as to the number or categories of gaming machine that may be made available for use under the licence or that contradict the provisions of the sections relating to categories of machines,4 or the regulations about the use of the machine,5 or regulations about the supply, installation, adaptation, maintenance or repair of the machines.6 This prevents the provisions of the Act and the regulations from being circumvented by the backdoor. However, a condition may be imposed that a specified gaming machine may not be made available for use under the licence if the Commission has told the licensee in writing that the manufacture, supply, installation, adaptation, maintenance or repair of the machine was not carried out under the auspices of a gaming machine technical operating licence or did not comply with the appropriate standards under s 96.7 Furthermore, an operating licence may not include a condition 1245

Gaming machines requiring the licensed activities to be carried on at a specified place or class of place or preventing them being carried on there; nor may it include a condition specifying the premises on which the licensed activities may be carried on, although it may include a limit on the number of sets of premises on which the licensed activities may be carried on. 1 2 3 4 5 6 7

See Chapter 6. GA 2005, s 242(1). See GA 2005, s 86(1). GA 2005, s 236. See GA 2005, s 240. GA 2005, s 241. GA 2005, s 86(2).

Gambling Commission’s Licence Conditions and Codes of Practice1 25.115 In common with other personal and operating licences issued by the Commission, conditions will be attached by the Commission to gaming machine general operating licences for AGCs and licensed FECs. Reference should be made to Chapter 6 on operating licences for details of these and to the LCCP document itself. Only those specific to machines and licensed AGCs and FECs are given here. A  condition will be attached to AGC and FEC operating licences that if the licensee or an employee becomes aware that a child or young person is using or has used the gambling provided under the licence, the licensee must return the stakes or fee or other money paid by the child or young person to use the gambling facilities as soon as reasonably practicable, and no prize may be given to that child or young person. This does not apply to using a Category D machine.2 Furthermore, licensed AGCs and FECs must not provide or be involved in the giving of credit for gambling.3 1 The latest version of the LCCP was published in July 2016 and came into force on 31 October 2016. 2 GA 2005, s 83(1). These are statutory conditions. 3 LCCP condition 6.1.1.

25.116 There are both social responsibility and ordinary code provisions (LCCP 3.2) requiring policies and procedures aimed at preventing under age gambling and that their effectiveness should be monitored. In AGCs, there is a social responsibility code requiring that those policies and procedures must take account of the structure and layout of the premises, and licensees have to take all reasonable steps to see to it that staff understand their responsibilities about preventing under age gambling, including giving them relevant and appropriate training, not only against inviting children or young people to gamble or to enter the premises, but also as to the legal requirements about returning stakes and not paying prizes to under age customers. There should be both induction and refresher training for staff as a minimum. The prevention procedures must include age checks of any suspected under age customer, removal from the premises of anyone who appears to be under age and who cannot produce an acceptable form of ID, and taking action where under-18s are attempting to enter the premises. No gambling facilities must be deliberately provided that appeal to under-18s 1246

Gaming machines and all adults must be refused service if they are accompanied by someone who is under 18. Acceptable forms of ID are only those with a photograph identifying the person, together with a date of birth, and which are valid and legible with no visible signs of tampering or reproduction. Examples of such ID are suggested, such as those carrying the PASS logo, a military identification card, a driving licence with photo card or a passport. An ordinary code provision for AGCs requires that staff adopt a Challenge 21 policy to check the age of any customer who seems to be under 21. Licensees who have 16 or more premises (fee Category C or higher) have to conduct test purchasing or take part in a test purchasing programme to check the effectiveness of their policies and procedures for preventing under age gambling and the results of those tests must be provided to the Commission. An ordinary code provision requires licensees with fewer than 16 premises (fee Categories A  or B) to consider how their policies and procedures for preventing under age gambling can monitor or test their effectiveness, and licensees should be able to explain to the Commission or licensing authority the approach they have adopted. Permanent exclusion from the premises must be considered for any adult bringing in a child or young person more than once, or if they believe the offence was committed knowingly or recklessly. There should be procedures to deal with children or young people repeatedly trying to gamble on premises restricted to adults, including warnings, reporting them to the Commission and the police and making available information on problem gambling to them. There are similar but not identical social responsibility and ordinary code provisions for licensed FECs. Additionally, licensees should consider reminding customers of their parental responsibilities if it is likely that their young or vulnerable children will be left unattended on or next to the licensed premises, and also whether there should be procedures to deal with the risk to such children. 25.117 There are ordinary code provisions dealing with the employment of children or young persons.1 These provisions apply to AGCs and similar ones apply to licensed FECs. Licensees who employ children (ie  those under 16 years) and young persons (ie  those aged 16 and 17) (‘under-18s’) are reminded that it is an offence to employ them to provide facilities for gambling, or for them to be required or allowed to perform a function in connection with a gaming machine at any time if gaming machines are sited on the premises. The Commission considers that servicing or cleaning machines are functions in connection with a gaming machine. In addition, in AGCs, licensees must be aware that it is an offence to employ under-18s to carry out any other function while gambling is being carried on. So, both AGCs and licensed FECs should have policies and procedures in effect to ensure that under-18s are never asked to perform forbidden activities and that all staff, including those who are under 18 are instructed about the laws relating to access to gambling by under-18s. Licensees must also consider adopting a policy that under-18s are not employed to work on AGC premises at any time when they are open for business, or on FEC premises in an adult only area when gambling is taking place; and that gaming machines are turned off if under-18s are working on the premises when the premises are closed or, for FECs, that the gaming machines in adult only areas are turned off if under-18s are working on the premises outside opening hours. 1 LCCP 3.6.5 and 3.6.6.

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Gaming machines 25.118 Some of the provisions of the Code are social responsibility provisions, and by GA 2005, s 82 there is a condition on all operating licences that those provisions must be complied with. The Commission’s published Code of Practice includes both social responsibility and ordinary code provisions. 25.119 The Code requires that licensees comply with any relevant code of practice as to advertising and marketing and that they have proper written procedures in place for handling complaints and disputes by customers. Reasonable steps must be taken to see to it that all staff are aware of advice on socially responsible gambling and where to get confidential help if their gambling becomes hard to control.

Premises licences for AGCs and licensed FECs 25.120 It is an offence to make a gaming machine available for use on premises unless the use is authorised by a premises licence,1 or one of the exceptions in GA 2005, s 37 applies. Adult gaming centre premises licences and family entertainment centre premises licences are granted, in common with other premises licences, by the relevant licensing authority.2 1 GA 2005, s 37(1) and (2). 2 See Chapter 10 and see the Commission’s Revised Guidance to Licensing Authorities (5th edn) September 2015.

25.121 There are specific provisions in the GA 2005, s 172 dealing with AGCs and FECs. By s 172(1), an AGC premises licence authorises the licence holder to make a maximum number of Category B3 or B4 machines available for use equal to 20% of the total number of gaming machines which are available for use on the premises, together with an unlimited number of Category C or D machines. Premises in existence before 30 July 2011 are entitled to make either Categories B3/B4 machines equal to 20% of the total number of gaming machines available for use or four Category B3/B4, whichever is the greater, in both cases together with any number of Category C or D machines.1 A family entertainment centre premises licence (by s 172(2)) authorises the licensee to make any number of Category C or Category D machines available for use on the premises. However, in both premises, only Category D machines may be played by those who are under 18; AGCs are adult only premises and in licensed FECs, all the machines other than Category  D  machines must be in adult only areas. As with operating licences, no condition on the licence may contradict s 172 about the number or category of machines available, or contradict any regulations made under s 236, s 240, or s 241.2 1 See s 172(1)(a) as amended by the Gambling Act 2005 (Gaming Machines in Adult Gaming Centres and Bingo Premises) Order 2007 (SI  2011/1710). See also the Categories of Gaming Machine Regulations 2007 (SI 2007/2158), reg 6(3)(a). 2 GA 2005, s 172(10) and s 86.

25.122 Of the arcades, only AGCs are permitted to have Category B machines (Category  B3 and B4). Since the loss of LAA  1976, s  16 machines,1 and with licensed betting premises being permitted Category  B2 machines, Category B machines in AGCs are highly desired. An issue arose about the 1248

Gaming machines division of premises into either AGCs and licensed FECs or into different AGCs.2 The Commission consulted on this issue and its view can be found in Part 7 of the Guidance to Licensing Authorities, (5th edn, September 2015). The Commission makes the point that a single building can have more than one premises licence for different parts of the building, but those different parts must reasonably be able to be regarded as being different premises. This is likely to be the case for premises licences on different floors of a building. Whether areas can be regarded as separate premises is a question of fact depending on the circumstances. The Commission states that it does not consider that areas of a building that are artificially or temporarily separated, for example by ropes or moveable partitions, can properly be regarded as different premises. The different premises must not be artificially created but must be able to be recognised as separate premises meriting their own licences which will bring with it the different machine entitlements. However, in the view of this writer, there must be common sense in this, and if there are genuine partitions which are reasonably solid, there is no reason why those should not be sufficient. It does not have to be on a separate floor nor does it have to be a separate room to amount to ‘premises’. Lord Justice Scrutton stated in the Commissioner of Customs & Excise v Griffiths3 that ‘premises’ meant some definite place ascertained by metes and bounds in respect of which the licence is to be granted. The case concerned the alcohol licensing of a restaurant on the fourth floor of Harrods. Under the GA 2005, premises includes: ‘any place, including a vessel and a vehicle.’4 1 See 25.79–25.81 above. 2 See Chapters 10 and 14. 3 [1924] 1 KB 735 at 746. 4 GA 2005, s 353(1).

25.123 Multiple activity premises such as tracks or holiday parks are a prime example of one large set of premises which can appropriately have separate premises licences for separate areas. Such premises could include AGCs, FECs, bingo licensed premises and also one or more premises with alcohol on-licences, and a casino in appropriate circumstances. These premises may be all on the same level of a much larger building, or on different floors.1 1 See the Commission’s Guidance to Licensing Authorities (5th edn, September 2015), Part 7, paras 7.5–7.8 and Part 16, paras 16.13–16.15; and the Commission’s publication ‘Multi-activity sites. A quick guide for licensing officers.’

25.124 There are some mandatory conditions which must be attached to all AGCs and licensed FEC licences in addition to the mandatory conditions that attach to all premises licences, and certain default conditions which must be attached unless excluded by the Authority which issues the licence.1 These are set out in Chapter 10. The Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulation 20072 sets out certain specific mandatory conditions for AGCs and licensed FECs which are contained in Schs 3 and 4 respectively. So far as AGCs are concerned, conditions specific to AGCs require that there should be a notice displayed in a prominent place at the entrance to the AGC, stating that no one under 18 is permitted to enter the premises. No alcohol may be consumed on the premises while gambling is being provided there, and a notice stating this must also be displayed at every entrance to the premises in a prominent place. There may be no direct 1249

Gaming machines access between the AGC and any other premises with a premises licence or an unlicensed FEC, or premises with club gaming or club machine permits under GA  2005, Sch  12, or premises with on-alcohol licences which have gaming machine permits under Sch 13. Any ATMs on the premises must be so placed that any customer who wants to use them has to stop gambling in order to do so. 1 GA 2005, ss 167 and 168. 2 SI 2007/1409.

25.125 For licensed FECs there are the same requirements as to alcohol and to notices regarding no under-18s and no alcohol being consumed in the premises, as well as the same condition as for an AGC concerning ATMs. However, there are different provisions regarding access to other premises. The mandatory condition prohibits ‘direct’1 access from the FEC only to premises with casino, AGC or betting premises licences (other than a track premises licence). There are conditions ensuring that Category C machines are kept in adult only areas separated by a physical barrier and supervised to ensure that under-18s do not enter, and ensuring proper visibility/ supervision of all adult only areas. 1 See the Commission’s Guidance to Licensing Authorities (5th edn, September 2015), para 22.12.

UNLICENSED FAMILY ENTERTAINMENT CENTRES 25.126 This is the third type of amusement arcade authorised under GA  2005, but unlike AGCs or licensed FECs, it does not need someone to hold operating and premises licences to authorise its use. Hence it is known as an unlicensed family entertainment centre. A  ‘family entertainment centre’ is defined as ‘premises (other than an adult gaming centre) wholly or mainly used for making gaming machines available’;1 an ‘adult gaming centre’ is defined as ‘premises in respect of which an adult gaming centre premises licence has effect’.2 Instead, an unlicensed FEC has its own licensing regime, and only one compendious ‘permit’ needs to be obtained. This is a ‘family entertainment centre gaming machine permit’,3 granted by the local licensing authority where the premises are situated.4 The licensing regime is contained in GA 2005, Sch 10. Only Category D machines may be made available for use under this permit. An FEC gaming machine permit may not be issued for a vehicle or vessel.5 1 2 3 4 5

GA 2005, s 238. A licensed FEC means premises which have in effect a FEC licence. GA 2005, s 237. GA 2005, s 247. GA 2005, Sch 10, para 4. GA 2005, Sch 10, para 24.

25.127 GA  2005, s  247 provides an exception to the offences created by s  37 (making gaming machines available for use without a premises licence) and s  242 (making a gaming machine available for use without an operating licence) if a Category  D1 gaming machine is made available 1250

Gaming machines in accordance with a family entertainment centre gaming machine permit (‘FEC permit’).2 1 The definition of a Category D gaming machine is found in reg 3 of the Categories of Gaming Machine Regulations 2007 (SI 2007/2158), as amended by SI 2009/1502, reg 2 and see 25.68–25.70. 2 GA 2005, s 247(1).

Application 25.128 The application must be made by the occupier or proposed occupier of the premises for which the application for the permit is made, and who proposes to use the premises as an unlicensed family entertainment centre.1 If the applicant is an individual, he must be over 18.2 No application can be made if the premises in question already have a premises licence.3 1 GA  2005, Sch  10, para  2. The Commission deals with unlicensed FECs in its Guidance to Licensing Authorities (5th edn, September 2015), in para 24. 2 GA 2005, Sch 10, para 2(2). 3 GA 2005, Sch 10, para 3.

25.129 The application must be in the form directed by the local licensing authority and include the information and documents it requires. It must specify the premises for which the permit is being sought,1 and be accompanied by the prescribed fee.2 1 GA 2005, Sch 10, para 5(a), (b) and (c). 2 GA 2005, Sch 10, para 5(d).

Consideration of the application 25.130 One of the notable differences between unlicensed and licensed FECs is that, when considering the application, there is no requirement for licensing authorities to take into account or even consider the licensing objectives, although they may do so. However, they must have regard to any relevant guidance from the Commission.1 Specific mention is made that GA  2005, ss  154 and 155 (as to the delegation to licensing committees) do apply.2 Licensing authorities may prepare a statement of the principles that they will apply in considering applications, which may include how they will determine the suitability of the applicant.3 The licensing authority, as under the previous law, is therefore considering both the applicant and the premises in one application. 1 See the Commission’s Guidance to Licensing Authorities (5th edn, September 2015), Part 24, para 24.9 for matters a licensing authority may wish an applicant to satisfy the authority about. The Commission has consulted on a new edition. 2 GA 2005, Sch 10, para 6. 3 GA 2005, Sch 10, para 7.

25.131 The licensing authority has power only to grant or refuse the application, and may not attach any conditions to the permit.1 An unlimited number of Category  D  machines is permitted, but no other category of 1251

Gaming machines machine may be made available for use.2 The licensing authority must consult the police before granting the application,3 and may only grant it if they are satisfied that the applicant intends to use the premises as an unlicensed FEC. In line with the FEC definition,4 it must be wholly or mainly used for making gaming machines available for use, and not be, for example, a shopping centre or holiday park, although specified premises within those types of premises could obtain an unlicensed FEC permit. It should be noted that only the licensed premises as defined on the plan which accompanies the application may be used as an unlicensed FEC, and it is particularly important to ensure that this is clearly delineated in situations where small numbers of Category D machines are being made available in a discrete area on a larger site, such as a pier or leisure centre. 1 2 3 4

GA 2005, Sch 10, para 8(1) and (2). GA 2005, s 247. GA 2005, Sch 10, para 9. GA 2005, s 238 see 25.207 above.

25.132 All applications should be decided on the evidence There was considerable debate about child protection issues in Parliament and before the Joint Scrutiny Committee. Parliament concluded that Category D machines should be playable by children and young people, and that there was ‘no compelling evidence to make us think that children and access to Category  D  machines is truly a problem’ (the Minister, Richard Caborn, at the Bill’s third reading). Dr Lewis Mooney at the third reading stated that ‘It is easy for those with strong views to make assertions. When we seek to examine objective evidence we see that none is forthcoming.’ The Joint Scrutiny Committee (JSC) for the Gambling Act 2005 received evidence from GamCare, Gordon House, the RIGT, Mark Griffiths, Peter Collins and over 70 stakeholders and concluded that there was no evidence that Category  D  machines were cause for concern. However, as Category D machines are playable by children, it would be wise for procedures and policies to be in place for their protection from harm.1 1 See also the Commission’s Guidance to Licensing Authorities (5th edn, September 2015), Part 24, paras 24.8–24.9.

25.133 The licensing authority may not refuse an application unless it has notified the applicant of its intention to refuse the application and of its reasons,1 and has given the applicant an opportunity to make representations.2 The licensing authority can specify whether these are oral or written representations, or both.3 1 GA 2005, Sch 10, para 10(1)(a). 2 GA 2005, Sch 10, para 10(1)(b). 3 GA 2005, Sch 10, para 10(2)(a)–(c).

25.134 If the permit is granted, the licensing authority must issue it as soon as is reasonably practicable;1 if refused, the licensing authority must notify the applicant of the refusal and the reasons for it as soon as is reasonably practicable.2 1 GA 2005, Sch 10, para 8(3). 2 GA 2005, Sch 10, para 8(4).

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Form of permit 25.135 There is a prescribed form for the permit set out in Sch  1 to the Gambling Act 2005 (Family Entertainment Centre Gaming Machine) (Permits) Regulation 2007.1 If the person to whom a permit is issued changes his name or wishes to be known by another name, he may send the permit to the licensing authority with the prescribed fee, along with a request that a new name be substituted for the old name; the licensing authority must comply with the request.2 1 SI 2007/454; and see GA 2005, Sch 10, para 11(1). 2 GA 2005, Sch 10, para 11(2)(a) and (b).

Duration 25.136 An FEC permit lasts for ten years beginning with the date specified as the date upon which the permit takes effect, unless it ceases to have effect before that date,1 or is renewed. A permit will not take effect if the person to whom the permit was issued is not an occupier of the premises on the date on which the permit was specified as taking effect.2  A  permit can be renewed.3 1 GA 2005, Sch 10, para 12(a) and (b). 2 GA 2005, Sch 10, para 13(2). 3 GA 2005, Sch 10, para 18.

25.137 A  permit lapses if the holder ceases to occupy the premises in relation to which the permit was granted,1 or if the licensing authority notifies the holder of the permit that the premises are not being used as a family entertainment centre.2 1 GA 2005, Sch 10, para 13(1). 2 GA 2005, Sch 10, para 14.

25.138 A permit held by an individual also lapses if the holder dies, or he becomes incapable of carrying on the activities authorised by the permit because of mental or physical incapacity, or he becomes bankrupt (within the meaning of s 381 of the Insolvency Act 1986), or sequestration of his estate is awarded under s 12(1) of the Bankruptcy (Scotland) Act 1985.1 1 GA 2005, Sch 10, para 15(1).

25.139 If the permit is not held by an individual, the permit will lapse if the holder ceases to exist or goes into liquidation (within the meaning of s 247(2) of the Insolvency Act 1986).1 1 GA 2005, Sch 10, para 15(2).

25.140 For the six months after the lapse, certain people may rely on the permit as if it still had effect and were issued to them. These are the personal representatives of the holder (in the case of an individual holder who dies), the trustee of the bankrupt’s estate (in the case of an individual 1253

Gaming machines holder who becomes bankrupt), and the liquidator of the company (in the case of a company holder that goes into liquidation).1 This gives time for a new application to be made if a permit for the premises is still required, as there is no power to transfer it. 1 GA 2005, Sch 10, para 15(3).

25.141 A  permit may be surrendered and will cease to have effect if the holder gives the licensing authority notice of surrender and returns the permit,1 or, if it cannot be returned, explains why it cannot reasonably practicably be returned. 1 GA 2005, Sch 10, para 16.

25.142 Where the holder of a permit is convicted of a relevant offence (listed at Sch  7 of the GA  2005) the convicting court may order forfeiture of the permit.1 The court can specify the terms of the forfeiture (which may include terms as to suspension), as can an appeal court, including the High Court hearing an appeal against conviction or other order made on conviction.2 The effect of a forfeiture order is that the permit ceases to have effect (unless any express provision to the contrary is made when the forfeiture order is made).3 As soon as is reasonably practicable after making or suspending an order for forfeiture, a court must notify the licensing authority.4 1 2 3 4

GA 2005, Sch 10, para 17(1). GA 2005, Sch 10, para 17(2). GA 2005, Sch 10, para 17(3). GA 2005, Sch 10, para 17(5).

Renewal 25.143 The holder of a family entertainment centre gaming permit may apply for renewal of the permit,1 but the application may not be made earlier than six months ending with the date on which the permit would otherwise expire,2 or later than two months ending with that date.3 1 GA 2005, Sch 10, para 18(1). 2 GA 2005, Sch 10, para 18(2)(a). 3 GA 2005, Sch 10, para 18(2)(b).

25.144 The same provisions in GA  2005, Sch  10 for an application for a permit also refer (with any necessary modifications) to an application for renewal.1 There are specific grounds for a refusal of a renewal of a permit. The grounds are that an authorised local authority officer has been refused access to the premises without reasonable excuse, or that renewal would not be reasonably consistent with pursuit of the licensing objectives set out in s 1 of the GA 2005.2 Therefore, although on the initial application the licensing objectives need not be taken into account, they may be at the centre of a renewal application. 1 GA 2005, Sch 10, para 18(3). 2 GA 2005, Sch 10, para 18(4).

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Gaming machines 25.145 The renewed permit lasts ten years beginning with the date specified on which the permit takes effect, unless it ceases to have effect for any of the reasons in GA 2005, Sch 10, or it is renewed again.1 The same provisions as to lapse and forfeiture apply. A permit does not cease to have effect if the period during which the permit has effect comes to an end whilst an application for renewal of the permit, or an appeal against a decision on an application for renewal of the permit, is pending.2 1 GA 2005, Sch 10, para 18(5). 2 GA 2005, Sch 10, para 18(6).

Maintenance of the permit 25.146 The holder of an FEC permit must keep the permit on the premises to which it relates.1 An occupier of the premises commits an offence if, without reasonable excuse, he fails to produce the permit for inspection on request by a constable, an enforcement officer, or an authorised local authority officer.2 A person guilty of this offence is liable on summary conviction to a fine not exceeding level 2 on the standard scale.3 1 GA 2005, Sch 10, para 19. 2 GA 2005, Sch 10, para 20(1); and see ss 303 and 304. 3 GA 2005, Sch 10, para 20(2).

25.147 There are provisions for obtaining copies of permits lost, stolen, or damaged, on payment of a fee.1 1 GA  2005, Sch  10, para  21; and see Gambling Act 2005 (Family Entertainment Centre Gaming Machine) (Permits) Regulation 2007 (SI 2007/454), reg 6.

Appeal process 25.148 The applicant for, or holder of, an FEC permit may appeal if the licensing authority: (a) rejects an application for the issue or renewal of a permit; (b) notifies the holder of the permit that the premises are not being used as a family entertainment centre; or (c)

gives a notice to the permit holder that, in the opinion of the licensing authority, the permit holder has become incapable of carrying on the activities authorised by the permit by reason of mental or physical incapacity.1

1 GA 2005, Sch 10, para 22(1).

25.149 An appeal is to the magistrates’ court for the local justice area in which the premises to which the appeal relates are situated.1 The appeal process must be begun within 21 days beginning with the day on which the appellant or holder receives notice of the decision against which the appeal is brought,2 and notice of the appeal must be given to the designated officer.3 1 GA 2005, Sch 10, para 22(2)(a).

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Gaming machines 2 GA 2005, Sch 10, para 22(2)(c). 3 GA 2005, Sch 10, para 22(2)(b).

25.150 On an appeal, the magistrates’ court may:1 (a) dismiss the appeal; (b) substitute for the decision appealed against any decision that the licensing authority could have made (with effect from such date and on such transitional or other terms as the court may specify); (c)

restore a permit (with effect from such date and on such transitional or other terms as the court may specify);

(d) remit the case to the licensing authority to decide in accordance with a direction of the court; (e)

make an order about costs.2

1 GA 2005, Sch 10, para 22(3). 2 GA 2005, Sch 10, para 22(3)(e).

25.151 If the magistrates’ court decides to remit the case to the licensing authority to be decided in accordance with a direction of the court, the subsequent decision of the licensing authority can be appealed to the magistrates’ court in the way outlined above.1 1 GA 2005, Sch 10, para 22(4).

Register 25.152 Each licensing authority must maintain a register of permits, and make the register or a copy and information available for inspection by members of the public at all reasonable times on request,1 but may require a reasonable fee for producing a copy or providing information.2 1 GA 2005, Sch 10, para 23(1). 2 GA 2005, Sch 10, para 23(2).

25.153 As an unlicensed FEC permit does not qualify as a primary licence and has no operating licence from the Commission, a linked licence could not be obtained by the holder of the permit – see 25.89–25.94 above.

OFFENCES 25.154 This part should be read in conjunction with Chapter 4 on offences generally.

Offences under sections 37 and 242 25.155 The general offence of providing facilities for gambling without an operating licence or without being within one of the exceptions set out in 1256

Gaming machines GA 2005, s 33(1) does not apply to making a gaming machine available for use.1 This is because there is a specific offence of making a gaming machine available for use under s 242, unless it is made available under the auspices of an operating licence, or its use is within one of the exceptions set out in s 242(1)(b). 1 GA 2005, s 35.

25.156 However, the general offence of using premises without a premises licence contrary to GA 2005, s 37(1) does apply to making a gaming machine available for use on premises without the necessary premises licence unless it is within one the exceptions set out in s 37(7). 25.157 The phrase ‘available for use’ is not defined, but it means available for use to players to play. This has been accepted by the Commission in its ‘Advice regarding when a machine is “available for use”’ issued in November 2012.1 1 See 25.70 above.

Exceptions 25.158 Exceptions to both GA 2005, s 37 and s 242 are contained in various sections. These are s  247 (family entertainment centre gaming machine permits);1 s  248 (no prizes available); s  249 (the only prize is no greater in value than any payment for the use of the machine); s  271 (club gaming permit);2 s 273 (club machine permit);3 s 282 (automatic entitlement to gaming machines in on-licensed premises);4 s  283 (licensed premises gaming machine permits);5 s 287 (fairs).6 1 See 25.207. See also s 250. 2 See Chapter 12. 3 See ibid. 4 See 25.125–25.132 and Chapter 12. 5 See Chapter 12. 6  Ibid.

25.159 Under GA 2005, s 248 no offence is committed under s 37 or s 242 by making a gaming machine available for use by someone if that person does not acquire an opportunity to win a prize when he uses the machine. The expression ‘prize’ in relation to a gaming machine is defined by s 239 so that it: ‘(a) includes any money, article, right or service won, whether or not described as a prize, but (b) does not include an opportunity to play the machine again.’ The definition is inclusive not exhaustive, and so there is the potential for it to include prizes, such as an opportunity to appear in a talent show. 25.160 It is important to note the limitations on this ‘get-out’ provision. The provision applies to a ‘gaming machine’ as defined in GA 2005, s 235. 1257

Gaming machines A gaming machine is a machine which is ‘designed or adapted for use by individuals to gamble’ (s  235(1)), unless it falls within various exemptions set out in s 235. Accordingly, a machine will only be a ‘gaming machine’ if it is used for ‘gambling’ (ie ‘gaming’ (s 6)), ‘betting’ (s 9, s 11), ‘pool betting’ (s 12), or participating in a lottery (s 14). Each of these activities will involve a participant competing for a ‘prize’ within the sense defined by s  239. ‘Gaming’ within s  6 involves the playing of a game of chance for a prize. ‘Betting’ within s  9 will usually involve a competition for ‘winnings’, but such winnings will clearly amount to a ‘prize’ within the meaning of s 239. In the case of betting prize competitions within s  11, specific reference is made to the winning of prizes. In the case of s  12, reference is made to ‘winnings’ in pool betting, but these again will fall clearly within the s 239 definition and amount to prizes. Finally, the definition of ‘lottery’ in s  14 refers to the winning of prizes. If a machine is not designed or adapted to be used in a way which can result in the winning of prizes in the defined sense, then it will not be a gaming machine (since it cannot be used by individuals for betting, gaming or a lottery), so that it will fall outside the regulatory provisions of the Act. For that reason, inter alia, s 37, s 242 and s 243 (offence of making a gaming machine available for use without an operating licence) will not apply to it. 25.161 The s  248 ‘get-out’ is designed to deal with a situation where a machine which is a gaming machine (because it is designed or adapted for gambling and is capable therefore of awarding prizes in the defined sense) is made available for use in circumstances where no opportunity to win a prize is in fact offered. In those circumstances, the effect of s 248 is that no offence is committed under s 37 or s 242. Note, however, that, as the machine remains a gaming machine, the provisions of s 243 (requiring a person manufacturing, supplying, installing etc such a machine to hold an operating licence) remain in full effect, as is perfectly appropriate given that the machine remains a gaming machine, albeit one that falls within the ‘get-out’ of s 248. 25.162 It should be noted that, at least as concerns machines upon which ‘gaming’ within GA 2005, s 6 takes place, an activity may amount to ‘gaming’ (so that the machine will be a gaming machine) even though the player makes no payment to use the machine,1 always provided that there is a prize. The effect of s 239(b) is that a machine which gives as an award a ‘free go’ will not, by virtue of that fact alone, be awarding a ‘prize’, and will therefore not be a gaming machine. 1 GA 2005, s 6(4)(b). A person can be gaming ie playing a game of chance for a prize, even though he is not at risk of losing anything in the game.

25.163 Furthermore, no offence is committed under GA 2005, s 37 or s 242 if the person using the machine does not acquire an opportunity to win a prize worth more than the amount he has paid to use the machine.1 ‘Paying’ ‘includes’ (and therefore is not limited to) paying an entrance charge, putting a coin in a machine which may or may not be returned, transferring money’s worth, and paying for goods or services at a price or rate reflecting the opportunity to use the machine. It does not matter who benefits from the payment, or to whom it is made.2 In the case of this ‘get-out’, it should again be noted that the machine remains a ‘gaming machine’; indeed, s 249(1)(a) refers 1258

Gaming machines to a ‘gaming machine’ (since the award of an opportunity to win a prize of a value which does not exceed the amount paid for use of the machine clearly amounts to a ‘prize’ within s 239) with the result that s 243 (requirement for an operating licence to manufacture, supply, install etc the machine) remains fully effective. 1 GA 2005, s 249(1). 2 GA 2005, s 249(2).

Fairs 25.164 No offence is committed under GA  2005, s  37 or s  242 if Category D gaming machines are made available for use at travelling fairs, provided all the facilities for gambling (which means all gambling and is not limited only to machine gambling) are no more than an ancillary amusement at the fair.1  A  ‘fair’ is not itself defined, except that it must consist wholly or principally of the provision of amusements.2 A fair is a travelling fair if those providing it wholly or principally travel from place to place for the purpose of providing fairs and do so at a place which has not been used for more than 27 days for that purpose in any calendar year.3 Therefore, Category D machines may be supplied at travelling fairs without the need for any operating or premises licence or other permit. Category D machines are the only machines playable by those who are under 18.4 1 2 3 4

GA 2005, s 287. GA 2005, s 286(a). GA 2005, s 286(b). GA 2005, s 46(2)(e) and s 48(2)(e).

Section 240 regulations 25.165 There are detailed regulations, namely the Gaming Machine (Circumstances of Use) Regulations 2007 (SI  2007/2319, amended by SI  2015/121), made under GA  2005, s  240 controlling the circumstances in which gaming machines may be made available for use. These are highly technical provisions and this chapter does not propose to deal with them. It is an offence to make a gaming machine available for use in contravention of those regulations.1 1 GA 2005, s 242(2).

Manufacture, supply etc 25.166 Any person manufacturing, supplying, installing, adapting, maintaining or repairing a gaming machine (or part of one) must have, or act in accordance with, an operating licence.1 To do so without one means he will commit an offence, unless the user has a permit under GA 2005, s 250.2 He further commits an offence if he supplies, installs, adapts, maintains or repairs a gaming machine (or part of one) and does not comply with the regulations under s 241.3 However, no offences are committed under s 243(1) or (2) if the supply of a gaming machine or part of one was for scrap, provided 1259

Gaming machines there is no element of salvage or if the supply is incidental to the sale or letting of property where the machine was previously used, provided it was used lawfully under the Act.4 1 GA 2005, s 243. The Secretary of State has power to make regulations excepting machines not designed or expected to be used to provide an opportunity to win a prize: s 248(2), and see 25.89 on machine operating licences and 25.98–25.104 on single-machine supply and maintenance permits and 25.168–25.182 on definitions. 2 See also s 250 permits see 25.98–25.104. 3 GA 2005, s 243(2). 4 GA 2005, s 243(3).

25.167 Anyone supplying, repairing, installing and maintaining a gaming machine or part of one under the auspices of a s 250 permit does not commit an offence under s 33 or s 243(1).1 1 GA 2005, s 250(1); and see 25.98–25.104.

Definitions Supply 25.168 ‘Supply’ is defined in GA 2005, s 353, and includes the: (1)  sale; (2) lease; and (3) placing on premises with permission or in accordance with a contract or other arrangement. 25.169 Both the supply of gaming machines and parts of gaming machines are regulated under GA  2005. However, s  235(3)(c)(ii) makes clear that the licensing regime does not include supplying parts of gaming machines which do not influence the outcome of a game. Hence, as the Explanatory Notes1 to the Act suggest, the supplier of the plywood from which the machine is constructed would not be included. The Commission considers such things as fuses, light bulbs, and artwork are also not included.2 1 Paragraph 583. 2 See the Commission’s Gaming Machine FAQs.

Manufacture 25.170 ‘Manufacture’ is not specifically defined in the Act. It does, however, have a plain English and common legal meaning. The Shorter Oxford English Dictionary,1 defines manufacture as both ‘to make and fabricate from material; produce by physical labour or machinery … specifically on a large scale’ and ‘to bring (material) into a form suitable for use’.2 In Prestcold (Central) Ltd v Minister of Labour,3 Lord Denning MR noted: ‘it seems to me that when a person makes a machine, by getting component parts from elsewhere and assembling them together himself, he can properly be said to be “manufacturing” that machine. Take 1260

Gaming machines some of the large works where motor cars and aircraft are assembled. These establishments are engaged in manufacturing the machines even though all the components come from other places.’ 1 5th edn, 2002. 2 Shorter OED (6th edn, 2007). 3 [1969] 1 All ER 69 at 71–2.

25.171 GA  2005 refers to the licensing of the manufacture of gaming machines, or a part of a gaming machine. Logically, this therefore refers to manufacturers who assemble gaming machines by simply putting together externally manufactured components (see Lord Denning MR above) and the manufacturers of the components themselves for gaming machines. However, s 235(3)(c)(ii) states that the licensing regime does not include the manufacturers of components for gaming machines which do not influence the outcome of a game. Hence, manufacturers of components or elements which are not linked to determining the outcome (ie whether a prize is paid) are excluded from the Act.

Install 25.172 Again, ‘install’ is not specifically defined in GA  2005. The Shorter OED defines install as meaning ‘to place (an apparatus, system) in position for service or use’.1 Hence, a person who wishes to place a gaming machine in position for its use is subject to the regulatory regime prescribed by the Act. This does not mean a premises operator moving a machine already within his premises. 1 6th edn (2007). See also 25.94 ff above.

25.173 ‘Install’ also applies to installing a part of a gaming machine. Hence, if an individual component is installed in a gaming machine which is already in position for service or use, then logically that would also require a licence. In any event, such an installation is likely to be caught by the need for persons who wish to adapt or repair a gaming machine to be licensed. GA  2005, s  235(3)(d) states that a reference to installing a part of a gaming machine includes a reference to installing computer software for the purpose of altering the operation of a gaming machine. According to the Commission, any of the following matters which impact upon the game outcome do require a licence: installing components as part of a repair or maintenance schedule, installing a retrofit component, and installing any external components including those in relation to server-based systems. Installing software codes, security patches or game upgrades or new games would also require licences. Any technician required to carry out an installation task must also have the appropriate licences. 25.174 However, s  235(3)(c)(ii) makes clear that the licensing regime does not include installing parts of gaming machines which do not influence the outcome of a game therefore plugging in a network cable, or a gaming machine into an electricity socket would not require a licence. 1261

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Adapt 25.175 ‘Adapt’ is not specifically defined in the Act. The Shorter OED suggests three definitions, to: (1) ‘fit, adjust, make suitable for’, (2) ‘alter or modify to fit for a new use, new conditions etc’, (3) ‘undergo modification to fit a new use, new conditions, etc’.1 1 6th edn (2007). See also 25.94 ff above.

25.176 It would appear that a wide range of activities would be caught by the definition of adapting a gaming machine, including adapting parts of gaming machines. However, GA  2005, s  235(3)(c)(ii) makes clear that the licensing regime does not apply to adapting parts of gaming machines which do not influence the outcome. 25.177 In addition to the above, a reference to a machine being designed or adapted for gambling includes: (i) a reference to a computer being adapted for that purpose unless it comes within one of the exceptions in s  235(1); and (ii) a reference to any other machine, to which anything has been done, as a result of which a person could reasonably expect it to be used as a gaming machine.1  A  reference to adapting a machine includes a reference to adapting a machine so that it becomes a gaming machine.2 In the view of the writer, there needs to be a pre-existing machine to be adapted, so that a new machine specifically designed for a purpose other than that of a gaming machine would not be adapted for that purpose unless something additional were done to it. 1 GA 2005, s 235(3)(b). 2 GA 2005, s 235(3)(e).

25.178 A part of a gaming machine includes computer software designed or adapted for use in the gaming machine,1 but it does not include a component which does not influence the outcome of the game. The Commission considers that a licence is required for: (i) making changes that alter the category of machine (unless this involves only a simple switch or dongle change or change in artwork); (ii) making modifications to machine security devices (other than external security devices such as locks or security snakes); (iii) modifying components as part of a repair or maintenance schedule, which has an impact upon game outcome; (iv) swapping out components that may affect the outcome of the game; (v) stake or prize changes; (vi) changing percentage, stake and/or prize settings where software modification is required.2 1 GA 2005, s 235(3)(c)(i). 2 See Gambling Commission, Gaming Machine FAQs.

Repair 25.179 GA 2005 does not specifically define the meaning of the ‘repair’ of a gaming machine. It does however have a clearly understood English meaning, 1262

Gaming machines defined in the Shorter OED as ‘the action or process of restoring something to unimpaired condition by replacing or fixing worn or damaged parts’.1 1 6th edn (2007). See also 25.94 ff above.

Maintaining 25.180 ‘Maintaining’ a gaming machine is also not defined specifically. ‘To maintain’ has a commonly understood English meaning, eg to ‘take action to preserve (a machine etc) in working order’, ‘to keep in repair’ and ‘keep in good order’.1 1 Shorter OED (6th edn, 2007). See also 25.94 ff above.

25.181 The difference between repair of and maintaining gaming machines is small. ‘Repair’ refers to a gaming machine that has become ‘impaired’ due to a worn or damaged part, or a fault, and requires to be mended. ‘Maintain’ must refer to the upkeep of a machine to ensure that it is in working order (and so does not require repair). Presumably both activities will be done by the same person, often at the same time. By mentioning both, the GA 2005 ensures that all persons who ‘service’ gaming machines are required to be licensed. Those who maintain or repair parts of gaming machines are included, although s  235(3)(c)(ii) applies, making clear that the licensing regime does not include those parts of gaming machines which do not influence the outcome of a game. 25.182 The Commission suggests activities which cannot affect the outcome of the game and therefore would not come under the heading of maintenance and repair activity include: (i) changing the front display of the gaming machine (including glass or paper artwork but not software modifications for video display); (ii) changing display notices on the gaming machine; (iii) cleaning the gaming machine; (iv) clearing coin jams and emptying hoppers; (v) changing fuses/light bulbs; (vi) moving the gaming machine to a new location within the licensed premises; (vii) changing percentage, stake and/ or prize settings provided this does not require any software modification.1 1 See Commission, Gaming Machines FAQs.

Linked machines 25.183 No linking of gaming machines is permitted if the prize available in one machine is determined to any extent by the use made of the second (and linked) machine. Therefore, one person playing a machine cannot also win prizes on other machines, and thereby circumvent the provisions on prizes for the different categories of machines.1 1 GA 2005, s 244(1).

25.184 This offence does not apply to gaming machines available for use on the same casino premises,1 but no linking between machines in different casinos is permitted. The Secretary of State may disapply linking of machines in casinos, whether or not the machines are on the same premises.2 1 GA 2005, s 244(1). 2 GA 2005, s 244(3).

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Credit 25.185 It was originally an offence to supply, install or make available for use gaming machines designed or adapted to accept payment by credit card under GA 2005, s 245. That provision has now been repealed.1 It is replaced by regulations under s 241, breach of which is an offence under s 243(2). These provide that no machine may be supplied or installed which is designed or adapted to permit money to be paid by means of credit or debit card.2 It is a condition of all general operating licences for AGCs and licensed FECs that licensees must neither provide credit themselves in connection with gambling nor knowingly facilitate credit being given in connection with gambling.3 However smartcards may be used. 1 Gambling Act 2005 (Repeal) (Remote Operating Licence and Credit) Regulations 2007 (SI 2007/2321), para 2(c). 2 Gaming Machine (Supply &c) Regulations 2007 (SI  2007/2320), para  2; and GA  2005, s  243(2). See also the Gaming Machine (Circumstances of Use) Regulations 2007, as amended, reg 4. But see s  243(3) for a defence where the machine is supplied for scrap, or incidental to the sale or letting of property. 3 See the Licence Conditions and Codes of Practice, condition 6.1. The Commission published the latest version of the LCCP in July 2016, which came into force on 31 October 2016. See GA 2005, s 81 permitting conditions to be attached to operating licences about the giving of credit in connection with licensed activities.

Penalties 25.186 The penalty for all of these offences is a maximum prison term of 51 weeks, a fine not exceeding level 5 on the standard scale, or both.1 1 GA 2005, s 246(1). There are different provisions for Scotland: s 246(2).

Children and young persons 25.187 There are a range of offences concerned with gambling and children and young persons, which are dealt with in Chapter 5. Briefly, those under 18 are not permitted to gamble (except for participating in lotteries and playing Category D machines). There are specific offences of inviting or permitting a child or young person to gamble within or to enter licensed AGCs,1 or an area of a licensed FEC where he has access to Category C machines which are available or being used.2 The young person also commits an offence of entering an AGC or licensed FEC in those circumstances.3 1 GA 2005, ss 46(1) and 47(5). 2 GA 2005, s 47(7). 3 GA 2005, s 49.

25.188 It is an offence for a child or young person to gamble but not to play a Category D machine.1 1 GA 2005, s 48(1) and (2)(e).

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Gaming machines 25.189 It is an offence under GA 2005, s 54 to employ a child or young person to perform any function on premises where gaming machines are situated, if the child or young person is or may be required in the course of his employment to perform a function in connection with the gaming machine. A  young person also commits an offence under s  54 if he is employed in those circumstances. 25.190 An offence is committed under GA 2005, s 55 if a person employs a child or young person to perform any function on premises operating in respect of a casino premises licence, a betting premises licence or an adult gaming centre premises licence. This does not apply to employment when no gambling is taking place on the premises; nor does it apply to employment in a regional casino where the area where the young person works is not used for gambling.1 A young person also commits an offence if he is employed in contravention of s 55.2 1 GA 2005, s 55(2). 2 GA 2005, s 55(4).

25.191 There is an exception to the general offence of failing to comply with a ‘return of stake’ condition attached to an operating licence by virtue of GA 2005, s 83.1 The condition cannot apply to a Category D machine.2 1 Which automatically incorporates a condition in operating licences that a licensee must, if he becomes aware that a child or young person is gambling, return any money paid in respect of those facilities. 2 GA 2005, s 83(2).

25.192 The Secretary of State has the power to create, by order, an offence of inviting, causing or permitting a child or young person below a specific age to use a Category D machine.1 1 GA 2005, s 59(1).

25.193 The penalty, on summary conviction, of an offence under GA 2005, Pt 4 (which covers the offences concerning children) is a maximum term of imprisonment of 51 weeks (in Scotland, this is six months), or a fine of up to level 5, or both.1 When the offence has been committed by a young person, the highest penalty that can be imposed is a level 3 fine.2 1 GA 2005, s 62(1) and (3). 2 GA 2005, s 62(2).

25.194 Other than the various exceptions carved out in the individual sections in GA 2005, Pt 4, there is a broad defence in s 63 of ‘reasonable belief about a person’s age’. It is a defence for any person charged with an offence under Pt 4 that (a) he took all reasonable steps to determine the individual’s age, and (b) that he reasonably believed that the individual was not a child or young person.1 1 See Chapter 5.

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Chapter 26 Enforcement of the regulatory system of the Gambling Act 2005

INTRODUCTION 26.1 Ensuring compliance with the regulatory system of the GA  2005 obviously includes matters such as refusal to grant the necessary authorisation(s) for lawful gambling to take place and the institution of criminal proceedings. Those are, however, dealt with elsewhere in this title. Here attention is drawn to Part 15 of the Act (ss  303–326) which contains a detailed code governing the powers and duties of the Gambling Commission’s enforcement officers, of local authority officers (including, in a limited number of cases, some officers of authorities that are not licensing authorities) and of the police in connection with the inspection and entry of premises to ensure compliance with the Act. These provisions are buttressed by policy statements and statutory guidance issued by the Commission which are identified in 26.8 below and by statements of principles to be produced by licensing authorities as to the exercise of their functions under Part 15 (and their power to prosecute under s 346). A detailed treatment of this non-statutory material is beyond the scope of this book but it should be consulted in cases where issues arise in connection with the exercise by the Commission or licensing authorities or the police of their enforcement powers. In Part 15 of the GA 2005 reference is repeatedly made to three statutory creations: ‘enforcement officers’ (employees and other persons appointed by the Commission); ‘authorised persons’ (ie  officers of certain statutory authorities); and, ‘authorised local authority officers’ (ie officers of licensing authorities who have been designated by their authority as authorised persons). These three categories are described at 26.4–26.6 below. These statutory provisions of Part 15 also govern the rights and duties of police constables in relation to entering premises for compliance and enforcement purposes under the GA 2005. The definition of ‘premises’ in the GA 2005 is extensive. It includes any place and, in particular, a vessel and a vehicle.1 With the exceptions of seaplanes and amphibious vehicles, ‘vessel’ includes: anything designed or adapted for navigation or other use in, on or over water; a hovercraft; and, also anything, 1267

Enforcement of the regulatory system of the Gambling Act 2005 or any part of any place, situated on or over water.2 Seaplanes and amphibious vehicles (other than hovercraft) fall within the Act’s definition of ‘vehicle’, as do trains and aircraft.3 Under the heading ‘inspection’, Part 15 of the GA 2005 gives three categories of people – constables, ‘enforcement officers’4 and ‘authorised persons’5 (the latter category including an important subcategory, ‘authorised local authority officers’)6 – the power to enter certain premises and, in addition, various powers which may be exercised following entry onto premises. 1 GA 2005, s 353(1). 2 GA  2005, s  353(1). ‘Hovercraft’ means a hovercraft within the meaning of the Hovercraft Act 1968. 3 GA 2005, s 353(1). 4 See GA 2005, s 303 and 26.4 below. 5 See GA 2005, s 304 and 26.5 below. 6 See GA 2005, s 304(1)(b) and (2) and 26.6 below.

Powers of entry 26.2 It will be seen that in some circumstances the power to enter premises does not require the authority of a warrant, but in other circumstances a constable, an enforcement officer or authorised person is required to make an application to a justice of the peace for the issue of a warrant. It is important to note, however, that where a power of entry is given under GA 2005, Pt 15, it is not in every case given to all three of these categories of people and, moreover, the extent of the power is different for each category. Where a constable is given the power under or by virtue of any section of Part 15 to enter premises, a constable may use reasonable force to enter premises in pursuance of the power.1 In the cases of enforcement officers and authorised persons, the use of force to enter premises – again subject to the requirement that it is reasonable force – is rather more restricted. An enforcement officer may use reasonable force for the purpose of entering premises: in pursuance of a power under or by virtue of s 306 (on reasonable suspicion that an offence under the Act may be being committed or may be about to be committed on the premises); and in pursuance of a power under or by virtue of s 307 (on reasonable suspicion that facilities for gambling – other than facilities for private or non-commercial betting and gaming – may be being provided, may be about to be provided or have been provided on the premises).2 An authorised person may use reasonable force only for the purpose of entering premises in pursuance of a power under or by virtue of s 307.3 1 GA 2005, s 323(1). 2 GA 2005, s 323(2); see 26.22 below for commentary on the provisions of s 306 and 26.25 below for commentary on the provisions of s 307. 3 GA 2005, s 323(3).

Powers following entry 26.3 Although, as discussed below, there are some important safeguards designed to prevent abuse of the powers given under GA  2005, Pt  15, the heading ‘inspection’ belies the extent of the activity which may be carried out when a power under that Part is exercised. A  constable, enforcement 1268

Enforcement of the regulatory system of the Gambling Act 2005 officer or authorised person exercising a power under Part  15 to enter premises may: (1) inspect any part of the premises and any machine or other thing on the premises;1 (2) question any person on the premises;2 (3) require access to any written or electronic record which is kept on the premises;3 (4) require to be supplied with a copy, in such forms as he directs, of an entry in a written or electronic record which is kept on the premises;4 (5) remove and retain anything if he reasonably believes that it constitutes or contains evidence of either the commission of an offence under the GA 2005 or the breach of a term or condition of a licence issued under the 2005 Act;5 (6) remove and retain anything if he reasonably believes that it is being used or has been used in the commission of an offence under the GA 2005.6 1 GA  2005, s  317(1)(a). A  reference to ‘machine’ in the GA  2005 is a reference to any apparatus which uses or applies mechanical power, electrical power or both: s 235(3)(a); see Chapter 25. 2 GA 2005, s 317(1)(b). 3 GA 2005, s 317(1)(c). 4 GA 2005, s 317(1)(d). 5 GA 2005, s 317(1)(e). The licences issued under the GA 2005 are: operating licences (see Part 5 (ss 65–126) and Chapter 6); personal licences (see Part 6 (ss 127–139) and Chapter 7); and premises licences (see Part 8 (ss 150–213) and Chapter 10. 6 GA 2005, s 317(1)(f). Offences are to be found within many Parts of the GA 2005, but Part  3 (ss  33–44) and Part  4 (ss  45–64) in particular deal exclusively with offences; the former contains ‘general offences’ (for which see Chapter  4) and the latter contains offences relating to children and young persons (for which see Chapter  5). Further, Part  11 of the Act (ss  252–265), which deals with lotteries, contains a number of offences relating to lotteries: see ss 258–263 and Chapter 15.

ENFORCEMENT OFFICERS, AUTHORISED PERSONS ETC Enforcement officers 26.4 The Gambling Commission may institute criminal proceedings in respect of any offence under the GA  2005.1 Employees of the Gambling Commission may be designated (by the Commission) as enforcement officers for the purposes of the GA 2005.2 In addition, the Commission is given the power to appoint persons other than its employees as enforcement officers.3 1 GA 2005, s 28. See GA 2005, Pt 2 (ss 20–32) and Chapter 3 for ‘Gambling Commission’. 2 GA 2005, s 303(1)(a). 3 GA  2005, s  303(1)(b). Where an enforcement officer is not an employee of the Gambling Commission, the Commission may pay to or in respect of the enforcement officer sums by way of or in respect of remuneration, allowances, expenses, pension and gratuity: s 303(2).

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Enforcement of the regulatory system of the Gambling Act 2005

Authorised persons 26.5 Aside from authorised local authority officers – which are considered separately below – ‘authorised persons’ are defined under s  304 of the GA 2005 as follows: (1) an officer of an authority other than a licensing authority is an authorised person for a purpose relating to premises if the authority has statutory functions, for an area in which the premises are wholly or partly situated, in relation to minimising or preventing the risk of pollution of the environment or of harm to human health, and the officer is authorised by the authority for the purpose of exercising any of those statutory functions;1 (2) an inspector appointed under s 18 of the Fire Precautions Act 1971;2 (3)

an inspector appointed under s 19 of the Health and Safety at Work Act 1974;3

(4)

an inspector or surveyor of ships appointed under s 256 of the Merchant Shipping Act 1995;4 and

(5) a person who is within a class prescribed by the Secretary of State by regulations.5 1 GA  2005, s  304(1) and (3). For the meaning of ‘licensing authority’, see s  2 and Chapter 9. See s 353(1) and 26.1 for the meaning of ‘premises’. 2 GA 2005, s 304(1) and (4)(a). 3 GA 2005, s 304(1) and (4)(b). 4 GA 2005, s 304(1) and (4)(c). 5 GA 2005, s 304(1) and (4)(d).

Authorised local authority officers 26.6 The definition of ‘authorised persons’ in s  304 of the GA  2005 includes ‘authorised local authority officers’. Authorised local authority officers are, in effect, a sub-category of authorised person. Authorised local authority officers are, however, a particularly significant sub-category in that they are officers of licensing authorities.1 Licensing authorities have a number of important roles under the Act: they are the issuers of premises licences, one of the Act’s main types of licence, as well as the issuers of a variety of permits created under the Act.2 Further, and although their power to institute criminal proceedings is not as wide as the power given to the Gambling Commission (which may institute criminal proceedings in respect of any offence under the GA 2005),3 licensing authorities are given the power to institute criminal proceedings in respect of a number of offences listed under s  346 of the Act.4 Section 304 provides that an officer of a licensing authority is an authorised person – and, specifically, is an authorised local authority officer – for a purpose relating to premises if the premises are wholly or partly situated in the authority’s area, and the officer is designated by the authority as an authorised person.5 1 GA 2005, s 304(2). 2 For ‘licensing authorities’, see GA 2005, s 2 and Chapter 9. For ‘premises licences’, see GA 2005, Pt 8 (ss 150–213) and Chapter 10.

1270

Enforcement of the regulatory system of the Gambling Act 2005 3 GA 2005, s 28; see Chapter 3. 4 GA 2005, s 346(1). However, s 346 is without prejudice to the Local Government Act 1972, s  222 (the power of local authorities to prosecute or defend legal proceedings): GA 2005, s 346(2). 5 GA 2005, s 304(1) and (2). See s 353(1) and 26.1 for the meaning of ‘premises’.

General 26.7 Where a constable, enforcement officer1 or authorised person2 exercises a power under or by virtue of GA 2005, Pt 15, he may take one or more persons with him.3 1 For ‘enforcement officer’, see GA 2005, s 303 and 27.4 above. 2 For ‘authorised person’, see GA 2005, s 304 and 27.5–27.6 above. 3 GA 2005, s 324.

COMPLIANCE AND ENFORCEMENT POLICY GUIDANCE 26.8 The Gambling Commission periodically produces guidance as to its policy with regard to compliance, enforcement and related matters, the most recent publications – both published in September 2009 – are entitled ‘Licensing, compliance and enforcement policy statement’, ‘Statement of principles for determining financial penalties’. Additional guidance from the Commission – together with Local Authorities Coordinators of Regulatory Services (LACORS) and the Association of Chief Police Officers (ACPO) – is the ‘Gambling Act 2005 – Joint Compliance and Enforcement Statement’. Further, and as required under the GA 2005, s 25, the Commission also gives guidance to licensing authorities as to the discharge of their functions, this guidance currently to be found in ‘Guidance to Licensing Authorities’ (4th edn) (the 4th edition was first published in September 2012 but was updated in January and February 2013). 26.9 The Gambling Act 2005 specifically requires each licensing authority, before each successive period of three years (beginning on 31 January 2007),1 to prepare and publish a statement of the principles that they propose to applying in exercising their functions under the Act during that period.2 Regulations specify a number of matters which must be set out in separate sections within the statement, including a section setting out: ‘the principles to be applied by the authority in exercising the functions under Part 15 of the Act with respect to the inspection of premises; and the powers under section 346 of the Act to institute criminal proceedings specified in that section’.3 1 See Gambling Act 2005 (Licensing Authority Policy Statement) (First Appointed Day) Order 2006 (SI 2006/637), para 2. 2 GA  2005, s  349(1). The provisions of s  349 also require licensing authorities to review their statements from time to time and, if thought necessary, revise the statement and publish the revisions: see Chapter 9. 3 Gambling Act 2005 (Licensing Authority Policy Statement) (England and Wales) Regulations 2006 (SI 2006/636), reg 5(d).

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Enforcement of the regulatory system of the Gambling Act 2005

SAFEGUARDS 26.10 Where a constable, enforcement officer1 or authorised person2 exercises or seeks to exercise a power under or by virtue of Part 15 of the GA 2005, there are a number of safeguards within that Part which are clearly intended to prevent the powers being abused. For example, and as has been seen, where a constable or enforcement officer or authorised person may use force to enter premises, the force used must be ‘reasonable’.3 Other safeguards are set out below. 1 For ‘enforcement officer’, see GA 2005, s 303 and 26.4 above. 2 For ‘authorised person’, see GA 2005, s 304 and 26.5–26.6 above. 3 See GA 2005, s 323.

Dwellings 26.11 A power to enter premises without a warrant under Part 15 of the GA  2005 does not apply in relation to a dwelling.1 However, a constable, enforcement officer,2 or authorised person3 may apply to a justice of the peace for the issue of a warrant authorising a constable, enforcement officer or authorised person to enter premises if the justice of the peace is satisfied: (1) that, but for the disapplication of a power to enter premises without a warrant to a dwelling, a constable, enforcement officer or authorised person would be able to enter the premises without a warrant in reliance on a provision of Part 15 of the Act;4 and (2) that at least one of the following conditions is satisfied: (a) that admission to the premises has been refused5 (in which case the justice of the peace must also be satisfied that either notice has been given to a person occupying the premises, or having responsibility for their management, of the intention to apply for a warrant, or that the purpose of entry may be frustrated or seriously prejudiced by the giving of such notice);6 (b) that admission to the premises is likely to be refused unless a warrant is produced7 (in which case the justice of the peace must also be satisfied that either notice has been given to a person occupying the premises, or having responsibility for their management, of the intention to apply for a warrant, or that the purpose of entry may be frustrated or seriously prejudiced by the giving of such notice);8 (c)

that the purpose of entry may be frustrated or seriously prejudiced unless a constable, enforcement officer or authorised person arriving at the premises can secure immediate entry;9 and

(d) that there is likely to be nobody at the premises capable of granting admission.10   1 GA 2005, s 318(1). See s 353(1) and 26.1 above for the meaning of ‘premises’.   2 See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’.   3 See GA 2005, s 304 and 26.5–26.6 above for the meaning of ‘authorised person’.   4 GA 2005, s 318(2)(a).

1272

Enforcement of the regulatory system of the Gambling Act 2005   5 GA 2005, s 318(2)(b) and (3)(a).   6 GA 2005, s 318(4).   7 GA 2005, s 318(2)(b) and (3)(b).   8 GA 2005, s 318(4).   9 GA 2005, s 318(2)(b) and (3)(c). 10 GA 2005, s 318(2)(b) and (3)(d).

26.12 A  warrant issued by a justice of the peace under the provisions described above ceases to have effect at the end of 28 days beginning with the day of issue.1 1 GA 2005, s 318(5).

Timing of the exercise of a power under or by virtue of Part 15 26.13 A power under or by virtue of Part 15 of the Gambling Act 2005 may be exercised only at a reasonable time.1 It seems that what time constitutes a ‘reasonable time’ is intended to be something of a moveable feast. In relation to this provision the Explanatory Notes to the Act state as follows: ‘Reasonable time may depend on the circumstances. If the reason for the entry requires it to be made at a time that would generally be perceived as an unreasonable time, then that time might nevertheless be reasonable in the circumstances of a particular case. For example, in a case where the person making the entry suspects that an offence is or is about to be committed and there is a strong likelihood that any evidence of the offence will be lost if entry is not made during night time hours.’ 2 1 GA 2005, s 320. 2 Explanatory Notes to the Gambling Act 2005, para 794.

Evidence of identity and authority 26.14 Where an enforcement officer1 or an authorised person2 seeks to exercise a power under or by virtue of Part 15 of the GA 2005, he must produce evidence of his identity and authority to a person (if there is one) who appears to the enforcement officer or the authorised person to be occupying the relevant premises or to have responsibility for their management.3 1 For ‘enforcement officer’, see GA 2005, s 303 and 26.4 above. 2 For ‘authorised person’, see GA 2005, s 304 and 26.5–26.6 above. 3 GA 2005, s 321.

Exercise of powers in relation to records 26.15 As has been seen, once entry to premises has been gained in pursuance of a power under Part 15 of the GA 2005, a constable, enforcement officer,1 or authorised person2 may exercise a number of further powers, including the following powers in relation to records: 1273

Enforcement of the regulatory system of the Gambling Act 2005 (1) a power to require access to any written or electronic record which is kept on the premises; (2) a power to require to be supplied with a copy, in such forms as he directs, of an entry in a written or electronic record which is kept on the premises; and (3) a power to remove and retain anything if he reasonably believes that it constitutes or contains evidence of either the commission of an offence under the GA  2005 or the breach of a term or condition of a licence issued under the GA 2005.3 Section 319(1) of the Act provides that these powers in relation to records may only be exercised if the records relate entirely to the matters to which the power of entry relates.4 1 For ‘enforcement officer’, see GA 2005, s 303 and 26.4 above. 2 For ‘authorised person’, see GA 2005, s 304 and 26.5–26.6 above. 3 GA  2005, s  317(1)(c)–(e); see s  317(a)–(f) and 26.3 above for the complete list of powers which may be exercised following entry. The licences issued under the GA 2005 are: operating licences (see Part 5 (ss 65–126) and Chapter 6); personal licences (see Part 6 (ss 127–139) and Chapter 7); and premises licences (see Part 8 (ss 150–213) and Chapter 10. 4 GA 2005, s 319(1).

26.16 However, if records contain some information which relates to the matters to which the power of entry relates and also some information which is not relevant to the matters to which the power of entry relates – described in the Explanatory Notes to GA 2005 as ‘mixed’ records1 – a justice of the peace may, on the application of a constable, enforcement officer or authorised person, issue a warrant disapplying s 319(1) if satisfied that: (1) that the disapplication is necessary;2 and (2) either that notice has been given to a person in control of the records of the intention to apply for such a warrant or that the purpose of exercising the power of entry may be frustrated or seriously prejudiced by the giving of such a notice.3 1 Paragraph 793. 2 GA 2005, s 319(2). 3 GA 2005, s 319(3).

26.17 A  warrant issued by a justice of the peace under the provisions described above ceases to have effect at the end of 28 days beginning with the day of issue.1 1 GA 2005, s 319(4).

Information 26.18 The GA  2005 requires the Secretary of State to make regulations requiring a person who exercises a power under or by virtue of Part 15 to provide information about the power and its exercise.1  A  constable, 1274

Enforcement of the regulatory system of the Gambling Act 2005 enforcement officer,2 or authorised person3 exercising such a power must comply with any relevant provision of such regulations.4 1 GA  2005, s  322(1). Regulations must, in particular, make provision about: the information to be provided (which may include ancillary information about a provision of the 2005 Act or another enactment or about a rule of law); the form and manner in which the information is to be provided; the person to whom, or the place at which, the information is to be provided (which may, in particular, include provision for the supply of a copy, if requested, by a person within a specified class); timing: s  322(2). At the time of going to press the regulations made under these provisions are the Gambling Act 2005 (Inspection) (Provision of Information) Regulations 2007 (SI 2007/319). 2 For ‘enforcement officer’, see GA 2005, s 303 and 26.4 above. 3 For ‘authorised person’, see GA 2005, s 304 and 26.5–26.6 above. 4 GA 2005, s 322(3).

Securing premises after entry 26.19 A person who enters premises in reliance on a power under or by virtue of Part 15 of the GA 2005 must take reasonable steps to ensure that when he leaves the premises they are as secure as they were before he entered.1 1 GA 2005, s 325. See s 353(1) and 26.1 above for the meaning of ‘premises’.

POWERS Compliance 26.20 A  constable, or enforcement officer,1 or authorised person2 may undertake activities for the purpose of assessing compliance with the provisions of the GA  2005,3 and whether an offence is being committed under or by virtue of the Act.4 1 2 3 4

For ‘enforcement officer’, see GA 2005, s 303 and 26.4 above. For ‘authorised person’, see GA 2005, s 304 and 26.5–26.6 above. GA 2005, s 305(a). GA 2005, s 305(b). Offences are to be found within many Parts of the GA 2005, but Part  3 (ss  33–44) and Part  4 (ss  45–64) in particular deal exclusively with offences; the former contains ‘general offences’ (for which see Chapter  4) and the latter contains offences relating to children and young persons (for which see Chapter  5). Further, Part  11 of the Act (ss  252–265), which deals with lotteries, contains a number of offences relating to lotteries: see ss 258–263 and Chapter 15.

Suspected offence Power of entry without a warrant 26.21 A  constable or enforcement officer1 may enter premises if he reasonably suspects that an offence under the GA  2005 may be being committed on the premises, or about to be committed on the premises.2 1 See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’.

1275

Enforcement of the regulatory system of the Gambling Act 2005 2 GA 2005, s 306(1). See s 353(1) and 26.1 above for the meaning of ‘premises’. See s 323 and 26.2 above as to the use of reasonable force to gain entry to the premises in exercise of this power.

Power of entry with warrant 26.22 In some circumstances, eg where the premises is a dwelling, it will be necessary to apply for a warrant. A constable or enforcement officer may apply to a justice of the peace for a warrant authorising the constable or enforcement officer to enter premises, if the justice of the peace is satisfied: (1) that there are reasonable grounds for suspecting that an offence under the 2005 Act has been committed on the premises;1 (2) that there are reasonable grounds for suspecting that evidence of the commission of the offence may be found on the premises;2 and (3) that at least one of the following conditions is satisfied: (a) that admission to the premises has been refused3 (in which case the justice of the peace must also be satisfied that either notice has been given to a person occupying the premises, or having responsibility for their management, of the intention to apply for a warrant, or that the purpose of entry may be frustrated or seriously prejudiced by the giving of such notice);4 (b) that admission to the premises is likely to be refused unless a warrant is produced5 (in which case the justice of the peace must also be satisfied that either notice has been given to a person occupying the premises, or having responsibility for their management, of the intention to apply for a warrant, or that the purpose of entry may be frustrated or seriously prejudiced by the giving of such notice);6 (c)

that the purpose of entry may be frustrated or seriously prejudiced unless a constable, enforcement officer, or authorised person arriving at the premises can secure immediate entry;7 and

(d) that there is likely to be nobody at the premises capable of granting admission.8 1 2 3 4 5 6 7 8

GA 2005, s 306(2)(a). GA 2005, s 306(2)(b). GA 2005, s 306(2)(c) and (3)(a). GA 2005, s 306(4). GA 2005, s 306(2)(b) and (3)(b). GA 2005, s 306(4). GA 2005, s 306(2) and (3)(c). GA 2005, s 306(2) and (3)(d).

26.23 A  warrant issued by a justice of the peace under the provisions described above ceases to have effect at the end of 28 days beginning with the day of issue.1 1 GA 2005, s 306(5).

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Enforcement of the regulatory system of the Gambling Act 2005

Inspection of gambling Power of entry and reasonable suspicion relating to the provision of facilities for gambling 26.24 Two of the most important instruments of regulation under the GA  2005 are operating licences,1 which are issued by the Gambling Commission,2 and premises licences,3 which are issued by licensing authorities.4 Amongst the principal offences under Part 3 of the Act5 are the offence of providing facilities for gambling under s  336 and the offence of using premises, or causing or permitting premises to be used to provide facilities for gambling under s  37.7 Both these offences are subject to exceptions, including: in the case of s 33, that an operating licence authorises the activity and the activity is being carried on in accordance with the terms and conditions of the licence;8 and, in the case of s 37, the use of the premises is authorised by a premises licence.9 1 2 3 4 5 6 7

See GA 2005, Pt 5 (ss 65–126) and Chapter 6 for operating licences. See GA 2005, Pt 2 (ss 20–32) and Chapter 3 for Gambling Commission. See GA 2005, Pt 8 (ss 150–213) and Chapter 10 for premises licences. See GA 2005, s 2 and Chapter 9 for licensing authorities. For GA 2005, Pt 3, see Chapter 4. See GA 2005, s 33 and Chapter 4. For ‘facilities for gambling’, see s 5. See GA 2005, s 37 and Chapter 4. See s 353(1) and 26.1 above for the meaning of ‘premises’. 8 See GA 2005, s 33(1)(a), (2) and (3) and Chapter 4. See GA 2005, Pt 5 (ss 65–126) and Chapter 6 for operating licences. 9 GA 2005, s 37(2)–(4); see Chapter 10.

26.25 If the offences under GA 2005, s 33 and s 37 can be seen as the Act’s main tools for ensuring compliance with its requirements as to, respectively, the holding of operating licences and the holding of premises licences, s  307 is an important tool for ascertaining if any offence under s  33 and/ or 37 has been committed. Section 307 provides that, where a constable, enforcement officer,1 or authorised person2 reasonably suspects that facilities for gambling – other than private and non-commercial gaming or betting – may be being provided, may be about to be provided or have been provided on premises, the constable or enforcement officer may enter the premises.3 However, this power of entry applies only for a purpose specified in s 307. These purposes are: (1) to discover whether facilities for gambling other than private and non-commercial gaming or betting are being provided, are about to be provided, or have been provided on the premises;4 (2)

to determine whether an operating licence or premises licence is held in respect of the provision of facilities for gambling on the premises;5 and

(3)

to determine whether facilities are being, will be or have been provided in accordance with the terms and conditions of an operating licence or premises licence.6

1 For ‘enforcement officer’, see GA 2005, s 303 and 26.4 above. 2 For ‘authorised person’, see GA 2005, s 304 and 26.5–26.6 above.

1277

Enforcement of the regulatory system of the Gambling Act 2005 3 GA 2005, s 307(1) and (2). See s 353(1) and 26.1 above for the meaning of ‘premises’. See s  323 and 26.2 above as to the use of reasonable force to gain entry to the premises in exercise of this power. 4 GA 2005, s 307(1) and (3)(a). 5 GA 2005, s 307(1) and (3)(b). 6 GA 2005, s 307(1) and (3)(c).

Private and non-commercial gaming and betting 26.26 The power of entry under GA 2005, s 307 does not apply to private and non-commercial gaming or betting. ‘Private gaming’ and ‘private betting’ are defined in Sch  15 to the Act.1 As far as private gaming is concerned, it is gaming which satisfies three conditions: that no charge is made for participation;2 that it is equal chance gaming;3 and that it does not occur in a place to which the public have access (whether or not on payment).4 However, the condition that the gaming is equal chance gaming does not apply in relation to ‘domestic gaming’ or ‘residential gaming’.5 Domestic gaming is gaming which takes place in a private dwelling and on a domestic occasion.6 Residential gaming is gaming which takes place in hostels, halls of residence and similar establishments not administered in the course of a trade or business and where more than half the participants in the gaming are residents of the hostel, hall or establishment.7 Private betting is betting which falls into one of two categories set out under the 2005 Act: ‘domestic betting’ and ‘workers’ betting’.8 Domestic betting is betting on premises in which each party to the transaction lives.9 Workers’ betting is betting made between persons, each of whom is employed under a contract of employment with the same employer.10   1 GA 2005, s 295 and see Chapter 23.   2 GA  2005, Sch  15, para  3(1). For these purposes it is immaterial how a charge is described; it is immaterial whether a charge is in money or money’s worth; an amount deducted or levied, by a person providing the facilities for gaming, from sums staked or won in the course of the gaming is a charge for participation in the gaming; a charge for admission to premises where gaming takes place shall be treated as a charge for participation in the gaming; and a stake is not a charge for participation: para 3(2).   3 GA 2005, Sch 15, para 4(1).   4 GA 2005, Sch 15, para 5.   5 GA 2005, Sch 15, para 4(2).   6 GA 2005, Sch 15, para 2(1).   7 GA 2005, Sch 15, para 2(2).   8 GA 2005, Sch 15, para 6.   9 GA 2005, Sch 15, para 7(1). A person lives in premises if he habitually resides in any part of the premises (whether or not there are other premises in which he also habitually resides): para 7(2). 10 GA 2005, Sch 15, para 8.

26.27 ‘Non-commercial gaming’ is gaming which takes place at a ‘noncommercial event’, whether as an incidental activity or as the principal or only activity.1 An event is non-commercial if the arrangements for the event are such that no part of the proceeds is to be appropriated for the purpose of private gain.2  A  betting transaction is ‘non-commercial betting’ if no party to the transaction enters it in the course of a business 1278

Enforcement of the regulatory system of the Gambling Act 2005 or holds himself out as being in business in relation to the acceptance of bets.3 1 GA 2005, s 297(1). See Chapter 23. 2 GA 2005, s 297(2), but see also s 297(3) as to the meaning of ‘proceeds of an event’. See Chapter 23. 3 GA 2005, s 302. See Chapter 23.

Operating licence holders 26.28 Operating licences, which may be either non-remote operating licences or ‘remote operating licences’,1 are issued by the Gambling Commission.2 Aside from the distinction the GA 2005 makes between nonremote operating licences and remote operating licences, different kinds of operating licence are required to authorise the provision of facilities for gambling of different kinds. Although the Secretary of State is given the power to make additions to, to remove, or to vary those listed,3 ten kinds of operating licence are listed in the GA 2005.4 These are operating licences which authorise the licensee: (1) to operate a casino – termed a ‘casino operating licence’;5 (2) to provide facilities for playing bingo – a ‘bingo operating licence’;6 (3) to provide facilities for betting other than pool betting – a ‘general betting operating licence’;7 (4)

to provide facilities for pool betting – a ‘pool betting operating licence’;8

(5) to act as a betting intermediary – a ‘betting intermediary operating licence’;9 (6) to make gaming machines available for use in an adult gaming centre – a ‘gaming machine general operating licence’ for use in an adult gaming centre;10 (7) to make gaming machines available for use in a family entertainment centre – a ‘gaming machine general operating licence’ for use in a family entertainment centre;11 (8) to manufacture, supply, install, adapt, maintain or repair a gaming machine – a ‘gaming machine technical operating licence’;12 (9)

to manufacture, supply, install or adapt gambling software – a ‘gambling software operating licence’;13 and

(10) to promote a lottery – a ‘lottery operating licence’.14   1 See GA 2005, s 67 and Chapter 6.   2 GA 2005, s 65(1).   3 See GA 2005, s 65(4) and (5).   4 GA 2005, s 65(2)(a)–(j). See s 65(4) and (5) and Chapter 6 for the Secretary of State’s power to amend s 65(2) to add, remove, or vary a kind of operating licence.   5 GA 2005, s 65(2)(a). See s 7 and Chapter 14 for the meaning of ‘casino’.   6 GA 2005, s 65(2)(b). See s 353(1) and Chapter 14 for the meaning of ‘bingo’.   7 GA 2005, s 65(2)(c). See ss 9–11 and Chapter 2 for the meaning of ‘betting’; and s 12 and Chapter 2 for the meaning of ‘pool betting’.

1279

Enforcement of the regulatory system of the Gambling Act 2005   8 GA 2005, s 65(2)(d).  9 GA  2005, s  65(2)(e). See s  13(1) and Chapter  2 for the meaning of ‘betting intermediary’. 10 GA 2005, s 65(2)(f). See s 235 and Chapter 25 for the meaning of ‘gaming machine’; and s 237 and Chapter 25 for ‘adult gaming centre’. 11 GA  2005, s  65(2)(g). See s  238 and Chapter  25 for the meaning of ‘family entertainment centre’. 12 GA 2005, s 65(2)(h). 13 GA 2005, s 65(2)(i). See s 41(2) for the meaning of ‘gambling software’. 14 GA 2005, s 65(2)(j). See s 14 and Chapter 15 for the meaning of ‘lottery’.

26.29 Section 308 of the GA 2005 applies to premises1 which a constable, or enforcement officer2 reasonably believes to be used by the holder of an operating licence wholly or partly for purposes connected with the licensed activities.3  A  constable or enforcement officer may enter such premises to determine whether the licensed activities are being carried on in accordance with the terms and conditions of the operating licence.4 1 2 3 4

See GA 2005, s 353(1) and 26.1 above for the meaning of ‘premises’. See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’. GA 2005, s 308(2). GA 2005, s 308(1), (3).

Family entertainment centres 26.30 In the GA  2005, ‘family entertainment centre’ means premises – other than an adult gaming centre – wholly or mainly used for making gaming machines available for use.1 An application for a family entertainment centre gaming machine permit, which authorises a person to make Category D gaming machines available for use in a specified family entertainment centre,2 is made to a licensing authority in whose area the premises are wholly or partly situated.3 1 GA 2005, s 238; see Chapter 25. For the meaning of ‘adult gaming centre’, see s 237 and Chapter 25. See s 235 and Chapter 25 as to the meaning of ‘gaming machine’. See s  236, regulations made thereunder and Chapter  25 as to the categories of gaming machine. 2 GA 2005, s 247(2); see Chapter 25. 3 GA 2005, Sch 10, para 4. See s 247, Sch 10 and Chapter 25 for the procedure for applying for a family entertainment centre gaming machine permit.

Power of entry following application for family entertainment centre gaming machine permit 26.31 A  constable, enforcement officer,1 or authorised local authority officer2 may enter premises in respect of which an application has been made for a family entertainment centre gaming machine permit for a purpose connected with consideration of the application.3 1 See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’. 2 See GA 2005, s 304(2) and 26.6 above for the meaning of ‘authorised local authority officer’. 3 GA 2005, s 309(1).

1280

Enforcement of the regulatory system of the Gambling Act 2005

Power of entry – premises in respect of which a family entertainment centre gaming machine permit has effect 26.32 A  constable, enforcement officer,1 or authorised local authority officer2 may enter premises in respect of which a family entertainment centre gaming machine permit has effect for the purpose of determining whether the gaming machines used on the premises, and the arrangements for their use, comply with the requirements of GA 2005 and regulations under it.3 1 See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’. 2 See GA 2005, s 304(2) and 26.6 above for the meaning of ‘authorised local authority officer’. 3 GA 2005, s 309(2).

Premises licensed for alcohol 26.33 In the GA 2005 an ‘on-premises alcohol licence’ means a premises licence under Part 3 of the Licensing Act 2003, which authorises the supply of alcohol for consumption on the licensed premises.1 1 GA 2005, s 277(b).

Power of entry following application for a licensed premises gaming machine permit 26.34 A  licensed premises gaming machine permit – which is a permit issued by a licensing authority in its capacity as licensing authority under the Licensing Act 20031 – authorises a person to make Category C or D gaming machines (or both) available for use on premises.2 An application for a licensed premises gaming machine permit may be made by an applicant for an on-premises alcohol licence or by an existing holder of an on-premises alcohol licence. Where an application is made for such a permit, an enforcement officer,3 or an authorised local authority officer4 may enter premises in respect of which the application has been made for a purpose connected with consideration of the application.5 1 2 3 4

GA 2005 Sch 13, para 1(1). See GA 2005, s 283(2) and Chapter 25. See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’. See GA 2005, s 304(2) and 26.6 above for the meaning of ‘authorised local authority officer’. 5 GA 2005, s 310(1).

Power of entry – exempt gaming 26.35 A constable, enforcement officer, or authorised local authority officer may enter premises in respect of which an on-premises alcohol licence has effect for the purpose of determining whether gaming carried on satisfies the conditions for exempt gaming (equal chance gaming) set out under s 279 of the GA 2005.1 1 GA 2005, s 310(2)(a).

1281

Enforcement of the regulatory system of the Gambling Act 2005

Power of entry – bingo 26.36 In the case of bingo played on premises in respect of which an on-premises alcohol licence has effect, a constable, enforcement officer, or authorised local authority officer may enter the premises for the purpose of determining whether the terms and conditions of any relevant operating licence are being complied with,1 or whether the provisions of GA  2005 relating to ‘high turnover bingo’ under s 281 apply.2 1 GA 2005, s 310(2)(b)(i). 2 GA 2005, s 310(2)(b)(ii).

Power of entry – gaming machines 26.37 A constable, enforcement officer, or authorised local authority officer may enter premises in respect of which an on-premises alcohol licence has effect for the purpose of ascertaining the number and category of gaming machines being made available for use on the premises.1 1 GA 2005, s 310(2)(c).

Prize gaming permits 26.38 Under the GA  2005, ‘prize gaming’ is defined as gaming where neither the nature nor the size of a prize played for is determined by reference to the number of players or the amount paid for or raised by the gaming.1 ‘Prize gaming permits’, which are issued by licensing authorities,2 authorise a person to provide facilities for gaming with prizes on specified premises.3 1 GA 2005, s 288; see Chapter 22. See GA 2005, s 6 as to the meaning of ‘gaming’. 2 See GA 2005, s 289(2) and Sch 14 for applications etc for prize gaming permits. See s 2 and Chapter 9 for ‘licensing authorities’. 3 GA 2005, s 289(2).

Power of entry following application for a prize gaming permit 26.39 Where an application is made for a prize gaming permit, a constable, an enforcement officer,1 or an authorised local authority officer2 may enter premises in respect of which the application has been made for a purpose connected with consideration of the application.3 1 See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’. 2 See GA 2005, s 304(2) and 26.6 above for the meaning of ‘authorised local authority officer’. 3 GA 2005, s 310(1).

Power of entry – premises in respect of which a prize gaming permit has effect 26.40 A constable, an enforcement officer,1 or an authorised local authority officer2 may enter premises in respect of which a prize gaming permit has 1282

Enforcement of the regulatory system of the Gambling Act 2005 effect for the purposes of determining whether prize gaming on the premises complies with the requirements of the 2005 Act and regulations under it.3 1 See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’. 2 See GA 2005, s 304(2) and 26.6 above for the meaning of ‘authorised local authority officer’. 3 GA 2005, s 311(2). See GA 2005, Pt 13 (ss 284–294) and Chapter 22 for prize gaming generally.

Members’ clubs, commercial clubs and miners’ welfare institutes Club gaming permits, club machine permits and exempt gaming 26.41 Section 312 of the GA  2005 is of relevance to members’ clubs, commercial clubs and miners’ welfare institutes.1 Subject to the gaming complying with conditions set out in the Act, some forms of gaming are permitted on the premises of such clubs and institutes without the authority of a premises licence, if a permit is held in respect of the gaming or if the gaming is exempt. 1 GA 2005, s 312(2). For the meaning of ‘members’ club’, see s 266 and Chapters 12 and 25; for ‘commercial club’, see s 267 and Chapters 12 and 25; and for ‘miners’ welfare institute’, see s 268 and Chapters 12 and 25.

26.42 Club gaming permits, which are issued by licensing authorities,1 authorise the provision of facilities for some forms of gaming as long as the gaming takes place on premises on which a members’ club or miners’ welfare institute operates, and the gaming takes place in the course of the activities of the club or institute.2 Such gaming must comply, however, with various conditions set out in GA 2005.3 1 GA 2005, Sch 12; see Chapters 12 and 25. 2 GA 2005, s 271(2); see Chapters 12 and 25. 3 See GA 2005, ss 271, 272 and 275 and Chapters 12 and 25 for the conditions relating to gaming under a club gaming permit.

26.43 As with club gaming permits, club machine permits are issued by licensing authorities.1 However, the Gambling Act’s provisions as to club machine permits differ from club gaming permits. Club machine permits can be held by commercial clubs (as well as by members’ clubs and miners’ welfare institutes), but the scope of the permission given is narrower, in that they authorise only the making of up to three gaming machines (each of which must be of Category B, C or D)2 available for use on premises which the club or institute operates and in the course of the activities of the club or institute.3 Again, the authority of a club machine permit is subject to the gaming complying with conditions set out in the Act.4 1 GA 2005, ss 273(2), 274 and Sch 12; see Chapters 12 and 25. 2 GA  2005, s  271(3)(a). See s  235 and Chapter  25 as to the meaning of ‘gaming machine’. See Chapter 25 as to the categories of gaming machine.

1283

Enforcement of the regulatory system of the Gambling Act 2005 3 GA 2005, s 273(2). 4 See GA 2005, s 273 and Chapters 12 and 25 for the conditions relating to gaming under a club machine permit.

26.44 As far as ‘exempt gaming’ is concerned, GA 2005 s 269 provides that members’ clubs, commercial clubs, miners’ welfare institutes and some other clubs1 may provide facilities for equal chance gaming which complies with conditions set out in the Act.2 1 See GA  2005, s  269(1) and Chapter  12 for the clubs and institutes which may provide facilities for exempt gaming. 2 For the conditions, see GA 2005, ss 269, 270 and 275 and Chapter 12.

Power of entry on reasonable belief that premises is used by a club or institute 26.45 Where a constable or enforcement officer1 reasonably believes premises are used by a members’ club, commercial club or a miners’ welfare institute, he may enter the premises for the following purposes: (1) to determine whether gaming is taking place on the premises or is about to take place on the premises;2 (2)

to determine whether any gaming that is taking place or is about to take place on the premises is in accordance with the provisions of GA 2005 as to exempt gaming under s 269, a club gaming permit, or a club machine permit.3

1 See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’. 2 GA 2005, s 312(1), (2) and (3)(a). 3 GA 2005, s 312(1), (2) and (3)(b).

Power of entry following application for club gaming permit or club machine permit 26.46 Where an application is made for a club gaming permit or a club machine permit, an authorised local authority officer1 may enter premises in respect of which the application has been made for a purpose connected with consideration of the application.2 1 See GA 2005, s 304(2) and 26.6 above for the meaning of ‘authorised local authority officer’. 2 GA 2005, s 312(4).

Licensed premises Power of entry following application for a prize gaming permit 26.47 Where an application is made for a premises licence, a constable, an enforcement officer,1 or an authorised person2 may enter premises in respect 1284

Enforcement of the regulatory system of the Gambling Act 2005 of which the application has been made in order to assess, having regard to the licensing objectives, the likely effects of activity carried on in reliance on the premises licence.3 1 See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’. 2 See GA  2005, s  304(3) and (4) and 26.5 above for the meaning of ‘authorised person’. 3 GA  2005, s  313(1). See GA  2005, Pt  8 (ss  150–213) and Chapter  10 for premises licences. See s 1 and Chapter 1 for ‘licensing objectives’.

Power of entry on review of premises licence 26.48 Licensing authorities may review a premises licence, either on application or on the initiation of the licensing authority.1 Where an application for a review is granted, or where a licensing authority give notice of their intention to hold a review of a premises licence, a constable, an enforcement officer,2 or an authorised person3 may enter premises in respect of which a premises licence has effect for a purpose connected with such a review.4 1 See GA 2005, ss 197–203 and Chapter 10 for reviews of premises licences. 2 See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’. 3 See GA  2005, s  304(3) and (4) and 26.5 above for the meaning of ‘authorised person’. 4 GA 2005, s 313(2).

Lotteries: registered societies 26.49 Under Part 5 of Sch  11 to the GA  2005 a society may apply to the local authority for the area in which the principal premises of the society are situated for registration.1 Where a society is registered with a local authority under these provisions, a constable, enforcement officer,2 or authorised local authority officer3 may enter premises owned or used by the society for the purpose of making inquiries in connection with a lottery promoted on behalf of the society.4 1 Gambling Act 2005 Sch 11, P t 5 (paras 41 56); see Chapter 15. See Chapter 15 for the benefits of such registration. 2 See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’. 3 See GA 2005, s 304 and 26.5 above for the meaning of ‘authorised person’. 4 GA 2005, s 314.

Temporary use notices 26.50 Section 37(1) of the GA 2005 provides that a person commits an offence if he uses premises, or causes or permits premises to be used, to operate a casino, provide facilities for the playing of bingo, make a gaming machine available for use, provide other facilities for gaming, or provide facilities for betting.1 The commission of the offence under s  37 is, however, subject to a variety of exceptions – not least, of course, if the use of the premises is authorised by a premises licence.2 A further exception is where a temporary use notice under Part 9 of the Act has effect and the activity is carried on in 1285

Enforcement of the regulatory system of the Gambling Act 2005 accordance with the terms of the notice.3 Temporary event notices, which can only be given by the holder of an operating licence, state the holder of the licence’s intention to carry on one or more specified prescribed activities.4 Amongst other things, the notice must also state the activity to be carried on in reliance on the notice,5 the premises on which the activity is to be carried on,6 and the period of time during which the notice is to have effect.7 Subject to the provisions of GA 2005, Pt 9 – there are, for example, time limits on a set of premises being the subject of temporary use notification8 and objections may give rise to a counter-notice providing that temporary use notice is to have no effect or to have effect only with modification9 – if the requirements of Part 9 are complied with, the temporary use notice has effect during the period specified in the notice.10   1 GA 2005, s 37(1), see Chapter 4.   2 See GA 2005, s 37(2), (3) and (4) and Chapter 10 for the disapplication of s 37(1) by virtue of the authority of a premises licence. For premises licences, see GA 2005, Pt 8 (ss 150–213) and Chapter 10.   3 GA 2005, ss 37(7)(b) and 214(1). For temporary use notices generally, see GA 2005, Pt 9 (ss 214–234) and Chapter 11.   4 GA 2005, s 215; see Chapter 11.  5 GA  2005, s  216(1)(b). Temporary use notices must be in the prescribed form: s 216(1)(a) and see Chapter 11.   6 GA 2005, s 216(1)(c).   7 GA 2005, s 216(1)(d).   8 GA 2005, s 218; see Chapter 11.   9 GA 2005, s 224; see Chapter 11. 10 GA 2005, s 217; see Chapter 11.

Power of entry following the giving of a temporary event notice 26.51 Where a temporary use notice is given, a constable, an enforcement officer,1 or an authorised person2 may enter premises in respect of which the temporary use notice has been given in order to assess, having regard to the licensing objectives, the likely effects of activity carried on in reliance on the temporary use notice.3 1 See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’. 2 See GA  2005, s  304(3) and (4) and 26.5 above for the meaning of ‘authorised person’. 3 GA 2005, s 313(1). See GA 2005, Pt 9 (ss 214–234) and Chapter 11 for temporary use notices. See s 1 and Chapter 1 for ‘licensing objectives’.

Power of entry whilst temporary event notice has effect 26.52 A constable, an enforcement officer,1 or an authorised person2 may enter premises in respect of which a temporary use notice has effect to determine whether an activity of a kind listed in GA 2005, s 37(1) is being carried on otherwise than in accordance with the temporary use notice.3 1 See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’. 2 See GA  2005, s  304(3) and (4) and 26.5 above for the meaning of ‘authorised person’. 3 GA 2005, s 313(2).

1286

Enforcement of the regulatory system of the Gambling Act 2005

Production of authorisations Pool betting operating licences 26.53 In certain circumstances the holder of a pool betting operating licence can give written authorisation to others to carry out activities under the authority of the operating licence. Pool betting operating licences are subject to the condition that bets may be accepted on behalf of the licensee only by the licensee, by a person employed by the licensee under a written contract of employment, by the holder of another pool betting operating licence, or in accordance with s  93(2) or (3) of the GA  2005.1 An agent accepts a bet on behalf of a licensee in accordance with s 93(2) if the agent is authorised by the licensee in writing to accept bets on behalf of the licensee, the agent is adult, the agent is on a track at the time of accepting the bet, the bet is accepted in reliance on an occasional use notice, and the bet is in connection with a horse-race or a dog-race.2 Section 93(3) applies to pool betting operating licences that authorise (expressly or impliedly) the provision of facilities for football pools. Holders of such licences may give written authorisation to an adult or young person to make documents or other facilities available in connection with the licensed activities, to receive entries on behalf of the licensee, to receive payments on behalf of the licensee, to make payments of winnings on behalf of the licensee.3 Where a pool betting operating licence provides for s 94 to apply, the holder of the licence may give written authorisation to a person to provide facilities for horse-race pool betting.4 1 2 3 4

GA 2005, s 93(1). See GA 2005, Pt 5 (ss 65–126) and Chapter 6 for operating licences. GA 2005, s 93(2). GA 2005, s 93(3). GA 2005, s 94(2).

26.54 A constable or enforcement officer1 may require the holder of a pool betting operating licence to produce to him a copy of any authorisation given under GA 2005, s 93(2) or (3), or s 94(2).2 Moreover, while a person is holding himself out as willing to accept bets on behalf of a holder of a pool betting operating licence in accordance with s  93(2) or (3), or s  94(2), a constable or enforcement officer may require the person to produce a copy of the authorisation within a specified period, or immediately.3 1 See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’. 2 GA 2005, s 316(1). 3 GA 2005, s 316(2).

Casino premises licences 26.55 A  casino premises licence authorises the holder and any person authorised by the licence holder in writing to use the premises for the provision of facilities for bingo (save in the case of a small casino), betting or both.1 1 GA 2005, s 174(3) and (4), see Chapter 14.

1287

Enforcement of the regulatory system of the Gambling Act 2005 26.56 A constable or enforcement officer1 may require the holder of a casino premises licence to produce to him a copy of any authorisation given under the above provisions.2 While a person is carrying on an activity in reliance on such an authorisation, a constable or enforcement officer may require the person to produce a copy of the authorisation within a specified period, or immediately.3 1 See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’. 2 GA 2005, s 316(3). 3 GA 2005, s 316(4).

Criminal offence 26.57 Section 316(5) of the GA  2005 provides that a person commits an offence if he fails without reasonable excuse to comply with any of the above requirements to produce a copy of an authorisation and, on summary conviction, is liable to a fine not exceeding level 2 on the standard scale.1 1 GA 2005, s 316; see 26.58–26.61 below as to offences under GA 2005, Pt 15.

OFFENCES UNDER PART 15 OF THE GAMBLING ACT 2005 26.58 Two offences are created under Part 15 of the GA 2005. In addition to the offence under s 316(5) (described in the preceding paragraph), under s 326 a person commits an offence if, without reasonable excuse, he obstructs, or fails to co-operate with, a constable, enforcement officer,1 or authorised person2 who is exercising or seeking to exercise a power under or by virtue of Part 15 of the Act.3 In England and Wales, a person guilty of the offence of obstruction is liable on summary conviction to a fine not exceeding level 3 on the standard scale.4 1 2 3 4

See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’. See GA 2005, s 304 and 26.5 above for the meaning of ‘authorised person’. GA 2005, s 326(1). GA 2005, s 326(2).

Offenders and prosecutors 26.59 The offences created under Part 15 of the GA 2005 may be committed by a ‘person’. Whilst ‘person’ includes an individual, it also includes bodies of persons. Section 341 contains important provisions relating to the prosecution of bodies of persons for offences under the Act.1 Where an offence under the Act is committed by a body of persons corporate or by an unincorporated body of persons (other than a partnership), and it is proved that the offence was committed with the consent or connivance of an officer of the body or as a result of the negligence of an officer of the body, the officer as well as the body is guilty of an offence.2 Where the offence is committed by a limited partnership, the foregoing provisions apply, save that it is a partner, rather than an officer, that is guilty of the offence, as well as the 1288

Enforcement of the regulatory system of the Gambling Act 2005 limited partnership.3 In the case of an offence committed by a partnership, other than a limited partnership, each partner is guilty of the offence.4 Unincorporated associations are to be treated as if they were incorporated bodies for all procedural purposes when prosecuted for an offence under the Act. 1 GA  2005, s  341. The Secretary of State is given the power to make regulations providing for the modification of a provision of s 341 in its application to a body of persons formed under, or in so far as the body is recognised by, law having effect outside the United Kingdom: s 341(7). 2 GA 2005, s 341(1) and (2). An ‘officer of a body’ includes: a director, manager or secretary; a person purporting to act as a director, manager or secretary; and, if the affairs of the body are arranged by its members, a member: s 341(3). 3 GA 2005, s 341(5). 4 GA 2005, s 341(4).

26.60 The Gambling Commission may institute criminal proceedings in respect of any offence under the GA 2005.1 The power of licensing authorities to institute criminal proceedings in respect of an offence under the Act is limited to those offences listed under s 346 of the Act,2 which includes the offence of obstructing a constable, enforcement officer,3 or authorised person4 exercising or seeking to exercise a power under or by virtue of Part 15.5 1 GA 2005, s 28; see Chapter 3. 2 GA 2005, s 346(1). However, s 346 is without prejudice to the Local Government Act 1972 s  222 (the power of local authorities to prosecute or defend legal proceedings): s 346(2). 3 See GA 2005, s 303 and 26.4 above for the meaning of ‘enforcement officer’. 4 See GA 2005, s 304 and 26.5 above for the meaning of ‘authorised person’. 5 GA 2005, s 346(1)(k).

The time limit for prosecutions under the Gambling Act 2005 26.61 A magistrates’ court may try an information for an offence under the GA 2005 if the information was laid within 12 months of the date (or the last date) on which the offence is alleged to have been committed.1 1 GA  2005, s  347(1). Magistrates’ Courts Act 1980 s  127(1) (which provides that a magistrates’ court shall not try an information or hear a complaint unless the information was laid or the complaint was made within six months of the commission of the offence or the complaint arose) does not apply to an offence under the Gambling Act 2005: GA 2005, s 347(2).

1289

Chapter 27 Money laundering

INTRODUCTION 27.1 The objectives of preventing gambling from ‘being associated with crime’ or ‘being used to support crime’ are amongst the licensing objectives identified by s 1 of the Gambling Act 2005. The gambling industry is one of the sectors perceived by policy makers to be vulnerable to the activities of money launderers.1 Consequently, the Money Laundering Regulations 20072 apply to casino operators, along those carrying on other regulated business such as banking or acting as an estate agent. The rest of the gaming industry is subject to the general law against money laundering, which is set out below. The Gambling Commission has also issued guidance to casino operators (‘the Guidance’)3 and advice to other gambling operators (‘the Advice’).4 These documents set out the Commission’s view of what licensees ought to do to combat money laundering and to advance the licensing objectives. They are documents of the first importance and ought to be consulted carefully by those advising licensees. They are particularly important documents because in some respects it can be said that the Commission requires operators to comply with a higher standard than is otherwise required by law. 1 For example, see FATF’s report on the Vulnerabilities of Casinos and the Gaming Sector (March 2009). 2 As amended by the Money Laundering (Amendment) Regulations 2012 (SI 2012/2298) in relation to, for example, the powers of supervisory authorities. 3 Money Laundering: The Prevention of Money Laundering and Combating the Financing of Terrorism (3rd edn, July 2016). LCCP ordinary code provision 2.1.1 requires casino operators to act in accordance with this guidance. 4 Duties and responsibilities under the Proceeds of Crime Act 2002 – Advice to operators (excluding casino operators). (2nd edn, September 2014 – at the time of publication it is understood that an updated version of this advice will be issued in late 2016.) LCCP ordinary code provision 2.1.2 requires such licensees to take into account the Commission’s advice.

What is money laundering? 27.2 In broad terms, money laundering is conduct designed to conceal the origins of the proceeds of criminal activity.1 The objective of money 1291

Money laundering laundering is to create the impression that the proceeds of crime are the proceeds of legitimate activity. Money laundering includes a very wide range of activities: from the crude use of a relative’s bank account to a complex chain of payments through off-shore bank accounts using false trading documents. Although money laundering can occur in many ways, it is usually analysed as involving three stages: (1) placement; (2) layering; and (3)  integration.2 Placement occurs when the launderer introduces the proceeds of crime to the financial system. For example, a drug dealer places a cash bet of £5,000 in a betting shop. Layering is the process of concealing the true nature of the criminal proceeds. To continue the example, if the drug dealing punter is lucky, he will receive a cheque from the betting shop for his stake and winnings. Integration occurs when the proceeds of crime are used as if they were the proceeds of lawful activity. To conclude our example, this occurs when the drug dealer deposits the betting shop cheque in a bank account. The placement stage is seen as the most vulnerable part of the money laundering process and is the focus of much of the law described below. In effect, the UK legislation conscripts into the war against money laundering those third parties who do business with the general public and forces them to act as unpaid gatekeepers to the financial system. 1 In R  v GH  [2015] 1  WLR  2126 at [33], in giving the judgment of the Supreme Court, Lord Toulson said that a ‘fair description of the ordinary meaning’ of money laundering was ‘the process by which the proceeds of crime are converted into assets which appear to have a legitimate origin, so that they can be retained permanently or recycled into further criminal enterprises’. 2 For example, see the FAQ section on the website of the Financial Action Task Force (FATF): www.fatf-gafi.org.

27.3 Over the past 20 years or so, governments and policy makers worldwide have become increasingly aware of the importance of money laundering to international crime and, more recently, terrorist activity. This awareness has resulted in a number of initiatives at an international level that have provided the impetus for UK criminal law in this area.1 Of particular importance has been the work of the Financial Action Task Force on Money Laundering (‘FATF’) established by the then G-7 in 1989. FAFT’s  40+9 Recommendations have been influential, as have its recommendations of February 2012 on combating money laundering and the financing of terrorism and proliferation. The influence of FATF’s recommendations can be seen in much of the thinking behind the EU directives on money laundering.2 1 For a good summary of the international initiatives and their implementation in the UK see J Ulph Commercial Fraud (Oxford, 2006) at para 3.02. 2 The importance of FATF is reflected by reg  18 of the Money Laundering Regulations 2007, which permits the Treasury to direct any person in the regulated sector (eg  a casino operator) not to have a business relationship with a person based or incorporated in a country blacklisted by FATF. Iran and North Korea are blacklisted by FATF as at 4 May 2016.

27.4 The European Union1 has also been active in this area and enacted its first money laundering directive in 1991 (‘the First Directive’).2 A second directive followed in 2001 (‘the Second Directive’),3 amending the First Directive, and a third was enacted in October 2005 (‘the Third Directive’),4 which repeals and replaces the First Directive (as amended). A  fourth 1292

Money laundering directive (‘the Fourth Directive’) was enacted in May 2015.5 From 26  June 2017, the Fourth Directive will repeal and replace the Third Directive. Significantly, the Fourth Directive extends the scope of regulation beyond casino operations to include all ‘gambling services’, including betting. The Fourth Directive, however, permits Member States to exempt from regulation gambling services (other than casinos) ‘on the basis of the proven low risk posed by the nature and, where appropriate, the scale of operation of such services’ (Art 1(2)). It remains to be seen if, and how, the UK will take advantage of this exemption.6 1 In its e-bulletin of 27 June 2016 the GC posed the question: ‘Brexit – what will it mean?’, answering: ‘It is business as usual for now. We will be working through the implications with DCMS and will provide further advice and updates in e-bulletin as and when things develop.’ 2 Directive 91/308/EC. 3 Directive 2001/97/EC. 4 Directive 2005/60/EC. 5 Directive 2015/849. 6 Those hoping for an exemption may draw some encouragement from the UK national risk assessment of money laundering and terrorist financing (October 2015), where the overall money laundering risk in the regulated casino sector and the retail betting sector was, ‘assessed to be low in comparison to regulated sectors. Both sectors are still vulnerable to abuse by money launderers, and so present a higher risk than most sectors in the UK’ (para 6.217).

27.5 The Third Directive was implemented in the UK by the provisions of Part 7 of the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended) and the Money Laundering Regulations 2007. This does not mean, however, that the Third Directive can be ignored. As explained below, it is likely that the courts will have reference to it for the purpose of interpreting Part 7 of the 2002 Act.1 Indeed, the future development of UK law in this area is likely to follow the initiatives at European and international level. Further legislative change will be required by 26 June 2017 to implement the Fourth Directive. It is likely that the Money Laundering Regulations 2007 (as amended in 2012) will be repealed and replaced in their entirety. More generally, HM  Treasury and the Home Office published an action plan in April 2016 that heralds potentially far reaching change to the requirement under the 2002 Act to file suspicious activity reports (‘SARs’) and seek consent before proceeding with certain acts. If these proposals are adopted then there will be substantial amendments to that legislation. Readers should be aware, therefore, that the law as set out below may have been superseded by the time of reading. 1 The jurisprudence of the European Court of Justice requires that a national court must interpret national law ‘as far as possible, in the light of the wording and purpose of the Directive in order to achieve the result pursued by the latter’ (Marleasing SA v La Comercial [1990] ECR I-4135 at para 8).

27.6 In addition to possible criminal liability under Part 7 of the Proceeds of Crime Act 2002 (‘PCA  2002’), those engaged in, or complicit in, money laundering activities may be subject to civil liability in favour of the true owner of the funds. 1293

Money laundering 27.7 In this chapter, we first examine the provisions of Part  7 of the PCA  2002 and then consider the requirements of the Money Laundering Regulations 2007. Finally, we consider briefly possible civil law liability for money laundering.

PART 7 OF THE PROCEEDS OF CRIME ACT 2002 27.8 Part 7 of the Proceeds of Crime Act 2002 sets out the UK’s criminal law regime for combating money laundering. Before considering its specific provisions, a number of general points can be made. First, the scope of Part 7 is much wider than required by the Third Directive or by FATF’s 40+9 Recommendations.1 For example, Part  7 applies to the proceeds of all criminal offences. It is not limited to the proceeds of serious crimes – which would have sufficed to implement the Third Directive. In addition, Part  7 is not limited to the proceeds of criminal activity in the UK. As explained below, identifying when activities overseas should be regarded as criminal for money laundering purposes has caused some difficulty. Nor indeed is Part 7 limited to activity within the UK.2 Furthermore, the threshold for the mental element for many of the offences under Part 7 is low. Mere suspicion is sufficient under s  328 and negligence suffices under s  330. Finally, the offences under Part  7 are wide-ranging and are not restricted to what might be considered as classic money laundering. In short, Part 7 enacts a potentially far-reaching and draconian code to combat money laundering. 1 In Bowman v Fels [2005] 1 WLR 3083 at [19], the Court of Appeal noted that ‘Part 7 of the 2002 Act includes more stringent provisions than were required by [the Second Directive].’ See also R v GH [2015] 1 WLR 2126 at [19]. 2 R v Rogers [2015] 1 WLR 1017. As regards licensed operators based in a foreign jurisdiction, the Gambling Commission issued an advice note in September 2014 setting out the Commission’s view as to their money laundering reporting obligations.

The money laundering offences 27.9 Under Part  7, money laundering is defined1 as any of the offences under ss  327, 328 and 329 of the PCA  2002: ie  concealing etc criminal property, being concerned in an arrangement concerning criminal property and acquiring etc criminal property. 1 PCA  2002, s  340(11). In addition, the definition includes an attempt, conspiracy or the incitement of any of those offences, or aiding, abetting, counselling or procuring any of them.

27.10

PCA 2002, s 327(1) provides that:

‘A person commits an offence if he— (a) conceals criminal property; (b) disguises criminal property; (c)

converts criminal property;

(d) transfers criminal property; 1294

Money laundering (e) removes criminal property from England and Wales or from Scotland or from Northern Ireland.’ Section 328(1) provides that: ‘a person commits an offence if he enters into or becomes concerned in an arrangement which he knows or suspects facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person.’ Section 329(1) provides that: ‘A person commits an offence if he— (a) acquires criminal property; (b) uses criminal property; (c)

has possession of criminal property.’

27.11 In summary, as explained below, a person does not commit any of these offences if he has made a disclosure to the National Crime Agency (‘the NCA’) and acted with its consent. In addition, under s 329, no offence is committed if the person acquiring, using or possessing the criminal property did so for adequate consideration (s 329(2)(c)). 27.12 Part 7 also creates offences of non-disclosure (ss 330–331) and tipping off (ss 333A–333E) by those in the regulated sector.1 In addition, Part 7 creates an offence of non-disclosure by nominated officers outside the regulated sector. These offences are examined below. 1 The activities comprising the regulated sector are listed in Sch 9 to PCA 2002 (as amended). It includes operating a casino under a casino operating licence, but not other gambling activities. Following the implementation of the Fourth Directive this may change to include other gambling activities.

Criminal property 27.13 Central to each of the money laundering offences is the concept of ‘criminal property’, which is defined in very broad terms by PCA 2002, s 340(3): ‘Property is criminal property if— (a) it constitutes a person’s benefit from criminal conduct or it represents such a benefit (in whole or in part and whether directly or indirectly), and (b) the alleged offender knows or suspects that it constitutes or represents such a benefit.’ As can be seen, in broad terms, the definition of criminal property has two elements: (1) the property can be traced to criminal conduct, often called the ‘predicate offence’;1 and 1295

Money laundering (2) the alleged money launderer knows or suspects that the property can be traced to criminal property. 1 It is clear under the PCA 2002 that mere suspicion that property represents the proceeds of crime is not sufficient. In R v Montila [2004] 1 WLR 3141 the House of Lords held, in a prosecution under earlier analogous legislation, that it was necessary to show that the property had its origins in criminal conduct. As to whether the prosecution must prove the commission of an offence, see R v Anwoir [2008] EWCA Crim 1354 and DDP of Mauritius v Bholah [2012] 1 WLR 1737.

27.14 The definition of criminal property has been the focus of a number of decisions of the Court of Appeal, as summarised by Lord Toulson in R v GH.1 The money laundering offences are ‘predicated upon the commission of another offence which has yielded proceeds which then become the subject of a money laundering offence’.2 Accordingly, criminal property must exist independently of the acts alleged to comprise one of the money laundering offences: to suggest otherwise ‘elides the distinction between a person who acquires criminal property and one who acquires property by a criminal act or for a criminal purpose’ (ibid at [31]). Criminal property, accordingly, has ‘the quality of being criminal property … by reason of criminal conduct distinct from the conduct alleged to constitute the actus reus of the money laundering offence itself …’.3 1 [2015] 1 WLR 2126 at [20]–[28]. 2 [2015] 1 WLR 2126 at [37]. 3 [2015] 1 WLR 2126 at [32].

27.15 PCA  2002, s  340 provides some assistance in determining when property constitutes the ‘benefit from criminal conduct’. Property is defined widely to cover all forms of property, including money (s 340(9)). Property constitutes the benefit of criminal conduct if a person obtains it, in whole or in part, as a result of, or in connection with, that conduct (s 340(5)).1 Even a saving made as a result of or in connection with criminal conduct is deemed to result in the receipt of a sum of money equal to the value of the pecuniary advantage obtained.2 1 Thus, stolen property in the possession of a thief is criminal property (R v Rose [2008] 3 All ER 315). But the thief is not guilty of acquiring criminal property by his act of stealing it from its lawful owner (R v GH at [48]). 2 A person ‘who cheats the Revenue by failing to pay the tax he should pay, has obtained a pecuniary advantage and therefore is taken to have obtained a benefit within the meaning of [s 340(3)] which is equal to the pecuniary advantage’ (R v Williams [2013] EWCA Crim 1262 at [26]).

27.16 Applying s 340, it is clear that stolen property or the proceeds of sale of stolen property can be criminal property. Similarly, the proceeds of sale of illegal drugs or assets purchased with those proceeds can also be criminal property. 27.17 One of the difficulties with Part 7 is that the definition of criminal property goes beyond the proceeds of serious crime to include any conduct ‘which constitutes an offence in any part of the United Kingdom’, regardless of how trivial or regulatory the offence.1 As regards conduct outside of the United Kingdom, it can constitute criminal conduct under Part 7 if it ‘would constitute an offence in any part of the United Kingdom if it occurred there’ 1296

Money laundering (s  340(2)(a)).2 This definition has the anomalous result that the proceeds of conduct that is lawful in the country where the conduct occurred can be criminal property under UK law. An example beloved of the lecture circuit is that of the Spanish matador. Since bull-fighting is a criminal offence under English law, his earnings from bull-fighting in Spain would be ‘criminal property’ as defined by s 340.3 1 PCA 2002, s 340(2)(a). 2 The House of Lords’ decision in Cox v Army Council [1963] AC 48 provides some assistance in applying this type of provision. In applying a similar provision, their Lordships accepted that there is a degree of flexibility in applying the hypothesis that the foreign act or omission occurred in England. 3 Similarly, conduct may be lawful in one part of the United Kingdom, but unlawful in another part, giving rise to the same problem.

27.18 Some of the difficulties resulting from the inclusion of overseas conduct in the definition of criminal property1 have been mitigated by amendments made to Part 7 by the Serious Organised Crime and Police Act 2005,2 which creates, in effect, a defence3 to the offences under ss 327, 328 and 329 as follows: ‘Nor does a person commit an offence … if— (a) he knows or believes that the relevant criminal conduct occurred in a particular country or territory outside the United Kingdom, and (b) the relevant criminal conduct— (i)

was not, at the time it occurred, unlawful under the criminal law then applying in that country or territory, and

(ii) is not of a description prescribed by an order made by the Secretary of State.’ 1 See the report of the Financial Markets Law Committee, Issue 69 – Proceeds of Crime Act 2002, October 2004, for a good analysis of some of the difficulties arising from the inclusion of foreign conduct in the definition of criminal property. 2 PCA 2002, ss 327, 328 and 329 were amended by s 102 of the Serious Organised Crime and Police Act 2005 to include in each section the subsection set out in the text above mutatis mutandis. 3 Strictly speaking, the amendment limits the scope of the offence rather than creating a defence to it. Consequently, the burden of proving the non-application of the limitation lies with the prosecution. See Hogan v DPP [2007] 1 WLR 2944.

27.19 The Secretary of State has made an order prescribing overseas conduct that is lawful under local law that is nevertheless outside the scope of the ‘defence’ set out in the preceding paragraph.1 The order excludes ‘conduct which would constitute an offence punishable by imprisonment for a maximum term in excess of 12 months in any part of the United Kingdom if it occurred there’, save for an offence under the Gaming Act 1968, an offence under the Lotteries and Amusements Act 1976 or an offence under s 23 or s 25 of the Financial Services and Markets Act 2000.2 1 The Proceeds of Crime Act 2002 (Money Laundering: Exceptions to Overseas Conduct Defence) Order 2006 (SI 2006/1070).

1297

Money laundering 2 In very broad terms, these provisions make it an offence to conduct investment business without the benefit of authorisation from the FSA or an exemption.

27.20 Importantly, the definition of criminal property also includes a subjective mental element: the alleged offender must know or suspect that the property represents the benefit of a criminal offence. The requirement of knowledge or suspicion also serves to define the boundary to an otherwise very wide definition and provides the mental element or mens rea for the offences under PCA 2002, ss 327 and 329.1 The concept of suspicion will be considered below in the context of s 328. 1 R v Fazal [2010] 1 WLR 694 at [16].

Authorised disclosure 27.21 Although the money laundering offences do not, strictly speaking, impose a duty of disclosure, their effect is to encourage those who may be used by criminals for the purpose of money laundering to report their suspicions to the relevant authorities.1 Those employed in the gambling industry are at risk of committing an offence under PCA 2002, s 328 if they accept funds from or make a payment to a third party and fail to report suspected money laundering. 1 In Squirrell Ltd v National Westminster Bank plc [2006] 1 WLR 637, Laddie J said at [16] that: ‘the purpose of section 328(1) is not to turn innocent third parties … into criminals. It is to put them under pressure to provide information to the relevant authorities to enable the latter to obtain information about possible criminal activity and to increase their prospects of being able to freeze the proceeds of crime.’

27.22 Each of ss 327(2), 328(2) and 329(2) of PCA 2002 provides, inter alia, that a person does not commit an offence if: ‘(a) he makes an authorised disclosure under section 338 and (if the disclosure is made before he does the act mentioned in subsection (1)) he has appropriate consent; (b) he intended to make such a disclosure but had a reasonable excuse for not doing so.’ In summary, the effect of these sections is that a money laundering offence is not committed if a disclosure is made to the relevant authority1 and either the latter consents to the doing of the act or it does not refuse its consent within a period of seven working days starting with the first working day after the person makes the disclosure.2 If consent is refused by the relevant authority within that period of seven working days, then the person is treated as having consent after the expiration of a 31-day moratorium period. The moratorium period gives the relevant authority an opportunity to seek an order from the court to freeze or confiscate the relevant assets. 1 In practice, the NCA or HM Revenue and Customs. 2 PCA 2002, s 335. As to the limited grounds upon which a refusal of consent may be the subject of judicial review, see R (UMBS Online Ltd) v SOCA [2008] 1 All ER 465.

1298

Money laundering 27.23 A person may seek consent directly from the relevant authority or may seek consent from his employer’s nominated officer. A nominated officer may not give the employee consent without first obtaining that consent from the relevant authority.1 Casino operators are required by the Money Laundering Regulations 2007 to appoint a nominated officer. In its Advice of September 2014 to other operators,2 the Gambling Commission ‘recommends that operators in the non-regulated sector should also consider appointing a nominated officer’ (para  8.3). In practice, it is likely that employees of gambling licensees will report suspicious activities to their nominated officer.3 1 PCA 2002, s 336(1). A nominated officer commits an offence if he gives consent to ‘a prohibited act’ without having first made a disclosure to the relevant authority and ‘he knows or suspects that the act is a prohibited act’. 2 See 27.1, n 4 and 27.8, n 2 above. 3 A nominated officer is at risk of committing an offence under PCA 2002, s 331 (in the regulated sector: eg a casino) or s 332 (outside the regulated sector: eg a betting licensee) if he fails to report to the relevant authorities suspicious activity reported to him.

27.24 In order to take advantage of the ‘defence’ of disclosure and consent, it is necessary to make an authorised disclosure under PCA 2002, s 338. This requires a disclosure to the relevant authority that the property is criminal property and that such disclosure be made before doing the prohibited act. A disclosure made during or after the prohibited act can also be an authorised disclosure if certain conditions set out in ss 338(2A) and 338(3) are satisfied, but these may prove difficult to satisfy in practice,1 particularly in the case of disclosures made after the prohibited act, where a reasonable excuse must be shown for not making the disclosure before the prohibited act (s 338(3)(b), as amended). 1 An authorised disclosure can be made by a person while doing the prohibited act, provided that he began doing the act when he did not know or suspect that the property was criminal property and makes the disclosure on his own initiative as soon as practicable after he first knows or suspects the presence of criminal property. An authorised disclosure can be made after the event if there was a reasonable excuse for not doing so before the event and it is made by a person on his own initiative and as soon as it is practicable for him to do so.

27.25 PCA  2002, s  338(4) further provides that ‘an authorised disclosure is not to be taken to breach any restriction on the disclosure of information (however imposed)’. In effect, a person making an authorised disclosure enjoys immunity from civil action for breach of contract or other duty of confidence owed to a third party. For example, an authorised disclosure by a bank concerning one of its customers will not be a breach of the duty of confidence owed by a bank to its customer. Notwithstanding the wide terms in which it is expressed, s 338(4) does not override legal professional privilege.1 1 Bowman v Fels [2005] 1 WLR 3083 at [87].

27.26 In addition, under licence condition 15.2.1,1 a gambling operator must report to the Gambling Commission the making of an authorised disclosure under s 338 of the Proceeds of Crime Act 2002. The making of such a report 1299

Money laundering is one of the key events that must be reported to the Commission within five working days of the licensee becoming aware of its occurrence. 1 LCCP Feb 2015 (Updated April 2015): ‘Reporting key events All operating licences’.

Arrangements 27.27

PCA 2002, s 328(1) provides:

‘A person commits an offence if he enters into or becomes concerned in an arrangement which he knows or suspects facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person.’ Section 328 is expressed in general terms. It has been described as an ‘extraordinarily broad’ offence.1 The background to s 328 lies in Art 24(1) of the Third Directive.2 Section 328 implements Art 24(1), but goes beyond what is required by it. Article 24(1) provides, inter alia, that ‘Member States shall require the institutions and persons covered by this Directive to refrain from carrying out transactions which they know or suspect to be related to money laundering’ until they have made a report to the relevant law enforcement authority. 1 JSC BTA Bank v Abylazov [2010] 1 WLR 976 at [11]. 2 This replaces Art 7 of the First Directive, as amended by the Second Directive.

27.28 PCA 2002, s 328 applies to any person who enters or becomes concerned in a relevant arrangement. Unlike Art 24(1), s 328 is not limited in its application to entities, such as casinos, subject to the Third Directive. Consequently, s 328 potentially applies to all gambling transactions. Section 328 is the most significant money laundering offence for third parties at risk of being used by criminals for the purpose of money laundering. Its operation has generated a good deal of interest and concern.1 In JSC BTA Bank v Abylazov,2 Moses LJ said that ‘there is considerable difficulty in identifying the essential characteristics of an offence under section 328, particularly since it covers any criminal property, may be committed without fraudulent intention, and embraces the broad and informal concept of an “arrangement”’.3 Section 328 clearly poses a significant risk for licensees under the GA 2005 and their employees. 1 A  good example is the decision in P  v P  [2004] Fam 1, where it was wrongly assumed that lawyers conducting litigation could be at risk of committing an offence under s 328. 2 [2010] 1 WLR 976. 3 [2010] 1 WLR 976 at [12].

27.29 There is no definition of ‘an arrangement’ in PCA  2002, Pt  7. On its ordinary natural meaning, an arrangement is capable of having a wide meaning.1 It includes an agreement and may even include a concerted practice between two or more individuals.2 In any event, a contract relating to gambling is clearly capable of being construed an arrangement under s 328. 1 In Bowman v Fels [2005] 1 WLR 3083 the Court of Appeal held that steps taken in ordinary legal proceedings to obtain a judgment were not an arrangement within s 328. The European Court of Justice has also held that the obligations under the First

1300

Money laundering Directive (as amended) do not apply to lawyers acting in the course of, or preparing for, legal proceedings (Ordre de Barreaux Francophone v Council (case C-305/05)). 2 See Re British Basic Slag Ltd’s Agreements [1963] 1 WLR 727 at 747 per Diplock LJ.

27.30 The act prohibited by s 328 is the entering into or becoming concerned in a relevant arrangement ‘which in fact facilitates the acquisition etc of criminal property …’.1 In Bowman v Fels,2 the Court of Appeal considered that these were single, rather than continuous, acts. Indeed the court (at [69]) expressly reserved the question of whether and how far s 328: ‘means that a person who has done some act, such as giving advice or playing a role in negotiations, can fall to be treated retroactively as having committed an offence by that act, if and when an arrangement is subsequently made’. Article 24 of the Third Directive (which replaces Art 7 of the First Directive) does not require such a broad interpretation of the prohibited act: it is directed against ‘carrying out transactions’, rather than acts preparatory to the transaction. Although the language of s 328 is potentially quite wide in its application, there is nothing in the background to the Act to suggest that Parliament intended to prohibit acts other than those within Art 24 or that radical change was intended.3 It is hoped that, when the scope of the act prohibited by s 328 is considered by the courts, a narrow interpretation will be adopted along the lines of Art 24(1) of the Third Directive. 1 R v GH [2015] 1 WLR 2126 at [16] and [39]. No offence is committed if suspicions of criminal property are misplaced and the property concerned is not criminal property. 2 [2005] 1 WLR 3083 at [67]. 3 Hansard sheds little, if any, light on the interpretation of Part 7.

27.31 It is clear that a licensee enters into an arrangement potentially within PCA 2002, s 328 when it enters into a gambling contract with a punter. 27.32 The mental element of the offence under PCA 2002, s 328 comprises two elements: (1) knowledge or suspicion that the arrangement facilitates the acquisition, retention or control of criminal property, which, by definition, requires; (2)  knowledge or suspicion that the property constitutes or represents the benefit of criminal conduct (s 340(3)).1 1 R v Geary [2011] 1 WLR 1634 at [15].

27.33 Knowledge and suspicion are clearly subjective states of mind.1 A person cannot be said to know or suspect a state of affairs merely because he negligently failed to acquire such knowledge or suspicion. The subjective state of mind required for liability under PCA 2002, s 328 can be contrasted with the objective state of mind that suffices for liability under s 330 and s 331; as set out below, under those sections a person may be liable if he has reasonable grounds for knowing or suspecting that another person is engaged in money laundering, even if he did not actually know or suspect that to be the case. 1 In K Ltd v National Westminster Bank [2006] EWCA Civ 1039 at [21], the Court of Appeal said that ‘the existence of suspicion is a subjective fact’. Shah v HSBC Private Bank [2009] 1 Lloyd’s Rep 328 at [45].

1301

Money laundering 27.34 Mere negligence must, however, be distinguished from wilful blindness, which may be inferred from negligence of a very high degree. A  deliberate failure to inquire is a legitimate basis for an inference of knowledge or suspicion of the truth of the matter. 27.35 Suspicion that an arrangement may facilitate money laundering is a sufficient state of mind for liability under PCA 2002, s 328. The possibility that suspicion of money laundering may trigger liability for a serious criminal offence1 has rightly led to anxiety among bankers and other professionals who assist third parties with their transactions and, consequently, a significant increase in the number of suspicious activity reports made by them. This clearly reflects the intention of Parliament and the requirements of Art 24 of the Third Directive. As set out below, the requirement of suspicion sets a low threshold of liability. Given the possibly severe penalties involved and likely reputational damage, those advising the gambling industry ought to take a cautious approach to the application of s 328. 1 The maximum penalty for each of the money laundering offences is 14 years’ imprisonment.

27.36 The Court of Appeal has considered the concept of suspicion in two leading cases. In R v Da Silva1 the Court of Appeal considered an appeal against conviction under s 93A of the Criminal Justice Act 1988.2 Ms Da Silva and her husband had run a coffee bar at a railway station. Her husband submitted falsified records to head office to claim salaries for three employees who had ceased to work at the coffee bar. On a number of occasions payments were made to Ms Da Silva’s bank account representing salary payments apparently due to the ‘ghost workers’. Ms Da Silva’s husband was convicted of obtaining money transfers by deception. Ms Da Silva was convicted of assisting another person to retain the proceeds of criminal conduct knowing or suspecting that the other person had engaged in or had benefited from criminal conduct. 1 [2006] 4 All ER 900. 2 This section was one of the forerunners of s 328 of PCA 2002.

27.37 The trial judge directed the jury as to the meaning of suspicion. He told them that the dictionary definition of suspicion was ‘an act of suspecting, the imagining of something without evidence or on slender evidence, inkling or mistrust.’ He concluded this part of his direction by saying that ‘any inkling or fleeting thought that the money being paid into her account 9950 might be the proceeds of criminal conduct will suffice for the offence against her to be proved.’ 27.38 On appeal, Ms Da Silva contended that the word ‘suspicion’ ought to be construed as suspicion on reasonable grounds. Her counsel submitted that it was impossible to suppose that Parliament had intended that a person could be convicted of assisting another to commit money laundering if that person suspected that another person was laundering money but had no reasonable grounds for that suspicion. 27.39 The Court of Appeal rejected the argument as impossible.1 In the court’s judgment, the implication proposed by Ms Da Silva would effect 1302

Money laundering a material change to the provision. Other provisions in the CJA  1988 demonstrated that Parliament sought to distinguish between having suspicion and having reasonable grounds for suspicion. (The same reasoning clearly applies to the PCA 2002, given the terms of s 328(1) and s 330(2)(b).) Consequently, for the purposes of s  328 it is irrelevant whether there are reasonable grounds for suspicion. The Court of Appeal did, however, observe that it is extremely unlikely that a jury would decide that a defendant had a suspicion if there were no reasonable grounds for entertaining such a suspicion.2 1 [2006] 4 All ER 90 at [8]. 2 At [10]

27.40 As to the meaning of the word ‘suspicion’, the Court of Appeal referred to authority on the meaning of ‘reasonable suspicion’ in the case of wrongful arrest. In Hussein v Chang Fook Kan1 the Privy Council had decided that reasonable suspicion did not require prima facie proof. Lord Devlin said (at 948): ‘Suspicion in its ordinary meaning is a state of conjecture or surmise where proof is lacking: “I suspect but I cannot prove”. Suspicion arises at or near the starting point of an investigation of which the obtaining of prima facie proof is the end.’ The Court of Appeal in Da Silva considered (at [14]) that Lord Devlin’s reference to ‘a state of conjecture or surmise’ gave ‘a general indication of the general meaning of “suspicion”’. 1 [1970] AC 942.

27.41 As to the meaning of the word ‘suspecting’, the Court of Appeal said at [16]: ‘It seems to us that the essential element in the word “suspect” and its affiliates, in this context, is that the defendant must think that there is a possibility, which is more than fanciful, that the relevant facts exist. A vague feeling of unease would not suffice. But the statute does not require the suspicion to be “clear” or “firmly grounded and targeted on specific facts”, or based upon “reasonable grounds”. To require the prosecution to satisfy such criteria as to the strength of the suspicion would, in our view, be putting a gloss on the section. We think that for the purposes of a conviction under section 93A(1)(a) of the [Criminal Justice Act 1988], the prosecution must prove that the defendant’s acts of facilitating another person’s retention or control of the proceeds of criminal conduct were done by a defendant who thought that there was a possibility, which was more than fanciful, that the other person was or had been engaged in or had benefited from criminal conduct.’ 27.42 Shortly after the judgment in Da Silva, the Civil Division of the Court of Appeal delivered judgment in K Ltd v National Westminster Bank plc.1 K Ltd traded in mobile telephones and held an account with the defendant bank. In August 2005 K Ltd instructed the bank to make a payment of £235,000 from 1303

Money laundering the account. The bank refused to make the payment or to explain why. K Ltd applied for an injunction against the bank shortly afterwards. The bank’s solicitor then wrote to K  Ltd’s solicitors and informed them that the Bank had made a disclosure to HM Revenue and Customs under the 2002 Act in relation to the proposed payment. The judge refused an injunction. 1 [2006] 4 All ER 907. Longmore LJ was the presiding judge in both appeals.

27.43 On appeal, K  Ltd submitted that an injunction should have been granted to compel the bank to comply with its contractual obligations. It was further submitted that the bank ought to adduce evidence of its suspicion of money laundering so that such evidence could be tested in cross-examination. Finally, it was submitted that the judge’s refusal to go behind the bank’s assertion of suspicion was a breach of Art 6 of the European Convention on Human Rights and Art 1 of Protocol 1 to it. 27.44 The Court of Appeal rejected these submissions. Longmore LJ said that it would be no defence to a charge under PCA 2002, s 328 for the bank to say that it was contractually obliged to make a payment on its customer’s instructions: ‘If the law of the land makes it a criminal offence to honour the customer’s mandate in these circumstances there can, in my judgment, be no breach of contract for the Bank to refuse to honour its mandate and there can, equally, be no invasion (or threat of an invasion) of a legal right on the part of the Bank such as is required before a claimant can apply for an injunction … where a statute makes it temporarily illegal to perform the contract, the contract will only be suspended until the illegality is removed. That still means that, during the suspension, no legal right exists on which any claim to an injunction must depend.’1 1 [2006] 4  All ER  907 at [10]–[11]. Longmore LJ further concluded that, assuming that his analysis was wrong, it would be inappropriate as a matter of discretion to grant an injunction to require the performance of an act that would result in criminal liability to the performer of the act.

27.45 The Court of Appeal applied its reasoning in Da Silva to the meaning of ‘suspicion’ in PCA 2002, s 328: ‘he or she must think that there is a possibility, which is more than fanciful, that the relevant facts exist. This is subject, in an appropriate case, to the further requirement that the suspicion so formed be of a settled nature.’ 1 1 [2006] 4 All ER 907 at [16]. In R v Da Silva [2006] 4 All ER 900 at [17] the Court of Appeal said that a direction that suspicion must be of a settled nature was a possible qualification to its reasoning. The court referred, by way of example, to circumstances where an initial suspicion was subsequently honestly dismissed by the defendant. This tentative suggestion is expressed in much stronger terms by the court in K Ltd.

27.46 The Court of Appeal rejected the proposition that K Ltd was entitled to challenge the bank’s assertion that it suspected money laundering. If a 1304

Money laundering bank employee suspects money laundering, then that suspicion must be reported to the authorities. It was irrelevant that the suspicion could not be supported on reasonable grounds. Moreover, the tipping off provisions in s 333 of PCA 2002 restricted the bank’s ability to provide information to its customer other than through the bank’s solicitor in the context of litigation.1 1 K  Ltd v National Westminster Bank plc [2006] 4  All ER  907 at [19]–[21]. In Shah v HSBC Private Bank [2010] 1 Bus LR 1514 the Court of Appeal held that it was for the bank to establish at trial the fact of suspicion in order to justify it not following its customer’s instructions.

27.47 In effect, the bank was entitled to refuse to perform its contractual obligations on the basis that one of its employees had a suspicion that the customer was money laundering. The bank was not entitled to give its customer an explanation for its conduct.1 Moreover, the bank was not obliged to explain its conduct to its customer or to compensate its customer for loss suffered as a result of freezing its bank account. The counterbalance is that this interference is likely to be for a limited period of time, albeit up to 40 days, and that the bank can seek consent from the relevant authority to complete the transaction. 1 PCA 2002, s 333 was replaced by ss 333A–333E as a consequence of the Terrorism Act 2000 and Proceeds of Crime Act 2002 (Amendment) Regulations 2007 (SI  2007/3398). Accordingly. the flexibility to inform a client in the course of litigation that a report had been made no longer exists.

What sort of factors are likely to justify suspicion of money laundering? 27.48 The Advice issued by the Gambling Commission to non-casino operators identifies ‘a pattern of increasing spend, spend inconsistent with apparent sources of income or unusual patterns of play’ as possibly indicative of money laundering.1 Other salutary examples of money laundering can be seen in the public statement issued by the Gambling Commission on 7 September 2015 concerning the Rank Group, and in February 2016 concerning Paddy Power Holdings. The Gambling Commission has also criticised the repeated making of authorised disclosures in respect of the same customer as providing a basis to continue to allow that customer to gamble. In those circumstances, the Commission considers that the operator should consider whether it wishes to allow the customer to continue to use its gambling facilities (eg see para 7.31 of its Guidance of July 2013 to casino operators). PCA 2002, s 328 is likely to create most practical difficulties for gambling licensees and their employees. For example, a betting shop worker may have the unenviable task of refusing to take a cash bet from a person known or suspected as a drug dealer or criminal in the area. The betting shop worker is at risk of committing an offence under s  328 if he accepts the bet in those circumstances2 without also making an authorised disclosure to the licensee’s nominated officer.3 It may be that there is insufficient time between the laying of the bet and the race to obtain consent from SOCA, so the punter, if lucky, must be refused his winnings and stake when he returns to collect them. As explained below, the betting shop worker may be unable explain to the punter why he is being refused his winnings pending consent from the 1305

Money laundering relevant authorities, as to do so may amount to the offence of prejudicing an investigation. 1 Paragraph 7.1. The Advice also acknowledges that the same behaviour may also indicate problem gambling or both (or, possibly, neither problem). 2 But no offence will be committed under PCA 2002, s 329, as the betting licensee will have given adequate consideration for the stake, even if he suspects that the stake is criminal property (Hogan v DPP [2007] 1 WLR 2944 at [16] and R v Afolabi [2009] EWCA Crim 2879 at [33]–[35]). The Gambling Commission appears to take a contrary view: ‘the offence of money laundering also includes simple criminal spend’ (para 13.7 of its Advice to non-casino operators). 3 A  corporate employer may also be open to prosecution under s  328 in these circumstances, as the employee’s actions and state of mind are likely to be attributable to the company on the principles in Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500.

The regulated sector 27.49 The offences described above are of general application. Part 7 also provides for a number of offences that apply only to those in the regulated sector. The regulated sector is defined by PCA  2002, Sch  9 (as amended),1 and includes casino operators. Other forms of gambling are not within the regulated sector. The regulated sector as defined by Sch  9 is mirrored by the definition of relevant business under the Money Laundering Regulations 2007 (as amended), which also includes operating a casino by way of business. Policy-makers at the European level perceive the activities identified by Sch 9 and the 2007 Regulations as posing a higher risk of money laundering and, consequently, they are subject to additional regulation. As set out above, the Fourth Directive provides for an extension of the regulated sector to include all forms of gambling, with evidence based exceptions permitted in the case of non-casino operators. 1 Schedule 9 was amended by the Proceeds of Crime Act 2002 (Business in the Regulated Sector and Supervisory Authorities) Order 2007 (SI 2007/3287).

27.50 Under PCA  2002, s  330, in summary, it is an offence for those in the regulated sector to fail to disclose knowledge or suspicion of money laundering. The most striking feature of s  330 is that an offence may be committed through a negligent failure to report suspicious activity. Thus, a person in the regulated sector may commit an offence where ‘he knows or suspects or has reasonable grounds for knowing or suspecting that another person is engaged in money laundering’.1 The italicised words demonstrate that the offence may be committed without any blameworthy state of mind. Furthermore, the obligation to report under s 330 arises on mere suspicion, or on the mere existence of reasonable grounds for suspicion, of money laundering, regardless of whether money laundering has in fact occurred. Accordingly, proof that money laundering has occurred is not necessary for the commission of the offence.2 In this sense the offence under s 330 may be contrasted with the money laundering offences under ss 327 to 329, where the acquisition etc of criminal property is a necessary part of the offence. 1 PCA 2002, s 330(2), emphasis added. 2 Ahmed v HM Advocate [2009] SLT 794 at [30 to [38].

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Money laundering 27.51 Section 330(7) provides limited guidance as to how the words emphasised above should be interpreted: in summary, a person does not commit an offence under s 330 if he does not know or suspect that another person is engaged in money laundering and that person was not provided with such training as is specified by the Secretary of State. The specified training requires that employees be made aware of the provisions of the Money Laundering Regulations 2007, Part 7 of the PCA 2002 and ss 18 and 21A of the Terrorism Act 2000. In addition, employees must be given ‘training in how to recognise and deal with transactions which may be related to money laundering.’1 Section 330(8) also requires a court to consider whether a person has followed any relevant published guidance that was issued by an appropriate body, approved by the Treasury.2 (Section 331(8) makes the same provision as regards the offence under that section of non-disclosure by a nominated officer in the regulated sector.) 1 Under the Money Laundering Regulations 2007 every person must in the course of regulated business take appropriate measures so that relevant employees are given this training (reg  3(1)(c)). This training is prescribed for the purpose of s 330 by the Proceeds of Crime Act 2002 (Failure to Disclose Money Laundering: Specified Training) Order 2003 (SI 2003/171). 2 The Treasury has approved for this purpose the Gambling Commission’s Guidance (see The prevention of money laundering and combating the financing of terrorism Guidance for remote and non-remote casinos (3rd edn, July 2016), para 1.48).

27.52 It is likely that s 330 will be interpreted to apply an objective standard in determining whether a person had reasonable grounds for knowledge and suspicion ie would a reasonable person in that position have known or suspected money laundering? 27.53 There are three other conditions that must be satisfied before an offence is committed under s 330:1 (1) The information that is the basis for knowledge or suspicion, or which gives reasonable grounds for such knowledge and suspicion, ‘came to [the alleged offender] in the course of business in the regulated sector’.2 This important provision limits the scope of operation of s 330 to the regulated sector and to knowledge acquired in the course of business in the regulated sector. (2) The alleged offender must be able to identify the money launderer or the location of the laundered property or believe (or it is reasonable to expect him to believe) that the information possessed by him will or may assist in identifying the money launderer or the location of the laundered property.3 This provision was introduced by way of amendment to the 2002 Act to meet the concern that those employed in the regulated sector were at risk of prosecution for failing to disclose information that had little (if any) intelligence value. (3) The alleged offender did not make a disclosure to a nominated officer or to the relevant authority as soon as practicable after acquiring the relevant knowledge.4 Since the purpose of s 330 is to require disclosure from those in the regulated sector, it follows that no offence can be committed where proper disclosure has been made. 1 No offence is committed if the person who should have made a disclosure ‘has a reasonable excuse for not making the required disclosure’, or is a professional

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Money laundering legal adviser and acquired knowledge in privileged circumstances (s 330(6)). In addition, under s 330(7B), an accountant, auditor or tax adviser who is a member of a professional body has an analogous defence. 2 PCA 2002, s 330(3). 3 PCA 2002, s 330(3A). 4 PCA 2002, s 330(4).

27.54 In practical terms, there is likely to be a considerable overlap between the scope of application of s 328 and s 330 for casinos. Knowledge or suspicion of money laundering is likely to be obtaining in the course of a gaming, which is an arrangement under s 328. In this situation, the difference between the provisions lies in the scope of criminal liability potentially arising under each section. Under s 328, for criminal liability, knowledge or suspicion must exist, but under s 330 it is sufficient if there are merely reasonable grounds for such knowledge or suspicion.

Tipping off 27.55 One of the purposes of an authorised disclosure is to give the relevant authority the opportunity to apply to the court for an order against the suspected money launderer to freeze or confiscate his assets. The purpose of such an order could easily be defeated if the suspected money launderer were to learn that his activities had been reported to the relevant authority. Consequently, PCA 2002 provides for the offences of tipping off and prejudicing an investigation. 27.56

As regards tipping off, PCA 2002, s 333A(1)1 provides, inter alia, that:

‘A person commits an offence if— (a) the person discloses any matter within subsection (2); (b) the disclosure is likely to prejudice any investigation that might be conducted following the disclosure referred to in that subsection; and (c) the information on which the disclosure is based came to the person in the course of a business in the regulated sector.’ In summary, the information protected from disclosure is the fact that a disclosure has been made under Part 7 to one of the proper authorities or to a nominated officer. 1 Section 333A(3) also creates an offence of tipping off that is committed where a person learns in the regulated sector that an investigation into money laundering is being contemplated, discloses that fact and such disclosure is likely to prejudice the investigation.

27.57 No offence is committed unless the person making the disclosure knows or suspects that the disclosure is likely to have the effect of prejudicing an investigation (s 333D(3) and (4)). Given this express limitation to the offence, it is very unlikely that a disclosure to another person within the reporting organisation, to a lawyer or to some regulatory body that a suspicious activity report has been made will amount to the offence of tipping off. 1308

Money laundering 27.58 PCA  2002, ss  333B–333D make express provision for certain disclosures that will fall outside the scope of the offence of tipping off. For example, disclosure by one employee to another of the same undertaking does not constitute the offence.1 Notably, unlike the former s 333(3)(b), these exceptions do not permit a lawyer to make a disclosure to another person in connection with legal proceedings or contemplated legal proceedings. Thus, the former practice2 whereby the subject of a suspicious activity report could lawfully be informed that a report had been made by the reporting party’s lawyers in the context of legal proceedings should no longer be followed. 1 PCA 2002, s 333B(1). 2 For example, see the facts of K  Ltd v National Westminster Bank plc [2006] 4  All ER 907.

27.59 Since the offence of tipping off is now restricted to information that came to a person in the course of business in the regulated sector, it has no application to gaming outside of casinos. Outside the regulated sector the issue to be considered is whether disclosure that a suspicious activity report has been made could amount to the offence of prejudicing an investigation under PCA 2002, s 342. 27.60 Amongst other things, it is an offence under s  342 to make a disclosure which is likely to prejudice an investigation where that person knows or suspects, in summary, that the relevant authority is acting in a money laundering investigation. No offence is committed if the person does not know or suspect that the disclosure is likely to prejudice the investigation.1 No offence is committed if the disclosure is made by a lawyer in the course of actual or contemplated legal proceedings.2 Consequently, if a gambling licensee (other than a casino) wishes to tell its client that it has made a suspicious activity report to SOCA concerning him, then the safest way to do so is through a lawyer in circumstances where that client has threatened legal proceedings. 1 PCA 2002, s 342(3)(a). 2 PCA 2002, s 342(3)(c) and (4)(a).

THE MONEY LAUNDERING REGULATIONS 2007 27.61 The 2007 Regulations apply to those conducting relevant business, as defined. Operating a casino by way of business is one of the activities included within the definition of regulated business.1 At present other gambling operators are not subject to the duties imposed by the 2007 Regulations. It is likely that the 2007 Regulations will be repealed and replaced in 2017 to implement the Fourth Directive. As set out above, the new Regulations may extend to gambling operators other than casino operators. For example, retail betting operators may be required to identify their customers and verify their identities where there are winnings or wagers of €2,000 or more (Art 11(d) of the Fourth Directive). 1 Regulation 3(h).

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Money laundering 27.62 In broad summary, the 2007 Regulations require those conducting a relevant business to carry out customer due diligence (ie  identify their customers and verify their identity), keep records of customer identity and maintain internal reporting procedures, including the appointment of a nominated officer. The 2007 Regulations also require a risk-based approach to preventing money laundering. 27.63 It is a criminal offence to fail to comply with many of the requirements imposed by the 2007 Regulations. In addition, the Gambling Commission is a supervisory authority for the purpose of the 2007 Regulations and is under a duty to supervise gambling licensees and to take necessary measures for the purpose of ensuring compliance by them with the Regulations.1 1 Regulation 24(1).

27.64 The Gambling Commission most recently issued its Guidance: The prevention of money laundering and combating the financing of terrorism. Guidance for remote and non-remote casinos (3rd edn) in July 2016, setting out in some detail its recommendations as to best practice . 27.65 In addition, the 2007 Regulations require that those conducting a relevant business must ‘establish and maintain appropriate and risk-sensitive policies and procedures … in order to prevent activities relating to money laundering and terrorist financing’.1 They must also take appropriate measures so that relevant employees are aware of UK anti-money laundering law and ‘given training in how to recognise and deal with transactions and other activities which may be related to money laundering or terrorist financing’.2 In deciding whether an offence has been committed under the 2007 Regulations, a court must consider any relevant published guidance issued by a supervisory or any other appropriate body and approved by the Treasury.3 1 Regulation 20(1). 2 Regulation 21(b). 3 Regulation 45(2). The Commission’s Guidance is such a document.

27.66 The 2007 Regulations make specific provision for the identification of casino customers. Under reg  10, a casino operator must establish and verify the identity of its clients in one of two ways. It may subject them to such due diligence before permitting them entry to its premises or access to remote facilities. Alternatively, it may adopt a threshold approach before requiring such due diligence, applying such due diligence only to customers who purchase chips with a value in excess of €2,000 or stake more than that sum in any 24-hour period. Before a casino may apply the threshold based approach, it must first satisfy the Gambling Commission that it has appropriate procedures in place to monitor and record the amounts paid or staked by customers. 27.67 In addition, the 2007 Regulations make special provision for dealing with politically exposed persons.1 In summary, this is a person who in the past 12 months has held high public office outside the United Kingdom, a member of his immediate family or a known close personal associate. Before permitting such a person to gamble, a casino must have approval from its 1310

Money laundering senior management and ‘take adequate measures to establish the source of wealth and source of funds involved’ and to ‘conduct ongoing enhanced monitoring of the relationship’. 1 Regulation 14(4).

THE TERRORISM ACT 2000 27.68 Part III of the Terrorism Act 2000 (‘TA 2000’) makes specific provision for certain money laundering offences in relation to ‘terrorist property’, which is defined as: ‘(a) money or other property which is likely to be used for the purposes of terrorism1 (including any resources of a proscribed organisation), (b) proceeds of the commission of acts of terrorism, and (c)

proceeds of acts carried out for the purposes of terrorism.’

1 Terrorism is defined by s 1 of the 2000 Act. In broad terms, terrorism is the use, or threat, of force to influence government or intimidate the public to advance a political, religious or ideological cause.

27.69 The money laundering offences under the TA  2000 are broadly similar to those under the Proceeds of Crime Act 2002, but differ in a number of important respects. 27.70

Section 18(1) of TA 2000 provides that:

‘a person commits an offence if he enters into or becomes concerned in an arrangement which facilitates the retention or control by or on behalf of another of terrorist property— (a) by concealment, (b) by removal from the jurisdiction, (c)

by transfer to nominees, or

(d) in any other way.’ 27.71 The TA  2000, s  18 offence has obvious similarities to the offence under PCA  2002, s  328, ie  arrangements that facilitate the acquisition, retention etc of criminal property. The principal difference is that, at least in theory, the s 18 offence is an offence of strict liability: it is not necessary for the prosecution to prove knowledge or suspicion that the arrangement involved terrorist property. Section 18(2) provides, however, that: ‘it is a defence for a person charged with an offence under subsection (1) to prove that he did not know and had no reasonable cause to suspect that the arrangements related to terrorist property.’ The defence under s 18(2) comprises two elements that the defendant must prove: (1)  that he did not know that the arrangement involved terrorist property, and (2) that he had no reasonable cause to suspect. The first element of 1311

Money laundering the defence is subjective, but the second element is objective and is analogous to a requirement to prove an absence of negligence. Consequently, the s 18 offence may be committed by an otherwise innocent person who negligently assists in an arrangement involving terrorist property. In addition, a person does not commit an offence under s 18 where, in summary, he has obtained consent from SOCA before or after entering into the transaction (ss  21ZA and 21ZB). 27.72 Section 21A of TA 2000 provides for an offence of failure to disclose in the regulated sector that is broadly similar to the offence under PCA 2002, s 330. The s 21A offence applies where information came to a person in the course of business in the regulated sector; the regulated sector is defined by Sch 3A of the 2000 Act.1 Schedule 3A defines the regulated sector in the same terms as it is defined under Sch 9 of the 2002 Act. Operating a casino by way of business is an activity in the regulated sector under the TA 2000. 1 TA 2000, s 21A(10).

27.73 Under TA  2000, s  21A a person commits an offence where three conditions are satisfied. (1) He knows or suspects or has reasonable grounds for knowing or suspecting that another person has committed an offence under any of ss 15–18 of the 2000 Act. The s 18 offence is the arrangement offence examined above. In broad summary the other offences are: offences relating to fund raising for the purposes of terrorism,1 use or possession of property for terrorist purposes2 and funding arrangements for the purpose of terrorism.3 (2) The information that is the basis for his knowledge, or suspicion, or reasonable grounds must come to him in the course of a regulated business. (3) He did not disclose the information to the relevant authorities, or his nominated officer, as soon as practicable after it came to him. No offence is committed if the relevant person ‘has a reasonable excuse for not disclosing the information’ or is a professional legal adviser and the information came to him in privileged circumstances.4 1 2 3 4

TA 2000, s 15. TA 2000, s 16. TA 2000, s 17. TA 2000, s 21A(5).

27.74 The TA 2000 also contains a more general offence of non-disclosure that has no parallel under the PCA 2002. Under TA 2000, s 19 it is an offence for a person not to disclose to the relevant authorities a belief or suspicion that another person has committed one of the offences under ss 15–18 where that belief or suspicion comes to his attention in the course of a trade or business that is not a business in the regulated sector. Applying this provision to the gambling industry, all licensees (other than casino operators) and their employees are subject to a potential duty to disclose under s 19 of the 2000 Act. 1312

Money laundering 27.75 In practice, there is likely to be a considerable overlap between compliance with the money laundering provisions of the PCA 2002 and the TA  2000. Although the scope of the 2000 Act is much narrower, applying only in relation to terrorist property, the obligations imposed by it are more onerous. In effect, under s  19 of TA  2000 there is a duty to report to the relevant authorities any belief or suspicion of a terrorist property related offence where that belief or suspicion is obtained in the course of business. In contrast, the duty to report under s 330 of PCA 2002 is restricted to the regulated sector and is much more focused in scope. Similarly, the offence under s 18 of the 2000 Act may be committed without knowledge or suspicion that the arrangement involves terrorist property.

CIVIL LIABILITY FOR MONEY LAUNDERING 27.76 Finally, we briefly consider potential civil law consequences of money laundering. In summary, a person who assists in money laundering may be liable in the tort of negligence to a third party in respect of loss caused by his conduct; in addition, a person who assists in money laundering may be liable in equity on the grounds of dishonest assistance. 27.77 Liability in negligence is likely to be established only in exceptional circumstances. The principal difficulty is the need to show that the defendant owed the claimant a duty of care to protect him against the loss that he has suffered. The courts have been notoriously reluctant to impose a duty of care in respect of pure economic loss.1 In very broad summary, it is necessary to show a special relationship between the parties before carelessness on the part of one party that causes loss to the other can give rise to liability in tort. 1 The difficult issue of when a duty of care is owned in respect of pure economic loss is beyond the scope of this work. A full account can be found in Clerk & Lindsell on the Law of Torts (19th edn, 2006) at paras 8–83–8–107.

27.78 A  good example of the issues involved can be seen in the House of Lords decision in Customs and Excise Commissioners v Barclays Bank.1 The Commissioners obtained freezing orders against two companies who owed large amounts in unpaid VAT. Each of the companies was a customer of Barclays Bank and it was informed of the freezing orders. Unfortunately, due to an administrative error Barclays Bank permitted the companies to withdraw large sums from their accounts notwithstanding that it had been informed of the freezing orders. In effect, Barclays Bank had, albeit unwittingly, facilitated the companies in retaining criminal property. 1 [2006] 3 WLR 1.

27.79 The Commissioners brought proceedings against Barclays Bank, alleging that it owed them a duty of care in relation to the loss they had sustained. Barclays Bank responded that, regardless of whether it had been careless, it owed no duty of care. The House of Lords held that there was no duty of care owed by Barclays Bank to the Commissioners. 1313

Money laundering 27.80 A person who assists in money laundering may also incur a liability in equity to the beneficial owner of the funds for dishonest assistance. A person who dishonestly assists in a breach of trust or fiduciary duty, such as by assisting in laundering the proceeds of the breach of duty, may be held liable to compensate the beneficial owner of the funds for the loss suffered by the breach of duty.1 1 A  full account of the relevant law may be found in Lewin on Trusts (19th edn, 2015) at Ch 40. Civil liability for money laundering is specifically considered at para 40.034.

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Chapter 28 Gambling and planning

28.1 This chapter provides an overview of the interrelationship between the regulation of gambling facilities within the UK and the scheme of land use planning. This chapter will outline the role of the planning framework in authorising and enforcing the provision of gambling uses and in the consideration of planning applications made in respect of proposed gambling facilities. Finally, this chapter will turn to identify broader principles of local government law which govern administrative decision-making and the exercise of enforcement action by planning authorities in respect of gambling facilities.

THE NEED FOR PLANNING PERMISSION 28.2 Planning legislation (principally the Town and Country Planning Act 1990 (as amended)) regulates the circumstances in which a ‘building’1 may be erected to provide a gambling facility or whether an existing building may be used to accommodate the provision of such a facility. The Act provides, subject to exceptions, that planning permission is required in respect of any ‘development’ of land.2 This consent may be obtained by express grant following a successful application made to the relevant local planning authority, conferred by development order, granted expressly by specific statutory provision, or deemed to be so granted. 1 A ‘building’ is defined in s 336(1) to include ‘any structure or erection, and any part of a building, as so defined, but does not include plant or machinery comprised in a building’. The statutory description of ‘building’ therefore differs from its everyday meaning. In unusual cases, in assessing whether something is a building or not, the size, permanence and physical attachment to the land are essential matters for consideration: Barvis Ltd v Secretary of State for the Environment [1971] 22 P&CR 710. 2 TCPA 1990, s 57(1).

28.3 The Town and Country Planning Act 1990 (‘TCPA  1990’) defines ‘development’ as either operational development, meaning ‘the carrying out of building, engineering … or other operations in, on, over or under land’, or 1315

Gambling and planning as a material change of use, meaning ‘the making of any change in use of any buildings or other land’.1 These species of development are separated under the Act so that the nature of the ‘use’ of land to provide a gambling facility will not be shaped by any use of the same land for the carrying out of any building or other works to enable a gambling facility to be provided. This means that any grant of planning permission to enable a material change in the use of land or building will not authorise any building or other works. The converse does not, however, follow and where, as is almost invariably the case, the use of land or building to provide a gambling facility will involve a change in use, the grant of planning permission for its construction may specify one or more authorised use(s) for the building.2 1 TCPA 1990, s 55(1) and s 336(1). 2 TCPA 1990, s 75(2) and (3).

28.4 In terms of so-called ‘operational development’, building works may include demolition, rebuilding, structural alterations of, or the making of additions to, a building and any other works which may normally be undertaken by a builder.1 Building works excluded from the meaning of development and which do not require planning permission are the carrying out for the maintenance, improvement or other alteration of any building, works which affect only the interior of the building, or do not materially affect the external appearance of the building.2 The question of whether carrying out works for the maintenance, improvement or other alteration of a building may materially affect the external appearance of a building is one normally determined by the local planning authority on application, or by the Secretary of State on appeal. It appears that the statutory emphasis placed upon the word ‘appearance’ requires that the external façade of, say, a building must not only be changed but must be materially altered in such a way as would be noticeable by the average passer-by. An assessment of the materiality of any alteration involves consideration of the building when viewed as a whole, rather than by reference to any specific aspect considered in isolation.3 1 TCPA 1990, s 55(1A). 2 TCPA 1990, s 55(2)(a). 3 Burroughs Day v Bristol City Council [1996] 1 PLR 78.

28.5 A  use of land or a material change in such use is not defined under statute. The courts have sought, however, to interpret a use of land by reference to activities which are undertaken in, alongside or on land but which do not interfere with its actual physical characteristic.1 The further question of materiality of an identifiable change of use is a matter of fact and degree to be determined by comparing the present and proposed uses, and assessing all relevant planning considerations arising in respect of the uses. 1 Parkes v Secretary of State for the Environment [1978] 1 WLR 1308, Lord Denning.

28.6 A  material change of use may occur either where the use of a building changes absolutely or where a use remains in part so as to amount to a change in part only. In assessing the materiality of any change it is the nature and character of the use that must be considered (eg change from retail 1316

Gambling and planning use to leisure use), and not the particular purpose of a particular occupier.1 It is also relevant when considering materiality to assess any identifiable impacts on land located adjacent to the land proposed to undergo the change of use (ie off-site effects) which may arise from the change of use.2 Indeed, any failure of the decision-maker to consider potential off-site effects when assessing the materiality of a change of use as part of an application or an appeal may mean that the determination is successfully challengeable by a claim for judicial review.3 1 Marshall v Nottingham Corporation [1960] 1 WLR 707, Glyn-Jones J. 2 Blum v Secretary of State for the Environment [1987] JPL 278, Simon Brown J. 3 Forest of Dean v Secretary of State for the Environment [1995] JPL B184.

USE CLASSES ORDER 28.7 Eleven separate categories of land uses and, further, isolated land uses known as ‘sui generis’ uses have been attributed statutory status.1 1 Town and Country Planning (Use Classes) Order 1987 (SI 1987/764), art 3(6).

28.8 Where the use of land or of a building stated within one use class is changed to a use prescribed within that same class, it is deemed that no material change or development has occurred and, accordingly, no planning permission is required. The scope for maintaining a change of use without requiring planning permission may, however, be excluded by a planning condition attached to the permission, which may have specifically authorised the land use now intended to be changed. Furthermore, although a change from, and to, uses contained within the same use class will not constitute ‘development’, it does not follow that a change in use from one use class to another necessarily will constitute development, since the materiality of any change will be fundamental to identifying whether development occurred.1 1 Rann v Secretary of State for the Environment [1980] JPL 109.

28.9 The principal forms of gambling facility are all categorised as specific land uses. A  betting office use is categorised as a sui generis use, falling outside of the dedicated use classes, and has been broadly defined as incorporating the provision of a service which is considered appropriate within a shopping area where that service is provided principally to visiting members of the public. A casino1 and an amusement arcade or centre2 are also sui generis uses, and a bingo hall is categorised as Class D2(c) (assembly and leisure).3 Whilst a change in the use of a building to provide a casino facility requires planning permission, a legislative saving formerly meant that an existing casino use could be changed to any use falling within Class  D2 (eg bingo hall or cinema) without the requirement for planning permission.4 1 2 3 4

Town and Country Planning (Use Classes) Order 1987, art 3(6)(m). Town and Country Planning (Use Classes) Order 1987, art 3(6)(b). Class D2(c): Town and Country Planning (Use Classes) Order 1987. Town and Country Planning (General Permitted Development) (Amendment) (England) Order 2006 (SI 2006/221).

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Gambling and planning 28.10 In addition to authorising a change of use within the same use class, certain changes of use from and to separate use classes do not require an express grant of planning permission. Within the context of gambling facility uses, a change from either a betting office or casino use, to a use falling within restaurant and café (Class A3), or a change from a betting office to a shop (Class A1), a financial or professional use (Class A2), a mixed use, an assembly or leisure use (Class D2), or a dwellinghouse (Class C3) will constitute permitted development, subject to satisfying relevant conditions engaged, and planning consent will therefore be deemed to have been granted.1 A final change in use, from a casino to an assembly or leisure use (Class D2), will also constitute permitted development. Also, development consisting of a change in the use of any building or other land from a use permitted by an express grant of planning permission, to another use which would have been specifically authorised by that consent when granted, will constitute permitted development.2 1 Class C of Part 3 (Changes of Use) of Sch 2 to the Town and Country Planning (General Permitted Development) Order 1995 (SI  1995/418), as amended. This has been revoked with savings, in relation to England, by SI 2015/596, art 8(1), (2), Sch 4, para 1. (Date in force: 15 April 2015: see SI 2015/596, art 1(1).) 2 Class E of Part 3 (Changes of Use) of Sch 2 to the Town and Country Planning (General Permitted Development) Order 1995 (SI  1995/418), as amended. This has been revoked with savings, in relation to England, by SI 2015/596, art 8(1), (2), Sch 4, para 1. (Date in force: 15 April 2015: see SI 2015/596, art 1(1).)

THE PLANNING APPLICATION 28.11 The content and form of an application for planning permission in respect of a gambling facility (or any other form of development) is specifically regulated by the TCPA  1990 and by related regulations.1 An application is required to be completed on a form prescribed by the local planning authority, to document all particulars set out and to be accompanied by a plan and any other drawings which identify the proposed development. Further information, or the verification of information submitted, may subsequently be requested by the local planning authority before determination of the application. 1 TCPA  1990, s  62; the Town and Country Planning (Development Management Procedure) (England) (Order) 2015 (SI 2015/595) [(Wales) Order 2012 (SI 2012/801), applying within Wales]; the Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) Regulations 2012; and the Town and Country Planning (Applications) Regulations 1988 (SI 1988/1812) (applying within Wales only, at the time of writing).

The decision-making process 28.12 In determining an application for planning permission or a planning appeal, permission may either be granted, granted subject to the imposition of such conditions as the decision-maker considers are appropriate, or refused. Since the decision whether to grant planning permission is, fundamentally, to be guided by planning policy, the decision-maker is required to have 1318

Gambling and planning regard to all relevant planning policies contained within the so-called ‘development plan’ (which includes all relevant neighbourhood plan policies) and determine the proposal in accordance with the plan unless ‘material considerations’ indicate otherwise. This is the statutory presumption that applies under s 38(6) of the Planning and Compulsory Purchase Act 2004. Most notably, material considerations include national guidance in the form of the National Planning Policy Framework 2012 (NPPF) and Planning Practice Guidance (PPG).1 1 TCPA 1990, s 70(2); Simpson v Edinburgh Corporation [1961] SLT 17.

28.13 Essentially, therefore, the decision must be ‘plan-led’. This means that the decision-maker may only reasonably depart from the policy framework of the development plan and displace the statutory presumption when either granting or refusing planning permission where such a departure from the plan is justified by other material considerations and is adequately reasoned.1 It is noteworthy, however, that the presumption that the decision-maker should exercise a plan-led approach does not mean that his or her discretion is materially or unreasonably fettered, since the decision-maker may quite legitimately arrive at a determination having been guided by, and with the intention of promoting, the objects and purposes of planning policy or of a relevant statutory requirement.2 1 Section 38(6) of the Planning and Compulsory Purchase Act 2004. 2 R v Tower Hamlets LBC, ex p Chetnik Developments Ltd [1988] AC 858, HL; Breen v Amalgamated Engineering Union [1971] 2 QB 175.

28.14 In England, the development plan will comprise the relevant local plan, any ‘saved’ policies deriving previous plans and frameworks, in addition to neighbourhood plan policies, which together guide planning decisionmaking more specifically for the particular local administrative area. 28.15 In Wales, the development plan comprises the ‘Planning Policy Wales’ document and the relevant local plan which guides planning decisionmaking for the local administrative area. 28.16 Where the relevant district-level plan is, at the date of determining a planning application or appeal, in draft form only, and so by definition is ‘emerging’, it will constitute a material consideration and will not form part of the development plan as statutorily defined.1 The particular weight which the decision-maker may attach to one or more relevant policies contained within an emerging (but not fully adopted) plan will primarily depend on the stage of the plan’s progression to formal adoption in replacing that which, at the date of the decision, remains part of the development plan. 1 Nottingham CC and Brostowe BC v Secretary of State for the Environment, Transport and the Regions [1999] EGCS 35, per Sullivan J.

28.17 In addition to having regard to all relevant policies contained within the development plan, the decision-maker will be expected to have appropriately interpreted those policies in their application to the development proposal.1 Unsurprisingly, this can prove a laborious task, 1319

Gambling and planning especially where, as is not infrequently the case, development plans articulate multi-faceted policies which contain overlaying considerations which must be balanced. Where there is any apparent policy contradiction, the decisionmaker must weigh the relative significance of each diverging policy.2 1 City of Edinburgh Council v Secretary of State for Scotland [1997] 1 WLR 1447. 2 R v Rochdale MBC, ex p Milne [2001] 81 P&CR 27, Sullivan J.

28.18 A  material consideration is not defined by statute, but the courts have approached defining materiality on the basis that the consideration relates to the use and the development of land.1 National planning policy in the form of planning policy guidance notes or statements and planning circulars issued by the government are but one source of material consideration. ‘Planning gain’ (in short, associated development benefits obtained from the developer(s) to enable the development, regeneration or improvement of the local area outside of the proposal site) is another familiar material consideration and is often secured by bilateral agreement between the relevant local planning authority and developer(s), or by an obligation entered into unilaterally by the developer(s).2 1 Stringer v Minister for Housing and Local Government [1971] 1 All ER 65. 2 TCPA 1990, s 106.

28.19 Other material considerations arising in respect of gambling facilities, which may not be articulated within the development plan but which may nevertheless be legitimately weighed in the planning balance include the degree of existing demand for the particular facility, the need for planning gain, identifiable regenerative benefits arising from the proposed development, both in terms of infrastructure and service provision, and of the local economy generally, and the degree to which the facility may be in-keeping with the nature and character of the locale.

National planning policy and planning guidance 28.20 As material considerations, national planning policy and planning guidance should be assessed by the decision-maker when deciding whether to grant planning permission. 28.21 Formerly, a casino, betting office, bingo hall and amusement arcade or centre were all implicitly recognised by (now cancelled) Planning Policy Statement 6 as planning uses in centres,1 on the basis that all were categorised as a leisure or entertainment facility. For casinos more specifically, central government signalled as long ago as December 2004 that the planning assessment of casino uses should be undertaken in accordance with the comprehensi