London Borough of Newham v Paddy Power Primary Gambling Activity and Betting Offices For IOLNorth Eastern Region

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1 Primary Gambling Activity and Betting Offices For IOLNorth Eastern Region Paddy Whur Woods Whur LLP Devonshire House 38 York Place Leeds LS1 2ED Significant number of new applications in Newham Clustering of units of premises in three particular areas Newham concerned about the impact of the increase Series of applications refused and then compromised on Appeal Paddy make applications for new licences in Green Street and High Street North Both applications refused Green Street as well as refused on crime and disorder also refused on primary gambling activity Newham believing that these premises would primarily be used for fixed odds betting terminals and not over the counter business Refusals appealed to Thames Magistrates Court Appeals successful in Summer 2013 District Judge Goldspring not engaged with primary gambling activity being an issue that the Licensing Authority could consider Therefore the Licensing Authority is not entitled to circumvent the split regulatory roles of the Gambling Commission and the Licensing Authority or the statutory intention of Parliament and cannot therefore take account of primary gambling activity when considering a Premises Licence application. 1

2 London Borough of Newham were successful in the grant of Permission to judicially review this decision and we await a date for the full hearing on the issue of whether the Licensing Authority has the power to assess primary gambling activity Gambling Commission Position Indicators of Betting as Primary Gambling Activity Advice Note October 2013 Status of Advice Note? Indicators of Betting as Primary Gambling Activity Offer of established core products (including live event coverage and bet range) Provision of information on products and events Indicators of Betting as Primary Gambling Activity Sizeofpremises Delivery of betting facilities Promotion of gambling opportunities and products Actual or expected use made of betting facilities LCCP and Primary Gambling Activity Licence Condition 16: Gaming Machines may be made available for use in licensed betting premises only at times when there are also sufficient facilities for betting available. LCCP and Primary Gambling Activity Indicators typically characteristic of genuine betting business The offer of established core products (including live event pictures and bet range) Overall range and frequency of events Range and frequency events involving core products 2

3 LCCP and Primary Gambling Activity Broadcasting live event coverage for core products LCCP and Primary Gambling Activity Event details including form/results Rangeofbetsavailableoncoreproducts Specificbettyperangebycoreproduct Customer information screens Promotion of Gambling Opportunities and Products In making judgements about whether individual premises are being run as betting businesses, the Commission will take into account expected or actual use of the betting facilities being provided. What matters is whether there is, or is intended to be, sufficient betting to constitute a betting business, rather than an arcade business. In assessing this the Commission takes into account the actual use of the facilities in terms of, number of bets accepted, total betting stakes received and gross gaming yield (GGY) generated. 3

4 A key test of whether a business is in fact a betting business is that it has business objectives that are based on betting, and the provision of sufficient betting facilities, which may include interim targets (and supporting promotional activity). Gambling Commission Proposed Amendments to Licence Conditions and Codes of Practice for all Operators Responsesby4December2013 Gambling Commission Proposed Amendments to Licence Conditions and Codes of Practice for all Operators Pages of the consultation with proposals to amend current licence condition 16andcurrentordinarycode9 Amendments specific to non-remote betting, bingo and casino operators This section sets out some minor points of clarification that are relevant for the nonremote betting sector in particular. Amendments specific to non-remote betting, bingo and casino operators One of the proposed changes (set out in paragraph 9.9) to the ordinary code provision for Primary Gambling Activity applies to bingo and casino operators as well as non-remote betting operators. 4

5 The Commission considers that in order to make category B2 gaming machines available in premises, betting must be the primary gambling activity provided at those premises at times when the gaming machines are made available. In making judgements about whether betting is indeed the primary gambling activity offered and ultimately whether the business is in fact a betting business the Commission will take into accountboththeexpectedandactualuseofthe betting facilities being provided. In summary, what matters is whether there are, or are intended to be, sufficient facilities for betting to constitute a betting business (as opposed to a gaming machine business, which would require different licences and confer different gaming machine entitlements). The Commission reinforced this understanding of the Act in May 2009 with the introduction of licencecondition16oflccptoallholdersofthis particular operating licence, following two periods of extensive consultation with the industry. Since 2009, it has become clear that the last paragraph of licence condition 16 has been a source of confusion. This is because the paragraph refers to a scenario where facilities for betting are provided only by means of selfservice betting terminals( SSBTs ). The use of SSBTs is a form of remote communication, therefore a betting premises which relies wholly on the use of SSBTs for the making and accepting of bets would require a remote operating licence only, which would not confer any entitlement to make gaming machines available for use. 5

6 Where an operator chooses to use SSBTs as part of their operating model alongside non-remote facilities, they will require the relevant ancillary remote operating licence in addition to their non-remote general betting standard licence. We recognise, however, that the condition needs to be made clearer to give effect to our policy intention and to take account of a recent 1 st Tier Tribunal judgement that turned on the construction of the current licence condition. We therefore propose to delete part of the current condition and qualify the reference to sufficiencyoffacilitiestomakeclearthatitisthe facilities provided under the non-remote operating licence (as opposed to any other type of licence) that go towards satisfying the licence condition. These and similar issues are also addressed in an updated Gambling Commission advice note on the Indicators of betting as primary gambling activity which will be published shortly and will be available on our website and distributed to relevant stakeholders. We will also be publishing a document providing advice for remote, non-remote and betting intermediaries. This document will include further information on the regulatory framework for SSBTs. Clarifications are also proposed for ordinary code provision 9: these changes are set out in the box below. 6

7 Proposed amended licence condition Primary Gambling Activity Non-remote general betting licences, except where betting is offered under a 2005 Act casino premises licence Proposed amended licence condition 1 Gaming machines may be made available for use in licensed betting premises only at times when there are available sufficient facilities for non-remote betting in reliance on this licence. Proposed amended licence condition 2 Such facilities for betting must include the provision of information that enables the customer to access details of the events on which bets can be made and to be able to place those bets, obtain details of the outcome of the events, calculate the outcome of their bets and be paid or credited with any winnings. Extract from proposed amended ordinary code provision 9 Primary Gambling Activity Non-remote general betting, bingo and casino operating licences, except where facilities are offered under a 2005 Act casino premises licence Extract from proposed amended ordinary code provision 9 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: Extract from proposed amended ordinary code provision 9 Ration 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 Theuse,eitherexpected oractual, to bemadeof the different gambling facilities 7

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