Legal advice: The gamble is far from over

This interest flowed predominately from Greene King’s application to the Gambling Commission for a bingo operating licence.

You may remember back in May we first reported the application. It was clear then that the Gambling Commission had concerns with the development of licensed bingo, and the provision of high-stakes gaming machines in pubs — premises not primarily concerned with the provision of facilities for gambling. 

Refusal

The Gambling Commission subsequently refused Greene King’s application. Interestingly the Gambling Commission panel was satisfied Greene King was fit and proper to hold a licence. It was satisfied as to Greene King’s suitability and competence to offer licensed bingo. However the commission was concerned with the development of commercial bingo in pubs, which are not dedicated gambling premises.

They decided that the provision of high-stakes bingo and high-stakes prize gaming machines in a pub environment had the potential to offend the licensing objectives of ensuring that gambling is fair and open, and protecting children and other vulnerable people from being harmed or exploited by gambling.

They referred to ‘scalability’ — that permitting an application of this nature, in pub premises, could lead to thousands of applications by other pubs on the high street. They therefore decided, as a matter of policy, that they should take a precautionary approach to the Greene King application and refuse it.

Act

The Gambling Act 2005 does not specifically prevent pubs obtaining operating licences or bingo premises licences. However, the Gambling Commission decided that this was not a development it wished to allow. The commission reasoned that a pub environment was one primarily for the supply and consumption of alcohol and not an environment for gambling and high-stakes gaming machines.

Greene King appealed to the First Tier tribunal, which handed down its decision on 2 December 2014. The tribunal allowed the appeal and remitted the bingo operating licence applications back to the Gambling Commission with a direction that the applications be granted.

In allowing the appeal, Judge NJ Warren accepted Greene King’s submission that the commission’s purpose in refusing the application was to prevent Greene King from applying for premises licences for its pubs.  The judge said parliament had concluded questions about premises should be determined locally by councils. He went on to say that the commission’s role in respect of premises licences is to "give guidance, make representations, even appeal against the licensing authorities’ decisions — but not to usurp the role of the decision maker".

Tribunal

Not surprisingly, the Gambling Commission did not agree with the decision of Judge NJ Warren and on 22 December 2014, the First Tier tribunal granted the Gambling Commission permission to appeal. The commission, in its press release, referred to the potential for large numbers of high-stakes gaming machines in pubs and concern that the "ruling appears to handicap the commission doing what it is set up to do — that is react to new developments and protect the vulnerable".

The commission went on to state: "We are clear, and this view is strongly supported by the Government, that commercial betting, gaming and bingo and any associated high-stakes and prize machines, should be provided only in separate premises licenced for that specific purpose — premises that adults make a deliberate choice to visit in order to gamble."

Although the litigation is specifically related to bingo and the provision of gaming machines in pubs, it now goes to the very heart of the Gambling Commission’s ability to regulate the gambling industry. The First Tier tribunal decided the Gambling Commission had gone too far in refusing Greene King’s application for the reasons given. We know the Gambling Commission does not agree, because it has appealed to the Upper Tier tribunal.

Decision

The Gambling Commission has announced it is working closely with the Department for Culture, Media & Sport to see how it can use powers to keep commercial gambling in dedicated licensed premises and stop it spreading to pubs. This suggests there is a political will to ensure the Gambling Commission is better armed to react to new developments within the gambling industry, and specifically in relation to gambling within pubs.

Any Upper Tier tribunal decision has the potential to have a significant impact on the gambling industry as a whole. We do not expect the Upper Tier tribunal to make a decision until at least the summer or early autumn.