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Session 2003 - 04 Publications on the internet Other Bills before Parliament Arrangement of Clauses (Contents)

Gambling Bill

These notes refer to the Gambling Bill as introduced in the House of Commons on 18th October 2004 [Bill 163] GAMBLING BILL EXPLANATORY NOTES INTRODUCTION 1.     These explanatory notes relate to the Gambling Bill as introduced into the House of Commons on 18th October 2004. They have been prepared by the Department for Culture, Media and Sport in order to help the reader of these clauses and to assist debate on them. They do not form part of the Bill and have not been endorsed by Parliament. 2.     These notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the clauses. Therefore, where a clause or a part of a clause does not seem to require any explanation or comment, none is given. BACKGROUND 3.     The Gambling Bill gives effect to the Government's proposals for reform of the law on gambling. The Bill contains a new regulatory system to govern the provision of all gambling in Great Britain, other than the National Lottery and spread betting. 4.     A draft Bill was published in November 2003 (Cm 6014), and further draft clauses were published in February and March 2004. The Bill followed on from the publication of a Government White Paper "A Safe Bet for Success" (Cm 5397) published in March 2002. The White Paper was itself the Government's response to the report of the Gambling Review Body (Cm 5206) published in July 2001. The purpose of the publication of the draft Bill was to enable pre-legislative scrutiny to take place, by a Joint Committee of both Houses. The Joint Committee was convened on 16th September 2003, and produced two reports on 7th April 2004 (HL paper 63-1; HC 139-1) and 22nd July 2004 (HL Paper 146-1; HC 843-1). The Government's responses to these reports were published on 14th June 2004 (Cm 6253) and 22nd September 2004 (Cm 6330). 5.     The present legislation on gambling is contained, primarily, in three statutes: the Betting, Gaming and Lotteries Act 1963 (c.2), the Gaming Act 1968 (c.65) and the Lotteries and Amusements Act 1976. The Bill will repeal all three measures. [Bill 163—EN]     53/3 SUMMARY OF THE BILL 6.     Gambling will be unlawful in Great Britain, unless permitted by: the measures contained in this Bill; or measures contained in the National Lottery etc. Act 1993 (c.39), or pursuant to the Financial Services and Markets Act 2000 (c.8). 7.     Two comprehensive offences are established: providing facilities for gambling or using premises for gambling, in either case without the appropriate permission. Such permission may come from a licence, permit, or registration granted pursuant to the Bill or from an exemption given by the Bill. Where authority to provide facilities for gambling is obtained under the Bill, it will be subject to varying degrees of regulation, depending on the type of gambling, the means by which it is conducted, and the persons by whom and to whom it is offered. 8.     The Bill introduces a unified regulator for gambling in Great Britain, the Gambling Commission ("the Commission"), and a new licensing regime for commercial gambling (to be conducted by the Commission or by licensing authorities, depending on the matter to be licensed). The Bill removes from licensing justices all responsibility for granting gaming and betting permissions, which they exercised previously. Instead, the Commission and licensing authorities will share between them responsibility for all those matters previously regulated by licensing justices. 9.     The Commission will not regulate spread betting, which is currently the preserve of the Financial Services Authority (at least for the time being), or the National Lottery, which is regulated by the National Lottery Commission. Those aside, the Commission will regulate all commercial gambling in Great Britain. 10.     The Commission will take over from the Gaming Board for Great Britain. In addition to assuming responsibility for the Board's current remit of regulating gaming and certain lotteries, the Commission will take on responsibility for regulating betting. The Commission will be responsible for granting operating and personal licences for commercial gambling operators and personnel working in the industry. It will also regulate certain lottery managers and promoters. The Bill sets out different types of operating licence that cover the full spectrum of commercial gambling activities conducted in Great Britain. It also makes provision for the Commission to have powers of entry and inspection to regulate gambling, with safeguards for those subject to the powers. 11.     The Bill establishes a Gambling Appeals Tribunal to hear appeals from decisions made by the Commission. 12.     Licensing authorities will have new powers to license gambling premises within their area, as well as undertaking functions in relation to lower stake gaming machines and clubs and miners' welfare institutes. In England and Wales local authorities are given these responsibilities; in Scotland they are given to licensing boards. There will be a new system of temporary use notices. These will authorise premises that are not licensed generally for gambling purposes to be used for certain types of gambling, for limited periods. 13.     The Bill contains three licensing objectives which underpin the functions that the Commission and licensing authorities will perform. These objectives are central to the new regulatory regime created by the Bill. They are: Protecting children and other vulnerable persons from being harmed or exploited by gambling; Preventing gambling from being a source of crime or disorder, being associated with crime or disorder, or being used to support crime; and Ensuring that gambling is conducted in a fair and open way. 14.     Regulation of gambling in Great Britain will be achieved through a variety of measures established under the Bill. These include: Secondary Legislation; Conditions on Licences; Codes of Practice; and Guidance. 15.     The Bill recognises and accommodates the significant technological changes that have taken place in the last 40 years. The Bill requires regulation of gambling where the player is not present on the operator's premises. For example, operators based in Great Britain must obtain an operating licence to authorise the provision of gambling via remote communication e.g. television or the internet. Moreover, the new licensing system has been designed to keep pace with technological developments, so that, subject to appropriate Parliamentary approval, gambling delivered by new, unforeseen, methods can be regulated in the future. 16.     The Bill revises the law of gambling. For example it will no longer be a requirement that casinos can only be situated in certain "permitted" areas of Great Britain; commercial bingo halls and casinos will no longer have to operate as clubs with a 24 hour membership rule (making them places to which the public will now have access), and betting will now be able to take place on tracks on Good Friday or Christmas Day. The Bill also repeals legislation that has prevented contracts relating to gambling from being enforceable through the courts. 17.     The Bill introduces a new regime for gaming machines. A new definition of gaming machine is provided, together with power to prescribe categories. The Bill provides certain entitlements for commercial operators to use specified numbers and categories of machines in consequence of their licences. It also establishes permit procedures for authorising use of the lowest stake gaming machines in specific locations. 18.     The Bill provides protection for children and vulnerable adults from the effects of harmful gambling. It will do this through a number of specific offences that will prevent children and young persons from being given access to inappropriate or harmful gambling opportunities. In particular, it will be an offence to invite or permit a child or a young person to gamble contrary to the provisions of the Bill. The Commission is required to promote socially responsible gambling through licence conditions and codes of practice directed at those providing facilities for gambling. The Bill also provides powers for the Commission to void bets that are unfair, for example due to cheating. 19.     A revised regime for the law of lotteries is contained in the Bill, building upon that set out in the Lotteries and Amusements Act 1976, which the Bill repeals. 20.     The Bill makes provision for the advertising of gambling, creating new offences relating to the advertising of unlawful gambling and providing powers for the Secretary of State to make regulations controlling gambling advertisements. 21.     The Bill establishes a series of authorisations for private and non-commercial gambling in Great Britain. This includes authorisations for domestic gaming and betting, and provisions for gaming and lotteries at non-commercial events. STRUCTURE OF THE BILL 22.     The Bill is set out as follows: Part 1, and Schedules 1 and 2 introduce the fundamental concepts used in the Bill, including definitions for "gambling", "betting", "gaming", "lottery" "casino", "remote gambling" and "licensing authorities". Part 1 also makes provision for situations where activities may fall into more than one category of gambling. Part 2, and Schedules 3 and 4 establish the Gambling Commission, define its powers and effect the transfer from the Gaming Board of Great Britain. The core powers and duties of the Commission are set out, including its consultation obligations. Part 3 sets out the general offences, including two key offences: the unlawful provision of facilities for gambling and the unlawful use of premises for this purpose. Part 3 also makes provision for the prohibition of "chain gifting schemes", a revised offence of cheating, and provisions on the manufacture of gambling software. Part 4 establishes a number of specific offences that involve the participation of children and young persons in gambling, their employment in relation to gambling and their entry to premises licensed to provide gambling. Part 5 and Schedule 6 concern operating licences issued by the Commission. This Part establishes: ????????????????     The different types of licence and the rules relating to them; ????????????????     The conditions which may be attached to them; ????????????????     The required procedure for applying for them; ????????????????     The requirements as to their duration and validity; and ????????????????     A review procedure, including powers to revoke licenses and impose financial penalties. Part 5 also provides powers for the raising of a levy on operating licence holders. Part 6 concerns personal licences issued by the Commission. It defines the circumstances in which the Commission can impose requirements for a person to hold a personal licence, and the procedures and rules relating to personal licences. Part 7 and Schedule 7 create a tribunal to hear appeals from decisions taken by the Commission and provide the relevant powers and procedures for bringing an appeal. Part 8 concerns premises licences issued by licensing authorities. This Part describes the functions of licensing authorities, the various types of premises licence and the procedure for application. It sets out powers for licensing authorities and the Secretary of State or Scottish Ministers to attach conditions to licences. There are provisions on the duration, transfer and review of licences, and the mechanisms by which appeals can be made. Part 8 also contains a resolution-making power for licensing authorities to determine that they will not grant further casino premises licences in their area. Part 9 provides a procedure for authorising the temporary use of non-gambling premises for gambling. Licensing authorities are responsible for these authorisations, which are time limited. Part 10 of and Schedule 8 to the Bill provide a new framework of regulation for gaming machines. There is power for the Secretary of State to prescribe categories of machine, by reference to the levels of stake and prize, the nature of the prize, and the premises where the machines are to be located. Manufacture and supply of a gaming machine will require an operating licence from the Commission, and making a gaming machine available for use without the necessary permission is an offence. Part 11 and Schedule 9 establish a new regime for lotteries, which is based upon, but revises the regime set out in the Lotteries and Amusements Act 1976. A new category of lawful lottery, the customer lottery, is created, together with a number of new rules concerning the operation and promotion of lotteries. Part 12 and Schedule 10 establish a new regime for gambling in clubs and miners' welfare institutes, developed from the regime in the Gaming Act 1968. It makes provision for the grant of permits by licensing authorities where gaming exceeds certain levels or where it involves the provision of gaming machines. There is also a requirement for bingo operating licences to be obtained, where the size of the bingo games played exceeds a specified threshold. Part 12 makes provision for gaming in premises holding an alcohol licence, and the use of gaming machines at travelling fairs. Part 13 and Schedule 11 make provision for prize gaming which is to be permitted in certain locations, subject to specific rules. Part 14 and Schedule 12 make provision for private and non-commercial gambling, which the Bills authorises without any requirement for further permission. Part 15 deals with the inspection rights and powers that are needed by the police, Commission enforcement officers, and local authority officers so that they can carry out their functions under the Bill. Safeguards are afforded to those who may be the subject of inspection. Part 16 provides a new regime for the advertising of gambling, replacing a number of provisions spread across different pieces of legislation, that the Bill repeals. It creates new offences relating to the advertising of unlawful and foreign gambling, and provides powers for the Secretary of State to make regulations controlling the advertising of gambling. Part 17 makes provision for contracts relating to gambling. It repeals a number of statutes, dating from the eighteenth and nineteenth centuries, which prevent gambling contracts from being enforceable at law. It also makes provision for contracts relating to bets to be made void in circumstances where the Commission believes such contracts have been rendered unfair by the misuse of information or by cheating. Part 18 provides an interpretation clause and a number of general Bill wide provisions. Part 18 and Schedule 5 also provide powers for the Commission to exchange information with other bodies and persons in the exercise of their functions. Part 18 and Schedule 15 give the Secretary of State power to make regulations to provide for the transition from the current regime for gambling regulation to the new regime established by the Bill. Schedules 13 and 14 provide for consequential amendments to other legislation and for repeals as a result of the Bill. TERRITORIAL EXTENT 23.     The Bill generally extends to England and Wales, and to Scotland with the exception of clauses 141 (legal assistance scheme), 161 (door supervision) and 325 (prosecution by licensing authority). Clauses 40 (chain gift schemes) and 319 (foreign betting) apply to Northern Ireland. Territorial application: Wales 24.      The Bill's effect in Wales is the same as in England. The Bill contains no provisions that relate exclusively to Wales, or affect the National Assembly for Wales. Territorial application: Scotland 25.     The Bill's effect in Scotland is the same as in England, with the exception of the following clauses: clauses 141 (legal assistance scheme), 161 (door supervision) and 325 (prosecution by licensing authority) are not applicable in Scotland; clauses 143 (form of licence), 151 (notice of application), 152 (representation), 158 (mandatory conditions), 159 (default conditions), 170 (annual fee), 204 (giving notice) and 327 (three-year licensing policy), provide Scottish Ministers with the power to make their own regulations in respect of premises licence matters in Scotland; and clauses 30 (provision of facilities for gambling), 34 (use of premises), 39 (cheating), 132 (breach of personal licence condition), 230 (penalty), 248 (penalty), 311 (foreign gambling), 321 (false information) and 324 (forfeiture) make provision for a term of imprisonment on summary conviction not to exceed 51 weeks. The application of these clauses to Scotland differs in that the maximum term of imprisonment is 6 months. PART 1: INTERPRETATION OF KEY CONCEPTS Introduction 26.     Part 1 of the Bill sets out definitions for the most important expressions and concepts that run through the Bill. Part 18 also contains an interpretation clause for the Bill. Clause 1: The licensing objectives 27.     The Bill sets out licensing functions to be exercised by the Commission in relation to operating and personal licences, and by licensing authorities in relation to the licensing of premises and the grant of certain permits. In exercising these functions, the Commission and licensing authorities must be guided by the licensing objectives, which underpin the new regulatory regime. The licensing objectives for the Bill are: 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. Clause 2: Licensing authorities 28.     This clause defines the term "licensing authority" and therefore determines who is to discharge the licensing authority's functions under the Bill. These functions include the licensing of gambling premises under Parts 8 and 9; the issue of permits authorising gaming and gaming machines in other premises under Parts 10, 12 and 13; and the registration of certain lotteries under Part 11. In England and Wales, local authorities are to act as the licensing authority for the purposes of the Bill. In Scotland, licensing authorities are to be licensing boards constituted under section 1 of the Licensing (Scotland) Act 1976 (c.66). 29.     The definition of "licensing authority" mirrors that in the Licensing Act 2003 (c.17), omitting certain bodies who should have functions only in relation to the subject matter of that Act. This will allow licensing authorities in England and Wales to coordinate their functions in relation to alcohol licensing and the licensing of gambling premises, as is already possible in Scotland. Part 8 makes further provision to achieve this. Clause 3: Gambling 30.     This clause defines "gambling". The present legislation provides for the regulation of gaming, betting and lotteries in various ways, but does not recognize a generic concept of gambling of which gaming, betting and lotteries are specific kinds. The Bill adopts the approach recommended by the Gambling Review Body, that there should be a single regulatory system for gambling, with different and distinctive provision for any of its specific forms, as appropriate. Accordingly, a definition of "gambling" is provided which defines the forms of gambling which are to be brought within the system of regulation set out in the Bill, and distinguishes them from activities which, although they combine expenditure and the influence of chance, should not be treated as gambling for the purposes of regulation. Further clauses in this Part contribute to this definition. Clause 4: Remote gambling 31.     The Bill contains specific provisions concerned with the regulation of the various technological means by which gambling activities can now be conducted. The Bill adopts the concept of "remote gambling" to cover gambling where the participants are not face to face on the same premises. 32.     This clause defines "remote gambling" to mean gambling where people are participating by means of "remote communication". The types of remote communication by which people may participate in remote gambling are: the internet; telephone; television; radio; or any other kind of electronic or other technology for facilitating communication. This list encompasses modern means of communication such as interactive television and mobile telephony, and is able, by virtue of sub-paragraph (e), to ensure that the definition keeps pace with future developments in this field. However, in order to ensure clarity as well as flexibility for the regulation of gambling, the Secretary of State may specify in regulations that a specified system or method of communication is, or is not, to be treated as a form of remote communication for the purpose of the definition. Clause 5: Facilities for gambling 33.     A fundamental concept in the Bill is the provision of facilities for gambling. It underpins the offences in Part 3 of the Bill, and the requirements for licensing in Parts 5, 6 and 8. There are many ways in which individuals and organisations can provide gambling activities, or take part in them, whether through remote communication or in more traditional ways. This clause therefore defines the activities which are subject to regulation under the Bill. 34.     Subsection (1) sets out the circumstances in which a person is to be treated as providing facilities for gambling. 35.     The list in paragraphs (a) to (c) of subsection (1) is aimed at different levels and aspects of the operation of gambling. Paragraph (a) is aimed at persons 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 persons to gamble in accordance with arrangements made by them. 36.     In paragraph (b), the reference to providing arrangements for gambling carries a general flavour of causing facilities to be available. The 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. 37.     Paragraph (c) is concerned with those persons who are directly involved in the gambling operation itself. Persons who participate in the operation 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 table. Persons who participate in the administration of gambling will 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 following the completion of a betting transaction. 38.     Subsection (2) restricts the scope of subsection (1) by providing for certain exceptions. The exceptions 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)), e.g. the supplier of gaming chips to a casino; the supply of goods (other than a gaming machine) to a person who may use them for gambling, but does not intend to use them to provide facilities for gambling (paragraph (b)), e.g. a retailer supplying a pack of playing cards to a person for domestic use; and electronic communications providers who do nothing more than act as a carrier of information for persons providing facilities for gambling or consumers partaking in gambling, e.g. an internet service provider or mobile telephone operator (paragraph (c)). 39.     Subsection (3) ensures that where a person makes available a means of remote communication (such as an internet connected personal computer) which has been adapted or presented in such a way as to facilitate gambling, it is treated as providing facilities for gambling under the Bill. This would include, for example, where an internet connected personal computer is adapted so that it has a home page menu 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. Clause 6: Gaming and game of chance 40.     This clause defines "gaming" for the purposes of the Bill as playing a game of chance for a prize, and then further defines the meaning of a "game of chance" and the concept of playing. The definitions are based on the relevant provisions in section 52 of the Gaming Act 1968, revised for the requirements of the Bill. In particular, subsection (3) provides that a person can play a game of chance even if there are no other players, or the actions of a computer stand in for another player. This ensures that gaming on a machine or through virtual games is brought within the scope of the Bill. 41.     Subsection (6) provides the Secretary of State with the power to prescribe whether a particular activity (or an activity carried on in specified circumstances) does or does not amount to: a game; a game of chance; or a sport, for the purpose of defining gaming under this clause. The purpose of subsection (6) is to cater for circumstances, which might arise in the future, where either a new product or activity is introduced and there is doubt as to its treatment under this clause, or where the interpretation being given to this clause means it would be prudent to put beyond doubt the proper classification of a particular activity in relation to the definition of gaming.

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Prepared: 19 October 2004