House of Commons - Explanatory Note
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Clauses 206 to 208: Objections and modification by agreement

462.     The licensing authority or anyone else entitled to receive a copy of a notice may object to it. The grounds for objections are that, having regard to the licensing objectives set out in Part 1 of the Bill, the notice should not have effect, or should only have effect with modifications. A notice of objection must be served upon the person seeking to make the facilities for gambling available (i.e. the server of the temporary use notice) within 21 days of the date of the temporary use notice, and must state the reasons for the objection. A copy must also be given to the licensing authority.

463.     Where objection notices have been served, the licensing authority must hold a hearing at which representations may be made by the person who gave the temporary use notice, the people who objected, and any other persons who were entitled to receive a copy of the notice. This requirement may be waived if the licensing authority, and each person who would be entitled to make representations, agree in writing that a hearing is unnecessary.

464.     Where an objection has been made to a temporary use notice, but a hearing has not taken place (either because it has not yet happened, or because it has been dispensed with), anyone who has raised objections under these clauses may propose a modification to the notice. If the modifications are agreed, a new temporary use notice, incorporating the modifications, can be served and the original notice will be treated as withdrawn. In these circumstances, the three-month time limit and fee will not apply to the new temporary use notice. If all objections are dealt with by modifications then this will dispense with the further need to hold a hearing in relation to the notice. If not, then those with objections outstanding can continue to contest the notice.

Clauses 209 to 211: Counter-notices and dismissal of objections

465.     Where:

  • an objection notice has been served;

  • modification has not removed the objection; and

  • either a hearing has taken place, or been dispensed with,

the licensing authority may determine that the temporary use notice should not have effect, or should only have effect with modifications. The principles it must apply in reaching a view are the same as those it applies when determining premises licence applications. Therefore, it should aim to permit the temporary use of premises for gambling, in so far as it thinks that permission:

  • accords with relevant Commission codes of practice and guidance;

  • is reasonably consistent with the licensing objectives; and

  • is in accordance with the authority's three-year licensing policy (established by the authority under Part 18 of the Bill).

466.     If the authority concludes that the temporary use notice should not have effect, or should only have effect with modifications, it must serve a counter-notice upon the person who served the temporary use notice. This counter-notice may provide that the temporary use notice:

  • will not have effect;

  • will have effect only in respect of a certain activity;

  • will only have effect in relation to an activity for a certain period of time or during certain hours of the day; or

  • will be subject to a condition.

467.     A counter notice must state the licensing authority's reasons for giving it

468.     If the authority concludes that it will not give any counter-notice, then it must inform all relevant parties of this fact. The result will be that any objection notices have been dismissed by the authority.

469.     Rights of appeal are available following an authority's decision to issue a counter-notice or to dismiss objections under these clauses. The person who gave the temporary use notice, and any person entitled to receive a copy of it, may appeal. An appeal lies to the magistrates' court, and must be made within 21 days of receiving notice of the licensing authority's decision. In Scotland, the appeal will be to the sheriff in whose area the premises are located. If the appeal is against the decision of the licensing authority not to issue a counter notice, then the person giving the temporary use notice will also be a respondent in the case.

470.     The magistrates' court or sheriff may, on hearing an appeal, dismiss it; direct the licensing authority to take some specified action; and make an order as to costs (or expenses). Where the decision is remitted to the licensing authority, the same rights of appeal will flow from their new decision as applied to their original one.

471.     A further right of appeal exists to the High Court or Court of Session on a point of law.

Clause 212: Endorsement of notice

472.     If no objections are raised to a temporary use notice during the 21-day period after it is made, then the licensing authority will return the notice to the person who gave it, endorsing it as valid. The Secretary of State may prescribe the precise method of endorsement in regulations.

473.     If a notice of objection was served, but did not result in a counter-notice being served (i.e. the objections were dismissed) then the temporary use notice will similarly be endorsed and returned to the person who gave it.

474.     An endorsed temporary use notice provides authorisation for the specified facilities for gambling to be provided at the relevant premises, in accordance with its terms.

Clause 213: Consideration by licensing authority: timing

475.     Licensing authorities will have two months from the date of the temporary use notice to complete proceedings on the notice. This includes considering whether to give a notice of objection; holding a hearing or agreeing to dispense with one, and giving a counter notice or a notice dismissing any objections.

Clauses 214 & 215: Miscellaneous provisions

476.     An endorsed temporary use notice must be displayed on the premises to which it relates at any time when it is being relied upon. It must also be made available on request to a police constable, a Commission enforcement officer or an authorised local authority officer.

477.     A person who has given a temporary use notice to a licensing authority may withdraw it at any time. It will then cease to have effect and any proceedings relevant to it will cease, except in relation to a matter which arose during, or in relation to, any time during which it was in effect.

Clause 216: Vehicles and vessels

478.     A temporary use notice may be given in respect of a passenger vessel, but may not be given in relation to a vehicle. The interpretation clause in Part 18 contains provisions for defining vessels and vehicles, and this clause contains rules for determining where vessels are located for the purpose of a licensing authority's functions under this Part.

Clause 217: Delegation of licensing authority functions

479.     The provisions of Part 8 of the Bill, in relation to the delegation of functions to a licensing committee established under the Licensing Act 2003, and further, delegation to officers of the authority, apply similarly to this Part. This clause makes such provision and specifies that an officer may not determine whether to issue a counter notice. Such decisions are to be made by the licensing committee.

Clause 218: Register

480.     This clause makes provision for licensing authorities to maintain registers of temporary use notices in a form and manner specified by the Secretary of State in regulations. The register must be available for inspection by members of the public at all reasonable times, and a copy must be provided to a member of the public on request. A charge may be made for copies.

481.     The Secretary of State may require the Commission, through regulations, to maintain a register of temporary use notices, which , in turn, should be available for inspection by the public. Regulations may require licensing authorities to provide information to the Commission in a specified fashion. Regulations may also relieve licensing authorities from the need to maintain a register.

PART 10: GAMING MACHINES

482.     Part 10 contains the main provisions of the Bill on gaming machines. It sets out a definition of "gaming machine" together with the offences relevant to illegal use or manufacture of a gaming machine. Parts 5 and 8 of the Bill deal with certain authorisations and entitlements to use gaming machines that arise from operating or premises licences respectively. This Part provides general provisions which apply to the use of any gaming machine, and includes regulation-making powers for the Secretary of State to set categories of machine and rules on use.

483.     Manufacture, supply, maintenance, repair, installation and adaptation of a gaming machine are all regulated activities under this Part.

484.     This Part applies to any gaming machine situated in Great Britain, or anything done in Great Britain in relation to a gaming machine, wherever that machine is situated. For example, a gaming machine manufactured in Great Britain, for export to another country, will be covered by the provisions in Part 10.

Clause 219: Gaming machine

485.     This clause provides a definition of a gaming machine for the Bill. It is significantly broader than the definition of gaming machine in section 26 of the Gaming Act 1968, which the Bill repeals. The new definition accommodates developments in technology which have taken place since the 1968 Act. It also covers a wide range of gambling activities which can take place on a machine, and includes betting on virtual events.

486.     Subsection (1) defines a gaming machine as a machine that is designed or adapted for use by people to gamble (whether or not it can be used for other purposes). This is a wide definition. Subsection (2) then sets out a number of exceptions which ensure that the definition does not capture certain specified types of machine.

487.     The definition at subsection (1) does not depend on any concept of players depositing stakes into the machine, or on the gambling activity being generated from within the machine itself (as opposed to being transmitted to the machine from other equipment). Nor is it restricted solely to gaming. To the extent that these may have been requirements under the 1968 Act, they are all abolished by the new definition.

488.     The exclusions at subsection (2) provide that the following are not gaming machines:

  • A domestic or dual-use computer which can be used for participating in remote gambling. The Secretary of State will describe the meaning of "domestic" and "dual-use computer" in regulations. The purpose of this exception is to exempt internet terminals and home computer equipment which are not dedicated or specifically configured for gambling activities, from the definition of gaming machine. There mere fact that a home computer can be used to access gambling facilities should not render the computer a gaming machine. However, someone offering the public access to the internet, via terminals, and configuring them to encourage gambling, is making a gaming machine available for use (unless any other exception applies, such as betting on real events). The regulations to be made under this power will set out the relevant criteria for determining whether equipment is a domestic or dual use computer, and can refer to matters such as the location of the computer, the software installed on the computer, and the circumstances in which the computer is used (subsections (2)(a), (4)(e) and (5));

  • A telephone or other communications device that can be used for remote gambling. The fact that, with modern technology, a telephone or interactive television can be used to participate in gambling will not render the equipment a gaming machine (subsection (2)(b));

  • A machine which is designed or adapted for betting only on real events. This exemption is designed to prevent equipment, such as automated betting terminals, through which people place bets on real events, from being counted as gaming machines. Such equipment is not unregulated. Making it available as part of a business will be providing facilities for betting, and will require the relevant operating licences under the Bill. However, in regulatory terms, these machines are not to be treated as gaming machines (subsection (2)(c)).

  • A machine upon which someone enters a lottery. Provided that the machine does not determine or announce the result of the lottery, then such a machine is not a gaming machine. This means that if a machine only dispenses lottery tickets (for a draw that takes place completely independent of the machine), or vends lottery paper scratchcards, then the machine is not brought within the definition. However, if the entire lottery is conducted by means of the machine, then that is to be a gaming machine (subsection (2)(d)).

  • A machine for playing bingo which is used by the holder of a bingo operating licence, in accordance with conditions attached by the Commission. This is designed to exempt mechanised cash bingo equipment, and similar items, which are used for playing real bingo games, but whose degree of computerisation or mechanisation means that it would otherwise be caught by the definition of gaming machine. The need for it to comply with Commission conditions ensures that the exemption is construed narrowly and not extended to any machine on which a virtual bingo game could be played (subsection (2)(e));

  • A machine which is used for playing real games of chance and which:

    ?????????     is controlled or operated by someone employed to do so (e.g. a croupier spinning a roulette wheel); or

    ?????????     is used in connection with a real game of chance which is controlled or operated by an individual (e.g. a computer terminal for staking on the outcome of a roulette wheel that is spun by a croupier) (subsection (2)(f)).

  • In both these instances the equipment could be construed as a gaming machine under the broad definition, but the fact that it is operated as part of a real game of chance means that it is not to be regulated under the gaming machine provisions. Such equipment and activities will be regulated under other parts of the Bill.

489.     Subsection (3) deals with the position of machines which are used for playing a real game of chance, but which have no human involvement from the organisers of the gaming, and which are not linked to a game which does have such human involvement. These machines are gaming machines, and will cover apparatus such as a roulette wheel which is completely mechanised, and works without the need for any croupier to spin the ball or accept stakes.

490.     These exemptions will prevent the broad definition of gaming machine from capturing equipment unintentionally. The definition is intended to cover a gaming machine that is used for taking part in virtual gaming, virtual betting or a virtual lottery (where the draw is part of the activity displayed on the machine).

491.     Subsection (4) provides clarification about the characteristics of a gaming machine. Reference to part of a gaming machine includes computer software to be used in a gaming machine, but does not include a component of a gaming machine which does not influence the outcome of the gambling (subsection (4)(b)). This means that where a gaming machine technical operating licence is required for the manufacture, installation etc. of gaming machines, computer software intended for use in the machine is included within the licensing requirement. However, the plywood from which the machine is constructed is not. References to installing part of a gaming machine include installing computer software (subsection (4)(c)). This is required because machines can be configured or changed by the downloading of gambling software, without any need to physically interfere with the machine.

Clause 220: Gaming machines: Categories A to D

492.     Gaming machines will be divided into categories, with different entitlements set out in the Bill to use the various categories. This clause requires the Secretary of State to define, in regulations, four classes of gaming machine, to be known as categories A, B, C and D. Category B may also be sub-divided into further sub-categories, and these regulations may identify to which sub-category of B machine an entitlement relates (subsections (1) and (2)).

493.     The categorisation will refer to the particular facilities for gambling which are offered on the machine, rather than any particular physical manifestation (subsection (3)). In particular, under subsection (4), the regulations can specify:

  • the maximum amounts that can be paid to use the machine;

  • the value or nature of the prize delivered as a result of its use; or

  • the types of premises on which it can be used.

494.     Details of the proposed A to D categorisation of gaming machines is set out in the Regulatory Impact Assessment published alongside the Bill. The intention is that category D will have the lowest levels of stakes and prizes, and that these will increase in value, up to category A, which will be a machine with no limits as to stakes and prizes. Details of how to obtain a copy of the Regulatory Impact Assessment are set out at the end of these notes.

495.     Part 8 of the Bill contains the principal commercial entitlements for different types of licensed gambling premises to use different categories of machines. Different permissions are also available under Part 12 of the Bill, for clubs, miners' welfare institutes, alcohol licensed premises and travelling fairs, and, also, pursuant to this Part, for family entertainment centres.

Clauses 221 to 223: Other definitions

496.     These clauses set out definitions for an adult gaming centre, a family entertainment centre, (including a licensed family entertainment centre), and a "prize" in relation to a gaming machine.

Clauses 224, 225 & 229: Use and supply of machines

497.     The Secretary of State can make regulations about the way in which gaming machines can operate. It will be an offence to make a gaming machine available for use if the machine does not comply with such regulations.

498.     Under subsection (2), the regulations may provide, in particular, for rules about:

  • The method by which payment may be made for use of machine (i.e. whether coins, banknotes, smartcards, tokens or other methods can be used). It is a separate offence, under this Part, to supply, install or make a machine available which can be paid for by a credit card;

  • The nature of, and arrangements, for receiving or claiming prizes;

  • The rollover of stakes or prizes (i.e. the carry over of amounts paid or won to a subsequent use of the machine);

  • The proportion of stakes or sums paid for use which must be returned as prizes;

  • The display of information on or around the machine (e.g. stickers on minimum age of use); or

  • Any other matter relating to the way that the machine works (e.g. whether it must operate randomly or not).

499.     The Secretary of State may also make regulations about the supply, installation, adaptation, maintenance or repair of a gaming machine.

500.     The penalty for making a machine available for use, in breach of these regulations, is a maximum term of imprisonment of 51 weeks in England and Wales, or 6 months in Scotland, or a fine up to level 5 (£5,000 currently), or both.

Clause 226: Making machine available for use

501.     The principal offence of making a gaming machine available for use, unlawfully, is set out in this clause. A person will commit an offence if he makes any gaming machine available for use unless he:

  • Holds an operating licence which permits such use;

  • Holds a family entertainment centre permit;

  • Holds a club gaming permit or a club machine permit under Part 12;

  • Has appropriate permission for alcohol licensed premises under Part 12;

  • Makes gaming machines available at a travelling fair in terms of Part 12, or;

  • the machine offers no, or a limited, prize (as defined in this Part).

502.     Under Part 3 of the Bill it is a separate offence for a person to use premises for making a gaming machine available for use without the necessary authorisation or exemption, such as a premises licence or a category D gaming machine permit. It will also be an offence under this clause to make a gaming machine available for use if the machine does not comply with regulations made by the Secretary of State, described above.

503.     The penalty for this offence is a maximum term of imprisonment of 51 weeks in England and Wales, or 6 months in Scotland, and/or a fine up to level 5 (£5,000 currently).

Clause 227: Manufacture, supply etc.

504.     As well as setting requirements about the use of machines, the Bill stipulates that various activities concerning the manufacture or supply of a gaming machine must also be regulated by the Commission. Under Part 5 gaming machine technical operating licences are available for those wishing to manufacture, supply, install, adapt, maintain or repair a gaming machine. Failure to hold such an operating licence, when undertaking any of these activities, is an offence under this clause. The penalty is a maximum term of imprisonment of 51 weeks in England and Wales, or 6 months in Scotland, and/or a fine up to level 5 (£5,000 currently).

505.     Exceptions from this offence exist for:

  • those holding a single machine supply and maintenance permit under this Part;

  • where the activities relate to a gaming machine that is for scrap; or

  • where the supply is incidental to the sale or letting of a property.

506.     This means that no operating licence is required where a machine is being broken up and no further use is made of it for gaming machine purposes, and where the machines are ancillary to the sale of a business which uses gaming machines. Any use, after sale, will continue to be subject to the other requirements of the Bill.

Clause 228: Linked machines

507.     It is an offence, under this clause, for gaming machines to be linked so that they operate together, and as a result pay out bigger prizes. There is one exception to this, which is that subsection (2) permits machines to be linked at licensed casino premises provided that all of the machines are situated on the same premises. Linkage of gaming machines in this way does not authorise casino licensees to offer maximum prizes in excess of those allowed for the category of machine being used.

508.     No linking between licensed casino premises is permitted, but subsection (3) gives the Secretary of State power to lift this prohibition, subject to appropriate Parliamentary approval.

509.     The penalty, upon conviction for this offence, is a maximum term of imprisonment of 51 weeks in England and Wales, or 6 months in Scotland, or a fine up to level 5 (£5,000 currently), or both.

Clause 231: Family entertainment centre permits

510.     Family entertainment centre (FEC) gaming machine permits allow certain gaming machines to be made available for use without an operating or premises licence. These permits are issued by licensing authorities using the procedure set out in Schedule 8. They relate to the lowest category of machine: category D. If an FEC wished to use category C and D machines, it would require an appropriate operating and premises licence, under Parts 5 and 8 of the Bill. The permits provided for here, only relate to category D machines.

511.     Only premises which are wholly or mainly used for making gaming machines available for use may hold an FEC gaming machine permit. This is a change from the position prior to the Bill, when any premises could apply for a permit allowing them to use an amusements with prizes gaming machine (the nearest equivalent to a category D machine). The intention is that gaming machines in certain non-gambling premises, like those now sometimes located in fish and chip shops and taxi cab ranks, should to be removed. Permits granted under Schedule 9 to the Gaming Act 1968 will no longer be available under the Bill, except to the extent that they relate to an FEC. Transitional provisions, under Part 18, will give effect to this change, and allow existing permits to continue after the repeal of the relevant provisions of the 1968 Act, until the date on which they would otherwise have expired if those provisions had continued in force. The position of premises holding an alcohol licence is dealt with separately in Part 12.

Schedule 8: Family Entertainment Centre gaming machine permits

512.     This schedule sets out the procedures for the application for and grant of an FEC gaming machine permit by licensing authorities. It also regulates the permit's form and maintenance. Provision is made for the licensing authority to maintain a register of permits issued. Permits cannot be issued to vessels or vehicles.

513.     Under paragraphs 6 to 10, the authority may prepare a statement of its principles in respect of the issue of these permits, and this can include matters which they propose to take into account in considering the suitability of an applicant. In exercising its functions under Schedule 8, including determining any application, the authority may have regard to the licensing objectives but must have regard to any guidance issued by the Commission. The authority must consult the local police prior to granting an application.

514.     Under paragraphs 11 to 21, permits will normally last 10 years, but will lapse if the holder ceases to occupy the premises, dies, becomes unfit to hold the licence or becomes bankrupt or insolvent. Lapsed permits may, however, remain in force for up to six months. This is to allow an orderly transfer of the affairs of the licence holder, and the maintenance of the business (with its machines) while a new permit is obtained. Permits cannot be transferred, but must be re-applied for if there is a new occupier of the premises to which the permit relates.

515.     Holders may surrender their permits voluntarily, and a court may order forfeiture of a permit if the holder is convicted of any relevant offence (see Schedule 6 and the interpretation clause in Part 5). Permits can be renewed, and a licensing authority may only refuse the application if access by an authorised officer of the local authority to the FEC has been refused without reasonable excuse, or renewal would not be reasonably consistent with pursuit of the licensing objectives.

516.     There is an appeal mechanism provided for those who wish to contest a decision of a licensing authority under this Schedule.

 
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Prepared: 19 October 2004