House of Commons - Explanatory Note
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Clauses 256, 257 & 259: Club gaming permit

573.     Members' clubs (but not commercial clubs) and miners' welfare institutes may apply for a club gaming permit from a licensing authority to authorise the provision of games of chance and gaming machines. This permit allows clubs and institutes to offer gaming facilities, in addition to those available under the exempt gaming allowances. Schedule 10 sets out the procedure and rules for this permit.

574.     The club gaming permit will authorise the provision of up to 3 gaming machines in categories B, C or D (but no more than 3 machines in total). The permit is subject to the condition that no person under 18 can use a category B or C machine, and the holder of the permit must comply with a Commission code of practice about the location and operation of gaming machines.

575.     The club gaming permit will also authorise additional gaming facilities to be provided. This gaming falls into two types:

  • Equal chance gaming. This is equivalent to that authorised under the exempt gaming allowances, but without any prescribed limits on maximum stakes or prizes. The other conditions set for exempt gaming apply equally to this entitlement ; and

  • such games of chance as are prescribed in regulations. This provision allows the Secretary of State to authorise particular games involving a bank or unequal chance games to be played under the permit. Under the Gaming Act 1968 pontoon and chemin de fer were permitted. This gaming is subject to a number of conditions, and rules which the Secretary of State may prescribe.

576.     The Secretary of State may make regulations which set different maximum participation fees for exempt gaming and gaming authorised by a club gaming permit. By this means a club which holds a club gaming permit can be permitted to make different charges for equal chance gaming, to a club which relies solely on the exempt gaming provisions.

Clause 258: Club machine permit

577.     Under this clause a club machine permit is available to a members' club, miners' welfare institute or a commercial club. This type of permit authorises the holder to provide up to 3 gaming machines in category B, C or D (but no more than 3 machines in total). It does not authorise the provision of any other type of facilities for gaming. Three conditions are automatically attached to a club machine permit. These relate to prior membership for use of the machines, restrictions on giving children and young people access to category C or B machines; and requiring compliance with Commission codes of practice about the location and operation of machines.

578.     Schedule 10 sets out the procedure in relation to an application for a club machine permit, and the rules which apply to its maintenance and validity.

Schedule 10: Club gaming permits and club machine permits

579.     Schedule 10 describes the procedures for obtaining club gaming and club machine permits, and the rules on their duration, maintenance, renewal and cancellation. Licensing authorities will issue both types of permit, and must keep registers of permits granted.

580.     By virtue of paragraphs 26 and 27 a licensing authority must have regard to Commission guidance and the three licensing objectives in undertaking its functions under this Schedule.

581.     Paragraphs 1 to 9 include a requirement that applications for a permit are copied to the Commission and the police, who may object to the application, in which case a hearing will be required, unless all the parties agree otherwise.

582.     Under paragraph 6 the licensing authority may only refuse an application on certain grounds. These grounds are that:

  • The applicant does not fulfil the requirements for a members' or commercial club or miners' welfare institute and therefore is not entitled to receive the type of permit for which it has applied;

  • The applicant's premises are used wholly or mainly by children or young people;

  • An offence under the Bill or a breach of a permit has been committed by the applicant while providing gaming facilities;

  • A permit held by the applicant has been cancelled in the previous 10 years; or

  • An objection has been lodged by the Commission or the police.

583.     If the authority is satisfied that (a) or (b) are the case it must refuse the application. If (c), (d) or (e) are at issue the licensing authority may reject the licence if they think fit, taking account of any relevant guidance issued by the Commission and the licensing objectives.

584.     A licensing authority has no discretion to attach conditions to a club machine permit or club gaming permit. Part 12 of the Bill sets out particular conditions which are to apply universally to permits of either type.

585.     Paragraph 10 provides a fast track procedure for clubs or institutes in England and Wales which hold a club premises certificate under section 72 of the Licensing Act 2003 (authorising the sale or supply of alcohol or provision of regulated entertainment). Under the fast-track procedure there is no opportunity for objections to be made by the Commission or police, and the grounds upon which an authority can refuse a permit are reduced. This is because the club or institute will already have been through a licensing process in relation to its club premises certificate, and to impose the full requirements of Schedule 10 would produce unwarranted duplication and cost.

586.     Paragraphs 16 to 19 provide that permits, with one exception, will last for ten years (in which case they can be renewed) unless they cease to have effect under another provision of the Schedule. These provisions are those for: lapse, surrender, cancellation or forfeiture.

587.     The exception to the ten year duration is that where a permit has been granted under the fast track procedure, such permits last indefinitely unless the club premises certificate under the Licensing Act 2003 ceases to have effect, or is surrendered or cancelled, or forfeited.

588.     Paragraph 24 sets out full appeal rights from the decisions of licensing authorities under this schedule.

Clauses 262 & 263: Alcohol licensed premises

589.     Clauses 264 to 268 are concerned with the provision of gaming and the making available of gaming machines in premises which are licensed to supply alcohol on the premises under Part 3 of the Licensing Act 2003. These clauses define the exact nature of such premises.

590.     The relevant premises are those which are used primarily for the supply of alcohol for consumption on the premises. This means that premises such as hotels and restaurants are not covered by the definition in this clause because although these premises may be licensed to supply alcohol for consumption on the premises, they are not primarily used for that purpose.

591.     Furthermore, the gaming and gaming machine rights granted in this Part only apply at those times when alcohol is authorised to be sold at the premises.

592.     A reference to "alcohol licensed premises" in these notes means premises which comply with the requirements of clauses 262 and 263.

Clauses 264: Exempt gaming

593.     This clause authorises the provision of gaming facilities on alcohol licensed premises, provided the gaming complies with certain conditions. No further authorisation is required to make the gaming lawful, provided the conditions are complied with.

594.     The conditions are as follows:

  • The facilities are limited to equal chance gaming;

  • Stakes and prizes for the gaming must not exceed any limits as to value or amount prescribed by the Secretary of State;

  • No amount may be deducted or levied from amounts staked or won;

  • No charge may be made for participation in the gaming;

  • The games played may only take place on one set of alcohol-licensed premises, i.e. there may not be any linking of games between premises; and

  • Children and young persons must be excluded from the gaming.

595.     Under section 6 of the Gaming Act 1968 (general provisions as to gaming on premises licensed for retail sale of liquor) cribbage and dominoes may be played for winnings at premises licensed to sell alcohol for consumption on the premises. It is also possible, under section 6, for the holder of such a licence to apply for permission for other forms of gaming on the premises. In all cases conditions may be made to prevent high-stake gaming taking place, and to ensure the gaming does not become the main inducement to attend the premises. The Bill repeals this section.

Clauses 260 & 266: Bingo in clubs and pubs

596.     These clauses contain particular provisions regulating bingo played pursuant to any of the permissions in this Part by clubs or miners' welfare institutes, or on alcohol licensed premises. The purpose of these clauses is to prevent facilities for bingo being offered on a large scale under the various authorisations in this Part. Where a club, miners' welfare institute, or alcohol licensed premises wishes to offer such bingo it will require a bingo operating licence from the Commission, under Part 5. Clubs and miners' welfare institutes are relieved from the general obligation under Part 5 to have at least one management office in the organisation held by a personal licence holder.

597.     The trigger in both clauses for needing a bingo operating licence is that "high turnover bingo" is played in a "high turnover period", and the clauses provide comprehensive definitions for both. The key element is that the total stakes or prizes for bingo games played in any period for 7 days exceeds £1000. Subject to appropriate Parliamentary approval, this figure can be amended by the Secretary of State by order.

Clause 267: Gaming machines

598.     This clause concerns the use of gaming machines on alcohol licensed premises.

599.     The effect of subsection (1) is to give alcohol licensed premises an entitlement to make up to two gaming machines of category C or D available on the premises. Part 10 contains the relevant powers for the Secretary of State to specify categories of gaming machine,

600.     Subsection (2) allows persons holding an on-premises alcohol licence, or applying for such a licence, to apply for a specified number of additional gaming machines to be sited on the premises. These machines can only be machines of category C or D. Such an application is made to the licensing authority under the Licensing Act 2003, and any such additional rights granted will be added as a condition to the alcohol licence. The relevant licensing authority, in reaching its decision, must have regard to the licensing objectives under this Bill (not the Licensing Act) as well as any other matters they think relevant. Where licensing authorities refuse an application for additional gaming machines, or grant it only for a smaller number of machines than that applied for, then the applicant may appeal against the decision. The appeal will be heard by the magistrates' court.

601.     Subsection (4) gives the Secretary of State the power to make regulations prescribing the procedure to be followed in relation to an application for the right to make available additional gaming machines.

602.     Subsection (7) makes it clear that where gaming machines are made available for use under this clause, their provision must be in accordance with all relevant codes of practice issued by the Commission.

603.     Under section 34 of, and Schedule 9 to, the Gaming Act 1968 (other uses of machines for amusement purposes), there is provision for a specific permit to be issued authorising the use of gaming machines under Part III of that Act. These provisions are repealed by the Bill.

Clause 268: Removal of exemption

604.     This clause enables the licensing authority responsible for the issue of an alcohol licence to remove from a licensee the right to provide exempt gaming or the entitlement to site gaming machines provided in this Part.

605.     The licensing authority may do this either when they issue the alcohol licence, or later, once the licence is in effect. The authority can only take away these rights where they think that:

  • the availability of such gaming or machines on those premises is not reasonably consistent with the pursuit of the licensing objectives under Part 1 of the Bill;

  • gaming has taken place, or gaming machines have been made available, in breach of the applicable conditions under this Part; or

  • the premises are used mainly for gaming, or the intention is for them to be used mainly for gaming in the future.

606.     The mechanism for taking away the gaming and machine rights conferred by this Part is to impose a condition on the alcohol licence. The Secretary of State is given the power to make regulations prescribing the procedure to be followed where a licensing authority seeks to add such a condition. This will ensure that the licence holder will have adequate opportunity to submit any representations against the removal of any rights, before the decision is taken by the licensing authority. Subsection (6) also confers a right on the holder of the licence to appeal to a magistrates' court against any decision of the licensing authority under this clause.

Clauses 269 & 270: Travelling fairs

607.     These clauses:

  • define a "travelling fair" for the purposes of the Bill, and

  • grant travelling fairs the right to provide unlimited numbers of category D gaming machines, provided any facilities for gambling offered at the fair are no more than an ancillary amusement.

608.     Fairs are also entitled to offer equal chance prize gaming, under Part 13 of the Bill. This means that any prize gaming and any gaming machines made available must not be the principal activities at the fair. Instead, in order to offer these limited gambling facilities, the fair must be composed mainly of non-gambling amusements and activities.

PART 13: PRIZE GAMING

609.     Part 13 contains authorisations for prize gaming. This is a type of gaming where the organiser puts up the prizes in advance, as distinct from gaming where the stakes of the participants make up the winnings. The definition of "gaming" in Part 1 covers any sort of gaming for prizes or winnings. Therefore, a provision in the Bill which authorises gaming generally, also authorises prize gaming. For example, a bingo operating licence authorises the playing of games of bingo for prizes or winnings. However, in this Part the permissions relate exclusively to prize gaming.

610.     The premises which can receive authorisations under this Part are: adult gaming centres, licensed or unlicensed family entertainment centres, and travelling fairs. There is also a permit for authorising other premises to provide prize gaming, under Schedule 11, and particular allowances for bingo operators.

611.     This Part is derived from provisions in section 16 (provisions of amusements with prizes at certain commercial entertainments) of the Lotteries and Amusements Act 1976 (which is repealed by this Bill). This Part does not replicate every aspect of that section. In particular, lotteries may not be promoted under this Part.

612.     This Part also makes authorisations similar to those offered by section 21 (special provisions as to gaming for prizes) of the Gaming Act 1968 (which is repealed by this Bill).

Clause 271: Meaning of "prize gaming"

613.     To be prize gaming, the prize for which the gaming is played must comply with the following requirements:

  • the nature or size of the prize must not be determined by reference to the number of persons playing the game;

  • the nature or size of the prize must not be determined by reference to the amount staked or raised by the gaming; and

  • the nature or size of the prize must not be determined by reference to any other matter relating to the progress or outcome of the game.

614.     This gaming is therefore different to gaming where the stakes paid by the players are used to calculate the winnings available. The effect of the definition is that in prize gaming the prizes will be determined by the operator of the gaming before play commences, and the payments he receives from the players will not be put directly to any prize on offer. Prize gaming can cover both money and non-money prizes.

Clause 272: Prize gaming permits and Schedule 11

615.     One way of authorising prize gaming is to obtain a prize gaming permit from a licensing authority. This clause and Schedule 11 make provision for the grant and maintenance of prize gaming permits. Anyone who occupies, or proposes to occupy, premises may apply for a permit, but a permit is not available in respect of premises which are subject to a premises licence under Part 8, or a club gaming permit under Part 12. This is because those licences and permits already give such premises the relevant rights to offer prize gaming. A permit cannot be granted for a vessel or a vehicle.

616.     By virtue of the provisions of Part 4, children and young people may only participate in equal chance prize gaming, and not any other form of prize gaming made available pursuant to a permit. There are a number of conditions applicable to prize gaming permits, which are common to all prize gaming authorised by this Part.

617.     Schedule 11 covers the process and procedure of the grant and maintenance of a prize gaming permit. The requirements are similar, but not identical, to those applicable to family entertainment centre gaming machine permits under Part 8 the Bill. The licensing authority must maintain a register of prize gaming permits.

618.     Under paragraph 7 a licensing authority can prepare a statement of principles which they propose to use for determining the suitability of an applicant for a permit. In exercising their functions in relation to prize gaming permits, a licensing authority may have regard to the licensing objectives set out in Part 1 of the Bill, but must have regard to any relevant guidance issued by the Commission. Paragraph 9 requires the authority to consult the local police prior to issuing a permit.

619.     Under paragraphs 12 to 17, a permit will expire after ten years (when it can be renewed) , unless it lapses (in which case certain transitional provisions are made), is surrendered or is forfeited under the provisions of these paragraphs. Renewal applications are considered on the same grounds as an original application (this is different to the renewal of a family entertainment centre gaming machine permit under Schedule 8, where the grounds for refusing renewal are more narrowly defined). Forfeiture can be ordered by any court sentencing a permit holder for a relevant offence, as defined in Part 5 and Schedule 6.

620.     Paragraph 21 provides a full appeals procedure for anyone wishing to appeal against the decisions of a licensing authority under this Schedule.

Clauses 273 & 275: Prize gaming in gaming and entertainment centres and fairs

621.     As a separate authorisation to the prize gaming permit, these clauses grant rights to conduct prize gaming to licensed adult gaming centres (AGCs), licensed and unlicensed family entertainment premises (FECs), and to travelling fairs. Licensed AGCs and FECs may offer any type of prize gaming, but an unlicensed FEC (i.e. one with a permit under Schedule 8 to the Bill), and a fair, may only offer equal chance prize gaming.

622.     The prize gaming which can be offered under these clauses is subject to conditions, and children and young people can only participate in equal chance gaming in a licensed FEC, and not any other form of prize gaming (people under 18 are not allowed into AGCs at all).

623.     In addition, for prize gaming to be offered lawfully at a fair, the gaming, together with any other facilities for gambling offered, must be ancillary to the other amusements and activities offered at the fair. In other words, the fair must not primarily be for offering facilities for gambling.

Clause 274: Bingo halls

624.     Under a bingo operating licence, any form of bingo may be offered. However, section 21 of the Gaming Act 1968 conferred certain entitlements to offer gaming for prizes upon premises licensed under Part II of that Act. This covered licensed casinos and licensed bingo clubs. Under the terms of Part 1 and Part 5 of the Bill, casinos are granted permission to offer any form of gaming (subject to conditions which may be imposed on a casino operating licence), and no longer need any express permission similar to that offered by section 21. However, the holder of a bingo operating licence is only authorised to offer bingo (whether prize bingo, or any other form).

625.     This clause permits holders of a bingo premises licence to offer prize gaming, provided the gaming complies with any conditions attached to the relevant bingo operating licence. Such conditions may be added as general conditions by the Commission or imposed by Secretary of State (see the notes on Part 5 for an explanation of these). In particular, the conditions may restrict the types of games offered under this authorisation, or place limits on the size of payments made by players to participate in the gaming, or on the size of prizes.

Clause 276: Conditions for prize gaming

626.     There are four conditions that prize gaming permit holders, licensed AGCs, licensed FECs, FECs with permits and fairs must comply with in order for them to offer prize gaming lawfully under this Part:

  • The amounts charged to players to take part in the prize gaming must not exceed any amounts prescribed by the Secretary of State;

  • The prizes offered in the prize gaming must not exceed any value set by the Secretary of State (and this covers money and non-money prizes);

  • The prize gaming must take place on the premises, in the course of one day only, and the results must be announced on the premises, and as soon as possible after the game ends; and

  • Participation in a game must not entitle the player to participate in any other gambling. In other words, the prize gaming must be free-standing and self-contained, and not linked with other gambling.

Clause 277: Power to restrict exemptions

627.      This clause gives the Secretary of State the power to remove some or all of the prize gaming entitlements conferred in this Part. The purpose of this clause is to provide flexibility in the event that, for example, an additional class of operating licence is added to Part 5 of the Bill which covers matters dealt with under the prize gaming clauses. If this were to happen, it would be necessary to remove the entitlements from Part 13, in order for new operating licence requirements to apply. This power is included to deal with such future contingencies.

PART 14: PRIVATE AND NON-COMMERCIAL GAMING AND BETTING

628.     This Part provides authorisations for gambling to take place in private, or on non-commercial terms. In particular, it permits various forms of domestic gambling, and also provides authorisations for gaming to take place at non-commercial events.

629.     These clauses replace various provisions of the Betting, Gaming and Lotteries Act 1963, the Gaming Act 1968, and the Lotteries and Amusements Act 1976. In particular, this Part replaces section 41 (gaming at entertainments not held for private gain) of the 1968 Act and section 15 (provision of amusements with prizes at exempt entertainments) of the 1976 Act. This Part does not provide any permissions for the promotion of lotteries. Those elements of the 1976 Act which dealt with lotteries at exempt entertainments (specifically sections 3 and 15) are now dealt with under Part 11 and Schedule 9. The "incidental non-commercial lottery" is the new type of exempt lottery, for what were lotteries at exempt entertainments.

Clauses 278 & 279: Private betting and gaming

630.     Under these clauses, people can participate in and offer facilities for betting and gaming, including on premises, without committing any offence under the Bill, provided their activity meets the various conditions for private gaming and betting. Schedule 12 sets out the various conditions.

631.     In addition, these clauses 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 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.

632.     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, even if only as a consumer, that too will 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, i.e. between friends, require any form of express authorisation. Therefore, these clauses make it clear that a person does not commit any offence under the Bill 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.

633.     These provisions apply equally to those using the services of a betting intermediary i.e. an internet betting exchange. The intermediary will require an operating licence under Part 5, but the users of the exchange will benefit from the exemption in these clauses, provided their use is in a non-business capacity.

 
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Prepared: 19 October 2004