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Clause 7: Casino
42. This clause provides a statutory definition of a "casino" for the first time in British law.
43. The definition establishes that a casino is an arrangement (whether on premises or via remote communication such as the internet) where people can participate in casino games. Subsection (2) defines "casino games" as games which are not equal chance games. This means that any games which involve playing or staking against a bank, or where the chances are not equally favourable to all the players will be casino games.
44. Subsection (3) enables the Secretary of State to provide in regulations for a specified activity to be, or not to be, treated as a casino game for the purposes of the definition of casino. This power is not the same as specifying what kinds of casino games (e.g. roulette or blackjack) may be played in a licensed casino. Separate powers to specify such matters are provided in Part 5 on operating licences.
45. The Bill regulates casinos in different ways, depending on their size and the facilities they provide. Subsection (5) provides for four categories of casino, to be defined in regulations made by the Secretary of State; and subsection (6) specifically enables casinos to be classified by reference to a number of different matters. These include:
46. In making such regulations, the Secretary of State can include provisions for determining what is and is not to be treated as a gaming table for the purposes of the casino definition, and for calculating when a floor area is to be treated as being used or designated for a particular purpose (see subsection (7)).
47. The three categories of casino to be licensed under the Bill are: regional, large, and small. A regional casino will have the largest floor space requirements, followed by large casinos, and then small casinos. There is a fourth class of casino, which is a casino below the minimum size for a licensed casino (subsection (5)). Casinos which have been licensed under the Gaming Act 1968, and which are too small to comply with the minimum requirements specified for regional, large or small casinos will fall into this fourth category. Transitional arrangements, under Part 18 of the Bill, will be made to permit this fourth class of casino to continue in operation, as if it were a small casino, under the Bill.
48. The Regulatory Impact Assessment published alongside the Bill contains full details of the proposed specifications for regional, large and small casinos. Details of how to obtain a copy are published at the end of these Notes.
Clause 8: Equal chance gaming
49. Under the Gaming Act 1968, the distinction is drawn between games of equal chance and games of unequal chance (including bankers' games). The Bill maintains this distinction, and offers different degrees of regulation and control depending on which type of facilities for gaming are being offered. This clause provides a definition of equal chance gaming.
50. At a number of places in the Bill rights to conduct equal chance gaming are granted. See, for example, Part 12 on clubs, and Part 14 on private and non-commercial gambling. By contrast, unequal chance gaming or bankers' games may only be made available, under the Bill, in limited circumstances, the main example being that of a licensed casino.
Clause 9: Betting: general
51. This clause defines "betting" for the purposes of the Bill. The present law contains no statutory definition of "betting" as an activity. In broad terms it is taken to mean the staking of money or other value on the outcome of a doubtful issue. Betting can be at fixed odds or by way of pool betting.
52. By virtue of this clause (which is subject to the qualification in clause 10) betting covers making, accepting or negotiating a bet in relation to:
53. Subsections (2) and (3) extend the meaning of the term to include bets on races, competitions, or events that have occurred in the past.
Clause 10: Spread bets &c.
54. Spread bets or other bets, which are subject to regulation under section 22 of the Financial Services and Markets Act 2000, are excluded from the definition of betting in this Part. Section 22 of the 2000 Act provides for regulated activities under that Act to be specified in an order. The relevant order is the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544). Article 85 of that Order specifies as a regulated activity investments in rights under:
and spread bets are accepted as falling within this description.
55. If a class of bet ceases to be subject to such regulation as a result of an order under section 22 of that Act, it automatically becomes subject to regulation under the Bill. Subsection (3) enables transitional provisions to be included in any such order under section 22 to ensure that the switch to regulation under the Bill happens in an orderly way.
Clause 11: Betting: prize competitions
56. Schemes constituting or purporting to be prize competitions will fall within the definition of betting in this Part, even though they may not involve the deposit of a stake in the way normal to betting, if they satisfy specified conditions. One of the conditions is a requirement to pay to enter; and Schedule 1 defines what is to count as such a requirement. The effect of making such schemes subject to regulation as betting is to ensure that all the relevant protections provided by the Bill in respect of betting apply. Therefore, in relation to schemes such as "fantasy football" competitions or the Racing Post's "Ten to Follow" competition, these will be regulated in the same way as bets placed on single events. But the definition is intended to exclude prize competitions (such as prize crosswords) where the elements of prediction and wagering are not both present.
Clause 12: Pool betting
57. This clause defines "pool betting". It is based on the definition in section 10 of the Betting and Gaming Duties Act 1981 (c.63), and has been amended to remove those various elements which are no longer relevant to the definition for the purposes of the Bill.
Clause 13: Betting intermediary
58. A person who provides a service for others to make or accept bets is called a "betting intermediary" in the Bill. The definition will include betting exchanges. There is a separate class of operating licence for betting intermediaries.
Clause 14: Lottery
59. This clause provides a definition of lotteries. It is intended to give statutory effect to the broad definition which the courts have evolved over recent years, while making specific additional provision in relation to arrangements whose status under the current law has proved problematic or uncertain.
60. The definition of lottery recognises that a lottery may involve more than one process for determining who the prize winners are. Where an arrangement involves more than one process then it meets the definition of a lottery if the first of those processes relies wholly on chance; and this is so even if subsequent processes require the lottery entrant to exercise skill or judgment.
61. The definition of lottery also contains provisions which replace section 14 of the Lotteries and Amusements Act 1976 (which in effect distinguishes lotteries from certain prize competitions by whether their outcome depends to a substantial degree on the exercise of skill). Under subsection (5), a process which requires skill or judgment is still to be treated as relying wholly on chance if this requirement neither prevents a significant proportion of persons who wish to participate from doing so, nor prevents a significant proportion of persons who participate from being eligible to receive a prize. This would include, for example, a competition in a fishing magazine where entrants needed to answer correctly a fishing question to which the vast majority of the readers of the magazine might reasonably be expected to know the answer. It would not matter that a majority of non-readers would not have the knowledge to answer the question, because non-readers would generally not be in a position to participate in the competition.
62. Subsection (7) gives the Secretary of State power to provide in regulations whether a particular arrangement or a particular kind of arrangement is, or is not, to be treated as a lottery. The purpose of subsection (7) 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. This enables the matter to be put beyond doubt.
Clause 15: Betting and gaming
63. Gambling transactions where there is an overlap between betting and gaming will be treated as gaming for the purposes of the Bill, unless the betting in question constitutes pool betting. This ensures, amongst other things, that activities which are available in licensed gaming premises are not also available on licensed betting premises because, like roulette, they involve placing bets.
Clause 16: Lotteries and gaming
64. Where gambling transactions satisfy the definitions of both games of chance and lotteries, then the arrangements are to fall under the controls on gaming unless they constitute a lawful lottery. This broadly maintains the position in the current law (section 52 of the Gaming Act 1968).
Clause 17: Lotteries and betting
65. Transactions that satisfy both:
are to be treated as betting unless they form part of a lawful lottery. This clause does not apply to fixed odds betting because it is not considered that such transactions are capable of falling within the definition of entering a lottery.
Clause 18: Non-commercial society
66. This clause defines the circumstances in which a society is to be treated as non-commercial for the purposes of Part 11 and Schedule 9.
Schedule 1: Betting: prize competitions: definition of payment to enter
67. Schedule 1 defines the circumstances in which someone is to be treated as having to pay to participate for the purposes of the "betting: prize competitions" definition. The definition covers cases where a participant has to send money (or its equivalent), but also transferring money's worth and paying for goods and services at a price or rate which reflects the opportunity to participate in the prize competition.
68. Entry by standard rate telephone call, ordinary post (such as ordinary first class post) or by the use of another comparable service at its standard price to submit an entry, or to claim a prize, is not to be regarded as payment for entry.
69. Where an operator or any third party earns income from the prize competition because an entrant has to pay to discover whether a prize has been won or to take possession of the prize (for example, by means of premium rate telephone lines), then this is to be treated as payment to participate.
70. A prize competition is not to be regarded as requiring payment for entry, provided that a free entry route is offered for the competition (for example, a letter sent by ordinary post or another method of communication which is neither more expensive or less convenient than participating by paying). However, to qualify, the free entry route must be displayed with equal prominence as the other means of paid entry, and entries which are not paid for must be no less likely to win all or any of the prizes than entries which are paid for.
71. The Schedule confers a power on the Secretary of State to make regulations which determine whether or not a specified arrangement is to count as requiring payment to participate. New schemes and kinds of competition are always being devised; and this power will enable any uncertainty which might arise about payment to be resolved in the regulations.
Schedule 2: lotteries: definition of payment to enter
72. Part 1 contains the definition of a lottery for the purposes of the Bill. The definition consists of three elements, one of which is that persons are required to pay in order to enter the lottery. This schedule sets out what is meant by payment to enter for the purposes of a lottery. The provisions of the Schedule closely follow those in Schedule 1 for prize competitions.
PART 2: THE GAMBLING COMMISSION
73. The Bill establishes a new, unified regulator for betting, gaming and lotteries in Great Britain called the Gambling Commission ("the Commission").
Clause 19: Establishment of the Commission
74. This clause establishes the Commission, which will be the central regulatory body for gambling in Great Britain. Schedule 3, discussed below, sets out the constitution of the Commission and its proceedings, the appointment of Commissioners and staff, as well as its financial and reporting arrangements.
Clause 20: Gaming Board: transfer to Commission
75. The Commission will take over from the Gaming Board of Great Britain, which was established under the Gaming Act 1968 and currently regulates gaming and certain types of lotteries. When commenced, this clause and Schedule 4 will transfer the Gaming Board's functions, rights and liabilities (including property) to the Commission. This clause also provides for the chairman and members of the Gaming Board in post immediately before the establishment of the Commission to become chairman and commissioners in the new organisation.
Clause 21: Duty to promote the licensing objectives
76. In carrying out its functions under the Bill, the Commission will have the statutory aim of pursuing, and, wherever appropriate, having regard to, the licensing objectives (as defined in Part 1) and permitting gambling in so far as it thinks such permission is reasonably consistent with pursuit of the licensing objectives. Therefore, in carrying out its licensing functions under Parts 5 and 6 of the Bill, or in issuing guidance and codes of practice. or advising the Secretary of State in accordance with Part 2, the Commission will have regard to the licensing objectives.
Clause 22: Policy for licensing and regulation
77. The Commission will be responsible for licensing gambling operators and personnel working in the gambling industry under the provisions of Part 5 (operating licences) and Part 6 (personal licences) of the Bill. This will be the primary licensing activity of the Commission, although the Bill also provides it with other regulatory and advisory functions concerned with the proper conduct and control of gambling in Great Britain. The Commission will have enforcement and prosecution powers.
78. This clause requires the Commission to prepare, publish, and keep under review, a statement that sets out the principles which will govern the exercise of its functions, and, in particular, explain how such principles will assist the Commission in its pursuit of the licensing objectives. This statement will underpin the work of the Commission.
79. Examples of specific matters which will be contained in the statement are: the principles, practice and procedure which the Commission will apply in considering applications for operating and personal licences under Parts 5 and 6.
80. Before issuing or revising a statement, subsection (5) provides that the Commission must consult the following:
81. The statement and any revisions to the statement must be published.
Clause 23: Codes of practice
82. As part of the Commission's regulatory oversight of gambling it is required to publish codes of practice about the manner in which facilities for gambling are provided. These will be directed at the holders of operating or personal licences, or any other person involved in providing facilities for gambling. This clause makes provision to this effect. A particular requirement imposed by the clause is that the Commission publishes a social responsibility code. Such a code will describe the arrangements which a person providing facilities for gambling is to make for:
83. The Commission will publish its codes of practice, and all revisions, in a way that will ensure that those to whom they are addressed are made aware of them, and the codes are required to state clearly when they, or any revisions to them, come into effect. The codes will set out how the licensing objectives will be met. The Commission will be able to revoke codes at any time.
84. Under Part 5, an operating licence is subject to the condition that the licensee complies with any relevant provision of a social responsibility code. Furthermore, it is open to the Commission to attach general or individual conditions to a licence requiring compliance with a provision of any other code (as further provided under Part 5). The same applies in relation to the Secretary of State's power to attach conditions to an operating licence.
85. A failure to comply with a code will not, of itself, render a person liable to prosecution or civil action. However, the codes can be used as evidence for criminal or civil proceedings; are to be taken into account by a court or tribunal in any case where it appears relevant; and are to be taken into account by the Commission in exercising any of its functions. For example, where a licence holder has his operating licence reviewed by the Commission for potential breach of a licence condition, under the powers provided in Part 5, the Commission will refer to a code of practice, where it is relevant.
86. Before issuing a code of practice, subsection (10) requires the Commission to consult:
87. Subsection (11) requires the Commission to consult the following persons as well, but only to the extent that it thinks it appropriate:
Clause 24: Guidance
88. Under the Bill, licensing authorities (local authorities in England and Wales, and licensing boards in Scotland) will undertake various regulatory functions in relation to a number of gambling activities. They will be responsible for:
89. In order to assist licensing authorities to perform these various licensing and regulatory functions, this clause requires the Commission to issue and publish guidance about how licensing authorities are to exercise their functions under the Bill, and the principles to be applied by authorities in exercising functions under the Bill.
90. Licensing authorities are placed under a duty, by subsection (2), to have regard to such guidance.
91. Before issuing guidance to licensing authorities, subsection (4) requires the Commission to consult:
92. Depending on the nature of code or any revision, subsection (5) also requires the Commission to consult to the extent it thinks it appropriate to do so:
Clause 25: Duty to advise the Secretary of State
93. One of the functions of the Commission will be to provide advice to the Secretary of State on matters relating to gambling, including on its regulation, its incidence and its effects. This clause permits the Commission to give advice about gambling to the Secretary of State either in response to a request or on its own initiative. Copies of any such advice will be sent to the Scottish Ministers also.
Clause 26: Investigation and prosecution of offences
94. The Commission will have powers to investigate whether an offence has been committed under the Bill, and pursue criminal proceedings if this has been the case. The Commission can do this on its own initiative or acting on other advice.
Clause 27: Licensing authority information
95. The Commission and licensing authorities will maintain registers containing appropriate details of licences that they have each issued. These registers will be open to the public. There will be circumstances where the Commission will need to obtain information directly from licensing authorities. For example, such information may be needed by the Commission to fulfil its duty under this Part to advise the Secretary of State. This clause places an obligation on licensing authorities to comply with requests from the Commission for information contained in a register maintained by the authority, or for information in the authority's possession in consequence of their licensing and regulatory functions.
Clause 28: Other exchange of information
96. This clause permits the Commission to pass on information received in the course of carrying out its functions to those people or organisations listed in Schedule 5, for use in the course of their, or the Commission's, business. This clause also provides a reciprocal power for the bodies listed in the Schedule to provide information to the Commission. Conditions may be imposed where a body provides information to the Commission under this clause.
Clause 29: Consultation with the National Lottery Commission
97. The National Lottery will continue to be regulated by the National Lottery Commission (NLC). This clause requires the Commission to consult the NLC about matters in which the NLC is likely to have an interest or where the Secretary of State directs them to do so.
98. The sorts of issues which are likely to be of common concern between the NLC and the Commission are the way in which lotteries are conducted, and in particular those matters with respect to the conduct of lotteries that are liable to present risks to those taking part. There may be also a mutual interest in whether a particular activity is properly to be described as a lottery or a form of betting.
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