House of Commons - Explanatory Note
Gambling Bill - continued          House of Commons

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Clause 47: Provision of facilities for gambling

159.     A young person commits an offence if he provides facilities for gambling, except in connection with private and non-commercial gaming and betting, lotteries, football pools and prize gaming at a travelling fair.

Clauses 48 to 52: Employment offences

160.     It is an offence to employ children and young persons to provide facilities for gambling, except in the case of private and non-commercial gaming and betting and in relation to prize gaming at a travelling fair. There is a further exception in the case of lotteries and pool betting on association football. In those cases, the offence only extends to the employment of children and not young persons.

161.     Further restrictions are imposed on the ways in which children and young persons can be employed to work on premises where facilities for gambling are provided.

162.     It is an offence to employ children to work in premises at any time when facilities for the playing of bingo are being provided on the premises. It is also an offence to employ children at a club at any time when facilities for gambling are being provided.

163.     In relation to any premises where gaming machines of any category are situated, then any child or young person employed may not perform any function that involves the gaming machine. Therefore, for example, a child may be employed in a family entertainment centre, but he may not interfere with the machine or pay customers winnings in the event that the machine does not have enough money in it to cover the winnings (and he may not enter the area where the category C machines are located).

164.     Generally children and young persons are not allowed to be employed in any capacity in casinos, betting premises and adult gaming centres. This is subject to an exception in the case of regional casinos where children and young persons can be employed in non-gambling areas. It is possible, however, for children and young persons to be employed on adult only gambling premises (small and large casinos, the gambling area of regional casinos, betting offices and adult gaming centres) when no activity is being carried on in reliance on the premises licence. Therefore, for example, a sixteen-year-old apprentice joiner may undertake improvement works on the structure of a bar in a casino when it is closed.

165.     There is also a prohibition on children and young persons being employed in the betting areas of tracks and the adult-only areas of family entertainment centres. This follows from the provisions referred to above which generally prohibit children and young persons from being able to enter such areas.

Clause 53: Invitation to participate in lottery

166.     This clause makes it an offence to invite, cause or permit a child to take part in a lottery, for example, by selling him a ticket. However, this offence does not apply to two types of lottery allowed under the Bill, that is, private lotteries and small incidental lotteries. This means that the clause does not, for example, prevent the sale to children of tickets in events such as the tombola at a school or church fete.

167.     The Bill does not criminalise the purchase by a child of a ticket in any form of lottery.

Clause 54: Invitation to participate in football pools

168.     Young people are to be permitted to participate in football pools, and it is, therefore, permissible for the operators of football pools to provide information to young persons, or to direct advertisements to young persons. However, children may not participate in football pools and this clause makes it an offence to invite, cause or permit a child to do so.

Clause 55: Return of stake

169.     Under Part 5, all operating licences for gambling are to be made subject to a condition requiring licence holders to return any money paid to them by children or young persons where the person concerned is not permitted to participate in the gambling activity. It also requires the licence holder to withhold any winnings that would otherwise be payable. This clause makes it an offence for a licence holder to fail to do so.

Clause 56: Age limit for category D machines

170.     No age limit is specified in the Bill below which children or young persons are not allowed to use a category D gaming machine. This clause gives the Secretary of State power by order to create an offence of inviting, causing or permitting a child or young person below a specified age to use a category D gaming machine.

Clause 57: Temporary use notice

171.     Temporary use notices issued under Part 9 may authorise gambling at premises that do not have a premises licence. The same applies in the case of premises subject to an occasional use notice. For the purposes of this Part, the relevant areas of such premises are to be regarded as being subject to the equivalent premises licence. Therefore, where a temporary use notice authorises casino table games in one part of a hotel, a young person working in the hotel may not enter that area during the time that the notice has effect.

Clause 58: Meaning of employment

172.     For the purposes of this Part, employment is to be regarded as having a wide meaning. As well as direct employees of the licence holder, persons engaged temporarily through an employment agency are equally to be regarded as employees of the licence holder.

Clause 59: Penalty

173.     Offences under this Part are to be punishable on conviction by a maximum term of imprisonment of up to 51 weeks in England and Wales, or a fine not exceeding level 5 on the standard scale (£5,000 at present), or both. Where it is young person who is convicted, imprisonment is not to be available and any fine imposed may not exceed level 3 on the standard scale (currently £1,000).

Clause 60: Reasonable belief about a person's age

174.     Where a person is charged with an offence under this Part of doing anything in relation to a child or young person it is to be a defence for the person to prove that he took all reasonable steps to determine the relevant person's age and he reasonably believed that the person was not a child or a young person.

PART 5: OPERATING LICENCES

175.     Operating licences are one of the principal forms of authorisation under the Bill for the lawful provision of facilities for gambling. A person holding an operating licence, and providing facilities within the terms and conditions of that licence, will not commit the offence of unlawful provision of facilities for gambling under Part 3.

176.     The clauses in this Part describe the licensing regime to be administered by the Commission for granting operating licences. Matters covered include the principles to be applied by the Commission in considering applications for operating licences, powers for conditions to be attached to licences, and the review procedures once licences have been granted.

177.     There are different kinds of operating licences for the various forms of gambling facilities e.g. to operate a casino, to provide facilities for betting, or to act as a betting intermediary. An operating licence for each kind of activity can authorise the provision of facilities on premises generally ("non-remote provision") or for the provision of those facilities by means of remote communication (remote provision"). However, it is not possible to combine a licence for both remote and non-remote provision (but one person can hold both a remote licence for betting, and a non-remote licence for betting, if granted both by the Commission).

178.     An operating licence for non-remote provision gives a general authorisation for the operator to provide facilities, but, before being able to use any particular premises, the holder of an operating licence will also need an authorisation under the Bill to use such premises for gambling. The principal form of such permission is a premises licence granted under Part 8 of the Bill, although there are other forms of permission e.g. an occasional use notice or a temporary use notice.

179.     In addition to authorising the provision of facilities for gambling, operating licences can be obtained to authorise:

  • the manufacture, supply, installation, adaptation, maintenance and repair of gaming machines; and

  • the manufacture, supply, installation and adaptation of computer gambling software.

180.     Part 1 of the Bill defines "betting", "gaming" and "lottery", and a number of related concepts. Part 18 of the Bill contains clauses which make provision for determining the value of a prize, and defining participation fee and stake, all of which are relevant concepts for this Part.

Clauses 61: Nature of licence

181.     There are ten different kinds of operating licence:

    a)     a casino operating licence;

    b)     a bingo operating licence;

    c)     a general betting operating licence;

    d)     a pool betting operating licence;

    e)     a betting intermediary operating licence;

    f)     a gaming machine general licence for an adult gaming centre;

    g)     a gaming machine general licence for a family entertainment centre;

    h)     a gaming machine technical licence;

    i)     a gambling software licence; and

    j)     a lottery operating licence.

182.     Subsection (1) empowers the Commission to issue these operating licences. Subsection (4) allows the Secretary of State, through secondary legislation, to amend this list so as to add, vary or delete a class of operating licence.

Clause 62: Form of licence

183.     A licence must specify the person to whom it is issued; how long it has effect; and any condition attached to the licence by the Commission (subsection (1)). The Secretary of State may set out in regulations further details of what information a licence must contain, and the form in which it is issued (subsection (2)).

Clause 63: Remote gambling

184.     Facilities for gambling can be provided remotely (i.e. by technology which means the player is not in the same place as the person offering the facilities), or non-remotely (i.e. face to face on premises). This clause defines a "remote operating licence" as an operating licence which authorises someone to provide remote gambling, and requires all licences to state whether they are a remote operating licence or a non-remote operating licence. A licence cannot be both.

185.     The effect of this clause is that for each of the ten kinds of operating licence, there are two basic types: a remote operating licence which authorises, for example, the provision of particular facilities by means of the internet; and a non-remote licence, which authorises the same facilities to be provided from premises. It will not be possible for one operating licence to combine authorisations for providing both remote and non-remote facilities for gambling. One person can hold both types of licence, but he will need to be granted each separately.

186.     Further provisions on the conditions which can be attached to a remote licence allow the Commission to limit the particular forms of remote communication by which gambling is offered under a remote licence. Therefore, a remote licence does not automatically confer an entitlement to use all forms of remote communication e.g. television, radio and the internet. Instead, conditions can limit provision to one, or any combination of the different forms of remote communication defined in Part 1.

Clause 64: Combined licence

187.     While there is a distinction between remote and non-remote operating licences, so that they cannot be combined in one licence, the Commission can issue operating licences which cover more than one of the ten kinds of licence, provided they are all either remote, or non-remote.

188.     The starting point, in subsection (1), is that one operating licence can authorise a combination of the different kinds of activities that make up the ten kinds of operating licence. However, this is subject to certain rules and limitations.

189.     Under subsection (3) a casino operating licence also authorises the provision of facilities for betting on the outcome of a virtual game, race, competition or other event or process, and the provision of equal chance gaming, other than bingo. This means that a casino operator does not need to obtain a betting operating licence if he wishes to offer this form of betting, and can automatically offer equal chance gaming, other than bingo. If he does wish to offer bingo, he will need to combine his casino operating licence with a bingo operating licence. However, by virtue of rules in Part 8, a small non-remote casino cannot offer bingo from its premises.

190.     Under subsection (4), a betting operating licence authorises the provision of facilities for betting on the outcome of a virtual game, race, competition or other event or process (other than a game of chance), but only to the extent that this is not restricted or excluded by a condition imposed by the Commission to restrict such betting. This gives the Commission power to regulate control virtual betting if the need arises.

191.     There are two types of operating licence specifically designed for authorising the provision of gaming machines: the gaming machine general licence for adult gaming centres and the gaming machine general licence for family entertainment centres. These specifically authorise the licence holder to make gaming machines available for use. However, under subsection (5) certain other types of operating licence also bring with them a general entitlement to make gaming machines available for use:

  • a non-remote casino operating licence;

  • a non-remote bingo operating licence;

  • a non-remote general betting operating licence; and

  • a non-remote pool betting operating licence.

192.     Apart from these four types of licence (and the two general gaming machine operating licences) no other operating licences may authorise the making available of gaming machines. Therefore, no remote operating licence confers a right to make gaming machines available for use.

193.     Moreover, the fact that certain operating licences provide this authorisation, does not entitle the holder of the licence to use any number or category of gaming machines, on any particular premises. The purpose of subsection (5) is to provide a generic authority for the operator to make gaming machines available for use, in the same way as a casino operating licence gives authority to provide facilities to operate a casino (in the abstract). The provisions of Parts 8 (premises licences) and 10 (gaming machines) control the precise locations where gaming machines may be used, and an operator must comply with the requirements of these Parts to use a gaming machine lawfully.

Clause 65: Application

194.     This clause sets out who may apply for an operating licence and the type of information that must accompany an application. Applications are to be made to the Commission, and such other persons as the Secretary of State directs. The application, in particular, must contain details of the gambling activities that the operator wishes to provide, and state whether the applicant has been convicted of a relevant offence (as defined in the interpretation clause for this Part).

195.     A fee is payable, which may vary for different types of licence (i.e. different kinds of gambling activity) or different circumstances (subsections (2)(g) and (5)). Such fees will be prescribed by the Secretary of State in regulations. It is anticipated that fees will vary across sectors to reflect the Commission's differing costs of regulation.

Clauses 66: Consideration of applications: general principles

196.     This clause sets out the general principles which the Commission will apply in determining applications, and particular matters of which they may take account. The detail of how the Commission will consider applications, and, for example, what evidence they will seek, will be set out in the statement of licensing policy that the Commission is required to produce under Part 2 of the Bill.

197.     The purpose of this clause is to outline the principles which will govern the Commission's decision-making in relation to the consideration of applications. The two main matters are: to have regard to the licensing objectives, and to have regard to the applicant's suitability, including his integrity, competence, and financial circumstances. The assessment may also cover the suitability of equipment to be used in connection with the proposed activities.

198.     The Commission's assessment may cover not just the applicant, but also people who are connected to the applicant because they are likely to exercise a function in connection with, or have an interest in, the gambling activities.

199.      There may be circumstances where the Commission will wish to assume that a class of applicant will automatically fulfil the requirement of integrity for the purpose of assessing suitability. In these circumstances the Commission's statement may make a determination to this effect. For example, the Commission could decide that local authorities, seeking a lottery operating licence, do not need to supply evidence of integrity as part of the application process.

200.     The Commission can also deem particular equipment or gaming machines to be suitable, in accordance with standards or tests that it has established, or asked others to establish for it. This is designed to aid both the Commission and applicants in making the application process as efficient as possible.

Clause 67: Consideration of application: criminal record

201.     One of the licensing objectives is to keep gambling crime free. This clause provides that the Commission may refuse an application for an operating licence if the applicant has a conviction for a relevant offence. This is without prejudice to the suitability of the applicant generally, but permits the Commission to reject an application by reason of the conviction for the relevant offence, should it consider this appropriate. "Relevant offence" is defined in the interpretation clause for this Part.

Clause 68: Consideration of application: demand

202.     Under the Betting, Gaming and Lotteries Act 1963 and the Gaming Act 1968, one of the considerations for the grant of a permit or licence was whether there was unmet demand for the specified gambling facilities in the particular area to which an application related. This clause revokes this principle, as unmet demand is not a relevant criterion, under the Bill, for determining whether or not to grant an operating licence. This clause also abolishes the "permitted areas" for casinos which were established under the Gaming Act 1963. Similar provisions are contained in Part 8, in relation to the consideration of premises licences. The necessary repeals for these various matters are set out in Schedule 14.

Clause 69: Procedure

203.     This clause sets out the powers of the Commission to require information from an applicant, and to have regard to information provided by other people when considering an application. In particular, the Commission may require the production of an enhanced criminal record certificate under the Police Act 1997 (c.50). This applies to the applicant or people relevant to the application.

204.     The licensing policy statement produced by the Commission under Part 2 must specify the procedures to be operated by the Commission, including the Commission's practice with regard to delegating functions, holding hearings, and requiring evidence. Schedule 3 also makes provisions with regard to the general proceedings of the Commission.

Clause 70: Determination of application

205.     This clause provides the range of determinations the Commission can make having considered an application, and the actions consequent upon a determination, including a requirement to give reasons where an application is rejected.

Clauses 71 to 74: Licence Conditions

206.     In this Part there are three types of licence condition that may be attached to operating licences under the Bill: general conditions and individual conditions, both of which are attached by the Commission; and conditions imposed by the Secretary of State.

207.     Clauses 71 and 72 concern general conditions, which are conditions the Commission may specify for an operating licence or a class of operating licence, and which have general application. So, for example, the Commission could specify a general condition that applied to all general betting operating licences, that the rules of the bet must be on display to customers (whether on premises, or over the internet). This condition would apply to everyone holding a general betting operating licence.

208.     Clause 72 sets out the procedures which the Commission must follow in specifying general conditions. These include holding general consultations (with some mandatory consultees) on the terms of a condition, and publishing conditions where they have been specified. In addition, the Commission must notify licensees in advance of a proposed imposition, modification or revocation of a general condition, giving three months notice, unless the matter is urgent. This ensures that licensees have adequate notice of general conditions and changes that may be made to them over time.

209.     Alongside a general condition, the Commission has power, under clause 73 to impose specific conditions on individual operating licences. These conditions are not subject to any publication or general consultation requirements, as is the case with general conditions. Rather, these conditions will address particular matters concerning an individual operator and its activities, where the Commission considers it appropriate. So, for example, the Commission could attach an individual condition on a particular casino operating licence that not more than five casino premises can be operated under it, due to the financial strength of the operator. Every operating licence issued must specify any individual conditions attached to it under this clause.

210.     Alongside the powers of the Commission to attach conditions to operating licences, the Secretary of State may make regulations which provide for a specific condition to be attached to a class of operating licence, under clause 74.

Clause 75: Scope of powers to attach conditions

211.     This clause gives specific examples of the matters to which general, individual or Secretary of State conditions may relate. The clause does not limit the breadth of the powers to set these three types of condition, but helps provide some understanding of the matters which conditions may cover.

212.     A condition may:

  • limit or restrict the nature or extent of the gambling facilities provided, or control the circumstances in which they are carried on;

  • make provision about the facilities that may be provided, the manner in which the facilities are provided or the number of persons employed in providing facilities;

  • make provision about the financial resources available to the licensee, including the maintenance of reserves in respect of potential liabilities;

  • where it is a remote operating licence, may restrict the methods of remote communication that may be used;

  • make provision about the advertising of facilities for gambling;

  • make provision about assistance to persons who are or may be affected by problem gambling; and

  • require the operator to identify or record the identity of users of his facilities.

Clause 76: Requirement for personal licence

213.     Part 6 of the Bill sets out the licensing regime for personal licences. This clause sets out the relationship between an operating licence and the need for an operator to use people holding personal licences to provide certain facilities for gambling.

214.     When the Commission considers an application for an operating licence, it will consider what offices or functions in the organisation should be performed by a personal licence holder, and attach conditions to the licence specifying what the requirements for personal licences are to be. These conditions could be set by general or individual condition, or the Secretary of State may set generic conditions by regulations to apply to classes of operating licence.

215.     There will be one mandatory condition on every operating licence, which is that every operating licence must specify at least one management office which is to be occupied by a person who holds a personal licence (subsection (1)). This will be set as a general or individual condition, not a Secretary of State condition. Beyond this one mandatory personal licence, the Commission may identify any additional number of posts in an operator's organisation which must be filled by a personal licence holder (subsections (2) to (4)). Such conditions will always relate to either a management office or an operational function.

216.     Management office (subsection(5)) means:

  • A director of a company;

  • A partner;

  • An officer in an unincorporated association; and

  • Any position which carries responsibility for:

????????????????     the conduct of a person who performs an operational function; or

????????????????     facilitating or ensuring compliance with the operating licence.

217.     Operational function (subsection (6)) means:

  • any function that enables the person to influence the outcome of gambling;

  • receiving or paying money in connection with the gambling; or

  • specified activities in relation to the manufacture and supply of gaming machines.

218.     The Secretary of State has the power to amend these definitions through secondary legislation (subsection (8)).

219.     These broad definitions will enable the Commission to consider the particular circumstances of each operator (irrespective of the job titles or posts the operator may use) and identify those functions and offices within an organisation that will require a person to hold a personal licence when carrying them out. This clause is not intended to require everyone performing any management office or operational function (as described above) to hold a personal licence. The Commission will decide what the appropriate licensing requirements are to be, either on an individual basis, or, where it is able to do so, according to classes of operating licence.

220.     If an operator does not engage and use a person holding an appropriate personal licence to perform an office or function identified by the Commission, it will breach a condition of its operating licence.

221.     While this clause provides the mechanism for operating licences to contain conditions about matters to be undertaken by a personal licence holder, it does not cover the process for obtaining a personal licence. That is set out at Part 6.

222.     Subsection (9) contains an exemption from the requirements of this clause to have personnel licensed under Part 6, for clubs or miners' welfare institutes holding a bingo operating licence. Part 12 requires clubs or miners' welfare institutes which provide facilities for bingo that exceed a specified threshold in terms of stakes or prizes in any week, to obtain a bingo operating licence. Games played below this threshold are authorised by other provisions in Part 12. Officers of these associations are not required to hold personal licences in relation to their additional bingo operating licence, and this subsection exempts them accordingly.

 
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Prepared: 25 November 2004