House of Commons - Explanatory Note
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Clauses 103 & 104: Duration

285.     As a general rule, operating licences will be of indefinite duration, subject to rules such as lapse or failure to pay the annual fee which will bring it to an end. However, the Commission has power to determine that operating licences, or a particular class of operating licence, should be given a particular duration. Such a determination will be made and promulgated as part of the Commission's licensing policy statement under Part 2.

286.     Where the Commission determines a particular duration, this will apply to existing and future licences. However, for existing licences the duration will begin from the date of publication of the determination rather than the date the licence was granted.

Clause 105: Renewal of licence

287.     This clause provides that where the Commission has decided that operating licences are to have a fixed duration, procedures for the renewal of licences can be put in place.

Clauses 106 & 107: Surrender and Lapse

288.     A licence ceases to have effect if it is surrendered to the Commission. This provides a voluntary procedure for a licence holder to give up his licence if he so wishes.

289.     A licence will lapse, and is not transferable, if the licence holder:

  • Dies;

  • In the opinion of the Commission becomes incapable of carrying out the licensed activities; or

  • Becomes bankrupt or goes into liquidation.

Clause 108: Forfeiture

290.     This clause provides courts with the power to order forfeiture of an operating licence where it is sentencing the holder of a licence on conviction for a relevant offence, as defined in the interpretation clause for this Part. This ensures that the courts can take appropriate steps, without the Commission needing to become involved.

Clause 109: Review

291.     The Bill provides that operating licences are granted for an indefinite period. However, the Commission has power to introduce time limits for licences if it believes there is a regulatory need to do so. The general position is that licences will not need to be renewed at any point and, therefore, the Commission needs the power to review, over time, the performance of licence holders and the operation of licence conditions. This clause provides the Commission with a number of powers to review operating licences it has granted. First, under subsection (1) the Commission may review matters relating to a class of operating licence i.e. not an individual licence, but a type of licence. For example, the Commission could review the operation of all gaming machine general licences. The purpose will be to review the manner in which licensees, as a whole, carry on licensed activities, and particularly, how licensees comply with the conditions attached to the class of operating licence. The purpose of this type of review could be to consider whether any changes to general conditions on licences are needed.

292.     Secondly, under subsection (2), the Commission has power to review any matter relating to an individual operating licence on any of three grounds:

  • If the Commission suspects that conditions of an operating licence are being breached;

  • If the Commission believes that the licence holder or any person connected with the gambling activities, has been convicted of a relevant offence in Great Britain or abroad; or

  • If the Commission for any reason:

????????????????     suspects that the licence holder may be unsuitable to perform the licensed activities; or

????????????????     thinks that a review would be appropriate.

293.     The clause makes it clear that a review can be carried out even if there is no suspicion or belief about the licence holder's activities. This ensures that a licence could be reviewed solely on the grounds, for example, that it had been held for a long period of time, and that the Commission considered a review prudent.

294.     In the event that the Commission decides to carry out a review of an individual licence there are procedural requirements to ensure that the licence holder can take part in the review (subsections (4) and (5)).

Clauses 110 to 114: Regulatory powers

295.     The Commission has a range of powers available to it, exercisable after a review, or in circumstances where a licence holder has failed to comply with other requirements specified in Part 5 of the Bill (e.g. to pay the annual fee). These clauses outline these powers, and the procedural steps the Commission must take before exercising them.

296.     The Commission can:

  • give the licensee a warning;

  • attach, remove or vary a condition to the licence;

  • suspend of revoke the licence; or

  • impose a financial penalty.

297.     Suspension powers are available to the Commission at the outset of, and during, a review, so that, if the Commission considers a matter sufficiently serious, it can require the operator to suspend all or part of his activities pending the outcome of the review. The Commission also has powers to suspend a licence following a review.

298.     Where the Commission concludes that a licence holder has breached the conditions of his licence, it may impose a financial penalty on the licence holder. The Commission must take a number of procedural steps before it can impose such a penalty, which include providing the licence holder with reasons for the proposed penalty, and time in which to make representations to the Commission. The Commission is subject to a time limit for imposing a penalty of two years following the date of the breach, or the date the Commission becomes aware of the breach, whichever is later.

299.     To ensure that licence holders are aware of the way in which the Commission intends to use its power to impose financial penalties, the Commission must prepare and publish a statement of the principles to be applied in exercising these powers. In particular, the Commission must, in considering the imposition of a penalty, have regard for the seriousness of the breach of condition, whether the licensee knew or ought to have known of the breach and the nature of the licensee (including his financial resources). Before preparing or revising such a statement the Commission must consult the Secretary of State, the Lord Chancellor and other persons as the Commission thinks appropriate.

300.     All the regulatory powers available to the Commission under these clauses are subject to full rights of appeal for those affected by them, under Part 7, to the Gambling Appeals Tribunal.

Clause 115: Information

301.     To assist the Commission to carry out its functions, this clause sets out obligations on licence holders to comply with requests for information. These cannot be "fishing exercises" by the Commission, but must concern questions of whether the licence holder has breached his licence conditions, or is unsuitable to carry on gambling activities. Non-compliance without reasonable excuse is an offence that will attract a fine not exceeding level 2 on the standard scale (currently £500).

Clause 116: Levy

302.     This clause provides the Secretary of State with reserve powers to impose an annual financial levy on the holders of all operating licences. The levy would be paid to the Commission, and treated as if it were part of the annual fee. This means that a licence would be revocable if the levy was not paid.

303.     The money raised by a levy would be used for alleviating problem gambling. Thus, the Commission could spend it on purposes or projects related to gambling addiction or other forms of harm or exploitation associated with gambling. The Treasury and the Secretary of State must consent to the Commission's expenditure of the levy. Such projects need not be undertaken by the Commission itself, but the Commission could fund others (including other public sector bodies) who are undertaking projects connected with problem gambling.

304.      The clause sets out the matters relating to the levy which must be set out in the regulations. A number of alternative methods for calculating the levy are listed, but none are mandatory. Before making these regulations imposing a levy, the Secretary of State must consult the Commission.

Clause 118: Relevant offence: disapplication of rehabilitation

305.     This clause identifies certain circumstances when section 4 of the Rehabilitation of Offenders Act 1974 (c.53) will not apply. This means that the Commission will be able to look at spent convictions in some cases. Where a person has a conviction for a relevant offence (defined in the interpretation clause for this Part and Schedule 6) then the Commission will be able to consider a spent conviction for the offence when a person applies for an operating licence.

Clause 119: Interpretation

306.     This clause provides definitions for terms used throughout Part 5, including "relevant offence".

Schedule 6: Relevant offences

307.     This Schedule lists the British offences which are "relevant offences" for the purposes of the Bill. By virtue of the interpretation clause for Part 5, a relevant offence can also be a foreign offence which is equivalent to an offence listed in Schedule 6.

308.     Under Part 5 of the Bill, the Commission has power to take relevant offences into account when considering applications for operating and personal licences. Where an offence is a relevant offence, the Commission may consider such offences during the application process, even though they are spent within the terms of the Rehabilitation of Offenders Act 1974.

309.     When sentencing a person convicted of a relevant offence, a court in Great Britain may order forfeiture of an operating or personal licence held by that person as part of the sentence. Where the licence held is a personal licence, the court may also disqualify the person from holding a personal licence for a period of up to 10 years, when it is sentencing for a relevant offence.

310.     While the Commission may take account of any domestic, unspent conviction for any offence when considering an application for a licence under Part 5 of the Bill, it is only those offences listed in this Schedule that attract the particular provisions regarding spent convictions, foreign offences, forfeiture and disqualification.


311.     This Part of the Bill deals with personal licences, which certain individuals working in the gambling industry will be required to hold. The Commission will grant these licences, which are of indefinite duration. This regime is also relevant to operating licence holders, who will be required to use personnel who hold a personal licence. Unless the operator is a small-scale operator, the Commission is obliged to use its condition making powers to ensure that, for each operating licence, at least one person occupies a specified management office and holds a personal licence authorising them to perform the functions of the office.

312.     Part 6 operates on the basis that much of the material set out in Part 5 on operating licences, is also relevant to personal licences. So, in relation to many of the procedural matters which the Commission will need to conduct for the personal licensing regime, the clauses in Part 5 are deemed to apply to personal licences under Part 6. Powers are taken for the Secretary of State to make necessary modifications to the Part 5 procedures, but this approach has been adopted to avoid repetition of large amounts of material in both Parts 5 and 6. Where particular matters need a self-standing provision for personal licences, Part 6 provides accordingly.

Clause 120: Nature of personal licence

313.     A personal licence will authorise the holder to perform a specified function relating to:

  • The provision of facilities for gambling; or

  • For another person who provides facilities for gambling.

314.      By attaching conditions to operating licences under Part 5, the Commission will identify posts which must be held by a personal licence holder. These fall into two groups: management offices and operational functions, both of which are defined in Part 5. Therefore, personal licences may need to be held by those directly providing the facilities for gambling, such as a croupier, or those who perform certain functions in a gambling operation but do not actually themselves provide the facilities, such as a compliance officer. Not everyone who works in the gambling industry will need a personal licence. It will be the task of the Commission, in granting operating licences, to determine which posts within any organisation need to be held by someone with a personal licence, and operators must employ people accordingly.

Clause 121: Application of provisions of Part 5

315.     The personal licensing system under Part 6 is not intended to be a free-standing regime in its own right, but instead sits alongside the regime for operating licensing in Part 5. This clause specifies that Part 6 is to be read as incorporating the features of the operating licence system set out in Part 5, except where:

  • it is modified by this Part 6; or

  • it is amended by regulations made by the Secretary of State.

316.     As a result, the basic procedures for application for, determination of, and review of, licences will be the same for both operating and personal licences, except where this Part (or the natural context) demands otherwise. Personal licences may be subject to general or specific conditions imposed by the Commission, or conditions imposed by the Secretary of State in regulations.

Clause 122: Exemption for small scale operators

317.     Part 5 requires that anyone holding an operating licence must have at least one person in a management office holding a personal licence. However, this clause exempts small-scale operators from this requirement. This is because, in small operations, the operating licence will achieve the same purpose as a personal licence. An independent on-course betting operator, employing only one or two people is likely to be the sort of operator who will be excused from holding a personal licence under this clause.

318.     The Secretary of State will define the meaning of "small scale operator" in particular by reference to the size and value of the business, and the number of employees (subsection (2)). Subsection (4) requires an operator, who benefits from this exemption, to produce his operating licence, as if it were a personal licence. Part 6 sets out the requirements for producing a personal licence.

Clause 123: Application

319.     The application procedures set by the Commission for personal licences will mirror those set out in Part 5, with suitable modifications. In particular, the licensing objectives, and the applicant's suitability (including integrity and competence) will be taken into account by the Commission in deciding whether to grant a licence. This clause makes it clear that the Commission can require the applicant's employer or intended employer to take part in the application process for a personal licence (subsections (1) and (2)). However, a person does not have to be employed in order to apply for a personal licence (subsection (4)). A person may acquire a licence prior to seeking employment in order, for example, to improve his chances of finding work.

Clauses 124 & 128: Duration and Review

320.     Subject to surrender, lapse, forfeiture or revocation, all personal licences will be of unlimited duration. The Commission will not have the power to introduce limited durations on personal licences, as it can for operating licences under Part 5.

321.     The review procedures for individual licences described in Part 5 will apply to personal licences, with any appropriate modification, but the power to review classes of licence is not available for personal licences.

Clause 125: Fees

322.     Personal licences will be subject to an application fee. The Secretary of State also has power to specify periodic fees to be paid by a personal licence holder to the Commission to maintain his licence. Unlike operating licence maintenance fees, these will not necessarily be annual fees. Instead, the Secretary of State may set the amount and the period for which the fees must be paid. Non-payment can lead to revocation of a personal licence. The maintenance fees will be used by the Commission to cover the costs of regulation.

Clause 126: Multiple licences

323.     An individual will not be allowed to hold more than one personal licence, but a personal licence can cover a number of management or operational functions. This allows one individual to conduct a number of functions relying upon one licence.

Clause 127: Production of licence

324.     This clause gives police constables and Commission enforcement officers power to require a personal licensee to produce their licence within a specified period. If the individual is carrying on a licensed activity, or is on licensed premises, then the licence must be produced immediately. This means that a personal licence holder will be required to keep the licence on his person when at work. This is in contrast to the operating licence holder, who, unless they are a "small scale operator" can only be required to produce the operating licence within a specified period. Failing to comply with these requirements will be an offence, attracting a fine not exceeding level 2 (currently £500), upon conviction.

Clause 129: Disqualification

325.     In addition to being able to order forfeiture of a personal licence as part of the sentence for a relevant offence, this clause allows a court to order that the person be disqualified from holding a personal licence for a period of up to ten years. This can be instead of, or in addition to, an order for forfeiture. Relevant offences are defined under Part 5 of, and Schedule 6 to, the Bill.

Clauses 130 & 131: Notification requirements

326.     Where the Commission revokes a personal licence, or a court orders forfeiture or disqualification, the operating licence holder is entitled to be notified by the Commission of what has happened to the personal licence. Equally, where an operating licence holder is aware that a personal licensee has been convicted of a relevant offence, he must inform the Commission of the fact. "Relevant offence" is defined in Part 5.

Clause 132: Breach of personal licence condition

327.     This clause makes it an offence for the holder of a personal licence to breach a condition of his licence, when acting in the course of (or in connection with) an activity authorised by an operating licence, which itself requires the personal licence to be held. This provision is a counterpart to the power of the Commission to attach conditions to personal licences. The holder of the operating licence may also commit an offence, on the same set of facts, under Part 5. The penalty for the personal licence holder is a maximum period of imprisonment in England or Wales of 51 weeks, and in Scotland of 6 months, and/or a fine not exceeding level 5 (currently £5,000).


328.     Part 7 provides for the formation and operation of an independent tribunal to deal with gambling matters. It will deal with appeals against decisions taken by the Commission in respect of operating and personal licences (Parts 5 and 6 of the Bill), as well as appeals in relation to a decision by the Commission to void a bet under Part 17.

Clause 133: The Gambling Appeals Tribunal

329.     This clause provides for the establishment of the Gambling Appeals Tribunal. The requirements for the foundation and operation of the tribunal are set out in Schedule 7 to the Bill. The Tribunal is being established to hear appeals from decisions of the Commission. Provisions for appeals from the decisions of licensing authorities are set out in those Parts and Schedules of the Bill which deal with the functions of such authorities e.g. Part 8 on premises licences and Part 9 on temporary use notices.

Clause 134: Appeal to Tribunal

330.     Rights of appeal are available to people affected by the decisions of the Commission. This clause sets out the particular circumstances under which holders of, and applicants for, operating and personal licences will have a right of appeal against decisions of the Commission.

  • A person who has applied for issue of an operating or personal licence, (or, when relevant, an existing licence holder who has applied for renewal of their licence), will have the right of appeal against the Commission's decision.

  • Where the Commission attach an individual condition to an operating or personal licence, the holder of the licence will have the right of appeal against the decision.

  • An operating licence holder that is a company limited by shares, which has applied for the operating licence to continue to have effect when a new company controller takes over, can appeal against the Commission's determination.

  • The holder of an operating or personal licence who has applied to the Commission for variation of the licence by adding, amending or removing an authorised activity; amending another detail of the licence; or adding, amending or removing an individual condition attached to the licence, may appeal against the Commission's decision.

  • The holder of an operating or personal licence can appeal against the Commission's use of its regulatory powers in connection with a review: that means that an appeal can be made against the issue of a warning to the licence holder; the variation or removal of a condition, or attachment of a new condition to the licence; suspension or revocation of the licence; or imposition of a financial penalty.

Clause 135: Timing

331.     This clause provides for a time limit within which an appeal must be commenced. An appeal in relation to the categories above must be made within one month of the date of decision or action that is to be appealed against. However, the Tribunal has discretion to permit an appeal to be started after this period.

Clause 136: Appeal from Tribunal

332.     This clause provides that parties to an appeal before the Tribunal may appeal the Tribunal's decision to either the High Court, or, in Scotland, the Court of Session. The right only extends to appeals based on a point of law, and appeals may only be brought with the permission of the Tribunal or, if this is denied, the relevant appeal court stated above.

Clause 137: Powers of Tribunal

333.     This clause provides for the Tribunal's powers following an appeal. It allows the Tribunal to either uphold or overturn all of, or part of, the Commission's decision. The Tribunal can also substitute a decision or action taken by the Commission for another. In so doing, it is limited to taking only decisions or actions of a kind which the Commission is empowered to take. For example; if the Commission recommended that a financial penalty be imposed, the Tribunal could rule that a more appropriate decision could be to revoke the licence, or to issue a warning. But the Tribunal cannot order something which the Commission could not have ordered in the first place.

334.     The Tribunal can also add to the Commission's decisions; i.e. it could uphold a decision to impose a financial penalty, and add that the licence should also be revoked. This clause also allows for the Tribunal to refer a matter back to the Commission for further consideration, following which there will again be the right to appeal to the Tribunal under this Part from the new decision made by the Commission.

335.     When determining an appeal, the Tribunal can take into account evidence that was not previously available to the Commission, and it must ensure that it considers any relevant code of practice issued by the Commission.

Clause 138: Stay pending appeal

336.     This clause provides that a decision or action of the Commission, in relation to an operating or personal licence, will not have effect until either the period for bringing an appeal has expired, or if an appeal is in progress, until the appeal has been finally determined or abandoned. For example, if a financial penalty is imposed, and this is appealed against, the penalty cannot be enforced until the Tribunal decides, following that appeal, whether to uphold the decision to impose the penalty.

337.     However, the Commission has the discretion to disapply this stay in a particular case if, for example, it considers that it is necessary that a particular licence is revoked or suspended with immediate effect. In such circumstances, the bringing of an appeal will not prevent the Commission's decision having effect, pending the outcome of the appeal. This power is provided so that the Commission can ensure fairness to players, protection of children and the vulnerable, and the prevention of crime (the licensing objectives).

Clause 139: Rules

338.     This clause gives the Lord Chancellor the power to make secondary legislation in relation to the regulation of appeals to the Tribunal, and the procedure of proceedings before the Tribunal. In particular, these rules may specify who can be a party to proceedings, including, specifically, for the purposes of an appeal against a decision of the Tribunal. Paragraph 13 of Schedule 7 gives a non-exhaustive list of matters about which rules can be made. It includes:

  • the manner in which appeals are instituted;

  • determination of ongoing issues during the course of proceedings and other ancillary matters;

  • issuing directions to parties;

  • disclosure;

  • joining the Commission to proceedings;

  • suspension of Commission decisions;

  • giving evidence and production of documents;

  • administration of oaths to witnesses;

  • public admission to proceedings;

  • representation of parties;

  • withdrawal of proceedings;

  • recording and declaration of decisions;

  • award of costs or expenses;

  • variation or revocation of Tribunal decisions.

339.     Rules made under this section may make it an offence not to comply with certain requirements.

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Prepared: 25 November 2004