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ASA Admonishes Ladbrokes Over Iron Man Ad

The Advertising Standards Authority hasn’t been putting its feet up during the summer holidays: instead, it spent August flexing its muscles over various advertising campaigns launched by gambling operators, the most significant ruling being against Ladbrokes for targeting, as the ASA sees it, the underage, in contravention of the Committee of Advertising Practice’s Codes of Practice.

The offending advertisement was sent to registered customers only, so only to individuals who had already been verified as being of age – which is something that makes the ASA’s ruling somewhat puzzling.

Added to this, the ASA’s investigation was triggered by a solitary complainant.

The advertisement in question offered 10 free spins plus 90 spins extra. It was emailed to registered customers featuring an image of Iron Man, an iconic character from the Marvel Comic, with the text: “IRON MAN 3 … Enjoy this exclusive Ladbrokes welcome offer with Iron Man 3”.

The complainant alleged that the advertisement breached the CAP because it was likely to be of particular appeal to children, in breach of rule 16.3 covering gambling, and specifically of rule 16.3.12, which states:

16.3 Marketing communications must not:

16.3.2 exploit the susceptibilities, aspirations, credulity, inexperience or lack of knowledge of children, young persons or other vulnerable persons.

Ladbrokes sought to argue that the advertisement was adult-themed and was reflective of popular culture, evidence about which established that the fans of Marvel were predominantly adults. In support of this argument, they relied upon data on attendance at Comic Con events and from Facebook, the latter showing that only 6.39% of the Marvel fan-base is aged under 18, with the vast majority being aged between 18 and 37.

The ASA was having none of it. It found fault with the Facebook data on the basis that those under 13 cannot open an account, thereby skewing those results. Whilst accepting that Iron Man is a popular character that appeals to many adults, it concluded that the advertisement was likely to be of particular appeal to children, by virtue of its comic book nature and also because of the widespread availability of toys associated with the character.

It didn’t matter that the advertisement had only been sent to individuals who had already successfully completed the registration process: the ASA concluded that the advertisement breached the relevant provisions of the CAP.

Although the ASA merely ruled that the advertisement must not appear again in its current form, and instructed Ladbrokes not to use images that might be of particular appeal to children or young people in future, without taking any further action, the decision is instructive and points to the high level of vigilance on the ASA’s part.

The Authority is clearly taking a strict line on any advertisements that might be appealing to the underage, regardless of the extremely small likelihood of such advertisements reaching that audience: after all, in this case, the advertisement would have had to be shared by an adult with a child or young person in order for them to become exposed to it, given that it was sent out only to customers who had already registered, and therefore been checked to ensure that they were aged over 18.

Operators should therefore take note.

I have recently been asked, by a major UK charity, to advise on their latest promotional campaign and, in particular, on their use of a cartoon character. Some of you may be aware of the different rules surrounding lotteries, particularly of the fact that the minimum age for participation is 16, rather than 18. Nevertheless, the CAP also has rules governing these. Rule 17 deals with these products, stipulating that marketing communications should not be directed at under 16s, whether through the selection of media or context in which they appear. That said, the rules surrounding lotteries are somewhat more relaxed than those that apply to “harder” gambling products – underage people may be featured to portray the “good cause” beneficiary, as long as they are not associated with gambling or invited to purchase a lottery ticket.

In many cases, not just in the lotteries sector, but across the industry, it is difficult to know where to draw the line – and the ASA has just shown that it will expose operators who get it wrong. If you have any doubts about your latest marketing campaign, please get in touch with me at, or with your usual contact.

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Gambling Commission fines Camelot

On 28 July, the Gambling Commission announced that it had fined Camelot, the operator of the National Lottery, £300,000 for undermining public confidence.

The Commission has been responsible for licensing and regulating the National Lottery since 1 October 2013, when it merged with the National Lottery Commission. No change to the legislation under which the Lottery is regulated occurred, however, and this remains the Lottery Acts of 1993, 1998 and 2006, the Horserace Betting and Olympic Lottery Act 2004 and various Statutory Instruments made under those pieces of legislation.

The National Lottery’s regulator was initially the Director General of the Office of the National Lottery, or OFLT. However, this changed in 1998, with the dissolution of that body and the establishment of the National Lotteries Commission. It has been the intention, since the drafting of the Gambling Act 2005, that the Gambling Commission would take over its powers and responsibilities.

A full record of all breaches by, and regulatory action taken in respect of, the National Lottery is available to view from a link on the Commission’s website, and makes for an interesting read:

Records are kept going back to 2002, during the currency of the second licence granted, and are broken down into individual financial years. The current licence is the third, and there have been some eleven breaches since it was awarded: three in 2009/2010, two in 2010/2011, two in 2013/2014, one in 2014/2015 and three so far in 2016/2017. They relate to matters as diverse as numbers on tickets not being consistent with those entered into a draw, prizes being incorrectly attributed to tickets, prizes being miscalculated, failures in updating the Prize Payment Security System, incorrect draw results featuring on the website, errors in scratchcards and interactive instant win games, and inadequate information being given on promotional material.

The Gambling Commission has taken over the same regulatory priorities and imperatives previously applied by the National Lotteries Commission. Protecting players is central. The Commission oversees the procedures used by Camelot to ensure the integrity of games and the security of scratchcards. It conducts independent research to confirm that there is no evidence of non-randomness of games, and monitors the reliability, security and efficiency of the National Lottery’s central computer systems and national network of terminals. The Commission also conducts “fit and proper vetting” of Camelot’s suppliers and oversees the transfer of funds to good causes.

In relation to all licence breaches dating back to 2009, this is only the second time that a financial penalty has been imposed – the other was in respect of a licence breach recorded on 26 August 2014, which arose because Camelot incorrectly calculated the Lotto jackpot prize tier such that the three winners of the jackpot prize in the draw held on Saturday 19 October 2013 shared £4.8m instead of the originally broadcast sum of £6.2m – a significant discrepancy. On that occasion, Camelot was fined £100,000.

In every other case, the Commission has been satisfied that Camelot’s policies, procedures and systems had been updated or fixed so as to prevent any recurrence of the problem, and therefore contented itself with recording a licence breach and taking no further action.

The recent findings relate to three separate incidents. First, following the Lotto draw on 10 October 2015, Camelot published the incorrect Millionaire Maker Raffle results on its website for an hour. This resulted in over 100,00 players who viewed them being misled. Then, on 5 November 2015, an incorrect jackpot advertisement was placed on the EuroMillions results checker page, stating that there were ten prizes of £1 million available, instead of one. Later, on 27 December 2015, the incorrect prize information for the Lotto Raffle top tier prize winners was published on the EuroMillions website, including a reference to “5 prizes at £20,000” which should have read “5 prizes at £1 million”. Again, on both of these occasions, players had been misled.

It would appear from the Commission’s recording and reporting of these breaches that the £300,000 fine has been imposed in respect of the first of them only, the one that occurred on 10 October 2015. For the others, the Commission has merely recorded a breach.

Camelot must now pay the £300,000 to good causes. Both incidences of financial penalties being imposed during the currency of the third licence have occurred since the Gambling Commission took over responsibility for regulating the National Lottery operator, and for breaches that were committed since that date. Only an examination of future years’ data will reveal whether or not this represents a harsher line being taken than was the case previously.

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Are Minor Variations Working

In July 2009, the Department for Culture Media and Sport issued Supplementary Guidance on “a simplified process for minor variations to premises licences and club premises certificates”. Part One of the Guidance repeats the wording: “a simplified process for minor variations to premises licences” This July 2009 Guidance replaced the Guidance on variations of premises licences published on the 28th of June 2007. It was envisaged that a minor variation was a “small variation that will not impact adversely on the licensing objectives”.

The July 2015 Guidance issued under Section 182 of the Licensing Act 2003 repeats the same phraseology of “a simplified process”. The question to be asked to determine whether an application is to be classified as a minor variation or not is whether the variation proposed could impact adversely on the licensing objectives. Paragraph 8.48 of the Guidance confirms that “in considering the application the Licensing Authority must consult relevant responsible authorities if there is any doubt about the impact of the variation on the licensing objectives… and take their views into account in reaching a decision”.

There are then cited some very helpful examples of what may be a minor variation, including small changes to the layout of premises, as long as the change does not increase the capacity for drinking, or affect access between the public part of the premises and the rest of the premises, or impede the effective operation of a noise reduction measure. Variations to extend licensing hours for the sale or supply of alcohol for consumption on or off the premises between the hours of 23.00 and 07.00 or to increase the amount of time on any day during which alcohol may be sold or supplied for consumption on or off the premises must be treated as a full variation, whereas applications to reduce licensing hours will normally be processed as a minor variation.

Paddy, Anna and I have all been involved in many applications for minor variations and generally Licensing Authorities take a sensible view as to whether an application can be classed as a minor variation or not. I am currently dealing with premises which have been taken over by one of our clients and a new layout plan has been submitted. There is no increase in the public area for drinking, no increase in bar serveries and the Licensing Authority has agreed that this application can be a minor variation.

We have however had instances where we have not agreed with a licensing officer’s decision and it may be that there will be further articles on this point, should one of our cases end up in the High Court. The Guidance confirms that, in some circumstances, it would be possible to amend or remove an existing condition as “premises may change over time and the circumstances that originally led to the condition being attached or volunteered may no longer apply” (paragraph 8.64). For example, there may be no need for door supervision if a bar has been converted into a restaurant.

 What if a door supervision condition had been placed on a licence requiring door staff on a Monday night because, when the licence was granted, Monday night was a busy night (perhaps a student night) and door supervision was required at that time? If the circumstances change and Monday night is no longer a busy night and the premises may only have 20 to 30 customers, then it must surely be appropriate to use the minor variation process to remove a specific requirement for a certain number of door supervisors and replace it with a condition that asks the premises licence holder to risk assess whether and when door supervision is required. I would suggest that this should be treated as a minor variation, especially if the police agree with the application being treated as such.

 Would it be appropriate in such a case for a licensing officer, who has received advice from the police suggesting that from a crime and/or disorder point of view there is no risk to the licensing objectives, to conclude that this particular application should be a full variation as opposed to a minor variation? Although the Guidance asks licensing officers to consider whether an application could impact on the licensing objectives, there clearly needs to be some evidential basis for a licensing officer to reach a particular decision. I do not think it is appropriate for licensing officers who have received advice from the police or environmental health that an application to vary a condition will not impact on the licensing objectives to then rule that the application is not a minor variation and a full application is required. A full variation does of course require a 28 day consultation period, an advertisement to be placed in a local newspaper and of course a significantly increased fee, which could be over £1900 if the multiplier applies… or am I being cynical?


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Does being Caught with Illegal Workers Necessarily Mean that your Licence Will be Revoked on Review

I have recently been involved in representing a premises licence holder who had his licence reviewed by the police after being found with seven members of staff for whom he could not, during the raid by immigration officers, provide documentary proof that they were entitled to work in this country. The police brought a review of the premises licence and in the body of the review asked for revocation of the licence citing the case of East Lindsey District Council against Abu Hanif (Zara’s Restaurant). In that case the employer had no records for the illegal employee, the person was not on a payroll, he was paid less than the minimum wage, there were no PAYE records and there was no payment to HMRC for tax.

In quite an interesting case the premises licence holder sought to argue before the District Judge that because this was a matter which brought about a civil penalty, and not a criminal penalty, the crime and disorder licensing objective had not been engaged.

The District Judge agreed with those submissions and therefore dismissed the decision of the licensing authority to revoke the licence.

However, the High Court saw differently and Mr Justice Jay overturned the decision of the District Judge, saying that where there was evidence of defrauding HMRC, exploitation of vulnerable workers and a failure to pay the minimum wage, then in those circumstances, albeit being dealt with by way of a civil penalty, the crime and disorder licensing objective was clearly engaged. Mr Justice Jay didn’t remit the matter back to the authority for a re-hearing, but determined on what he had heard that the revocation should stand.

He did say that “the licensing objectives are prescriptive and are concerned with the avoidance of harm in the future.”

There had also been a decision two weeks before mine in my case in an adjoining licensing authority dealing with premises known as the Star of India. In that case the evidence was that the premise licence holder had made no request for ID documents, was defrauding HMRC, was not paying the minimum wage and in addition there were Licensing Act breaches.

We carefully prepared for our review with the assistance of an organisation called People Force International. They were challenging some of the findings of the immigration officer and had found documentary evidence to deal with some of the suggested instances of illegal workers. By the time we came to the review the investigations had not been completed, and there were still appeals pending in relation to the civil penalty finding.

Amongst other things I successfully argued that the review was at the very least premature, in that the investigation and appeals had not been finalised by the time of the review hearing – even less so by the day that the review was launched and revocation was sought in the application.

We offered robust conditions as an alternative to revocation ,which were as follows:-

  1. The Premises Licence holder will operate a full digital HR management system where all relevant documents are stored for each individual member of staff.
  2. The Premises Licence holder will work with People Force International, or a other similar agency and carry out checks on the Home Office website to verify identification, Visa and right to work documents.
  3. No new member of staff will be able to work at the premises (including any trial period) unless they have provided satisfactory proof of identification and right to work.
  4. All documents for members of staff will be retained for a period of 12 months post termination of employment and will be made available to police, immigration or licensing officers on request.

The licensing authority were not impressed with the quality of the case that had been brought by the police and the fact that there was no immigration officer present to give an update on what had happened and what was the continuing position with the appeals. The Committee was content that the operator was promoting the licensing objectives and now had systems in place which gave them comfort that the errors that had happened before would not happen again in the future.It concerns me that the police force in this case were relying on a High Court decision where the circumstances were significantly different to the matter before the licensing authority. None of the detail had been put in the application for review, nor was it given in all of the submissions to the licensing authority. It just goes to show that there is no substitute for preparing properly for hearings as serious as this.

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How far do Gambling Companies need to Investigate Customers Funds

There have been some recent high profile cases where the Gambling Commission have investigated operators who have accepted huge sums of money in stakes from customers who have stolen the funds used for the gambling. The most recent case of this type was where the bookmaker Betfred was ordered to pay £800,000 as a settlement to the Gambling Commission’s investigation after accepting stolen cash from a “VIP Customer”. He had been allegedly offered free drinks and day trips to encourage him to keep betting. As a result of the Gambling Commission investigation Betfred were found to have failed to meet their obligation on social responsibility and the prevention of money laundering – two key conditions of their operating licence in the UK.

In this case it was shown they had taken thousands of pounds from a convicted thief without properly checking the customers wherewithal to pay or engage in it’s social responsibility obligations. The Gambling Commission stated that Betfred would pay more than £800,000 in “Compensation and in a contribution towards social responsibility causes” after it’s operating licence had been reviewed. The company was ordered to pay £443,000 to the victims of the criminal activities and a further £344,500 to social responsibility causes. The Gambling Commission also ordered Betfred to pay it’s investigation costs and perform an independent third party review of it’s anti-money laundering and social responsibility policies and procedures.

This highlights a significant issue for gambling companies who have strict obligations placed on them through the operating licences given to them by the Gambling Commission in the UK. In the instant case a significant proportion of the £850,000 that was stolen from an employer by the accountant was gambled with Betfred. The individual concerned had huge debts between 2013 and 2015 with Betfred who continued to give him free bets, days out and inducements to carry on betting. Betfred admitted that the customer was in their top five percent of customers in terms of spend and profit and was therefore treated as a VIP customer.

There is a clear anomaly for these betting companies who will want to preserve favour with VIP customers but must ensure that they undertake stringent money laundering and social responsibility checks on all of their customers. There will need to be close control over any inducements that are offered to VIP customers particularly where customers have asked to be self excluded or have clearly made contact with the gambling company to say that they are taking a break from gambling.

This case follows on the heels of Gala Coral who were ordered to pay £880,000 worth of compensation after a VIP problem gambler used the proceeds of theft to gamble with the company. In this case the Gambling Commission stated that Gala Coral had failed in its duty to prevent money laundering and problem gambling adding that it safeguards against both were inadequate. It was suggested that there were “Systemic faults” in the company’s approach to problem gambling and money laundering. In this case the company had relied on uncorroborated suggestions that the gambler was independently wealthy when in fact he had stolen £800,000 from a vulnerable person. This case again highlights the high level of compliance placed on gambling companies as the Commission stated: “Gala Coral had failed to conduct adequate enquiries about the source of funds the customer used to gamble in store and online and placed overreliance on the fact that the relevant payments were all made through one UK clearing bank account”.

The company was also criticised for failing to spot the signs that the man was a gambling addict. In this case the company agreed to pay £846,664 to the victim of the theft and his family as well as making a £30,000 payment to reflect the costs of the Commissions investigation.

These two cases show that there is a significant onus placed on the gambling companies to continue to monitor high rolling customers and be satisfied with the money laundering and social responsibility / problem gambling policies they have are robust and working in individual cases.

We are certain that these cases will not be the last of their type and are timely warnings that gambling companies must ensure that the policies they have in place are not merely written policies but are practically effective.

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Enforcement Action now going to Focus on PML Holders

Since the Gambling Act 2005 came in to effect on 1 September 2007 I have regularly commented on the style and approach of enforcement action taken by the Gambling Commission under the Gambling Act 2005. The first four or five years were not the most interesting of articles as it appeared little or no enforcement action was being taken, even in circumstances which quite clearly required some investigation or action.

There was undoubtedly a change of approach around 2011/2012 , since then we have seen numerous high profile investigations leading to major operators being the subject of public statements and making financial payments. Regulatory action has been commenced under Section 116 Gambling Act 2005 which permits the Commission to review an operating licence. The regulatory powers given to the Commission are set out in Section 117 and the ultimate sanction of revocation is dealt with in Section 119. I do not propose to go through the numerous cases which have been dealt with in the last four years but it is clear the vast majority of those cases relate to action being taken against the company who is the holder of the operating licence. What we have not seen (apart from in exceptional circumstances) is action being taken against individual Personal Management Licence Holders but it now appears from recent Gambling Commission publications that this is now being undertaken.

There has of course always been the power to deal with individuals who hold Personal Management Licences. Rob Burkitt from the Commission has quite rightly pointed out there always has been a power to take action against PML Holders, and those in senior positions, and that the Commission were always looking at taking the correct and appropriate action. Whilst Rob’s answer was of course completely correct it did not cover whether or not there had been a definite decision taken by the Commission in recent months to now take action against PML Holders and I doubt we will ever find out whether there was a round the table meeting when this decision was taken although I am in no doubt myself that this has happened. It seems to me inconceivable that in some of the high profile cases during the last four years no mention of any PML is made and yet in recent cases, which are clearly not on the same scale as others, the Commission are looking at taking action against PML Holders.

The Gambling Commission Statement of Principles for Licensing and Regulation March 2015 confirms at Paragraph 4.3 that the Commission expects those occupying senior positions whether or not they hold Personal Management Licences to:

  • uphold the licensing objectives and ensure compliance of operators with the LCCP
  • organise and control their affairs responsibly and effectively
  • have adequate systems and controls to keep gambling fair and safe
  • conduct their business with integrity
  • act with due care skill and diligence
  • maintain adequate financial resources
  • have due regard to the interest of customers and treat them fairly
  • have due regard to the information needs of customers and communicate with them in a way that is clear and not misleading and allows them to make an informed judgement about whether to gamble
  • manage conflicts of interest fairly
  • disclose to the Commission anything which the Commission would reasonably expect to know
  • work with the Commission in an open and co-operative way

A further Gambling Commission document “Licensing Compliance and Enforcement under the Gambling Act 2005: Policy Statement” March 2015 also deals with the Gambling Commission approach. At paragraph 5.3 “Where concerns have been raised about a licensee, the Commission may commence an investigation but it will not necessarily commence a licence review unless and until it appears likely that the Commission will need to exercise its formal powers under Section 117 of the Act”. In deciding whether enhanced compliance is required the Commission list a number of matters that they will take in to account and this list which is not exhausted includes: The nature and extent of the concerns, whether concerns have been raised about the licensee in the past, the extent of any attempt to conceal any failure, the impact on customers and the absence of internal controls and procedures.

Paragraph 5.19 sets out the procedure for reviewing an individual licence and makes it clear that before commencing a review of an individual personal licence the Commission must notify the licensee and inform him or her of the procedure to be followed in the conduct of the review. In most cases the Commission will fulfil this obligation by issuing a notice to the licensee which sets out: The ground floor commencing a review, the procedure to be followed, confirmation of the licensee’s right to make representations and when those representations should be made.

The powers have always been there to take action against Personal Management Licences. Having looked through the Gambling Commission website it does appear that, apart from the odd fairly exceptional case, the Commission has not taken action against Personal Management Licence Holders. It certainly does not appear to have taken any action against Personal Management Licence Holders for major companies and yet it now seems clear that this is to be the Commission approach. My personal view is such an approach needs to be handled with great care. Where there is criminality or serious and significant breaches of the LCCP or other matters then such an approach may be appropriate. Where a view has been taken that certain policies and procedures need updating and amending and there is no serious criminality / bad money being laundered / customers being defrauded then the Personal Management Licence review has to be a final step for the Commission.

The Commission should look to individuals to work with them and act on their advice or concerns and I have no doubt that the Commission will find the vast majority of PML Holders would only be pleased to do so. There are some excellent PML Holders in the UK with extensive knowledge of the industry and supporting legislation and guidance and to start a course of action which may impact upon a personal management licensee without serious and exceptional circumstances starts to set a dangerous precedent. The Commission should not forget that the imposition of conditions or even a warning on a Personal Management Licence will have a major impact on that individual and their ability to continue to work within the industry. No one questions that it is essential but the regulators in the industry should work together and the Commission should avoid Personal Management Licence reviews except in the most serious of cases.

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GC Consults on New Licence Fees to Take Effect in 2017

The Gambling Commission is consulting on proposed new licensing fees set to come into force next spring.

This consultation follows on from the publication by the Commission of its fees discussion paper on 1 September 2015 and a workshop for stakeholders on 24 September. The Commission sees a review of its fees structure as timely after the implementation of the Gambling (Licensing and Advertising) Act 2014 increased the volume of gambling it regulates (excluding the National Lottery) from around £6.7bn to approximately £9.3bn.

The consultation is open until 9 September and full details may be found here:

It should be noted that responses must be sent to both the Commission and the DCMS.

The main proposals, in summary:

  • Take into account the changes in the Commission’s costs and income following the coming into force of the 2014 Act;
  • Would result in a reduction of 10% in fees, £1.7m, across the gambling sector as a whole;
  • Tweak the fees applicable to various sizes and types of operator to ensure, the Commission says, proportionate recovery;
  • Replace number of premises with gross gambling yield (“GGY”) for various types of non-remote operator as the means of calculating fees;
  • Re-align cost recovery more proportionately, in the Commission’s view, with reference to GGY;
  • Sub-divide various fee categories into smaller sub-categories to promote fairness; and
  • Address other issues that have been identified in the current fees structure.

The Commission expects the proposed changes to come into effect on 6 April 2017. It will be holding a workshop for trade associations in Birmingham in September.

The Commission estimates that, as a result of the changes, around 1900 operators will benefit from a fees reduction, 1,000 will see fees held at current levels, while fewer than 100 will face an increase.

The GC has found that its fees income is, and will continue to be, in excess of its operational costs and this contravenes the principle of reasonable costs recovery enshrined in HM Treasury’s July 2013 Managing Public Money. These proposals therefore seek to address this imbalance by decreasing revenues (on the GC’s estimates) by around 10%.

One key proposal is to move several additional sectors across to GGY as the metric for determining both application and annual fees. It is suggested that this will apply to non-remote bingo, general betting (standard), adult gaming and family entertainment centres, as well as to 2005 Act casinos (which are currently charged by reason of the licence they hold, namely small or large). The Commission considers that it now has more reliable GGY data from operators than when the licence fees were originally set and that the new basis for calculation will be fairer, and more accurately reflect operators’ regulatory risk and cost burden.

The Commission also proposes sub-dividing a number of fee bands, in particular those for smaller operators, to “smooth out” the transition from one fee band to the next, thus enabling gambling businesses to grow without seeing a huge “hike” in fees. This is obviously a welcome move. Similarly, there is a suggestion that some of the largest fee bands will be sub-divided and that “fee formulae” will be introduced, based on turnover, for certain of the highest fee categories, such as machine technical and gambling software licences. This, the Commission say, will ensure an equitable recovery of costs when larger operators expand or merge with, or acquire, smaller businesses. It also plans to address the fees for general betting standard (real events) and remote betting intermediary operators, so that the smaller players pay less, whilst the bigger operators pay more.

Other proposed changes include slashing the variation fee for operators when they move up a fee band to a fixed fee of £25, rather than the current payment of 20% of the usual payment for the activity in question. This represents a very significant reduction in many cases. The Commission is also proposing reducing the charge for a change of corporate control declaration application where shares are transferred to a family member by a small, family-owned company from the current fee of 75% of the usual application fee for the activities authorised by the licence to a fixed fee of £100. Again, this would bring about a significant discount. The current requirement to pay £25 when a licensee changes his, her or its name is proposed to be scrapped and this, in the future, will attract no charge. This will particularly benefit female holders of operating licences who are obliged to apply for a change of name when they marry or divorce.

Many gambling software providers would benefit from the proposal to introduce a new category of remote operating licence for B2B providers who host their own remote casino and bingo games through another remote casino or bingo operator, but do not, themselves, transact with customers. Under the new arrangements, such operators would continue to need to hold a gambling software licence, but would only need the new operating licence, rather than a full bingo or casino operating licence, as is currently the case. This seems sensible to me given that most of the requirements relating to social responsibility, cash handling, protection of customer funds and so on that apply to B2C businesses simply are not relevant in the case of B2B businesses. I have long thought that the requirement to hold a full licence does not sit well with those entities and on several occasions this has resulted in simply responding “not applicable” to requests from the Commission for policies and procedures when making operating licence applications on behalf of the clients concerned.

Scrutiny of the Commission’s figures reveals a decrease in fees for just about every category of operator. The notable exception is the lottery sector, so the Commission’s view on that bears some further scrutiny.

The proposal for over 500 society lottery operators and ELMs is to hold fees at current levels. The GC makes the point that fees have been held at the same levels since 2009 (and indeed, since 2007 for most such operators), so continuing to hold them at current levels still represents a significant reduction in real terms.

The Commission points to the increase in fees for External Lottery Managers (“ELMs”) as part of the 2012 fees implementation and considers that these remain at the right level given the increasing influence of ELMs in the lottery market and their role in introducing significant developments in the kinds of product available. It also refers to the introduction of an ancillary licence for society lotteries (as a result of the 2011/12 fees consultation) that take payment via remote means up to a value of £250,000 per annum. This reduced annual fees for many society lotteries by around 30% and up to 60% for the very smallest lotteries as previously they had been required to a hold a full remote licence. The Commission therefore believes that the maintenance of the current fees levels for lotteries is appropriate although it says that it may have to review society lottery fees again once it has completed its current review of the sector. This will no doubt disappoint many in the lottery market, particularly ELMs, and I and my lottery clients shall await the outcome of any further fees review with interest.

One area of suggested change that some society lottery and ELM licence holders may benefit from, however, is the proposal to introduce annual fee discounts for the holders of two operating licences. Currently, such licence holders receive a 5% discount on the cheaper of the two licences they hold, whether it be remote or non-remote. It is proposed to apply that discount to every licence activity on both licences.

The proposed fee changes are intricate in places and this piece does not set them out in full. Should you require any advice on them, or assistance with responding to the consultation paper, please contact one of the team.


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What amounts to an abuse of process or entrapment in licensing test purchasing?

I was reminded this week of the case of East Riding of Yorkshire Council v Dearlove 2012 [ALL ER D] 163. I was advising a local authority in relation to a procedure that they wish to put in place for some test purchasing and had to reread the judgment.

This was a case where the High Court determined that the Magistrates’ Court below it had erred in staying, as an abuse of process, a prosecution brought by a local authority against an individual for operating a private vehicle without a licence. The High Court held that the local authority had not entrapped him by carrying out a “test purchase” in booking his vehicle in response to a newspaper advertisement placed by him offering his services.

The appellant local authority had appealed by way of case stated against the decision of the Magistrates’ Court staying a prosecution that it had brought against the respondent – Dearlove. Dearlove had placed an advert in a monthly free newspaper stating “Chauffer-driven BMW, VIP, Executive, Corporate Business Travel, Airport Connections, Male/Female Chauffeurs.” An email address was given at the bottom of the advert. This was reported to the local authority and a copy of the advert was faxed to it. The local authority informed Dearlove that he was not licensed to carry out the activities advertised. Initally, Dearlove indicated that he would apply for a licence that but he later claimed that he would be using the vehicle for weddings and funerals only, for which he did not need a licence. Dearlove was warned of the possibility of a “test purchase” and he said he was not trading as a taxi firm and that, indeed, he had no business at all.

A test purchase was ordered to check whether this was correct. The caller enquired about the fare for a specific journey and whether it included alcohol. At the end of the journey, Dearlove accepted payment as agreed and handed over an invoice and a business card.

The local authority prosecuted Dearlove for driving, operating and using a private hire vehicle without a licence in a controlled district and carrying on a licensable activity by selling alcohol from the vehicle without authorisation. After considering the relevant authorities the Justices concluded that the prosecution should be stayed.

The questions for the opinion of the High Court were whether:

  1. In the light of Attorney General’s Reference (3 of 2000), re R [2001] EWCA Crim 1214, [2001] 2 CR App R 26, the Magistrates has erred in law in finding the local authority’s conduct went beyond simply providing D with an opportunity to commit a crime.
  2. The Magistrates had erred in law in determining that the information available to the local authority prior to the test purchase did not amount to reasonable grounds for believing that criminal activity was taking place.
  3. The Magistrate’s erred in distinguishing the facts of Dearlove’s case from Nottingham City Council the Amin [2000] 1 WLR 1071 DC.

The High Court in looking at this case answered the three questions as follows in its decision:

  1. The local authority had not stepped over the line and had done nothing that any member of the public would not have been able to do. There was nothing in the way the test purchase was carried out that could amount to entrapment. Despite the fact that the local authority knew that Dearlove had no work and was vulnerable, it simply gave Dearlove the opportunity to provide a service as advertised by him. There were reasonable grounds for suspecting him and continuing suspicion was justified. Dearlove had had an express warning that a test purchase would be made and therefore there was no unfairness. There was a strong public interest in ensuring that services such as those offered by Dearlove were properly licensed. The brining of the prosecution could not be regarded as an affront to public conscience. The Justices had erred in ordering a stay of the case against him.
  2. The answer to the first question was yes; no answer was needed to the second question.
  3. The situation in the instant case was comparable to Amin but a yes or no answer was not required to the third question as formulated.

The case was therefore remitted to the Justices for substantive consideration, with the appeal being allowed.

This case gives clear guidance on the position of the local authorities in cases such as this and other areas where test purchasing is carried out – not just the situation with taxi licensing. Authorities have wide discretion and, as long as they act consistently with the guidelines set out in this case, will not be criticised for their approach to test purchasing, particularly if there is “a strong public interest in ensuring that services are not offered incorrectly.”

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House Of Lords’ Call For Evidence On The Licensing Act 2003

On 30 June the House of Lords Select Committee published its call for evidence on the Licensing Act. It is seeking the views of anyone with an interest in the legislation, including operators.

This follows on from a recommendation by the House of Lords Liaison Committee in its 3rd Report of Session, published on 14 March, that an ad hoc Committee should be set up to conduct post-legislative scrutiny of the Act. The Committee was set up on 25 May and has now started to receive evidence. It has already held sessions on 5 and 7 July, at which it heard from senior officials from the Home Office, the Department of Culture, Media and Sport, the Department of Health and Public Health England.

This is the first comprehensive review of the legislation since it was enacted and has been called for against the background of an analysis of the aims of the Government of the day in introducing it. These, say the Committee, were to balance “the broad range of interests engaged by licensing decisions – those of the entertainment and alcohol industries, small and large businesses, local residents and communities, policing, public health, and the protection of children from harm”.

The then Blair Government put it in this way:

“Our approach is to provide greater freedom and flexibility for the hospitality and leisure industry. This will allow it to offer consumers greater freedom of choice. But these broader freedoms are carefully and necessarily balanced by tougher powers for the police, the courts and the licensing authority to deal in an uncompromising way with anyone trying to exploit these greater freedoms against the interest of the public in general.”

The remit of the Committee is now to assess whether the Act has achieved these objectives. It will look at the Act itself, in its original form and with subsequent amendments, associated and subordinate legislation, their implementation, and associated developments.

The Committee has invited general views on the effectiveness of the Act, and will be studying the following specific issues, amongst others:

  • The key aims of the Act and the licensing objectives – are they appropriate? Should there be an additional objective of promoting health and wellbeing?;
  • Has any greater availability of alcohol had an impact on the health of the population?;
  • The lessons to be learned from across the UK and other countries;
  • Does the Act still aim to encourage tourism, leisure and culture? Should access to and enjoyment of licensable activities by the public be an additional objective?;
  • Government policy on alcohol, health and minimum unit pricing (MUP) – is the Act being used effectively in conjunction with other interventions as part of a coherent national and local strategy? Should MUP be introduced in England?;
  • Are all responsible authorities engaging appropriately with the licensing process and, if not, what can be done?;
  • Enforcement and crime and disorder – do the police have adequate powers to promote the licensing objectives?;
  • Late Night Levies and Early Morning Restriction Orders (EMROs) – have they been effective and, if not, what are the alternatives?;
  • Has the licensing process become too complex and, if so, what might be done to simplify it?
  • What could be done to improve the appeal procedure and is there a case for a further appeal to the Crown Court?; and
  • Should licensing fees be set at national level, or should this be devolved, at least to London and the other major cities to which Government proposes to devolve greater powers

The Committee is composed of a dozen members of the House of Lords drawn from the Conservative, Labour and Liberal Democrat Parties, with two crossbench members. It is chaired by the Conservative Peer, Baroness McIntosh of Pickering.

After hearing verbal evidence, the Committee will move on to consider written evidence. The deadline for interested parties to submit this is 2 September and the Committee will then report by 31 March 2017.

Written evidence should be submitted online using the written submission form available at, or by post to:

Michael Collon,
Clerk to the Select Committee on the Licensing Act 2003,
Committee Office,
House of Lords,

Guidance on submitting written evidence may be found here:

Submissions should be dated, and clearly state who they are from, whether it be an individual or made on behalf of an organisation. The Committee expects submissions to be concise, with numbered paragraphs, and any submission longer than six pages should include a one-page summary. You should also note that written evidence may be published online, although personal contact details will be redacted. If you do not wish your submission to be published, you must give your reasons for this, and the final decision on publication will rest with the Committee. Those making written submissions may also be called to give oral evidence in public.

As will be seen from the list of topics above, this is an extremely wide-ranging review of the licensing landscape and the implications for the industry could potentially be huge. Whilst some areas, such as simplifying the licensing process and improving the appeals system, with the possibility of recourse to the Crown Court, might be seen as positives, there is a whole range of issues that the Committee will be looking into, such as changes to the Levy and EMROs to make them more “effective”, that will give many in the trade cause for concern. The addition of a licensing objective encouraging access to, and enjoyment of, licensable activities by the public seems unlikely, and the emphasis placed on pubic health by the call for evidence certainly hints that the long-mooted new public health licensing objective is on its way.

It is therefore crucial that as many operators as possible engage with the process and respond in writing to the call for evidence. If you would like us to assist you in framing your written evidence, please contact one of the team.

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Woods Whur and Innpacked strategic relationship

We are delighted that our relationship with Innpacked is going from strength to strength. Our clients are benefiting from our hook up with them and many are already taking advantage of the direct link into their training packages. We have also had some real success with bespoke packages being tailored to our clients needs.

Innpacked is one of the most successful training companies in the UK hospitality industry. Their client base ranges from large multinationals to individual clients who are just beginning their career. The reason for our hook up with them is their ability to provide training that suits our client’s individual needs. They deliver mandatory courses that vary from the Level 2 Award for Personal Licence Holders, which is required to gain a personal alcohol licence, to the Level 4  Award in Food Safety in Catering. They also design bespoke courses which are written and delivered to our client’s exact requirements, such as employee and management induction courses. Their  main goal is to not only deliver quality training, but training that is relevant and adds value to your business or career.

Latest dates for Leeds NCPLH courses are as follows:

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If you need to book anyone on these courses during the summer months please contact or you can call her on 0800 078 6056.

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