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Paddy Whur’s Summer Update

Well its been a significantly busy start to 2016 and it does look as if Leeds has been a particularly vibrant market. Recent statistics have put Leeds in the same league table as Cardiff and Liverpool as leading for regional openings of new licensed premises. Whilst places like Manchester, Birmingham, Leeds and Cardiff have always been well stocked with pubs and bars, their range of restaurants has per capita been well below that of London. However, this is not the case now as these regional heavy weights are starting to offer a wide range of premises for customers to choose from. We have been fortunate to receive a significant number of these instructions and continue to assist operators when they are looking at new sites within the city.

We are delighted to be instructed in relation to the new Dakota Hotel on Greek Street in Leeds which will be a significant addition to the hotel sector. Clearly there is still a need for new reasonably priced beds in Leeds to cope with the increasing demands as a leisure destination city.

In our last newsletter I did comment on the issue of takeaways and the potential need for toilet provision due to the recent High Court ruling. At that stage I didn’t have a copy of the Decision. However, please find the link below to the reported case and can I thank James Rankin of Francis Taylor Buildings for sending me the case. We will of course continue to report on this matter if and when the Court of Appeal looks at the Decision.

http://www.bailii.org/ew/cases/EWHC/Admin/2016/1064.html

The case of Hemmings which deals with the ability of public authority to recover enforcement costs has now been litigated in the European Court of Justice. We may have to wait until the end of the year until we see the Decision of this case. Clearly Licensing Authority’s will be interested to see the final Determination of this Decision.

What is the current state of play with EMRO’s and the Late Night Levy

There has not been a great deal happening in relation to the EMRO and the Late Night Levy. We still do not have an EMRO in place. The only public hearing so far has been in Blackpool and other Licensing Authority’s seem to be reluctant to go through the protracted procedure when Blackpool reported a significant cost for the process with no positive result.

It appears that the Late Night Levy is also now stuttering as Blackpool have also voted against the implementation of the Levy as recently as the 25th May. They are going to review this decision later, probably in six months time but may favour a more structured review of their Statement of Licensing Policy. Tower Hamlets are currently in the process of consulting on the potential of the introduction of late night Levy. The consultation was due to conclude in mid May but we have not yet seen a decision as to how Tower Hamlets are to move forward. However, most other areas that have gone out to consultation have rejected the Levy and we will have to see whether any more Authorities look to introduce a Levy.

In April Nottingham announced their Levy raised £150,000 less than they had expected. Clearly there is a huge amount of bureaucracy to go through to secure a late night Levy and if the financial remuneration is not what was expected we can understand why many authorities are going cold on the concept.

We have seen the first prosecution for selling alcohol at a cost which is below the permitted minimum price. In May a shop keeper in Gateshead was found guilty of four charges relating to the sale of Kommissar Vodka which was found to be unfit for human consumption. The prosecution for the breach of the mandatory condition on minimum price was therefore wrapped up in a more broad prosecution relating to the sale of counterfeit vodka. He was fined £3,200 and ordered to pay costs. We have been involved in cases where alcohol was sold below the minimum price but the Police and Licensing Authority concerned dealt with the matter by way of a formal caution for the criminal offence and a review of the Premises Licence.

What will the rest of the summer bring?

Well we move into the height of summer and have the Queen’s 90th birthday extended licensing hours and also the Euro 2016 Football Championships to look forward to. It is going to be important that Premise Licence holders ensure that plastic bottles and glasses are used in outside areas – when the sun arrives! If there are conditions on Premises Licences they will be monitored and it is important in the circumstances that plastic/polycarbonate glasses are used. In addition should England, Wales and Ireland perform well there could be euphoria in licensed premises and it is important in the circumstances for licensees to remember that selling to someone who is intoxicated is a criminal offence and can lead to criminal prosecution and/or review of a Premises Licence.

I have been involved in a serious Summary licence Review this year in which the Premises Licence holder was being threatened with the revocation of his licence. A great deal of the evidence produced by the Police was of the level of drunkenness/incapacity of people in and leaving the venue. Operators often forget this is a critical part of the management of their premises and if not handled correctly could lead to the threat of prosecution and/or the loss of licence.

Lets hope that all the teams do well – with England winning the tournament – the sun comes out and we can all have a glorious summer.

Its hard to believe that it has been twenty years since we watched France play Spain at Elland Road in Euro 1996 and then saw Gazza score the wonder goal against Scotland. What a fabulous day and the pubs were all closed by midnight!

 

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Manchester on Alcohol and Entertainment Licensing Law

We are delighted that Colin Manchester has committed to a new edition of Manchester on Alcohol and Entertainment Licensing Law, which will be the 4th edition, and will be published by Woods Whur Publishing in 2017.

Colin told us, “There continue to be changes to the primary and ancillary legislation, as well as development in the law through High Court and Court of Appeal decisions, all of which means that licensing law continues to be a fertile area for litigation. I am pleased that 2017 will see me release the 4th edition of my text. It is also great news that Woods Whur Publishing are reducing the cost of the current 3rd Edition to £40 per copy as a mid-publication discount.”

To place an order please email info@woodswhur.co.uk

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High Court Rules some takeaway outlets will need to provide toilets

I have recently had the opportunity to discuss the action Hull City Council has taken to the High Court about the provision of toilets in take away outlets with their head of legal. This High Court decision may have significant implications for takeaway food stores that also provide an element of seating for customers.

The case involved Gregg’s the bakers and sandwich shops. Hull City Council successfully argued that the provision of seating for customers within the premises necessitated the provision of toilet accommodation for those customers. This is potentially hugely impactful for a significant number of similar operations.

The case was brought under Section 20 of the Local Government (Miscellaneous Provisions) Act 1976 which provides for the requirement of sanitary facilities in certain circumstances. This section allows local authorities to require the provision of toilets at places of entertainment or other ‘relevant places’, and to maintain them. The ‘relevant places’ definition include places where food or drink is sold to members of the public for consumption at that place.

There is guidance which suggests that ‘food premises’ which are predominantly takeaway operations (where customers are not encouraged to stay and consume food for a significant length of time, and provide less than 10 seats for occasional use by customers) would not generally be regarded as a ‘relevant place’ within the meaning of the Act and therefore would not normally be expected to provide toilet accommodation for customers.

Hull City Council said that approach could not be right, as such an interpretation gave the two local Greggs’ bakeries an “unlawful and unfair” commercial advantage. Greggs have changed their style of operation significantly, and in many areas now compete with other late night operators and have premises licences to allow them to sell hot food between 23:00 and 05:00.

In a hearing at the High Court in Leeds the judge decided that Hull council’s claim was well-founded. He went on to say: “It is obvious that if a person sits down in a Greggs outlet at the seats provided and proceeds to eat a pasty and a fizzy drink just purchased at the counter for that purpose, that is a normal use of the premises. The fact that most customers take away their purchases and those who stay do not normally stay long, does not change that.”

We have not yet been able to see the full judgement of this potentially impactful decision and have been told that Greggs will seek leave for the High Court decision to be reviewed by the Court of Appeal. We will keep you updated as to any further developments.

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Councils should be wary of the unintended consequences of cumulative impact policies

I am delighted to say that I successfully persuaded Birmingham Licensing Sub-Committee to grant a new licence for a thousand plus capacity, three room Bierkeller Complex on Broad Street in Birmingham. The premises sit in the heart of the city council’s Cumulative Impact Policy and the application received representations from the police due to it’s location.

This case reminded me again of how Cumulative Impact Policies, if not dealt with carefully, can have a negative consequence to the quality and development of the entertainment sector in town centres.

I have recently been conducting training with a licensing authority where I have advised them to consider removing their Cumulative Impact Policy as it is stifling the introduction of new operators in to the town centre who are popping up in closely competitive city centres. The consequence is that the existing operators are not threatened by competition, resting on their laurels and not investing in their units. Everyone suffers as a consequence.

If an operator is of real quality and has a track record of promoting the licensing objectives in other Cumulative Impact Policy areas then, in my view, licensing authorities should seriously consider the relative merits of granting or refusing the premises licence application. If the scales tip heavily in favour of investment, new jobs, contribution to business rates, bringing back to life of a unit which is only ever going to be an entertainment complex and potentially make other operators improve the quality of their offer – then they should seriously consider granting the licence.

The circumstances in Birmingham were as follows:-

  • The application premises sat in the heart of a Cumulative Impact Policy area.
  • They had previously traded as a Brannigans – with the premises failing when the company went in to administration in 2003.
  • They had been empty with a dead frontage ever since.
  • The premises had stayed vacant since that date but had planning permission stating that they were to be used as licensed premises with music and dining to be offered at all times.
  • The Birmingham City Council “Big City Plan” strategy document highlighted that this area was in need of regeneration as one of the entertainment areas for Birmingham.
  • The Cumulative Impact Policy had been brought in to Birmingham’s Statement of Licensing Policy after the previous occupier had left the premises.
  • The operator runs similar premises in Leeds, Manchester, Liverpool and Cardiff and had recently been granted a licence in the Cumulative Impact Policy area for Nottingham.
  • The police maintained their objection to the application albeit highlighting that their background checks had suggested that the operator was promoting the licensing objectives elsewhere and had submitted, through ourselves, a very robust operating schedule.

I was delighted that having heard all of the evidence, considered the submitted documents and having debated the application for a considerable time the Licensing Sub-Committee came back to express the view that we had rebutted the presumption of refusal within the Cumulative Impact Policy area and that the licence should be allowed.

The relevant section of Birmingham’s Statement of Licensing Policy highlights at paragraph 14.9 “For any application in these areas the council will expect the applicant to demonstrate the steps it will take to promote the licence objectives. Where relevant representations are made the council will consider the application on it’s individual merits and decided whether to apply the special policy. Where it is of the view that the application is unlikely to add to the cumulative impact on the licensing objectives the application will be granted”.

Many statements of licensing policy, which promote a Cumulative Impact Policy, have similar text within them as to the process that the licensing authority will go through in considering applications within a Cumulative Impact Policy area. The text tends to follow closely the text in the Section 182 Guidance to Licensing Authority documents issued by the Home Office. As I always remind licensing authorities when I am making an application in the Cumulative Impact Policy area these policies are not part of the primary legislation (they are not contained in the Licensing Act 2003) but are capable of being created within the localised Statement of Licensing Policy.

We have been particularly successful in recent times in persuading licensing authorities to grant new applications in Cumulative Impact Policy areas around the country including major new developments in Cardiff, Nottingham, Birmingham and other places.

It is still my real concern that new applications, and applications to vary premises licences need to be carefully assessed by licensing authorities and they must not forget that the Licensing Act 2003 is meant to provide a “light touch” licensing process . In addition, there are significant powers available on review for any premises that subsequently fall back on the promises that they offer licensing authorities as to how they will promote the licensing objectives.

What authorities must be very weary of is the potential for operators to look at other areas / cities to apply in and take their investment elsewhere. I represented an operator sometime ago in Leeds who made, what I thought, was a compelling application. This still received representations – purely because it was in the Cumulative Impact Policy area. The application was granted and the premises operator has not fallen foul of any regulatory concerns since opening. In addition, they have now been granted two other licences in Leeds and Yorkshire. What is concerning is that when we made the first application they said to me that if they had known that the hoops were going to be so significant to jump through they would have gone to Manchester rather than Leeds!

That in itself encapsulates for me the fact that Cumulative Impact Policies, if not used judiciously, can stifle development and improvement by keeping out operators which every city should be proud to accommodate.

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New Fundraising Regulator About To Start Work

The new Fundraising Regulator will commence its work in regulating charity campaigns this month.

The precise date is yet to be confirmed, but when it is, the Regulator will take over complaints about charities’ fundraising tactics from the Fundraising Standards Board (FRSB). It will also take control of the Code of Fundraising Practice, currently administered by the Institute of Fundraising (IoF), and the Fundraising Rule Books, which at the moment are the responsibility of the Public Fundraising Regulatory Association (PFRA); those two bodies are also due to merge this summer.

Unsurprisingly, charities are keeping an eye on these changes, and there is some concern about what their implications might be, for, amongst other aspects of donations, charitable, or society, lottery campaigns. But what has brought them about?

You will no doubt be aware of the media firestorm in recent years – particularly the last year – surrounding the methods charities use to elicit donations. Some of you will remember the case of Olive Cooke, the elderly poppy seller who tragically died in May last year, amidst allegations that she had been “hounded” by charities asking for donations. Whilst her family did not believe that charities were directly responsible for her death, they told the subsequent FRSB investigation, which reported in January this year:

We are very grateful that there has been an investigation into charity fundraising practice and are pleased that there have been changes to the Code of Practice as to how charities fundraise, as well as changes to the law to prevent elderly and vulnerable people feeling pressurised to give when they can’t. We want Olive to be remembered for her incredibly kind, generous and charitable nature. Far from being a victim, she was a strong believer in the importance of charities in UK society and local communities. At the same time, she was concerned about the amount of letters and contact that she was receiving from charities and we are sure she would have been very upset to know that her details were being shared or sold by some charities who she had agreed to support.

Olive’s death led to the Government commissioning the review by Sir Stuart Etherington, Chief Executive of the National Council for Voluntary Organisations, into the self-regulation of charity fundraising. That review took evidence from stakeholders in order to identify what changes were required to rebuild public trust in fundraising by charities. It was closely followed by the FRSB’s investigation, which looked specifically at Olive’s case, and by a report of the House of Commons Public Administration and Constitutional Affairs Committee, which was also published this January.

The Etherington Report and other investigations all identified shortcomings in fundraising practices, lessons to be learned and the need for more effective regulation. In Olive Cooke’s case, it emerged that she had received 466 charity mailings in the year leading up to her death, that some 99 charities had her details, and that approximately a quarter of those had passed them on to others, the overwhelming majority either without her consent or with only “assumed consent”. The default position of most charities was that the onus was on the donor to initiate an opt-out of data sharing, without clear guidance on how to do it. In addition, charities were failing to provide adequate opportunities for donors to opt out of future mailings.

The Government accepted Etherington’s recommendations in full. These included:

The abolition of the FRSB and the establishment of the new Fundraising Regulator which will no longer have a membership structure, but instead a universal remit to adjudicate all fundraising complaints and stronger sanctions for non-compliance;

  • The speedy merger of the IoF and the PFRA;
  • More focus on best practice and compliance by the merged IoF-PFRA body;
  • The move of the Code of Fundraising Practice into the new Fundraising Regulator;
  • A new Code of Practice, clearly aligned with the Charity Commission’s guidelines on charities and fundraising;
  • A move by fundraising organisations towards adopting a system of “opt-in” only, in their communications with donors;
  • The creation of a registration “badge” which organisations can display as a sign of their commitment to regulation and high standards; and
  • The creation of a “Fundraising Preference Service” (FPS) which will enable members of the public to prevent the receipt of unsolicited contact by charities and other fundraising organisations.

The changes this month, then, will bring these recommendations to fruition. The new Fundraising Regulator will assume responsibility for handling all complaints from members of the public and it will also start work, in collaboration with the newly-merged IoF-PFRA body, on drafting the new Code of Practice, although that process represents a significant piece of work and is expected to take some time. It will also develop the FPS and be responsible for operating it.

The FPS will complement the existing Telephone Preference Service (TPS), which is statutory, and the Mail Preference Service, which is not. It will enable those who are identified as vulnerable, and their families, as well as those who are aggrieved by being approached by charities, to opt out of being contacted. In future, charities will need to check the FPS as well as the TPS before contacting a potential donor.

The idea is to move towards a position where positive consent to being solicited will be required – this approach will be brought into force in any event in 2018 by the European Data Protection Regulation. Even if Britain were to leave the EU, positive opt-in is a concept favoured by the current Government, so it is likely to remain the ultimate objective in any event. In the interim, though, quite how negative opt-out will evolve into positive opt-in is something which the new Regulator will have to work out.

The new Regulator’s stated aims are to:

  • Be more accessible, providing a single point of contact for members of the public to register any concerns they may have about fundraising activities;
  • Put the public in control by making it easier for them to manage fundraising communications with charities;
  • Be more independent, ensuring that a wide range of views are reflected in the new Code of Practice and Rule Books;
  • Be collaborative, by working with the IoF and other sector stakeholders to share issues and trends in fundraising practice and identify areas where sector support on regulatory issues is needed; and
  • Strengthen regulatory partnerships, by working with the Charity Commission and other UK regulators such as the Gambling Commission, to share information and refer cases where wider governance issues arise.

The Regulator will be able to name and shame organisations that transgress, prevent them from carrying out certain types of fundraising for a period, and apply other sanctions, such as ordering compulsory training. It is expected to cost between £2 and £2.5 million a year to run, and these costs will be covered by charities themselves, via a levy that will depend on their fundraising spend – those that spend over £100,000 a year on fundraising will pay the highest rate.

Some charities have voluntarily changed their means of soliciting donations in recent times, in response to the various investigations and media criticism. Oxfam have stopped doorstep recruitment altogether, the RNLI and Cancer Research UK now only use a positive opt-in across all channels, and the Red Cross and Age Concern have signed up to renewing supporters’ consent every two years. This notwithstanding, there is widespread concern in the sector about the impact the changes will have, with some taking the view that they represent “a sledgehammer to crack a nut” by, effectively, punishing everybody to tackle the methods of a few.

Of course, lotteries represent an important fundraising stream for charities, and more and more are entering into the lottery market. The new Regulator’s Head of Policy, Gerard Oppenheim, was invited to speak at the recent Lotteries Council Annual Conference, and he fielded a series of anxious questions from the floor. He made it clear that, where lottery tickets are “primarily sold to raise money”, they will be treated as a donation, and thus will be subject to the scrutiny of the Regulator surrounding the way in which they are sold. It is difficult to see why lottery tickets would be sold for any other reason, and thus society lotteries will be subject to the new regime across the board, should a member of the public choose to complain about the way in which they are promoted.

Mr Oppenheim did recognise that society lotteries are already highly regulated, whether by the Gambling Commission or local authorities, and pledged to avoid “double regulation”. However, the new system will inevitably lead to an additional layer of control and further compliance issues for charities to worry about. Once the IoF and PFRA are merged, the intention is to produce fresh training and support in order to assist charities in coping with the new requirements. Quite how effective this is, and how it is disseminated, remains to be seen.

As matters stand, the Fundraising Regulator will have no jurisdiction in Scotland, and will only operate in relation to England, Wales and Northern Ireland. A decision in Scotland is expected in the summer, and Mr Oppenheim made it clear that the Regulator’s preference is for a UK-wide scheme to apply. This would certainly make sense in the interests of consistency and would assist those larger charities that operate nationwide, meaning that their obligations on both sides of the border would be the same.

Some say that the new rules will cost charities £20 billion in donations, and predict that some 30 million people will sign up to the FPS. Mr Oppenheim dismissed these estimates as “wild” and expressed the view that the FPS system would “fall over”, were this to be the case – it would simply not be able to cope. He also made the point that the FPS will enable members of the public to choose not to be contacted by certain charities, whilst remaining accessible to others.

The fact remains that the new scheme will undoubtedly have an impact on charities – representing, at the very least, an additional cost – and society lotteries look likely to be affected. As some delegates at Conference pointed out, they are already subject to a high degree of regulation, are competing with commercial entities, and are not eligible for Gift Aid. The precise effect of the changes remains to be seen and the devil will be in the detail of the new Code of Practice, complaints that are made to the Fundraising Regulator, its adjudications, and sanctions applied.

Worse may yet be to come – the Government has, in the Charities (Protection and Social Investment) Act 2016 which received Royal Assent in March, reserved various powers to the Minister, Rob Wilson, to impose levies and new regulation on charities if they don’t toe the line. The new Fundraising Regulator represents, Government says, the last chance for the self-regulation of the charity sector.

We will continue to monitor the situation and will update you when the new system comes into effect.

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Woods Whur Gambling Seminar and Networking Event

Speakers now confirmed for Woods Whur Gambling Seminar and Networking Event

Andy and I are delighted with the take up for our Gambling Seminar and Networking Event which will take place on Monday 6 June 2016 from 10:00 – 13:00. Sheila Roberts, the Chief Licensing Officer in Newham and Kerry Simpkin from Westminster Council have accepted an invitation to speak at the seminar along with Rob Burkitt from the Gambling Commission. We are delighted that we will have an all round perspective on the important topics to be discussed which will lead to this being an informative and interactive day.

If you have an interest in attending this event then please email Tanya@woodswhur.co.uk who will confirm your attendance. Alternatively if you would like to find out more about this event you can view our leaflet by clicking this link.

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2016 Promises to be no different to 2015 in terms of new regulations and inspections

On the 6th June 2016 we will be holding a seminar at the Hippodrome Casino Leicester Square from 10am to 1pm which will cover a wide range of topics for land based gambling operators. The main theme of the seminar will relate to the fact that 2015 was a pivotal year for the industry in terms of regulation and enforcement action and there is no suggestion that anything is going to change in 2016.

On the 11th of April 2016 we saw the publication of a new strategy aimed at tackling gambling related harm over the next three years with the National Responsible Gambling Strategy setting the basis that all operators and regulators will need to follow. The Gambling Commission have reported the publication of this strategy on their website and referred to the comments made by Sir Christopher Kelly who is Chairman of the Responsible Gambling Strategy Board: “the overarching aim is to minimise gambling related harm. Gambling related harm goes wider than the harm experienced by those identified as problem gamblers by existing screening tools – it can also effect the families of gamblers, their employers, their communities and society more widely.”

This strategy is on the back of the local based risk assessments that were introduced in April 2016 and followed some detailed investigations into casinos and betting offices during 2015/2016. If you have not already undertaken a risk assessment then you should do so immediately and you should ensure that you include on the risk assessment any local factors which may be relevant to the licensing objectives. Rob Burkitt from the Gambling Commission is quoted on their website as confirming this: “if there is a gambling premises adjacent to a bus stop which is used by college or school students between, say 3/5pm, the premises should ensure that staffing levels are adequate to mitigate the risk of underage access. If there is a gambling premises close to a homelessness hostel, the operator would ensure that they have staff awareness training to ensure that homeless customers are not putting themselves at risk of harm.” Rob has very kindly agreed to speak at our seminar on the 6th June.

I will be watching closely during the next twelve months to see where the focus of the Gambling Commission moves following its investigations in London and in particular in the casino sector in the last 48 months. I suspect that their focus will move on to other sectors of the industry such as bookmakers and bingo operators and I would also like to see the Gambling Commission producing some guidance in particular relating to anti money laundering policies during the next year or so. This may or may not coincide with the LCCP Prime Consultation Review although it is unlikely to coincide with the Money Laundering Regulations 2017 which I suspect will be pushed back to Autumn 2017. The fourth Anti Money Laundering Directive took effect on the 26th of June 2015 and EU countries will have two years from that date to implement the rules contained in the Directive International Laws. This will apply to a whole range of businesses including financial institutions and the rules will have to be complied with by businesses involved in making or receiving cash payments of a certain amount. The member states will have to prove that they have taken appropriate steps to identify, assess and mitigate anti money laundering risk.

I’m hoping that by the time our seminar takes place on the 6th of June we will have more information on the above. If you have not already signed up or would like to come please contact me at andrew@woodswhur.co.uk.

 

 

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When Does A Bad Debt Equal Non Compliance

It may be stating the obvious but the last thing any gambling operator I have ever been involved in would want on their books is bad debts. Nobody sets out to create a bad debt and it would never be part of any operation nor policy to incur bad debts. One accountant who I know very well would in fact take issue with me describing “outstanding monies” as “bed debts” but it seems generally accepted that a cheque which has been dishonoured is defined as a bad debt until full recovery is made. My accountant friend would say that it is ‘ monies due’ not a ‘ bad debt’!

Is a bad debt a breach of the Money Laundering Regulations 2007 and in particular the requirements set out in Regulation 7 which require operators to undertake customer due diligence measures as defined in Regulation 5. These regulations broadly speaking require an operator to identify and verify customers identity on the basis of documents, data or information obtained from reliable sources on a risk sensitive basis when establishing a business relationship with the customer. Regulation 8 requires operators to conduct ongoing monitoring of their business relationships with customers which in practice means that compliance with Regulations 5 & 7 are not one off events but should be checks which are continually undertaken. Regulation 14 requires operators to look closely at transactions undertaken by customers (including the source of funds) in circumstances which present a risk of money laundering.

This is all a risk based approach and there will be a different attitude and approach to a customer in a betting shop placing a five pound bet on a horse to win a race and a “high roller” customer in a casino who is signing cheques for several million pounds.

There has been a great deal of publicity recently with regard to these regulations and “customer due diligence” checks and “enhanced due diligence” checks and I think that gambling industry as a whole is coming to terms with the additional requirements now expected within the industry. I will be looking closely at these requirements in later articles and at our seminar on the 6th of June 2016 but I do think the issue of the so called “bad debt” is an interesting one and one that needs resolving. If you are satisfied that a customer has the means to pay and you can evidence the fact that the customer has the means to pay and you have carried out all anti money laundering checks then is the fact that the customer fails to pay a breach of the regulations? To put this another way “if you carry out customer due diligence and enhanced due diligence properly would you incur debts that are not paid?”

All clients and land based operators should ensure that CDD and EDD are properly undertaken and regularly undertaken in respect of those customers who present a higher risk but I am still not convinced that there is an argument that you are not complying with the regulations (subject to all of the above being complied with) just because some debts/cheques are not paid.

There have of course been a number of high profile cases recently with regard to whether or not a casino operator owes a duty of care to a customer (whether or not there is compliance with the regulations). In the case of “The Ritz Hotel Casino v Gaebury” Mr Al Gaebury lost two million pounds at The Ritz and a cheque he had given to The Ritz for that amount was dishonoured. The Ritz sued him and the issue of “duty of care” was raised but Mr Al Gaebury lost. This was similar to an earlier Ritz Hotel Casino case involving Noora Al Daher.

There was a complicated background to the Gaebury case which involved Mr Gaebury self excluding himself from the casino and then trying to get those self exclusions revoked. The Ritz ultimately let Mr Al Gaebury back in as a customer subject to him signing a waiver with regard to the “end of self exclusion” and Mr Gaebury returned to gamble at The Ritz and subsequently wrote the cheques which were not honoured. The Judge in this case agreed that there was no general duty of care owed by The Ritz to Mr Al Gaebury. The Judge repeated the words of the Judge in the Al Daher case “ gambling is an activity which has been legalised by parliament… the choice of parliament has been to commit casino’s to be licensed and gamblers to gamble in them as a matter of their own autonomy”.

Gambling operators will have to be aware that whilst the courts may be very reluctant to move away from an individuals right to gamble, the Gambling Commission may be more open to the argument that incurring bad debts/unpaid cheques can mean non compliance with Anti Money Laundering Regulations.

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The Lotteries Council Benchmarking Survey – Decaid Consultant Reports

In early 2015 the Lotteries Council of Great Britain commissioned Decaid Consulting to carry out a benchmarking exercise among its members, to identify attrition levels in lottery campaigns. The aim was to permit members better to plan, manage and advocate for their lottery product within their own organisation, and also to enable the Lotteries Council to strengthen its advocacy of charitable lotteries at a national level.

The study broke lottery entrants down by payment method – cash, direct debit, cheque, standing order and credit card. Anonymised data was provided by Lotteries Council members for the period 2010 – 2014. The measurement used was based on weekly draws, this being the most easily measured and accurate data recorded by charities. The results were weighted to take into account the vastly differing numbers of players participating in individual campaigns. Players who did not make their first payment were removed from the calculation, and recorded as “no-shows”: thus the attrition results were based only on players who paid for their first draw.

The results need to be considered in light of the fact that the respondent pool was relatively small: in total, 25 charities responded to the call to participate; however 4 did not submit any data ultimately, and 3 submitted data that was unusable. This left a pool of 18 participants. Of the total usable campaigns, 49% of entries were by direct debit, 39% by standing order, 7% by credit card and cheque and 5% by cash.

The study was keen to monitor the “no-show” rate for direct debit and standing order players, largely because a further contact with the player is often enough to prompt restoration of their instruction to their bank. The results, perhaps unsurprisingly, showed that standing orders perform rather better than direct debits in terms of player retention, with an overall decrease of 3.5% between 2010 and 2014, compared to an increase of 5% for direct debits.

Cash campaigns showed a relatively high attrition rate, but this is closely related to the success of the particular campaign. For example, of 8 campaigns, one showed an attrition level of 25% over 2 years, with another experiencing 45%. This has served to demonstrate the importance of charitable lotteries’ strategy, advertising and “message”, when seeking to attract cash players.

The results of the research demonstrate a completely different pattern for credit card and cheque players, by comparison with those who pay cash. Attrition rates for credit card and cheque appear to relate to quarters, 6 monthly periods and annual periods. Decaid conclude that this could be attributable to the fact that these players commit to a certain number of draws and then do not renew, or are not asked to renew. This finding clearly highlights an opportunity that is currently being missed by some charities, since by diarising the expiry of fixed periods and contacting the supporter again at the relevant time, support could be significantly enhanced. One charity lost 56% of lottery revenue between 2013 and 2014 as a result of the expiry of fixed periods. Hopefully the results of the research will focus minds in this respect.

The pattern for standing orders and direct debits is different, again, to cash, credit card and cheque, in that it reveals a very clear step-up in attrition after every 4 draws. Decaid explain this as representing players considering whether or not to renew every month. Again, the results should prompt charities to maintain regular contact with players, whilst all the time remaining aware of the current negative publicity surrounding overt “pushiness” and respecting the Institute of Fundraising Code of Practice.

The research also broke the results down by cause: air ambulances, hospices, other health initiatives and sporting bodies. Credit card and cheque payments markedly provided the most reliable source of income for air ambulances in terms of attrition. Across the board, standing order and direct debit players were observed as requiring less hands-on management, however.

The study also looked at payment methods by location. Here, the striking finding was that credit card and cheque payments work well in semi-rural areas, but appear to fail after 4 months in urban areas.

There is much to be learned from the detail of the report, but the gist is equally important: lotteries are undoubtedly an excellent stream of income for charities, and increasingly so, with a lot of new charities, particularly the larger national ones, entering the market. This report demonstrates the widely differing performance of various charitable lotteries and highlights opportunities for those encountering significant attrition rates to improve, including a better acquisition strategy and more attentive ongoing player stewardship.

Regardless of the performance of individual charitable lotteries, the report is clear on one thing: direct debit lotteries perform much better in terms of fundraising and attrition than door to door and face to face campaigns, run at the same time. Clive Mollett, Chair of the Lotteries Council, told me: “one of the benefits of this research is that it demonstrates the value of lotteries in fundraising for charities. It provides hard evidence that lotteries perform vastly better than other fundraising methods, in terms of attrition. For example, on-street canvassing, which some call “chugging”, has an attrition rate of 95% over 5 years – and it can take that time to recover the associated costs. There are still massive unexplored fundraising opportunities for charities in the lottery market.”

Should you have any queries on the research, or on raising funds for good causes via a lottery-type product, please contact me at anna@woodswhur.co.uk.

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Amendments needed to TENs and Part 5A Notices

Colin Manchester looks at some amendments that are needed to temporary event notices and the new Part 5A notice which has not yet come into effect.

Temporary event notices (TENs) have been subject to various amendments in recent years. There were several introduced by the Police Reform and Social Responsibility Act 2011 (PRSRA 2011) e.g. extending the right to object, originally confined to the police on the crime prevention objective ground, so that either the police or environmental health could object on any licensing objective ground (s 112), and extending the number of days in any calendar year on which a single premises can be used to carry on licensable activities from 15 to 21 days (s 115(3)). More recently, a further change has been made by s 67 of the Deregulation Act 2015, which has increased the maximum number of TENs that can be given under s 107(4) of the Licensing Act 2003 (2003 Act) for any one premises within the same year from 12 to 15. This recent amendment has led to a new TENs form being introduced by The Licensing Act 2003 (Permitted Temporary Activities) (Notices) (Amendment) Regulations 2016, SI 2016/20, to reflect the change. The new form duly reflects this change but a drafting error has been highlighted in a report of the Joint Committee on Statutory Instruments to Parliament. Section 9 of the new TENs form contains a declaration to be signed by the person giving the notice acknowledging that it is an offence to knowingly or recklessly make a false statement in connection with the TEN and that permitting an unauthorised licensable activity to be carried on at any place is an offence, but references in the form to the fine for these offences are incorrect. The form states that the fine for the former offence is one not exceeding level 5 on the standard scale and for the latter offence is a fine not exceeding £20,000 but these fines have been changed to unlimited fines by s 85 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and para 33(2) of Sched 4 to the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Fines on Summary Conviction) Regulations 2015, SI 2015/664. References in the new TENs form should simply be to a fine and this has been recognised by the Home Office: ‘The error was an oversight which the Department will seek to correct at the earliest opportunity, which is expected to arise later this year’ (para 1.4 of the Joint Committee Report).

This is not, however, the only oversight which needs correcting in the area of TENs, as will be seen below. The power of entry in s 108(1) of the 2003 Act of a constable or an authorised officer of the licensing authority to premises to which a TEN relates is ‘to assess the likely effect of the notice on the promotion of the crime prevention objective’. This was the only purpose for which entry would have been relevant prior to the amendments to the TENs regime introduced by the PRSRA 2011, as only the police could give an objection notice on crime prevention objective grounds, but this is no longer the case. Under s 104(2) of the 2003 Act, as amended by s 112(5) of the PRSRA 2011, the police or environmental health can object on any licensing objective ground. If the power of entry in s 108(1) is to complement the amended provision in s 104(2), it should be available to assess the likely effect of the TEN on the promotion of any licensing objective and not just the crime prevention objective. It is difficult to resist the conclusion that s 108(1) remaining in its original unamended form was an oversight but, unless and until it is amended, it seems that the power will only lawfully be exercised if entry can be justified to assess the likely effect on promotion of the crime prevention objective.

An additional form of authorisation, which as in the case of a TEN does not require permission from the licensing authority but simply the giving of a notice, is the Part 5A Notice. This is a new form of authorisation in Part 5A of the 2003 Act which has been added by s 67(2) of and Sched 17 to the Deregulation Act 2015, although these provisions have not yet come into force. When they do, the Part 5A Notice will enable the licensable activity of the retail sale of alcohol to be carried out over a period of time by community organisations or small businesses that sell alcohol as an ancillary part of a wider service without the need for a premises licence, club premises certificate or the use of multiple TENs. The Part 5A Notice, the relevant provisions for which are contained in ss 110A-110L of the 2003 Act, is closely modelled on the TENs regime. Thus the notice is given to the licensing authority (s 110D), police and environmental health have an opportunity to give an objection notice based on any licensing objective ground (s 110I), and a counter-notice can be given by the licensing authority (s 100J). There is a power of entry in s 110L for a constable or an authorised officer of the licensing authority to premises to which a Part 5A Notice relates. You can guess what is coming next. Yes, this is closely modelled on the power of entry in s 108(1) for TENs, with s 110L(1) providing: ‘A constable or an authorised officer may, at any reasonable time, enter premises to which a Part 5A notice relates to assess the likely effect of the notice on the promotion of the crime prevention objective’. So, as in the case of a TEN, the power of entry is expressed to be to assess the likely effect of the notice on the promotion of the crime prevention objective, although an objection notice and a counter-notice can be given if considered appropriate for the promotion of any of the licensing objectives. If the position remains unchanged, this is what I plan to say on s 110L(1) in the 4th edition of Manchester on Alcohol and Entertainment Licensing Law when it is published next year:

The position here is the same as it is for the power of entry for TENs in s 108(1). That section was not amended following changes introduced for TENs by the PRSRA 2011 under which an objection notice and a counter-notice could be given if considered appropriate for the promotion of any licensing objective and the view was expressed that the failure to amend s 108(1) was an oversight. This view is reiterated here in respect of s 110L(1), which is expressed in comparable terms to s 108(1) and which compounds the failure.

If the failure to amend s 108(1) and s 110L(1) was an oversight, the Home Office may (if it is aware of this … ) seek to correct these provisions at the earliest opportunity, although it will not be as easy to do so as with amending the new TENs form to correct the oversight in respect of the level of fines. This is because the TENs form is contained in regulations i.e. secondary legislation but the provisions in ss 108(1) and 110L(1) are contained in an Act of Parliament i.e. primary legislation. Amendments to secondary legislation can be made by Government departments with the legislation laid before Parliament for a period of time for approval before it takes effect. This is a relatively straightforward process. Amendments to primary legislation, on the other hand, need to be made in an Act of Parliament, the passage of which will take a much longer period and the provisions of which are subject to detailed debate and scrutiny during the course of the legislation’s passage. Unlike the TENs form oversight, there is no ‘quick fix’ for the ss 108(1) and 110L(1) oversight(s). A good starting point, however, would be an acknowledgement of these oversight(s) and the need for these provisions to be amended, even if it may take some time before effect can be given to their correction.

© Colin Manchester