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Gambling Commission wins the appeal in the Greene King case

In this article Andy Woods looks in more detail at the recent decision of the Upper Tier Tribunal which found in favour of the Gambling Commission in its appeal in the Greene King case against the decision of the First tier Tribunal.

The much-awaited decision of the Upper Tier Tribunal in the Greene King/Gambling Commission case was handed down on the 29th of January 2016 by Judge Levenson. I know that many people have been waiting eagerly for this decision and I have regularly had representatives from both Local Authorities and Operators asking me when the decision would be released and who I thought would win!! The background to the case is that Greene King which operates over a thousand premises with alcohol licenses had applied to the Gambling Commission for an operating licence to provide bingo and ancillary gaming machines in a limited number of premises. The application was made to the Gambling Commission on the 24th of May 2012 and was refused at a regulatory panel meeting on the 26th of February 2014. Greene King appealed to the First tier Tribunal and the decision of Judge Warren on the 8th of December 2014 was to allow the appeal and quash the decision of the Gambling Commission. Judge Warren stated in paragraph 31 of his decision: “…here in my judgment they (GC) were trespassing on territory which the Act assigns to Licensing Authorities…the Commission’s purpose in refusing the applications and indeed the only justification for doing so is to prevent Greene King from applying for a premises licence”.

The Gambling Commission appealed to the Upper Tier Tribunal and, as most of you who read the industry press will know, were successful. The Gambling Commission’s own website has in its latest news section the article “Gambling Commission wins Greene King appeal”.

I have no doubt however that many of you who were waiting for this decision will be disappointed that the decision does not look at the specifics of the actual Greene King application as the decision deals with simply whether or not the Gambling Commission acted within its powers. The debate amongst most people is whether Greene King’s application under the Gambling Act 2005 should be granted or not. Should a pub operator with over a thousand alcohol premises licences be granted an operating licence for bingo and ancillary gaming matters for a limited number of its pubs if it complies with the Gambling Act 2005? This could also be phrased in the following way: why shouldn’t Greene King get a licence to put bingo in certain areas of a limited number of pubs if it complies with the legislation and regulations? One point of view is that the Gambling Commission were trespassing on the actual legislation and trying to create their own legislation rather than merely enforcing what the Gambling Act 2005 stipulates whereas another school of thought argued that the Gambling Commission was perfectly entitled to refuse an application of this nature if it felt it was against the “spirit” of the legislation and did not promote the Licensing Objectives .

The Gambling Commission in various publications since the First Tier Tribunal’s decision has argued and is consulting on the fact that there should be a “graduated regulatory framework” (paragraph 2.10 Gambling Commission consultation document November 2015 “controlling where gaming machines may be played”). In paragraph 2.10 the Gambling Commission continues, “at the lowest tier are unlicensed family entertainment centres and pubs. They are subject to minimal regulation (a simple permit from or notification to the Licensing Authority) but offer very limited facilities for gambling. Bingo, adult gaming centres and betting premises in turn offer gambling activity of increasing “hardness” and are consequently subject to increasing levels of regulation.” If you are a pub and customers think they are entering a pub then you should not have a bingo operating licence, argues the Gambling Commission. Greene King on the other hand would argue that they will comply fully with all codes of practice, regulations and legislation and therefore should be granted the licence.

The Upper Tier Tribunal was not asked to and therefore did not determine the actual application by Greene King. The Upper Tier Tribunal was asked to rule on whether the First Tier decision was legally flawed in two ways:

  1. The First Tier Tribunal erred in law in finding that the Commission had taken into account matters which were exclusively for the Licensing Authorities on a premises licence application. This finding was contrary to the statutory scheme of the Act and the functions of the Commission as the national regulator:
  2. The First Tier Tribunal erred in law in requiring the Commission to issue an operating licence it had found to be inconsistent with licensing objectives in circumstances in which no factual finding had been made by the First Tier Tribunal which overturned that conclusion.

The Upper Tier Tribunal allowed the appeal on point one above and therefore did not consider point two. The Gambling Commission decision of the 26th of February 2014 had not taken into account matters which it should not have done by law but there is no ruling on whether the decision was factually correct based on the evidence before it.

It is necessary in order to fully understand the Upper Tier Tribunal decision to look at what the Gambling Commission said in its substantive decision in February 2014. The following is a summary of paragraph 66-69:

66 – GC is concerned about the development of commercial bingo in pub premises and whether this has a potential impact on the licensing objectives. The GC approach is a precautionary approach.

67 – GC must aim to pursue and wherever appropriate have regard to the licensing objectives and must permit gambling in so far as it thinks such permission is reasonably consistent with those objectives.

68 – The regulatory panel did not consider that granting these applications would be reasonably consistent with the pursuit of the licensing objectives. Putting high stake bingo and category B gaming machines in a pub environment could potentially jeopardise the second and third objective.

69 – The intention of the Act is to create a graduated regulatory regime and there are different expectations of those frequenting pub or bingo premises as to their primary purpose and taking a precautionary approach the application was refused.

Judge Levenson in the Upper Tier Tribunal also made the following comments:

  • GC has an integral role with oversight over gambling policy and regulation and issues statements of principles of codes of practice and “acts as a gatekeeper”.
  • Although Local Authorities consider individual premises licence applications this does not mean that the Commission has no power to consider matters relating to the operating environment.
  • The functions between the Gambling Commission and Local Authorities overlap to some extent.
  • The Commission has the function of setting policies at a national level.
  • It would be contrary to the GC’s statutory duties to grant an operating licence if the Commission was of the view that an operational model cannot be delivered consistently with the licensing objectives.

It will be interesting now to see what Greene King decide to do. As the Upper Tier Tribunal has ruled that there was no error in law in the Gambling Commission’s original decision and whilst everybody will tell you that each application is taken on its merits and a differently constituted panel will sit and decide the Greene King application it would be reasonable to guess that the Gambling Commission regulatory panel which will now have to look at the substantive application again will make the same decision as the original panel. It will refuse the application.

I have made several applications for new operating licences for bingo clients in the last two or three years and well in excess of 50 applications for bingo premises licences and the decision of the Upper Tier Tribunal supports the clear message that my clients have been given by the Gambling Commission. If you want to be a bingo operator with a bingo operating licence and a premises licence then your premises must be bingo premises, appear to be bingo premises and must not look as if they are something else. I have represented clients who have converted snooker clubs to bingo premises and we have never had an application refused but my clients have always made sure that the conversion of the premises is not a sham and that the converted premises are clearly bingo premises to the outside world whether or not they offer alcohol, food and snooker tables as well. There is nothing wrong with Bingo Premises offering a range of activities as long as the Premises appear to be Bingo Premises. The practical issue that the Gambling Commission and the Upper Tier Tribunal appear to have with Greene King is that whilst Greene King may comply with all the regulations in a certain part of a limited number of pubs the fact is that the premises will still be pubs, will look like pubs and will be a pub environment in all areas other than an area set aside for the playing of bingo. Greene King will continue to argue that their applications comply fully with the Gambling Act 2005 which “aims to permit” applications to be granted and they will be compliant with all codes of practice and regulations then their applications should be granted.

We will now wait further developments in this case but I have to say that I agree with the Upper Tier Tribunal’s comments that the Gambling Commission has to look at the way that premises will actually operate when considering an operating licence application and that cannot solely be a matter for the Licensing Authority. It would make no sense to me for the Gambling Commission to grant operating licences knowing full well that they themselves will then object to every single premises licence application on the basis that in their opinion the premises would not be suitable.