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Asbestos – Your duty to manage it

Two recent instructions by clients concerning exposure of their employees and contractors to asbestos has prompted me to discuss the issue in this edition.

Although the use of asbestos has been prohibited for a number of years in building and refurbishment works, it is still present in a vast number of premises across the country. Even premises which you consider to be relatively modern may well still present hidden dangers from asbestos.

Whether you own a building, are a tenant or, indeed, have some degree of control over a building without any form of contract or agreement, you will be deemed to have a duty under the relevant asbestos regulations. This means that you have an obligation to manage the threat from asbestos within the premises. Depending on the degree of control you have, this will cover all non-domestic premises and the common areas of domestic premises, such as halls and stairways.

I am constantly asked by clients about asbestos-related problems that can arise, particularly during refurbishment works. If you sublet a premises to a tenant who then carries out some refurbishment works or you carry out works yourself, there is a duty to cooperate with all the parties involved.

Normally, as the person owning or controlling a premises is best placed to understand what asbestos is present, there is an obligation on that person to share that information with those who potentially may come into contact with it, be that tenants or contractors or anyone else.

The law is quite clear on what you should you do: find out if there is asbestos in your premises and, if in doubt, make an assumption that some materials within the premises may contain it, in the absence of evidence to the contrary.

You also need to keep an up-to-date record of the location and condition of asbestos in the premises and assess the risk from it. This will allow you to prepare a plan on how you intend to manage that risk and then put that management plan into action.

In reality, it may be that if the asbestos is in good condition and is in an area that is confined, such as a locked room, that may be sufficient to manage the risk. If the asbestos is deteriorating, however, it may be that you need to secure the services of a licensed contractor to remove it or in some way manage it to prevent further deterioration.

No matter what steps you take, these need to be recorded and reviewed regularly.

Generally speaking, the best way to ensure that you are compliant is to commission a competent asbestos surveyor to produce a survey of your premises which confirms the presence or absence of asbestos-containing materials. Such a survey would effectively form the foundation of your management plan and any actions that will flow from it.

When you are commissioning work or allowing work to take place, you should share the survey and any other information that you have regarding the presence of asbestos and its condition with those who could be affected by it.

Importantly, you must always maintain a record of who you share information with and what information has been shared, to prevent any issues in the future whereby contractors or others deny being made aware of asbestos within your premises.

Clients are regularly caught out by their duty to manage asbestos and, as a result, expose themselves to civil claims by all those potentially affected by an exposure to the material, as well as prosecution for failures under the relevant regulations.

Don’t just assume that your premises does not have asbestos in it. You need to take positive action to check, to record what you find and plan accordingly.

Don’t let the first time you identify asbestos in one of your premises be when an employee or contractor is exposed to it, and you are faced with the consequences of this.

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Gambling Commission publishes its views on FOBTs

The Gambling Act requires the Gambling Commission (“GC”) to provide advice to the Government on all matters gambling, including its effects on the public. On Monday, it provided its “formal advice” to the Department for Digital, Culture, Media and Sport on the review of gaming machines and social responsibility – which, as we all know, has focussed primarily on B2 machines, or Fixed Odds Betting Terminals (“FOBTs”).

The advice was not circulated by the GC as an update or in a newsletter, which I find surprising- I heard about it on the news on Radio 4 (some of you will know that this is my station of choice) – although it is available on the GC website, here: http://www.gamblingcommission.gov.uk/PDF/Review-of-gaming-machines-and-social-responsibility-measures-–-formal-advice.pdf

It’s fair to say that the GC’s advice has caused some consternation among those campaigning for a reduction in the maximum stake for FOBTs to £2. This is because the GC has opted for a stake limit “at or below £30”.

Some might think that this represents the GC sitting on the fence – after all, “at or below £30” could mean anything between £0 and £30 – but the GC is at pains to point out that the final decision is one for Ministers to make.

The GC’s advice centres around the need to reduce the risk of harm to consumers – who are the focus of its present strategy – particularly the vulnerable. It believes that action needs to be taken, not just by government, but also by operators and the GC itself. The conclusion in the formal advice is that “the case has been made for action to be taken on B2 machines to reduce the risk of harm, and that this should include a stake cut.”

So, why has the GC not fallen in with the £2 maximum stake being campaigned for so strenuously by campaigners? The answer it gives is that it has identified four criteria to take into account in setting any maximum gaming machine stake. These are:

  • Impacts on gambling harm – the GC is concerned that merely reducing the stake might encourage players to adopt riskier strategies, play for longer or switch to other gambling products, particularly online;
  • Categorisation of gambling premises and a concern that any proposed change might mean that a “harder” form of gambling product is available in arcades, bingo halls and pubs, which are less tightly regulated than the betting and casino premises in which FOBTs are currently allowed;
  • The need to preserve consumer choice and to avoid eliminating the very popular game of roulette from betting shops; and
  • The need to take everyone’s views into account, being those of stakeholders such as Parliamentarians, Local Authorities, operators, faith groups and local residents.

It is between these competing considerations that the GC says it is for Ministers to decide. However, its advice does seek to draw a distinction between B2 slot-type machines (for which it believes that there is a case for limiting stakes to £2) and those that offer roulette, for example – the most popular game played on B2 machines – (for which its view is that the maximum stake should be £30 or less).

The GC also believes that limiting stakes is not enough to deal with gambling-related harm, and its prevention: it favours a comprehensive approach, and believes that there is a “strong case” for making tracked play mandatory across all B1, B2 and B3 machines, giving consumers access to information that will help them keep track of their play and make informed decisions about whether to continue gaming.

We’ll be monitoring this proposal carefully, as it will affect a large number of operators. The GC’s formal advice presents various matrices relating to the costs and benefits of introducing tracked play on this scale, but admits that, so far, the GC has “only limited information on the costs”, so we will have to wait to see if and how this proposal develops.

The GC’s advice has been met with a great deal of disquiet from campaigners pushing for the maximum stake on FOBTs to be reduced to £2. Tom Watson, Labour’s Deputy Leader, called the advice “deeply disappointing”, and accused the GC of having “caved in to industry pressure”. Carolyn Harris, the Labour MP who chairs the all-party Parliamentary group investigating FOBTs, said that she was confident that “Government will see past this and do the right thing, as the moral argument has been made so overwhelmingly for £2 [stake]”. John White, Chief Executive of the anti-FOBT amusement machine industry trade organisation BACTA, also weighed in, saying that “whilst a stake reduction is a step in the right direction, merely reducing this to £30 is still dangerously high…With a 20 second play duration on FOBTs, the proposed £30 stake will generate a loss of £90 within one minute. Within 10 minutes it is £900… [this] does not do enough to protect the consumers who are vulnerable.”

The GC says that it has drawn on a “a broad evidence base”, including on data from the Responsible Gambling Strategy Board and 20 billion plays on B2 machines. BACTA have rejected this as being “drawn from a narrow interpretation of a limited range of evidence and [focussed] on the theoretical rather than the reality.”

Matt Hancock, the Culture Secretary, is rumoured still to favour limiting the maximum FOBT stake to £2, but he is apparently under pressure from the Treasury, who get £700m in machine gaming duty every year, a large proportion of which is represented by revenue from FOBTs.

A decision by Government is expected in the next couple of weeks and we will, of course, update you in future editions of our Newsletter.

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Happy Easter from all the team at Woods Whur!

And in the blink of an eye it is Easter. It doesn’t seem like 5 minutes since we were breaking up for the Christmas holidays. It has been an unbelievably busy start to the year. All sectors seem to be particularly busy. James Thompson and Vinnie Schumacher have been tied up with the Uber litigation and are currently involved in a week-long inquest in Newcastle. The Regulatory practice at Woods Whur has really taken off since James joined us and he is not only servicing his own client base, but has also taken some significant instructions from long-standing clients of the firm. Unfortunately, from time to time, accidents can happen in licensed premises and it is really important to have first-rate systems in place so as to be able to deal with the regulatory fall-out after the event. What we have been learning from James is how important it is to be pro-active and not just re-active. We will be announcing some Regulatory and Licensing breakfast briefings for later in the year, so please feel free to book up for these when they become available.

There is a real buzz in Leeds and around the country, with new instructions significantly more numerous than in previous years. The recent news that some casual dining operators are struggling is bound to have an impact. Prezzo have announced that they are closing a number of units and we have already taken instructions to change premises licences from food-led offers to a wider leisure operation. This could have some very interesting consequences for premises which sit in Cumulative Impact Policy Areas. I have always been nervous about how CIPs can stifle development and keep potential new quality operators out of them. We have already started advising clients who are looking at sites in which they would need to remove restrictive conditions from a premises licence. These applications could well trigger local CIP – based objections and it will be interesting to see how the regulatory authorities view them. I have recently had a meeting with the Police and Licensing Authority in one town which has already started to look at the wording of its CIP. They have rightly assessed that there is the potential for a number of boarded-up frontages if they aren’t forward-thinking with their policies and approach to sites like this.

Live music venues appear to be flourishing and we currently have applications running in Cardiff, Birmingham and Bristol–it is fantastic to see operators investing in bespoke music venues and we are excited to be involved. I am also currently working with the operators of the Shindig festival in Somerset and that sector shows no sign of slowing down. I have, however, worked out that Yeovil is a long way from Leeds!

The gambling market is still moving on apace. Andy and Anna are both very busy with exciting casino projects in London and Brighton in particular: the sector looks like it is in for an era of change and development. Anna continues to receive fantastic instructions in the lotteries sector which never seems to slow down, and we all have interesting instructions in the on-line sector at the moment. Don’t forget to register to come along to our gambling conference and networking event at the Hippodrome Casino in Leicester Square on 8th May.

Please email Sarah@www.woodswhur.co.uk if you would like to attend.

There are not many spaces left so please do not miss out if you are intending to come along.

There are always challenges to face in the leisure industries and the betting industry is waiting with bated breath to see what the Government does about stakes and prizes for fixed odds betting machines. Anna deals with this in her detailed article on what could be a game-changer for the betting boys. It is a very interesting balancing act, that the Government must now wrestle with.

We are delighted that we have a new solicitor in the team. Leigh Schelvis has joined us from another Leeds firm and has already become immersed in our case load. Leigh is a two year-qualified lawyer and has strong connections with many of the independent operators in Leeds (working for them…not just socialising in them.) He will be supporting all of the senior lawyers at Woods Whur and, in particular, helping me in the Leeds and Yorkshire markets. We all hope that Leigh has a long and enjoyable career with us. Being Australian, we have been able to tease him about the disgraceful ball-tampering by his Country’s cricket team in South Africa. That said, our Kiwi, Vinnie Schumacher, has the bragging rights after we lost the first cricket test in New Zealand.

Let’s hope we do not see “the Beast from the East 3” over Easter and that all of our clients have a profitable long weekend.

 

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Warrington fight gets the green light…Paddy Whur secures new premises licence for Elland Road

I am delighted that I have secured Leeds United a new premises licence for the Josh Warrington against Lee Selby IBF world championship featherweight boxing bout at Elland Road Stadium on 19 May.

Josh is a lifelong Leeds United fan and for him to get his tilt at this world belt on the pitch at Elland Road in May is fantastic for him and the City.

We had to work quickly and engage the relevant authorities and local Ward Councillors in pre-application meetings.

It has been really encouraging to see how the Police, Local Authority and all those charged with maintaining safety at the venue have worked with us to turn this round so quickly to allow the fight to take place.

The licence will also accommodate Leeds United’s exciting plans for some major music events to take place at the ground.

Everyone at Woods Whur wishes Josh all the best in what will be a real battle to take the belt.

 

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Health and Safety Sentencing – 2 years on!

As those of you who have been reading my commentary on the sentencing guidelines since their introduction will know, there has been a significant rise in the fines handed down by the Courts since the guidelines came in two years ago.

In effect, the guidelines set a tariff for the Courts to follow when dealing with offenders under health and safety, corporate manslaughter and food safety legislation.

Recently released figures show that, in the period 2015/2016 before the guidelines came into effect, total fines imposed were £38.8 million.

Contrasting this with the first full year when the guidelines were in operation, a rise in fines to £69.9 million occurred.

This gives an average fine per offence of £126,000. In order to put that into context, when I started practising in this area, the average fine for a health and safety offence nationally ranged between £5,000 and £7,000.

Whether you operate in the private or public sector, whether you are a small or a large organisation and whether you are prosecuted because someone is injured or killed or where just a risk exists and no injury has been caused, the fine levels are significant.

I know I am in danger of repeating myself, but you cannot prepare and protect yourself enough in terms of health and safety as well as food safety.

Take expert advice, review your documentation, police your systems and record the results. The best way to prevent having to pay a significant fine is ensuring that you never have an accident or risk in the first place. There is no fool-proof solution, but robust systems, equally robustly policed are your best defence.

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Can you afford not to chase that debt?

Woods Whur have now been working with CRS for a year and we have seen some fantastic results. We decided to branch into Civil Debt Recovery with CRS when we realised the synergies of our businesses and the clients we already had in common. Taking over the legal function for them was the natural next step and it is already bearing dividends, with some resounding successes. I was amazed by how many client cross-overs we already had when I started to look into this opportunity and met with Jon O’Malley, the managing director of the company. Jon says: “We have been delighted since we have moved the legal function over to Woods Whur. We feel the attention to service levels and customer care that they have given us have moved our business on to another level. The Woods Whur team are integrated into our systems now to provide a seamless service. Our business is all about client care, and we have seen that is mirrored with Woods Whur. The best testimonial to the CRS/Woods Whur relationship is the positive feedback we have had from our clients regarding the improved swiftness and professionalism in handling of claims”.

The work that CRS covers broadly falls into three categories.

CIVIL RECOVERY

Civil Recovery is an alternative to criminal prosecution, where the matter is reported to the police, Serious Fraud Office or other Government body for investigation and possible prosecution. Civil Recovery is the legal means by which a business may attempt to reclaim losses and costs directly from a wrongdoer without going down a potentially lengthy criminal route.

From shoplifting or damage to property, to employee embezzlement and online fraud, such actions have a direct cost and – negative – impact on the profitability and growth of any organisation.

In addition to the actual value of goods stolen or property damaged, there are unavoidable and legitimate additional costs that have to be met by the business owner – from redeployment of staff and unscheduled time spent on administration to replacing stock and loss of income during repairs.

CRS understand that every business wants to tackle the often tricky subject of Civil Recovery in different ways, setting their own parameters and policy rules for pursuing claims against wrongdoers.

As such they have developed a unique framework of civil recovery solutions that can be seamlessly implemented by our clients to best meet their current requirements and which can easily be adapted in the future, as necessary – moving away from other, ‘one-size-fits-all’ processes that are prevalent in the industry.

Constantly pushing technological boundaries – CRS are the first company to develop a free-to-use case submission app and we’re in the business of helping your business. Take a look at the website to get more information about the app or contact Jon to arrange for a demo http://www.ukcrs.com

We have found that these solutions are particularly useful for operators in the leisure and the gambling sectors.

EMPLOYEE SCREENING

Any business owner wants to ensure that the best people are in the best jobs, so selecting, retaining and developing the right candidates is a priority in today’s competitive employment marketplace.

Employee screening can cover off everything from identity, academic qualification and employment history verification, through to criminal record searches, gap in employment analysis and adverse media impact. This is particularly useful for the leisure and gambling industries.

Pre-employment screening not only allows businesses to form a time-effective and accurate picture of potential employees when making their recruitment choices, but can also significantly reduce the burden placed on internal resources.

These are checks employers should be undertaking to mitigate risks of employing the wrong people, or, in the worst case scenario, people who don’t have the right to work in the UK at all. We have seen serious cases where the sanctions for employing illegal workers have led to the potential loss of the business due to the level of the fines imposed, and the very real threat of the loss of a premises licence.

Screening Checks Include:

Identity Verification

Are they who they say they are?

Passport and Document Verification/Right to work

Are travel documents and work visas current?

Employment History Verification

Where have they worked and why did they leave?

Criminal Record Search

Do they have any previous or unspent convictions?

Academic /Qualification Verification

Are they qualified to work for you?

Adverse Financial Checks

Does their personal, financial situation pose a risk?

Using the most up-to-date databases and industry-leading tools and methodologies, CRS tailor each candidate search according to the specific requirements of the client: Government departments and healthcare organisations may well set more detailed and different criteria for employee searches than businesses in the retail and logistics sectors, and the leisure and gambling sectors a different set again.

Once the criteria have been set, the team compiles a comprehensive report on each prospective employee, which includes all the must-know information, as well as other areas that the employer might want to consider when making their final selection, e.g. Adverse Financial Checks (motivation for taking the job), additional Directorships held (possible conflicts of interest) and Right To Work / International Screening (for candidates from other countries).

This is a cost-effective Employee Screening and Professional Vetting service and can help your business select and recruit the most suitable personnel to deliver the most value to your organisation. Testimonials from satisfied clients can be seen on the website and Jon O’Malley would be delighted to receive any enquiry for more information and guidance in this area. He can talk through systems, either on the phone or arrange for a convenient time to meet and demonstrate the range of solutions available.

He can be contacted at CRS on the following email address jon.omalley@civilrecoverysolutions.com

Online Fraud Detection

The approach to Online Fraud Detection uses a mix of state-of-the-art technology and software with tried and tested detective work.

The in-house detection team works in collaboration with online auction and trading site owners, police officers and ex-offenders, drawing from years of experience at both ends of the spectrum in this field of online fraud.

A full on-site consultation service is offered to clients, to analyse their current online fraud concerns and implement preventative solutions across the whole supply chain, to help minimise the costs associated with such activity in the future.

Jon would be delighted to discuss these Online Fraud Detection services in more detail, and can be contacted on the email address above.

These are significant potentially impactful issues for leisure and gambling operators and we have already seen success in these sectors.

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Woods Whur Gambling Conference is announced as another major operator receives a heavy fine!

In 2016, we held our first Gambling Conference at the iconic Hippodrome Casino, at which we updated delegates on ever-changing legislation and guidance. The event was full and over 120 people attended and contributed both by sharing ideas and questioning those who gave presentations. My opening presentation was called “Changing Times” and referred to 2015 as being a significant year for enforcement action and compliance. I referred to public statements of 13 September 2013, 28 October 2013 and 25 June 2014, as well as further public statements in 2015 and 2016. Those public statements all related to operators not complying with the relevant legislation and guidance, particularly on money laundering and “knowing their customers”. Anna Mathias developed this discussion further with her presentation “Update on Current Developments” and we also heard from Rob Birkett of the Gambling Commission, Kerry Simpkin of Westminster City Council and Sheila Roberts of the London Borough of Newham.

Our second conference will take place at the same venue on 8 May 2018, and our intention is to bring delegates up to date with relevant case studies and analysis of recent guidance. It seems to me to be far more helpful to give a presentation which highlights practical examples and real life scenarios rather than debate any interpretation or wording of recent guidance. We always try, in advising clients in gambling cases, to give pro-active and practical advice, so that the client is put in the best position to make an informed decision on their situation. This applies whether the client is looking to make a new application or requiring advice on a regulatory situation.

It seems clear from the latest William Hill case that compliance with the anti-money laundering regulations, which includes a requirement for the gambling industry to understand their customers and their customers’ financial position, is still the most significant topic for the gambling industry. William Hill were fined a minimum of £6.2million for “systematic social responsibility and money laundering failures”. The recent Gambling Commission Bulletin confirms the seriousness of this matter, saying: “systemic senior management failure to protect customers and prevent money laundering will result in William Hill Group paying a penalty package of at least £6.2 million”.

This is very similar to the case studies we looked at which had been dealt with between 2013 and 2016 and raises significant questions as to the extent to which certain operators have moved on and learned to understand their responsibilities.

Neil McArthur, who is the Executive Director of the Gambling Commission, was quoted in the Gambling Commission Bulletin as confirming: “we will use the full range of our enforcement powers to make gambling fairer and safer…gambling businesses have a responsibility to ensure that they keep crime out of gambling and tackle problem gambling – and as part of that they must be constantly curious about where the money they are taking is coming from”.

The Bulletin gives several examples of William Hill’s failures, including the following:

  • A customer was allowed to deposit £654,000 over nine months without source of funds ever being checked and the customer lived in rented accommodation and was working with a salary of approximately £30,000 per annum;
  • A further customer was allowed to deposit £541,000 over 14 months after the operator made the assumption that a customer’s potential income could be £365,000 per annum based on a verbal conversation.  

We are very much looking forward to welcoming people to our conference on 8 May. We expect to have a wide range of attendees, including those from the industry and local authorities, as well as many operators from the lotteries sector. There will be an opportunity to question those who are giving presentations and to socialise during a coffee and tea break.

I am absolutely delighted to confirm that Erica Young will be attending and speaking on behalf of the Gambling Commission and Philip Kolvin, QC will also be attending to deliver a keynote speech.

If anyone would like further information on the conference or would like to book a place (no charge) then please contact sarah@www.woodswhur.co.uk.

The event did fill up very quickly last time and the number of spaces is restricted given the size of the conference room.

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New restrictions on gambling advertisements are on the horizon

The advertising regulator in Great Britain has announced new standards for gambling advertisements after a broad government consultation on the health risks associated with the gambling industry. The new standards will restrict adverts that create what the Committees of Advertising Practice (CAP) consider to convey an “inappropriate sense of urgency” – such as those that include phrases like Bet Now! to push offers during live events and betting in play.

They will also endeavour to curb what they have called the “trivialisation of gambling”, for example by encouraging repetitive play. One of the other areas to come under the microscope is advertising which gives what the regulator deems to be an irresponsible perception of the risks involved in gambling.

In this week’s announcement, the CAP said the new measures will aim to provide greater detail on problem gambling behaviours that should not be portrayed – even indirectly – in advertising, and will strive to prevent “undue emphasis on money motives for gambling”.

These changes will come into effect on 2 April and will be taken into account when the Advertising Standards Authority (“ASA”) – the regulator that enforces the code – makes decisions on what adverts are and are not appropriate to broadcast and display.

The CAP said on Wednesday that, whilst problem gambling rates have generally remained relatively stable since the Gambling Act of 2005 came into force, there is evidence that suggests that certain claims, imagery or approaches portrayed in advertising might unduly influence people to gamble irresponsibly.

“We won’t tolerate gambling ads that exploit people’s vulnerabilities or play fast and loose with eye-catching free bet and bonus offers,” said Shahriar Coupal, the CAP director.

“Our new guidance takes account of the best available evidence to strengthen the protections already in place, ensuring that gambling is presented responsibly, minimising the potential for harm,” he added.

The advertising industry has welcomed the news. “The new guidelines on responsibility and problem gambling are an essential and welcome addition to the UK advertising codes for gambling,” said Stephen Woodford, chief executive of the Advertising Association.

“Our industry recognises the gambling sector is one which requires close, consistent and effective monitoring by our own regulatory bodies, as well as concerted effort through public education campaigns that use the ability of advertising to affect positive social change.”

The majority of complaints that the ASA receives about gambling advertisements are about the requirement for consumers to make a deposit to access their “free bets/bonus”, or the number of times they must then wager their “free bet” and deposit money before they are allowed to withdraw any winnings.

The new guidelines will also make it clear that “money back” offers must be in cash and not bonuses, that “risk free” offers must incur no loss to the consumer and that, when it comes to “matched bets”, any stake limitation should be treated as a significant condition and stated upfront.

Responding to this CAP announcement on tougher standards for gambling advertising, Cllr Simon Blackburn, Chair of the Local Government Association’s Safer and Stronger Communities Board, said:

“Councils have previously called for greater restrictions on gambling advertising and we are pleased to see the steps taken by the Committees of Advertising Practice to address this. Urgent or time limited offers encouraging people to bet immediately, and misleading descriptions such as ‘risk free’, can be particularly harmful for problem gamblers, so it’s right that they should be stopped. However, there must still be consideration of whether more curbs are needed alongside this.

“The LGA has been working closely with its members to help strengthen local gambling regulation, and it’s vital that this isn’t undermined by misleading or excessive levels of gambling advertising.

“We need to ensure that people, and particularly our children and young people, are kept safe and protected from the problems gambling can cause. Problem gambling is a major concern for councils which can cause greater personal harm. It can lead to spiralling debt, deteriorating mental health and wellbeing, and a toll on society – and taxpayers – through crime and disorder, family breakdown and homelessness.”

The rules are the first of a number of activities planned for 2018 in an effort to raise public awareness of the risks associated with gambling. The CAP said that later in the year it would publish further guidance specifically focusing on the protection of children and young people.

The timing of the announcement came as GVC, the online gambling firm behind Foxy Bingo, was fined £350,000 for “repeatedly misleading consumers” with offers of free bonuses, on the same day that regulators announced a crackdown on gambling adverts.

In October last year, regulators including the Gambling Commission, the ASA, the CAP and the Remote Gambling Association wrote to 450 operators of gambling sites urging them to remove what they called “unacceptable” adverts likely to appeal to children.

It will be interesting to see how these new powers are used and what impact they will have on the gambling sector. It will also be informative to see if there will be a direct result in the reduction of problem gambling. There will surely be an impact on “bet in play” adverts. This could be the end of Ray Winstone’s floating head telling us to bet NOW!

 

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How tidy is your back office, your cellar and storage area?

You may consider this subject to be trivial, irrelevant or not worthy of consideration – or perhaps all three!

However, a recent case against the discount store, Pound Stretcher, might force you to take a different view about keeping store rooms and other areas uncluttered, walkways unimpeded and other exits free to use. After an unannounced visit by local authority officers at one of its stores in Swindon, a number of issues were identified in relation to chaotic arrangements and grossly overstocked storerooms. The investigating authority found aisles and walkways, as well as fire exits, blocked, and staff not trained to the appropriate standards. As is typical in local authority investigations commenced by one local council, their findings and potential concerns were circulated nationally. In this case, other interventions followed, with further unannounced visits carried out by local authorities in Berkshire and East Sussex, where similar issues were discovered. All three cases led to prosecutions.

All three sets of proceedings were dealt in December of last year and the company was fined over a £1,000,000 in total for the offences. Quite tellingly in the sentencing Judge’s remarks was the observation that to “blame the local management is not only deeply unattractive…but quite unfair”.

Whilst the size of Pound Stretcher undoubtedly affected the size of the fine, it is worthy of note that such a significant penalty was imposed by the Court, regardless of the facts that no accident had occurred and neither had any harm had been caused to anyone.

I will leave it to you to assess how the Courts would have dealt with the situation, should have there been a fire or other accident.

Whilst you may have considered, when you started to read this, the tidiness of your back-of-house areas, including stockroom or cellar, to be incidental to your operation (and, let’s be honest a bit of a distraction), I would like to hope that the case of Pound Stretcher reinforces the need for your premises to be kept in good order, tidy and free from obstructions if you want to avoid what is a eye-watering financial penalty for a state of affairs which can all too easily occur in any premises.

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Gambling Commission issues a raft of guidance to the Lotteries Sector

The Gambling Commission (“GC”) has been busy in the last month or two in the lotteries sector, reminding society lottery operators and External Lottery Managers (“ELM”) of what it expects to see in terms of transparency and reinforcing its message that lotteries must be the preserve of good causes, and not be run for commercial gain. It has also issued some advice on the latest new trend in the lottery market – enabling players to sign up and play via SMS.

The lottery sector is evolving and diversifying all the time and, perhaps as an inevitable consequence of this, the products on offer may stray into realms which the GC considers to be of higher risk than traditional lotteries or raffles, and also less easily distinguishable from other types of gambling activity.

From 4 April 2018 all lotteries will have to make it clear to all players, before they buy a ticket, in exactly whose lottery they will be participating in, that is to say, exactly which society or charity the “good causes element” of their ticket money will be going to. This new Social Responsibility Provision is aimed at lotteries that are promoted under one “umbrella” brand. Perhaps more importantly, another new Social Responsibility Provision that will come into force on the same day will require societies to publish the percentage of lottery ticket monies applied directly to the good cause in the previous year. This needs to be done either through the society’s lottery page on its website, in its Annual Report or via any other means that are reasonable and proportionate, depending on the size and scale of the organisation.

This requirement to disclose percentage of actual charitable spend has given rise to concern for some. There are fears that it might lead to certain elements of the press, for example, drawing unfair and misleading comparisons between charities. My advice throughout has been that the requirement to publish the percentage does not preclude publishing accompanying information, such as the total amounts raised and applied to the good cause since the lottery scheme’s inception and how long the lottery has been operated for, for instance.

These changes result from a consultation on fairness and openness in lotteries conducted by the GC between 20 July and 30 September last year, and the GC has continued its drive for transparency, issuing a warning in December to all lottery operators following an adverse ruling by the Advertising Standards Authority (“ASA”) on 22 November, which arose from complaints about how The Health Lottery advertised some of its prizes.

The offending advertisement appeared on Facebook. It read:

“You know what they say: five chances to win is better than one, that’s why we run five weekly draws! What’s more, each draw has a jackpot of up to £100k – that means that there is a potential half a million pounds up for grabs week in week out… Up to £500k can be won every week. That’s 5 draws per week each with up to £100k jackpot Tuesday, Wednesday, Thursday, Friday and Saturday… Still only £1! That’s half the price of Lotto! Play now #EverybodyWins.”

The complainants, aware that the jackpot won was usually significantly less than £100,000, questioned whether the statements about a jackpot of up to £100,000 and total prize pot of £500,000 per week were misleading. The Health Lottery argued that the purpose of the advertisement was to highlight the fact that they operate five draws per week, each with a top prize of £100,000, making it possible for members of the public to win up to £500,000 in total. They insisted that, based on the normal volume of ticket sales, top prizes of £100,000 were a realistic expectation. However, the ASA noted the prize limits in the Gambling Act (“GA2005”), which currently restrict the top prize in a Large Society Lottery to £25,000 or, if more, to 10% of ticket monies. Given that ticket monies in any particular Large Society Lottery draw are limited to £4m, this means that the absolute maximum theoretical prize that may be won in any Large Society Lottery is £400,000.

The Health Lottery stressed that it had discussed the wording of its advertising with the GC, with a view to striking the appropriate balance between the highest top prize of £400,000 if there was a large number of ticket sales, and stating the minimum top prize of £25,000. It said that there had been 264 jackpot winners since The Health Lottery’s inception in 2011, of which 61% (181) had won a jackpot of £100,000 and 71%, £50,000 or more. It also pointed out that its method for calculating prizes is set out in its terms and conditions which, in turn, had been approved by the GC.

All of this notwithstanding, the ASA found that the advertisement was, indeed, misleading. Although there had been winners of £100,000 jackpots in the past, the possibility of winning £500,000 in a week by winning the jackpot in five consecutive daily draws had only existed since February 2015, when the scheme involving five weekly draws was introduced. Since then, no player had won a £100,000 jackpot. Accordingly, although the figures given in the advertisement were qualified by the words “up to”, the ASA held that they no longer represented a realistic amount that was likely to be won as a jackpot in any particular draw, given the 10% rule in GA2005.

The ASA therefore ordered The Health Lottery to withdraw the advertisement in its current form and instructed them not to exaggerate the likely winnings available. The GC has now passed on that warning to other lottery operators, saying that any information published about prizes must be presented in a clear, transparent and unambiguous way so that consumers are entirely clear about the prizes on offer and that, in particular, advertisements must not mislead by exaggeration. The GC advice, with a link to the ASA findings, may be viewed here: http://www.gamblingcommission.gov.uk/news-action-and-statistics/news/2018/Is-the-advertising-for-your-lottery-misleading.aspx

The GC has also taken the opportunity to remind the lottery industry about lotteries being confined to good causes, rather than being a commercial opportunity. Last week, it issued guidance, both on societies running lotteries on behalf of good causes, and on the limited ways in which commercial private sector businesses may be involved in fundraising, either by promoting their own lotteries or by supporting lotteries promoted by charities and other good causes.

Societies can run lotteries to raise funds for other good causes, provided that their aims and objectives allow them to do so. I have advised in a number of cases where the currently prevailing aims and objectives did not permit this, but we were able to achieve the societies’ ambitions by widening their aims and objectives to include raising funds for additional good causes.

The GC (or Local Authority, if the society is running a Small Society Lottery registered with them) should be notified of the amendment to the aims and objectives as a Key Event, as soon as reasonably practicable and, in any event, no later than 5 working days after the amendment takes place. The society would also need to check that their new aims and objectives are compliant with charity law.

Societies promoting lotteries on behalf of other good causes must also be careful to ensure that all players clearly understand that they, and not the beneficiary or beneficiaries of the lottery, are the promoter, and that there is full transparency as to the cause that the lottery is actually benefitting, that is to say, where the “good causes element” of their ticket monies is actually going.

The GC has also reminded commercial private sector businesses that lotteries may not be run for private or commercial gain, and last week issued a Guidance Note on the limited circumstances in which such a business may become involved in fundraising through this means. Briefly put, the company must set up a separate non-commercial society, which must get itself licensed as a society (or registered as such with the Local Authority in which their Head Office is situated, depending on projected turnover) or licensed as an External Lottery Manager (“ELM”), depending on whether it is the promoter of the lottery, or merely managing all or an aspect of, it as an ELM on behalf of a society.

Commercial entities can also run incidental lotteries at an event such as fundraising dinner or fete, or set up a workplace lottery for its staff, if it wishes to raise funds for charity. However, very specific rules apply to all such schemes and advice should be sought before launching one to ensure that the particular scheme satisfies all of the legal requirements in order legitimately to be considered exempt from regulation and the need to obtain a licence or registration.

Another subject which the GC has its eye on at the moment is lotteries via SMS. I think that it’s fair to say that this is one of the “hot topics” of the moment for the sector and I am dealing almost daily with queries from operators who are seeking to capitalise on this undeniably massive opportunity whilst, at the same time, striving to be compliant.

Last week, the GC issued a Guidance Note on the subject, which may be found here: http://www.gamblingcommission.gov.uk/for-gambling-businesses/Compliance/Sector-specific-compliance/Lotteries/Using-SMS-short-codes-for-lottery-promotion.aspx

This Note broadly reflects the discussions I have been having with the GC over the last few months on this subject, and I think that we all have the same broad areas of concern. These surround, firstly, social responsibility, including how to implement self-exclusion checks, assess the risk of problem gambling, impose limits on numbers of tickets sold and carry out age-verification checks. Secondly, the concerns surrounding money laundering (albeit, these are acknowledged by the GC to be low in the case of subscription lotteries) persist.

Thirdly, Licence Condition 11.1.7 (and 11.2.7 for ELMs) requires all players in a lottery to be provided with a “ticket” containing certain prescribed information (whether as a paper document, or as an electronic document that is capable of being downloaded and/or printed) . The question therefore arises as to who will be issuing the ticket and, if it is to be the SMS provider, whether the software required to do so needs to be licensed under a gambling software licence.

Fourthly, Licence Condition 11.1.1.9(c) requires all ticket monies to be paid to the relevant society before the draw takes place. I have advised on a number of cases involving this issue, and am confident that, as long as funds are ring-fenced, that the agreement between the SMS provider and the society provides for the lottery proceeds to be held on trust for the society, and to be transferred to, or collected by, the society within a reasonable period of, say, 14 days, this should be compliant.

Fifthly, operators will have to be very careful to check addresses of players – with only a mobile phone number to go on, additional verification will be required, to ensure both that lottery tickets are not being sold in a jurisdiction where it is unlawful to do so, or unlawful to do so without the appropriate licence, and also that players are not committing an offence in their own country of residence by purchasing lottery tickets remotely.

My residual concern relates to the requirements surrounding gambling software. I cannot see how any SMS provider can link in with gambling operators (for example, issuing a compliant ticket) without adapting their software specifically for gambling (the GC’s test as to what does, and does not, constitute gambling software). In my view, the jury is still out on this issue.

There is still a great deal of work to be done before the industry plunges into SMS. SMS is indisputably a great opportunity, but it is a real challenge from a compliance point of view. We will continue to monitor developments in this area and report back in further editions of this Newsletter.