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Changes afoot on Automated Self-Exclusion for Lotteries

Recently, I was approached by an External Lottery Manager (“ELM”) client who was concerned about one of the Gambling Commission’s (“GC”) changes to the social responsibility provisions of its Licence Conditions and Codes of Practice (“LCCP”). ELMs are the commercial partners of good causes who assist them in the administration of and promotion of their lottery and raffle schemes. They tend to have multiple charity clients.

The change that was troubling this client came into force on 31 October 2015. It took the form of a new Social Responsibility Code provision. Such provisions have the force of licence conditions and a breach of them by an operator may lead the GC to review the operator’s licence with a view to suspension, revocation or the imposition of a financial penalty and would also expose the operator to the risk of prosecution. The Code provision in question represents the introduction of a new requirement to enable customers to self-exclude by using a wholly automated process using remote communication, in addition to the method previously provided for, namely, contacting customer services.

The new Social Responsibility Code provision reads as follows:

“Customers must be given the opportunity to self-exclude by contacting customer services and in addition by entering an automated process using remote communication. In order to avoid inadvertent self-exclusion it is acceptable for an automated process to include an additional step that requires the customer to confirm that they wish to self-exclude. The licensee must ensure that all staff who are involved in direct customer service are aware of the self-exclusion system in place, and are able to direct that individual to an immediate point of contact with whom/which to complete that process.”

This new provision applies only to remote operators. My client was concerned because it helps a large number of charities run lotteries and raffles using remote communication. Its arrangement for enabling customers to self-exclude, which it provides to all its charity clients, involves placing information on their websites telling customers that it is possible to self-exclude but that, in order to do so, they must click on a link, and fill in a form requesting self-exclusion which they must then either post or email to the operator. I was asked to advise as to whether I thought that this process satisfies the requirements of a fully-automated self-exclusion procedure.

After considering the matter, I went back to the clients and advised that I was afraid that I didn’t believe that their current arrangements satisfy the Gambling Commission’s new requirement, but that I would take it up with the regulator. The rates of self-exclusion in the lotteries sector are very low indeed and in addition the new provision was, in my view, primarily addressed at remote gambling products that involve “instant win” or a high incidence of repetitive play. It is more targeted, for example, at online slot-machine-type games.

I discussed the matter with one of my contacts at the GC, who, in turn, sought the views of colleagues internally.

The new Code Provision is aimed at ensuring that customers can self-exclude in a simple and straightforward way, but does not detail the exact process that is required. However, the GC’s response confirmed my view that my client’s current arrangements would not be considered by the regulator as a fully-automated-process. However, the GC has now conceded that it is perhaps inappropriate to apply this new requirement to most remote lotteries. Its response stated:

“The requirement was primarily aimed at remote gambling operators (including lottery operators) who offer on-line gambling via a website. However, given the way that most remote lotteries operate – simply receiving low-level, regular subscription payment details by telephone or email and that the take-up of self-exclusion in the lotteries sector is very low, it was possibly an error to have applied this provision to all lotteries.”

The GC now intends to seek internal approval which, if given, may lead to a consultation on the matter, in order to amend the LCCP to exempt remote lotteries which do not offer gambling via a website or do not offer on-line instant win lotteries or other types of remote lotteries involving repetitive play from this provision.   In the meantime, the GC has said that it would be “very unlikely” to take compliance action against an otherwise compliant lottery operator who did not offer gambling via a website or instant win lotteries and who had not made available a fully automated self-exclusion process.

This was a significant positive outcome for my client in that, given the number of its charitable clients using its current arrangements, significant work would have been required in order to revise them, had the GC so stipulated. This exercise, which involved being frank with the GC about my view that I did not believe (on a no-names basis, of course!) that the client’s current arrangements satisfied the strict letter of the Social Responsibility Code provision, has demonstrated that a constructive and collaborative approach with the regulator can, in appropriate cases, achieve positive results and, on this occasion, it may well result in a change in the law.

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What Role should the Health Body play in Licensing Applications in England and Wales

Paddy Whur discusses the role of health bodies in premises licence applications in England and Wales.

I have recently had to deal with a representation by the DPH (Director of Public Health) in relation to a premises licence application in London.

We had undertaken a significant amount of pre-application consultation with the licensing authority and particularly the Environmental Health Officer and licensing police officer for the area. In addition we had undertaken significant public consultation before we had lodged the application and had received positive indications from all we had consulted with.

I was somewhat surprised after putting in the application for a new premises licence to receive a representation from the DPH and this was asking the authority to refuse the application outright as it contravened the crime and disorder and the public nuisance licensing objectives.

The health body, acting as a responsible authority under the Licensing Act, is in a difficult position in England and Wales in that there is currently no promotion of health licensing objective for them to hang a compelling representation upon.

When the list of responsible authorities was extended to include the health body for a licensing authority area, the Government were debating whether to introduce a fifth licensing objective but declined to do so.

Previously I had dealt with representations from the DPH in cases where there were multiple objections and in real effect they were adding weight to the objections raised by the application.

This was the first time that I have dealt with a case where the sole representation was from the director of public health and they were seeking to engage the authority to refuse the application and public nuisance licensing objectives.

I turned to the Section 182 Guidance document to see what is said in there regarding representations from health bodies in England and Wales. Paragraphs 9.20 to 9.24 set out the advice given by the Home Office. Paragraph 9.20 states “If the authority wishes to make representations, the DPH will need to decided how best to gather and coordinate evidence from other bodies which exercise health functions in the area, such as emergency department and ambulance services”. Paragraph 9.21 says “Health bodies may hold information which other responsible authorities do not, but which would assist a licensing authority in exercising its functions. This information may be used by the health body to make representations in its own right or to support representations by other responsible authorities, such as the police.” No evidence had been submitted to support the representation by the authority.

I immediately asked to have a meeting with the representatives from public health.

We discussed the two grounds of their objection and in particular focussed on the following relevant issues.

Crime and Disorder

We discussed with them that the police are the statutory responsible authority and experts on crime and disorder when it comes to informing a licensing authority.

To this effect, they enjoy enhanced status under Paragraph 9.12 of the Guidance (“The police should be the licensing authority’s main source of advice on matters relating to the promotion of the crime and disorder licensing objective…the licensing authority should accept all reasonable and proportionate representations made by the police unless the authority has evidence that to do so would not be appropriate for the promotion of the licensing objectives”).

I stressed to the Public Health Department that it was unique in my experience that their department was opposing a new grant on the Crime and Disorder licensing objective when the police had written to say “The operating schedule contains sufficient control measures that address the prevention of crime and disorder licensing objective and therefore we have no further comment to make.” I made the point that it would be difficult for the licensing authority to refuse the grant of the licence on crime and disorder grounds purely on the basis of a contention from public health, not backed up by evidence, when the police had assessed that the operating schedule exhibited sufficient control measures.

Prevention of Public Nuisance

A similar position arose here in that the Environmental Health Department of the licensing authority, being the statutory expert for public nuisance, had not objected to the application. They had been engaged throughout and had received extensive policies dealing with event safety, travel plans, dispersal policies and a noise management strategy. Again we highlighted that there had been significant local engagement by way of invitations to residents, businesses and councillors. Further, there had been attendance at business and community forums in the area and there had been no objection from the Environmental Health Department nor any businesses, residents or ward councillors.

The meeting was fruitful in that the public health body went away and considered their position before coming back to withdraw their representation to our application, it then being granted by way of delegated authority.

I think this case significantly highlights the difficulty that the health body are in when seeking to engage the licensing authority in a representation to the grant of a new premises licence.

In my view, it also exhibits how important it is to invest the time in pre-application meetings, to finesse a significant application before it is lodged with a licensing authority.

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Woods Whur and Innpacked

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

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

Please either click on the following link to see their APLH courses:

http://www.innpacked.com/course/aplh/

or for the whole suit of courses on:

http://www.innpacked.com/courses/

or email us direct on:

woodswhur@innpacked.com

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fabric – a rollercoaster ride of a case

Having concluded the successful appeal for fabric in 2015 the operators and myself hoped for a quiet year in 2016. Unfortunately the issues of young people taking recreational drugs at social gatherings and in music-led environments came to a head again this year.

Two further young lives were lost by individuals who were determined to take MDMA as part of their night out. Ultimately this led to the summary review of the premises licence at fabric, the suspension of the premises licence, the revocation of the licence and the eventual reinstatement of the licence after significant time was invested by the operator, the police and the licensing authority in coming to a compromise which all parties were able to sign off – removing the need for a week long appeal at Highbury Corner Magistrates’ Court.

The case in itself highlights the huge challenges to the leisure industry and enforcement agencies surrounding issues in the night time economy.

I think the hardest part for me in the whole process was attending the inquest at the Coroner’s Court when the family, friends, staff and medic who tried to save Ryan Brown’s life all gave evidence before the coroner. I had been working on this case for several months by that stage, and had looked after fabric’s licensing affairs for three years. Everything was brought into sharp focus when I saw young men similar to those who socialise with my elder daughters emotionally giving evidence about the loss of their friend. The Coroner highlighted that the evidence had shown a naivety in drug use and she expressed concern that whatever she would say, young people would still run the risks associated with taking recreational drugs. She highlighted the need for better education systems and praised the medical facilities that are available at fabric.

The proceedings before the Licensing Authority and in the run up to the appeal again stressed the difficult circumstances that operators have in keeping drugs away from their venues. I represent bars, hotel operators, restaurants and venues more traditionally associated with the late night sector. None of these types of premises are immune from people taking drugs within them. I am constantly surprised at where drug taking now takes place and by huge challenges for operators and enforcement officers alike.

The fabric case has re-emphasised the need for operators to never stand still. One of the key offers which has been put in place by fabric moving forward is a “Target Hardening Programme”. This will see significantly different types of searching and management of the front door of the premises in an attempt to make it harder for individuals to take drugs into the premises. The difficulty is that searching cannot be intimate and it is so easy for tablets and small amounts of powdered MDMA to be smuggled in intimate places.

The more I am involved in cases such as this, the more I am of the view that enlightened enforcement protocols, which include education rather than just prohibition, are the way forward. As the coroner emphasised, nothing she was going to say would stop young people who believe they are invincible.

The statistics which Professor Measham has shared with us during these proceedings all push in that direction. There are significant issues with creating environments where naïve drug users are prepared to risk taking all of their drugs in one go – the consequences being potentially fatal when individuals “Double Drop”.

One of the key issues that has come about during the fabric case is the potential loss of the cultural and late night entertainment sector in major cities.

There is a need to invest significant sums in opening and maintaining premises such as fabric. They clearly serve a huge, loyal market. I have never been involved in a case before where a review managed to engender 872 positive representations in the review. This then led to 160,000 people signing a petition to save fabric. Many thousands of people then contributed over £300,000 to create a fighting fund to give fabric an opportunity to fight the revocation and re-open. The press coverage and reporting of the case has been at a level that I’ve never seen before and this is not purely because of the premises themselves but also the fact that people are awakening to the possibility that summary reviews could be used to remove other premises in a similar fashion.

I formed a view very early in these proceedings that a summary review was a blunt tool used to deal with the issues at the premises. If you read the preamble to the Violent Crime Reduction Act (the legislation that brought in summary reviews to the Licensing Act 2003) and all of the guidance documents since, you will see that this mechanism was brought in primarily to deal with premises associated with serious violent crime and weapons at premises.

Some months on we are in a position I genuinely believe we could have reached without the need for the premises to have closed for 4 months and this could have saved huge amounts of money on all sides, and the potential financial ruin of the business.

There have been instances during this period where I have been asked to advise police forces as to whether a summary review should be launched in certain circumstances. I have been slow to advise their commencement in a particular case which was associated with violence during football matches. We managed to set up a level of communication between the operator and the police, where everything was achieved by way of a minor variation rather than going down significantly costly litigation. It is still my advice that taking the foot off the gas and making a careful, considered approach can be significantly beneficial to all parties.

This is not written with criticism of the police in mind, in the circumstances of the fabric case. I accept entirely that the pressures in place are considerable when young people have lost their lives at licensed premises and there is a belief that the operator could do more to manage out drugs in their premises. However, as was borne out in the significant discussions with Islington Council and the police in the run up to the appeal in fabric, with a will on the part of all parties, a sensible conclusion can be reached which promotes the licensing objectives and hopefully allows the late night industry to flourish.

 

 

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Shisha Smoking – a “hot topic”

The increasing popularity of shisha smoking in recent years has led local authorities to consider the various powers at their disposal to address the activity. For councils such as Westminster, the issue might be said to be “smoking hot” at the moment, with the authority looking at measures to control it and seemingly set on a course to reduce the harm it perceives it to cause.

Westminster issued its draft strategy, “Reducing the Harm of Shisha” in December 2015, citing a British Heart Foundation study from 2012, which showed a 210% increase in the number of premises in the UK offering shisha over the five years to then from 2007. Westminster says that its document is aimed at enabling people to make informed choices, to help businesses operate in a sustainable and responsible way, and to protect and enhance the amenity of every neighbourhood within its area of responsibility.

Consultation on the document closed on the 12 February this year, with the final strategy due to be published this spring: it has yet to appear, and enquiries of the council this week revealed that publication has now been deferred until spring 2017, for undisclosed reasons. Nevertheless, the council has confirmed that the issue of shisha smoking is still very much in its spotlight.

Responsibility for public health shifted to local authorities from 1 April 2013 and in addition they have powers under licensing, planning and environmental protection legislation at their disposal.

Westminster’s Draft Strategy proposes a three-pronged approach to the issue, as follows:

  • To educate people about the harm associated with shisha;
  • To regulate the activity; and
  • To lobby and form partnerships with other authorities and organisations such as the UK Healthy Cities Network and the Smokefree Alliance.

This approach, the council believes, will increase its effectiveness and ability to improve health outcomes and reduce nuisance.

Shisha involves smoking tobacco or herbal smoking products through a water pipe or hookah. Historically most prevalent in Africa, the Middle East and South East Asia, the activity has in recent years gained popularity in Europe and North America. Although traditionally carried on by members of the aforementioned ethnic groups, it has become popular with students and other young people from all ethnic backgrounds in recent years. It is instructive to note that shisha smoking is banned in public places in some countries such as Pakistan, with other Middle Eastern and Asian countries considering similar restrictions.

Shisha bars are found across the UK and, whilst they tend to be concentrated in cities such as Manchester and Birmingham and in other boroughs of London, such as Brent and Tower Hamlets, Westminster has seen an increase in the number of premises within its area offering shisha smoking, to a total of some 132 businesses at the end of 2015, with the number continuing to grow. In Westminster, the greatest concentration of such premises is around the Edgware Road Stress Area, although some are also found in the Queensway Stress Area, the West End Stress Area and elsewhere throughout the borough.

In the consultation paper, the council points to the fact that many of those who smoke shisha are unaware of its health impact, often wrongly believing that because the smoke is inhaled through a water pipe that is “safer” than traditional cigarette smoking. Studies looking at the long term health effects of shisha smoking are few and far between but, says the council, there is an increasing amount of evidence which suggests the health effects of shisha smoking are similar to, or worse than, those of cigarette smoke. It also points to health and safety issues arising from sharing water pipe mouth pieces and the fire risk associated with burning charcoal. In addition, the consultation paper highlights the possible amenity impacts of shisha smoking caused by noise and fumes and crime associated with the activity in terms of illicit tobacco and the evasion of excise duty.

The council is engaged in various smoking cessation campaigns, including some that target shisha smoking specifically, particularly amongst students. It is also in the course of drawing up guidance for businesses on the range of regulatory requirements associated with shisha smoking that need to be met, and on good practice to address health and amenity concerns.

Turning to the regulation of the activity, Westminster’s Consultation Paper highlights the wide range of powers that the council has at its disposal to control shisha smoking. These include:

  • Smokefree Legislation – The Health Act 2006 bans smoking in “substantially enclosed premises”, imposing various rules concerning the structures in which smoking can and cannot take place. Such matters are also governed by the Health and Safety At Work Act 1974.
  • Highways Law – The Council’s Highways Department has various powers to prevent shisha smoking obstructing the pavement and to require tables and chairs on the pavement to be licensed.
  • Environmental Protection Act 1990 – This gives the council various powers to curb statutory nuisance arising from fumes or noise. Such matters are also covered by the Anti-Social Behaviour Act 2003.
  • The Licensing Act 2003 – Although public health is not currently a licensing objective under this legislation, many in the sector expect it to be introduced as one shortly. This notwithstanding, there may nevertheless be conditions on premises licences as matters stand, which serve to limit to shisha smoking by, for example, preventing the use of outside areas after a certain time, or limiting the number of patrons allowed in outside areas. Should premises be found to be causing a public nuisance through shisha smoking activity, the council has powers to add such conditions to the licence upon a licence review.
  • Planning Legislation – The council has powers to tackle shisha smoking by alleging that, by offering it as an activity, premises have unlawfully changed planning use.

I am currently involved in a case in Westminster where the council, having attempted to use tables and chairs legislation to control shisha smoking at a set of premises, is now using the planning legislation and alleging that the shisha smoking at the premises amounts to an unlawful change of planning use from A3 (restaurant) to a mixed A3 and sui generis use. An application was made for a Certificate of Lawfulness on the basis that the shisha smoking at the premises is merely ancillary to the restaurant use. However, this was turned down flat by the authority, without any opportunity being given to lodge additional evidence. That decision has been duly appealed to the Planning Inspectorate, and a decision on that appeal is awaited early next year.

In what I believe to be a robust case, the arguments advanced included the following:

  • Shisha smoking is demonstrably a very small part of the business’s turnover (being approximately 5%);
  • There is no specifically designated shisha area at the premises;
  • The number of customers partaking of shisha is very low;
  • The number of menu items represented by the shisha activity at the premises is very low when compared to the number of food and drink items on offer;
  • The appearance and presentation of the premises remain very much those of a restaurant;
  • The shisha smoking at the premises isn’t leading to any intensification of their use; and
  • Shisha smoking at the premises has never given rise to any complaints, whether they be about noise, fumes or anything else.

It will be interesting to see what the outcome of this appeal will be and also what Westminster’s final shisha strategy document looks like when it finally comes out. I know that there is considerable concern amongst the business community in Westminster, with an increasing number of outlets offering shisha or wishing to do so. We will update you on the outcome of the appeal and on Westminster’s strategy in future editions of this newsletter. In the meantime, should you have any questions or concerns, please contact one of the team.

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Gambling Commission Urges Operators to up their Game on Consumer Focus

The Gambling Commission held its first Raising Standards Conference at its offices in Birmingham this week and its Chief Executive, Sarah Harrison, took the opportunity to address operators on the Commission’s vision for making the industry “the most trusted gambling operators in the world”, a vision that might lead it to impose tougher penalties for non-compliance in the future.

Although the Commission concedes that some progress has been made with the development of harm reduction strategies at operator level, and acknowledges the hard work done by the Association of British Bookmakers and the Remote Gambling Association on in-play messages and play limits, Ms Harrison made its view plain: more needs to be done.

She said:

“…you need to raise your ambitions and your sights higher. You need to step up the pace of change – in how you handle customer complaints, ensure advertising is clear, simplify terms and conditions, develop your risk management strategies on money laundering, evaluate the impact of social responsibility initiatives – and, working across all these areas, in how you do more to share best practice.”

The Commission’s vision for raising standards rests on its aim to ensure that operators place consumers at the heart of what they do, so that consumers have trust of, and confidence in, the industry. This is consistent with the document it published last month, “A two-way conversation: our plan for communicating with consumers”, with the work it is undertaking jointly with the Competition and Markets Authority on the fairness of operators’ terms, conditions and practices, and with the current Government’s focus on consumer welfare. Ms Harrison cited the examples of the banking and automotive sectors, saying:

“The message from those examples is clear – don’t wait for a crisis to happen that shakes the very foundation of customers’ trust in your industry. Act now and demonstrate to consumers that your interest in their needs is genuine.”

The Commission is urging operators to see best service standards as part and parcel of their competitive edge, to be driven in the way in which they deal with customer complaints by the value of customer feedback rather than merely paying lip-service to an obligation, and to treat licence and code obligations as a minimum obligation rather than an artificial cap. Ms Harrison quipped that she would like to see an industry “maybe even where the likes of John Lewis looks to one of you to learn how to improve their customer offer!”

Ms Harrison reiterated her view that effective consumer protection means focussing more on what customers need and less on what the regulator expects. She singled out a number of specific areas where work is required in order to raise standards: social responsibility, treating consumers fairly and money laundering.

On the first area, the Chief Executive set out the five aspects that the Commission will look for when assessing whether a social responsibility initiative is successful, as follows:

  • Clarity of purpose – is the initiative aimed at preventing harm or simply dealing with harm already occurring?;
  • Evaluation – how are operators assessing the impact of the initiative and sharing findings?;
  • Added value – are operators doing the bare minimum or taking their responsibilities further?;
  • Customer focus – are operators considering every aspect of the customer journey?; and
  • Transparency – are operators open about the inputs that have informed their initiatives?

On fairness to customers, Ms Harrison highlighted the huge increase in the last 12 months in the number of complaints or expressions of concern it has received from consumers – at approximately 80,000, this number represents over 300 per cent on the last two years. The main focus for customer concern surrounded self-exclusion, withdrawal of customer funds, terms and conditions and marketing and advertising. Ms Harrison announced that, in addition to the work it is currently undertaking with the CMA, the Commission will be conducting a review of ADR provision in the gambling sector towards the end of this financial year, and this will include examining the current practices and requirements in place for handling customer complaints. I would imagine that this will entail a consultation process, but operators are being urged to steal a march and start driving up standards in complaints handling and redress now.

Turning to the issue of money laundering, the speech obviously referred to the recent high profile settlements reached with certain operators, and announced the Commission’s intention to submit its advice “soon” as part of the consultation process on the Fourth Anti Money-Laundering Directive. Ms Harrison urged operators “specifically to raise [their] game and be far more curious about the source of customer funds”. She criticised a leadership culture which places commercial gain over compliance and which adopts a “wait and see” approach, in other words waiting until the source of funds is proven to be illegal before acting. This, she said, is “far from a risk-based strategy” and is simply not credible.

Perhaps one of the biggest take-aways from the address surrounds the Commission’s planned changes to the use of its enforcement powers. It plans to make public in more detail the outcome of regulatory decisions, not just early settlements. It will remove the bias that currently exists in its Statement for Licensing and Regulation in favour of a regulatory settlement over a licence review, and will instead place all of its enforcement tools on an equal footing and “use the right tool for the job”.

The changes will mean a likelihood of higher penalties going forward. Financial penalties currently reflect the need to remove profits from non-compliance, take account of costs and consumer harm, and deter poor compliance, but Ms Harrison indicated that to these considerations, in future a punitive element will be added, in cases of systemic and repeated failings where the Commission can detect no improvement in behaviour. This, together with the threat of more licence reviews, should be treated as a clear warning to operators, particularly given that financial penalties imposed in recent times have, even as matters stand, been hefty.

The Commission says that it is committed to using its enforcement tools proportionately, but now takes the view that settlement will not necessarily be the best way of achieving that proportionality. Settlement will nonetheless remain a key mechanism in driving compliance where the facts are agreed, and particularly in cases where the operator comes forward and declares an incidence of non-compliance, takes measures to implement a quick and effective improvement plan designed at preventing reoccurrence and gives the customer redress. Operators will receive credit for this and in such cases the Commission will “certainly consider resolution through settlement rather than licence review”. This underlines the importance of operators’ co-operating fully with the Commission in an open and transparent way, something which is required by the Licence Conditions and Codes of Practice in any event.

Ms Harrison announced that the Commission will consult on changes to its enforcement policy before Christmas. We will update you once the paper is published, and on the other developments announced in the Chief Executive’s speech, in future editions of this newsletter. In the meantime, should you have any queries or concerns, please contact one of the team.

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It’s Time to Undertake a Health Check of your Licence

It still surprises me that we often get calls from some clients asking us fairly basic questions. Who is the designated premises supervisor at these premises? What time can I operate until on New Years Eve? The police tell me I’ve got a certain condition on my licence Is this correct?

It is easy for an operator to become wrapped up in running the business and doing the day to day tasks for them sometimes to forget to take a step back and ensure that their house is in order. Christmas and New Year are always an exciting time for the trade with business opportunities at their best and customers who generally want to have a good time. It is reported that 400 million pints will be drunk in pubs in December and this does not include cocktails, wine and other drinks.

I think the start of November is a great time to take stock of licensing matters and to ensure that your licensing file is in order. I would always task one of the management team to do a presentation to all staff on the premises licence, conditions and undertakings, licensing objectives and other general responsibilities. Whilst Christmas and New Year can be a profitable time for the industry is also a time when resources can be stretched and some customers may want to partake in the festivities more than usual. I would draw up a list of matters to check and go through this with the whole team to ensure that everybody buys in to a general commitment to promote the licensing objectives and comply with conditions on the premises licence. Each list may be different but examples of matters which I would include in the list are as follows:

  • Have all Temporary Event Notices been applied for the Christmas and New Year period?
  • Have all risk assessments been undertaken for temporary events?
  • Do we actually know what sort of party or evening we are expecting at temporary events which are booked by private individuals?
  • Are all risk assessments generally up to date?
  • Have health and safety and fire checks been undertaken?
  • Are the management team fully aware of the conditions on the licence?
  • Are the management team fully aware of the operational hours on the licence in particular for Christmas and New Year?
  • Who is responsible for social media?
  • Is the social media message the message that the management team want to send out in to the public forum?
  • Are any special nights involving pub games legal?
  • Are all staff fully aware of the mandatory licensing conditions?
  • Are staff aware of the duty not to sell to customers who appear to be intoxicated?
  • Have additional staff been obtained for the exceptionally busy nights?
  • Will the requisite number of door staff be available?
  • Are training records up to date?
  • Is it a time to undertake some refresher training?
  • Have a meeting with the local police and see if there are any local initiatives.

The above list is of course not exhaustive. Christmas and New Year will be a fantastic time but it is very important to ensure that all folders and risk assessments are up to date and that staff are fully aware of their obligations to the general public during the Christmas period.

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Woods Whur Celebrate their 5th Birthday

It only seems like yesterday that having talked about setting up our own firm for many years Paddy and I eventually decided to form Woods Whur on 1 October 2011. We had a very short window to get everything up and running which with the benefit of hindsight was probably a good thing as it meant that we never really stopped to think about all of the hard work involved in setting up a new law firm.

We were delighted to announce recently that Paul Holland was also joining the team and Paddy and I have known Paul for longer than all three of us would care to remember! When Paddy and I started practising as solicitors in Hull Magistrates Court over twenty five years ago Paul was already a well established and well respected advocate. Paul specialises in licensing with over thirty years of advocacy experience and represents his clients both before licensing committees and on appeals under the Licensing Act 2003 and the Gambling Act 2005. Paul has considerable experience of dealing with the licensing requirements of all clients ranging from a small corner shop to an international sports stadium. He has a significant network of contacts within the regulatory authorities of Yorkshire and Lincolnshire and we are very excited about working with Paul in the future. Paul can be contacted on 07702 802 470 or Paul@www.woodswhur.co.uk.

We have been extremely fortunate to work with a number of great clients and to be involved in some significant licensing cases. We have appeared before local authorities throughout the United Kingdom and in Crown Courts and in the last few months have been involved in some ground breaking cases involving Fabric nightclub and Park Lane Casino. Kerry Welburn and Carole Collingwood have been with us since day one and indeed it would be remiss of me not to mention that on 8 November 2016 Carole celebrated (!!) seventeen years of working with Paddy. Tanya Broadhurst who we worked with at Walker Morris came back to work with us at Woods Whur which was great news and we have been exceptionally pleased with Amy Hayward who joined us earlier this year.

It is also hard to imagine that Anna Mathias has now been with us for nearly two years. Anna has settled in and is a great addition to the firm and a great advert for the firm. Anna has dealt with numerous cases particularly in the gambling sector and is an exceptionally experienced and well respected barrister within the industry. The only disappointment for Anna is that during her time at Woods Whur her beloved Swindon Town have not enjoyed the same success as she has although she remains a loyal and devoted follower. I am sure that Paul Holland who is a big fan of Hull City will be hoping that his team and Anna’s team do not meet each other in the near future!

Paddy and I would like to express our sincere thanks to all of our clients who we thoroughly enjoy working with and all the local and responsible authorities involved in our cases. The leisure sector continues to be a great industry to work in and we hope that we continue to do so for many years.

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Gambling Commission Focusing On Gambling Consumers

October has seen the Gambling Commission engage in an initiative to champion consumers in gambling transactions.

On 3 October it announced that it was “starting a two-way conversation”, publishing what it calls “a Plan for communicating with customers” and inviting comments on the Plan from both individuals and organisations representing consumers. The Plan has been welcomed by both Gamcare and the Citizens’ Advice Bureau, who believe the engagement will enable a better understanding of consumer behaviour and of how gambling affects them.

Launching the Plan in a video blog, the Commission chief executive Sarah Harrison said:

“We want gambling companies to do much more to put consumers at the heart of the business – we’re doing this via the regulations we set and the way in which we go about enforcing them.”

To what extent this hints at additional regulation and more stringent enforcement is currently unclear and much may depend on the feedback the Commission receives. There is no deadline for responding to the Plan – indeed, it appears that the Commission sees this as an open-ended process, with the publication of the Plan being merely the first step. In its foreword, the Plan states:

“We see this document as the start of a conversation. It’s not something that we will publish and leave to gather dust. The things people tell us after reading it will help us build on it over time. It may also change as we learn what works and, equally importantly, what doesn’t.”

The Plan is aimed at communicating with all interested members of the public, not merely active customers of a gambling company or consumers for whom gambling might be, or become, a problem. I see no reason why gambling operators should not themselves contribute to the debate, although the Plan does not specifically invite this.

The Commission wants the Plan to improve its own focus on putting consumers at the heart of its work in two ways – getting information from consumers, so that their voices are heard and better inform policy, and giving information to them to help them to solve any problems that they might encounter, or to avoid harm in the first place. The Commission says that, whilst it already spends much of its time looking after consumers’ interests, and stressing their importance to operators, it also needs to build on this, to look at itself and to up its game if it is to keep pace with the rapid innovation and product development taking place in the gambling sector.

The Plan is based on three principal themes – transparency and clarity, responsiveness and forming partnerships.

The Commission as regulator, somewhat unsurprisingly, sees transparency in what it does and how it makes decisions as key. It plans to carry out a “customer interest assessment” to look at how it currently publishes information and how to make it clearer and more accessible, in a number of ways: committing to plain English, summarising lengthier documents and sharing information in a more visual way so that it is more easily shared via social media. All of these moves are to be welcomed.

The responsiveness theme focuses on better enabling the Commission to keep up with a rapidly evolving sector. It plans to provide better signposting for consumers on how to deal themselves with problems associated with gambling transactions and how to complain and access Alternative Dispute Resolution. It is also looking at expanding and improving its research into consumer behaviour and at improving the performance of its Contact Centre and the way in which its staff work with the Commission’s specialist teams to ensure that increasingly complex enquiries are dealt with quickly and effectively. Again, this is to be welcomed.

The Plan announces the Commission’s intention to build new partnerships with consumer organisations. It is seeking views as to whom it should be partnering with. It is also set to review the remit of its Community Liaison Group which is currently attended by a variety of consumer organisations, academics and others, and to look at other ways of gaining insight into consumer behaviour, such as by setting up an online forum.

The Plan reveals that the Commission is working on its new website and also reviewing its social media strategy to improve the way in which it provides information to, and gathers feedback from, consumers. It will be interesting to see what the outcome of these projects is and how the Plan evolves over time.

In the meantime the Commission has already put the “partnerships” theme of the Plan into action this month, by backing an investigation launched by the Competition and Markets Authority on 21 October into the fairness of gambling operators’ terms and conditions.

The CMA has issued Information Notices under Part 3 of Schedule 5 to the Consumer Rights Act 2015 to a range of gambling operators. These Notices are just one tool that the CMA has to enable it to exercise its enforcement powers under the Enterprise Act 2002, legislation empowering it to bring cases to court for an adjudication as to whether a particular practice or contractual term is fair.

At this stage the CMA has not made any decision as to whether gambling operators are, indeed, breaching consumer protection law in their terms or practices but these Information Notices are designed to get to the bottom of whether concerns about misleading promotions and the like are founded. If it considers that they are, then this will lead to it taking enforcement action under the CRA 2015 and the Consumer Protection from Unfair Trading Regulations 2008.

This investigation is the result of the Commission approaching the CMA with concerns about potential breaches of consumer law by gambling firms, including misleading terms and conditions, promotions that are difficult to understand or that may be unachievable, players being blocked from collecting their winnings, bets being cancelled or odds altered, and terms unreasonably restricting players’ rights to challenge operators’ decisions.

As a result of the Commission’s approach, a joint programme of work has been agreed with the CMA, designed to ensure that terms and practices in the sector are fair. Nisha Arora, Senior Director for Consumer Enforcement at the CMA, said:

“Gambling inevitably evolves taking a risk, but it shouldn’t be a con. We’re worried players are losing out because gambling sites are making it too difficult for them to understand the terms on which they’re playing, and may not be giving them a fair deal.”

For her part, Sarah Harrison stressed that:

“We expect the gambling industry to ensure terms and conditions are not unfair. However, operators are still not doing enough. I continue to have concerns that many of these appear to bamboozle rather than help the customer make informed choices.”

No doubt some in the industry will be concerned about this initiative, the increased degree of scrutiny, threat of enforcement action and the importance of responding appropriately to Information Notices. If you have received a Notice and need our assistance, please contact one of the team.

We will continue to monitor the CMA investigation, and the evolution of the Commission’s consumer Plan, and will report further on both of these in future editions of this newsletter.

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The Enhanced Due Diligence Debate Continues and now Reaches Las Vegas

I know that I have written about enhanced due diligence previously but at present it is the one topic that causes me a great deal of concern as far as the industry is concerned and I think it is essential to keep debating this matter. I am not concerned that the industry is not carrying out some form of enhanced due diligence. I am concerned that it is still not clear to the industry what the Gambling Commission will be satisfied with which always leaves the industry open to threats of investigations and reviews. There is of course an argument that the Gambling Commission should not need to tell the industry and that the industry must regulate and risk assess itself based on the Anti-Money Laundering Regulations and I understand this point. There must come a stage however when the Commission set down some basic principles on enhanced due diligence even if it is merely a “general steer” as to what is satisfactory.

Anna and I attended a very interesting and helpful morning seminar on 17 October 2016 in London which was led by Mike Rothwell and Deloittes. Mike put forward some very persuasive arguments that any form of enhanced due diligence must be “principle based” with some form of set criteria in place to implement any policy. There were many questions raised at the seminar and several different points put forward as to what would constitute enhanced due diligence and it does seem to me that it will be down to an individual venues risk assessment based on the principles that Mike referred to which will determine the extent of enhanced due diligence at the premises. The challenge the industry faces was reflected in some of the questions put forward. Is it right that the financial trigger for enhance due diligence (i.e. the amount a customer gambles before enhanced due diligence is required) is the same for a Mayfair Casino as it is in a casino in Hull. (I am from Hull so I am allowed to use Hull as an example!). Is it also right that an extremely well known and wealthy person should have enhanced due diligence done on them when you have the documents to know who they are and know exactly where their wealth is coming from? How does this compare to an unknown person walking in to a Hull casino with £3,000 in cash? There are so many different alternatives to consider that I agree entirely with Mike Rothwell when he says that it must be a principle based decision and in effect a risk assessment on a case by case matter. The difficulty of course is that unless there are clear guidelines in place and a definite policy for each unit then you are leaving that decision down to somebody at the cash desk in a casino or behind the counter in a betting office or at the reception desk of a bingo hall. Surely those people are not expected to contact the Money Laundering Officer each time somebody comes in to the premises.

Some of us are due to attend a conference organised by the Gambling Commission in Birmingham on 8 November 2016 which is being fronted by Sarah Harrison and I know Mike is also speaking at this conference. I am hoping that we may be able to discuss this point further and see what the Gambling Commission’s position is on this particular point. I have to say however that I am incredibly disappointed to note that some of my clients and in particular one person who is the Money Laundering Officer in a Mayfair Casino has not been allowed to attend this conference because it is full! There is no point in having a conference if we cannot arrange for everybody to attend.

I was interested to note on a recent newsflash from Reuters that the Nevada State Gaming Regulator is investigating the Las Vegas Sands Corporation Casinos in relation to high stake Chinese players and the allegation that they are gambling through front men who would sign the credit paperwork. On 30 September 2016 Reuters were alone in alleging that a case involving the Sands Casino showed how “Shill” players and backroom loans are often part of the game as the casino found out when they tried to collect $6.4 Million Dollars in gambling debts. Lawyers for the two women who allegedly owed the money wrote to the casino confirming that the two ladies were local housekeepers “Allegedly recruited with the cooperation of Sands Personnel to take out millions of Dollars in credit in their names and sit near the players as they gambled with the borrowed chips”. The lawyers further argued that since everybody knew the debts were a sham then those debts should be null and void. The Sands spokesman made it clear that the company had “No clear evidence” that these women were recruited by Sands employees.

As well as reporting this case Reuters also comment that the episode shows how crucial Chinese money has become to Las Vegas at a time when Macau has overtaken Las Vegas as the worlds biggest gambling centre. Vegas responded by increasing their exclusive VIP rooms featuring the décor of Macau and as a result of this baccarat winnings has doubled over the past decade. Reuters report the Asian market accounts for as much as 90% of the baccarat gambling in Las Vegas. The question of course is whether this comes at a cost and US Law Enforcement Officials have become increasingly concerned that there is “Inadequate vetting of customers” and that “Huge cash transactions could make Las Vegas a target for money launderers”.

I suppose I should complete this article by confirming exactly what the money laundering regulations state with regard to enhanced due diligence. Regulation 14 which deals with enhanced due diligence confirms the following:

Enhanced due diligence and enhanced ongoing monitoring must be carried out in the following certain circumstances

A relevant person must apply in a risk sensitive basis enhance customer due diligence measures and enhanced ongoing monitoring:

  • In accordance with paragraphs 2-4;
  • In any other situation which by its nature can present a high risk of money laundering or terrorist financing;

Regulation 14 (1) (a) requires a relevant person to apply EDD in the following circumstances:

  • Customer not physically present;
  • Relevant person is a credit institution;
  • Relevant person proposes to have a business relationship or carry out an occasional transaction with a PEP;

Regulation 14 (1) (b) places an important duty on relevant persons to assess and manage the risk of money laundering and terrorist financing by requiring the relevant person to apply on a risk sensitive basis enhanced CDD measures and enhanced ongoing monitoring…in any other situation which by its nature can present a high risk of money laundering or terrorist financing.

Regulation 14 (2) deals with a situation with a customer not present.

Regulation 14 (5) sets out a definition of a politically exposed person. This term was introduced by article 13 of the third money laundering directive. It should not be forgotten that there is a requirement not just to carry out enhanced due diligence but also enhanced ongoing monitoring of customers.

I am hoping to be able to report further after the Gambling Commission conference on 8 November 2016.