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

I have attended a Police meeting this week with a long standing trouble free operator.

The Police were uncomfortable with some instances which have come to light of the way in which people had been ejected from or refused entry to the licensed premises. The techniques for removal/ejection were called into question and we were shown some video footage from the Council’s CCTV system.

The Police thought that there was a need for some refresher training for the door staff and also a reintegration of management and door staff to work together. It reminded me of instances that I have dealt with previously where staff working behind the bar had been comfortable to sell alcohol to people without I.D checking believing this had already taken place at the door by the door supervisors.

The management controls in the premises will determine whether there will subsequently be a review of the Premises Licence. The Premises Licence attaches to the premises and is in the owner/operator’s control. If door supervisors are seen to be behaving in a way which compromises any of the four licensing objectives there could be a review of the Premises Licence. Clearly if the Premises Licence is put into potential jeopardy as a result of this action then there could be serious ramifications for the owner/operator.

It is therefore very important that the owner/operator does not allow a door team to be the tail that wags the dog. Good quality door companies will provide a senior door man who understands potential issues that could be created at the premises as well as the continuity of door staff. One of the issues that arose in our Police interview was that the premises was located on the corner of two roads and some of the ejections could lead to people being thrown on to the carriageway of the road and therefore causing potential issues to their safety.

These live issues should be risk assessed for every venue and door teams should be constantly looking at what management controls are needed. Drug use in toilets is another significant risk to licensed premises and door supervisors (and/or toilet supervisors) have to be vigilant that a significant number of people carrying drugs with them are looking for a “soft” place to be able to take them. I was once involved in a pub premises licence review which had difficulties with their toilets. When the Premises Licence was reviewed the issue surrounded the gentlemen’s toilets and in particularly one cubicle. The DPS told us they had tried to put sloping surface blocks on the window ledge which had been removed and admitted they had given up at that point and not looked for any other ways to deal with the issues…not a good response.

One enlightened operator who we acted for asked all of their senior management to do the SIA door training course and all of their door supervisors to do the NCPLH course. We then had a training day where the management and the door supervisors integrated with role play in live scenarios so that both understood the issues that the other had to deal with at the premises.

This has brought back into sharp focus my view that I have always had that training is imperative and that any external agencies employed at licensed premises – for example door supervisors – do not put the long term life of the business in jeopardy by bringing the Premises Licence in for review.

 

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

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

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

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

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

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

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

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

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

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

What will the rest of the summer bring?

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The circumstances in Birmingham were as follows:-

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The new Regulator’s stated aims are to:

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

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

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

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

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

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

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

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

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

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

Speakers now confirmed for Woods Whur Gambling Seminar and Networking Event

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

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

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

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

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

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

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

 

 

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

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

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

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

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

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

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

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