Casino Licensing in The UK

Casino Licensing in The UK
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 Casino licensing in the UK

Article by Stephen McGowan, director and Head of Licensing (Scotland) at TLT Scotland Ltd

The operation of casinos in England, Scotland and Wales is governed by the Gambling Act 2005, which came into force on 1 September 2007. While this is an act of the UK Parliament certain aspects of gambling laws are dealt with differently in Scotland because of a separate legal system and a slightly different approach in relation to local licensing.

The 2005 Act created what might shortly be termed a three-tier system of licensing for gambling; operating licences, premises licence and personal licences.

Casino Operating Licences

Operating licences are issued by the UK Gambling Commission, the overall industry regulator and ‘watchdog’. An operating licence is required for anyone who wishes to make facilities for gambling available. This includes both gambling from premises and online facilities. There are several types of operating licence and this depends on the nature of the gambling that the operator wishes to make available. One of these, of course, is a casino licence.

To be issued with a casino operating licence the applicant must follow a rigorous application process. The Commission requires significant levels of detailed information on both the proposed business model as well as the personal details and financial arrangements of the individual(s) seeking the licence. Full financial disclosure of personal finances is the norm with these applications. In addition, applicants must undergo a criminal record check.

Casino licensing in the UK

In order to seek a casino operating licence you must have some considerable knowledge of the industry and practice of operating a casino at the ‘coal face’. This is because the Commission has to be satisfied with a number of issues, such as, detailed financial forecasts, profit/loss projections, market research and analysis and more, before issuing a licence.Casino licensing in the UK pic

In addition to this, a large number of policy documents relating to casino and general gambling operations must be designed. This can only be done by someone with the appropriate skills and expertise of both the industry and the law. For example, such policies would relate to money laundering, self-exclusion, primary activity, business continuity, and many more.

Depending on the number of persons who would hold certain positions within the applicant organisation, there may be an additional requirement for them to hold their own personal licence. Again this can be sought from the Gambling Commission and requires the applicant to demonstrate an appropriate level of knowledge and expertise.

Casino licensing in the UK

Underlying the licensing process are three “principles” or licensing objectives which are:

  • Preventing gambling from becoming a source of crime or disorder, being associated with crime or disorder or being used to support crime;
  • Ensuring that gambling is conducted in a fair and open way; and
  • Protecting children and other vulnerable persons from being harmed or exploited by gambling.

These three objectives underpin how the Commission will consider any application. In addition to these, applications may also require detail of the suitability of gaming machines or other equipment to be used for playing a casino game.

The Commission may grant or refuse the application, or grant it in respect of certain activities only. Any operating licence will be granted subject to a considerable number of conditions. Some of these conditions apply to casino licences only, but some apply to all types of operating licence.

Underlying the operation of a casino licence is a document known as the Licence Conditions and Codes of Practice. Adherence to this is a condition of every operating licence. The most recent version is from December 2011 and this deals with a vast range of requirements which include; financial robustness, cash handling, provision of credit, types and rules of casino games, rules on tipping casino employees and much more. A working knowledge of this document is essential for anyone who wishes to operate a casino in the UK.

Once an operating licence is granted, it can be varied by application, to very the terms of a condition. An operating licence cannot be transferred in the traditional licensing sense but the Act does allow for changes in ‘corporate control’ and other forms of change.

Casino premises licences

A casino operating licence allows the holder to provide casino gambling facilities. This can be done in two ways: remotely, or non-remotely. For obvious reasons, if the business intention is to provide facilities non-remotely then a premises will need to be secured. A separate licence for this premises is required. The application for a premises licence is made to the licensing authority. In England & Wales this is the local authority, whilst in Scotland this is dealt with by licensing boards. They have the same geographical territories as the Scottish local authorities but are a separate legal entity.

Casino licensing in the UK

There is a high-level cap on the number of casino licences available throughout the UK, which is set down in regulations under the Gambling Act 2005. What this means is that it is not always possible to even apply for a new casino premises licence because of this cap. In certain areas of the UK it is simply not possible to seek a new casino premises licence because the law prevents it. A number of casino licences exist across the UK but are not actually in use. These so-called paper licences, can in theory be moved from one premises to another, meaning a new casino could potentially open in one area if an unused paper licence exists in that area, or an existing casino wishes to move to another premises.

What cannot currently be done is to move these licences between local authority areas, although there has been some discussion that the “portability” of these licences should be extended so that an unused licence from London could be used in Inverness, and so on. That is not yet law.

In order to obtain a casino premises licence, you must first be the holder of a casino operating licence. An application is lodged to the licensing authority along with details of the layout of the premises and so on. A site notice would be affixed at the premises and the application advertised in a local paper.

Casino licensing in the UK

Ultimately, the application may go to a hearing although the Act allows a new licence to be granted under delegated powers if there have been no representations. With casino licences so rare, it would not be unusual for a licensing authority to call a hearing even if no representations were received. In considering the application, the licensing authority must “aim to permit” the application. This means that the default position for them is to look to grant the application, which is in stark contrast to alcohol licensing. The authority may take account of the gambling licensing objectives, their own statement of gambling principles (a local gambling policy statement), the Gambling Commission Guidance to Licensing Authorities, the most recent version of which is from September 2012, and also the Code of Practice which relates to that particular form of gambling.

Casino licensing in the UK

Stephen McGowan

The licensing authority may grant or refuse the application. In granting an application they may impose conditions. Unsurprisingly the 2005 Act contains a myriad list of conditions that would automatically apply to any gambling premises licence, and then further, special conditions for casino premises. In addition to this the licensing authority can add their own local conditions.

The Act differentiates types of casino premises by size; regional casinos, large casinos, small casinos, and then a special class known as converted casinos, which relates to licences which were converted from the old gaming laws. There are different conditions which attach to each of these. There is no regional casino in the UK at present so only large, small, and converted casinos are in operation.

The Act allows for casino premises licences to be varied, for example, a change to the layout plan, and also to be transferred from one party to another, although the incoming party would require to hold an operating licence. These application processes can be technical and difficult to conduct correctly so specialist legal advice should be sought.

Monitoring of operating and premises licences

Once either an operating or premises licence is in force, there is an annual fee to pay. The licences last in perpetuity and do not require to be renewed. However, licences can be suspended or revoked where material is brought to the attention of the Gambling Commission or the licensing authority. The process to consider sanctions such as theses is known as a licence review.

Both the Gambling Commission and the local licensing authority have considerable powers at their disposal in these reviews ranging from attaching conditions all the way up to the most extreme outcome, the revocation of the licence. In the case of operating licence reviews, the Gambling Commission also has the power to impose fines.

The Gambling Commission has a number of Compliance Officers who work all over the UK. These officers will generally work with operating licence holders where there are compliance issues, and ultimately can take further steps where non-compliance or offences have occurred. Licensing authorities may employ officers to conduct similar activies, but in respect of the local premises licences rather than the overarching operating licence. Finally, personal licences are also monitored by the Gambling Commission who again have the power to review and ultimately revoke that type of licence

To conclude

The licensing of casinos is perhaps the most complex aspect of licensing law in the UK due to the rarity of application and unique legal and technical know-how that is required. The cost of seeking the correct licences for the first time can be very high and there are ongoing fees to be paid once a gambling licence is in place. New or inexperienced individuals who are not familiar with the casino industry or the law would struggle considerably to obtain these licences without proper guidance and independent legal advice.

For more information please contact Stephen McGowan, on 0141 353 7773 / stephen.mcgowan@TLTsolicitors.com. Visit www.TLTsolicitors.com

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