Another U-Turn: Great Britain's Casino Questions and Other Gambling Issues

GAMING LAW REVIEWVolume 11, Number 6, 2007©Mary Ann Liebert, Inc.DOI: 10.1089/glr.2007.11605

Another U-Turn: Great Britain’s Casino Questions andOther Gambling Issues

DAVID MIERS

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AYEAR AGO, it seemed that the political acri-mony surrounding Great Britain’s casino

question (How many of the new casinos shouldthere be and where should they be located?)had finally been exhausted. There would beone regional casino, and eight each of the new“large” and “small” casinos provided by § 175of the Gambling Act 2005. The Casino Advi-sory Panel, established under § 175(4), had pro-duced a short list of eight locations for the re-gional casino. Much to everyone’s surprise, thepanel’s decision, announced on Jan. 30, 2007,was Manchester, instantly provoking legal andpolitical complaint. It was now for the secre-tary of state to decide whether to agree to thepanel’s choice and to its selection of the loca-tions for the large and small variety.1 There fol-lowed a further round of controversy reminis-cent of the debates of 2004 and 2005, whichresulted in a defeat for the government inMarch 2007 on the statutory instrument thatwould have signalled the bidding round for all17 new casinos. This generated intense specu-lation as to what the government would do toretrieve its plans for them. This the new primeminister, Gordon Brown MP (Member of Par-liament) emphatically answered in July by an-nouncing that there were better ways of achiev-ing regeneration and postponing a decision ontheir future pending a review. Another U-turn.2

Meanwhile, as planned, the Act came fullyinto force on Sept. 1, 2007, and the GamblingCommission, which has no responsibility for

the selection of these casinos’ locations, hascontinued to publish a range of consultationpapers and final guidance documents relatingto the Act’s implementation.3 Over the pastyear or so,4 the commission has taken a stanceon two areas of particular sensitivity, the pro-tection of children and problem gambling, andon the range of permissible advertising of gam-bling facilities. For their part, local authoritieshave been preparing for applications forpremises licenses.5

THE CASINO QUESTION

Locating the regional casino

Established under § 175(4) of the GamblingAct, the Casino Advisory Panel’s role was to

David Miers is a professor of law at Cardiff Law Schoolin the United Kingdom.

1 For the background, see David Miers, Implementing theGambling Act 2005: The Gambling Commission, and theCasino Question, 10 GAMING L. REV. 472–81 (2006).2 “More U turns than a London black cab” was the head-line remarking on the government’s final decision in April2005 approving the number of new casinos under theGambling Act 2005. Nick Mathiason, The Last Spin, THE

OBSERVER (London), Apr. 3, 2005, at 3.3 See GAMBLING COMMISSION, ANNUAL REPORT AND AC-COUNTS, 2006/07, HC Paper 680 (July 11, 2007), at 11–154 The commission publishes very useful regular e-bulle-tins recording its work over the previous month; seeGambling Commission, �www.gamblingcommission.gov.uk� (last visited Oct. 4, 2007).5 Section 25 gives the commission power to issue guid-ance to local authorities, which, by § 153(1), their licens-ing authorities are bound to take into account when ex-ercising their statutory functions; GAMBLING COMMISSION,GUIDANCE TO LICENSING AUTHORITIES (2nd ed., June 2007).A useful book that deals in detail with their statutory du-ties is GAMBLING FOR LOCAL AUTHORITIES: LICENSING, PLAN-NING AND REGENERATION (P. Kolvin ed., 2007) (hereinafter,GAMBLING FOR LOCAL AUTHORITIES).

advise the secretary of state on the locations forall three of the new categories of casino. Fol-lowing its initial announcement in May 2006 ofeight provisional locations for the regionalcasino, there followed in July a further filteringto produce a shortlist for the government’s con-sideration. In preferred order this comprisedthe Millennium Dome in Greenwich (London),Glasgow, Blackpool, Sheffield, Brent (London),Newcastle, Cardiff, and Manchester. Theprospect of the Millennium Dome finallyemerging as the panel’s first choice was pro-foundly disquieting for the government.6 Therewould be loud complaints from the supportersof the bid that for many, including bookmak-ers, was the favored location: Blackpool.7 Therejection of Blackpool’s specific claims in favorof the Millennium Dome would, more broadly,be widely regarded as another example of ametropolitan bias in the distribution of semi-public goods. And this perceived bias in favorof the South as against the North of Englandwould be further accentuated by the Dome’sown controversial history as the earlier benefi-ciary of substantial and additional funds drawnfrom the National Lottery.8

The panel’s final announcement on Jan. 30,2007, was a classic of good news and bad news.The good news for the government was thatthe winner was not the Millennium Dome. Thebad news that the winner was not Blackpoolbut was Manchester, which had figured last inthe 2006 short list. This wholly unexpected out-come presented the government with two po-litically difficult questions.9 It should bestressed that the panel was not charged withmaking decisions, but to advise the secretaryof state for culture, media and sport on the lo-cations for new casinos in Scotland, Wales, andEngland. The primary consideration for thepanel was to ensure that the locations providedthe best possible test of social impact. Subjectto this the panel was also asked:

• to include areas in need of regeneration (asmeasured by employment and other socialdeprivation data) that are likely to benefitin these terms from a new casino, and

• to ensure that those areas selected are will-ing to license a new casino10

The first question, therefore, was whether thesecretary of state, Tessa Jowell MP, would ac-cept the panel’s advice. As Option 2 of the Reg-ulatory Impact Assessment to the Draft Gam-bling (Geographical Distribution of CasinoPremises Licences) Order 2007 simply put it,“she could have decided to set aside their rec-ommendations”. But assuming that the panelhad properly assessed the bids according to thecriteria that the government had set down, itwould have been difficult to envisage thegrounds on which she might have so decided.In the event, considerations of procedural jus-tice led her to accept them. These were that the

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6 Philip Webster & Sam Coates, Ministers fear backlash ifDome is first supercasino, THE TIMES, passim, Jan. 30, 2007,at 4. During late 2006, the position of the MillenniumDome and of its owners’ (AEG) relationship with KerznerInternational was the subject of much adverse specula-tion. As had been the case during the bill’s enactment,there was also a political undercurrent as to appropriate-ness of the meetings that the deputy prime minister, JohnPrescott MP, had held with Philip Anschutz, the Dome’sowner. See Sam Coates, Prescott’s office ‘tried to thwartcasino bid rival’, THE TIMES (London), July 7, 2006, at 2;Dome tops casino shortlist, THE TIMES (London), July 25,2006, at 2; Casino shell under way without gaming licence,THE TIMES (London), Aug. 21, 2006, at 8; Sam Coates &Vik Iyer, Casino not done deal for Dome, says inquiry chief,THE TIMES (London), Aug. 31, 2006, at 7; Sam Coates, Domeowner must end its deal with casino operator, THE TIMES (Lon-don), Sept. 4, 2006, at 2; Jill Sherman, Casino plans thrownin chaos, THE TIMES (London), Sept. 15, 2006, at 26.7 See, e.g., Lorna Martin, Blackpool . . . last roll of the dice,THE OBSERVER’ passim Jan. 28, 2007, at 16; Nick Mathia-son, Queen of Las Vegas brings her winning streak to Britain,THE OBSERVER (London), Jan. 28, 2007, at Business Sec-tion 5.8 Attracting substantially fewer visitors than had beenforecast, the distributing body, the Millennium Commis-sion, made four grants totalling £179 million to the Domein addition to the original £449 million. Many regardedthese grants as a scandalous waste of public money. SeeNATIONAL AUDIT OFFICE, THE MILLENNIUM DOME, 1999–2000, HC 936; WINDING-UP THE NEW MILLENNIUM EXPERI-ENCE COMPANY LIMITED, 2001–02, HC 749.9 Philip Webster & Sam Coates, Against all odds: Manches-ter hits the jackpot with first supercasino, THE TIMES (Lon-don), Jan. 31, 2007 at 6–7.10 The panel’s terms of reference were finally agreed inAugust 2005. Casino Advisory Panel, Call for Proposals31 January 2006 ¶ 1, available at �http://www.culture.gov.uk/cap�. See Thirteenth Report of the Select Com-mittee on Merits of Statutory Instruments, Draft Gam-bling (Geographical Distribution of Casino Premises Li-cences) Order 2007 (Session 2006-07, H.L. 67-I, Mar.20,2007), 12 (hereinafter Draft Gambling Order 2007).

panel’s processes were clear and transparentand the recommendations robust; that she hada duty to all the licensing authorities to main-tain the integrity of the independent process;and that it was “only fair” to them that she con-tinued to abide by it.11

But many MPs remained wholly uncon-vinced.12 Some considered that problem gam-bling would increase, notwithstanding thepanel’s own conclusion. It had “gained theclear impression [from the Manchester bid] thatany adverse social problems, notably the prob-lem of ambient gambling arising from the es-tablishment of a casino in this very deprivedarea, would be tackled in a thorough and work-manlike manner.”13 Others considered that thedecision was vulnerable to legal challenge onthe basis of competition law, or simply pre-ferred Blackpool.14 The government had, ofcourse, recognized that its wider casino policywas “likely to have an impact on competition.”Only the regional casino would be permittedto site Category A machines (unlimited stakesand prizes) on their premises and all three ofthe new class of casino would, unlike the ex-isting casinos, be able to offer gambling mediaother than casino games. The government wassatisfied that given the widespread concernabout their social impact it was right to limitthe new entitlements to these 17 casinos, andthat in any event it would be open to any op-erator of an existing casino to apply for one ofthe new licenses.

These reasons did not satisfy the casino in-dustry, and the inevitable legal challenge wasmade jointly by the two principal trade associ-ations, the British Casino Association and theBritish Amusement Catering Trades Associa-tion, and by three commercial organizations.This was an application for a judicial review ofthe secretary of state’s decision to make the nec-essary Commencement Orders bringing sec-tion 175 into force.15 The applicants advancedthree arguments (all of which failed) in supportof their substantive complaint that they wouldsuffer a competitive disadvantage once the 17§ 175 casinos were open for business:16

1. The secretary of state wrongly believed thatshe had no discretion under the 2005 Act to

ameliorate the applicants’ position: thejudge rejected this, noting that she had infact exercised her discretion under the Actto alter their casino entitlements.

2. They had not been consulted: but the judgefound that “the facts amply demonstrated”that there had been an opportunity for theapplicants to put their views prior to the leg-islation being made.

3. The secretary of state had been in error inthinking that very few of the existing casi-nos could ever qualify even as “small” casi-nos under the Act, and had thus had exer-cised her powers on a false factual basis:Langstaff J held that, even if she was factu-ally mistaken, her mistake was irrelevantsince she was “bound to recognise, given the2005 Act, that existing and new casinos werenot in the same position.”17

The second question concerned the prospectof the government successfully negotiating thevotes in both houses of Parliament for the pur-pose of giving effect to the panel’s advice. Thevotes would not be on a bill but upon a draftstatutory instrument made under § 175(4) ofthe 2005 Act. By virtue of § 355(6), an order

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11 Draft Gambling (Geographical Distribution of CasinoPremises Licences) Order 2007, Regulatory Impact As-sessment.12 Eighty-three Labour MPs signed a Commons motionexpressing “surprise and regret” at the choice of Man-chester; Greg Hurst, Labour rebellion threatens first super-casino, THE TIMES (London), Mar. 26, 2007, at 23. MP re-volt may force Manchester casino review, THE OBSERVER, Feb.25, 2007, at 13.13 CASINO ADVISORY PANEL, FINAL REPORT OF THE CASINO

ADVISORY PANEL ¶ 182 (Jan. 30, 2007), available at �http://www.culture.gov.uk/cap/reports.htm�.14 Russell Jenkins, The lights go out on Blackpool’s grand idea,THE TIMES (London), Jan. 31, 2007, at 9; Editorial, RiskyBusiness, THE TIMES (London), Jan. 31, 2007, at 14; SamCoates, Supercasino licence for Manchester is challenged byMPs, THE TIMES (London), Feb. 8, 2007, at 2.15 Gambling Act 2005 (Commencement No. 6 and Tran-sitional Provisions) (Amendment) Order 2007, SI 2007/1527.16 R (on the application of the British Casino Associationand others) v Secretary of State for Culture, Media andSport [2007] EWHC 1312 (Admin). Judgment was givenon June 11, 2007.17 R (on the application of the British Casino Associationand others) v Secretary of State for Culture, Media andSport [2007] EWHC 1312 [92].

made by the secretary of state under § 175(4)requires a positive vote by each house (affir-mative resolution procedure). This, in turn,generated two main subissues. First, the in-strument would seek to give effect to all 17 newcasinos, not just the regional casino, and, as adraft order cannot be amended but stands orfalls in its entirety, a successful objection toManchester would lose the unobjectionable 16.Second, whereas the government was in a gen-erally stronger position to control its own mem-bers in the Commons, a coalition of peers in theHouse of Lords could defeat the order. And inboth Houses there was the prospect of a diffi-cult debate.

An important feature of proceedings on draftstatutory instruments in the House of Lords isthe close scrutiny that is given to them by theSelect Committee on Merits of Statutory In-struments. This committee has no power toveto or delay a draft order, but following its ex-amination, which may involve the taking of ev-idence, the committee publishes a report for theconsideration of the House; this is of obviousvalue when a debate is to take place. In this in-stance, the report was of particular importance,drawing the draft “to the special attention ofthe House on the ground that it gives rise to anissue of public policy likely to be of interest tothe House and may imperfectly achieve its pol-icy objectives.”18 This is a polite way of beingcritical.

Leaving aside some questions concerning thepanel’s methodology, which included the clar-ity of a ranking system that had produced aneventual winner that had progressed from thebottom of the regional short list to the top, therewere two main reasons why the committeereached its conclusions. First, it was not per-suaded that the panel’s recommendationswould meet the licensing objectives “which re-quire the prevention of harm from gam-bling[.]”19 The panel’s own statement of the“gold standard” for a regional casino as re-sulting in economic growth made no reference“to any of the Act’s objectives of preventingharmful effects to the community.”20 It wasquite clear that the panel was aware of theseobjectives, but its interpretation of the sift cri-teria did not give high priority to them. Sec-ond, the committee was not persuaded that the

panel had met its prime objective, the selectionof locations that provided the best possible testof social impact. “In essence the Panel was se-lecting candidates for a research project.”21 Inthe panel’s view, a key aspect for the viabilityof this test would be whether the social impactscould be traced. But the difficulty to which itsrecommendation for the regional casino gaverise was that while it might be relatively easyto conduct such an exercise in East Manches-ter, there was no guarantee that the licensingauthority would in fact approve a premises li-cense in that deprived area. It could quite prop-erly award the license to any site within its ju-risdiction. Such a decision would inevitablyinvalidate the test.22

The draft order fell to be considered by bothHouses of Parliament on March 28. A three-linewhip (in effect, an order to vote as the govern-ment wishes) resulted in a government major-ity of 24 in the Commons;23 but the Lords coali-tion, in which the Archbishop of Canterburywas prominent, was too strong, and the orderwas defeated by three votes.24 A key obstaclefor the government was the Lords’ refusal toaccept the proposition that the approval of theregional casino (and the 16 other new venues)was to be equated with a wholly different mat-ter of policy, urban regeneration.25

The loss of the draft order prompted muchspeculation as to what the government woulddo to retrieve a policy that had already caused

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18 Draft Gambling Order 2007, supra note 10. ¶ 39.19 Draft Gambling Order 2007, supra note 10 para 35.20 Draft Gambling Order 2007, supra note 10 para 9.21 Draft Gambling Order 2007, supra note 10 paras. 20 .22 Draft Gambling Order 2007, supra note 10, at ¶¶ 35–39.23 458 PARL. DEB., H.C. cols 1553-97 (Mar. 28, 2007).24 Sam Coates & Greg Hurst, Supercasino plan is dealt a newblow in narrow Lords defeat, THE TIMES (London), Mar. 29,2007, at 2.25 “My objection rather is that the sleight of hand by thewhole business of the gambling industry has become cou-pled with the regeneration theme, in ways which—I haveto be candid—I find quite baffling”; Dr. Rowan Williams,690 PARL. DEB., H.L. col. 1637 (Mar. 28, 2007). For his ear-lier comments, see Ruth Gledhill, This isn’t a path to cityrevival, says Archbishop, THE TIMES (London), Jan. 31, 2007,at 9, and a more lighthearted commentary, Ann Trene-man, My money’s on God in a fight with Mammon, THE TIMES

(London), Mar. 29, 2007, at 10. See also the comments ofa prominent cross-bencher in the House of Lords,Baroness Warnock, We were right to sink the supercasino,THE OBSERVER (London), Apr. 4, 2007, at 31.

it considerable political grief. There were sug-gestions that the parliamentary Joint Commit-tee that had examined the Draft Gambling Billin 2003/04 should be revived to examine thematter,26 and that the Department for Culture,Media and Sport might propose regional casi-nos for both Manchester and Blackpool as ameans of placating their parliamentary sup-porters.27 Neither materialized.28 Others sug-gested that it was time to fold,29 and it was clearthat the government had little appetite for fur-ther encounters that would cost political en-ergy.30 Instead, at Prime Minister’s Questionson July 11, Gordon Brown MP conceded thatthis was an issue on which there was no par-liamentary consensus. Together with the pub-lication of the 2007 Gambling Prevalence Sur-vey, he announced that there would be areview to see whether there may be “a betterway of meeting . . . economic and social needsthan the creation of super-casinos.”31 This wasnot perhaps so great a surprise given his ear-lier comments (as Chancellor of the Exchequer)following the panel’s announcement. Thesewere, first, to the effect that he saw no chanceof the government reverting to its 2005 pro-posal for eight regional casinos. Second, and ofgreater significance, he did not, despite thegovernment’s 2004 Statement of National Pol-icy,32 see the single venue as an element in apilot exercise on the basis of which othervenues might be approved if the resultsshowed no increase in problem gambling.33 Afurther indication of what one commentatorhas described as his “personal distaste” forgambling was his announcement that the taxrate of 50 percent on the regional casino’s grossgaming yield and on any “large” casino’s profitin excess of £ 9,360 million. The starting rate of2.5 percent for smaller casinos was abolishedwith effect from Apr. 1, 2007, and the 12.5 per-cent rate on gross gaming yield over £3,673million was increased to 15 percent. The in-dustry viewed these changes with dismay.34

The prime minister’s decision to abandon theGambling Act casinos naturally brought gloomto the supporters of and investors in the Man-chester bid and more generally to those whoconsidered the policy as a whole a desirablemove. Opponents, both of Manchester and ofthe general expansion of gambling opportuni-

ties, equally naturally welcomed it, and theDaily Mail, which had led media opposition be-ginning with the Draft Bill in 2003, publisheda triumphant front page.35 The matter awaitsthe government’s further decision. The conse-quence of all this is that the “prime objective”that was set for the Casino Advisory Panel, toselect locations which would provide the “bestpossible test” of the social impact of the newbreed of casino, is a virtual nonstarter. Evenwith the regional casino, some expert opiniondoubts whether 17 new casinos would be suf-ficient to provide the evidence that the gov-ernment was seeking.36 But in the absence oflegislative approval the test is for the momentin abeyance.37

The other casino question

But there is more than one casino questionfor Great Britain. The political and media focus


26 This suggestion was made by Baroness Golding, whohad herself been a member of the Joint Committee on theDraft Gambling Bill in 2003/04.27 Nick Mathiason, Blackpool may be winner after all, THE

OBSERVER (London), May 10, 2007, at Business.28 The notion that there might be two, which had beenraised at the time of the vote on the draft order, was neverlikely to succeed; Philip Webster & Sam Coates, Commonsrebellion threatens to scupper supercasino plans, THE TIMES

(London), Mar. 28, 2007, at 2.29 Editorial, THE TIMES (London), Mar. 30, 2007, at 20.30 Sam Coates, Why Labour took a legal gamble, THE TIMES

(London), Mar. 29, 2007, at 11.31 462 PARL. DEB., H.C. col. 1438 (July 11, 2007). See SamCoates, All bets are off as Brown decides against gambling onsupercasino, THE TIMES (London), July 12, 2007, at 6.32 DEPARTMENT FOR CULTURE, MEDIA AND SPORT, CASINOS:STATEMENT OF NATIONAL POLICY ¶¶ 5–6 (Dec. 16, 2004).The policy of limiting the number of casinos with the newgaming machine entitlements for the purpose of under-taking a social impact assessment was repeated in re-sponse to one of the potential challenges to the Man-chester decision. See Sam Coates, Supercasino licence forManchester is challenged by MPs, THE TIMES (London), Feb.8, 2007, at 2.33 Philip Webster & Sam Coates, Against all odds: Man-chester hits the jackpot with first supercasino, THE TIMES (Lon-don), Jan. 31, 2007, at 6.34 Sam Coates, Tax rises may leave few operators willing togamble on supercasino, THE TIMES (London), Mar. 22, 2007,at 15.35 Nick Mathiason, ‘Incredible hypocrisy’ of Mail web bettingsite, THE OBSERVER(London), July 15, 2007, at Business 1.36 GAMBLING FOR LOCAL AUTHORITIES, supra, at ¶ 25.62.37 See GAMBLING COMMISSION, ANNUAL REPORT AND AC-COUNTS 2006/07, supra, at ¶¶ 9, 26.

on the location of the supercasino has tendedto obscure a second and equally importantquestion. The 2005 Act creates only 17 new casi-nos. If and when they open for business, theywill take their place in a market in which therewere 138 1968 Act casinos operating in April2007. Its Report for 2005/06 showed that thecommission had received 79 new applicationsunder the old law prior to the cut-off date inApril 2006.38 Of these, by Mar. 31, 2007, 15 hadbeen withdrawn and 45 certificates of consentissued; 19 remained undecided.39 It is thereforeunlikely that the figure of 250 old style casinosmentioned in the 2005/06 report will bereached, but the potential for a total of over 200remains a possibility.

The result of this grandfathering process pre-sents a number of difficult and contradictoryquestions for the government, apart from theinevitable headlines decrying this develop-ment.40 Demographic change in the Britishpopulation, in particular in the spread of newurban developments, meant that some increasein the 140 or so casinos that had continued inbusiness between 1970 and 2005 (if under dif-ferent management) was justifiable. Someyears ago the Gaming Board effectively aban-doned the “demand” test unless a regulatoryissue was raised,41 which means that applica-tions are a matter of commercial judgment.

The possible addition of perhaps 60 to 70new premises challenges two of the govern-ment’s long-held policies for commercial gam-bling. First, it challenges its preference for therestrained modernization of the commercialgambling market. In the debates on the bill, theDepartment for Culture, Media and Sport re-peated that it did not wish to see a prolifera-tion of casinos. Moreover, its plans for the newbreed of small, large, and the regional casinoswere based on the notion that casino develop-ment would be concentrated in a limited num-ber of locations.

Second, and leaving aside the environmen-tal impact (accentuated by more relaxed ad-vertising regulations), an increase in casinoschallenges the notion that even in the absenceof a demand criterion, there might come a pointwhen the country has “enough” gambling op-portunities. The number of opportunities maybe self-limiting as a simple matter of market ac-

tivity, but it is already the case that the De-partment for Culture, Media and Sport has de-cided what are “enough” Category B, C, and Dmachines in their various locations and whatare “enough” prize and stake limits.42

Third, the expansion in the smaller 1968 Actcasinos challenges the fiscal basis on which thegovernment expects the new breed of casino togenerate economic growth. Assume that as amatter of policy the government aims to pro-vide gambling opportunities across the coun-try of a quantity N, which it considers is“enough,” and enough to generate planninggain where they are located. If it is also the in-tention to produce substantial regeneration,then it might be commercially and fiscally bet-ter to consolidate a large proportion of N in oneplace: a supercasino. But that regeneration islikely to be undermined where the consump-tion of these opportunities is dissipated acrossmany smaller outlets. Only a very small num-ber of the 1968 Act casinos will be larger thanthe new “large” category, but they cannot of-fer the alternative media available to that cate-gory and retain only their existing machine en-titlement of 20 Category B to D machines.43 Aleading expert, Professor Peter Collins, sug-gests that the “large” and “small” casinos willat most contribute a modest planning gain,while the additional 1968 Act casinos are un-likely to contribute any at all.44

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38 There were another 25 nonoperating licenses in Apr.2006. GAMBLING COMMISSION, ANNUAL REPORT, 2005/06,HC Paper 1226 (July 2006), at ¶ 3.2339 GAMBLING COMMISSION, ANNUAL REPORT AND ACCOUNTS

2006/07, supra, at ¶ 25.40 Anthony Barnett, Revealed: march of the new casinos, THE

OBSERVER (London), Jan. 28, 2007, at 1.41 GAMBLING COMMISSION, ANNUAL REPORT 2005/06, supra,¶ 3.15. Section 72 of the 2005 Act prohibits the commis-sion from taking into account either the expected demandfor facilities or the area in which they are to be locatedwhen it is deciding whether to grant an operating license.There is some evidence that licensing justices operatingunder the old law have been taking demand into account,with the result that many applications for gaming licenseshave been refused. GAMBLING FOR LOCAL AUTHORITIES,supra, at ¶ 7.53.42 See GAMBLING COMMISSION, GUIDANCE TO LICENSING AU-THORITIES, supra, pt. 16 (setting out the permissions andrestrictions on machines in detail).43 Id. at ¶ 16.14.44 GAMBLING FOR LOCAL AUTHORITIES, supra, at ¶ 28,71.

The social and economic impact of increasedcasino activity

Planning permission and premises licenses

Apart from the specific question whether anyplanning gain is to be derived from the 16 newcasinos, a broader question concerns any casino’ssocial and economic impact on the area in whichit is located, which includes the new 1968 Actpremises. One of the consequences of the earlierconcern about “stealth casinos,” that is, the con-version of leisure premises such as a cinema ora concert hall into a casino, was the specificationin April 2006 of casinos as falling outside thestandard Use Class system. Thus any proposalto develop existing casino premises or to buildanew must be considered as a new planning useagainst the full range of tests that planning au-thorities must apply to any proposed develop-ment. The policies from which these tests aredrawn are both local and national in their reach,and, for “town center uses,” set five tests that thelocal planning authority must address.

One of these is the impact of a casino. This typ-ically includes physical improvements to the sitein which it is located, increased consumer spend-ing in nearby shops and services, direct em-ployment opportunities within the casino, andsuch indirect gains as the casino’s purchases oflocal services as catering. Economic impacts ofthis kind are matters for the local authority’splanning body and have nothing to do with itslicensing authority. Indeed, there is a striking dif-ference between the decision on planning per-mission and the decision on the premises license.Whereas the planning authority is also requiredto consider the “need” for the casino, by § 153(2)of the 2005 Act the licensing authority is (as by § 75 is also the case for the commission) expresslyforbidden to have regard to the expected de-mand for the proposed facilities. Neither may thelicensing authority consider the outcome of aplanning application (§ 210).45

Unwanted social impact

The Gambling Act 2005 commences with thethree licensing objectives that form the bedrockon which the Gambling Commission is to un-dertake its work and which operators must re-spect and reflect in their commercial practices.

The first two objectives are preventing gamblingfrom being a source of crime or disorder, beingassociated with crime or disorder, or being usedto support crime, and ensuring that gambling isconducted in a fair and open way. These havelong been regulatory objectives for the casinomarket, though they have until now not hadstatutory expression. Broadly speaking, they areto be achieved in three ways. The first is by thestrict application and enforcement of the proce-dures for operating and personal licenses con-tained in Part 5 of the Act. The commission’s so-cial responsibility code requires holders ofoperating licenses to provide clear statements totheir customers about the rules of the games of-fered, and, more generally, such evidence as willsatisfy the commission that their games are notunfair.46 The second is a matter for the planningauthorities, which may take negative impacts ofthis kind into consideration when dealing withplanning applications. The third is for the licens-ing authorities to determine what conditions theywill attach to a premises license (§ 169), whichmay include conditions as to door supervision forthe purpose of maintaining order.

In addition to these regulatory controls arestandard law enforcement issues associatedwith crime and disorder. Some concern hasbeen expressed that the (intended) popularityof the new breed of casinos will simply gener-ate more opportunities for crimes of acquisitionagainst the person, aggravated by the earlierrelaxation in the general liquor licensing laws.This has in turn raised the question whethercurrent resource allocations to general policingwill be sufficient to the task.47

THE WORK OF THE GAMBLING COMMISSION

Operating, personal, and premises licenses

The structure of the new law is, in essence,very simple. By § 33, it is an offense to provide


45 Note that a further licence must be granted under theLicensing Act 2003 if the premises are to be able to selland serve alcoholic drinks.46 GAMBLING COMMISSION, LICENCE CONDITIONS AND CODES

OF PRACTICE, June 2007, Part II, § 3.47 Anthony Barnett, Super-casino ‘will spark crime-wave’ –secret report, THE OBSERVER, (London), Jan. 14, 2007, at 1.

gambling facilities anywhere in Great Britainunless the operator holds the relevant operat-ing and personal licenses and the premises arelicensed, or unless the gambling that is offeredis excepted or exempt under another part of theAct. There are many exemptions, and as onewriter has observed, “so many of them applyto the most numerous forms of establishmentproviding gambling – pubs and clubs – that thepractical law of gambling in Great Britain mayproperly be understood as a law of exemp-tions.”48

Much of the commission’s work over the pasttwo years has focused on the conditions thatwill attach to the three licenses that operatorsmust hold who are not excepted or exempt ifthey are lawfully to provide gambling facili-ties.49 These are operating and personal li-censes, which are granted by the commission,and premises licenses, which are granted by thelocal licensing authority. To all three types oflicense conditions may or must attach, andthese conditions are themselves of differenttypes. Some are incorporated simply by virtueof a provision in the Act; an example is § 82 bywhich the social responsibility provisions thatthe commission sets down in a § 24 code ofpractice automatically become license condi-tions.50 Another is provided by § 178. This pro-vides that where there is a condition as to doorsupervision attached to a premises license, ifthe person who is “guarding the premisesagainst . . . outbreaks of disorder” is requiredto be licensed under the Private Security In-dustry Act 2001, then that requirement itself be-comes a license condition. By § 75, operating li-censes may carry general conditions that thecommission imposes, either as to each licenseor class of license. These general conditionsmay be mandatory, as in the case of the condi-tions that the commission must attach to a lot-tery operating license under § 99. Both operat-ing and premises licenses may be subject toconditions individual to the license (§§ 77 and169); last, there are in the case of premises li-censes both mandatory (§ 167) and default con-ditions (§ 168).

Compliance with these and the many otherstatutory and code of practice requirementswill be resource intensive for the industry,which also bears the burden under § 122 of

being required to provide information to thecommission concerning “licensed activi-ties”.51

Protecting children and the vulnerable

The third of the Act’s licensing objectives is“protecting children and other vulnerable per-sons from being harmed or exploited by gam-bling.” One of the underlying principles is thatthe robust implementation of the statutory cri-teria for the grant of an operating license willprovide some guarantee that this objective willbe met, as will the general licensing conditions,in particular as they address social responsi-bility. The conditions that attach to premises li-censes likewise address both groups in detail,but it should be noted that their protection is ageneral matter that relates to the principles bywhich the licensing authority will determineapplications. Under § 166, a licensing author-ity may “resolve not to issue casino premiseslicenses[.]” With that exception, the authoritymust consider any application properly madeunder the Act,52 and do so in conformity,amongst other matters, with its own manda-tory § 349 statement of principles. These prin-ciples should explicitly address the licensingobjectives, and may, for example, take into ac-count the location of the premises where thatis relevant to this third objective. So the state-ment might indicate that the authority considercarefully applications where the premises arelocated “very close to a school or a centre forgambling addicts[.]”53 The authority would beacting unlawfully were it to say that it would

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48 GAMBLING FOR LOCAL AUTHORITIES, supra, at ¶ 9.5.49 It would be a full-time job to respond to its many con-sultation papers. The obligations are less onerous forsmall-scale operators; see § 129 and Gambling Act 2005(Definition of a Small-scale Operator) Regulations 2007,SI 2007/3266.50 Gambling Act 2005 (Operating Licence Conditions)Regulations 2007, SI 2007/2257.51 Gambling Act 2005 (Provision of Information) Regula-tions 2007, SI 2007/319.52 The authority must also take into account any repre-sentations made in respect of the application (§§ 161–62),but it may not reject an application simply because it orthe representations object on moral grounds. GAMBLING

COMMISSION, GUIDANCE TO LICENSING AUTHORITIES, supra,at ¶ 5.26.53 Id. at ¶ 6.13.

for these reasons never grant a license; it mustbe able to exercise its discretion.

Children

The 2005 Act is explicit about the safeguardsthat operators must observe with regard to gam-bling by children. With limited exceptions, theintention is that children and young peopleshould not be permitted to gamble and shouldbe prevented from entering adult-only gamblingpremises. The controls on children’s and youngpersons’ access to gambling facilities arise fromthree broad sources within the legislation.

The first is Part 4 of the Act, which creates aminicode regulating the extent to which chil-dren (those under 16 years of age) and youngpersons (16–17) may become involved in gam-bling, whether in terms of participation, entryinto licensed premises, or employment. Withthe exception of the National Lottery and thefootball pools (for young persons) and Cate-gory D machines (for both groups), § 46 pro-vides that it will be a criminal offense to invite,cause, or permit a child or young person togamble. The novel provision in § 83, which pro-hibits the operator both from giving a prize toa child and from demanding its return if he has,“effectively means that the operator cannot winand almost certainly loses by permitting chil-dren to gamble unlawfully.”54

The second stems from provisions of the so-cial responsibility code issued under § 24. Thisattaches conditions to operating licenses, whichare set out in the commission’s completed Li-cence conditions and codes of practice published inJune 2007.55 They require operators to put inplace policies and procedures to prevent un-derage gambling and to monitor their effec-tiveness. These procedures must include meth-ods for identifying those under 18 years of ageand provisions for staff training. One of theways in which operators can demonstrate acommitment to this code is by investing in orsupporting other organizations’ efforts to edu-cate or assist young people. A good example isthe education pack promoted by the charityTacade that has been developed by Notting-ham Trent University with financial supportfrom the Responsibility in Gambling Trust,56

which is itself funded by the industry.57

In addition to these general requirements theAct contains specific provisions concerningchildren’s access to casino premises and trackareas. Section 176 obliges the commission to is-sue at least one code of practice “about accessto casino premises by children and young per-sons”; this code is also set out in the Licence con-ditions and codes of practice. This requires the op-erator to take specified steps to exclude themfrom “prohibited places or premises”; that is,anywhere that would constitute an offence un-der § 47. The commission has identified a num-ber of minimum standards. Some are of gen-eral application and relate to such matters asproof of identification, signage, and door su-pervision and internal segregation of gamblingfrom other facilities provided on the premises.Others are very particular: heavily used en-trances will require sufficient designated su-pervisors (§ 176(20(b)(i)) to make a consideredjudgment about the age of everyone attempt-ing to enter the casino.

The second specific provision is § 182. Thisincorporates into any premises license in re-spect of a track the condition that the licenseeshall ensure that children and young personsare excluded from any area where betting fa-cilities are provided or any gaming machineother than one in Category D is situated.58 Un-like operators holding betting operating li-censes, those holding track premises licensesare not subject to the social responsibility code.


54 GAMBLING FOR LOCAL AUTHORITIES, supra, at ¶ 9.36.55 GAMBLING COMMISSION, LICENCE CONDITIONS AND CODES

OF PRACTICE, supra, pt. II, ¶ 2.2 To aid licensees’ aware-ness of their requirements, the social responsibility pro-visions are displayed in salmon pink boxes, to distinguishthem from “ordinary” conditions.56 Tacade is a well-established organization that ad-dresses issues concerning young people’s health. Formore information, go to �http://www.tacade.com�. YouBet! Gambling education materials for young people aged 11-16 years stands alongside Tacades earlier materials on sex-ual health, smoking, and alcohol. School children study-ing advanced level psychology will be offered a studyelement on fruit machine gambling and its addictive ap-peal. Gambling A level, TIMES (LONDON), July 31, 2007, at 4.57 Responsibility in Gambling Trust, About Us, �http://www.rigt.org.uk/� (last visited Oct. 5, 2007).58 Gambling Act 2005 (Exclusion of Children from TrackAreas) Order 2007, SI 2007/1410. By § 353, a “track”means a horse-race course, dog track ,or other premiseson any part of which a race or other sporting event is totake place.

Nevertheless, the commission expects thattrack license holders will adopt socially re-sponsible practices “commensurate with thevolume and intensity of gambling that occurson their premises.”59 There are some issues af-fecting the financial health of the horseracingindustry that are not pursued here.60

The third source stems from the grant of andconditions that may attach to the premises li-cense. In essence, children and young personsare not permitted to enter casinos, bettingshops, or adult entertainment centers. Familyentertainment centers, pubs, and clubs with aclub premises license may admit persons un-der 18, but must exclude them from playing onCategory B or C machines, or, in the case ofbingo clubs, the game itself.61 When consider-ing the license application, the licensing au-thority should ask for plans of the premises, sothat it can be sure that children in adjoiningpremises cannot accidentally enter them or ob-serve persons gambling.62 Once granted, the li-cense is subject to mandatory conditions.63 Forexample, it is a mandatory condition of thepremises licenses for all of these venues thatthey display prominent notices prohibitingpersons under 18 years of age from them, orprohibiting their use of machines (other thanCategory D). In the case of premises to whichunder 18s are permitted access, but who mustbe excluded from playing on Category B or Cmachines, it is a mandatory condition that themachine area be amenable to surveillance di-rectly by staff or by CCTV. Where gamblingand nongambling premises interconnect, nei-ther may there be any direct entrance betweenthem.

Underage gambling is an issue that is notconfined to premises falling within the Gam-bling Commission’s jurisdiction. The NationalLottery Commission, the regulator of the Na-tional Lottery, likewise operates under a statu-tory duty similar to that to which the GamblingCommission is subject, concerning in its casechildren’s access to Lottery products. The Na-tional Lottery Commission is generally unaf-fected by the Gambling Act, but each commis-sion must consult the other on matters ofcommon interest; a ready example is keepingchildren out of gambling.64 The National Lot-tery Commission has maintained its own com-

missioned research into underage play. Itsmost recent research published in 2006 showeda decline in underage play on the Lottery.65

There has also been a longstanding license re-quirement that the operator conduct visits toretailers to test their resistance to under agepurchase requests. In April 2007, the presentoperator, Camelot,66 published the highest

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59 See GAMBLING COMMISSION, GUIDANCE TO LICENSING AU-THORITIES, supra, at ¶ 20.106.60 Two issues continue to cause some difficulties forhorseracing: one internal and one external. The internalissue concerns the strength of the grip exerted by theindustry’s Horseracing Regulatory Authority on somejockeys’ involvement in corrupt betting practices. SeeHORSERACING REGULATORY AUTHORITY, INSIDE INFORMATION

INQUIRY, available at �http://www.thehra.org/� and R.Burger & W. Dodsworth, Horse whisperers, 157 NEW L.J.1102 (2007) (comment). The HRA has clarified one mat-ter in its definition of “inside information”, but the im-plementation of its new stance has created tension withinthe industry. See Alan Lee, Tension growing as wave of sus-pensions hits weighing room, THE TIMES (London), June 15,2007, at 92; Julian Muscat, Professionals given betting code,THE TIMES, 5 July 2007: 70; and Lydia Hyslop, Leniency ofdisciplinary panel halts progress on corruption, THE TIMES

(London), July 11, at 60. The external issue concerns thecommercial threats posed by the general increase in gam-bling media. See Lydia Hyslop, Getting the right messageacross on gambling across is vital for future, THE TIMES (Lon-don), July 18, 2007, at 59, and Casino machines pose threatto future, THE TIMES (London), Aug. 15, 2007, at 51.61 See GAMBLING COMMISSION, GUIDANCE TO LICENSING AU-THORITIES, supra, at ¶¶ 18.4, 19.4, 20.39, 20.43, 21.2, 22.2,27.7.62 See id. at ¶ 5.20.63 Gambling Act 2005 (Mandatory and Default Condi-tions) (England and Wales) Regulations 2007, SI 2007/1409.64 Recognizing that their regulatory concerns will inter-sect, § 31 provides that the Gambling Commission mustconsult the National Lottery Commission where it be-comes aware of a matter concerning the exercise of itsfunctions on which the National Lottery Commission islikely to have an opinion. Schedule 3 to the 2005 Actamends § 4 of the National Lottery etc Act 1993 Act toimpose a reciprocal duty on the National Lottery Com-mission.65 NATIONAL LOTTERY COMMISSION, REGULATING THE NA-TIONAL LOTTERY, ANNUAL REPORT AND ACCOUNTS, 2006/07,HC 826 (2007), at ¶ 29.66 On Aug. 31, 2007, the National Lottery Commissionannounced that Camelot Group plc had won the thirdlicense to run the Lottery with effect from Feb. 1, 2009,with 10 years’ duration. See National Lottery Commis-sion, �http://www.natlotcomm.gov.uk�. There was oneother bidder, Sugal and Damani UK Ltd. This two-horserace (the same number of runners and riders as bid forthe current license) can hardly have been the robust com-petition that the commission had sought.

level of refusal rate (94 percent) since its Oper-ation Child exercise was launched in 1999.67

Problem gambling

The likely impact of the changes that will bebrought about by the Act to the population ofproblem gamblers in Great Britain continues tobe a contentious matter. Throughout its gene-sis, the Act’s opponents regularly predictedthat there would be an increase from the rela-tively low number of problem gamblers esti-mated in 1999 to be between 0.6 and 0.8 per-cent of the adult population; that is, between250,000 and 370,000 persons.68 A follow-up tothe Gambling Prevalence Survey based on arandom sample of 9,003 adults was commis-sioned in 2005 and was published on Sept. 19,2007.69 Contrary to some earlier speculation tothe contrary,70 the report concluded that ac-cording to the Diagnostic and Statistical Manualof Mental Disorders, 4th Edition (DSM IV), mea-sure, “the problem gambling prevalence rate[in Great Britain] was the same as it had beenin 1999 (0.6%).” This equates to around 284,000adult persons.71

The survey found broadly similar rates ofparticipation to those in 1999 concerning thenow traditional forms of gambling. Overall, 68percent of the adult population had partici-pated in some form of gambling in the past year(72 percent in 1999). Participation in the Na-tional Lottery Draw remained the most popu-lar activity (57 percent), albeit a decrease since1999 (65 percent). Scratchcards (20 percent),betting on horse races (17 percent), and play-ing slot machines (14 percent) were the nextmost popular. Participation in the footballpools, once the principal gambling medium butwhich has suffered substantially since the in-troduction of the National Lottery in 1994, hassunk further, from 9 percent to 3 percent. Thisnow has about the same participation rate asonline gaming and casino gambling (4 percent).

Some comments may be made about the sur-vey’s findings and their relationship with thewider implications of the Gambling Act. First,the 2007 survey had to be adjusted to capturedata on engagement in new forms of gamblingthat have become available since 1999. Theseare playing fixed odds betting terminals

(FOBTs) in a bookmaker’s (3 percent), onlinebetting with a bookmaker (4 percent), and useof a betting exchange (1 percent). Despite theirlow participation levels, the use of both FOBTsand betting exchanges generated high levels ofproblem gambling; 11.2 percent and 9.8 percentrespectively of respondents. Both of these gam-bling media pre-date the Act and participationlevels are therefore not attributable to it; thequestion is whether the new regime’s approachto social responsibility will stabilize or reversethese levels.

Second, and notwithstanding the media at-tention that it receives, only 3 percent of re-spondents engaged in remote gambling oncasino and poker sites. So far as this level pre-sents the potential for high levels of problemgambling, the difficulty is that as the operatorsare all located outside the United Kingdom,there is nothing that the Gambling Commissioncan do; it simply has no jurisdiction over them.It has long been the government’s policy to cre-ate a regulatory space in which overseas oper-ators can “operate in a proper regulatoryframework that protects the interests of indi-vidual players and ensures that children can-not play on the internet”,72 and which therebybrings them the kudos of being so regulated.The question for remote gambling operators iswhether the apparent incentive of being regu-lated by “the most modern and the toughestregulatory regime for gambling anywhere in


67 NATIONAL LOTTERY COMMISSION, REGULATING THE NA-TIONAL LOTTERY, ANNUAL REPORT AND ACCOUNTS, supra, at¶ 29.68 K. SPROSTON, B. ERENS, AND J. ORFORD, GAMBLING BE-HAVIOUR IN BRITAIN: RESULTS FROM THE BRITISH GAMBLING

PREVALENCE SURVEY (London: National Centre for SocialResearch, 2000).69 GAMBLING COMMISSION, BRITISH GAMBLING PREVALENCE

SURVEY 2007 (London: National Centre for Social Re-search).70 Ned Temko, Gambling addicts on the rise, THE OBSERVER

(London), Sept. 2, 2007, at 11. See also Richard Ford, Re-laxed gaming laws ‘will cause extensive damage within 20years’, THE TIMES (London), Aug. 12, 2007,at 34; Lucy Nan-nerman, Stakes are high as experts predict a surge in addic-tion, THE TIMES (London), Aug. 12, 2007, at 35.71 GAMBLING COMMISSION, Executive Summary, BRITISH

GAMBLING PREVALENCE SURVEY 2007, supra.72 T. Jowell MP, 426 PARL. DEB., H.C. cols. 31 and 39 (1November 2004). See generally DEPARTMENT FOR CULTURE,MEDIA AND SPORT, THE FUTURE REGULATION OF REMOTE

GAMBLING: A DCMS POSITION PAPER (Apr. 2003).

the world”73 outweighs the disincentives bothof being so closely regulated and of an adversetax environment. In March 2007, GordonBrown MP, then chancellor of the Exchequer,announced that the tax on Internet sites wouldbe 15 percent of gross gaming yield; five timesthe rate that the industry expected.74

The highest prevalence of problem gamblingwas found among those who engage in spreadbetting (14.7 percent).75 Here again, the com-mission has no jurisdiction: spread betting isregulated by the Financial Services Authorityunder the Financial Services and Markets Act2000.76 Nevertheless, the media coverage towhich it (and other instances of online gam-bling) gives rise prejudices the government’spresentation of the Act as a measure that, whilehaving some deregulatory elements, explicitlyrequires operators to pursue socially responsi-ble practices. And, in the Gambling Commis-sion, the Act has established a regulatoryagency having extensive and far greater pow-ers than the Gaming Board for Great Britain(whose writ was also limited to gaming) to en-force compliance with that requirement. Butthese undoubted advances on the old law tendto be obscured by the noise generated by anunreflective and, in some aspects, hostile me-dia.77

The Act does not seek to exclude any partic-ular groups of adults from gambling, nor doesit define who might be a “vulnerable person”.Instead the commission’s guidance describesthe characteristics of such persons, as might berevealed by their behavior, capacity to make in-formed or balanced decisions or attitude whenasked about their gambling. This includes peo-ple who gamble more than they want to or be-yond their means, who have learning disabili-ties or mental health needs, or who are copingwith substance abuse.78 As is the case with theprotection of children, the government’s policyis to address the issue of containing problemgambling by a combination of the general prin-ciples for the grant of an operating license, thecommission’s social responsibility code, andspecific conditions attached to operating andpremises licenses. For example, under the so-cial responsibility code, operators must put inplace policies and procedures to promote so-cially responsible gambling, including contri-

bution to research, public education and theidentification and treatment of problem gam-bling.79

Some of these requirements lie on the com-mission itself. By § 70(3), when it is consider-ing an application for a nonremote casino op-erating license (that is, a land-based casino), thecommission must have regard to the appli-cant’s “commitment” to protecting vulnerablepersons and making assistance available tothose who might be affected by gambling prob-lems. Section 96 gives power to the commissionto set technical standards that discouragerepetitive play, while in 2007 the governmentmade the order required by § 235(2)(d) the Actto set technical standards that will discouragerepetitive play of machine-based lotteries.80

Self-exclusion and, more particularly, propos-als that operators should develop interventionprotocols, by which trained employees willtake the initiative where they see players los-ing control, proved controversial during theconsultation phase on license conditions. Both,however, figure in the published social re-sponsibility code. The former requires licensees

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73 T. Jowell MP, 426 PARL. DEB., H.C. col. 42 (Nov. 1, 2004).74 Sam Coates, Tax rises may leave few operators willing to gam-ble on supercasino, THE TIMES (London), Mar. 22, 2007, at 15.75 GAMBLING COMMISSION, Executive Summary, BRITISH

GAMBLING PREVALENCE SURVEY 2007, supra; Jill Sherman,Young, educated and rich gamble online, THE TIMES (London),Sept. 20, 2007, at 24.76 Section 5 of the 2000 Act provides that those licensedto offer spread bets must secure an “appropriate degreeof protection for consumers”. See DAVID MIERS, REGULAT-ING COMMERCIAL GAMBLING ch. 16.2(c) (Oxford UniversityPress 2004).77 See the discussion above concerning The Daily Mail’striumphant front page that greeted the Prime Minister’sdecision to hold implementation of the regional casino.That gambling continues to excite controversy, see the re-action to Oxford University’s decision to accept £2.5 mil-lion from Stanley Ho, the Macau casino operator; DominicKennedy & James Doran, Oxford takes gambling king’s cash,THE TIMES (London), May 26, 2007, at 13. There also con-tinues to be a moralistic undercurrent in some of the crit-ics’ comments. See, e.g., Tim Adams, The best chance you’llget?, THE OBSERVER (London), Jan. 7, 2007, at 10; Nick Co-hen, Why Tessa Jowell is hooked on gambling, THE OBSERVER

(London), Jan. 14, 2007, at 12.78 See GAMBLING COMMISSION, GUIDANCE TO LICENSING AU-THORITIES, supra, at ¶ 5.20.79 GAMBLING COMMISSION, LICENCE CONDITIONS AND CODES

OF PRACTICE, supra, at pt. II, ¶ 2.1.80 Gambling (Lottery Machine Interval) Order 2007, SI2007/2495.

to put in place procedures for self-exclusionand “to take all reasonable steps” to refuse aperson who has entered a self-exclusion agree-ment with the operator. Among other detailedsteps, the operator must close the person’s ac-count and remove him from its mailing lists.“Customer interaction” requires operators tohave procedures for identifying the level ofmanagement that may engage with a customerwho appears to be in difficulty, and, when it isappropriate, to refuse further services. In recog-nition of the debate to which this matter gaverise, the operator’s policies must have regardto its duties for the health and safety of itsstaff.81

As is the case with children, the mandatoryconditions of premises licenses address aspectsof the layout and facilities that might conduceto dysfunctional gambling. A specific manda-tory condition is that ATM machines must belocated so that the gambler has to cease gam-bling to use them. The prohibition on access be-tween interconnecting premises, which hasspecific application to children, is of general ap-plication. Until it was removed, the 1968 Actimposed on any would-be casino gambler acooling-off period: the famous 48- (later 24-)hour rule. Its purpose was to ensure that per-sons who wished to engage in gaming shouldmake a conscious decision to do so. We see asimilar policy in the commission’s rules that theentrances and exits from parts of a buildingcovered by one or more licenses “should beseparate and identifiable” so that people do not“drift” into a gambling area.82 Section 78(8) en-ables the commission to attach a condition toan operating license concerning “the provisionof assistance to persons who are or may be af-fected by problems relating to gambling[.]”This can include the provision of informationabout sources of help for those who have gam-bling problems, which will mean informationabout GamCare and the Gordon House Asso-ciation.83 This information needs to be readilyaccessible and available in areas where the cus-tomer can obtain it discreetly.84

Advertising

The pre-2005 Act regime governing the ad-vertising of gambling facilities was a mix of

statutory and self-regulation. The statutorycontrols were contained in the three principalActs dealing with gambling and in the gen-eral broadcasting legislation. These were sup-plemented by a number of nonstatutoryCodes of Practice made by the AdvertisingStandards Authority and the two Committeesfor Advertising Practice.85 As with everyother aspect of their regulation, it has alwaysbeen easier to exert control over the advertis-ing of “bricks and mortar” gambling venuesthan over the Internet. In 2006, the Depart-ment for Culture, Media and Sport and theGambling Commission issued Joint Guidanceto remote gaming operators on the applica-tion of § 42(1)(c) of the Gaming Act 1968(which prohibited the advertising of casinos)to their operations.

The advertising of gambling facilities is cov-ered by Part 16 of the Act. To understand howits controls will apply, it is necessary first to de-scribe two distinctions that are drawn in theAct, from which it becomes possible to identifyfour different forms of regulatory control.“Gambling” under the 2005 Act may be remoteor nonremote. Nonremote gambling needs nospecial definition, and essentially means gam-bling within bricks-and-mortar venues. But be-cause it attracts special regulation, remote gam-bling is defined, and, by § 4, means gamblingin which persons participate by means of “re-mote communication”. This includes (§ 4(2)),communication by the Internet, telephone, tele-vision, radio, and, so that the Act will not beovertaken by technological advance, “anyother kind of electronic or other technology for


81 GAMBLING COMMISSION, LICENCE CONDITIONS AND CODES

OF PRACTICE, supra, at pt. II, ¶¶ 2.4, 2.5.82 See GAMBLING COMMISSION, GUIDANCE TO LICENSING AU-THORITIES, supra, at ¶ 7.14.83 It is only recently that the National Health Service hascome to recognize gambling addiction as a condition thatit ought to address and treat; BRITISH MEDICAL ASSOCIA-TION, GAMBLING ADDICTION AND ITS TREATMENT WITHIN THE

NHS: A GUIDE FOR HEALTHCARE PROFESSIONALS (Jan. 2007),available at �http://www.bma.org.uk�.84 GAMBLING COMMISSION, LICENCE CONDITIONS AND CODES

OF PRACTICE, supra, at pt. II, ¶ 2.3.85 These are the Broadcasting Committee for AdvertisingPractice (BCAP) and the Committee for Advertising Prac-tice (CAP), which deals with nonbroadcast advertising;e.g., newspapers and magazines.

86 This section does not apply to foreign lotteries. But aperson who did anything in Great Britain in relation tothat unlawful lottery, for example, by advertising it,would commit an offense under § 259(2).87 Gambling Act 2005 (Advertising of Foreign Gambling)Regulations 2007, SI 2007/2319. The effect is that hun-dreds of sites outside the EEA will no longer be able toadvertise in print (or electronic) media.

facilitating communication[.]” This essentiallymeans gambling on the Internet or, more tra-ditionally, placing bets by phone.

The structure of § 4 means that it is also pos-sible to distinguish remote from nonremote ad-vertising. Nonremote advertising means phys-ical advertisements such as flyers, posters, andadvertisements in newspapers and magazines.Remote advertising includes television adver-tisements, Internet pop-ups, and other elec-tronic messages, such as might be received ona mobile phone. It is therefore possible to de-rive four permutations as to how remote andnonremote gambling may be advertised re-motely or nonremotely:

1. An advertisement on a poster on the Lon-don Underground of a gambling website inGibraltar would be a non-remote advertise-ment of remote gambling.

2. An internet popup of a betting shop locatedin Manchester would be a remote adver-tisement of a nonremote gambling venue.

3. A flyer handed out in a casino in Birming-ham advertising another in the same groupin Edinburgh would be nonremote adver-tising of nonremote gambling venues

4. A popup on a gambling website advertisinganother site would be remote advertising ofremote gambling.

Section 327 sets out what it means to adver-tise gambling. The definition is very broad andcovers anything that is done to encourage peo-ple to take advantage of facilities for gambling.It also covers bringing information about gam-bling facilities to people’s attention with a viewto increasing the use of those facilities and ex-tends the advertising of gambling to includethose who participate in or facilitate such ac-tivities. Advertising includes entering intoarrangements such as sponsorship or brand-sharing agreements. Section 328 provides thatthe secretary of state may regulate the form,content, timing, and location of any advertise-ments for gambling. These regulations can bein relation to specified classes of gambling,advertisements or places and will apply toadvertising by both remote means and non-remote means. The section creates various of-

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fenses for breach of the regulations that aremade.

There are, however, restrictions on the extentto which regulations controlling the form, con-tent, timing and location of gambling adver-tisements may make provision about broadcastadvertising. In essence, these are subject to thecontrol of the statutory broadcasting regulator,the Office of Communications. Section 319 im-poses a duty on the Office of Communicationsto set, and from time to time to review and re-vise, standards for the content of programs tobe included in television and radio services.When formulating these standards, the Officeof Communications, which has delegated itsfunctions to the Broadcasting Committee forAdvertising Practice (BCAP) must consult theGambling Commission. For its part, the Com-mission itself has delegated its responsibilitiesfor the print media to the Committee for Ad-vertising Practice (CAP).

Sections 330 and 331 make it an offense toadvertise respectively unlawful and foreigngambling.86 “Foreign gambling” is gamblingthat either physically takes place in a non-Eu-ropean Economic Area (EEA) state (nonremotegambling), for example, a casino in the UnitedStates, or is gambling by remote means that isnot regulated by the law of any EEA state. Sec-tion 331(3) provides that Gibraltar shall betreated as an EEA state, which means that thegambling operators who are based there willbe permitted to advertise in the United King-dom, and the section gives power to the secre-tary of state to specify other places and coun-tries to be so treated.87 Section 332 then makesprovision for nonremote advertising withinGreat Britain and the United Kingdom. Inessence, nonremote advertising falls within theAct’s remit only where the advertising is gov-erned by regulations made under § 328 or it

relates to unlawful gambling (§ 330), and theadvertising takes place wholly or partly inGreat Britain. A similar provision applies to ad-vertising foreign gambling under § 331, butonly applies where the advertising takes placewholly or partly in the United Kingdom.88

In March 2007, CAP, BCAP and the gamblingindustry as a whole issued new rules coveringgambling advertising that came into force onSept. 1, 2007.89 In short, advertisements mustnot portray, condone or encourage gamblingbehavior that is socially irresponsible or thatcould lead to financial, social, or emotionalharm. In this, the rules reflect self-regulatorypractice in many other jurisdictions. Whencombined, these various rules provide:

• Gambling products other than lotteriesand bingo may not be advertised on TVbefore 9 p.m. (the “watershed” familiar totelevision companies and advertisers).

• Sports betting advertisements associatedwith a televised sporting event (typicallyhorseracing and football) will be permit-ted before the watershed.

• No television advertising may link gam-bling with sexual or social success.

• No television advertising may be directedat children, feature people who are or ap-pear to be under 25 years of age, or sug-gest that gambling is a solution to finan-cial problems.

• All advertisements must include a refer-ence to a new website supported by theResponsibility in Gambling Trust,�www.gambleaware.co.uk�.

Potential commercial and practical difficul-ties are likely to follow the agreement not toprint logos advertising gambling operators onreplica football shirts that are to be sold to chil-dren. The agreement with the industry (appar-ently in exchange for its chance to advertisesports betting facilities before the watershed)threatens the multimillion-pound sponsorshipdeals with Premier League football clubs. The

practical difficulty is that large children willwear adult shirts, which can continue to carrysuch advertising. Those concerned about or op-posed to gambling have been cautious in theirinitial responses to this new code.90

Initially, the commission proposed to in-clude the advertising rules into the social re-sponsibility code.91 By section 82 any section24 social responsibility provision is automati-cally a license condition and thus compliancewith these rules would have been a conditionof an operating license. Following strong op-position from the operators and the trade as-sociations, the commission decided to makecompliance with these self-regulatory codes amatter for the general code, in which case non-compliance is an evidential matter only.92

These requirements have been restated in theindustry’s own code for socially responsibleadvertising. No doubt, should there be a rashof flagrantly offensive advertisements, thecommission will review the current balancebetween its statutory duties and the industry’scommercial expectations. It may then advisethe secretary of state to prescribe under sec-tion 328 what advertisements will be lawful.In the meantime, it is appealing to the indus-try’s commercial self-interest. Failure to meetthe new rules may result in the AdvertisingStandards Authority withdrawing an adver-tising campaign, which “can cost your bottomline and your reputation.”93


88 The remote advertising of foreign gambling (§ 333) ismore complex, and is not dealt with here. But see the Website of the Responsibility in Gambling Trust, �http://www.rigt.org.uk�.89 Committees of Advertising Practice, �http://www.cap.org.uk/cap/gambling/�.90 Francis Elliot & Adam Sherwin, Gambling adverts to beallowed on TV but not children’s shirts, THE TIMES (London),Aug. 8, 2007, at 4.91 GAMBLING COMMISSION, LICENCE CONDITIONS AND CODES

OF PRACTICE, Consultation document (March 2006), ¶ 7.16.92 GAMBLING FOR LOCAL AUTHORITIES, supra, ch. 20, ¶ 20.32.93 See generally, Gambling Commission, �http://www.gamblingcommission.gov.uk/Client/detail.asp?Con-tentId�227�.

Documents

Another U-Turn: Great Britain's Casino Questions and Other Gambling Issues