The Gambling Act Licensing Regime

The regime governing gaming ventures in the UK is quite convoluted but there are three main scenarios you may be faced with.  Your venture may be illegal under the legislation, you may be exempt from requiring a licence or you may need a licence (which come in various forms).

Illegal Ventures

In general terms, lotteries (i.e. games in which winners are chosen by the drawing of lots from amongst those who have paid money to participate) are illegal.  There are a few exceptions, notably where there is no entry fee (free prize draw) or there is deemed to be a sufficient element of skill to deter significant proportion of potential entrants or to prevent significant proportion of entrants from winning a prize (prize competition).

No Licensing Requirement

Skill competitions are generally outside of the Act although the precise structure and rules of the operation would have to be carefully reviewed to ensure that this is the case. Free prize draws are also permissible without licence. These may take different forms including scenarios where there is an entry fee but also an alternative free entry route.

Licensing Requirement

The three major objectives which underpin the Act are to:

• prevent gambling being a source of, or associated with, crime and disorder;
• ensure that gambling is conducted in a fair and open way; and
• protect children and other vulnerable persons from being harmed or exploited by gambling.

The major types of activity which require a licence are

• Gaming;
• Betting; and
• Lotteries.

Whilst the default position is that lotteries (apart from the state-controlled National Lottery) are illegal, there are a few exemptions:  Private Lotteries, Incidental Non-Commercial Lotteries, Customer Lotteries and Small Society Lotteries.

Licence requirements vary depending on the exact parameters and nature of the venture but can be broken down into three categories:

• Operating Licences;
• Personal Licences; and
• Premises Licences.

Whereas the Gambling Commission issues Operating Licences and Personal Licences, the grant of Premises Licences is the responsibility of the local Licensing Authority.

Operating Licences

These can cover either Remote or Non-Remote activities but not both. Remote activities are those where gambling occurs by use of a form of remote communication. The ten categories of Operating Licence are:

• Casino,
• Bingo,
• General Betting,
• Pool Betting,
• Betting Intermediary,
• Gaming Machine General for Adult Gaming Centre,
• Gaming Machine General for Family Entertainment Centre,
• Gaming Machine Technical and Gambling Software.

Operators must show how they have procedures to ensure that all equipment used for gambling complies with the Gambling Commission's technical standards and have to address the three legislative objectives set out above. The Gambling (Operating Licence and Single-Machine Permit Fees) Regulations 2006 as amended in 2007 set out the fees for Operating Licences.

Personal Licences

There are two categories of personal licence: Personal Management Licences and Personal Functional Licences.

At least one person involved in the management of the operating entity must hold a Personal Licence unless the entity is classed as Small Scale Operator (i.e. where there are no more than three qualifying positions within the management of the operator).

Applicants must adduce documents to satisfy the Gambling Commission of their identity and suitability. Application fees are set out in The Gambling (Personal Licence Fees) Regulations 2006.

Premises Licences

Prior to an applying for a Premises Licence, the entity applying must either hold or have applied for an Operating Licence. A Premises Licence authorises the premises to be used for one of five activities:

• Casino;
• Bingo;
• Betting;
• Adult Gaming Centre; or
• Family Entertainment Centre.

The Gambling (Premises Licences Fees) (England and Wales) sets out the fees to be paid for all.

For more information please contact Simon Halberstam.