Legal: Actions appear at odds with the act

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There has been a rash of negative press coverage for betting shops over recent months, primarily as a result of the Campaign for Fairer Gambling against particular gaming machines known as FOBT (fixed odds betting terminal).

This is a high-level machine capable of £500 jackpots and the typical example is electronic roulette.

The issue appears to have come to a head in what will no doubt be a test case following the decision by Newham Council in February to refuse an application by Paddy Power.

The council said: “Councillors invoked a primacy clause that states at least 50 per cent of gambling in shop premises must be ‘traditional’ betting rather then gaming machines. Newham has stepped up its fight against bad bookies by becoming the first council to use the ‘primary activity’ of a betting shop in their decision to reject a licence.”

There is, in fact, no such thing as a primacy clause, in the sense suggested. The notion that at least 50 per cent of gambling at a betting premises has to be betting, as opposed to gaming, betrays a misunderstanding of the legal position in my view.

The phrase here is “primary activity”, a phenomenon created by the Gambling Commission which is far more complicated than a simple 50 per cent test.

Significantly, the notion of “primary activity” does not exist in the Gambling Act 2005. The Gambling Commission created the concept, and it has been in a state of flux for some time. Whether or not the concept is ultra vires is a matter that continues to be debated.

If such a significant concept was intended by parliament one would have expected parliament to make that clear.

The commission has evolved the concept through ideas such as “actual use” and “typical betting shop”. None of these terms exists in the 2005 act. The notion of primary activity was introduced in relation to the splitting of premises; ie where an operator has one licence and splits the premises into two and applies for a second licence, and is based on the commission’s interpretation of s.150 of the act, which provides for different types of licence (ie betting, casino, bingo and so on).

Certain premises had machine entitlements under previous legislation which were not carried through, or “grandfathered”, to the new system. Many operators split premises to simply return their business to the position it was in prior to the 2005 act.

This perspective has been somewhat lost in the furore over FOBTs. We now have a concept created to prevent split premises applications being abused, which now seeks to control the uptake of one form of gambling at a bookies over another, when both betting and gaming are legal. The concept has therefore been extended well beyond the “splitting” issue into the basic nature of a betting licence itself. This has developed over years into a condition as follows: “Gaming machines may be made available for use in licensed betting premises only at times when there are also sufficient facilities for betting available”. The facilities are assessed by way of indicators, one of which is “actual use”.

I worry this is inadvertently creating a “duty to gamble” – forcing operators to make customers place bets. It may be actively driving operators to “push” betting to customers.

It should be up to operators to have facilities available, but up to the customer to decide whether to bet, use a machine, or, indeed, do neither but simply be there for reasons such as checking form and odds, socialising, watching televised events, or having a drink/snack.

• Stephen McGowan is head of licensing (Scotland) with TLT Solicitors