Court of Appeal confirms right of Gambling Commission to veto gambling in pubs

Out-Law News | 26 May 2017 | 2:49 pm | 2 min. read

The Gambling Commission in Britain can prevent pubs from providing gambling services to consumers even if those pubs satisfy the criteria necessary for obtaining an operating licence, the Court of Appeal in London has confirmed.

The Court ruled that the Commission is not obliged to issue an operating licence to pubs in those circumstances if it believes doing so would "be harmful to the statutory licensing objectives" set out in the Gambling Act.

The ruling upholds a 2016 judgment by an upper tribunal judge who said the Commission's right to refuse applications for operating licences on those grounds could be considered as "trespassing" on licensing issues that the Gambling Act assigns to local authorities to consider.

Businesses seeking to provide high-street gambling services must obtain both an operating licence from the Commission as well as a premises licence from the relevant local authority.

Pub retailer and brewer Greene King challenged the upper tribunal's ruling before the Court of Appeal.

The history of the case can be traced back to a decision taken by the Gambling Commission's regulatory panel in February 2014. That panel refused Greene King's applications for the bingo licences despite stating it was "satisfied as to the suitability and competence of [Greene King], and persons relevant to the applications, to offer the proposed licensed gambling activities".

In refusing the applications, the Commission's regulatory panel raised "concerns about the development of commercial bingo in what have traditionally been pub premises" and said granting the licences requested by Greene King would not be "reasonably consistent" with the licensing objectives set out under the Gambling Act.

There are three licensing objectives under the Act and the Commission has a statutory duty to promote those objectives. The first objective is to prevent gambling from being a source of crime or disorder or being associated with or used to support such activity. The second objective is to ensure that gambling is conducted in a fair and open way. The third objective is to protect children and other vulnerable people from being harmed or exploited by gambling.

The Commission's regulatory panel said that the combination of high stake bingo machines and other high stake fixed odds betting terminals with a pub environment "has the potential to jeopardise the second and third [licensing] objectives".

However, Greene King won an appeal against the regulatory panel's decision before a first-tier tribunal judge. That judge said it was wrong that the Commission should have "an effective right of veto on an application for a premises licence".

The upper tribunal said, though, that the first-tier tribunal judge had erred in the approach he had taken to reaching that conclusion. The Court of Appeal has now endorsed the view of the upper tribunal.

The Court of Appeal rejected Greene King's claim that the Commission's regulatory panel had incorrectly interpreted the provisions of the Gambling Act, and said it was "clearly open to the panel to conclude that visitors to a pub, after consuming alcohol, might be vulnerable to available high stake gambling".

With the Gambling Commission's powers now clarified, Greene King's case will now be reconsidered by the first-tier tribunal. The Court of Appeal said it will be up to the tribunal whether it agrees with its conclusions "on their merits".

Gambling law expert Audrey Ferrie of Pinsent Masons, the law firm behind Out-Law.com, said: "The Gambling Commission will be happy with this decision as it reaffirms their stance that higher stakes gambling should be the preserve of dedicated gambling premises such as bingo clubs and casinos. So far so good from their point of view."

Christopher Rees-Gay, also of Pinsent Masons, said the ruling "sends a clear message" to pub operators and the wider leisure industry that "very careful consideration will be needed when applying for operating licences in the future".

"Even if the Gambling Commission is satisfied as to the suitability and competence of the operator, the operating model must also be consistent with the gambling licensing objectives," Rees-Gay said.