Gambling Commission GG 281 2015
| Jurisdiction | UK Non-devolved |
| Judge | Judge H. Levenson |
| Judgment Date | 29 January 2016 |
| Neutral Citation | 2016 UKUT 50 AAC |
| Subject Matter | Gambling |
| Respondent | GK |
| Court | Upper Tribunal (Administrative Appeals Chamber) |
| Docket Number | GG 281 2015 |
| Appellant | Gambling Commission |
1. This appeal by the Gambling Commission (“the Commission) succeeds. In accordance with the provisions of section 12(2)(b)(i) of the Tribunals, Courts and Enforcement Act 2007 I set aside the decision(s) of the First-tier Tribunal made on 8th December 2014 under references GA/2014/0001 & 0002. I refer the matter(s) to a completely differently constituted panel in the General Regulatory Chamber of the First-tier Tribunal and direct that fresh decisions on the appeal(s) against the decision(s) of the Commission be made in accordance with the legal basis set out below and pursuant to further procedural directions to be given by or on behalf of the President of that Chamber.
2. Technically this appeal was brought in respect of two First-tier Tribunal decisions relating to the two limited companies named on the front sheet. However it is convenient to refer to the companies together as “Greene King” or “the company” and to proceed as though this were one case.
Hearing
3. I held an oral hearing of this appeal on 8th October 2015 at Field House (London). The Gambling Commission was represented by Philip Kolvin QC and Christopher Knight of counsel, instructed by the Solicitor to the Commission. Greene King was represented by Susanna Fitzgerald QC and Owain Draper of counsel, instructed by FraserBrown solicitors. I am grateful to them all for their assistance, notwithstanding the apparent inability of counsel on both sides to resist the occasional temptation to address me on the merits of the original licence applications and of the Commission’s decision.
Background and Procedure
4. I set out the background as I understand it to be and to the extent necessary to place my decision in context, but I am not to be taken as making any finding of fact on any disputed matter.
5. The Gambling Commission regulates all commercial gambling within the United Kingdom, other than spread betting. Local authorities which are licensing authorities have certain functions in relation to licensing premises for gambling. A gambling business must hold a relevant operating licence from the Commission. Holders of certain positions within a gambling business must hold a personal licence from the Commission. An application to a licensing authority for a premises licence may only be made by the holder of a relevant operating licence or a person who has applied for such a licence. I go into further detail below about the relevant legal provisions.
6. Greene King is a large business. It operates under various brand names over 1000 premises with alcohol licences. I am told by its representatives that it has never had any of these licences removed and neither it nor any member of its staff has ever been convicted of any regulatory offence in relation to alcohol. In many of its premises it has for some time provided bingo and other gambling facilities, including gaming machines. This has been done under statutory provisions allowing such operations to be carried out in premises with alcohol licences. I am told that Greene King has never been the subject of any regulatory action in relation to its provision of gambling facilities. However, under the Gambling Act 2005 there are limits on the types of gambling activities that can be carried out under those statutory provisions, and further licences are required for other gambling activities.
7. As explained in the decision of the First-tier Tribunal, under these provisions bingo is permitted only within strict limits For example, there is a maximum stake of £5; no fee may be charged for playing the game; the operator may not make any deductions from the stake or winnings; there can be no linking with other premises to provide a bigger game with larger prizes and the “high turnover rule” must be observed. This is that if in any period of seven days the aggregate of stakes or prizes at bingo in premises exceeds £2000, the owner must notify the Gambling Commission. It is an offence to exceed that limit again in the next twelve months. If the Gambling Commission grants a bingo operating licence the high turnover rule does not apply, but the other restrictions remain in place unless a premises licence is also granted (by the local licensing authority) in respect of particular premises. In that case all of the restrictions referred to above are removed.
8. Similarly, a set of premises licensed for alcohol has automatic entitlement to only two gaming machines, of a type restricted to a maximum £1 stake and a maximum £100 prize. As I understand it these are labelled by regulations as category C and D machines. A bingo premises licence brings with it the right to have an unlimited number of machines in those categories together with a right to have other machines (not exceeding 20% of the total number of machines) limited to a maximum stake of £2 and a maximum prize of £400 (category B4) or £500 (category B3). Neither the Gambling Commission nor the licensing authorities can impose further conditions in respect of the number or type of gaming machines. As the First-tier Tribunal drily commented (paragraph 20): “Gaming machines are lucrative”.
9. There came a time when the company wished to provide more bingo and further gambling facilities, including higher stakes and additional gaming machines of a category not covered by the alcohol licence provisions. Its intention was to trial and monitor these further activities in a small number of premises to see, among other things, whether any regulatory difficulties were caused.
10. On 24th May 2012 Greene King applied to the Gambling Commission for the relevant bingo operating licences in respect of up to eight of its premises. If such licences were granted it would then apply to the local licensing authorities for the necessary premises licenses. After what Greene King’s representatives describe as “a lengthy and exhaustive process of evaluation and assessment”, and a hearing before its Regulatory Panel on 26th February 2014, the Commission’s officials and the Panel were “satisfied as to the suitability and competence of the [company], and persons relevant to the applications, to offer the proposed licensed gambling activities” (paragraph 65 of its decision of 12th March 2014). That conclusion is not challenged or in issue in the present appeal. However, the Panel refused to grant the licences which had been applied for.
11. The company appealed to the First-tier Tribunal against the decision(s) of the Panel. The appeal(s) was/were considered by Judge Warren, then the President of the General Regulatory Chamber of the First-tier Tribunal. On 8th December 2014 he allowed the appeal(s), quashed the decision(s) of the Gambling Commission and remitted the matter to the Commission with a direction that the applications be granted, anticipating that conditions of the grant would be agreed between the parties. In summary his reasoning was that, having accepted that Greene King was suitable and competent for the relevant purposes, the Commission refused the applications because of its concerns about premises. He stated in paragraph 31 of his decision:
“… but here in my judgment they were trespassing on territory which the Act assigns to licensing authorities … the Commission’s purpose in refusing the applications, and indeed the only justification for doing so, is to prevent Greene King from applying for a premises licence”.
12. On 22nd December 2014 Judge Warren gave the Gambling Commission permission to appeal to the Upper Tribunal against that decision of the First-tier Tribunal and on 6th March 2015 I issued case management directions, including a direction under rule 5(3)(m) of The Tribunal Procedure (Upper Tribunal Rules) 2008 suspending immediately the effect of the decision of the First-tier Tribunal, such suspension to remain in force until the determination of the appeal or further direction. There has been no application to vary the suspension direction and it has remained in force but now lapses on the present decision being made.
The Legal Framework
13. The principal relevant statutory provision in the Gambling Act 2005 as amended. This is a massive piece of legislation containing over 360 provisions and 18 Schedules. Section 20 created the Gambling Commission (“the Commission”) to perform certain functions under the Act. It is not necessary to comment on all of these numerous functions but the following are particularly relevant. References are to sections of the 2005 Act unless otherwise indicated.
14. Section 22 provides as follows:
22. In exercising its functions under this Act the Commission shall aim –
(a) to pursue, and wherever appropriate to have regard to, the licensing objectives, and
(b) to permit gambling, in so far as the Commission thinks it reasonably consistent with pursuit of the licensing objectives.
15. Section 1 provides as follows:
1. In this Act a reference to the licensing...
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