36.1 Licensing authorities’ compliance and enforcement work and the costs of dealing with illegal gambling is covered by fees from premises licences and permits.
36.2 Licensing authorities in England and Wales will be aware that section 212(2)(d) of the Act specifically states that local authorities ‘shall aim to ensure that the income from fees… as nearly as possible equates to the costs of providing the service to which the fees relates’.
36.3 Furthermore DCMS Guidance to licensing authorities on setting premises licence fees states ‘The annual fee will cover the reasonable costs of compliance and enforcement work, including the cost of dealing with illegal gambling in a licensing authority’s area’.
36.4 Fee setting must be transparent and licensing authorities should closely track their costs and be able to evidence how they arrived at the fee levels in order to demonstrate that they have been calculated on a cost recovery basis only. Fees should be reviewed annually.
36.5 In Scotland all fees for gambling licences and permits are set centrally by Scottish Ministers at a flat rate but again are designed to cover the costs of compliance and enforcement work.
36.6 S.303 of the Act enables the Commission to designate employees of the Commission and to appoint persons other than employees, as enforcement officers for the purpose of the Act.
36.7 An officer of a licensing authority can be an authorised local authority person (authorised person) under s.304 of the Act, if the conditions in s.304(2) of the Act are met, namely if:
36.8 Designation of someone as an authorised person for the purposes of s.304(2) is likely to be carried out by the local authority’s licensing committee.
36.9 In England and Wales, s.101(1) of the Local Government Act 1972 provides that ‘a local authority may arrange for the discharge of any of its functions by a committee, sub-committee or officer of the authority'. Delegations are set out in tables at Appendix G.
36.10 In Scotland, a Council’s internal functions are laid down in the Local Government (Scotland) Act 1973 as amended, principally by the Local Government (Scotland) Act 1994 and the Local Government in Scotland Act 2003. S.56 of the Local Government (Scotland) Act 1973 provides that ‘a local authority may arrange for the discharge of any of their functions by a committee of the authority, a sub-committee, an officer of the authority or by any other local authority in Scotland’.
36.11 Authorised persons of the licensing authority exercise their inspection powers in accordance with the principles set out in the licensing authority’s statement of policy.
36.12 S.304(3) and (4) set out the circumstances in which officers of local authorities that are not licensing authorities, and certain other persons, can be authorised persons for the purposes of Part 15 of the Act. One example is Trading Standards officers who can be authorised by licensing authorities under s.304(3)(b) of the Act for the purposes of conducting test purchasing exercises.
36.13 The Act states that authorised persons, constables and enforcement officers may:
36.14 Where an application for a club gaming permit or club machine permit has been made, authorised persons, constables and enforcement officers may also enter a members’ club, a commercial club or miners’ welfare institute under s.312 of the Act, for a purpose connected with consideration of the application, to:
It should be noted that only police officers and enforcement officers can enter the premises that have been granted a permit to determine if the things being done are in accordance with that permit (and not primarily because they suspect a crime is taking place/has taken place). Therefore, if an authorised person was to accompany a police officer or enforcement officer (under s.324, see below), they would not then be able to exercise any powers whilst on the premises such as the seizure of evidence.
36.15 Under s.318 of the Act a constable, enforcement officer or authorised person can only enter a dwelling under a warrant issued by a justice of the peace.
36.16 S.324 of the Act allows a constable, enforcement officer, or authorised person who is exercising a power under Part 15 of the Act, to take one or more persons with him. It should be noted that the Act would not permit an authorised person to exercise any powers on premises such as the seizure of evidence, unless they had entered under a power of entry under the Act that is applicable to their status as an authorised person. This section of the Act seeks to provide access to premises for those assisting a constable, enforcement officer or authorised person in carrying out duties, such as photographers, forensic examiners and note takers.
36.17 Further detail about powers of entry and inspection are set out in Appendix F.
36.18 In Scotland, the relevant licensing authority is called a licensing board. The powers of licensing boards are similar to those of licensing authorities in England and Wales in that they grant, review and cancel club gaming permits and club machine permits.
36.19 However, s.310 and s.312 of the Act have created an anomaly in Scotland. In Scotland the equivalent of a licensing officer is a licensing standards officer (LSO). Although s.304(2) of the Act was intended to provide licensing authorities with the opportunity to empower licensing authority staff already involved in licensing, it does not apply to Scotland because those given responsibility by Scottish licensing authorities (usually the LSOs) are not officers of the licensing authority. The licensing boards are separate and LSOs are deliberately legally separated from the boards.
36.20 S.304(3) and (4) of the Act were intended to provide licensing authorities with the opportunity to empower staff involved in other regulatory roles, such as trading standards officers and environmental health officers, but because most Scottish licensing authorities have given responsibility to LSOs instead, they are unable to do this.
36.21 The Commission encourages local authorities to deploy suitably trained authorised persons under the Act to ensure that gambling is regulated effectively and that the public are afforded the protections set out in the three licensing objectives. The advice note The role of authorised persons in Scotland (this advice does not form part of the Guidance to licensing authorities) sets out the Commission’s understanding of the powers of authorised persons in Scotland. The note also offers guidance to licensing authorities and others about how they might contribute to effective co-regulation of the gambling industry in Scotland.
36.22 It should also be noted that police officers have the power to enter and inspect premises that are licensed under the Licensing (Scotland) Act 2005 at any time.
36.23 The Commission views the prevention of illegal gambling as an enforcement priority. Combating illegal gambling is of significant benefit to the licensed community as the provision of illegal unregulated gambling impacts upon the reputation of the industry as a whole. The persistent and widespread existence of illegal gambling also reduces the incentive on operators to be correctly licensed. Those engaged in illegal gambling should expect to be subject to the criminal investigation and prosecution process.
36.24 The Commission will generally take the lead in prosecuting the offence of providing facilities for gambling where it is committed in the context of illegal gambling which appears organised and has a potentially national or regional impact, or where there are deliberate, reckless or significant breaches by a licensed operator.
36.25 The expectation is that licensing authorities will take prosecutions against those providing or facilitating illegal gambling - in effect gambling without a licence or permit - where the criminality is contained in one premises.
36.26 Dealing with illegal poker or illegal/illegally sited machines in a specific premises often lends itself to a multi-agency coordinated approach with licensing authority officers leading the operation and the Commission, the police and sometimes HMRC providing support, advice and expertise. Licensing officers should contact their compliance manager in the first instance to agree if such a multi-agency approach would be appropriate.
36.27 As stated in paragraph 36.1, the annual premises licence fee is set to cover the costs of compliance and enforcement work undertaken by licensing authorities, including the cost of dealing with illegal gambling in a licensing authority’s area.
36.28 Test purchasing is one method by which the Commission or licensing authorities may, in England and Wales, measure the compliance of licensed operators or groups of licensed operators, with aspects of the Act subject to Primary Authority (PA) arrangements, detailed in paragraph 36.36 below. Test purchasing in Scotland is the subject of an Enforcement Protocol with offences prosecuted by the Crown Office and Procurator Fiscal Service.
36.29 Licensing authorities are familiar with the methodology in relation to the sale of age restricted products and are aware of the importance of following current guidance in this area, in order to ensure that tests are carried out in a manner that is risk-based and fair, with due regard to the welfare of young people involved in the test purchasing.
36.30 As noted above, in the first instance it is up to operators to ensure they are compliant with the Act and the associated regulations. The Commission’s approach in relation to test purchasing in general and age verification in particular is set out in our Advice note on test purchasing in England and Wales (this advice note does not form part of the Guidance to licensing authorities).This approach is in line with the responsibilities set out for regulators and enforcers in the Code of Practice: age restricted products and services published by the Better Regulation Delivery Office (Age Restricted Products and Services: A Code of Practice for Regulatory Delivery), which applies to England and Wales.
36.31 The Commission encourages operators to manage the business risk associated with both underage access to premises and permitting a young person to gamble. Where an operator is required to commission a third party to test the effectiveness of their policies and procedures or put its own testing in place as required by the Licence conditions and codes of practice (LCCP) and where the results of the tests are shared with us, we are less inclined to conduct our own test purchasing.
36.32 Local authorities, whether acting as a licensing authority or through another function such as trading standards, should consult with operators in the first instance where they have concerns about the underage access and age verification policies or whose premises they plan to test purchase. This will enable them to identify what programmes are in place to manage the business risk and take these into account in planning a test purchase exercise. To do otherwise would not be compliant with the Hampton principles. This approach is analogous to what is sometimes called ‘earned recognition’.
36.33 Local authorities should also consult with the Commission before planning such exercises in order to ensure that there is no conflict between any ongoing investigation or enforcement activity related to either the premises or the operator that we have initiated and the test purchase operation. Local authorities in England and Wales are also subject to PA arrangements.
36.34 Local authorities undertaking their own test purchase operations are requested to share any test purchasing results with the Commission.
36.35 However, local authorities will have in place democratically determined priorities and resource allocations as well as the ability to respond to complaints and intelligence related to specific premises. As a result, irrespective of the actions of an operator on their overall estate, test purchasing may be deemed to be an appropriate course of action.
36.36 The PA scheme, administered by the Better Regulation Delivery Office (BRDO) provides for a statutory partnership to be formed between a business and a single authority, eg a local authority. That single authority, the PA, can provide a national inspection strategy within which other local regulators can operate (Primary Authority statutory guidance), to improve the effectiveness of visits by local regulators and enable better sharing of information between them. The PA scheme therefore aims to ensure that local regulation is consistent at the national level.
36.37 Since October 2013, the PA has been extended to include age-restricted sales of gambling in England and Wales (it currently does not apply in Scotland). It does not apply to any other aspect of the Act. This means local authorities in England and Wales must follow any age restricted sales of gambling national inspection plans and strategies that are published on the PA register when considering proactive age restricted sales (gambling) activity including testing. PA plans do not prohibit licensing authorities undertaking reactive test purchasing. PA does not apply to the police or the Commission.
36.38 The Commission fully supports the development of PA schemes between gambling operators and local authorities, and has already worked closely with PAs in the development of their national inspection strategies for the major bookmakers with whom they have entered into partnerships. The inspection plans are designed to be largely uniform and to bring consistency to proactive test purchasing in those betting shops.
36.39 The PA scheme does not, of course, transfer responsibility for the regulation of age restricted sales of gambling to PAs. The PA inspection plans have the potential to help gambling businesses achieve high standards while also providing for more efficient and consistent regulation. These arrangements underpin the primary objectives of the Act in relation to protecting children from gambling-related harm and preventing them from accessing gambling facilities. The regulatory frameworks for gambling and for PA are therefore complementary.
36.40 The Act gives licensing authorities in England and Wales, the police and the Commission the power to prosecute the offence of using premises for gambling without the requisite permissions. In exceptional circumstances, such as repeated deliberate breaches of premises licence conditions, licensed operators or permit holders may be prosecuted without any prior regulatory action, such as warnings, suspension or revocation of licence or removal of permit. Most prosecutions will be against those illegally providing gambling without a licence or permit.
36.41 In Scotland, licensing authorities are not able to institute criminal proceedings themselves, but are to refer cases where there has been a breach of the Act to the Procurator Fiscal.
36.42 Normally the Commission or the licensing authority would decide when to involve the police, rather than the police initiating any action. The Commission considers that examples of scenarios where the police should be involved include:
36.43 There is a distinction between those who conduct gambling operations under a licence or permit but breach the conditions of that, and those who seek to profit from providing facilities for gambling without a licence or permit. While both situations result in unlawful gambling, the latter situation is generally considered by the Commission to be more serious.
36.44 Licensing authorities may want to consider whether their officers have powers under other relevant legislation, such as the Licensing Act 2003 or Local Government Act 1972. For example, s.87, s.88 ands.89 of the Licensing Act 2003 give licensing authorities the ability to review club premises certificates, including suspending and withdrawing certificates, and s.90 allows licensing authorities to withdraw certificates where it appears to the licensing authority that the club does not satisfy the conditions for being a qualifying club.
36.45 There are various local authority and police powers to manage issues such as street drinking and anti-social behaviour, and licensing authorities should look to these powers in the first instance as being more appropriate remedies than the Act.
36.46 Whilst of limited use due to the absence of a central database and the ability to share information with other authorities, licensing authorities may wish to consider the use of police cautions as a deterrent.
36.47 Supplementary enforcement and compliance materials are available on the Commission’s website including case law, sample conditions, letter templates and examples of circumstances in which LAs have made effective use of their powers under the Act in the LA Toolkit.
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