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Case studies

Working with HMRC on illegal betting in pubs

A pub in St. Helens was subject to a multi-agency operation and subsequent investigation involving officers from St. Helens Council, the Gambling Commission, Merseyside Police and HM Revenue & Customs (opens in new tab).

The pub manager pleaded guilty to providing illegal gambling under s37 of the Gambling Act 2005 (opens in new tab) at St. Helens Magistrates Court. He was sentenced to 100 hours of unpaid work and ordered to pay costs of £930.

HMRC also imposed back-dated tax of £2,952 and penalties totalling £9,750 for general betting duty, failure to declare betting income and submit betting duty returns.

Bookmaker and pub landlord fined for illegal betting

DSL Betting (Cumbria) Ltd [2011]

Cumbria police entered pub premises and found the landlord at a table with racing papers, betting slips, a mobile phone, drinks and pens. He had been recording horse racing bets for customers.

The case was prosecuted by Allerdale Borough Council who were supported in their enforcement action by both the Gambling Commission and Cumbria police. The landlord and bookmaker pleaded guilty to two counts:

  • aiding and abetting the use of premises to provide facilities for betting when no appropriate licence was in force
  • providing facilities for gaming not holding a licence or being exempt.

The betting company, which no longer operates any betting premises, was fined a total of £4,500 and ordered to pay court costs of £625 and a £15 victim’s surcharge.

Member of the public or member of a club?

Panama (Piccadilly) Ltd v Newberry [1962]

This case relates to whether a person ceases to be a member of the public merely because they have agreed to become a member of a club.

In a case (which related to a strip show), it was held that a person would not cease to be a member of the public as there was no evidence of any selective process or rule which enabled the selection of members, there was no sufficient segregation that would prevent members of the club from continuing to be members of the public.

Illegal lotteries in pubs

A scheme in which customers purchase a £1 raffle ticket and a draw takes place each week with the winning customer invited to choose one of the envelopes pinned to the wall behind the bar, was identified as an illegal lottery.

Each of the envelopes contain a playing card with any card other than the joker resulting in the customer winning £30. Should the card picked be the joker, the customer wins the jackpot. The jackpot is an amount over £30 which is paid out weekly (in effect a rollover).

Based on the fact that the company was deriving no financial profit from the scheme it was decided that the promotion may be operated as a customer lottery subject to a meeting the requirements for that type of exempt lottery:

  • A customer lottery or raffle can only be run by a business for its customers at the time they are on the business premises
  • Tickets must not be sold to children under 16 years of age
  • No prize can be more than £50 in value
  • No rollover of prizes from one lottery to another is permitted
  • Only one lottery draw is permitted in each period of seven days
  • Tickets must display the required information (they cannot be a cloakroom ticket)

The lottery may only be advertised on the premises where tickets are sold No profit can be made (customers lotteries are not suitable for fundraising). Further information may be found our guidance note Organising small lotteries.

Torbay council advised licensees to ensure that the changes required to the scheme were implemented with immediate effect. Any monies in the jackpot above the prescribed limit of £50 maximum prize per draw being returned to customers.

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