Guidance to licensing authorities
- Changes to the Guidance for Licensing Authorities
- Part 1: General guidance on the role and responsibilities of licensing authorities in gambling regulation
- Part 2: The licensing framework
- Part 3: The Gambling Commission
- Part 4: Licensing authorities
- Part 5: Principles to be applied by licensing authorities
- Part 6: Licensing authority policy statement
- Part 7: Premises licences
- Part 8: Responsible authorities and interested parties definitions
- Part 9: Premises licence conditions
- Part 10: Review of premises licence by licensing authority
- Part 11: Provisional statements
- Part 12: Rights of appeal and judicial review
- Part 13: Information exchange
- Part 14: Temporary use notices
- Part 15: Occasional use notices
- Part 16: Gaming machines
- Part 17: Casinos
- Part 18: Bingo
- Part 19: Betting premises
- Part 20: Tracks
- Part 21: Adult gaming centres
- Part 22: Licensed family entertainment centres
- Part 23: Introduction to permits
- Part 24: Unlicensed family entertainment centres
- Part 25: Clubs
- Part 26: Premises licensed to sell alcohol
- Part 27: Prize gaming and prize gaming permits
- Part 28: Non-commercial and private gaming, betting and lotteries
- Part 29: Poker
- Part 30: Travelling fairs
- Part 31: Crown immunity and excluded premises
- Part 32: Territorial application of the Gambling Act 2005
- Part 33: Door supervision
- Part 34: Small society lotteries
- Part 35: Chain gift schemes
- Part 36: Compliance and enforcement matters
- Appendix A: Summary of machine provisions by premises
- Appendix B: Summary of gaming machine categories and entitlements
- Appendix C: Summary of gaming entitlements for clubs and alcohol-licensed premises
- Appendix D: Summary of offences under the Gambling Act 2005
- Appendix E: Summary of statutory application forms and notices
- Appendix F: Inspection powers
- Appendix G: Licensing authority delegations
- Appendix H: Poker games and prizes
- Appendix I: Glossary of terms
6 - Permits
Club gaming permits
25.23 Schedule 12 of the Act sets out the application process and regulatory regime for club gaming permits and club machine permits. Scottish Ministers may, with the consent of the Secretary of State, make separate regulations in relation to club gaming or club machine permits in place of Schedule 12, if the applicant or the holder of the permit is the holder of a relevant Scottish licence. Scottish Ministers have made regulations in this regard (SSI No 504/2007: The Club Gaming and Club Machine Permits (Scotland) Regulations 2007 (opens in new tab)). In exercising a function under Schedule 12, the licensing authority must have regard to this guidance and, subject to the guidance, the licensing objectives.
25.24 A club gaming permit or club machine permit may not be issued in respect of a vessel or vehicle.
25.25 Under s.271 of the Act, the licensing authority may grant members’ clubs and miners’ welfare institutes (but not commercial clubs) club gaming permits which authorise the establishments to provide gaming machines, equal chance gaming(without having to abide by the stake and prize limits which would apply to exempt gaming in the absence of a permit) and games of chance as prescribed in regulations (SI No 1945/2007: The Gambling Act 2005 (Club Gaming Permits) (Authorised Gaming) Regulations 2007 (opens in new tab)), namely pontoon and chemin de fer. This is in addition to the exempt gaming authorisation under s.269 of the Act.
25.26 Club gaming permits allow the provision of no more than three gaming machines. These may be from categories B3A, B4, C or D but only one B3A machine can be sited as part of this entitlement. See Part 16 of this guidance for information on machine categories.
25.27 Where a club has gaming machines, it is required to comply with the code of practice issued by the Commission on the location and operation of machines.
25.28 The gaming which a club gaming permit allows is subject to conditions:
- (a) in respect of equal chance gaming:
- the club must not deduct money from sums staked or won
- the participation fee must not exceed the amount prescribed in regulations
- the game takes place on the premises and must not be linked with a game on another set of premises.
Two games are linked if:
the result of one game is, or may be, wholly or partly determined by reference to the result of the other game or
the amount of winnings available in one game is wholly or partly determined by reference to the amount of participation in the other game, and a game which is split so that part is played on one site and another part is played elsewhere is treated as two linked games
only club members and their genuine guests participate.
(b) in respect of other games of chance:
the games must be pontoon and chemin de fer only
no participation fee may be charged otherwise than in accordance with the regulations
no amount may be deducted from sums staked or won otherwise than in accordance with the regulations.
25.29 There are limits on stakes and prizes for poker played in those clubs and institutes that do not hold a club gaming permit issued by their local licensing authority. The introduction of these limits reflects significant recent growth in the popularity of poker, and the need to address the particular risks associated with such gaming. The regulations (SI No 1944/2007: The Gambling Act 2005 (Exempt Gaming in Clubs) Regulations 2007 (opens in new tab)) impose a stakes limit of £10 per person per game, within a premises limit of up to £250 in stakes per day and £1,000 per week. The maximum fees that clubs may charge their members for participating in gaming has been set at £1 per day (or £3 if they hold a club gaming permit). Clubs and institutes holding a club gaming permit are also able to provide facilities for specified banker’s games.
25.30 To help clubs and institutes to comply with the full range of statutory requirements for gaming, the Commission has issued a statutory code of practice on equal chance gaming in consultation with interested parties. The provisions of the Code of practice for equal chance gaming in clubs and premises with an alcohol licence (which also applies to alcohol-licensed premises) include:
- ensuring that young people and children are protected by excluding them from gaming (even if they are permitted on the premises)
- ensuring that gaming is fair and open by requiring close supervision of the games, record keeping (as appropriate), the need for standard rules and the display of stakes and prizes limits and the rules during play.
25.31 A 48-hour rule applies in respect of all three types of gaming, so that the games may only be played by people who have been members of the club for at least 48-hours, or have applied or been nominated for membership or are genuine guests of a member.
Club machine permits
25.32 If a members’ club or a miners’ welfare institute does not wish to have the full range of facilities permitted by a club gaming permit, they may apply to the licensing authority for a club machine permit under s.273 of the Act. This authorises the holder to have up to three gaming20 machines of categories B3A, B4, C and D. Commercial clubs are not permitted to provide non-machine gaming other than exempt gaming under s.269 of the Act, so they should apply for a club machine permit (although such a permit does not allow the siting of category B3A gaming machines by commercial clubs).
25.33 In England and Wales, premises which operate membership-based social clubs (often work premises) are able to apply for a club machine permit. Before granting the permit the licensing authority will need to satisfy itself that the premises meet the requirements of a members’ club and may grant the permit if the majority of members are over 18 years of age. The permit will allow up to three machines of category B3A, B4, C or D but only one B3A machine can be sited as part of this entitlement. If under-18s use the club, for example they are apprentices, they may play the category D, but not the B4 or C machines. This does not apply in Scotland because only a club with a premises licence under the Licensing (Scotland) Act 2005 (opens in new tab) may apply for a club machine permit (See SSI No 504/2007: The Club Gaming and Club Machine Permits (Scotland) Regulations 2007 (opens in new tab) and SSI No 150/2011: The Licensing (Scotland) Act 2005 (Consequential Provisions) Order 2011 (opens in new tab)).
25.34 Holders of licensed premises club machine permits are required to comply with the code of practice, which has been issued by the Commission on the location and operation of machines.
Applications for club gaming permits and club machine permits
25.35 The Secretary of State has made regulations in relation to applications for these permits, and Scottish Ministers have made separate regulations setting out the fees and applications requirements that apply in Scotland.
25.36 Applications must be made to the licensing authority in whose area the premises are located, and must be accompanied by the fee and documents prescribed in regulations (SI No 1834/2007: The Gambling Act 2005 (Club Gaming and Club Machine Permits) Regulations 2007 (opens in new tab) and SI No 2689/2007: The Gambling Act 2005 (Club Gaming and Club Machine Permits)(Amendments) Regulations 2007 (opens in new tab), SSI No 504/2007: The Club Gaming and Club Machine Permits (Scotland) Regulations 2007 (opens in new tab)). Within a time prescribed in the regulations, the applicant must also copy the application to the Commission and to the chief constable. The Commission and the police may object to the permit being granted. The period within which such objections must be lodged and the grounds on which they maybe made are set out in regulations. If any objections are made, the authority must hold a hearing (unless consent has been given to dispense with it), otherwise no hearing is necessary.
25.37 A licensing authority may grant or refuse a permit, but it may not attach any conditions to a permit. The authority has to inform the applicant, the Commission and the police of the outcome of the application and of any objections made.
25.38 Licensing authorities may only refuse an application on the grounds that:
- the applicant does not fulfil the requirements for a members’ or commercial club or miners’ welfare institute and therefore is not entitled to receive the type of permit for which it has applied
- the applicant’s premises are used wholly or mainly by children and/or young persons
- an offence under the Act or a breach of a permit has been committed by the applicant while providing gaming facilities
- a permit held by the applicant has been cancelled in the previous ten years
- an objection has been lodged by the Commission or the police.
25.39 If the authority is satisfied that (a) or (b) is the case, it must refuse the application. Licensing authorities shall have regard to relevant guidance issued by the Commission and (subject to that guidance), the licensing objectives.
25.40 In cases where an objection has been lodged by the Commission or the police, the licensing authority is obliged to determine whether the objection is valid.
25.41 There is a fast-track procedure for clubs in England and Wales which hold a club premises certificate under s.72 of the Licensing Act 2003 (opens in new tab). Under the fast-track procedure there is no opportunity for objections to be made by the Commission or the police, and the grounds upon which an authority can refuse a permit are reduced. This is because the club or institute will already have been through a licensing process in relation to its club premises certificate under the 2003 Act, and it is therefore unnecessary to impose the full requirements of Schedule 12. Commercial clubs cannot hold club premises certificates under the Licensing Act 2003 (opens in new tab) and so cannot use the fast-track procedure. The fast-track procedure also does not apply in Scotland.
25.42 Those clubs applying for permits by way of conversion of their pre-existing 1968 Gaming Act (opens in new tab) Part II or Part III club registrations do not have the fast-track procedure available to them, even if they hold club premises certificates. In these instances, the club must still send a copy of the application to the Commission and chief officer of police. However, the Commission (and the police) may not object to the application and the licensing authority is, in fact, obliged to grant the application. However, care should be taken that the emphasis of the club is not being changed, to become a dedicated poker club for example.
25.43 The grounds on which an application under this process may be refused are that:
- the club is established primarily for gaming, other than gaming prescribed by regulations under s.266 of the Act
- in addition to the prescribed gaming, the applicant provides facilities for other gaming
- a club gaming permit or club machine permit issued to the applicant in the last ten years has been cancelled.
- Factors to consider when granting a club gaming permit
25.44 The licensing authority has to satisfy itself that the club meets the requirements of the Act to obtain a club gaming permit. It is suggested that applicants for permits should be asked to supply sufficient information and documents to enable the licensing authority to take account of the matters discussed in paragraphs 25.46 to 25.46, at the time they submit their applications to the licensing authority. Licensing authorities should be particularly aware that club gaming permits may be misused for illegal poker clubs.
25.45 In determining whether a club is a genuine members’ club, the licensing authority should take account of a number of matters, such as:
- Is the primary purpose of the club’s activities something other than the provision of gaming to its members? This is an indicator that it’s a genuine members’ club.
- Are the profits retained in the club for the benefit of the members? This is the key difference between a members’ club and a commercial club
- Are there 25 or more members? This is the amount of members a club has to have to qualify.
- Are there genuine domestic addresses on the register of members? Are domestic addresses listed for every member? Are members local to the club? These are all indicators that the member lists are bona fide and are made up of genuine members.
- Do members participate in the activities of the club via the internet? It is less likely to be a genuine members’ club if this is the case.
- Do guest arrangements link a member to every guest? Is there evidence of a signing-in register for guests? Guests must be genuine guests of members and not members of the general public.
- Is the 48-hour rule between applying for membership and participating in any gaming properly applied? This is an indication that the club has a proper membership scheme.
- Are there annual accounts for more than one year? This would indicate that the club is permanent in nature, rather than temporary.
- How is the club advertised and listed in directories, including on the internet? If the club is categorised under ‘gaming’ or ‘poker’, it is less likely to be genuine members’ club.
- What information is provided on the club’s website? This can be a useful source of information about the club.
- Are children permitted into the club? Appropriate access to the premises by children may indicate that it is less likely that the club is primarily for gambling activities.
- Does the club have a constitution and can it provide evidence that the constitution was approved by the members of the club? This provides further evidence that it is a properly constituted members’ club.
- Is there a list of committee members and evidence of their election by the members of the club? Can the club provide minutes of committee and other meetings? These are further evidence that the club is a properly constituted members’ club.
25.46 The constitution of the club could also indicate whether it is a legitimate members’ club. Amongst the things to consider when examining the constitution are the following:
- Who makes commercial decisions on behalf of the club and what are the governance arrangements? Clubs are normally run by a committee made up of members of the club, rather than individuals or managers, who make decisions on behalf of the members. There will normally be a system (consultation, voting, paper ballots, annual general meetings, special meetings etc) which allows members to be involved in major decisions concerning the management and running of the club. Such arrangements would normally be spelt out in the constitution.
- Are the aims of the club set out in the constitution? A lack of aim or aims which involve gaming could indicate that it is not a genuine members' club.
- Are there shareholders or members? Shareholders would indicate a business enterprise linked to a commercial club.
- Is the members’ club permanently established? Clubs can’t be temporary and must be permanent in nature.
- Can people join with annual or quarterly membership? This would indicate that the club is permanent in nature.
- Are there long term membership benefits? This would also indicate that the club is permanent in nature and that it is a genuine members' club. The benefits of membership would normally be set out in the rules of membership.
25.47 Other than bridge and whist clubs, which are separately catered for in regulations, a club cannot be established wholly or mainly for purposes of gaming. In applying for a club gaming permit, a club must therefore provide substantial evidence of activities other than gaming. Useful questions which a licensing authority should consider include:
- How many nights is gaming made available? If gaming is available for all or most nights with little other activity, then it is likely that the club is established wholly or mainly for gaming.
- Is the gaming advertised? If gaming is advertised with little or no reference to the other activities of the club, then it is likely that gaming is the main activity of the club and that the gaming is run commercially.
- What are the stakes and prizes offered? The stakes and prizes limits must be complied with. Unlimited stakes and prizes are only available to genuine members’ clubs once a club gaming permit has been granted. If high stakes and prizes are offered, this is also likely to indicate that gaming is one of the main activities of the club.
- Is there evidence of leagues with weekly/monthly/annual winners? This could indicate that the club’s main activity is gaming.
- Is there evidence of non-playing members? If members participate in gaming exclusively, this is an indication that the main or only activity of the club is gaming.
- Are there teaching sessions to promote gaming, such as poker? This could be evidence that the club’s main activity is gaming.
- Is there tie-in with other clubs offering gaming, such as poker, through tournaments or leagues? This is also an indication that gaming is possibly one of the main activities of the club.
- Is there sponsorship by gaming organisations, for example online poker providers? Similarly, this could indicate that poker is one of the main activities of the club.
- Are participation fees within limits? The licensing authority could consider club records and adverts for gaming etc. Fees that exceed the limits could indicate that the gaming is run commercially.
25.48 A visit to the premises before granting of the permit may assist the licensing authority to understand how the club will operate.
Factors to consider for gaming under a club machine permit
25.49 The licensing authority should satisfy itself that the gaming on offer meets the conditions set out in the Act and relevant regulations. To do this, the licensing authority may wish to ask questions of the applicant or ensure that the exempt gaming complies with these conditions. The conditions are:
- there must be no rake from the pot (that is, the organiser cannot take any money from the prize fund, or deduct money from the stakes or winnings). Licensing authorities should examine the records for gaming or, if possible, observe or get statements about the pot.
- there must be no side bets. This is probably only going to be possible to verify through observation.
- participation fees must be within the limits prescribed in the regulations. Is there evidence of excess participation fees in club records, adverts for gaming in or outside of the club or from complaints? Participation fees must not be disguised as charges for dealers, mandatory tipping of dealers, table charges or hire charges. Again, observation of the gaming may be necessary.
- prizes must be within the limits prescribed in the regulations. Is there evidence that they are excessive from records at the club, in adverts for gaming etc? Note that daily and weekly limits must be monitored by the operator and that ‘money or money’s worth’ (for example, goods) counts towards the prize limits.
- where the games are poker tournaments or leagues, the licensing authority may find it useful to consult Part 29 which sets out how the law applies to poker. This should help the licensing authority to determine whether the gaming is within the law from evidence such as records in the club and adverts for gaming.
Factors to consider when monitoring club gaming permits
25.50 Once the licensing authority has issued a club gaming permit, various aspects need to be considered by licensing authorities in monitoring the club gaming permit. In addition to monitoring whether the club continues to meet the requirements of the Act for a club gaming permit (that is, whether it remains a genuine members’ club) and whether the gaming meets the conditions set out in the Act and the relevant regulations.
25.51 Where clubs have computers available for use by members, licensing authorities should be aware that these computers may be taken to be gaming machines in certain circumstances. Generally, a computer is not a gaming machine merely because there is a possibility of accessing a gambling website via the internet. However, a computer will be taken to be a gaming machine if it is knowingly adapted or presented to facilitate or draw attention to the possibility of it being used for gambling.
25.52 Each case will need to be looked at individually and ultimately the decision regarding whether a machine is a gaming machine is one for the courts to make.
25.53 The precise circumstances in which the facilities are offered - including the environment in which they are offered and the relationship with other gambling facilities provided - will need to be taken into account when assessing the status of those facilities. The following indicators may help in making decisions about whether a computer is knowingly adapted or presented to facilitate or draw attention to the possibility of it being used for gambling. This list is not exhaustive, and the presence or absence of any single factor is not necessarily conclusive:
- icons for gambling websites displayed on the desktop screen
- links to gambling websites available via the start menu
- screensavers, desktop wallpapers referring to gambling websites
- internet browsing history or favourites menu containing gambling websites
- promotional material (posters, flyers) indicating the use of computers for gambling
- gambling software downloaded onto a computer
- staff informing customers of the existence of the computer for access to gambling websites
- email messages or other promotional material sent to customers/individuals referring to the availability of computers on premises for gambling purposes.
25.54 Licensing authorities should note that, as a consequence of the Gambling (Licensing and Advertising) Act 2014 (opens in new tab), there is a requirement on remote gambling operators selling into the British market, whether based here or abroad, to hold a Commission licence to enable them to transact with British consumers.
25.55 Any of the factors mentioned in the preceding paragraphs in this section may give rise to the need to review the club gaming permit or take appropriate enforcement action.
25.56 The Commission provides advice and guidance to licensing authorities on permits and related matters and, on a case-by-case basis, will undertake targeted collaborations with licensing authorities in order to establish principle and precedent, and a clear understanding of the legal requirements.
25.57 An agency that may also be able to assist licensing authority enquiries is HM Revenue & Customs. If a club is trading under the auspices of a club gaming permit (as a members’ club) but is in fact a commercial club with, for example, their main activity being poker, they would be liable for gaming duty. Licensing authorities should bear in mind that clubs of this nature have premises to maintain, as well as staff and other costs, so the sums involved may be significant.
25.58 Under the Act, a private club with a club gaming permit cannot run the premises wholly or mainly for the purposes of gaming, nor can the club make a profit as all funds must be applied for the benefit of the member.
25.59 There have been occasions where club gaming permits have been misused by individuals seeking personal financial gain. One case led to the successful prosecution of a private member’s club owner under the Proceeds of Crime Act 2002 (opens in new tab). The club owner had been granted a club gaming permit but was later charged with money laundering in relation to the running of an illegal poker club. More poker-related case studies are in the LA Toolkit.
Maintenance of permits
25.60 The permit will have effect for ten years, unless it ceases to have effect because it is surrendered or lapses or is renewed. However, a permit granted under the fast-track procedure does not expire, unless it ceases to have effect because it is surrendered, cancelled or forfeited or it lapses.
25.61 The holder of the permit must pay to the licensing authority the first annual fee, and an annual fee before each anniversary of the issue of the permit, in accordance with regulations.
25.62 Permits may be amended to meet changing circumstances. Licensing authorities may only refuse a variation if on consideration of a completely new application they would refuse the permit.
25.63 The permit, which is to be kept on the premises it relates to, must be in a form specified by the regulations and, if obtained through the fast-track procedure, must identify the appropriate club premises certificate it relates to. It is an offence not to produce the permit when requested to do so by a constable or an enforcement officer.
25.64 If a permit is lost, stolen or damaged, the holder may apply for a replacement, subject to payment of a prescribed fee. The licensing authority must grant the application if it is satisfied that the permit has been lost, stolen or damaged and, where the permit is lost or stolen, a report has been made to the police. It should issue a copy and certify it as a true copy.
25.65 A permit will lapse if the holder of the permit stops being a club or miners’ welfare institute, or if it no longer qualifies under the fast-track system for a permit. In addition, a permit will cease to have effect upon being surrendered to the authority. A notice to surrender must be accompanied by the permit or a statement explaining why it cannot be produced. The authority must inform the police and the Commission when a permit has been surrendered or lapsed.
Cancellation and forfeiture of permits
25.66 The licensing authority may cancel the permit if:
- the premises are used wholly by children and/or young persons
- an offence or breach of a permit condition has been committed in the course of gaming activities by the permit holder.
25.67 Reference here to ‘a permit condition’ means a condition in the Act or in regulations that the permit is operating under.
25.68 Before cancelling a permit, the licensing authority must give the permit holder at least 21 days’ notice of the intention to cancel and consider any representations that they may make. The authority must hold a hearing if the permit holder so requests and must comply with any other procedural requirements set out in regulations. If there is no appeal, the cancellation will take effect 21 days after notice of the intention to cancel was given. The authority must notify the permit holder, the Commission and the police that the permit has been cancelled and the reasons for the cancellation.
Renewal of permits
25.69 In England and Wales, in accordance with paragraph 24 of Schedule 12 of the Act, an application for renewal of a permit must be made during the period beginning three months before the licence expires and ending six weeks before it expires. The procedure for renewal is the same as for an application. In Scotland, the Club Gaming and Club Machine Permits (Scotland) Regulations 2007 (SSI No 504/2007) (opens in new tab) apply. Permits granted in terms of these regulations do not expire, although they can cease to have effect in certain circumstances, can be cancelled and can be varied.
25.70 The duration of the permit will not be curtailed while a renewal application is pending, including an appeal against a decision not to renew.
25.71 If, at the time a permit is renewed, the applicant holds a club premises certificate, the fast-track procedure will apply as it does when application is first made for the permit. This does not apply in Scotland.
20 The application should be submitted by the club itself and not a third party such as a machine supplier.
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Last updated: 21 May 2021
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