Licensing, compliance and enforcement under the Gambling Act 2005
3 - Licensing
This chapter sets out the Commission’s approach to considering operating and personal licence applications, the kinds of evidence considered when assessing an application, and the process for assessing applications and notifying the outcome.
Who needs a licence?
Most providers of commercial gambling based in Great Britain or those providing remote gambling to consumers in Britain require an operating licence. Further guidance as to the types of operation or activity that might be exempt from requiring an operating licence can be found on our website.
Personal licences are required by those performing a specified management or operational function. The categories of people who need a personal licence are outlined in the Licence Conditions and Codes of Practice (LCCP).
Where an operator is required to have Personal Management Licence holders in specified management offices, the Commission expects that the person who occupies the Head of Compliance role will not normally also occupy one of the other specified management offices3.
Those seeking a licence are required to submit an application form with the prescribed fee and supporting documentation.
Information and evidence
All applicants are required to supply the Commission with sufficient and complete information to support their application, and in particular information that will enable an assessment of their suitability to be made. However, the Commission takes a risk based and proportionate approach to the amount and detail of information an applicant is required to provide. Guidance on the type of information required is included in the guidance notes that accompany the application form4.
The Commission may also seek information or opinions from other sources where appropriate, or where its initial review has highlighted areas of concern.
The sources the Commission may access include, but are not restricted to:
- Disclosure and Barring Service (DBS) and Disclosure Scotland
- Court records
- Company Watch
- Companies House
- Dun & Bradstreet
- Financial Conduct Authority
- The Insolvency Service
- The Solicitors Regulation Authority
- The Law Society of Scotland
- National Crime Agency
- sports governing bodies
- open source internet searches
- other regulators in the UK and abroad
- police forces in UK and abroad
- references provided to the Commission.
If an application is incomplete or information required to support the application is missing or not provided upon request then it may be determined on the basis of the information the Commission has available to it. This may affect the decision on whether a licence can be granted.
Assessment and determination of the application
Each application is considered on merit and on the evidence available. In considering an application the Commission has regard to the licensing objectives and whether they are likely to be compromised, and the suitability of an applicant to carry out the licensed activities.
In considering operating licence applications the Commission will include assessment of the suitability of those persons considered relevant to the application. The persons considered relevant may vary depending on the information provided in the operating licence application and on company structure, but are likely to exercise a function in connection with, or to have an interest in, the licensed activities. General guidance on who may be considered relevant is available on the Commission’s website and in regulations5.
When considering the suitability of an applicant the Commission has regard to the following elements and seeks evidence to support and enable an assessment to be made against each one.
Identity and ownership
The identity of the applicant and or person(s) relevant to the application, and, in the case of an application for an operating licence, who ultimately owns a corporate applicant.
Financial and other circumstances of the applicant and/or person(s) relevant to the application, past and present. For operating licences, this will include the resources likely to be available to carry out the licensed activities.
The honesty and trustworthiness of the applicant and/or person(s) relevant to the application.
The experience, expertise, qualifications, and history of the applicant and/or person(s) relevant to the application.
Criminal record of the applicant and/or person(s) relevant to the application.
Upholding the licensing objectives
Applicants for an operating licence are asked about their policies for ensuring that the licensing objectives will be adhered to. Guidance is provided on the Commission’s website and in the guidance notes that accompany the application form.
In assessing policies the Commission is looking for an overall understanding of the legislation and evidence that arrangements address social responsibility requirements. Where arrangements are considered to be inadequate, the Commission will pursue that with applicants. However, the responsibility for taking the lead in developing and updating measures designed to protect the licensing objectives lies principally with an operator.
On considering an application for a licence the Commission is required to grant it, reject it or grant it in respect of one or more of the specified activities and reject it in respect of the others. In some circumstances the Commission may attach specific conditions to the licence, which may, for example, have the effect of restricting the activities that may be carried out in reliance on the licence.
There is a positive obligation on applicants to show that they are able to satisfy the licensing objectives.
The Commission evaluates the information it receives and will categorise the application in one of the four following ways.
This indicates that an applicant poses a substantial risk to the licensing objectives; or there are significant concerns about an applicant’s suitability; or there is a risk of significant non-compliance with the requirements of the Act and the Commission’s LCCP.
This indicates that there is less risk to the licensing objectives; the applicant meets the minimum expectations regarding suitability; the applicant just meets the requirements of the Act and the Commission’s LCCP.
This indicates that the applicant is unlikely to pose a risk to the licensing objectives; the applicant appears to be suitable to carry on the licensed activities in question; the applicant appears likely to be able to meet the requirements of the Act and the Commission’s LCCP.
This indicates that the applicant is unlikely to pose a risk to the licensing objectives; the applicant has a proven track record of being able to carry on the licensed activities in question; the applicant has a proven track record of being able to meet the requirements of the Act and the Commission’s LCCP.
The Commission will keep applicants up to date with the progress of their application. Where the initial assessment gives rise to any concerns or doubts, the Commission will, if it is possible to do so, seek to address those concerns or doubts with the applicant by requesting additional information or clarification. The one possible exception to this would be the criminal record of the applicant where the Act6 allows for the refusal of an application on that ground alone if the applicant or a person relevant to the application has a conviction for a relevant offence7.
While the Commission is willing to engage with applicants through requests for clarification or further information, it will seek to expedite matters at all times, and will not allow uncooperative applicants to delay licensing decisions. If licensing decisions are delayed due to applicants’ failure to provide adequate information in good time, those applicants can expect their application to be determined on the basis of the information the Commission has available to it, with the risk the application will be refused.
Given that all applicants are required to supply the Commission with sufficient information to support their application, the Commission would not expect an applicant to subsequently seek to make material changes to their application.
If material changes are made, applicants are likely to be invited to withdraw their application and submit a new application, accompanied by the appropriate fee. If the application is not withdrawn it is likely that the application will be refused.
Identity and ownership
The Commission requires individuals to provide identification information, as recommended by the Disclosure and Barring Service (DBS), which is checked in accordance with their advice. The Commission will seek to follow up and resolve any inconsistencies, such as an indication on the DBS record that states aliases have been used by an applicant. The Commission also asks for current photographs of personal licence applicants and will check that these are consistent with any photographs on identity documents.
The Commission will check records about companies and directors’ records to ensure that we are clear that the correct legal entity is being licensed and to check whether there are any other related companies in a group, or historically related or common directors across a number of companies. If this is the case we may investigate related companies to understand the relationship.
The Commission will also want to ensure that it can establish who benefits from the gambling provided and therefore require that any shareholders with a 3% holding are listed and that those with over 10% holding complete an Annex A form to enable further checks to be carried out on them. If the beneficiary of any business is a Trust then the Commission will want to know who the beneficiaries of that Trust are.
If the applicant is a company based overseas or part of the company structure is based overseas then we would want a full description of the company structure and would satisfy ourselves that the overseas elements were either listed companies or that we knew of nothing untoward about them. We might carry out checks with overseas regulators.
For operating licence applications, the Commission will ask for accounts from existing businesses or financial projections where the applicant is a new business. Our main focus is on assessing the resources likely to be available to enable a licensee to carry on the licensed activities. The Commission does not purport to assess, on an ongoing basis, an operator’s solvency; the Commission is principally interested in financial stresses that might lead to an increased likelihood of compliance failures.
The Commission’s approach is slightly different depending on whether an applicant is a new start up or an existing business. With new businesses we consider the overall viability of the business and may wish to make further enquiries if it appears that the resources available are inadequate or not properly secured. With existing businesses the Commission will consider the resources devoted to the gambling operation and the degree to which they could deliver the necessary arrangements for the provision to be compliant with the Act.
The Commission will consider whether the information it collects raises any concerns about integrity. This involves an assessment of an applicant’s criminal record, further details of which are as follows, or past involvement in civil or regulatory investigations or proceedings.
The Commission will consider the evidence and findings of complaints about the applicant and investigations by other regulators. The Commission will look into the applicant and other relevant persons to see if there has been a history of problems or business failure and will use open source checks to assist with that.
The Commission will take up references and may review the CVs of the applicant or other relevant persons to assess their work experience and the training they have received which demonstrates their competence to carry out the role required of them.
For individuals who are likely to fulfil key senior roles, the Commission will look for evidence that the individual has some demonstrable experience, where appropriate, of working in a regulated industry and, if an individual has had no gambling experience, that suitable training or briefing in gambling regulation is planned.
The fact that an applicant has been convicted of a relevant offence will result in the criminality element of the assessment being marked inadequate. This does not mean that the application will automatically be refused. Each case will be considered on its individual facts and merits and consideration will be given to the seriousness, relevance and date of the conviction. The Commission may consider relevant offences which would otherwise be considered ‘spent’ under the Rehabilitation of Offenders Act 1974 (opens in new tab) when considering an application for a licence.8More information on the treatment of criminal convictions is as follows.
Once the assessment has been completed for each element of the application then an overall view is taken and marked on the same basis. The fact that one or more elements are ‘just adequate’ or less does not always mean that the licence will be refused. The overall evaluation is judged on a case by case basis having regard to the importance of the matters to which it relates and risk to the licensing objectives.
When considering the relevance of an offence the Commission will start from the basis that it will accept the information it receives regarding convictions from the DBS or Disclosure Scotland or the police as likely to be accurate. If there is any doubt about the accuracy of the information then it is the responsibility of the applicant to rectify the error with the reporting body. In any event, the Commission’s processes are not a forum for running arguments which could have been put in a criminal appeal.
The fact that a person has been convicted of an offence will be considered as a contraindicator of that person’s suitability as it raises a question about the character and behaviour of the individual in question.
In evaluating the seriousness and relevance of an offence, the Commission’s assessment will focus on whether the conviction has a potential bearing on suitability to hold a licence and will have regard to the public interest, which includes taking account of:
- the protection of the public
- the maintenance of public confidence in the gambling industry and the Commission
- the importance of upholding proper standards of conduct and competence by licensees.
Broadly, the Commission considers that the impact of a conviction on an applicant’s suitability to hold a licence is likely to be related to:
- the nature and seriousness of the offence
- the relevance of the offence in the context of the licensed activities.
In order to assess the nature and seriousness of the offence the Commission will take account of all the evidence and information available. This will involve consideration of the facts and circumstances of the offence, including the individual’s explanation and any further information. For example, through any Amplified Police Report (APR) and sentencing remarks made by a Court.
Consideration of the nature and seriousness of an offence includes consideration of:
- the seriousness of the offence, its legal definition, the relevant criminal behaviour, including the degree of dishonesty, intent or recklessness involved
- the sentence imposed
- whether there is repeat offending or a pattern of offending, including the time period over which the offending occurred and the age and experience of the applicant at the time
- evidence of rehabilitation or the lack of a capacity for rehabilitation
- harm or loss suffered by any victim(s) of the crime and the nature of any victim(s).
The assessment of relevance will include consideration of whether:
- the offence is a ‘relevant offence’ listed in Schedule 7 of the Act
- the behaviour which led to the conviction was not only criminal but was also inconsistent with the licensing objectives
- the relevance of the offence to the activities which the applicant would be permitted to carry out if granted a licence.
The Rehabilitation of Offenders Act 1974 provides that, after a prescribed period of time, certain convictions become ‘spent’. This means that a person who was convicted of an offence is after that time ‘rehabilitated’ and is to be treated for all purposes in law as if he had never been charged with, convicted of, or sentenced for the offence.
However, as indicated previously, by virtue of section 125 of the Gambling Act 2005, in the context of an application for an operating or personal licence, the Rehabilitation of Offenders Act 1974 does not apply to a ‘relevant offence’. Therefore applicants must disclose relevant offences even if they would normally be spent and the Commission may refuse a licence on the grounds that the applicant (or a person relevant to the application) has a conviction for a ‘relevant offence’.
When deciding what weight is to be attached to a conviction for a ‘relevant offence’, the Commission will take into account the passage of time since the offence was committed, the applicant’s explanations of the circumstances of the offences, and any information or reports which are available relating to the conviction.
When considering the applicant’s suitability to carry on the licensed activities, as required by section 70 of the Act, the Commission will also have regard to the applicant’s unspent convictions for offences other than ‘relevant offences’. Again, the Commission will take into account the passage of time since the offences were committed and the applicant’s explanations of the circumstances of the offences.
The Commission will disregard spent convictions that do not relate to ‘relevant offences’.
Communicating the final decision
All applicants will be informed in writing of the decision on their application. Where the Commission is minded to make a decision to refuse the application, grant in part, or to attach specific conditions to the licence the applicant will be given the opportunity to make representations before that decision is finalised. Details of these arrangements and subsequent appeals processes including appeals to the First-tier Tribunal (Gambling) are on the Commission’s website.
If the applicant is successful then a licence will be issued either by email or in hard copy. For operating and personal licences relevant details of the licence will be published in the public register9.
What happens after the licence has been issued?
Once a licence has been granted and issued, it is important that licensees read through it to check that the details on the licence are correct and that they are familiar with the conditions attached to the licence. Licensees should also be aware of the changes and matters they must keep the Commission informed of whilst they are the holder of a licence 10.
The Act requires the holders of operating licences to pay an annual fee for their licence, in advance. The first annual fee is due within 30 days of the licence being issued. Subsequent payments will be required before the anniversary date; that is the date of issue of the licence 11.
The Commission will remind licensees about the need to pay their annual fee approximately six weeks before each fee is due. Failure to pay annual fees by the due date may lead to the revocation of a licence.
Holders of personal licences will be required to pay a fee every five years to maintain their licence 12. Full details of the fee to be paid and any additional information the Commission may require will be requested at least six weeks before the fee is due. Failure to pay the fee will ultimately lead to the revocation of a licence.
3The Commission recognises that in exceptional circumstances this may be impractical, in which case the Commission may agree an exception should be made.
4Operating Licence Application Forms Guidance Notes and the Personal Licence Application Forms Guidance Notes (as amended from time to time).
5The Gambling Act 2005 (Definition of Small-scale Operator) Regulations 2006.
6Section 71 Gambling Act 2005.
7Section 126(2) and Schedule 7 Gambling Act 2005.
8Section 125 Gambling Act 2005.
9The Commission maintains a register of operating licences relating to each licence under the provisions of Section 106 of the Act.
10Licence Conditions and Codes of Practice (as amended from time to time).
11The Gambling (Operating Licence and Single-Machine Permit Fees) Regulations 2006 (as amended).
12The Gambling (Personal Licence Fees) Regulations 2006 (as amended).
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4 - Compliance
Last updated: 27 May 2021
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