Section 71: Consideration of application: criminal record

230.     One of the licensing objectives is to keep gambling crime free. This section provides that the Commission may refuse an application for an operating licence if the applicant has a conviction for a relevant offence. This is without prejudice to the suitability of the applicant generally, but permits the Commission to reject an application by reason of the conviction for the relevant offence, should it consider this appropriate. "Relevant offence" is defined in the interpretation section for this Part.

Section 72: Consideration of application: demand

231.     Under the Betting, Gaming and Lotteries Act 1963 and the Gaming Act 1968, one of the considerations for the grant of a permit or licence was whether there was unmet demand for the specified gambling facilities in the particular area to which an application related. This section revokes this principle, as unmet demand is not a relevant criterion, under the Act, for determining whether or not to grant an operating licence. This section also abolishes the "permitted areas" for casinos which were established under the Gaming Act 1968. Similar provisions are contained in Part 8, in relation to the consideration of premises licences. The necessary repeals for these various matters are set out in Schedule 17.

Section 73: Procedure

232.     This section sets out the powers of the Commission to require information from an applicant, and to have regard to information provided by other people when considering an application. In particular, the Commission may require the production of an enhanced criminal record certificate under the Police Act 1997 (c.50). This applies to the applicant or people relevant to the application.

233.     The licensing policy statement produced by the Commission under Part 2 must specify the procedures to be operated by the Commission, including the Commission's practice with regard to delegating functions, holding hearings, and requiring evidence. Schedule 4 also makes provisions with regard to the general proceedings of the Commission.

Section 74: Determination of application

234.     This section provides the range of determinations the Commission can make having considered an application and the actions consequent upon a determination, including a requirement to give reasons where an application is rejected.

Sections 75 to 78: Licence Conditions

235.     There are three types of licence condition that may be attached to operating licences under the Act: general conditions and individual conditions, both of which are attached by the Commission; and conditions imposed by the Secretary of State.

236.     Sections 75 and 76 concern general conditions, which are conditions the Commission may specify for an operating licence or a class of operating licence, and which have general application. So, for example, the Commission could specify a general condition that applied to all general betting operating licences, that the rules of the bet must be on display to customers (whether on premises, or over the internet). This condition would apply to everyone holding a general betting operating licence.

237.     Section 76 sets out the procedures which the Commission must follow in specifying general conditions. These include holding general consultations (with some mandatory consultees) on the terms of the condition, and publishing conditions. In addition, the Commission must notify licensees in advance of a proposed imposition, modification or revocation of a general condition, giving three months notice, unless the matter is urgent. This ensures that licensees have adequate notice of general conditions and changes that may be made to them over time.

238.     Additionally, the Commission has power, under section 77 to impose specific conditions on individual operating licences. These conditions are not subject to any publication or general consultation requirements, in contrast with general conditions. Rather, these conditions will address particular matters concerning an individual operator and its activities, where the Commission considers it appropriate. So, for example, the Commission could attach an individual condition on a particular casino operating licence that not more than five casino premises can be operated under it, due to the financial strength of the operator. Every operating licence issued must specify any individual conditions attached to it under this section.

239.     Alongside the powers of the Commission to attach conditions to operating licences, the Secretary of State may make regulations which provide for a specific condition to be attached to a class of operating licence, under section 78.

Section 79: Scope of powers to attach conditions

240.     This section gives specific examples of the matters to which general, individual or Secretary of State conditions may relate. The section does not limit the breadth of the matters with which these three types of condition can deal. Instead, this section helps provide some understanding of the matters which conditions may cover.

241.     A condition may:

• limit or restrict the nature or extent of the gambling facilities provided, or control the circumstances in which they are carried on;

• make provision about the facilities that may be provided, the manner in which the facilities are provided or the number of people employed in providing facilities;

• make provision about the financial resources available to the licensee, including the maintenance of reserves in respect of potential liabilities;

• where it is a remote operating licence, may restrict the methods of remote communication that may be used;

• make provision about the advertising or description of facilities for gambling (which could include the name given to a gambling product);

• make provision about assistance to people who are or may be affected by problem gambling; and

• require the operator to identify or record the identity of users of his facilities.

Section 80: Requirement for personal licence

242.     Part 6 of the Act provides the licensing system for personal licences. This section sets out the relationship between an operating licence and the need for an operator to use people holding personal licences to provide certain functions and facilities for gambling.

243.     When the Commission considers an application for an operating licence, it will consider what offices or functions in the organisation should be performed by a personal licence holder, and attach conditions to the licence specifying what the requirements for personal licences are to be. These conditions could be set by general or individual condition, or the Secretary of State may set generic conditions by regulations to apply to classes of operating licence.

244.     There will be one mandatory condition on every operating licence, which is that every operating licence must specify at least one management office which is to be occupied by a person who holds a personal licence (subsection (1)). This will be set as a general or individual condition, not a Secretary of State condition. Beyond this one mandatory personal licence, the Commission may identify any additional number of posts in an operator's organisation which must be filled by a personal licence holder (subsections (2) to (4)). Such conditions will always relate to either a management office or an operational function.

245.     Management office (subsection (5)) means:

• A director of a company;

• A partner;

• An officer in an unincorporated association; and

• Any position which (by reason of the terms of the appointment) carries responsibility for:

•      the conduct of a person who performs an operational function; or

•      facilitating or ensuring compliance with the terms of the operating licence.

246.     Operational function (subsection (6)) means:

• any function that enables the person to influence the outcome of gambling;

• receiving or paying money in connection with the gambling; or

• specified activities in relation to the manufacture and supply of gaming machines.

247.     The Secretary of State has the power to amend these definitions through secondary legislation (subsection (8)).

248.     These broad definitions will enable the Commission to consider the particular circumstances of each operator (irrespective of the job titles the operator may use) and identify those functions and offices within an organisation that will require a person to hold a personal licence when carrying them out. This section is not intended to require everyone performing any management office or operational function (as described above) to hold a personal licence. The Commission will decide what the appropriate licensing requirements are to be, either on an individual basis, or, where it is able to do so, according to classes of operating licence.

249.     If an operator does not use a person holding an appropriate personal licence to perform an office or function identified by the Commission, it will breach a condition of its operating licence.

250.     While this section provides the mechanism for operating licences to contain conditions about matters to be undertaken by a personal licence holder, it does not cover the process for obtaining a personal licence. That is set out at Part 6 of the Act.

251.     Subsection (9) contains an exemption from the requirements of this section for clubs or miners' welfare institutes holding a bingo operating licence. Part 12 requires clubs or miners' welfare institutes which provide facilities for bingo that exceed a specified threshold in terms of stakes or prizes in any week, to obtain a bingo operating licence. Games played below this threshold are authorised by other provisions in Part 12. Officers of these associations are not required to hold personal licences in relation to their additional bingo operating licence, and this subsection exempts them accordingly.

Section 81: Credit and inducements

252.     This section concerns restrictions on the offering of credit and inducements by operating licence holders. Subsection (1) provides that a condition may be attached by the Commission to an operating licence relating to:

• the giving of credit in relation to the licensed gambling activities;

• making offers or inducements designed to induce participation in the licensed gambling activities; or

• being party to arrangements for inducing, permitting or assisting person to gamble.

253.     In addition to this general condition-making power, subsection (2) provides that holders of non-remote casino or bingo licences may not themselves give any form of credit to people using their facilities. Nor may they arrange, permit or knowingly facilitate credit in connection with their gambling facilities. This means that credit cards cannot be used to pay for gambling offered by casino or bingo operators. A similar restriction is placed upon the relevant premises licences in Part 8, and Part 10 prevents credit cards being used to pay for gaming machines.

254.     Subsection (3) allows cash-withdrawal machines accepting credit cards to be used by casino or bingo operators, provided that:

• the nature and location of the machines complies with any relevant licence conditions; and

• the provider of the machine and the gambling operator are unconnected, and no payment is made or received in connection with the machine.

255.     Subsection 4 defines "credit" to include any form of financial accommodation and the acceptance of payment of a fee, charge, or stake in anything other than cash, cheque or debit card payment is considered credit.

Section 82: Compliance with code of practice

256.     This section makes it a condition of all operating licences that the holder must comply with any code of practice relating to social responsibility which is relevant to them. Codes of practice issued by the Commission under Part 2 are not of themselves automatically binding on operators, but are part of the overall scheme of regulation. However, this section provides that social responsibility provisions in any code are incorporated as conditions to an operating licence.

Section 83: Return of stakes to children

257.     The Act contains a range of provisions designed to prevent children and young people from gambling. Under this section a condition is imposed on all operating licences which requires operators to take certain steps in the event that they become aware that a child or young person has used their facilities to gamble. A child is a person under 16, and a young person a person under 18.

258.     If an operator becomes aware that a child or young person has used his gambling facilities, then the operator must return any money paid by the child or young person as soon as practicable, and must not pay out any winnings (although if winnings have been paid out before the operator is aware of the claimant's age, he may not demand repayment).

259.     This section does not apply to the use of the lowest stake gaming machine (a Category D machine) or equal chance gaming at a licensed Family Entertainment Centre (which can be played pursuant to authorisations under Part 13). The section only applies to children (and not a young person) when the gambling activity concerned is football pools or a lottery. The condition imposed by this section cannot be overridden by any contract or other agreement.

Section 84: Premises

260.     It is the role of licensing authorities to licence specific premises upon which facilities for gambling may be provided in Great Britain. These matters are regulated by Part 8 of the Act. Therefore, an operating licence cannot be subject to a condition which specifies particular premises upon which gambling activities must or must not be carried on. However, conditions may be attached to operating licences which deal with the number of sets of premises on which the licensed activities may be carried on (e.g. a maximum of 100 betting shops) or the number of people for whom facilities may be provided on any premises where the licensed activities are carried on.

261.     An operating licence is not limited to authorising the provision of facilities in one place. The fact that an operating licence is a "casino" operating licence or an operating licence for an "adult gaming centre" does not mean this only authorises the provision of one such facility. An operating licence gives a generic entitlement, to be used alongside any number of premises licences, subject to any conditions imposed under subsection (1) of this section.

Section 85: Equipment

262.     In issuing an operating licence, the Commission may attach a condition about the amount or specification of equipment to be used in the licensed gambling activities. Such equipment may include computers or devices for playing casino games, but does not include a gaming machine. This ties in with the powers of the Commission to consider the suitability of equipment when considering an application for a licence.

263.     The section contains a specific provision for equipment used for playing bingo. Under subsection (2)(a) a condition cannot be attached to a licence about the number of pieces of equipment used for playing bingo. This means that equipment such as "mechanised cash bingo equipment", used under the Gaming Act 1968 regime, cannot be subject to control about its numbers. It can be subject to licence conditions about its specification under subsection (2)(b), and such specification will enable this equipment to fall outside the definition of gaming machine in Part 10.

264.     Similarly, the Commission can use subsection (2)(b) to specify equipment for playing bingo in adult gaming centres or licensed family entertainment centres, (bingo played pursuant to the prize gaming entitlements in Part 13). Where it does so, such equipment will not constitute a gaming machine.

Section 86: Gaming machines

265.     While certain operating licences confer general permissions to use gaming machines, under section 68, the permission to use gaming machines on particular premises is contained in Parts 8 and 10 of the Act. This means that the Commission should not attach conditions to operating licences concerning numbers or categories of gaming machines which an operator is entitled to use. Therefore, subsection (1) prevents operating licences having conditions attached to them about:

• the number or categories of gaming machine that may be made available for use in accordance with an operating licence; or

• anything that contradicts regulations concerning the use of gaming machines, made by the Secretary of State under Part 10.

266.     This does not mean that the Commission cannot regulate the manufacture and supply of machines. Section 96 makes express provision for the Commission to set standards for the gaming machine technical operating licence.

267.     Subsection (2) provides a mechanism for the Commission to require operators to stop using machines that have been illegally manufactured, supplied, or handled. The Commission may notify an operator that a machine is not covered by an appropriate gaming machine technical operating licence, or does not comply with Commission standards. After such notification, the Commission may place a condition on the relevant operating licence requiring the operator to stop making the machine available for use. Failure to do so will amount to breach of the licence.

Section 87: Membership

268.     Under the Gaming Act 1968 it is a requirement that gaming licences under Part II of that Act can only be held by casinos or bingo halls that operate as a members' club. That rule is abolished by this Act, and as a result, this section provides that neither the Commission nor the Secretary of State can impose a condition on an operating licence requiring facilities to be provided on the basis of a club or on any other membership basis. However, nothing in this section or the rest of the Act prevents organisations from operating as a members' club if they so wish.

Section 88: Information

269.     This section permits the Commission or the Secretary of State to impose licence conditions requiring operators to pass information to the Commission or to such other people as may be specified. The purpose of this power is to promote information exchange between the Commission, operators and, for example, sporting regulators. The type of information which could be covered includes information concerning cheating or breach of sporting rules. Licence conditions could also be used to supplement the voiding of bets powers in Part 17. Voluntary codes are already in place in parts of the gambling industry to allow such information exchange. This section allows a uniform approach for different sectors to be established, as appropriate.

Section 89: Remote operating licence

270.     This section sets out particular rules applying to a remote operating licence.

271.     It is a presumption of a remote operating licence that remote gambling equipment used by the operator in providing facilities for gambling must be located in Great Britain. This is set out in subsection (1). Part 3 contains the definition of remote gambling equipment.

272.     Subsection (2) empowers the Commission to depart from this general presumption, in certain circumstances. The Commission may allow an operator to site particular pieces of specified remote gambling equipment off-shore, provided the Commission is satisfied that to do so is consistent with the licensing objectives in section 1. For example, the power could be used in relation to equipment facilitating player to player games which can involve individuals in different jurisdictions being pooled by operators. The matter is one of discretion, for the Commission.

273.     Without prejudice to its other condition-making powers, the Commission may establish, or authorise others to establish on its behalf, standards in respect of systems and processes used for remote gambling. These standards will be relevant to the consideration of applications for remote operating licences, made under section 69. The Commission can enforce these standards through licence conditions, including the testing of the operator's systems, on application and from time to time.

Section 90: Casino operating licence

274.     Part 1 provides a definition of casino, and gives the Secretary of State powers to define categories of casino. Under subsection (1) the Commission or the Secretary of State can impose conditions on any casino operating licence which restricts the type of casino game that can be made available. Under the Gaming Act 1968 these restrictions were imposed by secondary legislation. Under the Act the Commission has the power to achieve this by licence condition, or the Secretary of State may do so by regulations.

275.     Subsection (2) provides that the Commission may specify rules for casino games or any equal chance game played in a casino. Again, this power replaces the position under the Gaming Act where these matters were prescribed in secondary legislation.

Section 91: Bingo operating licence

276.     The Secretary of State may use her regulation making to attach conditions to bingo operating licences on the matters specified in subsection (1). This includes power to limit the amount of stakes or participation fees or value of prizes; or requiring a specified proportion of stakes to be paid out by way or prizes, or imposing requirements specific to bingo games that are played on more than one set of premises. Subsection (2) then lists matters about which conditions cannot be made in relation to bingo operating licences. This means that the Commission has no power to set conditions on these matters, and, to the extent that it is not expressly permitted by subsection (1), nor does the Secretary of State.

277.     The introduction of remote operating licences, together with the Secretary of State's power to impose requirements that are specific to games played on more than one set of premises, at subsection (1)(e), replace the statutory provisions relating to "multiple" and "linked" bingo that are repealed by this Act. Remote operating licences will be required by those wishing to provide bingo by means of remote communication, even where the bingo is played partly on licensed bingo premises. The fees for these licences will be commensurate with the regulatory costs for the particular activities concerned.

278.     Subsection (2)(f) prevents a condition being attached to a bingo operating licence which prohibits or limits the roll-over of prizes between bingo games. Neither the Secretary of State, nor the Commission can attach a condition relating to the roll-over of prizes.

279.     In setting participation fees under subsection (1), different types of fee may be set, as amplified by section 344. For example, fees for admission to the premises can be distinguished from a fee to participate in a particular game. Fees can also be apportioned between gambling and non-gambling purposes.

Section 92: General betting operating licence

280.     A general betting operating licence will be required by anyone wishing to accept or make bets by way of business (this includes negotiation of bets). If someone wishes to provide facilities merely for other people to accept and make bets, then the relevant operating licence will be a betting intermediary operating licence, not a general betting operating licence, as the latter is relevant only for people who are themselves making or accepting bets in the course of a business. See also sections 353(2)(a), 296(3) and 302.

281.     This licence replaces the bookmaker's permit under section 2 of, and Schedule 1, to the Betting, Gaming and Lotteries Act 1963.

282.     Subsection (1) sets out who is empowered to accept bets under the terms of a general betting operating licence: this will be the licence holder, an employee of the licence holder and any other holder of a general betting operating licence. No other person may accept or make bets under the authorisation of a general betting operating licence.

283.     Subsection (2) makes it clear that a general betting operating licence contains an implied term permitting the making of bets via postal services. This prevents any question of the need for a remote licence arising in relation to bets made by post.

Section 93: Pool betting operating licence

284.     Where an operator is making or accepting pool bets (as defined in section 12), then the appropriate operating licence will be a pool betting operating licence. This type of licence may cover any form of pool betting, but conditions may limit the particular pool betting activities an operator may provide. For example, a pool betting operating licence may specify that the operator may only operate pool betting in relation to football pools.

285.     This licence replaces the system for registration of pools promoters under section 4 of, and Schedule 2 to, the Betting, Gaming and Lotteries Act 1963. It is also the form of authorisation that will be required by operators of pool betting on dog-tracks, previously authorised by section 4(1)(b) of the 1963 Act. Part 8 of this Act contains separate provisions governing the use of dog-track premises for pool betting. Horserace pool betting is dealt with in the next section.

286.     As with the general betting operating licence, there are restrictions on who is permitted to accept pool bets under the licence. The restrictions are the same as those for the general betting operating licence, except that pool betting operators will also be allowed to authorise agents to accept bets on their behalf in certain circumstances. Those circumstances are:

• where the agent is on a track in reliance on an occasional use notice and is accepting bets in relation to a horse-race or a dog race on that track. In these circumstances the agent must be an adult and be authorised in writing to accept bets on behalf of the licensee (subsection (2)); or

• where the pool betting operating licence permits the operator to provide football pools and the operator has given written authority to an adult or young person to receive entries or payments on football pools on his behalf ("authorised collector") (subsections (3) to (6)). In these circumstances the authorised collector may provide coupons, receive entries and payments, and pay winnings, pursuant to the operating licence. Conditions may also be imposed on the operating licence specific to the authorised collectors.

287.     Under subsection (9) the Secretary of State may change, by order, the types of event on a track (subject to an occasional use notice) for which an agent may be authorised to take pool bets under subsection (2), and may add sports to the matters for which agents can be authorised under subsection (3), in addition to football pools.

288.     Subsection (7) makes it clear that a pool betting operating licence contains an implied term permitting the making of pool bets via postal services. This prevents any question of the need for a remote licence.