Gambling in the United Kingdom

Gambling is regulated by the Gambling Commission on behalf of the government’s Department for Digital, Culture, Media and Sport (DCMS) under the Gambling Act 2005. This Act of Parliament significantly updated the UK’s gambling laws, including the introduction of a new structure of protections for children and vulnerable adults, as well as bringing the burgeoning Internet gaming sector within British regulation for the first time.

Gambling for centuries has been a main recreational activity in Great Britain. Horse racing has been a favourite theme for over three centuries. It has been heavily regulated. Historically much of the opposition comes from evangelical Protestants, and from social reformers.

History

Main article: History of gambling in the United Kingdom
Gambling for centuries has been a main recreational activity in Great Britain. Horse racing has been a favourite theme for over three centuries. The earliest recorded races were held at Chester in 1539. King Charles II was an avid sportsman who gave Newmarket its prominence – he was a jockey in 1671 and built a palace there for his convenience. Ascot Racecourse started in 1711 under the patronage of Queen Anne. By 1750 the Jockey Club was formed to control the Newmarket, preventing dishonesty, and making for a level field. The five classic races began with the St Leger Stakes in 1776. Epsom Derby began in 1780. The availability of railways facilitated the rapid growth of the sport, making travel easy for the horses and running specials that attracted large audiences. Gambling has been heavily regulated. Historically much of the opposition comes from evangelical Protestants, and from social reformers.

There is no limit on the number of premises licences, with the exception of casino licences. Only 16 premises licences for casinos were made available under the 2005 Act and each licence is subject to a public competition, with the local authority determining which bidder will be awarded the licence.

Personal licences

Although the operating licence authorises an individual, company, or other form of association to operate a particular type of gambling, those responsible for the management of the business, for compliance and for the control of gambling, will need Commission approval in the form of a personal licence. There are two types of personal licences:
  • Personal management licence (PML).
  • Personal functional licence (PFL).
Any individual with management responsibility for any of the following five key positions must hold a PML:
  • Overall strategy and delivery of gambling operations.
  • Financial planning, control and budgeting.
  • Marketing and commercial development.
  • Regulatory compliance.
  • Gambling-related IT provision and security.
A PFL is issued to individuals working in a casino who are involved in gaming or handling cash (for example, croupiers, dealers and cashiers).
PML and PFL holders must take all reasonable steps to ensure that they do not breach any of the licence conditions. In addition, they have various detailed reporting requirements in relation to “key events”, notification of which must be submitted on behalf of the operator (section 15.2.1, LCCP), which include:
  • New 3% shareholders.
  • Investment not by way of subscription of shares.
  • Material change in the licensee’s banking arrangements.
  • Investigation into the licensee’s activities.
PML and PFL holders must keep gambling fair and safe, by taking all reasonable steps to ensure their associated licensed operator complies with the 2005 Act, the LCCP and other regulatory obligations.
In the authors’ experience, the Commission’s policy is to hold PML holders directly responsible for licence breaches. The practical reality is that it is individuals holding PML holders, not companies holding operating licences, who are making decisions. Therefore, they will be held fully accountable where they make a business decision, or fail to make a business decision (deliberate or inadvertent) that results in any breach.

Changes of corporate control

Under the 2005 Act (section 102), a change of corporate control occurs when a new person or other legal entity in the licensee’s ownership structure becomes a “controller” of the licensee. The definition of “controller” derives from the Financial Services and Markets Act 2000 (section 422), and covers a person or entity that holds 10% or more shares and/or voting power, or that holds less than 10% or more shares and/or voting power but has the ability to exercise significant control over the management of the licensee.
Licences are not transferable. An application for a new or separate licence is not required. However, an application providing detailed information on the change of control must be submitted to the Commission within five weeks of the change occurring (section 102(5), 2005 Act). Otherwise, the Commission will revoke the licence. The Commission has a statutory power to grant an extension before or after the expiry of this period.