Are Poker Clubs Legal?

ON THE LEGALITY OF “POKER CLUBS” AND THE INTERPLAY BETWEEN ALCOHOL AND GAMBLING LICENSING RULES FOR POKER IN PUBS AND CLUBS

The Gambling Commission recently issued an advice note on “poker clubs”, or to be more precise, on pubs/clubs running unlimited stakes poker nights under the suggestion that these are “private gaming” and therefore escape regulation. See the Commission’s note here.

Poker and other forms of equal chance gaming can be an attractive proposition for pubs/clubs looking to get punters in the door. The popularity of poker boomed just at the time the Gambling Act 2005 (“GA2005”) was deregulating this activity for alcohol licensed premises.

The old legislation, that is, the Gaming Act 1968 did, contrary to popular belief, allow for poker but only in very special circumstances and was, in fairness, very limited. That did not stop operators taking the view that poker was not “gaming” (and therefore avoid regulation) on the basis that it was more a game of skill than chance.

As the popularity of poker rose, so did the question of whether poker clubs were legal.

I recall a raid on Glasgow’s Cinciantti poker club back in 2006, prior to the GA2005 coming into force. This was in relation to charges under the Gaming Act 1968, and I wrote about this in my book “Gaming in Pubs and Clubs” (2008). A raid also occured in a Belfast club called the Cavendish in January that year. And then, of course, there is the celebrated Gutshot case R v Kelly (the original case was heard at Snaresbook Crown Court by Judge Wilkinson, but the court of appeal decision is featured in Licensing Review (2008) 72 LR 24 and is reported at [2009] 1 WLR 701 (CA (Crim Div)) in which the proprietor of the Gutshot poker club, Mr Kelly, tried to argue that he fell outwith the ambiut of the 1968 Act because poker was a game of skill and not a game of chance. He failed. Judge Thomas LJ said in that case: “This could have caused enormous problems for the gaming industry and given the green light for unregulated poker“.

DEAL OR NO DEAL?
So what is the current position – are poker clubs legal or not? The GA2005 now regulates this area but there is a crossover with the Licensing (Scotland) Act 2005 and the English Licensing Act 2003.

The starting point is that premises which have an alcohol licence have a special dispensation to offer poker as an activity without any further licence or permit. This is known as “automatic entitlement” (s.279 of the GA2005). There are certain rules which must be observed however, which include a maximum on stakes and prizes (which is currently a maximum stake of £5 and a maximum prize of £100)

A separate rule exists for certain types of club premises who are able to hold a special permit. The GA2005 allows members’ clubs and miner’s welfare institutes to hold a Club Gaming Permit. That permit allows various types of gambling to occur on the premises but in this blog we are interested because it allows unlimited equal chance gaming. In other words, poker nights with no limits on stakes or prizes. An attractive proposition!

However, there is also a rule in the GA2005 which says that a premises cannot be used mainly for gaming and this is a crucial part of this legal house of cards. In relation to the automatic entitlement for pubs having poker nights, this entitlement can be disapplied by a licensing board if they think that “the premises are mainly used or to be used for gaming” (s.284(2)(c)). In other words, having an alcohol licence does not allow you to run as a full time poker club. The “automatic entitlement” is therefore supposed to be a permission to offer poker (or other forms of equal chance gaming) as something other than the primary activity (I hesitate to use that phrase in a gambling context!). The question as to how frequent poker events would have to be before the premises is deemed to be “mainly” for gaming is therefore a matter of fact and degree at the whim of the licensing board. If the licensing board wishes to remove the entitlement they must give 21 days notice to the alcohol licence holder, consider representations, and hold a hearing if the licence holder requests one.

So much for pubs. What about clubs with a special Club Gaming Permit? The first thing to note here is that there are special Scottish regulations for the procedure for such permits, the Club Gaming and Club Machine Permits (Scotland) Regulations 2007 (SSI 2007 504). These allow a member’s club or a miner’s welfare institute to aplpy for the club gaming permit which allows unlimited poker. A licensing board may refuse the application if the applicant is not a member’s club or miner’s welfare institute as defined under the GA2005. This takes us back to s.266 which provides the definition of a member’s club. Part of this definition is that it is a club “which is established and conducted wholly or mainly for purposes other than the provisions of facilities for gaming” (there is a minor exemption to allow for bridge and whist clubs, but if that is relied on, no other forms of gaming can occur at all, so a bridge club could not offer even the occasional poker game – Gambling Act 2005 (Gaming in Clubs) Regulations 2007 (SI 2007/1942)).

So if our fictional club is set up as a poker club, it cannot meet the legal definition of “member’s club” and therefore the permit application may be refused. In addition, a “member’s club” cannot be established or conducted as a commercial enterprise so our fictional club could make no profit either.

STRAIGHT TO THE POINT
Let’s put all of this together. If an operator runs a pub or a club premises as a place where poker is the primary activity then that is likely to fall foul of the GA2005 regardless of the type of licence or permit in place. But is there a back door?

CAN “PRIVATE GAMING” OCCUR IN PUBS OR CLUBS?
That brings us back to the recent Gambling Commission alert on the suggestion that some premises were relying on an exemption known as “private gaming” to run unlimited poker games. What happens if the game occurs in such a premises, but in a “back room” where only the players have access?

Section 295 and Sched 15 of the GA2005 defines “private gaming” as either “domestic” or “residential” gaming. “Domestic” means in a private dwelling on a domestic occasion. Clearly designed to cover my monthly poker night at home with friends. “Residential” refers basically to the same thing but in a hostel, student halls and that sort of thing “not administered in the course of a trade or business” and more than half of the participants are residents. There can be no charge and crucially it is a condition of private gaming that “it does not occur in a place to which the public have access (whether or not on payment)” (Shed 15 Para 5).

The argument that a closed part of the pub/club, perhaps a back room, is not “public” has been attempted but I do not think is supported in law. There is substantial jurisprudence on this point as to whether such premises or occasions are treated as public and they usually are (a couple of licensing examples which come to mind are Performing Right Society Ltd v Rangers FC Supporters Club 1974 SLT 151 in which a member’s club was held to be a public place; and Vannet v Burns 1999 SLT 240 where a pub’s car park was deemed to be a public place because members of the public used it, and was “no less a public place because it was frequented by a special section of the public”). The people playing the game, even if in a back room, are members of the public. Creating some sort of artificial temporary membership or fictious special club makes no odds, in my view. Certainly, that is the Gambling Commission’s position on the matter at the time of this blog.

THE FINAL TWIST: GUTSHOT “LOSE” AGAIN?
The Gutshot club came to further attention earlier this year and this helps round off the notion of whether such a premises can operate wholly as a poker club. The Gutshot club had applied for a club premises licence under the Licensing Act 2003. This entitled it to then apply for a Club Gaming Permit under the GA2005 which allows unlimited stakes poker, just as I have laid out above. So far, so good.

But the police were concerned that the club was being used mainly as a poker club and the licensing authority revoked both the premises licence and the permit. The decision was appealed (let us call it International Poker Club Ltd v Hackney Borough Council) but ultimately that appeal was withdrawn. Somewhat innaccurately this was presented as an appeal “victory” for the police and Gambling Commission but in fact as it was withdrawn no decision was ultimately made by the magistrates. One might speculate about the weight the appellants gave to their own argument having withdrawn it; or that they were unable to continue to fund the appeal, and in turn whether the appeal would have been succesful. The Gambling Commission said afterwards:

We welcome this verdict which confirms that the narrow permission allowing members of genuine members’ clubs to play poker cannot be used to justify the provision of what amounts to a commercial poker club. This case sends a clear message to club gaming permit holders, who seek to offer poker, that they must operate in accordance with their permit or run the risk of losing it.”

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About Stephen McGowan

Leading Scottish licensing solicitor at TLT. Chairman of BII Scotland.
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