Overprovision of Betting Premises: An Update


Earlier this year I blogged on the idea of a proposed change to the Gambling Act 2005 which would allow licensing authorities to refuse an application for a new betting premises licence on the grounds of what in Scottish licensing circles might calls ‘overprovision’, or what is referred to in the English context as ‘cumulative impact’.

This has resulted from significant adverse attention to betting premises in the media arising from pressure groups and licensing authorities raising concerns about a perceived ‘clustering’ or ‘proliferation’ of betting shops and in particular the entitlement such premises have to Category B2 gaming machines known as Fixed Odds Betting Terminals or FOBTs.

Licensing authorities have been granting new betting licence applications sometimes through gritted teeth whilst indicating they are powerless to refuse them. Some authorities have been emboldened enough to refuse applications but those decisions have been overturned on appeal, the leading case being Paddy Power v Newham 2013 (on which I blogged here). In that case the magistrate upheld the appeal by the applicant but the local authority was granted leave to seek judicial review in early November 2013 and that is ongoing. In that case the thorny issue of primary activity is important but Newham also refused the licence based on a suggestion that the grant would lead to crime or disorder. The applicant contended that the evidence for that was nebulous. We wait that decision with interest. Since that time, Newham has also held a review of a betting premises which resulted in the imposition of local conditions, as reported here.

This is not simply happening down south. William Hill had a licence refused by Highland Licensing board a few weeks ago on the basis that the location was unsuitable, drawing a speculative inference that it may harm vulnerable people because of a nearby drug and alcohol treatment centre. Unsurprisingly William Hill appealed and on 5 November 2013 the Board announced that they would capitulate in entirety: as reported on the council website here, and in the press here. The Board conceded (having considered legal advice on the merits of the appeal no doubt) that the refusal had been based on pure speculation, with no real evidence, and without allowing the applicants to counter the claims of detriment.

But  now several English authorities have ramped up the rhetoric by passing ‘resolutions’ or ‘motions’ indicating they are not prepared to grant any more betting licences. The first to do so, as I understand it, was Liverpool, on 5 November 2013. Since that time a handful of other authorities have followed suit including various London councils, Islington and now Redbridge. It is also being considered elsewhere such as in Manchester.

Although these resolutions signal the authorities mindset, in my view there is no legal
effect in that they do not assist or add to the powers of refusal, but are instead statements of intent. At the recent conference of the Institute of Licensing in Birmingham I observed considerable murmerings when one delegate suggested the introduction of a new gambling licensing objective relating to ‘social deprivation’. There appeared to be no suggestion that the flip side of that, regeneration, should be a factor.

It is interesting to note that in the Scottish context the Better Regulation bill seeks to impose a requirement on local authorities to consider ‘sustainable growth’ and that economic and business growth would become a duty in regulatory activity – that is still working its way through the Parliamentary process but an analysis of the consultation responses can be read here.

One might argue that the existing objective concering vulnerable persons could be sufficient to capture allegations that a new betting premises would lead to deprivation but the key issue for me in all of this is those twin pillars of natural law which underpin an authority’s vires: evidence, and causality.

Evidence and causality cannot be put to one side. Policy and decision making must be based on both, otherwise we create a system where subjective assessment, moral posturing and political short-termism will win out. I would contend that it is incumbent upon licensing authorities to base decisions on an evidential basis, and not a moral or general ‘panic’ in the Stanley Cohen (who sadly died in January 2013) sense, and to understand the not insignificant difference between causation and correlation.

Some floral commentary by local councillors suggests that there is a presumption that betting shops of themselves lead to detriment or are simply places of ill-repute and perhaps this is influenced by the wider ‘high street’ debate too. There are less betting shops now than 20 years ago but the visibility of shops has perhaps changed as a result of a perceived greater presence on the high street.

Some have called for restrictions under planning laws but as I have pointed out previously planning laws are not reserved, whereas the 2005 Act is UK wide. The 2005 Act as it stands does not entitle an authority to take demand into account nor does it entitle an authority to refuse because of the simple reality that there are other betting shops in the locality. That would require a change to the primary legislation.

The issue of betting shop overprovision has been largely characterised by the demonisation of FOBTs and alleged social harm and, in more legally minded circles, the issue of ‘primary activity’. The Newham judicial review would appear to deal with both of these issues and the outcome will send shockwaves, either way: should the court uphold
the Newham position authorities across the land may be emboldened to refuse new
betting licence applications, should the court find that the Magistrate was correct (and in doing so will hopefully provide a judgement on whether primary activity is at all lawful), then those same authorities will run straight to Westminster to seek legislative change.

The Newham JR, if it provides an answer on primary activity, will also influence a number of ‘live’ operating licence reviews being conducted by the Gambling Commission across the country. It is interesting to note that the Commission’s interpretation of the Act has
been refuted by the courts previously. In the case of primary activity, this is not so much interpretation as it is creation, given the concept does not exist in the Act, whose genesis is at the hands of the Commission themselves, and was subsequently amended and added to by them in various degrees. The Commission is consulting on a further ‘tightening up’ of Condition 16 of the LCCP where primary activity resides (the closing date is 4 December 2013), apparently as a result of the Trafalgar Leisure Ltd v Gambling Commission decision (reported on here) which, in my view, adds to the suggestion from some that the whole concept of primary activity has fallen into disrepute.

There is sufficient public and political interest in betting premises these days that I expect this story to run for a while yet.


About Stephen McGowan

Leading Scottish licensing solicitor at TLT LLP.
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One Response to Overprovision of Betting Premises: An Update

  1. Pingback: Will Scotland have its own Gambling Laws? | Stephen McGowan's Licensing Blawg

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