Will Scotland have its own Gambling Laws?

ON SCOTTISH GOVERNMENT CALLS TO HAVE POWERS CONCERNING GAMBLING LAW DELEGATED TO HOLYROOD AND WHAT THIS MIGHT MEAN FOR THE GAMBLING INDUSTRY

On 7 August 2014 the Scottish Government issued an “Action Plan” under the banner “Pay Day Lending Action Plan”. The action plan can be viewed here. The plan focuses heavily on proposals to curb the presence of pay day pender premises on the high street. One could be forgiven for thinking that this has nothing to do with gambling law and the media response to this, as well as the way in which this plan has been discussed by ministers, has almost overlooked a most significant proposal contained within, and that the proposal to have gambling laws moved in entirety from Westminster to Holyrood.

The fact that this largely focuses on betting shops betrays the fact that this has come about as a result of pressure groups opposed to the use of FOBT machines. The campaigns against such machines have achieved considerable media coverage and grass roots support from local councillors many of whom sit on licensing boards and yet make public comments about the morality of FOBTs. It is also interesting to note that the Government sees this issue as one which is linked to the rise of pay day lender operators. It is yet more interesting that the media see this gambling proposal a footnote given how much coverage has been given to the “crack cocaine of gambling” – FOBTs. I take no view on whether FOBTs are the “evil” they are declared to be as part of this blog but instead wish to address the legal issues surrounding the suggestion that Scotland should have control of the gambling laws.

It should come as no surprise to readers of this blog that control of gambling law, in particular through the perceived issues of FOBTS and alleged “clustering” of betting premises, has been on the mind of MSPs for some time. My blog “Overprovision under the Gambling Act 2005?” published on 10/9/13 explores my research into Scottish calls for the Gambling Act to be amended. I updated this with another blog “Overprovision of Betting Premises: An Update” on 29/11/13. The signs have been there for those interested enough to look (granted there is probably few of us!).

This new 12 point action plan contains 3 points concerning licensing of betting shops and the Gambling Act 2005. These are:

Scottish Government will continue to argue for responsibility for the regulation of gambling to transfer to the Scottish Parliament.  
While the power to regulate gaming, betting and lotteries lies with Westminster, Scottish Government will continue to seek to influence the UK Government’s gambling policy.
Scottish Government will explore with the Gambling Commission and Local Authorities ways in which the Scottish Government can support the regulation of betting shops.

The first of these is the game changer. I take the opportunity to remind readers that the Gambling Act 2005 is not solely about betting shops or FOBTs. Fixed Odds Betting Terminals may prove to be the catalyst which affects the entire gambling industry in Scotland, should Holyrood get its stated wish granted.

The Gambling Act deals with casinos, adult arcades (AGCs), family arcades (FECs), bingo premises, lotteries (all the way from local charity lotteries to national operators such as the Health Lottery) as well as gambling in pubs and clubs through gaming machine permits as well as rules on card games such as poker and much more. It also deals with online operators and that sector faces UK change through the new Gambling (Licensing and Advertising) Act 2014. My point on this is therefore to remind commentators that when we talk about Holyrood being in control of gambling law this is a far wider picture than FOBTs in a high street bookies. The Scottish Government could adopt the Gambling Act and introduce a new Bill to make such changes to it as they think are necessary for Scotland. That would mean open season on the whole industry and you can bet that the result would be tighter regulation, not less (despite a number of findings on red tape issues from regulatory reform bodies). It would also mean, I suppose, a Scottish regulator akin to the UK Gambling Commission. That proposition fills me with anxiety. I have consistently argued that if Holyrood had control of the Gambling Act, they would look to introduce an overprovision test for new applications. That position is explored in the blogs noted above.

On the specific issue of FOBTs, and the Scottish Goverments second point above, the position currently is that the coalition Government is waiting on research to be published on the alleged addicitive qualities of FOBTs and will not take any legislative steps until that time. The Labour opposition has been vocal about FOBTs for years as discussed in my earlier blogs noted above. Pressure from Holyrood to change the Gambling Act on FOBTs will therefore likely fall on deaf ears – at least for now. In addition, Westminster has already looked at wider matters and produced a paper with proposals for change as recently as April 2014 and I discussed these in my blog “New Controls on Betting Premises and FOBTs” from 19/5/14. This is in addition to the self-imposed new guidance on the betting industry. Westminster could fairly point Holyrood to all this. Westminster could also simply ignore Scottish protest.

If there is a “yes” vote in #indyref in a few short weeks the debate will become moot as the power would transfer to an independent Scottish Parliament. If there is a “no” vote; I wonder whether the stated reconfiguration of devolution – the so-called devo-max approach – might result in gambling being one of those areas which Westminster agrees to devolve to Scotland. I doubt there would be a tas loss to HMRC as Scottish operators would still pay taxes in the same way that alcohol operators do, despite there being a separate alcohol licensing regime. It would mean a reduction in fees to the UK Gambling Commission, if a Scottish one were to be established. We shall see.

The final action plan is to have the Scottish Government work more closely with the Gambling Commission and licensing boards to “support the regulation of betting shops”. There is an inherent issue with this in relation to enforcement. The Scottish Government has already conceded that the drafting error which precludes Scottish enforcement is an issue. Despite a Gambling Commission “fix” by suggesting a somewhat circuitous route to have local officials authorised to enforce gambling laws, I still remain of the view that this is a live issue and one which would almost certainly result in legal challenge by any operator faced with adverse action by one of these officers. This issue is discussed in detail in my blog “Gambling: local enforcement in Scotland?” from 12/7/12. The Gambling Act came into force on 1 September 2007. Since that time, there has now only been one review of a gambling licence which was a casino premises – so not a single review of a betting licence anywhere in Scotland in 7 years. There have also been a handful of cases involving refusal of betting shop applications in Scotland but these have, to date, been conceded or overturned on appeal such as the William Hill cases from the Highlands reported here.

Add to that my significant worries about training. There needs to be much greater work done on training for local authorities and for officers or officials dealing with gambling premises. Alcohol licensing standards officers have to pass a three day training course in order to take that position. This is a requirement under the Licensing (Scotland) Act 2005. The Gambling Act 2005 is even more complex and even more esoteric that it’s alcohol-related sibling. You’ll have to take my word on that!

If Scotland and Scottish licensing boards are to have more powers, or be allowed to exercise existing powers that they are not entitled to or do not know of, then training is an absolute must. If this is overlooked then I envisage operatoes being placed under undue burdens by those trying to do a job but do not understand the law. This is an invidious position for the trade but also for the officer tasked with carrying out duties in a complicated area of law with no experience or training.

The next chapter in this story, as with so many other issues affecting Scottish life, will no doubt have to wait until the nation decides the indepence question next month.

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About Stephen McGowan

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