FOBTs in Scotland: Where are we now?


I read with great interest the publication of “Scotland in the United Kingdom: An Enduring Settlement” in January 2015. This paper is published following on from the recommendations in the Smith Commission report which flowed from the independence referendum in September 2014.

This publication deals with large swathes of proposed laws to be delegated to Holyrood but the clauses on FOBTs are of interest here. There has been a considerable watering down of the original requests over the last 18 months to what is now Clause 33 of the Draft Clauses annexed to the “Settlement” paper. As readers of this blog will appreciate, Holyrood has been specifically calling for complete power in relation to the Gambling Act 2005 since at least April 2014 if not before. At that time, the Government’s position was that if Scotland became independent, then of course gambling law would be within its powers, but failing that, it had formally requested Westminster for full control.

That request should be viewed through the prism of mounting allegations concerning clustering of betting premises and FOBTs. The Scottish Government’s fall back position was therefore that power should be granted to (a) control betting premises licence numbers, and (b) FOBT machines. As the debate continued, and the independence referendum lost, the SNP administration began to move away from requests to control the entire gambling law to focus on betting shops and FOBTs. I suggested in this blog that introducing a new ground of refusal of “overprovision” may be the result of this. However, matters were watered down further still. When the Smith Commission was published, it lumped pay-day loan premises and betting premises together, much like the recent consultations on planning law amendment, but again was chiefly concerned with FOBTs. There appears to have been no real effort made to argue for the totality of the 2005 Act passing to Scotland, although that is supposition on my part.

The new paper distils these requests further still. Clause 33 makes no mention of betting premises licences at all, in the way debated and discussed, as there is no power in relation to limiting numbers of premises at all. Instead, what we have is a clause which would allow the Scottish Parliament to create an Order giving licensing authorities the ability to limit the number of gaming machines where the maximum stake is £10 or greater, in granting new applications.

This power makes no difference to existing premises. Licensing boards would have no powers to look at existing premises either by dint of the numbers of premises themselves or the numbers of FOBT machines in those premises (leaving aside the hypothetical review hearing). This is a protectionist clause which ensures the continued operation of existing licensed betting premises. Only new applications would be subject to the Order.

It is odd that Clause 33 does not use the appropriate Gambling Act 2005 terminology to describe FOBTs – that is, B2 machines, with instead this reference to the £10 stake. This will only catch FOBTs as FOBTs are the only machines in betting premises that you can gamble over £10 in a single go. Other Cat B machines are unaffected. B1 machines are large casino slot machines, and B3, B3a and B4 machines have a maximum stake of £2 (and out of them only B3s are allowed in betting premises – B3A and B4 machines are found in club premises). The maximum stake in a B2 machine is £100. I am not sure why therefore FOBT machines are described so oddly in Clause 33.

So it would appear that there is no to be no “overprovision” refusal for betting licences and existing premises will continue to use the maximum of 4 FOBTs they are currently allowed. This is a far cry from the original formal request to have control over all aspects of the Gambling Act 2005.

What happens next? The draft clauses in the command paper will be brought forward as a new Scotland Bill after the general election in May 2015. As there is cross-party agreement on this issue the make-up of the Parliament should not derail that. That Bill would then need to pass the usual legislative hurdles including the House of Lords before becoming law. This will take some time. It is only at that point that the Scottish Parliament can draft and pass its own Order amending the Gambling Act 2005 so that licensing authorities can limit machines. This would also take some time and may be consulted upon for the precise detail. I would therefore be surprised to see the Order come into force before early 2017, although there is a caveat on that guesswork as you may expect. A settled cross-party political could see it fast-tracked; or, it could go the other way entirely. Place your bets, please!



About Stephen McGowan

Leading Scottish licensing solicitor at TLT LLP.
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One Response to FOBTs in Scotland: Where are we now?

  1. The rule will obviously also be subject to planning appeal/review. This rule at most helps incumbent suppliers to the detriment of new entrants/competitors, even then it is far from clear on what grounds some new limit will be applied to “new” licence holders. It also leaves an opening for a new category of Scottish machine with a £10 max stake and £500 max win.

    Given that research shows Scots bet at lower maximum stakes than average and that £2 B3 machines have a higher session loss (about £7) than the demonised B2s that take less per session it is hard to see what influence this new “power” would have on pretty much anything.

    The max win £500 was always more relevant unless you were part of the casino lobby that dislikes casino games being available anywhere else than casinos. Again a bizarre consideration given the online availability and the TV roulette we can all see late night.

    Stupid campaign and stupid “compromise” that means nothing apart from work for people working on planning applications and appeals.

    Meanwhile government, suppliers and regulators could stop obsessing about B2s and instead focus on help treatment and support for problem gamblers.

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