High Stake Gambling reform – A gamble not worth taking

Gambling rules: the proposed changes are subject to consultation (image: Getty/RobinsonBecquart)
Gambling rules: the proposed changes are subject to consultation (image: Getty/RobinsonBecquart)

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On 27 April 2023, the Department for Digital, Culture, Media and Sport published its Gambling White Paper, aimed at tackling gambling reform for the digital age. The proposed reforms vary from increased ‘know your customer checks’ to extra powers for the Gambling Commission to tackle black market operators. Some of these changes will undoubtedly influence the alcohol licensed trade and I have highlighted the key relevant proposals below:

Increased entitlement?

The first key point to note is the lack of change for the licensed trade in reference to machine entitlement. Currently, licensed venues have an ‘automatic’ entitlement to two gaming machines predicated on a notification being made to the local licensing authority and a fee being paid. Following the Call for Evidence on the White Paper, licensing trade bodies requested that two amendments be made.  The first was the possibility of an increased entitlement of gaming machines for licensed venues. The second request was the removal of the notification requirement and payment of the required fee. Whilst the Government was sympathetic to the argument that an automatic entitlement should not in itself require notification and payment, it did not go as far to remove it.

Unfortunately, for the licensed trade, the current entitlement and fees will remain the same. The justification provided is due to the poor track record of licensed venues implementing effective age verification for gaming machine operation. The Government highlighted the British Beer and Pub Association’s own test purchasing operations which showed a low pass rate in comparison with other sectors. As a result, the government does not think it would be appropriate to change the thresholds or requirements.

Cashless gaming machines?

A second change that will impact the licensed trade, is the possibility for cashless payments on gaming machines. Currently, secondary legislation (the Gaming Machine (Circumstances of Use) Regulations 2007) prohibits the use of debit cards for direct payment on gaming machines and prohibits any use of credit cards. The Government acknowledged a possibility of moving forward for debit card payments and other frictionless payment systems. The government will work with the Gambling Commission to develop a specific consultation for cashless payments, inclusive of proposed player protections before the removal of the above-mentioned prohibitions. This is a progressive step for gaming machines across the entire gambling trade, however additional protections for customers relating to cashless payments will need to be in place before any prohibitions are lifted.

Following the proposed consultation, aimed to be in summer of 2023, evidence will be needed to show that the introduction of the cashless system will not lead to an increase in risk to consumers. The consultation will allow the industry, inclusive of licensed venues, to respond to any principles and specific requirements the Government and Gambling Commission propose in order to ensure that the introduction of cashless payments does not lead to an increased risk to customers.

‘Think 21’ to ‘Think 25’

The Gambling Commission’s ordinary code states that all land-based licensees should require their staff to check the age of any customer who appears to them to be under the age of 21, also known as ‘Think 21’.  As this is an ordinary code provision, it is good practice rather than a mandatory requirement. The Gambling Commission will consult on making ‘Think 25’ rather than ‘Think 21’ the ordinary code expectation for all land-based licence holders, providing consistency across the sector whilst aiming to discourage children from taking part in gambling activities.

Increased licensing visits?

The Government is also looking to consult on increasing the cap on licensing authority premises licence fees.

As a part of the proposed consultation, the government is strongly encouraging licensing authorities to consider the range of resources required by them for comprehensive monitoring and enforcement. This may now include resources which may not have been necessarily envisaged or required when the gambling fees were originally set.

Following the proposed consultation, it is highly likely that licensing authority premises fees will increase, which in turn will result in more resources for Licensing Authorities. The Licensed trade should expect to see an increase in age-test purchasing on gambling machines in licensed venues and a general increase in visits across the whole of the alcohol and gambling sectors.

Additionally, some licensing authorities expressed concern that their powers were not sufficient. Whilst the intent of the Gambling Act is to provide licensing authorities with the ability to manage local risks and make decisions using local knowledge, the Government appreciates the need for local authorities to feel empowered when making use of their existing powers when making decisions about their areas. One of the areas which may see a change is the proposed cumulative impact areas (CIAs) which are likened to those already in place in the alcohol licensing regime. Whilst CIAs are more aimed at Bingo Halls and Gambling Premises, they may have a slight affect on alcohol led venues. The government will look to legislate, when parliamentary time allows, to bring the regime for gambling licensing more in line with that of alcohol licensing.

The above proposed changes are not set in stone, and all are subject to consultation. We will as always try and keep you up to date with any changes as and when we are aware.

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