Legal Eagle - UK code of practice for gaming machines
The Gambling Commission has published a code of practice for gaming machines provided in clubs and premises with an alcohol licence. Our Legal Eagle David Lucas explains.
Is it a lottery ticket machine or is it a B3A gaming machine? Does it matter? It most certainly does. The distinction between the two types of machine is very important because they are regulated in different ways by the Gambling Act 2005. A lottery ticket machine dispenses pre-printed lottery tickets in exchange for the cost of the ticket being inserted into the machine. There is no game or skill involved and the machine does not determine the outcome of the lottery. The machine must not display the result within a period of one hour, otherwise it would be regarded as a gaming machine. By contrast, a category B3A gaming machine does provide games but they are restricted to lottery style games. In this case, the outcome of the game is predetermined by the machine.
Manufacture and supply of lottery ticket machines Lottery ticket machines can be manufactured without the need for any permission but they may only be supplied to a licensed or registered society lottery, external lottery manager or the promoter of a private lottery. The Gambling Commission has recently issued a warning that it is misleading and potentially an offence to market lottery ticket machines by stating that the premises owner can site these machines for commercial gain. The premises owner is only entitled to receive a fee for siting a lottery ticket machine which is paid from the expenses of the lottery by the authorised promoter. The warning was given after investigations revealed that a number of lottery ticket machines found to be operating in pubs in the south-east of England had been supplied directly by machine suppliers under a profit share or other commercial arrangement with the pub landlord. The Gambling Commission stated that an arrangement to site a lottery ticket machine must be made between the licensed or registered promoter of the lottery and the site owner/manager. The authorised promoter of the lottery must always retain control of the management and the arrangements for the lottery. By way of a reminder, only licensed non-commercial societies and external lottery managers are permitted to promote large society lotteries. Small society lotteries can operate under a registration with a local authority and other small lotteries can lawfully operate without specific permission provided they comply with the requirements contained in the Gambling Act.
Use of lottery ticket machines A lottery ticket machine may only be used to dispense society lottery tickets (Gambling Commission licensed or local authority registered) and tickets in private lotteries such as private society lotteries in private members’ clubs. A lottery ticket machine is subject to the same regulations as any lottery, depending on the particular type of lottery that is being promoted by the tickets dispensed from the machine. A Gambling Commission licensed society lottery, a local authority registered society lottery or a private lottery is each subject to different regulatory requirements which impose restrictions on where and how tickets may be sold.
Gambling Commission licensed society lotteries Tickets for society lotteries licensed by the Gambling Commission may be sold anywhere except on a street. If a lottery ticket machine is being used to sell the tickets, the society and external lottery manager (if one is used) must always retain responsibility for the lottery. They must ensure that the lottery is operated in compliance with the licence conditions and codes of practice applicable to the operating licence issued by the Gambling Commission. The conditions and codes of practice require policies and procedures to be implemented which include age verification, self-exclusion and problem gambling. The society and any external lottery manager must ensure that lottery ticket machines are placed in locations where they can be supervised to ensure that only persons aged 16 or over can use them and that the machines have the relevant signs relating to the age of persons allowed to use them. Each lottery ticket must comply with the relevant requirements contained in the licence conditions and codes of practice.
Local authority registered society lotteries Lottery tickets may also be sold through a lottery ticket machine by a society that is registered with the local authority. The society must retain responsibility for the lottery which includes compliance with the relevant requirements contained in the Gambling Act. It will therefore be the responsibility of the society to ensure that lottery ticket machines are located in positions where they can be adequately supervised to prevent them being used by persons under 16 years of age and that they display signage concerning the age restriction. The lottery tickets sold from the machine must comply with the requirements contained in the Gambling Act.
Location of lottery ticket machines Lottery ticket machines which sell Gambling Commission licensed or local authority registered society lottery tickets can be sited in places such as private members’ clubs and pubs. Lottery ticket machines can also be provided by private members’ clubs on their premises in order to sell tickets in a private society lottery. Private societies, including private members’ clubs, are allowed to operate lotteries in order to raise money for the purposes for which the society is conducted, or to raise funds to support a charity or other good cause. In this case, the club would not require any form of permission from the Gambling Commission or local authority in order to operate the lottery or provide the lottery ticket machine.
The tickets sold from machines must comply with the requirements contained in the Gambling Act. There are no age restrictions relating to this type of lottery.
Category B3A gaming machines A category B3A gaming machine is restricted to a maximum stake of £2 and a maximum prize of £500. B3A gaming machines are only allowed in private members’ clubs or miners’ welfare institutes. In order for a category B3A gaming machine to be made available, a private members’ club or miners welfare institute will require a club gaming permit or club machine permit from the local licensing authority. Both permits allow a maximum of 3 gaming machines to be made available for use, provided that they are either category B3A, B4, C or D. The manufacturer or supplier of the gaming machines must be licensed by the Gambling Commission and the machines must comply with the technical standards published by the Commission. The Gambling Commission has published a code of practice for gaming machines provided in clubs and premises with an alcohol licence. The code of practice relates to the provision of gaming machines in accordance with club gaming and club machine permits. The code includes provisions relating to the location and supervision of gaming machines and prevention of the use of category B3A, B4 and C machines by persons under 18 years of age.
Report: David Lucas - Club Mirror Legal Eagle
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