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UK betting shops and their primary gambling activity

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In reaction to alarming figures revealed by the Campaign for Fairer Gambling showing that hundreds of millions of pounds are lost to fixed odds betting terminals in councils across the UK, several local authorities announced initiatives to block the spreading of betting shops on the high street.

In one case, the Newham council in east London rejected an application for a new Paddy Power betting shop on the grounds that it would make more money from gaming machines than from traditional betting on sports and racing.

Paddy Power immediately filed for appeal, but if the matter goes to the High Court, all applications for betting shop licenses will be put on hold. And if the betting shops’ primary gambling activity turns out to be gaming rather than betting, the Gambling Commission may be forced to revoke existing licenses.

In east London, the Newham Council rejected Paddy Power license application because “unconvinced that at least half of the gambling on premises would have been traditional betting.”

While several newspapers praised the council to be the first ever to reject a betting shop application using the Gambling Act 2005 clause that establishes that traditional betting must be the primary activity, Bookmakers Review could not find any such clause in the Gambling Act 2005.

There is primary gambling activity as part of the operating license conditions to distinguish betting shops from casinos and bingo halls, but nothing requiring that more than 50% of activity comes from traditional betting on sports.

The only reference to betting as the primary gambling activity we found is on a Gambling Commission document dated November 2011, where based on the latest industry statistics for betting shops, the average breakdown between turnover from betting and gaming is 54% vs 46%.

On the same document, the Commission says that the indicators used to assess compliance at premises where betting is the primary gambling activity are: the offer of established core products (including live event pictures and bet range); the provision of information on products and events; the promotion of gambling opportunities and products; the actual use made of betting facilities; the size of premises; the delivery of betting facilities.

No mention of 50% minimum from betting on sports required.

Furthermore the Commission says that gaming machines may be made available for use in licensed betting shops when there are also sufficient facilities for betting available, suggesting that while gaming machines should be limited in numbers, it is not possible to decide a priori how much business fixed odds betting terminals have to generate in relation to more traditional betting on sports and horse racing.

Concerns for the increasing number of betting shops and of FOBTs in the high streets and in particular in working class neighbourhoods are understandable, but it’s unlikely that the Newham Council interpretation of the Gambling Act 2005 is correct and will be supported by the appeal court.

Pierluigi Buccioli

If I read this wrong and the 50% clause exist somewhere, please let me know