Greene King, the UK’s largest pub chain, has lost its appeal to offer unlimited stake and prize bingo in pubs. On 25 May 2017 the Court of Appeal found in favour of the Gambling Commission and held that it acted within its powers in refusing Greene King a gambling licence to offer the facilities. This case illustrates the wide discretion that the Commission has when assessing licence applications and in particular that it may consider the operating environment in which gambling facilities take place when exercising its licensing functions.

Journey to the Court of Appeal

In 2012, Greene King applied, under Part 5 of the Gambling Act 2005 (the “Act”), to the Gambling Commission for operating licences to enable it to offer unlimited stake and prize bingo in up to 8 of its pub premises, in what was intended to be a pilot project. Whilst pubs with an alcohol licence are allowed to offer low-stakes bingo (where stakes and prizes do not exceed £2,000 over a seven-day period), higher stakes bingo requires an operating licence. Following the grant of these licences, Greene King would still have had to apply to the relevant local licensing authority under Part 8 of the Act for the necessary premises licences.

The Gambling Commission reviewed Greene King’s operating licence applications and, although it accepted that Greene King met the requirements of suitability and competence under section 70 of the Act, it decided that the proposed operation was not consistent with the licensing objectives. In particular, it found that the second licensing objective (ensuring that gambling is conducted in a fair and open way) and third (protecting children and other vulnerable persons from being harmed or exploited by gambling) were at risk. The latter was a particular concern due to the fear of the impairment of judgment that drinking causes, and the effect this could have on an individual’s vulnerability to gambling.

On appeal to the First-Tier Tribunal, it was decided that the Commission should not have gone on to assess the suitability of the premises (i.e. pubs), as this consideration was held to fall within the exclusive scope of local licensing authorities under the Act. The Panel’s decision was quashed and remitted to the Commission with a direction that the applications be granted.

The Commission subsequently appealed to the Upper Tribunal, who ruled that a consideration of the premises did fall within the Commission’s duty to ensure compliance with the licensing objectives and that it should not be required to let local licensing authorities deal with national policy issues. Greene King was granted permission to appeal to the Court of Appeal on the basis that this case raised an issue of statutory construction that had not previously been considered by the higher courts.

The Court of Appeal’s Judgment

The Court of Appeal determined that ‘suitability of premises’ was a relevant factor in the Commission determining whether an operation is consistent with the licensing objectives. In coming to this conclusion, it cited the Commission's ‘Licensing, compliance and enforcement under the Gambling Act 2005: policy statement’ which indicates that, when considering an application for an operating licence, the Commission will, as part of gauging consistency with the licensing objectives, assess the suitability of the proposed licensee and the proposed operating model. In the case of non-remote premises this includes "location and operating environment".

This case is of significance as the Court of Appeal clarified that the Gambling Commission has wide discretion when it comes to considering applications for operating licences: namely, it can assess the proposed operating model for consistency with the licensing objectives in addition to considering the suitability of an operator. The Gambling Commission - which has already publicly welcomed the decision - will see this as a victory, as it affirms the breadth of its licensing powers.

The Court of Appeal refused, however, to provide a view on the merits of the Greene King operating licence applications. Instead it considered the Commission to be perfectly entitled to find the proposed operation to be inconsistent with the licensing objectives and refuse the licence. The case will now be remitted to the First Tier Tribunal, which will decide whether Greene King should be granted a licence. Whilst, therefore, it is still to be seen whether or not Greene King, will be successful, what is clear is that the Commission takes the view that “hard gambling” in pubs puts the licensing objectives at risk. Whilst this is not tantamount to a blanket ban – as the Court of Appeal emphasised – anyone looking at such opportunities, would be wise to bear the Commission’s stance in mind.