The turn of the New Year means that the commencement of the new gambling regime is now less than nine months away. The Department of Culture Media and Sport and the Gambling Commission continue their heavy programme of consultation and implementation, but there are now enough pieces in place to give a good view of where we are going and how we will get there - which is just as well, the timetable within which operators must start applying for licences has already begun.

In this note, we will set out a general overview of the process to be followed by those wishing to provide gambling facilities from 1 September 2007 onwards.

The process applying to each of the prospective licensed sectors is broadly similar, but there are some sector-specific nuances. We will outline the key ones here, but we can’t hope to capture them all. Further detail can be found in the three Transitional Provision Orders (dated April, July and December 2006), which are summarised in a DCMS guidance note entitled ‘Transitional Arrangements’ published December 2006.

New licensing regime

As we outlined in our June 2005 note, the new regime will generally require those wishing to offer gambling facilities to hold an operating licence and a premises licence, and to employ a number of people in certain management and operational positions who hold personal licences.

However, not every operator will require a premises licence, for example:

• those offering ‘remote gambling’;

• those involved in the gambling ‘supply chain’ - such as the manufacture of gaming machines and the supply of gambling software;

• on-course bookmakers - who can rely on the premises licence obtained by the course itself; and

• those operating society lotteries. Furthermore, at certain lower levels of gambling, the requirement to hold the three types of licence is replaced by a requirement to hold the applicable permit, for example:

• family entertainment centres containing only category D machines;

• pubs that offer gaming machines; and

• certain gambling in members’ clubs.

Finally, certain ‘small-scale’ operators are exempted from the obligation to ensure that a number of its employees hold personal licences.

Existing operators - applications for licences

To the extent that an existing operator needs each of the three types of licence, applications should be made within the following timescales, to the following authorities:

• operating licences - apply to the Gambling Commission between 1 January and 27 April;

• premises licences - apply to your local licensing authority (licensing board in Scotland) between 30 April and 30 July;

• personal licences - apply to the Gambling Commission between 1 January and 29 June.

An existing operator that applies outside of these timescales may still be successful in its application, but there is no guarantee that it will have the necessary licences by 1 September, and it may, therefore, have to suspend its operations until its applications are processed.

Continuation rights

Provided an existing operator applies within the prescribed timescales, it will have the benefit of ‘continuation rights’. Continuation rights will entitle an operator lawfully to continue under the new regime (and until its application is determined) those activities that it was, on 31 August, authorised to carry on under the current regime.

Those whose permissions under the current regime expire before 31 August must apply to renew their permissions. However, many will find that their current permissions have been automatically extended.

In the case of gaming machines in pubs, gambling in members’ clubs, and suppliers of gaming machines, the permissions under the current regime will generally be deemed, on 1 September, to become permits under the new regime, and no applications need be made until the normal time for renewal.

Similarly, those who hold existing section 19 certificates under the Gaming Act 1968 (bingo and casino employees) need not apply for the equivalent personal licences until December 2009. New operators - applications for licences

Those who are not authorised under the current regime, but who wish to be licensed under the new regime, could choose to apply only for licences under the new regime. However, there is no guarantee that the necessary licences would be granted by 1 September.

These new operators are therefore encouraged to make the necessary arrangements so as to become authorised under the current regime, so that they can then take advantage of the ‘continuation rights’ available to existing operators. New operators should, therefore, make the necessary applications under the current regime and under the new regime. In most cases, applications under the current regime must be made by 27 April.

Where there is no comparable permission under the current regime - for example, gambling software developers - new and existing operators must merely make applications under the new regime, but must do so by the dates referred to above if they are to have the benefit of ‘continuation rights’.

Grandfather rights

There is no grandfathering of operating licences; the Government having taken the view that no-one should be exempt from the requirement to establish their suitability to undertake the relevant activities. However, the Government has guaranteed that the premises aspects of current permissions will be grandfathered. Those who hold premises based permissions under the current regime - for example casinos, arcades, betting shops and bingo halls - are guaranteed a premises licence, unless they fail to submit the information required, or it is obvious to the licensing authority that they will be unable to comply with a condition that would apply under the licence if granted.

Licence content

In making the applications outlined above, the important question arises - what are you applying for?

The general conditions to apply to all operating licences and personal licences have now been published by the Gambling Commission, along with the underlying codes of practice. These can be found on the Gambling Commission’s website (www.gamblingcommission.gov.uk). Following industry criticism, they are now much shorter than the original consultation drafts, but still contain additional requirements which operators should familiarise themselves with.

Both the conditions and the codes can be further modified in accordance with the respective processes set out in the Gambling Act.

In granting premises licences, licensing authorities will have to include certain conditions (mandatory conditions), will have the option to exclude certain conditions that will otherwise apply (default conditions), and will have the ability to add further conditions subject to certain constraints. The legislation by which the mandatory and default conditions are to be established was consulted on last year, and is expected to be laid before Parliament shortly.

In applying for a premises licence, applicants can either make a ‘fast track application’ for a licence containing all the mandatory and default conditions, or a ‘non-fast track application’ to vary some of the default conditions. Those making fast track applications can still apply to vary the default conditions at a later stage.

It is important for operators to bear in mind that where they are operating under ‘continuation rights’ - rather than an actual licence - they will still be required to comply with the standard licence conditions applicable to their sector (and in the case of premises licences this includes the full suite of default conditions). Act now

The Gambling Commission and licensing authorities will have a heavy workload this year, and, as with any new system, teething problems are likely to be encountered. All those who need to become licensed under the new regime should therefore seek to make the necessary applications sooner rather than later