Primary gambling activity: the FTT view

In an important decision that will impact on all betting premises licence applications the First-Tier Tribunal has given a long-awaited ruling on the meaning of 'primary gambling activity'. Gerald Gouriet QC and George Mackenzie analyse the judgment.

The phrase 'primary gambling activity' was introduced by the Gambling Commission in 2008/9 and its interpretation has been the subject of controversy ever since.

Under the heading “Primary Gambling Activity” the Commission imposes a condition on all betting premises licences:

“Gaming Machines may be made available for use in licensed betting premises only at times when there are also sufficient facilities for betting available.”

In the appeal decision in Luxury Leisure Ltd. v The Gambling Commission the Tribunal (NJ Warren) found that the condition means no more than what the plain words of it say, and rejected the Gambling Commission’s submission that the test for whether “sufficient” betting facilities are available is whether those facilities are “such as to indicate that betting is the primary gambling activity on the premises”.

The judge said: “I have concluded that I cannot accept the submission made on behalf of the Commission. The first and simplest reason for this conclusion is that the construction inserts into the condition, without justification, words which are simply not there. It seems to me that the words to be applied are the plain words of the condition.”

The importance of the decision is that it exposes the fallacy that a betting shop is in breach of the condition if the use of fixed odds betting machines is observed to be greater than the use of the betting facilities offered. In the judge’s words, what matters is the 'existence' of betting facilities, not the 'dominance' of them.

The judge was critical (as have many commentators been before him) of the ambiguity of the phrase 'primary gambling activity', which he said had bedevilled the consultation process since its inception in 2008. He was also critical of the Gambling Commission’s changing stance as to the meaning of its own concept. In that, he echoed the criticisms of District Judge Goldspring in the successful appeal brought by Paddy Power against the refusal of licences to them by the London Borough of Newham.

It is of note that the Gambling Commission steadfastly refused to explain the meaning of “primary gambling activity” in the recent High court proceedings (CO\12125\213 R (oao) London Borough of Newham-v-Thames Magistrates' Court), and resisted an application that they should be required to do so. It is a fortunate consequence of Luxury Leisure’s appeal that the Commission was forced to pin its colours to the mast: that their most recent interpretation of the “primary gambling activity” requirement has been held to be wrong will hopefully put an end to a what has been a long line of unnecessary and expensive litigation.

Gerald Gouriet QC and George Mackenzie are barristers at Francis Taylor Building.

Click here to download a copy of the judgment