This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.
The Gambling Commission has released an Information Note which provides some clarity on the circumstances in which a company that offers facilities for betting and/or gaming, can operate under another's licence.
The Gambling Act 2005 provides that a person does not commit an offence by providing facilities for gambling if he holds an operating licence authorising that activity and acts in accordance with that licence. A person who acts in the course of the licensed operator's business will also not commit the offence and does not need to be separately licensed (the "Section 33(3)(a) Exception"). The Gambling Commission's Information Note is helpful for operators who want to determine which of their corporate entities can rely on the licence of another group company and sets out a non-exhaustive list of factors that the Gambling Commission is likely to consider indicate that one entity is acting in the course of another entity's business and consequently able to benefit from the Section 33 (3)(a) Exception. These are:
- the company carries out the licence holder's work (and is not doing that same work for other people);
- the company's accounts are consolidated with the licence holder's;
- the company is a wholly owned subsidiary of the licence holder;
- the company's sole customer is the licence holder;
- responsibility for compliance is vested in the licence holder who, for example, draws up policies;
- the licence holder is responsible for adherence to technical standards; and
- governance arrangements show that the business is controlled by the licence holder.
While the above provides some clarity on what is an extremely important question for operators (particularly those intending to apply for continuation licences once the Gambling (Licensing and Advertising) Bill receives Royal Assent), these guidelines do not provide operators with a means of determining absolutely whether a group company will be able to rely on another's licence. The Gambling Commission will continue to make decisions on a case by case basis, looking at individual circumstances when deciding whether a company is within the scope of another's operating licence.
The Gambling Commission's Information Note can be found here.
