A Fundamental Shift: what removing ‘aim to permit’ could mean for UK betting shops

Gareth, how significant would it be to remove the ‘aim to permit’ principle from the Gambling Act 2005?

It would be a fundamental change. The ‘aim to permit’ principle was introduced by the Labour government as part of the Gambling Act 2005 and was intended to liberalise a system that had become very cumbersome under the previous legislation.

Before that, we had the demand test. You could spend days in court arguing about whether there was sufficient demand for a casino or betting shop in a particular area. That system had been around, broadly speaking, since the 1968 legislation for casinos and since 1963 in the Betting, Gaming and Lotteries Act pf that year for betting shops and the 2005 Act was designed to move away from it. However, ‘aim to permit’ has never meant automatic permission. An applicant still has to satisfy the licensing objectives, Gambling Commission requirements and the local authority’s own gambling policy.

The suggestion from the UK government appears to be that ‘aim to permit’ makes it intolerably difficult for councils to refuse licences. I don’t think that reflects what happens in practice. Local authorities already refuse gambling premises applications despite the provision being there.

Why are you particularly concerned about the timing of the proposed change?

Because local gambling impact assessments have only just been introduced. They are designed to give local authorities greater ability to examine the effects of gambling premises within their areas, including issues such as proximity to schools, concentrations of betting shops and evidence of problem gambling. Those assessments haven’t really had an opportunity to operate yet. Why remove ‘aim to permit’ before seeing whether this new mechanism works?

My concern is that removing the principle at the same time as introducing gambling impact assessments could make it considerably harder for operators to obtain new premises licences. Licensing committees that have spent years working within the ‘aim to permit’ framework could interpret its removal as a signal from government that they are expected to restrict the market. I think the government has jumped the gun on its own policy. It would make more sense to see how the impact assessment regime works before removing one of the central principles of the 2005 Act.

Would the changes threaten existing betting shop licences?

No. Existing operators aren’t suddenly going to lose their licences because of this. Existing premises remain subject to the review mechanisms that are already available, including where there are concerns around crime and disorder. The principal impact would be on new applications. It would potentially become considerably more difficult for an operator seeking to open a new betting shop to obtain a premises licence.

Could removing ‘aim to permit’ allow general opposition to gambling to play a greater role in licensing decisions?

That’s one of my concerns. The gambling impact assessments themselves should be evidence-based. A local authority will effectively have to audit its area and use that evidence to inform its policy. If there is evidence of particular problems – problem gambling, issues involving young people, concentrations of premises or other demonstrable harms – then councils should be able to respond to that.

The difficulty is that these assessments and policies will also involve consultation with local residents. Residents frequently don’t like betting shops. I acted on a betting shop application in Clapham some years ago where around 2,000 people signed a petition opposing it. There were extraordinary predictions about what would happen if the premises opened, including allegations around crime and prostitution. There wasn’t evidence to substantiate those claims. The betting shop opened and, many years later, it remains there without any of the problems that had been predicted.

Local opinion inevitably influences councillors, and councillors are elected politicians. The question is how you ensure licensing decisions continue to be based upon evidence rather than general hostility towards a particular type of lawful business.

Is there a danger that the old ‘demand test’ effectively returns through the back door?

Potentially, yes, although it wouldn’t formally be the same demand test that existed under the old legislation. Previously, demand was specifically written into the legislation and applicants would produce large amounts of evidence demonstrating the need for premises whilst other established premises would produce reams of evidence that demand was already satisfied. Under the proposed system, you could find yourself making almost the opposite argument – challenging a local policy or impact assessment that effectively says there are already too many betting shops within an area.

So you could see something resembling the old principle creeping back through the back door, particularly where the concentration of gambling premises becomes part of a local gambling impact assessment.

Would councils consequently have much greater discretion over betting shop applications?

Absolutely, and that raises another issue – inconsistency. There are hundreds of local authorities across England and Wales and each can have its own licensing policies. You already see significant differences between neighbouring authorities.

In London, for example, you can move a relatively short distance from one borough into another and encounter a completely different licensing policy. An operator proposing effectively the same premises could therefore face very different requirements depending upon which side of the boundary it sits. The more discretion you give individual authorities, the greater the possibility of that inconsistency increasing.

It also makes applications more expensive. Where you’re seeking to overcome restrictive local policies, you may need expert evidence on crime, problem gambling and other issues. We already see that with alcohol licensing in areas subject to cumulative impact policies. Gambling applications could increasingly go the same way.

Planning reform is another part of the government’s proposals. How does that complicate matters?

Betting shops have already had their own planning classification, but the proposed changes potentially bring other premises, including adult gaming centres, within a more restrictive planning regime. That creates another tier of bureaucracy for operators. You could potentially need to overcome both planning policies and the gambling licensing regime, including the local authority’s gambling policy and its gambling impact assessment.

The stated objective is to give communities more control over their high streets. But operators could find themselves facing substantially more complicated and costly processes when attempting to open premises.

The reforms have been presented partly as a way of improving Britain’s high streets. Do you see a connection between gambling premises and the decline of other high street businesses?

I don’t think one necessarily follows from the other. The fact that Britain has lost pubs, bars, restaurants and other businesses while gaining certain other types of premises doesn’t mean those businesses have been displaced by betting shops. There are much wider economic reasons why hospitality and retail businesses are disappearing – employment costs, National Insurance, VAT, business rates and the general cost of operating on the high street.

When those businesses disappear, they leave vacant units. A betting operator or another business may subsequently move into that space, but that doesn’t mean the betting shop caused the original business to close. That’s why I question whether gambling premises are being made a convenient scapegoat for much broader problems affecting the high street.

Could the changes result in more appeals against local authority decisions?

I think that’s highly likely. We see similar disputes in alcohol licensing, and if more gambling applications are refused on the basis of local policies and impact assessments, operators will inevitably consider appeals. However, overturning a licensing committee’s decision isn’t straightforward. Courts are understandably reluctant to interfere with decisions taken by elected local representatives, and there is a significant hurdle involved in demonstrating that the original decision was wrong.

So while there could be more appeals, that doesn’t necessarily mean operators will find it easy to overturn refusals.

Is there also a danger that councils themselves face additional costs from the new system?

Yes. There’s an irony here. Government is proposing to require local authorities to gather extensive evidence through gambling impact assessments, potentially at considerable expense, while I don’t think the evidence supporting such a fundamental change to the national licensing framework has been adequately demonstrated.

Local authorities will have to conduct these exercises, consult, produce the documents and presumably update them periodically. Across the country, that potentially represents a substantial cost to local taxpayers. If there is evidence of genuine local harm, then of course authorities should be able to respond to it. My concern is whether the scale and cost of the proposed response are proportionate to the problem government says it is trying to solve.

Ultimately, how profound a change could this be for Britain’s licensed betting office sector?

It is a big change because you’re reversing part of the philosophy behind the Gambling Act 2005. The 2005 Act deliberately moved away from the more restrictive approach of the previous legislation. ‘Aim to permit’ was an important part of that liberalisation. When appearing before a licensing committee, an operator could ultimately point to the legislation and say: provided we satisfy the licensing objectives and demonstrate that these premises can operate properly, the guiding principle is that you should permit them. Take that away and the pendulum starts swinging back towards restriction.

Operators will adapt because they always have, but you’re potentially combining the removal of ‘aim to permit’ with local gambling impact assessments, increasingly restrictive local policies and additional planning requirements. Betting shops are already lawful, licensed and highly regulated businesses. They are regulated through the Gambling Act, the Gambling Commission, operating licence requirements and local authority premises licensing. The question is whether adding further restrictions is a proportionate response to demonstrated harm.

If there are particular problems associated with particular premises or areas, address those problems. But changing a fundamental principle governing an entire lawful sector is a very significant step – and one that should be supported by compelling evidence.