Policy Statement for regulation of gambling in Jersey.

STATES OF JERSEY

POLICY STATEMENT FOR REGULATION OF GAMBLING IN JERSEY

Presented to the States on 16th November 2009 by the Minister for Economic Development

STATES GREFFE

2009   Price code: B  R.126

REPORT

Introduction

This  document  sets  out  ministerial  policy  regarding  gambling,  licensing  and enforcement and the Minister's view on the proposed Gambling Commission's (the Commission) social responsibility functions and licensing objectives in the event the States should pass the draft Gambling Commission Law and associated legislation. The  Minister  will  use  this  framework  to  form  a  basis  of  written  guidance  and directions to the Commission under Article 5 of the proposed new law.

Guiding principles

The licensing principles are set out in the Law and are as follows:

– gambling  should  be  regulated  in  accordance  with  generally  accepted international standards to prevent fraud and money laundering, and should not be permitted to be a source of crime;

– gambling should be verifiably fair to consumers of those services;

– gambling  should  always  be  conducted  responsibly  and  with  safeguards necessary to protect children and vulnerable people.

In exercising its functions under the Law, the Commission must always have regard to these licensing principles. The Commission will only permit gambling if it considers it reasonably consistent with pursuit of the licensing principles.

This statement will be reviewed by the Minister from time to time and revised after consultation with the proposed Commission when appropriate.

Statutory functions

The Commission's functions will mainly comprise 3 key areas: licensing, compliance and enforcement. In particular, the Commission has the power to:

– determine  applications  for  operating  licences  and  permits,  specify  the conditions to be contained in such licences and permits, limit the duration of such licences and determine applications to vary or renew operating licences;

– undertake activities for the purpose of assessing compliance with the Law and with any licence or permit condition, code of practice or other provision made by or by virtue of the Law, and also for the purpose of assessing whether an offence  is  being  committed  under  or  by  virtue  of  the  Law.  To  request information from licence holders and to carry out reviews and inspections of any regulated entity;

– take regulatory action against an licence holder following a review including the power to issue a formal warning (notices), to attach, remove or amend a licence condition, to suspend or revoke a licence in relation to offences under the Law.

Development of policies and procedures

This Statement of principles for licensing and regulation is the foundation for the work of the Commission. The Minister expects the Commission to develop a number of policies which build on the principles in this document and govern how Commission will carry out its work, including:

– Licensing, compliance and enforcement policy statement;

– Licence Conditions and Codes of Practice;

– Complaints procedure; and

– Corporate governance framework.

What the Minister expects from applicants for licences

The Minister expects applicants for licences to the Commission will:

– demonstrate to the Commission that they are fit and proper persons to hold such a licence;

– ensure that the activities they plan to carry out will be conducted in a manner which minimises the risks to the licensing principles;

– work with the Commission in an open and co-operative way;

– disclose  to  the  Commission  anything  which  the  Commission  would reasonably expect to know.

What the Minister expects from licensees

The Minister expects licensees to conduct their gambling operations in a way that does not  put  the  licensing  principles  at  risk  or  harm  the  integrity  of  Jersey.  Licence conditions and Codes of Practice will be issued to ensure this.

The Minister expects those holding licences to:

– comply with the Commission's social responsibility directives;

– conduct their business with integrity;

– act with due care, skill and diligence;

– take care to organise and control their affairs responsibly and effectively and have adequate systems and controls to minimise the risks to the licensing principles;

– maintain adequate financial resources;

– have due regard to the interests of customers and treat them fairly;

– have due regard to the information needs of customers and communicate with them in a way that is clear and unambiguous, and allows them to make a properly informed judgment about whether to gamble;

– manage conflicts of interest fairly;

– work with the Commission in an open and co-operative way; and

– disclose  to  the  Commission  anything  which  the  Commission  would reasonably expect to know.

Applying principles to functions

The Minister expects the regulator to apply the following principles in exercising its functions  under  the  Law.  These  principles  have  been  formulated  with  a  view  to ensuring  that  the  Commission  regulates  gambling  in  a  transparent,  accountable, proportionate, consistent and focused manner.

Regulating gambling in the public interest

The Commission will regulate gambling in the public interest, having regard to, and in pursuit of, the licensing principles in the Law. In doing so, the Commission will work with licensees, permit holders and other stakeholders and will ensure that it takes into account:

– the need to protect the public;

– the  need  to  maintain  public  confidence  in the  gambling  industry  and  the Commission;

– the importance of declaring and upholding proper standards of conduct; and

– competence of licence holders.

Reviewing regulatory approach

The  Commission  will  keep  its  regulatory  approach  under  review,  and  will  make changes to that approach when appropriate (for example, to reflect experience or new developments or guidance under Article 5).

Consultation

The Commission will consult on changes to its regulatory approach and follow States of Jersey best practice where it is appropriate to do so.

Decision-making processes

The  Commission  will  ensure  that licensing  and  regulatory  decisions  are  properly reasoned and evidence-based and undertaken in a timely manner.

Confirming licensing and regulatory decisions

The  Commission  will  provide  written  notification  of  licensing  and  regulatory decisions, including:

– a clear explanation of the reasons on which the decision is based (in a level of detail proportionate to its impact); and

– details of any appeal mechanism(s). Advice to the Minister

Observing Article 7, the Commission will provide the Minister with impartial and professional  advice,  in  keeping  with  its  core  objectives,  regarding  the  regulatory impact of any proposals to amend the gambling law or indeed identify any inherent conflicts with its guiding principles arising from its proposed mandate. The Minister will further charge the Commission to supply advice on:

– the incidence of gambling;

– the manner in which gambling is conducted;

– the effects of gambling;

– the regulation of gambling;

– the introduction, amendment or replacement of any enactment that relates to gambling.

The relevance of criminal convictions

The Commission will determine the weight it will attach to convictions for relevant offences  and  convictions  for  other  offences  committed  by  licence  applicants  or persons relevant to applications for operating licences, and have regard to the nature and seriousness of the offence and the time which has elapsed since the offence was committed.

Failure to declare convictions

The Commission will attach significant weight to failure by a licence applicant to declare  a  conviction  for  a  relevant  offence  or  conviction  for  any  other  offence committed by it or a person relevant to the application, in the absence of a reasonable excuse for such failure.

The opportunity to make oral representations

The Commission will provide an opportunity for licence applicants to make oral representations to it in appropriate circumstances.

Minimum burden test

The  Commission  will  ensure  that  its  regulatory  approach  imposes  the  minimum burden necessary to promote the licensing principles. The Commission must take into account the regulatory impact on different types and sizes of licence applicant and licence holder and ensure, without compromising key licensing principles, it does not unduly hinder economic progress.

Provision of information

The Commission will keep the gambling industry fully informed of the requirements of the regulatory regime and provide general information, advice and guidance, both on request and on its own initiative, with a view to aiding compliance.

Complaints

The  Commission  will  treat  all  complaints  seriously  and  will  address  them  in accordance with its published complaints procedure.

Adopting a risk-based approach

The Commission will adopt a risk-based approach to regulation to ensure that its resources are concentrated where they are needed and can be most effective.

Proportionality

The  Commission  will  generally  use  the  least  intrusive  regulatory  tool to  achieve compliance and will ensure that any action is proportionate to the importance of the matters to which it relates, having regard to its risk assessment.

Publication of regulatory action

The Commission will publish details of any regulatory action taken, except where it considers that this may have a disproportionately damaging effect on the licence holder.

Co-ordinating regulatory action

The  Commission  will  take  coordinated  regulatory  action  with  States  bodies  and regulators where it is appropriate to do so.

Co-operation with overseas authorities

The Commission, with the approval of the Attorney General, will assist allied overseas regulators to investigate breaches and offences perpetrated by mutual licensees if appropriate.

Promotion of licensing principles

The Minister expects the pursuance of licensing objectives to reflect those principles set out under the Commission Law, namely:

Gambling  should  be  regulated  in  accordance  with  generally  accepted international standards to prevent fraud and money laundering, and should not be permitted to be a source of crime.

The Commission will establish licensing, compliance and enforcement processes to prevent gambling from being a source or associated with crime or disorder or being used to support crime.

To enable this objective the Commission will undertake thorough due diligence to ensure:

– only suitable applicants will be granted licences;

– the suitability of licence holders will be assessed on an ongoing basis as part of the Commission's compliance activities;

– compliance activity is targeted where the risks to the licensing objectives are greatest;

– the suitability  of  licence holders  will  be  reconsidered  in  the  light  of  any subsequent criminal activity or association with such activity.

The  Commission  will  take  a  serious  view  of  applicants  and  licensees  who  have convictions for relevant offences. Each case will be considered on its merits, but there will be a presumption in favour of refusing an application or reviewing a licence in such cases.

The  Commission  will  examine  the  corporate  control  structures  and  ownership  of operators to enable the Commission to identify and satisfy itself of the integrity of controllers and beneficiaries of companies and others relevant to the operation of gambling.

The Commission will provide advice of compliance requisites to licensed operators and potential operators.

The Commission will provide guidance to parish authorities and to law enforcement agencies within Jersey.

The Commission will make available general advice to the public on what activities are permissible without a licence or permit.

The Commission will employ staff with the necessary skills and knowledge and will delegate  to  them  the  necessary  powers  they  need  to  carry  out  compliance  and enforcement functions.

The  Commission  will  seek  to  build  and  maintain  good  liaison  and  working relationships with insular authorities, other allied regulators, regulatory associations and external law enforcement bodies. The Commission will work closely with these bodies and where permissible share relevant information.

Where the Commission becomes aware that there are problems arising from disorder at gambling premises, the Commission may decide to commence a review of the licence.

Gambling should be verifiably fair to consumers of those services.

The Minister expects that gambling will be fair in the way it is played and offered, that the rules are transparent to players and they therefore know what to expect.

The Commission will ensure that licences are issued only to those who are suitable to offer gambling facilities or work in the industry.

The Commission must ensure that operators provide rules that are fair and clearly understandable. For example, the operator must make plain the probability of losing or winning, as well as presenting the terms and conditions attached to any wager, game or gambling facility.

It  will  be  a  requirement  for  operators  to  make  public  the  results  of  events  and competitions on which commercial, charitable and social gambling takes place.

The Commission will ensure that the licences it issues, together with the licence conditions it imposes and the codes of practice it publishes, set appropriate standards of conduct for licence holders, appropriate technical standards for gaming machines and other equipment used in connection with any licensed activity.

In  the  event  of  non-compliance,  the  Commission  will  ensure  that  conditions  are imposed that deter future non-compliance on the part of the licence holder.

Gambling should always be conducted responsibly and with safeguards necessary to protect children and vulnerable people.

The Commission will establish and maintain a social responsibility fund dedicated to education, research and promotion of responsible gambling and enable such initiatives for counselling of those harmed by excessive gambling.

The fund will be resourced by the gambling industry primarily by agreed voluntary donation.  However,  should  a  shortfall  in  funding  arise,  the  Minister  expects  the Commission to exercise powers under the draft Law to impose a levy on the industry to ensure the fund is adequately resourced.

The Commission will work with other bodies such as Gamcare and the Gordon Moody Association  to  build  and  maintain  knowledge  about  problem  gambling  and  the measures that may be taken to reduce any prevalence of problem gambling.

The Commission will issue guidance to ensure that gambling premises are presented in such a way that access by children and young persons continues to be prevented.

The Commission will require persons operating remote gambling to ensure that there are adequate age verification measures in place to prevent children and young persons gambling on their sites.

With regard to vulnerable persons' the Commission considers that this group will include:

– people who gamble more than they want to;

– people who gamble beyond their means; and/or

– people who may not be able to make informed or balanced decisions about gambling,  for  example  because  of  mental  health  problems,  learning disabilities, or substance misuse relating to alcohol or drugs.

Although the Commission's role is not intended to extend to treatment or care of those who have gambling problems, the Commission will follow developments in work of that kind.

The  Commission  will  issue  codes  that  include  social  responsibility  requirements, setting  out  what  practical  measures  operators  must  take  in  relation  to  social responsibility. This will build upon the shadow Commission's work to date on self- exclusion policies and problem recognition papers.

The Commission will identify good practice in protecting vulnerable people from being harmed by gambling and, where appropriate, place requirements on operators to put particular measures in place and to monitor their compliance. Compliance will be kept regularly under review, with activity by the Commission targeted at the greatest risks to the licensing principles. In the event of non-compliance, conditions may be imposed on the licence holder with the intention of deterring future non-compliance.