Poker clubs, no bluffing please!

Poker has enjoyed an incredible rise in popularity over the last few years, as anyone familiar with late-night television and/or the internet gaming scene will be well-aware.  This enthusiasm has spawned venues where poker-players can meet and game, ranging from Poker Leagues in pubs to fully-dedicated commercial Poker clubs.

Over the last decade, a number of private gaming venues arose, claiming to operate outside the restrictions of the old Gaming Act 1968 on the basis that Poker was a game of skill, rather than a game of chance.  In 2007, the Gambling Commission, in concert with the Police and the CPS, prosecuted the chairman of the famous Gutshot Club in London for organising unlicensed poker games from which the club took entry fees and a share of the stakes (a “rake”).  The Court decided in favour of the Commission, that Poker was “equal chance gaming”.  Even though considerable skill often determines the ultimate winner of a tournament, winning still requires the player to receive the right cards and therefore the requisite element of chance is involved.

The decision sent a shockwave through this nascent industry (although it was hardly a surprise to many legal professionals in the field).  So, in the light of that decision, how are the poker clubs still operating?

The answer is, of course, by ensuring that they stay within the law.  Poker itself is not outlawed, but there are limits imposed by the Gambling Act 2005 which must be complied with.

For commercial operators, full-scale, no limits, Poker Clubs must be run within casino-licenced premises.  Since the 2005 Act came into force, there can be no new casino licences granted other than the few, large, new venues fanfared by the government during the Act’s passage through Parliament.  However, several businesses had submitted applications for new casino licences under the old 1968 Act and these have taken some considerable time to be determined.  Dusk Til Dawn, in Nottingham, was only granted a new 1968 Act casino licence in 2008, and in order to do so had to agree to conditions restricting it from other casino activities.  Casino-licenced premises now have to have an Operating Licence from the Gambling Commission.  They have to satisfy the Commission that there are appropriate regulations and safeguards in place to ensure, for example, that gaming is conducted fairly and honestly (from the perspective of the house and the participants!) and that problem-gamblers are protected from themselves.  Casino-licensed venues would often regard themselves as offering the ultimate playing experience for poker devotees.

In pubs and commercially-run clubs, Poker Leagues have sprung up across the country.  In these venues, Poker is classed as “exempt gaming” but only if subject to strict (low) limits on stakes and winnings.  The intention is to ensure that the poker is a fun entertainment for the customers, rather than being an attraction in itself.  There is no scope for relaxing or lifting these restrictions, other than (slightly) for strictly non-commercial events such as Charity fund-raisers.

Many of the new venues, however, are Members’ Clubs.  These are subject to strict rules.  They must be non-profit-making organisations, owned and run by and for the membership.  Any profits made must be applied back to the club.  Membership must be properly regulated, for example by application at least 48 hours before first attending the club, and there should be proper records kept.  Crucially, the club must not be run primarily for gaming.  It must, genuinely, be set up to provide other attractions, such as bars, restaurants, snooker/pool and/or the other (non-gambling!) social attractions and interactions of a club set up for like-minded people.  Gaming must only be a side-activity, not the whole or even the main reason for members to come to the club.  From a quick glance at their websites, the interested observer may observe that some current venues are walking a fine line in this regard!

Like pubs and commercial clubs, members’ clubs are subject to strict (but slightly higher) limits on participation fees, stakes and prizes.  No rake is allowed. 

However, if a premises is genuinely a private members’ club, is not primarily run for gaming and has a Club Premises Certificate under the Licensing Act 2003 (i.e. a club alcohol and entertainments licence) it is possible to obtain a Club Gaming Permit from the local authority.  This removes the limits on stakes and prizes and allows the club to charge a £3 participation fee per player (but still no rake).  The club can also then offer more gaming machines than otherwise, as well as other activities such as Bingo.  This is the route followed by many premises offering themselves as (among other things!) Poker Clubs.  In order to qualify, the club activities and set-up have to be well thought-through, as the Powerhouse Sporting Club (the successor to The Gutshot) found in February 2008 when it was unable to persuade Islington Borough Council that it was a private members’ club existing primarily for non-gaming activities.  The report to the Council’s Licensing Committee is online at http://www.islington.gov.uk/democracy/reports/reportdetail.asp?ReportID=6199&intSectionID=6&intSubSectionID=2, and might be viewed as an object-lesson in the sort of activity likely to upset the Gambling Commission.

As the reader will have realised, this is a complicated and technical area of the law.  Getting it wrong could result in prosecution and/or loss of any existing alcohol and entertainment licence for the premises, with all the consequences that that would bring.  Anyone planning on offering gaming, particularly poker, in a public venue should contact Joe Lott, who will be happy to offer advice.