Memorandum submitted by GamCare
INTRODUCTION
GamCare is pleased to respond to the request by the Culture Media and Sport Committee for written evidence. As the national centre addressing the social impact of gambling, the changes to the regulation of gaming machines and the casino industry are of considerable interest.
GAMCARE
The charity is gambling-neutral with an underlying stance of promoting responsible attitudes to gambling. Through the national Helpline, face-to-face counselling and joint venture projects with other addiction agencies GamCare is the largest provider in the UK of counselling services for those affected by a gambling dependency.
On the prevention and education side of the social impact of gambling GamCare runs awareness and development programmes for schools, colleges, ethnic minorities, community groups, and HMYOI Feltham. The charity has a wide range of leaflets relevant to both recreational and problem gambling and has worked with the gambling industry to devise information available in gambling venues. Collaborative work with the slot machine sector on codes of social responsibility backed by certificated training courses for employees is now being extended to other sectors and to e-gaming applications.
As well as working with sections of the gambling industry to improve the level of social responsibility GamCare maintains a regular dialogue with all regulating authorities and with the DCMS. Further information about the work of the charity can be found at www.gamcare.org.uk.
THE IMPACT OF THE PROPOSALS ON THE SUPPLIERS, LESSORS AND THE USERS OF GAMING MACHINES
Gaming machines are both popular and widely available: The national gambling prevalence study (Gambling Behaviour in Britain 2000) determined that gambling on machines was, at 14 per cent of the population aged 16 and above, the third most popular activity after the National Lottery and Scratchcards. The Gaming Board (Annual Report 2000-2001) estimated that the number of licensed machines is in excess of 250,000.
There is little doubt that implementing the Government proposals will lead to a net increase in gaming machines most notably in casinos but also arising from the fact that the allocation for LBO's is to double and could grow in other locations where local authorities accept applications for extra machines.
Developing the range of gaming machines and their overall numbers will, if the experience in other countries is anything to go by, almost certainly lead to an increase in spend and, consequently revenues. In 1999 BACTA estimated the annual turnover of machines to be £10.3 billion (Report of the Gaming Board for Great Britain 2000-2001) which represents around a quarter of the £42 billion overall annual spend on gambling. This annual figure for machines alone produces an average spend of £28 million a day and it is likely that this figure has risen since 1999. Whilst it is difficult to guage what the future spend on machines will be, it has been estimated (David Marshall, Accor Casinos, GIF conference April 2002) that slots in the new style casinos could account for as much as 93 per cent of the revenues.
If these predictions of more machines and higher spend are correct it is reasonable to assume that more people will be attracted to playing them. We would estimate that the percentage increase in new gamblers may be small but the increase in existing gamblers attracted to play machines for the first time or extend their play is likely to be much larger. The gambling industry are predicting that this increase might well come from the 18-24 age range. It is known from the prevalence study and other sources that this age group is particularly attracted to slot machines. In fact at 32 per cent it was the most popular activity for the 16-24 age band in that survey (Gambling Behaviour in Britain 2000.). It is also known that older women also find the playing of gaming machines to be attractive and it is therefore likely that there will also be an increase level of play from this segment of the population.
The introduction of "multi-line" and "multi-stake" gaming machines with unlimited jackpots will, we anticipate, add to the attraction for adults. In contrast, the restrictions on the reclassified AWP machine might reduce adult play but these machines are still likely to be attractive to younger children whether they are sited in arcades or non-gaming premises like fish and chip shops.
Restricting the "all-cash machine" (category C) to 18 and over by law wherever they are sited should reduce the current level of use by under 18s. The impact of this is likely to be noticeable in places where currently there is no legal restriction and where a voluntary exclusion policy is not enforced (eg some pubs and motorway service areas). One effect of this might be to increase the attraction of playing by 18s and over particularly if category C machines are located in an "adult only" area of the premises.
THE POTENTIAL CONTRIBUTION OF CASINO-DEVELOPMENT TO THE ECONOMY, BOTH NATIONALLY AND LOCALLY
Whilst not an area of primary concern to GamCare it does of course have a social, or socio-economic, impact. We understand that there have been a number of studies done in other countries to establish the value of introducing casinos into an area. We would argue, however, that whilst economic reasons are very important it is vital that the wider view is taken. An independent socio-economic survey should be carried out prior to any final decision being taken and, most importantly of all, the population of the area that will be affected by the development should be allowed to have their say — preferably by means of a referendum.
Taking the economic argument to an extreme it has been said that "theft is a transfer of wealth that does not represent a social cost — there is no net change in the value of society's resources." (Tullock 1967). Whilst not suggesting gambling should be equated with theft it is an activity where there is a straight transfer of money and where there clearly are social costs for individuals, families and the wider community.
There does appear to be a strong argument for developing casinos as a means of contributing to area rejuvenation. However, a great many factors need to be taken into consideration such as the net increase in employment and how many small businesses will be eclipsed by larger enterprises. A further consideration must be that concerning casino customers. Estimates vary but by way of example it is suggested in a survey of Missouri Riverboat casino development that 61.3 per cent of customers lived in a 35 mile radius of the venue (Public policy and the displacement effects of casinos, Seigal & Anders 1999). The same survey concluded that the increase in gambling spend "resulted in a significant decline in sales tax revenues derived from entertainment and amusement establishments."
THE PREVENTION OF CRIMINAL INTERVENTION OF GAMBLING
With the exception of Triad involvement in illegal casinos that we have heard operate in London's Chinatown, GamCare has no knowledge of organised criminal infiltration into gambling activities within the UK. However, a small number of problem gamblers who attend for counselling do report beatings and assaults by money lenders when they are unable to pay the rapidly increasing interest charges on cash they have borrowed.
The Government proposals are likely to reduce the possibilities for illegal gambling although the future tax regime will prove to be an important factor as to whether cheating will continue to be an attractive proposition.
The retention of AWP machines in cafes and other locations will, unfortunately, continue to provide an opportunity for unscrupulous operators to illegally install category B or C gaming machines (as is currently the practice). Whilst powers of inspection and enforcement will be a deterrent in those areas where local authorities are vigilant, there would be no confusion or doubt if AWP machines were banned from this type of retail outlet altogether.
THE SOCIAL IMPACT OF THE CHANGES PROPOSED AND THE SAFEGUARDING OF THE YOUNG AND OTHERWISE VULNERABLE
Sir Alan Budd recognised the likelihood of an increase in the number of problem gamblers and the Government report highlighted this concern. In the introduction to its proposals (paragraph 1.4) it made reference to the fact that "over enthusiastic deregulation can cause real social and economic problems from which it is hard to rein back."
GamCare believes that given strong political will; real commitment on behalf of the gambling industry; a programme of selected and targeted research to monitor the impact of the changes; and sufficient resources to pay for effective treatment for problem gamblers and prevention programmes to safeguard children and the vulnerable, there is a good chance that there will not be a significant increase. On the other hand if we get it wrong there will be an unacceptably high social cost.
There appears to be a remarkable consensus in these first weeks following the publication of the Government proposals that the proliferation of casinos and gambling machines must be controlled and that there should be no explosive growth. Although this might be difficult to achieve in a fair and balanced fashion it is, we believe, absolutely vital that the changes are introduced in carefully planned stages and the impact of deregulated casinos with the attendant increase in high payout slot machines is monitored.
Proposals that are likely to increase the level of harm
Drink allowed on the gaming floor. Whilst we can understand the leisure activity argument for this we believe the current restriction has been a contributory reason in keeping the UK prevalence of problem gambling relatively low. Studies that have been done indicate that people that drink at the casino table gamble less intelligently, tend to exceed self imposed limits and chase losses (D Giacopassi et al, 1998). In other words they exhibit behaviour symptomatic of problem gamblers. Research carried out in Australia suggested that gamblers who drank heavily whilst gambling were likely to have difficulty in ending a gambling session (Dickerson & Baron, 1999).
Positive ID without membership into casinos. The proposals refer to positive identification and not proof-of-age. The latter is extremely important if the under 18 limit is to be properly applied. As has already been stated gaming machines are the preferred activity of young people and the environment of the amusement arcade is particularly attractive to them. The new style casino will similarly be an attraction and a foolproof system of identification and age check will need to be introduced in order to prevent entry by children as well as those that have self-excluded.
Multi-line machines. A recent report for the Gaming Industry Operators' Group in Australia (A Blaszczynski et al. 2001) suggested that reducing the number of lines on a machine could be an effective harm minimisation strategy as many gamblers overspend when this facility is available.
Removal of the demand test permitted areas for casinos. As referred to above, badly managed explosive growth of deregulated casinos without careful monitoring is likely to lead to an increase in problem gambling. Strict entry controls, social responsibility procedures, trained staff , and compliance with both regulations and guidelines will be important factors in containing the prevalence of harm. Additionally, public awareness messages and the resources to cope with any surge in demand for help both regionally and nationally will be important. Monitoring the impact of the first new style casinos should be carried out from the day of their introduction, and a year later a further national prevalence study should take place.
Proliferation of category A gaming machines. These are likely to prove popular because of the size of the payout and for the game features. As previously stated younger gamblers are most likely to be attracted to these machines. Unfortunately, it is young people in the 16-24 group who are three times more likely than older age groups to have a problem with their gambling (Gambling Behaviour in Britain, 2000).
Retention of AWP machines in non-gambling premises. This proposal means that gambling machines will continue to be available to children of any age. Whilst these low stake low payout machines are acceptable in the controlled and supervised environment of an amusement arcade, they are unlikely to receive the same level of attention from the proprietors of retail outlets who are partially dependent on the income from the machines. Neither will there be any incentive for retail owners to operate their machines in a socially responsible fashion. AWP machines in places like fish and chip shops provide an unintentional and inadvertent introduction to gambling for children. Whilst they are not expected to be the cause of significant problem gambling they are likely to be an incitement to children who are vulnerable to becoming dependent.
Proposals that should help minimise harm
Single regulator with powers of entry, inspection, search, seizure, enforcement and prosecution commencement. These measures will provide the necessary teeth that the Gaming Board lacks. Especially important as it is unrealistic to expect the police to treat gambling transgressions as a high priority area. Should act as a real deterrent to those who wish to break the rules or operate illegal machines or casinos.
Inspection and enforcement within the power of the Gambling Commission at all sites with gaming machines including clubs and pubs. This is particularly important in non-specific gaming venues such as a club and should be seen as the quid pro quo for their retention of jackpot machines. If the right of inspection and enforcement is not implemented for clubs it will set a dangerous anomaly and be unfair on all other machine operators.
Formal codes of social responsibility part of licence requirement. Bringing social responsibility within the regulatory framework is the single most positive proposal from GamCare's point of view. This is a significant step forward as it will be included within the Gambling Commission's power to impose sanctions for regulatory failures up to and including licence revocation.
Sufficient resources provided through the Gambling Industry Charitable Trust and the National Health Service to ensure an adequate level of treatment, prevention and research. Whoever the providers of these services will be in the future it is absolutely vital that an adequate level of funding is available if we are to develop gambling without significantly increasing the level of harm. Of equal importance is the need for continuity of funding for those organisations providing treatment and education programmes. The one year at a time approach makes forward planning almost impossible and creates difficulties with continuity of service delivery and retention of high calibre staff.
Reserve power to impose a statutory levy attached to the licence fee. Absolutely essential to have this long stop provision should the gambling industry prove unwilling or unable, on a voluntary self-regulatory basis, to support social impact and research organisations with sufficient funding to deliver an effective service.
Higher standard and more extensive coverage for "fit and proper" status. Should help in driving up standards including that of social responsibility.
Specified locations for reclassified categories of gaming machine. This proposal should make enforcement easier and remove some inappropriate sites.
Tightening the 18 age limit. This restriction applicable to all gaming machines and most gambling activities will help reinforce the message that gambling is an adult activity and that children are particularly vulnerable.
A stepped removal of permitted areas and monitoring effect of deregulated casinos. This will be vital if we are to ensure there is no return to the explosive growth that occurred in the early 1960's. The challenge for everyone is to avoid and an increase of problems through rapid liberalisation as has been recently experienced in Australia.
The restriction, as far as is practical, of restricting hard gambling activities (machines, casinos, betting) to specific licensed gaming venues. Should result in better control, staff trained to be socially responsibility, easier inspection and enforcement, and customers knowingly enter for the purpose of gambling.
Minimum size for new style casinos. This is sound in principle but suggested figure of 2,000 square feet is too small and will contribute to the rapid proliferation effect. One means of controlling expansion of casinos would be to initially set a much higher floor space requirement and reduce this in the light of experience — say 20,000 square feet.
Gambling Commission guidance to local authorities. This will aid consistency of approach and increase fairness. If a local authority restricts gambling too tightly it could lead to an increase in illegal gambling, and if it interprets regulations too loosely the controls will be insufficient to prevent customer exploitation.
Siting of ATM machines. The fact that the positioning of an ATM will require a break in play provides an important "reality check". These checks enable the customer to break from the absorbing cocoon of the gambling activity and make a considered judgement as to whether they wish to commit more money and time to gambling.
A maximum number of machines per gaming table. This provides an important control on the proliferation of high payout gaming machines. There is talk of "gaming sheds" springing up with thousands of machines in each one. A cap on the number will help create a balance between gambling activities available and limit the impact of a machine dominated gaming space.
Each playing position of an electronic multi-player table game counts as one machine. This provides an important control on overall numbers and establishes a principal that a machine represents a player position.
Research into the impact of gambling on machines by children. This will be an important contribution in determining the extent to which AWP machines contribute to problem gambling. It will complement the national prevalence study and strengthen the findings of research commissioned by the National Lottery Commission that identified a significant fruit machine problem gambling prevalence rate of 4.4 per cent among 12-15 year olds surveyed (BMRB 2001).
Creation of a separate category of AWP machines. A distinct category of Amusement With Prizes machines and the restriction of stakes and prizes is very important in reducing access by children. Restricting machine gambling by children to "trivial" machines provides an opportunity for them to learn to gamble under adult supervision without incurring significant financial damage.
No more inducements allowed than at present for casino customers. We see this as an important safeguard. Special treatment tends to inflate the fragile ego of the problem gambler and encourages further excessive play without consideration of the consequences.
Regulatory requirements for on-line gambling. These have the potential to create a standard of high probity and social responsibility. This is particularly important with regard to virtual casino and slot machine gambling that have a potential for rapid round the clock continuous gambling. A strong framework of regulation will also aid the establishment of international protocols with other jurisdictions.
The positive identification of on-line gamblers. This must, as with terrestrial casinos, include an effective age check. It is for GamCare a bottom line issue that all reasonable steps are taken to establish the age of the on-line gambler.
Restrictions to on-line money transactions. These are a further safeguard as it is crucial that any decision to commit money to gamble is a conscious rational decision.
Maximum stakes and the ability to self-ban. Both vital safeguards that aid gamblers retaining control of what they are doing. Customer led limits allow freedom of choice but provides a ceiling on spend. Self-exclusion for e-gaming applications, as with terrestrial gaming, enables the gambler to take a first step towards addressing their "out of control" situation.
Clocks, counting systems and play pauses. These are all vitally necessary "reality checks" that will break up the continuous play cycle of virtual casino table games and slots.
The provision of information. Information about keeping control, where to access help with links to appropriate sights are cornerstones of a socially responsible e-gaming site and are significant in balancing freedom of choice for the gambler with the responsibility of the operator.
Monitoring the effect of changes. Both for e-gaming and terrestrial gambling at casinos or on slots monitoring the changes is essential. The ability to amend regulation in the light of findings will also be important in preventing a significant increase in problem gambling. Careful application of this will develop understanding and enable sensible decisions to be taken. GamCare considers this to be a protection for the gambling industry as well as for the gambler.
Research into casino and slot machine gambling behaviour. A further important area for research is that of recreational or social gambling behaviour. Additionally, research into effective treatment for gamblers in trouble with these activities is also important. It is necessary to understand the benefits of gambling, as well as the costs. Effective treatment is the key to the provision of the right level of services as well as providing a check on value for money. Slot machine gambling is consistently the activity that has the highest caller rate to the GamCare national helpline and casino table games are third behind betting (GamCare care services report 2001).
THE POTENTIAL IMPACT ON THE NATIONAL LOTTERY OF INCREASED COMPETITION FOLLOWING THE DEREGULATION OF CASINOS, BINGO, POOL COMPETITIONS AND SOCIETY LOTTERIES
This is not a direct social responsibility issue although it does have a bearing on the overall social impact of gambling. The National Lottery is significantly the most popular gambling activity and whilst it is not directly a cause of much problem gambling (0.5 per cent of first time calls to GamCare's National helpline in 2001) it contributes to the general acceptability of gambling in the UK.
GamCare is a charity that for the last six years has received a community fund grant. We are, therefore, aware of the immense value the money for "good causes" brings to the voluntary sector and subsequently contributes towards the social well being of the country.
The Government paper has taken a protective stance where there was a likelihood of receipts to good causes being eroded by not allowing, for example, side betting on the National Lottery. Changes to other gambling activities are unlikely to have a significant negative impact on the National Lottery as, in our experience, people gamble on the Lottery and on other activities of their choice. Increases to society lottery payouts is likely to increase their attraction but given the National Lottery's ability to promote and introduce new products it is unlikely to have a marked effect. As society lotteries also benefit charities it is not a loss to the voluntary sector although we would have preferred the minimum amount to go to good causes from society lotteries to be the same as for the National Lottery.
SUMMARY
GamCare, the national charity addressing the social impact of gambling, considers the Government proposals on gambling to be sound and have achieved a good balance between freedom of choice and responsibility. The charity agrees with and accepts the majority of proposals with regard to casinos and slot machines and is pleased to see that within the regulatory framework there will be a requirement to demonstrate social responsibility. The higher standards of probity and powers of inspection and enforcement invested in the Gambling Commission should prove to be a positive influence on the legitimate gambling industry. It will be important to manage the changes so as to prevent an explosive proliferation of gambling activities, and to monitor the costs and benefits of increased gambling opportunity. Adequate resources from either voluntary contributions from the gambling industry, in addition to NHS involvement, or from a statutory levy are absolutely essential in providing effective treatment and education programmes. Given a genuine willingness by all interested parties it is not inevitable that that the prevalence of problem gambling will significantly increase as a result of the proposed changes.
25 April 2002
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