Memorandum submitted by HM Treasury and the Department for Culture, Media and Sport
GAMBLING INQUIRY
This memorandum is submitted by the Government on behalf of Her Majesty's Treasury and the Department for Culture, Media and Sport in response to the Committee's letters of 20 May to HMT (questions 4, 5 and 7) and DCMS.
RESEARCH INTO GAMBLING
1. In 1978 the Royal Commission on Gambling recommended that the Government establish a Gambling Research Unit to monitor and study the incidence, sociology and psychology of gambling, and that this Unit be funded by the Home Office. The Budd Review noted that its own work had been made more difficult by the failure of the Government to act on this Rothschild recommendation. The Government Response to Budd acknowledged that too little is known about the features of gambling activities, and that there is a need for research into problem gambling and its treatment.
(a) As there is little evidence on the likely social impact of deregulation, is the Government considering the funding of a research unit, or is the Government relying on the gambling industry to provide the necessary research and information on the effects of the proposed deregulation?
The Gambling Review Body recommended that the gambling industry should establish and fund, on a voluntary basis, a trust which would commission research into the causes, prevention and treatment of problem gambling. The Review Body envisaged that the trust would report results to the Gambling Commission, with advice on the implications for adjustments to regulation of gambling activities. Although the Review Body called for the industry to fund the trust, it recommended that the trust would have an independent chairman, and would include representation from, as well as the industry, "problem gambling service providers, the medical/scientific funding councils and the Gambling Commission".
The Government has accepted this recommendation, while making clear its intention to take reserve powers, as the Review Body recommended, to compel licensed gambling operators to provide funding for the trust through licence fees. One of the key issues for Government will be the sustainability of voluntary funding over the medium to longer-term.
A trust has already been established by the gambling industry, with an initial budget of £0.8 million for 2002-03. The trust has appointed a steering group, including representatives of the Gaming Board, the Economic and Social Research Council, DCMS and other independent members, to help it commission a consultant to develop strategies to deliver cost-effective research, education and support services. Advertisements for the invitation to tender for this work were published in the last week of May; and the assignment is to be fully completed by the end of 2002-03, when the trust will pursue research priorities.
As it stands the trust is not independent in the sense called for by the Gambling Review Body. The industry has, however, indicated its intention that additional independent trustees should be appointed; and the Government has made clear that it wishes to see early progress towards the achievement of this objective, as well as an increase in financial support for the trust to the level recommended by the Review Body. But progress to date has been encouraging; and in the Government's view the industry has made a good start in responding to the Review Body's proposals.
When the trust has achieved the necessary mixture of representation identified by the Review Body it will be in a position to commission research which will carry weight as independent. In the Government's view the Review Body were right to recommend an approach which provides at the same time for the industry to be involved in the process of commissioning and considering the results of research. The Gambling Commission, when established, will have a continuing quality control responsibility.
The Government has not, however, ruled out the possibility of commissioning or undertaking research in the area of problem gambling on its own account if necessary, liaising with the Commission and the trust to avoid duplication of effort.
It is also worth noting that the Commission, as envisaged by the Review Body, will be responsible for keeping the operation of the system of control and regulation under review, making adjustments as needed where they are within its powers and advising the Government on those that are not. As part of this responsibility the Government would expect the Commission, in addition to the research programme noted above, to survey, at regular intervals, the incidence of problem gambling in Great Britain. The 2000 Prevalence Study provides useful benchmark information for this purpose; and its value or accuracy have not been called into question on account of the substantial contribution which the industry made to funding it.
(b) Does the Government consider it wise to use only information provided by an industry-funded trust to guide future decision making by the Government and the Gambling Commission?
The Gambling Review Body did not recommend that the Commission, when established, and the Government should use only information provided by the trust; and the Government has never indicated any intention to be bound in this way. The evidence flowing from research funded by the trust, which should all be published and which should be both impartial and of good quality, will provide a very important source of information for decision-makers. But they should also take into account information from other sources, including the results of any research studies carried out independently of the trust by academic or other bodies, and information from overseas. And, as indicated in the answer to (a) above, the Government or Commission may wish to commission research on their own account.
(c) If, on the other hand, Government intends to fund this research, will the whole, or only part of that cost be included in the licence fees or gaming duty charged to the gambling industry?
Any expenditure by the Government on gambling research would be funded out of money voted by Parliament, in the same way as general public expenditure.
2. The Budd report highlighted the paucity of research into the effect of access to gaming machines by children and young persons. It also confirmed that under existing legislation the UK has the most liberal regime in allowing children access to machines. Most, if not all, European countries ban children from access to any gaming machines regardless of stake or prize.
(a) Has the Department considered the evidence available from these jurisdictions on children's gambling habits and addiction?
The Department has considered the research evidence listed in the report of the Gambling Review Body. It has also noted the observation in the report that many of the overseas studies, carried out in states where under-age gambling is prohibited, show that adult problem gamblers have a high propensity to have started gambling in childhood or adolescence, from which the Review Body concluded that it did not necessarily follow that the incidence of problem gambling in Great Britain would be reduced simply by introducing new legal restrictions on children's access to gambling.
(b) Has the Department compared this evidence with any research into the effects of machine gaming and other gambling activity by children in the UK?
The Review Body made this comparison; and so did the Department in considering the Review Body's report, helping it to conclude:
— that the stake and prize limits on machines which children are allowed to play should be reduced;
— that controls on access to other kinds of Machine or forms of gambling should be effectively enforced; and
— that the continued ability of children to play low-value machines which genuinely have the character of amusements with small prizes will provide legal leisure opportunities which current evidence does not suggest have to be closed off;
— that research is needed to throw more light on the risks which different designs of machine games, machine settings or other machine parameters may cause.
TAXATION
3. Changes in the duty payable on receipts from betting and bingo have already been implemented.
The Government has, within the past 12 months, implemented changes to the duty regimes for both fixed odds and pool betting. The Government has also recently announced that it will be considering the scope to abolish the tax on bingo stakes and replace it with a gross profits tax on bingo companies; work on this is underway, but no such change has yet been introduced. As was the case with, for example, the reform of pool betting, Treasury and Customs will be working closely with DCMS to review the likely impact of the Safe Bet changes on each affected sector and considering whether and how the tax system should be adjusted.
(a) Assuming that it implements all the proposed changes in "A Safe Bet for Success", is the Department pressing for any changes in the current regime for taxing gaming machines and casinos?
The Government has already taken great strides in reforming and modernising the taxation of gambling in advance of the major regulatory reforms set out in "A Safe Bet For Success". The changes to betting tax and pool betting are examples of our progress in this respect, and of course this momentum will continue with the review of bingo duty announced in the Budget. Treasury and Customs will continue to work closely with DCMS to review the likely impact of the Safe Bet changes on each affected sector and consider whether and how the tax system should be adjusted.
(b) Is Customs and Excise undertaking or proposing any reviews of these areas?
The Government keeps all taxes under review. The Government announced in the Budget that it would be "considering the scope to abolish the tax on bingo stakes and replace it with a gross profits tax on bingo companies". This consideration is already under way.
4. The Government has stated that the creation of resort casinos is not a specific policy objective, but acknowledge that the proposed changes would make it possible to develop Las Vegas style casinos. Does the Government believe that the current top rate of 40 per cent duty is likely to attract major investors?
The Government's position is that the viability and desirability of resort casinos on the international model (eg Las Vegas) being established in this country are matters for commercial operators and local authorities to decide upon (the latter acting primarily in their planning role). The new regulatory framework will continue to provide for a wider variety of gambling premises (and therefore market opportunities) here than in the majority of countries where resort casinos have been established. This may be less attractive to developers than a framework which restricts most forms of gambling to resort casinos, but that will be something for prospective operators to assess.
Operators will therefore be considering a range of financial, regulatory and logistical factors in determining the scale of any investment they might wish to make, and total tax rates will be one of these factors. As already indicated, Treasury and Customs will be considering the implications of the proposed regulatory reforms for all of the relevant gambling duty regimes. It is worth bearing in mind, however, that the level of tax on business in the UK is extremely competitive internationally. Further, the average duty rate currently paid by casinos in the UK is considerably lower than the top marginal rate and, at around 23 per cent, is comparable with the flat rates adopted in many jurisdictions with resort casinos.
5. The Committee understands that Atlantic City has used taxation on resort casinos to promote regeneration within New Jersey.
(a) Apart from any changes in the national regime for taxing casino receipts (gross gaming yield), is the Department considering any form of taxation to allow local areas to benefit directly from the development of resort casinos?
The Government keeps all taxes under review, but has no plans to hypothecate the tax raised in a particular geographical area to public expenditure in that area. Local areas would, of course, benefit directly from the development of resort casinos through what would be significant private infrastructure investment, increases in job opportunities and additional spending by consumers from outside the immediate area supporting a whole range of local businesses. As with other significant development projects, it would also be open to local authorities, in appropriate circumstances, to seek planning gains from prospective resort casino operators as part of the planning approvals process.
(b) If the Government is content to permit the development of resort casinos, does it have a view on whether they will be able to sustain long-term inward investment in such areas, or whether existing local businesses are likely to suffer from the new and more intensive competition?
Evidence from other countries indicates that the development of resort casinos is generally a beneficial stimulus to local economies, increasing employment levels in the area and bringing in large numbers of visitors who would otherwise not have visited; visitors who will spend money with existing local businesses as well as in resort casinos. There may be some adverse impact on existing leisure sector businesses, but these are unlikely to be beyond the normal competitive pressures in a more open market context. In the case of Blackpool, for example, the Department has received expressions of concern from local businesses, but has noted the view of the town council that on balance the overall net impact of liberalisation of this market would be positive. The less restrictive regulatory environment would, of course, apply to existing businesses as well as new entrants.
6. "A Safe Bet for Success" estimates that the cost of the new regulatory framework to the gambling industry could be an extra £12.2 million generated through licence fees. Currently gaming revenue duty accrues directly to the Exchequer, is the Government satisfied that sufficient income for the regulatory framework will be generated from licence fees, and what plans does it have to graduate these fees so as not to impose substantial barriers to competition?
The Government intends that licence fees should be set so as to provide, in each case, for the recovery of the full costs of the necessary regulatory activity involved in both issuing and monitoring compliance with licence conditions. This will apply to licences issued by both the Gambling Commission and local authorities, and fees will also need to include a proportionate contribution towards the overhead costs of the regulatory system. Licence fees will, therefore, vary between particular sectors and types of gambling activity. Detailed proposals for future licensing regimes will be developed in consultation with industry and other stakeholders, and the Government is prepared to consider whether, in particular circumstances, a graduated approach to setting licence fees might be appropriate (subject to ensuring that full cost recovery is achieved and that there is no inappropriate cross-subsidy between sectors). As a general principle, however, the Government does not expect licence fees, in themselves, to represent a significant barrier to market entry or competition.
7. In the majority of other jurisdictions having an extensive commercial gambling sector, the regulator has the fiscal responsibility that currently falls to Customs and Excise in the UK; this leaves the Gaming Board, local authorities and the police responsible for enforcing the law. Does the Government have any plans to devolve fiscal as well as legal responsibility to the new Commission?
The Government has no such plans.
LOCAL AUTHORITIES
8. The Budd Review recommended that local authorities should be able to impose a blanket ban on a specific type of gambling premises in their area, as Budd considered that this was a decision that could only be determined locally. The Government has chosen to reject this recommendation.
(a) Is this not contrary to the Government's policy of greater devolution of power to local authorities?
(b) Why, if licensing is to remain a local function, should local authorities not be able to decide whether certain gambling premises are appropriate to their particular area?
The Government was not persuaded that the Review Body's tentative analogy between gambling and sex establishments was appropriate. The Government sees gambling as a legitimate, mainstream leisure activity, albeit one with particular risks which an effective structure of regulation is needed to control. This view underpinned the conclusion that blanket bans, even if not applied to existing premises, would represent a disproportionate and unfair constraint on people's ability to pursue their leisure choices and on the ability of businesses to meet them.
The Government believes that, as in the case of premises selling alcohol or providing public entertainment, the better approach is to set out statutory criteria against which licensing decisions should be taken, with those criteria reflecting the purposes of regulation and therefore the risks to be avoided or reduced. The definition of these criteria is being taken forward in consultation with all relevant stakeholder interests. The Government will also, of course, be pleased to take into account any views which the Committee may express on this point. The aim is to create a transparent framework which will ensure that, wherever an application is made, the core principles to be applied in determining it are widely known and fully understood, whilst providing for particular local circumstances and considerations to be taken into account. As a general principle, however, the Government sees blanket bans of all or certain types of gambling premises as being incompatible with a fair and transparent licensing system.
9. Will local authorities be able to decide on a limit on the number of gambling premises?
(a) In which case, what guidance will the Gambling Commission be able to provide to a local authority choosing to which operator to award a licence, and how could such a system operate most fairly?
(b) Has the Government considered what guidance can be provided to them when imposing such a limit?
All applicants for premises licences will need to be licensed by the Gambling Commission before they can apply for a premises licence, but the Government does not envisage the Commission having a role in assisting local authorities to choose between licensed operators. The Government is not persuaded that to give local authorities the power to set a limit on the number of premises within its area (whether of a specific kind or in total) is consistent with the principle that applications should be considered on their merits against licensing criteria in the way envisaged above. In practice such a limit, if not arbitrary, would be difficult to distinguish from the demand tests in the present law which the Review Body recommended should be removed. However, it is certainly possible that, once a certain number of premises were in operation, the proposed addition of more could itself bring about risks of harm which would justify refusal of a licence application on the criteria as they generally apply. Local authorities will also, in cases where a proposal to start a gambling business requires planning permission, apply planning criteria and guidance. We are consulting interested bodies to ensure that the licensing and planning processes are complementary and do not involve unnecessary overlap or duplication.
(c) More generally, has the Government considered how the criteria that local authorities will be required to apply to applications for licences will allow local concerns to be taken into account whilst not compromising its intention to allow competition into the commercial gambling market?
See 8 above.
(d) Is the Government concerned that local authority rejection of their applications may result in lengthy appeals to magistrates and in applications for judicial review (particularly where potential operators have invested heavily in them)?
The Government's view is that adverse decisions of this kind should be subject to a full right of appeal, not least to ensure compatibility with human rights legislation. The existence of statutory criteria, against which local authorities will be required to decide all applications, should assist the determination of appeals.
10. Is the Government confident that local authorities have the sufficient resources to take on the enhanced role under the proposals?
Licence fees will be set at levels sufficient to reimburse local authorities for the full cost of taking on an enhanced role in this area. In addition it is recognised that there will be start-up costs, such as training and enhancements to computer systems, and we will be discussing these and other matters with local authority representatives over the coming months.
11. Would the extra costs involved affect a local authority's inclination to grant licences?
Provided that licence fees are set at the correct levels this should not be a consideration.
NATIONAL LOTTERY
12. What is the Department's response to the National Audit Office Report on the arrangements for licensing and regulating the National Lottery?
13. Does the Government consider it likely that the National Lottery Commission's responsibilities will be eventually subsumed into the Gambling Commission?
The Government believes that the report provided some very helpful lessons for the conduct of any future competition to run the National Lottery.
We shall be publishing shortly a consultation document seeking views on possible changes to the structure of licensing and regulation set out in the 1993 and 1998 Acts which takes account of the experience of the last competition and the recommendations made by the NAO in its report.
The overall aim of the review is to see what changes might be needed to ensure effective competition for the Lottery operation beyond the current licence period, on the basis that this offers the best prospects of maximising income for good causes. We will look at possible changes which might be made within the broad present framework of the Commission awarding one section 5 licence. Some of these changes, for example to the Commission's constitution or powers, might themselves need legislation; but they would leave the overall Lottery framework in place.
We are also likely to look at more radical options, including those already discussed by the Committee.
We will also be consulting on the future regulation of the Lottery. The consultation document will explore the arguments both, for and against, the possibility of the proposed Gambling Commission subsuming the functions of the current National Lottery Commission.
The Government will be seeking an open consultation on these matters and is unlikely to indicate any preferences at this stage; we will want to consider views from interested bodies and the public before considering the future structure of licensing and regulation.
If the outcome of the consultation points to legislation then this will need to be brought before Parliament in good time before next licensing round and we have the possibility of legislating on Budd and the National Lottery in one Bill.
14. Is the Government considering a form of taxation on gambling to benefit good causes, which will counterbalance the likely reduction, as a result of the deregulation, in income for good causes from the National Lottery?
The Government does not believe that its proposals will have a significant impact on the income for good causes which the National Lottery will produce.
GAMING MACHINES
15. The Government rejected the Budd recommendation that cafeĦs and fish and chip shops etc should lose their right to install AWP machines in favour of creating a "new regulatory framework". Other than an identification of machine categories for specific premises, this framework is not defined.
(a) How does the Government propose to control adult and "family entertainment centres" with adult areas, pubs and licensed premises to which children have access, and any other such premises where category C machines are located, to ensure that under age persons do not have access to those machines?
Category C gaming machines will be allowed only on those premises licensed for adult gambling or for the consumption of alcohol. Each of these places will need a licence allowing it to have these machines. Licences will include conditions requiring adherence to a Gambling Commission Code of Practice ensuring effective supervision and control to prevent persons under 18 from having access.
Those who allow children to play Category C gaming machines will be at risk of losing their licence. They will also be at risk of prosecution—under the Government's plans, it will be an offence for an operator to allow a child to play a gaming machine (and it will also be an offence for a child to play it).
Ultimately it will be for the Commission itself to determine—with the Government's agreement—what should be in its Code of Practice. But it is important that there should be broad support for the Code within the industry, and also that Parliament, when it comes to consider this issue, should know what is intended in this area.
DCMS is therefore discussing the possible content of the Code with the industry and with the Gaming Board. There is already a Code of Practice, agreed between the Gaming Board and BACTA (British Amusement Catering Trades Association) about access to existing adults-only £25 "AWP" gaming machines in family arcades. This Code calls for physical barriers to separate the adults-only gaming machines and for prominent signage. It also requires supervision on the premises at all times.
These measures generally work well. They have the support of the industry and their existence will greatly help the development of the new Code so far as arcades are concerned. But it is unlikely that measures of this kind will be suitable for all types of premises with Category C machines. In particular, it is hard to see how all pubs could realistically provide for the physical separation of machines.
Age controls are already an important concern for pubs. They will become more so as pubs move, with the Government's encouragement, to providing a family-friendly environment. Again, there will be detailed discussion of the issues involved between DCMS, the Gaming Board, and representatives of the licensed trade. It seems likely that the crucial elements in pubs will be signage and effective supervision, in particular that Category C machines should be visible to bar staff and that those who appear to be under-age and who attempt to use them should be challenged.
DCMS will work up the detail in discussion with the industry and other stakeholder interests.
(b) Can the Department be certain that their proposals to allow the siting of Category D machines in unsupervised premises will not lead to those premises unlawfully installing Category C machines or even jackpot machines?
(c) Who will have the responsibility for monitoring this?
No. The Government does not imagine that new laws will by themselves prevent the illegal installation of gaming machines. Current law similarly allows places of this kind to have low stake and prize machines (with a maximum 30p stake and a maximum prize of £5 cash or £8 in tokens) and, as the Gambling Review Report stated (paragraphs 23.7 and 23.10) there are already reports of gaming machines being installed without the necessary licence.
"A Safe Bet for Success" sets out substantive measures for enforcement where operators decide to flout the law. The Gambling Commission will have primary responsibility for dealing with this and other cases of illegal gambling (para 3.12 of "A Safe Bet"). The Commission will have powers of entry, search and seizure, and the ability, in collaboration with other agencies, to investigate and bring proceedings in connection with illegal gambling.
The Commission will not, however, be operating on its own as regards the illegal siting of gaming machines. HM Customs and Excise have an interest in the duty payable on gaming machines, and the Commission will be able to look to them, to the police and to local authorities for information and assistance.
Local authorities will have a particularly important role. They will issue the licences for family entertainment and adult gaming centres, and could also have an important role in the inspection of businesses such as cafes, restaurants, takeaways and minicab firms. That will enable them to pick up and act upon illegal siting of gaming machines in these places, with assistance from the Commission and the police as necessary.
16. The Government has rejected the Budd recommendation that Jackpot machines be removed from premises registered under Parts 2 and 3 of the Gaming Act. The overwhelming majority of Jackpot machines found in bona fide members and proprietary clubs are installed under Part 3 registration. There is no prohibition presently on children playing these machines but the Department has said it will implement legislation to guard against this.
(a) In rejecting this recommendation, has the Government considered the anecdotal evidence to which the Review Body referred concerning under age play in snooker and other proprietary clubs?
The Review Body stated—at para 23.38 of its report—that there was "anecdotal evidence" of under-age play on jackpot machines in registered clubs in general. It did not draw any distinction in this context between non profit-making members' clubs and others, such as many snooker clubs, which operate on a commercial basis.
The Government takes underage play at clubs very seriously and we have set out our proposals for addressing the associated risks in "A Safe Bet for Success". If a members' club wants to continue to have £250 jackpot machines, it will need to keep them in a clearly identifiable area of the club, with children unable to play them. This will be set out in a Code of Practice.
As with other operators such as arcades and pubs, DCMS will engage with clubs' representatives to work up an effective Code which clubs will be able to accept. There will also be powers of access and inspection for the Gambling Commission, which will be able to take enforcement action by way of seizure and prosecution. The local authority will be able to revoke a club's licence for gaming machines. Clubs that do not want to allow access by the Commission will be entitled to have amusement machines (10p stake, £5 top prize) of the sort that children will be able to play.
(b) Has Government considered allowing only bona fide members' clubs to continue using them but disallowing other clubs from doing so?
Yes, but we see no case for doing that. There would be difficulties in drawing a clear distinction in law, but more importantly the potential problem, and its solution, are the same for both types of club. Many proprietary clubs, including, again, snooker clubs offer a worthwhile service to the community and the Government has had evidence that there would be a significant effect on their viability if they lost their jackpot gaming machines.
17. Both Budd and the Government acknowledge that evidence suggests that problem gambling amongst adults could result from starting gambling at an early age. Is there a danger that the Government is bowing to industry pressure to allow children to gamble at an early age at the risk of creating problem gamblers of the future?
The Government's proposals draw a clear distinction between gaming machines and machines which are genuinely for amusement with small prizes. The present law sets out a category of amusement with prizes machines; but it is too wide, and includes machines which, in the Government's view, constitute gambling by virtue of the size of stake and prize. The Government's proposals would place an upper limit of 10p and £5 on stakes and prizes respectively for amusement machines; and there would be no presumption or prescribed timetable for increasing those limits. The available evidence does not indicate to the Government that preventing children from continuing to be able to play these machines would have a material impact on the incidence of problem gambling in Great Britain, or that the risks are so clear as to justify the substantial penalties that would be suffered not just by the gaming machine industry but by the wider leisure industry and indeed by families themselves. But the Government has made clear its willingness to keep the matter under review in the light of outcomes from the proposed research programme.
18. The proposal to introduce category A machines (casino slots) into casinos represents the most controversial proposal in respect of machines generally and will lead to a considerable increase in the number of gaming machines available in Britain. Given that casino slot receipts, in all jurisdictions which permit them in numbers, rapidly outstrips table game turnover; limiting their number to table numbers (as suggested by Budd, and under consideration by the government) might well lead to casinos installing extra tables simply to gain more machines. Has the department considered this, and if so what measures would it take to limit casino slot machine numbers?
The Gambling Review Body proposed (paragraphs 22.47 and 23.32 of their report) that there should be a maximum of eight gaming machines available in a casino for each "table available for play", but that when a casino had more than 80 available tables, there should be no ceiling on the number of machines it could have. It seems implicit in this proposal that the tables "available for play" would have to be open and staffed so that customers could use them.
It will be a matter of commercial judgment for operators, within the limits of space and any related licensing constraints, as to what the total product offer in any particular casino might be. But the Government has endorsed the Review Body's view that casinos should continue to provide a balanced mix of table gaming and gaming machines, alongside any other legitimate gambling products that they wish to offer. The proposal that there should be a direct correlation between the numbers of tables and machines represents one way of achieving that balance, but there may be others and the Government will be working with the industry to determine how its objectives in this area might best be met.
19. One of the objections put forward by BBPA and BACTA concerning the reduction or removal of AWP and Category C machines from the premises whose trade interests they represent, is that it would be commercially unfair in that they generate a significant proportion of their income in this manner.
(a) Does the Government consider that those premises in which gambling is not the prime reason for consumers to visit them (eg fish and chip shops or pubs) could put the prices up on their main trading service or commodity to compensate?
(b) Alternatively, that current licence holders could be given, say, two years to phase out (or down) the number of their machines?
A number of the submissions received by Government supported the proposition that the withdrawal of gaming machines from particular categories of premises would represent a considerable financial blow to businesses in these sectors.
The options identified by the Committee are clearly potential alternatives to the approach which the Government itself currently favours, although it should be noted that many of the businesses in question already operate on tight profit margins.
A number of those who responded also drew attention to the absence of tangible evidence of harm or significant regulatory risk arising from the siting of machines in non-gambling premises. The Government's proposals would restrict the number of gaming machines available in premises of this kind to broadly its current level, while addressing the problems which the machines can present in terms of access by children. Fish and chip shops, and other non-gambling premises without an alcohol licence, will be restricted to the new Category D amusement machines.
Gaming machines are an accepted part of the pub scene and pubs will be able to continue to site Category C machines, which will have the existing maximum pub prize of £25 and a top stake of 50p. But they will only be able to do so if they adhere to a Code of Practice which will set out effective, practical measures to prevent access to machines by children.
A pub which does not wish to restrict child access will be able to have Category D amusement machines instead. But a pub with a Category C machine which does not prevent child access will be at risk of losing its machine licence and hence its machine(s).
June 2002
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