V GAMING MACHINES
The current system of regulation
- There are currently about 250,000 legally sited gaming machines in Great Britain, the majority of which (60,000) can be found in pubs. There are three categories of machines:
- Jackpot machines, permitted only in casinos, bingo halls and clubs, with a maximum stake of 50p and maximum prize of £2,000 in casinos, £500 in bingo halls and £250 in clubs.
- All-cash machines, located in arcades, bingo halls, pubs and betting shops, maximum stake 30p and maximum prize £25.
- Amusement with Prizes machines (AWP) in arcades and other premises permitted by the local authority, maximum stake of 30p and maximum prize of £5 cash or £8 tokens (for a non-cash prize).
The Government's proposals
- The Government responded to concerns from the gaming industry over the Gambling Review proposals (principally that the Review Body wished to restrict gambling to places where the primary purpose of the premises was for gambling) by accepting some of the Gambling Review Body's recommendations, rejecting others and creating four new categories of gaming machines:
Casino slotscategory A, with unlimited stakes and prizes which may be linked. These machines are to be licensed to casinos only.
Jackpot machinescategory B, maximum stake £1, maximum prize £500 in a bingo club, betting shop or adult gaming centre (an over 18s arcade) or £250 in a registered club.
Adult gaming machinescategory C, maximum stake 50p, maximum prize £25 in bingo clubs, betting shops, adult gaming centres, adult-only areas of family entertainment centres (arcades to which children are permitted) pubs and other premises with an alcohol licence.
Amusement with prizescategory D, maximum stake 10p, maximum prize £5 (cash or non-cash) in family entertainment centres (including seaside arcades, bowling alleys, motorway services and theme parks) and non-gambling premises such as cafes, fish and chip shops, take-aways, taxicab offices etc.
Category A machines
- The introduction of category A casino slot machines to the UK will create a radical change in the look of casinos. Currently machines in casinos only account for 1 per cent of an average casino's turnover. The Committee were told in Las Vegas that slot machines accounted for over 70 per cent of a casino's turnover. The British Casino Association gave evidence that customers wished to see the unlimited stake and linked machines found overseas, as opposed to the technologically out of date machines currently found in UK casinos. The Gaming Board estimate that the number of casinos is likely to increase from 123 to anywhere between 200 and 450 casinos, and that the take up of category A machines could be perhaps between 90,000 and 100,000 nationwide.
- There will be no upper limit on the number of slot machines permitted in casinos. However, the Review Body recommended that there should be a mix of gaming activities in casinos to prevent the spread of unsavoury 'gaming sheds' found in other countries, which contain huge banks of casino slot machines. The Review Body recommended that there should be eight machines for each gaming table for the first eighty tables, with no restriction on the number of slot machines on tables after that first eighty. The Government agrees that there should be an appropriate balance between the number of tables and machines, and is currently in consultation with interested parties. We recommend that the Government endeavours to strike a balance between tables and machines that will not lead simply to casinos increasing the number of tables to accommodate more machines.
Category B machines
- Category B machines will only be allowed in bingo clubs, betting shops and adult entertainment premises (or designated areas within premises) to which children are not allowed entry, whether or not accompanied by an adult. The number of machines permitted will be four with the possibility of adding further Category C machines, subject to Local Authority approval. In addition Members' clubs will be allowed either three category B machines or three category C machines, but children must be prevented from playing these machines, which must be kept in a designated area. There will be no upper limit of Category B machines in casinos.
Category C machines
- Category C machines, in addition to those premises listed at above, will be allowed in adult only areas of family entertainment centres (arcades to which children are admitted) and premises that are licensed for the consumption of alcohol, provided that children are either excluded from the premises, or machines are sited in an area to which children do not have access. Operators will be allowed to install two machines, with local authorities having discretion to allow more.
Category D machinesAmusements with prizes
- AWP machines may be installed, subject to a local authority licence, without restriction in all premises licensed for gambling and alcohol as well as amusement arcades, fish and chip shops and other premises to which children can have access. Unlike gaming machines, over which the Gambling Commission will have powers of inspection and enforcement, the siting and inspection of AWP machines will be controlled by local authorities. The Government has proposed that the stake and prizes on AWP machines will be frozen for the indefinite future.
Children and AWP machines
- Under current regulations, children are allowed access to £5 cash and £8 token machines, but whilst they are prevented from playing all-cash machines in arcades, the rules preventing them from playing these machines in pubs and clubs are less strict and not enforceable by law. The Gambling Review body recommended that this loophole in the 1968 Act be closed, and the Government accepted this, so that children will only be allowed to play on AWP machines (category D) as these constitute 'amusement' rather than gambling.
- Of all the matters on which the Committee received evidence, the issue of children's access to AWP(and other) machines was, perhaps, the one on which opinions differed most strongly. Many of our witnesses believed that the Government was sending out an unclear message by allowing children to gamble on AWP machines whilst simultaneously stating that "gaming machines and children should not mix". The new categories of gaming machines, proposed by the Government, would, it was argued, confuse parents, children and the machine operators themselves, about the rules, regulations and dangers of the machines.
- The Gambling Review recommended that machines such as pushers and cranes should not be subject to the proposed regulatory regime for gaming and AWP machines. The Government rejected this, and has included them in the lower stake (Category D) gaming machines. BALPPA suggested that these machines, which have been located for many years in seaside amusement arcades, should form a second category of AWP machines, retaining the current maximums of 30p stake and £8 non-cash prize. BALPPA believed that the quality of the prize, eg a cuddly toy, was necessary for the viability of crane/grabber and ticket redemption machines and would be seriously affected by a new limit of £5.
- In the case of category D and C machines, however, several memoranda to the Committee have suggested that the distinction between higher and lower value slot machines is an artificial and disingenuous one. The Government makes the distinction between 'amusement'(category D) machines with a maximum stake of 10p and maximum prizes of £5 which are safe for children, and 'gambling' machines with higher stakes and prizes which are only suitable for adults. The concern is that there was no evidence on which the Government could properly have made this distinction, and, therefore, to have sanctioned AWP machines as safe for children to play on.
- Evidence to the Committee has stated that the level of prize money is only one of many reasons why gaming machines are potentially dangerous. For example, both the Methodist Church and Professor Orford emphasised that the rapid cycle of play of gaming machines and display of 'near misses' increased the temptation to chase losses, one of the key internationally recognised indicators of problem gambling, which could lead to gambling problems. Professor Orford also pointed out to the Committee that whilst to the Government a £5 prize might seem an 'amusement', to a child who receives £10 pocket money a week, a £5 prize would seem more of an inducement to gamble.
- The Children's Society was unable to give oral evidence to the Committee. In its written evidence the Society suggested that children were not capable of making adult judgments, had a lesser capacity than adults to resist the pressure to gamble, and therefore needed special protection from the dangers of gambling. Childline were also unable to give oral evidence or submit written evidence to the Committee, but were kind enough to forward to us a copy of their submission to the Gambling Review. Their submission, which must remain confidential for the protection of the children who use Childline, concludes that problem gambling is having a devastating effect on some children's lives.
- The Gambling Review took note of the research of Dr Sue Fisher, who conducted a prevalence study of gambling and problem gambling amongst 12-15 year olds. Her findings were that 75 per cent had played at some point on fruit machines and that 19 per cent had played on machines 'in the last week'. Of those who had played on machines, 44 per cent had played in pubs, 35 per cent in seaside amusement arcades and 32 per cent in inland arcades. Dr Fisher found that of those who had played on machines 58 per cent had 'felt bad' about the amount they played on machines, whilst 5.6 per cent could be classed as problem gamblers. The Gambling Review decided that, aside from the economic arguments put forward by the operators and trade associations, there was insufficient evidence on children's gambling to justify a complete ban, and, subject to the industry trust producing more independent research, we agree.
- There was particular concern that as well as in amusement arcades, bowling alleys, motorway services and theme parks (termed as family entertainment centres by the Government), AWP machines would remain in non-gambling premises such as cafés, take away restaurants and taxi cab offices. GamCare suggested that machines in these places are unlikely to receive the same level of attention from the proprietors of such establishments, as compared with those who run clubs, pubs and arcades. The Gaming Board told the Committee that there is currently no adequate control over AWPs in non-gambling or alcohol licensed premises, and that very often illegal machines (typically category C machines) appear in such places as there is no sufficient follow-up. The Gaming Board considered that the simplest way of controlling AWPs would be to ban them altogether from such premises, as did the Gambling Review. We were not especially persuaded by the arguments in favour of the status quo. We think it at best disingenuous to play down the evidence that, unsupervised, the presence of these machines does not pose a long-term danger to young children. We encourage the Government to reconsider its rejection of the Review Body's clear recommendation about this aspect of 'ambient gambling'. If the Government maintains its view, to allow AWPs in outlets such as fish and chip shops, it must ensure that local authorities are able to fund improved monitoring of these premises.
- We commend the Government for preventing children in future from playing on gaming machines generally and for the freeze on the amounts of stake and prize; but in order to avoid the accusation of bowing to industry pressure over AWP machines, the Government must ensure that adequate research is undertaken to monitor the effect of allowing children to gamble on low stake machines when no other jurisdiction in the world does so.
- We therefore agree with the Gambling Review Body's recommendation "that further research should be commissioned to examine the impact of machines gaming by children and that the Government should formally review the position in five years time to determine whether any such gaming by under 18s should continue to be permitted, or whether Great Britain should come into line with other jurisdictions and ban it". The Gambling Commission should consider ways in which this research can include children's use of AWP in non-gambling premises, to ensure that the Government can make a well-informed decision on the matter. In the meantime, AWPs in non-gambling premises are likely to provide 'an unintentional and inadvertent introduction to gambling for children'.
- There can be no doubt that once the Government's proposals are all implemented, there will be greater awareness by the public of a significantly larger range of gambling products. This greater awareness should be accompanied by knowledge of the basic principles about odds and the 'House edge'. The Committee has been told by various witnesses that it might be sensible to include education about the social and economic costs of gambling in the national curriculum, though there were concerns that this would be adding yet more pressure on schools. The Committee recommends that the new Gambling Commission ensure that the Industry Charitable Trust consider funding education programmes for schools, youth clubs and other groups to ensure that both parents and children understand the odds, are aware of the dangers of losing control and, as Mr Paul Bellringer of GamCare said, are able to regard gambling as a fun activity they can enjoy and walk away from.
Keeping children away from Category B and C machines
- The licensing of Category B machines in Members' clubs and Category C machines will be subject to the operator's adherence to a Gambling Commission Code of Practice to ensure effective supervision and control to prevent persons under 18 from having access to the machines. The Government states that it will be an offence for an operator to allow a child to play on a gaming machine, and an offence for a child to play on a gaming machine. The Commission will have powers of entry, search and seizure and prosecution of operators breaking the law, with the local authority able to revoke licences.
- There is currently a code of practice between the Gaming Board and BACTA concerning access to gaming machines in family arcades. The code includes physical barriers to keep separate adult-only machines, prominent signage and supervision on the premises at all times. The Government itself acknowledges that "it is hard to see how all pubs could realistically provide for the physical separation of machines". As the Government intends to propose separate legislation on liquor and public entertainment licensing which will make it easier for parents to bring children into pubs, it is essential that the Gambling Commission and the industry are able to agree on a workable Code of Practice.
- BISL gave evidence to the Committee that the law on underage play will provide sufficient sanction in its own right, together with good management, agreed notices and the existing good practice existing within their members' premises, rather than introducing a raft of inappropriate red tape and the cost of physical barriers which would also change the character of many traditional licensed premises. BACTA believed that the following should be included in the Code of Practice: locating machines only in the bar areas within sight of the bar staff and not in separate rooms; and clear signage and notices stating the law. BACTA called for the Code of Practice to be implemented as soon as possible, between a shadow Gambling Commission and trade associations. The Committee agrees that a code of practice concerning gaming machines should be decided by the Gaming Board or shadow Gambling Commission as soon as possible. We consider that:
- machines should be sited in the bar area, within sight of the bar staff;
- where appropriate, and without compromising the appearance of the premises, a line should be drawn on the carpet (as they have in Las Vegas casinos) to help staff distinguish between where children are and are not allowed;
- signage should be visible and legible from a reasonable distance to allow parents to recognise the adult gaming machine immediately;
- the machines themselves should be clearly labelled 'for over 18s only';
- the gaming industry could also take this opportunity to ensure that details of the GamCare helpline, or contact numbers for GamAnon, can be found near to or on machines.
- In the case of amusement arcades, which will be permitted to site both Category C and D machines, there was also some concern that, where they are poorly supervised, they may pose a personal danger to the children who congregate there. This observation is not new. The Rothschild Commission noted in 1978: "The chief complaint levelled against [amusement arcades] in the larger cities, is that they tend to become resorts for prostitutes, of adolescents who are liable to be picked up for immoral purposes, and of truanting children". This observation was itself a deliberate echo of the conclusions of the 1949-1951 Royal Commission, that such influences would be reproduced in any place offering "light, warmth and noise" to the bored or disaffected. The Committee urges local authorities to ensure that the amusement arcades that they license are, as BACTA assured the Committee, indeed safe for children.
97. Both BACTA and BISL have expressed dissatisfaction with the differing treatment of private clubs and pubs, of which children have access to both. Members' clubs will be allowed to retain up to three 'B' machines with a maximum prize of £250, whereas licensed premises will be allowed two 'C' machines, but can apply for more to the local authority. In many cases, this will mean that many licensed premises will already have more than they are legally entitled to, and will have to reapply to the local authority for machines they already have on the premises. BISL estimated that approximately 11,000 - 12,000 licensed premises will have to re-apply to retain their existing number of machines. BISL and BACTA suggested that either pubs' entitlement should increase to the three machines allowed in members' clubs (BACTA would like to see this number increase to four) or that 'grandfather rights' should be given so that, until the next licence application falls due, pubs and clubs should be able to keep their existing machines.
- BACTA was concerned that the 11,000 - 12,000 licence applications for existing machines would suffer from interminable delays. According to BACTA their members had widely differing experiences of the local authority licensing process. Whilst some local authorities had dedicated licensing officers with expertise and knowledge of their field who dealt with matters speedily and efficiently, other local authorities have:
"down-graded the licensing function until, in some cases, it is no more than an administrative matter dealt with as quickly as purchasing a packet of crisps from a shop ... little or no knowledge or expertise is shown, and sometimes no enquiries are made to see whether the applicant is suitable to have a licence or whether the application should be granted ... some local authorities are very slow in dealing with applications."
- With the licensing system already divergent in approach, BACTA believed that licensed premises were likely to apply at once for a new local authority permit, and that the cost to the local authorities in staffing and money would be great. "Some local authorities will cope better than others, but it is likely to be a great strain for all of them."
- Whilst we agree with the Gambling Review and the Government that local authorities are best placed to make local licensing decisions, as previously stated with regard to casinos, we believe that the new Gambling Commission should ensure that local authorities are aware of the knowledge and expertise necessary for their staff to administer the new licensing system fairly and with integrity. This recommendation clearly has implications for the cost to local authorities of the licensing system and confirms our recommendation in paragraph 71 that local authorities should be empowered to set licence fees at a level which covers their costs. The Government should ensure that the Gambling Commission provides regular assessment of the licensing system to allow for periodical readjustment of licence fees. In the case of existing gaming machines, which have already been approved by licensing justices, we consider that the Government ought to give further thought to the allowing of 'grandfather rights' for the first few years of the new licensing to avoid undue pressure on local authorities who will already be taking on a significant new role.
109 A safe bet for success, pp. 82-83 Back
110 A safe bet for success, p. 83 Back
111 Ev 50 (Vol III) Back
112 Q 122 Back
113 Ev 86 (Vol III) Back
114 Gambling Review Report, p. 133 Back
115 A safe bet for success, p. 18 Back
116 Ev 37 (Vol III) Back
117 A safe bet for success, pp. 15-17 Back
118 A safe bet for success, p. 15 Back
119 Gambling Review Report, p.133, and Ev 106 (Vol III) Back
120 A safe bet for success, p. 16 Back
121 Ev 11 (Vol III) Back
122 Ev 63 (Vol II) Back
123 Ev 6, 7 (Vol III), Ev 42 (Vol II) Back
124 Ev 42 (Vol II) Back
125 Ev 7, 11 (Vol III), QQ 1-5 Back
126 Q 4 Back
127 Ev 121 (Vol III) Back
128 Not printed Back
129 'A prevalence study of gambling and problem gambling in British Adolescents', in Addiction Research, 1999, Vol. 7, No. 6, pp 509-538 Back
130 Ev 2 (Vol III) Back
131 Ev 3 (Vol III) Back
132 QQ 266-271 Back
133 Ev 3 (Vol III) Back
134 QQ 27 and 237 Back
135 Q 28 Back
136 Ev 110 (Vol III) Back
137 Ibid Back
138 Ibid Back
139 Ev 37 (Vol III) Back
140 Ev 125 (Vol III) Back
141 QQ 16 and 17 Back
142 Royal Commission on Gambling (1978, Cm 7200; Chairman, Lord Rothschild), para. 23.20 Back
143 Royal Commission on Betting, Gaming and Lotteries 1949-51, para 428. See The Times editorial 2 March 1939, which suggests that children won't be deterred from the bright lights of the funfair by legislation. Back
144 Ev 123 (Vol III) Back
145 Ev 31 and 36 (Vol III) Back
146 Ev 31, 36 (Vol III) Back
147 Ev 125 (Vol III) Back
148 Ibid Back