APPENDIX 3
Letter from IGT-UK Limited to Michael Fabricant MP
As you may recall, I wrote to you a few months ago with regard to the initial findings of the Budd Report into gambling in the UK. I live in Wentworth Drive in your constituency and I am Managing Director of IGT-UK Limited (trading as Barcrest Games, Vivid Gaming, Red Gaming and IGT-UK Casino). IGT-UK is the wholly-owned subsidiary of IGT, the world's largest designer and manufacturer of slot machines, based in Nevada, USA.
IGT-UK is the UK market leader in the design and manufacture of Amusement With Prize Machines. We manufacture approximately 35,000 slot machines per year, 20,000-25,000 for the UK market and 10,000-15,000 for export to international markets, mainly continental Europe. We also design casino slot machines for North American and European markets. In total, we employ approximately 500 staff at our dedicated factory in Ashton-under-Lyne, Lancashire and in design centres at Burton-on-Trent and Birmingham.
I am writing to you because I note that you are on the Culture, Media and Sport Committee reviewing the DCMS Gambling Review. In my capacity as Managing Director of IGT-UK, I have already made a number of submissions to the DCMS during the consultation process. I attach a copy of our most recent submissions.
In general, we are very supportive of the DCMS position. The approach of liberalisation coupled with tough regulation and specific measures to combat under-age and problem-gambling draws upon the best international experience and will benefit industry, consumers and the Treasury. There are three matters to which I would particularly like to draw your attention:
1. Casinos. The objective of shifting gambling into the highly controlled casino environment is one of the great achievements of the DCMS Review. I have heard arguments made against this in some quarters that "only foreigners understand casino machines and so only foreigners will benefit". This is simply untrue. At IGT-UK, we have a history of using British personnel to write software for and manufacture casino slot machines that are exported throughout North America and Europe. I would also envisage that our major foreign competitors not already in the UK market will need to set up operations in this country, bringing employment and skills to the UK.
2. Licensing of manufacturers and game designers. As the gaming industry is liberalised, and therefore the scale of profits that may be made from illegal activity increases, it is imperative that absolute integrity is maintained throughout the supply chain. In particular, at a time when there are increasing numbers of software companies starting up solely to supply game software to gaming machine manufacturers, it is important that both these companies and those that assemble machines are licensed. The DCMS has presently left open the question of whether it will licence and conduct integrity checks on "machine manufacturers" and does not appear to be focused on the matter of gaming software houses. It is critical that appropriate probity checks are introduced with severe sanctions for dishonest behaviour in order to prevent a return to the problems with crime and corruption that dogged the industry in the 1960s returning.
3. Gaming machines in pubs. The present DCMS proposal is that two gaming machines are allowed as an adjunct of the liquor licence and the outlet is permitted to apply to the Local Authority for additional licences. In reality, many larger pubs already have more than two gaming machines. The new regulations could therefore lead to an initial avalanche of applications to Local Authorities for additional permits. The scale of this problem can be significantly reduced by raising the number of machines automatically allowed to three and by allowing pubs "grandfather rights" for existing permits (as the pubs have already secured these permits at a magistrate's hearing, it seems to be a waste of time "re-inventing the wheel" at a second hearing).
I would be grateful if you could read through the enclosed detailed submissions for further comments on the DCMS review.
16 May 2002
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