Select Committee on Culture, Media and Sport Memoranda


Memorandum submitted by the Bingo Association

  On behalf of The Bingo Association I am pleased to submit our representations to the Committee with regard to their inquiry.

  We understand that the Association will not be invited to appear before this initial inquiry, whose terms of reference are more oriented to machines and casinos. Notwithstanding that, we do have some relevant observations to make within those terms of reference, as the enclosed submission shows. Should the Committee require any further information, we shall be pleased to assist.

  In any event, we hope to have the opportunity to give oral evidence at any subsequent inquiry into the proposals for gambling which the Committee may hold.


  The Bingo Association represents 111 operators with 540 clubs, accounting for 74 per cent of the industry as a whole. Our members come from across the spectrum, from the very large operators with over 100 clubs to many single site businesses.

  As bingo operators, we are proud of our industry, and justifiably so. Bingo has grown into a unique leisure experience, providing our players with excellent facilities and a good night out, as well as the chance to win significant prizes. Every bingo game has a winner: the shared experience of anticipation and then winning is what sets us apart from all other gaming activities. Our players form part of a community: men and women of all ages who come together to meet and make friends and share a night's entertainment.

  The Association supported many of the recommendations in Budd, and welcomes the Government's proposals to implement them. We recognise the importance of achieving a balance between freeing gambling from unnecessary constraints but ensuring effective regulation, and the need to address concerns over problem gambling. Indeed, it is in this respect which the Association made its strongest criticisms of Budd's restructuring of the gaming sector: many of our members believe that the proposed expansion of casinos, to include other activities such as bingo, will result in increased levels of problem gambling. Many of our members question why no reference is made in the White Paper to the serious concerns we expressed for the future of bingo, and in particular the problem of bingo players being drawn into harder forms of gambling.


  One of the most fundamental changes introduced by Budd's proposals, and implicitly accepted by Government, is never specifically identified, receives no analysis or comment, and is ignored in the consideration of "dealing with the downside". Yet it removes a key plank of current legislation, implemented because gambling was spiralling out of control. The physical separation of hard and soft gaming was considered essential to restore effective regulation in 1968, and is at the core of legislation governing casinos and bingo clubs. Whilst many of the controls built up around this principle, such as membership and the 24-hour rule, are now no longer required to ensure effective regulation, the majority of the Association's members believe that retaining the separation between hard and soft gaming remains vital for future legislation. Without it, there are likely to be increased levels of problem gambling, plus the very real threat that many bingo clubs, offering a valuable social amenity at the heart of many communities, will close.

  Consider the differences between bingo and casinos, and then the likely impact of exposing players used to playing in one environment to the activities offered in the other. Bingo is as much a social occasion as it is the opportunity to win money: people go to meet and make friends in comfortable surroundings. It is a pari-mutuel type game, where stake is limited to the ticket price set by the operator, the speed controlled, with little or no ability to chase losses. The vast majority of gaming machines have a maximum payout of £25, with a maximum of four offering prizes up to £500. Casinos are hard gaming: they permit unlimited stake, offer the opportunity for repetitive play, and the ability to chase losses and reinvest winnings. Combined with this will be large numbers of linked unlimited stake and prize slots, following the lead of Las Vegas and other large gambling centres in the US. Bingo clearly does not sit comfortably within such an environment, and its introduction into casinos here would result in a significant change in the gambling habits of the British population.

  Although bingo players have the opportunity to play gaming machines in licensed bingo clubs, the primary activity which attracts them is a soft gaming product. Those who wanted to play only machines would not go to the trouble to become a member and have to wait for the interval sessions to play. They would simply choose a premises more suited to their gambling preferences, such as an arcade. However, placing bingo in casinos will significantly increase the potential for players to "trade up" to harder gaming.

  Those visiting new casinos to play bingo will be faced with banks of slot machines—a far cry from the machines currently found in bingo clubs. Those who are unfamiliar with a casino environment will easily be drawn into "trading up" from bingo to the harder casino products. It is hard to imagine that casino operators will not want to move players from bingo to slots: it is well known that within licensed bingo clubs at present, mainstage bingo provides only a small proportion of overall revenues. Compare this with the fact that 80 per cent of revenue in US casinos is generated by slots and it is clear to see the motivation for moving players from one to the other.

  In considering Budd's proposals, the Government has failed to recognise the flawed assumptions which underpin the proposals for casinos and bingo. Budd predicts that licensed bingo club numbers will remain steady and the number of casinos might double. However, this analysis is based on the assumption that the increase in casino numbers will relate to new premises, when in fact this is unlikely to be the case. It is far more likely that existing bingo club premises, many of which have large floor areas and scope to extend through mezzanine floors, will convert to casinos. There are indications already that this is planned. With no demand criteria to satisfy, no permitted areas to consider, and several operators already established in the UK gaming market, there is little to prevent this happening.

  The proposed minimum floor area for casinos will not act to stem a significant increase in casino numbers. Indeed, licensed bingo as it is known now is likely to be squeezed between casinos at one end and new, small, arcade style bingo at the other. The removal of the demand criteria and membership requirement is likely to mean the proliferation of small bingo outlets, based in retail units, offering mechanised cash bingo and machines. In fact, the primary purpose of such premises would be the attraction of a licensed club's entitlement to £25 AWPs and £500 jackpot machines. Given the Government's intentions on access to machines, the bingo industry is concerned that a minimum floor area has not been proposed for licensed bingo.

  Licensed bingo clubs currently make a significant contribution to local and national economies. In 2001, bingo contributed in excess of £235 million to the Exchequer and provided employment for 20,000 people in clubs across the country. Bingo clubs are part of the social fabric of many towns, providing a unique social amenity. The majority of the Association's members believe that if the Government's proposals are implemented, there will be a structural shift in the bingo sector which in the medium term will change the whole industry. There is a very real fear that the previous downward trend in bingo admissions will accelerate as players are moved into harder forms of gaming and a reduced floor area is devoted to bingo.

  If this were to happen, a reduction in bingo marketing and promotion would inevitably follow. Bingo would be submerged into an overall "casino" product, affecting the entire sector. Those in the industry who envisage this pattern of development fear that the choice will be between conversion to a casino (despite a preference for remaining as stand-alone bingo), or to sell out. Previous experience in the industry has shown that pressures of this kind usually lead to consolidation. Job losses would be likely.

  The Government comments in the White Paper that such concerns are matters of commercial judgement, and that the market should be left to dictate. Many of the bingo players for whom a visit to their local club is their only form of recreation and relaxation might disagree.

  Players currently have the choice between attending a casino for hard gaming, or a bingo club for more social soft gaming. Why should that choice be taken from them? Many people will not want to be exposed to the pressures of hard gaming, but merely want the opportunity to win money whilst enjoying a sociable evening out. Bingo played in a casino will not be the same as that currently enjoyed by our players. A valued social amenity would be lost and replaced by a bingo product operating as part of a hard, progressive, gaming environment.

  To argue that the closure of stand-alone bingo clubs as a result of casino development is merely the operation of market forces ignores the fact that gaming cannot be treated in the same way as other industries. If it were the same, it would not justify a distinct legislative and regulatory framework. It would be the responsibility of the DTI, not the DCMS, and would be treated like any other service or leisure industry. Gaming patently does not fall into this category, because of the potential for harm.

  The Bingo Association believes that the removal of bingo from the proposed mix in casinos would have little or no impact on the commercial opportunities offered in the White Paper. However, it would ensure that a genuinely soft gaming option remained for the playing public, and allow the licensed bingo sector to develop within the new legislative framework. Whilst government and legislation should not preach to people on how they should spend their money, it has an obligation to ensure freedom of choice. The proposed inclusion of bingo within casinos would inevitably remove that choice from a large number of current bingo players who would either be forced to play bingo in a casino, or stop playing. Most stand-alone bingo clubs would find it difficult to compete with multi-functional venues once there is no limit to the amount of prize money that can be added and this was recognised in "A Safe Bet for Success". Bingo could almost be run on a loss-leading basis within such an operation in order to secure volume, with the aim of translating bingo players into casino customers. This pattern can be seen in Las Vegas, where once there were premises offering bingo in much the same way as in the UK. Now, bingo is found mainly in casinos because it cannot compete as a stand-alone activity.

  Indeed, Budd would appear to support the Association's view that players used to the soft gaming environment of today's licensed bingo club would be drawn into harder gaming if bingo were located within a casino. In discussing the protection of the vulnerable, the Report observes that:

    "people's behaviour typically conforms to that of others in the situation, particularly where behaviour is public and unambiguous. Adults as well as adolescents and children are influenced by their peers. If individuals are exposed to settings in which people gamble, then behavioural norms, (what most people in the situation actually do) will influence their gambling behaviour. Thus the environments of, for example, casinos and arcades are likely to have a reinforcing effect on an individual's gambling activity, whereas buying lottery tickets in a newsagent's shop commonly would not." .

  Australia's experiences should serve as a warning to the British gaming industry as it considers the way forward. Following the relaxation of its gaming legislation, Australia has seen the proliferation of gaming to the point where problem gambling has increased significantly. The imposition of future restrictions on the gambling industry would seem inevitable.

  This is the view of the majority of members of the Bingo Association, which has debated this issue at length. However, there is a sizeable minority of operators (representing over half the total number of clubs) who wish to take advantage of the significant commercial opportunities presented by this proposal and therefore support the Government's proposals. They see the potential to apply for casino licences, and argue that many of the concerns outlined are purely competition issues that are not the concern of a gambling regulator. In addition, they do not share the view that Budd's proposals will necessarily lead to the decline in the independent sector feared by other operators. Some of these operators already operate casinos, and are therefore able to identify a potential synergy between casino gaming and bingo.

  These operators argue that customer choice is best served by allowing the widest possible range of facilities, and that as the most highly regulated level of gaming, casinos should be able to provide all forms of gaming product. They disagree with the argument that bingo will not mix with table games, citing the situation which existed before 1968 when bingo clubs included games such as roulette. This divergence of view was reflected in the bingo industry's submissions to the Review Body, and has remained broadly consistent since then.

  The industry has never had a serious problem involving under 18's taking part in gaming, as can be verified by the Gaming Board. It has employed 16-18 year olds in various capacities which has not given rise to problems, the suggestion that this should not be allowed to continue will deprive teenagers, and particularly students, of a valuable source of income. Provided the work done by this age group continues to be properly supervised, there would seem to be no danger of this encouraging under-age gambling. We therefore hope that the proposed prohibition on the employment of 16-18 year olds will not be proceeded with.

  The Association does not believe that society at large wants to see the proliferation of hard gaming in this country. Concerns over the participation of under-16s in the National Lottery have demonstrated society's desire to prevent under age gambling, particularly because this age group is vulnerable. Whilst addiction may in itself be an issue to be addressed, widening access to gaming is likely to encourage it, whilst weakening the structures designed to protect those who are vulnerable would clearly be a retrograde step. Government has a responsibility to ensure effective and appropriate regulation, and it is our view that it is failing in this responsibility if proposals to introduce "gaming sheds" are implemented.


  The White Paper makes it clear that the Lottery's current legislative advantage will be maintained in order to ensure that funds for good causes are maximised. Licensed bingo clubs have now adjusted to a gaming environment dominated by the Lottery, and anticipate that a new gaming framework will enable all gambling activities to develop and succeed.

  The Association is aware of concerns expressed over the possible impact of bingo deregulation, and in particular removal of prize limits for multiple bingo, on the National Lottery. Naturally, the industry supports the Government's view that the possible risks to the Lottery are not so great as to justify rejecting proposals for bingo. The attraction of bingo, played in a social environment, is very different from that generated by the Lottery. In scale they are vastly different: in 2000, bingo had total sales of £1.4 billion, compared to just under £5 billion for the Lottery (as stated in Camelot's results for the year to 30 March 2001). Sixty-five per cent of the population play the lottery, compared to seven per cent for bingo.

  The anticipated increase in spend on the National Game of 0.5 per cent would amount to increased sales of £490,000 across the year. The main benefit of the change in legislation is to improve admissions, which have wider benefits, rather than necessarily increase spends by the player. Admissions could improve without significant increases in overall spend, drawn by the attraction of a bigger main prize.

  In practice a £1 million bingo game once or twice a year is unlikely to affect the Lottery, which offers main draw prizes far in excess of this every week. Bingo jackpots of this level would be as the result of accumulated stake (stake retention), requiring periods in between games to generate the prize pool. Whilst the industry is flattered that Camelot regard bingo as competition, the statistics show this to be misjudged. Overall, bingo gains less in terms of deregulation under a new regime than many other sectors.

1 May 2002

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